Conciliation and arbitration in the coal industry of America

Front matter

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COPYRIGHT DEPOSIT.

Preface

This series of books owes its existence to the generosity of Messrs. Hart, Schaffner & Marx, of Chicago, who have shown a special interest in trying to draw the attention of American youth to the study of economic and commercial subjects. For this purpose they have delegated to the undersigned committee the task of selecting or approving of topics, making announcements, and awarding prizes annually for those who wish to compete.

For the year ending June 1, 1913, there were offered : —

In Class A, which included any American without restriction, a first prize of 11000, and a second prize of $500.

In Class B, which included any who were at the time undergraduates of an American college, a first prize of 1300, and a second prize of 1200.

Any essay submitted in Class B, if deemed of sufficient merit, could receive a prize in Class A.

The present volume, submitted in Class A, was awarded the first prize in that class.

J. Laurence Laughlin, Chairman,

Columbia University.

Henry C. Adams,

New York City.

Edwin F. Gat,

Harvard University.

Author's Preface

The purpose of this study is to describe the methods of voluntary settlement of disputes in the coal industry. It is to be hoped that the spirit of cooperation developed among the operators and miners may spread into other industries. That such a spirit has come only after much strife and that it needs to develop more fully does not detract from the good results obtained or from its power to encourage employers and employees in other industries to emulate it. In order to put the relations between the contracting parties to wage agreements on an equitable basis the cultivation of a mutual understanding is necessary.

Both the operators and the miners have shown a broad, liberal, and tolerant spirit by the way in which they have cooperated in furnishing the source material which has made this study possible. In this connection I am especially indebted to Mr. H. N. Taylor and Mr. G. L. Scroggs, of the American Federation of Coal Operators, to Mr. "W". D. Ryan, former Commissioner of the Southwestern Coal Operators, and to many other representatives of Coal Operators' associations. On the side of the miners the unfailing courtesy and generosity of Mr. John Mitchell, and Miss Elizabeth C. Morris, his secretary, in providing source material and in placing the facilities of Mr. Mitchell's private library at my command, are gratefully recognized. My grateful acknowledgments are due to Mr. Thomas Ashton, of the Miners' Federation of Great Britain, for a wealth of source material placed at my disposal. I hope to make larger use of it than space in this volume permits.

viii AUTHOR'S PREFACE

An expression of gratitude can but vaguely convey my appreciation of the cooperation and helpful criticism of Professors Henry R. Seager, Edwin R. A. Seligman, and Robert E. Chaddock, of Columbia University. The shortcomings of the work exist in spite of their helpfulness. Any attempt to formulate an expression of my appreciation of my wife's constant encouragement and cooperation can only prove inadequate.

Arthur E. Suffern.

Columbia University, April 17, 1914.

