^tia fork 
 Hntt OJoUege of JKgriculturc 
 
 Stitaca. BJ. f. 
 
 Utbrarg 
 
Cornell University Library 
 HD 8072.C92 
 
 Common sense and labour, 
 
 3 1924 013 854 496 
 
« Cornell University 
 B Library 
 
 The original of tliis book is in 
 tlie Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924013854496 
 
COMMON SENSE 
 AND LABOUR 
 
 BY 
 SAMUEL CROWTHER 
 
 GARDEN CITY NEW TOBK 
 
 DOUBLEDAY, PAGE & COMPANY 
 1920 
 
COPTBIGHT, 1920, BT 
 
 DOtJBtBDAT, PAGE & COMPANT 
 
 ALL BIGHTS RESEBTED, INCLUDINQ THAT OF 
 
 TBANBLATION INTO FOREIGN LANGtrAGE3, 
 
 INCLUDING THE SCANDINAVIAN 
 
 ®.lbtOb 
 
 COPTBIGHT, 1919, BT A. W. SHAW COMPANT 
 
CONTENTS 
 
 CHAPTEB PAGE 
 
 I. The Fundamental Causes of Labour 
 
 Unrest 3 
 
 II. The Relation Between the Employer 
 
 AND THE Employed 21 
 
 III. The Worker and His Wage .... 50 
 
 IV. Wages AND Profit-Sharing Delusions . 77 
 ■ V. The Fetish of Industrial Democracy . Ill 
 VI . When They Get Together .... 136 
 
 VII . The Economic Truths of Work . . . 171 
 
 VIII. The Man and the Machine .... 189 
 
 IX. The Methods and Policies of British 
 
 Labour 219 
 
COMMON SENSE 
 AND LABOUR 
 
COMMON SENSE AND LABOUR 
 
 CHAPTER ONE* 
 
 THE FUNDAMENTAL CAUSES OF LABOUR UNREST 
 
 A LARGE employer who has never had any diflBcul- 
 ties of moment with his workers and who has given a 
 great deal of his time to the study of how the employ- 
 ment relation might in all fairness be adjusted, re- 
 marked somewhat hopelessly the other day: 
 
 "There is something I do not understand in my 
 workers. In former years, we have always been able 
 rather easily to arrive at adjustments and I have 
 rather prided myself, I think, upon the sincerity of 
 the union between myself and those I employ. I 
 have scientifically worked out wage payments and 
 they have always been satisfactory. I have so ad- 
 justed my affairs that the volume of work passing 
 through the shops seldom decreases. If our selling 
 orders drop off, we produce for stock, and for the past 
 
 'Beprinted from Syttem, tht Magazine of Butinest, by permission of A. W. Shaw 
 Company. 
 
4 COMMON SENSE AND LABOUR 
 
 five or six years we have never laid off a man be- 
 cause there was no work for him. 
 
 "But to-day there is something different, there 
 seems to be something stirring, something which I 
 cannot comprehend and I am not sure that the men 
 themselves comprehend — for I have talked frankly 
 with many of them. There is something one might 
 almost call a subconscious restlessness that makes 
 them seem different. I cannot put my finger on it 
 and say 'it is this ' or 'it is that.' The quality eludes 
 me." 
 
 I have heard the same sort of statement from 
 many other employers variously expressed, and un- 
 doubtedly there are new and strange currents circu- 
 lating through the minds of workers everywhere. It 
 is not precisely a profound dissatisfaction with labour 
 as a means of livelihood. It is not so much wages 
 and hours, for although wage disputes are frequent 
 enough, they very often seem rather to be pegs on 
 which to hang trouble than real causes of themselves. 
 With the almost universal habit of eventually grant- 
 ing most demands for wage increases, doubling the 
 increase and then adding it into the cost of the prod- 
 uct, employers generally are not a great deal con- 
 cerned about the wages they pay. 
 
COMMON SENSE AND LABOUR 5 
 
 The matter of hours is on the same basis. The 
 desire for an eight-hour or a six-hour day would be 
 perfectly comprehensible if the workers gave any 
 evidence at all of desiring so to limit their working 
 time, but they seem to want the eight-hour day as a 
 basis of pay and not as a period of work. We have 
 had several strikes because the request for the eight- 
 hour day was granted literally, whereas what the 
 workers wanted was a ten-hour day with overtime 
 during two hours of it. 
 
 The unions have no answer. They have gained 
 the eight-hour day, which used to be a shibboleth, 
 they are talking of and also succeeding in extending 
 union control, but beyond that they have only vague 
 formulas and some interesting excursions into inter- 
 nationalism, possibly with the thought that if you 
 cannot set your own house in order, it is diverting to 
 poke about your neighbour's premises. The progress 
 of events has caught up with trades unions' platforms 
 and the workers are less happy than ever they were. 
 
 The attitude of the worker is curious; his outstand- 
 ing characteristic to-day is a reluctance to work. It 
 is extraordinarily hard to buy good service at any 
 price. Per man production has, to a considerable 
 extent, dropped oflF in America; it has dropped oflF 
 
6 COMMON SENSE AND LABOUR 
 
 50 per cent, in England and Germany. It is hard to 
 get men to work at any wage. You will rarely meet 
 with a manufacturer or a retailer who is not seriously 
 hampered by his inability to obtain employees. 
 
 What is the reason for this restlessness every- 
 where.'' Why is England practically on her back and 
 unable to produce? Why are France, Italy, and 
 Belgium always in and out of great strikes.'' Wliy do 
 you find such an intense dissatisfaction with every- 
 thing here? 
 
 The worker cannot tell you. When he is in the 
 midst of a strike, he can express some specific things 
 which he thinks he wants then but if you give them 
 to him, he will be around again in a week or two for 
 something more, and just as much and just as vaguely 
 dissatisfied as he was before he went on the strike. 
 
 The glib answer to all of this is of course the war, 
 but that is not an answer at all. It is only an evasion. 
 It is as though a man, being asked to write an article, 
 should forward a dictionary to the editor with a com- 
 ment that he would find all that he desired within 
 its covers and that all he had to do was to pick out 
 the words and arrange them. 
 
 The conduct of the war is responsible for the unrest 
 of the working man to-day, but that unrest is very 
 
COMMON SENSE AND LABOUR 7 
 
 slightly a reaction of the years of surging chaos. It 
 is due to the fact that the war activities destroyed 
 values — destroyed the relation between work and 
 production. They opened up to the unthinking mass 
 of the population (employers as well as employees), 
 a vista where somehow in a new order of things an ex- 
 istence might be possible without work — that money 
 is something of itself and can be invoked by prayer 
 or by blasphemy as a kind of manna from above. 
 
 Let us go back and see just what has happened 
 everywhere. The idea prevailed that, because in 
 peace times and in isolated cases you can get pro- 
 duction by offering money, the vast needs of war 
 production could be met by offering money. As a 
 matter of fact, in very few instances was the produc- 
 tion actually greater than in peace, but it was of a 
 different character and because it came in one order 
 given by the Government rather than in some mil- 
 lions of orders given by individuals; the very size 
 quite naturally dislocated reason. It did not seem 
 possible that such amounts could be produced except 
 by extraordinary and dramatic means. It did not 
 seem possible that there were such supplies of com- 
 modities in the world. If you will look back you 
 will find that governments bought feverishly with 
 
8 COMMON SENSE AND LABOUR 
 
 the spectre of a shortage always stalking about them. 
 I do not recall any commodity which somebody or 
 other did not at some time discover to be short, al- 
 though the actual shortages were rare. Whenever 
 anybody attempted the impossible calculation of 
 how much of any one commodity was in this coun- 
 try, he was absolutely certain to find that there was 
 not enough of it. The example of the member of 
 the Quartermaster's Department who happened to 
 be let loose in Spain and promptly bought 4,000,000 
 gallons of vinegar for our army was not unusual. He 
 was not sufiFering from the hallucination that soldiers 
 take beauty baths in vinegar. It was simply that 
 the amount needed passed his comprehension and he 
 therefore bought an incomprehensible amount of 
 vinegar. Probably if the Spanish producers could 
 have dug up a billion gallons he would have bought the 
 billion. He was only one of many thousands who in 
 Washington, in London, and in Paris, with infinite 
 dignity and infinite secrecy, bought everything that 
 could be bought. 
 
 Here in the United States we at no time during 
 the war had an actual shortage of labour, but the com- 
 panions of the commodity shortage sharks discovered 
 a labour shortage and they convinced employers all 
 
COMMON SENSE AND LABOUR 9 
 
 over the country that a worker was a rare bird and 
 one to be caught and kept at any price. The workers 
 were not slow, because they were human, to confirm 
 this impression of their extraordinary value. 
 
 So while on the one hand the Government was 
 buying up everything that was to be bought, they 
 began to induce employers to pay enormous amounts 
 for labour service, thus throwing into the world an 
 overpowering buying power while at the same time 
 taking out of the world the things which might be 
 bought. The quick and inevitable result was that 
 prices began to go up and the high wages to lose their 
 purchasing power. The wages had to be raised and 
 then in order to quiet popular discontent nearly 
 everywhere in the world, the governments started in 
 to fix prices. It has been well said by an economist 
 that although there is no insuperable economic diffi- 
 culty in the fixing of prices, no man has yet been born 
 into the world with the wisdom to fix a price. 
 
 In normal times a price is not fixed by any one, 
 although every little while a few producers do get 
 clandestinely together and think they fix prices. 
 Prices are fixed by the law of supply and demand and 
 both the demand and the supply depend upon the 
 cost of production. The fixing of a single price, there- 
 
10 COMMON SENSE AND LABOUR 
 
 fore, has more results tangental and otherwise than 
 any one has yet been able to estimate. But we are 
 here concerned with the effect upon the cost of pro- 
 duction. 
 
 In England certain prices were fixed so low that it 
 became necessary for the government to subsidize 
 producers, thus wholly destroying the relation with 
 costs of production and fundamentally dislocating 
 the foundation of British labour. 
 
 We did not go to such length here but we did 
 madly follow the theory that production might be 
 had merely by hanging up a bag of money in front 
 of the workers as one suspends a bunch of hay be- 
 fore the mouth of a greedy but unimaginative mule. 
 As time went on, we offered more and more money, 
 although as a result we did not get more and more 
 production. In most instances which I have inves- 
 tigated the successful production came about through 
 the perfecting of means and almost in spite of the 
 money involved. 
 
 Money came too lightly; a man soon discovered 
 that he might get almost as much by working easily 
 as by working hard and of course he worked easily. 
 In spite of all the panegyrics that have been written, 
 such is the war labour record everywhere. The facts 
 
COMMON SENSE AND LABOUR 11 
 
 were not made public but in every country the per 
 man productivity decreased as the war grew older. 
 You can say that it was due to war strain if you like, 
 but the only fact of interest in this connection is that 
 as wages increased the individual productivity de- 
 creased, although perfecting of machine methods 
 may have increased gross production, and in America 
 it did. But the effect of increasing wages and de- 
 creasing production was further to add to the infla- 
 tion of values which is always the companion of war. 
 The governments had unlimited credits and they 
 poured unlimited purchasing powers into markets 
 which had not their usual supplies of ordinary com- 
 modities. Prices shook off their shackles and went 
 a-soaring. 
 
 The worker found very quickly that his dollar, 
 shilling, franc, or mark was not what it seemed to be 
 and of course that aroused his resentment, for there 
 are very few people who have the slightest idea what 
 money really is. If they receive something which is 
 said to be money and it does not turn out to be worth 
 face value, they immediately want to start trouble. 
 It is easy for an agitator to convince them that their 
 money has been depreciated by some capitalistic 
 trick to avoid the payment of high wages. 
 
12 COMMON SENSE AND LABOUR 
 
 As the Government payments everywhere grew 
 and bank credit followed bank credit, the total of 
 bank deposits artificially swelled (for every credit 
 is also reflected in the deposit account) and individual 
 concerns began to show large profits. The workers 
 everywhere in the world viewed this accumulation of 
 capital as proof certain that the radicals were more 
 or less right in saying that it was to the advantage 
 of capital to wage war. What they did not and do 
 not realize is that the bank deposits are largely ficti- 
 tious and that the profit balances of the companies are 
 composed of the same sort of money which they get 
 in wages — that is money which is not all that it seems 
 to be. 
 
 Apparently their delusions are shared by many 
 employers, otherwise we should not see so many com- 
 pany presidents congratulate themselves and their 
 stockholders on the profits earned in war. 
 
 Through all of this time it was thought necessary 
 by all governments, animated by the surprising but 
 universal idea that war patriotism is confined to those 
 in authority, to urge forward all workers by posters, 
 advertising, and literature to the general eflFect that 
 the labouring man was the second line of defence, that 
 the war would be won in the factories and so on. 
 
COMMON SENSE AND LABOUR IS 
 
 The employer and the employee alike were told that in 
 accepting a government contract at a high price they 
 were performing a patriotic duty, a duty quite as high, 
 although different, as that of the soldier who went 
 into the field. Profiteering was stamped patriotic . 
 
 The soldiers in the volunteering days, and this is 
 especially true in England, were promised after the 
 war everything that the recruiting speaker happened 
 at the moment to be able to think of. In England 
 it was generally represented that the man who went 
 out to fight for his country would return to a life 
 of such luxury that the chief precaution in the future 
 would be to see that he was not cloyed by luxury. 
 It was represented to him in effect, if not in actual 
 words, that a wise and wealthy government would 
 care for him, not only while he was with the colours 
 but forever thereafter and a day. 
 
 The worker, viewing his pay more or less on pre- 
 war standards, concluded that governments could 
 pay anything. The returning soldiers, having had 
 complete support through some years, saw no par- 
 ticular reason why the government should not con- 
 tinue that support and in addition felt it was the 
 duty of those for whom they fought to save them 
 from want as they went back into civil life. "Being 
 
14 COMMON SENSE AND LABOUR 
 
 saved from want" depends a good deal on the point 
 of view but, generally speaking, on the receiving 
 end it means a life without work. 
 
 Up until the time of the Armistice none of these 
 matters was serious because few people had the 
 leisure to express themselves. Had peace been made 
 say within a few weeks of the Armistice and all re- 
 strictions everywhere lifted, it is quite probable 
 that industry might easily have returned to an approx- 
 imate normal functioning. But as peace was not 
 made, the armies of England and of Germany were 
 gradually demobilized and industry could not absorb 
 the workers. It could not absorb them in Germany, 
 because the Allied blockade prevented both exports 
 and imports, while England, although not blockaded 
 by a recognized enemy, had just as tight a cordon 
 thrown about her shores by a multitude of govern- 
 ment regulatory boards and commissions. 
 
 The people, not finding work, at once turned to 
 their governments and asked that the promises 
 of support which had been so freely given be re- 
 deemed. They got unemployment allowances and 
 thereupon absolutely confirmed the growing impres- 
 sion that it would be easily possible to live without 
 work and that it was the duty of the corporation 
 
COMMON SENSE AND LABOUR 15 
 
 or of the Government to support its employees or citi- 
 zens without any value being returned by the recipient 
 of the bounty. They got unemployment allowances 
 which in many countries were as great or greater 
 than the pre-war wages. 
 
 The unskilled labourer in England or Ireland re- 
 ceived a higher allowance from the government than 
 he earned as wages before the war. In Germany 
 the average unemployment allowance was actually 
 double the average pre-war wage. 
 
 It will be said at once that these figures mean noth- 
 ing, for the purchasing power of money has decreased, 
 but the fact that money has a variable purchasing 
 power is something that cannot be put into the minds 
 of the mass of the people. They will insist on high 
 wages in order to hve, but they will protest against 
 high commodity prices. You can convince one 
 worker out of every twenty thousand that unless 
 you have high production, high wages mean nothing, 
 but when you have convinced him, he will not leaven 
 the mass. Trades union officers and politic ans find it 
 personally profitable to support the proposition that 
 the offensive subject of work should not be introduced 
 while discussing the infinitely lovely topic of high 
 wages. 
 
16 COMMON SENSE AND LABOUR 
 
 The man who would come out with the following 
 statement would be hissed: 
 
 "It does not make any difference how high wages 
 are, provided they are represented by production. 
 High wages and high production make the ideal 
 situation in industry, but let me tell you with all 
 emphasis that if you ask for high wages and do not 
 offer high production, you will never attain even a 
 living wage, no matter how many dollars you happen 
 to receive. The price of the commodities will over- 
 take and pass the buying power of your wages." 
 
 But this next statement would be applauded, and 
 it is made every day in the week in ten thousand 
 places: 
 
 "You are entitled to ten dollars a day and a six- 
 hour day, five days a week. If the company you 
 work for cannot pay it, then take the company and 
 make them pay it, or turn around and make the 
 Government pay it. What did we fight this war for, 
 anyway.''" 
 
 The first statement is economically true; the second 
 statement is economically absurd. Many of those 
 who voice the second statement know that it is 
 absurd and make it only for the purpose of bringing 
 about a complete disruption between capital and 
 
COMMON SENSE AND LABOUR 17 
 
 labour, so that capital may be destroyed, just As 
 Lenin prints money as fast as his presses can turn 
 it out in order dramatically to demonstrate to the 
 people that money is useless. The second theory 
 has gained ground — as in Lawrence, Seattle, and 
 Winnipeg — and is at the root, expressed or unex- 
 pressed, of what we call labour trouble everywhere 
 in the world. 
 
 The reaction to the paternal war control is that 
 governments exist for the people, that they are some- 
 thing apart, and derive a power and a wealth other 
 than from the citizens, that the workingman is a 
 privileged person who produces all wealth and, there- 
 fore, should have all wealth, even though he does 
 not produce. It is an absurd idea but it finds sanc- 
 tion in many quarters which would be quick to re- 
 sent the implication that they believed any such 
 thing. For instance — "Give a Soldier a Job," 
 "Pay a Living Wage," "Be Good to Your Employ- 
 ees," and like slogans are only reflections of funda- 
 mental paternalism. 
 
 Quite as absurd, however, are the ideas of many 
 capitalists that they are public benefactors in employ- 
 ing great numbers of people; that they do a man a 
 "favour" when they hire him or that they cannot 
 
18 COMMON SENSE AND LABOUR 
 
 cheapen production without cheapening the hire of 
 the human element. 
 
 A few employers have met the question of wages 
 squarely, have paid whatever was asked, and have 
 made up for the high wages by increasing production 
 through better methods, and have cut their selling 
 expense ratio through a more rapid rate of turnover. 
 They have not had to raise their prices to the con- 
 sumer and they are making money. A few other 
 employers are likewise, through frank conferences, 
 asking the men what can be done, but it may truth- 
 fully be said that the majority of employers every- 
 where are filled with precisely the same idea of the 
 sanctity of the value of a coin that the workers have. 
 The employers have often turned backward toward 
 what they think are the old values and of course they 
 meet with the great body of workers marching for- 
 ward to the new values. Since both the employer 
 and the employee are suffering from the same de- 
 lusion but apply it differently, their differences often 
 seem to be scarcely possible of reconciliation. 
 
 The serious part of it all, however, is that in Eng- 
 land and on the Continent unemployment allowances 
 have broken the last bond between wages and pro- 
 duction and are so rapidly inflating the currency 
 
COMMON SENSE AND LABOUR 19 
 
 as to permit the thought that it is not worth while 
 to work for wages. From that opinion it is only a 
 step to the theory of production for use and the 
 entire abolition of capital. That same thought 
 is growing in the United States. Thus far it has 
 not to my knowledge been met by intelligent argu- 
 ment, but merely by denunciation and by somewhat 
 silly falsehoods as to what is going on in Russia. 
 The actual truth concerning what has happened in 
 Russia would be far more effective than police raids 
 and investigations by uncommonly stupid legisla- 
 tors. That which we call Bolshevism is not a cause 
 but an effect. 
 
 Another reflex of the war and its concurrent talk 
 of reconstruction (which talk always went in the 
 direction of confirming the idea that the State owed 
 a duty to its people without the people owing a 
 duty to the State) is the question being asked every- 
 where by returned soldiers: "What did I fight to 
 save?" 
 
 He did not fight to save the estate of his employer; 
 he did not fight for the right to work hopelessly at 
 the starvation wage; he fought perhaps to save his 
 home and fireside, if he happened to have one, and 
 if he did not have one, for a chance some time to 
 
20 COMMON SENSE AND LABOUR 
 
 get one if his fancy turned that way. He wants 
 recognition as a human being — a somewhat different 
 recognition from being handed a slip by a foreman 
 and told to draw his pay and get out because the 
 foreman does not feel well that day. He does not 
 really know what he wants, but it is something dif- 
 ferent from wliat he has. Some say that he is striv- 
 ing for the recognition of the dignity of labour and 
 probably they are right. 
 
 And so it goes throughout the world — this struggle 
 of unphrased forces — this conflict of emotions which 
 are new, incoherent, and which send a man willy 
 nilly in this or that direction. At the bottom of it 
 all, unseen and disregarded, is the broken relation be- 
 tween wage and production. Because they broke 
 that relation and could not mend it, Bolshevism 
 is failing in Russia. The relation is the foundation 
 of society. It is the foundation of our House of 
 State and yet we mostly prefer to tinker with the roof. 
 
CHAPTER TWO 
 
 THE RELATION BETWEEN THE EMPLOYER AND THE 
 EMPLOYED 
 
 A MANUFACTURER in the Middle West spent some- 
 thing more than a hundred thousand dollars fitting 
 up the roof of one of his buildings as a workingmen's 
 club. He had bowKng alleys, billiard and pool 
 tables, plenty of easy chairs, free lemonade on tap, 
 and a special elevator which could carry fifty people 
 at a time and make the trip in something less than 
 half a minute. 
 
 He opened the club with a big bang and then 
 settled back, satisfied to think what a splendid speech 
 he could make at the next trade convention. The 
 title bothered him. Would he select "Taking the 
 Workmen into the Big Family," or "The Place of 
 the Beautiful in the Labour Relation"? The second 
 title made a strong appeal, for it connoted a knowl- 
 edge of psychology and he had lately heard some 
 interesting lectures on psychology. 
 
 On the opening day the workmen crowded the 
 
 21 
 
22 COMMON SENSE AND LABOUR 
 
 club, wandering about joyously on company time, 
 but thereafter the clubbing instinct became sub- 
 normal. Day after day, the noon hour found but 
 half a dozen or a dozen men using the facilities which 
 had been provided for a thousand. The employer 
 began to be worried, he resented the disdain of his 
 generosity, and finally he asked a friend who happened 
 to be in the city to look over the place and find out 
 what was the matter. This friend was the owner of 
 a manufacturing plant in Connecticut, which he had 
 built entirely by his own efforts. He had started 
 as a workman and although he had made money, 
 he had never lost his perspective and was always 
 able to get the workers' point of view. He looked 
 over the place and then he reported: 
 
 ** You have one of the finest club houses I have ever 
 seen. You also have an extremely well-fitted-up em- 
 ployment ofl5ce. The employment manager's oflSce is 
 better than my own. I have never felt that I could 
 afford quite so much good mahogany. 
 
 "Your employment manager looks and acts like an 
 executive and I noticed that he doesn't waste much 
 time on the applicants for jobs. I was there when 
 a Polak came in. The manager asked him where he 
 had worked and what he could do. Then he said: 
 
COMMON SENSE AND LABOUR 23 
 
 " 'I have a job for you at $3.00 a day, you can take 
 it or leave it.' 
 
 "The Polak took it and went on into the shops. 
 Now let me ask you a question. Suppose a buyer 
 came in to see your sales manager and the sales man- 
 ager after telling what you had, said: 
 
 '"These are our prices, you can take them or 
 leave them' — what would you do with him.?*" 
 
 "I would fire him," come back the quick retort. 
 
 "Then let me suggest that you fire your employ- 
 ment manager. Hire a new manager — ^pay him at 
 least $10,000 a year on condition that he never wears 
 a white collar around the works. Give him a plain 
 table and a couple of benches off somewhere in a 
 comer. Tell him to shake hands with the applicants 
 for jobs, take them around the works, show them 
 the club house, and act generally as though he were 
 trying to sell the plant to the worker. 
 
 "The reason that your people do not use the club 
 house and are generally dissatisfied is that you have 
 never sold the company to them. That is, you have 
 never used any salesmanship to prove to them that 
 you are a square man and that this is better than an 
 ordinary place to work." 
 
 The employer took the advice, dropped his speech 
 
24 COMMON SENSE AND LABOUR 
 
 for the time being, and made it his own job to sell 
 himself and the company to the men he employed — 
 to demonstrate that he had not put in the club house 
 in any spirit of charity or as a preliminary to cutting 
 down wages, but only because he thought it was right 
 that all — ^president and employees alike — should be 
 able to have a good time while they were on the job. 
 
 Take another case. Someone had persuaded this 
 particular employer that it was good policy to "take 
 an interest" in employees — that he was temporarily 
 guardian of the careers of those whom he employed 
 and it was therefore his duty to direct them into the 
 right path and create a "happy family spirit." He 
 hired a social worker — a man who was fairly drunk 
 with the milk of human kindness and who squared 
 with all the descriptions of those who are said to 
 radiate happiness. This man did radiate — ^he even 
 ramified all over the place. 
 
 Here is a reel out of one of his days. 
 
 A young man having passed the employment office 
 and being properly ticketed and numbered was sent 
 out to this social relator — he made it a point to talk 
 with each new employee. 
 
 "My boy," began the ameliator, suavely and be- 
 nignly, "this should be a red letter day in your career. 
 
COMMON SENSE AND LABOUR 25 
 
 You have to-day become a part, not merely an em- 
 ployee, of a great organization and it is for you alone 
 to decide how far you shall progress. With diligence 
 you may become president of this company, displac- 
 ing perhaps the great man who now presides over us. 
 
 "I am here to help you, to give you advice and 
 counsel. I shall watch your daily doings and I want 
 you to come to me often and I want you to promise 
 me to learn some new thing every day — no matter 
 how small it may be, learn something." 
 
 The boy dutifully promised and went to work. 
 A couple of days later the social secretary met him 
 coming from the direction of the factory hospital, 
 looking a bit rueful and tenderly nursing a bandaged 
 hand. 
 
 "Well, my boy," beamed the secretary, "you see 
 I haven't forgotten you, what have you learned to- 
 day.?" 
 
 "I learned to keep me fingers out of the cogs." 
 
 Both of these employers really thought that they 
 were doing something in the way of establishing a 
 right relation with their employees, yet neither had 
 given the slightest thought to the fundamentals of 
 that relation. The first established an employees' 
 club, just as he might have endowed a hospital or 
 
26 COMMON SENSE AND LABOUR 
 
 any other charity — although he would have resented 
 any remark to the effect that he held his people to be 
 objects for charity. The second man really took 
 the view that his factory was a good place for a little 
 settlement work although he imagined, with perfect 
 sincerity, that he was helping his people. Both men 
 had quite involuntarily adopted the paternal ap- 
 proach. There is nothing paternal in the relation. 
 
 Let us look somewhat coldly at the bare facts. 
 The employer, representing capital, hires a man, rep- 
 resenting labour, to do certain work, under direction, 
 so that an amount of capital may be put through a 
 series of transformations and complete the cycle of 
 business with a greater value than when it started. 
 
 In swinging through the cycle, various amounts 
 are paid out for wages and other expenses, but unless 
 the intent is to have the capital come back greater 
 than when it started, the operation cannot be classed 
 as business. If the capital unintentionally comes 
 back less than when it started, the business is unsuc- 
 cessful. If it comes back greater, then the business 
 is successful. 
 
 There is nothing essentially eleemosynary in this 
 relation and there is no particular reason why the 
 person or persons who own and direct the progress 
 
COMMON SENSE AND LABOUR 27 
 
 of capital through the cycle should be inclined to 
 regard themselves as being made of a metal different 
 from those who, as employees, add to the value of the 
 capital in its progression. It is but natural to sup- 
 pose that those who own, and certainly those who 
 direct the course of capital, should have a somewhat 
 larger mental calibre than those who only accelerate 
 its progress; but the services which they severally 
 render to society are entirely honourable. 
 
 If the capital returns to the starting point without 
 an increment, it is of very little use to its owner and 
 most emphatically there exists with him no particular 
 reason for again starting it on such a perilous voyage 
 • — because it might come back from the next trip con- 
 siderably battered. 
 
 Unless the worker finds it personally profitable to 
 add to capital as it passes through his hands, there 
 is no particular reason why he should work and there 
 is every reason why he should turn his attention to 
 the devising of some means of living without work. 
 If work does not bring more than a bare existence it 
 can hardly be said to be worth while. 
 
 The most natural thing in the world is for the man 
 whose work permits him only to exist, to turn to 
 something which promises existence without work. 
 
28 COMMON SENSE AND LABOUR 
 
 Of course, the second line leads to dishonesty, but 
 the importance of being honest varies with the point 
 of view. The man who has nothing does not fear 
 the thief. Preaching the importance of property 
 rights to those who have no property is about as 
 effective as preaching in Eskimo purist to a Hot- 
 tentot. In order to be understood we must have 
 some conceptions in common. Even if one could 
 talk mulese it is very doubtful if a mine mule who 
 had never seen the sky would be deeply interested 
 in aeronautics. 
 
 We like to dodge the terms "capital" and "labour" 
 and to say that they are not distinct entities but, 
 because both make money out of the same general 
 set of circumstances, that their interests are mutual. 
 
 The only mutuality that exists between capital 
 and labour is of the variety which exists between a 
 buyer and a seller. In any single transaction it is 
 to the interest of the seller to get the highest price 
 and to the interest of the buyer to pay the lowest 
 price. They are in a sense antagonists. But Amer- 
 ican buyers and sellers have found through bitter 
 experience that it does not pay to cheat. The buyer 
 has learned that if he does not pay a fair price, the 
 seller skimps the goods, while the seller has learned 
 
COMMON SENSE AND LABOUR 29 
 
 that if he charges too much the buyer will not get his 
 money's worth, either in service or on resale, and will 
 not be able to come back to buy again. It is a give 
 and take arrangement without mutuality, but with 
 natural cupidity tempered by forehandedness. 
 
 Naturally we are all in a way capitalists and also 
 all labourers. Although the labourer may be a capi- 
 talist when he has a dollar in his pocket, he is a la- 
 bourer and nothing more when he works for hire, 
 even if he happens to have a million dollars in his 
 pocket. The capitalist is a buyer of labour and the 
 worker is a seller of labour; it only obscures to deco- 
 rate the capitalist with epithets or the labourer with 
 encomiums. There is no moral turpitude involved 
 in being either a labourer or a capitalist. The work- 
 man in selling his services may profiteer — that is, he 
 may sell a poor and useless thing at a high price. 
 The capitalist as a buyer may seek to beat down the 
 price to such an extent that the seller loses. And 
 also he may be a defaulting buyer. But these are 
 individual and not class characteristics; there is 
 nothing intrinsically invidious in either buying or 
 selhng. 
 
 But the parties will not deal with each other con- 
 tinuously unless each finds some sort of a profit. In 
 
30 COMMON SENSE AND LABOUR 
 
 the case of capital it is not profitable to buy labour 
 unless that purchase adds sufficiently to the value of 
 capital to make its engagement worth while. In the 
 case of labour it is not profitable to sell, unless by 
 reason of the sale there results a full family life, a 
 horizon as wide as the sight of the seer, which means 
 an entire opportunity to go forward as far and as 
 quickly as ability propels. 
 
 The proponents of the wage system — that is, of 
 production for profit — say that it is perfectly feasible 
 to bargain and sell in a way satisfactory to both the 
 buyer and seller. The opponents, on the other hand, 
 say that this relation is not possible, that both capital 
 and labour must be abolished and a new system of 
 society inaugurated, in which capital shall be owned 
 in common and production be solely for use and not 
 for profit. This is essentially the present Russian 
 experiment. These two systems are up before the 
 world to-day. 
 
 Capital believes in the wage system — it believes 
 in itself — ^but cool-headed men very frankly acknowl- 
 edge that they do not know how to apply the wage 
 system. 
 
 Labour does not know what it believes. It is 
 more or less in the position of a drunken man, lurch- 
 
COMMON SENSE AND LABOUR 31 
 
 ing down the street with a very indefinite idea of 
 where he is going, and sometimes falling on the capi- 
 talist sidewalk, and again on the anti-capitalist 
 sidewalk. Take, for instance, a recent meeting of 
 the American Federation of Labour. The members 
 set themselves resolutely against Bolshevism (which 
 is essentially production for use) and thus declared 
 themselves in favour of the wage system, but they 
 applauded every attack on capital, they declared 
 for various anti-capitalist schemes, and one man in 
 the course of a discussion on the daylight-saving law 
 thought he had made a splendid point against it by 
 saying it enabled employers to save money! They 
 asked for wages and hours without a word as to re- 
 sults and seemed to repose a vast confidence in sonor- 
 ous phrases. 
 
 The average employer or capitalist — call him what 
 you will — is equally at sea. He puts down labour 
 unrest to pure cussedness, just as though there were 
 any particular reason why a man should work if he 
 does not want to and can manage at the same time 
 to exist. The employer is apt to think that in the 
 management of capital he is entitled as of right to 
 the service of such individuals as he may desire and 
 at the wage he would like to pay them. 
 
32 COMMON SENSE AND LABOUR 
 
 Between the employer and the employee exists for 
 the moment a vast misunderstanding, not so much 
 of each other, but concerning their respective aims 
 and what they are really trying to decide. In this 
 confusion it is those who have given least attention 
 to the theory who claim the greatest public attention. 
 The most serious quarrels are not when the parties 
 know what they want, but when they, not knowing 
 what they themselves want, are certain they are 
 against whatever it is that the other fellow wants. 
 When words and reason fail, force is natural. A few 
 employers want an autocracy of capital and a few 
 employees want a revolution — but both extremes 
 form insignificant minorities here. The parties are 
 equally inarticulate and hence they tend to fight. It 
 is a reluctance to articulate that is causing employers 
 and employees to make ready to do a number of 
 very silly things, rather than sit down and see if they 
 really know what it is all about. 
 
 Reduced to its elements the question is not com- 
 plex. It is this: Is production for use better than 
 production for profit.'' 
 
 The worker wants a place and a dignity in society. 
 He wants an opportunity to live and to expand. 
 When he says he detests work and asks for very short 
 
COMMON SENSE AND LABOUR 33 
 
 hours, he really says that he cannot express himself 
 in his work and therefore needs an outside opportun- 
 ity. 
 
 Why should there be so much more trouble to-day 
 than yesterday? Was not the old way good enough, 
 and where are we going, anyhow? Has a new ele- 
 ment come into the world to change it and is there 
 no way out? 
 
 The quick answer is the war. The war was so 
 big and its effects are so entirely incomprehensible 
 that one may safely blame almost anything on it. 
 Has the war really anything to do with the present 
 situation? 
 
 The war did not create a general desire to live 
 better; the war did not give birth to Lenin and his 
 marvellous faculty for winning the support of many 
 people. The man who was content in 1913 to work 
 at a lathe in an automobile factory through ten hours 
 a day and at a wage is not different from the man who 
 in 1920 professes a complete disdain for the successor 
 of that lathe and says that if he works at all, it 
 is going to be for a precious short time each day and 
 for a lot of money. The mere fact that this man hap- 
 pened during a few years to make something more 
 frankly designed for killing than the automobile 
 
34 COMMON SENSE AND LABOUR 
 
 did not change his character. Then why all the 
 row? ' 
 
 Before the application of power to industry, labour 
 troubles were very infrequent. The employer did 
 not need much capital to begin business. Whoever 
 owned a set of tools might start up on his own ac- 
 count if he had an order or two on hand. The car- 
 penter, the plumber, and the automobile repair man, 
 among others, can do that to-day. One man form- 
 erly worked for another simply because he lacked 
 the courage to venture out on his own. As the ap- 
 plication of power developed, starting a business 
 required more and more capital. The average 
 worker could not look forward to working for himself. 
 
 He still remained, however, a craftsman and could 
 exercise an intelligent creative skill in all that he did. 
 When he made a steam engine, it was his steam en- 
 gine. He and his fellows had worked on every part — 
 it was their steam engine. 
 
 Then came the sub-division of labour wherein a 
 man instead of building all of one thing, built only a 
 part. Gradually that sub-division became more in- 
 tricate, until now in thousands of cases the worker 
 at an automatic machine has but a slight idea what 
 the part he makes is intended for, and no idea at 
 
COMMON SENSE AND LABOUR 35 
 
 all as to whether or not he has made a good part. 
 It is not his part. The opportunity for self-expression 
 has apparently left the job. Work became only an 
 uninteresting ordeal out of which the means of subsis- 
 tence might be had. Capital — ownership of the 
 machine — became the whole thing, and the worker, 
 feeling his inferiority, bowed to capital. And capital, 
 acting after the manner of a short-sighted buyer, 
 thought only of buying labour at the cheapest price. 
 The conditions in the industrial districts of 
 England — the under-sized, under-nourished British 
 Tommy — are striking evidences of how far that domi- 
 nation could go. We did not go so far here, but it 
 must be said in all frankness that the continuous 
 supply of ignorant immigrants gave the buyer of 
 labour a distinct advantage which he was not slow 
 to grasp. We like politically to talk about the great 
 American workman, but it is many years since we 
 had any American workmen. The native-born 
 American, as the machine became more prominent 
 than the man, passed on to the direction of industry, 
 or got out altogether. The newer generation took 
 the white collar and went into the offices, so that to- 
 day it is rare to find a native-born American in a 
 shop. 
 
36 COMMON SENSE AND LABOUR 
 
 The theory that the machine is the whole thing 
 is a fallacy. It has been demonstrated that no 
 matter how perfect the machine may seem to be, it 
 is more eflfective when its attendant has its mastery 
 than when he is but a human adjunct. 
 
 Robert B. Wolf made some interesting experiments 
 in this hne. He was manager of a large paper mill, 
 turning out news print. One of the most important 
 processes is that in which the wood and the chemicals 
 are mixed in a "cooker" at a certain temperature. 
 The quality of the finished product depends to a large 
 degree upon the evenness of this process. The cook- 
 ing machines are more or less automatic and the 
 labourers attending them are regarded as "unskilled." 
 The men did not know why they did anything, 
 neither did they know the results of their work. 
 
 Mr. Wolf arranged that samples of each heating 
 should be taken and he had the data on each plotted 
 on a chart across which ran a straight line represent- 
 ing the standard desired. As each "cooking" was 
 finished the workers had before them in dramatic 
 form the results of their work. They could see 
 whether they had done well or ill and very quickly 
 they wanted to know why. If one lot deviated far 
 from the standard, they investigated to discover why 
 
COMMON SENSE AND LABOUR 37 
 
 that had happened and they used the results of their 
 investigations on the next lot. This mill had been 
 turning out a very low grade of pulp which, taking 
 the standard as a hundred, seldom ran above eighty; 
 within six months, under the new system, the men were 
 regularly averaging above ninety-five. What is 
 more, they turned out nearly double the former 
 quantity. The workers gained no direct financial 
 benefit from their increased skill, but they foimd an 
 interest in life and consequently in their work which 
 they previously had not. That is, being given the 
 knowledge which permitted them to become masters 
 of the machine, they exercised their creative instincts 
 and more than doubled the value of the machine. 
 Where they had before worked shiftlessly, they now 
 worked steadily. Considered as machines these 
 men had been inefficient; considered as men, they 
 became efficient. 
 
 Sweeping a factory floor apparently'requires a mini- 
 mum of intelligence — any one can sweep. But is not 
 a job which requires no intelligence the better for 
 its addition? Take this instance. A factory had 
 twenty men who wandered about sweeping floors with 
 tender regard for their own energy and stop- 
 ping together when not under observation. That 
 
38 COMMON SENSE AND LABOUR 
 
 factory was always dirty. An engineer hroke up 
 this leisurely gang and divided the factory floor space 
 into zones, varying in size according to the amount 
 of debris which daily collected. He put a sweeper 
 in charge of each of these zones and made it the duty 
 of that man to keep that zone always clean. Inspec- 
 tion might occur at any time. If the floor were clean 
 the sweeper got a mark which entitled him to a spe- 
 cific addition to his wages. Within a month ten 
 men were keeping that factory spotlessly clean and 
 none of them was working as hard as before. In- 
 stead of a shiftless gang always dodging work, there 
 were substituted a number of intelligent caretakers 
 each of whom made much more money than a sweep- 
 ing job is supposed to pay — ^yet it cost the company 
 considerably less for sweeping than before. What is 
 more to the point, they had a clean factory instead 
 of a dirty one. 
 
 But in general, industry has not to any large de- 
 gree recognized the human factor excepting as some- 
 thing which might be stimulated to more intense 
 work by hanging up a money bag. This is in appar- 
 ent contradiction to welfare work — to the prevail- 
 ing desire to provide better living conditions, cleaner 
 shops, and facilities for amusement and recreation. 
 
COMMON SENSE AND LABOUR 39 
 
 But these provide for humanizing surroundings — not 
 the work itself. 
 
