INDUSTRIAL DIPLOMACY
Trade unions and federated unions--Formation of the National Civic
Federation--Notable industrial disputes are settled--Andrew
Carnegie dines with fighting labor leaders--Marcus Hanna, general
of industry--My chairmanship of the Board of Railway Labor
Arbitration--Our findings and recommendations--My chairmanship of
the New York Public Service Commission--Military necessities
impinge upon industrial relations--The President's Industrial
Conference of 1919-20.
When our industries were small, a strong human tie bound together
employer and worker. Following the expansion which began after the Civil
War, our industries resolved themselves into vast organizations and
corporations, and the relations between employer and worker became more
and more impersonal. The workers first organized into trade unions,
which presently expanded into federated unions similar to those which a
generation before had begun to be formed in Great Britain.
The rapid growth of our industries and the impersonal relations between
employer and employed made it apparent that social justice required that
reciprocal rights be recognized in order to bring about a better
understanding of a relationship which had already become increasingly
strained and often embittered, resulting in serious strikes and
lock-outs. One of the first organizations to meet this need was formed
in Chicago in 1894, following the Pullman strike. It was called the
Civic Federation of Chicago and was under the leadership of a number of
prominent men of that city, directed by Ralph M. Easley.
Six years later the scope of this organization was enlarged, and in the
name of the National Civic Federation a conference was called in
Chicago, in December, 1900, and the debate centered round the
proposition that in American industries voluntary conciliation was
preferable to compulsory arbitration. At that conference a committee was
selected whose duty it was to collect information at home and abroad
regarding measures of arbitration, and to advise with employers and
workmen in this country whenever and wherever possible.
In the following December, 1901, the National Civic Federation held a
conference in New York in the rooms of the New York Board of Trade and
Transportation. I was then president of that Board and was asked to
preside at the conference. After adjourning the sessions, we organized
the industrial department of the Federation, with a committee of twelve
men representing the public, twelve men representing employers, and
twelve men representing wage-earners. These three groups were headed,
respectively, by Grover Cleveland, Marcus A. Hanna, and Samuel Gompers.
All of their colleagues were men of national distinction and were
recognized leaders in their fields. From this larger committee of
thirty-six, an executive committee of five was selected, whose members
were as follows: Marcus A. Hanna, chairman; Samuel Gompers, first
vice-president; I, second vice-president; Charles A. Moore, treasurer;
and Ralph M. Easley, secretary.
The scope and plan of the industrial department was to promote
industrial peace in whatever way might seem best. We planned for a large
meeting in May, when two public sessions were to be held, one at Cooper
Union and one in the rooms of the New York Chamber of Commerce. We
issued a statement of our plan and scope and inaugurated a broad
educational campaign.
Meanwhile our department proved itself most practical. It actively
helped settle several disputes, notably the Albany street-car strike,
the disagreement between the National Metal Trades Association and the
International Association of Machinists, and the United States steel
strike. And it was instrumental in averting the threatened anthracite
coal strike.
The identical ideal that I held up in my opening address at the meeting
in January, 1901, I should hold up to-day: namely, that industrial
peace, to be permanent, cannot rest upon force, but must rest upon
justice, and in essential industries especially, upon a high sense of
responsibility to the public by both employer and employed. In no other
country are conditions, by nature and by principles of government,
better adapted to the equitable adjustment of the reciprocal rights,
duties, and privileges of labor and capital than in our own, because we
are a democratic people with no fixed class distinctions to separate us.
The laborer of to-day may be the capitalist of to-morrow, and vice
versa. Capital and labor are interdependent, not opponents; and it is on
the basis of that dependency that adjustments in the relationship
between them must be made. This ideal is, happily, more widely
recognized to-day than it was when the National Civic Federation was
organized.
I gave considerable attention to the work of the Federation for a number
of years. As the offices were in New York and the president and first
vice-president were both resident in other cities, the direction of the
organization between conferences largely fell upon me as second
vice-president, with the important assistance of the secretary, Mr.
Easley.
The Federation afforded a neutral forum where, under the chairmanship of
one of its officers, the disputants could discuss their grievances and
arrive at an understanding. Many times the growing bitterness between
them was checked and a strike or lock-out averted. The fact was often
borne in upon me how many of these industrial disputes grew out of
misunderstandings which were cleared away when men assembled around a
table and frankly discussed their differences.
To further the work and interests of the Federation I brought together
in social relationship, at several dinners at my home, the
representatives of all three groups; namely, the public, the
wage-earner, and the employer. One day Andrew Carnegie expressed the
desire to meet the labor leaders who had instigated the strike in the
Carnegie works which resulted in the Homestead riots. Accordingly I
arranged a dinner, to which I invited a number of the men of the labor
wing of the Federation, as well as some others of the committee,
together with Messrs. Wighe and Schaeffer, of Pittsburgh, officers of
the Amalgamated Union, who had led the Homestead strike.
