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64-TH CONGRESS \ ^FMATF (DOCUMENT

1st Session } SENATE j No> 415

INDUSTRIAL RELATIONS

FINAL REPORT AND TESTIMONY

SUBMITTED TO CONGRESS BY THE

COMMISSION ON INDUSTRIAL RELATIONS

CREATED BY THE ACT OF AUGUST 23, 1912

VOL. I

WASHINGTON

GOVERNMENT PRINTING OFFICE 1916

AUTHORITY TO PRINT.

[Public Resolution No. 15, Sixty-fourth Congress, first session.]

Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That the final report of the United States Commission on Industrial Relations, including the report of Basil M. Manly, director of research and investiga- tion, and the individual reports and statements of the several commissioners, together with all the testimony taken at its hearings, except exhibits submitted in printed form, which shall be appropriately referred to in said testimony, be printed as a Senate document under the direction of the Joint Committee on Printing; and that ten thou- sand additional copies be printed and bound in cloth, of which two thousand five hundred copies shall be for the use of the Senate and seven thousand five hundred copies for the use of the House of Representatives; and that of the final report of said commission one hundred thousand additional copies be printed, of which thirty thou- sand copies shall be for the use of the Senate and seventy thousand copies for the use of the House of Representatives: Provided, That the superintendent of documents is hereby authorized to reprint copies of the same for sale or distribution as provided by law.

Approved, April 28, 1916.

CONTEXTS OF VOLUME L

Page.

Final report of commission (see special table of contents, pp. 7-8) 5-269

Testimony taken .at hearings 271-1024

Suggestions of expert witnesses 273-398

J. D. Beck, member, Wisconsin Industrial Commission 278

C. W. Price, assistant to the Industrial Commission of Wiscon- sin : 285

R. W. Campbell, chairman, central safety -committee, Illinois

Steel Co., Chicago 294

W. H. Cameron, secretary, National Council of Safety 307

Mrs. Raymond Bobbins, president, National Women's Trade- Union, League : 309

John B. Andrews, secretary, American Association for Labor

Legislation 319

Herbert Quick, author and farmer 320

Charles W. Holman, University of Texas 333

John A. Fitch, industrial editor, "The .Survey" 334

William M. Leiserson, deputy, Industrial Commission of Wis- consin 344

F. C. Croxton, president, American Association of Free Public

Employment Offices 357, 392

Edward T. Devine, Columbia University _ :_ 358

L. A. Halbert, superintendent, Kansas City Board of Public Wel- fare 360, 364

James H. Boyd, ex-chairman, Employers' Liability Commission

of Ohio 370

Charles McCarthy, Legislative Reference Bureau of Wisconsin 377

Meyer Bloomfield, director, Vocational Bureau of Boston 390

Trade agreements in collective bargaining 399-761

John Mitchell, member, New York State Workingmen's Com- pensation Commission.'; 401

Francis S. Peabody, coal operator 428

Frank J. Hayes, international vice president. United Miae Work- ers of America 449

O. P. Briggs, ex-president, National Founders' Association- - 456,550

Joseph F. Valentine, president, International Molders' Union 481

Thomas J. Hogan, secretary Stove Founders' National Defense

Association 510

John P. Frey, executive officer and editor, International Mold- ers' Union 524

Joseph Schaffner, secretary and treasurer, Hart, Schaffner &

Marx, Chicago 564, 574

Sidney Hillman, president, Cloak and Skirt Makers' Union, New

York 1 566

Earl Dean Howard, manager, labor department, Hart, Schaffner

& Marx, Chicago 571, 592

Julius Henry Cohen, counsel, Cloak,. Suit, and Skirt Manufac- turers' Protective Association 575, 587

A. Bisno, chairman, educational committee, Cloak Makers' Union,

New York 579

James M. Lynch, commissioner of labor, State of New York 594

Albert W. Finlay, chairman, executive committee, United Ty-

pothetse of America — 609

George L. Berry, president, International Printing Pressmen and

Assistants' Union 620

Otto M. Eidlitz. general contractor, New York 644

3

4 CONTENTS OF VOLUME 1.

Testimony taken at hearings— Continued.

Trade agreements in collective bargaining — Continued. Page.

W. J. Spencer, building-trades department, American Federation

of Labor 659

Henry Struble, secretary, National Cut Stone Contractors' As- sociation 665

Thomas J. Williams, president, building trades department,

American Federation of Labor .. 675

Edward A. Crane, architect, Philadelphia 681

Charles Francis president, Printers' League of America 683

J. E. Williams, mediator of labor disputes 697

W. L. Mackenzie King, former minister of labor, Ottawa, Can- ada 713, 732

Samuel Gompers, president, American Federation of Labor___ 718, 738 James A. Emery, counsel, National Association of Manufac- turers 724, 745

Exhibits, printing trades 748

Exhibits, building trades 760

Efficiency systems and labor 763-1024

Frederick W. Taylor, consulting engineer, Philadelphia 765, 795

John F. Tobin, president, Boot and Shoe Workers' Union, Boston- 810 Harrington Emerson, standard of practice and efficiency engi- neer 822, 1021

Charles W. Mixter, time-study man Sentinel Automatic Gas Ap- pliance Co., New Haven 835

Robert G. Valentine, industrial counselor 852

James M. Dodge, chairman, Link Belt Co., Philadelphia 862

P. J. Conlon, vice president, International Association of Ma- chinists 873

David Van Alstyne, assistant to president, New York, New Haven

& Hartford Railroad 883

Carl G. Earth, consulting engineer, Philadelphia 886

A. J. Berres, secretary-treasurer, metal-trades department, Amer- ican Federation of Labor 899

Sanford E. Thompson, consulting engineer, Boston 913, 928

N. P. Alifas, president, district No. 44, International Association

of Machinists 940

Henry Lawrence Gantt, consulting engineer, Montclair, N. J 955

James Duncan, president, Granite Cutters' International Associa- tion of America 965

John Golden, president, United Textile Workers of America.. 985, 1012 Louis D. Brandeis, counselor at law, Boston 991

FINAL REPORT OF THE COMMISSION ON INDUSTRIAL RELATIONS

INCLUDING THE

REPORT OF BASIL M. MANLY, DIRECTOR OF RESEARCH AND INVESTIGATION

AND THE

INDIVIDUAL REPORTS AND STATEMENTS OF THE SEVERAL COMMISSIONERS

THE COMMISSION -OK INDUSTRIAL RELATIONS.

FRANK P. WALSH, Missouri, Chairman.

JOHN R. COMMONS, Wisconsin. S. THRUSTON BALLARD, Kentucky.

FLORENCE J. HARRIMAN, New York. JOHN B. LENNON, Illinois.

RICHARD H. AISHTON, Illinois.! JAMES O'CONNELL, District of Columbia.

HARRIS WEINSTOCK, California. AUSTIN B. GARRETSON, Iowa.

LEWIS K. BROWN, Secretary'

WILLIAM O. THOMPSON, Counsel.

BASIL M. MANLY, Director of Research and Investigation.

EXTRACT FROM ACT OF CONGRESS OF AUGUST 23, 1912, CREATING AND DEFINING

THE DUTIES OF THE COMMISSION ON INDUSTRIAL RELATIONS.

That a commission is hereby created to be called the Commission on Industrial Relations. Said commission shall be composed of nine persons, to be appointed by the President of the United States, by and with the advice and consent of the Senate, not less than three of whom shall be employers of labor and not less than three of whom shall be representatives of organized labor.

# * * # * . * *

SEC. 4. That the commission shall inquire into the general condition of labor in the principal industries of the United States, including agriculture, and especially in those which are carried on in corporate forms; into existing relations between employers and employees; into the effect of industrial conditions on public welfare and into the rights and powers of the community to deal therewith; into the conditions of sanitation and safety of employees and the provisions for protecting the life, limb, and health of the employees; into the growth of associations of employers and of wage earners and the effect of such associations upon the relations between employers and employees; into the extent and results of methods of collective bargaining; into any methods which have been tried in any State or in foreign countries for maintaining mutually satisfactory relations between employees and employers; into methods for avoiding or adjusting labor disputes through peaceful and conciliatory mediation and negotiations; into the scope, methods, and resources of existing bureaus of labor and into possible ways of increasing their usefulness; into the question of smuggling or other illegal entry of Asiatics into the United States or its insular possessions, and of the methods by which such Asiatics have gained and are gaining such admission, and shall report to Congress as speedily as possible, with such recommendation as said commission may think proper to prevent such smuggling and illegal entry. The com- mission shall seek to discover the underlying causes of dissatisfaction in the industrial situation and report its conclusions thereon.

i Appointed commissioner Mar. 17, 1915, to serve the unexpired term of Hon. F. A. Delano, resigned. 6

CONTENTS OF FINAL REPORT.

Page.

Letter of transmittal 9

I.

REPORT OF BASIL M. MANLY, DIRECTOR OF RESEARCH AND INVESTIGATION, SIGNED BY COMMIS- SIONERS WALSH, LENNON, O'CONNELL, AND GARRETSON 11-15 2

Letter of submittaL

Introduction 17

Method and character of investigation 19

Classification of witnesses upon industrial subjects 20

Summary of conclusions and recommendations 21-68

Labor conditions in the principal industries, including agriculture 21

Existing relations between employers and employees 25

Causes of industrial unrest 29

Unjust distribution of wealth and income 30

Unemployment and denial of opportunity to earn a living

Denial of justice 38

Denial of the right of organization 61

Conclusions and recommendations 68-152

I. Industrial conditions of adult workmen in general industries 68

Wages 68

Hours of labor 69

Safety and sanitation 69

Housing 70

II. Women and children in industry 71

III. Industrial conditions and relations on public utilities 73

General 73

Telegraph 74

Telephone 75

The Pullman Co 76

Eailroads , 77

IV. Industrial conditions in isolated communities 78

V. The concentration of wealth and influence 80

VI. The land question and the condition of agricultural labor 86

VII. Judicial settlement of labor claims and complaints 89

VIII. The law relating to trade unions and industrial disputes 90

IX. The policing ofindustry 92

The origin of industrial violence 92

State constabulary 97

Free speech 98

X. The conditions and problems of migratory laborers 101

XI. Unemployment 103

Extent and character of unemployment 103

Existing conditions of employment 106

Existing agencies for employment 108

Public employment agencies 112

XII. Organization, methods and policies of trade unions 115

XIII. Organization, methods and policies of employers' associations 117

XIV. Joint agreements 119

XV. Agencies of mediation, investigation, and arbitration 120

Proposed plan of a national system 121

Organization 121

Powers, duties, and jurisdiction 123

Cooperation 124

XVI. Industrial conditions and the public health— Sickness insurance 124

XVII Education in relation to industry. (See Report of Commissioner John B. Lennon

on Industrial Education, p. 253) 127

XVIII. Scientific management 127

Possible benefits to labor and society 128

Diversities and defects 129

General labor problems 139

Conclusions 143

XIX. Prison labor -. 143

XX. Immigration : 144

XXI. Labor conditions in American colonial possessions 145

XXII. Chinese exclusion '- 147

Constructive suggestions:

Changes in thelaw 147

United States commissioners 149

The judicial system

General administration 149

Selection of inspectors \

Chinese interpreters 150

Staff organization at Washington - - - 150

Salary plan 151

Restricting 152

7

8 CONTENTS OF FINAL REPORT.

Page.

SUPPLEMENTAL STATEMENT OF CHAIRMAN FRANK P. WALSH 153

SUPPLEMENTAL STATEMENT OF COMMISSIONER AUSTIN B. GARRETSON 158

SUPPLEMENTAL STATEMENT OF COMMISSIONERS JOHN B . LENNON AND JAMES O 'CONNELL 161

Criticisms not justified 161

Strong organizations the cure 162

The evidence 162

Extent of unrest 163

New governmental machinery unwise 164

The one true remedy 165

The public's duty 166

II.

REPORT OF COMMISSIONERS JOHNR. COMMONS AND FLORENCE J. HARRIMAN, SIGNED BY COMMIS- SIONERS COMMONS, HARRIMAN, WEINSTOCK, B ALLARD, AND AISHTON 169-230

Enactment, interpretation, and enforcement of labor law 171

Industrial commissions 173

Advisory representative council 176

Civil service and comments on preceding paragraphs 180

Commissions and class conflicts 182

Investigations 191

Rules and regulations 195

Review by commission 198

Court review 199

Testimony 200

Continuous industry, employment and insurance 200

Police and military 201

Legal aid 202

Legislation 203

Supreme courts 204

Mediation and minimum wage 206

Trade disputes 214

Foundations 220

Subsidies 221

Federalfund for social welfare 221

Immigration 225

Farmers and farm laborers 226

Corporation eontrol 228

Dissenting opinion of Commissioner Harris Weinstock 230

REPORT .OF COMMISSIONERS WEINSTOCK, BALLARD, AND AISHTON:

Points of dissent 231

Employers' objection to organized labor, fear of—

Sympathetic strikes 235

Jurisdictional disputes 236

Labor union politics 237

Contract breaking 237

Restriction of output 238

Prohibition of use of nonunion-made tools and material 240

Closed shop 240

Contests for supremacy between rival unions 242

Acts of violence 242

Apprenticeship rules .• 246

SUPPLEMENTAL STATEMENT OF COMMISSIONER S. THRUSTON BALLARD 249

III.

REPORT OF COMMISSIONER JOHN B. LENNON ON INDUSTRIAL EDUCATION, SIGNED BY COMMISSIONERS

LENNON, O 'CONNELL, GARRETSON, BALLARD, AND WALSH 253-261

Demand for industrial education 255

Control of vocational schools 257

General recommendations 258

Continuation of part-time schools 259

Teachers 260

Conclusions 260

IV. ADDITIONAL FINDINGS OF FACT, CONCLUSIONS, AND RECOMMENDATIONS 263-26')

LETTEE OF TEANSMITTAL.

COMMISSION ON INDUSTRIAL RELATIONS,

Chicago, III., August 23, 1915. To the Sixty -fourth Congress:

On behalf of the Commission on Industrial Relations, I have the honor to transmit herewith its final report.

The assembling of facts in the report of the staff from the records of our public hearings and the reports of investigators, under the direction of Mr. Basil M. Manly, might well be taken, in my opinion, as a model of efficiency and scientific treatment by governmental departments.

The plan of submitting none but undisputed facts in the final report of the commission has been faithfully adhered to.

No statement or conclusion of fact adverse to the attitude or in- terest of any person or group of persons is submitted, except as de- clared or assented to by the person or by the individuals comprising the group affected. Thus, for perhaps the first time in the history of our Government, the facts in relation to conditions in the indus- tries examined and the relations inquired into are placed beyond the realm of controversy and established upon the solid and scientific basis of ascertained and indisputable fact.

It is believed that the work of the commission has been conducted in a spirit of social justice and an earnest desire to serve the public by bringing into the light the facts regarding the industrial relations of the country. For the creation of this spirit, as well as for an earnest insistence that the education of the public should be the key- note, I feel that full credit should be accorded Mr. George P. West, and that in addition thereto he should be credited with the inspira- tion and planning of many of the most effective public hearings of the commission.

Respectfully,

FRANK P. WALSH, Chairman.

I.

Report of Basil M. Manly

Director of Research and Investigation

Embodying the Findings of Fact, Conclusions, and Recommendations

of the Staff, based upon their Investigations and the

Testimony of Public Hearings

SIGNED BY

Commissioners Walsh, Lennon, O'Connell, and Garretson

TOGETHER WITH

Supplemental Statements by Chairman Walsh, Commission- ers Garretson, Lennon, and O'Connell

11

LETTER OF SUBMITTAL.

CHICAGO, ILL., August 9, 1915.

To the COMMISSION ON INDUSTRIAL RELATIONS :

I have the honor to submit herewith my report, which has been prepared by direction of the commission as a summary and interpre- tation of the evidence contained in the public hearings of the com- mission and the reports of the staff, together with suggestions for action designed to remedy such evils and abuses as have been de- veloped by investigation.

In the preparation of this report I have directed my attention primarily to the most important question placed before the commis- sion by Congress, namely, " the underlying causes of dissatisfaction in the industrial situation." I have, however, attempted to cover as adequately as possible all the questions embodied in section 4 of the act.

A few words with regard to the method of preparation may be of value : The policy of the commission in intrusting certain important subjects to the members of the staff for investigation under the gen- eral supervision of the director has been continued throughout. The members of the staff who had charge of definite subjects have made their final reports embodying the results of their investigations and the pertinent parts of the testimony before the commission. These reports have, as far as possible, been accepted as the basis for the statements and recommendations contained in this report. It is only fair, however, to state that in certain respects they have been modi- fied, largely as a result of the discussion which took place when these reports were presented to the commission in tentative form. Never- theless, in every case the substance and essential ideas of each in- vestigator's report have been retained.

The enormous mass of testimony heard by the commission has been drawn upon freely. In using this testimony I have iDeen guided by the principle of quoting only statements made by the party to whom such evidence would be unfavorable or by persons who were clearly nonpartisan. For example, in the criticism of the attitude and actions of employers only the testimony given by employers or their agents has been quoted ; the testimony of labor representatives being used only to show the attitude of the workers.

In addition, I have utilized to a very large extent the reports of other governmental agencies, not only as sources of original informa- tion but as a check upon the statements and conclusions contained herein. In relation to a few subjects, indeed, the information al- ready collected made it unnecessary for the commission to conduct investigations of its own.

13

14 EEPOET OF COMMISSION ON INDUSTRIAL RELATIONS.

This report should properly be known as the report of the staff, except that, as noted above, I feel it necessary to assume personal responsibility for certain modifications which have been made from the original reports. I wish to state, however, that I have drawn most largely upon the following reports, which are submitted here- with, with the suggestion that Congress be requested to print them as supplements to this report : x

W. JETT LAUCK:

Analysis of Economic Causes of Unrest. EDGAR SYDENSTRICKER :

Labor Conditions in American Industry. CHRISTOPHER T. CHENERY:

The Telephone and Telegraph Industry.

Labor Conditions in Porto Rico, MARIE L. OBENAUER:

Women in Industry.

Interstate Competition. GERTRUDE BARNUM :

Enforcement of Laws Regulating Working Hours of Women In Wisconsin. GEORGE P. WEST:

Labor Conditions in Colorado. WILLIAM P. HARVEY :

Labor Conditions in the Black Hills.

Labor Conditions in Los Angeles. CHARLES W. HOLMAN:

Preliminary Report on the Land Question. JOHN L. COULTER:

Agricultural Labor and Tenancy. WILLIAM M. LEISERSON :

Unemployment. PETER A. SPEEK :

Conditions in Labor Camps.

Labor Complaints and -Claims.

Migratory Workers. GEORGE E. BARNETT:

Joint Agreements. GEORGE E. BASNETT and D. A. McCABE:

Mediation and Arbitration. LEO WOLMAN:

Extent and Growth of Labor Organizations. J. WALLACE BRYAN :

Trade-Union Law, EDWIN E. WITTE:

Injunctions in Labor Disputes. ROBERT F. HOXIE :

Scientific Management and Labor. B. S. WARREN:

Industrial Conditions and the Public Health. LUKE GRANT:

Violence in Labor Disputes aod the Policing of Industry.

The National Erectors' Association and the International Association of

Bridge and Structural Iron Workers. REDMOND S. BRENNAN and PATRICK F, GHX:

The Inferior Courts and Police of Paterson, N. J. EDWARD A. FITZPATRICK:

Chinese Exclusion.

In addition to those named above, the following members of the staff, who have performed exceptional service and whose reports have to some extent been used directly, should be mentioned : Henry Wiiithrop Ballantine, Charles B. Barnes, Francis H. Bird, E. H.

1 These reports have not heen printed with this document, on the recommendation of Chairman Frank P. Walsh, as stated in his letter in Senate Report No. 143, Sixty-fourth Congress. The reports on Labor Conditions in Colorado and the National Erectors' Asso- ciation were printed by the commission itself in 1915.

LETTER OF SUBMITTAL. 15

Busiek, W. J. Coyne, Nelle B. Curry, Alexander M. Daly, F. S. Deibler, Noel T. Dowling, H. E. Hoagland, Carl Hookstadt, B. F. Moore, Daniel T. O'Regan, M. O'Sullivan, Selig Perlman, Sumner Slichter, George L. Sprague, and Inis Weed.

