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WIGNIa Agaads

pres) )An address delivered at the annual meeting
of the Associated Employers of Indianapolis
February 16, 1922.

  
  

 

 

BUILDING AND
THE PUBLIC!

 

Methods of Closed Shop Control Revealed and
Menace to the Public Made Clear—The Public
Interest is Paramount and the Problem is a
Community Problem, Settlement of
which cannot be left to Con-
tractors —A Remedy for
present evils proposed

By WALTER DREW

Counsel, National Erectors Association

men are seeking ways and means to set their

affairs in order. And whether it be the af-
fairs of a particular business or of a general
industry, they come at the outset to the fact
that their particular problem is in large meas-
ure a part of a common and general problem
and that their affairs can be righted only when
affairs in general have again come into adjust-
ment and order.

fe all parts of the world anxious groups of

This is part of the price which mankind pays
to the machine for the expansion, the pro-
gress and the wealth it has made possible. The
giants, steam and electricity, have bound mod-
ern society together into a great complicated
and highly interdependent system. The old
self-contained community is gone, and it be-
gins to be apparent that even nations cannot
longer be entirely self-contained or free from
the effects of outside conditions.

_ We were just as dependent upon each other
ani upon the proper adjustment of our indus-
trial and commercial system before the catas-
trophe of war overtook us as we are now—only
‘axr¢ did not see it so clearly. While the system

e :

 

e date

 

 

cs, but
should
Fines
ate of
re are
ist be
‘ed.was running, we took it for granted and
worked a little harder each at his own job of
making hay in the sunshine of prosperity.

there were a creak here or a break there, we
let George fix it. There were signs and por-
tents then which would better have been heeded.
If we had properly attended to certain matters
then, some of the most serious features of
our present situation might have been avoided.

Among other things, we sat by while a small
group of able and forceful men, preaching the
vicious philosophy of organized force rather
than of cooperative service as a means to inr
dustrial betterment moulded millions of our
workmen into powerful and militant combina-
tions to use in seizing control of our industries.
And we heard these men frankly announce that
they intended to exercise the power thus ac-
quired without any responsibility to the law or
to society. We left individuals and groups who
were attacked by these combinations to fight an
unequal battle against them and in many cases
to join with them in common exploitation of
the public. But of all this we shall hear more

later.

The building industry, which is the subject
before us, is a part of the general emergency
problem which the public faces at this time,
and it also constitutes in itself a major problem *
with special and interesting features. Let us
consider some of the aspects of this general
problem.

 

 

WAR AN ECONOMIC DISASTER

However true it is that the great war in which
we were engaged was a glorious adventure and
that our part in it was a noble and worthy one,
yet the hard fact remains that from any stand-
point of sound practical business it was a de-
moralizing and destructive debauch. The sud-
den injection by the Government of billions up-
on billions of dollars of new buying power into
the channels of trade upset the balance between
the value of money and of goods. Goods be-
came dearer and money cheaper. When the
Government became paymaster and the public
treasury the source of the laborer’s hire, wage
were fixed regardless of any consideration save
that of the common danger. The production
and service of great basic industries was de-
voted to the needs of the war. In many cases
machinery and equipment were altered, =e

4and overhead increased, and in large measure
old trade relations disrupted or entirely des-
troyed. There is no need for us to follow in
detail the dizzy spiral of wages and prices, or
the frenzy of extravagance which seized upon
millions of our people who found themselves
suddenly with more money than they had ever
dreamed of having and which continued after
the war was ended and until the momentum of
war wages and war profits as a spending force
had become exhausted,

And when the billions had been shot away
or thrown upon the scrap heap, or spent on
silk shirts, fancy shoes, imitation art and other
non-essentials, we awoke to find that all this
money must be paid back. The great indus-
trial machine out of gear, its discipline im-
paired,—crippled in some parts and over-de-
veloped in others,—had been turned back to
its owners and they were expected to put it to
work to make up the waste of war and to repay
its cost, while at the same time it performed its
task of taking care of our daily needs. A host
of technical and complicated questions arose
as the banker, the trader, the manufacturer, or
the politician interpreted the situation from his
own point of view. But, however the problem
is stated, does it not come down to this—that a
level must be reached where each group in the
industrial and commercial system renders its
service upon a basis which will enable the pub-
lic to take advantage of it and at the same time
enables it to avail itself in turn of the services
of other groups? And to this we must add the
further need of distributing and bearing the
extra burden left us as the legacy of the war.

