AMERICAN RELIEF ADMINISTRATION
With the coming of the armistice victorious America and the Allies found
themselves face to face with a terrible situation in Eastern Europe. The
liberated peoples of the Baltic states, Poland, Czecho-Slovakia,
Jugo-Slavia, and the Near East, were in a dreadful state of starvation
and economic wreckage. A great, responsibility and pressing duty
devolved on America, Great Britain, France, and Italy to act promptly
for the relief of these peoples who had become temporarily, by the
hazards of war, their wards. But the Allies themselves were in no
enviable position to relieve others. Their own troubles were many. It
was on America that the major part of this relief work would fall.
No man knew this situation, as far as it could be known before the veil
of blockade and military control was lifted from it, better than
Hoover. And no man realized more clearly than he the direful
consequences that it threatened not only to the peoples of the suffering
countries themselves but to the peace and stability of the world, to
restore which every effort had now to be exerted. Hoover was not only
the man logically indicated to the President of the United States to
undertake this saving relief on the part of America, but he was the man
whom all of Europe recognized as the source of hope in this critical
moment. He came to the gigantic endeavor as the man of the hour.
Hoover naturally made Paris his headquarters, for the Peace Conference
was sitting here, and here also were the representatives of the Allies
with whom he was to associate himself in the combined effort to save the
peoples of Eastern Europe from starvation and help them make a beginning
of self-government and economic rehabilitation.
His first steps were directed toward: First, securing cooerdination with
the Allied Governments by setting up a council of the associated
governments; second, finding the necessary financial support from the
United States for making the American contribution to this relief;
third, setting up a special organization for the administration of the
American food and funds; and, fourth, urging the provision of funds and
shipping by the Allied Governments.
The special American organization for assisting in this general European
relief was quickly organized under the name of the American Relief
Administration, of which Hoover was formally named by the President
Director-General, and Congress on the recommendation of the President
appropriated, on February 24, 1919, $100,000,000 as a working fund for
the new organization. In addition to this the United States Treasury was
already making monthly loans of several million dollars each to
Roumania, Serbia, and Czecho-Slovakia. But while waiting for the
Congressional appropriation the work had to be got going, and for this
the President contributed $5,000,000 from his special funds available
for extraordinary expenses.
Before actual relief work could be intelligently begun, however, it was
necessary to find out by personal inspection just what the actual food
situation in each of the Eastern European countries was, and for that
purpose investigating missions were sent out in December, 1918, and
January, 1919, to all of the suffering countries.
Hoover had quickly gathered about him, as nucleus of a staff, a number
of men already experienced in relief work and food matters who had
worked with him in the Belgian relief and the American Food
Administration. Others were rapidly added, both civilians of business or
technical experience and army officers, detached at his request,
especially from the Quartermaster and Service of Supplies corps. From
these men he was able to select small groups eager to begin with him the
actual work. His own impatience and readiness to make a real start was
like that of a race-horse at the starting gate or a runner with his toes
on the line awaiting the pistol shot.
The atmosphere of Paris was an irritating one. The men in control were
always saying "wait." There were a thousand considerations of old-time
diplomacy, of present and future political and commercial considerations
in their minds. They were conferring with each other and referring back
to their governments for instructions and then conferring again. Common
sense and necessity were being restrained by political sensitiveness and
inertia. In Hoover's mind one thing was perfectly clear. Time was of the
essence of his contract. Every day of delay meant more difficulty. The
Eastern countries, struggling to find themselves in the chaos of
disorganization, waiting for an official determination of their new
borders, were already becoming entangled in frontier brawls and
quarreling over the control of local sources of food and fuel. Their
people were suffering terribly and were clamoring for help. Hoover was
there to help; he wanted to begin helping. So he began.
Hoover had already taken the position that the day of hate was passed.
With the end of mutual slaughter and destruction came immediately the
time for help. It was like that pitiful period after the battle when the
bloody field is taken over by the stretcher-bearers, the Red Cross
nurses, and the tireless surgeons. So Hoover had already clearly in mind
that the hand of charity was going to be extended to the sufferers in
Hungary and Austria and Germany as well as to the people who were
suffering because of the ravages of the armies of these nations. Dr.
Alonzo Taylor and I, whom he had sent early in December to Switzerland
to get into close touch with the situation in Eastern and Central
Europe, listened, for him, in Berne to the pitiful pleas of the
representatives of starving Vienna. By January Hoover's missions were
installed and at work in Trieste, Belgrade, Vienna, Prague, Buda-Pest,
and Warsaw. In February Dr. Taylor and I were reporting the German
situation from Berlin.
The attitude of the people in these countries was one of pathetic
dependence on American aid and confidence that it would be forthcoming.
The name of Hoover was already known all over Europe because of his
Belgian work, and the swiftly-spread news that he was in charge of the
new relief work acted like magic in restoring hope to these despairing
millions.
When the first food mission to Poland, making its way in the first week
of January, 1919, with difficulty and discomfort because of the
demoralized transportation conditions, had reached that part of its
journey north of Vienna towards Cracow which brought it into
Czecho-Slovakia, our train halted at a station gaily decorated with
flags and bunting among which the American colors were conspicuous. A
band was playing vigorously something that sounded like the
Star-Spangled Banner, and a group of top-hatted and frock-coated
gentlemen were the front figures in a great crowd that covered the
station platform. I was somewhat dismayed by these evident preparations
for a reception, for we were not coming to try to help Czecho-Slovakia,
but Poland, between which two countries sharp feeling was already
developing in connection with the dispute over the Teschen coal fields.
I told my interpreter, therefore, to hurry off the train and explain the
situation.
He returned with one of the gentlemen of high hat and long coat who
said, in broken French: "Well, anyway, you are the food mission, aren't
you?" I replied, "Yes, but we are going to Warsaw; we are only passing
through your country; we can't do anything for you."
"But," he persisted, "you are the Americans, aren't you?"
"Yes, we are the Americans."
"Well, then, it's all right." And he waved an encouraging hand to the
band, which responded with increased endeavor, while the crowd cheered
and waved the home-made American flags. And we were received and
addressed, and given curious things to drink and a little food--we gave
them in return some Red Cross prisoner packages we carried along for our
own maintenance--and then we were sent on with more cheers and hearty
Godspeeds.
Delay so plainly meant sharper suffering and more deaths that even
before the necessary financial and other arrangements were completed or
even well under way, Hoover had made arrangements with the Secretary of
War by which vessels carrying 135,000 tons of American food were
diverted from French to Mediterranean ports, and with the Grain
Corporation, under authority of the Treasury, by which 145,000 tons
were started for northern European ports. Thus by the time arrangements
had been made for financing the shipments and for internal
transportation and safe control and fair distribution, the food cargoes
were already arriving at the nearest available ports. Within a few weeks
from the time the first mission arrived in Warsaw and had reported back
to Hoover the terrible situation of the Polish people, the relief food
was flowing into Poland through Dantzig, the German port for the use of
which for this purpose a special article in the terms of the armistice
had provided, but which was only most reluctantly and by dint of strong
pressure made available to us.