 The worker has simply been a machine — a mere 
 adjunct without a place in society. Regardless of 
 whether his work was big or little, high-paid or low- 
 paid, he was hired only because he could do some- 
 thing which no machine had yet been designed to do. 
 The impotence of that position is being resented, and 
 if you will investigate the more recent strikes you 
 will discover that wages and hours are not the real 
 causes, but are merely convenient modes of expres- 
 sion. Most of the strikes abroad are against capital as 
 such, although they are expressed in money and hours 
 values. For instance, in the great Clyde strike in 
 1919, the leader told me very frankly that they were 
 asking for forty hours and higher wages, not in the 
 expectation or with any particular desire of getting 
 them, but simply because they wanted to ask for 
 something the employer could not give and if their 
 demands were gratified, then they would again strike 
 for still shorter hours and still greater pay, until 
 finally capital would throw up its hands and quit. 
 They wanted to go on to production for use. The 
 I. W. W. follows the same theory here, while most 
 of the unions that presently sanction strikes in Amer- 
 
40 COMMON SENSE AND LABOUR 
 
 ica couple union recognition with the money de- 
 mands. Union recognition is only a step toward 
 greater dignity for the worker. It is the loss of posi- 
 tion and dignity which hurts the worker and espe- 
 cially here in America where we have so little class 
 consciousness. 
 
 The unions are in an anomalous position in all this. 
 They say that they want the "closed shop " and union 
 recognition, in order to make collective bargaining 
 universal and thereby force the very highest rate of 
 wages. They want high wages and low prices, which 
 two desires are not in the least incompatible, but 
 which the unions render incompatible by opposing 
 the introduction of such methods as are directed 
 toward making high wages also spell high produc- 
 tion. The unions have had to oppose these methods 
 because most of them were directed toward forcing 
 the worker to a pace which hurt his health; in order 
 to satisfy their constituents they have had to op- 
 pose all methods, good or bad, which lead to better 
 work. 
 
 They have had to oppose high production also, 
 because the theory is widely held, especially in Eng- 
 land, that there is only a certain amount of work 
 in the world to do. There it resulted in the strict 
 
COMMON SENSE AND LABOUR 41 
 
 limitation of production on the theory that the less 
 work a man did the more men would find work. Be- 
 fore the war if an English manufacturer introduced 
 a machine capable of turning out a thousand parts 
 a day, and the worker with his old machine had been 
 capable of turning out only 500 parts a day, then the 
 union would either set a limit on the new machine 
 of 500 parts, or so raise the rate that the increased 
 efiiciency of the machine would be absorbed in the 
 higher wage. The English unions removed the limit 
 on production for the period of the war, and although 
 it is popularly supposed that they have now agreed 
 not to re-establish those limits, I could not find, while 
 in England recently, any actual evidence that the 
 unions had taken on a new economic theory. On 
 the contrary, unemployment has served to strengthen 
 the old theory, and in cases where the restriction of 
 output was removed, the men, with or without the 
 sanction of the union, immediately replied by striking 
 for hours so short that even the former limit of pro- 
 duction could not easily be reached. 
 
 It should be perfectly apparent to everyone 
 that the progress of industry, if it is to increase, has 
 to be constantly in the direction of the cheapening 
 of output. It takes only a moment's thought to 
 
42 COMMON SENSE AND LABOUR 
 
 prove the fallacy of the theory that there is only so 
 much work in the world to be done. The buying 
 power of a people cannot be estimated. Yet em- 
 ployer and employee alike think that markets have 
 limited capacities. Because a certain country bought 
 5,000 automobiles in one year at a price is some in- 
 dication that in the next year it will probably buy 
 at least that many at the same price. On that theory 
 unions limit production and owners make desperate 
 efforts to keep competitors out of the market. But 
 if we lower the price of an article, then we tap a new 
 buying power which cannot be estimated and we 
 provide more work for the workers. They have 
 more money to spend and further swell this new 
 buying power. 
 
 The Ford car is the best illustration of how lower- 
 ing a price not only uncovers, but adds, to hidden 
 purchasing resources, and the extraordinary part 
 of it all is that the sale of the inexpensive Fords 
 seems to increase the demand for more expensive 
 motors — which only goes to show that probably one 
 of the reasons we have not found a way to correlate 
 the parts of industry is that we really do not know 
 what industry is. 
 
 No economist has yet been able to trace, in other 
 
COMMON SENSE AND LABOUR 43 
 
 than the most superficial manner, the relation be- 
 tween price and demand. We can find in a single 
 year that lowering theprice of a single article increases 
 the demand for that article by so much, but we do 
 not know how greatly the demand for other articles 
 is increased thereby. About all that we can safely 
 say is that no single factor in industry is static. The 
 productive capacity of a man or machine is not static 
 and neither is the buying power of a market, for both 
 of these depend finally upon the ingenuity of the in- 
 dividual, which is something which cannot be mapped 
 and charted. 
 
 If any accurate national statistics have ever been 
 compiled anywhere, which I doubt — certainly the 
 most accurate would have been compiled in Germany. 
 (Among the various crimes for which Germany might 
 well be tried, not the least is the responsibility for 
 the present international passion for statistics.) 
 But take their estimates of the food supply. When 
 I was in Germany in March, 1919, the government 
 had divided up all the food of the country on a per- 
 cajnla basis and had rationed it out in miserable little 
 doles at fixed prices. That was all the food which 
 the most accurate statisticians in the world could 
 discover in Germany. But I could not find a single in- 
 
44 COMMON SENSE AND LABOUR 
 
 dividual who was not consuming, in addition to his 
 ration, at least three times as much food bought on 
 the outside, and the well-to-do people not infrequently 
 did not even bother to draw their rations. In the 
 cold, clear, statistical eye of the government this 
 additional food did not exist, because it was not on 
 their ledgers. 
 
 Coming back to the field of labour, statistics here 
 are equally useless, except as affording material for 
 the compiling of startling tabulations on the state 
 of the nation. New York, beginning about 1915, 
 developed an uncontrollable desire for social work 
 and an equally uncontrollable desire that each bit 
 of work should start with a comprehensive census. 
 Somebody wanted to take up farm labour in a serious 
 way and of course they began with a census. They 
 delegated the school teachers all over the state to 
 discover from the farmers of their districts how many 
 hired men would be required during the year. The 
 farmers, since it did not cost anything to hire a man 
 mentally, were liberal in their estimates. A farmer 
 who had been accustomed to getting along with one 
 additional man thought that he could use three in 
 the spring, foiu* in the harvest, and perhaps two in 
 the fall. Thus he put down that he needed nine men. 
 
COMMON SENSE AND LABOUR 45 
 
 The investigators also compiled statistics on the 
 number of farm hands available. 
 
 When the results were tabulated at Albany, they 
 were indeed startling. Comparing the nimiber 
 of men needed with the number of men available, 
 there did not seem to be a chance in the world that 
 New York would be able to plant or harvest any 
 crops, and out went the news that New York was in 
 a shocking way for farm help. Then somebody hap- 
 pened to note that the demand for farm labour was 
 several times greater than what had been thought to 
 be the entire agricultural population of the State, 
 which seemed odd indeed. They checked the census 
 in a few districts and found enough errors to with- 
 draw all the results. But in the meantime, the farm 
 labourers of New York had been officially informed 
 that they were among the rarest and most valuable 
 creatures on earth and they fixed their wages accord- 
 ingly. That census was checked; most census re- 
 turns are not. 
 
 For instance, at no time during the war was there 
 a shortage of labour, yet a Government census com- 
 piled on much the same lines as the New York farm 
 census showed such a shortage that employers every- 
 lyhere started bidding wildly for men. 
 
46 COMMON SENSE AND LABOUR 
 
 When we start out to remake society on the basis 
 of statistics, it is perfectly certain that we shall break 
 something, but it is not at all certain that we shall 
 make anything. What the world succeeded in 
 breaking during the war was the relation between 
 profits and production. 
 
 High wages and high profits can be legitimately 
 earned only by improvements in methods which 
 lower the price of the finished article. Then the 
 wages and the profits retain their purchasing power. 
 But when wages and profits are obtained by adding 
 to the price, the actual increase in purchasing power 
 is but temporary. The increase romps around the 
 circle and both the employer and the employee find 
 that the additional money they thought they had 
 made does not really amount to anything. This 
 is so self-evident that it is never recognized. 
 
 The cost of living is regulated by the cost of produc- 
 tion but, during the war, the cost of production being 
 disregarded, wages were soon demanded on the basis 
 of the cost of living, and capital's profits were like- 
 wise so based. 
 
 The Emergency Fleet Corporation gives probably 
 the best sample of the absolute destruction of any 
 relation between cost and production. That cor- 
 
COMMON SENSE AND LABOUR 47 
 
 poration, having undertaken a job far too big for 
 any human organization, thought it might accom- 
 plish miracles by spending money. It spent the 
 money but did not accomplish the miracles. It had 
 all kinds of welfare workers, all kinds of employment 
 policies, and also an infinite number of employment 
 experts, but the eflSciency of labour was less than 
 40 per cent, and did not begin to approach the eflS- 
 ciency of the baseball teams by which the units were 
 so adequately represented. 
 
 I have noted that the progress of industry pro- 
 duced a situation in which the work did not absorb 
 the creative instincts of the individuals. The 
 Emergency Fleet workers found more to interest 
 them in their baseball teams than they did in 
 their work. They could not be attracted to work 
 by money. 
 
 Considering all these factors, is there any particular 
 reason why industry should not be disturbed.'' If 
 the work itself does not satisfy and the money which 
 one gets for the work does not satisfy, then what is 
 left? If we seek to justify the wage system, is it 
 not entirely necessary to have an expression of wages 
 in terms of production? 
 
 The public is patient and long suffering, but when 
 
48 COMMON SENSE AND LABOUR 
 
 any group of employers or employees get together 
 and decide that each will take a fine big wad of 
 money and pass on the cost to the public, the public 
 eventually gets its revenge — although quite uninten- 
 tionally — by destroying the purchasing value of the 
 increments which the producers have so blithely di- 
 vided among themselves. 
 
 If employers and employees believe that it is the 
 count of money and not the purchasing power that 
 matters, and if they conceive that the democratic 
 control of industry is for the purpose of presenting 
 a united front against the public, then they can 
 only prove in the end either that the Bolshevists are 
 right, or at least that they are not wrong and that 
 the wages system is a failure. 
 
 But there is no need for that pessimistic view. 
 Throughout the country a great deal of common 
 sense is at work and there is a growing conception 
 that capital and labour are complementary, that it is 
 perfectly possible to effect a bargain and sale with a 
 reasonable profit to both sides and without more than 
 a natural amount of bickering. And further, that 
 there is enough slack in industry to provide for good 
 wages and profits without raising ultimate prices. 
 
 When a bank hires a president for $50,000 a year, 
 
COMMON SENSE AND LABOUR 49 
 
 the operation is not one of stilted acrimony, but an 
 amiable give and take without a loss of dignity on 
 either side. 
 
 Why is there no trouble here? Because they are 
 dealing on a level plane. Which points the way out. 
 
CHAPTER THREE 
 
 THE WORKER AND HIS WAGE 
 
 They wanted lathe hands and they wanted them 
 badly. The lid had been taken off costs. All that 
 the Government asked was production, and to the 
 factory management, production meant men and 
 more men. 
 
 Jim, we shall call him, slouched into the employ- 
 ment oflBce. In ordinary times he would have passed 
 back through the door faster than he came in, for that 
 estabhshment did not employ "rum hounds" or 
 tramps, and Jim was obviously both, but the place 
 needed men. And Jim answered the general descrip- 
 tion of a man. 
 
 "Can you run a lathe?" the employment agent 
 asked, skeptically. 
 
 "Sure," came from Jim, nonchalantly, "any of 
 your tools." 
 
 "All right," said the agent, "I'll put you to work." ' 
 
 This was supposed to be a first-rate company. 
 It called itself "eflScient"; it had welfare work, all 
 
 50 
 
COMMON SENSE AND LABOUR 51 
 
 kinds of mechanical conveyors, a gross or so of "Do 
 it Now" signs, and, since it had taken on munitions 
 work, Liberty-Bond, Win-the-War, Red-Cross, War- 
 Saving-Stamps, and nearly every other kind and 
 variety of poster decorated the entrances and the 
 blank walls of the shops. The management prided 
 itself on being up to date and hustling. 
 
 Jim went to work on a lathe, his particular job 
 being known as the "second rough turn," which 
 means that the shell forgings were turned to the 
 point where they had just enough rough metal left 
 to be cleaned up on the finishing operation. Jim 
 soon found that his lathe was not well suited for the 
 work — but, being on day rate, it did not concern him 
 much. He was more interested in what he was going 
 to get — not what the company would get. So at 
 noon he made a play for an advance in pay and got 
 it. 
 
 The lathe operation at first seemed right enough; 
 they used a light feed making two cuts. A heavier 
 feed did not seem possible. The very novelty of 
 being at work again — although it was only choice 
 that had kept him out of work — roused in Jim some- 
 thing of the old craftsmanship. He saw that the 
 way the tool was ground caused it to absorb too much 
 
52 COMMON SENSE AND LABOUR 
 
 power. This particular firm allowed its hands to 
 grind their own tools. Jim reground his and found, 
 as he had expected, that the whole operation could 
 be done in one cut instead of in two, and then a little 
 more experimenting convinced him that a higher 
 speed might be used. The net result was that by 
 noon of the second day he raised his output of six 
 shells per hour to twelve. Jim was rather inclined 
 to be proud of himself. 
 
 At the noon hour the man on the next machine, 
 whose name happened to be Slim, sidled up to Jim, 
 and asked somewhat cautiously, "Got a union card?" 
 
 "No," snapped Jim, "and I ain't going to get 
 none." 
 
 In the middle of the afternoon the foreman, who 
 had hitherto given no attention whatsoever to Jim, 
 held a moment's conversation with SUm and, turning 
 to Jim, demanded: 
 
 "What are you trying to do, wreck that machine? " 
 
 "Do you see it falling apart?" snapped Jim. 
 
 The foreman did not answer. Instead he turned 
 to Slim: "Show that guy how to run his machine." 
 
 "Have you got that card yet? " was the instruction 
 from Slim. 
 
 "No," came back from Jim, "are you capping for 
 
COMMON SENSE AND LABOUR 53 
 
 the union? What do you get out of it? What's the 
 matter with me, ain't I doubled the production? 
 There ain't a machine in this place that is doing half 
 what it ought to." 
 
 " You can that stuff," said SUm. "We are looking 
 out for ourselves. If we doubled up we would catch 
 up with the forgings and half of us would get the 
 gate. Anyhow, I ain't going to break my back lug- 
 ging that many forgings. When are you going to get 
 your card? " 
 
 "I ain't going to get any." 
 
 "You ain't, eh, that will be all for you," snarled 
 Slim, and beckoning to the foreman he went on: 
 
 "This guy don't know nothing about a lathe. 
 He'll smash this one before the day is out." 
 
 The foreman lost no time: "Go get your money 
 and beat it." 
 
 "Beat it? Where's the super?" yelled Jim, thor- 
 oughly mad. 
 
 "The super won't see you, I'll attend to that," 
 grinned the foreman. "All you've got to do is to 
 beat it." 
 
 Jim got his money from the cashier's cage, then 
 determinedly he headed to the general manager's 
 office only to be sent from there without a hearing 
 
54 COMMON SENSE AND LABOUR 
 
 to the superintendent, whose stenographer quickly 
 shifted him to the employment office, and in another 
 minute he was out on the road again. The intelli- 
 gent employment manager informed him on the way 
 out that he wished bums would keep away from that 
 plant. 
 
 Some weeks later the president of the company, 
 in consternation because the plant was steadily run- 
 ning behind the government production schedule, 
 retained an industrial engineer of reputation, who, 
 after a very little study, brought all of those machines 
 to the one-cut basis and increased the speed of the 
 feed, thereby saving 216 seconds on this one opera- 
 tion alone and increasing the per-machine production 
 of 67 shells in a ten-hour day to 128 shells. 
 
 The contract was for half a million shells and the 
 men on this operation were paid $5 a day. Trans- 
 lated into dollars the saving in labour on this single 
 operation of the contract was $15,000, and that with- 
 out taking into account the saving on overhead ex- 
 pense. 
 
 If you will just think over that incident you will get 
 a clue as to what wages really mean — and when they 
 are high and when they are low, and that the amount 
 of a wage is not an absolute but only a relative 
 
COMMON SENSE AND LABOUR 55 
 
 fact. When Jim entered that shop the wages were 
 too high regardless of the profits of the company or 
 any other factor; because full value was not being 
 given for wages. Such a wall of ignorant prejudice 
 had been erected that any suggestion for better 
 methods was resented. The suggestor found himself 
 out on the street, a "bum" — ^yet every man in that 
 department might have increased his pay by one 
 third without working a bit harder than he did be- 
 fore. The foreman and the men did not know their 
 business and the management, being ignorant of such 
 a condition, therefore did not know its business. 
 
 It seems almost incomprehensible that a man 
 should be fired for suggesting a better way to work, 
 yet in two thirds of the manufacturing concerns of 
 the United States a suggestion that there is a better 
 method will be met by a snarling, "Who's running 
 this place, anyway? Your work ain't none too good 
 at that." And an insistence on the suggestion will 
 be considered such a personal insult that the man 
 will be slated for firing at the first convenient oppor- 
 tunity. 
 
 The curious part of it all is that in most discussions 
 of wages, what the man does for a wage is seldom 
 considered, while page after page of testimony is 
 
56 COMMON SENSE AND LABOUR 
 
 taken as to how much it costs to live, although it 
 must be self-evident that as long as we work under 
 a wage system, if production be not returned for 
 wages, then a living wage can never exist. Inev- 
 itably a wage paid which is not wholly earned must 
 be added into the price of the finished product and 
 eventually raise the prJbe of all products, so that when 
 the wage earner goes to buy he is bound to find his 
 money insufficient. 
 
 Two glaring examples of this are England and 
 Germany to-day. In both countries great numbers 
 of people are getting unemployment allowances. 
 They are paid for doing nothing, while those who 
 are at work are giving but little in return for their 
 wages. The consequence ia that the price of all 
 commodities is so high that although the workers 
 are receiving unheard-of sums they are not able to 
 live as well, in most cases, as they did before the war. 
 
 If a man should buy a tract of land and then 
 instead of ploughing and sowing he should merely 
 sit on his porch and contemplate, he would get scant 
 sympathy if he said that his income from the farm 
 was wholly insufficient to support life decently. Yet 
 that is exactly what millions of workers are doing 
 to-day and are asking for Government aid because 
 
COMMON SENSE AND LABOUR 67 
 
 of the straits in which they find themselves — because 
 they will neither plough nor plant. 
 
 There are two sides to this. Some workers are 
 willing to plough and plant, but they think that the 
 owner of the field takes more than is coming to him — 
 that is, the employer is getting too much and they 
 are getting too little. There are employers just as 
 unintelligent as the workmen, who think that they, 
 too, can get something for nothing — that they can 
 get production without using brain power in the 
 movement of their capital, in the planning of the 
 work, and in the adequate paying of their men. 
 Ignorance is not a class trait and, comparatively 
 speaking, there are just as many employers who do 
 not know how to do their work as there are workmen 
 who do not know how to do theirs. That is one of 
 the reasons that we are having so much trouble 
 about wages. 
 
 Spurred on by the cost of living and not a little 
 convinced that maybe something after all can really 
 be had for nothing, the wage earner has taken the bit 
 into his teeth and is off at a gallop. It remains to be 
 seen whether he will tire himself out before he spills 
 the milk wagon. 
 
 The trades unionists, headed by Mr. Gompers, 
 
58 COMMON SENSE AND LABOUR 
 
 say, after the manner of oracles, that wages must 
 stay up. A few impolitic owners say that wages 
 must come down and at once, but whenever an or- 
 ganization attempts to reduce wages it has a strike. 
 
 The workers and the employers alike talk about 
 wages as though they were definite payments quite 
 detached from mundane affairs and as though a 
 dollar yesterday were the same as a dollar to-day 
 and a dollar to-morrow — that there is some particular 
 sanctity attached to the payments they made back, 
 say, in 1913 or 1914. Both sides quite forget that, 
 since the beginning of time, the average worker has 
 considered his wage too low, and the average em- 
 ployer has considered that same wage too high. 
 Neither side talks of production and its relation to 
 wages, but they agree that a dollar is a specific thing 
 and, for the purpose of wage argument, they are very 
 apt to take it as a standard of fixed value. The 
 employers forget that the dollar-a-day man disap- 
 peared long before the dollar watch went off the 
 market and that we to-day are dealing ina different 
 sort of a currency. A moving-picture producer who 
 is thoroughly acquainted with the country said to 
 me most significantly not long since: 
 
 "We used to reckon the nickel as the multiple 
 
COMMON SENSE AND LABOUR 59 
 
 of value for admission but now it is the dime. It is 
 foolish to raise an admission fee only five cents. 
 We have made many experiments and we know that 
 the man who formerly had a ten-cent show has just 
 as big an audience if he goes to twenty cents as if he 
 goes to fifteen." 
 
 Whether wages will stay up or come down does 
 not depend upon the employers, or upon Mr. Gomp- 
 ers, or upon any other man or group in the world. The 
 particular number of counters used is not of the slight- 
 est importance anyway. Wages are too high when 
 they do not give production. They are too low not 
 when they do not support life, but when the return 
 to the employer is higher than it should be. This is 
 a very indefinite statement, but the whole matter of 
 wages is indefinite because it gets down to particu- 
 lar cases, and the balance between labour and capital 
 is not a thing which can be decided, except in the 
 crudest manner, by national boards, for it is largely 
 a matter of individual brains. Nationally fixed 
 wages promote sloppy production and inevitably 
 raise prices. 
 
 There is no particular reason why there should be 
 a limit to wages, unless we are prepared to say there 
 is a limit to skill and intelligence. Skill and intelli- 
 
60 COMMON SENSE AND LABOUR 
 
 gence are as much the business of the employer as 
 they are of the worker. When an employer says 
 he cannot pay more than $5 a day in his business 
 he really says in effect: "I have reached my limit 
 of intelligence in the conduct of this business and I 
 do not know how further to improve the process of 
 fabrication." 
 
 Take a case in point. A factory making auto- 
 mobile parts in Cleveland was swamped with orders. 
 It had risen through a somewhat hazardous career, 
 having been originally financed on about half a shoe 
 string, and like so many firms connected with the 
 automobile industry, it went ahead faster than its 
 capital. It wanted to borrow money, but the 
 security from the banking standpoint was none too 
 good and the only rates offered were exceedingly high. 
 The workmen asked for higher wages but the cost 
 sheets showed that the company could not pay 
 materially higher wages without so increasing the 
 cost of the product that it would lose business to 
 competitors. 
 
 In their straits the company had recourse to an in- 
 dustrial counsel. He discovered a number of things. 
 Among them was that by the bad arrangement of the 
 machinery, stock room, and the transportation in- 
 
COMMON SENSE AND LABOUR 61 
 
 side the plant, 60 per cent, of the total shop wages 
 was paid for walking and not for working. He 
 found that the concern was carrying nearly a million 
 dollars' worth of raw stock whereas it used only about 
 $300,000 per month and all of the stock was at that 
 time readily procurable from day to day. He cut 
 down the stock, rearranged the factory, and ad- 
 justed credits so as to be able to turn the capital 
 every sixty days instead of slightly more than once a 
 year, with the result that this concern foimd that it 
 did not need more capital at all. It needed only 
 better management and planning. The managers 
 arranged to pay the men on performance and shortly 
 they were able, with the former plant facilities and 
 without increasing the number of men, to do nearly 
 double the business which they had previously 
 thought impossible without a large increase in capital. 
 The workers not only earn large amounts but the 
 company has greater profits than ever before. 
 
 If that company had succeeded in borrowing all 
 the money it wanted it would not have put its house 
 in order, but instead it would have gone sprawling 
 along wasting money in every direction and trying 
 to pay a satisfactory dividend on the additional 
 capital which it did not need. With all of this man- 
 
62 COMMON SENSE AND LABOUR 
 
 agement wastage added into the price of the product 
 it could not adequately have paid the men. 
 
 The workers are quite right when they say that 
 capital which performs no service in an enterprise 
 should not expect a profit and, although the largest 
 dividend paid upon capital will seldom mean a con- 
 siderable increase in wages if spread over the dividend 
 period, yet the principle is entirely correct that 
 watered stock or idle capital should not expect to re- 
 ceive a dividend. The converse is equally true, 
 workers who insist that more men than are necessary 
 be kept on a job should be prepared to pay the wages 
 of those men. And men who do not give a return 
 are no better than capital which does not give a 
 return. 
 
 But in many cases wage disputes do not seem to 
 turn so much on the gross wages paid as on the rela- 
 tion to what the company itself is earning. A very 
 large company, which is noted for extraordinary 
 stupidity in treating with workers, not long since an- 
 nounced a cut in wages and almost at the same time 
 a special dividend to stock holders, and very naturally 
 and very properly they immediately had a strike on 
 their hands. This strike will cost them consider- 
 ably more in lost business and in idle plant charges 
 
COMMON SENSE AND LABOUR 63 
 
 than the comparatively small amount of money 
 which they expected to save by cutting wages. It 
 is not so much that workers object to the reduction 
 of wages as they object to being taken in, to being 
 made the goats, so to speak, for extraordinary profits. 
 Profits may not be extraordinary but if the workers 
 think they are, it amounts to the same thing. If 
 a thoroughly representative body of the workers is 
 supplied with all the facts, wage adjustments on a 
 fair basis can always be arrived at. 
 
 An illustration of this is the Filene Store in Boston. 
 Many years ago E. A. Filene received a protest from 
 a cashier who, being accidentally short in her ac- 
 counts, asserted that the sum should not be deducted 
 from her wages because when she was over in her ac- 
 coimts it was the company and not she who received 
 the money. She thought mistakes could work both 
 ways. Mr. Filene said: "Let us leave it to a third 
 party." They did, and the third person decided 
 against the firm, but the idea gave such general sat- 
 isfaction that out of it grew a cooperative association 
 of the employees which now to a very large degree 
 helps in the management of the store. This coopera- 
 tive association appoints a committee to audit the 
 finances. Every employee in that store knows how 
 
64 COMMON SENSE AND LABOUR 
 
 much the company makes and more or less accurately 
 the salary of every executive oflficer, and although 
 they do not fix their own salaries, yet through a sys- 
 tem of committees and arbitration boards every 
 person who believes that his salary is not right has an 
 opportunity to show why it is not right. The em- 
 ployees have a flat wage and a commission on all 
 sales made above the point where they have earned 
 their wages according to the calculation of selling 
 expense. It is a curious fact that the decisions of 
 the board of arbitration will from year to year aver- 
 age about one half in favour of the company and one 
 half in favour of the employees. 
 
 Or take another case, which has to deal with 
 "roughnecks," with unskilled labour, and with the 
 class of anarchists and I. W. W. who staged the 
 Seattle strike. When General Disque went into 
 Oregon and Washington to get out aeroplane wood, 
 he was met with labour conditions about as serious 
 as it is possible to conceive. The employers were 
 mostly men who had once been workers. They were 
 hard-headed and hard-fisted. They fought to keep 
 up prices and to beat down labour. They hired a 
 man when they needed him and they fired him the 
 moment his services were unnecessary. The labour- 
 
COMMON SENSE AND LABOUR 65 
 
 ing men, a large number of whom were ignorant for- 
 eigners, retaliated in kind. They worked only when 
 they had no money; they "struck on the job"; they 
 practised sabotage. They delighted to leave in a 
 body when the employer particularly needed their 
 services. Whenever they found their employers 
 rushed for production and in pressing need of getting 
 out timber, they struck for more money. General 
 Disque found that it was the universal belief of the 
 employees that the operators were making enormous 
 sums of money — that they were gouging the Govern- 
 ment. The workers felt that it was only right and 
 just that they should in turn gouge the employers. 
 
 General Disque organized the Loyal Legion of 
 Loggers and Lumbermen on a quasi-patriotic basis, 
 but almost his first act was to require a comprehen- 
 sive audit to be made at each camp, showing the ex- 
 act cost of getting out the wood and how much the 
 operators were making. These he laid before com- 
 mittees of each camp and the wage troubles ceased. 
 
 Having all the facts, there was no difficulty at all 
 about arranging a satisfactory scale of wages and an 
 eight-hour day. They started in to make the camps 
 livable — which they had not been before— the work- 
 ers stopped travelling from camp to camp, and the 
 
66 COMMON SENSE AND LABOUR 
 
 labour turnover, which had been 1,000 per cent, a 
 year, dropped to nothing. What that means is pos- 
 sibly more easily comprehended from the fact that, 
 before the Legion came into being, the employment 
 agencies in Spokane found jobs for 8,000 men a 
 month while only about 12,000 were employed in that 
 district. 
 
 The Legion performed a splendid service during 
 the war, but from an employment standpoint their 
 most remarkable achievements have been since the 
 Armistice. They then adopted two very notable 
 policies, especially notable in view of the general 
 attitude of employers and employees everywhere. 
 Let me give them in the words of General Disque: 
 
 It was agreed that wages are not represented by dollars but 
 by purchasing power and that as the purchasing power of the 
 dollar increased, the wages and the employers' profits would de- 
 crease in order to promote the public buying of lumber. Several 
 wage reductions took place after consultation and agreement and 
 were accepted everywhere as fair. Since then the demand and 
 the price of lumber have risen and with them the wages, by agree- 
 ment, have increased. 
 
 That a man shall not be discharged without cause and that it 
 is to the advantage of the employer to provide continuous em- 
 ployment as far as his business will permit. It is recognized 
 that during the season when lumber cannot be cut, wages will 
 not be so high as in the active times, but that jobs can be found 
 in and about the camp in repair and construction work. 
 
COMMON SENSE AND LABOUR 67 
 
 Take another case. Up at Bantam, Connecticut, 
 is a machine plant employing about one hundred men. 
 These men hold a mass meeting once a month to 
 talk over business affairs, to hear complaints if there 
 are any, and more especially, constructively to discuss 
 the advancement of the business. A small percent- 
 age of these men are American born, nearly all of 
 them came into the plant as imskilled labourers. 
 They gained their training within this place. They 
 have committees to attend to various details, but 
 the working body being small, they transact most 
 of their business at mass meetings. 
 
 That plant is in the war zone only thirty miles from 
 Bridgeport, and at times during the war Bridgeport 
 was offering three times the wages which were being 
 paid at the smaller plant, but during that time only 
 two men left for the high wages and after a few weeks 
 both of them came back. Long before the Armistice 
 the meetings began to discuss what they were going 
 to do when peace came. Their wages had been in- 
 creased, they knew exactly what the company was 
 doing, what the company was making, and prac- 
 tically what each executive was drawing in the way 
 of salary. Over and above their wages they receive 
 a dividend on the gross factory production on the 
 
68 COMMON SENSE AND LABOUR 
 
 theory that if the factory turns out the proper 
 amount of goods, it is up to the management to make 
 the sales. They agreed among themselves that the 
 big thing was to keep going after the Armistice and 
 that, if it were necessary, they would reduce their 
 wages and go upon shorter time. 
 
 The salesmen of the company also attended those 
 meetings and those salesmen went out and secured 
 sufficient orders for advance work for delivery after 
 peace — the company was 100 per cent, on war work 
 — and where many companies were demanding that 
 the Government pay money for the cancellation of 
 their contracts, this company on the day of the Ar- 
 mistice wired Washington for permission to cancel its 
 contracts and within two days was going ahead full 
 time on peace work! The only reason for the delay 
 of two days was that most of the workers partici- 
 pated in every parade within a radius of twenty miles. 
 
 That plant has not found it necessary to reduce 
 wages. Other employers in that same valley, whose 
 people do not help them manage, have reduced wages 
 and have been most of the time tied up with serious 
 strikes. 
 
 Take another case. Out in Fort Wayne, Indiana, 
 is a piano factory which is organized as a kind of 
 
COMMON SENSE AND LABOUR 69 
 
 industrial democracy. The executives of the com- 
 pany form a cabinet; the superintendents and fore- 
 men meet in a body, which is called the Senate; while 
 the workmen elect by secret ballot to the House of 
 Representatives. These three bodies legislate for 
 the plant. These men in 1914, during the depression, 
 by their own action reduced their wages and went on 
 part time. There were then 265 of them and grad- 
 ually economic reasons caused their number to 
 dwindle until only 168 were left. These remaining 
 men devised so many new methods and so many new 
 machines that later, when times picked up, and 
 finally when the boom began, they were able without 
 increasing their number to double what was sup- 
 posed to be the former capacity of the plant. There 
 has been no wage trouble. Their productivity and 
 ingenuity have made them masters of their craft, and 
 it is profitable for the company to pay them double 
 what men in similar lines receive. In more than one 
 case, after having devised a better method, the men 
 have voluntarily rearranged their piece rates because 
 with their new methods the old rate produced an in- 
 come which they felt was disproportionate to the job. 
 In addition to their rates and wages each employee 
 shares in what is known as an "economy dividend" 
 
70 COMMON SENSE AND LABOUR 
 
 — the relative savings in production costs are divided 
 fifty-fifty between the company and the men. 
 
 What is a job worth? The average manufacturer 
 will tell you that he cannot pay above the market 
 rate, whatever that may be, and he will view dollars 
 of wages exactly as a workman views them — that 
 is, without any relation to what the one is going to 
 get, or the other to give, in return for the money. A 
 certain trade can pay so much and it cannot pay 
 more, that is settled. The wage is high or low ac- 
 cording to the number of dollars it contains, regard- 
 less of production — that is, regardless of return per 
 dollar of wages. Because a man who formerly got 
 $18 a week now finds $25 or $30 in his envelope he 
 is convinced that he is receiving fairly high wages, 
 while the employer is quite certain that he is paying 
 high wages . One hears everywhere the complaint that 
 the price of an article is so high because of the wages 
 which must be paid. Somehow or other every discus- 
 sion of employment troubles eventually gets around 
 to wages. Now just what have wages to do with 
 what is called " labour disorder" ? — when are they high 
 and when are they low? — and is there any particular 
 reason that wages should be lowered or be raised? 
 
 Wages have this much to do with labour trouble 
 
COMMON SENSE AND LABOUR 71 
 
 and no more: if the wage which a man receives for a 
 day's work is not sufficient to support him and leave 
 even a moderate amount for pleasure, the wage is 
 indeed too low; if the wage does not increase with the 
 intelUgence and production of the man, if it is pos- 
 sible for him to look ahead and see an absolute bar 
 beyond which he cannot go, then something is the 
 matter with the wage. High wages do not mean 
 contentment, and if employment is arranged solely 
 on the basis of wages, the men will neither give good 
 service nor stay on their jobs. During the war it 
 was the highest- and not the lowest-wage concerns 
 which had the greatest turnover of labour. 
 
 Turnover of labour is the number of men who must 
 be employed each year to retain an average force, and 
 during the war, in some very high-wage estabhshments, 
 twenty-five thousand men were employed during the 
 year to retain an average force of five thousand. 
 
 Wages are high when they do not result in produc- 
 tion; they are low — ^no matter how many dollars are 
 contained in them — if they give production. The 
 union between wages and production is inseparable, 
 but it is neglected by nearly all employers and by 
 most employees. There is somehow an idea, regard- 
 less of all the facts, that a particular job is worth 
 
72 COMMON SENSE AND LABOUR 
 
 just so much and no more. Hence we have what is 
 called the market rate which in turn varies according 
 to the demand, as compared with the supply of labour. 
 
 But the best employers of the country have long 
 since given up any idea that there is such a thing as a 
 market rate for labour. There is no market rate for 
 professional men above a certain grade, there is no 
 market rate for siu-gical operations, or for good por- 
 trait painting. In fact, we find the market rate only 
 in mediocrity; and that is what farseeing employers 
 have discovered and, by Ufting themselves out of 
 mediocrity, have found it unnecessary even to inquire 
 what the market rate is. 
 
 The market rate does not amount to much in mer- 
 chandising. If an article is thoroughly good it is 
 bought eagerly regardless of the price, because it 
 gives service. And that is just the way some em- 
 ployers have regarded the value of the service of those 
 whom they hire; instead of looking at wages as so 
 much paid out, they have looked at them in the 
 longer way of service purchased, and they have foimd 
 that for $2 rightly paid they can purchase more than 
 twice as much service as for $1. 
 
 There are many ways of paying wages and there is 
 no rule at all involved, there is no best way — ^the 
 
COMMON SENSE AND LABOUR 73 
 
 best way is that which suits the circumstance. In 
 many places what are called "piece rates" obtain; 
 that is, a man is paid for the number of articles or 
 operations which he completes during the day. 
 Piece rates are generally imsatisfactory, because it is 
 a very diflScult matter properly to fix the rates. A 
 very common loose method is this: suppose a group 
 of girls has been working on a certain article for some 
 time. The superintendent drops in, chats with the 
 foreman, and then asks why those girls shouldn't 
 go on piece rates. 
 
 "What will the best of them do a day? " he queries. 
 
 "Well, the fat girl will do about 200 and the big 
 Swede about 210." 
 
 "Then if we make the day's quota 225 they will 
 all have to hustle to get the money they are getting 
 now?" 
 
 "You bet they will," responds the foreman, "and it 
 will do them good." 
 
 And on that basis the rate is fixed with the idea 
 in mind that an economy has been accomplished, 
 when, as a matter of fact, the only accomplishment 
 has been in the way of creating a certain amount of 
 resentment and dissatisfaction, which means that the 
 goods will suffer. 
 
74 C0IVJ3I0N SENSE AND LABOUR 
 
 There is a scientific method of fixing piece rates 
 by means of the stop-watch, and the use of the stop- 
 watch in industry is a whole subject in itself. It is 
 objected to generally by workers because it has been 
 used as a basis for inhuman forcing by unintelligent 
 efficiency engineers. So great is the resentment 
 against stop-watches and efficiency that the mere 
 mention of them will often send a whole factory out 
 on a rampage. In the right use of the stop-watch 
 each motion is timed, the motions are studied, and 
 it is sought to ehminate every mmecessary motion. 
 The trainer of a track team watches his sprinters 
 closely to see that they do not throw away any exer- 
 tion but put every oimce into going forward. The 
 late Mike Murphy could add seconds to a runner 
 simply by taking away from him the motions which 
 amounted to nothing more than pawing into the air. 
 The stop-watch finds out by a study of the various 
 movements — and this is a long and elaborate process 
 — ^just how long it should take a man to perform a 
 certain operation; then it adds periods for rest, and 
 sets a standard of about 60 per cent, of the ideal 
 performance. If the piece rate is fixed on this stan- 
 dard, then a man will earn an ordinary day's wages 
 if he performs to the standard; when he goes over the 
 
COMMON SENSE AND LABOUR 75 
 
 staxidard he is paid an additional sum which gives 
 him more than the market rate for wages. The 
 reason that efficiency has fallen into such disrepute 
 is that charlatans sometimes fix standards without 
 knowing how to arrive at those standards, and make 
 the standards so high that the man, improperly in- 
 structed in his motions, has simply to wear himself 
 out in order to make even a good day's pay. 
 
 A man can always do a job better if he has proper 
 instruction — ^that is axiomatic. An amateur base- 
 ball pitcher, aspiring to become a professional, will 
 hang aroimd a well-known professional all day long in 
 the hope of picking up some better way of pitching. 
 But it is more or less the fashion among workers to 
 resent the idea that they, too, might learn from a 
 coach; and in this they are for the moment at one 
 with a considerable number of employers who insist 
 that whatever way a thing has previously been done 
 is undoubtedly the best way — and they will not 
 change. The employee who refuses to learn new and 
 better v/ays to do his work has his complement in 
 the employer who will not change methods. It is 
 not at all curious or remarkable that the most con- 
 siderable wage disputes usually occur in the most 
 backward establishments. 
 
76 COMMON SENSE AND LABOUR 
 
 The objection of intelligent workmen to better 
 methods is that, when they do give service and make 
 money, they immediately find that their rates are cut 
 to such a point that their additional service results 
 in no greater financial return to them than the previ- 
 ous poor service. In this, in many instances, they 
 are perfectly correct, for the short-sighted employer 
 does immediately cut down when he thinks a group 
 of men are "making all they ought to make." 
 
 From the experience of many able men this can 
 be deduced in regard to wages: "A wage is never of 
 itself high or low, but the amount is relative and its 
 righteousness depends upon the coordination of the 
 respective skill of both capital and labour. It is 
 not a fixed but a shifting payment, depending upon 
 and adjusted to performance, and that adjustment 
 is best made by frequent conference between the 
 employer and the employed." 
 
 But recently no fixed wage has been of itself satis- 
 factory and there have been devised methods, some 
 good and some bad, further to compensate according 
 to mass performance and to estabUsh a reason for 
 working with the company. 
 
 The wage is the measure of the worker's contribu- 
 tion — ^how is it to be measured? 
 
