The new industrial unrest : reasons and remedies

Contents

CHAFTBR PAGB

I. The New Industrial Crisis .... 3 II. The Industrial Crisis as it Appears from

above to the Capitalist-Employer . . 13 III. The Industrial Crisis as it Appears from

CHAPTER I The New Industrial Crisis

WE have recently emerged from two of the greatest strikes the country ever saw: the steel strike and the coal strike. In both cases the losses in wages, in production, in earnings, were stupendous, and in the case of the coal strike the country was brought close to the brink of disaster.

We have indeed emerged from both strikes — but with nothing really settled. Large numbers of the men went back to work dissatisfied. There was no compromise and apparently no spirit of compromise. Judge Gary stands just where he did before the strike began : so does Mr. Gompers : so do Mr. Fitzpatrick and Mr. Lewis. In the coal strike both operators and miners are sullen. The Pennsylvania operators were as unwilling to accept the President's proposal for a temporary cessation of hostilities as were the Illinois miners.

A West Virginia leader, commenting upon the discontent among the miners in his state, predicted another strike within a few months; and the twenty-four presidents of unions connected with the steel strike have expressed their determination to go forward with the struggle to organize the workers in the steel industry.

Leaders in both camps refer in clearer terms than ever before to what they seem to regard as irreconcilable differences of view. Judge Gary was heartily cheered by 1,500 members of the American Iron and Steel Institute, an organization of the iron and steel masters of the nation, when he declared his determination not to deal with representatives of labour unionism.

" This is the great question confronting the American people, and, in fact, the world public," he said.

During the progress of the strike, which began in September, 1919, Judge Gary received hundreds of letters and telegrams from employers and employers' associations in many parts of the country supporting his position.

On the other hand labour is taking a stronger stand than ever before. On December 13, 1919, the heads of 119 powerful national unions held a conference at Washington, and adopted a new "bill of rights." They reiterated their determination to exercise the right of organization for all industries, the right of collective bargaining, the right of " being masters of themselves."

" Labom-," they said, " must be and is militant in the struggle to combat the sinister influences and tendencies. Labour will not permit a reduction in the standard of living. It will not consent to reaction toward autocratic control."

This represents the view of the conservative wing of the labour movement, headed by Mr. Gompers. The more radical wing of the workers — and I do not mean by this the extreme revolutionary fringe — met on November 22, 1919, in convention at Chicago and organized a new Labour Party to carry the whole struggle into the field of politics — a movement which will be treated in another chapter.

" Labour," says an official report of this convention, " has hurled its challenge to the business and financial interests that control the American government to-day. ' The battle is on."

This sense that " the battle is on " is to be found among certain groups in both camps. I heard a great manufacturer arguing that the employers were better prepared at this time to fight than they ever would be again. They had surpluses from prosperous years: and a strike now would " cost only about half as much as it would in an ordinary year " on account of savings in income and excess profit taxation.

On the other hand I heard several labour leaders argue that they were in a better position to fight now than later, owing to the national shortage of labour. There was now no surplus from which employers could draw strikebreakers.

Reference is here made to the position of two large sections of the labour movement : but there exist, as every one knows, still more radical groups, smaller but noisier, which are for various kinds of " direct action," There was never before in America such a number of revolutionary groups, or so widespread a propaganda of radicalism.

These conditions are not set forth with any desire to be alarmist. There are strong counter-currents and reconstructive movements among both employers and employees — which will be treated in later chapters — but we ought above everything to face the situation honestly and frankly. It is only by recognizing the problem which confronts us that we shall be able to deal with it.

Another disturbing factor in the situation — in some ways the most disturbing of all — has been the impotency of the government in meeting these industrial crises. Both sides seem equally critical, if not contemptuous, of Congress; both sides have refused to accede to the requests of the President. The steel workers would not delay their strike even for two weeks until the President's industrial commission could sit. On the other hand Judge Gary refused the President's request for a conference with the labour leaders.

In the case of the coal strike the government through the Attorney General announced that " the full power of the government " would be used to save the country from a fuel famine. Nevertheless coal was not mined: factories were closed, railroad transportation was crippled: the country suffered acutely. Coal strike leaders w^ere enjoined by the federal court: but the injunction produced no coal. Congress investigated the steel strike: it had not the slightest effect upon the resumption in the production of steel. The recent cessation of the coal strike was no settlement at all : only a postponement of the controversy.