Similarly from Trieste the food trains began moving north while there
still remained countless details of arrangement to settle. I was in
Vienna when the first train of American relief food came in from the
South. The Italians were also attempting to send in some supplies, but
so far all the trains which had started north had been blocked at some
border point. The American train was in charge of two snappy doughboys,
a corporal and a private. When it reached the point of blockade the
corporal was told that he could go no farther. He asked why, but only
got for answer a curt statement that trains were not moving just now.
"But this one is," he replied, and called to his private: "Let me have
my gun." With revolver in hand he instructed the engineer to pull out.
And the train went on. When I asked him in Vienna if he had worried any
at the border about the customs and military regulations of the
governments concerned which he was disregarding, he answered with a
cheerful smile: "Not a worry; Mr. Hoover's representative at Trieste
told me to take the train through and it was up to me to take her,
wasn't it? These wop kings and generals don't count with me. I'm working
for Hoover."
But the whole situation in these southeastern countries because of their
utter disorganization and their hopeless embroilment in conflict with
each other, was too impossible. Whatever degree of peace the capitals of
these countries recognized as the diplomatic status of the moment, the
frontiers had no illusions. There were trenches out there and
machine-guns and bayonets. Men were shooting at each other across the
lines. Either the trains or cars of one country would be stopped at the
border, or if they got across they did not get back. Some countries had
enough cars and locomotives; some did not. If one country had some coal
to spare but was starving for lack of the wheat which could be spared by
its neighbor, which was freezing, there was no way of making the needed
exchange. The money of each country became valueless in the others--and
of less and less value in its own land. Everything was going to pieces,
including the relief. It simply could not go on this way.
Finally, as a result of Hoover's insistence at Paris on the terrible
danger of delay both to the lives of the people and the budding
democracy of Europe, the Supreme Economic Council took the drastic
measure of temporarily taking over the control of the whole
transportation system of Southeastern Europe which was put into Hoover's
hands, leaving him to arrange by agreement, as best he could, according
to his own ideas and opportunities, the other matters of finance, coal,
the interchange of native commodities between adjacent countries and the
distribution of imported food.
Hoover became, in a word, general economic and life-saving manager for
the Eastern European countries. It is from my personal knowledge of his
achievements in this extraordinary position during the first eight
months after the Armistice that I have declared my belief earlier in
this account that it was owing more to Hoover and his work than to any
other single influence that utter anarchy and chaos and complete
Bolshevik domination in Eastern Europe (west of Russia) were averted. In
other words, Hoover not only saved lives, but nations and civilizations
by his superhuman efforts. The political results of his work were but
incidental to his life-saving activities, but from an historical and
international point of view they were even more important.
Before, however, referring to them more specifically, something of the
scope and special character of the general European relief and supply
work should be briefly explained.
Altogether, twenty countries received supplies of food and clothing
under Hoover's control acting as Director-General of Relief for the
Supreme Economic Council. The total amount of these supplies delivered
from December 1, 1918, to June 1, 1919, was about three and a quarter
million tons, comprising over six hundred shiploads, of a total
approximate value of eight hundred million dollars. There were, in
addition, on June 1, port stocks of over 100,000 tons ready for internal
delivery, and other supplies came later.
The twenty countries sharing in the supplies included Belgium and
Northern France (through the C. R. B.), the Baltic states of Finland,
Esthonia, Latvia, and Lithuania, a small part of Russia, Poland,
Czecho-Slovakia, Germany, German Austria, Hungary, Roumania, Bulgaria,
Greater Servia, Turkey, Armenia, Italy, and the neutrals, Denmark and
Holland. By the terms of the Congressional Act appropriating the hundred
million dollars for the relief of Eastern Europe, no part of the money
could be used for the relief of Germany, Austria, Hungary, Bulgaria, or
Turkey. But Vienna needed help more quickly and imperatively than any
other eastern capital. Hoover arranged that money should be advanced by
England and France for food purchases in America for Austria and
Hungary. This food was put into Hoover's hands, and to him was left the
problem of getting it into the suffering countries. Germany was supplied
under the approval of the Allies in accordance with the armistice
agreement.
The "relief" of Eastern and Central Europe was, of course, not all
charity in the usually accepted meaning of the term. The American
hundred million dollars and the British sixty million dollars could not
buy the needed eight hundred millions' worth of food and clothing. In
fact, of that American hundred million all but about fifteen are now
again in the U. S. Treasury in the form of promises to pay signed by
various Eastern European Governments. About ten millions of it were
given by Hoover outright, in the form of special food for child
nutrition, to the under-nourished children from the Baltic to the Black
Sea. By additions made to this charity by the Eastern European
Governments themselves and by the nationals of these countries resident
in America, and from other sources, two and a half million weak children
are today still being given (May, 1920) a daily supplementary meal of
special food.
Hoover's experience in Belgium and Northern France had taught him how
necessary was the special care of the children. All the war-ravaged
countries have lost a material part of their present generation. In some
of them the drainage of human life and strength approaches that of
Germany after the Thirty Years War and of France after the Napoleonic
wars. If they are not to suffer a racial deterioration the coming
generation must be nursed to strength. The children, then, who are the
immediately coming generation and the producers of the ones to follow,
must be particularly cared for. That is what Hoover gave special
attention to from the beginning of his relief work and it is what he is
now still giving most of his time and energy to.
For the general re-provisioning of the peoples of Eastern and Central
Europe all of the various countries supplied were called on to pay for
the food at cost, plus transportation, to the extent of their
possibilities. Gold, if they had it--all of Germany's supply was paid
for in gold--paper money at current exchange, government promissory
notes, and commodities which could be sold to other countries, made up
the payments. The charity was in making loans, providing the food,
getting ships and barges and trains and coal for its transportation,
selling it at cost, and giving the service of several hundred active,
intelligent, and sympathetic Americans, mostly young and khaki-clothed,
and a lesser group of Allied officers, all devoted to getting the food
where it was needed and seeing that it was fairly distributed.