READJUSTMENT AND ORGANIZED LABOR

The falling prices which marked the process
of deflation laid upon industry the absolute
necessity of reducing the cost of production.
Industries cannot long continue to function and
furnish employment to their workers if the
cost of their product is greater than the price
at which it can be sold. Since labor cost from
the raw state to final consumer constitutes the
great bulk of production cost (85 to 90 per cent,
according to some writers), a lower labor cost
/ was essential to any material reduction in pro-
duction cost. Now we have heard a great deal
about the duty of the worker to bear his share

a

 

tY
1 the date

DUE

'o weeks, but
rower should
above. Fines
: the rate of
ks there are
9ks must be
is desired.of the burden of deflation. The fact is that
it has been entirely possible for labor cost to
have been reduced to correspond with the lower
price levels for goods without any loss to the
worker or any change in his standard of living.
The decline in the cost of living from its peak
in July 1920 of 104.5 per cent to a present
figure of 61.4 per cent above the pre-war level
has made it possible for the worker to accept
a proportionately lower wage and still buy as
much as formerly. The increase of the work-
er’s wage rates at their peak ranged from 130
per cent in the metal trades to 198 per cent in
the woolen industry over the pre-war level.
With no capital investment to depreciate, or
inventories to be written down, or stock of
goods to sell at a loss, or money borrowed when
it was worth less to be repaid when it became
worth more, the worker was the one person in
the community in a position to make his con-
tribution to the process of readjustment with-
out hardship. More than that, the worker
whose wage rate today is at the war level has
to all intents and purposes increased his wages
by as much as their purchasing power has be-
come greater through the decrease in living
costs.

THE REAL EMPLOYER OF LABOR

This is not all as to the position of the
worker in the scheme of things. A moment’s
thought will show us that the person we call
employer is not the real employer at all. The
final consumer of goods is the real employer
of labor, and what this final consumer is able
and willing to pay will ultimately fix the
worker’s wage. The employer, so named, is
called by the economists an entre-peneur, or
go-between, and this is a more accurate term.
He guesses at the demand for certain articles,
applies capital and labor to their production,
and then looks to the buyer for payment of
the capital and labor used. In short, as to
labor, he is a salesman of the worker’s services
to the user of goods, after assisting the.
worker to put those services in marketable
form.

Who are the consumers of goods? There
are 45 million wage earners in the country,
and with their dependants they constitute by
far the great bulk of the population. The in-

6dustries, of course, are buyers of machinery,
equipment and materials, but their purchases
go into production and must finally be paid for
by the final consumer. By and large, then,
the workers are in large measure employers
of each other. The buying power of the idle
worker—that is, his ability to employ other
workers—is either curtailed or gone entirely.
Fence unemployment tends to spread like a
contagious disease in the social body, whereas
employment begets employment. To the
worker, then, most of all it is vitally important
that a level be soon reached where there can
be exchange of service among the different in-
dustrial groups.

RUINOUS POLICIES OF LABOR LEADERS

In spite of this, the one group in the com-
munity which refuses to join in the common
effort to get our affairs in order is organized
labor. Across the path back to new levels of
equilibrium and stability, which every indus-
trial group must follow sooner or later, the
labor leaders have massed their millions of fol-
lowers to block the way. So long as this block-
ade can be made effective, normal conditions
cannot be restored to our idle workmen em-
ployed.

Here is how Mr. Gompers states the situa-
tion in the January “Federationist.” He says:

“Certain employers greeted the year 1921
with the battle cry of destruction. They felt
that the road was clear for the amassing of
fabulous wealth and for the re-establishment
of industrial dictatorship, * * * Two things
were clear in their minds: to reduce wages
and to destroy the unions. * * * Organized
labor stood firm against this destructive move-
ment. It has maintained its position with such
tenacity and purpose that wage reduction has
made but comparatively trifling headway, while
the destruction of unions has made no progress
at all. Labor is as united and as determined
as ever—and a great deal more so.”

In this short statement are contained a mis-
representation of facts, a false accusation, an
appeal to class hatred, and the outline of a
plan of action not only anti-social, but con-
trary to the true interests of union workers
themselves. The structure of closed-shop
unionism has been built upon a certain phil-
osophy, and Mr. Gompers as a leader must be
consistent no matter what his private views
may be. When wages were rising by leaps

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oY
. the date

DUE

o weeks, but
‘ower should
above. Fines
, the rate of
ks there are
%9ks must be
is desired.and bounds in the period of war inflation, union
men were told that the credit was due to the
power of their unions, notwithstanding that
wages of common labor and other unorganized
groups increased generally in greater propor
tion. Now that the operation of the same law
of supply and demand which put wages up 1S,
under changed conditions, bringing them down,
the labor leader finds himself in an embarrass-
ing position. If union power put wages up,
why can it not keep them up? And so, to ex-
plain the failure of even the power of the closed
shop to stop the workings of economic law,
the familiar bogey of a vast conspiracy On the
part of society and employers is brought forth
and paraded. The ghost is made to walk.

