Arbitration between capital and labor, a history and an argument

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UNITED STATES OF AMERICA.

Preface

THIS volume was written during the spare hours of a legislative session. It is not presented to the public as a work of literary excellence or of brilliant originality. The principles advocated herein are neither new nor untried.

It is my desire to offer a plain statement, in a historical and argumentative way, of the value and necessity of the peace principle of arbitration in settling disputes between capital and labor.

Events are daily transpiring which are crowding to the front the importance of amicably adjusting the controversies of workingmen and their employers. Their dissensions are operating injustice and damage to both sides and to society at large. There is danger in their occurrence

VI. PREFACE.

and continuance, and the conservative friends of social order see in these conflicts a subject worthy of the gravest consideration. What shall be done, is a great and pressing problem. It is a matter which affects more living persons than any other question with which our race has to deal. It is one of the broadest humanity. It is not simply a question that deals with dollars, wages, strikes, and riots; it deals with human wants, sufferings, affections, and grief. Centuries of strife have failed to solve it. A few recent years of peaceful methods, such as described in these pages, have accomplished more than all the past.

In the preparation of this volume, I have experienced no little difficulty from the paucity of material in American literature, for information upon the subject which it treats. With the exception of the valuable Report on Arbitration and Conciliation in England, by Mr. Joseph D. Weeks, there has been nothing complete published in this country. The principle and practice of arbitration in trade disputes has received much attention from the social economists, statesmen, workingmen, and capitalists of England. Hence,

PREFACE. vii.

the reader will find that almost all of the evidence as to its operations and success come from English sources.

I am under deep obligations to Mr. Weeks on account of a free recourse to his report, and for personal views obtained from him, and I am also indebted to Ex-Senator Wallace, of Clearfield, Pa., for favors connected herewith.

I have found in my investigations the following works of vast benefit in properly studying the question of voluntary arbitration, and I recommend them to those who desire to examine this subject: The State in Relation to Labor, by W. Stanley Jevons; The Question of Labor and Capital, by John B. Jervis; On Work and Wages, by Sir Thomas Brassy; On Labor, by W. T. Thornton; Trades Unions, by William Trant; The History and Development of Guilds, and the Origin of Trades Unions, by L. Brentano; Theory of Political Economy, by W. Stanley Jevons; Economic Position of the British Laborer, by Henry Fawcett; The Social Law of Labor, by William B. W T eeden ; Reports of the Condition of the Lndustrial Classes in Foreign Countries, London, 1870; Conflicts of Labor and Capital, by George Howell;

VI 1 1. PREFACE.

Reports of the Bureau of Labor Statistics, for the States of Ohio. Pennsylvania, and Massachusetts, and Report of Committee on Trad x lei . in the Proceedings of the National Association for the Promotion of Social Science, London, 1860.

With these words, this work is submitted to the consideration of an appreciative public.

DANIEL J. RYAN.

Portsmouth, 0., April, 1885.

Contents

CHAPTERS —

I. The Failure and Fallacy of Strikes 1

II. Voluntary Arbitration, Its Methods and Operations. 18

Chapter I The Failure And Fallacy Of Strikes

THE protracted and bitter struggles between workmen and employers known as strikes, form a subject worthy of special consideration in treating upon the matter of arbitration. Their failure and inefficiency in producing profitable results present an impressive lesson to labor, as well as a powerful argument for an appeal to the methods of peace and law, in settling industrial difficulties. A writer, whose official and personal opportunities have given him the right to speak with authority on this subject, has this to say concerning it:

"How do strikes originate? The history of one in its general features is the history of all. A number of men working for a firm or company, through their daily conversation become imbued with the belief that they should have an advance of wages; a meeting is called for some evening, the matter is discussed, and finally a committee is instructed to respectfully demand of the employers an advance of wages. The demand is refused or ignored, and no attempt at communication with the men is made by the employer. The men become morose and sullen, another meeting is held, and a strike is resolved upon. The men strike, the works are closed for a month or more, one of the parties weakens, a request for a conference ensues, the difficulty is adjusted, and the men return to Avork. It matters not which side has been defeated; ill feeling and a desire for another test of endurance has obtained a foothold, and the war continues until either the employes are all dead or scattered, or the employers withdraw from the business. If a demand comes from the employers for a reduction of wages, the method of proceeding is practically the same, with the same results."*

A strike never proved the right or wrong of any labor question. In isolated instances it may have resulted in some particular good, but these cases are rare exceptions in the history of strikes. In no case has a strike left the workingman in the same prosperous condition in which it found him. It leaves him out of money

* Second Annual Report of the Bureau of Labor Statistics of Ohio.

and out of work. It always turns Labor into a mendicant, and frequently into a criminal; it arouses in Capital feelings of cruel resentment, and transforms it into a heartless oppressor. The motives, as well as the origin of these strikes, are often simple and useless. One of the most extensive industrial territories in the United States is the Hocking Valley Coal region of Ohio. In no other collection of wageworkers in this country have strikes been more frequent or more damaging. Yet one who has examined by personal association, together with experience coming only from a practical miner, the conditions of employment there, says that " the majority of these labor troubles originate in almost nothing."* There must be, however, exceptions to this statement. The terrible struggle which has been going on in that region for the past year certainly cannot be said to have originated " in almost nothing." The protest of the miners against a reduction was based on much that was just and fair. Nevertheless, the differences on this point between the operators and miners could have been settled in its first stages by honest and frank arbitration. The failure of calm, candid discussion between operator and employe frequently leads to dissensions and ill-feelings,

*Annual Report of Inspector of Mines of Ohio.— Andrew Roy, 1851.

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which usually terminate in a strike. Further, on this same matter, he says. " both parties acknowledge that the price of mining should be reduced in the spring and raised in the fall. Yet the miners scarcely ever accede to a reduction without a strike, and the operators never allow an advance unless compelled to do so by a threatened strike." The bitter experiences of employers and employes seem to lessen in but a small degree this annual recurrence to the methods of barbarism to settle their differences. The conflict goes on. bringing disaster and ruin to the operators, and idleness and starvation to the miners. Another innocent victim of thesf struggles is the workingman of the cities. The price of coal during strikes becomes high, or at least they are sometimes the pretext for high prices, and the article of home use as necessary as the bread on the table is purchasable only by paying the price of a luxury. It is no blow to the wealthy: their fires always burn, even though their coal comes from distant districts. So while the miner in his struggle entails suffering and want upon his own family, his influence for increasing sufferingextends to the crowded tenements of the city and to the home of the mechanic far distant. The unjust demands of the operator have the same result.

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The moral influence of strikes is depressive. Idleness is most conducive to evil; and it is the worst enemy of industrial progress. A victim of involuntary idleness, as the workingman usually is in a strike, is a pitiable spectacle. Willing and able to labor, but controlled perhaps by some external agency which he must obey. No good can come to the laboring classes from such a source; it brings bitterness and defeat even when their controversy is successful.

Every strike is a pecuniary disaster to capital and labor. The misled wagemen are losers even when the imaginary victory is theirs. The annals of strikes are a series of foolish losing struggles for labor. A strike for a wage advance of ten per cent., if kept up for one month, and if the parties are successful, is no pecuniary advancement. It will require that striking labor ten months of uninterrupted work to earn back the money lost by the strike. Who is ahead in the contest? If the strike lasted thirty days, and the advance gained was only five per cent., the laborer would have to work one year and eight months to earn back what he lost during the strike! Is there any money to labor in striking?

A review of the history of the protests of labor against the aggressions of capital will be interesting in demonstrating the failure of strikes.