It is impossible to depict the utter bewilderment and helplessness of
the governments of the liberated nations of Eastern Europe at the
beginning of the armistice period. Nor is it possible to explain
adequately the enormous difficulties they faced in any attempt at
organizing, controlling, and caring for their peoples. With uncertain
boundaries--for the demarcation of these they were waiting on a hardly
less bewildered group of eminent gentlemen in Paris; with a financial
and economic situation presenting such appalling features of
demoralization that they could only be realized one at a time; with
their people clamoring for the immediately necessary food, fuel and
clothing, and demanding a swift realization of all the benefits that
their new freedom was to bring them; and with an ever more menacing
whistling wind of terror blowing over them from the East--with all this,
how the responsible men of the governments which rapidly succeeded each
other in these countries retained any persistent vestiges of sanity is
beyond the comprehension of those of us who viewed the scene at close
range.
For a single but sufficient illustration let us take the situation in
the split apart fragments of the former great Austro-Hungarian Empire,
which now constitute all or parts of German Austria, Hungary,
Czecho-Slovakia, Jugo-Slavia and Roumania. For all these regions (except
Roumania) Vienna had for years been the center of political authority
and chief economic control. In Vienna were many of the land-owners, most
of the heads of the great industries, and the directors of the
transportation system. It was the financial and market center, the hub
of a vast, intricate, and delicate orb-web of economic organization. But
the people and the goods of the various separated regions, except German
Austria, the smallest, weakest, and most afflicted one of them all, were
cut off from it and all were cut off from each other. The final
political boundaries were not yet fixed, to be sure, but actual military
frontiers were already established with all their limitations on
inter-communication and their disregard of personal needs. Shut up
within their frontiers these regions found themselves varyingly with or
without money--if they had any it was of ever-decreasing purchasing
power--with or without food, fuel, and raw materials for industry; and
with lesser or larger numbers of locomotives and railway cars, mostly
lesser. But of everything the distribution bore no calculated relation
to the needs of the industry and commerce or even to the actual
necessities of the people for the preservation of health and life.
Vienna, itself, "_die lustige schoene Stadt Wien_" was, as it still is
today and for long will be, the saddest great capital in Europe. Reduced
from its position of being the governing, spending, and singing and
dancing capital of an empire of fifty-five million people--it never was
a producing capital--to be the capital of a small, helpless nation of
scant seven million people concentrated in a region unable to meet even
their needs of food and coal--Vienna represents the pathetic extreme of
the cataclysmic results of War.
But if the situation was most complex and hopeless in the south, it was
far from simple or hopeful in the north. Poland, the smaller Baltic
states and Finland were all in desperate plight and their new
governments were all aghast at the magnitude of the problem before them.
To add to the difficulties of general disorganization of peoples, lack
of the necessities of life, and helplessness of governments, there was
ever continuing war. Armistice meant something real on the West and
Austro-Italian fronts, but it meant little to Eastern Europe. There was
a score of very lively little wars going on at once over there: Poland
alone was fighting with four different adversaries, one at each corner
of her land.
But the climax of the situation was reached in the realization by all
immediately concerned that something saving had to be done at once, or
the whole thing would become literal anarchy, with red and howling death
rampant over all. Bolshevik Russia, just over the Eastern borders, was
not only a vivid reality to these countries, but it was constantly
threatening to come across the borders and engulf them.
Its agents were working continuously among their peoples; there were
everywhere the sinister signs of the possibility of a swift removal of
the frontiers of Bolshevism from their Eastern to their Western borders.
In Paris the eminent statesmen and famous generals of the Peace
Conference and the Supreme Council sat and debated. They sent out
occasional ultimata ordering the cessation of fighting, the retirement
from a far advanced frontier, and what not else. Inter-Allied Economic
and Military Missions came and looked on and conferred and returned.
But nobody stopped fighting, and the conferences settled nothing. The
Allies were not in a position--this need be no secret now--to send
adequate forces to enforce their ultimata. An Inter-Allied Military
Mission of four generals of America, Great Britain, France and Italy
started by special train from Cracow to Lemberg to convey personally an
ultimatum to the Ruthenians and Poles ordering them to stop fighting.
The train was shelled by the Ruthenians east of Przemsyl, and the
generals came back. Eastern Europe expected the great powers to do
something about this, but nothing happened, and the discount on ultimata
became still more marked.
Somebody had to do something that counted. So Hoover did it. It was not
only lives that had to be saved; it was nations. It was not only
starvation that had to be fought; it was approaching anarchy, it was
Bolshevism.
As already stated, Hoover's food ships had left America for Southern and
Northern European ports before Hoover's men had even got into the
countries to be fed. As a consequence, food deliveries closely followed
food investigations. That counted with the people. One of Hoover's rules
was that food could only go into regions where it could be safeguarded
and controlled. That counted against Bolshevism. Shrewd Bela Kun was
able to play a winning game in Hungary against the Peace Conference and
Supreme Councils at Paris, but he was out-played by soft-voiced,
square-jawed Captain "Tommy" Gregory, Hoover's general director for
Southeast Europe, and it was this same California lawyer in khaki,
turned food man, who, when the communist Kun had passed and the pendulum
had swung as dangerously far in the other direction, allowing the
audacious Hapsburg, Archduke Joseph, to slip into power, had done most
to unseat him.
Gregory had been able to commandeer all the former military wires in the
Austro-Hungarian countries for use in the relief work. So he was able to
keep Hoover advised of all the news, not only promptly, but in good
Americanese. His laconic but fully descriptive message to Paris
announcing the Archduke's passing read: "August 24th, Archie went
through the hoop at 8 P. M. today."
Relief in Eastern Europe was spelled by Hoover with a capital _R_ and
several additional letters. It really spelled Rehabilitation. It meant,
in addition to sending in food, straightening out transportation,
getting coal mines going, and the starting up of direct exchange of
commodities among the unevenly supplied countries. There was some
surplus wheat in the Banat, some surplus coal in Czecho-Slovakia, some
extra locomotives in Vienna. So under the arbitrage of himself and his
lieutenants there was set up a wholesale international bartering, a
curious reversion to the primitive ways of early human society.
This exchange of needed goods by barter solved in some degree the
impossible financial situation, gave the people an incentive to work,
and helped reduce political inflammation. It was practical statesmanship
meeting things as they were and not as they might more desirably be, but
were not. I say again, and many men in the governments of Eastern
Europe, and even in the councils in Paris[1] have said, that Hoover
saved Eastern Europe from anarchy, and held active Bolshevism to its
original frontiers. That meant saving Western Europe, too.
Then Hoover came back to America to be an American private citizen
again. That is what he is today. He is still carrying on two great
charities in Eastern Europe: the daily feeding of millions of
under-nourished children, and the making possible, through his American
Relief Warehouses, for anyone in America to help any relatives or
friends anywhere in Eastern Europe by direct food gifts. But he is doing
it as private citizen. The story of Hoover--as far as I can write it
today--is that of an American who saw a particular kind of service he
could render his country and Europe and humanity in a great crisis. He
rendered it, and thus most truly helped make the world safe for
Democracy and human ideals. It would only be fair to add to his Belgian
citation the larger one of American Citizen of the World and Friend of
All the People. But he would only be embarrassed if anyone attempted to
do it now. We can safely leave the matter to History.
