The Armistice with Germany came suddenly and unexpectedly. To the organized workers the news was as welcome as to other citizens. But, had they looked at the matter from a special trade union standpoint, they would probably have found a longer duration of the War not entirely amiss. For coal had been unionized already before the War, the railways first during the War, but the third basic industry, steel, was not touched either before or during the War. However, it was precisely in the steel industry that opposition to unionism has found its chief seat, not only to unionism in that industry alone but to unionism in related or subsidiary industries as well.
The first three months after the Armistice the general expectation was for a set-back in business conditions due to the withdrawal of the enormous government War-time demand. Employers and trade unions stood equally undecided. When, however, instead of the expected slump, there came a prosperity unknown even during the War, the trade unions resumed their offensive, now unrestrained by any other but the strictly economic consideration. As a matter of fact, the trade unions were not at all free agents, since their demands, frequent and considerable though they were, barely sufficed to keep wages abreast of the soaring cost of living. Through 1919 and the first half of 1920 profits and wages were going up by leaps and bounds; and the forty-four hour week,—no longer the mere eight-hour day,—became a general slogan and a partial reality. Success was especially notable in clothing, building, printing, and the metal trades. One cannot say the same, however, of the three basic industries, steel, coal, and railways. In steel the twelve-hour day and the seven-day week continued as before for approximately one-half of the workers and the unions were preparing for a battle with the "Steel Trust." While on the railways and in coal mining the unions now began to encounter opposition from an unexpected quarter, namely, the government.
When in the summer of 1919 the railway shopmen demanded an increase in their wages, which had not been raised since the summer of 1918, President Wilson practically refused the demand, urging the need of a general deflation but binding himself to use all the powers of the government immediately to reduce the cost of living. A significant incident in this situation was a spontaneous strike of shopmen on many roads unauthorized by international union officials, which disarranged the movement of trains for a short time but ended with the men returning to work under the combined pressure of their leaders' threats and the President's plea.
In September 1919, the United States Railroad Administration and the shopmen's unions entered into national agreements, which embodied the practices under the Administration as well as those in vogue on the more liberal roads before 1918, including recognition and a large number of "working rules." These "national agreements" became an important issue one year later, when their abolition began to be pressed by the railway executives before the Railroad Labor Board, which was established under the Transportation Act of 1920.
In the summer of 1919 employers in certain industries, like clothing, grew aware of a need of a more "psychological" handling of their labor force than heretofore in order to reduce a costly high labor turnover and no less costly stoppages of work. This created a veritable Eldorado for "employment managers" and "labor managers," real and spurious. Universities and colleges, heretofore wholly uninterested in the problem of labor or viewing training in that problem as but a part of a general cultural education, now vied with one another in establishing "labor management" and "labor personnel" courses. One phase of the "labor personnel" work was a rather wide experimentation with "industrial democracy" plans. These plans varied in form and content, from simple provision for shop committees for collective dealing, many of which had already been installed during the War under the orders of the War Labor Board, to most elaborate schemes, some modelled upon the Constitution of the United States. The feature which they all had in common was that they attempted to achieve some sort of collective bargaining outside the channels of the established trade unions. The trade unionists termed the new fashioned expressions of industrial democracy "company unions." This term one may accept as technically correct without necessarily accepting the sinister connotation imputed to it by labor.
The trade unions, too, were benefiting as organizations. The Amalgamated Clothing Workers' Union firmly established itself by formal agreement on the men's clothing "markets" of Chicago, Rochester, Baltimore, and New York. The membership of the Amalgamated Clothing Workers' Union rose to 175,000. Employers in general were complaining of increased labor unrest, a falling off of efficiency in the shop, and looked askance at the rapid march of unionization. The trade unions, on their part, were aware of their opportunity and eager for a final recognition as an institution in industry. As yet uncertainty prevailed as to whether enough had survived of the War-time spirit of give and take to make a struggle avoidable, or whether the issue must be solved by a bitter conflict of classes.
A partial showdown came in the autumn of 1919. Three great events, which came closely together, helped to clear the situation: The steel strike, the President's Industrial Conference, and the strike of the soft coal miners. The great steel strike, prepared and directed by a Committee representing twenty-four national and international unions with William Z. Foster as Secretary and moving spirit, tried in September 1919 to wrest from the owners of the steel mills what the railway shopmen had achieved in 1918 by invitation of the government, namely, "recognition" and the eight-hour day. Three hundred thousand men went out on strike at the call of the committee. The industry came to a practical standstill. But in this case the twenty-four allied unions were not dealing with a government amenable to political pressure, nor with a loosely joined association of employers competing among themselves. Furthermore, the time had passed when the government had either the will or the power to interfere and order both sides to arbitrate their dispute. On the contrary, the unions were now dealing unaided with the strongest capitalist aggregation in the world.
At the request of President Wilson, Gompers had urged the strike committee to postpone the strike until after the meeting of the national industrial conference called by the President in October, but the committee claimed that it could not have kept the men back after a summer of agitation and feverish organization had they even tried. The President's conference, modelled upon a similar conference which met earlier in Great Britain, was composed of three groups of representatives equal in number, one for capital, one for labor, and one for the general public. Decisions, to be held effective, had to be adopted by a majority in each group. The labor representation, dominated of course by Gompers, was eager to make the discussion turn on the steel strike. It proposed a resolution to this effect which had the support of the public group, but fearing a certain rejection by the employer group the matter was postponed. The issue upon which the alignment was effected was industrial control and collective bargaining. All three groups, the employer and public groups and of course the labor group, advocated collective bargaining,—but with a difference. The labor group insisted that collective bargaining is doomed to be a farce unless the employes are allowed to choose as their spokesmen representatives of the national trade union. In the absence of a powerful protector in the national union, they argued, the workers in a shop can never feel themselves on a bargaining equality with their employer, nor can they be represented by a spokesman of the necessary ability if their choice be restricted to those working in the same plant. The employers, now no longer dominated by the War-time spirit which caused them in 1917 to tolerate an expansion of unionism, insisted that no employer must be obliged to meet for the purpose of collective bargaining with other than his own employes.[89] After two weeks of uncertainty, when it had become clear that a resolution supported by both labor and public groups, which restated the labor position in a milder form, would be certain to be voted down by the employer group, the labor group withdrew from the conference, and the conference broke up. The period of the cooperation of classes had definitely closed.