CHAPTER FOUR 
 
 WAGES AND PROFIT-SHARING DELUSIONS 
 
 A LIGHTNING joumey to unpopularity might be 
 made by that public officer who would announce: 
 "If the employers and the employees were to stop 
 talking about profits and wages for a while and talk 
 instead about work, it would not be long before prof- 
 its and wages would take care of themselves." 
 
 We have all talked ourselves into the notion that 
 the war has changed humanity, that all the old rela- 
 tions have shamefacedly backed out, and that work 
 and wages are something very different from what 
 they used to be. We talk about the dignity of the 
 worker and all that, but seldom about the dignity 
 of the work. We try to express dignity in money 
 terms instead of in work terms and — we get nowhere. 
 We have talked so volubly of reconstruction, but we 
 have forgotten what it is we were going to recon- 
 struct. The extraordinary fact stands out that the 
 three large concerns in this country which might 
 be said jointly to hold the long-distance record for 
 industrial peace are, judged by the standards of to- 
 
 77 
 
78 COMMON SENSE AND LABOUR 
 
 day, utterly unscientific in that they have no labour 
 methods at all, and they strikingly violate the dictum 
 that the relation between employer and employee 
 needs quick surgical attention. 
 
 The Baldwin Locomotive Works is 94 years old 
 and employs about 17,000; the Disston Saw Works 
 is 79 years old and employs about 4,000; the Endicott- 
 Johnson Company is 30 years old and sometimes 
 has as many as 19,000. None of them has ever had a 
 strike or even a serious wage dispute. (A few men 
 went out from Baldwin's during a car strike some 
 years ago but it was not a real strike.) The 
 heads and the workers together devote themselves 
 exclusively to work. The wages seem pretty well 
 able to care for themselves. They have had, of 
 course, diflferences concerning wages, but adjustments 
 have always been quickly arrived at. And here is 
 another fact to bear in mind: these employers have 
 been more interested in the work than in the stock 
 market — in the product than in its price. 
 
 The reason is not hard to find. Back of every 
 wage dispute, back of every labour difficulty, Ues 
 some kind of a suppression or a distortion of the crea- 
 tive instinct. The animating force of man is the 
 creative instinct; he find his happiness in creating. 
 
COMMON SENSE AND LABOUR 79 
 
 A real leader of industry seldom finds any particular 
 pleasure in the money he earns. A very few years 
 of success will give him more money than he can 
 possibly spend, and from then on the money earned 
 is only the score of the game. The real fun is in doing 
 things. The workman who is creating something 
 never bothers about wages or hours, because his 
 chief fun is in doing. But you cannot have the crea- 
 tive expression in the shop if you do not have it in 
 the office. The president who thinks that his com- 
 pany exists mainly to supply stock quotations is in 
 exactly the same case with the workman who looks 
 at his day's work not as a means of doing something, 
 but as a means of getting money without exertion. 
 
 Look at the progress of these three record holders. 
 The Baldwin Locomotive Works is something more 
 than a locomotive building plant — it is an institution. 
 For some time past Samuel M. Vauclain has been its 
 president, but for twenty years he has been the domi- 
 nating figure. Mr. Vauclain worked his way up 
 from an apprentice in the Altoona shops of the Penn- 
 sylvania Raihoad. His principal joy in hving is to 
 build locomotives. He reaches his office somewhere 
 around seven in the morning and leaves between six 
 and seven in the evening, although sometimes he will 
 
80 COMMON SENSE AND LABOUR 
 
 work eighteen or twenty hours at a stretch. He has 
 never taken a vacation, because he never could find 
 anything to do that would give him as much fun as 
 building locomotives. He has never bothered with 
 personal finance, and he further told me that he had 
 not for fifteen years known what his own salary was — 
 he said that he did not have time to bother with 
 money and simply had the company pay his salary 
 to a trust company. He knew the amount could not 
 help being enough because he was doing his work and 
 therefore it was of no particular use to bother about 
 it. He is a locomotive builder. He will not build 
 a bad locomotive at any price. A locomotive leav- 
 ing those great shops is regarded as tenderly and with 
 exactly the same spirit as a sculptor regards a finished 
 statue going out of the studio for its eventual pedestal. 
 The tradition of the company is : Good work. Every 
 man in that place from draughtsman to the lowest 
 grade of mechanic knows that Mr. Vauclain is a loco- 
 motive expert from any angle and could turn to any 
 job in the shop and do it better than the man who is 
 doing it. The people regard him just as art students 
 regard the master who drops in to criticize. They 
 know that he has done everything which they are 
 doing and has done it better than they are now doing 
 
COMMON SENSE AND LABOUR 81 
 
 it. He is their natural leader. They honour him 
 as such. Taking his personal example they resent 
 bad work as bitterly as he would resent it. They 
 are satisfied that if they work well they will be well 
 paid, and they always are. They do not work for 
 wages — ^they create locomotives. 
 
 Henry Disston and Sons, another Philadelphia 
 institution, was founded by Henry Disston, an expert 
 saw maker. In 1840, when he began in a cellar shop, 
 all the saws were imported from England. He made 
 his saws and then peddled them. He sold the best 
 saw that he knew how to make and sold it as the best 
 saw which could be made — regardless of the price 
 of any saw. The cellar shop grew into a factory and 
 the factory into a great plant covering many acres. 
 Henry Disston died a wealthy man, but always he 
 was first a saw maker. His sons followed him into 
 the factory; they became expert saw makers before 
 they became executives, and they became expert by 
 working side by side with the men at the benches 
 for from five to fifteen years. The second and the 
 third generations of the family have in turn gone into 
 the shops; it is a tradition of the family and of the 
 shop that the Disston boys shall serve their time on 
 exactly the same conditions as any other apprentices. 
 
82 COaiMON SENSE AND LABOUR 
 
 To-day the saws go all over the world and each saw 
 goes out as a product of craftsmanship rather than as 
 a saw. The executives and the employees are fellow 
 craftsmen; the older workers have worked with the 
 fathers of the present executives as well as with the 
 executives themselves; the apprentices of to-day who 
 will be the workers of to-morrow are working on a 
 level plane with the executives of to-morrow. The 
 old workers send their sons to Disston's to become 
 apprentices in the same matter-of-course way that 
 the owners send in their sons. An employee of the 
 saw works is regarded as a man of substance in the 
 community — he is of the aristocracy of workers. 
 And he did not gain that position by talking about 
 the dignity of labour; he got it by making good saws; 
 the dignity followed as day follows night. You 
 will find three generations of workers together in the 
 same shop; you will find three generations of Disstons 
 in the management. The names of the men who 
 fell in the Great War hang on the same wall with the 
 names of those who fell in the Civil War. When the 
 Rebellion broke out, Henry Disston called the shop 
 together to say that he would care for the families of 
 those who wanted to fight and that the old jobs would 
 be waiting when they got back. They organized 
 
COMMON SENSE AND LABOUR 83 
 
 a full company — every man of service age went. 
 The present executives did exactly the same thing 
 when we declared war with Germany and they did it 
 as a matter of course. The traditions go far back; 
 they are founded on the single principle of good work; 
 every other detail has cared for itself. The Disstons 
 do not know what a labour problem is. 
 
 The Endicott-Johnson Company is, first, the guar- 
 dian of a community making shoes, and, secondly, 
 a company. George F. Johnson began as shoemaker 
 and he is one to-day. He, too, believes in the dignity 
 of labour— not in the phrase but in the fact, and he 
 puts the idea into practice. Here is his creed in his 
 own words: 
 
 It is my opinion that "Wages" is not the answer to labour's 
 unrest. It is my opinion, also, that "Hours," and even "Work- 
 ing Conditions," is not the answer. 
 
 I haven't seen any plan of representation on Boards of Control 
 by the workers which seems to me as good and effective as our 
 plan, which prevailed when the "boss" worked and lived with 
 the workmen, when the workmen and the "boss" went to dinner 
 together, played together; in fact, a return to that simple demo- 
 cratic idea that the "boss" and the workers are not particularly 
 different; if anything, the workers had the best end of it; the 
 "boss" had to do all the worrying, find the money, and work a 
 little harder than anybody else. 
 
 This means that, in our industry, those who control, work with, 
 live with, and play with the working people, and this means the 
 
84 COMMON SENSE AND LABOUR 
 
 families of those in control; the children play and go to school 
 together. 
 
 We are trying to get our working people to feel that this is 
 their business just as much as ours, and that they must, them- 
 selves, protect the business : that they must feel that it is just as 
 much their business as ours to see that no "dead-heads," "dead- 
 beats," or "time-killers" stay in. We want, in other words, 
 our people to protect themselves by protecting the business. 
 
 We are working out a scheme, which must of course be gradual 
 and take a lot of time, to this end. We believe the day is coming 
 when the workmen themselves (this includes the workwomen,) 
 will not permit us to put a poor, inefficient, indifferent worker into 
 our business; they will help us to get good, faithful, loyal workers 
 into our business; they wUl work together to make a success, 
 and as great a success as possible. 
 
 The natural "Labour Leader" is the employer. If he fails 
 to recognize this fact, and if he cannot impress it upon the minds 
 of his working people that this is a fact, they will secure "leaders" 
 of another sort and kind — self-elected and self-appointed, rank 
 outsiders who could not possibly be well enough acquainted with 
 the industrial arrangement of a large industry to be able to 
 "lead" wisely, even though they were perfectly honest and 
 sincere; hence, we should say the safety of industry in the future 
 lies in a closer relationship between those who direct and those 
 who do their work. 
 
 And Mr. Johnson's company is the only large shoe 
 concern in the country which has never had a strike ! 
 
 Do these examples prove anything more than that 
 strong traditions and natural leaders develop a type 
 of royalist mind that spurns modernist thought? 
 "What lessons of general application do they hold? 
 
COMMON SENSE AND LABOUR 85 
 
 The dominating thought in each of these three 
 companies is the product — craftsmanship. They 
 prove that good work well done finds its proper pecu- 
 niary reward and, that if all is concentrated on the 
 work, the amount of wage will never come into 
 dispute. The cases are extreme, the situations are 
 such as could hardly be dupHcated by the ordinary 
 owner, but this much can be duplicated — the mutual 
 emphasis can be put upon the work, and the discussion 
 of wage may be in terms of work and skill instead 
 of only in dollars. That real work is always rewarded 
 is no mere copy-book maxim. It is an economic 
 fact never to be forgotten in the discussion of wages. 
 The wage adjusts itself to the work if the emphasis 
 is always on the work and not on the wage — on the 
 creation and not on the remuneration. And there 
 you have the key to wages; every scheme of employer- 
 employee management which can be said to be suc- 
 cessful will be found to be based upon good work 
 well done and upon nothing else. Work is the meas- 
 ure of wages. 
 
 A wage always is unsatisfactory when the work 
 and the wage are not balanced. If too much work 
 is given for the wage then the gap between the wage 
 earner and the wage payer rapidly widens, the first 
 
86 COMMON SENSE AND LABOUR 
 
 going down and the second going up, and the resulting 
 situation is deplorable. But if too little work is 
 given for the wages — and this is what most people do 
 not realize — we have high wages and small produc- 
 tion, which means that the wages do not buy any- 
 thing to speak of. 
 
 The doctrine of work is unpopular. The capitahst 
 would undoubtedly like to sit back and see profits 
 roll in without any mental exertion on his part. The 
 labouring man would like to doze under a tropical 
 tree and have his living drop like fruit about him. 
 Thus baldly stated, the situation is really ridiculous, 
 and as ridiculous it would be regarded, were it not 
 that these respective situations have been all dressed 
 up in words and phrases, so that unless the wanderer 
 in the intellect of industry is uncommonly wary, he 
 will find himself getting away from the main point 
 and giving attention to some side issue. 
 
 Look at a few of these purely side issues which can 
 be discussed limitlessly without getting anywhere. 
 In fact, there is a school, learned of phrase and stately 
 of mien, which would solve all things by further 
 discussion. 
 
 Take collective bargaining. The very word "bar- 
 gain" connotes a purchase and a sale, but the dis- 
 
COMMON SENSE AND LABOUR 87 
 
 cussions on the subject rarely touch the point of 
 what is bemg sold. And yet how can one either sell 
 or buy an indefinite thing? 
 
 Take union recognition. Is that recognition asked 
 to the end that incompetent workers be kept out of 
 shops and therefore the average productivity raised.'' 
 Or is it a device to relieve union oflScers of the bother 
 of collecting dues.!* In the "closed shop" the man 
 who falls behind in his dues loses both his card and his 
 job, and the collection of dues is therefore immensely 
 simplified. 
 
 Or take the eight-hour day with its fetching slogan 
 of "eight hours for work, eight hours for play, and 
 eight hours for sleep." How often is the cut in the 
 day really advocated in order to give the worker more 
 leisure? The eight-hour day to date is merely a 
 method of increasing wages — that is, a man works 
 eight hours for the same wages he was getting for ten 
 hours and then asks time and a half for the additional 
 two hours. The idea of doing as much in eight 
 hours as in ten hours, which would be a justification 
 of the movement, is only mentioned in a more or less 
 academic way, excepting by the man who is paying 
 the wages. 
 
 The popular appeal is always to the desire to get 
 
88 COMMON SENSE AND LABOUR 
 
 something for nothing. The objection among fair- 
 minded employers to unions as such rarely originates 
 in a dislike for organization among employees. It 
 arises because the purpose of the union organization is 
 seldom to discover ways and means to increase wages 
 by increasing efficiency of production, but usually to 
 increase wages by decreasing the efficiency of pro- 
 duction. The unions have been forced to be destruc- 
 tive because they have had to fight employers. The 
 very moment that union leaders become constructive 
 and tell their people that work is a necessity they 
 either lose their jobs or lose their members. The 
 Enghsh union leaders, after years of steadily preach- 
 ing that wages have nothing at all to do with work, 
 now suddenly find that unless they change their 
 teachings, there will be no work in England. The 
 more fearless of them, such as J. C. Clynes, are sug- 
 gesting that the people work. What is the result.'' 
 The craft unions are losing membership and the 
 "All Workers' Union" is gaining membership. The 
 proletarian arguments which are attracting members 
 are simply the old union arguments with a ruffle or 
 two added to the effect that if only you organize 
 tightly enough, you never will have to work. 
 
 The American worker has been convinced for the 
 
COMMON SENSE AND LABOUR 89 
 
 moment that he can get wages or profits without work. 
 With few exceptions, the American worker of to-day 
 is not producing as much in eight hours as he did in 
 four before the war. The percentage varies, but gen- 
 erally speaking the efficiency is just about one half. 
 A man who made eight articles, in 1914, will in the 
 same time make four of them to-day, and the deplor- 
 able part of the situation is that those four will prob- 
 ably be represented by a third at least more dollars 
 than the eight were. Expression of production in 
 dollars is now meaningless. We have stopped think- 
 ing of work in terms of production. We are thinking 
 in dollars and that gets us into trouble with profits. 
 
 Finding that wages paid in excess of the value of 
 the services rendered do not buy, and seeing that most 
 companies are exhibiting balance sheets containing 
 large surplus and profit items, the mind of the worker 
 is turning or being turned to sharing in those profits. 
 The wages of labour are expressed in great sums and 
 the wage looks small beside the profit. WeU-mean- 
 ing persons often suggest that a share of the profits 
 of industry belongs to the worker. No two groups 
 quite agree on what that share should be or who 
 should determine it. Some would confuse wages, 
 which are part of the cost of doing business, 
 
90 COMMON SENSE AND LABOUR 
 
 with profits which are the result of successful busi- 
 ness and add an indeterminate part of the profits 
 to the wage. Others advocate profit sharing as a 
 step toward the worker's ultimate control of capital. 
 There is a reason for the second position, but none 
 at all for the first, when it is urged by those who are 
 convinced that the capitaHstic system is the best. 
 
 And that profit sharing does not offer a solution 
 for proper wage payment is proved by its operation 
 in practice. Arising out of a delusion as to what prof- 
 its are, it falls down when the workers discover that 
 the great sums they thought they would get do not 
 amount to much after all, when divided up. If the 
 most profitable corporations agreed to share the en- 
 tirety of their profits — ^not a portion, but all — and 
 the share were added to wages, the increase of the 
 wage would seldom amount to 5 per cent. — and a 
 wage increase of 5 per cent, is scorned. The German 
 steel and munitions companies are supposed to have 
 made immense profits during the war. An investi- 
 gator took the sixty-six highest-profit companies; 
 they had a combined capital of $625,000,000. He 
 found that over a ten-year period the entire profits, 
 if divided per capita among the workers employed, 
 would increase wages only 2§ cents an hour! 
 
COMMON SENSE AND LABOUR 91 
 
 An enormous confusion exists about profits and 
 what they are. Mere bulk seems to be a crime. For 
 instance, the man who starts in business with a capital 
 of $1,000 and cannot net more than $100 profit, that 
 is, 10 per cent, a year, finds himself imable to exist, 
 but the corporation with a capital of $10,000,000 
 which could consistently earn 10 per cent, would be 
 classed as a particularly shameless example of what 
 combinations of capital can do to the plain people. 
 
 Then, too, both the workers and the public are 
 apt to look askance at the difference between the cost 
 of the raw material and the cost of the finished article 
 and to say mysteriously that "somebody is getting 
 theirs." It is true that in every line the progression 
 from the raw to the finished state is exceedingly 
 cumbersome and needlessly expensive, but in most 
 cases it is nobody in particular, but waste in general, 
 that consumes the enormous price addition. It is 
 perfectly ridiculous that the average article should 
 at least double in price between the time it leaves the 
 factory and the time that it reaches the hands of the 
 ultimate consumer. But that is rarely due to prof- 
 iteering or to any illegitimate practice; it is due to 
 lack of organization and the desire of people to have 
 things sold to them rather than to buy. 
 
92 COMMON SENSE AND LABOUR 
 
 For instance, the average person finds it exceed- 
 ingly inconvenient and expensive to carry home pur- 
 chases and would prefer, even at an added cost, 
 to have them delivered. It is rare to find any in- 
 dividual who does not believe in life insurance, and 
 it is well-known that premiums would be very much 
 lower if the selling expenses were eUminated. Yet 
 every experiment in selliag life insurance over the 
 coimter instead of through agents has resulted in 
 something pretty close to failure. Or take a staple. 
 Wheat, of course, does not have to be advertised — ^it is 
 notboughtin the grain form by the ultimate consumer. 
 But to sell flour or bread in large quantities to the 
 consuming public, it is absolutely necessary to trade- 
 mark the product and advertise it. The housewife, 
 confronted at the grocer's with Brand A flour — 
 which she has never heard of, and Brand B — which 
 she sees advertised — will buy Brand B, although it 
 may be quite a little dearer than Brand A. 
 
 Hmuan nature is what it is and, although we may 
 rail at its perversities, it is likely to stay with us for 
 some time to come, even against the objections of the 
 reformers. 
 
 The general ignorance of what capital is and how 
 profits are made is well illustrated by an experience 
 
COMMON SENSE AND LABOUR 93 
 
 of H. C. Osborn, president of the American Multi- 
 graph Company of Cleveland. That company for 
 some years did not pay a dividend. For the last 
 several years it has paid fair-sized dividends — al- 
 though the return on the money invested would not 
 be to date as great as if that same money had been 
 deposited in the ordinary savings bank. After a 
 recent dividend period one of the workers congratu- 
 lated Mr. Osborn and told him he must feel fine to 
 be making so much money. A little inquiry brought 
 out the fact that the worker thought that the presi- 
 dent received the entire earnings just as if he 
 were a proprietor and not a fellow worker. This 
 man had heard of stocldiolders, but had little com- 
 prehension of what part they played. Right then 
 and there Mr. Osborn decided to start a shop course 
 in economics. He discovered that, although many 
 of the workers knew the terms, they knew absolutely 
 nothing of corporate organization, of the fact that 
 legitimately issued stock represents money invested, 
 that a corporation has expenses other than those for 
 wages and material — that, for instance, it must con- 
 sider fixed charges, depreciation, and services to cus- 
 tomers — or that it cost a great deal of money to 
 advertise and sell machines. He is proceeding with 
 
94 COMMON SENSE AND LABOUR 
 
 his course in very simple fashion, explaining step by 
 step, with illustration and diagrams, that which we 
 call the cycle of business as applied to his own par- 
 ticular institution. 
 
 In the course of one of these talks he brought in 
 the model of the first machine. It was a crude affair 
 bearing about the same resemblance to the present- 
 day machine that the Robert Fulton does to the 
 Mauretania. Its appearance created great merri- 
 ment. Mr. Osbom asked how many of them would 
 be willing to contribute their savings to the develop- 
 ment of a commercial article from a contrivance such 
 as they saw before them. Not a man in the crowd 
 could conceive of doing such a thing! 
 
 Changing the scenery, one might present this same 
 lesson with almost any money-making specialty that 
 is on the market to-day. The first cash register was 
 merely a device which punched holes, representing a 
 nickel each, in a strip of paper; the storekeeper had 
 to count these holes at the end of the day to discover 
 what his sales had been. Yet Mr. Patterson took 
 what money he had made in the coal business and 
 put it all behind the development of this crazy device. 
 How many of the people who now clamour for the 
 profits of industry would contribute their labour. 
 
COMMON SENSE AND LABOUR 95 
 
 which they say is the source of money, to promote 
 an invention? 
 
 The workman does not want to be a part of in- 
 dustry; he wants to share in profits not as a partner 
 but as a vulture. And in this position he is perfectly 
 human and perfectly right. As I have pointed out 
 in a previous chapter there is no partnership be- 
 tween labour and capital, and it is just as untrue to 
 say that labour has a right to profits because capital 
 is the result of labour as it would be to say that 
 capital had a right to labour because if there were no 
 capital there would be no wages. Labour, demand- 
 ing that capital be turned over to it, is in no better 
 position than the bandit waiting to rob the gold 
 train as it comes over the hill from the mine. 
 
 The profit of capital — a part of which, if the owner 
 is forehanded, goes to augment his capital — is some- 
 times, it is true, the result of sheer luck; but more 
 often it is due to exceedingly skilful management and 
 good selling. That is really no affair of the work- 
 men; it is the affair of the executives. Honest profit- 
 sharing plans in which only the executives partici- 
 pate are commonly successful. Those including the 
 workers which are called successful will, on study, 
 be found, as a rule, not to be profit-sharing at all; or 
 
96 COMMON SENSE AND LABOUR 
 
 they will be found to be cases in which the workmen 
 have been receiving their regular wages and then 
 have accepted a share of the profits as a donation. 
 And, even in such cases, dissatisfaction invariably 
 follows a bad profit year. 
 
 The life of the average profit-sharing scheme does 
 not exceed five years and I am unaware of any case 
 in which the workers agreed to share losses as well 
 as profits. 
 
 Of true profit-sharing schemes there are very few. 
 One is an optical works in Germany. The philan- 
 thropic founder left these works in trust for the em- 
 ployees. The wages and salaries are paid according 
 to the respective worths of the people — that is, the 
 president gets a president's wage and the oflSce 
 boy gets an oflSce boy's wage. At the end of the 
 year the president and the office boy are cheek by 
 jowl in the sharing of profits, each getting exactly 
 the same amount. But this is mutuality of owner- 
 ship and not sharing profits with capital. 
 
 Another profit-sharing plan which has worked very 
 successfully again is not really profit-sharing at all. 
 The South Metropolitan Gas Company in London, 
 by the creating Act of Parhament, is permitted to 
 pay a dividend of 4 per cent, upon its shares and to 
 
COMMON SENSE AND LABOUR 97 
 
 charge 3s. Id. per 1,000 cubic feet of gas. The Act 
 further authorizes it to pay an additional dividend 
 of 2.8 per cent, for each reduction of one penny in 
 the price of gas. That is, the more cheaply the gas 
 sells, the greater may be the dividend. The com- 
 pany, as an incentive to economy, proposed to pay 
 its workers | per cent, extra for each penny reduction 
 in the price of gas. They pay ordinary current wages, 
 and this extra percentage to workers is really more 
 in the way of a bonus for economy than a sharing of 
 profits. The dividend to the employees has reached 
 as much as 8j per cent, and the scheme has been so 
 generally successful that it has been adopted by 
 nearly all of the gas companies throughout England 
 which hold similarly phrased charters. 
 
 The J. C. van Marken Press at Delft, Holland, 
 presents a most interesting example of a forward- 
 looking profit-sharing scheme. Of all Van Marken's 
 experiments with his industrial companies of Hof van 
 Delft, the ultimate is the printing company. The 
 shares of stock were serially numbered and the com- 
 pany reserved the right to retire the shares at par, ac- 
 cording to the serial numbers, with the design that the 
 workers might eventually acquire the capital — that 
 is, acquire the means of production. This capital 
 
98 COMMON SENSE AND LABOUR 
 
 stock is entitled to a 6-per-cent. cumulative dividend 
 and of the remaining profit, 25 per cent, goes to the 
 managers for their labours, 50 per cent, to the work- 
 men shareholders, 3 per cent, to the commissioners, 
 and 12 per cent, to the founders. This 12 per cent, 
 is a imique feature, representing Mr. van Marken's 
 estimate of the reward which capital should have over 
 and above the ordinary return upon investment, for 
 its adventurous spirit in risking the money in the 
 first instance. The right of this additional compen- 
 sation extends only to the original shareholders and 
 is personal, ceasing with death. 
 
 The workers are paid a minimum wage — that is, 
 a wage calculated for support and nothing more. 
 Their share of the profits is not paid in cash, but 
 goes to a savings account. When the amoimt of the 
 fund to the credit of any worker reaches 100 florins, 
 it is immediately appUed to the purchase for him 
 of a share of the capital stock — the original holder 
 of that share being forced to sell imder the agreement 
 and pass out of the company. In the first four 
 years one third of the capital stock had thus lodged 
 in the hands of the workers; in the course of the 
 next fifteen years all the original stockholders had 
 been retired. But by that time some of the workmen 
 
COMMON SENSE AND LABOUR 99 
 
 stockholders had died and their stock had passed 
 into their estates, while others had left the service 
 of the company. So the ownership was not with 
 the workers. However, this stock was on exactly 
 the same basis as the stock of the original stockhold- 
 ers and as the savings of a then worker reached 100 
 florins, a share of stock automatically passed to him. 
 Thus, the entire capital stock slowly revolves in 
 ownership, the idea in Mr. Van Marken's mind being 
 that the workers should have always a direct identity 
 with the shareholders. 
 
 Workers who have not yet accumulated suflScient 
 savings to buy stock are, however, regarded as mem- 
 bers of the corporation. During his first year of 
 service a worker has one vote on a parity with the 
 stockholder and an additional vote for each two years 
 of work up to a maximum of six votes. Shareholders, 
 also, regardless of the blocks they hold, are restricted 
 to a maximum of six votes. I visited this plant 
 during 1919 and I was informed that the general 
 desire was to change the scheme — that the workers 
 preferred higher wages to stock ownership, and that, 
 because of the low basic wage paid, it was decidedly 
 hard to get men to work. 
 
 For thirty years past the Procter & Gamble Com- 
 
100 COMMON SENSE AND LABOUR 
 
 pany have had some form of profit-sharing and their 
 experiences are interesting. Back in 1887 a certain 
 part of the year's earnings was set aside and distrib- 
 uted in cash to all employees in proportion to their 
 wages. The amounts appropriated caused dissatis- 
 faction. Then the company fixed the employee's divi- 
 dend at the same rate as that paid upon the common 
 stock of the company. It will be noted that there is 
 no reason whatever for making these rates the same, 
 but that thus fixing the rate is merely a way of shut- 
 ting off superfluous discussion. Up until 1903 this 
 percentage upon the wage was distributed in cash 
 twice a year and with this officially announced 
 result : 
 
 "During this time the expectation that it would 
 result in greater and more efficient effort on the part 
 of the employees was not realized. Not with the 
 majority. The dividend, coming as it did, at stated 
 intervals in lump sums, tended rather to defeat its 
 purpose than to further it. It had a tendency to- 
 ward extravagance and became a distinctly demoral- 
 izing influence. The money was spent and over- 
 spent before they received it. It was looked upon 
 as additional wages and had not the effect upon the 
 majority of increasing their loyalty and interest and 
 
COMMON SENSE AND LABOUR 101 
 
 of adding to their prosperity and material comfort 
 gathered from saving and the habit of saving." 
 
 The company then abandoned profit-sharing, 
 in so far as cash distribution was concerned, and 
 adopted profit-sharing as a means to enforce thrift 
 through stock ownership. The plan is one which has 
 been adopted with various modifications by quite 
 a number of companies. Any employee who has 
 been in the service of the company for 30 days or 
 more may apply to the trustee to buy for him in the 
 open market and at the market price an amount of 
 stock equal in par value to his yearly wages. It 
 takes about five years to pay for this stock. At the 
 end of that time the employee owns his stock outright 
 and receives dividends as would any other stock- 
 holder. A further development of the plan is sav- 
 ings certificates in the denomination of $100 each, 
 issued by the trustees and bearing 6 per cent, interest. 
 These the employees may purchase by depositing 
 5 per cent, of their wages and adding the dividends 
 under the profit-sharing plan. The profit-sharing 
 dividend itself is scarcely profit-sharing at all, but 
 rather a donation from the company's earnings as a 
 bonus for length of service. 
 
 A person employed throughout one year receives 
 
102 COMMON SENSE AND LABOUR 
 
 10 per cent, advance upon wages, and thereafter 
 an additional 1 per cent, per year until the maximum 
 of 20 per cent, has been reached. 
 
 In all fairness it cannot be said that the plan is 
 either a success or a failure. In the old stock-purchas- 
 ing plan, the maximum participation was 60 per cent, 
 and of the remaining 40 per cent, perhaps 15 per cent, 
 were ineligible because they were transient workers, 
 while the remaining 25 per cent, were those who 
 never, under any circumstances, were able to accumu- 
 late the 2| per cent, of the purchase required for the 
 initial deposit. 
 
 There are numerous other instances of profit- 
 sharing about, but the essentials are all the same, 
 and excepting where the distribution is solely with 
 executives, or where the circumstances are quite 
 pecuUar, I am unable to find that the mere sharing 
 of profits has the remotest influence in bettering the 
 relation. The first distribution of profits is always 
 greeted with wild enthusiasm — just as would be any 
 other substantial largesse. But there is never the 
 sHghtest disposition to accept the profits of the future 
 in the place of wages in the present — the profits 
 must be in addition to everything else. Every 
 plan tried in America, based on the Van Marken idea 
 
COMMON SENSE AND LABOUR 103 
 
 of paying a scant living wage — or even a full living 
 wage — with the prospect of bringing the eventual 
 wage to considerably above what might be called the 
 market rate by the distribution of profits, has failed 
 when applied to workers. 
 
 In the case of executives the situation is quite 
 different. It is the direction of the higher executives 
 which really makes the profits. These men do the 
 buying, the selling, the borrowing, and all of the 
 manoeuvring so necessary to business. If a season 
 is not successful they know why. There is no mys- 
 tery about depreciation and reserve; and, working 
 in February, they can visualize a profit to be paid in 
 December. It has therefore become the practice 
 among forward-looking organizations to have the 
 executives who manage the capital share in the fruits 
 of their efforts. In the National Cash Register 
 Company, for instance, the fixed salaries paid to 
 executives are quite low but they share in the profits 
 to such an extent that this share will often equal or 
 exceed the entire year's salary. In other corporations 
 the executives and higher employees are permitted 
 to buy a certain number of shares of stock under an 
 agreement to resell them when their connection with 
 the company terminates. They commonly do not 
 
104 COMMON SENSE AND LABOUR 
 
 pay any money for this stock, but merely give a 
 promissory note for the full purchase price with the 
 stock as collateral. This plan has the earmarks 
 of stock participation but, as a matter of fact, it is 
 only an easy way of adding a bonus to the salary 
 based upon the earnings of the company — ^it cuts 
 out a lot of mathematics. 
 
 Then there are the numerous plans by which the 
 employees of companies are encouraged and aided 
 in the purchase of the stock of the company. The 
 most notable of this kind is that of the United States 
 Steel Corporation, by which, under a partial-payment- 
 plan system, employees may buy stock. This plan 
 is very well thought of indeed by a number of leading 
 business men of the coimtry, as making for an iden- 
 tity of interest between the worker and the stock- 
 holder. 
 
 But it is strongly to be doubted if the number of 
 shares held by the rank and file of employees is suflS- 
 cient to give them a real interest, or that the dividends 
 which they receive are suflBciently large to make them 
 realize that there is a connection between the daily 
 work and the semi-annual dividend. It is urged, 
 and it would seem reasonable to believe, that if even 
 10 per cent, of the employees of a corporation were 
 
COMMON SENSE AND LABOUR 105 
 
 also owners of its stock, they then would act as a 
 leaven in the mass and make for better and more 
 cooperative work. The devotees of stock ownership 
 are always ready with numerous instances in which 
 the faithful workmen-stockholders, warring against 
 waste, bring in bits of metal lost on the roadway and 
 they recount how these conscientious souls chide 
 their fellow workers for acts against the best interest 
 of the company and therefore against the value of 
 the stock. I have looked into quite a number of 
 these shining examples and find most of them merely 
 expressions of a renewed license to be a busybody. 
 The self-conscious virtue of the fledgUng stockholder 
 is more apt to irritate his fellows than to help the 
 company. 
 
 The opportunity to purchase stock in the corpora- 
 tion for which he works is properly to be regarded not 
 at all as a method of adjusting the relation between 
 labour and capital, or of increasing mutual pro- 
 ductivity, but solely as a means of encouraging stal- 
 wart independence through thrift. And, from a 
 practical investing standpoint, it is more than doubt- 
 ful if a worker should be encouraged to elect the one 
 institution to be not only the source of his present 
 income, but also the repository of his savings. 
 
106 COMMON SENSE AND LABOUR 
 
 But you cannot have a meal of bear meat unless 
 first you have a bear. You cannot well share profits 
 or make the purchase of corporate stock desirable 
 unless you have profits. Accept all the theories of 
 profit-sharing at face value and without investiga- 
 tion, say that it is a success whenever tried — what 
 are you going to do about the workers for the com- 
 panies which do not earn profits? One out of every 
 five enterprises started in the United States fails; 
 of those that continue in business, only about 20 
 per cent, show profits. Complementary to universal 
 profit-sharing should be a demonstration of how not 
 to fail in business. Until all business is invariably 
 successful, profit-sharing is hardly the way to pay 
 wages. The man working for the skilfully managed 
 company that earns a lot of money is commonly no 
 more efiicient than the man working for the poorly 
 managed company that fails. Why, if their respec- 
 tive working talents are about equal, should the first 
 worker get more than the second? The one had 
 nothing to do with the profits nor the other with the 
 losses. 
 
 The satisfactory way of paying a man is for what 
 he does. If he makes a good article at a right price, 
 or otherwise performs a satisfactory service, then he 
 
COMMON SENSE AND LABOUR 107 
 
 can and should be paid adequately. It is up to the 
 employer to make the profit. If the employer can- 
 not make a profit, he has merely demonstrated that 
 he is incompetent to be charged with the manage- 
 ment of capital. The larger-visioned employers 
 all recognize to-day that the man who wants to pay 
 low wages — who wants to pay less than is justly 
 due — is more of a menace to the wage system than 
 the Bolshevik. The doctrine that low wages are 
 cheap has been pretty well exploded. 
 
 But what is adequate payment .'* There can be no 
 rule until mankind has been ironed into uniformity 
 — which will probably take a little while. There 
 are grades of labour and grades of men. The street 
 sweeper is not on a par with the watchmaker although 
 he may have greater potentialities. Christian Girl, 
 the president of the Standard Parts Company of 
 Cleveland, once swept the streets of Cleveland, but 
 he did not insist that as a street sweeper he should 
 be paid the salary that he now gets as the president 
 of a great organization. And thus we cannot escape 
 getting back to the controlling relation between the 
 wage and the work. And through the work it is al- 
 ways possible to arrive at the "adequate" payment. 
 
 In the case of Baldwin's, Disston's, and the 
 
108 COMMON SENSE AND LABOUR 
 
 Endicott-Johnson Company, which have been set 
 up as models, the relations between the company and 
 the men are so intimate and the knowledge of the 
 work is so mutually exact that striking the wage 
 bargains with individuals gives no trouble. But all 
 concerns cannot have that marvellous mutuality — 
 they must find a mechanical means of arriving at 
 the same end, but always upon the same basis of 
 fitting the wage to the work. The problem of the 
 adequate wage, of attaining the right balance, is 
 quite impossible when a general solution is sought, 
 but it is quite easy when it is treated as a matter of 
 cases and not of universal law. 
 
 The methods differ but they all proceed upon prin- 
 ciples, and these principles have been best stated by 
 William R. Basset thus : 
 
 1. In order to get any logical fixing of wages it is necessary first 
 to throw away all ideas of how much a man ought to get. A 
 man ought to get what he earns, no more and no less; and I con- 
 sider what is called the market rate of wages — ^whether it happens 
 to be the standard wage of the community or a rate fixed by the 
 imion — as in the nature of a minimum wage for that class of 
 work. 
 
 2. There is no reason why a machinist should not make $100 
 or even $200 a week if he returns that much service. And the 
 point, therefore, is not the gross amount that a man makes, but 
 the cost of his services per unit to the company. If a man makes 
 
COMMON SENSE AND LABOUR 109 
 
 $50 a week when turning out 10 units per hour, I can well afford 
 to pay him $100 a week if he turns out 20 well-made units in one 
 hour, for there is so much less overhead per unit on the 20 scale 
 than on the 10 that it costs me less per unit to pay $100 per week 
 than to pay $50. This is a self-evident point which is very often 
 neglected and, because it is neglected, the whole subject of wages 
 is in a chaotic condition. 
 
 3. In a very large number of cases the piece rate is fixed by 
 rule-of -thumb and the rate is lowered whenever it appears to the 
 foreman or superintendent that the man is making too much 
 money. If the rate were right in the first place it should not be 
 lowered because the man is making money — unless the increased 
 production is brought about solely by managerial skill. But 
 the rate is not usually right in the first place, because it is unfor- 
 tunately rare to find a scientifically set rate. 
 
 4. The average rate is based upon someone's guess as to what 
 a man may do — ^whereas it should be based upon a scientific 
 time study. 
 
 5. The use of the stop-watch is opposed by most workers 
 largely because it has been ill-used in the past, but if you have a 
 rate committee to which is intelligently explained the basis of 
 time study, and their services enlisted to obtain the proper study, 
 this opposition will disappear. 
 
 6. I think it is very proper for a worker to object to having an 
 incorrect time study forced down his throat and made the basis 
 for a rate which forces him at an inhuman pace in order to claim 
 a bare sustenance. 
 
 7. I do not favour piece rates nor any other one form of paying 
 wages, because there is no universal wage method. I have fre- 
 quently installed three or four different bases of payment in the 
 same shop, because only in such manner could we even approxi- 
 mate fairness. 
 
 8. But I think that every form of wage payment should also 
 
110 COMMON SENSE AND LABOUR 
 
 include an incentive — an individual incentive, so that a man may 
 be rewarded on both the quality and the quantity of what he 
 does — ^and right here let me say that quality is always more im- 
 portant than quantity, and it has been my unvarying experience 
 that where we stressed the quality element, we awakened the 
 spirit of craftsmanship and the quantity took care of itself. In 
 addition to the individual incentive I believe in stimulating co- 
 operation between employees by providing group or departmental 
 incentives; this need not be large and sometimes does not have 
 to be paid in money; but, generally speaking, a small money in- 
 centive, combined with a certain amount of publicity to engage 
 the natural instinct of competition, will produce splendid results. 
 I have known production to be nearly doubled under such cir- 
 cumstances. 
 
 9. Hand in hand with incentives goes the teaching of right 
 methods, the elimination of wastes, and the proper planning of 
 work. When all of these elements are present, the raising of a 
 wage is purely incidental, for then the increments are taken out 
 of the former wastes — which is as it should be. 
 
CHAPTER FIVE 
 
 THE FETISH OF INDUSTRIAL DEMOCRACY 
 
 What does industrial representation amount to? 
 "The democratization of industry" is rapidly be- 
 coming a cant phrase. It is alluring just as profit- 
 sharing is alluring, because it can mean a great many 
 things. As somebody well said not long since, we 
 are becoming a world that loves phrases. The ideal 
 phrase is one that no one can exactly define, but 
 with which everyone can agree in a general way. 
 We find the most staid, what-is-the-world-coming-to 
 sort of manufacturer nodding his head in approval 
 at the phrase and also we find the craziest and most 
 violent radical yelling and waving a red flag at the 
 same utterance. Which gives pause for comment — ■ 
 although it is bad form to inquire into popular 
 phrases. One of the reasons for this general agree- 
 ment that industry should be put upon a democratic 
 basis may be found in the general disagreement as to 
 what democracy is. Styles in democracy shift more 
 
 rapidly than styles in women's clothing. 
 
