ID 85i 632 n ^ New Spirit Inkdustra E Ernest JcAnson THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES [ THE NEW SPIRIT IN INDUSTRY F. ERNEST JOHNSON Raearch Secretary, Commission on the Church and Social Serruice of the Federal Council 0/ the Churches of Christ in America Foreword by Herbert N. Shenton Di'vision Chief of the Council of National Defense ASSOCIATION PRESS New Yokk: 347 Madison Avenub 1919 Copyright, 1919. By The International Committee of Young Men's Christian Associations CONTENTS Chapter Page Foreword v I. The Labor Situation i Class consciousness — A share in management — Domination by business interests — "Scientific Man- agement" — Weakness of "scientific management" — A "constitution" for industry — The "servile state" — Labor and the law — Labor troubles: the Lawrence strike — Racial factors — "48-54" — Low wages — Sus- picion and recrimination — Singing the "Interna- tional" — A "living wage" — The morals of magnates — The question of facts — Too much power in one place • — Profits first — High cost of industry — Unpaid debts — The new day. II. Organized Labor AND THE War .... 21 The trade union movement — The A. F. of L. — Women unionists — Unionism in Europe — Structure and methods — Strikes — Trade agreements — Em- ployers' attitude — "Ca'canny" — The British labor truce — The American contrast — A friendly Adminis- tration — The War Labor Board — A new labor con- sciousness — Plight of the imorganized — The Gov- ernment line-up — The crisis in Britain — The Whitley plan — Progress toward industrial peace — A national industrial conference — A new war threatened — A revolutionary report — "Bob" Smillie — America waits. III. The Political Labor Movement .... 43 Labor legislation — Health insurance — The British Labor party — A national mininmm — Democratic control of industry — A new system of finance — "Sur- plus for the common good" — The "street of tomor- row" — Cooperation — American labor in politics — ■ The Non-Partisan League — The Socialist parties — Labor and the League of Nations — The "Inter- national" — A higher patriotism — The Berne confer- ences — A "New International." 1458938 . iv THE NEW SPIRIT IN INDUSTRY Chapter Page IV. Democratizing Industry 62 A discredited regime — A plan that works — Trying the workers' way — A psychological gain — Types of bargaining — The Rockefeller plan — ^" Directors of personnel" — The Leitch plan — The trade agreement — Where the workers rule — Labor "rights" — Profit- sharing — Progress toward peace. V. Syndicalism 73 The Russian Revolution — The provisional govern- ments — The Bolsheviki — The Soviets — The Con- stituent Assembly — Lenin's appeal — Bolsheviks out- side Russia — The Socialist philosophy — Economic determinism — The L W. W. — Labor 'sishmaelites — • Varieties of radicals — Foreign syndicalist move- ments — The National Guilds — The Plumb Plan — The path ahead. VI. The Ethics of Industry 87 What democracy is not — The need of a moral judg- ment — Each to his own problem — The Quakers' challenge — "Old worlds for new" — A new kind of ex- pert — Industrial peace-makers — "Americanization" — A new type of ministry — Faith and practice. \ FOREWORD In America the post-war problems of readjustment and reconstruction are more in the nature of oppor- tunities than of obhgations. The manner and the degree in which the opportunities are developed will be one of the major indices of the real value of the War to make the world safe for democracy. It is for us to choose whether, under these potential post-war auspices, we will heroically dedicate ourselves to mak- ing the most of the new opportunities for improving the social order, or whether we will seek comfort in settling back into approximations of status quo ante bellum. An expansion of democracy and the reduction of the probabilities of war were the hopes that inspired untold sacrifices of life and wealth, of men and things. The War has been fought. Will the ends be achieved? If we are to have a larger democracy, it must be more than a revised political order, national or international. It must be a transformation of all of our human feelings and relations, of our procedures and of our institutions. Its primary determinants will be the ability and the desire of individuals, singly and collec- tively, to assume larger social responsibilities. In no sphere of human activities are the opportuni- ties for the development of such a democracy more abundant and the needs more urgent than in our industrial life. A new spirit is abroad. Production, distribution, and consumption are being evaluated in vi THE NEW SPIRIT IN INDUSTRY terms of the kind of men which the processes produce. Production of things is becoming recognized as sub- servient to the production of capable and morally responsible men. Increased responsibility for the use of things seems to promise more than could be accomplished by the mere redistribution of things, and the feelings which men have one toward the other are regarded as more determining than social rearrange- ments. When the sense of responsibility changes, economic redistribution follows and when feelings change there always is a social reorganization. For reasons such as these the development of industrial democracy may, to a very considerable extent, be considered as an ethical and spiritual problem. The ethically and religiously minded, whether in the Church or out of it, see the challenge of the situation. For the assistance of these and for the stimulation of others, this volume has been hurriedly assembled in the critical moments of rapid readjustment. It is not a finished treatise or formulated statement. It is a collection of ideas and facts for the purpose of stimu- lating thought and awakening a sense of responsi- bility; it aims to call attention to some of the spiritual elements in industrial readjustment; and it presents data and raises questions which will be useful in group discussions to the end of making them more definite and purposive. Herbert N. Shenton CHAPTER I THE LABOR SITUATION The labor problem is world wide. It exists because the majority of the people in the world have for cen- turies marketed their physical strength, dexterity, and endurance to those who were in position to assume responsibility for converting these factors into useful product, and to supply the tools. If labor could be separated from the human being who performs it — if one might sell his work as a commodity without in effect contracting to deliver himself for the period of such labor — there would be no problem other than that of fixing a price on wheat or cotton. But the "commodity theory" of labor is discredited by modern workers, and by modern-minded employers as well. The worker, to be sure, never forgets that he has something to sell, and every strike, or strike threat, is based on his assurance that his commodity is indis- pensable; but what the modern employer has to deal with is not only biceps, fingers, and thumbs, but feel- ings, appetites, and aspirations. Class consciousness The phenomenon of most importance in the labor movement is what is known as class consciousness. It may be the consciousness of craftsmen as such, and in that case it is akin to the professional fellowship of lawyers or doctors. It is more significant when it stands for the common lot of all wage workers — the 2 THE NEW SPIRIT IN INDUSTRY proletariat. In this form it stands over against the capitalists and employers of the world. The roots of this class feeling are in what sociologists call the con- sciousness of kind, and it thrives upon every en- counter between those whose economic interests are assumed to be opposed. The working class has not yet come to self-consciousness in any large way. The radical labor press berates its own people for their slow- ness as vehemently as it chastises the vested interests in industry and business. "Workers of the World, Unite!" is the impatient slogan of devotees of the "One Big Union." Labor in the United States is, in the main, as conservative as capital. A share in management The "hot spot" in the industrial situation is not wages or hours, but management, in which labor is Ndemanding an increasing share. This is in part the industrial counterpart of the demand for political democracy that is sweeping the world. It results from a growing conviction that freedom for the individual, the paramount democratic ideal, is not satisfied by a political formula, but must be realized in daily life and work. This means free choice of occupation; a voice in the determination of hours and wages, con- ditions of work, and shop discipline; and, in its fullest import, participation also in financial procedure — • buying, selling, and investment. It means the devel- opment of industry, not primarily as a dividend- producing process, but as an art. In this view, in- dustry derives its justification not merely from the fact that human beings have to consume, but from the fact that they are instinctively endowed to create and THE LABOR SITUATION 3 produce. The process becomes as important as the product. This phase of industrial conflict is mani- festly spiritual. Its purpose was voiced by Woodrow Wilson in "The New Freedom": "Industry, we have got to humanize . . . We have got to cheer and inspirit our people with the sure prospects of social justice and due reward, with the vision of open gates of opportunity for all. We have got to set the energy and the initiative of this great people absolutely free." This increasing urge among the workers is not always conscious, nor always free from traditional self-seek- ing aims, but it is symptomatic and prophetic. Domination by business interests A grievous charge against industry Is that it is dominated by business interests. Few people dis- tinguish in theory between a business corporation and a producing corporation — between a trust company and a shoe factory. "Big Business" is a term vaguely used to denote centralized industrial, as well as finan- cial interests. This is a confusion that is fatal to the perfection of industry in its own field. There is no good reason why the manufacture of food should be controlled exclusively by business ideals, while other forms of vital public enterprise are controlled by service ideals. Why should the painter's or the sculp- tor's art be dissociated from ideas of financial gain or loss, while the art of the craftsman is wholly subjected to considerations of profit? The instinct to create is quite as fundamental as the tendency to acquire. Normally, a man has a desire to be an artist in his own field. To rob him of the opportunity to create, in the full realization that he is contributing to the 4 THE NEW SPIRIT IN INDUSTRY intellectual and esthetic wealth of the world — to sub- ordinate all spiritual appraisal of human work to the accumulation of economic goods — this is nothing short of prostitution. "Scientific Management" A few years ago there appeared a movement known as "Scientific Management," which has in large meas- ure become characteristic of the spirit of American industry. It is a system by which the efficiency ex- pert, who now prefers to be called the "industrial en- gineer," comes into control of industrial processes. The form of this system that is best known is that worked out by Frederick W. Taylor. It originated in motion-study, which involved the timing of processes for the purpose of eliminating waste labor. During experimentation the workman is instructed to perform his tasks successively in various possible ways, and every movement is timed with a stop-watch. A large number of observations are recorded, so that it is pos- sible to deduce the most "efficient" method of doing a given piece of work — in other words, to eliminate the physiological waste in performing manual labor. Some remarkable achievements have been recorded as results of the installation of scientific management. For example, when applied to loading a car of pig-iron by hand, the workmen have handled forty-seven tons a day, in place of twelve and a half tons by the former uncriticized method. When applied even to shoveling coal, the amount of work done by the shoveler was doubled, or trebled. In machine-shop work the in- crease in production in certain operations has gone as high as 1800 per cent. The fatigue point in a given THE LABOR SITUATION 5 type of work has been discovered and rest periods have been introduced. On the face of it, scientific management results in a clear gain for both the employer and the workman, since wages on piece work increase automatically with production. Even on time work they are bound to reflect great increases in output. On the other hand, speeding up may be accompanied by a cut in wages, especially on piece work. Scientific management does great violence to trade union standards, and tends toward a substitution of individual contract for col- lective bargaining. Organized labor is strenuously op- posed to the system, wherever it results in violence to trade-union procedure. The state of mind that is produced in a man who feels that he is being exploited in the interest of quantity production is deplorable from a moral point of view and menacing to industrial peace. The recognition of initiative and of instinctive demands for normal expression may easily be reduced to the vanishing point by a system designed wholly to increase production. Not a little of the unrest in in- dustry today is due to this speeding-up process. A British writer^ pays his compliments to American industry in strong terms: "The workmen of the United States work under conditions of surveillance, speeding-up, and analytical watchfulness which the workmen of this country would not tolerate for a moment." At the same time he states that the American workmen reap greater benefits by submit- ting to the speeding-up process than their comrades •Arthur Ramsay — "Terms of Industrial Peace." 6 THE NEW SPIRIT IN INDUSTRY on the other side of the water, who hide behind estab- hshed conditions in industry as the vested interests of labor. Weakness of "scientific management" Clearly, the difficulty with scientific management is that, at one important point, it fails to be scientific. It manages everything except the attitude of the worker himself, which is the most important element in the situation. As an American investigator has aptly said: "However much a 'rough-neck' the workman may be, however crude his intellectual processes, his mental machinery is more complex and delicate than that of the finest chronometer." Mr. C. G. Renold, a prominent employer in Manchester, England, has made this astute comment on the management of labor as it exists today: "It must be remembered that the work of very many men, probably of most, is given more or less unwillingly, and even should the intro- duction of more democratic methods of business man- agement entail a certain amount of loss of mechanical efficiency, due to the greater encumbrances of demo- cratic proceedings, if it can succeed in obtaining more willing work and cooperation, the net gain in produc- tivity would be enormous." Nothing short of a mental cooperation of the workers themselves will secure the highest production. A "constitution" for industry The demand of the workers for a share in control of industry has also a large economic significance. It represents an effort to restore that security which the workman enjoyed in the full possession of his tools THE LABOR SITUATION 7 before the advent of machinery. He was then his own master, able to determine the conditions of his employment. The master workman was no better than his men — only the first among equals. Those were the days of craftsmanship. The worker "took possession of the works" when he loaded his tools on his back. Machine production has changed all this. Costly equipment is now required, representing a vested interest whose holder has a first claim on the product of the plant. In theory the employer, as the legal holder of the property, has the only right in the situation. His is the constitutional status. Property is an institution — labor is not. However, the stabili- zation of industry has required an increasing volume of legislation and of trade agreement, whose effect has been to raise the question of a permanent "constitu- tion for industry." The "servile state" It would be an error, however, to suppose that ag- gressive labor leaders look to the state primarily for the establishment and guarantee of constitutionalism in industry. Opinion is sharply divided on the effec- tiveness of state control, but it cannot be said that the War has strengthened the demand among the more restless elements in industry for assumption of control by the state. What was once called State Socialism is now commonly referred to as State Capitalism and its political result as the "servile state." It is found that the task of keeping state employes satisfied is no easier than that of any other employers. Political con- trol of industry is not a bright prospect. More and more labor is looking to its own efforts, under state 8 THE NEW SPIRIT IN INDUSTRY protection, to work out its salvation by continuous conference and bargaining with the employing class. The Railway Brotherhoods' plan for managing the railroads is an illuminating example. (See Chapter V.) Labor and the law A serious ground of discontent on the part of labor has been the disposition of the courts to emphasize property rights at the expense of human needs when rendering decisions in labor cases. Courts are much more liberal than formerly in such cases, but the free use of injunctions restraining the activities of unions is severely criticized by labor leaders. The fault is probably more with judicial theory than with the sym- pathies of the judges in question. A long process of education has been necessary in order to secure recog- nition of the fundamental justice, regardless of the effect on property interests, of limiting the labor of women and children and of surrounding the workers in hazardous trades with abundant safeguards. The A. F. of L. at its convention in June, 19 19, passed a resolution calling for legislation restraining the courts from the use of "injunctive decrees that invade per- sonal liberty," and announcing that such decrees would be treated by labor as illegal. The Federation, acting on the findings in an authorized study of the powers of our higher courts, denounced the courts for having "usurped" the right to declare laws unconsti- tutional. This attitude of settled disapproval prob- ably has much to do with the tendency of working people here and there to disregard agreements, and still more with the general opposition of labor leaders to incorporation of their unions. With the increasing THE LABOR SITUATION 9 reasonableness of the courts there is undoubtedly a grow- ing tendency on the part of labor to more ready recog- nition of obligations and assumption of responsibility. Equally important with an enlightened policy on the part of the courts is a tolerant reasonableness on the part of public officials, and greater wisdom on the part of legislators. I have had occasion to intercede with municipal authorities on behalf of some of the most orderly, conscientious, and responsible labor leaders I have ever known, who were merely seeking to exercise their constitutional right of