The effort of the government to get the parties to the controversy together to formulate some general plan of compromise — at the October Industrial Conference — failed utterly. A new Commission of Seventeen appointed by Mr. Wilson was later summoned to Washington, to devise some plan whereby in his own words,

" the public will not suffer at the hands of either class."

This commission was made up of a very able and distinguished group of public men, including several former governors and cabinet secretaries. Mr. Herbert Hoover was a member. And yet before the commission had its first meeting the labour groups had expressed their disapproval of it because it had no representative of labour upon it.

The labour situation upon the railroads has also been in a highly unstable condition, with the breach widening between Congress and the powerful railroad brotherhoods. The railroad unions were opposed to the plans for returning the railroads to private control: and have been upon the point, several times, of striking.

In this crisis the public, which is the principal sufferer, grows confused and impatient. Production suffers at a time when abundant production, not only for America but for the whole world, was never so necessary. Prices mount higher and higher. A strong tendency exists to deal with problems of immense complexity and difficulty either by hasty legislation, or crude force.

Never was there such need for accurate information, and patient action. A vast mass of detail regarding strikes and industrial disturbances is daily presented to us — detail which few ordinary busy human beings can possibly piece into a picture of the whole scene. We cannot see the forest for the trees : nor the news for the headlines. One of the most conscientious editors in the country told me that he did not know until some time after the steel strike began that the twelve-hour day and the seven-day week were so common still in the steel industry: and that it was a week or more after the coal strike began that he found out that the demand for a fiveday week of six hours a day — which seemed so astounding and unreasonable — ^would, if it were introduced, actually mean a slightly longer average worldng week than the miners of America have had during the past few years. Over and over again, in examining this unstable industrial situation, one feels as he did at Paris, during the Peace Conference. There is the same " slump " from the high spirit and noble idealism which characterized the war period. Never was there such unity between labour and capital as there was in America during the war, never such a spirit of co-operation, never so little regard for profit, never so great a concern for generous service and high production. It was the marvel of the whole world. I was in England during the spring of

1918 and know how widely the British press pubhshed the records made by us in shipbuilding and other industries through the co-operation of employers and their workmen. But the moment the war ceased the same disintegration took place in industrial relationships in America as we saw at Paris between the nations. The bottom fell out of ideahsm! The great moment had passed, there had been no miracle, we were back at the old controversies, selfish interests were again rampant, and the struggle was sharper than ever before.

We are passing through much the same psychological process in getting a new understanding between labour and capital as we are in getting a League of Nations. Much the same forces are at work: the same obstinate reactionary elements, the same unreasonable radicalism. We are trembling upon the thin edge, in both problems, between organization and anarchy. Which way are we going? Is it to be confusion and anarchy and war — or is it to be good order, and organization, and co-operation?

In both cases almost every one agrees that we cannot go back to the old. But can we go on to the new? Are we brave enough? Are we clear-sighted enough? Our record, so far, regarding future international relationships, is not reassuring. Will we do better with our equally difficult internal problems? We know, or think we know, pretty well what to do in international affairs. Almost every one agrees to some kind of a League of Nations. Are we anywhere nearly as clear about the industrial problem?

The prime difficulty in this crisis, as it was in Paris, is the want of proper publicity. The great American public does not understand the situation.

I felt over and over again at Paris that if one who had been there could sit down with a group of his neighbours and explain the whole situation, present the difficulties involved, describe the dangers of drifting without a constructive purpose, he could show them why, even though the treaty was defective in many ways, it was profoundly necessary to get some organization at work, some league in being to steady the world.

I have had exactly the same conviction regarding the present industrial situation in America. It is based upon the same solid faith in the essential good sense of the American people. If they can only see the situation, as it presents itself in some of the great industrial centres, where strikes have been raging; if they can only know what the issues really are as interpreted by leaders on both sides of the great controversy; if they can only understand how intensely human the problems are, how full of the common stuff of hfe; if they can be shown where the truly reconstructive experimentation is going on and who are the thoughtful leaders on both sides, — if the American people can see and know and understand these things they will decide aright regarding them.

It is with these conditions, and this need, in view, that the following chapters have been written — to present a survey, for the general reader, of the present industrial crisis, and the various reconstructive experiments now under way to meet it.