Meantime the steel strike continued. Federal troops patrolled the steel districts and there was no violence. Nevertheless, a large part of the country's press pictured the strike by the steel workers for union recognition and a normal workday as an American counterpart of the Bolshevist revolution in Russia. Public opinion, unbalanced and excited as it was over the whirlpool of world events, was in no position to resist. The strike failed.
Nothing made so clear to the trade unionists the changed situation since the War ended as the strike of the bituminous coal miners which began November 1. The miners had entered, in October 1917, into a wage agreement with the operators for the duration of the War. The purchasing power of their wages having become greatly reduced by the ever rising cost of living, discontent was general in the union. A further complication arose from the uncertain position of the United States with reference to War and Peace, which had a bearing on the situation. The miners claimed that the Armistice had ended the War. The War having ended, the disadvantageous agreement expired with it. So argued the miners and demanded a sixty percent increase in tonnage rates, a corresponding one for yardmen and others paid by the day or hour, and a thirty-hour week to spread employment through the year. The operators maintained that the agreement was still in force, but intimated a readiness to make concessions if they were permitted to shift the cost to the consumer. At this point, the Fuel Administration, a War-time government body, already partly in the process of dissolution, intervened and attempted to dictate a settlement at a fourteen percent increase, which was entirely unacceptable to the union. The strike continued and the prospect of a dire coal famine grew nearer. To break the deadlock, on motion of Attorney-General Palmer, Judge Anderson of Indianapolis, under the War-time Lever Act, issued an injunction forbidding the union officials to continue conducting the strike. The strike continued, the strikers refusing to return to work, and a Bituminous Coal Commission appointed by the President finally settled it by an award of an increase of twenty-seven percent. But that the same Administration which had given the unions so many advantages during the War should now have invoked against them a War-time law, which had already been considered practically abrogated, was a clear indication of the change in the times. In a strike by anthracite coal miners in the following year an award was made by a Presidential board of three, representing the employers, the union, and the public. The strikers, however, refused to abide by it and inaugurated a "vacation-strike," the individual strikers staying away on a so-called vacation, nominally against the will of the union officers. They finally returned to work.
Both the steel and coal strikes furnished occasions for considerable anti-union propaganda in the press. Public sentiment long favorable to labor became definitely hostile.[90] In Kansas the legislature passed a compulsory arbitration law and created an Industrial Relations Court to adjudicate trade disputes. Simultaneously an "anti-Red" campaign inaugurated by Attorney-General Palmer contributed its share to the public excitement and helped to prejudice the cause of labor more by implication than by making direct charges. It was in an atmosphere thus surcharged with suspicion and fear that a group of employers, led by the National Association of Manufacturers and several local employers' organizations, launched an open-shop movement with the slogan of an "American plan" for shops and industries. Many employers, normally opposed to unionism, who in War-time had permitted unionism to acquire scope, were now trying to reconquer their lost positions. The example of the steel industry and the fiasco of the President's Industrial Conference crystallized this reviving anti-union sentiment into action.
Meanwhile the railway labor situation remained unsettled and fraught with danger. The problem was bound up with the general problem as to what to do with the railways. Many plans were presented to Congress, from an immediate return to private owners to permanent government ownership and management. The railway labor organizations, that is, the four brotherhoods of the train service personnel and the twelve unions united in the Railway Employes' Department of the American Federation of Labor, came before Congress with the so-called Plumb Plan, worked out by Glenn E. Plumb, the legal representative of the brotherhoods. This plan proposed that the government take over the railways for good, paying a compensation to the owners, and then entrust their operation to a board composed of government officials, union representatives, and representatives of the technical staffs.[91] So much for ultimate plans. On the more immediate wage problem proper, the government had clearly fallen down on its promise made to the shopmen in August 1919, when their demands for higher wages were refused and a promise was made that the cost of living would be reduced. Early in 1920 President Wilson notified Congress that he would return the roads to the owners on March 1, 1920. A few days before that date the Esch-Cummins bill was passed under the name of the Transportation Act of 1920. Strong efforts were made to incorporate in the bill a prohibition against strikes and lockouts. In that form it had indeed passed the Senate. In the House bill, however, the compulsory arbitration feature was absent and the final law contained a provision for a Railroad Labor Board, of railway, union, and public representatives, to be appointed by the President, with the power of conducting investigations and issuing awards, but with the right to strike or lockout unimpaired either before, during, or after the investigation. It was the first appointed board of this description which was to pass on the clamorous demands by the railway employes for higher wages.[92]
No sooner had the roads been returned under the new law, and before the board was even appointed, than a strike broke out among the switchmen and yardmen, whose patience had apparently been exhausted. The strike was an "outlaw" strike, undertaken against the wishes of national leaders and organized and led by "rebel" leaders risen up for the occasion. For a time it threatened not only to paralyze the country's railway system but to wreck the railway men's organizations as well. It was finally brought to an end through the efforts of the national leaders, and a telling effect on the situation was produced by an announcement by the newly constituted Railroad Labor Board that no "outlaw" organization would have standing before it. The Board issued an award on July 20, retroactive to May 1, increasing the total annual wage bill of the railways by $600,000,000. The award failed to satisfy the union, but they acquiesced.