free assemblage for organization purposes. There is great danger, po- litical as well as moral, in the widespread tendency to pass laws without regard to their constitutionality and to administer them in a wilful and capricious manner. Labor troubles ; the Lawrence strike The aspirations that are stirring the heart of labor manifest themselves in frequent strikes and strike threats. As might be expected, when such distur- bances appear in great industrial centers they are not unmixed as to the issue involved and do not always yield readily to analysis. The strike which occurred in Lawrence, Massachusetts, in the winter and spring of 1919 is a case in point. The disturbance there re- vealed virtually everything that can be said to be wrong with American industry. Because of its bear- ing on the general situation, I am setting down briefly the results of a personal investigation. Racial factors Lawrence is fertile soil for industrial disturbances. Its population of something over 100,000 is considered lo THE NEW SPIRIT IN INDUSTRY to be over four-fifths foreign, either by birth or by parentage. The woolen and cotton mills employ about 35,000, making by far the larger part of the popula- tion dependent upon these industries. The ownership of the mills is largely absentee, and there is little con- tact between the owners and the townspeople. The great strike in 1912 left many animosities and the cleavage between the English-speaking and foreign- speaking peoples is well marked. In one mill, during the past winter, there were nationalities represented in the following proportions : Americans, 476; Arme- nians, 48; Canadians, 98; English, 35; Greeks, 6; French, 2; Germans, 24; Hebrews, 2; Irish, 83; Itahans, 213; Lithuanians, 258; Poles, 63; Welsh, 2; Portuguese, 63; Russians, 16; and Scotch, 31. It seems that in the past too little encouragement has been given to naturalization. (Lawrence is not alone in this civic delinquency. The case is reported of an employer who discharged a man because he took time off to become naturalized.) The foreign-speaking workers of Lawrence prefer to live in colonies and have resisted efforts to relieve congestion. A Federal investigator stated that one-third of the population lives in one-thirteenth of the area. They have vir- tually inherited the city and have been allowed to maintain whatever standard of living they chose. "48-54" The issue in the last strike was on its face identical with that of 191 2 — a reduction of hours which was asked for, accompanied by a reduction in wages, which was accepted by labor officials, but not reckoned with by the workers. The contention was tersely expressed THE LABOR SITUATION ii by the slogan which one saw on doors and walks — "48 — 54" — fifty-four hours' pay for forty-eight hours' work. It was merely an awkward way of putting a demand that the cut in hours should not affect the total wage. Low wages A very small percentage of the textile workers are unionized, and while the more skilled operations, such as weaving, sometimes command high wages, many workers, both men and women, were at the time of the strike receiving less than $15 a week. Men were shoveling coal for $10 a week. In one mill, employing normally over 7,000, the average wage of men was about $22 a week and of women, $17,50. These are the agent's figures and he also stated that some em- ployes — fewer than a hundred — were receiving less than $12. The average wage was much below that estimated by the United States War Labor Board for the support of a family. The workers knew this and they also knew that the mills had made large profits during the previous year. The mill just re- ferred to did $60,000,000 of business in 191 8. Before the War, dividends were not conspicuously large: American Woolen common received its first dividend in 1916. But in the aggregate ordinary earnings look large, and war profits look mountainous. Suspicion and recrimination It was evident to a disinterested person that a funda- mental weakness in the mill owners' position was the lack of a basis of understanding and a technique for mutual agreement. Of course, neither side credited 12 THE NEW SPIRIT IN INDUSTRY the claims put forth by the other side. On one occa- sion an agitator among the employes claimed that the stock of a certain company was selling at 300, and v,^hen shown the quotations — at 107 — insisted that they were "doctored." The prompt offer to deliver him stock at the rate quoted, in exchange for his house and lot, made no apparent impression. The mill owners, on the other hand, could see little but greed and ingratitude in the strikers' demands. They called the strike a Bolshevist uprising, and in support of this charge they called to witness incendiary speeches made by various revolutionary agitators, who tried to capitalize the unrest for their own propaganda. To be called Bolsheviks angered some, amazed others, and mystified the majority. But the leaders knew that they were conducting a movement that was only in part the expression of a wage demand — it was significant of the world unrest and had Russia as its background. Singing the "International" The meetings of the general strike committee opened with a verse of the famous "International": "Arise, ye prisoners of starvation ! Arise, ye wretched of the earth, For justice thunders condemnation, A better world's in birth. No more tradition's chains shall bind us, Arise, ye slaves; no more in thrall! The earth shall rise on new foundations, We have been naught, we shall be all. 'Tis the final conflict, Let each stand in his place. The Industrial Union Shall be the human race." THE LABOR SITUATION 13 The Italian section sang this lustily one afternoon in honor of "Big Bill" Haywood, the I. W. W. leader, when word came of his release from jail. Just what he had to do with the situation was not made clear; probably to the vast majority of the men and women in that crowded hall his name was only the symbol of an ideal, itself but dimly grasped, yet becoming more and more articulate as a demand for industrial freedom. In respect to revolutionary significance Lawrence is typical of radical centers throughout the United States. The general strike in Seattle during the past winter was inspired by revolutionary ideals. Bol- shevism has an international significance quite apart from its Russian manifestation. Shorn of a tempo- rary emotional content, it means the assumption of industrial control by the workers through direct industrial action. This doctrine has not a few apostles in America, even though the rank and file of the workers know little about it and probably care less. A "living wage" The United Textile Workers, affiliated with the American Federation of Labor, issued the original de- mand for a short week, but would have nothing to do with the "48 — 54" strike. Their position was that the wages would be adjusted shortly in accord with a general precedent, and the revolutionary complexion of the strike alienated them still more than what they considered its inopportune character. The strike, therefore, fell into the hands of the radical and aggres- sive Amalgamated Clothing Workers of America, who launched a movement for a new textile organization affiliated closely with their own. 14 THE NEW SPIRIT IN INDUSTRY The merits of the wage issue were hard to determine in a way acceptable to the mill owners or the public. Rents in the tenement sections are apparently aver- age, and crowding is common. The standard of living is low, and money that should go into rent and house furnishing is frequently hoarded. The mill owners look at the savings bank reports and shake their heads. It is a relatively advanced social consciousness that ac- cepts the responsibility of guardianship for a back- ward people. The eyes that are fixed upon maximum wages and industrial savings accounts do not see the actual hardships among low-paid workers. An out- standing need in industry is a way of making its management responsible to the community. The simplest facts are often accessible only to the govern- ment. The morals of magnates To many who read the magazine articles on the strike this situation seemed clearly abnormal, and the textile employers were assumed to be of a peculiarly avari- cious type. If the case were thus exceptional, it would be simple. But this is not true at all. The individual ofificers of the mills are among the best people one meets in the industrial world. This is the serious part of it. Putting "honest," respectable, even religious, men in command of an industry does not always alter its fundamental character. Employers who are church members have strikes on their hands just like the rest, and are sometimes in the end adjudged clearly in the wrong. A careful American observer of the proceed- ings of the Coal Commission inquiry in England, fol- lowing the War, said that the coal owners' representa- THE LABOR SITUATION 15 tives on the Commission made, "each in his own way, an impression for sincerity and staunch character," His comment continues: "The inquiry reveals simply that they, Hke the miners, are caught in an obsolete organization, functioning creakily in this new century." The question of facts The settlement of the strike is perhaps as illuminat- ing as its long and rather eventful course. The United Textile Workers, during May, issued a demand for a straight increase of fifteen per cent in all cotton mills; later they included the woolen mills. They based the demand on improved market conditions and an obvious inadequacy of wages. Presently the mill owners, whose agents in conferences and interviews had repeatedly pronounced the demands of the strikers impossible, granted the still greater demand of the union. There is scarcely any room for a doubt that the mills were resisting the strikers for disciplinary purposes and would have yielded the wage demand at any time if the radical leaders and revolutionary propaganda could have been excluded. This, in sub- stance, was told a New York Times correspondent by a prominent mill official. Quite aside from the merits of this attitude, the lack of ingenuousness on the part of the mill owners can have only one effect on future disorders: when they solemnly declare that wage de- mands are such as to cripple the industry they need expect no one to pay the slightest heed to their pro- tests. In a conference called by church groups, which was attended by representatives of the mills and of the strikers, it was strongly urged that the mill owners lay their facts affecting wages on the table for i6 THE NEW SPIRIT IN INDUSTRY public scrutiny. In the light of the settlement their unwillingness to do this appears quite intelligible. Too much power in one place Two facts in such a situation as this stand out as of paramount significance: the evil due to centralization of power in the hands of a very few persons, and the extreme costliness of modern machine production. The centralization of power inflicts upon the heads of the industries a responsibility that is morally unfair to them, as well as dangerous to the workers whose vital interests are in their hands. It is unfair, first, because no small group of persons may be assumed to grasp adequately and with fairness of mind the many human interests which must be balanced against one another in a modern industry. It is virtually impos- sible. Secondly, this centralization creates a group of so-called directors, who are frequently as powerless to modify industrial policies as are outsiders. In the textile mills the presidents and treasurers have full command of the industry, not because they intimidate the other directors, but because their domination is psychologically inevitable. Where one person controls others, the result is not always produced by inordinate pressure, but often by force of a mental command of the situation. Psychologists speak of the instinct of "mastery and submission." It operates in industrial management with fatal effect, because one or two people are in command of the facts. A director in a Lawrence mill told me that he could not, even by weekly visits to the mill, acquire information that would put him in position to have an original voice in the determination of policy. In the presence of THE LABOR SITUATION 17 those whose statements about vital facts one is not in position to question, he instinctively subsides. To be sure, a director finding himself in this position can re- sign. It may help him out, personally, but from the point of view of redeeming the industry the proposal that a conscientious director make place for one of less sensitive fiber is not particularly helpful. Thirdly, the corporation director is between two fires. He is re- sponsible both for wages and for dividends. Assuming that, as director, he is disinterested, his task often be- comes one of attempting to secure just advantages to one group at the expense of the other. The gentleman referred to above said that he voted in addition to his own holdings a considerable amount of stock which he held in a fiduciary capacity. Here, then, are three types of relationship borne by the director to the in- dustry: he represents his own interests, those of his clients, and, in general, the stockholders who elected him. Some of his clients tell him that they are not getting a "living dividend." A modern corporation may be composed of millionaires and dependent poor. The honest director is often in a bad way. Profits first The hazard to the workers in an industry under highly centralized control results from the perfectly evident fact that this supposition of disinterestedness on the part of directors is hardly within reason. Direc- tors are chosen from among the large stockholders, on the theory that a heavy holding is a guarantee of faithfulness to their property trust. This theory of what a director is for is admirably illustrated by the action of the Michigan Supreme Court, in condemning i8 THE NEW SPIRIT IN INDUSTRY the directors of the Ford Company for decreeing that all the earnings beyond five per cent a month should be reinvested in the business, with the avowed intent of employing more labor and thus achieving a social end. The court upheld the protest of aggrieved stock- holders, giving its judgment that "a business corpora- tion is organized for the profit of the stockholders, and the discretion of the directors . . . does not extend to the reduction of profits in order to benefit the public, making the profits incident thereto." The Lawrence strike throws a lurid light on the helplessness of the modern industrial community in the hands of manufacturers who govern their indus- tries wilfully. High cost of industry By the costliness of machine production I mean that, as at present organized, the average industry can scarcely meet the so-called legitimate charges upon it — interest on investment at what is considered a reasonable rate, salaries of management sufficient to retain such service (a large element in the cost of operation, because there is a natural monopoly of technical skill) , and a wage to labor that will maintain a plane of living which the community can approve. In many of our industries, the textiles, for example, or, more notably, the railroads, it is very doubtful if the last named of these claims can be met without an en- croachment upon either the first or second that will be fatal to the industry. Obviously, to interrupt the flow of capital into an industry or to lose technical manage- ment to competitors who bid higher for it would be ruinous to production on the present basis. Even as THE LABOR SITUATION 19 it is, a large percentage of industrial concerns pay no dividends on their common stock. Unpaid debts Ordinarily, in the competitive effort to reduce costs the employer finds that his charge for labor is the first to admit of depression. Labor, like capital and management, must be paid enough to keep it on the job, but being much less mobile than either manage- ment or capital, it suffers an inevitable disadvantage. In practice, the average employer avoids meeting the issue of a "living wage," because experience proves that he can avoid it with impunity. An interesting illustration of the underlying difficulty occurred in New York in 191 8 when the Photo-Engravers' Union served notice on the employers that they had investi- gated the apparent inability of the industry to pay a reasonable wage and had decided that the employers were unscientific in their methods of selling. The union proceeded to submit a new scale of prices and ordered the employers to put it into effect on a given day! This the employers did, and the increased price made possible the desired advance in wages. One scarcely knows whether such a bold and revolution- ary procedure should startle most the employers or the general public. Had the commodity involved been bread or shoes, the act of the union would have had more than a passing interest. The consuming public cannot always come conveniently to the rescue of contending factors in production. There is good ground for suspecting that under the load of expected dividends, salaries of management, and an "American standard" wage, many industries would collapse of 20 THE NEW SPIRIT IN INDUSTRY their own weight. In fact, it may properly be con- tended that industry is now extensively subsidized by the community. New York City has fifty-five homes maintained for girls whose wages will not allow them to live in ordinary dwellings. The industries in which those girls are employed are not paying their fixed charges. To recognize this condition does not commit one to a particular diagnosis or an exclusive remedy. Faulty accounting, the subservience of industrial to financial considerations, reckless competition, ex- travagance, poor organization, and poor labor man- agement no doubt account in large part for the near- bankruptcy of many industries. What is revealed is a constitutional weakness in the industrial order and the necessity for more fundamental thinking than has hitherto found a place in the industrial world. It calls for more than economic treatment. "Industrial rela- tions," says the younger Mr. Rockefeller, "are essen- tially human relations." Industry is in need of ethical rebuilding. The new day Running counter to the present industrial tradition is the new spirit which proclaims industry a form of service. Tt is insisting that labor shall have a first claim on the product. It is renovating politics by bringing industrial interests in by the front door in- stead of by the back. It is causing a conscientious re- examination, on the part of employers, of the whole enterprise of production, and setting free social im- pulses long imprisoned by a sterile industrial system. This spirit is only struggling for expression, but it will dominate the new day. CHAPTER II ORGANIZED LABOR AND THE WAR A new popular interest in labor problems has lately arisen, stimulated by the War. Many persons are reading labor news for the first time. Matters that formerly were confined to trade journals are finding their way into the public press. But it is a mistake to suppose that one may become familiar with the labor movement by giving attention only to its new and extraordinary features. New political activities, the tendency toward mass industrial action, and the emer- gence of new forms of democratic expression can be understood only in their setting within the trade union movement. There has been recently a disposition on the part of persons of liberal and radical temper to discount and discredit trade unionism because of its preoccupation with wages and hours. The criticism is not without point and should be seriously heeded, but what labor has today of a tangible sort it owes to the patient, often monotonous application of trade union pro- cedure. Not only so, but new types of labor organiza- tion and activity will fail in so far as they overlook or do violence to the structure and method of trade unionism. It is in this deposit of successive genera- tions of labor history that the basis of a constitution for industry must be found. 