CHAPTER V

COMPULSORY ARBITRATION

So far I have spoken only of the constructive side of the new

capitalism's labor program, its purpose to produce healthy and

industrially efficient laborers so as to increase profits. "State

Socialism" gives the workingman as a citizen certain carefully measured

political rights, and legislates actively in his behalf as a

profit-producing employee at work, but its policy is reversed the moment

it deals with him and his organizations _as owners and sellers of

labor_.

Towards the individual workers, who are completely powerless either

politically or economically until they are organized, the new capitalism

is, on the whole, both benevolent and actually beneficent. But it does

not propose that organized labor shall obtain a power either in industry

or in government in any way comparable to that of organized capital.

"Successful State Socialism," as Victor S. Clark says in writing of the

Australian experiments, "depends largely upon perfecting public control

over the individual."[72] But compulsory arbitration of labor disputes

which reaches the wage earners' organizations, is far more important to

"State Socialism" than any other form of control over individual. A

considerable measure of individual liberty may be allowed without

endangering this new social polity, and it is even intended

systematically to encourage the more able among the workers by some form

of individual or piece wages--or at least a high degree of

classification of the workers--and by a scheme of promotion that will

utilize the most able in superior positions, and incidentally remove

them out of the way as possible leaders of discontent.

Nor is it intended to use any compulsion on labor organizations beyond

that which is essential to prevent them from securing a power in society

in any way comparable to that of property and capital. For this purpose

compulsory arbitration is the direct and perfect tool. It can be

limited in its application to those industries where the unions really

occupy a position of strategic importance like railroads and coal mines,

and it can be used to attach to the government those employees that are

unable to help themselves. I have mentioned those weaker groups of

employees who would be unable to improve their condition very materially

except by government aid, and, even when so raised to a somewhat higher

level, have no power to harm capitalism. Compulsory arbitration or some

similar device must therefore replace such crudely restrictive and

oppressive measures as have hitherto been applied to the unions.

In the United States all "dangerous" strikes are at present throttled by

court injunctions forbidding the strikers to take any effective action,

and boycotts are held to be forbidden by the Sherman law originally

directed against the "trusts." Recently the Supreme Court decided that

the officers of the American Federation of Labor were not to be

imprisoned for violation of the latter statute. But the decision was

purely on technical grounds, and the court upheld unanimously the

application of the law to the unions. There is little question that the

attorney for the manufacturers, Daniel Davenport, was right when he thus

summed up the court's opinion:--

"It held that the boycott is illegal; that the victim of the

boycott has the right to go into court of equity for protection by

injunction; that such court has the right to enjoin any and every

act done in enforcing the boycott, including the sending out of

boycott notices, circulars, etc., that the alleged constitutional

right of free speech and free press affords the boycotter no

immunity for such publication; that for a violation of the

injunction the party violating it is liable to be punished both

civilly and criminally."

Against this law and the use of injunctions in labor disputes the

Federation of Labor has introduced a bill through Congressman W. B.

Wilson, which aims to free the unions from these legal obstacles by

enacting that no right to continue the relation of employer to employee

or to carry on business shall be construed as property or a property

right; and that no agreement between two or more persons concerning

conditions of employment or its termination shall constitute a

conspiracy or an offense against the law unless it would be unlawful if

done by a single individual, and that, therefore, such an act is not

subject to injunctions. While neither of the great parties has

definitely promised to support this particular measure, one party has

made a vague promise to restrict injunctions, and the leaders of the

progressive wings of both are quite definite about it. Nearly half of

the House of Representatives voted for the repeal of the Sherman law as

applied against union boycotts. Senator La Follette has demanded the

abolition of this species of injunction, and Governor Woodrow Wilson has

accused our federal courts of "elaborating a theory of conspiracy

destined to bring 'the sympathetic strike' and what is termed 'the

secondary boycott' under legal condemnation."

Such reforms are not as radical as might appear to Americans, for the

boycott is legal in Germany, while the crime of "conspiracy" was

repealed in Great Britain in 1875, and the rights of strikers were

further protected in that country by the repeal of the Taff Vale

decision against picketing a few years ago, and yet unions are in no

very strong position there. And weak as they are, the talk of compulsory

arbitration is growing, and it seems only question of time until some

modification of it is adopted. And, though the abuse of injunctions and

the other forms of anti-union laws and decisions now prevailing will

probably be done away with in this country, there is little doubt that

here also employers will use some great coal or railroad strike as a

pretext for enacting a compulsory arbitration law.[73]

Similarly, as governments continue to take on new industrial functions,

great importance is attached to the right of government employees, now

denied, to organize and to join unions. Senator La Follette and other

progressives also champion this right against President Taft, and will

doubtless win their fight, but, as I shall show later a right to

organize does not mean a right to strike--and there seems no probability

that any government will fail to answer the effort to strike on any

very large scale either by punishment for conspiracy against the State

or by excluding the strikers permanently from government employment.

