The Value of Existing Trade-Unionism

I

DURING the thirty years from 1879 to 1909 I was at the head successively of several corporations employing from two hundred to two thousand working people. Like most believers in democracy I originally believed also in the organization of labor; in the right of the working men, singly weak, to strengthen themselves by union in any honest effort for their own betterment. I believed that organization, bringing to the front the ablest minds among their number, would tend to educate the working people in the economics of labor, to their own good and that of the community. Results, however, have been disappointing. The management of trade unions appears to have become like that of city politics — an affair of personal self-interest rather than of the public good. This conclusion is drawn from various personal experiences, and from public documents to which I shall hereafter refer.

I came into contact with organized labor when, about 1899, a small typewriter factory in Chicago which I controlled, employing some two hundred and fifty men, joined the National Association of Manufacturers, consisting of over three thousand of the largest employers in the United States. At the moment I found its attention preoccupied with the matter of union labor. A great dread of labor unions swept over employers about 1900, and the National Association of Manufacturers, the Anti-Boycott Association, the Metal Trades’ Association, the Typothetæ, and many local associations were formed, largely for the purpose of defense. Labor conditions grew worse; strikes, original and sympathetic, multiplied, until many employers moved their works out of the city, and many others, including our concern, opened negotiations with various country towns for removal thither. We joined the Anti-Boycott Association, about 1901, and I became a member of the committee in charge of the litigation begun by this association in the Chicago courts. I was made, about the same time, the vice-president for Illinois of the National Association of Manufacturers, and subsequently the chairman of its special committee on strike insurance.

My company’s factory was unionized in 1903, for the first time in its nine years of existence, and forthwith was ‘struck’ by six unions affiliated with the Chicago Federation of Labor. The union demands included an eighthour day instead of ten hours, an advance of twenty per cent in wages, the handing over of shop rules and discipline to a union committee, the sanctioning of sympathetic strikes, the closed shop, and a number of lesser requirements.

Our company was young. Engaged as we were in a fierce competition with the so-called Typewriter Trust, and other large typewriter makers, whose works were without exception in country towns, and who paid lower wages for ten hours a day, the narrow margin of profits which we had attained would have vanished instanter, and we should have started at once toward bankruptcy. I stated these facts to the union leaders, and invited them to put an expert on our books to verify my assertion. They replied that they could not bother with our books, that we could ‘cook’ our accounts to suit ourselves, and anyhow they did not care to deal with weak concerns. If we could not do business in Chicago under union conditions, we had better get out of business or out of Chicago. ‘What then of our men whom you have just unionized?’ I asked. ‘Would you destroy their jobs forthwith?’ ‘They must sacrifice themselves for the cause of labor,’ was the reply, and the poor fellows did. As the business agents left they whistled, and most of the men dropped their tools and marched out.

Before this there had been a fortnight of negotiations, during which I looked about for help. I tried to join the Metal Trades and the Employers Associations, and to get under their collective-bargain umbrella; but I found no room there. These associations were controlled by the larger local factories such as the harvester, ice-machine and electrical works, with whose methods, scale of operations, sales, and seasons, our little typewriter factory had practically nothing in common. Labor conditions which were tolerable to them were to us about as deadly as the union demands. So I found myself, with a heavy heart, compelled to make my fight alone.

A few months before, I had met on the railway train one of the Studebakers of South Bend, whose factory had recently passed through a strike, of which he told me as follows: —

‘There had never been any unions in South Bend until the organizers came from Chicago to organize our men. As soon as this was done, they called a strike. Their demands seemed to us impossible. So we called the men together, and I made them a speech. I said to them, “We have got along with you men, from father to son, for thirty years, and have never had any trouble until these strangers came in to make it. Now you have put up to us demands that we believe are impossible. You, of course, believe the other way. And what you believe, any other body of men are likely to believe. If we can’t get along with you, we can’t get along with anybody else. Therefore, we are not going to try to supply your places or to run this factory unless we run it with you. We shall simply shut down and give you a chance to look around for a better job. If you don’t succeed in finding one and wish to come back, the old job is ready for you on the old conditions whenever men enough decide to come to work to run the shops. If you never come back the shops will stay closed.”