In any mention of buying power, the far-
mer must be included. His buying power must
supply the needs of about one-fourth of the
population of the country, and his industry
requires machinery and equipment equal ap-
proximately to one-fifth of that used in all
our manufacturing industries. His demand
upon the other industries of the country nor-
mally requires the services of hundreds of thou-
sands of workers to supply. His demands,
however, do not require those services today.
He is repairing his tools and machinery and
exchanging their use with his neighbors, and
he is putting patches upon his old clothes and
burning millions of bushels of corn for fuel.
With his products bringing only 13 per cent
more than the pre-war level, he cannot buy the
products of other industries at prices 50 to 100
per cent above that level. It may seem a fine
thing to keep war wages and have the farmer
supply his products at cost or less, but the
dream must have a rude awakening.

THE RESULTS OF FOOLISH OBSTRUCTION

What are the results of the obstructive course
of organized labor in some of our basic in-
dustries? Outside of the farming industry,
conditions upon the railways are perhaps the
most closely related to our national well being.
Transportation cost enters into the cost of
production and distribution of the necessities
of life over and over again. Also, the rail-
ways normally consume from 40 to 50 per cent
of all the iron and steel products of the coun-
try. Yet with railway rates at war levels, lay-
ing a heavy burden upon all industry, the cost

8of railway operation is such that the railways
are practically out of the market, and thous-
ands upon thousands of workers ordinarily
making things for railroad use are idle. The
high level of railway wages and the restrictive
labor rules of the so-called “national agree-
ments” put into effect under Government con-
trol are chiefly responsible for this high operat-
ing cost. The railway unions vastly increased
their strength during Federal control and their
resistance to the comparatively slight relief
as to wages and rules granted by the Railway
Labor Board after months of controversy was
carried to the very threshold of a nation-wide
strike. Railway rates cannot be lowered or
railway buying renewed on a normal scale until
there is a much more drastic revision of labor
costs on the roads. The railway unions are bit-
terly contesting any new changes in rates as
well as demanding a rehearing on_the slight
changes already made. Says Mr. Gompers in
the ‘‘Federationist” for the current month:
“The railroad workers now find themselves
confronting a situation in which they must
look to their economic strength to preserve
what a political institution has sought to de-
stroy * * * . Whatever the course to be pur-
sued, in the background must be the conscious-

ness of reliance on economic strength.”

In other words, Mr. Gompers counsels the
railway unions to subject the nation to the
horrors of a railroad strike rather than to ac-
cept and perform their share in the process of
readjustment.

CIVIL WAR IN WEST VIRGINIA

Of scarcely less importance is the coal indus-
try, for coal rep

in existing agreements,
strike in resistance to any
agreements expire.
upon the entire in
raised armies, supp

of civil war. Says Mr. Gompers again :

this time to make

“Ror the mine owners at
kers is the height

demands upon the mine wor

9

resents the heat and light needed
in the home and forms as well a large item in
production and transportation cost by virtue of
its general use for power. Without regard to
a general condition of unemployment and suf-
fering in the unionized fields, the Miners’ Union
has not only refused to modify the war wages
but threatens a general
change when these

In order to fasten its grip
dustry, this union recently
lied them with arms, and

launched an attack upon the non-union mine
Gelds of West Virginia, with all the features

 
 
 
 
  
  
 
  
 
 
 
  
  
 
 
  
 
 
  
   
 
 
   
 
 
 
 
 
 
 
 
 
 
  
  
   
  
   
    
  
  
 
  
   
 
 
   
   

ARY

on the date

DUE

o weeks, but
‘ower should
above. Fines

the rate of
ks there are
ks must be
s desired.ASNIVER SN

  

of brazen effrontery, the acme of abandoned
looting and pillage, * * * The President of the
United Mine Workers of America has said to
the miners and to the country that the miners
will not yield. The American labor movement
will support the miners in their position.”

 

So Mr. Gompers, compelled by the doctrines
and philosophy of the closed shop, is willing
to add to the horrors of a railroad strike the
further horrors of a coal strike to the end that
organized labor shall make good its refusal
to do its share in bringing about the country’s
return to normal basis. Yet both the railroad
workers and the miners could accept all the
wage reductions that have been suggested with-
out hardship or injury to their former stand-
ard of living.

RISING COST OF SHELTER

The building industry as a great basic in-
dustry has.no small place in the immediate
and general problem of readjustment. Labor
cost constitutes upwards of one-half of build-
ing cost, not counting the labor represented in
the making, handling and transporting of
building materials. We must have shelter, and
rent next to food is the largest item in the
family budget. While the item of food has
been falling from its peak of 119 per cent in
July 1920 above pre-war levels to 50 per cent
at present, the item of shelter has increased
from 58 to 69 per cent. The cost of buildings
also enters into the cost of everything we use,
for things are made in buildings, stored in
buildings and sold out of buildings. A million
and a half homes are needed, according to Sec-
retary Hoover, not to speak of other kinds of
construction, and billions of capital await in-
vestment in buildings when construction costs
are no longer at prohibitive levels. A revival
of building would put hundreds of thousands
of building trades workmen to work, reduce the
heavy burden of rent, and create a demand upon
many other industries which would result in
still further increase in employment. But here
again the forces of the closed shop bar the way.