They will doubtless be offered, as in France, instead of the right to

strike, the right to submit their grievances as a body, if they wish it,

to some government board (see Part III, Chapter VI).

The Australasian labor leaders were the first and are still the chief

advocates of compulsory arbitration among the unionists, and if they

find it used against them they have nobody but themselves to blame. That

Labor is disappointed in the result in those countries is shown by the

fact that of late years, both in Australia and New Zealand, the most

important strikes have been settled outside of the compulsory

arbitration acts, and Mr. Clark states that he is unaware of any

important exception.

But that the workers in Australia still hope to use this legislation for

their purposes is shown by the referendum of 1911, by which they sought

to nationalize the State laws on the subject. At the time of the

railroad strike in Victoria, Australia, in 1903, a law was passed which

imposed a penalty of "twelve months' imprisonment or a fine of one

hundred pounds" for engaging in a strike on government railways, and

made a man liable to arrest without warrant or bail "for advising a

strike orally or by publication, or for attending any meetings of more

than six persons for the purpose of encouraging strikers." Even then the

limit had not been reached. In 1909 the Parliament of New South Wales

passed an act especially directed against strikes in any industry which

produced "the necessary commodities of life [these being defined as

coal, gas, water, and food] the privation of which may tend to endanger

human life or cause serious bodily injury," and the penalty of twelve

months' imprisonment of the Victorian law was extended to all this vast

group of industries also. The law of New South Wales was most stringent,

providing that any one taking part in a strike meeting under these

circumstances is also liable to twelve months' imprisonment, and that

the police may break into the headquarters of any union and seize any

documents "which they reasonably suspect to relate to any walk-out or

strike." Under this law the well-known labor leader, Peter Bowling, was

sentenced to one year of imprisonment.

The unions violently denounced this enactment, but chiefly as they had

denounced previous legislation, on the ground that it permitted

_unorganized_ workmen to apply for relief under the law. That is to say,

while the employers were using the law to make striking a crime, they

were extending such benefits as it produced to the nonunion workers who

can often be used as tools for their purposes. But the astounding hold

that "State Socialism" has on the Australian masses, especially on the

working people, is shown by the steadfast belief that this measure can

be amended so as to operate to their interest. Bowling and his unions

made a serious agitation for the general strike against the coercive

measure just mentioned, but it was only by a tie vote that the New South

Wales Labour Congress even favored protest in the form of cancelling the

agreement which the unions had made under the Industrial Disputes Acts,

while in the next elections New South Wales returned a majority of labor

representatives opposing Bowling's policy of radical protest. That is,

the majority of the working people still express confidence in the

possibilities of compulsory arbitration, and even want to extend it.

Professor Le Rossignol of the United States and Mr. William D. Stewart

of New Zealand have undertaken a careful and elaborate investigation of

compulsory arbitration in New Zealand.[74] A reference to a few of their

quotations from original documents will show the nature and

possibilities of this coercive measure as it has developed in the

country of its origin. The original law in New Zealand was introduced by

the Honorable William Pember Reeves, the Minister of Labor, in 1894, and

was supported by the labor leaders. Mr. Reeves says: "What the act was

primarily passed to do was to put an end to the larger and more

dangerous class of strikes and lockouts. The second object of the act's

framer was to set up tribunals to regulate the conditions of labor."

"Mr. Reeves' chief idea," say our authors, "was to prevent strikes, and

a great deal more was said in Parliament about industrial peace than

about the improvement in the conditions of labor which the act was to

bring about. But there can be little doubt that the unionists, without

whose help the act could not have been passed, thought more of the

latter than of the former result, and looked upon the act as an

important part of the new legislation for the benefit of the working

class." Here is the contrast that we must always keep in mind. _The

purpose of the unionists is to see if they cannot obtain improvements in

their conditions; the purpose of the employers and also of "the public"

is to prevent strikes._ One of the most able students of the situation,

Mr. MacGregor, has shown that since the passing of the law the latter

purpose has been thoroughly accomplished, since it has been used not

only as was originally intended, to settle labor disputes which become

so serious as to threaten to "arrest the processes of industry," but

that it has practically built up a "system of governmental regulation of

wages and conditions of labor in general." That is to say, the law has

accomplished rather the purposes of the employers than those of the

employees.