‘So we shut down and left simply the watchmen there, as at night. We employed no strike-breakers, and there was no hard feeling. After a few weeks the older men began to think and argue and, in the course of two months, the strike gradually faded out. The men came back, a few at a time, work started up, and we have been nonunion ever since. No property was wrecked and no men killed, and we have had nothing to regret.’

Mr. Studebaker’s narrative impressed me strongly, and when I faced a similar situation I followed his lead exactly. We paid off the men and inclosed in every pay envelope a letter stating that we should not fill the men’s places, but merely wait until they found out that all the unions in Chicago could not furnish them another job; after which, if they chose to come back, the old jobs would be ready under the old conditions. It they found other work and did not return in a reasonable length of time, we should feel free to start up with new employees, first giving each man ten days’ notice so that he could, if he chose, apply for his old situation.

So the shop remained closed for nearly eight weeks. The unions picketed it in the meantime, but without reason. After six weeks the majority of the men indicated that they wished to return to work, and we gave them the agreed ten days’ notice. Before starting up, as many of the men expressed the fear of slugging, we agreed to put the property under the protection of the courts, and applied for an injunction restraining the unions and our union employees from picketing, intimidation, and violence.

Nevertheless, on the day that work was resumed, two men were slugged. We caught the sluggers, brought them before the court, had them sentenced, and then had the sentence suspended during good behavior. We also furnished our men with police escort to and from work.

These precautions ended all difficulties. The majority of our employees privately told their foremen that they had had no grievances, and had joined the union only because they were afraid to stay out. As soon as they felt themselves protected by the law, they quit the unions and returned to work.

None of them except the pickets received strike benefits from the unions while the strike lasted, although they had been told when joining the unions that a large war-fund had been laid by in previous years in anticipation of this year of struggle, from which they should benefit. When our strike was announced in the papers, the Chicago manager of a detective agency called to see me, stating that his office made a specialty of handling strikes, and that he could give me advance information of every movement made against our company. I expressed some doubt as to his ability to do so. He replied about as follows: —

‘These union leaders are all grafters; they will take money from you, or from me, from the politicians, and from the men, — anywhere they can get it. Our agency practically owns an official in every important union in America. We will give you detailed type-written reports of the proceedings of the executive and finance committees of the six unions with which you are concerned. When you start up, the unions will slip a union man in your shop to re-organize it. We will slip one of our operatives in there, too, and he will keep you informed as to what the union man is doing.’

He finally persuaded me to accept his services, and for nearly six months I received his daily reports, whose accuracy, regarding our strike at least, was sufficiently verified by my knowledge of the facts from our own side. The financial statements, which came in twice a month, showed that but onefifth of the union war-fund came back to the men, mostly in the shape of pay for pickets, while four fifths went in salaries and expenses of the organization. The largest single items were the bills of a certain lawyer, perhaps the most conspicuous champion of downtrodden labor in America, aggregating many thousands of dollars, paid him for defending sluggers and fighting injunctions against violence and intimidation of non-union men. Our strike collapsed in about eleven weeks, but according to these statements our pickets, who disappeared from the neighborhood entirely about that time, were continuing to draw pay when I stopped taking the statements some three months after. As the business agents were frequently seen about our neighborhood, and must have known that the pickets were not there, the interesting query arises — who got the money that was charged as paid for the services of the latter?

Another interesting item in the financial report was two dollars per man paid to the organizers for organizing our shop. To cover this, each man had been charged three dollars initiation fee, and about fifty of our men failed to pay it. After the collapse of the strike the business agents proposed to me to ‘call it off,’ provided the company would pay the union the amount of these defaulted initiation fees, — a proposal quite in keeping with the whole miserable performance.