Chapter I

THE INTRODUCTION AND EXTENSION OF CONCILIA- TION IN THE BITUMINOUS FIELD 1

1. Causes 1

2. Conditions in the bituminous field from the Civil War to the

joint movement in 1885 5

A. Early organizations 5

a. American Miners' Association 5

b. Miners' and Laborers' Benevolent Association .... 7

c. Miners' National Association, 1873 7

(1) Effects of panic of 1873 8

(2) Effects of individualism 9

(3) Inauguration of arbitration 10

(4) The organization at its height 12

(5) Trial of Siney and Parks 13

(6) Decline of the organization 16

B. Events leading to the joint conference of 1885 16

a. Arbitration in Ohio 16

b. Arbitration in Western Pennsylvania . . —. — ._ . » . .17

c. Interstate convention of 1880 19

d. Ohio Miners' Amalgamated Association 20

e. Arbitration under state laws providing for tribunals . —. — 2i~

(1) Arbitration in Western Pennsylvania . . ... 21

(2) Hocking Valley strike, 1884 23

f . Changes in the coal industry 24

(1) Enlargement of the market 24

(2) Working conditions 25

3. The struggle for a joint agreement from 1885 to 1898 ... 29

A. The National Federation of Miners and Mine Laborers . . 29 a. Suggestion of the interstate joint conference .... 30

B. Interstate joint conference of 1886 30

C. Withdrawal of Illinois 31

D. Withdrawal of Indiana 32

E. The problem of the joint conference 33

F. The formation of the United Mine Workers 33

G. The absorption of the immigrant 37

CONTENTS

H. Efforts to revive the joint conference 38

a. The "suspension" of 1894 39

I. The strike of 1897 41

a. Conditions of work and wages 41

b. Effects of machinery 42

c. Earnings of capital 42

d. Condition of the union 43

e. Negotiations for the Joint Conference of 1898 .... 44 4. Extension of the joint movement 46

A. The struggle in Illinois 47

a. Virden and Pana — importation of negroes 47

B. Iowa and Michigan seek admission to the joint confer-

ence 49

C. Organization of the Southwest Field 50

a. The strike of 1899 50

b. Conflict of federal and state injunctions 51

c. The Reese case 52

d. The miners' commissary 53

e. The Southwestern Interstate Joint Conference .... 53

f. The Southwest Field seeks admission to the joint confer-

ence of the Central Field 54

D. Attempt to organize Maryland 54

E. The struggle in Alabama, Tennessee, and Kentucky . . . 56

F. Organization of the Northwest 59

G. The Colorado struggle 60

Chapter II

1. The importance of the problem 63

2. The attempts at organization 66

3. Why West Virginia has remained unorganized 71

A. Rural workers and individualism 71

B. Immigration 72

C. Absentee ownership 74

D. The system of armed guards 75

E. Injunctions and conspiracy laws 76

F. State statutes vs. the common law 77

4. The broader aspects of the problem 79

A. The territorial aspect 79

B. Investigation by the Interstate Commerce Commission,

1907 80

C. Ownership of coal lands and stock 80

a. Holdings of Norfolk and Western Railway 80

b. Western Maryland Railroad Company holdings ... 81

c. The Baltimore and Ohio Railroad Company .... 81

CONTENTS xi

d. The Pennsylvania Railroad Company 84

e. The New York Central and Hudson River Railroad Com-

pany 84

f . Buffalo and Susquehanna Railroad Company .... 85

g. Buffalo, Rochester, and Pittsburg Railway Company . 85 h. Pittsburg, Shawmut, and Northern Railroad Company . 85

i. The Erie Railroad Company 86

j. Chesapeake and Ohio Railway Company 86

D. Traffic associations 86

a. The Tidewater Bituminous Steam Coal Traffic Associa-

tion 86

b. Ownership of stock and interlocking directorates ... 87

E. Direction of policy toward labor 91

F. Westmoreland County strike, 1910-11 91

a. Cause and spread of the strike 92

b. Operators' tactics 92

c. Refusal to arbitrate

G. The strike of 1912 in West Virginia 94

Chapter III

1. Purposes of the organization 109

2. Units of organization 110

A. International 110

B. Districts 110

C. Subdistricts Ill

D. Local unions Ill

a. Jurisdiction Ill

b. Democratic features Ill

c. Local and individual grievances 112

d. Membership 113

e. Finances 114

3. Officers 116

A. Qualifications 116

B. Duties of officers 116

C. Importance of organizers 118

4. Nomination and election of officers 119

A. Nominations 119

B. Elections 120

a. The recall 121

5. The International Convention 122

A. Powers 122

B. Representation 122

C. Election of delegates 123

D. Special conventions 123

I X ii CONTENTS

6. Strikes ..." ™J

A. The referendum v ~

B. When strikes are supported 124

7. International finances 125

Chapter IV The Coal Operators' Associations 128 ■i Oq

Introduction * * \ *. 1C , Q

a. The forces which gave rise to the associations iz»