When the increase in wages was granted to the railway employes, industry in general and the railways in particular were already entering a period of slump. With the depression the open-shop movement took on a greater vigor. With unemployment rapidly increasing employers saw their chance to regain freedom from union control. A few months later the tide also turned in the movement of wages. Inside of a year the steel industry reduced wages thirty percent, in three like installments; and the twelve-hour day and the seven-day week, which had figured among the chief causes of the strike of 1919 and for which the United States Steel Corporation was severely condemned by a report of a Committee of the Interchurch World Movement,[93] has largely continued as before. In the New York "market" of the men's clothing industry, where the union faces the most complex and least stable condition mainly owing to the heterogeneous character of the employing group, the latter grasped the opportunity to break with the Amalgamated Clothing Workers' Union. By the end of the spring of 1921 the clothing workers won their struggle, showing that a union built along new lines was at least as efficient a fighting machine as any of the older unions. It was this union also and several local branches of the related union in the ladies' garment industry, which realized the need of assuring to the employer at least a minimum of labor efficiency if the newly established level of wages was not to be materially lowered. Hence the acceptance of the principle of "standards of production" fixed with the aid of scientific managers employed jointly by the employers and the union.
The spring and summer of 1921 were a time of widespread "readjustment" strikes, or strikes against cuts in wages, especially in the building trades. The building industry went through in 1921 and 1922 one of its periodic upheavals against the tyranny of the "walking delegates" and against the state of moral corruption for which some of the latter shared responsibility together with an unscrupulous element among the employers. In San Francisco, where the grip of the unions upon the industry was strongest, the employers turned on them and installed the "open-shop" after the building trades' council had refused to accept an award by an arbitration committee set up by mutual agreement. The union claimed, however, in self-justification that the Committee, by awarding a reduction in the wages of fifteen crafts while the issue as originally submitted turned on a demand by these crafts for a raise in wages, had gone outside its legitimate scope. In New York City an investigation by a special legislative committee uncovered a state of reeking corruption among the leadership in the building trades' council and among an element in the employing group in connection with a successful attempt to establish a virtual local monopoly in building. Some of the leading corruptionists on both sides were given court sentences and the building trades' council accepted modifications in the "working rules" formulated by the counsel for the investigating committee. In Chicago a situation developed in many respects similar to the one in San Francisco. In a wage dispute, which was submitted by both sides to Federal Judge K.M. Landis for arbitration, the award authorized not only a wage reduction but a revision of the "working rules" as well. Most of the unionists refused to abide by the award and the situation developed into literal warfare. In Chicago the employers' side was aggressively upheld by a "citizens' committee" formed to enforce the Landis award. The committee claimed to have imported over 10,000 out-of-town building mechanics to take the places of the strikers.
In the autumn of 1921 the employers in the packing industry discontinued the arrangement whereby industrial relations were administered by an "administrator,"[94] Judge Alschuler of Chicago, whose rulings had materially restricted the employers' control in the shop. Some of the employers put into effect company union plans. This led to a strike, but in the end the unions lost their foothold in the industry, which the War had enabled them to acquire. By that time, however, the open-shop movement seemed already passing its peak, without having caused an irreparable breach in the position of organized labor. Evidently, the long years of preparation before the War and the great opportunity during the War itself, if they have failed to give trade unionism the position of a recognized national institution, have at least made it immune from destruction by employers, however general or skillfully managed the attack. In 1920 the total organized union membership, including the 871,000 in unions unaffiliated with the American Federation of Labor, was slightly short of 5,000,000, or over four million in the Federation itself. In 1921 the membership of the Federation declined slightly to 3,906,000, and the total organized membership probably in proportion. In 1922 the membership of the Federation declined to about 3,200,000, showing a loss of about 850,000 since the high mark of 1920.
The legal position of trade unions has continued as uncertain and unsatisfactory to the unions, as if no Clayton Act had been passed. The closed shop has been condemned as coercion of non-unionists. Yet in the Coppage case[95] the United States Supreme Court found that it is not coercion when an employer threatens discharge unless union membership is renounced. Similarly, it is unlawful for union agents to attempt organization, even by peaceful persuasion, when employes have signed contracts not to join the union as a condition of employment.[96] A decision which arouses strong doubt whether the Clayton Act made any change in the status of trade unions was given by the Supreme Court in the recent Duplex Printing case.[97] In this decision the union rested its defense squarely on the immunities granted by the Clayton Act. Despite this, the injunction was confirmed and the boycott again declared illegal, the court holding that the words "employer and employes" in the Act restrict its benefits only to "parties standing in proximate relation to a controversy," that is to the employes who are immediately involved in the dispute and not to the national union which undertakes to bring their employer to terms by causing their other members to boycott his goods.
The prevailing judicial interpretation of unlawful union methods is briefly as follows: Strikes are illegal when they involve defamation, fraud, actual physical violence, threats of physical violence, or inducement of breach of contract. Boycotts are illegal when they bring third parties into the dispute by threats of strikes, or loss of business, publication of "unfair lists,"[98] or by interference with Interstate commerce. Picketing is illegal when accompanied by violence, threats, intimidation, and coercion. In December 1921 the Supreme Court declared mere numbers in groups constituted intimidation and, while admitting that circumstances may alter cases, limited peaceful picketing to one picket at each point of ingress or egress of the plant.[99] In another case the Court held unconstitutional an Arizona statute, which reproduced verbatim the labor clauses of the Clayton Act;[100] this on the ground that concerted action by the union would be illegal if the means used were illegal and therefore the law which operated to make them legal deprived the plaintiff of his property without due process of law. In June 1922, in the Coronado case, the Court held that unions, although unincorporated, are in every respect like corporations and are liable for damages in their corporate capacity, including triple damages under the Sherman Anti-Trust law, and which may be collected from their funds.
