PROCEEDINGS OF ANNUAL MEETING 287
I. The Annual Address
SOCIAL EFFECTS OF TRANSPORTATION
By HONORABLE MARTIN A. KNAPP
Chairman of Interstate Commerce Commission, Washington, D. C.
The progress of mankind in devising means of transportation embraces
three distinctive stages. The primitive man traveled on foot and moved
his scanty belongings with his own muscle; and we can only imagine the
ages that elapsed before he secured any aid for the transfer of his
person or his property other than his own bodily powers.
Probably the first contrivance for carriage was a rough-hewn plank or
pole dragged upon the ground. Two connected planks doubtless formed the
original sled. Finally the idea was conceived—some accident suggesting
it—of lessening friction by the use of rollers. The rollers gradually
developed into wheels, and when at last the wheels were made in pairs
which revolved upon an axle the essential feature of all subsequent
vehicles was devised and employed.
The earliest movement on water, we may suppose, was equally crude and
simple. Some observant savage noticed that wood did not sink, and later
found out by experiment that a floating log would remain on the surface
even when his own weight was added. The rude dug-out followed the
discovery. The stick or limb by which the dug-out was pushed and turned
shaped itself at length into the lighter and more effective paddle; the
hollowed log was succeeded by a framed and covered structure, the
paddles became oars; and thus was evolved in prehistoric times the type
of all later boats on lake and stream. It was centuries after this—no
one knows how many—before the force of wind was utilized by the
invention of sails, and when that immense advance was achieved the
enduring era of ship-building commenced.
Roughly speaking, then, we may assign to the first stage in the
development of transport such results as were obtained by the muscular
strength of man, whether applied directly to the articles carried or
used in propelling the clumsy vehicles and water craft which he had
constructed. The motive power in all cases was the unaided energy of his
own body. And no later addition to the resources then at his command, it
should be observed, has wholly displaced the original method. The
natural powers of locomotion have not only remained unabated, but have
greatly increased by experience and training. Indeed, the manual
handling of articles of property must always be an important incident of
ownership and exchange, since no mechanical device can meet all the
needs of transfer or equal the delicacy and dexterity of our bodily
organs. Nor should we overlook in this connection the many-sided
ingenuity which has been displayed in constructing and perfecting a
great variety of vehicles for hand propulsion. The latest examples of
this ingenuity are the light racing shells which can be rowed with such
remarkable rapidity, and that unique and fascinating machine, the
up-to-date bicycle. These are at once the survival and the consummation
of primitive transportation, that is to say, transportation where human
energy is the motive power.
To the second stage of this development belongs the great increase of
force which was obtained by the subjugation of animals and their
employment for land transportation, and by the use of sails and rudders
which multiplied many times the efficiency of water carriage. When these
two results were secured, man had added to his own bodily powers the
superior strength of beasts of burden and the enormous energy derived
from the winds of heaven. This was an immeasurable gain and marked the
beginning of that wonderful civilization which slowly followed. The
animal kingdom was brought into service for the varied functions of land
distribution, and the ship which could be sailed and guided made every
waterway subservient to man’s requirements.
This hasty and imperfect outline brings us to a fact of history which
seems to me not merely significant but profoundly impressive. With the
subjection of animals and the use of wind-propelled vessels, both of
which achievements reached a high degree of perfection in the unknown
past, the means of transportation, broadly speaking, remained unchanged
and unaugmented until a period not much prior to the present time. It is
a long stretch of years from the savage cave-dweller to the twentieth
century man, and this wonderful world of ours had quite a career before
the present generation was born. Long before other agencies of
conveyance were dreamed of, while ox and horse, oar and sail, were the
only means of transport, the race had occupied most of the habitable
globe and advanced to lofty heights of national greatness. Strong
governments were established, vast populations engaged in varied
pursuits, and opulent cities crowded with every luxury. The institutions
of society had acquired strength and permanence, the arts of leisure and
refinement had approached the limits of perfection, and inductive
science had laid firm grasp on the secrets of nature. Great inventions
and discoveries had widened the fields of activity, furnished the means
and incentive for multiplied vocations and opened up in every direction
alluring vistas of advancement. In a word, there was the developed and
splendid civilization of little more than threescore years ago, before
any new or different motive power was utilized for commercial
intercourse.
And the weighty fact is that this immense and complex organism, with all
its accumulations of wealth and wisdom, its diversified employments, its
agriculture, manufactures, business affairs, financial systems,
commercial and political relations, civil and social order—its very life
and potency—was not only fitted to but dependent upon means of
transportation which, as respects their expense, speed and capacity, had
not essentially altered since the earliest tribes began to barter!
Enormous growth of enterprise and enlightenment, amazing progress in
every other sphere of human effort, with _motive power_, which lies at
the foundation of every activity, remaining from first to last a
constant quantity! Before the earliest recorded transaction—when Abraham
purchased the field of Ephron and paid for it his “400 shekels of silver
current with the merchant”—the horse and the ox were the established
agencies of land distribution; and what better agencies, bear in mind,
became available at any time thereafter until well along in the
nineteenth century? Yet the ox was as strong and the horse as fleet, and
their powers were as effectively employed, in the days of the Pharaohs
as they are at the present time. Indeed, no history is so ancient as not
to disclose the general use of animals for the purposes of carriage,
while the vehicles to which they were harnessed had then been developed,
in point of convenience and usefulness, to a degree not much exceeded in
any subsequent period. Though differing considerably in appearance from
the wagons with which we are familiar, yet they were constructed upon
the same principles and performed the same functions as those now
employed.
Similar progress was made in ship-building and seamanship as far back as
history affords proof or tradition. There were oar and sail, tides and
currents, and the inconstant winds, long before the ships of the
Phœnicians brought back from the East the gold of Ophir; and what more
was there than oar and sail, winds and currents—for all the purposes of
navigation—until, almost within the memory of men yet living, the little
steamboat of Robert Fulton ascended the Hudson River! In this long span
of time, it is true, bridges were built, highways improved, vehicles
finer fashioned, sailing craft increased in size, and the mariner’s
compass led to longer voyages; but, nevertheless, the forces by which
movement is effected, the actual means of distribution on land and sea,
continued without substantial change in character or efficiency age
after age and century after century until the recent, the very recent,
era of steam locomotion.
To my mind it is a matter of fascinating import that the long procession
of the world’s advancement down to the century just ended was
conditioned by and dependent upon agencies of transportation which were
themselves essentially unprogressive and incapable of important
betterment. True, there were minor modifications from time to time in
the line of mechanical adjustment, but the general methods employed, and
the results obtained, showed no marked improvement or material
alteration from those applied in the earliest days of commerce. Reduced
to the forms in ordinary use there were at the last as at the first the
beast of burden on land and the oar and sail on water. Yet thus hampered
and restricted in the means of transportation, which is the basis of all
commercial activity, there was built up in the long process of years the
varied and advanced civilization which the last century inherited.
Then all at once, as it were, into and through this social and
industrial structure, so highly organized, so complex in character, so
vast in its ramifications, yet so adjusted and adapted to the fixed
limitations of animal power, was thrust the new mode of conveyance by
mechanical force, and the third stage of transportation was suddenly
ushered in by the employment of steam as its principal motive power. The
advent of this new and marvelous agency was the greatest and most
transforming event in the history of mankind. It wrought an immediate
and radical change in the elemental need of society, the means of
distribution. The primary function was altered both in essence and
relations. The conditions of commercial intercourse were abruptly and
completely altered, and a veritable new world of energy and opportunity
invited the conquest of the race.
As time goes, this revolution has been phenomenally rapid. But
yesterday, as it seems, and the first iron track had not been laid, and
even the idea of steam as an available motive power had hardly been
conceived; yet already, within the limits of an ordinary lifetime, long
lines of railway—which sprung into being as if born of enchantment—have
stretched out in every direction from one end of the land to the other.
They have bridged the rivers, penetrated the wilderness, climbed over
mountains and traversed the deserts with their highways of steel. There
is scarce a hamlet so remote as not to hear the shrill whistle of the
locomotive, and the clang of its warning bell is everywhere a familiar
sound. In the passing of a generation the railroad and the steamship
have transformed the whole realm of commerce, of industry and of social
life. They have enriched every occupation, given multiplied value to
every pursuit, added incalculably to the means of human enjoyment, and
made our vast wealth possible; they are at once the greatest achievement
and the greatest necessity of modern civilization.
It is little more than sixty years since the first steam road was
constructed, yet at this time, within the limits of the United States
alone, nearly 200,000 miles of railway are in active operation; and of
this immense mileage—enough to put eight girdles around the globe—fifty
per cent has been built in the last two decades and more than eighty per
cent since the close of our civil war, only thirty-seven years ago.
Elsewhere similar activity has prevailed during the same period, until
animal power the world over has been almost wholly displaced for the
purposes of transportation. Not only has the railroad become the chief
agency by which inland commerce is carried on, but its influence upon
all pursuits is so powerful, and its relation to every phase of activity
so intimate and vital, that its effects upon social welfare and
industrial progress present an inquiry of the gravest moment.
No other triumph over the forces of nature compares with this in its
influence upon human environment. It has directly and powerfully
affected the direction and volume of commercial currents, the location
and movements of population, the occupations and pursuits in which the
masses of men are engaged, the division of labor, the conditions under
which wealth is accumulated, the social and industrial habits of the
world, all the surroundings and characteristics of the associated life
of to-day. The world has seen no change so sudden and so amazing.
The next fact to be noted is hardly less remarkable. Not only are the
new methods of transportation incomparably superior in speed, cheapness
and capacity, but, unlike those which have been superseded, these new
methods are themselves capable of indefinite increase and expansion. The
maximum efficiency of an animal is so well known as to amount to a
constant quantity, and this unit of power is practically unchangeable.