In another point of the most fundamental importance the law has become

something radically different from what the labor leaders who first

favored it hoped it would be. The act of 1894 was entitled: "An act to

encourage the formation of industrial unions and associations and to

facilitate the settlement of industrial disputes by conciliation and

arbitration." By the amendment of 1898 the words, "to encourage the

formation of industrial unions and associations," were left out. Thus

the law ceased to be directly helpful to the very unions which had done

so much to bring it about and are the only means employees possess to

make the law serve them instead of becoming a new weapon for employers.

An early decision of the Arbitration Court in 1896 had declared that

preference should be given to the unionists. "Since the employer was the

judge of the qualifications of his employees, the unionists did not gain

much by this decision," say Le Rossignol and Stewart. "In later awards

it was usually specified that preference was granted only when the union

was not a closed guild, but practically open to every person of good

character who desired to join." These later decisions brought it about

that the so-called preference of unionists became no preference at all.

"The Arbitration Court, except in a few minor cases, has refused to

grant unconditional preference and the unionists, realizing that

preference to an open union is no preference at all, now look to

Parliament for redress and demand statutory unconditional preference to

unionists."

In 1905 strikes and lockouts were made statutory offenses, and a single

judge was given the power practically to force the individual worker to

labor. After ten years of trial the law had become almost

unrecognizable from the workingman's standpoint, and from this moment on

the resistance to it has grown steadily. In a decision rendered in 1906,

the Chief Justice said: "The right of a workman to make a contract is

exceedingly limited. The right of free contract is taken away from the

worker, and he has been placed in a condition of servitude or status,

and the employee must conform to that condition." Not only do judges

have this power, but they have the option of applying or not applying it

as they see fit, for the amendment of 1908 "expressly permits the court

to refuse to make an award if for any reason it considers it desirable

to do so." With a law, then, that in no way aids the unions, as

such--however beneficial it may be at times to the individual

workingman--and which leaves an arbitrary power in the hands of the

judge elected by an agricultural majority, what has been the _concrete_

result? Especially, what principles have been applied by the judges?

Of course the first principle has been that all the working people

should get what is called a "minimum" or a "living" wage, but our

authors show that merely to keep their heads above the sea of pauperism

was not at all the goal of the workers of New Zealand. No doubt they

were already getting such a wage in that relatively new and prosperous

country, yet this was all the new law did or could offer, besides

keeping existing wage scales up to the rising cost of living. Anything

more would have required, not compulsory arbitration, but a series of

revolutionary changes in the whole economic and political structure.

"Another stumbling block in the way of advance in wages is the

inefficient or marginal or no-profit employer, who, hanging on the

ragged edge of ruin, opposes the raising of wages on the ground that the

slightest concession would plunge him into bankruptcy. His protests have

their effect on the Arbitration Court, which tries to do justice to all

the parties and fears to make any change for fear of hurting somebody.

But the organized workers, caring nothing for the interests of any

particular employer, demand improved conditions of labor, though the

inefficient employer be eliminated and all production be carried on by a

few capable employers doing business on a large scale and able to pay

the highest wages."

Here is the essential flaw in compulsory arbitration in competitive

industries (its limitations under monopolies will be mentioned later).

The courts cannot apply a different standard to different employers. On

the other hand, they cannot fix a wage which any employer cannot afford

to pay or which will drive him out of business. That is to say, the

standard tends to be fixed by what the poorest employer can pay, the

employer who, from the standpoint either of capital or of labor or of

efficient industry, really deserves to be driven from business. An

exception is made only against such employers as cannot even afford to

pay a _living_ wage--these alone are eliminated.

Le Rossignol and Stewart show that in view of these considerations the

court has repeatedly stated that "profit sharing could not be taken as a

basis of awards, on the ground that it would involve the necessity of

fixing differential rates of wages, which would lead to confusion, would

be unfair to many employers, and unsatisfactory to the workers

themselves."

With such a principle guiding the court, and it is probably a necessity

under commercial competition, it is no wonder that some of the

representatives of the unions have claimed that annual real wages have

actually fallen. "It is not easy," say our authors, "to show that

compulsory arbitration has greatly benefited the workers of the Colony.