22 THE NEW SPIRIT IN INDUSTRY The trade union movement Trade unionism goes back to the craft guilds of the Middle Ages. These guilds were well-recognized social institutions, serving quite as much to protect the con- suming public as to protect the craftsmen themselves. The craft ideal still dominates the union movement in the main. The workman's skill at his trade is his "vested interest." We still speak of "journeymen" tailors and printers, recalling the days when the craftsman, on finishing his apprenticeship, became a recognized master of his trade, free to travel as such wherever his work might call him. Over against the craft plan of organization is the industrial union, in which all the workers of an industry, highly skilled and slightly skilled alike, are organized in one body. Such an organization, when it overcomes the difficulties in- herent in the plan, becomes much more formidable than a craft union and a more definite expression of working-class consciousness. Industrial unionism is growing in favor in certain sections of Europe and of America, always among the more radical elements of labor. There are several strong industrial unions in America that are in good standing with the American Federation of Labor — the United Mine Workers and the Brewery Workers, for example. But as the empha- sis passes over from craft bargaining to mass industrial action, an organization loses caste with conservative labor. Industrial unionism is feared because of its revolutionary potency. The A. F. of L. In the United States organized labor is represented mainly by the American Federation of Labor (A. F. of ORGANIZED LABOR AND THE WAR ' 23 L.) with its III national and international unions. The word "international" signifies usually that the union extends into Canada. Certain strong organiza- tions remain outside the Federation, of which the better known are the four railway brotherhoods. The way has now been opened for the afhliation of these organizations with the A. F. of L. The Federation re- ported at its June meeting, 1919, the largest member- ship in its history — 3,260,000. It has five depart- ments — Union Label, Building Trades, Metal Trades, Railway Employes, and Mining. Samuel Gompers, the president, is the outstanding figure in the "regular" labor movement in America. Women unionists . The Woman'sTrade Union League, with about 75, 000 affiliated members, represents the best traditions and most effective efforts of organized woman's labor in the United States. Like the A. F. of L. it is a federa- tion of trade unionists. It would be difficult to over- estimate the service rendered the country during the War by this organization. Its standards for women's work became the standards of the Federal Govern- ment, when the latter organized its Women in Indus- try Service. The League is furnishing, to a degree quite out of proportion to its numerical strength, the spiritual ideals of American labor. The president, Mrs. Raymond Robins of Chicago, during the War thus described the goal of labor organization: "Just as the individual nation cannot alone protect Its liberty and life in this world war, so the individual worker cannot alone protect her liberty and life in the industrial struggle. The need of a self-governing 24 THE NEW SPIRIT IN INDUSTRY citizenship — self-governing in industry as well as politics — is greater at this hour than at any other in the life of America." Unionism in Europe In Great Britain, unionism has become all but uni- versal. The movement is united, strong, and definite in its aims. The Trades Union Congress (the British A. F. of L.) has over 4,000,000 affiliated members. There is a strong Woman's Trade Union League and a National Federation of Women Workers. The British Unions are a bewildering spectacle — 1,123 were re- ported in 1916. The craft tradition still predominates in English trade organization, but the trend is toward industrial unionism, of which the Triple Alliance, later referred to, is an example. The activities and demands of British labor have found political expres- sion and are discussed in the following chapter. Germany had in 1914 a little over 3,250,000 trade unionists. There are three groups — "Free" or Social Democratic unions, the "Christian" unions, and the "Liberal" unions. The first organization is by far the most powerful, but it is opposed by the other two. Women are included in considerable numbers. The forty-seven "Free" unions stand in remarkable contrast to the multitude of British organizations. Trade unionism in France is represented by the Confederation Generale de Travail (C. G. T.) with a membership of more than a million. The C. G. T. is strongly "syndicalist" although it has grown more conservative during the War. (See Chapter V.) Italy has its Confederazione Generate di Lavoro, or- ganized on the industrial basis, numbering about ORGANIZED LABOR AND THE WAR 25 400,000; the Unione Sindicale with about 100,000 members ; Catholic Unions, numbering about 120,000 ; and a Federation of Rural Workers, enrolling 150,000. The first two organizations constitute the aggressive labor movement. Italy is predominantly agricul- tural, but the influence of organized labor, particu- larly in its revolutionary phase, is a growing force. Canada's labor organizations are for the most part continuous with those of the United States and Great Britain. There are 160,000 members, more than 80,000 of whom belong to so-called "international" unions, affiliated, in the main, with the A. F. of L. In western Canada, labor is now reflecting the restlessness of the movement in our own northwest. An international labor conference held in Amster- dam during the present summer (191 9) chose William A. Appleton, of the British Federation of Trade Unions, as president of a new international trade union movement. Leon Jouhaux, of the French Confederation was made secretary. Structure and methods Labor federations are delegated bodies, which secure among their constituent unions a measure of unity in policy and action. The actual bones of the movement are found in the trade unions themselves, which are organized on the basis of "locals," district councils, state, and national or international bodies. Trade unions have a dues-paying membership, a general form of organization and government, and stated methods of work. The locals often function as social centers and as educational agencies — through addresses, discussion, and libraries. The Employers' 26 THE NEW SPIRIT IN INDUSTRY Industrial Commission which studied British indus- trial conditions for the U. S. Department of Labor, found considerable numbers of workmen attending classes in economics in preference to the moving-pic- ture houses. Many unions have insurance benefits. The various locals or councils of a city commonly unite to form a "central labor union," which is a diminutive A. F. of L. The primary aim of the union is to estab- lish uniform rules for the trade, by regulating the pro- cedure of its members and by enforcing its demands upon employers. The union label method of enforcing labor standards is better in theory than in practice. The union puts its official label on its product as a guarantee that it was produced under "union condi- tions." But there are relatively few persons, not them- selves members of unions, who demand the union label in purchasing goods. And there is not sufficient unity in the labor movement to guarantee mutual respect among unions for each other's labels. A little reflection upon what the absence of the union label may signify as to the conditions under which the article we propose to buy was made would lead us, whenever possible, to grant labor's simple request that we look for. its stamp of approval. Strikes The strike is the ultimate method of enforcing labor demands, but it operates more often potentially than actually. The strike is the labor counterpart of the employer's "lockout." Wages and hours are the com- mon objects of strikes. A secondary object, which, because of its vital nature, is often made a primary demand, is the "recognition of the union." Union ORGANIZED LABOR AND THE WAR 27 labor knows that only by maintaining the right of final endorsement of all conditions of employment can its economic power be secured. This leads to the demand for the "closed shop" — only union members to be employed. In practice this principle is admitted fre- quently by employers to the extent of declaring a "preferential shop," in which union members have preference when they are available. The open shop is still the rule in America, and labor has only a limited control save in certain well organized trades, such as the brewery workers, the printing and bookbinding trades, and the cigar makers, whose organizations are so strong as virtually to dominate the trade. Unity is sought by the expedient of the sympathetic strike. Theoretically, allied trades can by concerted action bring a large section of industry to a standstill at any time. The cost of striking, however, and the difficulty of overcoming "jurisdictional" disputes in allied trades, make wholesale strikes less common than might be expected. A significant development which is symptomatic of the general unrest in industry following the War is the widening range of issues for which the strike is invoked, and the refinement of method which it is undergoing. Radicals have been calling for a general strike to pro- test against the life imprisonment of Tom Mooney, for alleged participation in the Preparedness Day bomb outrage in San Francisco, in July, 1916. It is widely believed by working people that Mooney is the victim of a "frame-up," and this conviction was strengthened by the report of President Wilson's investigation com- mission and, more recently, by the report of a special investigator of the Department of Labor. A general 28 THE NEW SPIRIT IN INDUSTRY strike is advocated to enforce the demand for the release of Eugene V. Debs, who is serving a ten-year term for violation of the espionage law. The May Day disturbances in Europe had an avowed political significance. The British labor party has proposed to the Trades Union Congress that strikes be organized in protest against the Russian policy of the British Government. More and more, strikes are taking on the character of organized war. The lockout of the Willys-Overland employes in Toledo was followed by a proposal to collect fifty cents a week from every union laborer in the city for the support of the strikers, and, if necessary, to withdraw all union savings from the city banks and start a union bank. A union cooperative store was also proposed. In Winnipeg, the police joined the general strike. Trade agreements The trade agreement is an outstanding achievement of organized labor, for keeping the peace in industry. This is a product of laborious collective bargaining through the years. A notable example is that obtain- ing between Hart, Schaffner, and Marx, clothing man- ufacturers of Chicago, and the Amalgamated Clothing Workers of America. It not only defines minutely conditions of employment, but provides a technique for the settlement of disputes. The Hart, Schaffner, and Marx agreement is particularly interesting, be- cause it is maintained with a radical union, whose leaders are syndicalist in theory, although they use the conservative trade agreement method to secure immediate and tangible results. The trade agreement ORGANIZED LABOR AND THE WAR 29 plan is now spreading through the ready-made clothing industry. The International Typographical Union, maintains an elaborate agreement for the arbitration of disputes with the American Newspaper Publishers' Association. Evidence is not wanting that labor has taught many employers the lesson of effective organi- zation, and not a few employers are coming to regard organization on the part of labor as both inevitable and desirable. Employers' attitude • At present employers are of two classes in their attitude toward labor organization. On the one hand are those who will not treat with the union under any circumstances, but who profess themselves always willing to meet committees of their own employes. On the other hand are those who insist on dealing only with the responsible representatives of a national or- ganization. The reason for this contradiction is not far to seek. The employer naturally runs his own plant independently as long as he can. When he has only his own employes to treat with, he can more easily dominate the situation, up to a certain point. His domination may not be wholly conscious or delib- erate; it may be psychological as much as economic. A man one can call by his first name is not so formid- able as an outsider. Also, the choice of intelligent leadership and spokesmanship within one establish- ment is limited. However, when the necessity for fre- quent bargaining and secure agreement .arises, the employer discovers that he must deal with masters of the trade who are responsible in a large way for the 30 THE NEW SPIRIT IN INDUSTRY carrying out of pledges. It not infrequently happens, as in the case of the insurrectionary shop stewards in England and the Lawrence strikers, that the powerful trade unions represent a conservative opposition which aligns itself with that of the employers. The old line unions seem to suffer from an extreme centrali- zation and stereotyped procedure. A growing demand of labor is for greater democracy and elasticity in the mechanism of its own organization. "Ca' canny" A common charge against organized labor is the sys- tematic limitation of output. Undoubtedly this has been practiced, and to a reprehensible degree. It is a bit difficult, however, to discriminate morally-between such a policy and the propaganda going forward among cotton growers in the south, for example, for a deliberate curtailment of planting in order to maintain the price. The limitation of output was an inevitable result of the scare created by the advent of machinery, of the ever-present fear of unemployment, and of the very human temptation to "take it easy." Aggravated limitation of work — loafing, which is known in Great Britain as "Ca'canny" — is also a mild equivalent of tne strike, and may be employed as a coercive means or for revenge. A very liberal employer said to me that he was entirely friendly to union labor, but he found the overtime rule — time-and-a-half — a source of un- fairness to him. It is easy to be very deliberate, and devoted to detail when the job can be prolonged after the whistle blows and labor is then worth half as much again. There is no final cure for limitation of output save the introduction of a new motive which makes the ORGANIZED LABOR AND THE WAR 31 worker, in common with the employer, zealous for industrial efficiency. The British labor truce The labor aspect of the War in America has been very different from that seen in Great Britain. There, a great body of trade conditions had been built up as a result of many decades of patient and resolute effort. Forty-five per cent of the male working population of Great Britain belong to labor unions. The leaders are prominent national figures. Labor in Great Britain was, even before the War, on the way to a position of dominance. It had already the beginnings of a char- ter. So many and so great were the concessions that had been secured from capital, that the industries of the nation were not sufficiently elastic to meet the demands for war production. By the terms of the famous "Treasury Agreement" of March, 1915, the majority of the larger labor bodies relinquished their right to strike. The miners, led by Robert Smillie, stayed out of the agreement, and after fifteen months the great labor bodies which had signed it decided to break the truce. Labor was suspicious of the often repeated pledges of the Government to restore trade union conditions, which had been surrendered in the interest of winning the War. It became more and more apparent that the sweeping changes due to the introduction of new machinery and new methods, the development of new processes, and the greatly in- creased participation of women in industry could never be entirely abandoned. In place of the demand for restoration of the status quo appeared specific de- mands regarding wages, hours, and management. 