UNIQUE NATURE OF BUILDING INDUSTRY

And now we come to a closer view of our
subject. The building industry comes into a
more direct relation with the public than does
any other. This is due to the nature of the
business. The builder does not, like the manu-

10facturer, produce goods and run the risk of
their later sale. He deals not in a ready-made,
but a made-to-order product. It is the owner
who bears the risk of the undertaking—that is,
of making a profitable disposal or use of the
building when completed. The contractor,
then, is a mere broker or agent for the owner.
He assembles materials and labor after he gets
his contract. He does not have to meet the
building cost of some other locality for his
contract is based upon the conditions in the
locality where the building is situated. So
long as building demand continues, it is clear
that he has little concern with building costs
or with the conditions under which buildings
are constructed.

Consider, however, the effect of excessive
building cost upon the general public. It means
an unequal burden in rent for all classes, a high
overhead for the manufacturer and merchant,
and an uninviting community for the outside in-
vestor or worker. It means a handicap to pro-
gress and development and a depreciation in the
value of fixed investments. Clearly, therefore,
building conditions constitute a community
question of the first rank.

Aside from the lesser interest of the
builder in labor conditions as compared with
that of other producers, he occupies a unique
position in other respects in dealing with the
labor question. There is rarely any con-
tinuous employment of the same group of
workers, and in consequence little oppor-
tunity is afforded to build up their morale or
gain their loyalty. With a large number of
such temporary trade groups meeting on the
work, the tendency is for them to become
conscious of their general class interest and
to make common cause against the builder.
On the other hand, the owner wants his
building and is impatient of delay, and all too
often he refuses to support the builder even
when some principle vital to the public in-
terest is at stake. The cost-plus contract
is one of the ways in which the builder has
attempted to protect himself in this hard
position and by it the owner not only bears
the burden of existing conditions, but also
assumes the risk of any change in conditions
or added cost of construction during the
progress of the work. It is easy to under-
stand, then, why the builder has come almost

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e date

yeeks, but
er should
ve. Fines
e rate of
there are
must be
iesired.AVN ERS >

  

universally to adopt a policy of concession
and compromise in labor matters, and when
we come to see the extent to which he seems
to have failed in protecting the interests of
his clients and of the public, we must re-
member the circumstances of his position
and be fair enough to grant that all the re-
sponsibility does not lie at his door.

FORCE THE BASIS OF CLOSED SHOP
CONTROL

We should have no illusions, however, as
to the methods by which the closed shop has
secured and maintained its control of an
industry so poorly defended. Based upon
the concept of force to maintain its class
interest as against the rest of society, it
must ever rely upon the use of force to
secure its ends. In the building industry,
the use of the crudest forms of violence is
a familiar and customary feature of closed-
shop control. I call a highly-qualified wit-
ness, Mr. Luke Grant, a member of the Car-
penters’ Union and a writer of authority on
labor questions, and quote from his official
report to the Federal Industrial Relations
Commission. He says:

“In recent years there has been a marked
change in the nature of the violence committed
in the building trades and in the methods
used. The ordinary workman who in former
days was apt to use his fists on the head of a
‘scab’ for the sake of ‘the cause’, seldom does
so now. His place has been taken by the pro-
fessional thug and gunman. Violence has be-
come commercialized and made more brutal.
Assaults on non-union workmen are seldom
made openly as in former days when the
strikers did the assaulting. The professional
slugger lies in wait for his victim, assaults him
with a bludgeon or probably shoots him to
death. If the destruction of property seems
more expedient than the slugging of non-union
men, the professional will attend to that. It
makes no difference to him what the crime, or
who hires him to commit it. That such a sys-
tem of organized thuggery obtains in many of
the buiding trades unions is beyond dispute.”

Mr. Grant also states the union man’s
point of view. He says:

“The union man pays dues into his union for
protection. He expects his union to protect
him against the competition of the non-union
man. * * * If work must be obtained at the
expense of the non-union man, that does not

12make any difference. It is for that the union
man 1s paying dues. The aim of the union is
to have a monopoly in a particular trade.”

No interest is served by touching upon all
the many forms of coercion and compulsion
employed by the union to keep its monopoly
and to give its members their money’s worth
in protection against the outsider. They
take whatever form the particular situation
demands. The State has become a party to
some of them through its requirements for
licenses in different trades and in other
forms of supervisory legislation. Through
political control of license bureaus, a new
wall is built against the admission of me-
chanics in several trades. This matter is
mentioned because it is one of the things
which it is within the power of the public
to remedy.