Sweating has been abolished, but it is a question whether it would not

have disappeared in the years of prosperity without the help of the

Arbitration Court. Strikes have been largely prevented, but it is

possible that the workers might have gained as much or more by dealing

directly with their employers than by the mediation of the court. As to

wages, it is generally admitted that they have not increased more than

the cost of living. A careful investigation by Mr. von Dalezman, the

Registrar-General, shows that, while the average wages increased from

1895 to 1907 in the ratio of 84.8 to 104.9, the cost of food increased

in the ratio of 84.3 to 103.3. No calculation was attempted for clothing

or rent." If we take it into account that rents have risen very rapidly

and are especially complained of by the working people, we can see that

real wages, measured by their purchasing power, probably fell in the

first twelve years of compulsory arbitration, notwithstanding that it

was on the whole a period of prosperity in the Colony. For ten years, as

a consequence, the complaints of the workers against the decisions have

been growing, "not because the wages were reduced, but because they

were not increased and because other demands were not granted."

When the unions perceived that the principles for which they have been

contending were not granted, and that their material conditions were not

being improved, it was suggested that the judge of the Arbitration Court

should be elected by the people, in the hope that the unions might

control the election, "but this would be at variance with all British

traditions and could not be brought about," say our authors. No doubt

British tradition has had something to do with the matter, but the

impracticability of this remedy is much more due to the fact that the

employees confront an agricultural and middle class majority.

At first it was the employers who were displeased, but now they are

becoming converted. The employers, say Le Rossignol and Stewart, "have

come to realize that they might have lost more by strikes than they have

ever lost by arbitration; and, since the workers have been dissatisfied,

the employers are more disposed to stand by the act, or to maintain a

neutral attitude, waiting to see what the workingmen will do."

It would seem, then, that the real gain from the law has been through

the abolition of strike losses, and since these had previously been

borne by employers and employees alike, this saving has been pretty

equally divided between the two classes, neither making any relative

gain over the other. But at the bottom this is a blow to the unions, for

the purpose of every union policy is not merely to leave things where

they were before, but to increase the workers' relative share. Any

policy that brings _mutual_ gain requires no organized struggle of any

kind. It is the workers who are the plaintiffs, and the employers the

defendants. When things are left _in statu quo_ it is a moral and actual

defeat for the employees.

This is why, in the last two or three years, the whole labor movement in

New Zealand has arisen against the law. In 1908 the coal miners' union

refused to pay a fine levied against it, alleging that it had no funds.

"In this position the union was generally condemned by public opinion,

but supported by a number of unions by resolutions of sympathy and gifts

of money. Finally, the Arbitration Court decided to proceed against the

men individually for their share of the fine. The whole of the fine,

together with the costs of collection, amounting to over 147 pounds, was

recovered by means of attachment orders under the Wages Attachment Act

of 1895. According to a recent decision of the Court of Appeals, the men

could have been imprisoned, if they had refused to pay, for a maximum

term of one year, but it was not necessary to do this, and public

opinion was not in favor of imprisonment for the offense."

This and other strikes in 1907 and 1908 "caused a widespread opinion

among _employers_ and the general public that the act should be amended

chiefly for the sake of preventing strikes. The laborers, as a class,

were not enthusiastic about the matter, since the proposed amendments

were designed to compel them to obey the law rather than to bring them

any additional benefit." After having been debated for a year, a new law

was passed, and went into effect January 1, 1909. This new law, though

still compulsory, repeals some of the features of the previous

legislation which were most obnoxious to the unions. Even this act,

however, they found entirely unsatisfactory, and "during the year ending

March 31, 1909, sixteen workers' unions, and a like number of employers'

unions, had their registration cancelled for neglect, while two other

unions formally cancelled their registration." This meant practically

that these unions have withdrawn from the field of the act and expressed

their disapproval of compulsory arbitration, even in its recently

modified form. Not only have the unions been withdrawing, but, freed

from its bondage, they began at once to win their most important

strikes, indicating what its effect had been. Even the employees of the

State have been striking, and successfully.

"The workers' position is embarrassing. The original act was passed for

their benefit as well as to prevent strikes, but when it could no longer

be used as a machine for raising wages, they were the first to rebel

against it." There can be no doubt that our authors are correct, and

that the working people are beginning to feel they have been trapped. In

both New Zealand and Australia they have given their approval to an act

which in actual practice may become more dangerous than any weapon that

has ever been forged against them. The only possible way they could gain

any advantage from it would be if they were able to elect the judge of

the Arbitration Court, but, to obtain a political majority for this

purpose, they would have to develop a broad social program which would

appeal to at least a part of the agriculturists as well as to the

working people, but here we turn to the considerations to be brought out

in the next chapter.

Mr. Charles Edward Russell, as the result of two visits to Australasia,

has very ably summed up the Socialist view of compulsory arbitration in

_The Coming Nation_, of which he is joint editor. Mr. Russell says:--

"The thing is a failure, greatly to the surprise of many capable

observers, and yet just such a result might have been expected from

the beginning, and for two perfectly obvious reasons, both of

which, strange to say, were universally overlooked.