1. The American Federation of Coal Operators 129

2. Illinois Coal Operators' Association 134

A. Objects ]lt

B. Membership *™

a. Obligations of members x ^

b. Delinquents and withdrawals ^ 136

c. Basis of representation and voting 136

C. Officers and their duties 137

a. The commission 1^7

b. The executive board 138

(1) Duties of the board I 38

D. The defense fund 140

Chapter V The Interstate Joint Conference 142

1. The foundations of the joint conference . . 142

A. The "right" of organization and representation . . . .143

B. The encouragement of good feeling 143

C. Formulation of principles 144

2. The conference at work 145

A. Membership * 4 5

B. Organization and rules . .146

C. The order of business I 48

D. Inviolable contracts 152

3. The formation of scales I 53

A. The scale of 1898 I 53

B. The renewal of the scale of 1898 155

C. Scale of 1900 and renewals 156

a. Illinois grievances I 57

D. Reduction in wages in 1904 16°

E. Failure to agree in 1906 I 62

F. Reestablishment in 1908 164

G. Settlement by states in 1910 165

H. The new method in 1912 166

4. Results of collective bargaining 170

CONTENTS xiii

CHAPTER VI Introduction 179

a. The task of the state conference 179

b. Conditions of the industry in Illinois 180

1. Organization 181

2. The fundamentals settled 181

3. Administrative machinery 184

A. Business contracts 184

B. The steps in conciliation 184

C. The pit committee 186

D. Method of investigating disputes 186

a. The Danville Case 187

b. The case of the Athens local union 189

E. Coercion by fines 189

F. The Monthly Bulletin of Decisions 190

4. The system in the Southwest 191

5. The system a growth 192

6. The operators ask for a "closed shop" 193

A. The operators' offer 194

B. The need for the closed shop 194

C. The legality of the closed shop 195

7. The problem before the public 198

Chapter VII Conciliation And Arbitration In The Anthra- Cite Field 201

Introduction 201

a. Causes deferring peaceful adjustment 201

1. From the formation of Bates's Union in 1849 to the close of

the Civil War 202

2. Beginning of arbitration, 1869 to 1875 203

A. Workingmen's Benevolent Association 203

B. The Anthracite Board of Trade 204

C. The sliding scale 205

D. The Reading Railroad attempts to stop the struggle . . . 207

E. Settlement by arbitration 209

F. The break-up of the union . . . . 210

a. The inadequacy of arbitration 210

b. Concentration of ownership 211

c. Formation of pools 212

d. The "long strike" in 1875 212

e. Period of the "Molly Maguires" 213 xiv CONTENTS

f . The contribution of the Workingmen's Benevolent Association 214

3. History of consolidation 214

A. Legal background 215

a. Constitutional provisions, 1874 215 c. Coal land acts of the eighties and their amendments . 217

d. Effects of judicial interpretation 218

e. Results of Interstate Commerce Commission Investigaf. Acts to "quiet the title of real estate" 219