When we finally started up as a nonunion shop, desiring to keep out union spies while filling a few vacancies, we advertised anonymously for men of the six trades, in three different ways, thus running eighteen ‘ads’ at once: for union men, closed shop — for nonunion men, non-union shop — and for men, open shop. Nearly a hundred applicants answered both union and non-union advertisements and were, of course, rejected; but the far more interesting development was the fact that out of about one thousand applications received by mail over eight hundred and fifty were for the non-union job. Many wrote strongly, eager for steady work from which they could not be called by business agents every little while. Even from the ‘polishers,’ supposed to be solidly unionized, of fiftyone applications thirty-one were for the non-union job. This ‘straw vote’ satisfied me that our little shop at least could ignore the unions; and it did.

Meantime the work of the AntiBoycott Association was going on in Chicago and the vicinity. Its purpose was to enforce the common and statute law regarding conspiracy and combination in restraint of trade against the labor unions. The strikes of 1901-1903 afforded a favorable opportunity, and Chicago a strategic point for its operations. Several important injunction suits were brought and fought through the local committee of which I was a member. The moral effect of the protection of the courts upon the laboring population was so marked that, during the years from 1900 to 1903, not far from one hundred injunctions were taken out in Chicago and the vicinity. It became well understood among employers that the majority of employees, even union men, preferred to remain at work if protected ; naturally the hostility of the unions to the issuing of injunctions by the courts grew bitter, and still persists.

Eventually less aggressive counsels prevailed in the National Association of Manufacturers. Suggestions of a great fighting association of employers and the formation of a large war-fund, of extensive lock-outs and the like, came to nothing. Collective bargaining accomplished little. The Studebaker method of non-resistance, involving merely ability to shut down, appealed to me as the best defense against professional trade-unionism. I therefore proposed at the annual meeting of the National Association of Manufacturers a method of conferring that ability on every member; namely, a plan for mutual strike insurance, permitting any member to insure against loss of profits and waste of fixed charges during idleness caused by strikes.

The Honorable Carroll D. Wright, Commissioner of Labor, had published, in 1901, the first report of the Department of Commerce and Labor on Strikes and Lock-outs, covering the years 1881 to 1900. The averages from this report indicated that such insurance could be written at a premium of less than one per cent per annum.

The association listened to the suggestion and appointed a committee on strike insurance, of which I was made chairman; and in that capacity I conducted an extensive correspondence, sending out printed interrogatories to the entire membership of the association, which yielded much valuable information,— among other things the fact that union labor was universally found to be from thirty to forty per cent less efficient than non-union labor.

I then thought, and still think, strike insurance an absolutely lawful, cheap, and practical method of coöperation among employers, which if generally adopted would put professional labor leaders clean out of business. For an employer need only say to the business agents, ‘Go ahead and strike. It will cost me nothing. I am insured, and I will shut down and go fishing until the men feel like going to work again.'

But my associates, like myself, had had their experience in 1903; and had found out that unionism had not entirely superseded the laws of supply and demand. They answered my committee substantially as follows: ‘Your proposals are sound, but not worth while. We do not have strikes very often. When business is good, and we want men, we have to bid up for them; when it is bad and we do not want them, they come around after us. We prefer to take our chances, and if a strike comes, meet it in our own way. Organized or not, we can and will pay labor only what trade justifies.'

In short, by 1904, to these representative employers, over three thousand of the largest in the land, organized labor was no longer the devouring monster of 1900, but had shrunk to a mere gad-fly of trade, at which the patient ox of industry might indeed switch an uneasy tail, but against which it was scarcely worth while to screen him.

Later on, our company dropped out of the National Association of Manufacturers and of the Anti-Boycott

Association, and my personal contact with the labor organizations ceased. I now relate these experiences merely as a ‘story’ to lead the reader on to a far more important and convincing array of facts found in certain public documents, namely: —

The Second Report of the Commissioner of Labor, on Strikes and Lockouts from 1881 to 1905; the Report of the Senate Committee on the Course of Prices and Wages from 1900 to 1907; of the Census Bureau on Manufactures brought down to 1905; and the advance bulletins of the Census of 1910.

