Industrial arbitration; a world-wide survey of natural and political agencies for social justice and industrial peace

Contents

CHAPTBR PAGE

I Elements of a Vast Problem 1

II English Experiments 22

Chapter I

EVERY word that has ever been written about Capital and Labor has one focus of interest. That focus is an intangible ideal of relationship between two social factors which everybody has sought and nobody seems to have found. If any one were able to offer an ideal it might not have been necessary to write this book. Nobody seems to know quite to what end we are working. No other realm of our social life is more barren of definite, universal ideals.

The struggle for a larger dish of porridge among small business men, trades people and farmers is a problem in which the rest of the world does not seem to be particularly interested, but when a large body of people bind themselves together In one way and

I

2 INDUSTRIAL ARBITRATION i

another and present a demand collectively, the problem assumes a wider significance.

The question of a little more porridge for one group and a little less salad for another, involving a wide range of standards from private exploitation of the wage earner to collectivism and from collectivism to syndicalism, is no simple one. Actually it is the basis of the conflict between Capital and Labor. Whether the Sherman act should exempt trade and labor unions ; whether the "open" or "closed" shop shall prevail; what shall be done about sympathetic strikes and jurisdictional disputes between trade unions; what about the boycott, the blacklist and the picket; what about sabotage? — these are all incidental and minor questions as compared to that of how the profits of industry will be divided between the master and his men. Must the men be content with a subsistence wage or are they entitled to a subsistence wage plus some luxuries, and if so, how many or what? Or, is industry to be managed tacitly upon a cooperative basis and are the men to share with the master the profits of production? If so, how are the profits to be divided? The master's contention is for the lion's share of the profits because he risks his capital in an enterprise. He is the entrepreneur. Yet he does not forbear to reduce wages when business is bad and profits are low. He would deny the right of his men to share the profits from his capital and their labor when profits are abnormally high, yet he would reduce their wages when the earning power of his capital and their labor is impaired.

When any one talks about industrial arbitration, he at once raises every problem that has to do with the relation between Labor and Capital. Having raised every problem, he may wrestle with them until his mind grows weary and his heart quits throbbing without ever knowing very much about the point at which he is trying to arrive. The question of temperance is a simple one beside that of meting out justice to Capital and Labor. No one believes very ardently that intemperance is defensible, at least under average conditions, and the ideal In this problem is a very definite one. It may be difficult to rid great cities of vice, yet most every one is willing to admit the end to which our crusaders labor. Likewise, men may differ about the modern application of eugenics, but they do not disagree about the worthy purpose of biological fitness. While these problems seem to abide with us, any one who cares to attempt a solution is not wanting in aims or objects.

Not so with the seemingly irrepressible conflict between master and men, employer and employee, the bourgeoisie and the proletariat, Capital and Labor !

Socialists have pitched their fight against the present industrial order on the theory that there is a class consciousness in the industrial world and that Capital and Labor represent fairly the division of the industrial world into two great classes. If the Socialists are correct, their philosophy must be accepted as the proper basis for finding the ideal. If they are wrong, their philosophy will not avail much. If they are partly right and partly wrong, conclusions must be tempered by such limitations as appear in an examination of our industrial fabric. Socialists proceed on the theory that Labor and Capital have nothing in common ; that industrial warfare is therefore inevitable. In fact. Socialists welcome the industrial conflict as a means by which the socialized state is to be made a fact.

If our present civilization amounts to anything, it is difficult to get the Socialist view-point. Much may be said for and against the skyscraper and the railroad, but it is hard to conceive how they might have been builded without the cooperation of the two factors in industry. Furthermore, Socialism espouses the cause of only one party in the alleged inevitable conflict and would raise the proletariat only to higher and higher pinnacles of privilege. Socialism ignores the interests of the capitalist, the small business man, the farmer — the proprietary class. It off"ers no hope and no encouragement to such as these. Some Socialists will dispute this point but they can hardly make their case even though they were able to change human nature, a program with doubtful consequences.

After all, the Socialist may be nearer right than anybody else. He is so if the readjustment between Labor and Capital is to be a readjustment in one direction only; if Labor is to gain what Capital is to give up and if the man who is part laborer and part capitalist is to be ignored altogether. The Socialist program is replete with suggestions as to how the readjustment may be accomplished. But we should ask ourselves whether the collectivism of the Socialists is the suggestion we want to follow and whether we want to precipitate the revolution which collectivism involves. Do we want to ignore the interests of the small business man, the farmer — the man who is part capitalist and part laborer and whose concern in solving the problem is not a direct one? Do we want to turn our backs on a century of kaleidoscopic industrial and commercial magic or suddenly pronounce the era of private enterprise a failure? Are we willing to admit that the present regime has done its work and that the time has come to usher In a new order of society? Some of us are willing to answer all these questions in the affirmative. A majority are not. All of which neither dispels our confusion nor discloses, amidst the confusion, even the vague outlines of an ideal.