B. Ownership of lands 220

C. Attempt to control production by pools 221

a. Early attempts 221

b. Combination of operators and carriers 221

c. The "Morgan Pool," 1886 222

d. Effects on prices 223

D. Lease of Jersey Central by the Reading Railroad, 1883 . 223

E. The Jersey Central and Lehigh Valley leases, 1890-

1893 224

F. The Temple Iron Company deal, 1898 226

G. The purchase of the Pennsylvania Coal Company, 1899 . 227 H. Railroad consolidation 228

a. The Erie purchases 228

b. The Reading obtains the Jersey Central, 1901 .... 228

4. Immigration 229

A. Its importance 229

B. Contract labor 230

a. Legal background 230

b. Judicial interpretation 231

c. Agencies encouraging evasion 231

C. Immigration from Southern Europe 232

5. The labor troubles of 1887-88 234

A. The causes 234

B. Rise of the Knights of Labor and the Miners' and Laborers'

Amalgamated Association 234

a. Inauguration of the strike 235

b. The Reading Company furnishes the Lehigh operators

with coal 236

c. Extension of the strike to the Schuylkill region . . . 236

d. Findings of the Congressional Committee of 1888 . . 237

e. The settlement of the strike 239

f . Effects of immigration on the strike 239

6. The strike of 1900 240

A. The work of the United Mine Workers 240

B. Disrupting factors 241

C. Economic pressure 241

D. Negotiations for settlement 242

CONTENTS xv

E. Settlement of the strike 243

7. The strike of 1902 244

A Preparation for another struggle 244

B. Negotiations of 1902 245

a. Operators' attitude toward a joint conference .... 245

b. Meetings arranged by the Civic Federation 245

c. The first offer to arbitrate 246

d. Order for temporary suspension , . 247

C. The special Bituminous Convention 248

D. Misunderstanding and discontent 249

E. Conference called by President Roosevelt 250

F. The President appoints a commission 25 1

G. The award of the commission 252

8. Adjustments since 1902 255

A. Formation of the Conciliation and Arbitration Board . . 255 a. Rules of the board 256

B. The cases before the board 256

C. Attitude of both parties toward the board 257

a. The operators' position 257

b. The miners' position 258

9. The negotiations of 1912 261

A. Preliminary negotiations in 1906 and 1909 261

B. The miners' demands 261

C. The joint conference 262

a. The operators' reply 262

b. The miners' rebuttal 263

c. The agreement 265

CHAPTER Vin

CONCILIATION AND ARBITRATION IN THE BRITISH COAL INDUSTRY 269

Introduction 269

1. The rise of the miners' unions 270

A. Early conditions 270

B. Formation of the Miners' Association of Great Britain and

C. The Miners' National Union, 1863 . . 272

a. Regulatory measures 274

D. Formation of the Miners' Federation of Great Britain, 1889 275

2. Methods of industrial adjustment 277

A. Arbitration 277

B. The era of sliding scales 278

C. The big strikes of the nineties 279

a. The strike of 1893 280

D. The Royal Commission on Labour 282 xvi CONTENTS

E. The Conciliation Act of 1896 283

a. Results under the Act 283

b. The Court of Arbitration 284

c. The Industrial Council 284

F. Modern conciliation boards in the coal industry .... 285 3. The policy of legal enactment 288

A. Labor representation 288

a. The "Labour Representation Scheme" 289

b. Membership in the "Labour Party" 291

c. The Steele Case, 1907 292

d. The Osborne Case, 1909 293

e. Government payment of Parliamentary members, 1^11 . 294

B. The eight-hour law, 1908 295

a. Difficulty of obtaining the act 295

b. Provisions of the act 297

c. Amendments 299

C. The Minimum Wage Act, 1912 299

a. Growth of the minimum wage demand 299

b. Abnormal "places" 300

c. Preliminary negotiations 301

d. The strike ballot 302

e. Intervention by the government 303

f . The provisions of the act 304

g. Settlement under the act 306

h. Effect of the minimum wage 308

i. Possibilities of the industry bearing a minimum wage . 309

Chapter IX

1. Relationship between a conciliatory system, prices of coal, and

a regulatory policy 313

A. Recommendations of investigating committees 315

a. The committee of 1888 315

b. The committee of 1893 316

c. The Interstate Commerce Commission Investigation,

1907 317

B. The common law remedies 319

C. The inadequacy of decisions based on laws in restraint of

trade 320

a. The recent anthracite decision 320

b. The "commodities case" 323

c. United States vs. Lehigh Valley Railroad Company . . 324

D. The lack of public policy 325

E. The work of the Interstate Commerce Commission . . . 327

a. Coxe Brothers Case 327

b. The Baird Case 329

CONTENTS xvii

c. The power to fix maximum rates 331

d. The Commission handicapped by the courts .... 331

F. The need for an accounting system 332

G. The work of concentrated capital 334

H. The operators ask for a commission 335

I. Regulatory measures 337

a. The eight-hour day 338

b. A legal ton 338

c. Regulation of immigration 339

d. The minimum wage 339

J. Possible rise and influence of a labor party 340

2. Relationship between a conciliatory system, the supply of coal,

and governmental action 343

A. The Canadian Industrial Disputes Act 344

(1) Application for a board 344

(2) Composition of the board 344

(3) Conciliation, investigation, and publicity 345

(4) Powers of the board 345

(5) Penalties for strikes and lockouts during investigation 346

(6) Results from the act 347

B. Conclusion 348

APPENDIX, STATISTICAL TABLES 357

INDEX 373

In making a study of conciliation and arbitration in the coal industry of America we find another instance of the evolution from individual bargaining to a method of adjusting wages and settling differences by conferences between the employers and employees. That such an evolution has been brought about through response to changing conditions in transportation, markets, and industrial needs is only to be expected.