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The path of English industry is strewn with tombstones marking ruinous and ineffective struggles of labor. The earliest wide spread and long continued strike of English workmen was that of the Lancashire cotton spinners, which occurred in 1810. In that year the spinners in the mills of Manchester, Stockport, Macclesfield, Staleysbridge, Ashton, Hyde, and as far north as Preston, left their work simultaneously. Thirty thousand persons were thrown out of employment. The strike, which was for an advance in wages, continued four months. It was four months of misery, lawlessness, and destitution to the participants. The hard-earned savings of years were consumed in endeavoring to win the contest. The advance was not obtained — the desired point was an increase of fifty per cent. : failure was the result. The loss was enormous, but out of the pocket of the laborer. The spinners of Manchester struck in 1829; they lost a million and a quarter of dollars before it was ended. Gain? Nothing. In 1830 the spinners at Ashton and Staleysbridge lost the same amount in wages by a strike. In 1833 the builders of Manchester inaugurated a famous strike. They had nothing to show for their struggle but a loss of $360,000 in wages. The spinners of Preston lost $360,000 in 1836. In 1854 seventeen thou-

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sand spinners in the same place struck for thirtysix weeks, and they lost $2,100,000 in wages. The iron workers of England lost in 1854 $215, 000 in the same way. The dear price of strikes is not always paid by labor; capital suffers as well. The Belfast linen operators in 1875 lost $1,000,000 by one season's strike. This treats of but a few instances. In the pottery strikes of Staffordshire of 1834 and 1836, the loss to both workmen and manufacturers was $943,050 in the latter year, and $250,000 to the workmen alone in the former.

The bread winners of America never made a dollar by striking. When every such transaction is put upon the trial sheet of investigation, and subjected to cool calculation, the figures will be on the debit side every time. The great railroad strike of 1877 was founded on the just demands of employes who, as a matter of humanity, were entitled to increased wages. It was simply a labor rebellion against the aggregated and oppressive railroad capital of the country. But what did it amount to? Nothing. Lives lost, property burned, public peace disturbed, and every day was a day lost in bread and butter to the strikers. The loss to labor was millions, to capital, tens of millions. It settled no dispute; £ave to no man work.

In 1880 the Bureau of Labor Statistics of Massachusetts made a thorough report of the result of 159 strikes in this country. The report classifies the strikes and their causes as follows: to secure better wages, 118; to secure shorter days, 24; to enforce union rules, 9; resisting employers' rules, 5; against introduction of machinery, 3. The report shows the result to have been as follows: unsuccessful, 109; successful, 18; compromised, 16; partly successful, 6; result unknown, 9; contest then pending, 1. In the various Fall River strikes in that State, the enormous sum of $1,400,000 has been lost in wages by the voluntary idleness of the operatives. And it is stated that " in more than sixty-eight percent, of them, loss in wages, varying with the extent and duration of the strike, has been submitted to without any material benefit accruing to oifset it."*

The strike of the Amalgamated Association of Iron and Steel Workers of Cincinnati and vicinity in 1881 was a five months' struggle which cost the strikers $500,000 in wages and injured the trade of Cincinnati to the extent of a million and a half of dollars. In the end both parties got together, talked it all over, made concessions to each other, and an agreement was

* Report of the Bureau of Labor Statistics.— 1880, pages G5-68.

ARBITRATION. V

reached. This was practically arbitration. Why not do that at first?

The strike of the Brotherhood of Telegraphers throughout the United States and Canada commenced July 19, 1883. It lasted just thirty days. The demands of the strikers were for shorter hours of labor and an increase of pay. They claimed that eight hours for day work and seven hours for night work should be the limit; and demanded an increase of fifteen per cent, on salaries. They accomplished absolutely nothing, and on the 18th of August the Brotherhood pronounced the strike a failure, and advised all operators who could secure situations to go to work.

They paid an immense sum in lost wages for their contest, which Avas just and deserved success. William Orton, President of the Western Union Telegraph Company, testified before a Congressional committee that telegraph operators could not perform daily more than six hours of continuous labor without endangering their health. Their wages had been reduced twentyfive per cent, in three years. They had grounds for complaint, but striking brought no relief.