[Footnote 1: The official representative of the Treasury of one of the
Allied powers, who had no reason to be too friendly to the American
director of relief, for Hoover had often to oppose the policies of this
power in the Paris councils, has recently written of him: "Mr. Hoover
was the only man who emerged from the ordeal of Paris with an enhanced
reputation. This complex personality, with his habitual air of weary
Titan (or, as others might put it, of exhausted prizefighter), his eyes
steadily fixed on the true and essential facts of the European
situation, imported into the Councils of Paris, when he took part in
them, precisely that atmosphere of reality, knowledge, magnanimity, and
disinterestedness, which, if they had been found in other quarters also,
would have given us the Good Peace."]
APPENDICES
APPENDIX I
STATEMENT GIVEN TO THE PRESS BY U. S. FOOD ADMINISTRATOR HOOVER ON
NOVEMBER 12, 1918 (THE DAY AFTER THE ARMISTICE BEGAN), CONCERNING THE
RESULTS OF FIFTEEN MONTHS OF FOOD ADMINISTRATION
With the war effectually over we enter a new economic era, and its
immediate effect on prices is difficult to anticipate. The maintenance
of the embargo will prevent depletion of our stocks by hungry Europe to
any point below our necessities, and anyone who contemplates speculation
in food against the needs of these people can well be warned of the
prompt action of the government. The prices of some food commodities may
increase, but others will decrease, because with liberated shipping
accumulated stocks in the Southern hemisphere and the Far East will be
available. The demands upon the United States will change in character
but not in volume.
The course of food prices in the United States during the last fifteen
months is of interest. In general, for the first twelve months of the
Food Administration the prices to the farmer increased, but decreased to
the consumer by the elimination of profiteering and speculation. Due to
increases in wages, transportation, etc., the prices have been
increasing during the last four months.
The currents which affect food prices in the United States are much less
controlled than in the other countries at war. The powers of the Food
Administration in these matters extend:
First, to the control of profits by manufacturers, wholesalers and
dealers, and the control of speculation in foodstuffs. They do not
extend to the control of the great majority of retailers, to public
eating places, or the farmer, except so far as this can be accomplished
on a voluntary basis.
Second, the controlled buying for the Allied civil populations and
armies, the neutrals and the American army and navy, dominates the
market in certain commodities at all times, and in other commodities
part of the time. In these cases it is possible to effect, in
cooeperation with producers and manufacturers, a certain amount of
stability in price. I have never favored attempts to fix maximum prices
by law; the universal history of these devices in Europe has been that
they worked against the true interests of both producer and consumer.
The course of prices during the first year of the Food Administration,
that is, practically the period ending July 1,1918, is clearly shown by
the price indexes of the Department of Agriculture and the Department of
Labor. Taking 1913 prices as the basis, the average prices of farm
produce for the three months ending July 1, 1917, were, according to the
Department of Agriculture's price index, 115 per cent more than the
average of 1913 prices, and according to the Department of Labor index,
it was 91 per cent over 1913 prices. The two departments use somewhat
different bases of calculation. The average of farmers' prices one year
later--that is, the three months ending July 1,1918, was, according to
the Department of Agriculture indexes, 127 per cent over the 1913 basis
and, according to the Department of Labor index, was 114 per cent over
the 1913 average. Thus farm prices increased 12 per cent on the
Department of Agriculture calculations and 23 per cent upon the
Department of Labor basis.
An examination of wholesale prices, that is, of prepared foods, shows a
different story:
The Department of Agriculture does not maintain an index of wholesale
prices, but the Department of Labor does, and this index shows a
decrease in wholesale prices from 87 per cent over 1913 basis to 79 per
cent over the 1913 basis for the three months ending July 1, 1917, and
July 1, 1918, respectively. The Food Administration price index of
wholesale prices calculated upon still another basis shows a decrease of
from 84 per cent to 80 per cent between these periods one year apart.
Thus all indexes show an increase in farmers' prices and a decrease in
wholesale prices of food during the year ending July 1, 1918. In other
words, a great reduction took place in middlemen's charges, amounting to
between 15 per cent and 30 per cent depending upon the basis of
calculation adopted. These decreases have come out of the elimination of
speculation and profiteering.
The course of retail prices corroborates these results also. Since
October, 1917, the Food Administration has had the services of 2,500
weekly, voluntary retail price reporters throughout the United States.
These combined reports show that the combined prices per unit of 24 most
important foodstuffs were $6.62 in October, 1917. The same quantities
and commodities could be bought for $6.55 average for the spring
quarter, 1918--that is, a small drop had taken place. During this same
period of quarters ending July 1, 1917, to July 1, 1918, the prices of
clothing rose from 74 per cent to 136 per cent over 1913, or a rise of
about 62 per cent, according to the Department of Labor indexes.
Since the spring quarter, ending July 1, 1918, there has been a rise in
prices, the Department of Agriculture index for September showing that
farm price averages were 138 per cent over the 1913 basis, and the
Department of Labor index showing 136 per cent, or a rise from the
average of the spring quarter this year of 11 per cent and 22 per cent
respectively to the farmer. The wholesale price index of the Department
of Labor shows a rise from 79 per cent average of the spring quarter,
1918, to 99 per cent for September, or a rise of 20 per cent. The Food
Administration wholesale index shows an increase from 80 per cent to 100
per cent, or 20 per cent for the same period.
In October, 1918, the Food Administration retail price reports show that
the retail cost of the same quantity of the 24 principal foodstuffs was
$7.58 against an average of $6.55 for the spring quarter 1918, or a rise
of about 18 per cent.
It is obvious enough that prices have risen during the last three
months both to the farmer and to the wholesaler and retailer. On the
other hand, these rising prices have only kept pace with the farmers'
prices.
Since the first of July this year, many economic forces have caused a
situation adverse to the consumer. There has been a steady increase in
wages, a steady increase in cost of the materials which go into food
production and manufacture, and in containers and supplies of all kinds.
There has been an increase of 25 per cent in freight rates. The rents of
the country are increasing and therefore costs of manufacturing,
distribution and transportation are steadily increasing and should
inevitably affect prices. The public should distinguish between a rise
in prices and profiteering, for with increasing prices to the
farmer--who is himself paying higher wages and cost--and with higher
wages and transport, prices simply must rise. An example of what this
may come to can be shown in the matter of flour. The increased cost of
transportation from the wheat-producing regions to New York City amounts
to about forty cents per barrel. The increased cost of cotton bags
during the last fourteen months amounts to thirty cents per barrel of
flour. The increase in wholesalers' costs of drayage, rents, etc.,
amounts to ten cents, or a total of eighty cents without including the
increased costs of the miller or retailer.