Special mention should be made also of Charles J. Stowell and Elizabeth A. Hyde, whose work in research and in the digesting of testimony has been invaluable.

— The success of the public hearings was due in large measure to the courage, tact, and good humor of Thomas J. Egan, who performed the difficult duties of sergeant at arms for the commission. / •' I wish to express my appreciation of the generous cooperation of the secretary, Mr. Lewis K. Brown, upon whose executive ability and tactful administration of the commission's affairs the work of the 1 staff in large measure depended. I wish also to express to the com- , mission my acknowledgment and appreciation of the unusual free- dom which has been accorded me in the administration of the work of research and investigation, and in the conduct of the public hearings.

Respectfully,*

BASH, M. MANLY, Director.

FINAL REPORT OF THE COMMISSION ON INDUSTRIAL RELATIONS.

REPORT OF BASIL M. MANLY, DIRECTOR OF RESEARCH AND

INVESTIGATION.

INTRODUCTION.

The question of industrial relations assigned by Congress to the commission for investigation is more fundamental and of greater importance to the welfare of the Nation than any other question ex- cept the form of our government. The only hope for the solution of the tremendous problems created by industrial relationship lies in the effective use of our democratic institutions and in the rapid extension of the principles of democracy to industry.

The immediate effects of the form and character of industrial or- ganization are, however, greater and closer to the lives and happi- ness of all classes of citizens than even the form and character of our political institutions. The ordinary man, whether employer or worker, has relatively little contact with the Government. If he and his family are well fed, well housed, and well clothed, and if he can pay for the education of his children, he can exist even under an autocratic monarchy with little concern, until some critical situa- tion develops in which his own liberty is interfered with or until he is deprived of life or property by the overwhelming power of his tyrannical ruler. But his industrial relations determine every day what he and his family shall eat, what they shall wear, how many hours of his life he shall labor and in what surroundings. Under certain conditions where his individual or corporate employer owns or controls the community in which he lives, the education of his children, the character and prices of his food, clothing, and house, his own actions, speech, and opinions, and in some cases even his religion, are controlled and determined, in so far as the interests of the employer make it desirable for him to exercise such control. Such conditions are established and maintained not only through the dictation of all working conditions by the employer, but by his usurpation or control of the functions and machinery of political government in such communities.

In the available time it has been impossible to ascertain how gen- eral such conditions are, but it is clearly indicated by the investiga- tions that in isolated industrial, mining, or agricultural communi- ties, which are owned or controlled by single individuals or corpora- tions, and in which the employees are unorganized, industrial feu- dalism is the rule rather than the exception.

38819°— 16 2 17

18 KEPORT OP COMMISSION ON INDUSTRIAL RELATIONS.

In such communities democratic government does not, as a rule, exist, except in name or form, and as a consequence there now exist within the body of our Republic industrial communities which are virtually principalities, oppressive to those dependent upon them for a livelihood and a dreadful menace to the peace and welfare of the Nation.

Such conditions as these are the direct and inevitable consequence of the industrial relations which exist in such communities. Politi- cal freedom can exist only where there is industrial freedom ; politi- cal democracy only where there is industrial democracy.

Such industrial democracy has been established in a greater or less degree in certain American industries or for certain classes of employees. But .between conditions of industrial democracy and industrial feudalism there are almost infinite gradations marking the stages of evolution which have been reached. In every case, however, investigation has shown that the degree of political free- dom and democracy which exists is conditioned by the industrial status of the citizens who form the majority of the community.

The problems of industrial relations, therefore, demand the atten- tion of Congress, not only because they' determine the life, security, and happiness of the 25,000,000 citizens of the United States who occupy the position of wage earners but because they affect for good or evil the government of localities and States and to a smaller de- gree that of the Nation itself. What each of these wage earners shall eat, what he shall wear, where he shall live, and how long and under what conditions he shall labor are determined by his industrial status and by his relation, individually or collectively, to the person or corporation employing him. Similarly and almost as directly, this relationship determines whether the machinery of government shall be used for or against his welfare ; whether his vote shall count for or against his own interest ; whether he shall be tried by a jury of his peers or a jury selected in collusion with the employing com- pany, or, under conditions of so-called martial law, by no jury what- ever ; whether, in fact, he shall be a free man or be deprived of every right guaranteed by Federal and State constitutions, imprisoned without warrant for the commission of crimes of which he may be innocent or forcibly deported from the community or State in which he has made his home. For these reasons it seems desirable at the outset to suggest a recommendation to Congress that these problems of industrial relationship should occupy their due prominence in the deliberations of that honorable body, and that the entire machinery of the Federal Government should be utilized to the greatest possible degree for the correction of such deplorable conditions as have been found to exist.

The lack of a proper industrial relationship and the existence of bad labor conditions is a matter of the most serious moment during times of peace, but the events of the past year have demonstrated how enormously their menace to the welfare of a nation is increased during a period of war. The present European war is being fought on the farms and in the factories as much as in the trenches. The effective mobilization of our industrial resources is as important, simply from the standpoint of war, as is the mobilization of our mil- itary and naval forces.

REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 19

It is equally important that action should be taken now, and not after war is a reality.

An attempt has been made in the succeeding pages of this report to suggest some of the measures which should be adopted, with a full realization, however, that no action will be effective which does not come through an understanding by the American people of the essen- tial facts regarding industrial conditions. Practically there are only two alternatives for effective action: First, the creation of a huge system of bureaucratic paternalism such as has been developed in Germany ; second, action which removes the many existing obstacles which prevent effective organization and cooperation, reserving for performance by the Government only those services which can not be effectively conducted by voluntary organizations and those which are of such vital importance to the entire Nation that they should not be left to the hazard of private enterprise.

In closing this introductory statement it is proper to append a quotation from Carlyle, the great Scotch historian, which contains in a few eloquent sentences the very heart of the situation in Ameri- can industry :

With the working people, again, it is not so well. Unlucky ! For there are from twenty to twenty-five millions of them. Whom, however, we lump together into a kind of dim compendious unity, * * *, as " the masses." Masses indeed; and yet, singular to say, the masses consist of units, * * *, every unit of whom has his own heart and sorrows ; stands covered there with his own skin, and if you prick him he will bleed. Every unit of these masses is a mirac- ulous man, even as thou thyself art ; struggling with vision or with blindness for his infinite kingdom (this life which he has got once only in the middle of eternities) ; with a spark of the divinity, what thou callest an immortal soul, in him!

Clearly a difficult " point " for government, that of dealing with these masses ; if indeed it be not rather the sole point and problem of government, and all other points mere accidental crotchets, superficialities, and beatings of the wind ! For let charter chests, use and wont, law common and special, say what they will, the masses count to so many millions of units, made, to all appear- ance, by God, whose earth this is declared to be.

METHOD AND CHARACTER OF INVESTIGATION.

In the investigation of questions so intimately affecting the lives of a large part of the American people the ordinary methods of compiling facts and drawing deductions would have been utterly insufficient, not only because the ground to be covered was too ex- tensive, but because the situation was too largely the result of the opinions, beliefs, and convictions of employers and employees to be susceptible of ascertainment by such a method. Furthermore, it became clear very early in the investigation that the problems which were presented could be solved only by the will arid conscience of the American people acting either directly or through their repre- sentatives in the State and Federal Governments.

The commission has therefore called before it witnesses represent- ing persons drawn from almost every walk of life, whose knowledge and opinions were believed to be of value. In order that the informa- tion developed by these hearings should reach the people they were not only held in public, but, through the newspapers, the facts de- veloped by them have been carried throughout the Nation.

These hearings have occupied in all 154 days, or rather more than the equivalent of 6 months of the commission's time. One or more

20 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.

hearings were held in each of the following cities: Washington, New York, Paterson, Philadelphia, Boston, Chicago, Lead (S. Dak.)? Butte, Seattle, Portland, San Francisco, Los Angeles, Denver, and Dallas. The witnesses, however, were by no means limited to these localities, but in every case the best-informed persons were brought to the centers at which the hearings were held.

The representative character of the witnesses may best be shown by the statement on the following page.

Classification of ivitnesses upon industrial subjects.

Affiliated with employers :

Employers, managers, foremen, etc

Representatives of employers' organizations —

Attorneys 15

Efficiency engineers 10

Employment agents

Capitalists, bankers, directors, etc 20

230

Affiliated with labor :

Trades-union officials 135

Workingmen and working women 90

Attorneys 6

Industrial Workers of the World 8

Representatives of the Socialist Party G

245

Not affiliated with either group:

Agriculturists 22

Attorneys 15

Public officials 69

Representatives of civic organizations

Educators 22

Economists and sociologists 20

Investigators 11

Representatives of the press 14

Clergy 10

Physicians 7

Unclassified 17

On Chinese exclusion 84

265

Total 740

These witnesses were not arbitrarily selected by the commission, but were chosen only after careful investigation by agents of the com- mission, who consulted the persons best informed regarding the industry, locality, or question under consideration. Every oppor- tunity was given employers and employees to suggest the names of witnesses who could best present their side of the case, and the per- sons thus suggested were without exception heard with absolute free- dom not only as regards time, but without regard to the technical rules of evidence.

It seems desirable also to call attention to the fact that in this report, except for citations from admittedly nonpartisan official bodies, there are no statements of fact affecting any person or group of persons which have not been submitted to the parties directly concerned, or which have not been quoted from documents submitted by them or from their public testimony. The submission of the facts developed by preliminary investigation to the parties affected for verification or correction at public hearings is believed to be the best means of ascertaining the truth and avoiding evasion. The same is

REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 21

true of the recommendations and conclusions contained in the report, a very large number of which were submitted for criticism at public hearings or by correspondence.

SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS.

In the act of Congress creating the commission, section 4 named 11 questions into which inquiry was specifically directed. Of these questions three, relating to industrial conditions, industrial relations, and the causes of industrial unrest, were fundamental in character and of broad scope, while eight were specific and dealt more largely with matters of detail. Leaving these eight specific questions for detailed consideration in the body of the report, it seems desirable to present briefly at this point the findings and conclusions with re- gard to these general questions.

LABOR CONDITIONS IN THE PRINCIPAL INDUSTRIES, INCLUDING

AGRICULTURE.

In considering the conditions of labor in American industries, it has seemed that they could be judged or appraised only by com- paring conditions as they actually exist with what knowledge and experience shows that they might easily be made during the im-> mediate future if proper action were taken to utilize the resources of our Nation efficiently and distribute the products equitably.

As against this view there has been an attempt by some persons to urge the judgment of all things by comparison with the past. Much stress has been laid by certain witnesses upon the alleged im- provement of the condition of the workers during the past quarter century.

This point, however, is regarded as generally immaterial. The crux of the question rather is, Have the workers received a fair share of the enormous increase in wealth which has taken place in this country, during the period, as a result largely of their labors? The answer is emphatically, No !

The wealth of the country between 1890 and 1912 increased from sixty-five to one hundred and eighty-seven billions, or 188 per cent, whereas the aggregate income of wage earners in manufacturing, mining, and transportation has risen between 1889 and 1909 only 95 per cent, from two thousand five hundred and sixteen millions in 1889 to four thousand nine hundred and sixteen millions in 1909. Furthermore, the wage earners' share of the net product1 of in- dustry in the case of manufactures was only 40.2 per cent in 1909, as compared with 44.9 per cent in 1889.

Similarly, the attempt to dismiss deplorable labor conditions in the United States by arguments that they are better than in Euro- pean countries is repugnant. To say that conditions are better than in Great Britain, for example, is simply to say that somewhat less than one-third of the population is in a state of absolute poverty, for that was the condition reported by the latest British commission It should be a matter of shame also to boast that the condition of

1 The net product is the value that remains after subtracting the cost of materials from the total value.

22 REPORT OP COMMISSION ON INDUSTRIAL RELATIONS.

American laborers is better than that of laborers in the " black bread belt " of Germany.

That conditions are, as a matter of fact, but little better is proved conclusively by the almost complete cessation of immigration from Germany, England, and France. No better proof of the miserable condition of the mass of American workers need be sought than the fact that in recent years laborers in large numbers have come to this country only from Russia, Italy, Austria-Hungary, and the backward and impoverished nations of southern and eastern Europe*

With the inexhaustible natural resources of the United States, her tremendous mechanical achievements, and the genius of her people for organization and industry, there can be no natural reason to pre- vent every able-bodied man of our present population from being well fed, well housed, comfortably clothed, and from rearing a family of moderate size in comfort, health, and security. How far this ideal is actually achieved is discussed in some detail in the fol- lowing pages.

It is evident both from the investigations of this commission and from the reports of all recent governmental bodies that a large part of our industrial population are, as a result of the combination of low wages and unemployment, living in a condition of actual poverty. How large this proportion is can not be exactly determined, but it is certain that at least one-third and possibly one-half of the families of wage earners employed in manufacturing and mining earn in the course of the year less than enough to support them in anything like a comfortable and decent condition. The detailed evidence is pre- sented in a separate report which is submitted for transmittal to Congress.1 At this point it is sufficient to call attention to the results of the most exhaustive and sweeping official investigation of recent years, that of the Immigration Commission, which reported to Con- gress in 1909, This investigation secured detailed information re- garding the daily or weekly earnings of 619,595 employees of all classes in our basic manufacturing industries and in coal mining, and information regarding income and living conditions for 15,726 families.

It was found that the incomes of almost two-thirds of these fam- ilies (64 per cent) were less than $750 per year and of almost one- third (31 per cent) were less than $500, the average for all being $721. The average size of these families was 5.6 members. Elab- orate studies of the cost of living made in all parts of the country at the same time have shown that the very least that a family of five persons can live upon in anything approaching decency is $700. It is probable that, owing to the fact that the families investigated by the Immigration Commission were, to a large extent, foreign born, the incomes reported are lower than the average for the entire working population ; nevertheless, even when every allowance is made for that fact, the figures show conclusively that between one-half and two- thirds of these families were living below the standards of decent subsistence, while about one-third were living in a state which can be described only as abject poverty.

American society was founded and for a long period existed upon the theory that the family should derive its support from the earn-

1 Report of Edgar Sydenstricker : Labor Conditions in American Industries.

REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 23

ings of the father. How far we have departed from this condition is shown by the fact that 79 per cent of the fathers of these families earned less than $700 per year. In brief, only one-fourth of these fathers could have supported their families on the barest subsist- ence level without the earnings of other members of the family or income from outside sources.

Other facts collected in this investigation show conclusively Jbhat a very large proportion of these families did not live in decency and comfort. Thirty per cent kept boarders and lodgers, a condition repugnant to every ideal of American family life, especially in the crowded tenements or tiny cottages in which the wage earners of America characteristically live. Furthermore, in 77 per cent of the families two or more persons occupied each sleeping room, in 37 per cent three or more persons, and in 15 per cent four or more persons.

The most striking evidence of poverty is the proportion of pauper burials. Th repugnance of all classes of wage earners of all races to pauper burial is such that everything will be sacrificed and heavy debts incurred rather than permit any member of the family to lie in the " potter's field " ; nevertheless in New York City 1 out of every 12 corpses is buried at the expense of the city or turned over to physicians for dissection.1

The terrible effects of such poverty may be outlined in a few para- graphs, but their far-reaching consequences could not be adequately shown in a volume.

Children are the basis of the State; as they live or die, as they thrive or are ill nourished, as they are intelligent or ignorant, so fares the State. How do the children of American workers fare ?

It has been proved by studies here and abroad that there is a direct relation between poverty and the death rate of babies; but the frightful rate at which poverty kills was not known, at least for this country, until very recently," when through a study made in Johnstown, Pa., by the Federal Children's Bureau, it was shown that the babies whose fathers earned less than $10 per week died during the first year at the appalling rate of 256 per 1,000. On the other hand, those whose fathers earned $25 per week or more died at the rate of only 84 per 1,000. The babies of the poor died at three times the rate of those who were in fairly well-to-do families. The tremen- dous significance of these figures will be appreciated when it is known that one- third of all the adult workmen reported by the Immigration Commission earned less than $10 per week, even exclusive of time lost. On the showing of Johnstown these workmen may expect one out of four of their babies to die during the first year of life.

The last of the family to go hungry are the children, yet statistics show that in six of our largest cities from 12 to 20 per cent of the children are noticeably underfed and ill nourished.

The minimum amount of education which any child should receive is certainly the grammar school course, yet statistics show that only one-third of the children in our public schools complete the grammar school course, and less than 10 per cent finish high school.2 Those

1 Statistics for New York are the only ones available which are reasonably complete. Even there not all are included who die in a state of extreme poverty, as it is well known that national societies and sympathetic individuals claim a large number of bodies of persons absolutely unknown to them.

8 Elimination of Pupils from School. Edward L. Thorndike. Bull. 379, TJ. S. Bureau of Education.

24 REPORT OF COMMISSION ON" INDUSTRIAL RELATIONS.

who leave are almost entirely the children of the workers, who, as soon as they reach working age, are thrown, immature, ill trained, and with no practical knowledge, into the complexities of industrial life. In each of four industrial towns studied by the Bureau of Labor Statistics, more than 75 per cent of the children quit school before reaching the seventh grade.1

Tlje great seriousness of this condition is even more acutely realized when it is known that in the families of the workers 37 per cent of the mothers are at work2 and consequently unable to give the chil- dren more than scant attention. Of these mothers 30 per cent keep boarders and lodgers and 7 per cent work outside the home.

As a final statement of the far-reaching effects of the economic condition of American wage earners, it seems proper to quote the following statement of the Chicago Commission on Crime, which after thorough investigation, has reported during the past year :

The pressure of economic conditions has an enormous influence in producing certain types of crime. Insanitary housing and working conditions, unemploy- ment, wages inadequate to maintain a human standard of living, inevitably produce the crushed or distorted bodies and minds from which the army of crime is recruited. The crime problem is not merely a question of police and courts; it leads to the broader problems of public sanitation, education, home care, a living wage, and industrial democracy.8

The other factors in the conditions under which labor is employed in American industry, such as working hours, regularity of employ- ment, safety, and sanitation, are left for later discussion. Suffice it to say in this connection that while in certain fields great improve- ments have been made, the general situation is such that they accen- tuate rather than relieve the deplorable effects of inadequate income which have been pointed out.

As a picture of American industry, this presentation is undeniably gloomy and depressing, but as a diagnosis of what is wrong with American labor conditions, it is true and exact. There are, of course, many bright spots in American industry, where workmen are well paid and regularly employed under good working conditions in the determination of which they have some share. But, even as the physician pays little attention to the good eyes and sound teeth of a patient whose vital organs are diseased, so impressive is the urgent need for attention to the diseased spots in industry, it is felt to be unnecessary to waste time in word pictures of conditions which are all right or which may be depended upon to right themselves.

In agriculture there is no array of exact figures which can be quoted to show the condition of labor. But, speaking generally, 'the available evidence indicates clearly that while in some sections agricultural laborers are well paid and fairly treated, the condition of the mass is very much like that of the industrial workers.

Moreover, there is a peculiar condition in agriculture which merits a brief but strong statement at this point as a preface to a more de- tailed discussion later. The most alarming fact in American agri- culture is the rapid growth of tenancy. In 1910 there were 37 tenant -

1 Conditions Under Which Children Leave School to Go to Work. Vol. VII of Report on Conditions of Woman and Child Wage Earners in the United States. S. Doc. No. 645, 61st Cong., 2d sess.

2 Summary Report on Immigrants in Manufacturing and Mining. Vols. 19 and 20 of Reports of the Immigration Commission. S. Doc. No. 633, 61st Cong., 2d sess.

» Report of the City Council Committee on Crime, Chicago, Summary of Findings, sec. 14, p. 12.

REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 25

operated farms in each 100 farms in the United States, as compared with 28 in 1890, an increase of 32 per cent during 20 years. No nation-wide investigation of the condition of tenant farmers has ever been made, but in Texas, where the investigations of this commission were thorough and conclusive, it was found not only that the economic condition of the tenant was extremely bad but that he was far from being free, while his future was regarded as hopeless. Badly housed, ill nourished, uneducated, and hopeless, these tenants continue year after year to eke out a bare living, moving frequently from one farm to another in the hope that something will turn up. Without a large family the tenant can not^hope to succeed or break even, so in each tenant family numerous children are being reared to a future which under present conditions will be no better than that of their parents, if as good. The wife of a typical tenant farmer, the mother of 11 children, stated in her testimony before the commission that in addi- tion to the rearing of children, making their clothes, and doing the work of the house, she always helped with the crops, working up to within three or four months before children were born, and that during all the years of her married life she had had no ready-made dresses and only three hats. The investigations of this commission in that rich and generally prosperous section of the country only con- firm and accentuate the statements of the Federal Industrial Com- mission which reported in 1902 :

The result of this system [share tenancy] is that the renters rarely if ever succeed in laying by a surplus. On the contrary, their experiences are so dis- couraging that they seldom remain on the same farm for more than a year. They are not only unable to lay by any money, but their children remain un- educated and half clothed. The system is apparently one of the most undesira- ble, so far as its effect on the community is concerned.1

Similarly, the Public Lands Commission reported in 1905 :

There exists and is spreading in the West a tenant or hired labor system which not only represents a relatively low industrial development, but whose further development carries with it a most serious threat. Politically, socially, and economically this system is indefensible.

The condition of agricultural laborers can not, however, be dis- missed without referring to the development of huge estates which are operated by managers with hired labor on what may properly be called a " factory system." The conditions upon such estates are deplorable, not only because of the extremely low wages paid (80 cents per day in the case of one which was carefully investigated), but even more because these estates, embracing within their bound- aries entire counties and towns, are a law unto themselves and the absolute dictators of the lives, liberties, and happiness of their em- ployees. It is industrial feudalism in an extreme form. Such estates are, as a rule, the property of absentee landlords, who are for the most part millionaires, resident in the eastern States or in Europe.

EXISTING RELATIONS BETWEEN EMPLOYERS AND EMPLOYEES.

Considering the whole field of American industry, there are almost infinite variations of relationship between employers and employees, ranging from the individual worker hired by a single employer, as

1 Reports of the Industrial Commission, Vol. XIX, 1902, p. 98.

26 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.

in domestic service and agriculture, to the huge corporation with a hundred thousand stockholders and a quarter of a million em- ployees. Relationship varies from that of direct contact to a situa- tion where the employee, together with thousands of his fellow workers, is separated by hundreds of miles from the individuals who finally control his employment and of whose existence he is usually entirely ignorant.

A thorough discussion of the relationships which exist under these various forms of industrial organization would be not only tedious, but useless for all practical purposes. The typical form of industrial organization is the corporation. In transportation approximately 100 per cent of the wage earners are employed by corporations; in mining, 90 per cent; and in manufacturing, 75 per cent. Moreover, it is under this form that the great problems of industrial relations have developed.

The actual relationship which exists between employers and em- ployees under the artificial conditions which characterize the cor- porate form of organization can not be understood without an analysis of the powers, functions, and responsibilities of the different elements which go to make up the typical corporation. The actual ownership of a corporation is vested in the stockholders and bond- holders, whose only interest in the industry is represented by cer- tificates upon the basis of which they expect the payment of interest or dividends at stated intervals.

The control of the property, as far as operation is concerned, rests finally with the stockholders, or with some particular class of stockholders whose shares entitle them to vote. The stockholders, however, act through the board of directors, who are usually elected in such a way that they represent only the dominant interest.1 As far as the organization of the corporation is concerned, the prin- cipal function of the board of directors is to select the executive officials. These executive officials, either directly or indirectly, select the numerous superintendents, foremen, and petty bosses by whom the direct operation of the enterprise is managed and through whom all the workers are hired, discharged, and disciplined.

This is a skeleton of corporate organization. To understand its operations it is necessary to examine the functions and responsibili- ties of the different parts of the organization.

Theoretically and legally, the final control and responsibility rests with the stockholders, but in actual practice a very different situa- tion is found. The relationship of stockholders to a corporation is anything but permanent : in a busy week on Wall Street the number of shares bought and sold in one of the great corporations will greatly exceed the total number of shares that are in existence. The stockholders as a class, therefore, have no guiding interests in the permanent efficiency of the corporation as regards either the preser- vation of its physical property or the maintenance of an efficient productive organization. Stocks are bought either as a speculation or as an investment, and in case either the physical property deteri- orates or the productive organization tends to become inefficient, the well-informed stockholder generally takes no steps to correct the

1 See the testimony of Mr. Jacob H. Schiff, Mr. Samuel Untermyer, and others upon thU point.

REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 27

condition, but merely throws his stock upon the market. This marks a very real and definite distinction from the actual ownership of a property or business which must be kept in good condition by its owner as regards b8th plant and organization. If all industries were owned and operated by individuals, there might be some reason to hope that generally satisfactory wages and physical conditions might be attained through the education of the owner to a realization th#t permanent success depended absolutely upon the maintenance of the plant in the best condition and the permanent satisfaction of the legitimate demands of the workers, but with the impersonal, re- mote, and irresponsible status of control by stock ownership, such a hope must be purely illusory. The ordinary stockholder in a large corporation actually occupies a less direct relationship to the corporation in which he is interested, has less knowledge of its actual operations, and less control over its management than the ordinary citizen has over local, State, and National Governments.

Boards of directors in theory are responsible for and would natur- ally be expected to maintain supervision over every phase of the corporation's management, but, as a matter of fact, we know that such supervision is maintained only over the financial phase of the business, controlling the acquisition of money to operate the busi- ness and distributing the profits. Actual direction generally exists only through the removal of executive officials who fail to deliver the expected profits, and through the appointment of their successors.1

Upon the testimony of financiers representing, as directors, hun- dreds of corporations, the typical director of large corporations is not only totally ignorant of the actual operations of such corporations, whose properties he seldom, if ever, visits, but feels and exercises no responsibility for anything beyond the financial condition and the selection of executive officials. Upon their own statements, these directors know nothing and care nothing about the quality of the product, the condition and treatment of the workers from whose labor they derive their income, nor the general management of the business.2

As far as operation and actual management are concerned, the executive officials are practically supreme. Upon their orders pro- duction is increased or decreased, plants are operated or shut down, and upon their recommendations wages are raised or lowered. But even they have little direct contact with the actual establishment of working conditions, and no relation at all with the rank and file of the workers. They act upon the recommendations of superintend- ents, whose information comes from their assistants and foremen, and from the elaborate statistics of modern business, which account for every piece of material and product, show the disposition of every penny that comes and goes, but ignore as though they did not exist the men and women whose labor drives the whole mechanism of business.

Here, then, is the field of industrial relations: Masses of workers on the one side dealing in some manner with foremen and super- intendents on the other, behind whom is an organization of execu-

1 See especially the testimony of Messrs. J. P. Morgan, John D. Rockefeller, jr., and August Belinont upon this point.

* See the testimony of Messrs. Jacob H. Schiff, Daniel Guggenheim, Roger W. Babson, and John D. Rockefeller, jr.

28 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.

tive officials, representing in turn the board of directors, who are the chosen representatives of the stockholders.

The crux of the whole question of industrial relations is: Shall the workers for the protection of their interests be organized and represented collectively by their chosen delegates, even as the stock- holders are represented by their directors and by the various grades of executive officials and bosses?

In considering this issue the first question that presents itself is, Why should such representation be demanded as a necessity? Not only are the executive officials, superintendents and bosses, some wit- nesses have urged before the commission, for the most part humane and well-intentioned men, but they know that the interests of the business depend upon the welfare of the workers and, if unhindered, will pay the best wages and create the best working conditions that the business can afford. Organization and representation are there- fore argued to be unnecessary and tending only to promote friction and interfere with the management of the business.

Let us grant the high character and good intentions of officials and consider the statement of the workers in reply.

They say that in modern corporate business the actions of officials are governed not by their personal intentions, but by the inexorable demands for interest and dividends, and are driven not by their de- sire to create a permanently successful business with a contented labor force, but by the never-relaxed spur of the comparative cost sheet. The constant demand is for high production at low cost, not through improvements and good conditions which might give them next year, but this very month. In the high pressure of business every superintendent knows that if his plant is at the bottom of the comparative scale for two months his position topples, and if for three months it is virtually gone. He can not afford to experiment with changes that will not give immediate results. If he were his own master he might take a chance, knowing that the loss of this year would be compensated by gains under better conditions next year, but the monthly cost sheet does not wait for next year; it de- mands results now.

But it may be said that if he can not improve conditions himself he can at least recommend them to his superiors, to be transmitted to the board of directors for approval. This might indeed be done, and with the extension of an understanding among managers that low- production costs may be secured with high wages, probably would be to an increasing extent, except that boards of directors scorn such ab- stractions as the high-wage-low-cost theory and habitually insist that managers shall buy labor, as they buy material, in the cheapest mar- ket. Moreover, raising wages is traditionally unpopular among stockholders and directors, and recommendations for better condi- tions, particularly if they involve new capital, are frowned upon.1 Neither the stockholders nor the directors have to live on wages or work in the existing surroundings, and profits deferred are con- sidered profits lost.

The workers, therefore, deny the potency of even good intentions on the part of managers and point to labor history, which they

1 See the discussion in the 1915 stockholders' meeting of the United States Steel Corpo- ration which was devoted almost exclusively to the question whether the corporation, at an expense of a few thousand dollars, should continue to send a copy of the annual report to each stockholder of record.

REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 29

allege shows that at best only isolated cases can be pointed out where marked improvements have taken place except in response to repeated demands from the workers or to forestall the growth of threatened organization. They point also to such facts as that chil- dren of 12 years or younger were not only employed in the factories (as they still are in some States where there has been little aggressive agitation), but almost without exception were insisted upon by the employers as a necessity.

The evidence of this character, which is summarized elsewhere, seems to be conclusive of the necessity for organization and repre- sentation under modern business conditions. But even if it were not necessary it is difficult to see any reason why what is demanded and required by stockholders should be denied to workers. It would be as illogical for stockholders individually to attempt to deal with the representatives of the unions as it is for the individual worker to attempt to deal with executive officials representing the organized stockholders.

CAUSES OF INDUSTRIAL UNREST.

It is presumed that Congress had in mind, in directing the commis- sion to inquire into the "causes of dissatisfaction in the industrial situation," something far different from that " dissatisfaction with the present which is the hope of the future," that desire for better things which drives men forever forward. Such dissatisfaction is the mainspring of all progress and is to be desired in every nation in all walks of life.

It is believed that Congress intended the inquiry to be directed to that unrest and dissatisfaction which grows out of the existence of intolerable industrial conditions and which, if unrelieved, will in the natural course of events rise into active revolt or, if forcibly sup- pressed, sink into sullen hatred.

Of the existence of such unrest ample evidence has been found. It is the basis of the establishment and growth of the I. W. W., whose card-carrying members number only a few thousands, but which as " a spirit and a vocabulary " permeates to a large extent enormous masses of workers, particularly among the unskilled and migratory laborers. But entirely apart from those who accept its philosophy and creed, there are numberless thousands of workers, skilled and unskilled, organized and unorganized, who feel bitterly that they and their fellows are being denied justice, economically, politically, and legally. Just how widespread this feeling is or whether there is imminent danger of a quickening into active, nation-wide revolt, none can say. But no one who reads the papers from which the workers get their ideas and inspiration ; no one who has studied with care the history of such strikes as those at Lawrence and Paterson, in West Virginia and Colorado, and has understood the temper of the strikers ; no one who has associated with large numbers of work- ers in any part of the country, can fail to be impressed by the gravity of the situation. ,

This sense of tension and impending danger has been expressed by numerous witnesses before the commission, but by none more forcibly than by Mr. Daniel Guggenheim, a capitalist whose interests in mines and industrial plants extend to every part of the country.

30 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.

Chairman WALSH. What do you think has been accomplished by the philan- thropic activities of the country in reducing suffering and want among the people?

Mr. GUGGENHEIM. There has a great deal been done. If it were not for what has been done and what is being done, we would have revolution in this country.

The sources from which this unrest springs are, when stated in full detail, almost numberless. But upon careful analysis of their real character they will be found to group themselves almost without exception under four main sources which include all the others. The four are :

1. Unjust distribution of wealth and income.

2. Unemployment and denial of an opportunity to earn a living.

3. Denial of justice in the creation, in the adjudication, and in the administration of law.

4. Denial of the right and opportunity to form effective organi- zations.

1. UNJUST DISTRIBUTION OF WEALTH AND INCOME.

The conviction that the wealth of the country and the income which is produced through the toil of the workers is distributed without regard to any standard of justice is as widespread as it is deep-seated. It is found among all classes of workers and takes every form from the dumb resentment of the day laborer, who, at the end of a week's back-breaking toil finds that he has less than enough to feed his family while others who have done nothing live in ease, to the elaborate philosophy of the " soap-box orator," who can quote statistics unendingly to demonstrate his contentions. At bottom, though, there is the one fundamental, controlling idea that income should be received for service and for service only, whereas, in fact, it bears no such relation, rand he who serves least, or not at all, may receive most.

This idea has never been expressed more clearly than in the testi- mony of Mr. John H. Walker, president of the Illinois State Fed- eration of Labor :

- A workingman is not supposed to ask anything more than a fair day's wage for a fair day's work ; he is supposed to work until he is pretty fairly tuckered out, say eight hours, and when he does a fair day's work he is not supposed to ask for any more wages than enough to support his family, while with the business man the amount of labor furnishes no criterion for the amount they receive. People accept it as all right if they do not do any work at all, and accept it as all right that they get as much money as they can; in fact, they are given credit for getting the greatest amount of money with the least amount of work; and those things that are being accepted by the other side as the things that govern in every-day life, and as being right, have brought about this condition, this being in my judgment absolutely unfair; that is, on the merits of the proposition in dealing with the workers.

The workers feel this, some unconsciously and some consciously, but all of them feel it, and it makes for unrest, in my judgment, and there can be no peace while that condition obtains.

In the highest paid occupations among wage earners, such as railroad engineers and conductors, glass blowers, certain steel-mill employees, and a few of the building trades, the incomes will range from $1,500 to $2,000 at best, ignoring a few exceptional men who are paid for personal qualities. Such an income means, under pres- ent-day conditions, a fair living for a family of moderate size, edu- cation of the children through high school, a small insurance policy,

REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 31

a bit put by for a rainy day — and nothing more. With unusual re- sponsibilities or misfortunes, it is too little, and the pinch of neces- sity is keenly felt. To attain such wages, moreover, means that the worker must be far above the average, either in skill, physical strength, or reliability. He must also have served an apprenticeship equal in length to a professional course. Finally, and most im- portant, he or his predecessors in the trade must have waged a long, aggressive fight for better wages, for there are other occupations whose demand for skill, strength, and reliability are almost as great as those mentioned, where the wages are very much less.

These occupations, however, include but a handful compared to the mass of the workers. What do the millions get for their toil, for their skill, for the risk of life and limb? That is the question to be faced in an industrial nation, for these millions are the back- bone and sinew of the State, in peace or in war.

First, with regard to the adult workmen, the fathers and potential fathers, from whose earnings, according to the " American standard," the support of the family is supposed to be derived.

Between one-fourth and one-third of the male workers 18 years of age and over, in factories and mines, earn less than $10 per week ; from two-thirds to three-fourths earn less than $15, and only about one-tenth earn more than $20 a week. This does not take into con- sideration lost working time for any cause.

Next are the women, the most portentously growing factor in the labor force, whose wages are important, not only for their own sup- port or as the supplement of the meager earnings of their fathers und husbands, but because, through the force of competition in a rapidly extending field, they threaten the whole basis of the wage scale. From two-thirds to three-fourths of the women workers in factories, stores and laundries, and in industrial occupations gen- erally, work at wages of less than $8 a week. Approximately one- fifth earn less than $4 and nearly one-half earn less than $6 a week.

Six dollars a week — what does it mean to many? Three theater ticketSj gasoline for the week, or the price of a dinner for two; a pair of shoes, three pairs of gloves, or the cost of an evening at bridge. To the girl it means that every penny must be counted, every normal desire stifled, and each basic necessity of life barely satisfied by the sacrifice of some other necessity. If more food must be had than is given with 15-cent dinners, it must be bought with what should go for clothes ; if there is need for a new waist to replace the old one at which the forewoman has glanced reproachfully or at which the girls have giggled, there can be no lunches for a week and dinners must cost 5 cents less each day. Always too the room must be paid for, and back of it lies the certainty that with slack seasons will come lay-offs and discharges. If the breaking point has come, and she must have some amusement, where can it come from? Surely not out of $6 a week.

Last of all are the children, for whose petty addition to the stream of production the Nation is paying a heavy toll in ignorance, deformity of body or mind, and premature old age. After all, does it matter much what they are paid? For all experience has shown that in the end the father's wages are reduced by about the amount that the children earn. This is the so-called " family wage," and examin- ation of the wages in different industries corroborates the theory

32 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.

that in those industries, such as textiles, where women and children can be largely utilized, the wages of men are extremely low.

The competitive effect of the employment of women and children upon the wages of men, can scarcely be overestimated. Surely it is hard enough to be forced to put children to work, without having to see the wages of men held down by their employment.

This is the condition at one end of the social scale. What is at the other?

Massed in millions, at the other end of the social scale, are fortunes of a size never before dreamed of, whose very owners do not know the extent nor, without the aid of an intelligent clerk, even the sources of their incomes. Incapable of being spent in any legitimate manner, these fortunes are burdens, which can only be squandered, hoarded, put into so-called " benefactions " which, for the most part, constitute a menace to the State, or put back into the industrial machine to pile up ever-increasing mountains of gold.

In many cases, no doubt, these huge fortunes have come, in whole or in part, as the rich reward of exceptional service. None would deny or envy him who has performed such service the richest of re- wards, although one may question the ideals of a Nation which re- wards exceptional service only by burdensome fortunes. But such reward can be claimed as a right only by those who have per- formed service, not by those who through relationship or mere para- sitism chance to be designated as heirs. Legal right, of course, they have by virtue of the law of inheritance, which, however, runs counter to the whole theory of American society, and which was adopted, with important variations, from the English law, without any con- ception of its ultimate results and apparently with the idea that it would prevent exactly the condition which has arisen. In effect the American law of inheritance is as efficient for the establishment and maintenance of families as is the English law, which has bulwarked the British aristocracy through the centuries. Every year, indeed, sees this tendency increase, as the creation of " estates in trust " secures the ends which might be more simply reached if there were no prohibition of " entail." According to the income-tax returns for 10 months of 1914, there are in the United States 1,598 fortunes yield- ing an income of $100,000 or more per year. Practically all of these fortunes are so invested and hedged about with restrictions upon expenditure that they are, to all intents and purposes, perpetuities.

An analysis of 50 of the largest American fortunes shows that nearly one-half have already passed to the control of heirs or to trustees (their vice regents) and that the remainder will pass to the control of heirs within 20 years, upon the deaths of the " founders." Already, indeed, these founders have almost without exception re- tired from active service, leaving the management ostensibly to their heirs but actually to executive officials upon salary.

We have, according to the income-tax returns, 44 families with incomes of $1,000,000 or more,1 whose members perform little or no useful service, but whose aggregate incomes, totaling at the very least $50,000,000 per year, are equivalent to the earnings of 100,000 wage earners at the average rate of $500.

The ownership of wealth in the United States has become concen- trated to a degree which is difficult to grasp. The recently published

1 The income tax statistics, as a matter of fact, cover only a period of 10 months in 1914.

REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 33

researches of a statistician of conservative views1 have shown that as nearly as can be estimated the distribution of wealth in the United States is as follows:

The " rich," 2 per cent of the people, own 60 per cent of the wealth.

The " middle class," 33 per cent of the people, own 35 per cent of the wealth.

The "poor," 65 per cent of the people, own 5 per cent of the wealth.

This means in brief that a little less than 2,000,000 people, who would make up a city smaller than Chicago, own 20 per cent more of the Nation's wealth than all the other 90,000,000.

The figures also show that with a reasonably equitable division of wealth, the entire population should occupy the position' of comfort and security which we characterize as middle class.