We have already pointed out that since the War ended the American labor movement has in the popular mind become linked with radicalism. The steel strike and the coal miners' strike in 1919, the revolt against the national leaders and "outlaw" strikes in the printing industry and on the railways in 1920, the advocacy by the organizations of the railway men of the Plumb Plan for nationalization of railways and its repeated endorsement by the conventions of the American Federation of Labor, the resolutions in favor of the nationalization of coal mines passed at the conventions of the United Mine Workers, the "vacation" strike by the anthracite coal miners in defiance of a government wage award, the sympathy expressed for Soviet Russia in a number of unions, notably of the clothing industry, have led many to see, despite the assertions of the leaders of the American Federation of Labor to the contrary, an apparent drift in the labor movement towards radicalism, or even the probability of a radical majority in the Federation in the not distant future.
The most startling shift has been, of course, in the railway men's organizations, which have changed from a pronounced conservatism to an advocacy of a socialistic plan of railway nationalization under the Plumb Plan. The Plumb Plan raises the issue of socialism in its American form. In bare outline the Plan proposes government acquisition of the railroads at a value which excludes rights and privileges not specifically granted to the roads in their charters from the States. The government would then lease the roads to a private operating corporation governed by a tri-partite board of directors equally representing the consuming public, the managerial employes, and the classified employes. An automatic economy-sharing scheme was designed to assure efficient service at low rates calculated to yield a fixed return on a value shorn of capitalized privileges.
The purpose of the Plumb Plan is to equalize the opportunities of labor and capital in using economic power to obtain just rewards for services rendered to the public. In this respect it resembles many of the land reform and other "panaceas" which are scattered through labor history. Wherein it differs is in making the trade unions the vital and organized representatives of producers' interests entitled to participate in the direct management of industry. An ideal of copartnership and self-employment was thus set up, going beyond the boundaries of self-help to which organized labor had limited itself in the eighties.
But it is easy to overestimate the drift in the direction of radicalism. The Plumb Plan has not yet been made the sine qua non of the American labor program. Although the American Federation of Labor endorsed the principle of government ownership of the railways at its conventions of 1920 and 1921, President Gompers, who spoke against the Plan, was reelected and again reelected. And in obeying instructions to cooperate with brotherhood leaders, he found that they also thought it inopportune to press Plumb Plan legislation actively. So far as the railway men themselves are concerned, after the Railroad Labor Board set up under the Esch-Cummins act had begun to pass decisions actually affecting wages and working rules, the pressure for the Plumb Plan subsided. Instead, the activities of the organizations, though scarcely lessened in intensity, have become centered upon the issues of conditions of employment.
The drift towards independent labor politics, which many anticipate, also remains quite inconclusive. A Farmer-Labor party, launched in 1920 by influential labor leaders of Chicago (to be sure, against the wishes of the national leaders), polled not more than 350,000 votes. And in the same election, despite a wide dissatisfaction in labor circles with the change in the government's attitude after the passage of the War emergency and with a most sweeping use of the injunction in the coal strike, the vote for the socialist candidate for President fell below a million, that is behind the vote of 1912, notwithstanding a doubling of the electorate with women's suffrage. Finally, the same convention of the American Federation of Labor, which showed so much sympathy for the ideas of the Plumb Plan League, approved a rupture with the International Trade Union Federation, with headquarters in Amsterdam, Holland, mainly on account of the revolutionary character of the addresses issued by the latter.
FOOTNOTES:
[89] The most plausible argument in favor of the position taken by the employing group is that no employer should be forced to decide matters as intimately connected with the welfare of his business as the ones relating to his labor costs and shop discipline with national union leaders, since the latter, at best, are interested in the welfare of the trade as a whole but rarely in the particular success of his own particular establishment.
[90] The turn in public sentiment really dated from the threat of a strike for the eight-hour day by the four railway brotherhoods in 1916, which forced the passage of the Adamson law by Congress. The law was a victory for the brotherhoods, but also extremely useful to the enemies of organized labor in arousing public hostility to unionism.
[91] See below, 259-261, for a more detailed description of the Plan.
[92] The Transportation Act included a provision that prior to September 1, 1920, the railways could not reduce wages.
[93] A Protestant interdenominational organization of influence, which investigated the strike and issued a report.
[94] The union had not been formally "recognized" at any time.
[95] Coppage v. Kansas, 236 U.S. (1915).
[96] Hitchman Coal and Coke Co. v. Mitchell et al, 245 U.S. 229 (1917).
[97] Duplex Printing Press Co. v. Deering, 41 Sup. Ct. 172 (1921).
[98] Montana allows the "unfair list" and California allows all boycotts.
[99] American Steel Foundries of Granite City, Illinois, v. Tri-City Central Trades' Council, 42 Sup. Ct. 72 (1921).
[100] Truax et al. v. Corrigan, 42 Sup. Ct. 124 (1921).
To interpret the labor movement means to offer a theory of the struggle between labor and capital in our present society. According to Karl Marx, the founder of modern socialism, the efficient cause in all the class struggles of history has been technical progress. Progress in the mode of making a living or the growth of "productive forces," says Marx, causes the coming up of new classes and stimulates in each and all classes a desire to use their power for a maximum class advantage. Referring to the struggle between the class of wage earners and the class of employers, Marx brings out that modern machine technique has concentrated the social means of production under the ownership of the capitalist, who thus became absolute master. The laborer indeed remains a free man to dispose of his labor as he wishes, but, having lost possession of the means of production, which he had as a master-workman during the preceding handicraft stage of industry, his freedom is only an illusion and his bargaining power is no greater than if he were a slave.