Such changes do not come under the category of profiteering. They are
the necessary changes involved by the economic differences in the
situation. We cannot "have our cake and eat it." In other words, we
cannot raise wages, railway rates, expand our credits and currency, and
hope to maintain the same level of prices of foods. All that the Food
Administration can do is to see as far as is humanly possible that these
alterations take place without speculation or profiteering, and that
such readjustments are conducted in an orderly manner. Even though it
were in the power of the Food Administration to repress prices, the
effect of maintaining the same price level in the face of such increases
in costs of manufacture, transportation and distribution, would be
ultimately to curtail production itself. We are in a period of inflation
and we cannot avoid the results.
We have had a large measure of voluntary cooeperation both from
producers, manufacturers and wholesalers, in suppression of profiteering
and speculation. There are cases that have required stern measures, and
some millions of dollars have been refunded in one way or another to
the public. The number of firms penalized is proportionately not large
to the total firms engaged.
In the matter of voluntary control of retailers we have had more
difficulty, but in the publication from week to week in every town in
the country of "fair prices" based upon wholesale costs and type of
service, there has been a considerable check made upon overcharges. The
Food Administration continues through the armistice until legal peace
and there will be no relaxation of efforts to keep down profiteering and
speculation to the last moment.
APPENDIX II
ADDRESS OF MR. HOOVER AT HIS INAUGURATION AS PRESIDENT OF THE AMERICAN
INSTITUTE OF MINING ENGINEERS (NEW YORK CITY, FEBRUARY 17, 1920)
I have been greatly honored as your unanimous choice for President of
this Institute with which I have been associated during my entire
professional life. It is customary for your new President, on these
occasions, to make some observation on matters of general interest from
the engineer's standpoint.
The profession of engineering in the United States comprises not alone
scientific advisers on industry, but is in great majority composed of
men in administrative positions. In such positions they stand midway
between capital and labor. The character of your training and experience
leads you to exact and quantitative thought. This basis of training in a
great group of Americans furnished a wonderful recruiting ground for
service in these last years of tribulation. Many thousands of engineers
were called into the army, the navy, and civilian service for the
Government. Thousands of high offices were discharged by them with
credit to the profession and the nation.
We have in this country probably one hundred thousand professional
engineers. The events of the past few years have greatly stirred their
interest in national problems. This has taken practical form in the
maintenance of joint committees for discussion of these problems and
support to a free advisory bureau in Washington. The engineers want
nothing for themselves from Congress. They want efficiency in
government, and you contribute to the maintenance of this bureau out of
sheer idealism. This organization for consideration of national problems
has had many subjects before it and I propose to touch on some of them
this evening.
Even more than ever before is there necessity for your continued
interest in this vast complex of problems that must be met by our
Government. We are faced with a new orientation of our country to world
problems. We face a Europe still at war; still amid social revolutions;
some of its peoples still slacking on production; millions starving; and
therefore the safety of its civilization is still hanging by a slender
thread. Every wind that blows carries to our shores an infection of
social diseases from this great ferment; every convulsion there has an
economic reaction upon our own people. If we needed further proof of the
interdependence of the world, we have it today in the practical blockade
of our export market. The world is asking us to ratify long delayed
peace in the hope that such confidence will be restored as will enable
her to reconstruct her economic life. We are today contemplating
maintenance of an enlarged army and navy in preparedness for further
upheavals in the world, and failing to provide even some insurance
against war by a league to promote peace.
Out of the strain of war, weaknesses have become ever more evident in
our administrative organization, in our legislative machinery. Our
federal government is still overcentralized, for we have upon the hands
of our government enormous industrial activities which have yet to be
demobilized. We are swamped with debt and burdened with taxation. Credit
is woefully inflated; speculation and waste are rampant. Our own
productivity is decreasing. Our industrial population is crying for
remedies for the increasing cost of living and aspiring to better
conditions of life and labor. But beyond all this, great hopes and
aspirations are abroad; great moral and social forces have been
stimulated by the war and will not be quieted by the ratification of
peace. These are but some of the problems with which we must deal. I
have no fear that our people will not find solutions. But progress is
sometimes like the old-fashioned rail fence--some rails are perhaps
misshapen and all look to point the wrong way; but in the end, the fence
progresses.
Your committees, jointly with those of other engineering societies, have
had before them and expressed their views on many matters concerning the
handling of the railways, shipping, the reorganization of the government
engineering work, the national budget, and other practical items.
The war nationalization of railways and shipping are our two greatest
problems in governmental control awaiting demobilization. There are many
fundamental objections to continuation of these experiments in socialism
necessitated by the war. They lie chiefly in their destruction of
initiative in our people and the dangers of political domination that
can grow from governmental operation. Beyond this, the engineers will
hold that the successful conduct of great industries is to a
transcendant degree dependent upon the personal abilities and character
of their employees and staff. No scheme of political appointment has
ever yet been devised that will replace competition in its selection of
ability and character. Both shipping and railways have today the
advantage of many skilled persons sifted out in the hard school of
competition, and even then the government operation of these enterprises
is not proving satisfactory. Therefore, the ultimate inefficiency that
would arise from the deadening paralysis of bureaucracy has not yet had
full opportunity for development. Already we can show that no government
under pressure of ever-present political or sectional interests can
properly conduct the risks of extension and improvement, or can be free
from local pressure to conduct unwarranted services in industrial
enterprise. On the other hand, our people have long since recognized
that we cannot turn monopoly over to unrestrained operation for profit
nor that the human rights of employees can ever be dominated by
dividends.
Our business is handicapped on every side by the failure of our
transportation facilities to grow with the country. It is useless to
talk about increased production to meet an increased standard of living
in an increasing population without a greatly increased transport
equipment. Moreover, there are very great social problems underlying
our transport system; today their contraction is forcing a congestion of
our population around the great cities with all that these overswollen
settlements import. Even such great disturbances as the coal strike have
a minor root in our inadequate transportation facilities and their
responsibility for intermittent operation of the mines.
We are all hoping that Congress will find a solution to this problem
that will be an advanced step toward the combined stimulation of the
initiative of the owners, the efficiency of operation, the enlistment of
the good will of the employees, and the protection of the public. The
problem is easy to state. Its solution is almost overwhelming in
complexity. It must develop with experience, step by step, toward a real
working partnership of its three elements.
The return of the railways to the owners places predominant private
operation upon its final trial. If instant energy, courage and large
vision in the owners should prove lacking in meeting the immediate
situation we shall be faced with a reaction that will drive the country
to some other form of control. Energetic enlargement of equipment,
better service, cooeperation with employees, and the least possible
advance in rates, together with freedom from political interest, will be
the scales upon which the public will weigh these results.