32 THE NEW SPIRIT IN INDUSTRY The American contrast In America, on the other hand, labor enjoyed no such industrial charter. The country is young and labor is undisciplined and, in large part, is as yet unconvinced of the value of organization. Probably less than one-fifth of the male workers eligible for union membership were organized prior to the War. Women workers, save in the garment trades, have not been an important factor in labor activities. As a result of this scant organization, standards have been fluid, experimental, and far from uniform. Strikes have been abundant. During 1916, the last pre-war year, 2,495 strikes were reported in twenty industries. A friendly Administration When war was declared, the Administration promptly took advantage of England's experience and secured for organized labor practically everything that it asked. The threatened railway tie-up of 191 6, by which the Railroad Brotherhoods obtained from Congress the Adamson basic eight-hour law, was no doubt the psychological background for labor's rela- tions with the Government during the War. President Wilson had made many liberal utterances on the labor question and Secretary Baker, who is the President of the National Consumers' League, is an open champion of labor rights. It is not strange that all these factors conspired to establish a partnership between organized labor and the Government. Nearly a million mem- bers were added in a year to the A. F. of L. Unions are becoming fashionable. The teachers and actors are organizing and vigorously asserting themselves. ORGANIZED LABOR AND THE WAR 33 The War Labor Board The creation of the War Labor Board, with ex- President Taft and Frank P. Walsh as joint chairmen, not only stabilized industry during the War, but went far toward bringing workers and employers to a basis of understanding and setting national standards for the settlement of labor disputes. At the same time the importance of the Government as an employer was not overlooked. The War Labor Policies Board, presided over by Professor Felix Frankfurter, was less discussed in the press than the War Labor Board, but was per- haps no less important. Much progress was made toward the development of a national labor policy. The attitude of the Government is illustrated in the provision for re-training war cripples. Every man who suffered more than a ten per cent disability is given full trade or professional training at the Gov- ernment's expense. An advance position was taken in reference to women by the creation of a Women in Industry service under the direction of Mary Van Kleeck, who became a member of the War Labor Policies Board. The permanent maintenance of this service is one of the most urgent matters now awaiting decision by Congress. The War Labor Board has died of starvation. A new labor consciousness Thus, while in Great Britain labor was making unprecedented sacrifices, in America labor was having its day. Both here and in Great Britain, however, and on the Continent as well, it is apparent that an outstanding result of the War has been a new sense on the part of labor of its own dignity and worth. In 34 THE NEW SPIRIT IN INDUSTRY order to keep production of ammunition, ships, and food at top speed, we have told the industrial worker that he was a partner of the soldier and sailor in the great enterprise of winning the War. It is not strange that he came to believe it. It was stated in June, 1918, by an executive of the British Miners' Federa- tion that, with a shortage in production from the French coal mines of 800,000 tons a month, the British miners could end the War in nine days by laying down their tools! In the spring of 191 9 the miners actually threatened to tie up every industry in Great Britain, if their demands for increased pay and shorter hours were not met. The assertion of labor rights, backed by solid economic power, has never been so insistent or so potent as now. The guns had scarcely ceased firing when a prominent employer, by announcing that labor must be reconciled to a reduction in wages, drew the fire of Samuel Gompers, who threatened such an efifort with the resistance of all the economic power of American labor. The present temper of the more aggressive union labor organizations in this country is illustrated by the refusal of the employes of the Willys- Overland Company in Toledo to work longer than forty-eight hours a week, in spite of the fact that the company had but two weeks previously distributed $400,000 under its new profit-sharing plan. The union men describe the plan as "50-50 — after the company gets theirs." Plight of the unorganized But recognition of enormous gains and the corre- sponding increase in the strength of labor should not close one's eyes to the alarming condition of unor- ORGANIZED LABOR AND THE WAR 35 ganized workers, particularly women. The figures reported in connection with the Lawrence strike make it perfectly clear that multitudes of workers could not possibly live on their own earnings. Recent investigations in New York City and State show wages for women far below the line of comfortable living, in spite of hours, in many cases, that are insufferably long. The Government line-up An odd and significant effect of the War, both in America and in Great Britain, has been to bring the Governments into alignment with "regular" organized labor as against the activities of the more radical ele- ments. In the great Clyde strike in the engineering trades in the spring of 1916, the shop stewards of the Amalgamated Society of Engineers became dissatis- fied with the conduct of their trade union and under- took to handle the situation for themselves. Skilled tradesmen were being replaced by semi-skilled and unskilled women workers — a process known as the "dilution" of labor — and the newcomers were under- cutting the union wage scales. Trade union officials bound by the Treasury Agreement, which made strikes illegal and arbitration compulsory, found no way to abate the grievance, and the shop stewards, led by one David Kirkwood, organized a strike, "on their own," as the English say. This amounted to insurrection, and made it possible for Mr. Lloyd George to attack the radicals as "enemies of organized labor." It was a strange experience for British trade unionists to be vigorously defended by a Coalition premier! In America the same situation has resulted. The necessity of a disciplined, conservative, and 36 THE NEW SPIRIT IN INDUSTRY wholly trustworthy body of labor that would cooper- ate with the Government program exalted the Ameri- can Federation of Labor to an unprecedented degree. If Samuel Gompers had been a member of the Cabinet he could not have exercised more influence. In Law- rence, in Seattle, and elsewhere, organized labor has allied itself with the conservative "law and order" elements and has opposed radical propaganda as vigorously as has the Department of Justice. As for employers, it was easy during the War for them to be generous. Many were operating on a "cost plus" basis. High wages went into "cost" and never inter- fered with the "plus." Profiteering has been wide- spread and the beneficiaries of inflated trade could afford to keep organized labor contented. Finally, the tremendous increase in government employment has taken labor demands out of the field of private controversy. The crisis in Britain The situation in Great Britain was seen by the Gov- ernment to be critical as early as the summer of 1917, when a Commission of Inquiry into Industrial Unrest was set in motion. Among the causes reported to exist were the following: High food prices in relation to wages and unequal distribution of food. Restrictions of personal freedom and, in particular the effect of the munitions of war acts. Workmen have been tied up to particular factories and have been unable to obtain wages in relation to their skill. In many cases the skilled man's wage is less than the wage of the unskilled. . . ORGANIZED LABOR AND THE WAR 37 Lack of confidence in the government. This is due to the surrender of trade-union customs and the feehng that promises as regards their restoration will not be kept. . . . Delay in settlement of disputes. In some instances ten weeks have elapsed without a settlement, and after a strike has taken place the matter has been put right in a few days. Lack of housing in certain areas. Industrial fatigue. Lack of proper organization amongst the unions. Inconsiderate treatment of women, whose wages are sometimes as low as thirteen shillings. More startling was the pronouncement of the Gar- ton Foundation, in its "Memorandum" now recognized as one of the significant documents of the War: "Many of the men who return from the trenches to the great munition and shipbuilding centers are, with- in a few weeks of their return, among those who exhibit most actively their discontent with present conditions. To a very large number of men now in the ranks, the fight against Germany is a fight against 'Prussian- ism,' and the spirit of Prussianism represents to them only an extreme example of that to which they object in the industrial and social institutions of their own country. They regard the present struggle as closely connected with the campaign against capitalist and class-domination at home." The Reconstruction Committee of the British Gov- ernment had already appointed a sub-committee known, from the name of its chairman, as the Whitley Committee, to inquire into "relations between em- ployers and employed." This committee was charged not only with discovering methods of improving indus- trial relations, but with devising a permanent plan for "review of industrial conditions by those concerned." 38 THE NEW SPIRIT IN INDUSTRY The Whitley plan The Whitley Committee made, in all, five reports to the Government — the first in March, 191 7, and the last in June, 1918. Its plan called for national indus- trial councils, district councils, and works committees for each industry in which both employers and workers are well organized. The committee hesitated to re- commend the plan for industries where organization is far from complete. In adopting the Whitley plan, the Government has given the most explicit endorsement of trade union structure and method. The works committees and industrial councils have equal repre- sentation from employers and workmen. Among the specific proposals made for the func- tioning of the industrial councils are: the better utili- zation of the practical knowledge and experience of the working people; the establishment of regular methods of negotiation and the settlement of principles govern- ing wages and their readjustment, so as to give labor a share in increasing prosperity and productivity; the assurance of greater steadiness of earnings and em- ployment to the workers; the provision for increased research and technical training. The committee recorded its conviction that in each industry there was a sufficiently large body of opinion ready to adopt its proposals. In a report on conciliation and arbitration, the committee rejected compulsory arbitration as dis- tasteful to both parties in industry, and condemned any scheme of conciliation that involves the suspension of a strike or lockout already begun. Voluntary con- ciliation and arbitration are favored. ORGANIZED LABOR AND THE WAR 39 Progress toward industrial peace Spurred on by growing industrial unrest, the British Government brought the Whitley recommendations before the several sections of its Commission of In- quiry into Industrial Unrest. Their reception of them was favorable, as was the general response of employ- ers' and labor organizations, and the formation of councils went forward rapidly. The first industries to be organized on the Whitley plan were pottery, building, heavy chemicals, gold, silver, and kindred trades, rubber and silk, baking and furniture. The Employers' Industrial Commission of the United States Department of Labor, which studied labor con- ditions abroad in February and March, 1919, found beginnings of the National Industrial Council plan in thirty industries. And, which is quite as significant, the Government has undertaken to apply the Whitley plan in its essentials to its own industrial establish- ments. A national industrial conference The British Government, in February, 1919, called a National Industrial Conference of employers and employes, which appointed a "Joint Provisional Indus- trial Committee," and arranged to meet again within a few weeks to hear this committee's report. Employ- ers and workers were equally represented on the committee, which included both men and women. The report, which has now been adopted by the Con- ference, is an epoch-marking document. It calls for enforced national minimum wage scales, a forty-eight hour week, to be departed from only by mutual agree- 40 THE NEW SPIRIT IN INDUSTRY ment, obligatory recognition of trade unions, responsi- bility of both employers and working people to their accredited organizations, and a National Industrial Council — a permanent "industrial parliament" — con- sisting of 200 employers' and 200 employes' represen- tatives. This body will be, presumably, in effect a government institution, since Parliament and the administration will almost necessarily be guided by its advices, and will use the Council's equi-partisan stand- ing committee of fifty as they use the Ministry of Labor. A new war threatened Perhaps even more significant of the trend of Britain's post-war labor policy is the adoption by the Government of the Sankey report, emanating from the Coal Commission. A crisis developed in January, 1919, which threatened to tie up every industry in the United Kingdom. The Miners' Federation, 800,000 strong, presented an unprecedented demand for a thirty per cent increase in wages, a six-hour day — exclusive of the time spent underground in going to and returning from the coal pits — and the nationali- zation of the coal industry. The miners are part of the Triple Alliance — miners, railwaymen, and transport workers — and the strike which they called would have produced the most complete paralysis in British indus- trial history. Upon the Government's offer to submit the questions at issue to a joint commission, which should report before March 20, the Federation post- poned the strike date to March 22. ORGANIZED LABOR AND THE WAR 41 A revolutionary report Three reports presently appeared, one signed by the workers, one by the employers, and one by the chair- man, Mr. Justice Sankey, and the representatives of employers in general. The last was accepted, reducing the working day underground to seven hours with a promised reduction to six hours in 192 1, provided the industry is then in a position to stand it; increasing wages of adults two shillings a day and of persons under sixteen, one shilling a day. The report con- templates that this increase be borne by the industry at the present market rate for coal. On the subject of nationalization, concerning which a later report was promised, the Sankey document had this to say: "Even upon the evidence already given, the present system of ownership and working in the coal industry stands condemned, and some other system must be substituted for it, either nationalization or a method of unification by national purchase or by joint con- trol." The promised reports on nationalization have now been submitted. Mr. Sankey and the miners concur in calling for immediate legislation for acquisition by the Government of the mining properties, just com- pensation being made to the legal owners. It is now the Government's "move." "Bob" SmiUie The dominant figure in the Coal Commission was Robert Smillie, head of the Miners' Federation with 800,000 members, the strongest industrial union in the world. He is also the head of the Triple Alliance with 42 THE NEW SPIRIT IN INDUSTRY 1,500,000 affiliated members. Smillie is apparently the most popular labor leader in England. He is a socialist — a member of the Independent Labor Party, which has furnished much of the radical leadership of British labor. A titled, conservative English writer has referred to Smillie as "the leader of the new democ- racy." He is the embodiment of that idealism and human passion that is driving British labor forward. In America we have only occasional flashes of that fire.^ America waits Our own Administration has avoided any thorough- going effort at reconstructing industry. The anomalies of the situation are as marked as in Great Britain, but the vast resources of the country, the expectation of a strong European market, our greatly improved posi- tion in reference to carrying trade, and the proposed exclusion of immigration for at least two years — these factors are counted on to keep labor employed, wages high, and dividends satisfying. However, the stimulus given by the War Labor Board to a more democratic organization of industry, coupled with a natural ten- dency to copy successful experiments abroad, is mak- ing for changes in America in the direction of progress. > An admirable account of recent British labor history will be found in "British Labor and the War," by Paul V. Kellogg and Arthur Gleason, 1919. For a popular treatment of organized labor in America, see "American Labor Unions," by Helen Marot, 1914. CHAPTER III THE POLITICAL LABOR MOVEMENT In America the trade union movement has avoided direct political activity. It has, however, used its economic power frequently for political ends. The most notable example is perhaps the forcing of the Adamson eight-hour law from the Government on a threat of the Railway Brotherhoods to tie up transpor- tation. It has long been deemed important for candi- dates for office on any ticket to stand well with labor, yet the policy of the A. F. of L. under Mr. Gompers's leadership, is antagonistic to direct political activity. The theory underlying this position is that labor rep- resents, primarily, economic power, and that active participation in politics will incur the misuse and de- terioration of this power. The tendency in America toward a political labor party has been inspired by British developments, which we shall notice presently. Labor legislation The achievements of labor through non-partisan political effort should not be under-estimated. In all the states laws have been put on the books by labor influence. The application of safety devices, the limi- tations placed on woman and child labor, the guar- antee of labor's right to "picket" in time of strikes, the wide acceptance of the principle of workmen's com- pensation for injuries — these are examples of economic pressure successfully applied on the part of labor to 44 THE NEW SPIRIT IN INDUSTRY the law-making machinery. Workmen's compensa- tion laws are in force in forty-one states. The Federal Government has made similar provision for its million employes. In the last six years fourteen states — all of them in the west save Massachusetts — have adopted legislation aimed at establishing a minimum wage for women and children. Health insurance Labor is now turning its attention to the subject of health insurance. The United States is dis- tinctly behind Europe in this matter. Eleven Euro- pean countries, including Great Britain, Germany, Holland, and Russia, have compulsory health insur- ance laws. A number of states have begun investi- gation with a view to legislation. Influential labor organizations throughout the country are pressing this demand, with the assistance of social workers, public officials, and a large section of the disinterested public. Another urgent matter, both from the point of view of the public welfare and from that of satisfy- ing a demand of labor, is the rehabilitation of indus- trial cripples. A bill providing for the adaptation to this end of the machinery developed for re-training war cripples was one of the important measures which the Sixty-Fifth Congress adjourned without passing. The British Labor party The most important recent event in English politics is the reorganization of the Labor party in Great Britain, which makes it a powerful combination, for political action, of labor forces in the United Kingdom. The present trend of American labor is quite incom- THE POLITICAL LABOR MOVEMENT 45 prehensible save as viewed against the background of the British labor movement. The Labor party speaks not only for its own con- stituency, but for the British Trades Union Congress, with over 4,000,000 members, and for the British Cooperative Movement, with 3,500,000. It launched a campaign for the formation of local organizations in the Parliamentary Constituencies throughout Great Britain, and also invited for the first time the enrol- ment of individual members. It has made a special appeal to the 6,000,000 women voters, newly enfran- chised, and it has also declared that workers by hand and by brain are to be recognized on equal terms. The party itself has been compared to a "holding company." Among its constituents are the orthodox wing of the British Socialist Party, the Fabian Society, and the Independent Labor Party. It numbers more than 2,500,000 members. The party represents the vast majority of Britain's 5,000,000 trade unionists. The secretary and leader of the British Labor party is Mr. Arthur Henderson, formerly a member of the War Council, from which he retired when the breach between organized labor and the Government became too wide to ignore. Other prominent figures are J. H. Thomas, J. R. Clynes, Ramsay MacDonald, M.P., Robert Smillie, and PhilipSnowden, M.P. Mr. Sidney Webb, of the Fabian Socialist Society, is credited with the authorship of the program upon which the party entered the elections in