With every shade and measure of justice possible from peonage to syndicalism and with philosophies which represent these varying measures of industrial justice, it is going to be rather difficult to establish an ideal. Some one may rise up to suggest a middle ground, but who knows what a middle ground is, or who believes it would satisfy anybody if a middle ground were found? Any device for industrial arbitration is not going to recognize the validity of peonage. Nor are the syndicalists likely to witness the fruition of their ideals in any award which an industrial arbitration board may hand down. Between these two opposite poles there is a vast unexplored wilderness, a confusion of ideas and ideals that baffles any man who seeks a fair remedy. Perhaps we shall never find a panacea. Probably we must content ourselves with palliatives and be resigned to their discovery from time to time under new and changing conditions. Our social focus Is subject to incessant change. What is good for the present generation is obsolete for the next. Is it not fair to believe that we can hope only to do a few of the things in the present generation that seem, most timely and proper? Perhaps it is too much to expect to find a fixed ideal in these days of political, social and industrial revolution.

With all that has been done, it does not seem that strikes are becoming less frequent in this country. Four of the most disastrous strikes in the history of the country have occurred in the last few years. The strikes of the French government employees in 1909, the English railway strikes of 191 1, the general strike in Italy, the miners' strikes in Colorado and Michigan, offer little encouragement to the i"nventors of devices now extant for adjudicating industrial controversies. Of course, it may be that the cause of the trouble is not industrial unrest so much as a deep-seated spirit of revolt in the hearts of men and akin to the militancy of an army, surmounted with banners' and stepping to the tune of martial music. The world has been at peace for a long time and who knows but this so-called industrial unrest is merely the effervescence of a rampant spirit of revolution abroad in the world/

To call forth an idea suggested by William James in his Moral Equivalent for War, perhaps our strikes and lockouts are the immoral equivalent of war, the price we pay for nearly a half century of world peace. If this is so, may we not expect to find a working basis in a moral equivalent for industrial warfare? Frankly, it would appear that a moral equivalent does exist and I believe that it has appeared in the new spirit of inquiry, examination and introspection now causing old thrones to totter and old bulwarks of privilege to crumble. The search for the ideal, we may find, is quite as invigorating as the pursuit of, or progress toward, the ideal.

Specifically, no social or industrial question has arisen anywhere but has some relation, proximate or remote, to the political systems under which we live. It is the demand for a larger measure of so-called industrial democracy which has set on foot

^ When this was written the European war was merely threatened. It was not a fact. The statement may stand, however, with the further statement that industrial unrest is almost certain to subside with the end of the war. If English unionists pursue their struggle, even during the war, it goes to prove only that a considerable portion of the English working men, having had no part in the war, are not yet able to accept it as a serious crisis in which their government is involved.

an Introspective examination of our political institutions. Lately we have learned in this country that political freedom is no end in itself; that it is futile unless it raise to a plane of greater independence economically the mass of our people.

Former President Roosevelt In his Neiv Nationalism and President Wilson in his New Freedom stopped a long way short of the Ideal, though the former seems to have been nearer the goal because he evidently had an ideal in mind. Mr. Wilson appears to hold that political freedom is everything; that all the rest follows after that. As a matter of fact, it does not follow necessarily, and experience shows that it has not always done so, as witness the doubtful success of direct primaries, the initiative, referendum and recall In some states.

But Industrial democracy, so-called, Is no Ideal at all. It Is merely a term that may mean everything or nothing.

This country has proceeded very far in the direction of political independence and It does not seem that the barriers still remaining will long prevail. Men may resist and oppose such institutions as direct primaries, the Initiative, referendum and recall, but they are the Inescapable response to a growing need for a governrnent which will concern itself with the intimate and human affairs of life rather than the "red herrings" of obsolete political platforms.

"Give the people more power," is a current slogan which, however, is meaningless unless the people are educated to use the new power wisely. It is not sufficient to give the people more power without tangible suggestions as to what they are to do with it. Fortunately, a program is not wanting — a program that has a direct bearing on the subject of this book; a program that, to some degree, answers the question, "What shall we do to be saved from the inhumanity and wastefulness of industrial warfare?"

