There was still another unfavourable influence on public opinion. The main profits of a protected trust lie in its being able to sell more dearly than it could if exposed to foreign competition. But now if the consolidated industry itself proposes to sell to other countries, it must of course step down to the prevailing level of prices. It must therefore sell more cheaply abroad than at home. But this is soon found out, and creates a very unfavourable impression. The American is willing to pay high prices, as far as that goes; but when he has to pay a price double what the same factory charges for the same goods when delivered in Europe, he finds the thing wholly unnatural, and will protest at the next election. Thus there have been plenty of factors to counteract the favourable conditions, and the history of trusts has certainly not been for their promoters a simple tale of easy profits.
Now, if we do not ask what has favoured or hindered the trusts, nor how they have benefited or jeopardized their founders, but rather look about to see what their effect on the nation has been and will be, some good features appear at once. However much money may have been lost, or rather, however fictitious values may have been wiped out in the market, the great enterprises are after all increasing the productive capacity of the nation and its industrial strength in the fight with other peoples. They give a broad scope to business, and bring about relations and mutual adaptations which would never have developed in the chaotic struggling of small concerns. They produce at the same time by the concentration of control an inner solidarity which allows one part to function for another in case there are hindrances or disasters to any part of the great organism, and this is undoubtedly a tremendous factor for the general good. A mischance which, under former conditions, would have been disastrous can be survived now under this system of mutual interdependence: thus it can hardly be doubted that the combined action of the banks in the year 1903 prevented a panic; since, when stocks began to fall, the banks were able to co-operate as they would not have been able previously to their close affiliation.
Furthermore, economic wealth can now be created more advantageously for the nation. The saving of funds which were formerly spent in direct competition is a true economy, and the trusts have asserted again and again that as a matter of fact they do not put up prices, but that they make sufficient profits in saving what had formerly been wasted in business hostilities. Certainly the trusts make it possible to isolate useless or superannuated plants, without causing a heavy loss to the owners, and thus the national industry is even more freely adaptable to changing circumstances than before; and this advantage accrues to the entire country. The spirit of enterprise is remarkably encouraged and the highest premiums are put on individual achievement. Almost all the men who hold responsible positions in the mammoth works of the Steel Trust have worked up, like Carnegie himself, from the bottom of the ladder, and made their millions simply by working better than their fellows.
On the other hand, the trusts have their drawbacks. One of the most regrettable to the American mind is their moral effect. The American distrusts such extreme concentration of power and capital; it looks toward aristocracy, oligarchy, and tyranny. At the same time the masses are demoralized, and in very many cases individual initiative is strangled. There are, as it were, nothing but officials obeying orders; no men acting wholly on their own responsibility. Work ceases to be a pleasure, because everything goes by clock-work; the trust supersedes the independent merchant and manufacturer just as the machine has superseded the independent artisan.
The trusts have other demoralizing effects. Their resources are so tremendous as in the end to do away with all opposition. The independent man who hopes to oppose the great rival, can too easily be put in a position in which he is made to choose between beggary and the repudiation of all his principles. Everybody knows the shameless history of the Standard Oil Company, which has strangled not merely weak proprietors, but, much more, has strangled strong consciences. Then, too, the whole system of over-capitalization is immoral. Large trusts can hardly be formed except by purchasing the subsidiary companies at fancy prices, and issuing stock which in large part represents the premium paid to the promoters. Indeed, this whole system of community of interests which puts thousands of corporations into the hands of a few men who everywhere play into one another’s hands, must bring it about that these men will soon grow careless and overlook one another’s irregularities in a way which will threaten sober business traditions. The whole country was shocked on hearing the revelations of the Shipbuilding Trust, and seeing with what criminal carelessness the organization went on in a little group of friends, and how the methods of poker-playing were applied to transactions of great moment. The fundamental objection, however, is always that it is immoral to kill competition by agreements which create a monopoly.
Now, what can be done to obviate these evils? Apparently the first thing would be a revision of the tariff; and yet even their opponents must agree that there is only an indirect relation between the protective tariff and the trusts. It is true that the high tariffs have helped to create those industries which have now come together in trusts, and if the industries were to be wiped out, of course there would be nothing left of consolidations. But it is surely not true that the trusts are the immediate effect of the tariff, and the more a revised tariff were to let in foreign competition so much the more would the national industries need to form themselves into trusts for the sake of the benefits of consolidated management. All the business advantages and all the moral evils of trusts would still remain, even though the dividends were to sink. And the trusts would not be carried off the field unless American industry itself should utterly succumb to the foreign enemy.
Most of all, however, it seems clear that any policy prejudicial to the conditions of production and distribution would first of all, and most sadly, hit the competitors of the trusts. There is no absolute monopoly in any American industry. Indeed, even the Sugar Refining Company has a few outside competitors, and there is a legion of independent producers outside of the Steel Trust who are themselves in part organized in groups, and in many industries the trusts do not comprise even half of the manufacturers. Now, if the high tariff wall should be torn down so that a flood of cheap foreign manufactures could come in, it is certain that the first sufferers would be the small independent companies, which would be drowned out, while the mighty trusts would swim for a long time. Indeed, the destruction of such home competition would greatly benefit the trusts. Some of the strongest of these would hardly be reached at all by a reduction of the tariff—as, for instance, the strongest of them, the Petroleum Trust, which does not enjoy any protection. And it is also to be asked if trusts do not prosper in free-trade England? So soon as the water is squeezed out of their stocks, as has in good part lately happened, the trusts would still have a great advantage after protective duties should be abolished. And at the same time the necessary depression of wages which would result from that movement would endanger the whole industrial fabric. Moreover, the social and moral evils of the trusts would persist. Therefore the Republican party, which is just now in power, will take no part in solving the trust question by reducing the tariff.
Those Republicans who oppose the trusts are much more inclined to proceed to federal legislation. President Roosevelt has, in a number of speeches which are among the most significant contributions to the whole discussion, pointed to this way again and again. The situation is complicated and has shifted from time to time. The real difficulty lies in the double system of legislative power which we have already explicitly described. We have seen that all legislative power which is not expressly conferred on the Union belongs to the several states; specially has each state the right to regulate the commercial companies to which it has given charters. But if the company is such a one as operates between several states—as, for instance, one which transports goods from one state to another—it is regulated by federal law. Now, as long ago as the year 1890, in the so-called Sherman Act, Congress passed draconic regulations against interstate trusts. The law threatens with fine and imprisonment any party to a contract which restricts interstate commerce. It can be said of this law that it entirely did away with the trusts in their original form, in which the various companies themselves composed the trust. At the same time the federal officials were strongly seconded by the judicial doings of the separate states, as we have already seen. But the effect has only been to drive industry into new forms, and forms which are not amenable to federal regulations, but fall under the jurisdiction of the separate states. Corporations were formed which have their home in a certain state, but which by the tremendous capital of their members have been able to acquire factories distributed all through the country. Indeed, they are not real trusts any more, and the name is kept up only because the new corporations have descended from trusts and accomplish the same purpose.