CHAPTER II The Industrial Crisis as it Appears to the Capitalist-Employer

IT is important, in approaching the problem of industrial unrest which now confronts America, to understand first how it looks from above to the employer. In order to present this point of view clearly I am using the explanatory example of Gary, Indiana, one of the centres of the recent steel strike. In the following chapter I shall show how the same conditions appear to the workers.

It is much easier to get at the point of view of the employer in the steel industry than it is to get at the point of view of the workers, for it is quite definitely the expression of one man —Judge Gary, the head of the United States Steel Corporation. It is a clear-cut, far-sighted, logically-expressed point of view, whereas the voice of the workers is confused and vague: a multitudinous murmur, as diverse as Babel, with as many opinions as a town-meeting. Be as conscientious as you like in making your inquiries and you are never quite sure you have got it all. Judge Gary knows exactly what he wants: the workers are profoundly restless, without any one clear idea of what they want. Not only ignorance and foreignness but real differences of view divide and confuse them. Judge Gary's position is based upon experience and tradition: but the workers want something new, they are pressing forward into an undiscovered country. Judge Gary, representing the group having power and place, desires security: the workers, having neither, want change.

There are, indeed, other voices, and powerful counter-currents among employers in American industry — even in the steel industry as I shall show later. John D. Rockefeller, Jr., and Charles M. Schwab are far from seeing eye to eye with Judge Gary. Nevertheless in the recent controversy Judge Gary was the typedefender, the accepted spokesman, of the entire industry. No other important witness representing the employing side of the steel industry was heard by the Senate Conmiittee. His stand was supported by the Iron and Steel Institute, which represents the entire steel industry in America. He was commended for his position by J. P. Morgan, the most powerful financier in America. Even some of the strong men in the steel industry who differed sharply with Judge Gary in regard to his policies or practices, came to his support in this emergency.

I have a copy of a letter from a steel master connected with an independent company, in which he says:

"At the greatest personal sacrifice, both in friendship and in money, for the past twenty-five years, I have waged an unceasing warfare against the steel corporation on the question of the seven-day week, the twelve-hour day, and the autocratic methods of dealing with workmen, but in the present struggle my sympathies are entirely with Judge Gary."

Boiled down, the position of this steel master is that the recent conflict was really a revolutionary struggle for the control of the steel industry on the part of organized labour: he was, therefore, with Judge Gary. Now that the employers have won the strike he is for beginning a harder fight than ever against what he calls " these rehcs of barbarism " — meaning the twelve-hour day, the seven-day week, and the refusal to permit workmen to organize and bargain collectively. Indeed, in the company he represents, the men have been encouraged to form shop committees and to co-operate with the management.

Judge Gary's leadership was accepted by the entire steel industry not alone because of the enormous power of the United States Steel Corporation — ^the general policies of which must and do set the pace for the entire steel industry in America — but because of his sheer abihty. It is not for nothing that he is at the head of the greatest business corporation in the world, with property worth $2,250,000,000 (his own figures) and having 270,000 employees. He not only has this enormous power, and is conscious of having it, but he knows with penetrating clearness what he wants to do with it.

" While I have a good deal of authority and power," he told the Senate Committee, " I use the same very sparingly, I am in the habit of consultation."

No one who touches the steel industry at any point fails to become conscious of this pervasive authority. Though the power-house may be distant, no one who makes a contact anywhere, fails to get a shock. I had such an experience myself — which I tell in no spirit whatever of criticism, but merely to illuminate the point I am making. When I went to the city of Gary to look into the strike situation I was as anxious to understand the point of view of the management as I was that of the workers. So I asked quite directly if I might see the mills and talk with some of the superintendents and foremen. They seemed astonished: and referred me to the headquarters of the subsidiary corporation at Chicago. So I went there: and found that no observer had been allowed to enter the mills since the strike began: and that it was impossible for any one to talk about the situation without Judge Gary's personal permission.

" But how am I going to get your point of view? Judge Gary has complained that investigators present only the workers' side. How can I get your side if I can see nothing, and no one will talk to me?"

I told what I was trying to do and what for. Judge Gary was reached by long-distance telephone in New York — and I was enabled, then, to talk with the representatives of the corporation at Chicago and at Gary, and to visit the mills.

But to a remarkable degree these men I talked with, and very able men they are, echoed Judge Gary's views. They would give facts, but would express no opinions whatever of their own. It is a wonderfully disciplined organization that Judge Gary has created. It speaks as one man.