Substantially the same thing is true of a vessel of given dimensions and
given spread of canvas. For this reason distribution remained, as I have
said, the one fixed and inflexible element to which other activities,
however elastic and progressive, were necessarily adjusted and by which
they were limited.
Now, a special and most suggestive feature of transportation by steam,
electricity or other kinds of mechanical force is that its capacity is
not only unmeasured and unknown, but will doubtless prove to be
virtually inexhaustible. That is to say, no certain limits can be
assigned to the operation or effect of these new agencies as compared
with those which have been supplanted. Therefore, speed may reach many
times the rate now attained, the size of vehicles may be greatly
increased and the cost of carriage for the longest distances reduced to
an astonishing minimum; so that, as progress goes on in developing the
means and methods of distribution, the habits and needs of men will be
more and more modified, with consequences to social order and the
general conditions of life which may be far greater than have yet been
imagined.
Among the results already realized, which directly forecast what will
further happen, some of the more obvious may be briefly mentioned. For
well understood reasons the speed and capacity of water craft are much
superior to those of vehicles drawn by animals, while the cheapness of
the former gives them a great advantage over the latter. While the old
conditions prevailed, the waterways were mainly relied upon for the
conveyance of bulky products. Commercial movements on land were, of
course, considerable, but the transfer of heavy goods, such as enter
most largely into ordinary consumption, was principally effected by
sailing vessels. Therefore, the fertile lands along the river-banks and
the indented shores of the sea were the first to be occupied for
agricultural pursuits, the exchange of produce for merchandise being
accomplished by water carriage. The great cities founded prior to our
time were for the most part located upon or near navigable streams while
the masses of population outside the towns dwelt within easy reach of
these natural channels.
But the building of railroads has often deflected and sometimes wholly
altered the routes of distribution. In our own country, for example,
notwithstanding it is penetrated by numerous rivers which flow,
generally speaking, from north to south, the great volume of traffic is
carried by railways running east and west across valleys and mountains.
Even where the rail lines are parallel with river courses they absorb
the greater share of freight and passenger movement. In short, the
routes of land transportation in all the principal countries of the
world have been largely recast in the last fifty years by the changes
from river to rail conveyance.
The next most noticeable effect, as it seems to me, is the prodigious
increase of commerce under the stimulus of modern agencies. It is
estimated by Mulhall that as late as 1820 the carrying capacity of all
the sailing vessels of the world—and there were then no others—did not
much exceed 3,000,000 tons; yet this is less than one-sixteenth of the
tonnage actually moved last year by the railroads of our New England
states. This astonishing growth in the quantity of transported articles,
and in so short a time, is sufficient to produce, as it certainly has
produced, the most important and significant results; since the fact
itself indicates a current volume of transport business compared with
which the commerce of our grandfathers seems like the idle play of
children. Because of this wonderful speed and cheapness of distribution,
the average prices of food, fuel, clothing, building material and other
necessary supplies have been greatly reduced, independent of the
standard by which prices are measured. And this cheapening of most
commodities has in turn brought a marked alteration, within a very brief
period, in the style of living, dress, home-furnishings and the like,
which makes the present conditions of life far more desirable and
attractive than ever was known before.
The effect of this cheap conveyance is also seen in the commonness of
pleasure travel, the extent of immigration, the spread of population
over new territories, and in all the employments and surroundings of the
people everywhere. The railway is not only the chief means of developing
uninhabited or thinly settled regions, but the same line may operate in
both sparsely and thickly populated districts, since an indefinite
number of trains can be moved on the same track. For instance, the
200,000 miles of railroads of the United States serve some 75,000,000
persons, distributed through an area, excluding Alaska, of more than
3,000,000 square miles; while in Great Britain about 22,000 miles of
railway serve at least 45,000,000 persons, located within a mainland
area of less than 117,000 square miles. Thus, in Great Britain as
compared with the United States, one-ninth as much railway mileage
reaches more than half as many persons, because of the density of a
population confined within a territory not larger than one-twenty-fifth
of the land surface of the United States.
Again, the railway at once causes the concentration of people in cities
and at the same time is the prime factor in the creation of cities. It
is impossible that such inland towns as Atlanta and Denver, for example,
could have acquired their present importance without the facilities for
carriage and intercourse which railroads provide. In 1870 nearly
forty-seven per cent of all our people employed in gainful occupations
were engaged in farming; while only twenty years later barely thirty-six
per cent were following that pursuit. And what is still more suggestive,
the recent census shows that more than one-third of our entire
population live in towns of 5,000 inhabitants and upwards, as against
less than seven per cent in 1830. That so great a change has taken place
in so short a time in the geographic distribution of our people can only
be explained by the potent force of steam transportation, while the fact
itself has a social significance which can hardly be overstated.
In the region west of the Alleghanies the railroad has been the pioneer
in opening up unoccupied lands for settlement, while the lines upon
which railroads were there built and the points they reached determined
the location and growth of numerous towns and cities in that great
section of country. On the other hemisphere, as is well known, a
wonderful railway is now pushing to completion across the vast stretches
of Siberia, a territory larger than the United States and Europe
combined, connecting the capital of Russia with the Pacific Ocean. The
consummation of that project cannot but have immense effect upon the
commerce, industries, social welfare and military power of a large
portion of the world’s inhabitants.
In connection with this should be observed the rapid increase in
stationary steam power which has been coincident with and primarily
caused by steam locomotion. Taken together they make up the colossal
forces now exerted in the fields of commerce and industry, in comparison
with which all the power of all the beasts of burden is hardly worth the
mention. And this in turn reminds us of the mutual action of production,
shipping and land transportation in producing the stupendous results we
everywhere observe. It is impossible that these gigantic agencies should
come into such active operation without the most vital consequences to
every phase of human life.
Take into account, also, the new and wonderful means of transmitting
intelligence. The obstacles of time and distance, hitherto so
formidable, are swept away by telegraph and telephone. We send our
thought and speech with lightning swiftness to the four quarters of the
globe, and hold all lands and peoples within the sphere of instant
intercourse. So recent is this miracle that we are still dazzled by its
marvels and fail to realize how powerfully it aids the unification of
world-wide interests.
That this substitution of steam and electricity as the instruments of
commerce has been an immeasurable gain is witnessed here and everywhere
by half a century of unparalleled progress. Along these modern pathways
the world has literally leaped. No longer tied to beasts of burden, the
entire realm of industry has been quickened and enlarged; productive
energy has been invigorated by new and limitless means of distribution;
the products of the whole earth are embraced in wide circles of
exchange; all the luxuries of all lands are brought to every household;
wealth has multiplied until we are almost surfeited with its abundance;
the genius of invention has been stimulated to larger exercise, the
sphere of thought grandly extended, the impulses of charity awakened to
nobler activity, while keener sympathy through closer contact is leading
the race to real brotherhood.
But these manifold benefits have not been secured without many and
serious dangers. The potent energy which produced such marvels of
utility and convenience has generated an array of forces which test with
severe strain the structure of organized society. So radical a change in
the methods of distribution, and consequently of production, was sure to
be attended with peril as well as beneficence, and to entail a series of
results, immense and far-reaching. Passing by the acute abuses which are
incident to the process of development, for they are transitory and must
gradually disappear, we may well consider the more profound and
permanent effects, what I venture to call the economic effects, of
present and future methods of transportation upon the whole range of
industrial activity. This brings into view again the impressive fact I
mentioned at the outset, and suggests some graver consequences than
those that appear on the surface and appeal to ordinary observation.
When transportation was measured by the strength and endurance of
animals, only a limited area could be reached from a given centre. Its
slowness and expense confined all inland distribution within narrow
bounds. Only eighty years ago it cost $125 to move a ton of freight from
Philadelphia to Pittsburg, and the average price for carrying the
necessaries of life was not less than twenty cents a ton for every mile
of haul. On such a basis most commodities were shut off from distant
markets, and farm products would seldom permit of conveyance more than
100 or 150 miles. Only such articles as were of small bulk and weight
compared with their value were moved to any considerable distance from
the place of production. For this reason the requirements of an ordinary
family were almost wholly supplied from nearby sources. And this
means—without amplifying the statement—that productive energy, for the
most part, was restricted by the consuming capacity of the surrounding
neighborhood. The forces outside each separate circle were but feebly
felt and had little influence upon its daily affairs. Broadly speaking,
the activities of each locality were adjusted to its own conditions and
were practically undisturbed by like operations in other places. What we
call competition was held in check by slow and costly means of
conveyance; its effects were moderate and limited, its friction seldom
severe.
But the use of steam for motive power and electricity for communication
increased enormously the range of accessible markets, and at once
intensified competition by the celerity and cheapness of distribution.
Industrial strife has already become world-wide in extent, and distance
an ineffectual barrier against its destructive assaults. For the
commercial factor of distance is not at all a matter of miles, it is
merely a question of time and money. The fact that the cost of moving a
hundred pounds of goods a single mile by wagon transports a ton of the
same goods by rail more than three times further is some indication of
the effect of cheap and rapid conveyance in bringing remote places
closer together. Our grandparents got their supplies mainly in the
localities where they resided and only a few persons were concerned in
their production. To-day it may safely be said that five millions of
people and five hundred millions of capital are directly or indirectly
employed in furnishing an ordinary dinner. When merchandise of every
description is carried at great speed from one end of the land to the
other, and at an average cost of less than three-quarters of a cent a
ton a mile, as is now the case, the expense of transport is but a
trifling impediment to the widest distribution.