According to the first-mentioned report, there were in the United States in 1905, besides transportation companies, some 216,262 wage-paying concerns, employing 6,157,751 workers. In 1881 the workers numbered 4,257,613; so that for the twenty-five years included their average number may be assumed as 5,200,000. During this period there were no less than 36,757 strikes (not counting those of less than a day), involving 181,407 concerns, and 1546 lockouts involving 18,547 concerns. Neglecting the lock-outs and excluding railroad employees, 8,485,600 persons were thrown out of employment by strikes, for an average period of 25.4 days. These totals are large enough to form the basis of reliable percentages and sound conclusions. Assuming the low normal of 250 working days per annum, we may figure the total time lost by strikes during that twenty-five years as two thirds of one per cent of normal working time — an almost negligible fraction.

Of the establishments involved, 90 per cent were ‘struck’ by organized, and but 10 per cent by unorganized labor.

Organized labor won or partly won in 65 per cent, and unorganized labor in 44 per cent, of strikes undertaken.

Lock-outs averaged 85 days in duration, against 25.4 days for strikes. Employers won or partly won in 68 per cent of the lock-outs begun.

Sixty-seven per cent of all strikes were for wages, hours, and other primary questions between employers and their men; 33 per cent were for recognition of the unions, and other secondary questions between employers and the unions, as distinguished from the men. But, during the twenty-five years, as labor organization progressed, this proportion changed steadily and significantly. In 1881, for instance, wage questions caused 71 per cent of the strikes, and ‘recognition’ but 7 per cent. In 1905 the figures were respectively 37 and 36 per cent. As the percentage of strikes for recognition rose, the percentage of victories fell, from the grand average of 65 per cent for the twenty-five years, to 52 per cent in 1904 and 1905, the last, two years.

Substantially no strikes were undertaken for sanitary conditions, or against dangerous machinery, child or female labor, and the like welfare questions, which the labor leaders have practically left to the philanthropists.¹

To-day, after fifty years of organization, we may say roughly that 70 per cent of the industrial workers and 90 per cent of all wage-earners remain non-union and may be presumed not to favor strike-machines. The enormous majority of wage-workers neither unionize nor strike, but prefer to remain at work and settle their wage questions and working conditions for themselves directly with their employers.

II

In valuing the widely differing results of strike-effort, that is, the efficiency of trade-unions, certain general considerations must be borne in mind. ‘The destruction of the poor is their poverty.’ All an employer needs to win any ordinary strike is the ability merely to shut down, and wait until starvation does its work. This he knows perfectly well. But low wages, long hours, and such primary questions between him and his men are seldom worth to him a shut-down, or a fight to keep running. They mean merely increased cost of labor which, like that of material, can generally be added to prices, and the burden passed along to the consumer. Indeed, the large majority of increases and decreases, the natural fluctuations of wages and prices, take place automatically under the law of supply and demand; and differences come to the striking point, as we have seen, only two-thirds of one per cent of the time — which is too seldom to count much. Ordinarily, therefore, the employer is indifferent, and easily yields wages and hours demanded. He is seldom the tyrant blood-sucker of helpless laboring men, women, and children that union leaders and muck-rakers love to depict; with rare exceptions he is a pretty decent fellow, who likes his working people, and willingly pays full going wages, and runs as short hours as his trade will permit.

Of prime importance to him, on the other hand, is the kind of work he gets for wages paid during the 99⅓ per cent of the time between strikes. ’No man can serve two masters: for either he will hate the one, and love the other; or he will hold to the one, and despise the other.' When ’recognition’ means that employees must take orders from half a dozen different unions instead of from the man who pays them; that old and faithful hands must unionize or leave; that sympathetic strikes and boycotts and refusal to handle non-union material may unexpectedly and uselessly involve him in the troubles of distant strangers; in short, that brains, foresight, and energy may any day be ripped out of his business, as a scullion rips the vitals from a fish, and it must broil helpless on the gridiron of competition,—all of this being exactly what ‘recognition’ does mean, — verily the employer is bound to fight or lock out, if he can. But first, with property and trade at stake, he carefully considers his position.