The actual concentration has, however, been carried very much further than these figures indicate. The largest private fortune in the United States, estimated at $1,000,000,000, is equivalent to the aggregate wealth of 2,500,000 ^ of those who are classed as "poor," who are shown in the studies cited to own on the average about $400 each.

Between the two extremes of superfluity' and poverty is the large middle class — farmers, manufacturers, merchants, professional men, skilled artisans, and salaried officials — whose incomes are more or less adequate for their legitimate needs and desires, and who are rewarded more or less exactly in proportion to service. They have problems to meet in adjusting expenses to income, but the pinch of want and hunger is not felt, nor is there the deadening, devitalizing effect of superfluous, unearned wealth.

From top to bottom of society, however, in all grades of incomes, are innumerable number of parasites of every conceivable type. They perform no useful service, but drain off from the income of the producers a sum whose total can not be estimated.

This whole situation has never been more accurately described than by Hon. David Lloyd-George in an address on " Social waste " :

I have recently had to pay some attention to the affairs of the Sudan, in connection with some projects that have been mooted for irrigation and develop- ment in that wonderful country. I will tell you what the problem is — you may know it already. Here you have a great, broad, rich river upon which both the Sudan and Egypt depend for their fertility. There is enough water in it to fertilize every part of both countries; but if, for some reason or other, the water is wasted in the upper regions, the whole land suffers sterility and famine. There is a large region in the upper Sudan where the water has been absorbed by one tract of country, which, by this process, has been converted into a morass, breeding nothing but pestilence. Properly and fairly husbanded, distributed, and used, there is enough to fertilize the most barren valley arid make the whole wilderness blossom like the rose.

That represents the problem of civilization, not merely in this country but in all lands. Some men get their fair share of wealth in a land and no more — sometimes even the streams of wealth overflow to waste over some favored regions, often producing a morass, which poisons the social atmosphere. Many have to depend on a little trickling runlet, which quickly evaporates with every commercial or industrial drought; sometimes you have masses of men and women whom the flood at its height barely reaches, and then you witness parched specimens of humanity, withered, hardened in misery, living in a desert where even the well of tears has long ago run dry.

1 Prof. Willard I. King, The Wealth and Income of the People of the United States. 38819°— 16 3*

34 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.

Besides the economic significance of these great inequalities of wealth and income, there is a social aspect which equally merits the attention of Congress. It has been shown that the great fortunes of those who have profited by the enormous expansion of American in- dustry have already passed, or will pass in a few years, by right of inheritance to the control of heirs or to trustees who act as their " vice regents." They are frequently styled by our newspapers "monarchs of industry," and indeed occupy within our Eepublic a position almost exactly analogous to that of feudal lords.

These heirs, owners only by virtue of the accident of birth, control the livelihood and have the power to dictate the happiness of more human beings than populated England in the Middle Ages. Their principalities, it is true, are scattered and, through the medium of stock ownership, shared in part with others; but they are none the less real. In fact, such scattered invisible industrial principalities are a greater menace to the welfare of the Nation than would be equal power consolidated into numerous petty kingdoms in different parts of the country. They might then be visualized and guarded against ; now their influence invisibly permeates and controls every phase of life and industry.

" The king can do no wrong," not only because he is above the law but because every function is performed or responsibility assumed by his ministers and agents. Similarly our Rockefellers, Morgans, Fricks, Vanderbilts, and Astors can dp no industrial wrong, because all effective action and direct responsibility is shifted from them to the executive officials who manage American industry. As a basis for this conclusion we have the testimony of many, among which, however, the following statements stand out most clearly :

Mr. John D. Rockefeller, jr.:1

* * * Those of us who are in charge there elect the ablest and most upright and competent men whom we can find, in so far as our interests give us the opportunity to select, to have the responsibility for the conduct of the business in which we are interested as investors. We can not pretend to follow the business ourselves.

Mr. J. Pierpont Morgan :

Chairman WALSH. In your opinion, to what extent are the directors of cor- porations responsible for the labor conditions existing in the industries in which they are the directing power?

Mr. MOBGAN. Not at all I should say.

The similitude, indeed, runs even to mental attitude and phrase. Compare these two statements: Mr. John D. Rockefeller, jr. :

My appreciation of the conditions surrounding wage earners and my sympathy with every endeavor to better these conditions are as strong as those of any man.

Louis XVI:

There is none but you and me that has the people's interest at heart. (" II n'y a que vous et moi aimions le peuple.")

The families of these industrial princes are already well estab- lished and are knit together not only by commercial alliances but by a network of intermarriages which assures harmonious action when- ever their common interest is threatened.

1 Before congressional investigating committee.

REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 35

Effective action by Congress is required, therefore, not only to readjust on a basis of compensation approximating the service actu- ally performed, the existing inequalities in the distribution of wealth and income, but to check the growth of an hereditary aris- tocracy, which is foreign to every conception of American Govern- ment and menacing to the welfare of the people and the existence of the Nation as a democracy.

The objects to be attained in making this readjustment are: To reduce the swollen, unearned fortunes of those who have a super- fluity ; to raise the underpaid masses to a level of decent and comfort- able living ; and at the same time to accomplish this on a basis which will, in some measure, approximate the just standard of income pro- portional to service.

The discussion of how this can best be accomplished forms the greater part of the remainder of this report, but at this point it seems proper to indicate one of the most immediate steps which need to be taken.

It is suggested that the commission recommend to Congress the enactment of an inheritance tax, so graded that, while making gen- erous provision for the support of dependents and the education of minor children, it shall leave no large accumulation of wealth to pass into hands which had no share in its production.1 The revenue from this tax, which we are informed would be very great, should be reserve.d by the Federal Government for three principal purposes :

1. The extension of education.

2. The development of other important social services which, should properly be performed by the Nation, which are discussed in detail elsewhere.

3. The development, in cooperation wivh States and municipali- ties, of great constructive works, such as road building, irrigation, and reforestation, which would materially increase the efficiency and welfare of the entire Nation.

We are informed by counsel not only that such a tax is clearly within the power of Congress, but that upon two occasions, namely, during the Civil War and in 1898, such graded inheritance taxes were enacted with scarcely any opposition and were sustained by the Supreme Court, which held that the inheritance tax was not a direct tax within the meaning of the Constitution. We are aware that similar taxes are levied in the various States, but the conflict with such State taxes seems to have presented little difficulty during the period in which the tax of 1898 was in effect. Under any circum- stances this need cause no great complication, as the matter could be readily adjusted by having the Federal Government collect the en- tire tax and refund a part to the States on an equitable basis.

There is no legislation which could be passed by Congress the immediate and ultimate efforts of which would be more salutary or would more greatly assist in tempering the existing spirit of unrest.

2. UNEMPLOYMENT AND DENIAL OF OPPORTUNITY TO EARN A LIVING.

As a prime cause of a burning resentment and a rising feeling of unrest among the workers, unemployment and the denial of an op-

1 It is suggested that the rates be so graded that not more than $1,000,000 shall pass to the heirs. This can be equitably accomplished by several different gradations of taxation.

36 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.

portunity to earn a living is on a parity with the unjust distribution of wealth. They may on final analysis prove to be simply the two sides of the same shield, but that is a matter which need not be dis- cussed at this point. They differ in this, however, that while un- just distribution of wealth is a matter of degree, unemployment is an absolute actuality, from which there is no relief but soul-killing crime and soul-killing charity.

To be forced to accept employment on conditions which are insuffi- cient to maintain a decent livelihood is indeed a hardship, but to be unable to get work on any terms whatever is a position of black despair.

A careful analysis of all available statistics shows that in our great basic industries the workers are unemployed for an average of at least one-fifth of the year, and that at airtimes during any normal year there is an army of men, who can be numbered only by hundreds of thousands, who are unable to find work or who have so far degen- erated that they can not or will not work. Can any nation boast of industrial efficiency when the workers, the source of her productive wealth, are employed to so small a fraction of their total capacity ?

Fundamentally, this unemployment seems to rise from two great causes, although many others are contributory. First, the inequality of the distribution of income which leaves the great masses of the population (the true ultimate consumers) unable to purchase the products of industry which they create, wrhile a few have such a super- fluity that it can not be normally consumed but must be invested in new machinery for production or in the further monopolization of land and natural resources. The result is that in mining and other basic industries we have an equipment in plant and developed prop- erty far in excess of the demands of any normal year, the excess being, in all probability, at least 25 per cent. Each of these mines and industrial plants keeps around it a labor force which, on the average, can get work for only four-fifths of the year, while at the same time the people have never had enough of the products of those very indus- tries— have never been adequately fed, clothed, housed, nor warmed — for the very simple reason that they have never been paid enough to permit their purchase.

The second principal cause lies in the denial of access to land and natural resources even when they are unused and unproductive, ex- cept at a price and under conditions which are practically prohibi- tive. This situation, while bound up with the land and taxation policies of our States and Nation, also rests fundamentally upon the unjust distribution of wealth. Land or mineral resources in the hands of persons of average income must and will be used either by their original owners or by some more enterprising person. By the overwhelming forces of economic pressure, taxation, and competi- tion they can not be permitted to lie idle if they will produce any- thing which the people need. Only in the hands of large owners — free from economic pressure, able to evade or minimize the effects of taxation and to awrait the ripening of the fruits of unearned in- crement— can land be held out of use if its products are needed.

There can be no more complete evidence of the truth of this state- ment than the condition of the farms of 1,000 acres and over, which, valued at two and one-third billion dollars, comprise 19 per cent of all the farm land of the country and are held by less than 1 per cent

REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 37

*

of the farm owners. The United States census returns show that in these 1,000-acre farms only 18.7 per cent of the land is cultivated as compared with 60 to 70 per cent in farms of from 50 to 499 acres. Furthermore, it is well known that the greater part of these smaller farms which are left uncultivated are held by real estate men, bank- ers, and others wrho have independent sources of income. More than four-fifths of the area of the large holdings is being held out of active use by their 50,000 owners, while 2,250,000 farmers are struggling for a bare existence on farms of less than 50 acres, and an untold number who would willingly work these lands are swelling the armies of the unemployed in the cities and towns.

A basic theory of our Government, which found expression in the homestead acts, was that every man should have opportunity to secure land enough to support a family. If this theory had been carried out and homesteads had either gone to those who would use them productively or remained in the hands of the Government, we should not yet have a problem of such a character. But these acts were evaded; land was stolen outright by wholesale^ and fraudulent en- tries were consolidated into enormous tracts which are now held by wealthy individuals and corporations.

The Public Lands Commission, after an exhaustive inquiry, re- ported in 1905 :

Detailed study of the practical operation of the present land laws shows that their tendency far too often is to bring about land monopoly rather than to multiply small holdings by actual settlers.

* * * Not infrequently their effect is to put a premium on perjury and dishonest methods in the acquisition of land. It is apparent, in consequence, that in very many localities, and perhaps in general, a larger proportion of the public land is passing into the hands of speculators than into those of actual settlers making homes. * * * Nearly everywhere the large landowner has succeeded in monopolizing the best tracts, whether of timber or agricul- tural lands.

To one who has not read the preceding statements carefully there may seem to be a contradiction in proposing to prevent great capi- talists from creating an excess of productive machinery and over- developing mineral resources while pointing out the necessity of forcing land and other natural resources into full and effective use by the people. The two propositions are, as a matter of fact, as fundamentally distinct as monopoly and freedom. The capitalist increases his holdings in productive machinery and resources only because through monopolization and maintenance of prices he hopes to reap rewards for himself or increase his power, while the aim in desiring the full development of land and other resources by the people is that they, producing for themselves, may enjoy a sufficiency of good things and exchange them for the products of others, and thus reduce to a minimum the condition of unemployment.

There are, of course, many other causes of unemployment than the inequality of wealth and the monopolization of land which there is no desire to minimize. Chief among these are immigration, the inade- quate organization of the labor market, the seasonal character of many industries, and the personal deficiencies of a very large num- ber of the unemployed. It can not be denied that a considerable proportion of the men who fill the city lodging houses in winter are virtually unemployables as a result of weakness of character, lack

1 S. Doc. 154, 58th Cong., 3d sess., p. 14.

38 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.

of training, the debasing effects of lodging-house living and city dissipation, and, last but not least, the conditions under which they are forced to work in the harvest fields and lumber, railroad, and construction camps. The seasonal fluctuations of our industries are enormous, employing hundreds of thousands during the busy season and throwing them out on the community during the dull season, and almost nothing has been done to remedy this condition. It would be difficult to imagine anything more chaotic and demoralizing than the existing methods of bringing workmen and jobs together. Cer- tain measures for dealing with these conditions, which are discussed elsewhere in the report, need to be pushed forward with all possible vigor. But it may be confidently predicted that the unemployment situation will not be appreciably relieved until great advances have been made in the removal of the two prime causes — unjust distribu- tion of wealth and monopolization of land and natural resources.

The most direct methods of dealing with the inequality of wealth have already been briefly discussed and will be considered elsewhere in the report. With respect to the land question, however, the fol- lowing basic suggestions are submitted :

1. Vigorous and unrelenting prosecutions to regain all land, water power, and mineral rights secured from the Government by fraud.

2. A general revision of our land laws, so as to apply to all future land grants the doctrine of "superior use," as in the case of water rights in California, and provision for forfeiture in case of actual nonuse. In its simplest form the doctrine of " superior use " implies merely that at the time of making the lease the purpose for which the land will be used must be taken into consideration, and the use which is of greatest social value shall be given preference.

3. The forcing of all unused land into use by making the tax on nonproductive land the same as on productive land of the same kind and exempting all improvements.

Other measures for dealing with unemployment are discussed under that head on pages 103-115.

The unemployed have aptly been called "the shifting sands be- neath the State." Surely there is no condition which more immedi- ately demands the attention of Congress than that of unemploy- ment, which is annually driving hundreds of thousands of other- wise productive citizens into poverty and bitter despair, sapping the very basis of our national efficiency, and germinating the seeds of revolution.

3. DENIAL OF JUSTICE.

No testimony presented to the commission has left a deeper im- pression than the evidence that there exists among the workers an almost universal conviction that they, both as individuals and as a class, are denied justice in the enactment, adjudication, and adminis- tration of law, that the very instruments of democracy are often used to oppress them and to place obstacles in the way of their movement toward economic, industrial, and political freedom and justice. Many witnesses, speaking for millions of workers as well as for themselves, have asserted with the greatest earnestness that the mass of the workers are convinced that laws necessary for their protection against the most grievous wrongs can not be passed ex- cept after long and exhausting struggles ; that such beneficent meas-

REPORT OF COMMISSION OX INDUSTRIAL RELATIONS. 39

ures as become laws are largely nullified by the unwarranted deci- sions of the courts ; that the laws which stand upon the statute books are not equally enforced; and that the whole machinery of Gov- ernment has frequently been placed at the disposal of the employers for the oppression of the workers; that the Constitution itself has been ignored in the interests of the employers; and that constitu- tional guaranties erected primarily for the protection of the workers have been denied to them and used as a cloak for the misdeeds of corporations.

If it be true that these statements represent the opinions of the mass of American workers, there is reason for grave concern, for there are 25,000,000 of them, of whom 3,000,000 are welded together into compact organizations.

But if it be true that these charges are justified; if, in fact, our legislators, our judges, and executives, do not afford equal considera- tion to the workers and are concerned with protecting the rights of property rather than the rights of men, and at times even become the instruments for the oppression of the poor and humble, then the situation demands and must receive the prompt and decisive action of every right-thinking man in order that these evils may be eradi- cated and justice and liberty established in the place of injustice and oppression.

Before examining the evidence, it should be understood that it is not charged that such acts of injustice are universal, but that they occur so frequently and in such diverse parts of the country that any man may reasonably fear that he himself or those with whom he is associated may at any time be the victim of injustice or dis- crimination. It has been urged, and perhaps properly, that the charges would be sustained if it were found that such acts of injus- tice had been committed only upon rare occasions, if it should also be established that such injustices were allowed to stand without redress, and if those who were guilty of their commission were left unimpeached and unpunished.

An enormous mass of evidence bearing upon these charges has been presented to the commission by witnesses or collected by its staff. This material is presented in some detail in another part of the report, but the summary which follows may be regarded as rea- sonably full and exact.

First, with regard to the enactment of laws, it is charged that the workers have been unable to secure legislation to protect them against griev.ous wrongs, except after exhausting struggles against over- whelming odds and against insidious influences.

The evidence bearing upon this question has dealt with the his- tory of three principal lines of legislation in which the evils sought to be remedies are now universally admitted to have been Very great, involving wanton destruction of life, the exploitation of women and children, and the practical enslavement of American seamen. A careful examination has been made of the history of attempts to secure adequate legislation to prevent child labor, to protect women against extreme hours of labor and night work, to secure the safety of factories, railroads, and mines, and to provide for the safety, com- fort, and liberty of seamen.

The history of child-labor legislation shows that although agita- tion for the protection and education of children began during the

40 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.

early part of the nineteenth century in Massachusetts, Rhode Island, Connecticut, New York, and Pennsylvania, no adequate legislation was obtained until nearly the end of the century. Time after time in each of these industrial States the sentiment of the public was aroused, organization was effected, and well-drafted bills were intro- duced only to be killed in committee, emasculated or killed on the floor of the legislature, or passed with exceptions which rendered them entirely ineffective. Even the attempt to reduce the hours of children below 12 per day was bitterly contested and met by every known trick of legislative chicanery. The wThole history of the con- test for adequate child-labor legislation is even now being repeated in some of the Southern States, where laws prohibiting the employ- ment of children are bitterly contested and beaten session after ses- sion by legislators, unsympathetic or controlled by the cotton-mill interests.

Similarly, although the movement to restrict the working hours of women and to prohibit night work began in Massachusetts' and Pennsylvania as early as 1840, the first legislation limiting the hours was the 10-hour bill passed in Massachusetts in 1874, and night work went unregulated until the passage of the act of 1899 in Nebraska.1

The movement for safety of life and limb in the factories and workshops, although pushed with great vigor in almost every session of the State legislatures after 1880, secured only a few acts providing for such obvious matters as the guarding of set screws and gears, but made practically no provision for their enforcement. No really effective -action to promote safety took place until, after many years of hard fighting, the first workmen's compensation acts were passed between 1900 and 1910, which for the first time made the unsafe con- dition of factories directly expensive.

Even upon the railroads, where the safety of the public as well as of the workers was involved, at least 10 years of constant agitation on the part of the railroad brotherhoods and various interested citi- zens was necessary before the first Federal act providing for safety appliances was passed in 1893.

In the case of the movement to secure the safety, comfort, and liberty of seamen, it is a matter of record that Andrew Furuseth, president of the seamen's union, backed not only by all the members of his own organization but by the entire American labor move- ment, attended each session of Congress and devoted his whole ener- gies to securing legislation upon this subject for the entire period of 22 years from 1893 to 1915, when the seamen's bill finally became a law.

Other evidence has been presented covering the long fights to secure legislation to remove the evils of company stores, payment in scrip, prison labor, arbitrary deductions from wages, " sweating," tenement houses, and a number of other matters upon which ade-

1 It is worthy of note that although the decision on the Massachusetts law was favorable and thus established a precedent (Commonwealth v. Hamilton Mfg. Co., 120 Mass., ::8:;». it was thrown aside by the Illinois court in 1895 in holding unconstitutional a law of that State prescribing an 8-hour day for women (Ritchie v. People, 155 111., 98), and it was not until 1910 that the same court accepted a 10-hour law as constitutional (Ritchie v. Wyman, 244 111., 509). The Nebraska statute limited the hours of women to 10 a day and prohibited night work between the hours of 10 p. m. and 6 a. m., but the first case did not raise the question of night work (Wenham v. State, 65 Neb., 394). In New York, however, a statute regulating night work was held unconstitutional in 1907 (People v. Williams, 189 N. Y., 131 , and it was not until the present year that a similar law was sustained (People v. Schweinler Press, 214 N. Y., 395).

REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 41

quate legislation has not yet been secured, except perhaps in a few States, although there has been unremitting agitation upon these questions for more than half a century. This evidence shows clearly that the workers have just grounds for the charge that the legisla- tures have been criminally slow in acting for the relief of grievous wrongs and have used every subterfuge to escape adequate and aggressive action, even while thousands of men, women, and children were being killed, maimed, or deformed as a result of their negli- gence.