Nor should we forget that it was the opening up of new and ever
enlarging markets, by the cheapness of steam transportation, which gave
the first opportunity for the extensive use of machinery; and this in
turn quadrupled the capacity of labor and greatly reduced the cost of
large-scale production. By this revolution in the methods of
manufacture—caused by the railroad and steamship—the mechanic was
supplanted by the operative, and the skilled and independent craftsman
of former days found his occupation gone. For what chance now have
hand-made articles when the factory-made product is carried across the
continent at nominal cost? But the factory without the railroad would be
only a toy-shop. If its wares had to be hauled over country roads by
mules and horses, the points they could reach would be few and nearby,
and thus contracted sales would limit the size of the plant and the
volume of its business. It is simply because transportation is now so
speedy, so cheap and so abundant that great establishments have become
profitable and driven their smaller rivals from the field.
These facts—which might be multiplied without limit—bear directly, as I
think, and with a force not fully perceived, upon the whole problem of
industrial competition. For, as the means by which industrial products
are distributed become more convenient, quicker in action and less
expensive, the area of distribution rapidly enlarges, and as the area of
distribution enlarges the competition of industrial forces increases in
something like geometrical ratio. The movement of property by rail in
the United States alone already exceeds three millions of tons every
twenty-four hours. Think of the rivalry of products, the strife of
labor, the strain and struggle of trade, which such a movement implies.
With the constant acceleration of that movement, which is certain to
happen, how long can the friction be endured? How soon will it become
unbearable?
When Adam Smith wrote “The Wealth of Nations,” it took two weeks to haul
a wagon-load of goods from London to Edinburgh, and such a thing as a
business or industrial corporation was virtually unknown. To-day the
great enterprises of the world are in the hands of corporations, and the
time is fast approaching when they will absorb all important
undertakings. Why? Simply because the railroad and the steamship—cheap
and rapid transportation, all the while growing cheaper and quicker—ever
widening the area of profitable distribution, furnish the opportunity,
otherwise lacking, for the employment of larger and still larger
capital. This opportunity permits and encourages the concentration of
financial resources; so that, within limits not yet ascertained, the
larger the business the greater its possibilities of gain. But the
legitimate, the inevitable offspring of corporations is monopoly. Why?
Simply because the operation of these massive forces—impinging and
grinding upon each other in every market—begets an extremity of mutual
danger which always invites and often compels a common agreement as to
prices and production; that is, a trust. Just as the implements of
warfare may become so devastating in their effects that nations will be
forced to live in amity, so the destructiveness and exhaustion of
commercial strife in these larger spheres of action may make combination
a necessity.
Thus the potent agencies by which distribution is more and more rapidly
and cheaply effected, which so unite and intensify the forces of
production, are fast altering the conditions and changing the character
of industrial development. And the end is not yet; it outruns
imagination. What will be the ultimate effect of these methods of
conveyance when brought to higher perfection and employed with still
greater efficiency? When these agencies of commerce are increased in
number and capacity, as they will be; when cost is still further and
greatly reduced, as it will be; when speed is doubled, as it will be,
and quadrupled, as it may be; when the whole United States shall have
reached the density of population now existing in Great Britain, how can
industrial competition possibly survive?
So, in the measureless and transforming effects of modern
transportation, and the ends to which it resistlessly tends, I find the
primary cause of the economic revolution upon which we have entered. The
incoming of these new and unfettered forces not only changed the basic
function of society, but disturbed its industrial order. In the effort
to restore a working equilibrium the gravest difficulties are
encountered, and we do not clearly see how they are to be overcome.
Already we are compelled to doubt the infallibility of many inherited
precepts and to reopen many controversies which our grandsires regarded
as finally settled. The ponderous engine that moves twice-a-thousand
tons across an empire of states, the ocean steamer that carries the
population of a village on its decks and the products of a township in
its hold, are indeed splendid evidences of constructive skill, but more
than this they are economic problems as well which challenge and dismay
the present generation. They force us to discredit the venerable maxim
that “competition is the life of trade,” and warn us, I think, that the
political economy of the future must be built on a nobler hypothesis. If
it be true in the long run, as I believe experience teaches, that where
combination is possible competition is impossible, is it not equally
true that combination becomes possible just in proportion as
transportation becomes ampler, speedier and cheaper? So the opportunity,
if not the necessity, for combination has already come in many lines of
activity and will certainly come in many more. The circumstance that
permits competition, its _sine qua non_, is mainly difference of
conditions. Practically speaking, this difference is chiefly found in
the means of distribution. As that difference disappears, with the
constantly diminishing time and cost of transport, the ability to
combine will enlarge and the inducement to do so become overwhelming.
That seems to me the obvious tendency of our industrial and social
forces to-day, and that tendency, I predict, will be more and more
marked as time goes on.
In the unrest and discontent around us, deep-seated and alarming here
and there, I read the desperate attempt to avoid the effects of
industrial competition and a tremendous protest against its savage
reprisals. Every trust and combination, whether organized by capitalists
or by artisans, is a repudiation of its teachings and a denial of its
pretensions. The competitive theory may have answered the age of mules
and sail-boats and spinning-wheels, but it fails to satisfy the
interlacing needs or to sustain the interdependent activities which are
founded on modern methods of intercourse and distribution; it is a
theory unsuited to the era of railways and wireless telegraphy, this era
of ours, so restless in thought, so resistless in action.
This, then, as I conceive, is the underlying question. Shall we continue
to enforce with precept and penalty the rule of competition, whose cruel
creed is “every man for himself,” or shall the effort and industry of
the world be hereafter conducted on a more humane and fraternal
principle? That is to say, is society—stripped of its polish and
altruistic pretences—is society after all only a mass of struggling
brutes fighting for the best places and the biggest bones, and is
government simply an armed referee standing by to see that every dog has
fair play? In short, is personal selfishness the ultimate force and
individual greed the bottom fact? For myself, I disbelieve the doctrine.
I am not terrified by the cry of paternalism nor dismayed by unreasoning
clamor at the dangers of monopoly. The trusts and the unions are here,
in money, in labor, in production and in distribution—they came with the
railroad and the steamship—and they have come to stay.
When population was scattered and sparse, when movement was difficult
and costly, when communities were isolated by distance and by
dissimilarity, and bonds of relationship were feeble and few, the
attrition of rivalry was complacently endured. But now, when seas are
spanned with steamships and netted with electric wires; when city and
forest, farm and factory, mine and counting-room are joined together by
innumerable pathways of steel, and the swift locomotive, rushing across
continents—like the shuttle through the loom—weaves this majestic fabric
of commerce which covers the globe; when life is no longer localized in
effort or achievement, and the thought of one man is the instantaneous
possession of all men, the friction of unbridled competition has become
irksome and intolerable. It is folly to shut our eyes to unmistakable
facts or to stand in the way of inevitable events. Doubters may deride,
demagogues denounce, and ignorant lawmakers strive to build up legal
barriers; but neither agitation, nor protestation, nor legislation can
stop the growth or prevent the advance of industrial federation.
I much mistake, therefore, if we are not entering upon a period of great
transitions, a period of difficulty and many dangers. The whole
structure of industry and social life is liable to be subjected to a
strain—possibly to a shock—for which experience furnishes no guiding
precedent. We have settled the administrative questions; we can collect
taxes, build court-houses and pay the policeman. We have settled the
political questions; for the nation lives and will live, the greatest
and grandest in all the earth. But the further test is now to come, the
test of the ocean liner and the limited express. Can we settle the
economic questions? Can we raise this wide realm of industry from
selfishness to charity, from strife to friendship, from competition to
co-operation, from the warring instincts of the savage state to the
larger and nobler needs of associated life? This is the problem which
steam and electricity present for solution.
Will there be a fourth stage and another revolution in the methods of
transportation? That is to ask, I suppose, will the puzzle of aerial
navigation find a practical solution? Whether it does, or whenever it
does, of this we may be certain, that the varied products of labor and
skill, the endless commodities that supply our ever growing wants, will
always seek their passage from producer to consumer along the routes of
least resistance. Therefore, it may happen, in some bright and wonderful
to-morrow, nearer to us perhaps than we imagine, that the stubborn land
over which our ponderous vehicles are now dragged will be abandoned,
even the liquid waterways discarded, and the vast commerce of the future
be borne swiftly and noiselessly through the yielding air. If that
marvelous day shall come, assuredly will it bring its harder questions
and press us with its weightier demands.
II. Industrial Conciliation and Arbitration
INDUSTRIAL CONCILIATION AND ARBITRATION
By HONORABLE MARCUS A. HANNA
United States Senator from Ohio
When I received the kind invitation of this society to come to this
meeting, I confess I did not know what I was coming to. I like to talk
upon practical things, and there is no subject to-day that is nearer my
heart than is this question of the relation between capital and labor.
The subject assigned to me was “Arbitration,” which I consider only
introductory in entering upon the discussion of a subject as broad as
the one under consideration this evening. The matter of arbitration
might be considered under two heads. Arbitration in business circles, by
business men, whom we may call employers or capitalists, if you please,
is one phase of it, but arbitration to settle differences between
employers and employees is an advanced stage of it. It is a progressive
form of arbitration.
To have success in conciliation, or arbitration, there must be thorough
and effective organization on both sides. The large aggregations of
capital, feared at first by labor, may prove to be labor’s best friend,
in that, control of a trade being thus centralized, there is opportunity
to establish friendly relations which shall make uniform conditions
throughout the country, or large sections thereof, and reduce the basis
of competition to the quality of the product rather than to the
concessions forced from labor.
The growth of sentiment for arbitration and conciliation has been
reflected in the legislation of the various states. While foreign
countries made the earlier attempts by legislation to promote the
formation of local boards of arbitration, some of the states of the
Union were first to establish permanent central bodies with authority to
mediate in labor disputes and to arbitrate matters referred to them.