Carnegie knew these leaders well, and they knew him. He called them by
their Christian names and they called him "Andy." They said that night
that they and their colleagues in the union had always believed that
that strike and riot would never have taken place had "Andy" been
present. As a matter of fact, Carnegie's relations with his men had
always been very friendly. He was unjustly accused of the responsibility
for the Homestead riots, which might not have occurred had he, instead
of Mr. Frick, been in charge of the employers' side. Mr. Carnegie at the
time was in Scotland.
Only a short while before this Carnegie dinner, Marcus Hanna had died,
and our executive committee offered to Mr. Carnegie the presidency of
the Federation, to succeed Mr. Hanna. Mr. Carnegie was gratified and
very much touched, especially by the implied confidence on the part of
the twelve labor men of the Federation; but on account of his advanced
years he felt that he could not give the position the attention it
deserved. He was, however, glad to become a member of the executive
committee, and as such revealed himself in a most favorable light.
Beneath his Scotch nimbleness of mind there was a broad, tolerant, and
lovable heart. He met the laboring men, not as their superior, but as
one having a genuine brotherly interest in their welfare. It became very
evident to us all why he was so highly regarded by his workmen, and why
he had so much influence with them: they trusted to his fairness and had
a real affection for him personally. In his Autobiography he makes
feeling reference to his connection with the Federation.
Marcus Hanna, who was known to the country chiefly through his political
activities, was looked upon as the leader of a group of rich men who had
won political power by commercializing our political system; and was
regarded by many as an evil influence. But in connection with the great
industrial interests that he had built up in Ohio and elsewhere--coal
mines, iron works, shipping, street railways--little was known of him.
He had shown great capacity as an industrial general in the management
of his men, winning their good-will by fair and equitable treatment; and
it is said he never had a strike in the industries he administered. He
was highly regarded by the labor leaders, who had confidence in his
fairness to the wage-earners. He did not oppose, as did so many of the
employers of his time, the organization of labor unions. On the
contrary, he believed that such organizations were necessary adequately
to protect the rights of the workers.
As chairman of the executive committee of the Civic Federation, Hanna
displayed this better side of his character and his great ability as an
organizer and a leader. Here he was not the cunning politician, but the
genial head of an industry who recognized the just demands of the
wage-earners and was always generous with them in regard to compensation
and labor conditions.
The work we did and the experiences we encountered as officers of the
Federation, each group coming into close contact with the others and
adjusting with them industrial differences, had a decided educational
value for us all. For myself, the study I gave during these years to the
relations between capital and labor, and my active part in the
conciliation and arbitration of labor disputes, provided me with an
intensely practical background and preparation for the secretaryship of
the Department of Commerce and Labor, which later fell to my lot. It was
this experience and my personal acquaintance with the representatives of
capital and labor all over the country that induced me, as head of that
Department, to organize the Council of Commerce and to plan the Council
of Labor, to both of which I shall refer more specifically later.
The Board of Railway Labor Arbitration of 1912 was perhaps the most
important labor arbitration body brought into existence up to that time.
Its decisions affected the whole Eastern district: that is, that section
of our country lying east of Chicago and East St. Louis, and north of
the Ohio River to Parkersburg, West Virginia, and of the Potomac River
to its mouth. Fifty-two railroad lines and over thirty-one thousand
engineers were involved. The latter negotiated through the Brotherhood
of Locomotive Engineers.
The representatives of the Brotherhood and the members of the Conference
Committee of Managers of the railroads held several conferences in
March, 1912, at which the Brotherhood made certain requests. The
conferences ended with the refusal of the roads to grant these requests
or any part of them, whereupon ninety-three per cent of the members
voted for a strike. Charles P. Neill, United States Commissioner of
Labor, and Judge Martin A. Knapp, of the United States Commerce Court,
tendered their friendly offices under the Erdman Act, but were unable to
mediate, and the contending parties would not agree to arbitrate under
the provisions of the Erdman Act. It was then decided to submit the
dispute to a board of arbitration composed of seven members, one to be
chosen by each side, and those two to agree on the other five within
fifteen days of their own appointment.
The roads chose Daniel Willard, president of the Baltimore and Ohio
Railroad, and the Brotherhood chose P. H. Morrissey, former grand master
of the Brotherhood of Railroad Trainmen. At the end of fifteen days,
these two had not succeeded in agreeing upon the other five members of
the board, though they had agreed upon a list from which the five might
be chosen. A committee consisting of Mr. Neill, Judge Knapp, and Chief
Justice White, of the Supreme Court of the United States, then chose
five names from that list, and the final personnel of the board was as
follows: Dr. Charles R. Van Hise, of Madison, Wisconsin; Frederick N.