"In the first place, the court was nominally composed of three

persons, and really of one. That one was the judge appointed by the

government.

"The representative of the employers voted every time for the

employers; the representative of the unions voted every time for

the unions; the judge alone decided, and might as well have

constituted the whole court.

"At first the judge decided most of the cases in favor of the

policy of increasing wages. Fine, again. Many wage scales ascended.

"But the judge, as a rule, did not like his job. He desired to get

to the Supreme Court as rapidly as possible; to the Supreme Court

where the honors were. A succession of judges went by. At last came

one that agreed with the employers that wages were too high for the

welfare of the country. This had long been a complaint of the

manufacturers in particular, who were fond of pointing out how high

wages discouraged the opening of new factories, and consequently

the development of the country. This judge, being of the same

opinion, apparently, began to decide the cases the other way.

"Then, of a sudden the second fatal defect in the system opened up.

"The men grew restless under the adverse decisions of the court.

That raised a new question.

"How are you going to compel men to work when they do not wish to

work under the conditions you provide?

"Nobody had thought of that."

Referring, then, to the failure to prevent the strike of the

slaughterers against the law in 1907, or to punish them after they had

forced their employers to terms, Mr. Russell gives the Socialist opinion

of the legislation of 1908, passed to remedy this situation:--

"At the next session of Parliament it amended the law to meet these

unexpected emergencies and find a way to compel men to work.

"To strike after a case had been referred to the court was now

made a crime, punishable by a fine, and if the fine were not paid,

the strikers' goods could be distrained and he could be imprisoned.

Any labor union that ordered a strike or allowed its members to

strike was made subject to a fine of $500. Outside persons or

organizations that aided or abetted a strike were made subject to

severe penalties.

"Fine, again. But suppose the labor unions should try to evade the

law by withdrawing from registry under the act? _Government thought

once more, and produced another amendment by which the penalties

for striking were extended to all trades engaged in supplying a

utility or a necessity, whether such trades were organized or not._

"You could hardly surpass this for ingenuity. 'Supplying a

necessity' would seem to cover about everything under the sun and

to make striking impossible. There must be no more strikes.

"Sounds like home, doesn't it? To do away with strikes. You see the

employing class, which all around the world gets what it wants and

controls every government, had put itself back of the arbitration

law. It had discovered that the law could be made to be a good

thing, so it was at the dictation of this class that the amendments

were passed. What the injunction judges do in America, or try to

do, the law was to do in New Zealand.

"Except that not Judge Goff nor Judge Guy, nor any other injunction

judge of our own happy clime, has dared to go quite so far as to

declare that all striking everywhere is a crime to be punished with

imprisonment.

"How are you going to compel men to work? Why, thus, said the

government of New Zealand. Put them in jail if they do not like the

terms of their employment."

Mr. Russell then gives an account of the miners' strike, above referred

to, which he points out was ended by the labor department paying the

miners' fines. He concludes:--

"Mr. Edward Tregear, a scholar and thinker, had filled for many

years the place of chief secretary for labor. It is not a cabinet

office, but comes next thereto. He is a wise person and a sincere

friend of the worker, as he has shown on many occasions. As soon as

he heard that the ministry actually purposed to imprison the miners

because they did not like the terms of their employment, he went to

the minister of labor and earnestly protested, protested with tears

in his eyes, as the minister himself subsequently testified,

begged, argued, and pleaded. No possible good could come from such

rigor, and almost certainly it would precipitate grave disaster.

"To all this the minister was obdurate. Then Mr. Tregear said that

he would resign; he would not retain his office and see men

imprisoned for exercising their inalienable right of choice,

whether they would or would not work under given conditions.

"Now Mr. Tregear was one of the most popular men in New Zealand,

and his resignation under such conditions would raise a storm that

no ministry would care to face. Hence the government was in a worse

situation than ever. On one side it fronted a dangerous venture

with the certainty of a tremendous handicap in the resignation of

the chief secretary, and on the other hand was an acknowledgment

that the arbitration law was a failure and could be violated with

impunity.

"In this emergency decision was halted for a few hours while the

government people consulted. Meantime, by quick and desperate

efforts, the strike was ended, and the men went back to work.

"This left the fines unpaid. The labor department solved that

difficulty and allowed the defeated government to make its escape

from a hopeless situation by paying the miners' fines.

"To all intents and purposes it was the end of compulsory

arbitration in New Zealand. Not nominally, for nominally the thing

goes on as before; but actually. It is only by breaking our shins

upon a fact that most of us ever learn anything; and the exalted

ministry of New Zealand had broken its shins aplenty on a fact that

might have been discerned from the start.