 Ill 
 
112 COMMON SENSE AND LABOUR 
 
 The hide-bound autocratic employer usually means 
 by democracy in industry that he intends to hand- 
 pick a certain number of employees and call them a 
 shop committee. Or agaia, in the case of a corpora- 
 tion, he and his fellows may arrange for the most revo- 
 lutionary departure of putting one or two employees 
 upon the board of directors. When one or both of 
 these acts have been committed, the demands of 
 democracy are supposed to have been satisfied, and 
 autocracy, if not annihilated, at least amehorated. 
 Starting from this lip-service type and ranging down 
 the hne, one meets with other forms of democracy 
 in variously coordinated and uncoordinated shop 
 committees, organized as committees or as legisla- 
 tive bodies, until finally one reaches the radicals to 
 whom the phrase connotes a species of state socialism. 
 One passes on to the extreme radicals who understand 
 by this democracy the annihilation of capital and 
 the entire control of industry through elective and 
 easily recalled committees. And one stops only with 
 the ultra-extreme radicals, who conceive that the 
 only form of industrial democracy is the autocracy 
 of the proletariat. The democratization of industry 
 is easily the most ecumenically satisfying phrase now 
 at large. 
 
COMMON SENSE AND LABOUR 113 
 
 A further reason that we can have sp many inter- 
 pretations of the term is because so much confusion of 
 thought exists concerning industry itself and more 
 especially concerning what capital is and does, and 
 who pays wages and why. Practically every dis- 
 cussion of industrial relations eventually gets back to 
 the discusser's conception of the function of capital. 
 
 Let us get the facts squarely in mind and segregate, 
 so to speak, a few of the meanings of democracy in 
 industry. If it be taken in its broadest sense, then 
 you must evolve a system of industry in which there 
 is neither employer nor employed, but where all are 
 employees on an equal basis of pay quite regardless of 
 skill. And unless we can conceive a society in which 
 all authority shall be equal, that is, which shall be 
 both headless and footless, then to be thoroughly 
 democratic any leadership should rotate through 
 Soviets or committees. This programme involves 
 necessarily the abolition of the private ownership 
 of capital. All "direct-action" movements have a 
 society of this general nature in view, although 
 with family differences which they consider very 
 important. The normal human being need not con- 
 cern himself with the various refinements of the social 
 revolutionists; they all are heading toward an event- 
 
114 COMMON SENSE AND LABOUR 
 
 ual production for use as opposed to production for 
 profit, and the individual disagreements can mostly 
 be put down as of gait. Therefore, if we discuss the 
 taking over by the Government of the means of 
 production and the management of those means by 
 communes or what-nots, we are not discussing labour 
 but social revolution — even if we file ofif the raw edges, 
 as in the Plumb Plan, and shy at force, or if we 
 sharpen the raw edges and advocate force and lots 
 of it, as do the I. W. W. The social revolution is 
 not a labour problem. It is a conception of a new 
 social existence. When eminent citizens advocate 
 the equal representation of the employer and the 
 employee and presumably therefore equal authority 
 in management, and in the same breath talk about 
 dealing justly with complaints and retaining well- 
 trained employment managers, and so forth, they 
 are discussing an equality which can exist only as a 
 pound may equal a quart. The chief engineer is, 
 in his way, as important as the captain, but he does 
 not navigate the ship. If we believe, and most of us 
 do believe, in the private ownership of capital, then 
 we cannot go beyond representative regulation and 
 into democratic control. It is important to bear 
 this in mind because there is a disposition to take the 
 
COMMON SENSE AND LABOUR 115 
 
 field in full cry after capital as such, yet all the time 
 disclaiming that its private ownership is to be killed 
 when caught. 
 
 That representation in industry is good is no 
 longer open to question, but it is equally not open to 
 question that mere representation as such is of no 
 particular moment. A great many employers would 
 like to think that merely starting up some kind of a 
 representative system will solve all the problems of 
 industry — that it will serve as a substitute for nat- 
 ural leadership or skill. It will do nothing of the 
 kind, as experience has amply shown, and the only 
 reason for the many imreasonable expectations of 
 the results to flow from representation is that the 
 situation has not been visualized in its entirety. 
 
 Under our capitalistic system, the wages of both 
 capital and labour are paid out of production and out 
 of nothing else. Capital does not pay wages and it 
 could not pay them for more than a week or two at 
 the most, even if it wanted to, any more than a camel 
 could live indefinitely on its hump. Without pro- 
 duction the discussion of wages, or working hours, 
 or conditions is academic. That is one of the chilling 
 facts of existence. Representation in industry, then, 
 is valuable when it aids in production and in the fair 
 
116 COMMON SENSE AND LABOUR 
 
 distribution of the profits of production. It is a 
 means to an end and not an end in itself. 
 
 To get down to cases. The most striking and am- 
 bitious plan of general representation is that of the 
 Joint Industrial Councils which were evolved by the 
 Whitley Committee, appointed by ParUament to 
 devise a better industrial relation for Great Britain. 
 In England and in Scotland, the trades union move- 
 ment, which had achieved remarkable proportions 
 before the war, during the war gained something ap- 
 proaching an ascendancy of industrial Ufe. The 
 English unions are ritualistic bodies divided into 
 sects much as are the evangelical churches, but they 
 have one great principle in common — that there is 
 only a certain amount of work in the world to be done 
 and, therefore, the longer you take to do it and the 
 more men are required in the doing, the more jobs 
 there will be for the workingmen. It would almost 
 seem that any industrial propaganda in order to be 
 popular must be uneconomic! 
 
 Affairs were coming to a pretty pass in England 
 before the war, and during the war the Labour party 
 secured an enormous number of rules and regulations 
 of various kinds, although they did officially, if not 
 individually, promise to take off the limit on produe- 
 
COMMON SENSE AND LABOUR 117 
 
 tion and permit the employment of imskilled labour, 
 working with automatic machinery, which had not 
 been permitted before the war. It was apparent 
 that industry could not resume, when the war ac- 
 tivities had ceased, without some working basis be- 
 tween the employers and the employed, and to that 
 end was evolved the Whitley Plan. This provided 
 for individual workshop committees, made up of rep- 
 resentatives of the employer and the employed; Joint 
 District Coimcils, made up of delegates of the local 
 unions and the employers' associations for the dis- 
 trict; and finally a National Council in the industry, 
 similarly composed of representatives of the national 
 imions involved and the national employers' associa- 
 tions. The plan further provided for the stimulation 
 of the study of industrial methods, but essentially 
 it was an agreement that each industry should be 
 controlled as a imit by a national council supervising 
 local councils, which should in turn supervise works 
 management. The control came from the top, not 
 from the bottom, for although the shop committee 
 might be a constructive body, primarily it was a 
 complaint bureau or a magistrate's court where minor 
 violations of the rules might be adjudicated.* 
 
 ♦For & further discussion of the Whitley Councils see Chapter Nine. 
 
118 COMMON SENSE AND LABOUR 
 
 It would not be fair to say that the Whitley Plan 
 has failed, but it would be quite untrue to say that 
 it has had any measure of success. It was essentially 
 a categorical prayer for the status quo ante; by it the 
 unions and, more important, the imion officers, were 
 practically confirmed in their offices, and the "closed 
 shop" made absolute. At once the proletarian 
 movement as opposed to crafts unionism gained 
 enormous ground. It seems totally impossible for a 
 imion leader, who has brought himself into power 
 by preaching a strict limitation of work, to turn about 
 and preach that work is necessary. The mass of the 
 workers will always follow the man who promises 
 something for nothing. But were the Whitley Plan 
 a success, it would undoubtedly create grave dangers. 
 The pubUc is not represented in its councils, and each 
 industry would take on the nature of an immense 
 trust of workers and capital, and although this im- 
 mense power might be exercised for good, it is more 
 reasonable to suppose that it would not be, for any 
 group of individuals given unrestricted and unre- 
 viewed power usually gets drunk with that power. 
 Of course. Parliament is supposed to exercise a super- 
 vision, but what can ParUament do against the united 
 front of an essential industry? We have seen in 
 
COMMON SENSE AND LABOUR 119 
 
 America the railroad employees terrorize the Govern- 
 ment. What would have been their power had the 
 railroad owners also united with them? 
 
 The Whitley Plan is presumed to construct, but 
 the machinery is essentially regulatory and is more 
 concerned with not doing than with doing. The 
 Whitley Plan holds nothing for America because, if 
 for no other reason, this is a large country in which 
 living conditions so vary as to make the uniform 
 regulation of any national industry neither feasible 
 nor desirable. And again, trade unionism is not 
 particularly strong in the United States, because 
 there is comparatively little class consciousness in the 
 workers, as has been demonstrated by the total failure 
 of all sympathetic'strikes. We have, however, in this 
 country one plan in analogy which offers an example 
 of collective bargaining with trade unionism on a fair 
 constructive basis, in which getting the work done 
 and seeing that both sides get a square deal have a 
 more important place than the observation of rules. 
 
 The defect of trade imionism in a country as large 
 as the United States is that national rules formulated 
 in any but the most general terms will, when applied 
 to a specific case, work an injustice to both the em- 
 ployer and the employee. It is well enough in theory 
 
120 COMMON SENSE AND LABOUR 
 
 to say that the conditions in a trade should be every- 
 where alike, but we all know that without some 
 radical amendments to the laws of nature this is im- 
 possible. Trade unionism in England, for instance, 
 always legalistic, has invented so many rules and 
 laws that, in any given case, experts should really 
 be called in to determine the respective rights and 
 duties of the employer and the employee. We all know 
 that English industry before the war was being grad- 
 ually buried under a mass of union regulation. It 
 was quite general in any district for the employers 
 to unite in an association and, through a representa- 
 tive, to make treaties with the various unions op- 
 erating in their shops. They had adopted, more 
 particularly in the engineering trades, a kind of 
 double-barrelled collective bargaining and, when you 
 consider that in any one shop'perhaps a dozen unions 
 might be at work, each with its own rules and operat- 
 ing without regard to the rules and rights of any other 
 union, it is quite easy to realize that the English 
 employer was indeed unhappy. In addition to all 
 of the union rules and regulations, each shop also 
 contained a certain number of unskilled workers who 
 were not organized, and who, according to the unions, 
 had no rights on earth. 
 
COMMON SENSE AND LABOUR 121 
 
 The clothing trade in the United States has 
 adopted what, in many respects, are the best features 
 of the Whitley Plan and none of its more dangerous 
 ones. In the clothing trade the relation between the 
 employer and the employee is commonly very bitter. 
 The workers are mostly foreigners, many of them do 
 not even speak English, and they have brought them- 
 selves from the terrible sweat-shop degradation to 
 their present position only by dint of constant fight- 
 ing. A not inconsiderable portion of the employers are 
 also former sweat-shop workers, and, as is always the 
 case, they give the same treatment to their employees 
 as they themselves received as workers. The Russian 
 influence prevails in the unions and they are very radi- 
 cal. The strikes have been long and bitter and in the 
 City of New York both sides have often used violence. 
 
 The Chicago firm of Hart, SchaflFner & Marx took 
 the lead in bringing about a better condition. They 
 met the problem squarely; they believed that the 
 unions and employers were really competing for the 
 good will of the public and that, although one might 
 alone gain it, it would be better if both had it together. 
 They accepted the principle of unionism and of col- 
 lective bargaining, but held, further, that a union 
 should be recognized only as it manifested a general 
 
122 COMMON SENSE AND LABOUR 
 
 desire to fulfill its agreements and to better industry. 
 They thought that many of the traditional principles 
 and practices of unionism had developed out of a 
 state of militancy and that this militancy would not 
 be necessary if the employer changed his own tactics' 
 They thought an arbitration board within the shop 
 would, if fairly administered, settle most troubles. 
 They agreed with the union for a board of three 
 people, one to be chosen by the union, another by 
 the company, and these two to elect a third. For a 
 long time the two arbitrators could not agree upon a 
 third member, which turned out to be no particular 
 misfortune after all, because it resulted in a series 
 of compromised decisions and convinced both sides 
 that it was necessary to give as well as to take. A 
 third member was eventually agreed upon. The 
 closed-shop issue is always insisted on by unions, be- 
 cause it gives the officials a club with which they can 
 recruit members and collect dues. No employer 
 willingly submits to the closed shop. 
 
 Hart, SchaflFner & Marx worked out a compromise 
 known as the preferential shop. Under this arrange-' 
 ment union members are the first to be taken on and 
 the last to be let go, and thus, while the advantage 
 in union membership is retained, the rights of non- 
 
COMMON SENSE AND LABOUR 123 
 
 unionists are conserved. Out of the Board of Arbitra- 
 tion grew the present Labour Agreement, which is 
 rather elaborate. It is among the Board of Arbitra- 
 tion, the company, and the Amalgamated Clothing 
 Workers of America. The Board of Arbitration is the 
 final court. The Trade Board is the Court of First 
 Listance. The latter consists of eleven members, 
 all of them employees of the company, one half 
 chosen by the company and the other half by the 
 union. The chairman is elected or appointed under 
 the agreement, and is supposed to be representative 
 of both interests. The provisions of the agreement 
 are executed by deputies, each side having its own 
 deputies, who may also act as counsel in presenting 
 complaints. In each shop the union is entitled to 
 have a duly-accredited representative or agent and he 
 is "expected to represent the cooperative spirit of 
 the agreement in the shop and be the leader in pro- 
 moting that spirit of amity and spirit of good will 
 which it is the purpose of this agreementtoestablish." 
 The agreement defibaes a procedure for the arbitration 
 of all disputes, defines rates and hours during the 
 life of the agreement, and also aflBrms the full powers 
 of discharge and discipline in the company with an 
 appeal over to the Trade Board. 
 
124 COMMON SENSE AND LABOUR 
 
 The company has been operating under such 
 agreements for nine years with remarkable success. 
 The agreement is not considered as expressing the 
 maximum of good will, but rather as a binding mini- 
 mum and the company, through a singularly intelli- 
 gent and not at all paternal welfare department, has 
 gone far toward eliminating many of the petty dis- 
 putes which so often grow into serious differences. 
 The plan has worked so well that it has now been 
 adopted by the employers and employees engaged in 
 the manufacture of men's clothing in New York, 
 Rochester, Chicago, and Baltimore, proceeding as the 
 National and Industrial Federation of Clothing Manu- 
 facturers. The larger plan has not been in operation 
 long enough adequately to be tested, but the whole 
 thought of the agreement is constructive and there 
 seems no good reason why it should not work. In 
 the case of Hart, Schaffner & Marx, the success would 
 seem to be due to the fact that, while every proper 
 facility is given for the fair adjudication of com- 
 plaints, the real emphasis is upon production. The 
 agreement, which is a model of its kind, is shot 
 through and through, not with the abstract rights of 
 people, but with the proposition, phrased in various 
 ways, that the employer and employed are associated 
 
COMMON SENSE AND LABOUR 125 
 
 for purposes of production and mutual profit and not 
 merely for further discussion. This agreement has 
 stood where most agreements of the trades unions fail, 
 because this one goes to production, while the others 
 devote the primary attention to rules and rule mak- 
 ing. This is collective bargaining with a definite idea 
 of what is being bought and sold. 
 
 The clothing agreement is, in a way, on the rep- 
 resentative basis. The employer and the worker have 
 a common forum. It differs from the many represen- 
 tative systems which are now arising all over the 
 country in that they do not, as a rule, involve any 
 form of contract with the trades union. The American 
 employer cannot in fair conscience deal with the 
 trades union instead of with his employees unless : 
 
 1. A majority of the employees are members of 
 the union; and 
 
 2. The union officers exercise a constructive control 
 over the members — ^that is, that they can require 
 the members to work as well as to strike; and 
 
 S. The union officers are willing to concede that 
 the primary purpose for the engagement of capital 
 is to augment itself and not to offer itself for distribu- 
 tion. In other words, a recognition that wages are 
 paid out of production. 
 
126 COMMON SENSE AND LABOUR 
 
 Since all these factors are rarely present in any 
 attempted imion bargain, the present trend is toward 
 company forums and away from the collective bar- 
 gaining with outside interests. The more convenient 
 method, assuming that wages are a matter of bargain 
 and sale, would be for an employer to deal with a 
 responsible union on economic principles. Such 
 tmion supervision would immensely stimulate broad 
 business thought and be a great help to industry. 
 This is quite aside from the point as to whether a 
 trades union answers any need which a well-function- 
 ing state cannot fill. 
 
 But very few union leaders have the personal force 
 to put over sound, economic thought with their fol- 
 lowers. They can control them only by promising 
 more pay for less work, and therefore making an 
 agreement with the average union is not more satisfy- 
 ing than nailing jelly to a wall. The aim of both 
 sides is frequently an agreement without mutuality. 
 
 It is in the direction of having each side appreciate 
 the problems of the other that arise the real bene- 
 fits to industry of representation. It teaches the 
 worker that the processes of industry are in no wise 
 mysterious and teaches the employer that the worker 
 is willing to cooperate if given a fair chance — all 
 
COMMON SENSE AND LABOUR 127 
 
 of which amounts to saying that participation in the 
 problems of industry teaches both the employer and 
 the employed that good profits result not from leg- 
 erdemain but from skilled production, marketing, and 
 finance. One hears a great deal about the enormous 
 benefits to be derived from having in the works some 
 kind of a committee, or whatever it may be called, to 
 receive and settle complaints and possibly periodically 
 to present the worker's side to the management. This 
 may take any one of many forms — from an elected 
 committee or committees to an appointed committee 
 of both the management and the men. But any 
 kind of an industrial body organized solely to settle 
 disputes amounts to nothing. Such a body does 
 not touch the constructive, creative faculty and also 
 it does not touch the reason for most disputes, which 
 is that one side, or both, does not understand how 
 profits are legitimately made. If you settle enough 
 disputes you may have order, but you will not have 
 progress. Bearing this principle in mind, it is not 
 surprising to discover that representation of the 
 workers on the board of directors of a corporation to 
 protect the interest of labour is only a sentimental 
 arrangement quite unproductive of results, and also 
 that shop committees or bodies set up to hear dis- 
 
128 COMMON SENSE AND LABOUR 
 
 putes are remarkably industrious in the gathering 
 of dispute material but rarely do anything in the way 
 of progress, unless, peradventure, they depart from 
 their original conception and become constructive. 
 This is just what happened at the Filene Store. 
 They started an arbitration board, but gradually 
 the employees' association became a quasi-legislative 
 body and a class for the study of the economics of 
 business. They early asked for and received the 
 right to inspect the books of the corporation, and the 
 company was fortunate to have at the time a number 
 of employees who understood enough about business 
 to translate these financial statements to the people 
 involved. The success at Filene's is not due to the 
 machinery of government, but to the widespread 
 knowledge among the people employed of how the 
 company makes money and where the wages come 
 from. For instance, each sales person has a sales quota, 
 which is fixed on the amount of goods that must be 
 sold in order to pay the particular base wage received. 
 When that wage has been earned, the company and 
 the employee spht the amount charged as selling ex- 
 pense in the total of sales beyond the quota. Even 
 the most stupid girl grasps where her wages come 
 from — that they do not come out of the air! 
 
COMMON SENSE AND LABOUR 129 
 
 In the small business with only half a dozen or so 
 employees everybody knows how and where the 
 wages come from. The workers know that if the 
 boss has no work to do, they will not get money, 
 and that if they are very slow in their jobs, the 
 boss will be miable to compete on a price basis 
 with some other business that has speedier men. 
 It is only when the selling and the accounting are 
 very far away from the men on the bench that 
 the work and the wage lose connection. In the 
 moderate-sized factory it is not necessary to lose 
 this touch. 
 
 Take this experience. The Irving Pitt Company had 
 never had a strike; they had always paid as high or 
 higher wages than were being paid in the community; 
 they had reduced hours to forty-four, and generally 
 were on a fair basis with their five hundred men. 
 They had an open shop, and although they did not 
 treat with the unions as such, union and non-union 
 men were on exactly the same basis in the shop. 
 Then came a union organizer and forthwith, and 
 without formulating any demands whatsoever, the 
 men started to walk out. The president of the com- 
 pany asked the group what it wanted. Some did 
 not know; others replied, "more money." 
 
130 COMMON SENSE AND LABOUR 
 
 "How much more money?" 
 
 That again was a puzzler. Several thought that 
 two dollars a week more would be right, others asked 
 only a dollar additional, while a few very frankly 
 stated that they wanted nothing in particular but 
 were going to be "good sports" and go out with the 
 rest of the bunch. Finally they all decided that what 
 they wanted was the right to organize. 
 
 "Have you made any demand to organize? Has 
 anything been refused? Have you ever mentioned 
 to any foreman, superintendent, or any one else in 
 authority that you wanted more money?" 
 
 The men had to admit that they had made no re- 
 quests of any kind. 
 
 "I am not opposed in principle to organized 
 labour," went on the president, "but you know as I 
 know that the present strike movement here has 
 nothing to do with wages or hours, but what the 
 agitators are after is to start the class war. If you 
 believe in the class war, say so, and go to it. Then 
 there is nothing for us to adjust. But if it is your 
 own affairs with which you are concerned, why do 
 you not organize and I will not only deal with you 
 collectively, but I will turn over to you the decision 
 on every matter in controversy. You can elect a 
 
COMMON SENSE AND LABOUR 131 
 
 committee of representatives and the company will 
 agree in advance to do what they decide." 
 
 This solution, the president later confessed, was 
 quite impromptu; he had thought it out while he was 
 talking and he had no details in his head. 
 
 The men were suspicious. As usual they thought 
 that some kind of a game was being put up; they 
 wanted to know when the organization would start, 
 and generally they were skeptical. The president 
 on the spot appointed the chief agitator among the 
 workers to go forward with the plan and make ar- 
 rangements for an election that very afternoon. The 
 men elected twenty members all of them from the 
 rank and file; there were no superintendents or fore- 
 men on the board, but the men agreed to have the 
 superintendents, the purchasing agent, and the chief 
 planner sit with them, merely so that they might 
 have at hand complete and accurate information 
 from the company's side on any question that might 
 arise. 
 
 The board went to work, it first took up the de- 
 mand of the assembly-room boys for higher wages — 
 those boys were about to quit. The board examined 
 into the facts, granted an increase to one boy, and 
 refused the others. In the face of a decision by their 
 
132 COMMON SENSE AND LABOUR 
 
 fellows, the boys took the award and stayed at work. 
 During the course of this decision one of the members 
 of the board wanted to see the company's books. 
 That brought on a discussion. Another member 
 declared that what the company was making had 
 nothing to do with the rate of wages. He took the 
 ordinary union view that wages depended on the 
 condition of the labour market, and if the company 
 was earning large profits and could a£Ford to pay 
 semi-skilled men as much as skilled men were receiv- 
 ing on the outside, it would be to the advantage of 
 the company to hire only skilled men, for then they 
 would get more for their money. Considering the 
 question from this angle, the board immediately de- 
 cided that it did not want to see the books. The 
 company did not at any time participate in this dis- 
 cussion and it would not have objected to surrender- 
 ing the books. 
 
 The attitude of the members of this board is not 
 at all an unusual one among workmen. The theo- 
 rists and the agitators declaim loudly that the work- 
 ers want the profits of industry, and in the same 
 breath they declare for imiform wages, which are two 
 contradictory proposals, because profits cannot al- 
 ways and everywhere be the same. The average 
 
COMMON SENSE AND LABOUR 133 
 
 workman, however, when he gets down to the specific 
 case, in which he is himself involved, seldom bothers 
 about profits. As a man who has had long experience 
 with labour puts it: 
 
 "The rank and file of the workmen do not care 
 how much you make, just so long as they are sure 
 that they are getting theirs. If he has no automobile 
 he does not object to you having a Ford, but he would 
 object to a Rolls Royce. But if he has a Ford he 
 rather likes to see you with a $5,000 or $6,000 car, 
 while if he can own, say, a $9,000 car you may buy 
 yourself a circus wagon, if your fancy turns that way, 
 and he will then examine it not with envious, but 
 with appraising, eyes." 
 
 This particular board, at the outset, wanted col- 
 lective bargaining, but in practice they preferred 
 individual rulings. Collective bargaining is never 
 really popular, it is a result of the minority 
 will being imposed upon that of the majority. A 
 man is afraid to get up in meeting and say that he 
 is better than the others and ought to have more 
 money. A workman is just like any one else and 
 down in his heart he resents being compelled to ac- 
 cept uniformity. 
 
 The decisions of the board were fair. In only one 
 
134 COMMON SENSE AND LABOUR 
 
 case did they grant a request which the company 
 would have denied. The usual human nature crop- 
 ped out. One of the most prominent members of 
 the board thought that his position and influence 
 entitled him to more money than he had been getting. 
 He made a loud speech for himself, but the board 
 refused him. In the course of time fewer and fewer 
 disputes came before the board. A tendency has de- 
 veloped to settle out of court, but the board still meets 
 regularly once a month on company time and it is a 
 success. This plan was not originated with any idea 
 in mind of granting autonomy to the workers. It 
 was purely an opportunist remedy, but it has worked 
 extraordinarily well in practice, which is somewhat 
 remarkable because it has few constructive features. 
 Perhaps it works because it is the worker's own child. 
 There is a deal in that. 
 
 The above is really more a case of personal contact 
 than of representation, but this element of personal 
 contact, like everything else in this wholly unneces- 
 sarily complicated and rigmarole-surrounded problem 
 of capital and labour, is variously interpreted. Per- 
 sonal contact sometimes connotes hand-shaking and 
 welfare work and there are employment "experts" 
 who think so highly of personal contact that they 
 
COMMON SENSE AND LABOUR 135 
 
 advocate having the executive periodically circulate 
 through the shops calling the workers by name. Since 
 most executives have not the name-remembering 
 capacity of a club doorkeeper, the practice sometimes 
 gives rise to very amusing situations as some perverse 
 geniuses get the names badly shuffled. To correct 
 this, it has been seriously advocated that the man or 
 his machine be tagged with the name with which the 
 Lord blessed his family, or the approximation of it 
 which the employment manager may be able to spell, 
 and thereby permit the executive, imless he happens 
 to be near-sighted, to be friendly in exact nomen- 
 clature. This interesting mental exercise has, of 
 course, nothing to do with the labour problem. The 
 most it can do is to establish a kind of acquaintance- 
 ship and it neglects the fact that the employee may 
 not always consider the executive worth knowing. 
 There are two sides to being "friendly." 
 
 The next stage of industrial representation is the 
 purely constructive, in which capital and labour 
 meet not as partners but as persons anxious to make 
 all that they can out of the same general opportunity. 
 Some splendid results have here been accomplished. 
 
CHAPTER SIX 
 
 WHEN THEY GET TOGETHER 
 
 Giving the workers a voice in the management, as 
 I have previously shown, of itself amounts to nothing 
 at all. As far as the workers are concerned in- 
 dustrial representation is of value in the degree that 
 it makes them familiar with the processes of the busi- 
 ness and incites the creative instinct. If it does 
 not accompUsh these results, if it does not give them 
 an intimate familiarity with and interest in the busi- 
 ness, the right to have a say is not more valuable 
 than a Cooper Union free-for-all. 
 
 A second and quite unadvertised side of represen- 
 tation, which is quite as important as that touching 
 the employees, is that to be of greatest efficacy it 
 must also teach the employer something about the 
 adventure in which he is engaged — that is, cause him 
 to look at the business itself and not merely at the 
 bank account. 
 
 Representation is a blow at managerial incom- 
 petency. If the men get thoroughly on their jobs 
 
 136 
 
COMMON SENSE AND LABOUR 137 
 
 so also must the managers, and although it is popu- 
 lar to assume that the employer is always right 
 and the worker always wrong, such is by no means 
 the truth, and the more quickly we recognize this 
 fact the more quickly we shall attain that well- 
 balanced industrial condition to which eflficient pro- 
 duction is a natural sequence. Just as that worker 
 who is loudest in declaiming his rights is commonly 
 the poorest worker, so also that employer who is per- 
 fectly certain of the strength of his position is com- 
 monly the poorest employer. The right kind of rep- 
 resentation will cause not only a far more eflficient 
 working force but also a far more eflficient managing 
 force, and the two in conjunction will make good 
 business. 
 
 When we find that a plan of industrial representa- 
 tion which gives a free forum to the workers does not 
 function we can be perfectly certain of one of two 
 things — that either the representatives have not 
 been furnished by the management with all the busi- 
 ness facts or that the management itself is not cap- 
 able. Where the workers transform a representative 
 system into a society to increase wages you can take 
 for granted without investigation that no sincere 
 and straightforward attempt has been made to let 
 
138 COMMON SENSE AND LABOUR 
 
 them ascertain how the business is conducted, and 
 also you may take for granted that when a manage- 
 ment does refuse to permit workmen to know facts 
 and figures, it either does not know the facts and 
 figures itself, or someone in the management is doing 
 something which he should not do. 
 
 The workman is made of exactly the same stuff as 
 the employer and when he and his fellows ask for im- 
 possible wages and hours they are only following the 
 lead of those employers who get together and 
 agree to limit production in order to maintain 
 high prices. Wherever you go in this employer and 
 employee relation you find that the employee, when 
 he gets a measure of irresponsible power, starts out 
 to do exactly what the employer used to do when he, 
 too, suffered from the delusion that he had a power, 
 the use of which did not have to be accounted for to 
 the pubUc. The strong point in industrial represen- 
 tation is that neither the employer nor the employee 
 will be fooUsh enough to do anji;hing which will not 
 stand the light. Both inevitably realize not only their 
 responsibility to each other but to the public. They 
 have to practise open diplomacy that is really open. 
 
 And so, working together with a clear knowledge 
 of what business is, the impossible often becomes 
 
COMMON SENSE AND LABOUR 139 
 
 easy. That which is to-day generally called "im- 
 possible" is for a manufacturer to keep pace with 
 rising wage and material costs without passing the 
 increases on to the consumer. Everywhere one 
 hears that it is "impossible" to have lower prices 
 until the workers consent to do more work and take 
 less money. It is true that workmen are doing very 
 Uttle work, doing it without intelligence, and asking 
 a lot of money for it, but the career of the White 
 Motor Company suggests that perhaps some of 
 these "impossibilities" are mental rather than physi- 
 cal. 
 
 At the White Company in Cleveland service has 
 outstripped wage, with the very remarkable conse- 
 quence that, although materials have increased 50 
 per cent, and wages 110 per cent, since 1914, the 
 company has found it necessary to increase the cost 
 of the finished product to the consumer by only 
 10 per cent. The net increase in manufacturing 
 cost is only 7 per cent. This is an unequalled record. 
 
 The makers of typewriters have not found it neces- 
 sary to increase their price to the public because they 
 have cut down selling expenses, but their manufac- 
 turing costs are actually very much greater than be- 
 fore the war and there has been no marked increase 
 
140 COMMON SENSE AND LABOUR 
 
 in building efficiency. The demand for machines 
 has, however, been so enormous that it has been pos- 
 sible, in spite of very high wages and in spite of the 
 high cost of materials, to sell more machines than 
 ever before and therefore to take smaller profits per 
 machine. Selling more machines, the profits are 
 greater than ever before. 
 
 The White Company has made its record through 
 straight manufacturing efficiency. The average 
 wage to-day based on 51 weeks' work is $32.34 as 
 against $14.04 in 1910 and $15.03 in 1914. The 
 factory value of the product for 1919 is $33,500,000 
 as against somewhat less than $4,000,000 in 1910 and 
 about $9,000,000 in 1914. 
 
 In the White Company the selling side is not 
 important, for at the present time it is not necessary 
 really to sell first-class motor trucks. It is more a 
 question of being able to deliver them. 
 
 Hand in hand and as a part of the remarkable 
 record in efficiency, this company has achieved just 
 as remarkable a record in the holding of its men. 
 Cleveland is what is known as a labour centre in that 
 there are a very large number of factories located in 
 the district. During the war it was a paradise for 
 the man who liked to hire himself from day to day 
 
COMMON SENSE AND LABOUR 141 
 
 to the highest bidder. Every possible inducement 
 is present for machine-gun-like hiring and firing. 
 The average turnover of labour, that is the nimiber 
 of men hired in comparison with the total number 
 employed, was 300 per cent, during the war. The 
 average of the White Motor Company for 1917 was 
 74 per cent, and for 1918 was 62 per cent., which 
 includes the withdrawals by draft or enlistment 
 amounting to 8.75 per cent. The largest month 
 during these two years had 9.2 per cent., in September, 
 
 1917, and the lowest had 2.6 per cent., in January, 
 
 1918. For the year 1919 the lowest monthly per- 
 centage was 1.23 and the highest 2.65. When you 
 consider that, the country over, it seems almost 
 impossible to get a day's work for a day's pay, and 
 that men consent to be hired apparently only for 
 the purpose of ascertaining what the job is like, which 
 curiosity is very quickly satisfied, the example of 
 the White Company is worthy of the closest study 
 and holds many lessons for those who would solve 
 the problem of industry by resounding formulae. 
 
 The remarkable success is not due to trick or magic 
 but to the firm grasping by everyone of the cardinal 
 principle of our economic life, and that is that wealth, 
 whether in the form of wages or profits, comes from 
 
142 COMMON SENSE AND LABOUR 
 
 only one source: production. The people know why 
 they work. Thus every adjustment has been com- 
 paratively easy. 
 
 But it may be said right here that this principle, 
 now amounting to a conviction, did not grow of itself, 
 but is the result of extremely intelligent, fair-minded 
 management which involves a complete exposition 
 of all of the financial and other workings of the com- 
 pany to the people in mass through well-phrased 
 editorial work and a complete representative sys- 
 tem with a representative for each ten employees. 
 There is absolutely no paternalism and no aloofness, 
 but instead a complete readiness to meet any radical 
 argument on its own ground with facts and figures. 
 It is what might be called an un-union shop in that 
 there is no discrimination against trade unions, but 
 there are many union men employed, and in fact the 
 presidents of several of the local unions have been 
 shop-committee chairmen. One of the employment 
 officers is a former union labour leader of Cleveland, 
 and the executive officers are to quite a considerable 
 degree believers in many of the principles of social- 
 ism and even of Marx socialism. They are wholly 
 against absentee ownership, in favour of corporate 
 form of enterprise, and look forward to the day when 
 
COMMON SENSE AND LABOUR 143 
 
 the worker, learning the advantage of thrift, will con- 
 trol industry by buying himself into it. 
 
 The average employer is not sufficiently acquainted 
 with economic principles to answer a good radical 
 agitator on his own ground. The active managers 
 of this company in contact with the workers could 
 all be persuasive radical agitators were they only less 
 sufficiently informed on the processes of industry. 
 They are not trades unionists because they know that 
 a man cannot fly by tugging at his boot straps, that 
 is, by continually asking for more in return for less. 
 They are not state socialists because they are very 
 much inclined to doubt that the wisdom of the state 
 is infinite, and they are not Bolshevists because they 
 think that the road to freedom is through work. Al- 
 together they are a very remarkable collection of 
 true liberals, their outstanding distinction from most 
 liberals being that they know what they are talking 
 about and do not merely follow phrases. 
 
 Let us see how all of this came about. In 1914, 
 when the war began, the managers instantly realized 
 that if the war continued through any great length of 
 time there would be a world-wide inflation of cur- 
 rency and that the buying power of money would 
 rapidly shrink. They examined into the effects of 
 
144 COMMON SENSE AND LABOUR 
 
 past wars and they decided to organize to meet con- 
 ditions. They did not organize all at once, they did 
 not take Bottle 999 off the shelf and swallow its 
 entire contents with the expectation of being there- 
 after fortified against all industrial disease. Instead 
 they felt that the surest way to attain the end they 
 sought was to spread economic knowledge — to let 
 the workers go forward with them in the study of 
 conditions, so that instead of an antagonistic body 
 they would have a cooperative body. 
 
 They finally achieved this through the organiza- 
 tion of shop committees with the object of bringing 
 about a closer relationship between the management 
 and its employees and increasing the confidence of 
 each in the other through an educational programme 
 arranged to develop a better understanding of the 
 common problems. Each department is divided 
 into groups of about ten men and a representative 
 elected by each group by secret ballot. These form 
 a Department Committee. These committees elect 
 their own chairmen and secretaries and hold meetings 
 every other week on company time, and at these 
 meetings the superintendents and other supervisors 
 may attend, but they are not members and are per- 
 mitted to speak only on invitation. That is all the 
 
COMMON SENSE AND LABOUR 145 
 
 organization there is; the rest is left to the committees 
 themselves. 
 
 They have no rules as to what they shall do and 
 what they shall not do. The forums are wide open 
 for the discussion of the business. In charts and 
 figures the meetings have before them every financial 
 and other activity of the company. There is nothing 
 the men cannot investigate if they want to. They 
 can and do make recommendations of various sorts, 
 but the big thing that these committees have done 
 is to grasp what production means and what capital 
 does and thus thoroughly to comprehend the policy 
 of the company. The company does not believe 
 that it is possible to overproduce. Neither do the 
 men now. They say with economic exactness that 
 "the term (over-production) is merely a negative 
 expression of the phenomenon of under-production. 
 Production means the creation of wealth. Without 
 production a company will be without wealth and so 
 will experience depression due to under-consumption." 
 That knocks out the familiar argument that over- 
 production spells idleness for the worker. The 
 company has planned and has to date carried through 
 a logical programme of annual expansion and, by 
 putting the cards on the table, has demonstrated 
 
146 COMMON SENSE AND LABOUR 
 
 thoroughly to the men that the highest possible wage 
 can be paid only when the highest possible produc- 
 tion is attained. This is graphically illustrated by 
 showing that the larger the concern and the higher 
 the per-man production, the higher will be wages, 
 not merely in dollars, but in actual buying power. 
 
 All of these committee meetings have before them 
 estimates of the buying power of the dollar. Taking 
 the buying power of the dollar in 1914 as a unit: they 
 estimate a decrease of one half for 1919 — that is, a 
 dollar of 1914 is worth fifty cents to-day. The chart 
 shows that in 1914 the production of the company was 
 valued at $9,023,172. They had 2,202 workmen on 
 an average who received an average weekly wage 
 of $15.03 and a total wage of $1,688,467. For 
 1919 there is an estimated production of $33,500,000 
 with the average number of men 5,500 and the aver- 
 age wage of $32.44, making a total wage of $9,000,000. 
 This, reduced to a graphic, shows that the value of 
 the product has increased in a greater proportion 
 than the average number of men employed and, that 
 with the larger production, the wages have not only 
 more than doubled as expressed in dollars over 1914, 
 but translating the 1919 wage of $32.44 into 1914 
 dollars, the wage to-day would be $16.22 as against 
 
COMMON SENSE AND LABOUR 147 
 
 $15.03, which represents in five years an absolute 
 increase of $1.19. This does not seem to be a very 
 large increase in these days of enormous dollar values, 
 but it takes on a dififerent light when it is considered 
 that in this same company the wages declined from 
 $14.04 m 1910 to $12.82 in 1911 and rose again m 
 1914 to $15.03. The actual increase is really greater 
 than $1.19 because the 1919 dollar is worth more than 
 fifty cents as compared with the 1914 dollar. 
 
 Through such methods as these and through dis- 
 cussions from every possible angle the entire person- 
 nel realizes fully the company's policy — which is 
 essentially this: 
 
 "Production is the greatest essential in a factory. 
 For the whole community to maintain a comfortable 
 and humane standard of living it is necessary for 
 every man in the community to produce consistently, 
 otherwise there will not be enough wealth to go 
 around. The generally accepted idea and fear of 
 over-production is at bottom unsound and should not 
 enter into the policy of either management or em- 
 ployees. There really can be no such thing as over- 
 production in industry. 
 
 "Production must first be arranged consistently 
 with plant investment, inventories, and personnel. 
 
148 COMMON SENSE AND LABOUR 
 
 They Jiaust be well balanced to attain maximum re- 
 sults for employees and management. Such activi- 
 ties as purchasing, stores, inventories, cost systems, 
 maintenance, and plant repairs, over which produc- 
 tive labour has no control and in the opinion of the 
 management has no desire to be bothered with, are 
 arranged to keep production standards atamaximum. 
 In this way it is made possible to earn the greatest 
 amount with least exertion and to build up a secure 
 future for the employees in the factory. 
 
 "After the proper organization is established and 
 maximum production arranged for, the first and most 
 important consideration is 'Labour.' 
 
 "The highest possible wage on a straight time 
 basis without bonuses, premiums, or 'profit-sharing' 
 is paid to employees. The factors instrumental in 
 establishing the wage scale are cost of living and 
 amount of production. It is the policy of the man- 
 agement always to study the future from all angles, 
 and make the White Motor Company a safe work- 
 shop, and a part of every employee's home." 
 