Judson, of St. Louis; Dr. Albert Shaw, Otto M. Eidlitz, and myself, of
New York, in addition to Mr. Morrissey and Mr. Willard.
[Illustration: _Copyright by American Press Association_
MEMBERS OF THE RAILWAY BOARD OF ARBITRATION
From left to right: Standing: Daniel Willard, Otto M. Eidlitz, Albert
Shaw, P.H. Morrissey Sitting: Charles R. Van Hise, Oscar S. Straus,
Frederick N. Judson]
On July 12th the board met and organized, electing me as chairman. The
decisions of the board were to be binding for one year and thereafter
could be terminated by either side upon a thirty days' notice. For two
weeks we held hearings, morning and afternoon, at the Oriental Hotel,
Manhattan Beach, New York. When the hearings were over, the board
adjourned until early September, when the work of making the awards was
begun. Because of my nomination for Governor by the Progressive Party at
the time, I found it advisable to relinquish the chairmanship of the
board to Dr. Van Hise, although I continued my membership and active
interest to the end.
The hearings were reported and consisted of 1250 pages of testimony. The
questions that confronted the board were not alone whether or not the
wages in a given case should be raised, but, if it was found that the
rate was inadequate, by what margin should it be increased? It was
fairly difficult to arrive at principles of standardization applicable
to so many roads, and to fix a basis of differentiation for the many and
complicated branches of employment. The whole subject, however, had our
most careful and painstaking consideration. We took up the whole
intricate problem of the running of railroads, with relation to the
several kinds of work performed by the engineers, in passenger service,
freight service, in switching, and in yard work, bearing in mind always
that railways were public utilities and that the necessities and comfort
of the whole people depended upon their functioning; and that therefore
the necessity for uninterrupted service far transcended the interests of
either the roads on the one side or the employees on the other.
Our decisions as finally printed made a book of one hundred and
twenty-three pages. One of our chief recommendations was that National
and State wage commissions be created which should function in relation
to labor engaged in public utilities as the public service commissions
functioned toward capital. I quote from the report:
Especially for the public utilities is it important that labor
should have a just wage, and if the existing wages are not
adequate, they should be increased. If a just increase in wages
places the public utilities in a position that does not enable them
to secure a fair return upon capital invested and maintain a proper
reserve, they should be allowed to increase their rates until they
are in that position.
Another point upon which we laid stress was the limitation of the right
to strike:
While it is clear from the public point of view that a concerted
strike of railway employees for a great region would be as
intolerable as a strike of the postal clerks; on the other hand,
the position of the employees is a very natural one. They feel
under existing conditions that the power to strike is their only
weapon of defense against employers and the only means by which
they can enforce a betterment of their conditions of service. They
realize, too, that the principle of concerted action, for all the
railroads in a great section of the country, gives them a most
effective weapon, and they are naturally loath to relinquish or
impair it.
While this is the situation under the present conditions, and the
railway employees feel that they cannot surrender their right to
strike, the necessity would no longer exist for the exercise of
this power, if there were a wage commission which would secure them
just wages.
Finally, it is the belief of the Board that in the last analysis
the only solution--unless we are to rely solely upon the
restraining power of public opinion--is to qualify the principle of
free contract in the railroad service. A strike in the army or navy
is mutiny and universally punished as such. The same principle is
applied to seamen because of the public necessity involved. A
strike among postal clerks, as among the teachers of our public
schools, would be unthinkable. In all these cases, the employment,
to borrow a legal phrase, is affected with a public use; and this
of necessity qualifies the right of free concerted action which
exists in private employments.
However, if the principle be accepted that there are certain
classes of service thus affected with a public interest and men who
enter them are not free concertedly to quit the service, then these
men must be guarded in the matter of wages and conditions by public
protection; and this it is believed can best be done through an
interstate wage commission.
The report was signed by six members of the board, Mr. Willard adding an
explanatory statement. Mr. Morrissey wrote a dissenting opinion. For a
number of years the findings of this board, with slight alterations,
continued to be effective in adjusting wages for the different kinds of
service among the engineers, and in governing conditions and number of
working hours of the employees.
* * * * *
The President's Industrial Conference of 1919-20, of which I was a
member, was of value chiefly in that it correlated the best ideas in
practice throughout the country with regard to the prevention and relief
of industrial unrest and the betterment in general of the relationship
between employer and employee, and that it published suggestions based
on these ideas, of which the main points were the following:
1. The parties to the dispute may voluntarily submit their
differences for settlement to a board, known as a Regional
Adjustment Conference. This board consists of four representatives
selected by the parties, and four others in their industry chosen
by them and familiar with their problems. The board is presided
over by a trained government official, the regional chairman, who
acts as a conciliator. If a unanimous agreement is reached, it
results in a collective bargain having the same effect as if
reached by joint organization in the shop.