"If you are to have compulsory arbitration, you must compel one

side as much as the other.

"But in the existing system of society, when you come to compelling

the workers to accept arbitration's awards, you are doing nothing

in the world except to compel them to work, and, however the thing

may be disguised, compulsory work is chattel slavery, against which

the civilized world revolts.

"This is the way the thing works out, and the only way it ever can

work out. There can be no such thing as compulsory arbitration

without this ultimate situation.

"If, therefore, any one in America believes in such a plan for the

settlement of labor troubles, I invite the attention of such a one

to this plain record.

"For my own part, years ago I was wont to blame the labor leaders

of America because they steadfastly rejected compulsory

arbitration, and I now perceive them to have been perfectly right.

The thing is impossible."[75]

A somewhat similar act to the Australasian ones, though less stringent,

has been introduced in Canada. The Canadian law, which is a compromise

between compulsory arbitration and compulsory investigation, applies to

mines, railways, and other public utilities. Strikes have been

prevented, but let us see what benefits the employees have received.

Whatever its effect on wages and hours, the law has the tendency to

weaken the unions, which hitherto have been the only reliable means by

which employees were able to advance their condition. Not only does it

make organization seem less necessary, but it takes the most powerful

weapon of the union, the ability to call a sudden strike. If we add to

this the unfavorable influence on public opinion in case the unions are

not contented with the rewards, and the fact that the law works against

the union shop, which is the basis of some unions, we can understand the

ground of their hostility.

"The Canadian Labour Disputes Investigation Act" is especially

interesting and important because it is serving as a model for a

campaign to introduce legislation along similar lines into the United

States. Already Mr. Victor S. Clark, the author of the study of the

Australian Labour Movement, to which I have referred at the beginning of

the chapter, has been sent by Mr. Roosevelt and Mr. Taft to investigate

into the working of the act. Ex-President Charles W. Eliot of Harvard

has also advocated strenuously and at some length a similar statute, and

it has been made the basis for the campaign in Massachusetts and other

states. Mr. Clark reported: "Under the conditions for which it was

devised, the Canadian law, in spite of some setbacks, is useful

legislation, and it promises more for the future than most

measures--perhaps more than any other measure--for _promoting industrial

peace by government intervention_."

Here is the very keynote to compulsory arbitration, according to its

opponents, whose whole attack is based on the fact that its primary

purpose is not to improve the condition of the working people, but to

promote "industrial peace by government intervention."

Mr. Clark concedes that "possibly workers do sacrifice something of

influence in giving up sudden strikes," though he claims that they gain

in other ways. "After such a law is once on the statute books, however,

it usually remains, and in New Zealand, Australia, and Canada it has

created a new public attitude toward industrial disputes. This attitude

is the result of the idea--readily grasped and generally accepted when

once clearly presented--that the _public_ have an interest in industrial

conflicts quite as immediate and important in its way as that of the

conflicting parties. _If the American people have this truth vividly

brought to their attention by a great strike, the hopeful example of the

Canadian act seems likely, so far as the present experience shows, to

prove a guiding star in their difficulties._" (Italics mine.)

In the agitation that was made in behalf of a similar law in

Massachusetts, just exactly what is meant by the word "public" began to

appear. It refers not only to the consumers of the article produced by

the industry in which the strike occurs, but also to other dependent

industries, to the merchants of the locality where the workmen live, and

to the real estate interests. Here, then, are definite economic

interests which are concerned primarily in the prevention of strikes and

in the uninterrupted operation of the industry, and only in a secondary

way in rates of wages. _It is not a disinterested and non-partisan

public; it is not on the side of the employers nor on the side of the

employees, but it is opposed to the most effective weapons the working

people have yet found to advance their interests, namely, the strike and

the boycott._

It is said that if the workers lose the right to strike, the employers

lose the right to lockout. It has been customary to set the lockout over

against the strike as being of equal importance, but this is not the

truth. Employers can discharge their workingmen one at a time when they

are dissatisfied with a limited number; and they can often find a

business protest for temporarily shutting down or restricting their

output. To abolish strikes, then, is to take away the employees' chief

means of offense or defense; while to pretend to abolish strikes _and

lockouts_ is to leave in the hands of the employers the ability to

discharge or punish in other ways the men with whom they are

dissatisfied.

When it was proposed to introduce the Canadian law in Massachusetts, no

unionists of prominence indorsed it, but it was favored by a very large

number of employers, while those employers who objected did so for

widely scattered reasons. Mr. Clark is probably right in suggesting

that, while such a law will not be enacted in the United States as

things are now, it is very probable that it can be secured after some

industrial crisis--and there is little doubt that President Eliot and

perhaps also Mr. Roosevelt, for whom Mr. Clark was investigating, and

many other influential public men, are expecting this time to arrive

soon.