 They bring everything down to the man — for 
 instance, the company sets aside a special fund from 
 production to cover the hospital, the losses in the 
 factory kitchen and restaurant, time paid to em- 
 
COMMON SENSE AND LABOUR 149 
 
 ployees for jury service, time paid to employees in 
 registration, medical service, amusements, and the 
 expense of publishing and sending the company's 
 monthly magazine to each of the employees. The 
 total of these expenditures for 1918 was $127,720.93. 
 These expenditures are charted and reduced to the 
 average cost per man per month, week, and day. 
 They amoimt to eight cents a day per man and thus 
 every vestige of paternalism is removed by the con- 
 clusive demonstration that these expenditures are 
 paid for out of production to the end that production 
 may be bettered. They thus rightly appear as a 
 community effort and not as company benefaction. 
 There are many other points of interest in the 
 operations. The employment oflSce tries to hire 
 employees of all creeds and nationaUties, so mixing 
 them up that there can be no sections or factions. 
 They will not take men who have not at least applied 
 for their first papers, and they prefer married men 
 beyond thirty to single men. But over and above 
 all is the great principle of the organization spread 
 through representation and able management that 
 the progress of the company is the employee's prog- 
 ress because only out of greater and greater produc- 
 tion can higher and higher wages be paid. 
 
150 COMMON SENSE AND LABOUR 
 
 It follows as of course that this production must be 
 good production and therefore the creative instinct is 
 stimulated. 
 
 It is almost needless to say that under these condi- 
 tions it would not be possible for an ineJBBcient execu- 
 tive to hold his job or to administer his job by absent 
 treatment. Essentially this whole plan may be re- 
 lated back to the same principles that hold in the 
 Disston, the Baldwin, and the Endicott-Johnson 
 plants, but with the difference that where the re- 
 sults in those cases are in a sense unconscious the 
 results in the White Company are due to conscious 
 effort. 
 
 An almost equally remarkable record, attained by 
 quite a different mode, is that of the American Roll- 
 ing Mill Company at Middletown, Ohio. This com- 
 pany employs some five thousand people, has been 
 operating about twenty years, and has not only never 
 had a strike, but also since the Armistice the per-man 
 production has not dropped. The usual story of dis- 
 organized, dissatisfied men is notably absent, and 
 also there is notably absent any elaborate machinery 
 for the preservation of what is called "industrial 
 peace." 
 
 The company operates two plants at Middletown, 
 
COMMON SENSE AND LABOUR 151 
 
 Ohio, a blast furnace at Columbus, a works at Zanes- 
 ville, coal mines in West Virginia, and ore mines in 
 the Lake Superior district. What is said about the 
 plant at Middletown applies with equal force to all 
 of the other plants of the corporation. As George 
 M. Verity, the president, stated to me in the midst 
 of the steel strike: 
 
 "We know of this strike only through the news- 
 papers. I am interested in it and the men are in- 
 terested in it, but not in any very personal way and 
 not at all in so far as it concerns our own affairs." 
 
 The company has no formal system of represen- 
 tation and it has not felt the need for any. Mr. 
 Verity is a big, broad man and he has filled the whole 
 organization with the idea that everyone from the top 
 down should regulate his every action in, as he ex- 
 presses it, "a spirit of fairness, a square deal always 
 both in theory and practice; a big, broad view of 
 every problem, cutting out all narrowness and Uttle- 
 ness ; a spirit of unselfishness, of loyalty, and of cour- 
 tesy to and consideration for the other fellow." 
 
 These are fine words, but fine words butter no 
 parsnips. Mr. Verity does the buttering by being 
 eternally at his desk. He hves in Middletown and 
 he and his associates both in Middletown and in the 
 
152 COMMON SENSE AND LABOUR 
 
 other plants are continually among the men per- 
 sonally and meeting with them in group affairs so 
 that the relation of even a labourer to the company 
 never becomes a coldly impersonal affair. Further, 
 some twenty-four men are appointed throughout 
 the various departments and charged with the duty 
 of seeing that the company policy is kept alive as a 
 fact. Mr, Verity thinks of these men as spokes in a 
 great business wheel of which he is the hub. Every one 
 of them wears a gold seal company ring and it is their 
 duty to see that every complaint or every possibility 
 of a complaint is instantly attended to. 
 
 The career of this company emphasizes the fact 
 that it is not the machinery of control that mat- 
 ters in the industrial relation, but the essential re- 
 sults that may be obtained. If the results can be 
 obtained without elaborate organization so much 
 the better. 
 
 The Midvale Steel and Ordnance Company, in 
 spite of its size, has not lost the personal element. 
 Here again we find not so much a system as a man, 
 and that man is Wilham B. Dickson, the chairman 
 of the board and vice-president of the company. 
 His view is expressed wholly in the famous answer 
 which Mr. Carnegie gave when asked, "Which is 
 
COMMON SENSE AND LABOUR 153 
 
 the most important factor in business — ^labour, 
 capital, or management?" — "Which is the most 
 important leg of a three-legged stool?" 
 
 In 1918 the company posted a notice stating that 
 it recognized that the prosperity of the corporation 
 was a joint affair of the company and its employees, 
 that the wage earners had the right to bargain col- 
 lectively, and suggested that in order to attain these 
 ends the employees of the various departments elect 
 representatives. These representatives elected from 
 themselves a committee to confer with the officers of 
 the company. They evolved a plan providing for a 
 representative for each 300 employees, the only 
 qualification for a representative being that he should 
 have been in the employ of the company at least a 
 year. These are known as Division Representatives 
 and they elect a Plant Conference Committee con- 
 taining one representative for each 3,000 employees. 
 
 The plan has worked. Its rules are not elaborate, 
 and although a cursory examination might lead to 
 the inference that the representatives were primarily 
 elected to form a complaint and arbitration board, 
 the real thought behind the plan is to spread a knowl- 
 edge of how the business is conducted and to let the 
 men in on the problems of management in a construe- 
 
151 COMMON SENSE AND LABOUR 
 
 tive way. The arbitration machinery is so well 
 rounded and comprehensive that there cannot be 
 an unadjudicated grievance, but the driving force 
 comes from the fact that Mr. Dickson, who started 
 as a workman and has risen through the ranks, has 
 thoroughly sold to the people the idea that he wants 
 them to help in making a better company. 
 
 That the employees have not only recognized but 
 accepted their responsibility could not be better 
 shown than their announcement after the meeting 
 of the American Federation of Labour at Atlantic 
 City, in which among other things the six-hour day 
 was endorsed and the project for the unionization 
 of steel companies launched. They passed a resolu- 
 tion which contained these words: 
 
 The persistent and unceasing demand of workmen employed 
 in all classes and kinds of industries for a shorter day's work and 
 an increased wage in order to meet the present high cost of living 
 is uneconomic and unwise and should not be encouraged. 
 
 No plan of representation is automatic — the people 
 have to cooperate, and that they will not do until 
 they are convinced that no trick is intended. 
 
 I know of no case in which the workers have asked 
 for or initiated any form of industrial representation, 
 
COMMON SENSE AND LABOUR 155 
 
 or have received the representation otherwise than 
 with suspicion. Workers do not yearn for democracy ; 
 they commonly know nothing whatsoever of the 
 processes of industry and always they will more 
 readily receive an untruth than a truth. There is 
 nothing strange about this. They have been firmly 
 grounded in the notion that the employer will cheat 
 them if he can, in which view they are more often 
 right than wrong. The excessive demands of work- 
 ers engaged in the building industry, for instance, 
 are due to the fact that before they were organized 
 they were given just as little money as it was possible 
 to give them. The general contractor made his 
 money by what is known as "skinning" the sub- 
 contractors, the sub-contractor made his profit by in 
 turn skinning the workmen whom he employed and 
 the dealers from whom he bought materials, and so 
 it went all down the line. It used to be a very com- 
 mon practice for employers to pay their men in 
 cheques and if the work were in a sparsely settled 
 district to arrange with saloons to cash these cheques 
 only at a discoimt of anywhere from 10 per cent, to 
 30 per cent. It was not imcommon to take a construc- 
 tion gang out into the wilds where there was no trans- 
 portation, under the promise of high wages, pay these 
 
156 COMMON SENSE AND LABOUR 
 
 wages for a time in cheques which the men cpuld not 
 cash, and then discharge all of them without provid- 
 ing means by which they might get home. The 
 contractors, having the men in this position, would 
 then offer to hire them back at low wages. It serves 
 no good purpose to recount all of this stuff excepting 
 to bring to mind that it is perfectly natural and per- 
 fectly understandable for workers in the ascendency 
 to act as the employers did when they were in the 
 ascendency. And the good employer must suffer 
 with the bad. It is not, therefore, remarkable that 
 the attempts to get upon a fairer basis, when initi- 
 ated by the employer, are received with suspicion by 
 the employees. We have only to try to picture what 
 would have happened to a group of employees who, 
 in the old days when the supply of labour was greater 
 than the demand, would have approached their em- 
 ployer with the suggestion for a shop committee or 
 for any kind of a workers' body to legislate upon con- 
 ditions in the shop. It is a remarkable tribute to 
 the fundamental fairness of the average man, to the 
 fimdamental fairness of the American worker, that 
 he receives every clear-cut plan for industrial repre- 
 sentation with far better grace than the employer 
 would have received such suggestions. 
 
COMMON SENSE AND LABOUR 157 
 
 The plain fact is that most representative plans are 
 received and put into operation by employers with 
 the utmost reluctance and only through neces- 
 sity — which is a cause for gratitude since any ar- 
 rangement arrived at from other than economic 
 necessity is bound to fail. A general benevolence 
 toward humanity is either a professional asset or a 
 recreation. The strength of the best of the plans 
 is that, omitting the gestures, they have been adopted 
 through reasons of necessity. There are a number of 
 these plans. Some of them are heralded as panaceas 
 and a few of them are not heralded at all. None 
 of them is a panacea and the patient is not instantly a 
 new man after taking. 
 
 The most interesting plan of general application 
 with specific changes for the case in hand is what is 
 called not very accurately "Industrial Democracy," 
 as very successfully promulgated by John Leitch. 
 Under this plan the workmen are represented in a body 
 called the House of Representatives composed ex- 
 clusively of workmen elected by the various depart- 
 ments, the elections being by secret ballot and the 
 number of representatives varying according to the 
 size of the plant. This body is organized essentially 
 along the lines of the lower house in any bicameral 
 
158 COMMON SENSE AND LABOUR 
 
 system of government. It has committees on vari- 
 ous subjects connected with those affairs that touch 
 the workmen and including committees to receive 
 complaints upon wage matters, and other special or 
 standing committees to deal with improvements in 
 production. The thought behind this body is that 
 it will discuss the plant conditions with a view to 
 making betterments, these betterments being in- 
 stantly reflected in the pocketbook by a wage divi- 
 dend which is based upon economies of operation. 
 If some improvement is introduced by which a thou- 
 sand dollars is cut out of the month's production 
 costs, that sum is divided in equal parts between the 
 company and the men, the share of the men being 
 given separately to each of them as a percentage 
 dividend upon his wages. 
 
 It is the experience of practically all of those who 
 have had to do with the enhsting of the cooperation 
 of labour that although money will not induce cooper- 
 tion, money given as a result of cooperation and 
 directly related to the thing done is a feature which 
 cannot be neglected. 
 
 In addition to the House of Representatives is a 
 body known as a Senate which is composed ex-officio 
 of foremen, managers, and department heads. Its 
 
COMMON SENSE AND LABOUR 159 
 
 powers are coiirdinate with and equal to those of the 
 House of Representatives and these two bodies func- 
 tion together in much the same way as do the House 
 and the Senate in our national government, that is, 
 either may initiate legislation, but any enactment by 
 the one must be introduced and passed by the other. 
 To facilitate legislation, provision is made for the 
 appointment of joint committees to iron out differ- 
 ences and for joint sittings where necessary. 
 
 When any bill has been passed by both bodies it 
 goes forward to what is known as the Cabinet, which 
 is composed of the executive officers of the company. 
 The Cabinet has the final power of veto; without 
 its approval an act does not go into force. An- 
 other credit mark is added to the essentially com- 
 mon-sense record of the American worker by the 
 fact that in the fifteen or twenty places in which this 
 scheme has been put into operation it has never been 
 found necessary for any cabinet to veto an act which 
 had the approval of both the representative bodies. 
 
 It will be seen that the Leitch plan possesses a con- 
 siderable emotional advantage in the titular designa- 
 tion of the elective committees. Just as secret 
 societies get a deal of satisfaction out of sonorous 
 titles, so do the workmen find honour in being 
 
160 COMMON SENSE AND LABOUR 
 
 "senators" and "representatives." The dignity of 
 the titles undoubtedly adds to the conscientiousness 
 with which they perform their duties. The success 
 of the plan, however, is not in its mechanics, but in 
 the fact that Mr. Leitch is a man of strong personality 
 wholly believing in himself and what he has to offer 
 and therefore he succeeds in selling, that is in convinc- 
 ing, both the workers and the employer of the pecuni- 
 ary and moral benefits of being just and fair. 
 
 He initiates the system by a series of talks develop- 
 ing the elemental principles of justice, energy, econ- 
 omy, and efiiciency, all of which culminate in service, 
 and he takes these imdoubtedly commendable vir- 
 tues out of their usual atmosphere of abstract good- 
 ness and puts them into the day's work. It is in this 
 primary conjunction, in this prying open of minds, 
 so that all hands profess themselves willing to take a 
 chance, that the plan usually succeeds in getting a fair 
 start — and it is about one half of the battle to get a 
 fair start. Getting away to a fair start does not 
 mean that the people are convinced, but it does mean 
 that they will suspend judgment and take a chance. 
 Sometimes we forget that any measure of self- 
 government suddenly dumped upon the people bene- 
 fits that people in much the same way that a ton of 
 
COMMON SENSE AND LABOUR 161 
 
 coal would benefit a householder quite out of coal 
 if it were delivered to him all at once and unexpect- 
 edly when he happened to be standing in the bin. 
 
 The Packard Piano Company at Fort Wayne, 
 Indiana, the Shelton Looms of Sidney Blumenthal 
 & Company at Shelton, Connecticut, and the tobacco 
 pipe factory of Wilham Demuth & Company at 
 Brooklyn Manor, New York, are the most conspic- 
 uous examples of this industrial democracy. 
 
 The Packard Piano Company has been running 
 under the plan for nearly seven years, and the most 
 startling result is that by better methods and better 
 machinery iuvented almost wholly by the men the 
 plant force has been reduced from 268 to 168 and the 
 former production has been nearly tripled. In this 
 plant the interest of the men is so intense and they 
 feel themselves so much a part of the business that 
 not long since they resolved in meeting that the presi- 
 dent should take a vacation. He took a vacation 
 and they materially increased production during his 
 absence ! 
 
 The reduction in men, it is well to add, was effected 
 during the dull period of 1914 when more than a hun- 
 dred men had to leave because the factory was on part 
 time, arranged for by the workers themselves. When 
 
162 COMMON SENSE AND LABOUR 
 
 business picked up again the remaining men found 
 that through better methods they could handle the 
 work without taking on additional people. 
 
 The Blumenthal Company makes velvet fabrics 
 which are exceedingly easy to spoil in manufacture. 
 The company had considerable difficulty not only with 
 the amount of production but also with the kind of 
 production, the number of "seconds" turned out being 
 wholly disproportionate. After the men themselves 
 had obtained a voice in the management of the busi- 
 ness they evolved a quality bonus based on perfect 
 production. They investigated tools and machinery, 
 made no end of improvements, and not only very 
 largely increased production but also practically 
 eUminated the "seconds" which up to that time had 
 been such a serious factor. 
 
 In the Demuth Company almost the same 
 story is had excepting that here the whole process 
 of making tobacco pipes was examined and improved 
 to the end that poor workmanship resulting in 
 pipes which had to be sold at lower prices was all but 
 eliminated. 
 
 In all of these cases and in every other case where 
 Industrial Democracy has been tried, not only have 
 wages been raised but the comparative cost of the 
 
COMMON SENSE AND LABOUR 163 
 
 product also haj been lessened — which is real manu- 
 facturing. 
 
 The Demuth Company offers an interesting ex- 
 ample of what can and what cannot reasonably be 
 expected from representation and the part which 
 strikes really play. The Demuth employees, al- 
 though the men were receiving entirely satisfactory 
 wages and the bulk of them were satisfied that 
 through inteUigent effort they could continuously 
 better their situations, went on strike and stayed out 
 for about a fortnight in spite of everything that could 
 be done to the contrary. The strike was not author- 
 ized by the House or by the Senate. It did not have 
 the support of the English-speaking workers. It 
 was exclusively among the foreigners who did not 
 speak EngUsh and it was caused not through any 
 desire for the bettering of wages or working condi- 
 tions, but solely by a group of extreme radicals who 
 convinced the aliens that the time had come to start 
 the Social Revolution. 
 
 This strike illustrates that in one section of what is 
 known as the industrial problem there exists an in- 
 sanely radical element which has to be recognized, ac- 
 cepted as incurable, and prepared against. It is part 
 of the revolutionary creed to preach that those who 
 
164 COMMON SENSE AND LABOUR 
 
 do not work exclusively with their hands and some- 
 times use their brains are in constant and deadly terror 
 of those who sometimes use their hands and never use 
 their brains. It is extraordinarily difificult to deter- 
 mine when force should be used, for force is always 
 the first reply of the blockhead, than whom no better 
 example exists than the average policeman! But it 
 is to be borne in mind that just as certain mental dis- 
 orders are helped by a plunge into cold water, so also 
 other disorders wrongly classed as "industrial" are 
 cured by what is vulgarly known as a "bat in the eye." 
 When a strike has a cause the representatives can 
 well handle it. In the American Multigraph Com- 
 pany of Cleveland (whose representative plan has 
 been previously described) the toolmakers asked for a 
 heavy flat increase in rates. A good mechanic is very 
 scarce in these days. Industry conducted by un- 
 imaginative mechanical engineers with their noses 
 continually poking into blue prints has evolved 
 machines to take the place of human skill and now 
 when skilled mechanics are needed they are very hard 
 indeed to obtain and so a toolmaker is apt to be 
 rather chesty. This particular group of toolmakers 
 thought itself so essential that it might go in for some 
 lavish wage increases. 
 
COMMON SENSE AND LABOUR 165 
 
 An employees' committee investigated the wages 
 in the department and they reported that a flat in- 
 crease would be gross extravagance, for although a 
 few of the men were underpaid, a considerable num- 
 ber were grossly overpaid and that those whose pay 
 was out of all proportion to their abiUty had been 
 most active in demanding the flat increase. The com- 
 mittee went over the whole scale of wages in the de- 
 partment, raised some men, and reduced others. A 
 few of those who were reduced stayed on and the 
 others left. Then this committee went carefully 
 through the wages of the entire manufacturing side 
 of the establishment, correcting as far as possible every 
 inequality, and very successfully trying to coordinate 
 abihty and remimeration. Having finished the fac- 
 tory they asked for permission to look over the oflBce 
 with the idea in mind that everyone should get what 
 was coming to him. Because office people are com- 
 paratively easy to get and the holder of a white-collar 
 job usually inclined toward meekness, no end of irreg- 
 ularities were turned up in the office. They found a 
 few people, who had persistently presented their 
 claims, overpaid. They foimd others who were afraid 
 to talk about their wages underpaid, and here again 
 the committee adjusted service and remuneration. 
 
166 COMMON SENSE AND LABOUR 
 
 taking into account not only tbe actual services ren- 
 dered, but the market value of such services in other 
 parts of Cleveland which data they obtained by first- 
 hand investigation. I have never heard of a more 
 thorough or more successful task of wage adjustment 
 than this one which was carried through by workers 
 whose conception of wages is usually supposed to be 
 boimd up in the word "more." 
 
 The Procter & Gamble Company, whose profit- 
 sharing and other plans were noticed in an earlier 
 chapter, has had a most remarkable industrial career 
 and has for a year and a half been operating an em- 
 ployees' conference plan with such excellent results 
 that no notable disturbance in eflSciency has occurred 
 since the Armistice. 
 
 I harp back to this bridging, to the period between 
 war work and peace work, because in America as well 
 as in every other belligerent coimtry the eflSciency 
 of the workers steadily decreased during the war and 
 after the Armistice dropped to a new low level, which 
 is variously estimated, but which is probably about 
 one half of the pre-war efficiency. Any industrial 
 organization that passes this point without dropping 
 in efficiency is well worth investigation. 
 
 The Procter & Gamble Company through its 
 
COMMON SENSE AND LABOUR 167 
 
 president, William Cooper Procter, was among the 
 earliest to regard employees as something more than 
 human chattels. Beginning as a firm away back in 
 1837, they have steadily progressed and, by advertis- 
 ing and other means, have sold their product not 
 only to the public, so that it has become a household 
 word, but also to the employees themselves. 
 
 The influence of advertising in selling a company 
 not only to the public but to its own people is a sub- 
 ject all in itself. The words used in the advertising 
 have to be true words and they have to be backed up 
 by the company, and when thus considered, advertis- 
 ing is imdoubtedly a great help, but also it is a two- 
 edged sword. Nothing will so quickly break up an 
 organization as any kind of imtrue advertising, for 
 that convinces the working people that they are 
 employed by a lot of crooks. The advertising of in- 
 dustrial good will is also dangerous. 
 
 The Procter & Gamble Company has the back- 
 groimd of honest performance and tradition and I 
 think it is their career of honest effort in making a 
 product as well as in deahng with the employees that 
 forms the foundation of their industrial situation. 
 
 The company has been particularly fortunate in 
 keeping its employment administration entirely free 
 
168 COMMON SENSE AND LABOUR 
 
 from quackery and paternalism and its various ex- 
 periments in profit-sharing (although to my mind 
 meaning very Uttle of themselves) have at least con- 
 vinced the employees not only of the company's de- 
 sire to be fair, but also of its desire to keep ahead of 
 the procession and to have something a httle better 
 than any one else has. 
 
 The development of the company toward repre- 
 sraitative government is, therefore, to be considered 
 as an efiFort to keep fully abreast of the times rather 
 than as a new idea introduced to meet an emer- 
 gency. The company began to experiment with shop 
 committees in 1917, and these developed into what is 
 known as the Employees' Conference Plan with the 
 idea in mind that the representatives should con- 
 structively cooperate to the end as expressed in the 
 Constitution that there might be promoted "mutual 
 understanding, . . . friendly relationship, and 
 . . . of eflBcient cooperation to a greater extent 
 than theretofore ... to afford the employees 
 ready means of making suggestions and of bringing 
 to the direct attention of the management matters 
 which in their opinion need adjustment or correction, 
 as well as to give to the management opportxmity to 
 outline its views and plans to the workmen, to the end 
 
COMMON SENSE AND LABOUR 169 
 
 that both may benefit and that a fuller understanding 
 may exist." 
 
 There is a committee for each of the three main 
 plants of the company, and each committee is in turn 
 composed of representatives elected by the employees 
 with a representative, for each fifty employees and 
 one at least for each department. Each committee 
 has an Executive Council made up of the officers 
 elected by the committee and four members appointed 
 by the Chairman. The Executive Committee is the 
 active working body. The committee at Ivorydale 
 may be taken as an example and especially its treat- 
 ment of the eight-hour day. The committee con- 
 sidered the shorter work day and the changes in the 
 wage scale and so competently worked out every 
 detail that the company put their recommendations 
 into effect without change. They have gone into 
 many other matters, such as a Health Service De- 
 partment and an Emergency Fund for the immediate 
 assistance of employees in distress, and, as seems 
 always to be the case when a committee is given real 
 responsibility and untrammelled opportunity, they 
 accept and administer their responsibility in whole- 
 hearted and intelligent fashion. 
 
 A further step of this company is the inclusion in 
 
170 COMMON SENSE AND LABOUR 
 
 the Board of Directors of three members to be elected 
 by the employees. It is too early as yet to state 
 whether such membership will be of any practical 
 benefit, for this will depend almost entirely upon the 
 type of men that the workers elect. Undoubtedly 
 it will give an opportunity for the dissemination of 
 knowledge concerning industrial enterprise, which is 
 always of the highest value, but, on the other hand, 
 if the employee members are, as is usually the case, 
 afraid to speak out in meeting, their presence will not 
 amount to anything one way or the other. 
 
 These are the most prominent examples of indus- 
 trial representation — prominent in point of accom- 
 plishment rather than in size, and many other plans 
 have been omitted either because they do not differ 
 from those already described, or because the per- 
 formances have not been, for one reason or another, 
 wholly successful. 
 
CHAPTER SEVEN 
 
 THE ECONOMIC TRUTHS OP WORK 
 
 "Well, what are you going to do about it? What's 
 your method? What solution have you?" 
 
 One cannot long discuss the relations of work with- 
 out being abruptly brought up in what I believe is 
 called "hard-headed" fashion against the necessity 
 for detailing a "remedy for labour unrest," with 
 numbered sections like a patent medicine catalogue, 
 giving full directions on just what to take for each 
 and every ill of the body industrial. Now I should 
 not like to say that being "hard-headed" in dealing 
 with the human relation in industry is on all fours 
 with being simply "bone-headed," but the difference 
 for practical purposes may be disregarded. 
 
 No one who had failed in business would demand 
 an instant national conference to devise a programme 
 that would infalUbly prevent commercial failure. 
 No one has quite faith enough in the law for that. 
 Yet people meet with all seriousness to settle the 
 actions and reactions of the human being when en- 
 
 171 
 
172 COMMON SENSE AND LABOUR 
 
 gaged in industry either as employer or employee. 
 We make merry over the minute regulations of the 
 old guilds and of various long-dead potentates and 
 wonder how autocracy could ever be so gravely 
 whimsical, and in the same breath we ask for some 
 better-phrased regulations to accomplish the same 
 ends. The employer would bind and gag the em- 
 ployee. The employee conceives of justice as the 
 figure of an employer done up in a straitjacket. 
 
 Everywhere is the notion that the war somehow 
 changed the world in an elemental way. A lot of very 
 high authorities said that it was going to change it and 
 not a few were quite specific about it. The common 
 difficulty of all of these millenniums is that while they 
 point out the various ways in which we should all 
 like to have the world bettered, none of them gives 
 a clue as to how Mother Nature may be made more 
 generous. Take a sample. 
 
 In the discussion by the International Labour 
 Conference at Washington over the universal eight- 
 hour day one delegate was bold enough to suggest 
 that perhaps the eight-hour day was not entirely 
 feasible because the length of time that people spend 
 at their work was possibly not so important as the 
 amount of work that they did. Thereupon a French 
 
COMMON SENSE AND LABOUR 173 
 
 delegate arose and reproachfully accused the former 
 speaker of trying to take labour back into the Dark 
 Ages and of failing to realize that this was a new 
 world which was not going to be fettered by any of 
 the old ideas. Really he was so sad about it all that, 
 on the whole, it was rather a moving spectacle. 
 
 It is this aesthetic divorce of labour from work 
 that is behind much of what we may call "industrial 
 unrest." There is a great clatter about rights and 
 only a few whisperings about work. The prevailing 
 tendency is to agree with those who assert that the 
 war made a "new world" and that the great cata- 
 clysm of war swept away all of the imloveliness and 
 hardship which have been with us for so many thou- 
 sands of years. But if you will look about, you will 
 discover that fish are just as hard as ever to take 
 from the sea; that grain does not grow any more 
 readily or more quickly than ever it did; that the 
 mines do not give up their contents by tapping them 
 with a wand, and that there are no fairies about ready 
 to clothe and feed the multitude. The more you 
 examine into this old world the less you can dis- 
 cover in the way of improvement wrought by several 
 years of war. It is poorer than it was, it is producing 
 less than it did, and it has its sense of values consider- 
 
174 COMMON SENSE AND LABOUR 
 
 ably jarred and twisted. In fact, about the only 
 real change of a fairylike nature that has come about 
 is the remarkable ability demonstra,ted by govern- 
 ments to make one, two, or three dollars grow where 
 only one grew before, although it is beginning to sink 
 into a few minds that this new crop of dollars does 
 not contain so much nourishment as did the old crop. 
 The caloric content of the new coinage is consider- 
 ably less than that of the old. 
 
 Nothing has happened to decrease the importance 
 of work, and the labour problem gets down even- 
 tually to sintiple economics and to the controlling 
 proposition that prosperity increases only according 
 to the margin of production over consumption. Out 
 of that margin all capital is created. When the 
 amount of capital in a community is small and the 
 amount of labour is large, then the condition of 
 labour must be bad because there is not enough 
 productivity to support it. That is, labour bids 
 against itself for the right to work for capital. Such 
 is the condition of China; there it is cheaper to hire a 
 dozen men than to put in a machine costing $100. 
 When, however, the supply of capital is larger than 
 the supply of labour it is capital that has to compete 
 for labour. Then labour has the advantage. 
 
COMMON SENSE AND LABOUR 175 
 
 Japan afiFords the best modern view of a country 
 that is passing from the one stage to the other. 
 When Japan started on its industrial career there was 
 a vast amount of labour and very little capital. 
 Consequently a man could not command more than 
 a bare existence. There were no strikes, there could 
 be none— if a man lost his job he was lucky not to 
 starve to death. As industry has increased the 
 Japanese supply of capital, the workmen have begun 
 to assume an air in the nature of independence and 
 lately we have seen great strikes in Japan. Had not 
 the amount of capital, that is the amount of produc- 
 tive means in Japan, vastly increased during these 
 last ten years so that more and more labour had to be 
 bought in order to keep this capital employed, these 
 strikes in Japan would have been impossible. 
 
 Whichever way you turn in this whole industrial 
 situation you run up against the fact that unless 
 you produce more you cannot have more. In Amer- 
 ica there have always been more facilities needing 
 the employment of labour than there were men to 
 be employed. Consequently wages, compared with 
 the rest of the world, have been high. In Russia 
 there are millions of people and a very small amount 
 of capital, that is, of productive enterprise, and con- 
 
176 COMMON SENSE AND LABOUR 
 
 sequently only a mere pittance in wages has ever 
 been paid. It would seem to be self-evident, then, 
 that it is more or less nonsense to talk about wages 
 and hours as abstract affairs, that it is ridiculous 
 for any body of people to come together from all over 
 the world and try to decide on how many hours of 
 labour each day will be required to support life. 
 Certainly it will require less labour in the Sandwich 
 Islands where clothing need not be worn and dinner 
 may be had by shaking a tree than in New England 
 where the winters are cold, the ground is sterile, and 
 about aU that the earth yields willingly is a grave. 
 Yet it was no more than this question that moved 
 the French and several other delegates almost to 
 tears! It not only shocked but also grieved them to 
 have any one mention such things in this "new 
 world." 
 
 The point is that leisure succeeds and does not 
 precede work, that if you plan a day with four hours 
 of work and four hours of poetry-writing you are 
 perfectly justified provided that you find more nour- 
 ishment in poetry than in beefsteak. The hours of 
 labour are determined by an adjustment between 
 what we want and what we are willing to work for, 
 and the hope of leisure can spring only out of a con- 
 
COMMON SENSE AND LABOUR 177 
 
 fidence in the ability of collective brains to provide 
 facilities by which a man may do more with less effort. 
 The only way to provide these facilities is by increas- 
 ing the margin of production over consumption, for 
 it is that margin which provides the capital for in- 
 creased facilities. 
 
 All of this is rather hard to understand because 
 we are accustomed to thinking in terms of money 
 rather than in terms of things, and instinctively we 
 realize that it does not get us anywhere to blame 
 things on Nature. We pass the buck into the lap 
 of something which is vaguely called Capital. 
 
 Capital is supposed to own the instrumentalities 
 of work. Labour is supposed to operate them, while 
 the PubHc is supposed to do the consuming. They 
 are convenient and almost meaningless terms. There 
 are a few owners of capital who do not work, but 
 there are precious few of them who do not manage 
 and none of them who do not consume and thus 
 become part of the pubhc. There are a few workers 
 who do not own anything of a productive nature, 
 but they again form part of the consuming Public. 
 When you try to find out who make up the Public, the 
 real trouble starts, for it is quite impossible even in a 
 particular controversy such as the steel strike to 
 
178 COMMON SENSE AND LABOUR 
 
 separate the employers and the strikers from that 
 PubUc which they are supposed to serve. And yet, 
 despite the facts, we find a man Hke Arthur Hender- 
 son booming in this fashion: 
 
 The capitalist governments, bankrupt of expedients, merely 
 reiterate the cry of "increased production," but the workers ask: 
 
 "Production for what purpose? 
 
 "That the profiteers and the exploiters may continue to feed 
 on the substance of working-class life, and that industry may still 
 yield profits to non-producers, or to enable the exhausted, im- 
 poverished peoples to reestablish and improve their standard 
 of life and thus to elevate the general level of existence?" 
 
 There is a certain balance in nature that cannot 
 be neglected without disaster. First, take the fun- 
 damental balance between capital and labour. 
 The capital of a country, to repeat, is the margin 
 between production and consumption; this margin 
 is the only source of industrial betterment for it 
 provides the facilities for production. Every im- 
 provement in the facilities for production is for the 
 benefit of labour; a man may buy an automatic 
 machine in the hope of cutting out the payment of a 
 certain number of men and the men may resist the 
 improvement because it costs them their jobs. The 
 stagecoach drivers rebelled against the steam rail- 
 way; every improvement in spinning brought riots — 
 
COMMON SENSE AND LABOUR 179 
 
 indeed almost every invention in industry has been 
 fought tooth and nail. Yet every one of them has 
 brought a larger life to the worker — however small 
 that life may be in comparison to what we should 
 like to have it. In the old days a weaver working 
 at home on a hand loom and helped by his whole 
 family could do little more than exist; he usually had 
 to be a farmer as well, to eke out his industrial earn- 
 ings. When the power loom came fully into use 
 that weaver's condition was for the moment even 
 worse because there being more men than jobs, he 
 had to take what was thrown to him in the way of 
 work and wages. 
 
 There were for the time being more men than jobs 
 simply because the amount of capital — the facilities 
 for production — was small. But soon the increased 
 production and the large profits of the owners 
 brought more capital into the world and caused more 
 competition for the service of labour. Then the 
 condition of the weaver began to improve imtil to-day 
 the average weaver is apt to have a motor, a phono- 
 graph, a piano, good food and clothing, and, indeed, 
 really far more comfort than the mill owner had when 
 the power loom was first introduced. 
 
 It must be self-evident that the profits of capital 
 
180 COMMON SENSE AND LABOUR 
 
 and the wages of labour must come out of what is 
 produced. Idle capital is no more satisfying than 
 idle labour. If the service of labour is needed to 
 make capital produce, then it follows that the more 
 capital there is in the world the more demand will 
 exist for labour and the higher will be its wages in 
 actual buying power. Thus the rich man has to 
 be considered, whether or no, as an economic benefit. 
 He is rich because he consumes less than he acquires. 
 His very desire to have wealth forces him to put out 
 his surplus in productive enterprise and thus, by 
 increasing the productive capital, he increases the 
 demand for labour. 
 
 Every little while someone rises to remark that 
 the law of supply and demand is obsolete and that 
 what is really wanted is someone to decree divisions. 
 For instance, some would fix profits and decree stan- 
 dards of wages. But if you fix profits you encourage 
 waste; it is not human nature to struggle for the 
 honour of paying a large tax; therefore, money that 
 would ordinarily go into surplus slips out in exces- 
 sive salaries and unnecessary services. The war 
 taxes are presently doing that to business everywhere. 
 Therefore you decrease the supply of excess produc- 
 tive energy and do not make for future improve- 
 
COMMON SENSE AND LABOUR 181 
 
 ment; the fixing of wages without regard for their 
 productivity likewise limits output. Consequently a 
 concern produces less and not more. What is the 
 difiference? It is this: 
 
 The demand for that concern's output will increase 
 by the increase in population and the price of the ar- 
 ticle will go up. Then fix the price of the article — 
 somebody is sure to say : Well and good. But fixing 
 the price of a thing does not produce more of it. The 
 most that can be done is to assure prospective buyers 
 that when they do buy they will not have to pay 
 more than the price. In other words, it tells a man 
 who needs a pair of shoes that if he can find a pair 
 to buy he will not be overcharged — which assurance, 
 however, does nothing at all toward keeping the 
 snow out of leaky shoes! 
 
 If you fix a price, then you have to go a step farther 
 and decree a ration, and then you have production 
 for use and a vast drab uniformity. And not only 
 that but unless you have also an autocracy to compel 
 work, the rations of everything must grow less — for 
 the population will grow and the means of production 
 will not. The law of supply and demand is not dead 
 and will hardly die ahead of the solar system. 
 
 Bearing this inexorable fact in mind it is easily 
 
182 COMMON SENSE AND LABOUR 
 
 comprehended that no labour movement which does 
 not contemplate increased production benefits the 
 workers. Thus collective bargaining, the eight-hour 
 day, and all the other slogans with which labour 
 leaders and radical journals exercise themselves have 
 nothing whatsoever to do with the labour situation. 
 The world goes forward by doing more, not by doing 
 less, and when government boards or arbitration 
 boards or other constituted bodies attempt to fix 
 wages without making any provision for the payment 
 of the wages, disaster always results. 
 
 It is not that wages are always right, generally 
 they are not right, but the economic fact is inescap- 
 able, that if a wage is raised without a corresponding 
 increase in efficiency of production so that the wage 
 can be absorbed and not passed on to the public, only 
 a temporary rise has been granted, for inevitably 
 the increased cost will find its reflection in a higher 
 cost of living. The present attitude of many union 
 leaders is that good work does not comit, and that 
 unfortunately is too often the attitude of union lead- 
 ers, for to speak very plainly on the subject, few of 
 them are other than demagogues. Their positions 
 are always quasi-political in that they hold oflSce by 
 popular sanction and, therefore, their policies must 
 
COMMON SENSE AND LABOUR 183 
 
 be guided not by a sense of economic righteousness 
 but by that which will tend to keep them in office. 
 A labour leader who counsels sound economics can- 
 not stay in office as against a candidate who promises 
 the moon. A man talking common sense has no 
 chance against a man making wild and untrue state- 
 ments and, therefore, it is unfortimately a fact that 
 the average labour union is really a menace not to 
 the employer but to the employee. 
 
 The policy of labour unions tends inevitably to 
 lower real wages by the arbitrary restriction of pro- 
 duction either frankly by advocating short working 
 periods at high wages regardless of production, or by 
 holding to a uniform wage scale based on the least 
 efficient member. The labour union when organized 
 as a protection to underpaid and overworked men — 
 who in such condition cannot progress in production 
 — ^fills a distinct need in society by teaching the em- 
 ployer how to do business. But the labour union 
 ascendant is an economic absurdity because always 
 it operates to decrease the purchasing power of wages. 
 For instance, in two of the large cities of the country 
 from 1,500 to 2,500 common bricks laid in the wall a 
 day formerly represented a fair day's work for the 
 bricklayer. With the progression of Unionism it is 
 
184 COMMON SENSE AND LABOUR 
 
 now impossible to have more than 500 to 1,000 bricks 
 laid under the same conditions. 
 
 A most ridiculous incident came to my attention 
 not long since; a carpenter going from one job to an- 
 other was laboriously pushing his bicycle and when 
 asked why he did not ride he said it was against the 
 imion rules to ride from one job to another because 
 that saved too much time and would therefore tend 
 to deprive another man of a job. He had the bicycle 
 with him because when he left his work in the evening 
 he wanted to get home as quickly as possible. This 
 is economic insanity. 
 
 The purchasing power of wages, however, may be 
 decreased by an arbitrary outside body with the 
 power to fix the wages and in this respect the Govern- 
 ment Labour Boards during the war showed un- 
 paralleled efficiency. Mr. Charles Piez, the Director- 
 General of the Emergency Fleet Corporation, has 
 furnished me some rather striking facts, as for in- 
 stance the following: 
 
 In the case of a well-managed yard on the Pacific 
 coast in which the number of men increased threefold 
 in a little more than a year, a comparison of wages 
 and output with the corresponding items of two years 
 before revealed the fact that before the signing of the 
 
COMMON SENSE AND LABOUR 185 
 
 Armistice wages had advanced 70 per cent., and the 
 output per man had dropped to 70 per cent. The result 
 was a labour cost 2.4 times that of two years previous. 
 In the case of two well-managed yards on the Atlantic 
 coast the results in the one were: labour advance, 120 
 per cent.; output, 80 per cent.; resulting labour cost, 
 2.75 times that of the former period. In another — la- 
 bovu- advance, 100 per cent.; output, 66f per cent.; re- 
 sulting labour cost, 3 times that of two years previous. 
 These increases were not due to the Fleet Corpora- 
 tion but were primarily made necessary by an agree- 
 ment among the American Federation of Labour, the 
 Emergency Fleet Corporation, and the Navy, with- 
 out which the cooperation of labour could not have 
 been had. This agreement gave no specific instruc- 
 tion to the board on the subject of wage increases 
 but the general idea was that the adjustment should 
 be made in conformity with the cost of Uving. And 
 to quote from Mr. Piez: 
 
 It takes but a moment's reflection to indicate the absolute 
 futility of such a practice. If the shipyard workers and the mu- 
 nitions workers were entitled to such consideration, why was not 
 every wage and salaried worker earning less than $2,000 per year 
 entitled to similar consideration, and why would it not have been 
 absolute justice to all if wages and salaries had been advanced 
 periodically to keep step with the rising cost of living? This 
 
186 COMMON SENSE AND LABOUR 
 
 would at least have had the advantage that no one group would 
 have profited at the expense of the other; and the failure of such 
 a step to overtake or even stay so elusive an aSair as the cost of 
 living in war times might have forcibly brought home to all of us 
 that increased production of the individual and increased self- 
 denial in consumption were, after all, the only eflFective remedies 
 to apply to the situation. 
 