It is stated by Andrew Roy, formerly Ohio's Mine Inspector, that the strikes among the Hocking Valley coal miners have been almost annual for the past twelve years. And he says that " it would be a very moderate calculation to place the losses to the miners alone, the result of striking, as equal to three hundred thousand dollars a year." Thus in twelve years the loss to the miners has been three million six hundred thousand dollars! Labor able to be performed, but absolutely annihilated. The mine operators' loss is estimated very low at five millions of dollars. Add to these pecuniary losses, the lawlessness and bloodshed that has resulted from these heated conflicts, and what answer can prove striking a benefit to labor?

Pages and pages of narratives of these injurious and unsuccessful contests between workmen and capitalists could be recited. But enough has been said to show that whatever good is accomplished by these struggles is paid for at a cost and sacrifice which never brings adequate returns.

In this general censure of the uselessness of strikes, I am not forgetful of the fact that ofttimes they have been the ultimate and only remedies of labor in its effort to obtain justice. But I hold it to be true, that there is a better and cheaper method of protecting the workingman, and giving him justice in his disputes with capital. Happily influences are at work which are daily directing, at the same time protecting, labor in its demands. The trade unions of to-day, contrary to the opinions of many, are the most potent factor in preventing rash and useless strikes in the domain of capital and labor. They have their missions, and it has uniformly been more for good than for evil. And when the}^ do inaugurate a strike, this can be said for them — that it is only done after the maturest deliberation, and after the cost, as far as the governing power can see, is fully estimated. William Trant, in his valuable little treatise recently written on Trade Unions, their Origin and Objects, Influence and Efficacy, presents a very effective defense against the charges made against them; and from this source I quote at length, as showing their relations to strikes. While he is speaking of the English societies, it may be observed that the same is applicable, but in a more appropriate degree, to the societies of American workmen.

" In order, however, that trade unions may lay claim to fitness for carrying out their objects, they must show something more than that they are able to conduct a strike to a successful issue, to palliate the evils of an unsuccessful strike, and to succeed in occasionally forming a board of arbitration. They must show that in their very nature they have the desire and power to prevent

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strikes. It is gratifying to be able to state that in this respect, also, the trade anions are eminently successful. Indeed, economy, if nothing else

would dictate such a policy. The executories of trade unions have been tanght by experience, that even when an object is worth striving for, a strike is often the worst, and always the most expensive, way of obtaining it Strikes is rule, are a dernier resort, and are more frequently discountenanced by the general secretary than approved of by him. Indeed, it is the boast of most trade union secretaries that they have prevented more strikes than they have originated. This is all the more creditable, because some branch or other is always urging a strike. At least twenty times in as many ihoe: — rote

Mr. Allan, "we have recommended that a strike should not take place 'About one-third,' answered Mr. Applegarth. when questioned on the subject by the Royal Commissioners, 'of the applications made to us to strike, during the last few years, have been refused 3.nd Mr. Mac- Donald, Secretary of the House Painters' Alliance, said, ' Our parent bc ::t:~~ never originated a strike, but has stopped many. 7 The desire of the trade unionists to prevent strikes is also shown by the following resolution, which was unanimously agreed upon at the Trade Unions' Congress in 1874, viz.: 'That in the opinion of this Congress, that in all trades where disputes occur, and where it is possible to prevent strikes by starting co-operative establishments, all trades societies and trades councils be recommended to render such assistance as lies in their power, and thus, as far as possible, prevent strikes and lock-outs in the future.' This, at any rate, shows that the unions are as willing to devote their funds to the prevention of strikes as to their origination; and although some of the speakers to that resolution showed a preference for co-operative principles inconsistent with a thorough belief in those of trade unionism, } r et the congress wisely limited its resolution to those circumstances when the co-operative form of trading is certain to prevent a strike, and not to the promulgation of co-operative principles generally."