Of course, this change would have been of no advantage for the several companies if the stern spirit shown by Congress in this legislation had been manifested once more by the separate states, that is, if each separate state had forbidden what the Union had forbidden; but so long as a single state in the whole forty-five permitted greater freedom to business than the others, of course all new companies would be careful to seek out that state and settle there. And, what was more important, would there pay taxes—a fact which tended to persuade every state to enact convenient trust laws.
Now, it is not a question between one state and forty-four others, but rather between the diversities of all the forty-five. Almost every state has its peculiar provisions, and if its laws are favourable to the trusts this is because, as each state says, if it were to stand on high moral grounds it would only hurt itself by driving away profitable trusts, and would not benefit the whole country, because the trusts would simply fly away and roost in some other state. More especially the industrially backward Western States would be always ready to entertain the trusts and pass most hospitable laws, for the sake of the revenue which they could thereby get for their local purposes. And so it is quite hopeless to expect the trusts to be uprooted by the legislation of the separate states. If all forty-five states were to pass laws such as govern stock companies in Massachusetts, there would be no need of further legislation; and it is also no accident, of course, that there are very few trusts in the State of New York. All the great trusts whose directors reside in the metropolis have their official home across the river in the State of New Jersey, which has made great concessions to the companies.
If these companies are to be reached by law, the surest way seems to be by taking a radical step and removing the supervision of large stock companies from the single states, and transferring it to the federal government; this is the way which President Roosevelt has repeatedly recommended. In our political section we have explicitly shown that such a change cannot be introduced by an act of Congress, but only by an amendment to the Constitution, which cannot be made by Congress, since it is in itself a product of the Constitution. Congress would be able only to take the initiative, and two-thirds of both houses would have to support the proposition to change the Constitution; and this change would have to be ratified by three-fourths of the state legislatures themselves. Now, it would be difficult to get a two-thirds majority in both houses on any question hostile to trusts; but it is quite out of the question to induce the three-fourths of the states to cripple their own rights in so important a matter as the regulation of stock companies; particularly as in economic matters local power is necessary to local optimism, and the weaker states would never consent to give up such rights, since they would be forced to see industrial laws framed according to the requirements of the more highly developed states. Was the President, then, in his speeches, like Don Quixote, tilting against the windmills; or was he proposing, as some of his opponents said, quite impracticable solutions in order to divert attention from such a handy solution as that of tariff reduction? And was he declaiming loudly against the trusts before the public in order really to help on the friends of capital?
Perhaps another point of view may be found. It may be that President Roosevelt proposed a constitutional amendment in order to arouse discussion along certain lines, and in order specially to have the chance of demonstrating that federal control of those overgrown business enterprises is necessary, and that their control by the several states is dangerous. It looks indeed as if such discussion would have been highly superfluous if not insincere, if it were true that the sole way of helping the situation were the quite impossible constitutional amendment.
But such is not the case; there is another way of reaching the same end without meeting the difficulties involved in changing the Constitution. Of course, the President was not free to discuss this means, nor even to mention it. This way is, we think, for the Supreme Court to reverse its former decision, and to modify its definition of interstate commerce in closer accord with the latest developments of the trusts. We have seen that there are drastic laws relating to interstate commerce which have overthrown all the earlier trusts; but a corporation claiming home in New Jersey, although owning factories in different states and dependent on the co-operation of several states for its output, is to-day treated by the Supreme Court as a corporation pertaining to one state. If, now, the Supreme Court were to decide that such a corporation transacts interstate commerce, then all the severity of the existing federal laws would apply to such corporations, and everything which could be accomplished by an amendment to the Constitution would be effected by that one decision. Of course, the President could not suggest this, since the Supreme Court is co-ordinate with the Executive; yet if public attention should be awakened by such a discussion, even the judges of the Supreme Court might consider the matter in a new light.
To be sure, this would at the same time require the Supreme Court somewhat to modify its previous interpretation of the Anti-Trust Law itself, and not merely its application; since otherwise, if the trusts come under federal jurisdiction, the law might wipe out the new trusts, as it did the old, instead merely of regulating them. In view of the recently published memoirs of Senator Hoar, there can be no doubt that the Supreme Court has interpreted the law forbidding the restraint of trade more strictly than was originally intended in the bill which Hoar himself drew up. Congress meant to refer to agreements in restraint of trade in a narrow, technical sense, while the court has interpreted this law as if it were to apply to every agreement which merely regulates production or sale in any place. But this unnecessarily severe construction of the law by the unexpected verdict of the court can of course be set aside by a further Congressional measure, and therefore offers no difficulty.
The Administration might proceed in still another way. A good deal has been said of greater publicity in public affairs, and in the last few years energetic measures have already been taken at the instance of the President. Many of the evils of trusts lie in their concealment of the conditions under which they have been organized; and the new Department of Commerce is empowered to take official testimony concerning all such matters, and to demand this under oath. Whether this will be an ultimate gain is doubted by many, since those acquainted with the matter say that the secrets of modern book-keeping make it impossible to inspect the general condition of a large industrial concern when its promoters desire to conceal the truth. While if one were to go back of the books and lay bare every individual fact to the public eye, the corporations would be considerably injured in their legitimate business. And in any case, this new effort at publicity has so far no judicial sanction. One large trust has already refused to give the information desired because its counsel holds the Congressional law to be unconstitutional, and this matter will have to be settled by the Supreme Court.
The most thoughtful minds are coming slowly to the opinion that neither tariff provisions nor legislation is necessary, but that the matter will eventually regulate itself. The great collapse of market values has opened the eyes of many people, and the fall in the price of commodities manufactured by trusts works in much the same direction. People see, more and more, that most of the evils are merely such troubles as all infant organisms pass through. The railroads of the country were also at first enormously overcapitalized, but the trouble has cured itself in the course of time. The surpluses have been spent on improvements, and railroad shares to-day represent actual values. Such a change has in fact already set in among the trusts. Paternal regulation by the government, which prescribes how industry shall go on, is always essentially distasteful to Americans. Exact regulative measures which shall be just cannot be framed beforehand by any government. Even Adam Smith believed, for instance, that the form of organization known as a stock company was suitable for only a few kinds of business. The American prefers to submit all such questions to the actual business test. All experimental undertakings are sifted by natural selection, and the undesirable and unnecessary ones fall through. It is true that many lose their property in such experiments, but that is only a wholesome warning against thoughtless undertakings and against hasty belief that the methods profitable in one field must be profitable in every other. It is true that here and there a man will make large profits rather too easily, but Roosevelt has well said that it is better that a few people become too rich than that none prosper.