Sixteen states have established such central boards, beginning with
Massachusetts and New York in 1866 and following, in succeeding years,
with California, Colorado, Idaho, Illinois, Louisiana, Montana,
Minnesota, Ohio. Utah, Wisconsin, New Jersey, Michigan, Connecticut and
Indiana. These central boards usually consist of three members, an
employer, an employee and a neutral.
Massachusetts, New York, Ohio, Indiana, Illinois and Wisconsin seem to
be the only states within which tangible results have been accomplished,
doubtless due to the highly developed industries prevailing and the
frequency of labor disputes therein. In this as in all other matters of
enforcement of public laws, successful results depend upon the strong
impelling influence of an enlightened public sentiment.
The United States Government has established a method for arbitration
and mediation in strikes and lock-outs upon interstate transportation
lines, by virtue of its constitutional authority over interstate
commerce. The act of 1888 provided for a voluntary board, but had no
provision for enforcement of awards, and seems to have fallen into
disuse. In 1898 a new act was passed under the terms of which either
party to a dispute upon any interstate transportation line might request
the intervention of the chairman of the Interstate Commerce Commission,
and the United States Commissioner of Labor. These officers have no
specific authority to intervene on their own motion, but apparently have
the right to attempt conciliation even in the absence of an application
from either party. There has been no case of arbitration under the act,
so its effect in application is yet to be demonstrated.
The compulsory law of New Zealand has found no favor in this country.
The hearings before the recent Industrial Commission show that the
representatives of both employers and workingmen gave testimony against
compulsory arbitration. The employers object because, they claim, it
would be one-sided owing to the lack of responsibility on the part of
the workingmen, while the workingmen object because, they claim, it
would be manipulated to suit the employers, and, if enforcement carried
imprisonment, it would provide for a species of slavery intolerable in a
free country. Many state boards, however, while not advocating as a
whole compulsory arbitration, urge further legislation which shall
prevent public inconvenience and loss resulting from strikes and
lock-outs involving public service corporations and means of transit.
This condensed summary of the general features of the question brings us
logically to a consideration of the method or methods best suited to our
time and country. Since the great majority interested on both sides,
employer and employed, reject any system of arbitration which includes
compulsion in its composition, experiments must be along the line of
mutual concession and tactful persuasion. Such results may be hoped for,
and, perhaps, confidently expected in the system of mediation and
conciliation promulgated by the Industrial Department of the National
Civic Federation.
That brings me up to date. I do not propose to treat this question from
an academic standpoint, but to give an expression of my own experience,
having been a large employer of labor for more than thirty years, and
having studied that question from the standpoint of mutual interest. My
attention was strongly directed to this subject as far back as 1874, at
the end of one of the most severe and destructive strikes that ever
occurred in Northern Ohio, in the coal mines, long and protracted,
bitter and destructive. When it was over both sides had suffered, and it
occurred to me that there ought to be some other way to settle these
differences, and as a result of that we organized in Northern Ohio an
organization of employers, the mine owners, and the men organized what
was known then as the National Bituminous Coal Miners’ Association, the
first of that character ever organized in the United States. Their
constitution and by-laws provided that no strikes should occur until
every other effort in the right should fail, and the employers
covenanted that they would give hearings and consideration to any
committees sent to them by the union.
As a result, during the life of the organization on the part of the men,
there never was a serious strike. All differences, which with small
beginnings very often lead to disastrous strikes, were settled by the
employer and employee coming together with a proper spirit, with a
determination to do right. Upon that hypothesis I have been working ever
since, and from that day to this I have never had a serious strike.
The Civic Federation is the outgrowth of the evolution to which your
chairman has referred. This country has grown greatly. Our industries
have multiplied, and the opportunities for labor equally with it. Great
undertakings are claiming the attention of the people, and this question
of labor and capital has approached a crisis. This Civic Federation has
adopted a constitution and by-laws covering simply the methods of
procedure, and has also adopted a principle, and that principle is the
Golden Rule.
Now, Mr. Chairman, the great productive capacity of this country has
forced upon us the aggregation of capital and the creation of great
material wealth seeking opportunity for investment. This rapidly
increasing wealth must find investment, and to make the investment in
industrials secure we must have industrial peace.
The Civic Federation is beginning to lay the foundation for such
results, with the hope that it will appeal to the whole country and to
all classes of the people. We are simply placing before the American
people the opportunity to unite with us in the accomplishment of this
purpose, as necessary to our social conditions as to our industrial
conditions. Of course, it is not an easy task; the conditions in the
United States differ from those in any other country in the world. This
great cosmopolitan people, coming to our shores by thousands every year
from every country and from every clime, this coming together of all
classes and all kinds of people from the four quarters of the globe,
produces a condition of things not found in any other country. It is not
an easy matter to assimilate such a large number of foreign immigrants;
they do not understand our language, they are not abreast with the
education of a self-governing people; they do not understand our
institutions. Therefore, it must necessarily be a work of education, and
the Civic Federation is merely a nucleus to begin this educational work.
When I make the appeal to all persons and all classes in the United
States to join with us, I believe that in their hands ultimately rests
the future of that question. We may have arbitration and we may have
meetings of our conciliatory committees, but unless we have the sympathy
of the people, who in the end are the final arbiters on this question,
we cannot hope to succeed.
The Civic Federation is only two years old, and the Industrial Bureau of
the Civic Federation has been scarcely organized, but seven strikes have
already been settled in three months. It has prevented the occurrence of
two strikes which would have brought from the labor ranks more than two
hundred and fifty thousand people, and that has been accomplished, my
friends, by simply finding out to start with what the differences were,
and who were right and who wrong. When men get together with the
determination to treat each side of the question fairly, and when the
public feels that the men connected with this enterprise are thoroughly
acquainted with details, men of prominence in the country, well known
and well understood, and are men giving their time for the love of the
work and the good they may accomplish, the public realizes that it means
something.
In adjusting the relations of labor and capital, appeal must be made to
the sympathies of the people. Opportunities like this to-night must be
embraced to inform intelligent audiences of the character of the work to
be done and to give them an opportunity to contribute their mite and
influence to help the cause along. I know no city in the United States
where we can look for more aid and comfort than in this great industrial
centre of Philadelphia. Indeed, it was because of this that I was
induced to come here to-night and discuss this question of capital and
labor before people who in every day of their lives can put into
execution and effect the principles for which we are contending.
My experience has taught me, my friends, that the employer because of
his position has the most to do, and it must be expected that the
employers, at least in the beginning of this educational work, should go
more than half way. They provide work, and are responsible for the
conduct of business, and upon them rests the responsibility of seeing
that the men receive their share of its benefits. We must rise to a
higher level, where we can have a broader view of this question, where
we can tear ourselves away from the prejudices which have heretofore
stood between capital and labor.
I believe in organized labor, and I have for thirty years. I believe in
it because it is a demonstrated fact that where the concerns and
interests of labor are entrusted to able and honest leadership, it is
much easier for those who represent the employers to come into close
contact with the laborer, and, by dealing with fewer persons, to
accomplish results quicker and better.
The trusts have come to stay. Organized labor and organized capital are
but forward steps in the great industrial evolution that is taking
place. We would just as soon think of going back to primitive methods of
manufacturing as we would primitive methods of doing business, and it is
our duty, those of us who represent the employers, from this time on to
make up our minds that this question is one that must be heard.
You are well aware that there has been a tendency in this country, from
the very nature of things, to what is called socialism. Everything that
is American is primarily opposed to socialism. We talk about it and
regret that these conditions exist, regret that there are extremists who
are teaching the semi-ignorant classes labor theories, that proceed upon
the principle that liberty is license. This is a condition which must be
met. It is the duty of every American citizen to assume his
responsibilities in this educational work, and to assist any
organization which can correct these theories and these ideas. There is
no question concerning our body politic to-day that should command
deeper or more serious thought. There is nothing in the organization of
society in this country that can afford to permit the growth of
socialistic ideas. They are un-American and unnatural to us as a people.
In the beginning of this work I received great encouragement from an
address which Samuel Gompers made in Cooper Union Institute, in New
York, about a year and a half ago, when he took the broad ground that in
the interests of labor there was no room for the socialist or the
anarchist, no room for men who undertook to disturb the principles of
our society and government. When such words came from a man leading the
largest labor organization in the world, a man of advanced thought and
of honest intent, I knew that now is the time to strike, now is the time
to proclaim to the American people that in the consideration of this
question, which sooner or later must be forced upon us, we must consider
what is for the best interests of society as well as for our material
development.
If I can impress these principles upon the people of this country,
either by word or action; if I can hold the attention of the American
people away from all selfish and political interests long enough to have
them study and investigate this great question, I shall feel that of all
the efforts I have ever made to serve my country and society in any way,
that has been the best.
THE LIMITATIONS OF CONCILIATION AND ARBITRATION
By SAMUEL GOMPERS
President American Federation of Labor
The subject under consideration involves the difference between the
isolated bargain made by workmen acting as individuals and the joint or
collective bargain made by an aggregation of workers. The individual
bargain made by a workman with his employer is practically based upon
the condition of the poorest situated among the applicants for the
position, and the conditions of employment, accepted or imposed, are
fixed by the immediate and dire necessities of the poorest conditioned
worker who makes application for the job. The collective bargain is made
upon the basis of about the average economic condition or situation of
those who desire to fill the position.
The individual bargain is made at the entrance to the factory, the shop,
the mill, or the mine; the collective bargain is made usually in the
office of the employer.