And he verified his argument by the accounts of the various English trade unions, that they spend, comparatively, a very small per cent, of their funds in sustaining strikes. In 1882, the Amalgamated Engineers, with an income of £124,000 and a cash balance of £168,000, expended in strikes, including the support they gave to other trades, £890 only, less than one per cent. The Iron Founders spent out of an income of £42,000, £214; the Amalgamated Carpenters who had been engaged in strikes, expended £2,000 out of £50,000, only four per cent.: the Tailors spent £d^Jo out of a fund of £18,000; the Stone Masons, with a trade union of eleven thousand members, spent nothing in strikes. During six years, it is estimated that seven English trade unions spent in the settlement of disputes. £162.000 out of a capital of almost £2,000,000. In 1882, these specific societies, with an aggregate income of £330.000 and a cash balance of £360,000, expended altogether in matters of dispute about £6,000. These figures from Frederic Harrison's address before the Trade Union Congress at Nottingham, in October. 1883, certainly are creditable t<> the cause of trade unionism. "When it is remembered that ninetynine per cent, of these societies' expenditures were for benevolent and provident purposes, and one per cent, only for strikes, it is absurd to say that the chief object of a trade union is to foster trade disputes."

As far as industrial organizations can prevent these conflicts, they have lent all their powers and machinery to that end. Yet in spite of their unquestioned attempts, there has been, and will continue to be. these terrible and costly struggles which have crippled labor and its cause, and at the same time almost destroved the mechanism of trade. The condition of things, therefore, compels labor and capital in their own interests, and society for its peace, to go farther and inquire whether there is " a balm in Gilead " for these troubles. Strife and stubbornness and bulldozing have failed. The inhuman system of lock-outs — capital's starving-out process — does not admit of an argument in defense. The situation is pointedly put by George Howell, who was at one time Secretary of the English Trade Union Congress. Said he, " the whole question lies in a nutshell. Is brute force better than reason? If it be, then a costermonger may be a greater personage than a philosopher, and Tom Sayers might have been considered superior to John Stuart Mill." It is obvious, and it is needless to argue the question, that public interests, as well as the individual interests of employer and employe, would be best subserved if the same result in industrial disputes could be attained without the barbarisms of strikes and lock-outs. If differences could be corrected amicably without the cessation of labor and the depreciation of capital, it would certainly be money in the pocket of the worker as well as the capitalist. Take, for instance, the strike of the colliers of South Wales in 1875. It included 120,000 workmen, and lasted seventeen weeks. The loss in wages has d variously calculated from three to five millions of dollars : and. after all that loss, it was finally settled by the miners and operators coming together, and by reasonable methods arbitrating their differences in a manner that provided a basis which prevented many a subsequent com—:

When men of labor and capital meet together as men of business should meet, and discuss their differences, in a friendly spirit, the chances are altogether in favor of an amicable settlement, profitable in the end, to all concerned and participating. Their success runs in parallel lines; if they diverge iross, the symmetry which the

laws of trade and nature design is marred. As the bow unto the arrow is. useless ne without the other, sc La labor and capital. Labor is capital: capital is labor: and in this stage of - t - cannot have one without both.

_ is remedy for the conflict. It is the

remedy that civilized nations have substituted for war: the remedy that has killed the doctrine that ''might is right."' It is the submission to the influence of reason. The voluntary arbitration of labors troubles and capital's claims, trusting to an enlightened public opinion to sustain awa: - is the only rational method consistent with the welfare of society This inclusion is justified on the following summarized grounds:

1. Strikes have failed to accomplish what the workingman demands, although they have given him partial relief.

2. Their enormous cost in wages thrown away has proven that no good that comes from them is worth the price paid.

3. Their demoralizing effect, generally culminating in lawlessness and at times in bloodshed, antagonizes public opinion to the just claims of labor.

4. Their arbitrary management, which creates a general idleness in a trade when the irritation is local, is clearly unjust.