The development of affairs shows most of all that prices can be inflated for a short time, but that they slowly come back to a reasonable figure so long as there are no real monopolies. The experience of the last ten years teaches, moreover, that the most important factor which works against the trusts is the desire for independence on the part of capitalists, who do not for a long time willingly subordinate themselves to any corporation, but are always tempted to break away and start once more an independent concern.
And comparing the situation in 1904 with that of 1900, one sees that in spite of the seeming growth of the trust idea, the trusts themselves have become more solid by the squeezing out of fictitious valuations; they are more modest, content themselves with less profits, and they are much less dangerous because of the competition which has grown up around them. The trusts which originally ruled some whole industry through the country are to-day satisfied if they control two-thirds of it. A single fundamental thought remains firm, that the development of industry demands a centralized control. This idea works itself out more and more, and would remain in spite of any artificial obstruction which might be put before it. But the opposite tendencies are too deeply rooted in human nature, in Anglo-Saxon law, and in the American’s desire for self-initiative, to let this centralization go to dangerous limits.
But those who will not believe that the trusts, with their enormous capitals, can be adequately restrained in this way, may easily content themselves with that factor which, as the last few years have shown, speaks more energetically than could Congress itself—this is organized labour. The question of capital in American economy is regulated finally by the question of labour.
The Labour Question
As the negro question is the most important problem of internal politics, so the labour question is the most important in American economic life; and one who has watched the great strikes of recent years, the tremendous losses due to the conflicts between capital and labour, may well believe that, like the negro question, this is a problem which is far from being solved. Yet this may not be the case. With the negro pessimism is justified, because the difficulties are not only unsolved, but seem unsolvable. The labour question, however, has reached a point in which a real organic solution is no longer impossible. Of course, prophecies are dangerous; and yet it looks as if, in spite of hard words, the United States have come to a condition in which labourers and capitalists are pretty well satisfied, and more so perhaps than in any other large industrial nation. It might be more exact to say that the Americans are nearer the ideal condition for the American capitalist and the American labourer, since the same question in other countries may need to be solved on wholly different lines.
In fact, the American problem cannot be looked into without carefully scrutinizing how far the factors are peculiar to this nation. Merely because certain general factors are common to the whole industrial world, such as capital, machinery, land values, labour, markets, and profits, the social politician is inclined to leave out of account the specific form which the problem takes on in each country. The differences are chiefly of temperament, of opinions, and of mode of life.
It is, indeed, a psychological factor which makes the American labour question very different from the German problem. This fact is neglected, time after time, in the discussions of German theorists and business men. It is, for instance, almost invariably affirmed in Germany that the American government has done almost nothing toward insuring the labourer against illness, accident, or old age, and that therefore America is in this respect far inferior to Germany. It can easily be foreseen, they say, that American manufacturers will be considerably impeded in the world’s market as soon as the progress of civilization forces them to yield this to the working-man.
The fact is that such an opprobrium betrays a lack of understanding of American character. The satisfaction felt in Germany with the laws for working-men’s insurance is fully justified; for they are doubtless excellent under German conditions, but they might not seem so satisfactory to the average American nor to the average American labourer. He looks on it as an interesting economic experiment, admirable for the ill-paid German working-man, but wholly undesirable for the American. The accusation that the American government fails in its duty by not providing for those who have served the community, is the more unjust, since America expends on the average $140,000,000 in pensions for invalid veterans and their widows, and is equally generous wherever public opinion sees good cause for generosity.
It cannot be doubted that the American labourer is a different sort of creature from the Continental labourer; his material surroundings are different, and his way of life, his dwelling, clothes and food, his intellectual nourishment and his pleasures, would seem to the European workmen like luxuries. The number of industrial labourers in the year 1880 was 2.7 million, and they earned $947,000,000; in 1890 it was 4.2 million earning $1,891,000,000; and in 1900 there were 5.3 million labourers earning $2,320,000,000; therefore, at the time of the last census, the average annual wage was $437. This average figure, however, includes men, women, and children. The average pay of grown men alone amounts to $500. This figure gives to the German no clear idea of the relative prosperity of the working-man without some idea of the relation between German and American prices.
One reads often that everything is twice as expensive in America as in Germany, while some say that the American dollar is worth only as much as the German mark—that is, that the American prices are four times the German; and still others say that American prices are not a bit higher than German. The large German-American steamships buy all their provisions of meat in New York rather than in Hamburg or Bremen, because the American prices are less. If one consults, on the other hand, a doctor or lawyer in New York, or employs a barber or any one else for his personal services, he will find it a fact that the American price is four times as high as the German. The same may be said of articles of luxury; for bouquets and theatre tickets the dollar is equal to the mark. It is the same with household service in a large town; an ordinary cook receives five dollars per week, and the pay of better ones increases as the square of their abilities. Thus we see at once that an actual comparison of prices between the United States and Europe cannot be made. A dollar buys five marks’ worth of roast beef and one mark’s worth of roses.
In general, it can be said that the American is better off as regards all articles which can be made in large quantities, and worse off in articles of luxury and matters of personal service. The ready-made suit of clothes is no dearer in America than in Germany and probably better for the price, while the custom-made suit of a first-class tailor costs about four times what it would cost in Germany. All in all, we might say that an American who lives in great style and spends $50,000 a year can get no greater material comforts than the man in Germany who spends a third as much—that is, 70,000 marks. On the other hand, the man who keeps house with servants, but without luxuries, spending, say, $5,000 a year, lives about like a man in Germany who spends 10,000 marks—that is, about half as much. But any one who, like the average labourer, spends $500 in America, unquestionably gets quite as much as he would get with the equal amount of 2,100 marks in Germany.
But the more skilled artisan gets $900 on the average—that is, about three times as much as the German skilled workman; so that, compared with the wages of higher-paid classes, the working-men are paid relatively much more than in Europe. The average labourer lives on the same plane as the German master artisan; and if he is dissatisfied with the furnishings of his home it is not because he needs more chairs and tables, but because he has a fancy for a new carpet or a new bath-tub. In this connection we are speaking always of course of the real American, not the recent immigrants from Southern and Eastern Europe, who are herded together in the worst parts of large cities, and who sell their labour at the lowest rate. The native American labourer and the better class of German and Irish immigrants are well clothed and fed and read the newspapers, and only a small part of their wages goes for liquor.