Important phases of our shipping problem that have come before you
should receive wider discussion by the country. As the result of war
pressure, we shall spend over $2,800,000,000 in the completion of a
fleet of nineteen hundred ships of a total of 111,000,000 tons--nearly
one quarter of the world's cargo shipping. We are proud of this great
expansion of our marine, and we wish to retain it under the American
flag. Our shipping problem has one large point of departure from the
railway problem, for there is no element of natural monopoly. Anyone
with a water-tight vehicle can enter upon the seas today, and our
government is now engaged upon the conduct of a nationalized industry in
competition with our own people and all the world besides. While in the
railways government inefficiency could be passed on to the consumer, on
the seas we will sooner or later find it translated to the national
Treasury.
Until the present time, there has been a shortage in the world's
shipping, but this is being rapidly overtaken and we shall soon be met
with fierce competition of private industry. If the government continues
in the shipping business, we shall be disappointed from the point of
view of profits. For we shall be faced with the ability of private
enterprise to make profits from the margins of higher cost of government
operation alone. Aside from those losses inherent in bureaucracy and
political pressure, there are others special to this case. The largest
successfully managed cargo fleet in the world comprises about one
hundred and twenty ships and yet we are attempting to manage nineteen
hundred ships at the hands of a government bureau. In normal times the
question of profit or loss in a ship is measured by a few hundred tons
of coal wasted, by a little extravagance in repairs, or by four or five
days on a round trip. Beyond this, private shipping has a free hand to
set up such give-and-take relationships with merchants all over the
world as will provide sufficient cargo for all legs of a voyage, and
these arrangements of cooeperation cannot be created by government
employees without charge or danger of favoritism. Lest fault be found,
our government officials are unable to enter upon the detailed higgling
in fixing rates required by every cargo and charter. Therefore they must
take refuge in rigid regulations and in fixed rates. In result, their
competitors underbid by the smallest margins necessary to get the
cargoes. The effect of our large fleet in the world's markets is thus
to hold up rates, for so long as this great fleet in one hand holds a
fixed rate others will only barely underbid. If we hold up rates an
increasing number of our ships will be idle as the private fleet grows.
On the other hand, if we reduce rates we shall be underbid until the
government margin of larger operation cost causes us to lose money.
We shall yet be faced with the question of demobilizing a considerable
part of this fleet into private hands, or frankly acknowledging that we
operate it for other reasons than interest on our investment. In this
whole problem there are the most difficult considerations requiring the
best business thought in the country. In the first instance, our
national progress requires that we retain a large fleet under our flag
to protect our national commercial expansion overseas. Secondly, we may
find it desirable to hold a considerable government fleet to build up
trade routes in expansion of our trade, even at some loss in operation.
Thirdly, in order to create this fleet, we have built up an enormous
ship-building industry. Fifty per cent of the capacity of our ship yards
will more than provide any necessary construction for American account.
Therefore there is a need of obtaining foreign orders, or the reduction
of capacity, or both. I believe, with most engineers, that, with our
skill in repetition manufacture, we can compete with any ship builders
in the world and maintain our American wage standards; but this
repetition manufacture implies a constant flow of orders. It would seem
highly desirable, in order to maintain the most efficient yards until
they can establish themselves firmly in the world's industrial fabric,
that the Government should continue to let some ship construction
contracts to the lowest bidders, these contracts to supplement private
building in such a way as to maintain the continuous operation of the
most economical yards and the steady employment of our large number of
skilled workers engaged therein.
When we consider giving orders for new ships, we must at the same time
consider the sale of ships, as we cannot go on increasing this fleet.
When we consider sale, we are confronted with the fact that our present
ships were built under expensive conditions of war, costing from three
to four times per ton the pre-war amount, and that already any merchant,
subject to the long time of delivery, can build a ship for seventy-five
per cent of their cost. It would at least seem good national policy to
sell ships today for the price we can contract for delivery a year or
two hence, thus making the government a reservoir for continuous
construction.
We could thus stabilize building industry to some degree and also bring
the American-owned fleet into better balance, if each time that the
government sold three or four emergency constructed cargo vessels it
gave an order for one ship of a better and faster type. This would make
reduction in our ship-building steadier and would give the country the
type of ships we need.
Our joint engineering committees have examined with a great deal of care
into the organization of and our expenditure on public works and
technical services. These committees have consistently and strongly
urged the appalling inefficiency in the government organization of these
matters. They report to you that the annual expenditure on such works
and services now amounts to over $250,000,000 per annum, and that they
are carried out today in nine different governmental departments. They
report that there is a great waste by lack of national policy of
cooerdination, in overlapping with different departments, in competition
with each other in the purchase of supplies and materials, and in the
support of many engineering staffs.
They recommend the solution that almost every civilized government has
long since adopted, that is, the cooerdination of these measures into one
department under which all such undertakings should be conducted and
controlled. As a measure practical to our government, they have
advocated that all such bureaus should be transferred to the Interior
Department, and all the bureaus not relating to those matters should be
transferred from the Interior to other departments. The Committee
concludes that no properly organized and directed saving in public works
can be made until such a re-grouping and consolidation is carried out,
and that all of the cheeseparing that normally goes on in the honest
effort of Congressional committees to control departmental expenditure
is but a tithe of that which could be effected if there were some
concentration of administration along the lines long since demonstrated
as necessary to the success of private business.
Another matter of government organization to which our engineers have
given adhesion is in the matter of the national budget. To minds charged
with the primary necessity of advance planning, cooerdination, provision
of synchronizing parts in organization, the whole notion of our
hit-or-miss system is repugnant. A budget system is not the remedy for
all administrative ills, but it provides a basis of organization that at
least does not paralyze administrative efficiency as our system does
today. Through it, the cooerdination of expenditure in government
department, the prevention of waste and overlapping in government
bureaus, the exposure of the "pork barrel," and the balancing of the
relative importance of different national activities in the allocation
of our national income can all be greatly promoted. Legislation would
also be expedited. No budget that does not cover all government
expenditure is worth enactment. Furthermore, without such reorganization
as the grouping of construction departments, the proper formulation of a
budget would be hopeless. The budget system in some form is so nearly
universal in civilized governments and in completely conducted business
enterprise, and has been adopted in thirty of our States, that its
absence in our federal government is most extraordinary. It is, however,
but a further testimony that it is always a far cry of our citizens from
the efficiency in their business to interest in the efficiency of their
government.