When the period covered by the collective bargain has expired and the
conditions under which labor has been carried on for a specific period
become unsatisfactory to either or both, a conference is held and a new
agreement endeavored to be reached under which industry and commerce may
be continued. When there is failure to agree, a strike occurs.
The effort at best in the joint bargaining or in the strike is the
effort to secure the best possible conditions for the wage-earners. Much
as we deplore strikes and endeavor to avoid them, they are the highest
civilized expression of discontent of the workers in any part of the
world. China has no strikes. The people of India have no strikes, but in
the highest developed and most highly civilized countries strikes do
occur. In China, when discontent arises, we see it manifested in
revolution against constituted authority, the venting of prejudice
against the foreigner; the stiletto, the bludgeon, war brutality are the
manifestations of the discontent of the poor and of the workers of those
countries.
I am not here to defend strikes, nor to find an excuse for them, but
that we may more clearly understand the subject to which we are giving
attention, it may not be amiss to at least set ourselves right
concerning strikes. Our forefathers, when establishing our government,
wisely reserved to the popular branch of our federal government the
right to control revenue and expenditure, a right which had been
struggled for and secured by the House of Commons of Great Britain. The
strike of labor is in another form the holding of the purse-strings of
the nation, to protest against injustice and wrong being meted out to
the laborers. It is the determination of the workers that in the last
analysis, if there be no other means by which their rights may be
accorded and their wrongs righted, they may say with Lincoln, “Thank
God, we live in a country where the people may strike!” Nevertheless a
strike ought to be avoided by every means within the power of every man,
capitalist, laborer, or the neutral citizen, and he who would not give
his best efforts and thought to prevent a strike is scarcely doing
justice to his fellow-men, nor is he loyal to the institutions under
which we live. But I re-assert that there are some things which are
worse than strikes, and among them I include a degraded, a debased, or a
demoralized manhood.
Labor insists upon and will never surrender the right to free
locomotion, the right to move at will, the right to go from Philadelphia
to Camden or California, or vice versa, at will. To achieve that right
it has cost centuries of struggles and sacrifices and burdens. Laborers,
moreover, will insist upon the right freely to change their employment,
a right which they have secured through centuries of travail and
sacrifices. That right three-fourths of the nation was up in arms a
little more than forty years ago to achieve for the black man, and the
white laborers of America will not surrender that prerogative. Laborers
are aiming at freedom through organization and intelligence.
The Industrial Department of the National Civic Federation is
erroneously thought by some to be an arbitration committee, whereas the
first purpose is to endeavor to bring about a conference between
employers and employees before any acute state of feeling shall occur
relative to their diverse interests. If a rupture occurs, the committee
endeavors to bring about a conference so that arbitration may be
resorted to if both parties to the controversy shall so request.
As a rule, men do not care to refer matters in which they are
particularly and financially interested to what are usually termed
disinterested parties. They prefer to meet with those whose interests
may be opposite to theirs, and, each conceding something in a
conciliatory spirit, endeavor to come to an adjustment and agreement.
Unorganized workmen have a notion that they are absolutely impotent,
that the employers are omnipotent, almighty. This is typified in the
thought or expression, “What can labor do against capital?” Likewise the
employers of unorganized workmen usually regard themselves as “monarchs
of all they survey,” and brook no interference. If any workman has the
temerity to question the justice or sense of fairness of the employer or
the wages paid, he is dismissed and a strike frequently results.
No strikes are conducted more bitterly than strikes of previously
unorganized workmen. As soon as such men become desperate enough to
strike, they are transformed; they no longer believe the employer
all-powerful, but attribute to themselves that function and faculty; the
touching of shoulders brings a newfound power to their minds, of which
they never dreamed before, and they look upon their employers against
whom they went on strike as absolutely at their mercy.
The employers, in these cases, usually regard the matter of request to
be heard upon the question of wages, hours or other conditions of
employment, as dictation by their workmen; but whether the strike is won
or lost, if the workmen but maintain their organization, the initial
step has been taken for a joint bargain and a conciliatory policy in the
future. Both parties have learned a severe but a profitable lesson, that
neither party is impotent, and neither all-powerful. The organized labor
movement in our day is an assertion of the principle that there is no
hope that the workers can protect their interests or promote their
welfare unless they organize; unless they advocate conciliation to
adjust whatever controversies may arise between themselves and their
employers and declare for arbitration with their employers upon any
disputed points upon which they cannot agree. There are some who
advocate compulsory arbitration. I concur with Senator Hanna, who does
not believe in compulsory arbitration. Indeed, voluntary arbitration
cannot be successfully carried out unless both parties are equally
strong and powerful or nearly so. This is true between nations as well
as between individuals. Russia never arbitrated the question of the
nationality of Poland. England did not arbitrate the question with
Afghanistan, but simply bombarded her. England in her dispute with
Venezuela proposed to bombard her, and only when the United States said,
“Hold on, this is of very serious consequence to us,” did England
consent to arbitrate. There has never yet been in the history of the
world successful arbitration between those who were powerful and those
who were absolutely at their mercy. There has never yet been arbitration
between the man who lay prone upon his back and the man who had a heel
upon his throat and a sabre at his breast. Arbitration is possible, but
only when capital and labor are well organized. Labor is beginning to
organize, and when labor shall be better organized than it is to-day we
shall have fewer disputes than we have now.
Of the agreements made between employers and employed, two-thirds, if
not more, of the violations, of the failures to abide by the awards of
arbitrators, are on the part of the employers. But if it were not so, if
the awards were broken by either one or the other side or by both sides
in equal proportion, it would be better, it would make for human
progress and economic advantage, to have an award violated than to have
the award forced by government upon either one side or the other. The
employer if he chose could close his business, and that would mean his
enforced idleness. On the other hand, if the state entered and forced
workmen to accept an award and to work under conditions which were
onerous to him or to them, you can imagine the result. Men work with a
will when they work of their own volition, then they work to the
greatest advantage of all. On the other hand, if men were compelled to
work by order of the state, with the representatives of the state
entering with whip in hand or a commitment to the jail, it would create
a nation of sullen, unwilling and resentful workers; a condition that we
do not wish to encourage; a condition which would be most hurtful to our
industrial and commercial greatness and success. It is strange how some
men desire law to govern all other men in all their actions and doings
in life. The organized labor movement endeavors to give opportunities to
the workers so that their habits and customs shall change by reason of
new and better conditions.
We have our combinations of capital, our organizations and federations
of labor. These are now working on parallel lines and have evolved the
National Civic Federation. Through the efforts of men noted for their
ability, for their straightforwardness, noted for the interest they take
in public affairs, an effort is being made to bring about the greatest
possible success industrially and commercially for our country with the
least possible friction.
One of the greatest causes of the disturbance of industry, the severance
of friendly relations between employer and employees, is the fact that
the employers assume to themselves the absolute right to dictate and
direct the terms under which workers shall toil, the wages, hours and
other conditions of employment, without permitting the voice of the
workmen to be raised in their own behalf. The workers insist upon the
right of being heard; not heard alone at mass-meeting, but heard by
counsel, heard by their committees, heard through their business agent,
or heard, if you please, through the much-abused walking delegate. They
insist upon the right to be heard by counsel; the Constitution of our
country declares that the people of our country may be heard through
counsel. It is a saying in law, and I repeat it, though not a lawyer,
that he who is his own lawyer has a fool for a client. The organized
workmen have long realized this truism and have preferred to be heard by
counsel, and we say that the political and civil right guaranteed to us
by the constitutions of our country and our states ought to be extended;
the principle of it ought to be extended to protect and advance our
industrial rights.
One of the representatives of the Illinois Board of Arbitration recently
said to me that there were so many cases of employers who refused to
recognize the committees of the organizations of their employees that
the Board was in doubt whether it ought to name each individual employer
or simply group such employers together and give their number in round
figures. No man in this world is absolutely right and no man absolutely
wrong. If this be so, men ought, as organized labor has for half a
century demanded, and as the National Civic Federation has emphasized,
to meet in conference and be helpful in allowing common-sense and fair
dealing and justice and equity and the needs of the people to determine
what shall be the conditions under which industry and commerce shall
continue to advance until we shall be in truth producers for the whole
world.
The movement for which we stand tends to foster education, not only
among the workmen, but among the educated; for of all those possessing
crass ignorance and prejudice regarding industrial matters, the educated
man who takes his cue regarding the labor question from those who are
always opposed to the labor movement and who never takes the trouble to
find out the laborer’s side of the labor question, is in the most
deplorable condition.
RESULTS ACCOMPLISHED BY THE INDUSTRIAL DEPARTMENT, NATIONAL CIVIC
FEDERATION
By HONORABLE OSCAR S. STRAUS
The contest between capital and labor is as old as the human race, and
very likely will continue as long as there is employer and workman.
Early in the history of our country, that rugged reformer, who stood for
much of the liberty we enjoy to-day, Roger Williams, said: “What are all
the wars and contentions about, except for larger bowls and dishes of
porridge?” That is putting the question in a very graphic form. This
struggle for the dishes of porridge is still going on, and unfortunately
very often through clash and strikes the dish gets broken and neither
side gets any of the porridge. We want to save the porridge; we want the
dishes to be so large that labor will get its full share, we know that
capital will take care of itself. In these industrial contests there are
other interests at stake than labor and capital—the general public,
greater in numbers than either of these. The Civic Federation believed
that if it organized a machinery which contained within itself the
representatives of both the laborers and the employers, and associated
with these two the representatives of the general public, it would have
the true basis for the solution of the labor question. You have heard
from capital and labor. I am here as the representative of the general
public.