More important than the economic prosperity of the American working-man, though not wholly independent of it, is the social self-respect which he enjoys. The American working-man feels himself to be quite the equal of any other citizen, and this not merely in the legal sense. This results chiefly from the intense political life of the country and the democratic form of government, which knows no social prerogatives. It results also from the absence of social caste. There is a considerable class feeling, but no artificial lines which hinder any man from working up into any position. The most modest labourer knows that he may, if he is able, work up to a distinguished position in the social structure of the nation.
And the most important thing of all is probably the high value put on industry as such. We have spoken of this in depicting the spirit of self-initiative. In fact, the background of national conceptions as to the worth of labour must be the chief factor in determining the social condition of the working-man. When a nation comes to that way of thinking which makes intellectual activities the whole of its culture, while economic life merely serves the function of securing the—outward comforts of the nation as it stretches on toward its goal of culture, then the industrial classes must content themselves with an inferior position, and those who do bodily labour, with the least possible amount of personal consideration. But when a nation, on the other hand, believes in the intrinsic worth of industrial culture, then the labour by which a man lives becomes a measure of his moral worth, and even intellectual effort finds its immediate ethical justification only in ministering to the complex social life; that is, only so far as it is industry.
Such now is the conception of the American. Whether a person makes laws, or poetry, or railway ties, or shoes, or darning-needles, the thing which gives moral value to his life’s work is merely its general usefulness. In spite of all intellectual and æsthetic differences, this most important element of activity is common to all, and the manual labourer, so far as he is industrious, is equal to those who work with their brains. On the other hand, the social parasite, who perhaps has inherited money and uses it only for enjoyment, is generally felt to be on a lower plane than the factory hand who does his duty. For the American this is not an artificial principle, but an instinctive feeling, which may not do away with all the thousand different shadings of social position, but nevertheless consigns them to a secondary place. One may disapprove of such an industrial conception of society, and like better, for example, the æsthetic conception of the Japanese, who teach their youth to despise mercantile business and tastefully to arrange flowers. But it is clear that where such an industrial conception prevails in a nation the working-man will feel a greater self-respect and greater independence of his surroundings, since the millionaire is also then only a fellow-workman.
Undoubtedly just this self-respect of the American labourer makes him the great industrial force which he is. The American manufacturer pays higher wages than any of his competitors in the markets of the world and is not disconcerted at this load, because he knows that the self-respecting working-man equalizes the difference of price by more intense and intelligent labour. It is true that the perfection of labour-saving machinery is a tremendous advantage here, but after all it is the personal quality of the working-man which has brought about that in so many industries ten American workmen do more than fifteen or, as experts often say, twenty Italian workmen. The American manufacturer prefers to hire a hundred heads rather than a thousand hands, even if the wages are equal, and even the greedy capitalist prefers the labourer who is worth thirty dollars a week to one who is worth only twenty. The more the working-man feels himself to be a free co-operator, the more intelligently does he address himself to the work. We hear constantly of improvements which artisans have thought out, and this independent initiative of theirs does not in the least impair the discipline of industry. American discipline does not mean inferiority and the giving up of one’s own judgment, but is a free willingness to co-operate and, for the common end, to intrust the leadership to some one else. This other person is exalted to the trustworthy position of leader by the desire of those concerned, so that each man is carrying out his own will in obeying the foreman.
Therefore, everything which in any wise savours of compassion is entirely out of the question for him. In fact, the friendly benevolence, however graciously expressed, intended to remind the workman that he is after all a human creature, perhaps the friendly provision of a house to live in or of some sort of state help for his family, must always be unwelcome to him, since it implies that he is not able, like other fathers of a family, to be forethoughtful and provident. He prefers to do everything which is necessary himself. He insures himself in a life-insurance company and, like anybody else, he looks out for his own interests—tries to improve his conditions by securing good contracts with his employer, by arranging organizations of his fellow-workmen, and by means of his political rights. But whatever he accomplishes, he enjoys it because he has worked in free competition against opposing interests. Any material benefits which he might purchase by enduring the patronizing attitude of capitalists or legislators would be felt to be an actual derogation.
And thus it happens that social democracy, in the technical sense, makes no advance among American workmen. The American labourer does not feel that his position is inferior; he knows that he has an equal opportunity with everybody else, and the idea of entire equality does not attract him, and would even deprive him of what he holds most valuable—namely, his self-initiative, which aims for the highest social reward as a recognition of the highest individual achievement. American society knows no unwritten law whereby the working-man of to-day must be the same to-morrow, and this gives to the whole labour question in America its distinction from the labour question in European aristocratic countries. In most cases the superiors have themselves once been labourers. Millionaires who to-day preside over the destinies of thousands of working-men have often themselves begun with the shovel or hod. The workman knows that he may set his ambition as high as he likes, and to exchange his equal opportunity for an equality of reward would mean for him to sink back into that social condition in which industry is thought to be only a means to something else, and not in itself a valuable activity. Although Bellamy may already dream of the common umbrella, his native country is probably further from social democracy than any country in Europe, because the spirit of self-initiative is here stronger than anywhere else, and because the general public is aware that no class distinctions cut it off from the highest positions in the country. It knows that everything depends on industry, energy, and intelligence.
This does not hinder the working-men, in their fight for better conditions of labour, from adopting many socialistic tenets. The American calls it socialism even to demand that the government own railways, telegraph lines, express companies, or coal-fields, or that the city conduct tramways, or gas or electric-light works. Socialism of this sort is undoubtedly progressing, although the more extravagant ideas find more wordy orators to support them than hearers to give belief. It is also very characteristic that the labour leaders do not make such agitation their life work, but often after a few years go over to one or another civil occupation. The relation between working-man and capitalist, moreover, is always felt to be temporary. A man is on one side of the line to-day and on the other to-morrow. There is no firm boundary between groups of men, but merely a distribution in temporary groups; and this separates the American labour unions from even the English unions, with which otherwise they have much in common.
Many other conditions by which the American working-man’s life is separated from the Englishman’s are of an economic sort. It is remembered, for instance, how successful the English unions have been in establishing co-operative stores, while in America they have failed in this. The department shops in the large cities have been able to sell cheaper and better goods, and have been in every way more popular. But enough of comparing America with the Old World—we must discuss the actual situation in the New.
The labour movement of the United States really began in the third decade of the last century. Of course, only the North is in question; in the South slavery excluded all alliances and independent movements for improving the condition of the manual labourer. There had been small strikes as early as the eighteenth century, but the real movement began with the factories which were built during the nineteenth.
From the very beginning the demand for shorter hours and higher wages were the main issues. At the same time the American world was filled more or less with fantastic notions of co-operation, and these influenced the course of affairs. Boston and New York were the centres of the new movement. As early as 1825 in New York there appeared the first exclusively labour newspaper, the “Labour Advocate”; it commenced a literature which was to increase like an avalanche. The labourers figured independently in politics in 1830, when they had their own candidate for governor. But all political endeavours of the working people have been mere episodes, and the chief labour movements of the century have taken place outside of politics; the leading unions have generally found that their strength lay in renouncing political agitation. Only when legal measures for or against the interests of labourers have been in question, has there been some mixing in with politics, but the American workmen have never become a political party.