As to the attitude of the corporation toward labour — and I am trying now to exhibit the industry fairly as it looks from above, — one of the foremen at Gary seemed to me to strike a kind of keynote:

"Judge Gary," he said, "knows far better what is good for these workingmen, mostly ignorant foreigners, than they know themselves."

Let me develop this a little further from Judge Gary's own testimony before the Senate Committee. As I said, he knows his power.

" I recognize," he testified, " that the power of concentrated capital necessarily involves the power to do more or less harm. I recognize the fact personally that concentrated capital has the advantage over a single individual, if the concentrated capital is in the hands of dishonest and unfair men."

This point of view leads directly to the very heart of Judge Gary's attitude toward labour. Kecognizing the power of concentrated capital for good or evil, he desires to do good, as he sees the good. Absolute power is to remain in the hands of the employer — but the employer must use it wisely and generously. All his utterances — and like any man who believes honestly and earnestly in what he says, he has been a free talker, — all his utterances, and his testimony before the Senate Committee, resound with this doctrine.

" The only way of combating and overcoming that " — the " wave of unrest in certain locations," he said to the presidents of the subsidiary companies of the United States Steel Corporation on January 21, 1919, " is for the employers, the capitalists, those having the highest education, the greatest power and influence', to so manage their own affairs that there will be left no just ground for criticism."

A little later in the same address he discloses vividly his whole policy toward the workers. This should be read carefully:

" Make the Steel Corporation a good place for them (the workers) to work and live. Don't let the families go hungry or cold; give them playgrounds and parks and schools and churches, pure water to drink, every opportunity to keep clean, places of enjoyment, rest and recreation: treating the Vi^hole thing as a business proposition; drawing the line so that you are just and generous and yet at the same time keeping your position and permitting others to keep theirs, retaining the control and management of your affairs, keeping the whole thing in your own hands, but nevertheless with due consideration to the rights and interests of all others, who may be affected by your management."

This is the very bony structure of his philosophy: and Judge Gary is one of the rare men who has tried to practise all he preaches. The Steel Corporation has spent millions of dollars in various forms of welfare work — forms so interesting and so significant in many ways, — the prevention of accidents, the pension system, and the encouragement of stock ownership by the workers — that I shall enlarge upon them in another chapter. He has also " treated the whole thing as a business proposition." He told the students of Trinity College in June, 1919, that " It pays big, in dollars and cents, for the employer to maintain working conditions which are beneficial to the health and disposition of the employee."

He has also adhered from the beginning with singleness of purpose to the principle he lays down for his subsidiary presidents of " keeping the whole thing in their own hands."

This principle forms, indeed, the basis of his attitude toward unionism in his plants and explains his refusal to meet or deal upon any terms with representatives of organized labour. His logic is clear. If once it is admitted that unionized workmen may have any say regarding their conditions, the whole fabric of his philosophy begins to crumble. Judge Gary is not a weak man, and not muddle-headed: he saw the issue from the very beginning, and has never swerved in his course. He has the immense advantage, as a leader, of a perfectly clear and logical position, — and one concerning which he is absolutely sure of himself. He believes it as one believes a religious dogma. He believes that if you let unionism begin anywhere, it will mean more and more power to the workers and finally the " closed shop." It is nothing to him that the strike leaders and Mr. Gompers declare that the strike is not for a " closed shop " — he will not have even the camel's head in the tent. To him such a change in the tried system which he knows, such a division of control even in one department of the industry, not only threatens the power of the capitalist-employer, but makes for confusion and lowered production. He cites the English situation as an example of this and bids us beware of it. So he is against the whole movement, root and branch: for it is to him the beginning of revolution.

The corollary of his principles, of com'se, is exactly what his foremen at Gary told me, that he knows better what is good for the workman than the workman himself knows. He tells the Senate Committee that unionism " is not a good thing for either the employer or the employee."

" We know what the rights of our employees are," he said in an address, " and we feel obligated and take pleasure in knowing that we are at all times doing all we can for the people in our employ."

" How did you know," asked Senator Walsh, in the Senate inquiry, " that hundreds of thousands of your employees were content and satisfied? "

" I know it," said Judge Gary, " because I make it my particular business all the time to know the frame of mind of our people. . . . My instructions regarding the treatment of the men are absolutely positive."