But with the adaptation to changing needs a new spirit has been born. The employers and employees have both learned the advantage of cooperation and organization and at the same time have gained a new tolerance each for the other. They have transferred the settlement of the wage controversy from scenes of force and violence to the conference hall, where reason and intellect are working out something bigger than mere trade agreements. That progress which comes as a result of the interplay of group forces, and after much testing, is likely to be better and freer from vexing conditions than the innovations which are brought about by attempting to work out a hard-andfast rule of law. Where the employer and worker are willing to grant each other justice and the public fair treatment, we shall not need to increase the complexity of our administrative machinery. Here we have group organization and interests supplanting individualism, and greater freedom in working out their common welfare than could occur under government regulation. Membership in a local group and striving together for group interests have given the parties a concept of the meaning of membership in a larger national group and greater appreciation of efforts xx INTRODUCTION

looking to the public welfare. This is demonstrated by increasing deference to public opinion and a recognition of the necessity of fair treatment to all concerned. Both sides realize that their actions are of national importance as well as local, and that, if they are to wear the badge of desirable citizens, individual and group selfishness must be subordinated.

If the conciliation movement in settling labor disputes had contributed nothing more than men of the kind it has brought forward on both sides, it would be worth all the effort expended in building it up. The operators in their position as captains of industry would have been men of prominence anyhow, but the movement has surely made them larger-minded and more public- spirited. In the bituminous field men of large wealth, endowed with the qualities of leadership, find it necessary to adopt democratic methods of control in order to meet the solidarity of an opposing organization governed by democratic principles. Even in the anthracite field we find entrenched monopoly and autocratic leadership obliged to yield to this same force when once it asserts itself. A consideration of what the conciliation movement has done for the miners conveys some conception of what democracy rather than autocracy in industry really means in our national life. It has not only brought forth sane and capable leaders, but it has unified one of the most heterogeneous populations in any industry and, besides making them realize the necessity of having wise and efficient leaders, has shown them the power of democracy in the use of the vote.

We shall first direct our attention to the introduction and extension of conciliation and arbitration in the bituminous coal industry of America. The emphasis will be put upon the development of conciliation and arbitration as a system, with just enough of the historical to give a perspective of its evolution. In connection with the exten-

INTRODUCTION xxi

sion of the system we shall be concerned with the so-called "West Virginia Problem" which threatens to disrupt it.

In order to understand the forces behind the system we must first direct our attention to the organization of both parties, employers and employees. We are then in a position to appreciate the significance of the interstate joint conference of the central field and the importance of its methods and accomplishments. After the general agreement of the interstate joint conference, which establishes regulations between fields, has been considered, our interest is drawn to the adjustments that are made in the most highly developed of state joint conferences. In this connection we become acquainted with the machinery by which adjustments are made under the agreements. This is a quite different function from the formulation of agreements.

The conditions in the anthracite field then demand our attention. This field has had such a different history that it is impossible to relate it to the bituminous field. In fact there is no connection between them worthy of note before 1900, and even from that time on the evolution of the systems is different.

In the course of the survey thus made there are many indications that we are just approaching some of the problems with which Great Britain has already dealt in her coal industry. So we turn to a study of developments there to see what significance they may have for us.

In conclusion we find that the system of conciliation and arbitration involves us in new problems which have a vital relation to public welfare ; that the public as a third party must concern itself with functions which the other two parties cannot be expected to perform ; in short, that the public must be alive to the new industrial, social, and political problems which are arising from the evolution of the coal industry.

CONCILIATION AND ARBITRATION

IN THE COAL INDUSTRY

OF AMERICA