Evidence has further been presented to show that such a condition has not been the result entirely of the complacency or slothfulness of legislators, but that powerful influences have been at work to prevent such remedial legislation. The most convincing evidence presented upon this phase of the question is the record of the Na- tional Association of Manufacturers and its allied organizations, as contained in the testimony and findings before congressional com- mittees,1 in the printed reports of that association and in the testi- mony before the commission of the representatives of various State employers' associations. The substance of this evidence is so well known to Congress and to the public that it is necessary here to call attention only to the fact that the efforts of such associations in preventing the enactment of practically all legislation intended to improve the condition or advance the interests of workers were not confined to Congress, but were even more effective in the State legislatures.

The persistent and bitter manner in which the railroads fought the laws providing for safety appliances, although the measures were moderate and necessary, not only for the safety of the traveling public, but for the efficient operation of the roads, is well known to Congress.

Perhaps the most significant statement regarding the insidious influences of this character is contained in a letter from Mr. L. M. Bowers, chairman of the board of directors of the Colorado Fuel & Iron Co., to the Secretary of Mr. John D. Rockefeller, jr., under date of May 13, 1913 :

The Colorado Fuel £ Iron Co. for many years were accused of being the political dictator of southern Colorado, and, in fact, were a mighty power in the entire State. When I came here it was said that the C. F. & I. Co. voted every man and woman in their employ without any regard to their being nat- uralized or not, and even their mules, it used to be remarked, were registered if they were fortunate enough to possess names. Anyhow, a political depart- ment was maintained at a heavy expense. I had before me the contributions of the C. F. & I. Co. for the campaign of 1904, amounting to $80,605, paid out personally by President Hearne. All the vouchers and checks I have examined personally, all of which were payable to Albert A. Miller, upon which he drew the currency and, it is said, handed the money over to Mr. Hearne, who paid it out. So far as I can discover, not one particle of good was accomplished for the company, but Mr. Hearne was an aspirant for the position of United Spates Senator and devoted a vast amount of time and money with this end in view, I have no doubt.

The company became notorious in many sections for their support of the liquor interests. They established saloons everywhere they possibly could.

1 U. S. Senate Committee on Judiciary. Maintenance of a Lobby to Influence Legisla- tion. Hearings before a subcommittee pursuant to S. Res. 92, 63d Cong., 1st sess.

Charges Against Members of the House and Lobby Activities of the National Association of Manufacturers of the United States and Others. Hearings before select committee of House of Representatives appointed under H. Res. 198, 63d Cong., 1st sess.

42 EEPOKT OF COMMISSION ON INDUSTKIAL RELATIONS.

This department was managed by one John Kebler, a brother of the one-time president of the company, who died about the time I came here, a victim of hia own intemperate habits. A sheriff, elected by the votes of the G. P. & I. Co. employees, and who has been kept in office a great many years, established him- self or became a partner in 16 liquor stores in our coal mines. To clean up the saloons and with them the gambling hells and houses of prostitution has been one of the things that Mr. Welborn and I have devoted an enormous amount of time to during the past five years. The decent newspapers everlastingly lam- pooned the C. F. & I. Co. at every election, and I am forced to say the company merited, from a moral standpoint, every shot that was fired into their camp. Since I came here 1 not a nickel has been paid to any politician or political party. We have fought the saloons with all the power we possess. We have forbidden any politician from going into our camps, and every subordinate offi- cial connected with the company has been forbidden to influence our men to vote for any particular candidate. We have not lobbied in the legislature, but have gone directly to the governor and other able men and have demanded fair treatment.

Second, it is charged by the workers that after wholesome and necessary laws are passed they are in large part nullified by the courts either upon technicalities of a character which would not be held to invalidate legislation favorable to the interests of manufacturers, merchants, bankers, and other property owners, or thrown out on the broad ground of unconstitutionally, through strained or illogical construction of constitutional provisions. It is argued that such action is doubly evil, because the power to declare legislative acts unconstitutional has been assumed by the courts in the face of a complete absence of legal sanction, in complete disregard of early decisions denying the possession of such power, and in complete con- trast to the practices of the courts in every other country of the civilized world. It is not within our province to decide whether or not this assumption of power by the courts was justified. It is suffi- cient here merely to examine the evidence bearing upon the allega- tions that laws necessary for the correction of grave industrial abuses are nullified by strained interpretations or for reasons which would be insufficient in other cases, and that they are held unconstitutional upon pretexts which in reality are the outgrowth of economic bias on the part of the judges.

A large number of decisions illustrating these points have been brought to the attention of the commission, but only a few need be cited here. It has been held, for example, even that statutes requiring dangerous machinery to be guarded may be disobeyed by the em- ployer, and children employed about such unguarded machinery are held to have assumed the risk.2 The same has been held regarding the employment of women.3

Many other cases might be cited on the question of strained in- terpretation,4 bearing out the assertion made by Justice Lurton, of

1 This statement of Mr. Bowers should be considered in conjunction with his testimony that the evil influences created by the Colorado Fuel & Iron Co. were still in power and his admission that the company was deeply interested in the last State election and that 150 men were put into the field from his office alone to work for the candidates favored by the company, which was deeply interested in the election of officials who would vigorously

Srosecute the strikers. His letters narrating how the governor of Colorado was whipped ato line should also be considered, as well as the testimony of Dr. B. S. Gaddis, former head of the sociological department of the Colorado Fuel & Iron Co., that officials openly influenced elections.

2 Higgins v. O'Keefe, 79 Fed., 900 ; White v. Wittemann Lith. Co., 131 N. ¥., 631.

3 Knisley v. Pratt, 148 N. Y., 372.

* Nappa v. Erie Ry. Co., 195 N. Y,, 176, 184 ; Gallagher v. Newman, 190 N. Y., 444, 447-448 ; Cashman v. Chase, 156 Mass., 342 ; Quinlan v. Lackawanna Steel Co., 107 A. D. 176, affirmed 191 N. Y./329 ; Finnigan v. N, Y. Contracting Co., 194 N. Y., 244.

BEPOKT OF COMMISSION- ON INDUSTRIAL RELATIONS. 43

the Federal Supreme Court, when, in a case not involving industrial relations, he says:

The judgment just rendered will have, as I think, the effect to defeat the clearly expressed will of the legislature by a construction of its words that can not be reconciled with their ordinary meaning.1

Probably there are no other cases which have created so much bitterness as those of personal injury in which the plaintiffs have been denied recovery of damages on the principles of " fellow serv- ant," " assumption of risk," and " contributory negligence," and the obstacles which have been created by the courts to prevent the re- moval of these defenses for the employer have served only to in- tensify the feeling. The contrast in attitude of the judges can not better be shown than by considering that while they have held each employee of a corporation responsible under these three principles not only for his own involuntary acts but for the physical condition of the entire property and the conduct of each of his fellow workers, they have repeatedly absolved officials, directors, and stockholders from responsibility for accidents, even when the unsafe condition of the property had been published, or when orders had been issued which were directly responsible for the accidents. It would hardly be an exaggeration to say that, if the courts had held officials and directors to as great a degree of responsibility as employees for the condition of the property and the actions of their agents, there is hardly one who would have escaped punishment for criminal negli- gence. According to the best estimates, approximately 35,000 per- sons were killed last year in American industry, and at least one- half of these deaths were preventable.2 What would be the situation if the courts, following the clear logic of their own decisions, should hold the stockholders, directors, and officials criminally responsible for each of the 17,500 preventable deaths to which attention has time after time been directed? >

That the courts, including even the highest tribunal of the Nation, do allow their economic bias to influence them in holding laws' uncon- stitutional is nowhere more clearly expressed than in the dissenting opinion of Mr. Justice Holmes in the case of Lochner v. New York,3 wherein the right of the Legislature of New York to limit the hours of work in bakeries was involved. He said :

This case is decided upon an economic theory which a large part of the country does not entertain. If it were a question whether I agree with that theory [limiting the consecutive hours of labor in bakeries which may be re- quired of an employee], I should desire to study it further and long before making up my mind. But I do not conceive that to be my duty, because I strongly believe that my agreement or disagreement has nothing to do with the right of a majority to embody their opinions in law.

* * * Some of these laws [referring to several which he has discussed] embody convictions or prejudices which judges are likely to share. Some may not, but a constitution is not intended to embody a particular economic theory, whether of paternalism and the organic relation of the citizen to the State, or of laissez faire. It is made for people of fundamentally differing views, and the accident of our finding certain opinions natural and familiar or novel, and even shocking, ought not to conclude our judgment upon the question whether statutes embodying them conflict with the Constitution of the United States.

1 Thompson v. Thompson, 218 U. S., 611.

2 Industrial Accident Statistics, Bui. Whole No. 157, U, S. Bureau of Labor Statistics, 1915.

3 Lochner v. N. Y., 198 TJ. S., 45.

44 BEPOET OF COMMISSION ON INDUSTRIAL RELATIONS.

This statute of the State of New York, which had been sustained by the courts of New York, was thus held unconstitutional, we are assured by the highest possible authority, on the economic theories of five judges, whose bias is clearly reflected in the majority opinion. By that action not only were the bakers of New York deprived of all legal relief from the hardships of working long hours in under- ground bakeries, but the entire movement for relieving the condition of other workmen in similarly unhealthful occupations throughout the country was effectually checked for a decade. Can these judges, the workers ask, absolve themselves from responsibility for the thousands of lives wrhich have been shortened as a result of their decisions, the ill health and suffering of other thousands who con- tracted disease as a result of unduly long exposure to bad conditions and a lack of sufficient fresh air and leisure ? The provision of the Constitution which was held to be violated by this act was the four- teenth amendment, designed solely to protect the emancipated negroes.

The wide range of the labor laws declared unconstitutional may be seen from the following list, which includes only those cases which may be clearly understood from their titles :

LABOR LAWS DECLARED UNCONSTITUTIONAL.

Requiring statement of cause of discharge.1

Prohibiting blacklisting.2

Protecting workmen as members of labor unions.3

Restricting power of courts to grant injunctions, etc.4

Protecting employees as voters (Federal).5

Forbidding public employment office to furnish names of applicants to em- ployers whose workmen were on strike.6

Fixing rates of wages on public works.7

Regulating weighing of coal at mines (four States).8

Providing for small attorneys' fees in successful actions to recover wage claims.'

Fixing the time of payment of wages.10

Prohibiting use of " scrip." 1

Prohibiting or regulating company stores."

Fixing hours of labor in private employment.13

Defining liability of employers for injuries."

It is difficult to find parallel cases to illustrate the difference in the point of view assumed by the courts upon the same constitutional question according to economic or social results of the decisions in

1 Wallace <v. G. C. & N. R. Co., 94 Ga., 732.

2 Wabash R. Co. v. Young, 162 Ind., 102.

State

' 4 Pierce v 'stablemen's Union, 156 Cal., 70 ; State v. Shepherd, 177 MoM 234 ; Cheadle v. State, 110 Ind., 301.

6 United States 7\ Amsden, 1 Bissell, 283.

6 Mathews v. People. 202 111., 389.

7 Street v. Varney Electrical Supply Co., 160 Ind., 338.

8 Harding v. People, 160 111., 459 ; in re Preston, 63 Ohio St., 428 ; Com. v. Brown, 8 Pa. Super. Ct., 339 ; In re House Bill No. 203, 21 Colo., 27.

» Randolph v. Builders' and Painters' Supply Co., 106 Ala., 501 ; Builders' Supply Depot v. O'Connor, 150 Cal., 265; Davidson v. Jennings, 27 Colo., 187; Manowsky v. Stephan, 233 111., 409.

10 Republic Iron & Steel Co. v. State, 160 Ind., 379 ; Braceville Coal Co. 17. People, 147 111., 66 ; Johnson v. Goodyear Mining Co., 127 Cal., 4.

11 Godcharles v. Wigeman, 113 Pa. Si., 431 ; Jordan v. State, 51 Texas Cr. App., 531.

12 Frorer v. People. 141 111., 171 ; State v. Fire Creek Coal & Coke Co., 33 W. Va., 188.

13 In re Morgan, 26 Colo., 415 ; Lochner v. New York, 198 U. S., 45 ; Low u. Rees Printing Co.. 41 Nebr., 127 ; Ritchie v. People, 155 111., 98 ; People v. Williams, 189 N. Y., 131.

14 B:illard v. Mississippi Cotton Oil Co., 81 Miss., 507 ; Baltimore & O. S. W. R. Co. v. Read, 158 lud., L'5.

KEPOBT OF COMMISSION ON INDUSTRIAL RELATIONS. 45

different cases. There are a few clear-cut cases, however, in which the contrast is plainly shown, as, for example, in the inconsistency between the decisions in the Debs case,1 wherein it is held that the control of Congress over interstate commerce is so complete that it may regulate the conduct of the employees engaged therein to the extent of enjoining them from going on a sympathetic strike, and the decision in the Adair case,2 wherein it is held that Congress has so little power over the conduct of those engaged in interstate commerce that it can not constitutionally forbid employers engaged therein discharging their employees merely because of membership in a labor union.

In this same connection it is proper to contrast the almost uniform prohibition by the State and Federal courts of secondary boycotts in labor cases even to the extent of enjoining the publication of " un- fair lists," with the decision in the case of Park Co. v. Druggists' Association (175 N. Y.). In this case the Park Co. charged that the Druggists' Association fixed prices of proprietary medicines; that they refused to sell to anyone who did not abide by the prices thus fixed ; that the druggists combined in this association refused to sell to the Park Co. ; and that they used spies to ascertain with whom the Park Co. did business with intent to compel such customers to cease doing business with the Park Co. The facts were admitted on de- murrer, but the court refused to issue an injunction, holding that the bo}Tcott was caused by plaintiff himself and could be removed when- ever he saw fit to abide by the association's rules ; and, further, that there was no conspiracy. If the same line of reasoning were fol- lowed in labor cases, it is difficult to imagine any kind of boycott which would be illegal.

Finally, reference should be made to the history of the fight for the enactment of eight-hour legislation in Colorado, which illustrates the grounds upon which the workers not only of that State, but throughout the Nation, distrust legislatures, courts, and executive officials.

Although the 8-hour day was established in Colorado gold mines by agreement among the operators after the Cripple Creek strike of 1894, in the coal-mining industry a 20-year struggle followed the miners' first attempt at legislation.

The eight-hour bill presented to the general assembly in 1895, though supported by the Western Federation of Miners, the United Mine Workers of America, and labor organizations in general, was, upon reference to the Supreme Court for an advance opinion, re- ported as unconstitutional and failed of enactment.

A bill brought successfully to enactment in 1899, and which was substantially a copy of the Utah law upheld by State and Federal Supreme Courts, was declared by the Colorado Supreme Court to be unconstitutional.3

In 1901 the people adopted by an overwhelming vote an amend- ment to the constitution which provided for eight-hour legislation. This was followed by the introduction in the next general assembly (1903) of several bills, and by the inauguration of active opposition thereto on the part of corporations. No fewer than 11 anonymous bulletins were attributed to one officer of a smelting company.

1 158 TJ. S., 564. 2 208 U. S., 161. 3 In re Morgan, 26 Colo., 415.

46 REPORT OF COMMISSION OK INDUSTRIAL RELATIONS.

On account of disagreements in conference, none of the several bills passed ; and so great was the public outcry that at the extra ses- sion in July, 1903, each house passed resolutions blaming the other for the failure.

In the session of 1904-5 a bill substantially the same as the present law, and favored by all political parties, was so amended by Mr. Guggenheim as to be " absolutely worthless." It remained on the statute books, a dead letter, until 1911.

In 1911, house bill No. 46 was passed. The operators succeeded in having it submitted to a referendum vote, and at the last moment they initiated a smelterman's eight-hour bill, the two came up on the same ballot, and in the succeeding confusion both were adopted by the people, because of their genuine interest in the passage of an eight-hour law.

The legislature of 1913 repealed both the laws so enacted in 1911, and reenacted house bill No. 46, the present law. By a decision of the Supreme Court, allowing a "safety clutch," this law may not be referred.

The essential injustice and stupidity of this long fight of the em- ployers against eight-hour legislation is strikingly shown by a letter from Mr. L. M. Bowers, chairman of the board of directors of the Colorado Fuel & Iron Co., to Mr. J. D. Rockefeller, jr.. stating that after they saw that such legislation was inevitable, they tried out the eight-hour day in their mines and found that it was economically profitable. The Colorado Fuel & Iron Co. thereby is shown to have stubbornly resisted by every conceivable device, for a period of 20 years, a just law which was not only necessary for the health and welfare of its 12,000 miners but was actually profitable for the com- pany itself.

The reason for the effectiveness of the opposition of the Colorado Fuel & Iron Co. is also shown in the letter quoted on page 41 from Mr. Bowers to the secretary of Mr. Rockefeller, describing the com- plete and corrupt control which the company exercised over the State government during this period.

Third, it is alleged by the workers that in the administration of law, both common and statute, there is discrimination by the courts against the poor and in favor of the wealthy and powerful. It is further stated that this discrimination arises not only from the eco- nomic disabilities of the poor, which render them unable to employ equally skillful lawyers, to endure the law's delay, and to stand the expense of repeated appeals, but out of an actual bias on the part of the judges in favor of the wealthy and influential. It should arouse great concern if it be true that the courts do not resolve their doubts in favor of the poor and humble; how much graver then is the injustice if the judges do in fact lean toward the rich and mighty ?

To establish this claim by the presentation of a sufficient number of cases would be a tedious task. Many such have been presented to the commission but can not be considered fully here. Instead, it would seem that in such cases we may safely rely upon the uncon- tra dieted opinion of weighty authorities whose position removes from them any suspicion of bias.

BEPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 47

Ex-President William H. Taft has said:

We must make it so that the poor man will have as nearly as possible an equal opportunity in litigating as the rich man; and under present conditions, ashamed as we may be of it, this is not the fact.

Prof. Henry E. Seager, of Columbia University, testified before the commission:

I don't see how any fair-minded person can question but what our judges have shown a decided bias in favor of the employers. I would not be inclined to ascribe this so much to a class bias, although I think this is a factor, as to the antecedent training of judges. Under our legal system the principal task of the lawyer is to protect property rights, and the property rights have come to be concentrated more and more into the hands of corporations, so that the successful lawyer of to-day, in a great majority of cases, is the corporation lawyer. His business is to protect the rights of employers and corporations. It is from the ranks of successful lawyers, for the most part, that our judges are selected, and from that results inevitably a certain angle on the part of a majority of our judges.

The bias of the courts is nowhere more clearly shown than in cases involving persons and organizations with whose economic and social views the court does not agree. An interesting example may be cited in the case of Warren v. United States, 183 Fed., 718, where the editor of Appeal to Reason, Fred D. Warren, was sentenced by the Federal district court to six months' imprisonment and a fine of $1,500 for the circulation through the mails of matter offering a reward to anyone who would kidnap a certain governor for whom extradition had been refused.1

The sentence was commuted by President Taft, against the protest of Warren, to a fine of $100 to be collected in a civil suit. In com- menting on the sentence, President Taft is reported to have said :

The district court evidently looked beyond the record of the evidence in this case and found that Warren was the editor and publisher of a newspaper en- gaged in a crusade against society and government.

Moreover, this is not a prosecution for criminal libel ; it is a prosecution for what at best is the violation of a regulation as to the use of the mails. To visit such an offense with a severe punishment is likely to appear to the public to be an effort to punish the defendant for something that could not be charged in the indictment.

This obviously was not intended as a reflection upon the court, but the attitude of a large part of the workers is that if President Taft was justified in making such an assertion it was a case demand- ing impeachment of the judges involved rather than a commutation of sentence for Warren.

Fourth, it is charged by the representatives of labor not only that courts have neglected or refused to protect workers in the rights guaranteed by the Constitution of the United States and of the several States, but that sections of the Constitution framed primarily to protect human rights have been perverted to protect property rights only and to deprive workers of the protection of rights se- cured to them by statutes.

First, with regard to the Federal courts, it is startling and alarm- ing to citizens generally, and particularly to workers, to learn that the concensus of Federal decisions is to the effect that the sections of the Constitution defining the rights of citizens to trial by jury,

1 It was alleged by Warren that this was done to call attention to the gross dis- crimination in the case of Haywood and Moyer, who were kidnaped aud transported from one State to another.