 It must be admitted that much of the labour unrest that mani- 
 fested itself in these wage demands grew out of the unwise and 
 unregulated competition for the available labour by the employ- 
 ers. Wise and proper use of the available labour supply was 
 just as essential as wise allocation of the supply of raw materials, 
 yet, while we had a large body of experts in the War Industries 
 Board controlling the supply and distribution of materials, the 
 directive control of the supply of labour was left to a few de- 
 tached individuals or boards that were supposed to enlist in a 
 scheme of voluntary cooperation and coordination under the 
 none-too-powerful and none-too-effective direction of the War 
 Labour Policies Board. . . . 
 
 But turn the crank a little farther and look at the 
 employer. How many employers really know the 
 relation of the wages they pay to the work done.'' 
 How many employers do not resent wage payments 
 above arbitrary sums that they have in mind? In 
 other words, how many employers really know what 
 they are doing.? 
 
 An encouragingly large number of employers do 
 to-day know what they are doing, but it must be ad- 
 mitted that the general state of economic knowledge 
 
COMMON SENSE AND LABOUR 187 
 
 among employers is not greater than that among the 
 miion men. Each is dense in his own way and he 
 likes his way. I heard a fairly large employer say 
 not long ago that his trade association had benefited 
 him only once and that was when the members met 
 and unanimously resolved to reduce wages ! He said 
 that that was the only really first-class meeting he had 
 ever attended. Yet that man objects to the unions 
 doing the same sort of thing but in a diflFerent direc- 
 tion. 
 
 Now there is one other delusion that is continually 
 getting us into trouble and that is the acceptance of 
 the statement that work is undesirable and that a 
 man is happier with leisure than with work. Indeed 
 perhaps the majority of people look forward to the 
 day when they will have amassed enough money to 
 quit work. If it be true that a life of leisure is the 
 most desirable then we cannot blame the manual 
 worker for deciding, however wrongly or prematurely, 
 to have his in the present and let the future take care 
 of itself. But is not that work which takes the full 
 creative power of a man the finest of all pleasures? 
 And we have seen that even the humblest of tasks can 
 be so shaped as to absorb a deal of creative energy. 
 
 We started out to find a labour problem and have 
 
188 COMMON SENSE AND LABOUR 
 
 discovered something more in the nature of an 
 economic problem that is too complex for bulk solu- 
 tion and yet is not so very diflBcult when split up into 
 little sections. Perhaps in our himt for the universal 
 remedy we are neglecting the less-pretentious rem- 
 edies right at hand. 
 
 Are we not tending to put too much faith and 
 hope in patent medicines? 
 
 And too little in common sense? 
 
CHAPTER EIGHT 
 
 THE MAN AND THE MACHINE 
 
 Bricklayers are a refractory lot. Under the con- 
 trol of a powerful luiion they have steadily increased 
 their prices and hmited their day's work. Some 
 years ago a new scientific way of laying bricks was 
 devised in which waste motion was cut out and the 
 bricklayer's capacity was many times multiplied. 
 In the fear that they might within a short time lay 
 all the bricks the world had to lay they put on arti- 
 ficial limitations. To-day bricklaying is not only 
 expensive but the bricklayers strike at the drop of a 
 hat. What has happened? Contractors, when they 
 can possibly avoid it, do not build houses of brick, 
 nor do they lay pavements of brick. Instead they 
 use reinforced concrete. In a recent operation at 
 Youngstown, Ohio, five men erected three houses 
 in two days. In that operation the contractors put 
 up a community of 281 soUdly built, attractively 
 designed, concrete houses, with sewers, streets, and 
 all that a town should have, in less than a year, and 
 
 189 
 
190 COMMON SENSE AND LABOUR 
 
 at no time were more than 200 men employed on 
 the job. Plasterers and carpenters have gone the 
 way of the bricklayers; therefore, in this new type 
 of house 75 per cent, of the carpenter work has been 
 eKminated and in a still newer house they are putting 
 in steel sashes, mastic floors, and concrete base- 
 boards so that there will be no carpenter work at all. 
 They avoid 80 per cent, of the normal amount of 
 plastering and expect shortly to be rid of the remain- 
 ing 20 per cent. 
 
 Because the girls who operate telephone exchanges 
 will not remain on their jobs after they are trained 
 and in one conspicuous instance in Boston tied up 
 the whole business of the city by going on strike, the 
 telephone companies are introducing an automatic 
 exchange which is working with entire satisfaction in 
 150 towns and is shortly to be tried in New York. 
 Because the compositors and printers of New York 
 imagined themselves so necessary to the conduct of 
 the world that they could not only demand any wages 
 and hours that they saw fit but also could censor what 
 went into the publications they printed, new methods 
 to avoid composition and printing are being pushed. 
 Small oflBce matter is being multigraphed instead of 
 printed, and one magazine, having made some not 
 
COMMON SENSE AND LABOUR 191 
 
 wholly unsatisfactory experiments in photographic 
 reproduction instead of printing, started a lead which 
 probably will result in the perfecting of a new process 
 that will not require compositors. Germany, being 
 shut off from imports of cotton, discovered that a 
 splendid cloth might be woven out of nettles and 
 that paper possessed unthought-of possibilities in 
 the weaving line. 
 
 And, on the other hand, not a few employers, xm- 
 willing or unable to change their processes, are look- 
 ing toward the Orient for plant sites. One great 
 company making incandescent lamps finds it cheaper 
 to manufacture in Japan than in the United States 
 and expects, unless conditions in the United States 
 improve, to make all its lamps, which as yet require 
 a considerable amount of hand work, across the 
 Pacific. Within the last year a number of large 
 American companies have had representatives in- 
 vestigating Japanese sites and conditions. The same 
 sort of movement is quietly going on in England and 
 at least one nationally known firm has closed its 
 British factories and moved abroad simply because 
 it finds further negotiations with EngHsh labour 
 improfitable. Under government management, the 
 United States freight and express conditions are so 
 
192 COMMON SENSE AND LABOUR 
 
 bad, the carriage is so expensive, and the delays are 
 so maddening that motor truck lines have been 
 established all over the country. When the long- 
 shoremen of New York went on strike and tied up 
 the port's shipping, the owners of many of those ves- 
 sels took advantage of the opportunity to change 
 from coal to oil burning — for with an English coal 
 strike on and an American coal strike threatened, 
 coal as a fuel became wholly undesirable. 
 
 Wherever you happen to poke your nose in indus- 
 try or commerce you will find that shortages of men 
 or materials, natural or artificial, are met by stimu- 
 lated human ingenuity — all of which goes to show 
 first how beautifully nature orders its aif airs to pro- 
 tect mankind from supposed monopoHes and how 
 utterly ridiculous it is for any group of men, whether 
 they be capitalists or labourers, to imagine that the 
 progress of the world can be held up for their benefit. 
 Monopoly is a comparative word, and, however 
 necessary the article or service which is sought to be 
 monopoHzed seems to be, there is always a point of 
 expense or convenience at which something else is 
 produced which is not only then uncontrolled but 
 which probably is better. A philosophical person 
 with a detached viewpoint would hail the monopolist 
 
COMMON SENSE AND LABOUR 193 
 
 and the profiteer as benevolent lunatics forcing the 
 world rapidly forward! 
 
 For instance, Ireland would never have had its 
 splendid linen industry had not the English weavers 
 succeeded in getting through an act prohibiting the 
 weaving of wool in Ireland. We should not have had 
 beet sugar had not the growers of cane feUcitated 
 themselves too ardently upon being the sole sources 
 of sugar. Just about the time that the knight in 
 armour had become impregnable from human as- 
 sault and half a dozen well-mounted knights could 
 clean up several thousands of unplated citizens, in 
 fact, when they had reached such a point of impreg- 
 nability that the only way for indignant vassals 
 to get even was to trap the warrior whole and leave 
 him in his can imtil he died, gunpowder came along 
 and knighthood ceased to flower. 
 
 The appositeness to the present situation in the 
 world of industry is that, while at the present time we 
 are faced with a purely temporary unrest, founded 
 mainly upon an economic delusion that something 
 may be had for nothing, when we do get around to 
 brass tacks again there are going to be considerably 
 more jobs than there are people to fill them. We 
 shall then be nationally faced with the choice of find- 
 
194 COMMON SENSE AND LABOUR 
 
 ing ways and means by which a man can do perhaps 
 twice as much as he is now doing or of sending our 
 capital abroad to points where there are more men. 
 The price of labour is, in some industries, fairly im- 
 important, but other industries to-day consume a 
 far higher proportion of labour than they do of raw 
 material — as in watch making. In such case the 
 owner can afford to take the raw material almost any- 
 where to have it fabricated. Whatever may be the 
 labourer's conception of the importance of the at- 
 tendance that he dances to an all but automatic 
 machine — a conception rising in its fullness with the 
 I. W. W. who eloquently claim that the operator 
 should own both the machine and the product — 
 the thought is rebutted by the fact that experience 
 has shown that a pig-tailed Oriental can manage 
 the machine about as well as the most eloquent 
 advocate of the rights of man. There is always a 
 way out. 
 
 We are short of labour now. Employment offices, 
 public or private, do not exist to provide jobs for 
 people out of work — although often they think they 
 do. They exist to provide a better assortment for 
 the prospective worker to choose from and to avoid 
 the wearisome task of personally investigating the 
 
COMMON SENSE AND LABOUR 195 
 
 qualifications of a large number of employers. A 
 certain amount of emigration is taking place. It is 
 not serious. A few are but fulfilling the intention 
 they came here with — they imagine that conditions 
 on the other side are unchanged; some are going back 
 to discover what has happened to their relatives. 
 Most of them will return to us; a number of em- 
 ployers have told me that they are already receiving 
 letters from their agents to that effect. There will be 
 some new immigration from Europe as soon as it is 
 permitted, but the bulk of it will probably go to South 
 America. Our own industries have increased their 
 capacity for men since 1913. For five years we have 
 had comparatively few people coming in. We de- 
 pended in the past upon this steady flow of immi- 
 grants to man our farms and our machines. When 
 we begin the scale of production which our own ne- 
 cessities and the necessities of the world make im- 
 perative, we shall desperately need more men than 
 we now have. All signs point that way. 
 
 Labour is now in the ascendant; it will be even 
 more in the ascendant when money begins to flow 
 into productive enterprise. We may then expect 
 to find one of the two things I have above outlined 
 happening — that is, either a vastly enlarged use of the 
 
196 COMMON SENSE AND LABOUR 
 
 workingman by extending his powers through the 
 addition of mechanical means and the elimination 
 of waste, or the exporting of capital. It is in the first 
 direction that the new world for the American worker 
 lies. 
 
 For talk as we may of the unequal distribution of 
 wealth and regret it as we may, the fact remains that 
 the great obstacle to a better distribution is not the 
 reticence of its possessors but the absence of enough 
 wealth to distribute. The very best estimate is that 
 if all rent, interest, and profit were added to wages, 
 the wages would not go 25 per cent, above 
 what they now are. Turn from static distribution 
 to increased production and you find it is rather easy 
 to increase a wage by one quarter through an im- 
 proved process or machine — that is being done every 
 day, and such wage increases result in more money to 
 the worker, more money to the employer, and a 
 smaller cost price to the consumer. It is the applica- 
 tion of science to the work that helps the worker. 
 The social reformer cheers but does not invigorate. 
 As Professor Milliken well said not long ago: 
 
 "One little new advance like the discovery of 
 ductile tungsten which makes electric light one third 
 as expensive as it was before is a larger contribution 
 
COMMON SENSE AND LABOUR 197 
 
 to human well being than all kinds of changes in the 
 social order." 
 
 Looking into the progress of our own country it 
 takes something in the nature of a perverted mind 
 not to discover that the reason we have paid higher 
 wages is that, since we started to become an indus- 
 trial nation, the investment per man in machinery 
 and tools has steadily increased. In 1899 it was 
 $1,770 per person employed; in 1904 it was $2,117; 
 in 1909 it was $2,488; m 1914 it was $2,848, and a 
 compilation made to-day would give a considerably 
 higher figure. The big jump came between 1899 
 and 1909 when the investment increased 105 per cent, 
 while the population of the country increased only 
 21 per cent. To equip this country for even a part 
 of the things it may do will, in the next five years, 
 require a proportionately greater investment than 
 that of the former star decade. We have to make 
 up not only two years in peace production but also 
 two years in wear and tear. The railroads, for in- 
 stance, are far back of the task the country has for 
 them; they break down on the least pressure. They 
 require an enormous amount of money for rehabili- 
 tation, extension, and improvement. The normal 
 capital expenditure throughout industry will have to 
 
198 COMMON SENSE AND LABOUR 
 
 be very large in order merely to catch up with normal 
 progress. We have a supernormal task and a sub- 
 normal man-power; the task and the power can be 
 coordinated only by spending brains and money 
 to find ways and means for man to extend himself 
 mightily. 
 
 How are we going about it? Does industry con- 
 sider itself "perfected".'* What is the attitude to- 
 ward invention? I asked W. R. Basset, an indus- 
 trial engineer of experience in many industries, to 
 tell me some of the things he thought right to be in- 
 vented. He answered: 
 
 "I gave some thought to your request for some- 
 thing that should be invented. As I looked over 
 the field, every time I came at all near something 
 that might be invented to advantage, I had to go into 
 the details and practically invent the machine itself, 
 — ^mentally, at least — ^to prove its practicability. 
 
 "It would, as an instance, be fine to have a machine 
 into the maw of which one could pour molten iron, 
 and out of the other end of which one received an 
 automobile. That is an exaggerated case. The con- 
 clusion I am coming to as I run over our experience 
 is that whenever it occurred to us that some device 
 was badly needed, coincident with the thought came 
 
COMMON SENSE AND LABOUR 199 
 
 action and the device would be constructed. It is 
 very, very rare indeed that one sees some operation 
 being performed and wishes there were a machine 
 to do it. Whenever that thought has occurred in the 
 last fifty years, work has been started on a machine. 
 
 "The real job that lies before us is to hustle from 
 one operation to another in all sorts of industries, 
 and speculate upon whether each operation can be 
 done better with a machine. You, I am svu-e, will 
 promptly find yourself inventing equipment instead 
 of writing of the need, for the thought is indeed father 
 of the machine." 
 
 That is the keynote of to-day's progress in what 
 we yesterday called "invention." It is not whether 
 the thing can be done with a machine; it is more or 
 less taken for granted that it can so be done. The 
 question is "Will it pay?" And with men scarce 
 and therefore high-priced, as men will be, the margin 
 of cost between the inanimate and the animate way 
 of doing will be largely increased and therefore the 
 urge to develop will be present. For the argument 
 that the machine has to prove is always: "Will it 
 pay?" 
 
 Making a machine pay is far more of a managerial 
 problem than making the services of man pay. 
 
200 COMMON SENSE AND LABOUR 
 
 When there is no work you do not have to pay a man; 
 under our haphazard system of society we have 
 been accustomed to " lay off " a man whenever there 
 was no work for him to do. The development of 
 cost accounting has shown that laying off men and 
 shutting down or running on part time is about the 
 most expensive of factory diversions and every- 
 where intelligent management is recognizing that 
 part of its task, in order to quaUfy as skilled, is to 
 keep the plant going twelve months of the year. 
 The interest on the money invested in machines 
 keeps right on whether or not the machine is running 
 and in addition the obsolescence (or getting out of 
 date) of a machine is a factor always to bear in mind. 
 Many a machine kept idle for three years and "as 
 good as new" is worthless nevertheless because a 
 better style has in the meantime been invented. 
 
 Thus, adopting a machine is something more than 
 just discovering if the work can be done by a machine. 
 There is the classic case of a man who having made 
 large savings by the introduction of labour-saving 
 devices became so obsessed with the notion that he 
 put in a mechanical conveyor to replace a man with 
 a truck. The conveyor worked as conveyors do 
 and the sight gave the owner great satisfaction, but 
 
COMMON SENSE AND LABOUR 201 
 
 a by-stander pointed out that whereas a man with 
 a single truck had previously attended to all of 
 the cartage between the two points, now the owner 
 had to employ a man at one end to load, a man at 
 the other to unload, and in addition had the inter- 
 est upon the investment in the conveyor. I know a 
 merchant in a small way who employs only one girl 
 in his oflBce; but he has enough accounting ma- 
 chinery in that office for a business of ten times its 
 size — he must have several thousand dollars tied up 
 in office appliances to do work that the girl could 
 easUy do by hand in half a day. He pays for 
 both the machines and the girl and, of course, he 
 wastes money. However, he does get an uncom- 
 mon amount of fun in seeing the apparatus work and 
 he might charge the expense to the entertainment 
 account! 
 
 There is always the question of investment. One 
 large company making flooring materials worked 
 out an automatic machine that will do more than 
 twenty men, but that machine stands the company 
 all of a million dollars. No one else in the business 
 has, as yet, considered it profitable to venture so 
 costly an experiment. And there is some doubt in 
 the minds of the owners whether that machine, al- 
 
202 COMMON SENSE AND LABOUR 
 
 though it works perfectly, really pays; if they had 
 their money out they would hardly make the step 
 again. Then, there is a machine for making bottles 
 that displaces from ten to sixteen glass blowers. It 
 does pay even although it cost something more than 
 a million dollars to develop. For glass blowers have 
 always been scarce, high-priced, and given to vaca- 
 tions without notice — all of which works to the ad- 
 vantage of the machine. 
 
 It is these pioneers who have to pay the freight. 
 Once an invention has been made thoroughly prac- 
 tical, comes the process of making it ever cheaper 
 to install and to operate. In spite of the vast cost 
 of materials and labour, the telephone and the tele- 
 graph are managed more cheaply per call than they 
 were fifteen years ago. The ability to send more 
 than one message on a wire is an illustration of how 
 equipment can be intensified, and it is only a question 
 of time before there wiU be no wires. The experi- 
 ments of John Hays Hammond, Jr., and others have 
 gone far toward the establishing of electrical impulses 
 that are so distinctive as not to be interfered with — 
 and it is interference that has so far been the only 
 large objection to the use of the wireless. Similarly, 
 the turbine is but a more intense way of using steam 
 
COMMON SENSE AND LABOUR 203 
 
 power than was the older engine. Twenty years 
 ago one of the strongest objections to the gas engine 
 was its great size as compared with its power; to-day 
 the strongest point in favour of that sort of engine 
 is that it takes up so Uttle room as compared with 
 the power exerted. The progress of the airplane 
 depends upon the further intensification and develop- 
 ment of this engine that was once too clumsy to com- 
 pete with the steam engine. 
 
 It is the need that precedes the invention; this is 
 a day of conscious invention. The day of haphazard 
 invention has by no means passed — any one who 
 would predict limitations, who would say that we 
 shall take this or that line — would be more than fool- 
 ish. Some man just as silly as Watt may turn up 
 with something quite as silly as the steam engine 
 and we may laugh him away for a time. Probably 
 somewhere in the world and unconfined is an in- 
 dividual with a notion quite as ridiculous as that a 
 man could fly, and perhaps if he has any literary 
 neighbours they will make another Darius Green out 
 of him. There are quite too many things that we do 
 not understand to warrant any one in predicting 
 future limits. But it is in the way of commercial 
 invention that the great progress of recent years has 
 
204 COMMON SENSE AND LABOUR 
 
 been made — in the combining of the best minds of 
 science with the best minds of commerce. The busi- 
 ness of what might be called inventing had better 
 be called investigating. Invention is no longer in 
 the main a haphazard affair, and, although there are 
 plenty of inventors living in cellars and garrets, there 
 are even more of them comfortably housed in well- 
 equipped laboratories and paid good salaries. There 
 are also the men who work independently such as 
 Edison, John Hays Hammond, Jr., Tesla, and Hud- 
 son Maxim; those are names we know. But in 
 the big laboratories are hundreds of others who are 
 constantly developing. 
 
 No modern plant is considered complete without a 
 research department. The scientists give part of 
 their time to improving present processes and part 
 to developing future processes or designs. The 
 typewriter concerns are always working ahead on 
 new models; their objectives are the minimizing 
 of weight and noise. The National Cash Register 
 Company is usually two or three years ahead of the 
 machine that it has on the market; a large depart- 
 ment does nothing but work out designs to do what 
 the officers think the next machine should do; once 
 they arrive at a model, they put it out in use and 
 
COMMON SENSE AND LABOUR 205 
 
 watch carefully for defects. Then they fetch it back 
 again for further study and improvement, imtil 
 finally they achieve a model that suits — and such a 
 model seldom represents an outlay of less than a 
 million dollars. The General Electric Company 
 maintains not only what might be called a practical 
 laboratory for development but also a laboratory 
 for purely scientific research — for it is recognized 
 that we are only on the threshold of electrical de- 
 velopment. They are working constantly not only 
 to discover more about the properties of electricity 
 but also to find new and cheaper ways, materials, and 
 processes. 
 
 However these laboratories may function in nor- 
 mal times they can redouble their activities under 
 urgent pressure. Gas masks had been thought of 
 and used in mines and the like before the war and 
 lives depended on them, but they had never stood 
 between the life and death of a whole nation as 
 they did when Germany sprung its first gas attacks; 
 then nearly perfect gas masks were invented. For 
 years it had been thought desirable to have some 
 means by which a vessel might detect the approach 
 of another in a fog; after the Titanic there was a good 
 deal of talk about some way of locating icebergs. 
 
206 COMMON SENSE AND LABOUR 
 
 But it was not until the German submarines put our 
 nation in peril that detectors were evolved that took 
 the locating of a ship out of the realm of the human 
 eye. Preserving a nation from destruction is on a 
 different footing from preserving a few vessels from 
 shipwreck. The gyroscope, too, was a toy until its 
 utility in warfare was demonstrated. 
 
 And if we become desperately short of labour — 
 and vuiless all signs fail we shall — ^then the urge to 
 invention or improvement will be as great as that of 
 war, but with this diflFerence: waste is not considered 
 in war, cost is no object at all. In peace, cost is the 
 ruling factor and where we neglected waste in war 
 we shall now go forward with a keen eye to cost — 
 to waste prevention. For we can get greater pro- 
 duction with less men either by helping the man 
 out with a machine or by cutting out the man's 
 waste motions or the waste in material. The wise 
 man uses all modes — indeed, the modern way is 
 first to see if you are getting all that is to be had 
 out of what you have on hand before you attempt to 
 extend. 
 
 Look at a few of the opportunities and the begin- 
 nings of what can be accomplished. Take the rail- 
 roads. The opportunities are great for the facilita- 
 
COMMON SENSE AND LABOUR 207 
 
 tion of traflBc through a better general average of 
 roadbeds and roUing stock. In the last five years 
 the economy and capacity of locomotives have been 
 doubled. But the big immediate and comparatively 
 cheap improvement is in the terminal handling. 
 The loading, unloading, and switching about takes 
 a prodigious amount of time and costs the services 
 of many men. One has only to realize that every 
 hour cut off the movement of freight means an hour 
 of interest saved on the money invested in the goods, 
 to estimate that the actual money saving in cost of 
 transportation is not all that is involved. The great 
 initial advantage that gave the Armour business its 
 start was the recognition by the late P. D. Armour 
 that the privately owned refrigerator car would per- 
 mit the distribution of dressed meat from a central 
 point at a maximum of speed and .a minimum of cost. 
 An example of what can be saved in handling is the 
 plan at Cincinnati where the Motor Terminals Com- 
 pany has devised a scheme through the use of cranes, 
 motor trucks with interchangeable bodies, electric 
 trucks operating in freight houses and piers, and the 
 latest hoisting machinery which will save 66,000 
 freight cars now used exclusively in transfer or similar 
 service, and will save more than 300,000 switch-cut 
 
208 COMMON SENSE AND LABOUR 
 
 movements a year. In addition the system will per- 
 mit a continuous flow of traflSc. 
 
 Mechanical loading and unloading is advancing 
 quickly; at Locust Point near Baltimore they have a 
 mechanism which unloads bulk material directly 
 from the ship hold into the box car. An automatic 
 belt conveyor capable of handling twenty cubic feet 
 an hour runs the full length of the 800-foot pier. In 
 a general way these appliances allow one man to do 
 more than ten might do in the old manual-effort way. 
 But brute force is still the power that loads and un- 
 loads most of our ships and railway trains. 
 
 The handling of the ocean-going craft is especially 
 wasteful; the freights are mostly mixed and therefore 
 not capable of standardized handling, but there is no 
 ocean record even to be mentioned in the same breath 
 with the achievements on the Great Lakes. The 
 record there is held by the steamer Widener which 
 unloaded 10,636 gross tons of ore into cars in two 
 hours and fifty minutes. The loading record is held 
 by the Corey which took on 9,457 gross tons of ore 
 at Superior, Wisconsin, in 25 minutes. The vessel 
 docked at 1 :40 p. m., the loading began at 2:43 p. m., 
 was concluded at 3 :08 p. m., and the boat sailed away 
 at 3:15 p.m. The ocean steamship companies are 
 
COMMON SENSE AND LABOUR 209 
 
 the despair of the engmeers; although a big hner 
 represents an enormous investment of money and 
 it is of the highest importance that all this money 
 should be working through every possible minute, 
 the traditions of the sea are so strong that the prac- 
 tices of sailing-ship days are more in evidence than 
 the practices of modern industry. Experts say that 
 the whole matter of seamen's and stevedores' wages 
 might easily be settled if only the ships did not lose 
 so much time and money in port through lack of 
 mechanical facihties. Even under the stress of war, 
 when every available bottom was needed to rush 
 American troops and supplies to France, the addi- 
 tional turnover was gained mostly through the use 
 of more men and not more machinery. But that 
 hurry gave an indication of what might be accom- 
 plished. 
 
 The army did have the time to install machinery at 
 Boston and Brooklyn and it worked wonders. The 
 most interesting features are the banks of automatic 
 elevators. In Brooklyn there are three banks of 
 ten each and six of seven each, and instead of an 
 operator to an elevator, one man controls each bank 
 with ease through an electrical control board with 
 telltale lights and switches. He stops and starts 
 
210 COMMON SENSE AND LABOUR 
 
 the cars, opens the doors, and has all the control 
 of the individual operator. Into these elevators 
 whisk trains of power trucks and trailers, the loads 
 are uncoupled, and the drivers go off for more. The 
 human hand is used only to direct; machines do the 
 work. 
 
 A great awakening has come throughout the whole 
 material-handling industry and, spurred on by the 
 increasing cost and scarcity of labour, an association 
 of manufacturers of such machinery is conducting 
 an exchange for ideas and they are making remark- 
 able progress in what was once the most backward 
 section of our industrial effort. 
 
 In facihtating the movement of people is another 
 field of great opportunity. It is impossible to 
 reckon the cost of the time lost in traversing great, 
 useless architectural stretches of railway stations, 
 waiting around for crowded elevators, and ascending 
 or descending unnecessary stairways. Little or no 
 thought seems to have been given to the waste of 
 human time and energy in the design of many of our 
 raihoad and subway terminals, and even where eleva- 
 tors or moving stairways are provided, a flight of steps 
 or two is usually added to prevent the human muscles 
 from getting soft. And I have never seen the mov- 
 
COMMON SENSE AND LABOUR 211 
 
 ing stairway used here for descending — ^they so use 
 them in England. Another device much used in 
 Germany and not at all in vogue here is the endless 
 chain elevator with open cars always in motion, and 
 in and out of which the people seem to hop with ease. 
 They save men and they save time in a building of 
 less than ten stories in height; although the open 
 cars seem dangerous and would probably be used 
 here to bankrupt the accident insurance companies, I 
 could not discover that they were sources of accidents 
 in Germany. 
 
 It is romantic to speculate what the airplane will 
 do in transportation (and undoubtedly it will do a 
 great deal especially in the way of moving the mails) 
 but the big economic values are in saving time on 
 masses of men and materials. 
 
 When we get into industry, the savings in time or 
 the extension of the power of men are easier to visual- 
 ize. Charles P. Steinmetz calculates that in the 
 last century the use of power and machinery has 
 multiphed the per man productive power of the coun- 
 try by ten. That is, one man is now worth as much 
 in a productive way as ten were when Madison was 
 president. There are a million harvesters in use 
 throughout the country and it would take at least 
 
212 COMMON SENSE AND LABOUR 
 
 two men to do the work of one man and a machine. 
 There is a saving of a million men right oflF. Going 
 back beyond the harvester into the days of the hand 
 scythe and flail, probably the entire working popula- 
 tion of the country could not harvest the present 
 annual grain crop. And now looms up the little 
 farm tractor already cutting into the need for man 
 power and it is expected that soon it will be perfected 
 to a point where, at a moderate first cost, it will be 
 able to exert the power for almost any job around the 
 farm. And I am not taking into account the man- 
 saving power of the farmer's Ford which lets him do 
 in an hour or two what formerly took him the entire 
 day. The modern farm buildings, with the shortage 
 of help, are beginning to be arranged to save foot- 
 steps and also to be equipped with simple labour- 
 saving devices. The agricultural machinery was 
 sold to the farmer with a deal of diflSculty, and it is 
 only lately that he has understood that time might 
 also be saved by the more sequential arrangement of 
 processes as well as by machinery. 
 
 It is impossible to turn anywhere without finding la- 
 bour-saving devices; the shortage of help has brought 
 in the mechanical home laundry; the dish-washing 
 machine, and other electrical devices promise to 
 
COMMON SENSE AND LABOUR 213 
 
 make the self-service home feasible, and attention is 
 now being given to the designing of the whole house 
 on the principle of easy attendance. For no perverse 
 genius could hope consciously to design such a model 
 of inconvenience as the average house. It is stiU 
 in the era when servants were cheaper than imple- 
 ments. 
 
 In imskUled labour, the machine is displacing the 
 man; if a big ditch is to be dug, we have, instead of 
 a file of foreigners, an automobile trench machine 
 which breaks the earth, lifts it out, and puts it into 
 automatic dumping motor trucks. Out in Iowa a 
 contractor on a hotel was faced with a lack of com- 
 mon labour for the concrete work; he got in touch 
 with a designer and they, within a few days, worked 
 out an automatic arrangement so that not a bit of 
 the sand, gravel, and cement had to be touched 
 with a shovel. In a few large sawmills convey- 
 ors have taken the place of the turbulent huskies 
 and the logs go from the cars right through the mills 
 without being touched by hand. There is mining 
 machinery in plenty to be had but only about half 
 of our coal is mined by machine; mining is in many 
 respects (and for sound economic reasons) probably 
 our most backward industry. If a conference be- 
 
214 COMMON SENSE AND LABOUR 
 
 tween the owners and miners took place to improve 
 the industry instead of to row over wages, the wages 
 would probably care for themselves and so would 
 the owners' profits and the public's price. 
 
 The cleaning of the hair from the surface of skins 
 in the process of getting leather used to be a long, 
 tedious process; now a machine will do in a second 
 what formerly took hours of hand time. A heavy 
 piece of leather is commonly split into several thick- 
 nesses for lighter uses; this was once a skilled hand 
 job, for a slip would spoil the skin; now swiftly mov- 
 ing knives will split the most irregular pieces with 
 never a slip. And so on through nearly every proc- 
 ess of working leather, the machine has taken the 
 place of the hand. Our automatic shoe machinery 
 is famous the world over and is constantly being 
 improved. 
 
 And then there are no end of simple changes that 
 together make for vast savings. A woollen manu- 
 facturer employed five men with axes to break out 
 the frozen bales as they came in. It was hard work. 
 An engineer interrupted the terrific hacking by 
 putting in a hose throwing a jet of live steam which, 
 thrust into a bale, thaws it out in a few minutes; one 
 man now does more than the five did. By the al- 
 
COMMON SENSE AND LABOUR 215 
 
 most self-evident plan of having a pressman bore 
 three pieces of metal at a time instead of one, 
 that pressman became nearly three times as valuable. 
 By so planning the course of goods through a factory 
 that there will be no pools and eddies whereby valu- 
 able material is held back, enormous sums are often 
 saved. A striking instance that comes to mind is 
 the coordination of stocks and operations in one mill 
 that ordinarily had four million dollars tied up in 
 goods in process, so that with the same output only 
 one million dollars was at any one time in use — 
 which not only gave that company three million 
 dollars right out of the sky, but decreased their 
 annual costs by the interest on that large amount. 
 In an underwear factory a hand operation was 
 thought not worth bothering with becaxise it cost 
 only four cents a dozen garments; an investigation 
 showed that in addition to the four cents a quarter 
 of an inch of material was also wasted; they designed 
 a machine to do the work and turned up with a sav- 
 ing of $7,500 a year — out of something not worth 
 bothering about! 
 
 But the subject of waste is one all of itself; we 
 waste at least one quarter of the coal we buy by bad 
 firing; we waste an untold amount of power through 
 
216 COMMON SENSE AND LABOUR 
 
 not using the forces contained in our streams. A 
 manufactured article just about doubles in price 
 between the producer and the consumer buying at 
 retail and that without any one getting much of a 
 profit on the journey — in spite of all the talk about 
 profiteering. 
 
 I have tried to indicate a mere fraction of the econ- 
 omies of man power that are being made to-day and 
 from them to suggest something of the economies 
 which are possible — although circumstances rather 
 than vision will ultimately determine. One can say 
 in a rough way that probably we can at least double 
 our productivity within the next five years if the 
 will to work is present. Doubling our productivity 
 will double wages. But those wages, curiously 
 enough, will have to be increased in spite of the cur- 
 rent agitation for higher wages and not because of it. 
 The whole trend to-day is in the way of raising wages 
 as expressed in dollars and depressing them in point 
 of real buying power — which is the inevitable result 
 of wages without skilled and willing work. The 
 Sixty-Third Congress, in the thought that it was 
 playing up to the labour vote, tacked to several ap- 
 propriation bills prohibitions against the use of the 
 stop-watch in any of the work thus provided. They 
 
COMMON SENSE AND LABOUR 217 
 
 thought that they were guarding against the econom- 
 ical spending of the people's money and insuring the 
 favoured worker of a day's pay without a day's work 
 — after the benevolent manner of politicians in deal- 
 ing with the taxpayers' fimds. But without time 
 studies the individual worker can never learn how to 
 use his hand and brain to the best advantage and 
 therefore Congress, utterly ignorant of the process 
 of industry and yielding to clamour, in eflFect decreed 
 that men employed by the Government should not 
 increase in skill and make themselves capable of 
 earning larger wages ! 
 
 The shortage of labour need have no terrors for 
 Americans; it should operate toward cheaper goods 
 and higher wages. But the elimination of waste 
 and the extension of power will require different 
 and larger organizations. The expensive laboiu:- 
 saving device is not for the man with a small amount 
 of business, the economies of distribution are not 
 for the corner grocery. To pay high wages and 
 justify large machine expenditures we need large 
 productive units — otherwise there is not the produc- 
 tion out of which to pay the charges. Large produc- 
 tive units arise only from the accumulations of 
 capital, and these accumulations arise only from prof- 
 
218 COMMON SENSE AND LABOUR 
 
 its. And while the welfare of the country and the 
 worker demand the results which can thus come only 
 from profits, the country and the worker also demand 
 from time to time that there shall be no profits. 
 Which leaves us just where we started ! 
 
CHAPTER NmE* 
 
 THE METHODS AND POLICIES OF BRITISH LABOUR 
 
 The better class of American worker considers 
 himself a potential manager or superintendent; the 
 same class of British worker looks forward to being 
 always a worker. The American workman commonly 
 considers his acts as individual and expects rewards 
 as an individual, without paying much attention 
 to what his fellows are getting; the British worker 
 considers himself one of a class and will usually refuse 
 any individual benefit that is not also conferred upon 
 his fellows — ^he is even apt to resent the proposal 
 as one tending to alienate him from his fellows. If an 
 American worker thinks he is being treated unfairly 
 or if a wage increase is refused, he will quit his job; 
 the British worker will not leave his job — he will 
 tell his fellow employees about the trouble and they 
 will at once adopt his grievance as their own and pre- 
 sent a united front against the employer. Instead 
 
 *Bcprinted from Factory, the Magazine of Management, by permution of A. W. Shuw 
 Company. 
 
 219 
 
220 COMMON SENSE AND LABOUR 
 
 of leaving for another job the aggrieved employee 
 will probably be able to start a strike. 
 
 English workers will go on strike with even less 
 provocation than it takes to cause an American to 
 quit his job. The manager of an engine factory in 
 Manchester told me that he expected a strike at least 
 once every fortnight and another manager said that 
 when he started a tour of the works he was never 
 quite sure that he would not come upon a strike some- 
 where during the trip. In America we think of a 
 strike as a serious affair involving great economic 
 loss; there are very great strikes in England but for 
 every big strike there are a thousand small strikes 
 which may last anywhere from ten minutes to an 
 hour. The British worker carries a chip upon his 
 shoulder and the slightest puff of wind will take it off; 
 no matter what takes it off, the employer is to blame 
 and the strike is the universal reply to the employer. 
 
 "If I post a notice," said a works manager to me, 
 "and the men do not understand it or do not like it, 
 they will instantly go on strike. I have posted a 
 notice at ten in the morning and at ten minutes past 
 ten have found the entire force fihng out of the gate 
 on their way to hold a meeting and pass resolutions." 
 
 As an instance of the trivial nature of some strikes 
 
COMMON SENSE AND LABOUR 221 
 
 the aftermath of the forty-seven-hour week settlement 
 in 1918 is interesting. The British worker was ac- 
 customed to a long day — he started at five or six in 
 the morning, had a break at eight or nine for break- 
 fast, another at twelve or one for lunch, and a tea break 
 at half-past four or five. Under the forty-seven and 
 forty-four-hour week schedules which include Satur- 
 day half holidays, the employers took it for granted 
 that the men would have their breakfasts before they 
 left home and they arranged for a single break in the 
 day for the lunch hour. At once a violent agitation 
 developed. Some men declared that they were 
 unable to eat early in the morning and that the long 
 wait until the lunch hour had a serious effect upon 
 their physical well being. Others stated that their 
 wives refused to prepare breakfast and they had to 
 come to work hungry. Still others asked that the 
 day start as early in the morning as before but that 
 the stopping time be advanced — they had become 
 accustomed to early rising and did not like to change 
 their habits. Again a misunderstanding arose as to 
 whether the eight-hour day meant eight hours of 
 work or eight hours between the starting and the 
 stopping time — a net work period of seven hours. 
 All of these seem to be trivial questions except as to 
 
222 COMMON SENSE AND LABOUR 
 
 the actual length of the eight-hour day which it might 
 be imagined would have been fixed at the time of 
 settlement, but the regulations were the subject of 
 dozens of small strikes and a national strike was 
 threatened. 
 
 All over the coimtry employees were discussing 
 with the utmost gravity the matter of whether or 
 not it was humanly possible for a man to have break- 
 fast before he started to work! 
 
 British workers are extraordinarily punctilious — 
 but so are the employers. The worker has fought 
 his way up from a position of nearly complete degra- 
 dation and he is very suspicious. Employers differ 
 in popularity, but their individual popularity has 
 but little effect upon the working relation except 
 in specialty trades where the workers are not drawn 
 from the general mass. For instance, no matter 
 what wages are paid or what the good feeling between 
 master and man, no clerk would work one minute 
 after one o'clock on Saturday, at which time the law 
 says the working week ends. It is practically impos- 
 sible to buy anything in a shop after a quarter to one 
 on Saturday, for the people are then arranging so 
 that the closing can take place on the exact minute 
 with all stock replaced. 
 
COMMON SENSE AND LABOUR 223 
 
 The feeling that the employee is one sort of an 
 animal and the employer another grows from the 
 intense class consciousness of the employed. One 
 cannot at all comprehend British labour unless this 
 class feehng is recognized; the feeling may or may 
 not be respectful — as a rule it is respectful, for the 
 English like to have someone different from them- 
 selves over them. They do not like a show of equal- 
 ity on the part of the employer, but prefer condescen- 
 sion if it has a basis in breeding and is well carried 
 off. 
 
 Because the Britisher does not mind being classed 
 as a worker he is open to political treatment in mass 
 — that is if he is a manual worker. The class idea 
 has infinite sub-divisions; the bank clerk is the aris- 
 tocrat and thinks nothing of the ordinary clerk, 
 who in turn will have no part with the sales clerk. 
 The factory workers, too, have their class distinc- 
 tions among themselves, but they will present a 
 united front upon occasion. They have the common 
 bond of being against the employer and hence they 
 are far stronger destructively than constructively. 
 The skilled man, however, will seldom make common 
 cause with the unskilled unless a common interest is 
 affected. 
 
