Arthur Kallet, an engineer and director of Consumers' Research, and Frederick Schlink, an engineer, publish "100,000 Guinea Pigs: Dangers in Everyday Foods, Drugs, and Cosmetics." It is "intended not only to report dangerous and largely unsuspected conditions affecting food, drugs, and cosmetics, but also, so far as possible, to give the consumer some measure of defense against such conditions."
Schlink moves Consumers' Research to the rural village of Washington, N.J Engineers and journalists from New York City become disenchanted with rural life, long hours, and low pay. Requests for raises are denied.
Three employees of Consumers' Research, with the assistance of the American Federation of Labor, form a union. Schlink fires them. In September, 40 Consumers' Research employees go on strike, demanding reinstatement of the fired workers and a minimum wage of $16 a week. Seeing "an unholy alliance" of strikers and "capitalist advertisers" against consumers, Schlink retaliates with strikebreakers and armed detectives and charges that the strikers are "red."
Amherst College economics professor Colston Warne delivers a speech titled "Protecting Consumers' Rights," in which he states, "There is in New York City now a consumers' laboratory which tests products, and rates them as to their quality. It is owned and controlled by organized consumers. This laboratory is called the Consumers' Union." Warne became one of the founders of Consumers Union and chaired its board from 1936 to 1979.
Strikers from Consumers' Research start their own organization. In February, the State of New York grants a charter for Consumers Union, set up to provide consumers with "information and counsel on . . . goods and services" and "maintain laboratories . . . to supervise and conduct research and tests." Arthur Kallet is appointed director.
In May, Consumers Union Reports appears, with articles on Grade A and Grade B milk, breakfast cereals, soap, and stockings. A three-tiered Ratings scheme--Best Buy, Also Acceptable, and Not Acceptable--is adopted to present the results of scientific tests of products. An article on credit unions explains why they're better than banks, and an article on the efficacy of Alka-Seltzer concludes that its claims, when analyzed, "vanish like the gas bubbles in the air." Circulation is a little more than 4000.
Lawrence Crooks, independently wealthy and with a passion for cars, joins the Consumers Union staff and heads up its Auto Test Division until 1966. Because the organization at first can't afford to buy many new cars, he buys them himself or borrows them from friends. Early reports focus on taking care of cars or tires.
In the midst of the Great Depression, CU has little money to buy products to test, so many early reports are on inexpensive items like electric fans, hot water bottles, and radios.
Consumers Union publishes "Report on Contraceptive Materials" with distrubution limited to CU members who are married and using contraceptives on the advice of a physician.
An article in Reader's Digest, "Guinea Pigs, Left March!", attacks Consumers Union. "They are out to discredit, if not to destroy, the system." Good Housekeeping, whose Seal of Approval Consumer Reports calls a fraud, in turn accuses Consumer Reports of prolonging the Depression. A secret Congressional committee labels Consumers Union and most other consumer groups “communist transmission belts.” Major publishers, including The New York Times, refuse to carry ads for Consumer Reports.