THE SYMPATHETIC STRIKE AS A WAR
WEAPON

By far the most important weapon em-
ployed by the building trades unions and the
one upon which their autocratic power
chiefly rests is the sympathetic strike.
From the mere quitting of work by men in
other trades because of sympathy with some
trade that may be at odds with the em-
ployer, the sympathetic strike has been de-
veloped to the point where at the word of a
central authority all of the trades upon the
work may be called on strike upon the com-
plaint of a single business agent and without
_ any vote of the rank and file of the unions,
and generally without their knowledge of
the issues involved. This action may be
extended from the particular work to all of
the work of the contractor in the locality,
and through action of the international
unions the strike may be further extended
to include all of the contractor’s work in
every city in the country. The fact that
the original grievance may be confined to a
particular trade and that the chief sufferers
from the strike are neutrals and third par-
ties who have no interest in the dispute and
no power to settle it makes no difference.
There can be no justification for the sympa-
thetic strike in law or in morals. Its use 1s
in the highest degree anti-social. Mr. Gom-

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e date

veeks, but
er should
ve. Fines
1e rate of
there are
must be
desired.-o

Ze TVERD

   

pers has said concerning it: “A sympathetic
strike is absolutely against the principles of
the American Federation of Labor.” (Sys-
tem tor April, 1920.) This statement 15
made for public consumption, but it at least
indicates that the American Federation of
Labor does not consider the sympathetic
strike defensible.

CENTRALIZED CONTROL DICTATES UNION
ACTS

By these and other ways have the forces
of the closed shop come into the control of
building in most of the cities of the country.
The same plan of organizing this control is
generally followed. Representatives from
the various trades form a central governing
body, called the Building Trades Council,
and in many places this Council has assumed
complete and autocratic control of the in-
dustry. It calls strikes on and off, in one or
all trades, and with no vote of the men
affected. In the shadow of its power cor-
ruption and extortion flourish, and it is com-
mon knowledge in many of our large cities
that no building operation, large or small,
escapes without payment of tribute. Its
ban against a contractor means business
ruin. There can be no collective bargaining
in any real sense between parties standing
upon such unequal terms. What passed for
collective bargaining consisted of the deliv-
ering of an ultimatum by the unions without
negotiation or discussion, with the alterna-
tive of a life and death struggle in case of
refusal.

SPOILS SYSTEM AND JURISDICTIONAL
DISPUTES

But the employer was by no means secure
when he had made his peace and started his
work under conditions in accordance with
the law of the Council. While united in
common ‘cause against any menace to their
jcint control, the different trades fought bit-
terly among themselves over the spoils of
monopoly. In quarrels over jurisdiction,
groups of unions take sides, each striking
against the other, and the building remains
idle during the weeks or months of their

14controversy, with the contractor and the

Owner as helpless onlookers. Said Mr.

Gompers as early as 1902 on the question of
jurisdictional warfare:

“Unless our affiliated unions radically and
soon change their course we shall at no dis-
tant day be in the midst of an internecine con-
test unparalleled in any era of the industria]
world, aye, not even when workmen of dif-
ferent trades were arrayed against each other
behind barricades in the streets over the
question of trade against trade, * * * There is
Scarcely an affiliated Organization which
not engaged
ganization (a
Organizations
tion, * * * Th

is
in a dispute with another or-
nd in some cases with several
), upon the question of jurisdic-
is contention for jurisdiction has
grown into such Proportions and is fought
with such intensity as to arouse the most bit-
ter feuds and trade wars. In many instances
employers fairly inclined toward organized
labor have been made innocently to suffer
from causes entirely beyond their control.”

Mr. Gompers’ grim prophesy has been sey-
eral times fulfilled when riya] unionists and
their armed thugs have engaged in actual
warfare in the streets of our great cities,
and jurisdictional disputes have been in-
creasing with the extension of union control
and the greater spoils to be fought over,

As with Alexander of old, it was natural
that the labor leaders, after securing control
of building construction, ‘sHould look abroad
for more worlds to canquat, They found it
in building materials. From preventing any
but union men from working on the build-
ing, it was an easy step to demand that only
such materials as had been manufactured
by union men should be permitted to be
used. The boycott against open-shop ma-
terial was made effective by the same sym-
pathetic strike which had brought about the
exclusion of open-shop workmen on the
building. In trade after trade this embargo
against materials was put into force and the
power of the closed-shop building unions
was thus used as a lever to force the closed
shop into factory, shop, yard and mill,

15

e date

 

weeks, but
wer should
dove. Fines
the rate of
s there are
‘s must be
desired.CLOSED SHOP BREEDS INEFFICIENCY

And what of the efficiency of the worker
under this system? Protected in his job
by the union, as Mr. Grant has told you,
why should the worker exert himself? So
would reason a shirker. But it is not the
shirker who is entirely responsible for the
low efficiency of the building trades union-
ist. He is a believer in the vicious “ca’-
canny” or “go-easy” philosophy. A Gov-
ernment Report issued in 1904 on the subject
of Restrictions of Output says: “It has been
found that there is in the building trades a
very general feeling that by working slower
the work will be made to last longer.” And
the report contains many examples of union
rules limiting output and penalizing honest
effort. As union power has grown and with
it the ability to put this philosophy into
effect, the efficiency of the building trades
worker has steadily decreased and the re-
strictive rules and practices of the unions
multiplied. We have no time here to ex-
amine the mass of evidence brought to light
on this subject by investigations in various
cities. By and large we may say with assur-
ance that before the war the output of the
building mechanic in closed-shop localities
was a half or less of what it normally should
be, and that during the war and post-war
boom this fell to a third or fourth of normal
output. If the building mechanic under the
spur of unemployment has been getting back
toward the pre-war, level of efficiency, he
has merely begun :the dong journey he must
take before he is giving an honest day’s
work for his monopoly wages.