224 COMMON SENSE AND LABOUR 
 
 Such is the background of English labour. It is 
 unthinkable to the working mind that an employer 
 can desire to be fair or to make money other than 
 by bearing down on employees — we must remember 
 that England is not so very far away from the intoler- 
 able conditions that once obtained in the Lanca- 
 shire cotton mills. The slums of London, Liverpool, 
 and Glasgow are still among the worst in the world. 
 And also it is well within the memory of many work- 
 ers when the common man had precious little to say 
 about how the country was governed. The employer 
 and employee approach each other in a spirit of hos- 
 tility and without the slightest faith in the spoken 
 word; they are each prepared to bargain for an advan- 
 tage and, when the bargain has been arrived at, to put 
 it down on paper, each with the hope that some way 
 of evading it may later turn up. This is not the uni- 
 versal attitude, but it is the general attitude. A 
 few leaders on both sides see beyond the immediate 
 discussion and note the frightful waste in barter. 
 
 The worker, having nothing in common with the 
 employer, has accepted the philosophy that the less 
 work one does the more work there will be to do. He 
 resists every improvement in machinery and every 
 speeding or scientific process which will tend to put 
 
COMMON SENSE AND LABOUR 225 
 
 through work in a shorter time or with less men. He 
 replied to piece-rate payments by setting up exact 
 rules as to how much a man might do in a given time 
 — a man must not do more. He asks for shorter 
 and shorter hours, not so much that he wants the 
 leisure as to make work for his fellows, and he cares 
 not a jot as to where or how the employer finds 
 the money for higher wages. In short, the employee 
 is concerned only with what he and his fellows get 
 out of industry; the employer is considered as being 
 well able to care for himself. 
 
 The class feeling readily translated itself into poli- 
 tics when the trades union movement gained groimd. 
 All trades imions have poUtical tenets; some of them 
 are founded upon pubhc ownership, some have as an 
 end the control of industry. They have not all the 
 same political aims, but they all have some political 
 aims and they are able more or less to subordinate 
 their differences in a political movement imder the 
 general caption of the "Labour Party." This party 
 has now its various sections, and they will come up 
 later in this article. Labour leaders now usually 
 have political oflSces as well as imion places; they will 
 be town coimcillors. Members of Parliament or 
 even, since the war, Cabinet Ministers. And they 
 
226 COMMON SENSE AND LABOUR 
 
 are by no means always workmen. Philip Snowden, 
 for instance, is a journalist and so is Ramsay Mac- 
 Donald; others like the Rt. Hon. J. C. Clynes, lately 
 Minister of Food, came up from the ranks. 
 
 The trades imion movement has grown rapidly 
 since 1913 and now about 1,200 unions exist, cover- 
 ing almost every branch of trade and with a present 
 membership of nearly 6,000,000, which represents an 
 increase of about a third since 1913. An English 
 employer must nowadays deal with a union and not 
 with his employees as individuals. The employers 
 found themselves at a disadvantage in bargaining 
 with imions and hence they, too, in many trades and 
 more particularly in the engineering trades (the 
 English engineer corresponds nearly to our machin- 
 ist), organized employers' associations with national, 
 district, and local organizations to treat with unions. 
 The workers put out of their hands the power to ad- 
 just wages and the employers replied by doing the 
 same thing. Hence wages and hours of work are 
 not individual matters; they are fixed by the repre- 
 sentatives of the employers and employees after 
 elaborate dickering. When they do fix a wage or a 
 working time it goes down into an agreement forth- 
 with and since one factory may have in it a dozen 
 
COMMON SENSE AND LABOUR 227 
 
 or more unions it is usual to make a joint agreement 
 covering all the imions represented. These treaties 
 are bound and pubhshed and naturally vary in 
 intricacy. Here is about an average one; it is 
 talcen from the Birmingham district : 
 
 WORKING CONDITIONS 
 
 BETWEEN THE 
 BiKMINGHAM AND DISTRICT ENGINEERING EmPLOTERs' 
 
 Association 
 (federated with the engineering employees' federation) 
 
 and 
 The Engineering Trades Unions 
 
 1. THE AGREEMENT between The Engineering Employ- 
 ers' Federation and The Amalgamated Society of En- 
 gineers, The Steam Engine Makers' Society and The 
 United Machine Workers' Association, dated 1st October, 
 1907, forms the basis of THIS AGREEMENT, and is an in- 
 tegral part hereof, together with any other Agreement which 
 may hereafter be arrived at between the said Engineering 
 Employers' Federation and the Amalgamated Society of 
 Engineers, the Steam Engine Makers' Society and the United 
 Machine Workers' Association. 
 
 2. Work Hours. Not more than 53 Hours shall constitute a 
 full Week's work throughout the District, and any Hours 
 worked in excess of the said 53 Hours shall be paid for as 
 Overtime at the rates laid down hereunder. 
 
 3. Overtime. The rate of Wages paid for Overtime, after making 
 due allowance for sickness and idleness enforced by the Em- 
 ployer, shall be as follows : — 
 
 (a) For time not exceeding Four Hours in any One Day 
 Time-and-One-Quarter; provided always that no 
 
228 COMMON SENSE AND LABOUR 
 
 Overtime shall be paid for until the full recognized 
 
 hours have been worked during the week in question. 
 
 (b) For time exceeding Four Hours in any One Day, Time- 
 
 and-One-Half; provided always that this rate shall 
 
 not be paid until the number of hours represented by 
 
 an ordinary Day and Four Hours' Overtime have been 
 
 worked during the day in question. 
 
 i. Night Shifts. The recognized Hours for Night Shifts are 
 
 to be 10 per Night and 50 per Week, counting from Monday 
 
 Evening until Saturday Morning, and the Hourly rate of 
 
 Wages therefor shall be Time-and-a-Quarter, calculated on the 
 
 Day Rates. For all time worked in excess of 50 Hours in any 
 
 Week payment shall be made at the rate of Time-and-a-Quarter 
 
 on the Time-and-a-Quarter rate. Men working during the 
 
 Day and required to change to Night Shift must be paid for 
 
 the First Night as if for Overtime, and not Night-Shift rate. 
 
 5. Out-Workers. Out-Workers employed for more than 4^ 
 Hours from the Factory, but reaching home before 12 mid- 
 night, shall be paid One Shilling per Day or part of a Day extra. 
 If employed after Midnight, or if unable to return home 
 for any Night, the payment shall be 2/6 per Day. The 
 actual time of travelling to and fro shall be paid for at the 
 ordinary rate of Wages laid down in these Rules in addition 
 to travelling expenses. 
 
 6. Sunday Work. Except when working on Employers' own 
 plant (which shall be at the rate of Time-and-a-Half). Sim- 
 day work shall be paid for Double Time. For the purjjose 
 hereof, Christmas Day, Boxing Day, Easter Monday, Whit- 
 Monday, the first Monday in August, and any special statutory 
 Bank Holiday shall be counted as Sunday. An employer 
 may, by giving statutory notice, substitute another day for 
 any of the aforementioned holidays. Reasonable leave of 
 absence being granted where possible. 
 
COMMON SENSE AND LABOUR 229 
 
 7. Pattemmaleers. When leaving their employment, Pattern- 
 makers shall be allowed Two Hours for Tool Grinding, which 
 shall be paid for at the current rates. 
 
 Agreed to 
 The Birmingham and District Engineering Employers' 
 Association, on the one part, 
 
 AND 
 
 The Amalgamated Society of Engineers, 
 
 Steam Engine Makers' Society, 
 
 Amalgamated Society of Toolmakers, 
 
 United Machine Workers' Association, 
 
 Electrical Trades Union, 
 
 Associated Blacksmiths' and Ironworkers' Society, 
 
 Amalgamated Society of Smiths and Strikers, 
 
 Boiler Makers', Iron and Steel Ship Builders' Society, 
 
 Friendly Society of Ironfounders, 
 
 National Society of Amalgamated Brass-workers and 
 
 Metal Mechanics, 
 Scientific Instrument Makers' Trade Society, 
 United Patternmakers' Association, 
 Amalgamated Society of Corbmakers. 
 
 AGREEMENT 
 
 between 
 
 The Engineering Employers' Federation 
 
 and 
 
 The Engineering Trade Unions 
 
 1st October, 1907 
 
 London 
 24, Abingdon Street, S.W. 
 
 AGREEMENT made this 1st day of October, 1907, between 
 The Engineering Employers' Federation (hereinafter called 
 
230 COMMON SENSE AND LABOUR 
 
 the "Federation") of the one part, and The Amalgamated 
 SociETT OF Engineers, The Steam Engine Makers' Society, 
 and The United Machine Workers' Association (hereinafter 
 called the "Trade Unions") of the other part. 
 
 The Federation on the one hand, and the Trade Unions on 
 the other, being convinced that the interests of each will be best 
 served, and the rights of each best maintained, by a mutual agree- 
 ment, hereby, with a view to avoid friction and stoppage of work, 
 agree as follows: — 
 
 1. General Principles of Employment. The Federated Em- 
 ployers shall not interfere with the proper functions of the Trade 
 Unions, and the Trade Unions shall not interfere with the Em- 
 ployers in the management of their business. 
 
 2. Employment of Workmen. Every Employer may belong 
 to the Federation, and every Workman may belong to a Trade 
 Union or not, as either of them may think fit. 
 
 Every Employer may employ any man, and every Workman 
 may take employment with any Employer, whether the Workman 
 or the Employer belong or not to a Trade Union or to the Feder- 
 ation respectively. 
 
 The Trade Unions recommend all their Members not to 
 object to work with non-Union Workmen, and the Federation 
 recommend all their Members not to object to employ Union 
 Workmen on the ground that they are Members of a Trade 
 Union. 
 
 No Workman shall be required, as a condition of employment, 
 to make a declaration as to whether he belongs to a Trade Union 
 or not. 
 
 3. Piecework. Employers and their Workmen are entitled 
 to work Piecework, provided : — 
 
 (a) The prices to be paid shall be fixed by mutual arrange- 
 ment between the Employer and the Workman or Work- 
 men who perform the task. 
 
COMMON SENSE AND LABOUR 231 
 
 (b) Each Workman's day rate to be guaranteed irrespec- 
 tively of his piecework earnings. 
 
 (c) Overtime and nightshift allowances to be paid in ad- 
 dition to piecework prices on the same conditions as 
 already prevail in each workshop for timework. 
 
 All balances and wages to be paid through the Office. 
 
 4. Overtime. The Federation and the Trade Unions are agreed 
 that systematic overtime is to be deprecated as a method of pro- 
 duction, and that when overtime is necessary the following is 
 mutuaUy recommended as a basis, viz. : — 
 
 That no Union Workman shaU be required to work more than 
 32 hours' overtime in any four weeks after full shop hours have 
 been worked, allowance being made for time lost through sick- 
 ness, absence with leave, or enforced idleness. 
 
 In the foUowing cases overtime is not to be restricted: — 
 
 Breakdown work, repairs, replacements or alterations for 
 the employers or their customers. 
 
 Trial trips and repairs to ships. 
 
 Urgency and emergency. 
 
 5. Rating of Skilled Workmen. Employers have the right to 
 employ Workmen at rates of wages mutually satisfactory to the 
 Employer and the Workman, or Workmen, concerned. 
 
 In fixing the rates of skilled Workmen, the Employer shall have 
 regard to the rates prevailing in the district for fully trained and 
 skilled men. 
 
 Unions, while disclaiming any right to interfere with the wages 
 of Workmen other than their own Members, have the right 
 in their collective capacity to arrange the rate of wages at which 
 their Members may accept work. 
 
 , General alterations in the rates of Wages in any district shall 
 be negotiated between the Employers' Local Association and the 
 Local Representatives of the Trade Union or Unions concerned. 
 
 6. Apprentices. There shall be no recognized proportion of 
 
232 COMMON SENSE AND LABOUR 
 
 apprentices to journeymen, but it shall be open to the Unions to 
 bring forward for discussion the proportion of apprentices gen- 
 erally employed in the whole Federated area. 
 
 An apprentice shall be afforded facilities for acquiring a prac- 
 tical knowledge of the branch of trade he adopts, and shall be 
 encouraged to obtain a theoretical knowledge thereof as far as 
 circumstances permit. 
 
 7. Selection, Training, and Employment of Operatives and Man- 
 ning of Machine Tools. Employers have the right to select, train, 
 and employ those whom they consider best adapted to the various 
 operations carried on in their workshops, and to pay them accord- 
 ing to their ability as Workmen. 
 
 Employers, in view of the necessity of obtaining the most 
 economical production, whether by skilled or unskilled Workmen, 
 have full discretion to appoint the men they consider suitable to 
 work all their machine tools, and to determine the conditions 
 under which they shall be worked. 
 
 The Federation recommend their Members that, when they 
 are carrying out changes in their workshops which will result in 
 displacement of labour, consideration should be given to the case 
 of the Workmen who may be displaced, with a view, if possible, 
 of retaining their services on the work affected, or finding other 
 employment for them. 
 
 8. Provisions for Avoiding Disputes. With a view to avoid 
 disputes, deputations of Workmen shall be received by their 
 Employers, by apjwintment, for mutual discussion of any ques- 
 tion in the settlement of which both parties are directly concerned; 
 or, it shall be competent for an official of the Trade Union to ap- 
 proach the Local Secretary of the Employers' Association with 
 regard to any such question; or, it shall be competent for either 
 party to bring the question before a Local Conference to be held 
 between the Local Association of Employers and the Local 
 Representatives of the Trade Unions. 
 
COMMON SENSE AND LABOUR 233 
 
 In the event of either party desiring to raise any question, a 
 Local Conference for this purpose may be arranged by applica- 
 tion to the Secretary of the Employers' Association, or of the 
 Trade Union concerned, as the case may be. 
 
 Local Conferences shall be held within twelve working daya 
 from the receipt of the application by the Secretary of the Em- 
 ployers' Association, or of the Trade Union or Trade Unions 
 concerned. 
 
 Failing settlement at a Local Conference of any question 
 brought before it, it shall be competent for either party to 
 refer the matter to the Executive Board of the Federation and 
 the Central Authority of the Trade Union or Trade Unions 
 concerned. 
 
 Central Conferences shall be held at the earliest date which 
 can be conveniently arranged by the Secretaries of the Federa- 
 tion and of the Trade Union or Trade Unions concerned. 
 
 There shall be no stoppage of work, either of a partial or of a 
 general character, but work shall proceed under the current con- 
 ditions until the procedure provided for above has been carried 
 through. 
 
 9. Constitviion cf Conference. An Organizing Delegate of the 
 Amalgamated Society of Engineers shall be recognized as a 
 Local OflScial entitled to take part in any Local Conference, but 
 only in his own division. In case of sickness, his place shall be 
 taken by a substitute appointed by the Executive Council. 
 
 Any member of the Executive Council, or the General Secre- 
 tary of the Amalgamated Society of Engineers, may attend Local 
 Conferences, provided that the member of the Executive Council 
 shall attend only such Conferences as are held within the division 
 represented by him. 
 
 A member of the Executive Council, or the General Secretary 
 of the Steam Engine Makers' Society and of the United Machine 
 Workers' Association respectively, may attend any Local Con- 
 
234 COMMON SENSE AND LABOUR 
 
 ference in which the Societies, or either of them, are directly 
 concerned. 
 
 Central Conferences shall be composed of members of the Ex- 
 ecutive Board of the Federation and members of the Central Au- 
 thority of the Trade Union or Trade Unions concerned. 
 
 An Employer who refuses to employ Trade Unionists will 
 not be eligible to sit in Conferences. 
 
 The following Trade Unions are parties to this Agreement, viz. : 
 Steam Engine Makebs' Society, 
 United Machine Workers' Association, 
 National United Society of Smiths and Hammermen, 
 Society of Amalgamated Toolmakehs, Engineers and 
 
 Machinists. 
 Scientific Instrument Makers' Trade Society, 
 United Kingdom Society of Amalgamated Smiths and 
 
 Strikers. 
 The following are parties to the aforementioned "Provisions 
 for Avoiding Disputes": 
 
 Electrical Trades Union, 
 
 National Society of Amalgamated Brassworkers and 
 
 Metal Mechanics, 
 Unwed Journeymen Brassfounders, Turners, Fitters, 
 
 Finishers and Coppersmiths' Association of Great 
 
 Britain and Ireland. 
 
 PROVISIONS FOR AVOIDING DISPUTES 
 
 as agreed between 
 The Engineering Employers' Federation 
 
 AND 
 
 Amalgamated Society op Engineers, 
 Workers' Union, 
 
 National Union of General Workers, 
 National Amalgamated Union of Labour, 
 
COMMON SENSE AND LABOUR 235 
 
 Amalgamated Society of Cokemakebs, 
 
 Nationai. Amalgamated Union of Enginemen, Mechanics, 
 
 motormen, and electrical workers, 
 Associated Blacksmiths' and Ironworkers' Society of 
 
 Great Britain and Ireland 
 
 When a question arises, an endeavour shall be made by the 
 management and the workmen directly concerned to settle the 
 same in the works or at the place where the question has arisen. 
 Failing settlement deputations of workmen, who may be ac- 
 companied by their Organizing District Delegate (in which event 
 a representative of the Employers' Association shall also be 
 present), shall be received by the Employers' Association by 
 appointment without imreasonable delay for the mutual discus- 
 sion of any question in the settlement of which both parties are 
 directly concerned. In the event of no settlement being arrived 
 at, it shall be competent for either party to bring the question 
 before a Local Conference to be held between the Local Associa- 
 tion and the Local Representatives of the Society. 
 
 In the event of either party desiring to raise any question a 
 Local Conference for this purpose may be arranged by applica- 
 tion to the Secretary of the Local Association or to the Local 
 Representative of the Society. 
 
 Local Conferences shall be held within seven working days, 
 unless otherwise mutually agreed upon, from the receipt of the 
 application by the Secretary of the Local Association or the Local 
 Representative of the Society. 
 
 Failing settlement at a Local Conference of any question 
 brought before it, it shall be competent for either party to 
 refer the matter to a Central Conference which, if thought 
 desirable, may make a joint recommendation to the constituent 
 bodies. 
 
 Central Conferences shall be held on the Second Friday of 
 
236 COMMON SENSE AND LABOUR 
 
 each month, at which questions referred to Central Conference 
 prior to fourteen days of that date shall be taken. 
 
 Until the procedure provided above has been carried through 
 there shall be no stoppage of work either of a partial or a gen- 
 eral character. 
 
 Even before the war the trades union organization 
 had settled down on Great Britain like some huge 
 octopus with one or more tentacles reaching into 
 every shop. The relation of master and man dis- 
 appeared and in its place came a hostile relation of 
 employers' association vs. employees' association 
 that was either legal or extra-legal, but which in true 
 Enghsh fashion resolved itself into a kind of constitu- 
 tional arrangement with each side holding on to 
 written rights as firmly as their forefathers held 
 on to the provisions of Magna Charta. The actions 
 of the employers and the employees were governed 
 as exactly as is the conduct of a military oflBcer and 
 with as little opportunity for initiative. 
 
 Some trades were further advanced than others 
 and some were more radical. The miners have al- 
 ways been very radical and their head for many 
 years, Robert Smillie, is an outspoken advocate of 
 complete control by the workers. The advantages 
 of combination having been seen, three of the largest 
 and most powerful unions went a step further and 
 
COMMON SENSE AND LABOUR 237 
 
 made an offensive and defensive alliance. This 
 "Triple Alliance" is a combination of the transport 
 workers, the railway employees, and the coal miners. 
 Their officers hold the keys of industry; should they 
 strike in unison Great Britain could not function. 
 They have each, however, struck separately and 
 the demands of the coal miners will give an indication 
 of the present trend of mind of the British worker. 
 They asked for: 
 
 1. A six-hour day. 
 
 2. A minimum wage of a poimd sterling a day. 
 
 3. The nationalization of the mines. 
 
 The strike of the miners was not left to the people 
 concerned; the public intervened through a commis- 
 sion appointed by the Government and that com- 
 mittee refused nationalization for the present but 
 granted a day which would gradually shorten to 
 six hours and made a substantial increase in wages. 
 They also recommended that a penny be taken from 
 each ton of coal mined and applied to the bettering 
 of housing conditions. It came out before that com- 
 mission that the mine owners had consistently more 
 than doubled the price of coal with each wage in- 
 crease previously granted and this has directed the 
 attention of labour generally to the subject of the 
 
238 COMMON SENSE AND LABOUR 
 
 profits of proprietors. Here is a characteristic ex- 
 pression : 
 
 "Let it never so plausibly be accepted that the 
 capitalist class should continue to exist; let it be 
 never so plausibly argued that the maintenance of 
 the profiteering system is necessary or advisable, 
 the resolute affirmation must be made and main- 
 tained by labour that, while one penny of profit con- 
 tinues to be earned by capital, labour cannot enter 
 into a final agreement with it. Compromises, tem- 
 porary agreements, conditional settlements, these, 
 it is true, cannot be avoided. What can be avoided 
 is the admission that except by their force capitalists 
 as such have a right to exist . The principle that labour 
 is entitled to the whole of its product is just, and any 
 dilution of the principle is a concession to injustice." 
 
 At the opening of the war in 1914 the labour 
 condition of Great Britain was very critical. The 
 employers and employees had deadlocked and the 
 provisions of the existing agreements were flagrantly 
 disregarded by both sides. At once it became ap- 
 parent that the proper munitions could not be turned 
 out if labour did not do its part. The Government 
 called a conference of labour men (Treasury Con- 
 ference of March, 1915) and agreed upon certain 
 
COMMON SENSE AND LABOUR 2S9 
 
 principles which were later embodied in the Muni- 
 tions Act. The workers agreed that there should 
 be no stoppage of work upon munitions and that 
 all regulations restricting output should be put 
 aside and to arbitrate differences. The Government 
 agreed to supervise all factories, to limit profits, 
 to set up certain standards of pay, and that all the 
 pre-war powers of the unions be restored after the 
 war. Later the men agreed to the dilution of labour 
 and the entry of women into the shops. The pre- 
 vious regulations had prevented the use of unskilled 
 labour even for machine tasks that required no skill; 
 the policy had been that a machine should never be 
 allowed to replace a man. 
 
 As the war went on and labour grew more and more 
 powerful — as it became more and more necessary 
 for the conduct of the war — the necessity forced itself 
 for a constructive programme to replace the purely de- 
 structive programme it had previously followed. It 
 therefore in 1917 adopted a kind of platform of con- 
 siderable elaboration, the four "pillars " of which were : 
 
 (a) The Universal Enforcement of the National Minunum. 
 
 (b) The Democratic Control of Industry. 
 
 (c) The Revolution in National Finance. 
 
 (d) The Surplus Wealth for the Common Good. 
 
240 COMMON SENSE AND LABOUR 
 
 The democratic control of industry is defined as: 
 
 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. And 
 the Labour party refuses absolutely to believe that the British 
 people will permanently tolerate any reconstruction or perpetua- 
 tion of the disorganization, waste, and inefiBciency involved in 
 the abandonment of British industry to a jostling crowd of sepa- 
 rate private employers, with their minds bent, not on the service 
 of the community, but — by the very law of their being — only on 
 the utmost possible profiteering. What the nation needs is 
 undoubtedly a great bound outward and onward in its aggregate 
 productivity. But this cannot be secured merely by pressing 
 the manual workers to more strenuous toil, or even by encourag- 
 ing the Captains of Industry to a less wasteful organization of 
 their several enterprises on a profit-making basis. What the 
 Labour party looks to is a genuinely scientific reorganization of 
 the nation's industry, no longer deflected by individual profiteer- 
 ing, on the basis of the Common Ownership of the means of Pro- 
 duction; the equitable sharing of the proceeds among all who 
 participate in any capacity and only among these, and the adop- 
 tion, in particular services and occupations, of those systems and 
 methods of administration and control that may be found, in 
 practice, best to promote, not profiteering, but the public interest. 
 
 And again it said: 
 
 In the disposal of the surplus above the Standard of Life society 
 has hitherto gone as far wrong as in its neglect to secure the neces- 
 sary basis of any genuine industrial eflBciency or decent social 
 order. We have allowed the riches of our mines, the rental 
 value of our lands superior to the margin of cultivation, the 
 
COMMON SENSE AND LABOUR 241 
 
 extra profits of the fortunate capitalists, even the material out- 
 come of scientific discoveries — ^which ought by now to have made 
 this Britain of ours immune from class poverty or from any wide- 
 spread destitution — to be absorbed by individual proprietors; 
 and then devoted very largely to the senseless luxury of an idle 
 rich class. Against this misappropriation of the wealth of the 
 community, the Labour party — speaking in the interests not of 
 the wage-earners alone, but of every grade and section of pro- 
 ducers by hand or by brain, not to mention also the generations 
 that are to succeed us, and of the permanent welfare of the com- 
 munity — emphatically protests. One main Pillar of the House 
 that the Labour party intends to build is the future appropria- 
 tion of the Surplus, not to the enlargement of any individual for- 
 tune, but to the Common Good. It is from this constantly aris- 
 ing 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 wiU have to be 
 found the new capital which the community day by day needs 
 for the perpetual improvement and increase of its various enter- 
 prises, for which we shall decline to be dependent on the usury- 
 exacting financiers. It is from the same sovurce that has to be 
 defrayed the public provision for the Sick and Infirm of all kinds 
 (including that for Maternity and Infancy) which is still so 
 scandalously insufl^icient; for the Aged and those prematurely 
 incapacitated by accident or disease, now in many ways so im- 
 perfectly cared for; for the Education alike of children, of adoles- 
 cents and of adults, in which the Labour party demands a 
 genuine equality of opportunity overcoming all differences of ma- 
 terial circumstances; and for the organization of public improve- 
 ments of aU kinds, including the brightening of the lives of those 
 now condemned to almost ceaseless toil, and a great development 
 of the means of recreation. From the same source must come 
 the greatly increased public provision that the Labour party 
 
242 COMMON SENSE AND LABOUR 
 
 will insist on being made for scimtific investigation and original 
 research, in every branch of knowledge, not to say also for the 
 promotion of music, literature, and fine art, which have been 
 under Capitalism so greatly neglected, and upon which, so the 
 Labour party holds, any real development of civilization funda- 
 mentally depends. Society, like the individual, does not live 
 by bread alone — does not exist only for perpetual wealth produc- 
 tion. It is in the proposal for this appropriation of every surplus 
 for the Common Good — in the vision of its resolute use for the 
 building up of the community as a whole instead of for the magni- 
 fication of individual fortunes — ^that the Labour 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. 
 
 These quotations sufficiently show that labour in 
 England on its constructive side is entirely socialistic 
 and has gone far beyond wages and hours and shop 
 conditions; its programme has most of the features 
 of what is known as the "Social Revolution" except 
 that it does not advocate violence. All of the ends 
 are to be achieved by constitutional methods. 
 
 The difficulty with the whole programme is that 
 an apparently democratic scheme is to be put 
 through, just how is not stated, by autocratic 
 bodies. The trades unions have certain regulations 
 which require pre-requisites of skill and the like 
 
COMMON SENSE AND LABOUR 243 
 
 for membership and their tendency is to become 
 autocratic in fact while democratic in word. The 
 ordinary member of a trades miion has about as 
 much to say in its decisions as has an independent 
 voter in a boss-ridden ward. Again, the trades union 
 organization with its intricate sub-division of trades 
 is most unwieldy within a shop — instead of the 
 workers being able to protest as a mass they are 
 frequently compelled to act through a dozen mediums 
 with no certainty as to what or when those mediums 
 would decide. Finally the trades imions have no 
 place for the new elements in war laboiir — the un- 
 skilled man and the woman. 
 
 Take the case of the xmskilled man. Up to the 
 time of the war he had never held a steady job or 
 received wages that did more than permit him to ex- 
 ist. During the war he found plenty of employ- 
 ment at high wages and for the first time experienced 
 something of economic security. Being used as a 
 "dilutee" he discovered that many of the tasks which 
 were supposed to require extraordinary skill did 
 not really require so much skill after all and that he 
 could easily perform them. With the end of the 
 war he saw the trades unions insisting that these 
 tasks again be restored to their members and that 
 
244 COMMON SENSE AND LABOUR 
 
 he be thrown out on casual jobs. The interest of 
 the unskilled man and the interest of the trades 
 imionist became opposed. 
 
 Take the women. The trades unions set their 
 faces absolutely against the retention of women in 
 places which men had filled before the war. They 
 insisted that they be discharged forthwith. A con- 
 siderable number of the women had not worked be- 
 fore the war but more of them had worked — it is 
 fiction that women war workers were anywhere 
 drawn from the comfortably living classes — and they 
 did not care to return to the ill-paid drudgery of 
 domestic or similar service. Their interests were op- 
 posed to the trades unions. 
 
 Even before the war a movement in opposition to 
 the trades unions had arisen, known as the "Rank 
 and File Movement." It asked for the abolition 
 of craft unions and the substitution of one great 
 workers' union which should have no qualification 
 for membership excepting the common ability to 
 work. The leaders were all disciples of Karl Marx 
 and agreed thoroughly with the Russian Bolshevists. 
 They were for the instant destruction of capital and 
 the rule of the proletariat. They found their strong- 
 est hold in the Clyde shipyai'ds and were behind the 
 
COMMON SENSE AND LABOUR 245 
 
 strikes of 1915. The government then deported 
 the ringleaders from Glasgow, but permitted them 
 to go into other districts, notably Sheffield and Co- 
 ventry, where, setting up as martyrs, they spread 
 their doctrine of the class war. They proposed 
 that the control of industry be in the workshop and 
 not in any trades union body. Thus they were as 
 bitterly against the trades union as against the cap- 
 italist, and in fact classed them together for, whatever 
 the declarations of the trades unions, their leaders 
 and members were squarely for the continuance of 
 the system of collective bargaining between capital 
 and labour under trades union supervision. 
 
 The new body was open to both sexes and it found 
 favour with all who desired "direct action." It 
 called several strikes in defiance of the union execu- 
 tives and thereby started that most ominous of 
 British movements — the "unofficial strike." Since 
 the strikes were not sanctioned by the executives 
 the strikers could not draw strike pay and the new 
 organization then developed the doctrine of the short 
 strike. Instead of staying out for long they advo- 
 cated short and frequent strikes. They annoimced 
 that they would pay no attention at all to any agree- 
 ments which they happened to make at the moment 
 
246 COMMON SENSE AND LABOUR 
 
 with capital in order to settle a strike. It was wrong 
 to compromise with capital and they would regard 
 their compromises only as a means by which to put 
 the employer off his guard. 
 
 The new movement could not gain ground in the 
 union councils; therefore they took the workshops as 
 their field and started an auxiliary movement known 
 as the "Shop Stewards' Movement." 
 
 THE SHOP STEWARD 
 
 The shop steward is very old in British industry. 
 No one seems to know when he first appeared; old 
 factory men remember having stewards twenty 
 years ago. The original purpose was to have men 
 in each department elected by the members of the 
 department so that the management might have a 
 ready means of communication with the workers. 
 A small department would have a single steward 
 but a large department would have several. They 
 were elected by the men in meetings held outside the 
 factory — British workers rarely hold any kind of a 
 meeting at the works. The antipathy to the em- 
 ployers is so great that they suspect they are being 
 spied upon in a meeting at the works. The elected 
 stewards formed a kind of committee and nominated 
 
COMMON SENSE AND LABOUR 247 
 
 one of their number as "convenor" or chairman. 
 The convenor attended to the caUing of meetings 
 and was the oflScial spokesman of the committee 
 with the employers. In some few cases the stewards 
 have had a constructive function, but more com- 
 monly they have existed simply to pass on "kicks." 
 They rarely decide anything for themselves. 
 
 In unionized shops they did have a function in 
 representing all of the people in intra-shop affairs 
 which did not concern the unions as such. For in- 
 stance, sanitary improvements, complaints against 
 individuals, and the like, which did not come under 
 union rules, would pass into the hands of the stewards. 
 In other cases the steward was a minor union official 
 and did not represent the workers as a whole. When 
 he was a union officer he looked after new men, saw 
 that dues were paid, and watched for infractions of 
 union rules. 
 
 But the steward's job was not a very pleasant one 
 and carried with it so Uttle honour that in many 
 places any one who asked to be a steward got the 
 place. Frequently the employers did not even know 
 who the stewards were. Of late years, since the rise 
 of the Rank and File Movement, the shop stewards 
 have quite changed their functions. 
 
248 COMMON SENSE AND LABOUR 
 
 The radical leaders working from the shop control 
 side saw in the shop stewards a better chance of suc- 
 cess than with the union officers, who were too well 
 fixed poUtically easily to be disturbed. By planting 
 a radical shop steward in the midst of a union group 
 they hoped to spread their propaganda. Therefore 
 they bent all energy upon these representatives and 
 with such good results that to-day in England prob- 
 ably two thirds of the stewards are radicals. The 
 old function of the steward was to make peace easy 
 or at least to give a chance to adjust troubles; the 
 function of the new steward is to cause all the trouble 
 that he can. 
 
 During the war the functions of the pre-war shop 
 stewards grew enormously, but side by side with 
 the official shop stewards, recognized by the unions 
 through their district committees, grew up a class 
 of unofficial shop stewards not recognized by and 
 often not attached to any particular union. The 
 line between official and unofficial stewards is, how- 
 ever, by no means hard and fast, and often it is 
 difficult to say whether a particular steward is recog- 
 nized or not. The unofficial stewards were awaiting 
 their chance. The break came when the shop stew- 
 ards, first on the Clyde and subsequently in most of 
 
COMMON SENSE AND LABOUR 249 
 
 the principal centres, joined together to form not 
 only works committees in particular works but also 
 workers' committees covering all the works in a 
 district. Committees of stewards in a particular 
 works are often recognized by the trades unions, but 
 workers' committees are always purely unoflBcial 
 bodies. 
 
 These workers' committees have usually been 
 dominated by men of "industrial unionist" views. 
 These men have continued to belong to their various 
 trades unions and, as a rule, to work for amalgamation 
 among them on industrial lines, but during the war 
 they have repeatedly taken action in calling strikes 
 without the consent of the union executives — who 
 have been unable to do so owing to the operation 
 of the Munitions Acts. In the minds of most of the 
 advanced elements in the shop stewards' movement 
 the right basis for industrial action is the work- 
 shop, and organization in the labour movement 
 should, in their view, be built up on an all-grades 
 workshop basis. Many hope to achieve this by a 
 transformation of the existing union machinery, and 
 they work for this transformation within their unions, 
 both as a lever for bringing about amalgamation and 
 as a means of securing control over industry. 
 
250 CO]\OION SENSE AND LABOUR 
 
 Late in 1917 negotiations were entered into be- 
 tween the trades union executives and the employers 
 for the recognition of shop stewards, and an agree* 
 ment providing for partial recognition was accepted 
 by some of the unions. 
 
 The unofficial shop stewards' and workers' com- 
 mittee movement on the whole repudiates recogni- 
 tion at present, holding that it will hamper freedom 
 of action and will mean a surrender to craft unionism. 
 Recognition, these elements hold, is desirable only 
 in an industrial union.- For the present they prefer 
 to remain entirely vmofficial, without restrictions and 
 witliout responsibility. A minority, but only a small 
 minority, has the idea of completely overthrowing the 
 existing unions and substituting for them a new shop 
 movement, but the vast majority works for the 
 transformation of the existing unions and expects to 
 find in them, when they have been transformed by 
 amalgamation and include all grades, skilled and 
 unskilled alike, a full form of recognition which will 
 make workshop organization the basis of the whole 
 industrial structure. 
 
 The unofficial shop stewards' movement, as a 
 whole, seeks the overthrow of capitalism and the 
 realization of the workers' control over industry. 
 
COMMON SENSE AND LABOUR 251 
 
 The most active section are the industrial unionists 
 of the Socialist Labour party, but they are only a 
 small minority of the whole, and there are many 
 different theoretical points of view represented in the 
 movement. The bulk of the adherents have hardly 
 a definite theoretical point of view. 
 
 Being a shop steward does not appeal to the 
 workers of higher skill and pay. The stewards are 
 often drawn from the very lowest grades who are 
 always most susceptible to radical propaganda. 
 
 Sometimes it has happened, for example, that the 
 shop steward in a shop employing, say, highly 
 skilled electricians, has been an unskilled labourer, 
 and employers have declined to discuss highly skilled 
 work with him. But the shop-steward movement has 
 grown, and the advocates of industrial unionism, as 
 against craft imionism, have seen in it the possibility 
 of breaking up the craft unions. The shop stewards 
 organized, and then took unto themselves the right 
 to bring out a whole shop on strike, irrespective of 
 what the executives of the trades unions concerned 
 might say. 
 
 The shop stewards are less versed in affairs than 
 the experienced officials of the trades unions, and they 
 have no fimds. An unauthorized strike is one not 
 
252 COMMON SENSE AND LABOUR 
 
 authorized by the executive, and in which no union 
 funds are available for strike pay. Having no funds 
 to draw upon, it cannot settle down, like the old 
 trades unions, to a long struggle of endurance be- 
 tween employers and employed. It has therefore 
 adopted the lightning strike, intended to last a few 
 days, followed by another lightning strike, and so on. 
 
 The manager of a shop now rather expects a shop 
 steward to be a radical. If an extreme socialist is 
 taken on to-day, to-morrow he will undoubtedly be, 
 by some mysterious process, a shop steward. They 
 are always ready to strike or to promote a strike 
 and they are behind the great unauthorized strike 
 movement in England. In the Clyde strikes of 
 February, 1919, the shop stewards were the first to 
 go out and they organized themselves into district 
 Workers' and Soldiers' Committees on approved 
 Russian lines. 
 
 The shop stewards are not, however, to be judged 
 wholly by the revolutionary twist which has turned 
 the majority. In a considerable number of cases 
 they have been of actual service. Look at these 
 experiences. 
 
 The first is a firm employing 6,000 people and 
 it has had shop stewards for some years. The 
 
COMMON SENSE AND LABOUR 253. 
 
 system sprung up in this fashion. Originally in- 
 dividual workmen laid their grievances before the 
 management, bringing, according to the general 
 habit, a companion to help to state the case. As 
 time went on, men who were recognized as good 
 advocates were sorted out and they became semi- 
 official advocates. About 1912 or 1913 this in- 
 formal system developed into a recognized com- 
 mittee of shop stewards. Each department elects 
 its own shop steward, the total number of whom is 
 nearly forty. They form a committee. On questions 
 affecting a particular department or departments, the 
 convenor interviews the management along with the 
 shop steward or shop stewards concerned, while on 
 questions affecting all the works he interviews the 
 management, in company with all the shop stew- 
 ards. Among specific matters handled may be men- 
 tioned the following: (a) The base times for 
 premium work. This system prevails throughout 
 the works, and if the base time cannot be settled 
 between the foreman of the department and the work- 
 men, then the matter is brought by the convenor and 
 the shop steward of the department to the manage- 
 ment, (b) Dilution — the shop stewards have pro-| 
 tested against the principle but they have made an 
 
254 COMMON SENSE AND LABOUR 
 
 amicable arrangement with the management in 
 every case. The wages of dilutees have also been 
 discussed in conferences by the management and 
 committee. 
 
 Another firm, a Glasgow firm employing 2,350 
 people, has at the present time two Workers' 
 Committees in the establishment. The first, which 
 is called the Shop Committee, must also be desig- 
 nated a Welfare Committee, and has been in ejcistence 
 since 1900. In 1916 they enlarged this committee, 
 or rather, they formed a separate committee, which is 
 called the Industrial Committee, and is based essen- 
 tially on trade unionism and the shop-steward system. 
 The twelve representatives of the men are elected 
 entirely by the shop stewards of the different unions. 
 There is thus no system of election by all the 
 workers and the committee is not representative 
 of all the workers, but, on the other hand, there is a 
 definite nexus established with trades union sentiment 
 and organization. Two directors of the firm and the 
 head foreman sit with the twelve representatives of 
 the men. When there is business to transact, the 
 men's representatives are paid as usual during the 
 time occupied at the meetings. The members of the 
 committee hold oJKce for one year. There are two 
 
COMMON SENSE AND LABOUR 255 
 
 chairmen, one from the men's representatives and one 
 from the firm's and they preside at alternate meet- 
 ings. The only other oflBcer is a secretary elected 
 by the committee. The following are some of 
 the questions treated by the Industrial Committee 
 during eighteen months: (1) The question of 
 the convenor of shop stewards going into other 
 departments for the discussion of grievances. This 
 was discussed and the result was the formulation of 
 regulations. (2) Wages of women and girl em- 
 ployees. (3) The record of changes in practice. 
 (4) Questions arising from the premium bonus 
 system. (5) Appeals against dismissal. (6) The 
 question of men forgetting to clock on, and of whether 
 they should receive wages for the period for which 
 they had forgotten to clock on. (7) The question of 
 working overtime on Saturdays (the committee 
 agreed to refer this to a general plebiscite). (8) 
 The question of wages of apprentices. (9) The 
 question of rules for night shift work. 
 