December, 1918. Henderson, who had lately changed his political residence, Mac- Donald, and Showden were all defeated for re-election. On the other hand, the party's parliamentary strength was materially increased and it is now the recognized 46 THE NEW SPIRIT IN INDUSTRY opposition group. The Sinn Feiners (pronounced "Sheen Fainers"), who are the ultra-nationaHst Irish group, have seventy-three seats as against sixty-five of the Labor opposition, but the Sinn Feiners are in open revolt against the Government and do not occupy their seats in Parliament, Mr. Henderson's defeat was presumably mainly due to his change of constitu- ency, in order to be in London where the head- quarters of the party are located. Mr. Thomas has been made chairman of the parliamentary group. He is a man of extraordinary gifts. The now famous program known as "Labor and the New Social Order," makes a radical attack upon the existing industrial situation: "What this war is consuming is not merely the secur- ity, the homes, the livelihood, and the lives of millions of innocent families, and an enormous proportion of all the accumulated wealth of the world, but also the very basis of the peculiar social order in which it has arisen. The individualist system of capitalist produc- tion, based on the private ownership and competitive administration of land and capital, with its reckless 'profiteering' and wage slavery . . . may, we hope, indeed have received a death blow. With it must go the political system and ideas in which it naturally found expression. We of the Labor party . . . will certainly lend no hand to its revival. On the contrary, we shall do our utmost to see that it is buried with the millions whom it has done to death." As against this old order the program calls for "a deliberately planned cooperation in production and distribution for the benefit of all who participate by hand or by brain ... on that equal freedom, that general consciousness of consent, and that widest THE POLITICAL LABOR MOVEMENT 47 possible participation in power, both economic and political, which is characteristic of democracy." i Upon the figure of a four-pillared house, the pro- gram is built up. The four supports are (i) The Uni- versal Enforcement of the National Minimum; (2)The Democratic Control of Industry; (3) A Revolution in National Finance; and (4) The Surplus Wealth for the Common Good. A national minimum "We are members one of another," declares the Labor party — "no man liveth to himself alone." A minimum of thirty shillings ($7.20) a week is de- manded for all workers. This is, normally, equivalent to about $18 a week in the United States. The guar- anty of employment is declared to be a government obligation: "It is now known that the Government can, if it chooses, arrange the public works and the orders of national departments and local authorities in such a way as to maintain the aggregate demand for labor in the whole kingdom (including that of capi- talist employers) approximately at a uniform level from year to year." The program points out to the Government spe- cific works that need to be undertaken, which will absorb unemployed labor: (i) the rehousing of the population to the extent, possibly, of a million new cottages and an outlay of £300,000,000; (2) the im- mediate making good of the shortage of schools, train- ing colleges, and technical colleges; (3) new roads; (4) light railways; (5) the unification and reorgani- zation of the railway and canal system; (6) afforesta- tion ; (7) the reclamation of land ; (8) the development 48 THE NEW SPIRIT IN INDUSTRY and better equipment of the ports and harbors; (9) the opening up of access to land by cooperative small holdings and in other practicable ways. Democratic control of industry The Labor party is emphatic on this point: "The first condition of democracy is eflfective personal freedom. This has suffered so many encroachments during the War that it is necessary to state with clear- ness that the complete removal of all the wartime restrictions on freedom of speech, freedom of publica- tion, freedom of the press, freedom of travel, and free- dom of choice of place of residence and kind of em- ployment must take place the day after peace is declared. The party stands for the complete abolition of the House of Lords, and for a most strenuous oppo- sition to any new Second Chamber, whether elected or not, having in it any element of heredity or privilege, or of the control of the House of Commons by any party or class. But unlike the Conservative and Lib- eral parties, the Labor party insists on democracy in industry as well as in government. It demands the progressive elimination from the control of industry of the private capitalist, individual, or joint-stock; and the setting free of all who work, whether by hand or by brain, for the service of the community, and of the community only." The program calls for the immediate nationalization of railways, mines, and electrical power production. A new system of finance "Too long," says the Labor party, "has our national finance been regulated, contrary to the^ teaching of political economy, according to the wishes of the possessing classes and the profits of the financiers. The colossal expenditure involved in the present war THE POLITICAL LABOR MOVEMENT 49 (of which, against the protest of the Labor party, only a quarter has been raised by taxation, whilst three-quarters have been borrowed at onerous rates of interest, to be a burden on the nation's future) brings things to a crisis. "Meanwhile innumerable new private fortunes are being heaped up by those who have taken advantage of the nation's needs; and the one- tenth of the popula- tion which owns nine-tenths of the riches of the United Kingdom, far from being made poorer, will find itself, in the aggregate, as a result of the war, drawing in rent and interest and dividends a larger nominal income than ever before. Such a position demands a revolution in national finance. . . . For the raising of the greater part of the revenue now required the Labor party looks to the direct taxation of incomes above the necessary cost of family mainte- nance; and for the requisite effort to pay off the national debt, to the direct taxation of private fortunes both during life and at death." "Surplus for the common good" "One main pillar of thehouse that the Labor party intends to build is the future appropriation of the surplus, not to the enlargement of any individual fortune, but to the common good. It is from this constantly arising surplus (to be secured, on the one hand, by nationalization and municipalization, and, on the other, by the steeply graduated taxation of private income and riches) that will have to be found the new capital which the community day by day needs for the perpetual improvement and increase of its various enterprises, for which we shall decline to be dependent on the usury-exacting financiers." An interesting provision is that made for scientific investigation and research: "not to say also for the promotion of music, literature, and fine art, which have been under capitalism so greatly neglected. . . . Society, like the individual, does not live by bread 50 THE NEW SPIRIT IN INDUSTRY alone — does not exist only for perpetual wealth production. . . . The Labor party, as the party of the producers by hand or by brain, most distinctively marks itself off from the older political parties, standing, as these do, essentially for the maintenance, unimpaired, of the perpetual private mortgage upon the annual product of the nation that is involved in the individual ownership of land and capital." The "street of tomorrow" With the completion of its "house" the Labor party considers the street in which it is to stand — the inter- national relations of the democratized State: "As regards our relations to foreign countries, we disavow and disclaim any desire or intention to dis- possess or to impoverish any other state or nation. We seek no increase of territory. We disclaim all idea of 'economic war.* We ourselves object to all protective customs tariffs; but we hold that each nation must be left free to do what it thinks best for its own economic development, without thought of injuring others. We believe that nations are in no way damaged by each other's economic prosperity or commercial progress; but, on the contrary, that they are actually themselves mutually enriched there- by. We would therefore put an end to the old en- tanglements and mystifications of secret diplomacy and the formation of leagues against leagues." At its summer meeting in 1919 the Labor party called on the Government to discontinue its policy of hostility to Russia. Its proposal that the Trades Union Congress undertake by industrial action to pro- test against that policy is indicative not only of the radical temper, but of the international spirit, of the party. THE POLITICAL LABOR MOVEMENT 51 Cooperation Almost equally significant with the Labor party is the cooperative movement, which, with the party and the Trades Union Congress, completes the "trinity" of British labor. The Cooperative Union represents consumers' enterprises mainly, but it is of vast significance to labor. There were, in 191 6, 1,390 consumers' and 108 producers' societies. The employes numbered 148,000. They are organized, but disputes are rare. The Union seeks to control prices by becoming the largest buyer and by owning the necessary shipping to command the supply of raw materials. The Cooperative is said on good authority to cater directly or indirectly to about one- third of the population. The shareholders pay market prices at the stores, but secure their advan- tage in the distribution of profits. One town of 2,500 inhabitants is composed entirely of cooperators, who have applied the principle not only to necessities but to the theater and the motion picture house. In the United States the cooperative movement has been slow to develop, but has made rapid strides during the War. The Cooperative League of America reports 2,000 societies, and there are many others not so recorded. The states of Pennsylvania, Illinois, California, and Washington have notable develop- ments under way.^ American labor in politics In America a labor party is in the process of forma- tion. It is having its birth within the trade union See the Intercollegiate Socialist for April-May, 19 19. 52 THE NEW SPIRIT IN INDUSTRY movement, not by authorization of the Federation of Labor, but by the crystalHzation of radical elements within trade union bodies. The city of New York has now an organization known as "The American Labor Party of Greater New York," which represents the central labor unions, the Women's Trade Union League, and the United Hebrew Trades. The party put forward in the spring of 19 19 an extensive program similar in content to that of the British Labor party. The Illinois Labor party, which is the first state labor party to appear in connection with the new movement, had its first contest in the Chicago spring elections of 191 9 and polled about 54,000 votes. Labor parties are organizing in a number of states and it is estimated that there are beginnings of a politi- cal labor movement in 200 cities. The convention of the American Federation of Labor in June, 1919, passed a mild resolution, disapproving the formation of labor parties, but no contest developed. The leaders of the political movement express indifference to the attitude of labor officials. A labor party has been formed in Canada, and is cooperating with the United Farmers' Association. The movement is likely to effect a close alignment with that of labor in the United States. The Non-Partisan League Not least among the significant political tendencies in the United States is the Non-Partisan League, which controls North Dakota and is on the way to control in several other states in the northwest. It is represented in a score of states and has become a very considerable national political force. The League THE POLITICAL LABOR MOVEMENT 53 had its origin in a history of corrupt politics which, while perhaps not unique, particularly afflicted the farmers of the state. The legislature obstinately re- fused to be governed by the popular mandate in 1914 for state-owned terminal elevators. The following year the agricultural forces began to mobilize for action, and in the primary election of 1916 the newly formed League captured the Republican ticket. In November, 191 8, it swept the state on a platform calling for state-owned elevators, flour mills, and storage plants; a state bank from which the farmers can secure first mortgage loans at low rates instead of the exorbitant charges to which they have been sub- jected ; a state building association to aid farmers and industrial workers in building dwellings; state hail insurance; workmen's compensation; the initiative and referendum; and the exemption from taxation of improvements upon land. In June, 1919, the League carried a legislative referendum on the eight laws designed to put this radical program into effect. As its name indicates, the Non-Partisan League is not a political party and cannot put a ticket into the field. It uses the party which will nominate candi- dates that it approves, and its influence is so great where it is well organized that it dominates the pri- mary elections in which candidates are chosen. The League's program is revolutionary in the general direction of state socialism, yet there has been little affinity between the Socialist party of North Dakota and the League. An understanding was reached by the League in 191 6 with the Agricultural Workers' Organization, to which most of the farm labor of the state belonged, which virtually ended the serious 54 THE NEW SPIRIT IN INDUSTRY labor troubles that had been prevalent. The Agri- cultural Workers' Organization is affiliated with the I. W. W. The League headquarters are in St. Paul. The Socialist parties We have already seen how the socialist movement in Great Britain has found expression through the British Labor party. United States: The Socialist party in America has been, until recently, the most distinctively political of all parties, in that it has maintained one political principle, as its platform, throughout its history. The outstanding characteristic of American politics is the dearth of thorough-going and consistent adherence to political doctrines by the major political parties. 'The quest of issues seems to prevail over the desire for constructive political effort. Against this tradition the Socialist party stands in significant contrast. The chief organ of the party is the New York Call. The most recent congressional platform of the party bears marked resemblance to the British Labor party's program. At the same time, the Socialist party is so firm in its adherence to the principle of state owner- ship on the one hand, and to the Marxian philosophy on the other, that much of the most significant radical thinking in America has sprung from other than strictly Socialist soil. (See Chapter V.) The Social- ist party now reports something over 100,000 mem- bers. This membership represents, however, much less than the real numerical strength of the party. Its membership is on a dues-paying basis and the party requires of every member a pledge to support its plat- THE POLITICAL LABOR MOVEMENT 55 form and its candidates. This prevents many persons of socialist convictions from voting with the party and it is always impossible to predict the strength of the Socialist vote. In New York, for example, in the mayoralty election of 1917, Morris Hillquit, the Social ist candidate, polled 142,000 votes. In a presidential campaign the party has registered as many as 900,000 votes. The majority Socialists have consistently re- pudiated the War, holding that international con- flicts are but the inevitable result of the capitalist system. This has caused a defection in Socialist ranks of many of the most prominent party leaders and writers. An insurgent "left-wing" movement has ap- peared in the wake of the War, having close affinities with the communists of Russia (Bolsheviki). This group is as much scorned by the "regulars" as it is feared by conservative interests. As to the future strength of the party, probably much will depend upon the relation which develops between it and the American Labor party, assuming that the Labor party becomes a movement of the strength which is now indicated. The American Labor party is leaving the way open for liaison with the Socialist party, although it will have no dealings with the old line political parties. The leaders of the two movements are divided as to the proper procedure, but the majority of opinion seems to be in favor of close relations. Germany: In Germany the Social Democratic party was, before the War, the strongest political labor or- ganization in the world. It had over a million mem- bers in 1914. Its chief organ Vorwdrts (Forw^ard) is one of the most influential papers in Germany. In 1914 the party controlled eighty-six daily papers. It 56 THE NEW SPIRIT IN INDUSTRY had III members of the Reichstag, the largest single group in that body. France: In France the United Socialist party se- cured, in 1914, 102 seats in the Chamber of Deputies. The socialists also control many municipalities. French labor is so strongly syndicalist that the out- standing political socialists — Briand, Viviani, Sembat, Guesde, Thomas — have had more "bourgeois" than strictly socialist connections. The socialist organ UHumanite has a considerable influence. Italy: The Italian Socialist party is not very strong in numbers, and is largely middle class. Yet in Italy the Socialists have notably preserved the working class consciousness which was opposed to the War. Italy also has a vigorous syndicalist movement. Russian Socialism is so distinctively a part of the industrial revolutionary movement that it will be discussed under the head of Syndicalism. Labor and the League of Nations Since 1900 there has been an International Asso- ciation for Labor Legislation, with affiliated branches in twenty-five countries. By the terms of the Cove- nant of the League of Nations there will be, at the seat of the League, an international labor office. The signatory powers, while not bound to a specific pro- gram, will undertake to establish by appropriate legis- lation the following principles : 1. In right and in fact the labor of a human being should not be treated as merchandise or an article of commerce. 2. Employers and workers should be allowed the right of association for all lawful purposes. THE POLITICAL LABOR MOVEMENT 57 3. No child should be permitted to be employed in industry or commerce before the age of fourteen years. In order that every child may be insured reasonable opportunities for mental and physical education between the years of fourteen and eighteen, young persons of either sex may only be employed on work which is not harmful to their physical development and on condition that the continuation of their technical or general education is insured. 4. Every worker has a right to a wage adequate to maintain a reasonable standard of life, having regard to the civilization of his time and country. 5. Equal pay should be given to women and to men for work of equal value in quantity and quality. 