He cannot fight or lock out, but must yield for the nonce, when, as in the building trades, time is of the essence of his obligations, with important work to be finished by a day certain; or when he is financially so weak that he must keep going or fail. He cannot yield or lock out, but must fight, when, as in the railroad and other public service, the law and franchises enforce continuous operation, yet limit prices for service; or when, as of late in the soft-coal and garment trades, competition is so intense as to have precisely the same effect. The poor chap ponders long, and often decides wrongly. But the labor leaders are held back by no financial responsibility of their own or of their unions. The union men may suffer individually, but the leaders’ comfortable salaries run on, and union treasuries are on tap. The leaders’ personal importance increases enormously during a strike, while for the grafters among them — and union history is full of graft — the strike is their greatest opportunity.

The student can understand, then, why there were ten strikes to one lockout, and nine union strikes to one called by unorganized labor; why labor has won the majority of strikes so far, and lost the majority of lock-outs; why, as they strike more and more for ’recognition’ and like secondary causes, the unions win less and less; and why the leaders fight three times as desperately, and hold their unlucky followers out three times as long, for ‘recognition,’ involving their own power and prestige, as for wages, concerning only the men — yet, nevertheless, lose oftener in the end. One can understand, too, why, when trade conditions compel reductions of wages or demand shop discipline and efficiency, capital takes a stand and labor is comparatively helpless.

And finally one can understand why — as Allan Pinkerton said of the Mollie McGuire thirty years ago — ‘Organized labor is organized violence.’ It must always be. So long as the great majority of laborers remain outside the unions, and a majority of those inside are there only through fear, terrorism becomes the only means of preventing free competition in labor and the settlement of strikes according to the real attractiveness, or the contrary, of labor conditions. Samuel Gompers is credited by a recent New York daily with the remark, ‘Organized labor without violence is a joke.’ It seems impossible that he should have said such a thing, but the thing itself is true of existing trade-unionism.

Seeing then that labor is at actual ‘war’ with capital but two thirds of one per cent of the time; and that even then organized labor wins but three times to unorganized labor’s twice, what after all is all this colossal organization worth to labor? What is the net value of three wins to two during less than one per cent of the time? Does this minute increase of efficiency justify the cost of organization during the remaining ninety-nine per cent ?

The labor leaders will answer that organization is the sole foundation of good wages all the time. Well, is it? Let us turn to the Senate Report on Wages and Prices for the following testimony: —

While from 1900 to 1907 the average price of 25 leading commodities advanced 17 per cent, farm labor, entirely unorganized, advanced from 60 to 67 per cent. Ribbon and hosiery mill-labor, poorly organized, two thirds of whose strikes failed (see strike report) advanced respectively 44 and 36 per cent; railway labor, highly organized, advanced as follows: trainmen 33 per cent, machinists 30 per cent, engineers 20 percent, miscellaneous 18 per cent; building-trades labor, overorganized, advanced but 32 per cent; cabinet-makers, well-organized, advanced but 20 per cent.

Another comparison from the same report of wages paid in 1907 in different cities and countries, shows that union carpenters earned in Philadelphia $21 per week, in Louisville $18, in Baltimore $21, in Chicago $27.50, in London, England, $10.65. Union compositors earned in Philadelphia 43 cents per hour, in Chicago 67 cents, in San Francisco 80 cents.

That is to say, of the different classes considered by the Senate Committee, entirely unorganized, unskilled labor gained most in wages, badly organized labor came next, and the best organized and strongest of all union labor, the railway engineers, gained least; while laborers of the same unions at one and the same time, in different, cities of the same country, drew widely different and apparently inconsistent rates of wages for the same work.

How can these contradictory facts be accounted for on the theory that unionism is the foundation of wage scales? It is not. Actually, they are fixed the world over by local conditions of supply, demand, and efficiency; and trade-unionism has had about as much effect upon them, broadly speaking, as has had that magnificent fake, the protective tariff.

If unionism cannot, what then can secure for the workingman high wages, that is, a high standard of living? The answer is plain — nothing but efficiency: high-producing power conferred on labor by conjunction with brains and capital. This almost axiomatic proposition is prettily demonstrated by the 1905 Census Report on Manufactures, which shows: —

That small establishments whose annual product amounted to $5000 or less employed 1.9 per cent of the labor, drew 1.6 per cent of the pay-roll, and produced 1.2 percent of the total output.