There is much more that could be added
to the record of the closed shop in the build-
ing industry, but to what purpose? It is
enough to know that for each item in the
record of crime and selfish greed and in-
trigue and exploitation there is a price to be
paid—a tribute to be exacted from the com-
munity so long as it remains under the yoke.

ANTI-PUBLIC CONSPIRACY

There is, however, one last chapter that
must be told. It shows the final and logical
outcome of the closed shop and also consti-

16

  

¢tutes its complete damnation. Why quarrel
with the unions and resist their demands
when the public pays the bill, is the thought
that came to certain groups of employers.
The so-called “exclusive” agreements were
accordingly developed. The union’s mem-
bers agreed to work only for members of
the employers’ group, and the employer’s
group in turn agreed to employ only mem-
bers of the union. The closed-shop control
of the union thus protected the employers’
group from outside competition and gave
them a monopoly, and they in turn were able
to concede the demands of the union no
matter how exorbitant, since they could pass
the burden on to the public. It was all very
simple. Let me read from an official record.
Speaking of such an agreement in the mar-
ble industry, it says:

“The effect of the closed agreement, as far
as the workmen in the union are concerned,
is to give them steady employment, to keep
the older men in the shops, to give all the
members a sense of security in their jobs, and
to reduce the speed of the members to what
they consider a fair day’s work. * * * The
amount of work done by marble tile setters in
New York is only one-half of what should be
expected. Yet by excluding marble cut out-
side New York and excluding outside contrac-
tors from entering New York, the marble em-
ployers are able to recoup themselves from
the building industry of New York.”

No, this is not part of the record of a re-
cent investigation. It is taken from that
same Government Report we have men-
tioned, which was made nearly twenty years
ago, and such combinations even then were
established in many trades. The arrange-
ment has been extended to take in manufac-
turers and dealers in materials. The unions
in the combine handle only the materials of
and work only for the favored employer
groups, while the employer groups in their
turn employ only members of the unions.
Again it is all very simple. The union gets
a monopoly of the work, the contractors a
monopoly of building construction, and the
material men a monopoly for their materials
in the jurisdiction covered by the agreement.
And the monopoly of all three groups rests
{upon and is made possible only by the power
of the closed shop.

17

    
  
  
 
 
   
  
 
  
   
 
 
 
 
 
 
 
 
 
 
 
 
 
  
   
  
 
 
 
 
 
 
  
   
 
 
 
 
  
 
   

ie date

weeks, but
wer should
,0ve. Fines
the rate of
3 there are
‘ss must be
desired.In the Lockwood investigation, such com-
binations were shown to exist in trade after
trade, and investigations and prosecutions in
other cities have shown such conditions to
be general and widespread. So far as some
of these groups took the further step of
fixing prices, they have in many instances
been prosecuted, but their practical mo-
nopoly has not been affected, and possessing
that there is no need for them to take the
final step of price-fixing. The law of mo-
nopoly—that the charge will always be'reg=
ulated by what the traffic will bear—still
operates. Very recently a gentleman living
in the country near New York secured bids
from contractors in several nearby cities for
the tiling of a bath-room. The bids were
all over $250 and only a few dollars apart.
He happened to find a workman able to do
the work and also a way to purchase the
materials outside the combine, and his bath-
room as a result is costing him less than
$100 for both labor and material. And this
is in one of the trades where there has been
prosecution and punishment for price-fixing.

So to the cost of all the graft and in-
efficiency and jurisdictional warfare and re-
strictive practices and monopoly wages of
the closed shop, we must add the monopoly
profits of material men and contractors in
order to reach the final bill which the com-
munity pays as the price of closed-shop rule
in the building industry. JI submit that
when the closed shop comes to be used as
the cornerstone of a conspiracy between
employers and the unions against the pub-
lic, nothing in the way of further condem-
nation remains to be said about it.