48 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.

security from unwarranted arrest and search, free speech, free assembly, writ of habeas corpus, bearing of arms, and protection from excessive bail and cruel and unusual punishments, apply only to Federal jurisdiction and in reality protect the citizen only against the action of the Federal Government. The only sections protect- ing the personal rights of citizens under ordinary circumstances are the thirteenth amendment, prohibiting involuntary servitude, the fifteenth, protecting the right to vote, and the fourteenth, pro- viding that " No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States ; nor shall any State deprive any person of life, liberty, or property, without due process of law, nor deny any person within its juris- diction the equal protection of the laws."

We are, however, informed by counsel who has examined the cases involved that the fourteenth amendment has had no appreciable effect in protecting personal rights. According to the existing de- cisions, the due-process clause does not guarantee the right of trial by jury,1 nor does it necessitate indictment by grand juries,2 nor has it restrained arbitrary arrests and imprisonment on the part of State governments when men are kidnaped in one State and carried to another.3

Up to 1911 the United States Supreme Court intervened in 55 cases in which the fourteenth amendment was invoked. In 39 of these cases .private corporations were the principal parties. Thirty-two statutes were affected by these decisions, and in only three, concern- ing the civil rights of negroes, were the personal rights of individual citizens involved. With the exceptions involving the rights of negroes in jury cases (e. g., Strauder v. West Virginia, 100 U. S., 303), the fourteenth amendment has not acted to secure or protect personal rights from State encroachment,4 but only to prevent en- croachment on property rights.5 In all the other numerous cases in which the fourteenth amendment was invoked to protect personal rights, the attempt failed.

On the other hand there is abundant evidence of the great protec- tion which it affords corporations and other forms of organized capital. On that point we may quote the statements of Mr. C. W. Collins, of the Alabama bar, who analyzed the decisions of the United States Supreme Court through the October, 1910, term.6

Private corporations are using it as a means to prevent the enforcement of State laws. Since 1891 a majority of cases under the amendment have involved a corporation as the principal party. * * * The increase of this kind of litigation runs parallel to the rise of the trust movement in America. At the 1909-10 term of the court, out of a total of 26 opinions rendered under the amendment 20 involved a corporation as the principal party.

* * * The fourteenth amendment is the easiest of all constitutional meas- ures to invoke. In a country where economic activity is so intense and time so vital an element, it has been grasped as a sure measure of delay, with always the possibility of obtaining affirmative relief. The amendment, though in- tended primarily as a protection to the negro race, has in these latter days be-

1 Maxwell v. Dow, 176 TL S., 581 ; Walker v. Sauvinet, 92 U. S., 90.

2 Hurtaclo v. California, 119 U. S., 516.

s He Pettibone, 12 Idaho, 264 ; 203 U. S., 192 ; Re Moyer, 35 Colo., 150 ; 140 F. R., 870 ; 203 U. S., 221 ; Re Boyle, 6 Idaho, 609.

* See for illustration : Virginia v. Rives. 100 TJ. S., 313 ; Plessy v. Ferguson, 163 U. S., 537 ; Twining v. New Jersey, 211 U. S., 78 ; Brown v. N6w Jersey, 175 U. S., 172.

6 See for illustration: C. M. & St. P. Ry. v. Minnesota, 134 11. S., 418; Cotting v. K. C. Stockyards Co., 183 TJ. S., 79 ; G. C. & S. F. Ry. v. Ellis, 168 U. S., 150. 6 The Fourteenth Amendment and the States, C. W. Collins.

REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 49

come a constitutional guaranty to the corporations that no State action to- ward them can become effective until after years of litigation through the State and Federal courts to the Supreme Court of the United States. The course of the amendment is running away from its originally intended channel (p. 145).

The fourteenth amendment, although a humanitarian measure in origin and purpose, has been within recent years practically appropriated by the corpora- tions. It was aimed at restraining and checking the powers of wealth and privilege. It was to be a charter of liberty for human rights against property rights. The transformation has been rapid and complete. It operates to-day to protect the rights of property to the detriment of the rights of man. It has become the Magna Charta of accumulated and organized capital (p. 137).

It is thus quite clear that the fourteenth amendment not only nas failed to operate to protect personal rights but has operated almost wholly for the protection of the property rights of corporations. These facts taken in conjunction with the many decisions, such as the Lochner case,1 in which the fourteenth amendment has been invoked to annul statutes designed to better conditions of life and work, must constitute just ground for grave concern not only to the workers but to every citizen who values his liberty.

With the "bills of rights" contained in the constitutions of the several States, the situation, as far as the workers are concerned, is somewhat different, since in many jurisdictions these have been used upon numerous occasions to afford substantial protection to them in their personal rights. The workers call attention particularly, how- ever, to the long list of statutes, city ordinances, and military orders abridging freedom of speech and press, which not only have not been interfered with by the courts but whenever tested have almost uniformly been upheld by the State and Federal courts.2 They point also to the grave injuries done to workers individually and collectively by the thousands of arrests which have been made with- out just cause in labor disputes, without relief from either the courts or the executive; to the denial of the right to the writ of habeas corpus upon numerous occasions; to the fact that where, as for ex- ample, in Los Angeles, San Diego, and Fresno (Cal.), Spokane (Wash.), Minot (N. Dak.), Paterson (N. J.), Little Falls (N. Y.), Lawrence (Mass.), Idaho, Colorado, and West Virginia, workers have been grievously injured, brutally treated, or interfered with in the pursuit of their guaranteed rights by other classes of citizens or by officials, the courts have not interfered and the perpetrators have gone unpunished.

On the general question of martial law and habeas corpus a mem- ber of the staff has made an elaborate comparison of the cases aris- ing- from nonlabor disturbances with the cases arising from labor disturbances. It is not necessary, and would require too much space, to recite these cases in full, but among the former may be mentioned the Milligan case, and other cases arising in the State courts of Indi- ana, Illinois, Kentucky, North Carolina, and Wisconsin 3 (all during or immediately following the Civil War), and three cases in the courts of Kentucky, Ohio, and Oklahoma since that time ; 4 among

1 Lochner v. N. Y., 198 U. S., 45.

2 Fox v. Washington, 236 U. S.. 273 ; Fitts v. Atlanta, 121 Ga., 267 ; Ex parte Thomas, 102 Pacific, 19.

3 In re Milligan, 4 Wall. (U. S.), 2; Skeen v. Monkeimer, 21 Ind., 1; Johnson v. Jones, 44 111., 142 ; Corbin v. Marsh, 2 Dur., 193 ; Ex parte Moore, 64 N. C.f 802 ; In re Kemp, 16 Wis., 382.

4 Franks v. Smith, 142 Ky., 232 ; Ohio v. Coit, 8 Ohio, 62 ; Fluke v. Canton, 31 Okla., 718.

38819°— 16 4*

50 BEPORT OF COMMISSION ON INDUSTRIAL RELATIONS.

the latter, i. e., those arising from labor disturbances, are included the cases from Colorado, Idaho, Montana, Pennsylvania, and West Virginia.1 The results of such comparison are summarized in part as follows:

Although uniformly held that the writ of habeas corpus can only be sus- pended by the legislature, in these labor disturbances the executive has in fact suspended or disregarded the writ. In the labor cases the judiciary either disregards the fact that the writ has been suspended by the executive or evades the issue. In nonlabor cases the courts have protested emphatically when the executive attempted to interfere with the writ of habeas corpus.

In many instances in which the military has been in active operation be- cause of nonlabor disturbances, the judiciary has almost without exception pro- tested against the exercise of any arbitrary power and has almost uniformly attempted to limit that power.

In cases arising from labor agitations, the judiciary has uniformly upheld the power exercised by the military, and in no case has there been any pro- test against the use of such power or any attempt to curtail it, except in Mon- tana, where the conviction of a civilian by military commission was annulled.

Finally, it is impossible to imagine a more complete mockery of justice and travesty upon every conception of fair dealing than the innumerable decisions holding unconstitutional wise and salutary laws for the protection of workers, upon the ground that they vio- late the right of contract, even while the workers, whose rights are supposed to be affected, clamor for the maintenance of the statute. The appeal for the protection of the workers' rights in such cases comes invariably from the employers, and is urged against the pro- test of the workers, yet in almost unbroken succession the judges sol- emnly nullify the wisest acts of legislatures on just such specious, self-serving pleas. There are notable cases in which the judges have unmasked the mummery, as, for example, in Holden v. Hardy,2 where it was said:

Although the prosecution in this case was against the employer of labor, who, apparently, under the statute, is the only one liable, his defense is not so much that his right to contract has been infringed upon, but that the act works a peculiar hardship to his employees, whose right to labor as long as they please is alleged to be thereby violated. The argument would certainly come with better grace and greater cogency from the latter class.

There appear to be no reported cases in which the workers have urged that their rights are violated by such restrictive legislation, which in fact invariably originates with them; but the courts con- tinue to hand down decisions " protecting the sacred right of con- tract of the worker," when the only person benefited is the employer, who is thus able to " turn the very Constitution itself into an instru- ment of inequality."

This entire situation is fraught with such grave dangers not only to the workers but to all citizens who value their individual liberty, that the Nation can not be entirely secure until those fundamental rights are affirmatively guaranteed to every citizen of the United States by the Federal Government. It is therefore earnestly recom- mended that Congress forthwith initiate an amendment to the Con- stitution securing these rights against encroachment by Federal, State, or local governments or by private persons and corporations.

Fifth. It is charged that the ordinary legal machinery provides no adequate means whereby laborers and other poor men can secure

1 In re Moyer, 35 Colo.. 159 ; in re Boyle, 6 Idaho, 609 ; In re McDonald. 49 Mont., 455; Com. v. Shortall, 206 Pa., 165; Mays and Nance v. Brown, 71 W. Va., 519; Ex parte Jones, 71 W. Va., 567.

2 169 U, S., 366.

BEPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 51

redress for wrongs inflicted upon them through the nonpayment of wages, through overcharges at company stores, through exorbitant hospital and other fees, fines, and deductions through fraud on the

Eart of private employment offices, loan offices, and installment ouses, and through the " grafting " of foremen and superintendents. The losses to wage earners from these sources are stated to amount each year to millions of dollars and to work untold hardship on a class of men who can ill afford to lose even a penny of their hard- won earnings.

These charges were thoroughly investigated in all parts of the country by an experienced member of the commission's staff.

He cites, for example, that in California, where the situation has been more completely uncovered than elsewhere and where remedies are beginning to be applied, during the year ending June, 1914, 9.621 claims were presented to the commissioner of labor alone. Of these, 7,330 were for nonpayment of wages, of which 4,904 were suc- cessfully settled and $110.912 of unpaid wages was collected. This is believed to have been only a small proportion of the total claims of laborers throughout the State, inasmuch as the number of claims was growing rapidly as the work of the bureau became better known, and because, during a period of only 10 months, over 2,200 claims were presented to the State commission on immigration and hous- ing. The work of handling these claims and making its existence known to laborers throughout the State was just getting well under way, although with a small appropriation and inadequate force, when the collection of wage claims was suddenly checked by a de- cision of 'the State court of appeals1 that the payment-of- wages law was unconstitutional on the ground that since it provided for fine or imprisonment where the wages of laborers were illegally retained, it was in effect a provision for imprisonment for debt.

The investigation in other States revealed equally bad or worse conditions, while in all except a few no efficient means existed by which these claims could be prosecuted. In conclusion, our investi- gator reported :

(a) The existing labor and life conditions of common laborers in this country produce immense numbers of justified labor complaints and claims, involving not only great sums of money in the aggre- gate but untold personal hardship and suffering.

(Z>) The existing public and private legal institutions are utterly inadequate to secure justice to the laborers in the matter of these complaints and claims.

(c) This situation has already created in the laborers distrust of the Government, of employers, and of the well-to-do classes gener- ally, and is one of the contributory causes of the existing industrial unrest.

The measures recommended, which have to do largely with State and local administrations, are discussed on page 89. It is sug- gested, however, that the commission recommend to Congress that, inasmuch as the immigrant laborers, who suffer most largely from these injustices, are ethically and legally wards of the Nation until they become citizens, the Bureau of Immigration of the Federal Department of Labor should be given the authority and necessary

!Nov. 23, 1914.

52 REPORT OF COMMISSION ON INDUSTRIAL EELATIONS.

appropriations to establish, wherever it may seem necessary, in con- nection with its existing offices in all parts of the country, legal aid divisions which would freely and aggressively prosecute these claims and complaints on behalf of the immigrant laborers, and, if there are no constitutional or statutory barriers, on behalf also of Ameri- can citizens.

Sixth. It is charged by the workers that the courts, by the unwar- ranted extension of their powers in the issuance of injunctions, have not only grievously injured the workers individually and collectively upon innumerable occasions but have, by the contempt procedure consequent upon disobedience to such injunctions, deprived the work- ers of the right, fundamental to Anglo-Saxon institutions, to be tried by jury.

This charge is not limited to members of trades-unions, nor to work- ers, but is voiced also by many who have no reason for partisanship. For example, Mr. S. S. Gregory, former president of the American Bar Association, testified before the commission :

These injunctions are based upon the theory that the man carrying on a busi- ness has a certain sort of property right in the good will or the successful con- duct of that business; and that when several hundred or several thousand excited men gather around his premises where he carries his business on and threaten everybody that comes in there to work, and possibly use violence, that that is such an unlawful interference with property right as may be the subject of protection in equity. And that view of the law has been sustained by the courts of practically all the States.

But the great difficulty about this was this, that having enjoined defendants, namely, striking workmen, perhaps from unlawful interference with the busi- ness of the employer, where that unlawful interference consisted in an attack or an assault and battery upon another man, to wit, perhaps a strikebreaker so-called, or one who was hired to take the place of one of the striking work- men, that thereafter the judge who had ordered the injunction and whose authority had been thus defied, was permitted to put the person charged with the breach of that injunction upon trial upon a charge of contempt, really for having committed an unlawful and criminal act.

Now the Constitution has thrown around the prosecution of criminals (the Constitutions, State and Federal) a number of securities. They are entitled to trial by jury ; they are entitled to be confronted by the witnesses who are to testify against them ; they are entitled to be heard by counsel.

But none of those guaranties except perhaps the right to be heard by counsel is secured in contempt proceedings ; and the obvious wisdom of permitting 12 men drawn from the body of the people to pass on questions of fact — men who are supposed to be prejudiced neither for nor against the parties, who know nothing about the case until they are sworn in the jury box — has so far com- mended itself to the wisdom of legislators and jurists to such a degree that it has become a permanent feature of our jurisprudence ; and to provide that the court may proceed against parties for contempt, where the conduct charged against them is criminal, is really an evasion of the constitutional guaranties and a plain attempt to commit to equity jurisdiction over matters which it has been decided over and over again by all the courts that it has no jurisdiction with respect to, namely, the administration of the criminal law.

For instance, I might receive, as I leave the room of this tribunal to-day, a threatening letter from somebody saying they were going to kill me for some- thing I had said, or had not said, before the commission. Now, that involves personal loss possibly to my wife or those dependent upon me ; but no court of equity would listen for a moment to a bill I should file saying "A B " or some other blackhand gentleman had threatened to kill me, or if filed by anybody dependent upon me, and therefore there should be an injunction to prevent him from killing me. That would be an absurdity — a legal absurdity ; and none the less is it so where a man is enjoined from committing acts of violence in a strike to try him for contempt, without a trial by jury. And that has been an injustice that has rankled in the minds of everybody that has been a victim of it, and justly so.

REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 53

Sir Charles Napier says, "People talk about agitators, but the only real agitator is injustice ; and the only way is to correct the injustice and allay the agitation."

Judge Walter Clark, chief justice of the Supreme Court of North Carolina, also testified before the commission as follows:

Chairman WALSH. Have you studied the effect of the use of injunctions in labor disputes generally in the United States, as a student of economics and the law?

Judge CLAKK. I do not think they can be justified, sir, * * * [Their effect] has been, of course, to irritate the men, because they feel that in an Anglo-Saxon community every man has a right to a trial by jury, and that to take him up and compel him to be tried by a judge is not in accordance with the principles of equality, liberty, and justice.

Chairman WALSH. Do you think that has been one of the causes of social unrest in the United States?

Judge CLAKK. Yes, sir ; and undoubtedly will be more so, unless it is remedied.

It is not within the province of the commission to attempt to decide the question of whether or not the issuance of such injunctions is an unwarranted extension upon the part of the courts ; but the weighty opinions cited above are very impressive and are convincing that the workers have great reason for their attitude. It is known, however, from the evidence of witnesses and from the information collected by the staff, that such injunctions have in many cases inflicted grievous injury upon workmen engaged in disputes with their employers, and that their interests have been seriously prejudiced by the denial of jury trial, which every criminal is afforded, and by trial before the judge against whom the contempt was alleged.

It is felt to be a duty, therefore, to register a solemn protest against this condition, being convinced of its injustice not only by reason of the evil effects which have resulted from this procedure, but by virtue of a conviction that no person's liberty can safely be decided by any one man, particularly when that man is the object of the alleged contempt.

The Clayton Act undoubtedly contains many features which will relieve this situation as far as the Federal courts are concerned, but it seems clear that it does not contain anything like a complete solu- tion of the existing injustices, even for the limited field of Federal jurisdiction.

Seventh, it is charged by the representatives of labor that laws de- signed for the protection of labor in workshops and mines and on railroads are not effectively enforced, except in a few States. This is a matter of considerable moment to labor, but it is, after all, re- garded by the workers, since it concerns chiefly only their safety and comfort, as ranking far below the other matters discussed, which in- volve primarily their liberty and rights as freemen and, secondarily, their only means of bettering their condition. Moreover, it is almost entirely a matter of administration, which is discussed in detail else- where in the report. With the great attention which the method of administration is now receiving, not only from labor organizations but from civic organizations, and lately even from employers' asso- ciations, it is likely to reach a satisfactory stage before very long.

Eighth, it is charged that in cases involving industrial questions, the workers are liable to great injustice by reason of the fact that in many localities they are excluded from juries either by the qualifica- tions prescribed (usually payment of property tax) or by the method of selection.

54 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.

In California, for example, it was testified that grave injustice had heen done in many cases because the juries (composed only of property owners, for the most part employers) were greatly prej- udiced against the defendants, whose program, if successful, would directly or indirectly affect the interests of the jurors.

Similarly, in Cook County, 111., which includes Chicago, it was found by a committee of the Lawyers' Association of Illinois that although the system of selection by commissioners was intended to produce an impartial selection from all classes of the community, out of probably 1,000 different occupations in Cook County the commissioners confine the selection of the great bulk of the jurors to the following 10 occupations: Managers, superintendents, fore- men, presidents and owners of companies, secretaries of companies, merchants, agents, salesmen, clerks, and bookkeepers.

To quote from the report :

There are 76,000 mechanics affiliated with the Building Trades Council in Chicago, yet in the 3,440 jurors investigated by your committee there are only 200 mechanics drawn from the 76,000 in the Building Trades Council.

There are about 200,000 mechanics belonging to the different labor organiza- tions in Chicago, yet there are only about 350 mechanics drawn as jurors by the commissions in the 3,440 investigated, or about 10 per cent, when the per- centage ought to be about 70 per cent.

The report of the committee adds:

Another comparison will show that out of these 3,440 jurors the commission took only 314 jurors from 130 different occupations, or an average of less than 3 jurors from each occupation, while from the 10 favored occupations mentioned above, 1,723 jurors were picked, or the grossly excessive average of 172 from each of said 10 occupations.1

A similar situation was disclosed by the investigations of members of the staff in Paterson, N. J.

Finally, there is the very grave situation where, by putting aside the legal and customary methods, the jury is chosen by the sheriff or other officers, who may be unduly influenced by either party to the case. Such a situation, inimical in the extreme to the interests of the workers, has been conclusively proved to have existed in Colo- rado and in other mining districts.