2. If the Regional Conference fails to agree unanimously, the
matter, with certain restrictions, goes, under the agreement of
submission, to the National Industrial Board, unless the parties
prefer the decision of an umpire selected by them.
3. The voluntary submission to a Regional Adjustment Conference
carries with it an agreement by both parties that there shall be no
interference with production pending the processes of adjustment.
4. If the parties, or either of them, refuse voluntarily to submit
the dispute to the processes of the plan of adjustment, a Regional
Board of Inquiry is formed by the regional chairman, of two
employers and two employees from the industry, and not parties to
the dispute. This Board has the right, under proper safeguards, to
subpoena witnesses and records, and the duty to publish its
findings as a guide to public opinion.
5. The National Industrial Board in Washington has general
oversight of the working of the plan.
6. The plan is applicable also to public utilities, but in such
cases, the government agency, having power to regulate the service,
has two representatives in the Adjustment Conference. Provision is
made for prompt report of its findings to the rate regulating body.
The Conference makes no recommendation of a plan to cover steam
railroads and other carriers, for which legislation has recently
been enacted by Congress. (Esch-Cummins Bill.)
7. The plan provides machinery for prompt and fair adjustment of
wages and working conditions of government employees. It is
especially necessary for this class of employees, who should not be
permitted to strike.
8. The plan involves no penalties other than those imposed by
public opinion. It does not impose compulsory arbitration. It does
not deny the right to strike. It does not submit to arbitration the
policy of the "closed" or "open" shop.
9. The plan is national in scope and operation, yet it is
decentralized. It is different from anything in operation
elsewhere. It is based upon American experience and is designed to
meet American conditions. It employs no legal authority except the
right of inquiry. Its basic idea is stimulation to settlement of
differences by the parties in conflict, and the enlistment of
public opinion toward enforcing that method of settlement.
Unfortunately nothing came of the painstaking work of this conference
beyond the publishing of its final report of March 6, 1920.
* * * * *
The chairmanship of the New York Public Service Commission did not at
all appeal to me when first Governor Whitman offered it to me. The
commission as it then existed had unfortunately lost public confidence
to a large extent, and I felt that it was not the kind of service for
which I was especially qualified. However, it was pointed out to me that
there was constant danger of strikes on the part of the thousands of
workmen engaged in the construction of subway and elevated extensions,
and an added appeal was made to me in view of the considerable
experience I had had in adjusting labor difficulties. And so, after
declining, I was finally prevailed upon by the Governor and the late
George W. Perkins, in December, 1915, to accept this arduous duty.
As soon as it became known that I had accepted the chairmanship, the
Governor received a communication from William Henry Hodge, the
distinguished engineer, announcing his willingness to serve on the
commission, although before my selection he had refused such
appointment. The other members of the commission were: Charles E.
Hervey, William Hayward, and Traverse H. Whitney. Messrs. Hayward and
Hodge left the commission, when we entered the war, to join the army.
Mr. Hayward was commissioned Colonel, having organized the 15th New
York, afterward the 369th United States Infantry, a regiment of colored
men who performed gallant service in France. Mr. Hodge was commissioned
Major and was promoted to Lieutenant-Colonel, and gave his splendid
talents to the services of his country in building roads to the battle
fronts of France. Due to his strenuous labors over there, this gifted
engineer and exemplary patriot died shortly after the armistice.
The commission had charge of the building of the subways and elevated
lines then in process, as well as the regulation of traffic and all
public utilities. As the war progressed, it became clearer that our
country would inevitably be drawn in, and therefore increasingly
important that nothing should prevent the functioning of our public
utilities. And accordingly it was not long before my services as
adjuster and arbitrator of labor difficulties were needed. The cost of
living was rapidly rising, and there was great unrest among laborers;
and the demand for skilled and unskilled labor grew day by day. When our
country entered the war, it was highly important for the moral effect
upon our own people, as well as to avoid giving encouragement to our
enemies, that the transportation system of our greatest metropolis
should operate without interruption. During the following year and a
half I was able to adjust a dozen or more important labor disputes and
to prevent a number of strikes. The situation was complicated by the
fact that the laborers were not employees of the commission, but of the
several contractors to whom contracts had been awarded under conditions
of fierce competition, so that every increase in wages materially
affected their profits and in the end caused many of them to suffer
considerable loss. I had to appeal to the patriotism of both sides, and
it is a pleasure to be able to state that in every instance the response
was most gratifying.