But capitalism, Marx goes on to say, while it debases the worker, at the same time produces the conditions of his ultimate elevation. Capitalism with its starvation wages and misery makes the workers conscious of their common interests as an exploited class, concentrates them in a limited number of industrial districts, and forces them to organize for a struggle against the exploiters. The struggle is for the complete displacement of the capitalists both in government and industry by the revolutionary labor class. Moreover, capitalism itself renders effective although unintended aid to its enemies by developing the following three tendencies: First, we have the tendency towards the concentration of capital and wealth in the hands of a few of the largest capitalists, which reduces the number of the natural supporters of capitalism. Second, we observe a tendency towards a steady depression of wages and a growing misery of the wage-earning class, which keeps revolutionary ardor alive. And lastly, the inevitable and frequent economic crises under capitalism disorganize it and hasten it on towards destruction. The last and gravest capitalistic industrial crisis will coincide with the social revolution which will bring capitalism to an end. The wage-earning class must under no condition permit itself to be diverted from its revolutionary program into futile attempts to "patch-up" capitalism. The labor struggle must be for the abolition of capitalism.
American wage earners have steadily disappointed several generations of Marxians by their refusal to accept the Marxian theory of social development and the Marxian revolutionary goal. In fact, in their thinking, most American wage earners do not start with any general theory of industrial society, but approach the subject as bargainers, desiring to strike the best wage bargain possible. They also have a conception of what the bargain ought to yield them by way of real income, measured in terms of their customary standard of living, in terms of security for the future, and in terms of freedom in the shop or "self-determination." What impresses them is not so much the fact that the employer owns the employment opportunities but that he possesses a high degree of bargaining advantage over them. Viewing the situation as bargainers, they are forced to give their best attention to the menaces they encounter as bargainers, namely, to the competitive menaces; for on these the employer's own advantage as a bargainer rests. Their impulse is therefore not to suppress the employer, but to suppress those competitive menaces, be they convict labor, foreign labor, "green" or untrained workers working on machines, and so forth. To do so they feel they must organize into a union and engage in a "class struggle" against the employer.
It is the employer's purpose to bring in ever lower and lower levels in competition among laborers and depress wages; it is the purpose of the union to eliminate those lower levels and to make them stay eliminated. That brings the union men face to face with the whole matter of industrial control. They have no assurance that the employer will not get the best of them in bargaining unless they themselves possess enough control over the shop and the trade to check him. Hence they will strive for the "recognition" of the union by the employer or the associated employers as an acknowledged part of the government of the shop and the trade. It is essential to note that in struggling for recognition, labor is struggling not for something absolute, as would be a struggle for a complete dispossession of the employer, but for the sort of an end that admits of relative differences and gradations. Industrial control may be divided in varying proportions,[101] reflecting at any one time the relative ratio of bargaining power of the contesting sides. It is labor's aim to continue increasing its bargaining power and with it its share of industrial control, just as it is the employer's aim to maintain a status quo or better. Although this presupposes a continuous struggle, it is not a revolutionary but an "opportunist" struggle.
Once we accept the view that a broadly conceived aim to control competitive menaces is the key to the conduct of organized labor in America, light is thrown on the causes of the American industrial class struggles. In place of looking for these causes, with the Marxians, in the domain of technique and production, we shall look for them on the market, where all developments which affect labor as a bargainer and competitor, of which technical change is one, are sooner or later bound to register themselves. It will then become possible to account for the long stretch of industrial class struggle in America prior to the factory system, while industry continued on the basis of the handicraft method of production. Also we shall be able to render to ourselves a clearer account of the changes, with time, in the intensity of the struggle, which, were we to follow the Marxian theory, would appear hopelessly irregular.
We shall take for an illustration the shoe industry.[102] The ease with which shoes can be transported long distances, due to the relatively high money value contained in small bulk, rendered the shoe industry more sensitive to changes in marketing than other industries. Indeed we may say that the shoe industry epitomized the general economic evolution of the country.[103]
We observe no industrial class struggle during Colonial times when the market remained purely local and the work was custom-order work. The journeyman found his standard of life protected along with the master's own through the latter's ability to strike a favorable bargain with the consumer. This was done by laying stress upon the quality of the work. It was mainly for this reason that during the custom-order stage of industry the journeymen seldom if ever raised a protest because the regulation of the craft, be it through a guild or through an informal organization, lay wholly in the hands of the masters. Moreover, the typical journeyman expected in a few years to set up with an apprentice or two in business for himself—so there was a reasonable harmony of interests.
A change came when improvements in transportation, the highway and later the canal, had widened the area of competition among masters. As a first step, the master began to produce commodities in advance of the demand, laying up a stock of goods for the retail trade. The result was that his bargaining capacity over the consumer was lessened and so prices eventually had to be reduced, and with them also wages. The next step was even more serious. Having succeeded in his retail business, the master began to covet a still larger market,—the wholesale market. However, the competition in this wider market was much keener than it had been in the custom-order or even in the retail market. It was inevitable that both prices and wages should suffer in the process. The master, of course, could recoup himself by lowering the quality of the product, but when he did that he lost a telling argument in bargaining with the consumer or the retail merchant. Another result of this new way of conducting the business was that an increased amount of capital was now required for continuous operation, both in raw material and in credits extended to distant buyers.