That middle-sized concerns of $100,000 to $200,000 annual product, employed 18.8 per cent of the labor, drew 18.3 per cent of the wages, and produced 14.4 per cent of the output.

That large concerns of $1,000,000 or more annual product employed 25.6 per cent of the labor, drew 27.2 per cent of the pay-roll, and produced 38 per cent of the output.

Evidently the little fellow who is ‘crushed by the trust’ and goes to work for it, ‘no longer free but a mere slave,’draws more pay than before, as it grows bigger, and his efficiency grows with it. A little of the resulting saving comes to him direct; a little goes to the trust; but the bulk of it comes to you and me, to everybody, himself included, in reduction of prices and cost of living. That is the law of trade.

How much ought to come to him direct? What should be his share of the increment of his productive value due not to himself, but to capital and brains? Not much! Like the ‘unearned increment’ on real estate, most of it rightfully belongs to the community; and one way or another the community gets it. What then are those ‘rights of labor,’ which labor is to get when Mr. Gompers’s prophecy of the final domination of muscle over mind is realized? Probably labor itself would define them as an even ‘divide,’ master and man alike, all round. Well, what would that amount to? Here is a crude guess.

The census of 1910 gives the total wealth of the nation as about 107,000 millions of dollars, of which about one quarter was in the land; which last the nation neither made nor saved. The rest was in worldly goods produced by all, and saved by some of us. It amounts to, say, $983 each for every man, woman, and child in the United States; or, say, $4500 per family. At the usual capitalistic return of 5 per cent this would yield $225 per annum, or 61 cents per day per family. That is, were all the brains and property of the country to continue as now at the service of labor, and were it to work as hard as now, and were each family head to draw 61 cents per day greater average pay, labor would get everything— nothing left for capital, brains, and time spent in evolution of the commercial situation.

Labor would probably turn upon Gompers and say, ‘Is that all? Where are our rights — our automobiles and Scotch castles, our golf and idle days?' And some wiser man than Edward

Bellamy would answer, ‘Those things are not on the cards, boys. You will each have to turn out many hundred times more work than you are doing every day in order to pass such luxuries around.' The boys would probably reply, ‘If 61 cents a day extra, and hard work for life, is all there is in it, we will take a vacation and spend our $4500 apiece right now, and have one good time while it lasts.’

As a matter of fact, there are no ‘rights,’there is no enormous profit stolen from its daily toil, which labor does not get. The whole wealth of the country, its accumulation of three centuries, was 80,000 million dollars in 1910, land-values neglected. The farm products of that year were 9000 millions, the industrial products 15,000 millions, and the precious metals 126 millions; probably all in all we produced 25,000 millions of dollars value last year. The savings of three centuries, then, are barely three years’ product! and they, too, are perishable. The food and merchandise disappear in a year; the roads, rolling-stock, and machinery in ten years; the buildings, say, in thirty. All must be renewed from year to year. The world really lives from hand to mouth, its toiling millions consuming at least 97 per cent of all they produce. A few million of workers of rare industry and thrift, a few hundred thousand of still rarer brain and energy, gather together the small fraction that remains, and concentrate it by the world-wide machinery of modern commerce in a few favored countries — for themselves, as they fondly suppose, but really, under a mightier intelligence than theirs, mainly for the use and benefit of labor, which works and thinks as little as possible, and saves hardly at all.

Let us inquire now what are the plainly evident interests of wageworking people, and upon them try to build logical and useful principles of association with those of their fellow men who, possessing brains, will always also control capital. Those interests are, as I see them: —

Employment. The laborer must have a job, furnished him by some one else, for he has not the ability to create one for himself. It must be continuous; for his time is all he has, and every day lost is so much pay gone forever. He, himself, should be the last man to interrupt or cripple his own job; nor should it be subject to interruption by quarrels of other men with other jobs in which he has no concern.

Freedom to work. If employment fails, does not pay, or is unsuitable, it is absolutely vital that the laborer shall be free to seek any other employment or locality without being shut in or out by union walls. It is best for him, as for the community, that labor, like capital, should be liquid, free to flow where most needed; in ample supply everywhere, in stagnation nowhere.