At the beginning of the thirties, working-men of different industries united for the first time in a large organization, such as later became the regular form. But at the outset of the movement there appeared also the opposite movement from the side of the capitalists. For instance, in 1832 merchants and shipholders in Boston met solemnly to declare it their duty to oppose the combinations of working people which were formed for the illegal purpose of preventing the individual workman from making a free choice as regards his hours of labour, and for the purpose of making trouble with their employers, who already paid high wages.
The organization of the working-man and that of the employer have grown steadily, and the nation itself has virtually played the rôle of an attentive but neutral spectator. In the case of direct conflict the sympathy of the country has almost always been on the side of the working-man, since in the concrete case the most impressive point was generally not the opposition between capital and labour, but the personal contrast of the needy day-labourer and the rich employer; and the sentimentality of the American has always favoured the weaker classes. The nation however, has shown an equal amount of sympathy toward capital whenever a general matter of legislation was in question; that is, whenever the problem has seemed more theoretical than personal. In such cases the capitalists have always been felt to be the pioneers of the American nation by putting their enterprise into all sorts of new undertakings, applying their capital and intelligence to economic life; so that they have seemed to a greater extent in need of national protection than the workman, who may always be easily replaced by some one else.
Considering the matter as a whole, it can be said indeed that the nation has preserved a general neutrality, and let both parties virtually alone. A change has very recently taken place. The new conditions of the industrial struggle make it clearer day by day that there are three parties to the conflict, rather than two; that is, not only capitalist and labourer, but also the general public, which is dependent on the industrial output, and therefore so immediately concerned in the settlement of differences as to seem, even in concrete cases, entitled to take active part. The turning-point came perhaps during the coal strike in the winter of 1902–03, when the President himself stood out to represent this third party. But we must follow the development more minutely—must speak of the labour organizations as they exist to-day, of the results of legislation, of the weapons employed by the labourers and those used by the capitalists, of their advantages and disadvantages, and of the latest efforts to solve the problem. Three forms of working-men’s organizations can be discriminated to-day—the Knights of Labour, the independent trades-unions, and the federated trades-unions.
The Knights of Labour are by principle different from both of the other groups; and their influence, although once very great, is now waning. Their fundamental idea is a moral one, while that of their rivals is a practical one. This is, of course, not to be taken as meaning that the labour unions pursue immoral ends or the Knights of Labour unpractical ones. The Knights of Labour began very modestly in 1869 as a secret organization, somewhat like the Free Masons, having an elaborate initiation and somewhat unusual procedures. Their constitution began with the motto, “Labour is noble and sacred,” and their first endeavours were for the intellectual uplifting of the labourer and opposition to everything which made labour mean or unworthy. The order grew steadily, but at the same time the practical interests of different groups of working-men necessarily came into prominence. In the middle eighties, when they gave up their secret observances, the society had about a million members, and its banner still proclaimed the one sentiment that industry and virtue not wealth are the true measure of individual and national greatness. Their members, they insisted, ought to have a larger share of the things which they produced, so as to have more time for their intellectual, moral, and social development. In this moral spirit, the society worked energetically against strikes and for the peaceful settlement of all disputes.
Its principal weakness was perhaps that, when the membership became large, it began to take part in politics; the Knights demanded a reform in taxation, in the currency, in the credit system, and a number of other matters in line with state socialism. It was also a source of weakness that, even in local meetings, working-men of different trades came together. This was of course quite in accordance with the ethical ideal of the society. As far as the moral problems of the workmen are in question, the baker, tailor, mason, plumber, electrician, and so on, have many interests which are identical; but practically it turned out that one group had little interest in its neighbour groups, and oftentimes even strongly conflicting interests were discovered. Thus this mixed organization declined in favour of labour societies which comprised members of one and only one trade, so that at the present time the Knights of Labour are said to number only 200,000 and their importance is greatly reduced. It is still undoubted that the idealistic formulation in which they presented the interests of labour to the nation has done much to arouse the public conscience.
At the present time the typical form of organization is the trades-union, and between the independent and the federated trades-unions there is no fundamental difference. There are to-day over two million working-men united in trades-unions; the number increases daily. And this number, which comprises only two-fifths of all wage-earners, is kept down, not because only two-fifths of the members of each trade can agree to unite, but because many trades exist which are not amenable to such organization; the unions include almost all men working in some of the most important trades. The higher the employment and the more it demands of preparation, the stronger is the organization of the employed. Printers, for instance, almost all belong to their union, and in the building and tobacco trades there are very few who are not members. The miners’ union includes about 200,000 men, who represent a population of about a million souls. On the other hand, it would be useless and impossible to perfect a close organization where new individuals can be brought in any day and put to work without any experience or training; thus ordinary day-labourers are not organized. The number of two million thus represents the most important trades, and includes the most skilled workers.
The oldest trades-union in America is the International Typographical Union, which began in 1850. It is to be noticed at once that the distinction between national and international trades-unions is a wholly superficial one, for in the hundreds of so-called international unions there has been no effort to stretch out across the ocean. “International” means only that citizens of Canada and, in a few cases, of Mexico are admitted to membership. It has been the experience of other countries, too, that the printing trades were the first to organize. In America the hatmakers followed in 1854, the iron founders in 1859, and the number of organized trades increased rapidly during the sixties and seventies. The special representation of local interests soon demanded, on the one hand, the division of the larger societies into local groups, and, on the other, the affiliation of the larger societies having somewhat similar interests. Thus it has come about that each locality has its local union, and these unions are affiliated in state organizations for purposes of state legislation and completely unified in national or international organizations. On the other hand, the unions belonging to different trades are pledged locally and nationally to mutual support. But here it is no longer a question, as with the Knights of Labour, of the mixing up of diverse interests, but of systematic mutual aid on practical lines.