The next phase in the evolution of the market rendered the separation of the journeymen into a class by themselves even sharper as well as more permanent. The market had grown to such dimensions that only a specialist in marketing and credit could succeed in business, namely, the "merchant-capitalist." The latter now interposed himself permanently between "producer" and consumer and by his control of the market assumed a commanding position. The merchant-capitalist ran his business upon the principle of a large turn-over and a small profit per unit of product, which, of course, made his income highly speculative. He was accordingly interested primarily in low production and labor costs. To depress the wage levels he tapped new and cheaper sources of labor supply, in prison labor, low wage country-town labor, woman and child labor; and set them up as competitive menaces to the workers in the trade. The merchant-capitalist system forced still another disadvantage upon the wage earner by splitting up crafts into separate operations and tapping lower levels of skill. In the merchant-capitalist period we find the "team work" and "task" system. The "team" was composed of several workers: a highly skilled journeyman was in charge, but the other members possessed varying degrees of skill down to the practically unskilled "finisher." The team was generally paid a lump wage, which was divided by an understanding among the members. With all that the merchant-capitalist took no appreciable part in the productive process. His equipment consisted of a warehouse where the raw material was cut up and given out to be worked up by small contractors, to be worked up in small shops with a few journeymen and apprentices, or else by the journeyman at his home,—all being paid by the piece. This was the notorious "sweatshop system."
The contractor or sweatshop boss was a mere labor broker deriving his income from the margin between the piece rate he received from the merchant-capitalist and the rate he paid in wages. As any workman could easily become a contractor with the aid of small savings out of wages, or with the aid of money advanced by the merchant-capitalist, the competition between contractors was of necessity of the cut-throat kind. The industrial class struggle was now a three-cornered one, the contractor aligning himself here with the journeymen, whom he was forced to exploit, there with the merchant-capitalist, but more often with the latter. Also, owing to the precariousness of the position of both contractor and journeyman, the class struggle now reached a new pitch of intensity hitherto unheard of. It is important to note, however, that as yet the tools of production had not undergone any appreciable change, remaining hand tools as before, and also that the journeyman still owned them. So that the beginning of class struggles had nothing to do with machine technique and a capitalist ownership of the tools of production. The capitalist, however, had placed himself across the outlets to the market and dominated by using all the available competitive menaces to both contractor and wage earner. Hence the bitter class struggle.
The thirties witnessed the beginning of the merchant-capitalist system in the cities of the East. But the situation grew most serious during the forties and fifties. That was a period of the greatest disorganization of industry. The big underlying cause was the rapid extension of markets outrunning the technical development of industry. The large market, opened first by canals and then by railroads, stimulated the keenest sort of competition among the merchant-capitalists. But the industrial equipment at their disposal had made no considerable progress. Except in the textile industry, machinery had not yet been invented or sufficiently perfected to make its application profitable. Consequently industrial society was in the position of an antiquated public utility in a community which persistently forces ever lower and lower rates. It could continue to render service only by cutting down the returns to the factors of production,—by lowering profits, and especially by pressing down wages.
In the sixties the market became a national one as the effect of the consolidation into trunk lines of the numerous and disconnected railway lines built during the forties and fifties. Coincident with the nationalized market for goods, production began to change from a handicraft to a machine basis. The former sweatshop boss having accumulated some capital, or with the aid of credit, now became a small "manufacturer," owning a small plant and employing from ten to fifty workmen. Machinery increased the productivity of labor and gave a considerable margin of profits, which enabled him to begin laying a foundation for his future independence of the middleman. As yet he was, however, far from independent.
The wider areas over which manufactured products were now to be distributed, called more than ever before for the services of the specialist in marketing, namely, the wholesale-jobber. As the market extended, he sent out his traveling men, established business connections, and advertised the articles which bore his trade mark. His control of the market opened up credit with the banks, while the manufacturer, who with the exception of his patents possessed only physical capital and no market opportunities, found it difficult to obtain credit. Moreover, the rapid introduction of machinery tied up all of the manufacturers' available capital and forced him to turn his products into money as rapidly as possible, with the inevitable result that the merchant was given an enormous bargaining advantage over him. Had the extension of the market and the introduction of machinery proceeded at a less rapid pace, the manufacturer probably would have been able to obtain greater control over the market opportunities, and the larger credit which this would have given him, combined with the accumulation of his own capital, might have been sufficient to meet his needs. However, as the situation really developed, the merchant obtained a superior bargaining power and, by playing off the competing manufacturers one against another, produced a cut-throat competition, low prices, low profits, and consequently a steady and insistent pressure upon wages. This represents the situation in the seventies and eighties.
For labor the combination of cut-throat competition among employers with the new machine technique brought serious consequences. In this era of machinery the forces of technical evolution decisively joined hands with the older forces of marketing evolution to depress the conditions of the wage bargain. It is needless to dilate upon the effects of machine technique on labor conditions—they have become a commonplace of political economy. The shoemakers were first among the organized trades to feel the effects. In the later sixties they organized what was then the largest trade union in the world, the Order of the Knights of St. Crispin,[104] to ward off the menace of "green hands" set to work on machines. With the machinists and the metal trades in general, the invasion of unskilled and little skilled competitors began a decade later. But the main and general invasion came in the eighties, the proper era from which to date machine production in America. It was during the eighties that we witness an attempted fusion into one organization, the Order of the Knights of Labor, of the machine-menaced mechanics and the hordes of the unskilled.[105]
With the nineties a change comes at last. The manufacturer finally wins his independence. Either he reaches out directly to the ultimate consumer by means of chains of stores or other devices, or else, he makes use of his control over patents and trade marks and thus succeeds in reducing the wholesale-jobber to a position which more nearly resembles that of an agent working on a commission basis than that of the quondam industrial ruler. The immediate outcome is, of course, a considerable increase in the manufacturer's margin of profit. The industrial class struggle begins to abate in intensity. The employer, now comparatively free of anxiety that he may be forced to operate at a loss, is able to diminish pressure on wages. But more than this: the greater certainty about the future, now that he is a free agent, enables him to enter into time agreements with a trade union. At first he is generally disinclined to forego any share of his newly acquired freedom by tying himself up with a union. But if the union is strong and can offer battle, then he accepts the situation and "recognizes" it. Thus the class struggle instead of becoming sharper and sharper with the advance of capitalism and leading, as Marx predicted, to a social revolution, in reality, grows less and less revolutionary and leads to a compromise or succession of compromises,—namely, collective trade agreements.