It is a sweeping program of social and industrial measures that will take care of our most aggravated examples of industrial iniquity. It is a program of primary importance and fundamental relation to the worker's welfare. But it is no Utopia because there is nothing about it that is fixed, nothing permanent, nothing very definite.

The mere fact that we have failed to find a panacea to curb inordinate ambitions and aspirations of master and men is no proof that the history of a world-wide, century-old effort to find such a panacea is wholly uninteresting. Even though we find

ELEMENTS OF A VAST PROBLEM ii

legislative taboos In England, France, Germany, Australia, New Zealand, Canada and our own country have been almost universally unsuccessful in securing Industrial peace, an examination of those failures will be a source of helpfulness to the students of our paramount world problem. If the world-wide failure of the taboo Is established, perhaps that failure will be suggestive of additional steps that may be taken to accomplish what the taboo has failed to do.

There is just one Instance, New Zealand, where the taboo has worked better than anywhere else. It may be interesting to seek the causes of its success. It may be a source of enlightenment to find that the taboo has worked well in New Zealand and Australia because it was not much heeded there; because Its adoption was prefaced by a code of primary and constructive industrial and social measures, in operation when the taboo was invented ; also, because that code has been supplemented from time to time by a comprehensive program of measures that reflects the most intimate concern of the government In the health, well-being and comfort of its working people.

But we can not be quite sure that the workers of New Zealand will* always be willing to accept a wage which constitutes a comparatively small share of the profits of industry. Who is able to say that, even though workers anywhere are assured of every comfort of life, they will be content with comforts, alone? Who knows when they will rise up and demand to share, with the man who risks his capital and directs enterprise, the luxuries that he enjoys? Under our present economic order it is difficult to maintain that any particular measure of industrial justice, short of a measure which gives the worker an equal share with the master, will always be satisfactory to the worker. Any one who sets a limit short of this mark must do so arbitrarily, and do so disregarding the economic tendencies of several centuries. If, however, we find certain things which experience seems to show ought to be done now, may we not leave the discovery of our Utopia to the fate of generations, wiser by our experiments and our experience?

Among many peoples, it may be surprising to find the endeavor to avert controversies and disturbances has attributes of striking likenesses. Monopolistic combinations of Capital and of working people. Including the right of workers to organize, restriction of apprentices, an unskilled surplus, wages, hours of labor, cost of living, sympathetic strikes, Jurisdictlonal disputes, sabotage, the boycott, the blacklist and a score of other less important manifestations of an unceasing conflict — all are problems common to every country where industrial development has reached an advanced stage.

1. Most people acquiesce in the wisdom of capitalistic combinations. Even those who oppose are not able to present an alternative that squares with the principle of economic production. By no means is this the case with labor organizations. Combinations of Capital still resist combinations of Labor and the so-called public either looks on with ill-concealed disgust or is openly arrayed on one or the other side of the controversy.

2. The right of Labor to organize precipitates a clash between two opposing theories in industry : First, the arbitrary right of the employer to control every element of his enterprise, the privilege of getting his labor where he can get it cheapest and of imposing whatever conditions his humanity or inhumanity inspires; secondly, the right of the workers to combine for mutual self-help against their employer and to resist his will with the strike, the boycott and the picket, either peaceably or by force. One group of Socialists adheres to peaceful methods. Another group openly advocates violence.

The latter group comprises the syndicalists, whose most powerful organization in this country is the Industrial Workers of the World.

Trade and labor unions have served to raise wages and working conditions of their membership, but they accomplish little directly for the working men outside the pale of organization. In the United States, not to exceed one-sixth of the wage earners belong to organizations which practise collective bargaining. Five-sixths of the wage earners constitute the surplus available supply of labor. It is here that wages and working conditions are subject to the caprice of the employer. It is here that he is able to make his will the law of industry. This fact may be interpreted as an argument in favor of organization. But conceding the thorough organization of all working people, many problems yet remain and trade unionism is not wholly satisfactory in a country where individualism has been the dominant stepping stone of human endeavor, because it puts the efficient and the inefficient worker in the same straight jacket. There is something dull and prosaic in the idea of putting every man on the same plane and limiting his progress by the progress of the group or crowd in which he toils. There is something repugnant to every man in the tyranny of majorities; something discouraging, something devitalizing. On the other hand, the trade union Is an institution by which a considerable number of workers have been able to raise themselves out of the slough of despondency ; an expression of chaotic and cataclysmic mutterlngs and munnurlngs reduced to a philosophy, translated into a "cause." The organization of one-sixth of the workers, it may be said, points the way to the other five-sixths. Organization is the stepping stone of the unorganized. It Is a command to the unorganized to go and do likewise.