PUBLIC INTEREST MUST BE PROTECTED

There is ever a large host of volunteers
each with his own cure for our industrial
ills. Some of these cures are aimed at the
prevention of industrial warfare, but we
have seen that peace between employer and
worker may become a more serious menace
to society than war. Some of them would
organize labor relations in accordance with
a plan or scheme or formula. But the prob-
lem of labor relations is part of the larger
problem of human relations, and the rela-

18tions among men are matters ef ever-vary-
ing contact and adjustment and cannot be
fitted into any rigid form or plan. If the
fundamental basis of relationship is right,
the form of the relations will take care of
itself. In the industrial field, the obvious
need from the public viewpoint is that those
principles shall be maintained which are es-
sential to a proper basis of relationship and
that in whatever form the relations take the
public interest shall be protected.

In a well-ordered society, rights must be
reciprocal. No individual may enjoy a right
the exercise of which prevents the enjoy-
ment of a like right by some other indi-
vidual. The rights of one must end where
the rights of others begin. It was this fun-
damental truth which was recognized when
our Government was established and our
political system organized upon the basic
principles of individual liberty and equality.
These principles were adopted because, in
studying the history of governments that
had gone before, they were deemed by our
forefathers to constitute the only workable
basis for an organized society. We hear
them proclaimed—perhaps none too oiten—
to the blare of trumpets and the waving of
flags. They are all too seldom recognized
as the essentials to a workable basis for the
practical as well as political relations of
society. More than that, how can they be
denied in the one field and long remain valid
in the other?

WHAT INDIVIDUAL LIBERTY MEANS

Now individual liberty and equality of
opportunity means the right to work open
shop. This does not mean that men have
not also the right to organize and to deal
on a closed-shop basis with anyone willing
to deal with them. It does mean, however,
that when a closed-shop group brings coer-
cion and pressure to bear to compel others
to deal upon a closed-shop basis whether
they wish to or not, they have overstepped
the bounds of proper and lawful action, for
they are denying to those whom they seek
to coerce the free exercise of the individual
right of contract. So long, then, as the

19

 
 
 
 
 
 
  
 
 
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
 
 
  
  
  
 
 
 
 
 
  
  
  
      

7
L

the date

UE

weeks, but
wer should
90ve. Fines
the rate of
3 there are
‘Ss must be
desired.«tt TMs

  

right to operate open shop if the parties
desire is recognized and maintained, groups
of employers and workmen who choose to
conduct their relations upon a closed-shop
basis have a right to do so, provided, of
course, they do not carry their agreements
to the point of a conspiracy against the
public.

As a practical matter, I believe that the
preservation of the right to work open-shop
is an essential to any constructive value to
be derived from closed-shop operation. The
moment that the element of unlawful coer-
cion is removed and it is left to the parties
to choose the form of their relations, the
necessity is at once laid upon the union
which seeks a closed shop to give some val-
uable consideration in return therefor. The
closed shop would need to represent a con-
tribution in the shape of constructive co-
operation or superior efficiency to induce the
employer to accept it. The closed shop ob-
tained by force on the other hand has no
need to win its way by merit and service,
and the irresponsible power which it repre-
sents inevitably leads to evils which react
upon the worker and threaten the structure
or society, Ihe public interest, therefore,
requires that the right of open-shop opera-
tion shall be maintained.

LEGAL RESPONSIBILITY

Another essential which I believe is
equally important to healthful conditions in
industry is that the vast power of indus-
trial combinations should not be exercised
without full legal responsibility. The indi-
vidual who unlawfully injures another is
liable in damages, but the . combination
which does the same thing is not itself so
liable in most of our states. This comes
about because the law has not kept pace
with the growth of combinations. The in-
dividuals of the combination may perhaps
be liable to the injured party, but this is a
remedy with little practical value. The
combination itself whose vast power has
been used to attack, overwhelm and destroy,
is beyond the reach of its victims. Notwith-
standing full and complete evidence that the
Executive Board of the Iron Workers’

20Union had with union funds over a period
of years deliberately destroyed hundreds of
thousands of dollars of open-shop iron work
by dynamite, there was no way open for the
recovery of this damage from the union
treasury. Power without responsibility
must always be abused so long as humans
are human. This condition again is one of
the chief causes for the evils of the closed
shop. If unions were made responsible for
their conduct and agreements and for viola-
tion of the rights of others, they would in
self-preservation tend to improve in charac-
ter and leadership.

There is another measure of general im-
portance, but which, as to the building in-
dustry in particular, is an absolute necessity
before there can be any semblance of sound
and healthful conditions. That is the elim-
ination of the sympathetic strike. We need
not add to the counts of our indictment
against it because no one defends it. The
legal remedies of those attacked are entirely
insufficient, and resort to the courts is the
one unforgivable offense against the powers
which assert their right of absolute control
over the building industry. The inevitable
decree of business annihilation against the
offender is as sure of execution as the orders
of a court of chancery. The public interest
requires that the sympathetic strike should
be made criminal as well as unlawful. Any
association participating in such a strike
should be made liable to the injured parties
and the jury in its discretion be permitted to
assess double or treble damages. In addi-
tion to other penalties, such an association
should also be liable to dissolution at the
suit of the public prosecutor.