5. They lead to an unjust distribution of wages by making the uniform rates of wages established apply to the indolent and unskilful as well as to the industrious and efficient workman.

Just arbitration has none of these evils. Is it not better to make equity a living principle in all disputes of the wage workers, and seek to bring the force of peaceful justice into play, instead of the more violent and damaging contests, which, if won, are but defeats? How shall that be done? How has it been done? We shall see.

Chapter II. Voluntary Arbitration — Its Methods And Operations

ARBITRATION is the adjudication by private persons appointed to decide a matter or matters in controversy, on a reference made to them for that purpose, either by agreement of the disputants, or by the order or suggestion of a court of law. When the subject to be decided is one of work or wages, or both, arising between employer and employe, it is industrial arbitration. The proceeding generally is called a submission to arbitration; the persons appointed to decide are termed a Board of Arbitrators or Referees, and their opinion or adjudication of the subject-matter before them is called an award. Boards consist usually of an even number of members, and when they fail to agree they call upon a third person who is known as the umpire. His decision expresses the award. One of the ancillaries to arbitration is the effort to promote harmony and an agreement between the disputants before their contest is subjected to the formal inquiry and decision of arbitration; this is known as conciliation. With these prefatory and explanatory words, an examination will be made into the methods and worth of industrial arbitration.

I do not claim that courts of arbitration, even when based upon the voluntary action of labor and capital, are a complete panacea for all the ills of trade and industry. As long as men have passions there will be " wars and rumors of war," but I do claim that they will, in a wonderful degree, dispense with those disastrous agencies now used in the settlement of trade disputes.

There is a distinction to be made in the beginning between statutory arbitration and voluntas arbitration. The former applies to arbitration, the awards of which have the force of judgments of courts; in fact, such a board of arbitration is a court for the time being, having full power to subpoena witnesses and enforce its judgments as a court of record. Voluntary arbitration is an entirely different system. As the term indicates, there is no authority of law unless it be in the method of erecting the boards. Its awards have not the force of judgments, and it rests upon the honor of the disputants, rather

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than upon the writ of the sheriff, to carry them into effect. All the experience and history on this question is uniformly to the effect, that the only successful arbitration between labor and capital in the past has been purely voluntary. For years there have been upon the statute books of many of the States laws providing for arbitration of disputes, but they have never been applied in labor troubles. Boards with a justice of peace air about them, and clothed with powers of compulsion, fines, and commitment, have never been considered by contesting employer and employe as a safe or judicious forum to submit their case. In England since the fifth year of the reign of George IV. (1824) there has been in force a statute providing for arbitration in the industrial disputes. Under it tribunals with compulsory powers and processes were created, but it still remains a dead letter, and has been especially objectionable both to employers and employed.

The opinion of those who have been close observers of this matter are of interest as bearing on this subject. In this country no man has given the question of arbitration a broader and deeper investigation than Mr. Joseph D. Weeks, of Pittsburg. In 1878 he was appointed a special Commissioner of the State of Pennsylvania to proceed to England and examine in person the methods and operations of the system of voluntary arbitration, now a settled question in that country. His comprehensive and able report to Governor Hartranft in December, 1878, contains the result of his full examination. He says: " The voluntary feature of these boards is one to which I desire to call particular attention. Both Mr. Mundella and Mr. Kettle, to whom the cause of arbitration and conciliation in England owes much that it is, and who represent somewhat diverse views on the subject, agree that these boards should be voluntary and not compulsory. Though there are acts of Parliament, which provide compulsory legal powers by which either side can cornpel the other to arbitrate on any dispute, these powers have never, in a single instance, so far as I could learn, been used; but the large number of differences that have been settled by arbitration in Great Britain in the last eighteen years have all been voluntary in their submission and in the enforcement of the award." Prof. W. Stanley Jevons, the eminent English economist, speaking of arbitration, says: "All available evidence tends to show that successful boards of arbitration must be purely voluntary bodies. * * In all probability success