3, Restriction of apprentices is merely one method by which trade unions seek to limit the supply of labor within a particular trade and to protect themselves against recruits from the unskilled surplus.

4. Wages and living are the subject of endless controversy. Not only does the question of wages involve the division of porridge at a particular time, but it Involves frequent alterations in the portions because the cost of living is never fixed and working people have very much to say about the purchasing power of their wages. In the last twenty years in this country, the tendencies of wages and living both have been upward, but the rise in wages has not been so great as the rise in living and this is the cause of unceasing controversy and intermittent conflict. It is likewise true the world over.

5. Hours of labor have a double-barreled significance. Not only does the reduction of hours afford the worker more time for leisure and the enjoyment of life, as leisure reflects enjoyment, but reduced hours may mean and sometimes does mean a curtailment of labor's output, thus increasing the demand for labor and consequently the rate of wages.

6. Sympathetic strikes — the stoppage of work In one industry to promote the success of a grievance in another — represent nothing more than many units with common aims acting together. Sympathetic strikes are the answer of Labor to the secret or open combinations of Capital. One is no more defensible than the other. If the issue of wages, hours and working conditions is one to be settled arbitrarily by employers, are not employees warranted in summoning their combined strength to defeat the imperious ultimatum of the employer? If one has the capitalistic view-point, he is not very likely to indorse a sympathetic strike, but if he has another view-point he is likely to believe the sympathetic strike amounts to a fair method of retaliation.

7. Then, there are the jurisdictional disputes between labor and trade organizations which the sympathetically-minded may regard as one of the unfortunate by-products of a very wise system, and which the contrary-minded are likely to regard with embittered opposition.

8. Sabotage, as openly urged by one working men's organization, is a deplorable expression of a class grievance. But can we say very much in behalf of an Industrial epoch that gives birth to an expression of violence? Is it not likely that somewhere we have failed — failed to erect the proper safeguards against the distress of a not inconsiderable mass of humanity? Are we to believe blindly that there are no excuses for and no extenuating circumstances connected with the philosophy which espouses direct action? The history of strikes has been written in blood. It is a history replete with nauseous disclosures of working conditions. Nor must we forget the private detectives and special police of those employers who maintain a despicable system of espionage in season and out of season, strike or no strike.

So long as nations fly at one another's throats for some commercial advantage of doubtful value, may we not expect the worker to believe he has the right, even though he dare not exercise it, to use force, if necessary, to obtain a minimum measure of justice? We eulogize the heroes of past wars but we condemn with scorn the man who resorts to less drastic measures to win a strike. Yet the worker has little, if anything, to gain by a war and everything to gain by a strike. In a strike, he may win the right to meet his employer on equal terms and freely to bargain with him as to wages, hours and working conditions. In which case he knows his employer will not find it expedient to say, "If you don't like your job, you may quit."

"The resistance of syndicalism is a new kind of revolt — more dangerous to capitalism than the demand for higher wages," says Walter Lippmann. And again: "You can not treat the syndicalists like cattle, because, forsooth, they have ceased to be cattle.

"We are not civilized enough," says Lippmann in another place, "to meet an issue before it becomes acute. We were not intelligent enough to free the slaves peacefully — we are not intelligent enough to-day to meet the industrial problem before it develops a crisis. That is the hard truth of the matter. And that is why no honest student of politics can plead that social movements should confine themselves to argument and debate, abandoning the militancy of the strike, the insurrection, the strategy of social conflict."

The eight propositions already cited comprise the greatest problems with which industrial conciliation and arbitration has to do. They are not the only problems. In fact, there are scores of problems pertaining to particular industries about which the layman never hears. The boycott, the blacklist and the picket have been mentioned. These three problems are secondary but there remains a vast number of others, if not secondary, then tertiary, or still further removed from the arena of the conflict.

Since the industrial conflict involves deep-seated causes and since it has to do with every element of the social organization, every factor in social progress, we shall know very little about industrial conciliation and arbitration unless we view it in the light of the social and political institutions prevailing where experiments have been carried on. We must not forget that we are dealing with a problem having its roots deep in the past — deep in centuries of ignorance, political inequality, economic bondage. Nor should we be disappointed if we fail forthwith to develop a millennial solution of the problem since we are not so far removed from the ignorance and inequality of past centuries. But this is the excuse, in each instance, for presenting a kaleidoscopic view of social and political life in the several countries.