MUST GO BEYOND CONTRACTOR

But whatever means are put at his dis-
posal, the correction of the evils in the build-
ing industry and the protection of the public
interest cannot be left to the building con-
tractor. He remains merely an agent, with
no such concern in the matter as will lead
him to undertake alone to challenge a power
whose domination he has long accepted.
There are many contractors in every com-

21

» date

yeeks, but
er should
»ve. Fines
1e rate of
there are

; must be

desired.munity who would gladly have their indus-
try swept clean of the things that have made
it a byword, but there are others who have
found ways to profit under the existing con-
ditions and who do not desire them changed.
There is also a group of great national con-
tractors who occupy the weakest position of
all and they constitute a most important
factor. Their nation-wide operations make
them subject to attack and discipline wher-
ever the closed shop is most strongly en-
trenched, no matter what the conditions
may be in the community where the par-
ticular issue may arise. They cannot be
counted upon, therefore, to assist in any
local movement for betterment of condi-
tions.

A COMMUNITY PROBLEM

The building problem must sooner or later
be recognized for what it is—a community
problem to be successfully dealt with only
by the community. The public is waking
up to this fact and from one end of the
country to the other the building situation
is being taken up by chambers of commerce
and business organizations, and often by
citizens’ committees specially organized for
the purpose. Wherever the public has in-
tervened, much good has been accomplished,
but in no large community where the public
has not taken an active part have conditions
been materially improved. The history of
what these movements have accomplished
would constitute a long story in itself. The
measures taken have depended upon the pe-
culiar circumstances of each locality and
upon the strength and purpose of those con-
ducting the particular movements. In some
of the former union strongholds such as San
Francisco and Boston, the open shop has
been put into operation. In other places,
the attempt has been made to continue
closed-shop conditions, but to secure, under
public supervision, a modification of their
evils and a measure of protection for the
public. In some places the unions’ refusa:
to carry through a program of this kind, az
in Chicago, is resulting in the adoption ot
the open shop as the only final alternati:
But the temporary establishment of the

22open shop under the spur of the enthusiasm
which accompanies community movements
is not enough. When the movement stops,
matters will drift back to their old status.

THE REMEDY

The community in protection of its para-
mount interest must intervene in building
affairs not only to set them right, but to
keep them right. A code of principles es-

sential to efficiency, honesty and right deal- : date
ing should be established and enforced in
the building industry. Aid should be given E

to all those under unjust or unlawful attack
because of adherence to this code. All
forms of unlawful coercion should be elim-
inated, especially the sympathetic strike, and
the right to bargain on a free and voluntary
basis should be restored. Conspiracies
against the public, whether of employers, or
workers, or both, should be exposed .and
destroyed. For these things and many
others that will need to be done, a perma-
nent organization representative of business
and financial interests should be created—a
sort of vigilance committee, if you will—
which should be provided with adequate ma-
chinery and resources for its work and be-
hind which the whole power of the com-
munity could be rallied. With some such
organization established and commanding
public respect and support by reason of its
fearless and impartial attitude toward all
groups or issues, there would be a basis for
real hope of better things.

yveeks, but
er should
ve. Fines
1e rate of
there are
must be
desired.~ +17 OW

 

WHY THE EMPLOYER OPPOSES THE
CLOSED SHOP

From Pamphlet No. 48

1. The employer is asked to make con-
tracts and agreements with organizations
which are not legally responsible for their
fulfillment.

2. The rules of closed-shop unions are
made by men 95 per cent of whom are not
employed in any one establishment and have
no knowledge of its problems. National, as
well as local rules govern the establish-
ments. The working conditions in every
plant are established by outside control,

3. These rules specifically limit the num-
ber of apprentices that may be employed,
thus reducing the number of skilled workers
available for industry. Employers would
also benefit by the greater buying power of
a large number of skilled workers.

4. Closed shop rules and customs restrict
the amount of work which shall be per-
formed. Employers are unable to pay the
more efficient workers according to their
ability.

5. Even where the workers in a closed
shop plant are satisfied with their own con-
ditions, the plant may be closed down be-
cause of sympathetic strikes and jurisdic-
tional disputes.

6. Closed shop leaders and small groups
of wrong-minded employers can make agree-
ments to deprive other employers of business
by shutting off their labor supply, The con-
ditions revealed in New York exist in many
industries and localities.

Honest employers recognize that the
closed shop leads to “exclusive agreements,”
which are opposed because they are dishon-
est, contrary to public policy, and bring fair-
minded employers into disrepute.

 

WILLIAM Howarp Tart:

“The outrage perpetrated upon the entire com-
munity by Brindell and his associates in which some
employers seem to have connived, cannot be too
strongly condemned. Its direct effect has been so to
decrease the construction as to keep up the rents |
everywhere and, indeed to make it well nigh im-
possible to furnish decent shelter for the poor.”

24: Gaylord

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