As racial, religious, and ethnic cleavages faded among the mass of industrial workers in the midst of the naked class war of the 1930s, the overt bigotry and narrow exclusionism that disfigured the AFL isolated it from the newly burgeoning workers' movement of “self-organization.” The insurgency inside the AFL's Machinists union (IAM) was exemplary of the enveloping schism within the AFL, in which the issue of interracial unity repeatedly came to the fore. Despite the IAM leaders' announcement in March 1936 that they would extend their union's jurisdiction to include metal and transport workers, skilled and unskilled alike, they refused to abandon their long-standing admissions policy of “whites only.”

Later that year, at the IAM's November convention, young “Jimmy” Matles called for the abolition of the IAM's secret initiation ritual restricting membership to “Caucasians.” Shutting blacks out, recalled Matles, “was something the industrial unionists didn't intend to live with.” When he and his fellow delegates rose to speak for their motion, “the convention became bedlam [and] … chairs started to fly. The young delegates could hardly be heard amidst the hooting and hollering [by the old guard]. At the height of the uproar, [IAM President Arthur] Wharton banged his gavel, declared the ritual inviolate and adjourned the session.…” The suppression of their call for equal membership rights for black workers aroused Matles and the lodges under his leadership to secede and join UE and the CIO.