This volume attempts to present in concise form a history of conciliation and arbitration in England, Germany, France, New Zealand, Australia, Canada and the United States, together with an analysis of the operation of the several schemes. No system so far devised has worked with any conspicuous degree of perfection. If conciliation and arbitration have not done what they were designed to do, the reasons ought to appear from the analysis of the several experiments. However imperfect the schemes may be, an effort has been made to deal sympathetically with them. Conciliation and arbitration by state agency may be regarded as a milepost of the greater movement, contributing in some measure to the ultimate solution of the problem and the realization of harmony in the industrial world.

Although conciliation and arbitration function to the same end, they are different processes. Conciliation Is an Informal method of settling industrial disputes or of preventing them. Conciliation may be carried on between the parties, or representatives of the parties, directly or through unofficial or state agencies. With the rise of trade unions, we have seen Labor, acting through its committees of the trade organization, barter with Capital directly in joint conference. We call this collective bargaining. We have also seen it join with Capital, without, however, any formal agreement to that effect, in accepting the good offices of third parties. Arbitration is a formal process. In those countries where the submission of matters in controversy is not compulsory, it generally follows a signed agreement in which both parties bind themselves to carry out the award. Formal hearings are held in which testimony is taken and a written award is made, informing each party what it is to do. Where arbitration is carried on under sanction of law, the award may be and generally is legally binding.

Chapter II

NDUSTRIAL conciliation and arbitration, like many economic, social and political institutions now on trial in this country, has a European origin. It was an invention of the last century, but the germ of the idea is to be found in the rise of the industrial state. The beginnings of the industrial state are to be found in England, Germany and France, and date from the sixteenth century.

Since the operation of every device for conciliation and arbitration is intimately dependent upon basic political, social and industrial conditions, all of which, in turn, reflect the temper of working people and the masters of enterprise, it is necessary to examine the background of English society in connection with the study of particular devices for conciliation and arbitration.

When feudalism gave way to commercialism in England, the guild began to appear. The merchant guilds were associations of traders and within certain fixed jurisdiction they enjoyed a complete monopoly of manufacture and trade under special charters from the Crown. For instance, one guild held control of the trade of Oxford and suburbs and another of cloth-dyeing in Nottingham and ten leagues around.

Craft guilds or associations of artisans sprang up about the same time. Several English towns had weavers' guilds as early as 1130. They appeared as rivals of the merchant guilds and finally succeeded in breaking up the monopolies enjoyed by the merchant guilds. They were legalized by the Crown about the middle of the twelfth century.

In the beginning, the guilds were guardians of commercial morality, protecting the people against short weights and shoddy material. They performed social, educational and religious functions, acted as benefit, Insurance and burial societies. Many of the guilds became wealthy, acquiring large sums of money, vast tracts of land, buildings and colleges. The guild lands, with the exception of those held by the London guilds, were confiscated during the reign of Edward VI.

Provisions for the settlement of Individual disputes between master and workmen were common in English laws as far back as the middle of the sixteenth century. Beginning with the Statute of Apprentices in 1562 and ending with a special act of Parliament in I 747, these laws simply referred all disputes between employer and employee to the local magistrate for adjudication. Reference of disputes was compulsory on the request of either party and decisions likewise were binding upon both parties and enforceable by proceedings of distress and sale or imprisonment.

The Statute of Apprentices, which grew out of monopolistic labor conditions fostered by the guilds, was designed as a legal restraint on wages. Among other things, it provided that no person should, under a penalty of forty shillings a month, use or occupy any art, mystery or manual occupation without a previous seven years' apprenticeship. The number of apprentices was limited to three to one journeyman, and for every additional apprentice after the third, another journeyman was required. The act probably would have favored traders and artisans by limiting the supply at the expense of non-apprenticed labor, except that the justices in Quarter Sessions were empowered to fix the rate of wages in husbandry and handicrafts. This act was one of the contributing causes to the wide-spread pauperism which followed. During the period the statute was In force, the residuum of labor was driven into agriculture or into new industries where apprenticeship did not prevail.

England has had one notable experience in an effort to compel working men to labor when they are otherwise disposed. Because that experience is suggestive of the consequences of compulsory arbitration if attempted in this country, it is of interest here.

Wages rose enormously after the Black Plague of 1348 and Parliament passed the Statute of Laborers in 135 1. This act sought to compel every man and woman under sixty years of age to serve the first employer who should demand his or her services and at the prevailing wage before the plague, or in 1347. Fines and imprisonment were provided as punishments for violations of the act. The statute also attempted to regulate prices. It was a miserable failure and accomplished none of the objects designed by its f ramers. Additional legislation Increasing, the severity of the statute was just as futile, just as foolhardy.