The Industrial Department of the National Civic Federation is composed
of twelve men representing the employers, twelve men representing labor,
and twelve men representing the general public. At the head of these
three groups of the Civic Federation stand Grover Cleveland, Senator
Hanna, and Samuel Gompers. This is the only semi-public office
ex-President Cleveland has accepted since he retired from the office of
President of the United States. The purpose and the objects of the
National Civic Federation appealed to his heart. His acceptance and
co-operation have been to us a tower of strength and an inspiration for
our difficult task.
The Civic Federation feels there is a possibility of inaugurating a
great work, of promoting a better feeling and better relations between
the employers and the workmen, and thereby removing some of the chief
obstacles militating against industrial peace. We have been criticised;
peacemakers always are. I want to answer one or two criticisms that have
been made in reference to our organization. One of the misconceptions is
that the Civic Federation is a board of arbitration. Its purpose is to
mediate, to conciliate, and only in very exceptional cases, when
requested by both sides, to arbitrate between capital and labor. It has
been said that the existence of such a body would stimulate laborers to
threaten to strike or to strike or to make demands which otherwise they
would not make, with the hope that the subject might be brought before
this body, and that they might thereby gain concessions which otherwise
they could not hope to secure. It might as well be said that preventives
and curatives stimulate disease. It has also been stated that we promote
the organization of labor, and that organized labor stimulates strikes.
The Civic Federation’s platform or statement of objects distinctly
provided that its province would embrace _unorganized_ as well as
organized labor. The scope of the Federation is embodied in the By-Laws:
“The scope and province of this Department shall be to do what may seem
best to promote industrial peace and prosperity; to be helpful in
establishing rightful relations between employers and workers; by its
good offices to endeavor to obviate and prevent strikes and lock-outs,
to aid in renewing industrial relations where a rupture has occurred.
“That at all times representatives of employers and workers, organized
or unorganized, should confer for the adjustment of differences or
disputes before an acute stage is reached, and thus avoid or minimize
the number of strikes or lock-outs.
“That mutual agreements as to conditions under which labor shall be
performed should be encouraged, and that when agreements are made, the
terms thereof should be faithfully adhered to, both in letter and
spirit, by both parties.
“This Department, either as a whole or a sub-committee by it appointed,
shall, when requested by both parties to a dispute, act as a forum to
adjust and decide upon questions at issue between workers and their
employers, provided, in its opinion, the subject is one of sufficient
importance.
“This Department will not consider abstract industrial problems.
“This Department assumes no powers of arbitration unless such powers be
conferred by both parties to a dispute.”
The Civic Federation recognizes conditions and aims to improve them in
the interest of the public welfare. Railroad accidents do not argue for
the stage-coach, but that the railroad should be better constructed so
that accidents may be more and more eliminated. Education upon this
great question of labor and capital is not entirely confined to the
labor side. We have found in our short experience that education is
needed upon the other side as well, and if the Civic Federation succeeds
in bringing out a more conciliatory spirit on both sides and thereby
contributes to a better understanding of such principles as have been
laid down to-night by Senator Hanna and Mr. Gompers, it will be doing a
very great public service.
It will perhaps surprise some of you, I confess, that before I became
more familiar with this subject, I was agreeably surprised, to hear, in
the conferences recently held in the rooms of the National Civic
Federation, one of the most important officers of organized labor,
state, that he wished it to be understood, that organized labor does not
approve of sympathetic strikes, and that organized labor has come to the
conclusion that restrictions of output should not be permitted, as all
such efforts were uneconomical.
The chances for industrial peace in this country are greater than they
are in any other country. The fact that this conflict and antagonism
have existed and now exist in the countries of Europe, is no reason why
the same conditions should obtain in the United States, and the reason
is very evident. In the first place, we are not divided in this country
into permanently distinct classes. There is no fixed gap between the
laboring and capitalistic classes. The most successful capitalists in
this country to-day are men who have themselves risen from the ranks of
labor, men who have been the architects of their own fortune. The large
fortunes of to-day are to a great extent held by the men who achieved
them, and for that reason there is a natural and closer contact between
capitalists and laborers in this country than in any other. In America,
as a rule, the great fortunes are not as yet in the hands of the second,
third and fourth generations and are never likely to be to any
considerable extent.
I will refer but briefly to the work the Industrial Department of the
National Civic Federation has performed since its organization in
December last: The first contest that came up before it was the
threatened clothing cutters’ strike. This strike affected forty thousand
hands in the clothing trade. It was announced in October before the
organization of this committee, and was to go into effect on the first
of January. On our committee we had the chief representatives both of
the clothing cutters and of the manufacturers. A meeting was called of a
section of the committee of the Civic Federation, and when the two
chiefs of the rival interests came together, the trouble was
satisfactorily adjusted in the course of ten minutes. The next matter
that claimed our help was the Dayton Cash Register strike. It began nine
months ago, or more, and consequently before our committee was formed.
We were asked to mediate by the Cash Register people, and we are
gratified to state that that great trouble after we had been called in
was very speedily adjusted.
The third matter was the Union Iron Workers’ strike in San Francisco. It
began nine months ago, six months before our committee was organized.
Our committee was called in and the adjustment was largely, if not
entirely, due to our mediation.
A number of other questions have come before us; one was that of the
paper manufacturers; a general strike had been decided upon and we
brought the workmen and paper manufacturers together and they had a
conference, and as a result postponed the question of their differences
for further consideration.
Then there was the Boston’ Freight Handlers’ trouble. The Civic
Federation came into that upon the invitation of the Mayor of Boston and
the Massachusetts Board of Arbitration; and without arrogating to
ourselves too much credit, I think both of those bodies concede that we
were of material help in adjusting those difficulties.
The anthracite coal controversy has been before us. You know that the
springtime always produces a great many labor troubles. They are called
the spring crop of strikes. I do not know whether we can uproot all the
seed; in fact, I know we cannot. I think there has been rather less of
it thus far this spring than usual. Still the entire spring has not gone
by, and we cannot yet tell what may happen. At any rate, we have brought
together the leading coal operators and the leading representatives of
the coal miners; brought them face to face, and that is a thing that had
not been done before. They discussed their various grievances, and the
whole matter has been adjourned for a month in order that each side may
consider and deliberate.[1]
There are other important matters before us. We are happy to say up to
the present time, which we think is rather remarkable, we have as yet
had no failure to report.[2] I am proud to say this because I am afraid
in another year, should you have Senator Hanna and Mr. Gompers before
you, they may not be able to bear witness to so good a report. I will
say, however, that at the conference in December, where there were
present the representatives of two million organized laborers and of the
leading employers of the country, we were impressed with the desire of
these men to endeavor to find a common ground upon which they might
arrive at a better understanding. The representatives of labor in their
treatment of the subject were highminded and liberal in their views; I
think I am voicing the sentiments of everyone of my colleagues in the
Civic Federation when I say that such men as Gompers, Mitchell, Sargent
and Duncan have given every evidence of being conservative, patriotic
and considerate of the public welfare.
In conclusion, permit me to say that the powers of the Civic Federation
are entirely voluntary, and that its effective force is public opinion.
We can advise, endeavor to conciliate, remove misunderstandings, and
invite both sides of the controversy to come together and confer. We
cannot compel, except by the force of reason and public opinion. We may
invite to arbitration; we may upon request of both sides arbitrate.
Arbitration is a powerful weapon, and experience has shown that the side
in the wrong is the first to object, upon the ground, “There is nothing
to arbitrate.” That answer is itself a confession of wrong. It was
Penn’s famous maxim, “We must concede the liberties we demand.” If both
sides to this controversy will bear that maxim in mind, much trouble can
be avoided. That maxim implies that organization on the one side
justifies, if it does not compel, organization on the other side; and
each side must concede the rights which it claims for itself, and any
contest waged upon principles which conflict with such concessions the
public will not justify. The refusal to recognize conditions does not
change those conditions, and often embitters the relations that exist
between the respective sides. The mission of the Civic Federation is one
of peace, and like all peacemakers will doubtless, as time runs on, come
in for abuse and misinterpretation of its purposes. We are prepared for
this reward, and so long as we remain true to our mission, and that we
will so remain our membership is a guarantee, no amount of abuse will
cause us to flinch from the duty that is before us.
CO-OPERATION OF LABOR AND CAPITAL
By W. H. PFAHLER
National Association of Iron Founders
There is no subject of greater general importance before the world
to-day, none more simple in its character, and yet none so handicapped
by fanaticism, as that of the relation of employer and employee.
Remove the curtain between the two real parties to the controversy,
which is often held by men of selfish purpose on both sides, and you
behold two simple factors, the wage-payer and the wage-earner, each
dependent upon the other and both serving the same master, the great
consuming public, of which they are also equal and very important parts.
The wage-payer, being directly in contact with the purchasing consumer,
claims that he must have a result in production equal in every way to
the wages paid, while the wage-earner contends that he must have a wage
equivalent to his contribution in time, energy and skill, to the article
produced.
Every visible article of use, for food, clothing or shelter, of
necessity, luxury or culture, represents three component parts, and the
production of each such article depends upon the proper combining of
these parts, which are: 1st. Raw material. 2d. Capital. 3d. Labor.
Raw material, supplied by nature, is controlled only by the law of
supply and demand, except when by legislation the natural law is for a
time superseded, and it then becomes a matter of political action, in
which the entire community, except the few who are directly interested
in profit, join to abolish the corrupt legislation and restore the
natural condition. Raw material is, therefore, the basis of cost in
determining the price of every product to the public.