The attitude of a large minority of British unions and of a considerable

part of the British Socialists is similar to that of the Canadian and

Australian majority. When in 1907 the railway employees of Great Britain

were for the first time sufficiently aroused and organized, and on the

point of a national strike, a settlement was entered into through the

efforts of Mr. Lloyd George and the Board of Trade (and it is said with

the assistance of King Edward) which involved an entirely new principle

for that country. A board was constituted to settle this and future

strikes of which the Master of Rolls and other British functionaries

were the leading elements. Actually the workers consented for several

years to leave in the hands of the judges over whose election and

appointment they have only an indirect and partial, if indeed any,

control, complete power over their industrial life. The executive of the

Fabian Society issued a manifesto congratulating the government on this

"progressive" settlement, though few prominent labor leaders were

willing to give it their full indorsement. The Fabian manifesto said

that the advance in wages which could be secured by the settlement "will

undoubtedly have been secured on the trade-union program, through the

trade-union organization, by the trade union's representatives, and

finally, in the argument before the arbitrator, by the ability of the

trade union's secretary." But this settlement had nearly all the

features of the Canadian law which I have just mentioned, and especially

in failing to give any recognition to the unions, left the strongest

possible weapon in the hands of their enemies. Nevertheless, more than a

third of the members of the British Trade Union Congress voted since

that time for a compulsory arbitration act, and British radicals like

Percy Alden, M.P., to say nothing of conservatives, agitate for a law

along New Zealand lines. The railway strike of 1911 has decreased the

popularity of this proposal among unionists and Socialists, but has

augmented it in still greater proportion among nearly all other classes.

In the meanwhile, in spite of the employees' efforts, and external

concessions by the employers, the power in the newest railway

conciliation scheme lies also in the hands of the government (see Part

III, Chapter V).

Statements by President Taft and other influential Americans lead us to

believe it will be a very short period of years before similar

legislation is applied to this country, in spite of the hostility of the

unions, or perhaps with the consent of some of the weaker among them,

which have little to gain by industrial warfare. While Secretary of War,

Mr. Taft predicted a controversy between capital and labor which should

decide once and for all how capital and labor should share the joint

profits which they created. In this and many similar utterances there is

foreshadowed the interference of the State. Indeed, the settlement of

the Pennsylvania coal strike in 1903 was a clear example of such

interference, and there is no question that the precedents established

will be followed up on the next occasion of the kind by some arrangement

even less advantageous to employees who now almost universally feel, as

the present demands of the miner's union show, that they got the worst

of the former decision.

The railway and mining situations in Great Britain, and the demand for

the government to take some measure to protect employees against the

"trusts" in this country (to say nothing of the menace of a great coal

strike), promise to make compulsory arbitration an issue of the

immediate future. Mr. Roosevelt, who now proposes that the government

should interfere between monopolies and their employees, is the very man

who is responsible for the coal strike tribunal of 1903, which not only

denounced sympathetic strike and secondary boycott, but failed to

protect the men against discrimination on account of their unionism.

Were he or any one like him President, the institution of government

wage boards would be dreaded like the plague.

Similarly Mr. Winston Churchill, in Great Britain, recognizes the

extreme seriousness of the situation. His position is ably summed up by

the _Saturday Evening Post_:--

"Winston Churchill has propounded a capital-and-labor puzzle to his

British constituents.

"To a modern state, he says in substance, railroad transportation

is a necessity of life--and how literally true this is of England

was shown in the general strike of last August, when the food

supply in some localities ran down to only a few days'

requirements. So the government cannot permit railroad

transportation to be paralyzed indefinitely by a strike. It cannot

sit by and see communities starve. A point will soon be reached

where it must intervene and force resumption of transportation.

"Strikes, however, form one of the modern means of collective

bargaining between employer and employees. They are, in fact, the

workmen's final and most effective resource in driving a bargain.

Denied the right to strike, labor unions would be so many wooden

cannon at which employers could laugh. If the employer knew

absolutely that the men could not strike, he might offer any terms

he pleased. In wage bargaining the men would not stand on a level

footing, but be bound and gagged.

"If, then, the government takes away, or seriously restricts, the

right of the men to strike, isn't it bound to step into the breach

and readjust the balance between them and the employer, by

compelling the employer to pay them fair wages? There can be no

free bargaining if it is known that at a certain point the

government will intervene on one side. Must it not, then, also be

known that at a certain point the government will intervene on the

other side and compel payment of adequate wages?