In the belief that the right to trial by an impartial jury is neces- sary for the maintenance of justice, and that such impartiality can be secured only by including all classes of citizens, it is suggested that the commission recommend that Federal and States statutes should be passed providing for the creation of juries by drawing the names from a wheel, or other like device, which shall contain the name of every qualified voter in the district from which the jury is to be selected. The adoption of this method in Missouri and other States has resulted uniformly in securing impartial juries of much higher grade, and has also eliminated almost entirely the sources of corruption attending the selection of juries.

Ninth, it is charged by the workers that, during strikes, innocent men are in many cases arrested without just cause, charged with fictitious crimes, held under excessive bail, and treated frequently with unexampled brutality for the purpose of injuring the strikers and breaking the strike.

In support of this charge, the commission has been furnished with evidence showing that in a number of recent strikes large numbers

1 Eternal Vigilance is the Price of Liberty. Report of committee to the Lawyers' Association of Illinois, 1914.

KEPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 55

of strikers were arrested, but that only a small number were brought to trial and relatively few were convicted of any serious offense; that those arrested were, as a rule, required to give heavy bail, far beyond their means, or were detained without trial until their effec- tiveness as strikers was destroyed; and that in many cases strikers were brutally treated by the police or by special deputies in the pay of the companies. A number of these strikes have been investigated by public hearings of the commission, by members of its staff, or by other departments of the Federal Government. In each of the strikes investigated the charges as made were in essentials substantiated.

In Paterson, N". J., which was investigated with unusual thorough- ness and which, because of its size and its location in the most densely populated section, might be considered likely to be free from such abuses, it was found that during the strike of the silk workers 2,238 arrests, charging unlawful assembly or disorderly conduct, were made, and that in all there were 300 convictions in the lower courts. Men arrested for unlawful assembly were held in bail of $500 to $5,000. The right of trial by jury was generally denied. Men were arrested for ridiculous reasons, as, for example, for stand- ing on the opposite side of the street and beckoning to men in the mills to come out. This was the allegation on which the charge of unlawful assembly was placed against four men, and for which they were sent to jail in default of $500 bail, and, although never indicted, the charges still stand against them as a bar to their rights as citizens and voters. Men were fined arbitrarily, as in the case of one who was fined $10 for permitting strikers to sit on a bench in front of his house. Not more than $25 worth of damage was done during the entire strike, involving 25,000 workers, and there was no actual violence or attempt at violence on the part of the strikers during the entire strike. Under such conditions the editor of a local paper was arrested, charged with criminal libel, for comparing the conditions in Paterson with the rule of Cossacks; and four men who sold the paper on the streets also were arrested. The editor was tried and convicted in the lower court, but the verdict was set aside by the Supreme Court, while the four men, after being held several days in default of bail, were released without trial.

It is impossible to summarize the activities of the police and au- thorities during this strike better than by referring to the testimony of two of the leading citizens of Paterson, who said that they had resolved to get rid of the " agitators " and were ready to go beyond the law to accomplish their purpose.1 A full appreciation of the

1 In a letter recently received from one of these witnesses his position is reiterated with a striking illustration of inability to comprehend the fundamental principles of American Government and the limitations imposed upon the power of one class to oppress another :

" Another point which is only partially covered in my testimony is in regard to what Chairman Walsh endeavored to get me and various other citizens to admit would be an infraction of free speech and personal liberty if the agitators were prevented from coming into Paterson or not permitted to hold their meetings here. The United States Govern- ment puts up the bars at Ellis Island against certain classes of ' undesirable citizens,' and as far as I have been able to learn the Government's action in debarring from this country the immoral and criminal class and those who would become a charge on the country meets with the approval of the Americans generally. If it is proper and right for the United States Government to say who shall and who shall not enter this country I think it is equally proper for the city of Paterson to debar undesirable citizens who are coming here to sow discontent and cause trouble in the city. New York City has had a dead line at Fulton Street for a great many years and the police authorities have pre- vented certain persons from crossing that line, and this has been considered a proper exercise of the police powers of the city. I can see no difference between this action on the part of the New York authorities and similar action which was desired by many of our citizens in Paterson in regard to the I. W. W. agitators."

56 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.

injustice committed during this strike can be secured only by read- ing the testimony taken at Paterson and the reports of the com- mission's investigators based upon the records of the police and the courts.

In Los Angeles and Indianapolis essentially the same conditions were found by the commission, while in McKees Rocks, Bethlehem, and Westmoreland County, Pa., Lawrence, Mass., and Calumet, Mich., investigated by the Federal Department of Labor, essentially the same conditions of injustice were found to prevail. The condi- tions in West Virginia and Colorado, which were almost beyond belief and had the additional feature of military rule, will be dis- cussed elsewhere. >

An examination of the entire mass of evidence is convincing that such conditions are in fact typical of strikes which are serious enough to arouse the authorities, especially where the workers are unor- ganized before the strike and therefore lacking in influence in the community.

Tenth, it is asserted by the workers that in many localities during strikes not only is one of the greatest functions of the State, that of policing, virtually turned over to employers or arrogantly assumed by them, but criminals employed by detective agencies and strike- breaking agencies are clothed, by the process of deputization, with arbitrary power and relieved of criminal liability for their acts.

Only three such cases are cited here, though the commission has in its records evidence regarding a considerable number. At Roosevelt, N. J., it was found by the commission's investigators and later con- firmed in court that the office of sheriff was virtually turned over to one Jerry O'Brien, the proprietor of a so-called detective agency; that he imported a number of men of bad reputation and clothed them with the authority of deputies; and that on January 19, 1915, these criminals, without provocation, wantonly shot and killed 2 men and wounded 17 others who were on strike against the American Agricultural Chemical Co., which paid and armed the deputies.

Similarly, during the Calumet, Mich., strike, about 230 men were imported from detective agencies in eastern cities, 52 under pay from the county board of supervisors, which was made up almost entirely of copper company officials. The actions of these men were so wantonly brutal that they were censured by the local judge, but they went unchecked in their career of arrogant brutality, which culminated in their shooting, without provocation, into a house in which women and children were, killing two persons and wounding two others.

The recent strike in Bayonne, N. J., threw more light on these armed guards. During this strike one of the New York detective agencies furnished for the protection of the Tidewater Oil Co.'s plant men who were so vicious and unreliable that the officials of the company themselves say that their presence was sufficient to incite a riot. These men shot without provocation at anyone or everyone who came within sight, and the killing of at least three strikers in Bayonne and the wounding of many more is directly chargeable to these guards.

The character of the men who make a specialty of this kind of employment has never been more frankly described than in the testi- mony of Mr. L. M. Bowers, chairman of the board of directors of

REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 57

the Colorado Fuel & Iron Co., who repeatedly referred to those in the employ of that company as " cutthroats," against whose charac- ter, he stated, he had frequently protested.

According to the statement of Berghoff Bros. & Waddell, who style themselves "labor adjusters" and who do a business of strike breaking and strike policing, there are countless men who follow this business at all times. They say they can put 10,000 armed men into the field inside of 72 hours. The fact that these men may have a criminal record is no deterrent to their being employed, and no check can be made on the men sent out by these companies on hurry calls.

When the question of providing the bail for these men arose as a result of the killing of the strikers at Bayonne, the company attor- ney actually declined to furnish bail for them on the ground that they were thugs of whom the company knew nothing and that it would not be responsible for their appearance.

In view of the endless crimes x committed by the employees of the so-called detective agencies, who have been permitted to usurp a func- tion that should belong only to the State, it is suggested that the com- mission recommend to Congress either that such of these agencies as may operate in more than one State, or may be employed by cor- porations engaged in interstate commerce, or may use the mails, shall be compelled to take out a Federal license, with regulations to insure the character of their employees and the limitation of their activities to the bona fide business of detecting crime, or that such agencies shall be utterly abolished through the operation of the taxing power or through denying them the use of the mails.

Eleventh. It is charged that in many localities the entire system of civil government is suspended during strikes and there is set up in its place a military despotism under so-called martial law.

In West Virginia, for example, during the strike of coal miners in 1912 martial law was declared and the writ of habeas corpus denied, in the face of a direct prohibition by the constitution of the State, in spite of the fact that the courts were open and unobstructed, and without reference to the protests of the strikers. Persons out- side the military zone were arrested, dragged before military courts, tried and sentenced under so-called martial law. Upon appeal to the civil courts of the State the actions of the military authorities were upheld, in spite of the oath of the judges to support the consti- tution, which in terms provided " that no citizen, unless engaged in the military service of the State, shall be tried or punished by any military court for any offense that is cognizable by the civil courts of the State," and, further, " The privilege of the writ of habeas corpus shall not be suspended."

The decisions of the court stirred Hon. Edgar M. Cullen, a former chief judge of the Court of Appeals of New York — a witness before this commission and recognized as unusually conservative and care- ful in his utterances — to make the following statements:

Tinder these decisions the life and liberty of every man within the State would seem to be at the mercy of the governor. He may declare a state of war, whether the facts justify such a declaration or not, and that declaration is con- clusive upon the courts.

1 See the reports of congressional committees which investigated the Homestead strike, the Pullman strike, and the recent strikes in Colorado and West Virginia.

58 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.

If he declares only a portion of the State to be in a state of war, under the decision in the second case a person in any other part of the State, however distant, may be arrested and delivered to the military authorities in the martial zone, and his fate, whether liberty or life, depends on the action of a military commission, for I know of no principle which authorizes a military commission to impose the punishment of imprisonment that would not equally authorize the imposition of the punishment of death. Under that doctrine, should armed resistance to the Federal authority justifying a suspension of the writ of habeas corpus occur in Arizona a citizen could, on a charge of aiding the insurrection, be dragged from his home in Maine and delivered to the military authorities in Arizona for trial and punishment.

The remedy suggested by the learned court, of impeachment by the legisla- ture, would hardly seem of much efficacy. By impeachment the governor could only be removed from office. He could not be further punished, however flagrant his opposition may have been, except by a perversion of the criminal law, for if the doctrine of the courts is correct he would not have exceeded his legal power.

The governor might imprison or execute the members of the legislature, or even the learned judges of the supreme court themselves.1

The attention of the commission has also been directed by wit- nesses to the repeated occurrence of similar or, if possible, more ex- treme conditions in Colorado and Idaho, which testimony has been confirmed either by the investigations and hearings of the commis- sion or by the reports of responsible officials of the Federal Govern- ment. In Colorado martial law has been in effect ten times since 1894. Similarly in Idaho martial law has been in effect on several occasions. In both of these States not only have strikers been impris- oned by military courts, but thousands have been held for long periods in u bull pens," hundreds have been forcibly deported from the State, and so arrogant have the troops become upon occasions that they have refused to obey the mandates of the civil courts, although the constitutions of both States provide that the military shall always be in strict subordination to the civil power.2 In fact, on one occasion at least^ when orders of the court for the production of prisoners had been ignored and the military officers were sum- moned before the court, they surrounded the courthouse with in- fantry and cavalry, came into court accompanied by soldiers with fixed "bayonets, and stationed a gatling gun in a position command- ing the courthouse.2 During the recent strike in Colorado the mili- tary was supreme and wielded its arbitrary power despotically and at times brutally.

i . Twelfth, it is charged by the workers that in some localities the control by the employers of the entire machinery of government is so great that lawless acts on the part of agents of the employers go imheeded and unpunished, while vindictive action against the leaders of the strike is accomplished by methods unparalleled in civilized countries. It is seldom that evidence sufficient to substan- tiate such sweeping charges can be secured, even if the charges are true; but in the testimony and documents which have been gathered by the commission there seems to be conclusive proof that in one State at least, Colorado, such a condition of complete domination of the State government has prevailed and, it would seem, does still prevail.

1 Address before New York State Bar Association, 1014. * Constitution of Colorado I, .">::. Constitution of Idaho I, 12.

8 See report of U.'S. Commissioner of Labor, Carroll 1). \Vright, on Labor Disturbances in Colorado for a detailed history of events up to and including 1904.

KEPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 59

First, Hon. Frederick Farrar, attorney general of Colorado, tes- tified in substance as follows:

As a result of a personal investigation into conditions in Las Animas and Huerfano Counties, Colo., in the summer of 1913, a very perfect political machine was found to exist. The head of this political machine is the sheriff, and it is conducted along lines very similar to those maintained by corrupt political organizations. It has a system of relief in case of need, and a system of giving rewards to its people. It was difficult to determine which was cause and which effect, but there was undoubtedly some relationship between the political machine and the coal companies. Witness believes the machine ex- isted through its power as a machine over the coal companies, but has no knowledge of any money being used. His investigation did not lead into question of whether the machine controlled coroners' juries in cases of death from accidents in mines, etc., or of whether mining laws were obeyed.

Second, Hon. Thomas M. Patterson, formerly United States Sen- ator, testified :

The men employed by the large mining companies have been used to gain political power. There is no doubt that it is the deliberate purpose of these companies to control the officials of the counties in which they are operating, and to have a great influence in the selection of judges and in the constitution of the courts. In this purpose they have been successful. Election returns from the two or three counties in which the large companies operate show that in the precincts in which the mining camps are located the returns are nearly unanimous in favor of the men or measures approved by the companies, regardless of party. The companies know whom they want elected, and do not hesitate, judging from the results, to make it known.

Third, State Senator Helen Ring Robinson testified in substance as follows;

As a member of the committee of privileges and elections, which investi- gated conditions in Las Animas County, she listened for three weeks to the story of political conditions there. Long before the strike was ordered she realized that the industrial situation was hopeless because the political situ- ation appeared hopeless.

" I found that while the counties of Las Animas and Huerfano are geographi- cally a part of Colorado, yet industrially and politically they are a barony or a principality of the Colorado Fuel & Iron Co. Such situations, of course, must mean a knitting together of the industrial and political situation, and I don't wish to say that the Colorado Fuel & Iron Co. have limited their efforts to Las Animas and Huerfano Counties. If that were so, the situation in the State itself would not be so seriously affected by them; but they have in time past reached out beyond the boundaries of their principality and made and unmade governors; men who desire positions of high place in Colorado would be very loath to antagonize them whether they lived in Las Animas or Routt County, or in Denver, and it would not matter in that case to which political party they belonged."

Attention should be called to another aspect of the control of the machinery of government by one class for the oppression of another. The scales of justice have in the past swung far in one direction- legislatures, courts, and administrative officers under the domination of corporations have grievously wronged the workers. There is grave danger that, if the workers assert their collective power and secure the control of government by the massing of their numbers, the scales may swing equally far in the other direction and every act of injustice, every drop of blood, every moment of anguish, be repaid in full, not upon some obscure and humble worker, but upon those who now glory in the sense of boundless power and security.

In the few cases in which the workers have momentarily secured control of local situations, they have followed the examples that

60 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.

have been set and have in many instances used their power unjustly and oppressively. In Colorado, for example, during the strikes in the metal mines, where the Western Federation of Miners controlled a camp, they followed the example of the operators and deported persons whom they deemed to be obnoxious. Similarly, during the fight between two factions of the Western Federation of Miners in Butte, Mont., the dominant faction forced several persons to leave, the city and set aside the ordinary processes of law. It is inevitable that this should be the case, and it is remarkable only that the masses of workers, even when acting as mobs, show greater self-restraint than do organizations made up of business men ordinarily regarded as upright, respectable, and admirable citizens.

For the security and honor of the Nation the scales of justice must be brought to a stable equilibrium. This can be accomplished only by a realization by every citizen that every act of injustice, whether done in far-off States or at one's very door, whether affect- ing a friend or an enemy, is in its consequences an invasion of one's own security and a menace to one's liberty.

There is reason, however, to expect that no sober and well-consid- ered action for the removal of these abuses will be taken, and one may, without being an alarmist, share the fears expressed by Judge Seymour D. Thompson :x

The dangerous tendencies and extravagant pretensions of the courts which I have pointed out ought not to be minimized, but ought to be resisted. Their resistance ought not to take place as advised by Jefferson, by " meeting the invaders foot to foot," but it ought to take place under the wise and moderate guidance of the legal profession, but the danger is that the people do not always so act. In popular governments evils are often borne with stolid patience until a culminating point is reached, when the people burst into sudden frenzy and redress their grievances by violent and extreme measures, and even tear down the fabric of government itself. There is danger, real danger, that the people will see at one sweeping glance that all the powers of their Govern- ment, Federal and State, lie at the feet of us lawyers, that is to say, at the feet of a judicial oligarchy ; that those powers are being steadily exercised in behalf of the wealthy and powerful classes, and to the prejudice of the scattered and segregated people; that the power thus seized includes the power of amend- ing the Constitution; the power of superintending the action, not merely of Congress, but also of the State legislatures ; the power of degrading the powers of the two Houses of Congress, in making those investigations which they may deem accessory to wise legislation, to the powers which an English court has ascribed to British colonial legislatures; * * holding that a venal legis- lature, temporarily vested with power, may corruptly bargain away those essential attributes of sovereignty and for all time; that corporate franchises bought from corrupt legislatures are sanctified and placed forever beyond recall by the people ; that great trusts and combinations may place their yokes upon the necks of the people of the United States, who must groan forever under the weight, without remedy and without hope ; that trial by jury and the ordinary criminal justice of the States, which ought to be kept near the people, are to be set aside, and Federal court injunctions substituted therefor; that those injunctions extend to preventing laboring men quitting their employ- ment, although they are liable to be discharged by their employers at any time, thus creating and perpetuating a state of slavery. There is danger that the people will see these things all at once; see their enrobed judges doing their thinking on the side of the rich and powerful; see them look with solemn cynicism iipon the sufferings of the masses, nor heed the earthquake when it begins to rock beneath their feet ; see them present a spectacle not unlike that of Nero fiddling while Rome burns. There is danger that the people will see all this at one sudden glance, and that the furies will then break loose and that all hell will ride on their wings.

1 Address before State Bar Association of Texas, 1896.

EEPOET OF COMMISSION" ON" INDUSTEIAL KELATIONS. 61

It is true that Judge Thompson spoke 19 years ago, but the real clanger lies in the fact that during that period we have done little to remove the evils cited by him, and that there is even reason to fear that we have simply moved nearer to the danger line instead of away from it.

In considering the action which needs to be taken it has been urged by some that the end to be achieved is to place personal rights on a parity w^ith property rights. It is necessary to render a firm protest and warning against the acceptance of such an ideal. The establish- ment of property rights and personal rights on the same level can leave only a constant and ever-growing menace to our popular insti- tutions. With the acceptance of such an ideal our democracy is doomed to ultimate destruction. Personal rights must be recognized as supreme and of unalterable ascendency over property rights.

Relief from these grave evils can not be secured by petty reforms. The action must be drastic and directed at the roots from which these evils spring.

With full recognition of the gravity of the suggestions, it seems necessary to urge the commission to make the following recom- mendations :

1. That Congress forthwith initiate an amendment to the Consti- tution providing in specific terms for the protection of the personal rights of every person in the United States from encroachment by the Federal and State Governments and by private individuals, asso- ciations, and corporations. The principal rights which should be thus specifically protected by the' power of the Federal Government are the privilege of the writ of habeas corpus, the right to jury trial, to free speech, to peaceful assemblage, to keep and bear arms, to be free from unreasonable searches and seizures, to speedy public trial, and to freedom from excessive bail and from cruel and unusual pun- ishments.

2. That Congress immediately enact a statute or, if deemed neces- sary, initiate a constitutional amendment, specifically prohibiting the courts from declaring legislative acts unconstitutional.

3. That Congress enact that in all Federal cases where the trial is by jury, all qualified voters in the district shall be included in the list from which jurors are selected, and that they shall be drawn by the use of a wheel or other device designed to promote absolute im- partiality.

4. That Congress drastically regulate or prohibit private detective agencies doing business in more than one State, employed by a com- pany doing an interstate business, or using the mails in connection with their business. Such regulation, if it is feasible, should include particularly the limitation of their activities to the bona fide func- tions of detecting crime, and adequate provision should be made for the rigid supervision of their organization and personnel.