The largest union of this sort is the American Federation of Labour, which began its existence in Pittsburg in 1881, and has organized a veritable labour republic. The Federation took warning at the outset from the sad fate of previous federations, and resolved to play no part in politics, but to devote itself exclusively to industrial questions. It recognized the industrial autonomy and the special character of each affiliating trades-union, but hoped to gain definite results by co-operation. They first demanded an eight-hour day and aimed to forbid the employment of children under fourteen years of age, to prevent the competition of prison labour and the importation of contract labour; they asked for a change in laws relating to the responsibility of factory owners and for the organization of societies, for the establishment of government bureaus for labour statistics, and much else of a similar sort. At first the Federation had bitter quarrels with the Knights of Labour, and perhaps even as bitter a one with socialistic visionaries in its own ranks. But a firm and healthy basis was soon established, and since the Federation assisted in every way the formation of local, provincial, and state organizations, the parts grew with the help of the whole and the whole with the help of the parts. To-day the Federation includes 111 international trades-unions with 29 state organizations, 542 central organizations for cities, and also 1,850 local unions which are outside of any national or international organizations. The interests of this Federation are represented by 250 weekly and monthly papers. The head office is naturally Washington, where the federal government has its seat. Gompers is its indefatigable president. Outside of this Federation are all the trades-unions of railway employees and several unions of masons and stonecutters. The railway employees have always held aloof; their union dates from 1893, and is said to comprise 200,000 men.
The trades-unions are not open to every one; each member has to pay his initiation fees and make contributions to the local union, and through it to the general organization. Many of the trades-unions even require an examination for entrance; thus the conditions for admission into the union of electrical workers are so difficult that membership is recognized among the employers themselves as the surest evidence of a working-man’s competence. Every member is further pledged to attend the regular meetings of the local branch, and in order that these local societies may not be too unwieldy, they are generally divided into districts when the number of members becomes too great to admit of all meeting together. The cigarmakers of the City of New York, for example, have a trades-union of 6,000 members, which is divided into ten smaller bodies. Every single society in the country has its own officials. If the work of the official takes all his time, he receives a salary equal to the regular pay for work in his trade. The small organizations send delegates to the state and national federations; and wherever these provincial or federal affiliations represent different trades, each of these trades has its own representative, and all decisions are made with that technical formality which the American masters so well. In accordance with this parliamentary rigour, every member is absolutely pledged to comply with the decisions of the delegates. Any one who refuses to obey when a strike is ordered thereby loses all his rights.
The rights enjoyed by the members of the trades-unions are in fact considerable. Firstly, the local union is a club and an employment agency, and especially in large cities these two functions are very important for the American working-man. Then there are the arrangements for insurance and aid. Thus the general union of cigarmakers of the country, which combines 414 local unions having a total membership of 34,000 men, has given in the last twenty years $838,000 for the support of strikes, $1,453,000 for aid to ill members, $794,000 for the families of deceased members, $735,000 for travelling expenses, and $917,000 for unemployed members; and most of the large unions could show similar figures. Yet these are the lesser advantages. The really decisive thing is the concessions which have been won in the economic fight, and which could never have been gotten by the working-men individually. Nevertheless, to-day not a few men hold off from the unions and get rid of paying their dues, because they know that whatever organized labour can achieve, will also help those who stay outside.
The main contention of these trades-unions refers to legislation and wages, and no small part of their work goes in fighting for their own existence—that is, in fighting for the recognition of the union labourer as opposed to the non-union man—a factor which doubtless is becoming more and more important in the industrial disputes. Many a strike has not had wages or short hours of labour or the like in view, but has aimed solely to force the employers officially to recognize the trades-unions, to make contracts with the union delegates rather than with individual men, and to exclude all non-union labourers.
The newly introduced contention for the union label is in the same class. The labels were first used in San Francisco, where it was aimed to exclude the Chinese workmen from competition with Americans. Now the labels are used all over the country. Every box of cigars, every brick, hat, or piano made in factories which employ union labour, bears the copyrighted device which assures the purchasing public that the wares were made under approved social and political conditions. The absence of the label is supposed to be a warning; but for the population of ten millions who are connected with labour unions, it is more than a warning; it is an invitation to boycott, and this is undoubtedly felt as a considerable pressure by manufacturers. The more the factories are thus compelled to concede to the unions, and the more inducements the unions thus offer to prospective members, and the faster therefore these come in, the more power the unions acquire. So the label has become to-day a most effective weapon of the unions.
But this is only the means to an end. We must consider these ends themselves, and first of all labour legislation. Most striking and yet historically necessary is the diversity in the statutes of different states, which was formerly very great but is gradually diminishing. The New England states, and especially Massachusetts, have gone first, and still not so fast as public opinion has often desired. In the thirties there were many lively fights for the legislative regulation of the working hours in factories, and yet even the ten hours a day for women was not established until much later; on the other hand, the employment of children in factories was legislated on at that time, and in this direction the movement progressed more rapidly.
A considerable step was taken in 1869, when Massachusetts established at the expense of the state a bureau for labour statistics, the first in the world; this was required to work up every year a report on all phases of the labour question—economic, industrial, social, hygienic, educational, and political. One state after another imitated this statistical bureau, and especially it led to the establishment of the Department of Labour at Washington, which has already had a world-wide influence. During the seventies there followed strict laws for the supervision of factories, for precautionary measures, and hygienic improvements. Most of the other states came after, but none departed widely from the example of Massachusetts, which was also the first state to make repeated reductions in the working-day. Here it followed the example of the federal government. To be sure, the reduction of the working-day among federal employees was first merely a political catering to the labour vote, but the Federation kept to the point and the separate states followed. Twenty-nine states now prescribe eight hours as the day for all public employees and the federal government does the same.
The legislative changes in the judicial sphere have been also of importance for trades-unions. According to Old English law at the beginning of the nineteenth century, it was conspiracy for workmen to unite for the purposes which the trades-unions to-day hold before themselves. This doctrine of conspiracy, which to be sure from the beginning depended largely on the arbitrary interpretation of the judges, has been weakened from time to time through the century, and has finally given away to legal conceptions which put no obstacles in the way of the peaceful alliance of working-men for the purpose of obtaining better conditions of labour. They especially regard the strike as lawful so long as violence is not resorted to. Nearly all states have now passed laws which so narrow the old conception of criminal conspiracy that it no longer stands in the way of trades-unions. Other legal provisions concern the company stores. In some mining districts far removed from public shops, the company store may still be found, where the company buys the articles needed by its employees and sells these things to them at a high price. But nearly every state has legally done away with this system; it was, indeed, one of the earliest demands of the trades-unions.
There have been great improvements too in legislation relating to the responsibility of employees. The Anglo-Saxon law makes an employer responsible for injury suffered by the workmen by reason of his work, but not responsible if the injuries are due to the carelessness of a fellow-workman. The penalty fell then on the one who had neglected his duty. It was said that the workman on taking up his duties must have known what the dangers were. But the more complicated the conditions of labour have become, the more the security of any individual has depended on a great many fellow-labourers who could not be identified, so that the old law became meaningless. Therefore, the pressure of trades-unions has in the last half century steadily altered and improved the law in this respect. American state law to-day virtually recognizes the responsibility of the employer for every accident, even when due to the carelessness of some other labourer than the one injured.