It follows then, that the strike, which was a great surprise and shock to Judge Gary, was not due to his workers, not due to any grievances upon their part — for his instructions regarding their good treatment were " absolutely positive," — but to outside agitators and revolutionaries, and to foreigners — as he repeatedly tells the Senate Committee.

Similarly when the subject of the twelve-hour day, the seven-day week, the " long turn," and the like, came up for discussion before the Senate Committee, he was forced by the logic of his own position — for he had said that he knew at all times the frame of mind of his employees — to declare that his workmen really wanted the long day and Sunday work — although most of the workmen who testified before the Senate Committee, and there were many of them, complained of the long hours and the Sunday work.

" The question of hours," Judge Gary tells the Committee " has been largely a question of wishes, of desire, on the part of the employees themselves." They want them because they '' want more compensation."

So much for the industry as it looks in its broader aspects, from above — to the only spokesman among the employers. Taking up, specifically, the twelve-hour day complaint, the employers argue against change from a two-shift to a three-shift basis on account of the immense cost entailed. It would require at once a large increase in the number of workmen employed, when the labour supply in America is already dangerously short: and in most steel-towns the housing is far from sufficient for such added population. There is great difficulty also in making wage readjustments; for if the workers go to an eight-hour day and expect twelve-hours pay for it — and they cannot live on much lessit means an enormous addition to the labour-cost of steel. The eight-hour day has already been introduced in a number of American steel mills, though in none of those owned by the United States Steel Corporation: and it is universal in England — and has been for many years.

Another thing that disturbs the employers profoundly — and I am trying to show how the situation looks and feels to them — is what seems the utterly wild demand of the more radical groups of labour not only to a voice in settling labour questions (which is all that the conservative labour movement has asked in the past) but in the management of the industry itself. They assert that the whole labour movement is being permeated with these dangerous ideas: several of them told me that they had formerly held < Gompers in high esteem as a conservative labour leader, but that he now seemed to have yielded to the radical element. They made a great point — Judge Gary did in his Senate testimony — of the leadership of such men as Wilham Z. Foster, who was formerly a radical syndicalist, and a member of the I. W. W. They have had reprinted and distributed widely Foster's small red book. I had it offered to me four different times in as many days — to show what labour is after.

They see clearly the enormous complexity and delicacy of the industrial mechanism they have built up. They see the complicated technical processes in their industry — I visited at Gary the huge establishment where the by-products of the coking ovens are reduced into various valuable oils and chemicals — they see the immense intricacy of their organization for digging and shipping the ore and the coal and for manufacturing and selling their products from China to Peru. They know how little it takes to throw this delicate mechanism out of gear. The idea, then, of crowds of ignorant workers, who have no knowledge of the problems involved, no training to deal with them, breaking in with extreme demands for a share or a control of the management seems wildly destructive and disastrous. They fear it desperately — and exhibit as a proof of the reasonableness of their fear what has happened in Russia. They regard it not only as meaning the destruction of their own power, and of the organization which they have built up so painfully through so many years, but as a complete overthrow of our institutions. The solid earth of traditions, economic practises, legal regulations — their very earth seems crumbling under their feet. I am trying here to show how the situation really looks and feels from above. It is this feeling that has brought so large a number of employers, many of whom do not agree with his pohcies, to the support of Judge Gary.

One of the more moderate employers said to me : " We probably made a mistake in not sooner establishing a basis of real co-operation with our men: but that is past: and now that the issue has come in the form it has, we've got to stand by Judge Gary."

One unfortunate effect of the present crisis has been to drive both sides to extremes. The employers' group has undoubtedly been moving toward the extreme position of Judge Gary: and the labour group has undoubtedly been moving away from Mr. Gompers toward the more radical leadership. But there are also tremendous counter-influences at work, and many quiet reconstructive experiments — which I shall describe later.

CHAPTER III The Industrial Crisis as it Appears to the Worker

HAVIISTG examined, in the previous chapter, the point of view of the employer-capitahst in the steel industry, I wish now to show how the same conditions appear from below to the workers. It is only as one tries to understand how the worker feels and thinks: his own actual point of view: that we can get at the problem.

When I went to Gary to make inquiries about the steel strike I had in mind the twelve demands made by the national leaders when the men walked out on September 22, 1919, but I heard only two discussed with any emphasis either by the workers or the management. ! First, the twelve-hour day.