6. A weekly rest, including Sunday or its equiva- lent, for all workers, 7. Limitation of the hours of labor in industry on the basis of eight hours a day, or forty-eight hours a week, subject to an exception for countries in which climatic conditions, the imperfect development of industrial organization, or other special circumstances render the industrial efficiency of the workers sub- stantially different. The International Labor Con- ference will recommend a basis approximately equival- ent to the above for adoption in such countries. 8. In all matters concerning their status as workers and social insurance, foreign workmen lawfully ad- mitted to any country, and their families, should be insured the same treatment as the nationals of that country. 9. All states should institute a system of inspection, in which women should take part, in order to insure the enforcement of the laws and regulations for the protection of the workers. These nine points represent, from the labor point of view, a minimum program. Mr. Gompers, who was chairman of the Labor Commission of the Peace 58 THE NEW SPIRIT IN INDUSTRY Conference, has frankly admitted that American labor has little to gain from it. Working conditions in the United States are far in advance of those in Europe, Mr. Gompers considered the work of the American labor commissioners as a missionary enterprise. It is of more than passing significance, however, that labor has been given a position of prime impor- tance by provision within the League Covenant for the beginnings of an international labor charter. The labor ofhce will have twelve members chosen by gov- ernments, six chosen by employers and six by labor. An international labor conference will be held annually — the first session in Washington in October, 19 19. The "International" At the present moment it can scarcely be said that there is an international political labor movement. There is a dormant organization, however, known as the "International," which is the descendant of the Communist League formed by Karl Marx and his associates in 1847. It was from this organization that the famous Communist Manifesto issued. The League was short lived, as was the International As- sociation of Working Men, organized in 1862. In 1889, the centenary year of the French Revolution, an inter- national socialist congress was held in Paris. Succes- sive congresses were held until the International Socialist Bureau was formed in 1900. This is the organization which the War has left virtually dormant. Membership in this Bureau was open to: I. All associations which adhere to the essential principles of socialism: socialization of the means of production and distribution; international union and THE POLITICAL LABOR MOVEMENT 59 action by the workers; a political class struggle by the proletariat of the world. 2. All organizations which accept these principles, even though they do not participate in political action. Twenty-eight countries have organizations affiliated to this Bureau. It met once a year, until the War, in Brussels. Its secretary, Camille Huysmans, and its chairman, Emile Vandervelde, are outstanding figures in international socialism. Many attempts have been made by national labor bodies to hold an international congress of labor dele- gates during the War, but all without success. Inter- Allied conferences have been held and have had much to do with the crystallizing of such ideas as are repre- sented in the British Labor party's program. Leaders of that party have made strenuous efforts to secure contact with the Russian revolutionists. After the Bolshevik revolution of November, 191 7, the Allied governments steadily disapproved such contacts. On the urgent request of Mr. Arthur Henderson, Premier Lloyd George consented to send the Labor radical, Ramsay MacDonald, to interpret Allied war aims to Russian revolutionists. However, Mr. Havelock Wil- son, of the Seaman's Union, vetoed the order of the Prime Minister by declaring that not a ship would be manned to carry Ramsay McDonald on this mission. A higher patriotism The British Labor party has become a repository of international spirit during the War. At the Not- tingham meeting of the party in January, 1918, not- withstanding a very genuine devotion to the national war aims, the conference opened with the lusty sing- 60 THE NEW SPIRIT IN INDUSTRY ing of "The Red Flag." An American correspondent at that notable meeting says that there was no falter- ing when they reached the lines: "Look round — the Frenchman loves its blaze; The sturdy German chants its praise; In Moscow's vaults its hymns are sung Chicago swells its surging song." He remarks sententiously that it was like the con- vention of our National Progressive party in 1912 singing "Onward, Christian Soldiers" — save that the Britons knew the words. The average American, trade unionist or not, would have supposed that the assem- bly had -gone mad and was shouting for "Bolshevism." At this meeting Ramsay MacDonald said to his colleagues: "See us here, shoulder to shoulder; dis- agreeing; comrades in our disagreements. And when you think that the extension to this table by a few feet, the addition to these chairs by half a dozen, is all that it means to bring the International together, in the name of God, let us think of this." Mr. Gompers, whom the American Government has recognized as the exclusive representative of American labor during the War, has supported the most rigid adherence in Allied countries to this policy of "no communication with the enemy" — the "enemy" in- cluding not only the Central Powers, but Bolshevik Russia as well. The Berne conferences In February, 1919, however, an international labor conference was held at Berne, Switzerland, and simul- taneously in the same city an international socialist conference. These meetings were noteworthy in the THE POLITICAL LABOR MOVEMENT 6i fact that they brought together for the first time rep- resentatives of the warring nations. The labor con- ference was much the less spectacular, but it drafted a proposed labor chart for recommendation to the Paris Conference — a document much more thorough- going in its fifteen provisions than the one already noticed, which was finally incorporated in the Cove- nant. The socialist meeting, which Mr. Gompers and his associates and the Bolshevik contingents in various countries refused to recognize, was more significant for discussion than for action. The conference approved the labor charter drawn up by the labor conference, warmly debated "Bolshevism," and mildly condemned the doctrine of proletarian dictatorship, passed a lib- eral League of Nations resolution, and another reso- lution vaguely condemning German militarism. The German Majority Socialists who had steadily sup- ported the German war program were conspicuously out of touch with the main body of delegates. "If we had met at Stockholm two years ago," one of the Ger- mans said after the conference, "the German revolu- tion might have come in January, 1918." A "New International" In March, 1919, there met in Moscow a group of left-wing socialists representing, directly or indirectly, twenty-three countries. This group of radicals, hurl- ing a second "Communist Manifesto" at the capitalist world, launched a "New International," whose corner- stone is the world ideal of a proletarian dictatorship. In one form or another, the international political labor movement is sure to be revived, probably with unprecedented vitality and effectiveness. CHAPTER IV DEMOCRATIZING INDUSTRY In its investigation of industrial unrest, the British Government found that two wars were going on in- stead of one. Whatever the intention of employers' or of labor organizations, the interests of capital and labor were in practice opposed at every point. The essential difficulty was expressed in the illuminating Memorandum of the Garton Foundation in these words : "The explanation of the comparative failure of the employers' associations and trade unions on the constructive side of the industrial problem is to be found in their strictly sectional and defensive origin and outlook. Regarding themselves as entrusted with the interests of one party to industry and not of industry itself, they have paid no attention to the problems and difficulties of the other side, and they have come together only when one had a demand to make of the other or when a conflict was imminent. Thus they have always met in an atmosphere of antagonism, and their negotiations have been carried on as between two hostile bodies." A discredited regime When Winston Churchill became minister of muni- tions, he said the War was a race with revolution. The situation has been well described by Mr. C. G. Renold, one of England's most enlightened employers: "Industry had reached a deadlock, a cat-and-dog fight between capital and labor, and we cannot go back to it. DEMOCRATIZING INDUSTRY 63 An industrial Armageddon was impending ... we should have it pretty badly by this time if the War had not come. The old method of strengthening everything on both sides and fighting things out has just about reached its limit, and there must be some way found to get out of the difficulty. Cooperation is the only ultimate solution in sight." A plan that works Hans Renold, Limited, in Manchester, is among the pioneers in democratic experimentation. We have already noticed the radical shop steward move- ment which broke loose in the Clyde district in 1916. That particular "movement" is exceptional and radical. The leaders are young "left wing" revolution- ists, who are frankly seeking to overthrow the capital- ist system. Their activities have been very significant and have probably been a chief factor in driving the Government to heroic measures in dealing with labor unrest. But apart from its more radical manifesta- tions, the shop steward idea is a basic factor in instigating the many contemporaneous experiments in representative government for industry. The Hans Renold Company has been working out the problem through a period of years. To avoid ambiguity, the term "shop committee" or "shop stewards' committee" should be distinguished from "works' committee" in the British Government plan. The shop steward has long been a recognized minor official in the engineering trades. He has stated duties as the union's representative in the shop. The stewards representing the various crafts in a shop may become a shop committee. This is the men's 64 THE NEW SPIRIT IN INDUSTRY own committee. The management has no authority over the shop stewards. The Whitley plan provides only for joint committees representing management and men. Obviously the stewards have the greater democratic sanction and significance. Trying the workers' way In the Renold Company a welfare committee existed long before the War. Experience under the munitions act taught Mr. Renold, as it did many employers, that discipline could be more satisfactorily left to committees of employes than made the subject of frequent hearings before the local munitions courts. The idea was conceived of turning to account the demonstrated success of the welfare committee. A workshop committee was proposed, to be composed of elected representatives of the workers and represen- tatives of the management. The more active union men in the skilled trades suspected this new procedure and forthwith organized a shop committee on the old lines and asked for recognition. It was granted in all friendliness but with some misgivings on the part of the management, which now had two com- mittees on its hands. It was decided that the shop stewards should have jurisdiction over matters with which their union was concerned — such as rates, agreements, and dilution — and that the other com- mittee should represent the less skilled and less well organized — by far the majority. The committee that really worked well was the men's own committee. There is a steward in the Hans Renold Works for about every twenty-five men. Any little group can DEMOCRATIZING INDUSTRY 65 have a steward that gets together and elects one. Of the gains in treating with these committees Mr. Renold says: "When we didn't agree with the com- mittee we wanted them to get the idea that we were playing fair, and it was worth almost any amount of time spent in negotiation to get that feeling estab- lished." A psychological gain The formal plan for works committees and joint councils, approved by the Government, is not dis- credited by comparison with the shop stewards movement. It is less ambitious in democratic method, and promises less than the regime of the Renold Company, but it is very significant nevertheless. Whenever men representing widely different interests and viewpoints meet together for friendly conference, regardless of the distribution of power, the psychologi- cal situation — which is perhaps the most important — is sure to be modified in the interest of peace, justice, and cooperation. In America about 200 industrial establishments have adopted some form of employes' representation. This movement did not originate in war experiences, but it has been greatly stimulated by the problems of war production and by British example. There are two distinct types of representative government in American establishments: one in which all dealings and operating agreements are between the company and its own employes, and one in which the union, representing the employes, enters into a contract with the employer. 66 THE NEW SPIRIT IN INDUSTRY T3rpes of bargaining The first type has been called non-union collective bargaining. It is not necessarily anti-union, but organized labor is never satisfied with a mode of government in which the union has not a primary voice. The second type is the trade agreement to which the union is a party. Mr. John D. Rockefeller, Jr., has been one of the pioneers in employes' representation of the non- union type. Following the disastrous strike in the Colorado coal fields in 1914, Mr. Rockefeller made an extended inquiry into the causes of unrest. Out of his studies have come the elaborate representation plan of the Colorado Fuel and Iron Company and that of the Standard Oil Company of New Jersey. The idea underlying these and all similar plans is that capital and labor are jointly interested in every industrial question, and that this common interest should, and can, dominate the situation to the exclu- sion of industrial strife. The Rockefeller plan Mr. Rockefeller's plan has undoubted merit in that it recognizes: (i) the primary importance of the human problems of industrial management, (2) the claim of the community upon industry as a form of service, and (3) the necessity of a "constitution for industry stipulating the rights of employes and their guarantees against injustice." Perhaps the least that a critic of the plan, from the labor point of view, might say is that there is no approach to self-government in the scheme. All committees are joint; no powers are delegated. Hiring and discharging are expressly DEMOCRATIZING INDUSTRY 67 delimited spheres for company action. In the Stan- dard Oil Company's agreement there are more than a score of specified offenses for which dismissal may be peremptory. If there is a fundamental fault in the industrial theory involved in this system, it will doubtless be found in the discrimination between capital-labor antagonisms and management-employe controversies. No doubt the locus of most strife today is in management. Save for the socialists, workmen are not at odds with the stockholders, a majority of whom may be people in moderate circum- stances. But management cannot be separated from ownership, because it almost invariably has the owner's consciousness and point of view. An indus- try might be run wholly by people in the company's pay, with the directors excluded, and yet be unre- sponsive to the wage-earners' demands. The execu- tives can usually be trusted to take the stockholders' view of any question raised. ♦'Directors of personnel" This one-sidedness in control, however, is in a measure offset by a new development in labor policy, namely the appearance of the employment manager, "director of personnel," or, as in the Colorado plan, the "president's industrial representative" — an official whose sphere of responsibility is the human relations which industry involves. To be effectual, this type of management demands training in psychology and ethics. Already labor management is coming to be a discipline in our higher schools. But unless the aim is genuine democracy, the ofhcial will affect nothing but the pay roll. 68 THE NEW SPIRIT IN INDUSTRY The Leitch plan A combination of scientific management with a representative system of control has been worked out by Mr. John Leitch, a director of industrial personnel. The plan, which he calls "industrial democracy,"^ also a non-union type, is patterned upon the Govern- ment of the United States, with some modifications. The higher executives are the Cabinet, the lower officials the Senate, and the employes' representatives the House. The Cabinet is a party to legislation, however. The plan has produced remarkable results in morale, esprit de corps, and increased production. The increased profits are shared. But there is room for grave doubt whether our political system of representation is applicable to industry in any thoroughgoing way. The trade agreement Coming to the second, or union, type of bargaining, it appears that employers who deal with labor through the unions may have much or little democracy in their industrial relations. As illustrated in the case of the insurrectionary shop stewards in Great Britian, union machinery may operate as a steam roller, the employers furnishing the motive power. The em- ployes themselves may be disregarded. On the other hand, as in the agreements obtaining in the garment industries, the employes may be directly represented. The chief problem seems to be to keep the union sufficiently in command of the situation to insure to every grouD of workers the necessary generalship and i"Man to Man," by John Leitch, New York, 1919. DEMOCRATIZING INDUSTRY 69 organized support, and at the same time to provide for definite participation in the business of industrial management by the rank and file. The Hart, Schaffner, and Marx agreement with the Amalgamated Clothing Workers of America and the agreement obtaining between the Dress and Waist Manufacturers' Association of New York and the International Ladies' Garment Workers are illustra- tions of the genuine sharing of control. Hart, Schaff- ner, and Marx have in their establishment a trade board for the settlement of disputes composed of ten employes, five nominated by their fellow-employes and five by the management, and presided over by an impartial chairman. An arbitration board of three members — a representative of the employes, one of the management, and an impartial chairman — has final power on appeals. The company is enthusias- tic over the reduction of friction that has resulted from the agreement. The history of the women's clothing industries in New York City during the last decade is likewise instructive in the possibilities of a true sharing of industrial management. Agreements governing wages, hours, and working conditions now obtain in 2,500 establishments, involving 95,000 workers.