Thus on the whole a progress has been made all along the line. It is true that some states have still much to do in order to come up with the most advanced states, and the labour unions have still many demands in store which have so far been nowhere complied with—as, for instance, that for the introduction of the Swiss referendum, and so forth. Government insurance is not on this programme—one point in which the American working-man remains individualistic. He prefers to make provision for those dependent on him, against old age, accident and illness, in his own way, by membership in unions or insurance companies. As a fact, more than half the labouring men are insured. Then too the number of industrial concerns is increasing which make a voluntary provision for their employees against illness and old age. This was started by railroad companies, and the largest systems fully realize that it is in their interest to secure steady labour by putting a pension clause in the contract. When a workman takes work under companies which offer such things, he feels it to be a voluntary industrial agreement, while state insurance would offend his sense of independence.
The state has had to deal with the labour question again in the matter of strikes, lockouts, boycotts, and black-lists. During the last two decades of the nineteenth century, there were 22,793 strikes in the country, which involved 117,509 workers; the loss in wages to the workmen was $257,000,000 and in profit to the employers $122,000,000; besides that $16,000,000 were contributed to aid the strikes, so that the total loss made about $400,000,000. The problems here in question are of course much more important than the mere financial loss. About 51 per cent. of these strikes resulted successfully for the workmen, 13 per cent. partially successfully, and in 36 per cent. the employers won.
Since 1741, when the bakers of New York City left work and were immediately condemned for conspiracy, there has been no lack of strikes in the country. The first great strike was among sailors in 1803, but frequent strikes did not occur until about 1830. The first strike of really historical importance was on the railroads in 1877; great irregularities and many street riots accompanied the cessation of work, and the state militia had to be called out to suppress the disturbances in Cincinnati, St. Louis, Chicago, and Pittsburg. The losses were tremendous, the whole land suffered from the tumults, and in the end the working-men won nothing. When in the year 1883 all the telegraphers in the country left their work and demanded additional payment for working on Sunday, most of the country was in sympathy with them; but here too the employers, although they lost millions of dollars, were successful. In 1886 there were great strikes again in the railroad systems of the Southwest.
The bitterness reached its highest point in 1892, when the Carnegie Steel Works at Homestead were the scenes of disorder. Wages were the matter under dispute; the company, which could not come to an agreement with the labour union, proposed to exclude organized labour and introduced non-union workmen. The union sought by the use of violence to prevent the strangers from working; the company called for aid from the state; the union still opposed even the militia, and actual battles took place, which only the declaration of martial law by the governor, after the loss of many lives, was able to suppress.
The Chicago strike in 1894 was more extensive. It began with a strike in the Pullman factories in Chicago, and at its height succeeded in stopping the traffic on a quarter of all American railroads. The interruption of railway connections meant a loss to every person in the country, and the total loss is estimated at $80,000,000. The worst accompaniments of strikes soon appeared—riots, intimidations, assaults, and murders. And again it was necessary to call out troops to restore peace. Great wage disputes followed presently in the iron and steel trades; but these were all surpassed in inner significance by the great coal strike of the winter before last.
The conditions of labour in the anthracite coal mines of Pennsylvania were unfavourable to the labourers. They had bettered themselves in a strike in 1900, but the apparently adequate wages for a day’s labour yielded a very small annual income, since there was little employment at some seasons of the year. The working-men felt that the coal trusts refused to raise the wages by juggling with arguments; the capitalists tried to prove to them that the profit on coal did not permit a higher wage. But the labourers knew too well that the apparently low profits were due only to the fact that the trusts had watered their stock, and especially that the coal mines were operated in connection with railroads under the same ownership, so that all profits could be brought on the books to the credit of the railroads instead of the mines. The trades-unions thought the time was ripe for demanding eight hours a day, a ten per cent. increase in wages, and a fundamental recognition of trades-unions, along with a few other technical points. The organized miners, under their leader, Mitchell, offered to wait a month, while the points of difference might be discussed between both parties; Senator Hanna, whose death a short time later took from politics one of the warmest friends of labour, offered his services as mediator, and left no doubt that the workmen would accept some compromise.
In spite of this moderation of the working-men, the representatives of the mine owners refused in any way to treat with them. Their standpoint was that if they recognized the trades-unions in their deliberations, they were beginning on a course which they might not know how to stop; if eight hours were demanded to-day by the trades-unions, seven hours might be demanded in the same way next year. The employers thought it high time once for all to break up the dictatorial power of the trades-unions. President Baer explained that trades-unions are a menace to all American industry. The strike continued. Now the anthracite miners produce five million tons every month, which supply all the homes in the eastern part of the country. A cold winter came on, and the lack of coal throughout the country brought about a condition which resembled the misery and sufferings of a time of siege. In many places it was not even a matter of price, although this was four times what it ordinarily is, but the supply of coal was actually used up. Schools and churches had to be closed in many places. And now the public understood at last perfectly clearly that, if the trades-unions wanted to exert their whole power, the country would be absolutely helpless under their tyranny. Nevertheless, the embitterment turned most strongly against the employers, who still affirmed that there was nothing to arbitrate, but that the workmen simply must give in.
The workmen then put themselves on the wrong side by threatening with violence all men who came to take their places in the mines; indeed, they forced back by barbarous methods the engineers who came to pump out the water which was collecting in the mines. Troops had to be called, but at that moment the President took the first steps toward a solution of the problem by calling representatives of both parties to Washington. A commission was finally appointed, composed of representatives of both parties and well-known men who were neutrally inclined, and after Pierpont Morgan on the side of the capitalists gave the signal to consent to arbitration, the coal miners went back to work. The commission met, and some time later in the year 1903 decided about half of the points under dispute in favour of the miners, the other half against them. This was by no means the last strike; the building trades in many parts of the country, and specially in New York, were thoroughly demoralized during the year 1903, the movement proceeding from the strikes of 5,000 bridge builders: then too, the textile workers of the East and miners of the South have been restless. And at the present time, every day sees some small strike or other inaugurated, and any day may see some very large strike declared. It was the coal strike, however, which set the nation thinking and showed up the dangers which are threatening.
The results of the coal strike had shown the friends of trades-unions more clearly than ever the strength which lies in unity. They had seen that results could be achieved by united efforts such as could never have been gotten by the unorganized working-man. They had seen with satisfaction that the trades-unions had taken a conservative part by putting off the great strike as long as possible; and they had seen that the employers would not have consented for their part to any arbitration. In the end not only many of the union demands had been granted, but, more than that, the policy of the trades-unions had been put in the most favourable light. A whole country had to suffer, human lives were sacrificed and millions lost, and in the end the trades-unions won their point; if the mine owners had been willing in the autumn to do what they had to do in winter, a great deal of injury would have been spared. But the trades-unions could truthfully say that they had been true to their policy and had always preferred peace to war. The majority of votes within the trades-unions was against thoughtless and unnecessary strife, against declaring a strike until all other means had been tried. Many people felt that the interests of that neutral party, the nation at large, were better looked out for by the more thoughtful union leaders than by such capitalists as were the Pennsylvania coal magnates.