But the manufacturer's emancipation from the middleman need not always lead to trade agreements. In the shoe industry this process did not do away with competition. In other industries such an emancipation was identical with the coming in of the "trust," or a combination of competing manufacturers into a monopoly. As soon as the "trust" becomes practically the sole employer of labor in an industry, the relations between labor and capital are thrown almost invariably back into the state of affairs which characterized the merchant-capitalist system at its worst, but with one important difference. Whereas under the merchant-capitalist system the employer was obliged to press down on wages and fight unionism to death owing to cut-throat competition, the "trust," its strength supreme in both commodity and labor market, can do so and usually does so of free choice.
The character of the labor struggle has been influenced by cyclical changes in industry as much as by the permanent changes in the organization of industry and market. In fact, whereas reaction to the latter has generally been slow and noticeable only over long periods of time, with a turn in the business cycle, the labor movement reacted surely and instantaneously.
We observed over the greater part of the history of American labor an alternation of two planes of thought and action, an upper and a lower. On the upper plane, labor thought was concerned with ultimate goals, self-employment or cooperation, and problems arising therefrom, while action took the form of politics. On the lower plane, labor abandoned the ultimate for the proximate, centering on betterments within the limits of the wage system and on trade-union activity. Labor history in the past century was largely a story of labor's shifting from one plane to another, and then again to the first. It was also seen that what determined the plane of thought and action at any one time was the state of business measured by movements of wholesale and retail prices and employment and unemployment. When prices rose and margins of employers' profits were on the increase, the demand for labor increased and accordingly also labor's strength as a bargainer; at the same time, labor was compelled to organize to meet a rising cost of living. At such times trade unionism monopolized the arena, won strikes, increased membership, and forced "cure-alls" and politics into the background. When, however, prices fell and margins of profit contracted, labor's bargaining strength waned, strikes were lost, trade unions faced the danger of extinction, and "cure-alls" and politics received their day in court. Labor would turn to government and politics only as a last resort, when it had lost confidence in its ability to hold its own in industry. This phenomenon, noticeable also in other countries, came out with particular clearness in America.
For, as a rule, down to the World War, prices both wholesale and retail, fluctuated in America more violently than in England or the Continent. And twice, once in the thirties and again in the sixties, an irredeemable paper currency moved up the water mark of prices to tremendous heights followed by reactions of corresponding depth. From the war of 1812, the actual beginning of an industrial America, to the end of the century, the country went through several such complete industrial and business cycles. We therefore conveniently divide labor and trade union history into periods on the basis of the industrial cycle. It was only in the nineties, as we saw, that the response of the labor movement to price fluctuations ceased to mean a complete or nearly complete abandonment of trade unionism during depressions. A continuous and stable trade union movement consequently dates only from the nineties.
The cooperative movement which was, as we saw, far less continuous than trade unionism, has also shown the effects of the business cycle. The career of distributive cooperation in America has always been intimately related to the movements of retail prices and wages. If, in the advance of wages and prices during the ascending portion of the industrial cycle, the cost of living happened to outdistance wages by a wide margin, the wage earners sought a remedy in distributive cooperation. They acted likewise during the descending portion of the industrial cycle, when retail prices happened to fall much less slowly than wages.
Producers' cooperation in the United States has generally been a "hard times" remedy. When industrial prosperity has passed its high crest and strikes have begun to fail, producers' cooperation has often been used as a retaliatory measure to bring the employer to terms by menacing to underbid him in the market. Also, when in the further downward course of industry the point has been reached where cuts in wages and unemployment have become quite common, producers' cooperation has sometimes come in as an attempt to enable the wage earner to obtain both employment and high earnings bolstered through cooperative profits.
FOOTNOTES:
[101] The struggle for control, as carried on by trade unions, centers on such matters as methods of wage determination, the employer's right of discharge, hiring and lay-off, division of work, methods of enforcing shop discipline, introduction of machinery and division of labor, transfers of employes, promotions, the union or non-union shop, and similar subjects.
[102] The first trade societies were organized by shoemakers. (See above, 4-7.)
[103] See Chapter on "American Shoemakers," in Labor and Administration, by John R. Commons (Macmillan, 1913).
[104] See Don D. Lescohier, The Order of the Knights of St. Crispin.
The puzzling fact about the American labor movement is, after all, its limited objective. As we saw before, the social order which the typical American trade unionist considers ideal is one in which organized labor and organized capital possess equal bargaining power. The American trade unionist wants, first, an equal voice with the employer in fixing wages and, second, a big enough control over the productive processes to protect job, health, and organization. Yet he does not appear to wish to saddle himself and fellow wage earners with the trouble of running industry without the employer.
But materialistic though this philosophy appears, it is nevertheless the product of a long development to which the spiritual contributed no less than the material. In fact the American labor movement arrived at an opportunist trade unionism only after an endeavor spread over more than seventy years to realize a more idealistic program.
American labor started with the "ideology" of the Declaration of Independence in 1776. Intended as a justification of a political revolution, the Declaration was worded by the authors as an expression of faith in a social revolution. To controvert the claims of George III, Thomas Jefferson quoted Rousseau. To him Rousseau was in all probability little more than an abstract "beau idéal," but Rousseau's abstractions were no mere abstractions to the pioneer American farmer. To the latter the doctrine that all men are born free and equal seemed to have grown directly out of experience. So it appeared, two or three generations later, to the young workmen when they for the first time achieved political consciousness. And, if reality ceased to square with the principles of the Declaration, it became, they felt, the bounden duty of every true American to amend reality.