Labor, whether skilled or unskilled, engaged in the reduction of the raw
material to the finished product, is also dependent upon the law of
supply and demand to fix its value or wage; and any effort to change
this value brings the wage-earner in direct conflict with the consumer,
through his representative, the employer, whose duty it is to know, and
who usually does know, what proportion of the entire cost of any article
can be distributed in wage so as to retain the value of the article at a
price not in excess of the ability of the consumer to purchase, and yet
within limits which will prevent a more favored nation or district from
furnishing the same article in competition, and thereby cause idleness
for the wage-earner and loss to the employer.
Capital represents plant, machinery, transportation, interest, and all
the factors known as unproductive, and yet absolutely essential for the
combination of material and labor. Capital is usually, though not
always, the owner of material and the direct employer of labor, and
therefore must stand for the silent partner in the combination. What is
so frequently called a war between capital and labor is simply an effort
on the part of the wage-earner and wage-payer to determine what part of
the product of labor, as distinct from material, is represented in the
price to the public, and after deducting the proper charge for plant,
etc., how the balance, which is profit, shall be divided between the
employer and the employee,—or wage-payer and wage-earner.
The growth of prosperity in this country has always been in ratio to
increased production, and until a recent period such increased
production has been the direct result of the co-operation of the
wage-earner and the wage-payer. In the beginning of our commercial
history it was only necessary for one man to exchange the product of his
own industry for that of other men to obtain the necessities of life,
and then the results of labor were not measured by a unit of value or
wage, but by the amount of energy expended in production.
When the rapid growth of the country required greater productiveness,
and the enlargement of territory made necessary a change in the
distribution of the products of labor, the factory system was
introduced, whereby capital, or unproductive labor, was joined with
productive labor to accomplish greater results than had heretofore been
attained by individual labor.
This brought with it the employment of a number of wage-earners under
the direction of one or more employers, or wage-payers, and made it
necessary to determine the relation of one to the other, or rather the
share each should have in the division of profits.
All conflicts which have ever arisen between men upon any subject,
whether social, political or religious, have been based, not upon
difference in conditions really existing, but upon difference of opinion
as to the relation which existed between the parties to the conflict;
and strife, to a greater or less extent, has been brought into use to
determine such position.
An excess of power on one side or the other succeeded in establishing
for a time the opinion of the victor, but never removed the cause of
dispute; and so the organization of wage-earners into associations or
unions enabled them to establish from time to time, by power which they
never hesitated to exercise, such wages and conditions as in their
opinion were fair to them, but not always in accord with the condition
of supply and demand.
From their struggle arose the continual change of wages in ratio to the
power of either party, the employer lowering wages when by reason of
limited demand he could limit production, and the employee raising wages
when his services were in sufficient demand to enable him to do so.
The union was able in many cases,—I may say in all cases,—to enforce its
demands because of the combined power it could exercise against the
individual employer, and, as is usual in such cases, soon began to
exercise a power which was unnatural and unwarranted. The result of this
was the necessity of forming an organized opposition to their force by
creating an opposing force in the organization of the employer class,
and this brings me to the history of two organizations of this character
with which I have been closely identified during the past fifteen years,
and which have been successful in establishing a new basis of relation
between the employer and employee.
Fifteen years ago the industry in which I am engaged was in perpetual
conflict, involving three or four strikes or lock-outs every year,
causing great loss in time and money to employer and employee. Unable
longer to endure the strain, an association was formed of about fifty of
the leading firms engaged in the business, for the sole purpose of
defending the members against the unjust demands of their employees. It
was decided to create a large fund for the purpose of carrying on a
warfare against the union to which our men belonged. Within a year from
the organization a strike occurred which resulted in every member of the
Defence Association closing his shop, and the consequent defeat of the
union. A second strike occurred in which, after many weeks of severe
struggle, the union was again defeated by the united action of the
Defence Association. In the third year of its existence, the Defence
Association was invited by the officers of the union to appoint a
committee to meet a similar committee from their organization for the
purpose of discussing some plan by which strikes and lock-outs could be
avoided. Frequent meetings were held; many attempts at forming a plan
were abandoned, until finally it was agreed that all questions of
difference between any employer, member of our association, and his
employee, member of the union, should be referred to a committee of
three from each association for arbitration and that, pending such
action, no strike or lock-out should occur. As a result of this
agreement, during the past ten years no strike has occurred in this
industry, and every point of difference has been amicably adjusted by
conference. Each year a general conference is held, at which the wages
are fixed for the ensuing year, and such other changes as may be of
mutual advantage are adopted.
It is true that at first the members of local unions, led by some wild
agitator, would make a demand upon their employer, and, failing to
enforce the demand, would quit work; but the national officers of the
union would require them to return to work at once and await the usual
and proper means of adjustment.
The Arbitration Board is composed of an even number of men because then
an agreement when reached becomes unanimous, and a failure to agree
(although no such failure has ever occurred) will not result in the
enforcing of the opinion of either side by the decision of a third
party. We prefer rather to adjourn from time to time, under the
agreement to have no strike or lock-out, and let time and reason aid in
finding some common ground upon which we can agree. These agreements
made from time to time have been signed for the members of the union by
their officers, and it gives me the highest pleasure, as a tribute to
human nature, and in reply to those who deny the responsibility on the
part of workingmen to a contract, to say that in the history of our
organization no agreement has ever been violated in any manner.
The success of this organization led to the formation of a larger and
more powerful one, known as the National Founders’ Association, of which
I had the honor to be the first president. It required a long time to
convince many of the larger employers of men that the formation of such
an association was not dangerous, because in the negotiations it would
be a virtual recognition of the union; but we at last succeeded in
organizing with about fifty members.
Within six months the president of the union in which most of our men
are employed addressed a letter to our body requesting a conference to
devise a plan for conducting negotiations on lines similar to those of
the Stove Defence Association. This conference resulted in what has ever
since been known as the New York Agreement, which is as follows:
_Whereas_, The past experience of the members of the National
Founders’ Association and the Iron Molders’ Union of North America
justifies them in the opinion that any arrangement entered into that
will conduce to greater harmony of their relations as employers and
employees will be to their mutual advantage; therefore,
_Resolved_, That this Committee of Conference indorse the principle of
arbitration in the settlement of trade disputes, and recommend the
same for adoption by the members of the National Founders’ Association
and the Iron Molders’ Union of North America on the following lines:
That, in the event of a dispute arising between members of the
respective organizations, a reasonable effort shall be made by the
parties directly at interest to effect a satisfactory adjustment of
the difficulty, failing to do which either party shall have the right
to ask its reference to a Committee of Arbitration, which shall
consist of the presidents of the National Founders’ Association and
the Iron Molders’ Union of North America or their representatives, and
two other representatives from each association appointed by the
respective presidents.
The finding of this Committee of Arbitration, by a majority vote,
shall be considered final so far as the future action of the
respective organizations is concerned.
Pending adjudication by this Committee of Arbitration there shall be
no cessation of work at the instance of either party to the dispute.
The Committee of Arbitration shall meet within two weeks after
reference of the dispute to them.
This agreement to go into effect Monday, March 4, 1901.
Occurring at a time when we were passing from extreme depression to a
revival of business activity, when there was an enormous demand for good
workmen, when wages were moving upward and when strikes were of almost
daily occurrence in every industry, this agreement was observed in
letter and in spirit, and, as a result, both employer and employee
enjoyed industrial peace and prosperity.
Because of a failure to agree on certain demands made by the union,
which would have resulted in reduction of production, a strike was
commenced in the city of Cleveland by the union about two years ago,
which lasted over seven months and cost upwards of a million dollars,
but at the end resulted in a conference lasting some days, in which both
parties to the conference agreed to prevent a recurrence of warfare and
united in an agreement which marked greater progress in the labor
situation than had ever been reached before.
The resolution was as follows:
_Whereas_, The N. F. A. and the I. M. U. of N. A., through their duly
accredited representatives, at a joint conference held in Detroit,
Mich., June, 1900, each formulated a declaration of principles to
which they still adhere and which they have been unable to harmonize
after careful consideration; and
_Whereas_, The consensus of enlightened opinion points to conciliatory
methods and the principles of arbitration as the most desirable and
equitable policy to be pursued when disputes arise between any
employer and his employees; and as this is a policy to which both the
N. F. A. and the I. M. U. of N. A. most heartily subscribe, they
entered into an agreement, the one with the other, since known as the
New York Agreement, by virtue of which their representatives have been
enabled to meet and harmoniously discuss important matters affecting
their mutual interests, and to endeavor to settle them in accord with
the more enlightened and equitable policy referred to; and,
_Whereas_, These efforts have discovered the fact that wide
differences of opinion, upon certain vital and essential principles,
exist between the members of the N. F. A. and the I. M. U. of N. A.,
which their representatives have hitherto failed to harmonize by the
method provided in the New York Agreement, thus seriously endangering
the high purposes to which they stand committed, and in one instance
leading to a serious conflict between the members of the two
associations in an important section of the joint jurisdiction; be it
therefore
_Resolved_, That it is the earnest opinion of this Joint Conference
Committee, composed of representatives of the N. F. A. and the I. M.
U. of N. A., that agreement upon the essential points of difference
can only be secured by the slow evolutionary processes begotten of
friendly intercourse and the more intelligent understanding of mutual
interests, which time and the influences of education alone can bring.
And be it further
_Resolved_, That we hereby reaffirm our adherence to the New York
Agreement, whose beneficent provisions we will continue to invoke,
until by joint agreement we are enabled to reach a more defined code
of conciliation and arbitration.
The National Founders’ Association now numbers nearly 500 members,
having a combined capital of over $400,000,000, and employing nearly
30,000 molders and more than 100,000 workingmen in other departments,
and is daily adding to the number because the manufacturer has seen that
it is the best—in fact, the only—method of dealing with organized labor.