On the other hand, it was felt that the most calmly planned strikes can lead to embitterment and violence, and the tyrannical and murderous suppression of the non-union working-man. And here the American sense of freedom is touched. Every man has the right to decide freely under what conditions he shall work; the strike-breaker was regarded as a hero, and the trusts did their best to convince the world that the interference of the trades-unions in the movements of non-union workmen is a menace to American democracy. The unionists admit that it is unlawful power which they have used, but pretend that they had a moral right; they say that every working-man has a claim on the factory more than his weekly wage: for he has contributed to its success; he has in a way a moral share, which brings him no income, but which ought to assure him of his position. And now, if during a strike an outside person comes in and takes his place, it is like being robbed of something which he owns, and he has the right of asserting his claim with such means as any man would use on being assaulted.
Capitalists turned against the trades-unions with the greater consternation, because these latter put not only the independent working-man, but also the companies, in a powerless position. They showed that their right to manage their own property was gone, and that the capitalist was no longer the owner of his own factory the instant he was not able to treat with the individual working-man, but forced to subject himself to the representatives of trades-unions. It was easy to show that while he, as undertaker of the business, had to take all the risks and be always energetic and industrious, the working-men were simply showing their greed and laziness by wanting shorter days, and that they would never be really satisfied. It was affirmed that the best workman was an unwilling party to the strike, and that he would more gladly attend to his work than to trades-union politics, and that as a fact he let his trades-union be run by irresponsible good-for-nothings, who played the part of demagogues. Every man who had ever saved a cent and laid it up, ought to be on the side of the capitalist.
But the public took a rather different attitude, and felt that the group of capitalists had been revealed in a bad light by the strike, and when their representatives came to instruct the President of the United States, in a brusque way, on the rights of property, the public began to revise its traditional ideas. The public came to see that such large corporations as were here in question were no longer private enterprises in the ordinary sense of the word; that a steel trust or coal trust cannot be such an independent factor in the commonwealth as a grocery shop in a country town. It was felt that the tremendous growth of the business was the product of national forces, and in part dependent on public franchises; wherefore, the business itself, although privately owned, nevertheless had a semi-public character, so that the public should not be refused the right to interfere in its management. Belief in state socialism, in state ownership of railroads and mines, made great progress in those days; and the conviction made still greater progress that the working-man has a moral right to take an active hand in managing the business in which he works.
And so public opinion has come round to think that violence on the part of working-men, and refusal to treat with trades-unions on the part of employers, are equally to be condemned. The community will hardly again permit capital and labour to fight out their battles in public and make the whole nation suffer. It demands that, now that labour is actually organized in unions, disputes shall be brought up for settlement before delegates from both sides, and that where these cannot come to a solution the matter shall be brought before a neutral court of arbitration which both sides agree to recognize.
Of course these disputes will continue to arise, since the price of manufactured articles is always changing; the employer will always try to lower wages in dull times, and the labourers will try to force wages up during busy times. But it may be expected that the leaders of trades-unions will be able to consider the whole situation intelligently and to guide the masses of working-men carefully through their ambitions and disappointments. Although the employers of labour continue to assert that, so soon as they are handed over to the mercies of the trades-unions, the spirit of enterprise will be entirely throttled and capital will decline to offer itself, because all profit is sacrificed to the selfish tyranny of the working people, nevertheless, experience does not show this to be true. Trades-unions are convinced that, in these days of machinery, too small a part of the profit falls to the labouring man; but they know perfectly well that they themselves can prosper only when the industry as a whole is prosperous, and that it cannot prosper if it is burdened by too high wages. Trades-unions know also that after all they will be able to gain their point in courts of arbitration and elsewhere only so long as they have the sympathy of the public on their side, and that every undue encroachment on the profits of capital and every discouragement of the spirit of enterprise will quickly lose them the sympathy of the American nation. If they really attack American industry, public opinion will go against them. That they know, and therefore the confidence is justified that, after all, their demands will never endanger the true interests of capital. Capitalists know to-day that they will always have trades-unions to deal with, and that it will be best to adapt themselves to the situation. Many thoughtful captains of industry admit that the discipline of trades-unions has had some salutary effect, and that some of their propositions, such as the sliding wage-scale, have helped on industry.
Thus both parties are about to recognize each other with a considerable understanding. They instinctively feel that the same condition has developed itself on both sides; on the one side capital is combined in trusts, and on the other labour has organized into unions. Trusts suppress the competition of capital, trades-unions kill the non-union competitor. The trusts use as weapons high dividends, preferential rates, and monopoly of raw material; the unions use the weapons of old-age insurance, free aid during illness, the union label, strikes, and boycotts. Both sides have strengthened their position by the consolidation of many interests; just as the steel works are allied with large banks, railroads, steamship lines, copper mines, and oil companies, so the leaders of trades-unions take care to spread the disputes of one industry into other industries.
Moreover, both parties fight alike by means of artificially limiting the market; and this is, perhaps, the most dangerous factor of all. While the trusts are continually abandoning factories or temporarily shutting them down in order to curtail production, so the trades-unions restrict the offering of labour. Not every man who wants to learn a trade is admitted to an apprenticeship; the trades-union does not allow young men to come in while old men who have experience are out of work. The regulation of the flow of labour into the trades which require training, and the refusal of union men to work with non-union men, are certainly the most tyrannical features of the situation; but the trades-unions are not embarrassed to find high-sounding arguments for their course, just as the trusts have found for their own similar doings.
Things will continue in this way on both sides, no doubt; and the nation at large can be content, so far at least as, through this concentration and strict discipline on both sides, the outcome of the labour question is considerably simplified. As long as the mass of capitalists is split up and that of working-men chaotically divided, arbitration is difficult, and the results are not binding. But when two well-organized parties oppose each other in a business-like way, with mutual consideration and respect, the conference will be short, business-like, and effective.
The next thing necessary is simply an arrangement which shall be so far as possible automatic for appointing an unprejudiced court of arbitration in any case when the two parties are not able to agree. In this matter public opinion has gone energetically to work. In December, 1901, at the instigation of the National Civic League, a conference of leading representatives of capital and labour was called, and this appointed a standing commission to pass on disputes between employers and labourers. All three parties were represented here—capital by the presidents of the largest trusts, railroads, and banks, trades-unions by the leaders of their various organizations, and the public by such men as Grover Cleveland, Charles Francis Adams, Archbishop Ireland, President Eliot, and others, who enjoy the confidence and esteem of the whole nation.