Another great national problem to which every engineer in the United
States is giving earnest thought, and with which he comes in daily
contact, is that of the relationship of employer and employee in
industry. In this, as in many other national problems today, we are
faced with a realization that the science of economics has altered from
a science of wealth to a science of human relationships to wealth. We
have gone on for many years throwing the greatest of our ingenuity and
ability into the improvement of processes and tools of production. We
have until recently greatly neglected the human factor that is so large
an element in our very productivity. The development of vast repetition
in the process of industry has deadened the sense of craftsmanship, and
the great extension of industry has divorced the employer and his
employee from that contact that carried responsibility for the human
problem. This neglect of the human factor has accumulated much of the
discontent and unrest throughout our great industrial population and has
reacted in a decrease of production. Yet our very standards of living
are dependent on a maximum productivity up to the total necessities of
our population.
Another economic result is, or will be yet, a repercussion upon the
fundamental industry of the United States, that is, agriculture. For the
farmer will be unable to maintain his production in the face of a
constant increase in the cost of his supplies and labor through
shrinkage in production in other industries. The penalty of this
disparity of effort comes mainly out of the farmer's own earnings.
I am daily impressed with the fact that there is but one way out, and
that is again to reestablish through organized representation that
personal cooeperation between employer and employee in production that
was a binding force when our industries were smaller of unit and of less
specialization. Through this, the sense of craftsmanship and the
interest in production can be re-created and the proper establishment of
conditions of labor and its participation in a more skilled
administration can be worked out. The attitude of refusal to participate
in collective bargaining with representatives of the employees' own
choosing is the negation of this bridge to better relationship. On the
other hand, a complete sense of obligation to bargains entered upon is
fundamental to the process itself. The interests of employee and
employer are not necessarily antagonistic; they have a great common
ground of mutuality and if we could secure emphasis upon these common
interests we would greatly mitigate conflict. Our government can
stimulate these forces, but the new relationship of employer and
employee must be a matter of deliberate organization within industry
itself. I am convinced that the vast majority of American labor
fundamentally wishes to cooeperate in production, and that this basis of
goodwill can be organized and the vitality of production re-created.
Many of the questions of this industrial relationship involve large
engineering problems, as an instance of which I know of no better
example than the issue you plan for discussion tomorrow in connection
with the soft coal industry. Broadly, here is an industry functioning
badly from an engineering and consequently from an economic and human
standpoint. Owing to the intermittency of production, seasonal and
local, this industry has been equipped to a peak load of twenty-five or
thirty per cent over the average load. It has been provided with a
twenty-five or thirty per cent larger labor complement than it would
require if continuous operation could be brought about. I hope your
discussion will throw some light on the possibilities of remedy. There
lies in this intermittency not only a long train of human misery through
intermittent employment, but the economic loss to the community of over
a hundred thousand workers who could be applied to other production, and
the cost of coal could be decreased to the consumer. This intermittency
lies at the root of the last strike in the attempt of the employees to
secure an equal division among themselves of this partial employment at
a wage that could meet their view of a living return on full employment.
These are but a few of the problems that confront us. But in the
formulating of measures of solution, we need a constant adherence to
national ideal and our own social philosophy.
In the discussion of these ideals and this social philosophy, we hear
much of radicalism and of reaction. They are, in fact, not an academic
state of mind but realize into real groups and real forces influencing
the solution of economic problems in this community. In their
present-day practical aspects, they represent, on one hand, roughly,
various degrees of exponents of socialism, who would directly or
indirectly undermine the principle of private property and personal
initiative, and, on the other hand, those exponents who in varying
degrees desire to dominate the community for profit and privilege. They
both represent attempts to introduce or preserve class privilege, either
a moneyed or a bureaucratic aristocracy. We have, however, in American
democracy an ideal and a social philosophy that sympathizes neither with
radicalism nor reaction as they are manifested today.
For generations the American people have been steadily developing a
social philosophy as part of their own democracy, and in these ideals,
it differs from all other democracies. This philosophy has stood this
period of test in the fire of common sense; it is, in substance, that
there should be an equality of opportunity, an equal chance, to every
citizen. This view that every individual should, within his lifetime,
not be handicapped in securing that particular niche in the community to
which his abilities and character entitle him, is itself the negation of
class. Human beings are not equal in these qualities. But a society that
is based upon a constant flux of individuals in the community, upon the
basis of ability and character, is a moving virile mass; it is not a
stratification of classes. Its inspiration is individual initiative. Its
stimulus is competition. Its safeguard is education. Its greatest mentor
is free speech and voluntary organization for public good. Its
expression in legislation is the common sense and common will of the
majority. It is the essence of this democracy that progress of the mass
must arise from progress of the individual. It does not permit the
presence in the community of those who would not give full meed of their
service.
Its conception of the State is one that, representative of all the
citizens, will in the region of economic activities apply itself mainly
to the stimulation of knowledge, the undertaking only of works beyond
the initiative of the individual or group, the prevention of economic
domination of the few over the many, and the least entrance into
commerce that government functions necessitate.
The method and measures by which we solve this accumulation of great
problems will depend upon which of these three conceptions will reach
the ascendancy amongst our people.
If we cling to our national ideals it will mean the final isolation and
the political abandonment of the minor groups who hope for domination of
the government, either by "interests" or by radical social theories
through the control of our political machinery. I sometimes feel that
lawful radicalism in politics is less dangerous than reaction, for
radicalism is blatant and displays itself in the open. Unlawful
radicalism can be handled by the police. Reaction too often fools the
people through subtle channels of obstruction and progressive
platitudes. There is little danger of radicalism's ever controlling a
country with so large a farmer population, except in one contingency.
That contingency is from a reflex of continued attempt to control this
country by the "interests" and other forms of our domestic
reactionaries.
The mighty upheaval following the world war has created turmoil and
confusion in our own country no less than in all other lands. If America
is to contribute to the advance of civilization, it must first solve its
own problems, must first secure and maintain its own strength. The kind
of problems that present themselves are more predominantly
economic--national as well as international--than at any period in our
history. They require quantitative and prospective thinking and a sense
of organization. This is the sort of problems that your profession deals
with as its daily toil. You have an obligation to continue the fine
service you have initiated and to give it your united skill.
APPENDIX III
ADDRESS OF MR. HOOVER BEFORE THE BOSTON CHAMBER OF COMMERCE (MARCH 24,
1920)
As you are aware, a report has recently been issued by the Industrial
Conference, of which I have been a member together with Governor McCall
and Mr. Hooker of your State. The conference embraced among its members
representatives from all shades of life including as great a trade
unionist as Secretary Wilson. I propose to discuss a part of the problem
considered by that commission. There is no more difficult or more urgent
question confronting us than constructive solution of the employment
relationship. It is not sufficient to dismiss the subject with generous
and theoretic phrases, "justice to capital and labor," "the golden
rule," "the paramount interest of the people," or a score of others, for
there underlies this question the whole problem of the successful
development of our democracy.