The highest going wages, regularly paid. As ‘going’ wages the world over practically absorb the product of each country, it is idle to attempt to secure more. The only way the laborer can induce, or indeed enable, his employer to pay the highest wages is to produce the utmost in return, and make him prosperous. For, though it does not follow that a prosperous business always pays the highest wages, a losing business practically never does. Therefore, up to the point of healthy fatigue, the workman in his own interest should put his heart and back into his work, in fullest accord with the brain that creates and pays for his job; doing his level best to increase output and decrease unit-cost to his employer and to the community.

As labor seldom saves, and figures ahead only from pay-day to pay-day, pay-days must be regular and frequent, and the work steady. The employer, to be ideal, must be strong and successful; in short, a capitalist as far as possible independent of the troubles of other business concerns.

If these are the interests of labor, they are plainly identical with those of capital and of the community. There will always remain justly to be determined, however, the questions, what are ‘ going wages ’ and ‘ healthy fatigue.’

These are questions of fact and of individual capacity, whose determining factors, in spite of all our contrivances, will probably always be those of supply, demand, and efficiency in open market— namely, of competition: questions whose mastery demands more study than average working people are capable of. Nevertheless, to satisfy ‘Labor’ — which nowadays ‘wants to know,’ and would cut loose from simple and sound old methods, —that labor-competition is inevitable, as well as immediately and ultimately just, and yet to mitigate as far as may be, its harshness, ‘ Capital ’ might well, it seems to me, utilize the fine principle of brotherhood, of strength in union among laboring people; devising for the larger industries, with its greater intelligence, a form of union among employees more logical than present unionism, wage-contracts more just to the individual, and more efficient than present collective bargaining, and last, but not least, a practical method of enforcing such contracts on both sides. For it is useless to make contracts which cannot be enforced. The law will not compel a laborer to work, and neither he nor his union has any property good for damages resulting from his breach of contract. When the pinch comes, the union leaders calmly say they ‘cannot hold the men’ (which is perfectly true), and that is the end of their contracts — mere ropes of sand!

Capital prefers, therefore, to hire from day to day, and take its chances of getting such labor as it wants in the open market. If, now, labor desires that capital shall bind itself by longterm contracts to stay out of the open market, and deal only with particular bodies of laborers, it is not only justice, but. common sense, that the latter also shall be bound, and that their side of the contract as well as capital’s shall be guaranteed by property.

To accomplish all this, let us suppose that the employer first, in order to disentangle his concern from the labor troubles of others, himself quits all employers’ associations, and proposes to his employees to form a union of their own, not tied to other unions and their wars; offering each man who joins it a written contract providing: —

1. For its termination only on three months’ notice from either party, or by common consent.

2. For steady work without strike or lock-out, while trade conditions permit.

3. For the highest efficiency consistent with healthy fatigue, and corresponding highest ‘going’ wages; reasonable maximum scales of efficiency and wages to be proposed by the employer as conditions change from time to time, employees falling below maximum efficiency to draw reduced wages pro rata to performance.

4. For the prompt acceptance or rejection, by representative members of the union, of trade conditions, scales of efficiency and maximum wages, working rules, etc., from time to time ananounced or proposed by the employer; fullest facilities for investigation thereof to be afforded by him.

5. For the creation of a joint guarantee fund equal, say, to live per cent of each employee’s wages, to be contributed on pay-days, one half by him and one half by the employer, and placed in trust to accumulate at interest; its sum to be divided between himself and the employer if he quits or is discharged with the three months’ notice, or by mutual consent; or to be forfeited entire by or to him, if he quits or is discharged without the three months’ notice, during his first fifteen years’ employment. After fifteen years he may at any time either retire, and withdraw the whole as a savings fund, or retire on a pension representing it, upon giving the three months’ notice.