On the other hand, the labor organization, recognizing the strength and
fair dealing of the employers’ association, is from time to time so
modifying its plans and methods as to make it possible to work in
harmony with the employer, and together secure results for both that
have heretofore been impossible.
This brief history enables me to declare not only as a conviction, but
as an axiom, that there is a common ground upon which the wage-payer and
the wage-earner can safely unite to form a community of interest in the
great industrial problem, and that negotiation for the adjustment of
their several interests can be conducted without strife, to the mutual
advantage of both.
The history of all associations of manufacturers formed for the purpose
of establishing and maintaining just and fair business relations between
their employees and themselves, proves beyond doubt that better results
can be obtained in this way than in any other.
Following the conference resolution adopted at Cleveland, the first
agreement entered into as a result of the conference involves so many
points of imaginary difference between employer and employee, and shows
the possibility of arranging even the smallest difference by conference,
that it is worthy of, careful study by both the employer and employee.
This agreement was made in the city of Philadelphia, March 4, 1901, is
still in force, and I believe has never been violated by either party to
the contract.
_Agreement between the National Founders’ Association (on behalf of
its Philadelphia members), and the Iron Molders’ Union of North
America (on behalf of its Philadelphia members)_:
Article 1. In view of the fact that there has been an agreement
entered into at the recent conference in Cleveland, Ohio, between
representatives of both associations, on the question of equitable
wage rates for molders, and in view of the mutual understanding that
there is to be a further conference on the subject within a reasonable
time—as may be agreed upon by the presidents of the respective
associations—for the purpose of further perfecting the details
regarding the regulation of wages of molders;
It is agreed that the temporary agreement, entered into July 16, 1900,
shall be null and void, and that the agreement herein contained shall
supersede the above-mentioned temporary agreement.
Art. 2. The iron molders, members of the Philadelphia Union of the
Iron Molders’ Union of North America, agree to withdraw their demands
that the foundrymen of Philadelphia should operate their foundries
under the rules and regulations of the union.
Art. 3. In accordance with the national agreement, entered into at the
recent conference in Cleveland, on the regulation of molders’ wages,
the foundrymen of Philadelphia who are members of the National
Founders’ Association, and the molders of Philadelphia who are members
of the Iron Molders’ Union of North America, agree to the following
wage scale:
The standard minimum wage rate for bench and floor molders who have
learned the general trade of molding shall be twenty-seven and
one-half (27½) cents per hour, or sixteen dollars and fifty cents
($16.50) per week of sixty hours, it being understood that when a
molder has completed his work before regular shop-closing time such
time shall not be deducted in computing the week of sixty (60) hours.
Art. 4. The standard minimum wage rate shall be subject to the
following DIFFERENTIALS:
1. The young man who has completed his apprenticeship, and who, by
reason of his mechanical inferiority or lack of experience, or both,
in either branch of the trade of molding, shall be unfitted to receive
the full wage rate provided for above, shall be free to make such
arrangements as to wage with his employer for a period mutually
satisfactory as may be agreeable to himself and employer.
2. The molder who, by reason of his physical incapacity or physical
infirmity, cannot earn the standard minimum wage rate, is to be free
to make such arrangements as to wages as may be mutually satisfactory
to the employer and himself.
3. There being in some foundries a grade of work calling for less
skill than is required by the ordinary molder, this grade of work
being limited in quantity, it is agreed that nothing in this agreement
shall be construed as prohibiting the foundrymen from employing a
molder to make such work and paying for same at a rate that may be
mutually agreed upon between the molder and the foundryman. It is
understood that a molder who is working for and receiving a rate of
wages of twenty-seven and one-half (27½) cents per hour or over, is
not to be asked or expected to make the grade of work referred to
above for any less wage rate than he is regularly entitled to under
this agreement. This does not give the molder the right to refuse to
make the work if it is offered to him at his regular wage rate.
Art. 5. It is agreed that nothing in the foregoing shall be construed
as prohibiting piece or premium work, and when it is desired on the
part of the foundryman that his work shall be done under the piece
work or premium system, it is agreed that the wages of the molder
shall be based so that he may earn a wage not less than if working by
the day. This is understood as applying to molders who are competent
to do an equal amount of work and of equal quality to the average
molder in the foundry in which he is employed.
Where the foundryman and molder cannot agree on the piece price for a
certain piece of work, the foundryman is to have the work done by the
day for a period of a day or more, according to the nature of the
work, in order to establish a fair and equitable wage rate on the work
in question.
It is further agreed that nothing in this agreement shall be construed
as preventing a molder from agreeing with his employer on a piece
price as soon as he is given a pattern.
Art. 6. Time and half-time shall be paid for all overtime, excepting
in cases of accident or causes beyond control consuming not more than
thirty (30) minutes; and double time for Sundays and legal holidays—to
wit: Fourth of July, Labor Day, Thanksgiving Day and Christmas. It
being further understood that when foundries do not make a practice of
running beyond bell or whistle time and are occasionally late, the
“give and take” system shall apply in all such cases, it being further
understood that both sides should show a spirit of fairness in
adjusting matters of this kind.
Art. 7. Arbitrary limitations of output on the part of molders, or
arbitrary demands for an excessive amount of output by the molders on
the part of the foundryman, being contrary to the spirit of equity
which should govern the relationship of employer and employee, all
attempts in that direction by either party, the molder or foundryman,
are to be viewed with disfavor and will not receive the support of
either of the respective associations parties to this agreement.
It being further agreed that the wage rates specified herein are to be
paid for a fair and honest day’s work on the part of the molder, and
that in case of a molder feeling that a wrong has been done him by his
employer and that his treatment has been at variance with the terms of
this agreement, he shall first endeavor to have the same corrected by
a personal interview with his employer, and, failing in this, then he
shall report same to the proper channel of his local union for its
investigation. If there is any objectionable action on the part of the
molder which is in conflict with this agreement or the spirit thereof,
then the employer is to endeavor to point out to the molder where he
is wrong, and, failing in this, he may discharge the man for breach of
discipline, or else retain him in his service and submit the case to
the National Founders’ Association for investigation.
In order that there may be no misunderstanding as to the wages a
molder is to receive under the above agreement, it is understood that
a molder must agree with the employer on the rate of wages that he is
to receive at the time he is engaged; it being further agreed that
neither the molder nor the foundryman is to deviate from the terms of
this agreement as to wages or deportment.
Art. 8. In conformity with the agreement adopted at the recent
conference in the city of Cleveland, the National Founders’
Association and the Iron Molders’ Union of North America deprecate
strikes and lock-outs, and desire to discourage such drastic measures
among the members of their respective associations.
It is therefore agreed that all unfair or unjust shop practices on the
part of molders or foundrymen are to be viewed with disfavor by the
Iron Molders’ Union of North America and the National Founders’
Association, and any attempt on the part of either party to this
agreement to force any unfair or unjust practice upon the other is to
be the subject of rigid investigation by the officers of the
respective associations; and if upon careful investigation such
charges are sustained against the party complained of, then said party
is to be subject to discipline—according to the by-laws of the
respective associations.
And it is further agreed that all disputes which cannot be settled
amicably between the employer and molder shall be submitted to
arbitration under the “New York Agreement.”
Art. 9. When the words “employer” or “foundryman” are used, it is
understood that their foremen or representatives may carry out the
provisions of this agreement and act for them.
Art. 10. It is further agreed that nothing in the foregoing shall be
construed as applying to operators of molding machines who have not
learned the general trade of molding, and the right of a foundryman to
introduce or operate molding machines in his factory shall not be
questioned.
Art. 11. This agreement shall continue in force to July 16, 1901, and
thereafter to June 3, 1902, and to continue from year to year, from
June 3, 1902, unless notice be given on May 1 of any year by either
party to this agreement signifying their desire to change or modify
the conditions of this agreement.
And it is further agreed that should any agreement be reached by a
conference of representatives of the National Founders’ Association
and the Iron Molders’ Union of North America upon the question of wage
rates for molders, and in conflict with the terms of this agreement,
that a conference of the parties hereto shall be called immediately to
conform the terms of this agreement to those of the national
agreement; otherwise this agreement is to continue in force as above
provided.
In England, several years ago, the great strike of engineers involving
75,000 men, and extending over a period of six months, was finally
settled by conference between the representatives of the associated
employers and representatives of the several unions, and resulted in an
agreement which established harmonious relations between both parties,
and has ever since prevented strikes or lock-outs.
In Belgium, in 1899, a lock-out, probably the greatest which has ever
occurred, involving almost every industry, shutting out more than 50,000
men, and extending over a period of seven months, was only settled after
the employers discovered to their own great advantage that matters can
be arranged more satisfactorily when the representatives of organized
capital confer with the representatives of organized labor. The result
of their conference was the removal of all obnoxious demands and the
adjustment of wages and conditions of labor upon an equitable basis,
embodied in an agreement now in force and held equally binding on
employer and employee, the result of which was, in England as in the
examples cited in this country, the elimination of strikes and
lock-outs.
A review in detail of the results accomplished by the methods of
conference and conciliation, in these cases referred to, would require
more space than can be used in this paper—but warrant the following
conclusions:
First.—That labor organizations are the natural result of a great
movement in the business world which is replacing costly competition
with profitable co-operation, and are formed primarily for the
protection of their members, upon the theory that collective bargaining
for the sale of their labor is more profitable than individual contract.
Second.—The accomplishment of their object requires labor organizations
to secure the membership of the largest number of persons employed in
any kindred trade, and (because voluntary advancement of wages rarely or
never occurs) to demand a change in wages and betterment in conditions
whenever it appears that the need for their labor is in excess of the
supply, and therefore warrants such demand. Labor organizations are
necessary also to resist collectively any movement on the part of the
employer which would result in injury to the workingman.