^ Where the workers rule Oddly enough, in order to describe the most notable example of democratic labor policy we must return to the non-union type. The Filene Store in Boston is not an industrial establishment, and its problems and 2 See U. S. Department of Labor Monthly Labor Review, Dec, 1917, pp. 19-39- 70 THE NEW SPIRIT IN INDUSTRY personnel are not at all typical of those with which labor management in industry has to deal. Yet this example of a group of employes virtually running the business cannot be other than significant for industry. These employes nominate four of the eleven directors, elect an arbitration board with final authority in matters of discipline, dismissal, and the interpretation of rules, and change the rules and the wage rates when they choose. This is pure workers' control. Mr. Filene states that the employes have never misused their powers and that every liberal feature of the store's labor policy has paid.^ The employes have on occasion evidenced a consciousness of trusteeship in the exercise of their privileges. Labor "rights" The demand of organized labor for democratic management of industry takes the form primarily of insistence on the right of collective bargaining through union channels. The American Federation of Labor has called for legislation making it a criminal offense for employers to "interfere with or hamper the exercise of this right." The reconstruction program of the New York State Federation of Labor refers to the sharing of shop management as a right that must be won for labor at all costs; it is taken for granted that this will come through regular trade union bargaining. Give to the unions the right to organize freely and to bargain for their constituency and they 3 System Magazine, December, 1918, and January, 1919 — Serial article: "Why the Employes Run Our Business," by Edward Filene. DEMOCRATIZING INDUSTRY 71 will have no anxiety over the realization of their ultimate aims. Profit-sharing Much is said of profit-sharing as a form of industrial democracy. It is a widely used expedient for giving the employe a personal interest in the business. A common method of distributing profits is to grant stock in the company to the employes in accord with a stated plan. The acquisition of stock by the workers is in itself a stabilizing factor, and when it is given as a recognition of service it undoubtedly has, in general, a good moral efifect. Some industries make the sharing of profits a direct reward for efficient work; that is, increases in profits beyond a certain norm are shared. It is probable that the attitude of labor toward this arrangement would be more friendly if it were not usually contingent upon extraordinary effort on the workers' part. Making the worker a capitalist on a small scale can never meet his demands as worker. As a stockholder he is — like his brother stockholders, whether rich or poor — relatively powerless in the government of the industry. Mr. Sidney Webb has said that profit-sharing as a means of realizing the demands of labor is a thoroughly discredited expedient. For America this is perhaps not wholly true, but the crux of the industrial situa- tion, here as well as abroad, is not in relative wealth but in relative power. It is commonly charged by employers that work- men want to share profits, but will not share losses. Obviously they cannot agree to meet losses by a sacrifice of wages. An instructive case is on record. 72 THE NEW SPIRIT IN INDUSTRY however, in which the employes of their own accord offered to rehnquish annually a part of their share in the profits, in order to create a sinking fund which should guarantee the stockholders against loss. Progress toward peace The general verdict seems to be that when the employes in an industry are well satisfied, the man- agement and the stockholders are most likely to be in the same frame of mind. There is no definite limit to production where a spirit of cooperation obtains. But industrial management is, in a sense, what social workers call a "case problem." Personnel in industry varies so widely in race, language, temper, and endowment that one cannot successfully dog- matize in matters of policy.* But there can be no doubt that progress toward industrial peace and the development of industry as an art lie in the direction of greater powers and responsibilities for the workers. •For a description of typical plans of joint management see a little handbook, "The Shop Committee," by William L. Stoddard, 1 919. CHAPTER V SYNDICALISM The French term for "labor union" is "syndicat ouvrier." Because French labor has been characterized by direct industrial action more than by reformist political efforts, "syndicalism" has come to be a general word denoting direct action. "Direct" in this sense signifies immediate application of economic power, as in the labor strike, in lieu of a slower, indirect effort to reform a situation through political action. French labor has always been more idealistic, and hence more revolutionary, then English or German labor. The French Revolution has left its mark. Yet it was not in France, but in Russia, that the storm broke. The Russian Revolution In March, 1917, the world was startled by the sud- den overthrow of the monarchist government in Rus- sia, under Czar Nicholas II. The event was surprising, not because it was wholly unexpected by close stu- dents of the revolutionary movement in Russia, but because the forces which had been at work since the abortive revolution of 1905 operated quietly and in the dark, and few supposed that the crisis would be reached so early. For ten years the councils or "soviets" which had sprung into being as the expression of the working- class mind, maintained clandestine activities in the way of revolutionary agitation and education. When 74 THE NEW SPIRIT IN INDUSTRY the moment arrived for a proletarian uprising, sup- ported by general dissatisfaction with the govern- ment's handling of the War and severe economic suffer- ing, it required but a few days to effect a complete transformation in the government. The economic collapse in Russia was the inevitable result of the withdrawal, at the outbreak of war, of the German managers of Russian industries. The country had been dominated almost entirely by Germany on the industrial side, and the enforced retirement of its industrial managers, accompanied by an absurdly undiscriminating general mobilization, made a col- lapse inevitable. The great Russian revolution was accomplished so quickly and easily that the working class itself scarcely realized what had been done. The provisional governments The first revolutionary government under the lead- ership of Lvoff and Miliukov was only partly socialis- tic. It was controlled by the Cadets, as the constitu- tional democrats in the Duma were called. The First Provisional Government collapsed after a few weeks and the Second Provisional Government was estab- lished under the leadership of Alexander Kerensky. He represented the Socialist Revolutionist Party to which Catherine Breshkovskaya, "the Little Grand- mother of the Revolution," belongs. Kerensky was able to keep the reins of government for several months, during which he vainly sought to unify the country politically and to establish a working under- standing with the Allies. It cannot be doubted that the end of his regime was hastened by the lack of Allied support. He tried to rebuild the Russian fronts SYNDICALISM 75 which had collapsed, but insisted that all political and social reform should be carried out in an orderly way by a constituent assembly. This the radical ele- ments, supported by the revolutionary hopes of the suffering people, would not wait for. The Bolsheviki In November, 191 7, a second revolution occurred by which the reins of government passed to a party now known as the Bolsheviki. This group, whose name signifies "majority," was the dominant faction of the Social Democratic Labor party. It was also known as Maximalist, since it stood for the immediate realiza- tion of the maximum socialist program. The Menshe- viki, or minority of the party, were known as Mini- malists since they favored the slower adoption of socialist principles. The Bolsheviki, under the leader- ship of Lenin, a man of noble birth, whose true name is Vladimir UlianofT, and Trotsky, a Russian Jew, formerly well known in New York, whose real name is Bronstein, set up a new regime on a fourfold platform: "Immediate peace, the land for the peasants, workers' control of industry, all power to Soviets." The Soviets The Soviets were already established in the cities, but had limited power. They represent an industrial form of government quite different from that indicated by the democratic ideals of Europe and America, yet purely democratic in theory and, in certain respects evidently efficient. On the agricultural side, the soviet has its roots in the Russian mir, the oldest democratic institution in Russia. Owing to the 76 THE NEW SPIRIT IN INDUSTRY extended mobilization, a form of soviet was also de- signed for the soldiers; thus the formula became cur- rent — "Soldiers', Peasants', and Workmen's Councils." The population of Russia is estimated as eighty- four per cent peasant, nine per cent industrial, seven per cent (until the War) bourgeois — that is, owners and managers. Of this seven per cent, one per cent had nearly lOO per cent of industrial management, and as already stated, was almost entirely German. The absence of a middle class made possible the setting up of a working-class government such as would scarcely be conceivable in England or in America. Since the War began, no topic of general interest has been subject to so much contradictory statement and so much prejudiced discussion, as the Bolshevik revolution in Russia. There is no doubt that the present government, officially known as the Russian Socialist Federated Soviet Republic, has established a form of government which is quite out of harmony with prevailing ideals of political democracy. Instead of delegates representing territories without class cleavages, the Russian Soviets, graduated all the way from the local to the national body, are composed of representatives chosen by the various industrial establishments and peasant communities. Lenin once said that the difference between Russia and America in this respect is that in America industry is clandes- tinely represented in politics, but that in Russia it is represented openly and by design. The Constituent Assembly The Constituent Assembly which was called for the purpose of framing a constitution was prorogued by SYNDICALISM 77 the Bolshevik government, because it was dominated by a group of moderates who were out of harmony with the radical movement. This act of the govern- ment, on its face a violation of ordinary democratic procedure, brought upon the Bolsheviki the condem- nation of Europe and America. Strangely enough, however, the Assembly, which before it died declared for immediate peace and for the distribution of the land, passed out of existence apparently without pro- test and without its loss being seriously felt by the workers themselves, who had already become accus- tomed to the soviet method of representation and of government. Colonel Raymond Robins, of the Ameri- can Red Cross Mission to Russia, states that at the time when he was seeking cooperation for the relief work conducted by our Government, his Kerensky credentials availed him little, but that whenever he received a pledge from the head of a local soviet, he got all that was promised. Lenin's appeal Colonel Robins has thrown much light on the sign- ing of the Brest-Litovsk Treaty. The Second Con- gress of Soviets was held in session for two days while Lenin waited for replies to his appeals to England and the United States. He had offered to defy Germany if the British and American Governments would stand by him. Finally, receiving no word of reply, Lenin said to Robins, "I told you so," and called for ratifica- tion. The treaty is commonly referred to in Soviet Russia as "the Peace of Tilsit." Lenin, who is now recognized as one of the ablest men in Europe, even by those who thoroughly detest 78 THE NEW SPIRIT IN INDUSTRY his theories, has aimed to follow a scientific socialist program, even to establishing what Marx called the "dictatorship of the proletariat." This has resulted in what is known as the "red terror." The Bolsheviki seem to have been entirely averse to capital punish- ment at first, but later deliberately undertook to make away with those whose continued opposition they believed would be fatal to their aims. The extent of the "red terror" has probably been exaggerated, but bloodshed has been abundant. The true facts will not be known until normal international relations are re- stored. The declared aim of the dictatorship of the working class is to create a society in which everyone shall work and in which classes shall, therefore, disap- pear. No "bourgeois" person — that is, no one who lives in whole or in part by the labor of another — is entitled to a vote in Soviet Russia. Bolsheviks outside Russia Thus what commenced as a political revolution has become a complete industrial revolution carried out in syndicalist fashion. Echoes of it are heard in many parts of the world, and a new word, "bolshevism" has been coined to denote the Russian program and method. Apart from the "red terror," Russian bolshe- vism has a definite industrial meaning — virtually what our American I. W. W. have sought to bring about by direct action. Radicals evidence much amusement — and reasonably — at the general use of the term "bol- shevism" as a damning epithet. The speaker of a great state legislature has pronounced a minimum wage bill "bolshevik." On the other hand, leaders of the radical labor movement are willing to own the SYNDICALISM 79 epithet. "From the top of my head to the soles of my feet," says Eugene V. Debs, "I am a Bolshevik." It is interesting to note the radical groups through- out the world which Lenin, considers true comrades of the Russian revolutionists. He finds confreres in Germany (the Spartacides) ; in Czecho-Slovakia, the Baltic Provinces, Poland, and the Ukraine; in Nor- way, Sweden, Denmark, Holland, and Switzerland; in all the larger Allied nations, and in America. Our own groups to which the Russian Communists pay their respects are the followers of Debs in the Socialist party, the Socialist Labor party, the I. W. W., and the Workers' International Industrial Union. The Socialist philosophy The Marxian philosophy of history underlies all strictly working class programs. It is known as eco- nomic determinism, and is susceptible of both mod- erate and extreme statement. It has modified the thinking of many economists, who nevertheless repu- diate it as an exclusive principle for interpreting events. Obviously, in bold statement, the doctrine is materialistic and explains ideals as mere reflexes. It has ardent devotees, who do not hesitate to explain the most sentimental romance by reference to some "eco- nomic determinant." Party socialism has suffered much at this point from the over-statement of a very impor- tant principle. The events of the last five years have rudely shaken socialism out of its dogmatic slumbers. Economic determinism This has taken place partly because of the conflict between national consciousness and class conscious- 8o THE NEW SPIRIT IN INDUSTRY ness, in which it has been demonstrated that a French proletarian feels himself closer to the capitalist of his own blood and language than to a proletarian brother who happens to be a national foe. The issue, to be sure, has demonstrated nothing as to the ultimate merits of the class ideal, but it has shattered the notion that in their present state the working people, or any other people, are governed wholly by an eco- nomic determinant. The War has revealed many underlying economic and commercial causes, but they have operated indirectly. In part, also, the jar which doctrinaire socialism has experienced during the War is due to the gradual rise of a philosophy of opportun- ist action. The theory of evolution has been under- going a change represented most notably by the writ- ings of William James and Henri Bergson. French syndicalism has received a considerable impetus from Bergson. In this new view of life the present is more important than the past. Every moment is creative. Supreme importance is placed upon the human will. This philosophic atmosphere is conducive to syndical- ism — that is, direct, creative action in the field of industry. The I. W. W. The Industrial Workers of the World (I. W. W.) represent syndicalism in its pure form in the United States. They were "bolshevists" before the Bolsheviki appeared. The I. W. W. adhere to industrial labor organization as against craft organization, because they aim at class consciousness and class movement. Working-class unity is not furthered, they believe, by organization on a craft basis, in which groups that SYNDICALISM 8i should be allied are severed by jurisdictional dis- putes. They also hold that political action is a hin- drance rather than an aid to their industrial ends. The strike is their chief weapon and the general strike is their ultimate aim. They object not only to the poli- tical method, but to the ideals of a political state. However, the I, W. W. seem to be divided now on the propriety of political action. William D, Haywood, the leader of the movement, has advised his followers to vote or not to vote, depending on the circumstances. The Russian soviet is a close approximation to I. W. W. ideals. Labor's Ishmaelites Because of its efforts to organize the unskilled, and because of the extremely unpopular character of its doctrines and methods, the I. W. W, is an Ishmaelite organization. It flourishes in the logging camps of the Pacific coast and by means of sporadic strikes in indus- trial centers which have large foreign populations. During the War the organization has suffered great restraint and in many cases, it is to be feared, real per- secution. It is almost impossible for an avowed I. W. W, to secure any semblance of justice. His profession is considered as evidence of opposition to all govern- ment and order. He is not, however, an anarchist, but an industrial, revolutionary socialist. He considers that his is the true type of socialism. In the trial of forty-three members of the I, W, W. in Sacramento in 1918 it is stated on good authority that men were con- victed wholly without evidence and that at least in one case no charge whatever was brought against the man in question; he was simply sentenced with the 82 THE NEW SPIRIT IN INDUSTRY group on evidence submitted against his companions. It Is a mistake to suppose that the I. W. W. preach and practice violence on all occasions. The doctrine of "sabotage" (French "saboter," meaning to "skimp work") Is freely taught, and sabotage is "limited only by the ingenuity of the person who practices It." It may mean the destruction of machinery or buildings, and It may mean only "Ca'canny" — loafing on the job. It is the worker's way of retaliating for a real or fancied offense. The I. W. W. consists in the main of migratory workers. Marriage Is discouraged among its members, because the man who settles down acquires inevitably a "vested interest" In things as they are. The organi- zation