This week's dramatic action by the federal government to prop up the U.S. banking system represents the most sweeping act of governmental intervention in this country's financial markets since the Great Depression.

Back then, the federal financial rescue was orchestrated by the Roosevelt Administration's Reconstruction Finance Corporation, which pumped $1.6 billion in federal investments into 6,000 U.S. banks.

The RFC's firm reach into the inner recesses of the U.S. financial system had a direct impact on Minneapolis, where it helped change the course of this city's labor history.

In the summer of 1934, Minneapolis was the scene of a bitter strike that pitted a defiant truck drivers union, Teamsters Local 574, against an equally militant group of trucking company owners. The owners were determined to break the strike, which threatened to paralyze the city's commercial life. They were backed by the shadowy Citizens Alliance, a local industry group that had exercised a tight hold on the city's economy and had thwarted union organizing efforts for decades.

As the summerlong strike escalated into street violence, Gov. Floyd Olson intervened in an effort to forge an agreement between the Local 574 and the trucking owners, but the owners resisted his entreaties.

Then, on Aug. 8, a new player appeared on the sidelines of this local labor battle. That day, President Franklin Roosevelt came to Rochester for a ceremony honoring the Mayo brothers. While there, the president met with Olson, who briefed him on the Minneapolis strike.

A labor delegation, led by Minneapolis Labor Review editor Robley Cramer, also came to Rochester and met with Roosevelt's chief aide, Louis Howe. Cramer knew that the RFC, with its financial lifeline to Minnesota banks, was in a position to exert substantial influence over Minneapolis business leaders, including those in the Citizens Alliance. Cramer urged Howe to draw the federal agency into the Minneapolis labor controversy and use it as a prod to bring about a settlement of the strike.

Those August meetings set in motion a series of events that brought about a settlement and labor peace in the streets of Minneapolis. The RFC's head, Jesse Jones, soon started making calls to local business leaders, including the heads of Minnesota's Northwestern National Bank, urging a settlement of the trucker strike. Jones was able to do more than "jawbone." He had a substantial club at his disposal: a threat to withhold much-needed federal commercial credit from the local banks and utilities.

Within two weeks of the president's visit to Minnesota, the strike was settled when the trucking company owners finally acquiesced to a settlement plan developed by a team of federal labor negotiators. The plan gave the Local 574 leaders much but not all of what they wanted. Striking workers would be reinstated by the employers, and a new higher wage rate would be put in place for truckers and their helpers.

Most significantly for the city's struggling labor movement, the settlement broke the Citizen Alliance's tight hold on the city's economy. After 1934, labor in Minneapolis would face a more level playing field as it negotiated with management for wages, benefits and recognition.

Now in 2008, Northwestern National Bank's successor organization, Wells Fargo, will be the recipient of $25 billion in federal investments. It remains to be seen whether this latest federal intervention will change the course of local history, as it did nearly 75 years ago.

Iric Nathanson is writing a book on the history of Minneapolis in the 20th century for the Minnesota History Society.