Employees who prefer not to join such a union are not to be forced to do so, or to quit other unions; but to remain without benefits as ordinary employees by the day. Those who join and sign contracts are, of course, free to quit or strike without notice, if they think it worth while to forfeit their half of the guarantee fund. In case of a deadlock between the employer and the union representative, the employer as well as the men, if dissatisfied with existing scales or conditions, must give notice and wait three months before lock-out or strike, or forfeit the guarantee funds. Individual men preferring not to give notice would, of course, hold their jobs and their guarantee funds.

At the end of the three months’ notice, should the deadlock continue, the men would draw their shares of the accumulated guarantee fund, and go their ways, sacrificing their pension-standing, etc. The employer would have to build up a new force. Probably both sides would try the ordinary endurance test, to see which would yield first; the men better financed than usual, and the employer having had three months for finishing work in process and preparing to shut down, with his share of the guarantee fund as a financial anchor to windward. The possibility of strikes would not be abolished, but would, in my judgment, be greatly lessened under this plan. Nothing clears the judgment like financial responsibility.

Such a form of unionism would, it seems to me, promote as well as human contrivance can the common interests of labor and capital, namely, continuous employment, freedom for labor to flow where wanted, high efficiency and high wages under healthy conditions; and would add to the general blessings of industrial peace the special blessings of thrift and insurance. A prominent western actuary recently laid before his employer friends a plan under which the employer’s half of such a five per cent guarantee fund would more than suffice, and might be used during the first fifteen years to pay the premiums upon a death, accident, and sickness insurance policy in one of the standard companies, covering (in lieu of employers’ liability) the same scale of benefits as are now provided for working men under the admirable German Compulsory Insurance laws. At the end of the fifteen years the accumulations of the employee’s half of the fund and interest would suffice to take the place of the insurance policy, which could then be dropped; and thereafter the whole fund would accumulate to provide the same benefits, and a savings fund or retiring pension at the employee’s option.

He would, however, sacrifice all the accumulations and the two and a half per cent of his wages, should he break his contract and quit without notice; or should he, in case of accident or injury, elect to abandon his contract benefits, and hold his employer liable under existing laws — a strong reason for doing neither.

Would the men sign such contracts, offering incomparably greater benefits to themselves and the community than are offered by existing trade-unions, laws, and charities? If we may forecast their probable action from the foregoing statistics, most of them would. It is certain, however, that no union man would do so if the present union leaders could prevent. Prying capital and labor apart with a wedge of class hatred, and inserting themselves between, is now their gainful, conspicuous, and interesting vocation. Permanent, peaceful, and profitable relations between employer and employee would put them out of power. Therefore, when Mr. Taylor, by long experiment, finds ways for men to do vastly more work with less effort, and draw much more pay, Mr. Mitchell promptly repudiates for labor the idea of doing so much for the money. If Mr. Perkins offers Steel Corporation shares to its employees on easy payments, so that they may be directly interested in its success and in the profits from their own toil, Mr. Morrison denounces the offer as bribery, and those who accept it as traitors to their class.

So there you have the issue sharply defined. However sordid the motives of capital, its methods have been enormously beneficial to the race. It has learned that human efficiency means abundance for human need, and abundance low prices, and low prices larger trade, and larger trade greater profits. With the purely selfish purpose of garnering these profits, capital has for a century produced and supplied to the race, in return for its daily toil, an everincreasing store of the necessaries and luxuries of life.

On the other hand, labor, equally selfish but less intelligent, everywhere and always fights efficiency, discipline, scientific management; in short, fights every means of increasing output and reducing unit-cost. Everywhere and always, strange as it may seem, labor stands for monopoly, violence, and coercion, and against personal independence. The non-union man has no right to life, liberty, and the pursuit of a job. At the very moment of time when the world demands of capital the utmost commercial freedom, the widest competition, the greatest energy, the cheapest and best service, labor stands for the exact opposite, — for tyranny, combination in restraint of trade, high cost, inefficiency, and sloth. To sum up, in hauling the heavy load of human existence, it is the admitted principle and purpose of organized labor to balk and not to pull.

A priori, and from the broad experience, personal and national, cited above, the conclusion comes to me irresistibly, that the principle is false, the purpose wrong, and the result inevitable; in fine, that existing trade-unionism is of no value, to itself or to the community, and must make way for something better.