has its headquarters In Chicago and publishes The New Solidarity. Its New York organ is The Rebel Worker. Varieties of radicals An offshoot of the I. W. W., sometimes calling Itself the "true I. W. W." is known as the Workers' Interna- tional Industrial Union. Its members consider them- selves followers of Daniel DeLeon. They hold the same industrial Ideals as the other organization, but strongly assert the necessity of political action as well as Industrial action. They are virtually affiliated with the Socialist Labor Party, which is now little more than a remnant. Its organ is The Weekly People, published in New York. There is also a left-wing movement in the regular Socialist party whose organ, The New York Com- munist, is edited by John Reed. The discrimination of one set of revolutionists from another is today SYNDICALISM 83 merely a matter of recognizing comparative shades of red. Foreign syndicalist movements Apart from Russia, the most active revolutionary propaganda has, of course, been going forward in Germany and Hungary. The soviet system was defi- nitely inaugurated in Hungary and the followers of the younger Liebknecht and Rosa Luxemburg in Ger- many made serious trouble for the present socialist government until Liebknecht was assassinated. The moral prestige which Liebknecht secured because of his almost solitary opposition to the War made him an influential figure among liberals and radicals throughout the world. The followers of Liebknecht were known as the "Spartacus" group. By comparison with them the Majority Socialists of Germany, desig- nated as the "Left" before the War, are now the "Right." In Bavaria, whose revolutionary president, Kurt Eisner, was later assassinated, the Government, in the spring of 1919, was turning palaces into work- ing-class dwellings and arming the workers against a possible counter-revolution. The home of syndicalism, the French Republic, has since the War been under effective conservative influ- ence. The Confederation Generate du Travail (corre- sponding to the British Trades Union Congress) has been a strong industrial, class-conscious organization and has had little affinity with the Socialist Party. Now, the party is swinging toward direct action and the Confederation seems to be more interested in politics. But the spell of military victory and the Peace Conference has fallen over French labor for the 84 THE NEW SPIRIT IN INDUSTRY time being. It has at times seemed probable that a Bolshevist coalition would be effected, including Russia, Hungary, and Germany. At present, how- ever, the conservative forces seem to be approaching dominance in Germany and Hungary. The National Giulds The syndicalist movement in England has taken a peculiar form. The temper of British labor has never been so radical and explosive as that of the French workers. The British movement is represented largely by intellectuals, and much of its energy has gone into academic discussion and political theorizing. It is most important that some national group should be at work on labor problems from this angle. The National Guilds Movement, or "Guild Social- ism," stands for an ideal between that of the western democracies and that of Soviet Russia. As outlined by a foremost advocate of the National Guilds, Mr. G. D. H. Cole,^ Guild Socialism would leave the political state to be kept intact as represented by a political parliament. This parliament is to give expression to the people as consumers, and their representation will be, as at present, by territory. Production, however, is to be regulated in an entirely different way. Men and women as producers will belong to appropriate guilds, and will be represented in a National Guild Congress, which is a near equivalent to the All-Russian Congress of Soviets. A judicial body somewhat analogous to the United States Supreme Court is to hold the balance between the political parliament and 1 "Self-Government in Industrj%" by G. D. H. Cole, 1917. SYNDICALISM 85 the Guilds Congress. The plan calls for autonomy in the various industries and its ideal and goal is indus- trial democracy. The organ of the Guilds Movement is The New Age, published in London, and a considerable literature is being developed. The Guild ideal is held by many leaders of the British Labor Movement and has awakened interest in America. The Plumb Plan Although not distinctly revolutionary^ the plan of the Railway Brotherhoods, which the American Fed- eration seems ready to join in fighting for, is essen- tially syndicalist, after the National Guild model. It calls for a corporation to operate the roads, whose only capital shall be operating ability. The Govern- ment is to own the roads and the board of directors is to be chosen, one-third by the operating force, one-third by the appointed officers and employes, and one-third by the President of the United States, with the approval of the Senate. The employes are to share the earnings; vested interests disappear. The path ahead The industrial civilized world today presents a varied aspect. There is little place for the doctrinaire and the dogmatist. Movements are being launched with frank recognition on the part of their leaders that they do not know where they are going. It is pre- eminently an age of social and industrial experimenta- tion. Of all the powerful nations, the United States is doubtless the most conservative as judged by the 86 THE NEW SPIRIT IN INDUSTRY temper of its working people and by the complexion of its labor movements. Yet it is no time for blind oppo- sition to inevitable tendencies. History shows that tide-stemming is quite the most unprofitable business that can be indulged in. Where we shall go, we can- not say, but it will doubtless be a long way from here. CHAPTER VI THE ETHICS OF INDUSTRY About two years ago a group of British Quaker em- ployers came together to ask themselves a significant question: "What relation is there between the fact that we are employers of labor and the fact that we are Christian men?" As the implications of that question unfolded they continued their conferences, determined to follow the logic of the situation, wher- ever it might lead. Their conclusions are striking and important, but that is a story by itself. The point for emphasis here is that they asked the question and pressed it. What democracy is not The ethical phase of the industrial problem may be assumed to be less subject to experimentation or dis- pute than questions that are scientific and technical. We do not know just what we mean by industrial democracy — we do not know precisely what democ- racy means in any situation. Yet we certainly know some things that democracy is not, and if we find those things in industry, we are clearly obligated to do something. It is easier to pronounce things wrong than to set about righting them, but the ethical task often consists primarily in pronouncing them wrong. The need of a moral judgment It may be questioned whether the safe and sane method of approach to social problems — never attack- 88 THE NEW SPIRIT IN INDUSTRY ing until we have something better to offer — is not fundamentally quite erroneous. It would seem from the history of reform, as well as of revolution, that new forms of association have been born of very pres- ent and unavoidable emergencies. The judgment that a situation is impossible is a precursor to the dis- covery or creation of an alternative. The community will in the end listen to its prophets. Why should not our idealists in pulpits, editorial rooms, and professors' chairs bring pressure to bear upon industry? The knowledge that he cannot tell the industrial manager just what to do should never deter the moralist. The moral duty to decide between right and wrong is primary. What shall be done about it is a subsequent inquiry. It is the business of the industrial technician to devise means of putting industry in line with the moral judgment of the community. To the end of securing a clear moral judgment on the industrial order there are certain definite questions that might be asked. For example, what is the net effect of our industrial system upon the individual spirit? Does it in any way violate what all would agree to be the minimum claims of democracy, namely, freedom for the Individual to render the greatest ser- vice of which he is capable? Or does it ask and accept only a small part of what he might give if his spirit were freer? Does our present order put a premium on the most social impulses of employers and workers, or upon the most self-seeking human instincts? Does the statement, commonly heard today, that labor and capital are partners, describe a present condition or express a wish? THE ETHICS OF INDUSTRY 89 Each to his own problem There is a good bit of serious study going forward in this country, but perhaps people are too generally busy studying other people's problems. Employers have been studying their employes even to the last details of their household affairs, and working-class sympathizers are assiduously at work on the moral problems of the employer. In the past, progress has usually followed the serious attempts of people to solve their own problems. The consistent gains of the trade union movement have come about in just that way. What would happen if in industrial communities all over America employers who profess an ethical or a religious faith should sit down around a table and do what the British Quakers did? The Quakers' challenge The conclusions of these earnest inquirers are highly illuminating. They refuse to hide behind the obvious necessity of reforms in industry which are beyond the powers of a single group. Christian employers, they hold, should work for the alteration of the present system in so far as it is inconsistent with Christian principles, but, they insist, "in the meantime we can- not afford to neglect the urgent needs and the out- standing opportunities which confront us in our own factories." It would be hard to find a more direct and effectual challenge to the most conservative business mind than is contained in the searching inquiry of these Quakers: "For most of us does not our business afford us the greatest opportunity we have of serving our fellowmen, and have we yet ever fully tested the 90 THE NEW SPIRIT IN INDUSTRY potentialities of the present system, whatever criti- cisms may be urged against it, as a field for applied Christian ethics?" Even more pointed is their recom- mendation to all employers "to consider very care- fully whether their style of living and personal expen- diture are restricted to what is needed to ensure the efficient performance of their functions in society." American Friends have not been behind their Brit- ish brothers in constructive thinking on the industrial problem. The Philadelphia Yearly Meeting has es- tablished an active Social Order Committee, from which issue frequently reports and pronouncements of high value. A "Message" published by the Committee in 191 8 called for a "re-examination of the Quaker testimony for simplicity in the light of modern con- ditions." Investors are asked to favor "those invest- ments that have a social motive, even if returning a low rate of interest." A bulletin issued in the summer of 1919 gives publicity to a proposal that a group of investors be formed who will finance businesses, at low rates of return, which shall be organized for the ex- press purpose of experimenting in the interest of better industrial conditions. All this is fundamental, real. "Old worlds for new" Mr. Arthur J. Penty, one of the English Guild So- cialists, in his book, "Old Worlds for New," contends on scientific grounds for the simplification of life which the Quakers advocate as an ethical ideal. The road to industrial freedom, he believes, leads back to the old craft method of production, and away from the quest of efficiency in terms of quantity and speed of produc- tion. Whether or not the future will bring anything of THE ETHICS OF INDUSTRY 91 this sort must remain an open question. Human de- mands increase in number and diversity with the de- velopment of science and art. But the spirit that prompts Mr, Penty's call for renunciation is the only spirit that will make possible an adequate approach to the ethical problems of industry. A new kind of expert In these pages I have attempted only to point out certain phases of the industrial situation which have ethical significance. The industrial problem is in its larger aspect, everybody's problem. It should furnish the subject matter of much of our educational work, from primary school to college. It is not sufficient, though essential, that experts should be busy in the field of industrial relations from both the employer's and the workman's point of view. We must have a new kind of expert, one whose approach to the prob- lem is non-partisan — even non-industrial, in the first instance — but simply human. The prime necessity in industry is a moral judgment upon its methods, its ideals, and its underlying philosophy. To pronounce such a judgment one must be able to bring to bear ethical fundamentals upon industrial questions and to introduce them effectively into industrial controversy. There is tremendous force in a moral judgment pro- nounced by someone highly esteemed in the ethical realm. It was with this fact in view that Professor Albion W. Small called upon the churches of the country to set up a commission for the study of industrial dis- putes.^ The primary purpose would not be mediation, ^American Journal of Sociology, March, 19 19. 92 THE NEW SPIRIT IN INDUSTRY but simply the impartial presentation of facts and the pronouncement of moral judgments. The commis- sion, I take it, would be composed of men whose chief qualification is not economic training or industrial expertness, but, so to say, ethical expertness — men who can bring to bear upon industry, unhampered by industrial or economic preconceptions, the authority of conscience as disciplined by religion. Is not this pro- posal at least in line with the indications of the present day? There is a gratifying tendency on the part of theological schools to introduce courses in industrial problems, but the movement is only begun, and it lags. There is a field for research, unparalleled by anything which the schools of technology are doing. Industrial peace-makers Furthermore, it is doubtful if the possibilities of mediation in industrial conflicts have been more than guessed at. Employers are increasingly aware of the importance of human relations. Hart, Schafifner, and Marx of Chicago testify, as a result of experience with one of the most radical labor groups in America, that a mutual facing of facts and an exchange of viewpoints can solve almost all the problems that are arising in our industrial life. There are in every community persons whose vocational activities are directed pre- cisely toward this end of promoting understanding and sympathy between man and man. Cases are not wanting where serious obstacles to industrial peace have been overcome by the efforts of those whose rela- tion to the matter was not economic, industrial, or financial, but ethical. Conciliation is always better than arbitration. Labor welcomes mediators more THE ETHICS OF INDUSTRY 93 than arbiters. At present the isolation between most moraUsts — whether teachers, preachers, or writers — and modern industry could hardly be more complete. "Americanization" It must be remembered that labor problems in America are seriously aggravated by the presence here of vast numbers of people who have never become well acquainted with our customs or methods, or even our language. The human problem in Ameri- can industry is proportionately a much larger concern than in European countries. For this reason the duty to interpret what we please to call American ideals to immigrant working people and, conversely, to inter- pret their minds to our American employers and gen- eral public, is an outstanding feature of the ethical situation. "Americanization," as far as industry is concerned, has not been an altogether beautiful process. The feeling of being exploited, the persisting alien consciousness that may be found in large indus- trial populations, is deplorably evident in times of industrial conflict. A new type of ministry In this connection one element in the last Lawrence strike is especially noteworthy. Three ministers, whose sympathies were aroused by stories of what was occurring, went to Lawrence and made common cause with the strikers. They took their professional careers in their hands and incurred suspicion and criticism. Quite without reference to the merits of the strike or of the specific part played in it by the three clergymen, the spectacle of ministers of religion stepping out of 94 THE NEW SPIRIT IN INDUSTRY their conventional surroundings and becoming militant champions of what they believe to be the cause of democracy is significant, not to say refreshing. Groups of immigrant workers, alienated from all conventional forms of religion, rallied about these men who under- took to live their life and to fight their battles. In times of stress or of crisis the ministers invariably counseled moderation and the use of moral, instead of physical, force. On one occasion a group of excited Italians, enraged by what they considered to be unfair- ness on the part of the police, were shouting wildly for revenge. The young minister who led the strike said : "Yes, we must fight, but this is the way we will fight," and he folded his arms and smiled. The counsel for peaceable methods prevailed. Faith and practice The notable pronouncements made by religious bodies since the signing of the armistice, bearing upon social and industrial problems, give promise that the fundamentallyethical character of such problems will in the future receive wider recognition. The scholarlyand thorough reportof theArchbishops* Fifth Committee of Inquiry, representing the Church of England, and the courageous examination of the present social order made in this country by the National Catholic War Council have now been followed by a critical state- ment issuing from the Commission on the Church and Social Service of the Federal Council of the Churches of Christ in America. A good beginning has been made. If the principles set forth in these pronounce- ments are put into practice by those who promulgated them something approximating a sensation will be THE ETHICS OF INDUSTRY 95 experienced in the industrial world. Not all who speak the word will do the deed, but there is unmis- takably an increasing company, in which the younger men and women in our churches and schools are largely represented, who are entering with the spirit of crusaders upon the ethical conquest of modern life. It is upon these that both the burden and the hope of the future rest. No amount of science or research will take the place of a will to realize an ethical achieve- ment in the world of work. If we speak at times with a note of certainty as to the future it is because we are confident that, however theories may fail and pro- grams prove inadequate, the moral will of humanity may be counted on to bring in the new day. ^ I UNIVERSITY OF CALIFORNIA LIBRARY Los Angeles This book is DUE on the last date stamped below. Form L9-Series 4939 UC SOUTHERN REGIONAL LIBRARY FACILITY AA 000 896 752 3 ^851 J632n i