Out of a combination of the principles of individual rights, individual self-determination, equality of opportunity, and political equality enumerated and suggested in the Declaration, arose the first and most persistent American labor philosophy. This philosophy differed in no wise from the philosophy of the old American democracy except in emphasis and particular application, yet these differences are highly significant. Labor read into the Declaration of Independence a condemnation of the wage system as a permanent economic régime; sooner or later in place of the wage system had to come self-employment. Americanism to them was a social and economic as well as a political creed. Economic self-determination was as essential to the individual as political equality. Just as no true American will take orders from a king, so he will not consent forever to remain under the orders of a "boss." It was the uplifting force of this social ideal as much as the propelling force of the changing economic environment that molded the American labor program.
We find it at work at first in the decade of the thirties at the very beginning of the labor movement. It then took the form of a demand for a free public school system. These workingmen in Philadelphia and New York discovered that in the place of the social democracy of the Declaration, America had developed into an "aristocracy." They thought that the root of it all lay in "inequitable" legislation which fostered "monopoly," hence the remedy lay in democratic legislation. But they further realized that a political and social democracy must be based on an educated and intelligent working class. No measure, therefore, could be more than a palliative until they got a "Republican" system of education. The workingmen's parties of 1828-1831 failed as parties, but humanitarians like Horace Mann took up the struggle for free public education and carried it to success.
If in the thirties the labor program was to restore a social and political democracy by means of the public school, in the forties the program centered on economic democracy, on equality of economic opportunity. This took the form of a demand of a grant of public land free of charge to everyone willing to brave the rigors of pioneer life. The government should thus open an escape to the worker from the wage system into self-employment by way of free land. After years of agitation, the same cry was taken up by the Western States eager for more settlers to build up their communities and this combined agitation proved irresistible and culminated in the Homestead law of 1862.
The Homestead law opened up the road to self-employment by way of free land and agriculture. But in the sixties the United States was already becoming an industrial country. In abandoning the city for the farm, the wage earner would lose the value of his greatest possession—his skill. Moreover, as a homesteader, his problem was far from solved by mere access to free land. Whether he went on the land or stayed in industry, he needed access to reasonably free credit. The device invented by workingmen to this end was the bizarre "greenback" idea which held their minds as if in a vise for nearly twenty years. "Greenbackism" left no such permanent trace on American social and economic structure as "Republican education" or "free land."
The lure of "greenbackism" was that it offered an opportunity for self-employment. But already in the sixties, it became clear that the workingman could not expect to attain self-employment as an individual, but if at all, it had to be sought on the basis of producers' cooperation. In the eighties, it became doubly clear that industry had gone beyond the one-man-shop stage; self-employment had to stand or fall with the cooperative or self-governing workshop. The protagonist of this most interesting and most idealistic striving of American labor was the "Noble Order of the Knights of Labor," which reached its height in the middle of the eighties.
The period of the greatest enthusiasm for cooperation was between 1884 and 1887; and by 1888 the cooperative movement had passed the full cycle of life and succumbed. The failure of cooperation proved a turning point in the evolution of the American labor program. Whatever the special causes of failure, the idealistic unionism, for which the ideas of the Declaration of Independence served as a fountain head, suffered in the eyes of labor, a degree of discredit so overwhelming that to regain its old position was no longer possible. The times were ripe for the opportunistic unionism of Gompers and the trade unionists.
These latter, having started in the seventies as Marxian socialists, had been made over into opportunistic unionists by their practical contact with American conditions. Their philosophy was narrower than that of the Knights and their concept of labor solidarity narrower still. However, these trade unionists demonstrated that they could win strikes. It was to this practical trade unionism, then, that the American labor movement turned, about 1890, when the idealism of the Knights of Labor had failed. From groping for a cooperative economic order or self-employment, labor turned with the American Federation of Labor to developing bargaining power for use against employers. This trade unionism stood for a strengthened group consciousness. While it continued to avow sympathy with the "anti-monopoly" aspirations of the "producers," who fought for the opportunity of self-employment, it also declared that the interests of democracy will be best served if the wage earners organized by themselves.
This opportunist unionism, now at last triumphant over the idealistic unionism induced by America's spiritual tradition, soon was obliged to fight against a revolutionary unionism which, like itself, was an offshoot of the socialism of the seventies. At first, the American Federation of Labor was far from hostile to socialism as a philosophy. Its attitude was rather one of mild contempt for what it considered to be wholly impracticable under American conditions, however necessary or efficacious under other conditions. When, about 1890, the socialists declared their policy of "boring from within," that is, of capturing the Federation for socialism by means of propaganda in Federation ranks, this attitude remained practically unchanged. Only when, dissatisfied with the results of boring from within, the socialists, now led by a more determined leadership, attempted in 1895 to set up a rival to the Federation in the Socialist Trade and Labor Alliance, was there a sharp line drawn between socialist and anti-socialist in the Federation. The issue once having become a fighting issue, the leaders of the Federation experienced the need of a positive and well rounded-out social philosophy capable of meeting socialism all along the front instead of the former self-imposed super-pragmatism.
By this time, the Federation had become sufficiently removed in point of time from its foreign origin to turn to the social ideal derived from pioneer America as the philosophy which it hoped would successfully combat an aggressive and arrogant socialism. Thus it came about that the front against socialism was built out from the immediate and practical into the ultimate and spiritual; and that inferences drawn from a reading of Jefferson's Declaration, with its emphasis on individual liberty, were pressed into service against the seductive collectivist forecasts of Marx.