 Another firm employing a very large number of 
 people and working various engineering specialties 
 has a committee which dates back to 1908. The 
 committee consists of twenty-two members, one 
 from each department. Each member must be a 
 
256 COMMON SENSE AND LABOUR 
 
 trades unionist, but voting is open to all men, whether 
 or not trades unionists. The women do not have 
 votes. There are members of twenty-six trades 
 unions in the works. The members are elected 
 annually, each department electing its represent- 
 atives. The procediu-e with regard to com- 
 plaints consists of three Courts of Appeal — the 
 Works Manager, the Managing Director, and the 
 Board of Directors. Thus, a man not satisfied with 
 the response of a foreman goes to his departmental 
 representative on the committee (or directly to the 
 secretary or chairman, who have freedom of move- 
 ment from department to department). The chair- 
 man or secretary of the committee and the repre- 
 sentative of the complainant's department then 
 approach the Works Manager, and thereafter, if 
 necessary, the Managing Directors and finally the 
 Board of Directors. The committee acts for al- 
 most all purposes by the methods just mentioned. 
 The committee has been largely responsible for mak- 
 ing the appeal for better timekeeping effective, and 
 this is the more remarkable, because even before the 
 appeal was made the timekeeping record was con- 
 sidered very good. The other questions discussed 
 with the officials of the committee and the repre- 
 
COMMON SENSE AND LABOUR 257 
 
 sentatives on it of particular departments have in- 
 cluded dilution, which was carried through without 
 trouble, and grievances in regard to premium bonus 
 times, including the fixing of new times when methods 
 of production are altered. 
 
 A small engineering establishment in the west 
 of England employs men, apprentices, and women. 
 The men are all skilled mechanics. There are sixteen 
 apprentices. The Works Committee was formed 
 in the autumn of 1916. It was set up by the man- 
 agement in order to administer a bonus scheme 
 proposed by the management in response to a de- 
 mand by the employees for a 10 per cent, ad- 
 vance in wages. The committee meets regularly 
 each month. (1) To settle the amount to be 
 set aside for the payment of bonus. For this 
 purpose, the books of the company are opened 
 to the committee. (2) To assess the value of 
 the profit-sharing amount. (3) To assess the fines 
 incurred by employees under the scheme. (4) 
 To determine the amount of bonus to which each 
 employee is entitled. 
 
 The committee represents both the manage- 
 ment and the employees. The two Works Mana- 
 gers are also ex-officio members. The rest of the 
 
258 COMMON SENSE AND LABOUR 
 
 committee consists of six representatives elected 
 by ballot by all the employees. These members 
 represent the works as a whole. The commit- 
 tee is charged, in addition to its special duties, 
 with the consideration generally of any grievances 
 arising in the shop. Its functions in this re- 
 spect are not specified or limited. The committee 
 has dealt with shop conditions, wages, holidays, and 
 bad timekeeping. The value of the output has 
 already advanced some 30 per cent, and is expected 
 to rise rapidly in the near future owing to improved 
 methods and eflSciency. The committee is regarded 
 as a great success and has acted as an incentive to 
 efficiency in the works and in furthering increased 
 production. 
 
 Another small engineering works employs about one 
 hundred and twenty men, women, and boys in engi- 
 neering work. For several years prior to the latter part 
 of 1917 the company adopted the practice of meeting 
 the whole of the men employed in the works once a 
 month, to discuss any matters connected with the es- 
 tablishment that seemed to require examination. At 
 the end of 1915 this practice was abandoned because 
 it was felt by the management (1) That much time 
 was wasted discussing irrelevant and unimportant 
 
COMMON SENSE AND LABOUR 259 
 
 matters; (2) That real grievances did not freely come 
 out in the presence of the whole body of the employ- 
 ees. The employees at the suggestion of the man- 
 aging director elected seven representatives to form 
 an employees' committee, which would meet as a 
 joint works committee with the management. The 
 committee is composed of three representatives of 
 the management nominated by the managing direc- 
 tor and seven representatives of the employees. 
 The functions of this committee are very similar to 
 those abeady mentioned. The committee has 
 proved specially useful as a means of arriving at a 
 proper interpretation of oflBcial orders and circulars. 
 The management has found the committee of the 
 greatest service in conducting the business of the 
 works. 
 
 A firm employing 700 men, women, and boys has a 
 committee of five men. The women and boys are 
 not represented. The five members represent the 
 shop as a whole and do not represent separate 
 departments or grades. The principal business of 
 the committee is to assist in fixing and adjusting 
 piecework prices. The management, in the first 
 instance, settle what they consider fair prices, and 
 submit them to the committee with the data on 
 
260 COMMON SENSE AND LABOUR 
 
 which they have been fixed. The men's committee 
 then meets separately to consider the suggested 
 prices. Ample time is allowed them for considera- 
 tion and discussion, both among themselves and 
 with the workers affected. A joint meeting is then 
 held between the committee and the management, 
 at which the several prices imder consideration are 
 reviewed and any suggestions as to amendment are 
 considered. If a good case is made out to the satis- 
 faction of the management, the price is raised or 
 reduced. If it becomes necessary to reconsider the 
 price already fixed, any suggestions on this score are 
 brought by the committee to the attention of the 
 management and are jointly considered. No friction 
 of any sort has so far arisen. Prices have been fre- 
 quently reduced or increased by mutual agreement. 
 
 WORKSHOP COMMITTEES 
 
 The line of demarcation between the committees of 
 shop stewards and the Works Committee is indefinite. 
 If the shop stewards happen all to be radicals and 
 meet only to cause trouble, they are usually called 
 stewards, but if they are a reasonable body and 
 organize to act with the management they are works 
 committees. 
 
COMMON SENSE AND LABOUR 261 
 
 Here are some opinions expressed by employers 
 who have had experience with committees: 
 
 (1) "Useful work is the outcome." (2) "Com- 
 mittees should be encouraged; much depends on 
 class of men chosen from both sides." (3) "Applied 
 to large establishments, very commendable." (4) 
 "If established generally, would do an infinite 
 amount of good." (5) "Nothing but good would 
 accrue if such committees were general." (6) "In 
 entire sympathy." (7) "Experienceisa very happy 
 one and not by any means one-sided, as the members 
 of the committee do everything possible to render 
 assistance to the firm." (8) "Very harmonious 
 relations although , . . grievances much too 
 one-sided." (9) "Perfectly satisfied." (10) "En- 
 courages men to leave work to engage in business 
 which management should attend to." (11) "Power 
 is taken from management and exercised by the 
 men." (12) "Simply looking for trouble." (13) 
 "Advantage would be taken to look for trouble." 
 (,14) "Any amount of friction would ensue." (15) 
 " Afraid grievances would come from only one side, and 
 little endeavour would be made to assist the manage- 
 ment in conduct of works." (16) "Dealing with 
 accredited shop stewards entirely satisfactory." 
 
262 COMMON SENSE AND LABOUR 
 
 The Rt. Hon. G. H. Roberts, formerly Minister 
 of Labour, advocates the workshop committees. 
 He says (and he was once a worker himself) : 
 
 "It is essential that the owners should sit on the 
 committees, for after all the primary purpose is to 
 promote a better imderstanding. I realize that there 
 may be difficulties at first, and that workpeople may 
 be unwilling to speak frankly in the presence of 
 their employers. There is no reason why they 
 should not first meet separately. Much of the 
 industrial unrest which prevailed before the war 
 and during the war had its origin in what, viewed 
 dispassionately, were trivial things, which could 
 easily be remedied if there were a tribimal ready at 
 hand to deal with them. The immunity of strikes 
 in the printing trade may be attributed to the fact 
 that by the existence of the "chapel," as it was 
 termed, close personal contact was maintained with 
 the workers and those in authority. We must recog- 
 nize that workmen claim, and have a right to claim, 
 a fair share of the prosperity they help to create, and 
 a voice in the conditions under which they labour. 
 I want workmen to take an active interest in the 
 welfare of their firm, to make suggestions how the 
 quality of the product on which they are engaged 
 
COMMON SENSE AND LABOUR 263 
 
 can be improved, how the quantity can be increased, 
 and the organization bettered." 
 
 The modern best thought behind the Works 
 Committee is that it shall have powers of construc- 
 tion, and it has been generally perceived by fore- 
 handed employers that if the demand for workers' 
 representation is not to destroy the wage system, 
 then the workers must be taken into a share in the 
 management through committees. Hence we find 
 that employers think more of the committee system 
 than do the employees; the employees of radical 
 tendency oppose all committees which do other than 
 formulate demands. They oppose the idea of con- 
 ferences or any action which might connote mutuality. 
 And many socialistic writers take the view that 
 the workers' committee is not at all a step in the 
 right direction because the superior intelligence of 
 the employers will always overcome that of the 
 employee members; they see it as a wedge driven 
 into the solidarity of the workers. 
 
 At first the unions took the same view; they thought 
 that the committee system would tend toward 
 shop instead of union control and permit direct ad- 
 justment instead of adjustment through the unions. 
 Not a few of the unions had even gone so far as to 
 
264 COMMON SENSE AND LABOUR 
 
 declare that all wages over the minimum should not 
 be paid directly to the workers but to the union, and 
 by it distributed in accordance with needs. Often 
 in the action of the British unions may be seen a 
 greater desire to perpetuate and strengthen the union 
 than to benefit the worker — which is one of the rea- 
 sons that the contra-union movement has gained so 
 much. 
 
 But the unions stand for the wage system; without 
 wages the unions could not exist. There is really no 
 place for the union or the union leader in syndicalism. 
 And hence the unions found that their interests were 
 not on the side of the control by workers, but on the 
 side of control by employers. At the close of the war 
 it became apparent that the pre-war union practices 
 which had been suspended by agreement with the 
 Government could not be restored — that the clock 
 could not be turned back. 
 
 The idea had been that the soldiers as they were 
 demobilized should go right back into their former 
 jobs and the coxmtry would start on its ways of peace. 
 But the soldiers who did go back found in most cases 
 that no jobs existed; the control of raw materials and 
 the various other governmental controls made busi- 
 ness too nervous at once to engage in the vicissitudes 
 
COMMON SENSE AND LABOUR 265 
 
 of peace work. The Government granted unemploy- 
 ment allowances to all who had not jobs and they paid 
 these allowances directly and not through the unions, 
 thereby giving strength to the communists' propa- 
 ganda that the Government really could support 
 the population if only it so chose. 
 
 The shortage of work with only a portion of the 
 army demobilized gave further aid to those who 
 desired to resume the practice of having a man do as 
 httle as possible in order that more men might be 
 employed. Up on the Clyde the shipyard people and 
 the engineers went on an "unofficial" strike for a 
 forty-hovu: week on the plea that only by short hours 
 could places be found for the unemployed. The 
 miners joined in a strike of their own (which, however, 
 was official) and the London tube workers went out 
 "unofficially" for some days. The trainmen threat- 
 ened to strike. These strikes not only menaced in- 
 dustry, but, with industry, the unions. The unions 
 had to take the side of the employers or prepare to go 
 out of business. 
 
 In the meantime a Parliamentary Committee 
 headed by the Rt. Hon. J. H. "Whitley and composed 
 of union men, employers, and representatives of the 
 general public had been appointed to devise some 
 
£66 COMMON SENSE AND LABOUR 
 
 industrial scheme which might make for a belter re- 
 lation between employer and employee. They took 
 the workshop committee idea and the chief features 
 of the organization of the engineering trades, which 
 had already a national association of employers 
 and district councils erected for the purpose of 
 dealing with the unions on industrial disputes and 
 changes. 
 
 JOINT INDUSTRIAL COUNCILS 
 
 The Whitley Committee proposed that each trade 
 in the empire organize itself by constituting first a 
 National Joint Industrial Council made up of repre- 
 sentatives of the employers' association and of the 
 unions with district councils similarly constituted 
 from the district associations and unions, with finally 
 a workshop committee of employers' and employees' 
 representatives. Being on the supervisory bodies, 
 the unions gained a control over the workshop com- 
 mittees, and this put nearly all the union leaders in 
 consonance with the plan. 
 
 The report has been welcomed as the greatest step 
 ever taken in the way of founding an enduring rela- 
 tion between capital and labour. Here it is in 
 full: 
 
COMMON SENSE AND LABOUR 267 
 
 To THE Right Honoubable D. Llotd George. M. P. 
 Prime Minister. 
 
 Sib: 
 
 We have the honour to submit the following Interim Report 
 on Joint Standing Industrial Councils. 
 
 2. The terms of reference to the Sub-Committee are: — 
 
 "(1) To make and consider suggestions for securing a 
 permanent improvement in the relations between employ- 
 ers and workmen. 
 
 "(2) To recommend means for securing that industrial 
 conditions affecting the relations between employers and 
 workmen shall be systematically reviewed by those con- 
 cerned, with a view to improving conditions in the 
 future." 
 
 3. After a general consideration of our duties in relation to 
 the matters referred to us, we decided first to address ourselves 
 to the problem of establishing permanently improved relations 
 between employers and employed in the main industries of the 
 coimtry, in which there exist representative organizations on 
 both sides. The present report accordingly deals more espe- 
 cially with these trades. We are proceeding with the considera- 
 tion of the problems connected with the industries which are less 
 well organized. 
 
 4. We appreciate that under the pressure of the war both em- 
 ployers and workpeople and their organizations are very much 
 pre-occupied, but, notwithstanding, we believe it to be of the 
 highest importance that our proposals should be put before those 
 concerned without delay, so that employers and employed may 
 meet in the near future and discuss the problems before them. 
 
 5. The circumstances of the present time are admitted on all 
 sides to offer a great opportunity for securing a permanent 
 improvement in the relations between employers and employed. 
 
268 COMMON SENSE AND LABOUR 
 
 while failure to utilize the opportunity may involve the nation 
 in grave industrial diflSculties at the end of the war. 
 
 It is generally allowed that the war almost enforced some 
 reconstruction of industry, and in considering the subjects re- 
 ferred to us we have kept in view the need for securing in the 
 development of reconstruction the largest possible measure of 
 cooperation between employers and employed. 
 
 In the interests of the commimity it is vital that after the war 
 the cooperation of all classes, established during the war, should 
 continue, and more especially with regard to the relations be- 
 tween employers and employed. For securing improvement 
 in the latter it is essential that any proposals put forward should 
 offer to workpeople the means of attaining unproved conditions 
 of employment and a higher standard of comfort generally, and 
 involve the enlistment of their active and continuous coopera- 
 tion in the promotion of industry. 
 
 To this end, the establishment for each industry of an organ- 
 ization, representative of employers and workpeople, to have 
 as its object the regular consideration of matters affecting the 
 progress and well-being of the trade from the point of view of all 
 those engaged in it, so far as this is consistent with the general 
 interest of the community, appears to us necessary. 
 
 6. Many complicated problems have arisen during the war 
 which have a bearing both on employers and workpeople, and 
 may affect the relations between them. It is clear that industrial 
 conditions will need careful handling if grave difficulties and 
 strained relations are to be avoided after the war has ended. 
 The precise nature of the problems to be faced naturally varies 
 from industry to industry, and even from branch to branch 
 within the same industry. Their treatment consequently will 
 need an intimate knowledge of the facts and circumstances of 
 each trade, and such knowledge is to be found only among those 
 directly connected with the trade. 
 
COMMON SENSE AND LABOUR 269 
 
 7. With a view to providing means for carrying out the policy 
 outlined above, we recommend that His Majesty's Government 
 should propose without delay to the various associations of 
 employers and employed the formation of Joint Standing In- 
 dustrial Councils in the several industries, where they do not 
 already exist, composed of representatives of employers and 
 employed, regard being paid to the various sections of the indus- 
 try and the various classes of labour engaged. 
 
 8. The appointment of a Chairman or Chairmen should, we 
 think, be left to the Council who may decide that these should 
 be— 
 
 (1) A Chairman for each side of the Council; 
 
 (2) A Chairman and Vice-Chairman selected from the 
 members of the Council (one from each side of the 
 Council) ; 
 
 (3) A Chairman chosen by the Council from independent 
 persons outside the industry; or 
 
 (4) A Chairman nominated by such person or authority 
 as the Council may determine or, failing agreement, 
 by the Government. 
 
 9. The Council should meet at regular and frequent intervals. 
 
 10. The objects to which the consideration of the Councils 
 should be directed should be appropriate matters affecting the 
 several industries and particularly the establishment of a closer 
 cooperation between employers and employed. Questions con- 
 nected with demobilization will call for early attention. 
 
 H. One of the chief factors in the problem, as it at first pre- 
 sents itself, consists of the guarantees given by the Government, 
 with Parliamentary sanction, and the various undertakings en- 
 tered into by employers, to restore the Trade Union rules and 
 customs suspended during the war. While this does not mean 
 that all the lessons learnt during the war should be ignored, it- 
 does mean that the definite cooperation and acquiescence by 
 
270 COMMON SENSE AND LABOUR 
 
 both employers and employed must be a condition of any setting 
 aside of these guarantees or undertakings, and that, if new ar- 
 rangements are to be reached, in themselves more satisfactory 
 to all parties but not in strict accordance with the guarantees, 
 they must be the joint work of employers and employed. 
 
 12. The matters to be considered by the Councils must in- 
 evitably differ widely from industry to industry, as different 
 circumstances and conditions call for different treatment, but 
 we are of opinion that the suggestions set forth below ought to 
 be taken into account, subject to such modification in each case 
 as may serve to adapt them to the needs of the various industries. 
 
 13. In the well-organized industries one of the first questions 
 to be considered should be the establishment of local and works 
 organizations to supplement and make more effective the work 
 of the central bodies. It is not enough to secure cooperation at 
 the centre between the national organizations; it is equally 
 necessary to enlist the activity and support of employers and 
 employed in the districts and in individual establishments. The 
 National Industrial Council should not be regarded as complete 
 in itself; what is needed is a triple organization — in the work- 
 shops, the districts, and nationally. Moreover, it is essential 
 that the organization at each of these three stages should proceed 
 on a common principle, and that the greatest measure of common 
 action between them should be secured. 
 
 14. With this end in view, we are of opinion that the following 
 proposals should be laid before the National Industrial Councils : — 
 
 (a) That District Councils, representative of the Trade 
 Unions and of the Employers' Association in the industry 
 should be created, or developed out of the existing ma- 
 chinery for negotiation in the various trades. 
 
 (b) That Works Committees, representative of the 
 management and of the workers employed, should be 
 instituted in particular works to act in close cooperation 
 with the district and national machinery. 
 
COMMON SENSE AND LABOUR 271 
 
 As it is of the highest importance that the scheme making 
 provision for these Committees should be such as to secure the 
 support of the Trade Unions and Employers' Associations con- 
 cerned, its design should be a matter for agreement between 
 these organizations. 
 
 Just as regular meetings and continuity of cooperation are 
 essential in the case of the National Industrial Councils, so they 
 seem to be necessary in the case of the district and works organ- 
 izations. The object is to secure cooperation by granting to 
 workpeople a greater share in the'consideration of matters affect- 
 ing their industry, and this can only be achieved by keeping 
 employers and workpeople in constant touch. 
 
 15. The respective functions of Works Committees, District 
 Councils, and National Councils will no doubt require to be 
 determined separately in accordance with the varying conditions 
 of different industries. Care will need to be taken in each 
 case to delimit accurately their respective functions, in order to 
 avoid overlapping and resulting friction. For instance, where 
 conditions of employment are determined by national agree- 
 ments, the District Councils or Works Committees should not be 
 allowed to contract out of conditions so laid down, nor, where 
 conditions are determined by local agreements, should such power 
 be allowed to Works Committees. 
 
 16. Among the questions with which it is suggested that 
 the National Councils shoiJd deal or allocate to District Councils 
 or Works Committees the following may be selected for si>ecial 
 mention : — 
 
 (i) The better utilization of the practical knowledge and 
 experience of the workpeople. 
 
 (ii) Means for securing to the workpeople a greater share 
 in and responsibility for the determination and observance 
 of the conditions xmder which their work is carried on. 
 (iii) The settlement of the general principles governing 
 
272 COMMON SENSE AND LABOUR 
 
 the conditions of employment, including the methods 
 of fixing, paying, and readjusting wages, having regard 
 to the need for securing to the workpeople a share in the 
 increased prosperity of the industry, 
 (iv) The establishment of regular methods of negotiations 
 for issues arising between employers and workpeople, 
 with a view both to the prevention of differences, and to 
 their better adjustment when they appear, 
 (v) Means of ensuring to the workpeople the greatest 
 possible security of earnings and employment, without 
 undue restriction upon change of occupation or employer, 
 (vi) Methods of fixing and adjusting earnings, piecework 
 prices, etc., and of dealing with the many diflaculties 
 which arise with regard to the method and amount of 
 payment apart from the fixing of general standard rates, 
 which are already covered by paragraph (iii). 
 (vii) Technical education and training, 
 (viii) Industrial research and the full utilization of its 
 results. 
 
 (ix) The provision of facilities for the full consideration 
 and utilization of inventions and improvement designed 
 by workpeople, and for the adequate safeguarding of the 
 rights of the designers of such improvements, 
 (x) Improvements of processes, machinery, and organ- 
 ization and appropriate questions relating to manage- 
 ment and the examination of industrial experiments, with 
 special reference to cooperation in carrying new ideas into 
 effect and full consideration of the workpeople's point of 
 view in relation to them. 
 
 (xi) Proposed legislation affecting the industry. 
 17. The methods by which the functions of the proposed 
 Councils should be correlated to those of joint bodies in the 
 different districts, and in the various works within the districts, 
 
COMMON SENSE AND LABOUR 273 
 
 must necessarily vary according to the trade. It may, therefore, 
 be the best policy to leave it to the trades themselves to formu- 
 late schemes suitable to their special circumstances, it being 
 understood that it is essential to secure in each industry the 
 fullest measure of cooperation between employers and employed, 
 both generally, through the National Councils, and specifically, 
 through district Committees and workshop Committees. 
 
 18. It would seem advisable that the Government should put 
 the proposals relating to National Industrial Coimcils before the 
 employers' and workpeople's associations and request them to 
 adopt such measures as are needful for their establishment where 
 they do not already exist. Suitable steps should also be taken, 
 at the proper time, to put the matter before the general public. 
 
 19. In forwarding the proposals to the parties concerned 
 we think the Government shoxdd offer to be represented in an 
 advisory capacity at the preliminary meetings of a Council, 
 if the parties so desire. We are also of opinion that the Govern- 
 ment should imdertake to supply to the various Councils such 
 information on industrial subjects as may be available and likely 
 to prove of value. 
 
 20. It has been suggested that means must be devised to 
 safeguard the interests of the commimity against possible action 
 of an anti-social character on the part of the Councils. We have, 
 however, here assumed that the Councils, in their work of pro- 
 moting the interests of their own industries, have regard for the 
 National interest. If they fulfil their functions they will be the 
 best builders of national prosperity. The State never parts with 
 its inherent over-riding power, but such power may be least 
 needed when least obtruded. 
 
 21. It appears to us that it may be desirable at some later 
 stage for the State to give the sanction of law to agreements made 
 by the Coimcils, but the initiative in this direction should come 
 from the Councils themselves. 
 
274 COMMON SENSE AND LABOUR 
 
 22. The plans sketched in the foregoing paragraphs are ap- 
 plicable in the form in which they are given only to industries 
 in which there are responsible associations of employers and 
 workpeople which can claim to be fairly representative. The 
 case of the less well-organized trades or sections of a trade neces- 
 sarily needs further consideration. We hope to be in a position 
 shortly to put forward recommendations that will prepare the ' 
 way for the active utilization in these trades of the same practical 
 cooperation as is foreshadowed in the proposals made above for 
 the more highly organized trades. 
 
 23. It may be desirable to state here our considered opinion 
 that an essential condition of securing a permanent improvement 
 in the relations between employers and employed is that there 
 should be adequate organization on the part of both employers 
 and workpeople. The proposals outlined for joint cooperation 
 throughout the several industries depend for their ultimate suc- 
 cess upon there being such organization on both sides; and such 
 organization is necessary also to provide means whereby the 
 arrangements and agreements made for the industry may be 
 effectively carried out. 
 
 24. We have thought it well to refrain from making sug- 
 gestions or offering opinions with regard to such matters as 
 profit-sharing, co-partnership, or particular systems of wages, 
 etc. It would be impracticable for us to make any useful general 
 recommendations on such matters, having regard to the varying 
 conditions in different trades. We are convinced, moreover, 
 that a permanent improvement in the relations between employ- 
 ers and employed must be founded upon something other than 
 a cash basis. What is wanted is that the workpeople should 
 have a greater opportunity of participating in the discussion 
 about and adjustment of those parts of industry by which they 
 are most affected. 
 
 25. The schemes recommended in this Report are intended 
 
COMMON SENSE AND LABOUR 275 
 
 not merely for the treatment of industrial problems when they 
 have become acute, but also, and more especially, to prevent 
 their becoming acute. We believe that regular meetings to dis- 
 cuss industrial questions, apart from and prior to any dififerences 
 with regard to them that may have begun to cause friction, will 
 materially reduce the number of occasions on which, in the view 
 of either employers or employed, it is necessary to contemplate 
 recourse to a stoppage of work. 
 
 26. We ventm'e to hope that representative men in each in- 
 dustry, with pride in their calling and care for its place as a con- 
 tributor to the national well-being, will come together in the 
 manner here suggested, and apply themselves to promoting in- 
 dustrial harmony and efficiency and removing the obstacles that 
 have hitherto stood in the way. 
 
 We have the honour to be. Sir, 
 Your obedient Servants, 
 J. H. Whitlet, Chairman A. Susan Lawrence 
 
 F. S. Button J. J. Mallon 
 
 Geo. J. Cabteb Thos. R. Ratcufpe-Ellis 
 
 S. J. Chapman Robt. Smillie 
 
 G. H. Claughton Allan M. Smith 
 J. R. Cltnes Mona Wilson 
 
 J. A. HoBSON 
 
 H. J. Wilson, 
 Arthur Greenwood, 
 Secretaries. 
 8th March, 1917. 
 
 In a further report the committee elucidated their 
 
 proposals thus: 
 
 Better relations between employers and their workpeople can 
 best be arrived at by granting to the latter a greater share in 
 the consideration of matters with which they are concerned. In 
 
276 COMMON SENSE AND LABOUR 
 
 every industry there are certain questions, such as rates of wages 
 and hours of work, which should be settled by District or Na- 
 tional agreement, and with any matter so settled no Works 
 Committee should be allowed to interfere; but there are also 
 many questions closely affecting daily life and comfort in, and 
 the success of, the business, and affecting in no small degree 
 eflSciency of working, which are peculiar to the individual work- 
 shop or factory. The purpose of a Works Committee is to estab- 
 lish and maintain a system of cooperation in all these workshop 
 matters. 
 
 We have throughout our recommendations proceeded upon 
 the assumption that the greatest success is likely to be achieved 
 by leaving to the representative bodies of employers and em- 
 ployed in each industry the maximum degree of freedom to settle 
 for themselves the precise form of Coimcil or Committee which 
 should be adopted, having regard in each case to the particular 
 circumstances of the trade; and, in accordance with this principle, 
 we refrain from indicating any definite form of constitution for 
 the Works Committees. Our proposals as a whole assume the 
 existence of organizations of both employers and employed 
 and a frank and full recognition of such organizations. Works 
 Committees established otherwise than in accordance with these 
 principles could not be regarded as a part of the scheme we have 
 recommended, and might indeed be a hindrance to the develop- 
 ment of the new co-relations in industry to which we look for- 
 ward. We think the aim shoiJd be the complete and coherent 
 organization of the trade on both sides, and Works Conunittees 
 will be of value in so far as they contribute to such a result. 
 
 We are of opinion that the complete success of Works Commit- 
 tees necessarily depends largely upon the degree and eflSciency 
 of organization in the trade, and upon the extent to which the 
 Committees can be linked up, through organizations that we 
 have in mind, with the remainder of the scheme which we are 
 
COMMON SENSE AND LABOUR 277 
 
 proposing, viz., the District and National Councils. We think 
 it important to state that the success of the Works Committees 
 would be very seriously interfered with if the idea existed that 
 such Committees were used, or likely to be used, by employers 
 in opposition to Trade Unionism. It is strongly felt that the 
 setting up of Works Committees without the cooperation of the 
 Trade Unions and the Employers' Associations in the trade or 
 branch of trade concerned would stand in the way of the im- 
 proved industrial relationships which in these Reports we are 
 endeavouring to further. 
 
 In an industry where the workpeople are unorganized, or 
 only very partially organized, there is a danger that Works 
 Committees may be used, or thought to be used, in opposition 
 to Trade Unionism. It is important that such fears should be 
 guarded against in the initiation of any scheme. We look upon 
 successful Works Committees as the broad base of the Industrial 
 Structure which we have recommended, and as the means of 
 enlisting the interest of the workers in the success both of the 
 industry to which they are attached and of the workshop or 
 factory where so much of their life is sptent. These Committees 
 should not in constitution or methods of working discourage 
 Trade organization. 
 
 Works Committees, in our opinion, should have regular meet- 
 ings at fixed times, and, as a general rule, not less frequently 
 than once a fortnight. They should always keep in the forefront 
 the idea of constructive cooperation in the improvement of the 
 industry to which they belong. Suggestions of all kinds tending to 
 improvement should be frankly welcomed and freely discussed. 
 Practical proposals should be examined from all points of view. 
 There is an imdeveloped asset of constructive ability — valuable 
 alike to the industry and to the State — awaiting the means of 
 realization; problems, old and new, will find their solution in a 
 frank partnership of knowledge, experience, and good will. Works 
 
278 COMMON SENSE AND LABOUR 
 
 Committees would fail in their main purpose if they existed only 
 to smooth over grievaaices. 
 
 We recognize that, from time to time, matters will arise which 
 the management or the workmen consider to be questions they 
 cannot discuss in these joint meetings. When this occurs, we 
 anticipate that nothing but good will come from the friendly 
 statement of the reasons why the reservation is made. 
 
 We regard the successful development and utilization of 
 Works Committees in any business on the basis recommended in 
 this Report as of equal impwrtance with its commercial and scien- 
 tific efficiency; and we think that in every case one of the partners 
 or directors, or some other responsible representative of the man- 
 agement, would be well advised to devote a substantial part of 
 his time and thought to the good working and development of 
 such a committee. 
 
 There has been some experience, both before the war and 
 during the war, of the benefits of Works Committees, and we 
 think it should be recommended most strongly to employers and 
 employed that, in connection with the scheme for the establish- 
 ment of National and District Industrial Councils, they should 
 examine this experience with a view to the institution of Works 
 Committees on proper lines, in works where the conditions render 
 their formation practicable. We have recommended that the 
 Ministry of Labour should prepare a summary of the experience 
 available with reference to Works Committees, both before and 
 during the war, including information as to any rules or reports 
 relating to such Committees, and should issue a memorandum 
 thereon for the guidance of employers and workpeople generally 
 and we imderstand that such a memorandum is now in course 
 of preparation. 
 
 In order to ensure uniform and common principles of action, 
 it is essential that where National and District Industrial Councils 
 exist the Works Committees should be in close touch with them. 
 
COMMON SENSE AND LABOUR 279 
 
 and the scheme for linking up Works Committees with the Councils 
 should be considered and determined by the National Councils. 
 
 We have considered it better not to attempt to indicate any 
 specific form of Works Committees. Industrial establishments 
 show such infinite variation in size, number of persons employed, 
 multiplicity of departments, and other conditions, that the par- 
 ticular form of Works Committees must necessarily be adapted 
 to the circumstances of each case. It would, therefore, be impos- 
 sible to formulate any satisfactory scheme which does not pro- 
 vide a large measure of elasticity. 
 
 It will be perceived that the controlliag thought is 
 to establish a government for trade on constitutional 
 lines, recognizing that the employers constitute one 
 class and the employees another, and that each can 
 best treat collectively. It puts industry into the con- 
 trol of the employers and the unions. 
 
 The two glaringly weak spots are that the public is 
 not considered and that no check exists against 
 building up guilds of infinite power. For instance, a 
 combination of the owners and workers in, say, the 
 engineering trades would have almost a mastery of 
 the government of the country while a combination 
 of two or three of the greatest trades would have 
 absolute mastery. Another point of weakness is 
 that the association is voluntary and the decisions 
 of the councils are not backed by other than public 
 opinion. But since public opinion is more powerful 
 
280 COMMON SENSE AND LABOUR 
 
 than any government, this is an apparent rather than 
 an actual weakness. 
 
 The reception of the plan has been various. It was 
 adopted by Parliament and has the support of most 
 imion leaders although some of them give but lip 
 service. The shop stewards replied with a mani- 
 festo of their own which well illustrates the diver- 
 gence of opinion on industrial matters. The main 
 points of this manifesto are: 
 
 Working hours to be forty per week, to terminate at 6. p. m. 
 on Friday. K there are two shifts they shall be from 6 a. m. 
 till 2 p. M., and from 2 p. m. till 10 a. m. K there are three shifts, 
 the third shall be from 10 p. m. till 6 a. m., but this shall count 
 as twelve hours for payment, and not eight. In every case 
 there shall be a break of half-an-hour for a meal, included in the 
 eight hoius and paid for. 
 
 When the Unemployed Register of the Trades Union concerned 
 reaches two and a half per cent, the Unions reserve to themselves 
 the right to order any reduction of hours they consider necessary, 
 and such shorter hours shall carry the full week's wages. 
 
 Overtime shall not be allowed except in very special cases. Each 
 case must be submitted by the employers to the Union for consent 
 before any overtime is worked, except in cases of sudden "break- 
 down," when the Shop's Committee shall be allowed to decide 
 on the merits of the case. All overtime to be paid double time. 
 
 Where pajTnent by results is in operation, or is introduced, 
 it shall only be allowed on a Fellowship system. 
 
 Arrangements to be made for ten days per annum to be ob- 
 served as holidays at the customary periods. When they fall 
 
COMMON SENSE AND LABOUR 281 
 
 on a Saturday or a Sunday the following working-day sliall con- 
 stitute the holiday. In addition an arrangement shall be made 
 for each worker to have two clear weeks' holiday per annum at 
 convenient dates. AU holidays to be paid for. 
 
 As regards out-working allowances, if the worker 
 cannot get home at night, he is to receive his full 
 wages, plus 75 per cent., plus travelling expenses. 
 Regulations affecting apprenticeship prescribe that 
 there shall be not more than one apprentice for 
 every three journeymen, with payment all the time 
 on a most generous scale. 
 
 No man is to be called upon to work more 
 than one machine at a time unless the machines 
 are purely automatic, or unless the sanction of the 
 Shop Committee find of the unions has first been 
 obtained. 
 
 In the event of disputes, there shall be a conference 
 between the employers and the trades union, which 
 must be held within seven days. There shall be no 
 cessation of work pending the conference, and the 
 conditions prevailing prior to the dispute shall op- 
 erate until agreement is reached. 
 
 When the workman wishes to leave, he is to do so 
 without prejudice from his employer, provided he has 
 given notice of his intention to the Works Committee. 
 
282 COMMON SENSE AND LABOUR 
 
 The whole Joint Industrial Council scheme is, at 
 the time of writing, in the formative stage. Whether 
 or not it will be a success remains to be seen. Since 
 its adoption many and more serious strikes have 
 taken place in Great Britain than ever before and a 
 national conference had to be called for the unionists 
 and the employers to discuss ways and means. They 
 did not arrive at any concrete conclusions and it is 
 not safe to generalize on either success or failure. 
 The best criticism that has yet been written and 
 which points out the possibilities of success as well as 
 the possibilities of failure is this from the London 
 Athenoeum: 
 
 Experience will probably show how loyal tyto the trades unioa 
 can exist side by side with loyalty to the shop. Profit-sharing 
 and co-partnership have endeavoured to breed a shop loyalty on a 
 cash basis and have failed. The Workshop Committee may pro- 
 vide a better way through the development of real joint control. 
 The new Shop Stewards' Movement — one of the most significant 
 developments of the war period — is based upon the shop. It is 
 the local side of industrial unionism, seeking to weld the workers 
 together, irrespective of craft or degree of skill. It is a product 
 of the spirit which is demanding "control by the workers." 
 The movement has created some consternation in oflScial circles. 
 Its spontaneity is a sign that it has arisen in response to new 
 needs, and it may be taken for granted that it will continue to 
 grow. It must, therefore, be reckoned with in the future. It 
 is for industrial organizations to find a place for the Shop Stew- 
 
COMMON SENSE AND LABOUR 283 
 
 ards' Movement in the industrial constitution. It may be that 
 it will be coordinated with both the Joint District Council and 
 the Workshop Committee. 
 
 This triple organization of national, district, and shop ma- 
 chinery, if it be honestly applied and the many difficulties faced, 
 will mark a great step forward. It is urged by some that it 
 cannot be successfully worked under a capitalist system. This 
 may be true, but joint control in private industry is not a worse 
 state of affairs than the bureaucratic control of public services. 
 If joint control is to be postponed until industries pass under 
 public ownership, the trades union movement will have a long 
 time to wait, and when the time did arrive, it would find the 
 workers unfamiliar with the problems of industrial administra- 
 tion, and public ownership would mean an industrial bureaucracy. 
 
 Considering the Report as a whole, and the possibilities which 
 are latent in it, we must realize that it marks a fresh departure 
 in industrial relations. It gives a new importance to both em- 
 ployers' and workpeople's organizations, and it offers a new 
 status to the worker and the worker's representatives. It is 
 the first large attempt which has been made to solve the question 
 of industrial government. Its proposals are moderate and tenta- 
 tive; it indicates but the first steps; it leaves the final questions 
 of ownership and control open. The recommendations of the 
 Sub-Committee have been made in view of all the existing cir- 
 cumstanoes, and represent what appears to be immediately pos- 
 sible. The Report is obviously in line with modem thought. 
 It is, for example, an attempt to apply the principle of decentral- 
 ization. Geographical devolution and functional devolution 
 are both attempts to relieve the congestion of the central author- 
 ity, and to bring government into closer contact with the gov- 
 erned and with the living problems of government. Further, 
 it is a recognition of the right of the human being, whatever his 
 economic and social circumstances, to human treatment; and 
 
284 COMMON SENSE AND LABOUR 
 
 human treatment means not so much the provision from above 
 of better conditions of life, as the provision of opportimities 
 for obtaining those conditions. 
 
 We can fully understand that when an industry settles itself 
 down to the task of applying the Report, it will meet with many 
 difficulties, some of which are connected with industrial organiza- 
 tion. There is little cohesion among employers, though the 
 contrary view is widely held. In the case of workpeople over- 
 lapping unions present many obstades, whilst the new responsi- 
 bilities of the trades unions will necessitate a reorganization which 
 will not be rapidly completed. But the fact that the Report 
 has been so favourably received by all except the backwoodsmen 
 amongst the employers, and a small irreconcilable minority 
 amongst the workers, shows that there is a general willingness 
 to give the Report a chance. It is important, however, that 
 employers as a whole should recognize that they must be pre- 
 pared to sacrifice some of their powers — that, in a word, the 
 day of industrial autocracy is rapidly drawing to a close. The 
 employers must adjust themselves to the new circumstances. 
 And as the trades union movement becomes more and more 
 articulate, it will become less and less inclined to tolerate autoc- 
 racy at home. Industry is the last citadel of irresponsible 
 government and oligarchic authority in this country. The 
 war has sharpened men's appetites for freedom and given new 
 zeal to the demand for an industrial democracy. The ways of 
 approach to this goal are many. An industrial constitution 
 opening up avenues to wider and wider powers of self-government 
 is one of the most important. The Report of the Reconstruction 
 Sub-Committee modestly opens a door through which employers 
 and workers may slowly pass into a new industrial order. 
 
 THE END 
 
 THE COUNTRY LIFE PRESS, GARDEN CITY, NEW YORK 
 

 ; * '-, "-fr '"''■.AriMK""!"*" • "• ■ ■-■■■■ 
 
 .. , I , ill' \n — -« *— Wi *JhSi i"!** 1 Ji-'i 
 
 .. > — J^ ^j, .„,p^,>-i V >'■ ■* • - -■' 
 
 ■ ■■I.ll M^M,hfN >', -— • "■• t 
 
 C* ""I 1- " 1 J - ' 
 
 '«• f'SPI/Ill ■■■»■■ ■■■!■'■ _' ■■ 
 
 "-,-"■"■"■ ■"-■■J;-" "■ j,«f.. 
 
 ; ,.-.'■»;■■'!■. '-4.— '*-^i-"-^^^-"-iV;^t 
 
 ■V ™4iv' 
 
 . ; ■::■.; .,,'sv.:.' ' .' -■,...-,, Sj-;-.' ."^■.V,5!f5slu'^'™j::ia'. ■.,-"— "■'""'?■'*."■"■■.■ :' -P 
 
 , .^■fnhxih';"";',-'-,"' ,■■, •:, '■i-nv- , ■ ■ ,■■■,19...^ ■'>■■ >v" WM»iA«sa«nSH^^HIP 
 
 
 
 
 
 ■ ■ KHMMA ■■■ k> k ILK (.JJK'%