During last year there was a great deal of industrial unrest throughout
the entire world. This has somewhat moderated during the last few
months, but the underlying causes are only slumbering. Because the
country is not today involved in any great industrial conflicts, we
should not congratulate ourselves that the problem of industrial
relations has been solved. Furthermore, the time for proper
consideration of great problems does not lie in the midst of great
public conflict but in sober consideration during times of tranquillity.
There is little to be gained by discussion of the causes of industrial
unrest. Every observer is aware of the category of disturbing factors
and every one will place a different emphasis on the different factors
involved.
There is, however, one outstanding matter that differentiates our
present occasion from those that have gone before. It cannot be denied
that unrest in our industrial community is characterized more than ever
before by the purposes and desires that go beyond the demand for higher
wages and shorter hours. The aspirations inherent in this form of
restlessness are to a great extent psychological and intangible. They
are not, for this reason, any less significant. There is perhaps in some
local cases an infection of European patent medicines, and the desire
to use labor for political purposes. Aside from this, however, they do
reveal a desire on the part of the workers to exert a larger and more
organic influence in the processes of industrial life. They want better
assurance that they will receive a just proportion of their share of
production. I do not believe those desires are to be discouraged. They
should be turned into helpful and cooeperative channels. There is no
surer road to radicalism than repression.
One can only lead up to consideration of these problems by tracing some
features of our industrial development even though they may be trite to
most of you. One underlying cause of these discontents is that with the
growth of large plants there has been a loss of personal contact between
employers and employees. With the high specialization and intense
repetition in labor in industrial processes, there has been a loss of
creative interest. It is, however, the increased production that we have
gained by this enlargement of industry that has enabled the standard of
living to be steadily advanced. The old daily personal contact of
employer and employee working together in small units carried with it a
great mutuality of responsibility. There was a far greater understanding
of the responsibilities toward employees and there was a better
understanding by employees of the economic limitations imposed upon the
employer. Nor can the direct personal contact in the old manner be
restored.
With the growth of capital into larger units, there was an inequality of
the bargaining power of the individual. Labor has therefore gradually
developed its defense against the aggregation of capital by
counter-organization. The organized uses of strike and lockout on either
side and the entrance of their organization into the political arena
have become the weapons for enforcement of demands. The large
development of industrial units with possible cessation of production
and service, through strikes and lockouts, penalizes the public. The
public is not content to see these conflicts go on, for they do not
alone represent loss in production, and thus lowering of the standard of
living, but also they may, by suspension of public service, jeopardize
the life of the community.
But the solution of the industrial problem is not solely the prevention
of conflict and its losses by finding methods of just determination of
wages and hours. Not only must solution of those things be found out
but, if we are to secure increased production and increased standard of
living, we must reawaken interest in creation, in craftsmanship and
contribution of his intelligence to management. We must surround
employment with assurance of just division of production. We must enlist
the interest and confidence of the employees in the business and in
business processes.
We have devoted ourselves for many years to the intense improvement of
the machinery and processes of production. We have neglected the broader
human development and satisfactions of life of the employee that leads
to greater ability, creative interest, and cooeperation in production. It
is in stimulation of these values that we can lift our industry to its
highest state of productivity, that we can place the human factor upon
the plane of perfection reached by our mechanical processes. To do these
things requires the cooeperation of labor itself and to obtain
cooeperation we must have an intimate organized relationship between
employer and the employee and that cannot be obtained by benevolence;
that can only be obtained by calling the employee to a reciprocal
service.
Therefore it has been the guiding thought of the conference that if
these objects are to be obtained a definite and continuous organized
relationship must be created between the employer and the employee and
that by the organization of this relationship conflict in industry can
be greatly mitigated, misunderstanding can be eliminated, and that
spirit of cooeperation can be established that will advance the
conditions of labor and secure increased productivity.
It is idle to argue that there are at times no conflict of interest
between the employee and the employer. But there are wide areas of
activity in which their interests should coincide, and it is the part of
statesmanship on both sides to organize this identity of interest in
order to limit the area of conflict. If we are to go on with the present
disintegrating forces, these conflicts become year by year more critical
to the existence of the State. If we cannot secure a reduction in their
destructive results by organization of mutual action in industry, then I
fear that public resentment will generate a steadily larger intervention
of the Government into these questions.
In consideration of a broad, comprehensive, national policy, the
Conference had before it four possible alternative lines of action.
First, the attempt to hew out a national policy in the development of
the progressive forces at work for better understanding in industry
under such conditions as would maintain self-government in industry
itself; or, secondly, to adopt some of the current plans of industrial
courts, involving summary decision with jail for refusal to accept, such
as that initiated in the State of Kansas; or, thirdly, the
nationalization at least of the services upon which the very life of the
community depends; fourthly, to do nothing.
In a survey of the forces making for self-government in industry, the
Conference considered that definite encouragement must be given to the
principles of collective bargaining, of conciliation, of arbitration,
but that such forces could not develop in an atmosphere of legal
repression. There is but little conflict of view as to the principle of
collective bargaining and its vital corollary, fidelity to the bargain
made. There has been conflict over the methods of representation on both
sides. The Conference, therefore, has proposed that the Government
should intervene to assist in determination of the credentials of the
representatives of both sides in case of disagreement, and that such
pressure should be brought to bear as would induce voluntary entry into
collective bargain. Furthermore, it was considered that the large
development of conciliation and arbitration already current in
connection with such bargaining should be encouraged and organized under
a broad national plan that would give full liberty of action to all
existing arrangements of this character and stimulate their further
development.
The Conference has therefore proposed to set up a small amount of
governmental machinery comprising Chairmen covering various regions in
the United States, with a Central Board in Washington, as a definite
organization for the promotion of these agencies. It has believed that
this is a step consonant with the normal development of our institutions
and the progressive forces already in motion, and that in such steps lie
the greatest hope of success. No one is compelled to submit to the
machinery established but where the employer and employee refuse to
enter into, or fail in, bargaining, then through the use of this
machinery the public stimulates them to come together under conditions
of just determination of the credentials of their representatives. The
plan is, therefore, a development of the principle of collective
bargaining. It is not founded on the principle of arbitration or
compulsion. It is designed to prevent the losses through cessation of
production due to conflict but, beyond this, to build up such
relationship between employer and employees as will not only mitigate
such disaster but will ultimately extend further into the development of
the great mutual ground of interest of increased production and under
conditions of satisfaction to both sides. It is a part of the conception
of the Conference that only in bargaining and mutual agreement can there
be given that free play of economic forces necessary to adjust the
complex conditions under which our industries must function.