"Mr. Churchill carries his puzzle only that far. On our own account

we add, How far will that leave us from regulation of wages as well

as of rates by the government, and how far will that leave us from

government ownership?"[76]

In a word, Mr. Churchill's remedy for the evils of "State Socialism" is

more "State Socialism"--and undoubtedly there is an inevitable trend in

that direction. But the government railway strikes of France, Austria,

Italy, Hungary, and other countries ought to show him that his remedy,

advantageous as it may be from many standpoints, is scarcely to be

considered even as a first step towards the solution of the labor

problem. As long as capitalists continue to control government, "State

Socialism," on the contrary, makes the strike more necessary, more

decisive, and invaluable, not only to employees, but to every class that

suffers from the government or the economic system it supports.

The most representative of American Socialists, Eugene V. Debs, has

given us an excellent characterization of this movement as it appears to

most Socialists.

"Successful leaders are wise enough to follow the people. For

instance, the following paragraph is to the point:--

"'Ultimately I believe that this control of corporations should

undoubtedly, directly or indirectly, extend to dealing with all

questions connected with their treatment of their employees,

including the wages, the hours of labor, and the like.'

"And what Socialist made himself ridiculous by such a foolish

utterance? No Socialist at all; only a paragraph from his latest

article on the trusts by Theodore Roosevelt. Five years ago, or

when he was still in office and had the power, he would not have

dared to make that statement. But he finds it politically safe and

expedient to make it now. It is not at all a radical statement. On

the contrary, it is simply the echo of E. H. Gary, that is to say,

John Pierpont Morgan, president of all the trusts.

"Mr. Roosevelt now proposes that Bismarck attempted in Germany

forty years ago to thwart the Socialist movement, and that is State

Socialism, so called, which is in fact the most despotic and

degrading form of capitalism.

"President Roosevelt, who is popularly supposed to be hostile to

the trusts, is in truth their best friend. He would have the

government, the capitalist government, of course, practically

operate the trusts and turn the profits over to their idle owners.

This would mean release from responsibility and immunity of

prosecution for the trust owners, _while at the same time the

government would have to serve as strikebreaker for the trust

owners_, and the armed forces of the government would be employed

to keep the working class in subjection.

"If this were possible, it would mark the halfway ground between

industrial despotism and industrial democracy. But it is not

possible, at least it is possible only temporarily, long enough to

demonstrate its failure. The expanding industrial forces now

transforming society, realigning political parties, and reshaping

the government itself cannot be fettered in any such artificial

arrangement as Mr. Roosevelt proposes. These forces, with the

rising and awakening working class in alliance with them, will

sweep all such barriers from the track of evolution until finally

they can find full expression in industrial freedom and social

democracy.

"In this scheme of State Socialism, or rather State capitalism, Mr.

Roosevelt fails to inform us how the idle owners of the trusts are

to function except as profit absorbers and parasites. In that

capacity they can certainly be dispensed with entirely and that is

precisely what will happen when the evolution now in progress

culminates in the reorganization of society."[77] (My italics.)

[72] Victor S. Clark, "The Labour Movement in Australasia."

[73] In her "American Socialism of the Present Day" (p. 185), Miss

Hughan has quoted me (see the _New York Call_ of December 12, 1909), as

classing the abolition of the injunction as one of the revolutionary

demands never to be satisfied until the triumph of Socialism. As a means

to check the growth of the power of the unions, this method of arbitrary

government by judges has never been resorted to except in the United

States. It is evident, then, that this statement was only meant for

America. It should also have been qualified so as to apply solely to the

America of to-day. For as other methods of checking the unions exist in

other countries, it is obvious that they could be substituted in this

country for the injunction, a proposition in entire accord with all I

have written on the subject--though unfortunately not stated in this

brief journalistic expression. I have now come to the belief, on the

grounds given in the text, not only that a new method of fighting the

unions (namely, compulsory arbitration) _can_ be substituted for the

injunction, but that this _will_ be done within a very few years.

[74] Professor Le Rossignol and Mr. William D. Stewart, "Compulsory

Arbitration in New Zealand," in the _Quarterly Journal of Economics_.

Reprinted in their book, "State Socialism in New Zealand."

N. B. The reader who is interested is referred to the whole of both

these volumes. There is little matter in either that does not have a

direct bearing on our subject, and they have been utilized throughout

this and the following chapter.

FOOTNOTES:

[75] _The Coming Nation_, Sept. 2, 1911.

[76] The _Saturday Evening Post_, Nov. 25, 1911.

[77] The _New York Times_, Nov. 25, 1911.

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