4. DENIAL, OF THE RIGHT OF ORGANIZATION.

The previous discussion of the'causes of industrial unrest has dealt with the denial of certain fundamentals to which the workers believe they have natural and inalienable rights, namely, a fair distribution of the products of industry, the opportunity to earn a living, free access to unused land and natural resources, and just treatment by

62 EEPOET OF COMMISSION OX INDUSTRIAL KELATIONS.

legislators, courts, and executive officials. A more serious and funda- mental charge is, however, contained in the allegation by the workers that in spite of the nominal legal right which has been established by a century-long struggle, almost insurmountable obstacles are placed in the way of their using the only means by which economic and political justice can be secured, namely, combineo^ action through vol- untary organization. The workers insist that this right of organiza- tion is fundamental and necessary for their freedom, and that it is inherent in the general rights guaranteed every citizen of a democ- racy. They insist that " people can free themselves from oppression only by organized force. No people could gain or maintain their rights or liberties acting singly, and any class of citizens in the State subject to unjust burdens or oppression can gain relief only by combined action."

The demand for organization and collective action has been mis- understood, it is claimed, because of the belief among a large number of citizens that its purpose was simply to secure better wages and better physical conditions. It has been urged., however, by a large number of witnesses before the commission that this is a complete misconception of the purposes for which workers desire to form organizations. It has been pointed out with great force and logic that the struggle of labor for organization is not merely an attempt to secure an increased measure of the material comforts of life, but is a part of the age-long struggle for liberty; that this struggle is sharpened by the pinch of hunger and the exhaustion of body and mind by long hours and improper working conditions ; but that even if men were well fed they would still struggle to be free. It is not denied that the exceptional individual can secure an economic suffi- ciency either by the sale of his unusual ability or talent or by syco- phantic subservience to some person in authority, but it is insisted that no individual can achieve freedom by his own efforts. Simi- larly, while it is admitted that in some cases exceptional employers treat their employees with the greatest justice and liberality, it is held to be a social axiom that no group of workers can become free except by combined action, nor can the mass hope to achieve any material advance in their condition except by collective effort.

Furthermore, it is urged by the representatives of labor that the efforts of individuals who are bent upon bettering their own condi- tion without reference to their health or to the interests of others directly injure each of their fellow workers and indirectly weaken the whole fabric of society.

It is also pointed out that the evolution of modern industry has greatly increased the necessity for organization on the part of wage earners. While it is not admitted that the employer who has only one employee is on an economic equality with the person who is employed by him, because of the fact that the employer controls the means of livelihood, which gives him an almost incalculable advan- tage in an}' bargain, nevertheless this condition of inequality is held to have been enormously increased by the development of corpora- tions controlling the livelihood of hundreds of thousands of em- ployees and by the growth of employers' associations whose members act as a unit in questions affecting their relations with employees.

There have been many able and convincing expositions of this belief by witnesses before the commission, but there is no other which

BEPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 63

seems to have so completely covered the entire field as the testimony of Mr. Louis D. Brandeis, who, as he stated, has studied this problem from the standpoint both of employers and of employees :

My observation leads me to believe that while there are many single things — single causes — contributing causes to unrest, that there is one cause which is fundamental, and it is the necessary conflict between — the contrast between — our political liberty and the industrial absolutism.

We are as free politically, perhaps, as it is possible for us to be. Every man has his voice and his vote, and the law has endeavored to enable, and has suc- ceeded practically in enabling, him to exercise his political franchise without fear. He, therefore, has his part, and he certainly can secure an adequate part of the government of the country in all of its political relations — in all rela- tions which are determined by legislation or governmental administration. On the other hand, in dealing with industrial problems the position of the ordinary worker is exactly the reverse. And the main objection, as I see it, to the large corporation is that it makes possible— and in many cases makes in- evitable— the exercise of industrial absolutism. It is not merely the case of the individual worker against employer, which, even if he is a reasonably sized employer, presents a serious situation calling for the interposition of a union to protect the individual. But we have the situation of an employer so potent, so \vell organized, with such concentrated forces and with such ex- traordinary powers of reserve and the ability to endure against strikes and other efforts of a union, that the relatively loosely organized masses of even strong unions are unable to cope with the situation.

We are dealing here with a question not of motive, but of condition. Now, the large corporations and the managers of the large corporations — of the powerful corporations — are probably, in a large part, actuated by motives just the same as an employer of one-tenth of their size. Neither of them, as a rule, wishes to have his liberty abridged ; but the smaller concern usually comes to the conclusion that it is necessary that it should be where there is an im- portant union found. But when you have created a great power, when there exist these powerful organizations who can afford — not only can successfully summon forces from all parts of the country — to use tremendous amounts of money in any conflict to carry out what they deem to be their business prin- ciples, you have necessarily a condition of inequality between the two con- tending forces. The result is that contests, doubtless undertaken with the best of motives and with strong convictions of what is for the best interests not only of the company but of the community, leads to absolutism. In all cases of these large corporations the result has been to develop a benevolent abso- lutism— an absolutism all the same ; and it is that which makes the great corpo- ration so dangerous. It is because you have created within the State a state so powerful that the ordinary forces existing are insufficient to meet it.

Now, to my mind the situation of the worker that is involved — and I noted, Mr. Chairman, that when you put the question you put the question of physical condition — unrest, in my mind, never can be removed, and, fortunately never can be removed by the mere improvement of the physical and material con- ditions of the working man. If it were we should run great risk of improving their material conditions and reducing their manhood. We must bear in mind all the time that however much we may desire material improvement and must desire it for the comfort of the individual, we are a democracy ; and that we must have above all things men ; and it is the development of manhood to which any industrial and social system must be directed. We are committed not only to social justice in the sense of avoiding things which bring suffering and harm and unequal distribution of wealth, but we are committed primarily to democracy, and the social justice to which we are headed is an incident of our democracy, not an end itself. It is the result of democracy, but de- mocracy we must have. And, therefore, the end to which we must move is a recognition of industrial democracy as the end to which we are to work, and that means this: It means that the problems are not any longer, or to be any longer, the problems of the employer. The problems of his business — it is not the employer's business. The union can not shift upon the employer the responsibility for the conditions, nor can the employer insist upon solving, according to his will, the conditions which shall exist ; but the problems which exist are the problems of the trade ; they are the problems of the employer and the employee. No possible degree of profit sharing, however liberal, can meet

64 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.

the situation. That would be again merely dividing the proceeds of business. That might do harm or it might do good, dependent on how it is applied.

No mere liberality in the division of the proceeds of industry can meet this situation. There must be a division not only of the profits, but a division of the responsibilities; and the men must have the opportunity of deciding, in part, what shall be their condition and how the business shall be run. They also, as a part of that responsibility, must learn that they must bear the results, the fatal results, of grave mistakes, just as the employer. But the right to assist in producing the results, the right, if need be, the privilege of making mistakes, is a privilege which can not be denied to labor, just as we must insist on their sharing the responsibilities for the result of the business.

Now, to a certain extent we get that result — are gradually getting it — in smaller businesses. The grave objection to the large business is that almost inevitably, from its organization, through its absentee stockholdership, through its remote directorship, through the creation practically of stewards to take charge of the details of the operation of the business and coming into direct relation with labor, we lose that necessary cooperation which our own aspira- tions— American aspirations — of democracy demand. And it is in that, in my opinion, that we will find the very foundation of the unrest; and no matter what is done with the superstructure, no matter how it may be improved one way or the other, unless we reach that fundamental difficulty, the unrest will not only continue, but in my opinion will grow worse.

It is very significant that out of 230 representatives of the interests of employers, chosen largely on the recommendations of their own organizations, less than half a dozen have denied the propriety of collective action on the part of employees. A considerable number of these witnesses have, however, testified that they denied in prac- tice what they admitted to be right in theory. A majority of such witnesses were employers who in the operation of their business maintained what they, in accordance with common terminology, called the " open shop." The theory of the " open shop," according to these witnesses, is that workers are employed without any refer- ence to their membership or nonmembership in trade unions; while, as a matter of fact, it was found upon investigation that these em- ployers did not, as a rule, willingly or knowingly employ union men. Nevertheless, this is deemed by the commission to be a minor point. The " open shop," even if union men are not discriminated against, is as much a denial of the right of collective action as is the " anti union shop." In neither is the collective action of employees permitted for the purpose of negotiating with reference to labor con- ditions. Both in theory and in practice, in the absence of legisla- tive regulation, the working conditions are fixed by the employer.

It is evident, therefore, that there can be at best only a benevolent despotism where collective action on the part of the employees does not exist.

A great deal of testimony has been introduced to show that em- ployers who refuse to deal collectively with their workmen do in fact grant audiences at which the grievances of their workmen may be presented. One is repelled rather than impressed by the insistence with which this idea has been presented. Every tyrant in history has on stated days granted audiences to which his faithful subjects might bring their complaints against his officers and agents. At these audiences, in theory at least, even the poorest widow might be heard by her sovereign in her search for justice. That justice was never secured under such conditions, except at the whim of the tyrant, is sure. It is equally sure that in industry justice can never be attained by such a method.

REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 65

The last point which needs to be considered in this connection is the attitude frequently assumed by employers that they are per- fectly willing to deal with their own employees collectively, but will resist to the end dealing with any national organization, and resent the intrusion of any persons acting for their employees who are not members of their own labor force. In practice these statements have been generally found to be specious. Such employers as a rule op- pose any effective form of organization among their own employees as bitterly as they fight the national unions. The underlying motive of such statements seems to be that as long as organizations are un- supported from outside they are ineffective and capable of being crushed with ease and impunity by discharging the ringleaders. Similarly, the opposition to the representation of their employees by persons outside their labor force seems to arise wholly from the knowledge that as long as the workers' representatives are on the pay roll they can be controlled, or, if they prove intractable they can be effectually disposed of by summary dismissal.

To suggest that labor unions can be effective if organized on less than a national scale seems to ignore entirely the facts and trend of present-day American business. There is no line of organized in- dustry in which individual establishments can act independently. Ignoring for the time the centralization of control and ownership, and also the almost universal existence of employers' associations, the mere fact of competition would render totally ineffective any or- ganization of employees which was limited to a single establishment. Advance in labor conditions must proceed with a fair degree of uni- formity throughout any line of industry. This does not indeed re- quire that all employees in an industry must belong to a national organization, for experience has shown that wherever even a con- siderable part are union members, the advances which they secure are almost invariably granted by competitors, even if they do not employ union men, in order to prevent their own employees from organizing.

The conclusions upon this question, however, are not based upon theory, but upon a thorough investigation of typical situations in which the contrast between organization and the denial of the right of organization could best be studied. The commission has held public hearings and has made thorough investigations in such in- dustrial communities as Paterson, N. J., Los Angeles, Cal., Lead, S. Dak., and Colorado, where the right of collective action on the part of employees is denied. These investigations have shown that under the best possible conditions, and granting the most excellent motives on the part of employers, freedom does not exist either politically, industrially, or socially, and that the fiber of manhood will inevitably be destroyed by the continuance of the existing situ- ation. Investigations have proved that although the physical and material conditions may be unusually good, as, for example, in Lead, S. Dak., they are the price paid for the absolute submission

I of the employees to the will of the employing corporation. Such conditions are, moreover, shown by the hearings of the commission and by the investigations of its staff to be unusual. Los Angeles, for example, although exceptionally endowed in location, climate, and natural resources, was sharply criticized for the labor conditions 38819°— 16 5*

66 HEPOET OF COMMISSION ON INDUSTRIAL RELATIONS.

which had developed during its " open shop " regime even by Mr. Walter Drew, representing several of the largest associations which contend for the "open shop." It is significant that the only claim ordinarily made for the conditions in such establishments or locali- ties is that " they are as good as are secured by the union." As a matter of fact, there are few establishments which make this boast, and in the majority the conditions were found to be far below any acceptable standards.

The commission has also, through public hearings and the inves- tigations of its staff, made a thorough and searching investigation of the conditions in those industries and establishments where collective action, through the medium of trade unions and joint agreements, exists. It has not been found that the conditions in such industries are ideal, nor that friction between employers and the unions is un- known ; nor has it been found that the employees in such industries have entirely achieved economic, political, and industrial freedom, for these ideals can not be gained until the fundamental changes in our political and economic structure, which have already been referred to, have in some way been accomplished. It has been found, however, that the material conditions of the workers in such industries and establishments are on a generally higher plane than where workers are unorganized; that important improvements in such conditions have been achieved as the direct result of organization ; that the friction which exists in such industries and establishments has been reduced rather than increased by organization ; and that the workers at least have secured a basis upon which their political and economic freedom may ultimately be established.

The evils of graft, " machine politics," factional fights, and false leadership, which have been found sometimes to exist in such organ- ized industries, are those which are inevitable in any democratic form, of organization. They are the same evils which have accompanied the development of the American Nation, and of its States and municipalities. Such evils as we have found to exist are indeed to be condemned, but a study of the history of these organizations seems to show clearly that there is a tendency to eradicate them as the organizations become stronger and as the membership becomes more familiar with the responsibilities and methods of democratic action. Furthermore, there is a fundamental principle which applies in this field as in all other lines of human activity. This principle is contained in the following contrast: In democratic organizations such evils and excesses as may arise tend to disrupt and destroy the organization and are therefore self -eradicating; while in an au- tocracy, evils and excesses tend inevitably to strengthen the existing autocrat and can be eradicated only in the event of a revolt on the part of those who suffer from such evils. This is the history not only of every form of artificial association, but of nations.

The fundamental question for the Nation to decide, for in the end public opinion will control here as elsewhere, is whether the workers shall have an effective means of adjusting their grievances, improv- ing their condition, and securing their liberty, through negotiation with their employers, or whether they shall be driven by necessity and oppression to the extreme of revolt. Where men are well or- ganized, and the power of employers and employees is fairly well balanced, agreements are nearly always reached by negotiation; but,

REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 67

even if this fails, the strikes or lockouts which follow are as a rule merely cessations of work until economic necessity forces the parties together again to adopt some form of compromise. With the unor- ganized there is no hope of achieving anything except by spon- taneous revolt. Too often has it been found that during the delay of attempted negotiations the leaders are discharged and new men are found ready to take the place of those who protest against condi- tions. Without strike funds or other financial support the unor- ganized must achieve results at once ; they can not afford to wait for reason and compromise to come into play. Lacking strong leaders and definite organization, such revolts can only be expected to change to mob action on the slightest provocation.

Looking back over the industrial history of the last quarter cen- tury, the industrial disputes which have attracted the attention of the country and which have been accompanied by bloodshed and violence have been revolutions against industrial oppression, and not mere strikes for the improvement of working conditions.^ Such revolutions in fact wrere the railway strikes of the late eighties, the Homestead strike, the bituminous coal strike of 1897, the anthracite strikes of 1900 and 1903, the strike at McKees Rocks in 1909, the Bethlehem strike of 1910, the strikes in the textile mills at Lawrence, Paterson, and Little Falls, many of the strikes in the mining camps of Idaho and Colorado, the garment workers' strikes in New York and other cities, and the recent strikes in the mining districts of West Virginia, Westmoreland County, Pa., and Calumet, Mich.

As a result, therefore, not only of fundamental considerations but of practical investigations, the results of which are described in detail hereinafter, it would appear that every means should be used to extend and strengthen organizations throughout the entire industrial field. Much attention has been devoted to the means by which this can best be accomplished, and a large number of suggestions have been received. As a result of careful consideration, it is suggested that the commission recommend the following action :

1. Incorporation among the rights guaranteed by the Constitution of the unlimited right of individuals to form associations, not for the sake of profit but for the advancement of their individual and col- lective interests.

2. Enactment of statutes specifically protecting this right and pro- hibiting the discharge of any person because of his membership in a labor organization.

3. Enactment of a statute providing that action on the part of an association of individuals not organized for profit shall not be held to be unlawful where such action would not be unlawful in the case of an individual.

4. That the Federal Trade Commission be specifically empowered and directed by Congress, in determining unfair methods of compe- tition to take into account and specially investigate the unfair treat- ment of labor in all respects, with particular reference to the follow- ing points :

(a) Refusal to permit employees to become members of labor or- ganizations.

(?>} Refusal to meet or confer with the authorized representatives of employees.

68 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.

5. That the Department of Labor, through the Secretary of Labor or any other authorized official, be empowered and directed to present to the Federal Trade Commission, and to prosecute before that body all cases of unfair competition arising out of the treatment of labor "which may come to its attention.

6. That such cases, affecting as they do the lives of citizens in the humblest circumstances, as well as the profits of competitors and the peace of the community, be directed by Congress to have precedence over all other cases before the Federal Trade Commission.

CONCLUSIONS AND RECOMMENDATIONS.

The remainder of the report is devoted largely to the conclusions and recommendations with respect to specific questions propounded by Congress. The facts upon which these conclusions and recom- mendations are based are contained in the testimony taken by the commission and in the reports of its investigators. The complete corrected testimony is transmitted to Congress, as well as a carefully prepared digest or the evidence. The reports of the investigators have likewise been placed in the possession of Congress.1

I. INDUSTRIAL CONDITIONS or ADULT WORKMEN IN GENERAL

INDUSTRIES.

In this section only the conditions of adult workmen are consid- ered, leaving the questions affecting women and children for separate consideration later. The problems involved are essentially different, and the position of women and children in relation to the State may be clearly distinguished from the position of adult workmen.

WAGES.

As a result of the investigations which have been made the follow- ing conclusions are justified :

1. The welfare of the State demands that the useful labor of every able-bodied workman should, as a minimum, be compensated by suf- ficient income to support in comfort himself, a wife, and at least three minor children, and in addition to provide for sickness, old age, and disability. Under no other conditions can a strong, contented, and efficient citizenship be developed.

'2. Under existing conditions such an income is not received by fully one-half of the wage earners employed in industry.

3. The natural resources of the United States are such that an industrial population properly educated and efficiently organized can produce enough to achieve this standard of living.

4. It is probable that even at present the national agricultural and industrial output is sufficient to permit the establishment of such a standard.

5. The problem is therefore essentially one of distribution.

6. The fixing of the wages of adult workmen by legal enactment is not practicable nor desirable as a general policy, except for public employees.

7. A just standard of wages in any industry or occupation can best be reached by collective bargaining between employers and employees

1 These reports have not been printed with this document, on the recommendation of Chairman Frank P. Walsh, as stated in his letter in Senate Report No. 143, Sixty-fourth Congress.

EEPOET OF COMMISSION ON INDUSTRIAL RELATIONS. 69

for the purpose of forming voluntary joint agreements. The success and justice of such joint agreements is, however, dependent upon the essential equality of the two parties and can not be attained unless effective organization exists.

It is suggested that the commission make the following recom- mendations :

1. In order that the public may be kept fully informed with regard to labor conditions, and that a proper basis of facts should exist for negotiation and arbitration, the Federal Government should enact the necessary legislation to provide for the collection, through the Bureau of Labor Statistics or otherwise, of the full and exact facts regarding wages, hours of labor, and extent of unemployment for every industry. Every employer should be required by law to file with the proper authority a sworn statement of these facts according to a prescribed form. These statistics should be published annually, and the full data regarding any industry or plant should be accessible to any mediator or any other responsible citizen.

2. Uniform statutes should be passed by the legislatures of all States requiring that wages be paid at least semimonthly and in cash, except where by joint agreement other methods are agreed upon.

HOURS OF LABOR.

As a result of investigation the following conclusions are justified:

1. The physical well-being, mental development, and recreational needs of every class of population demand that under normal circum- stances the working day should not exceed eight hours.

2. A very large percentage of the workmen in manufactures, transportation, and mining work more than eight hours per day.

3. This is in marked contrast to the condition of those whose economic position enables them to define the length of their own working day.

4. Practical experience has shown that the reduction of working hours is in the interest not only of the worker and the community generally, but of the employer.

5. The regulation by legal enactment of working hours of adult workmen is not generally practicable nor desirable, except for public employees.

It is suggested that the commission recommend :

1. That in the so-called continuous occupations, other than the movement of trains, requiring work during both the day and the night for six or seven days per week, the State and Federal Govern- ments should directly intervene, so that the working hours should not exceed eight per day nor extend to more than six days per week.

SAFETY AND SANITATION.

The investigations which have been made warrant the following conclusions :

1. Great progress has been made during recent years in promoting safety and sanitation in manufacturing, mining, and transportation.

2. The progress has been most rapid in the direction of safeguard- ing workers from industrial accidents.

70 REPORT OF COMMISSION ON INDUSTRIAL RELATIONS.

3. Progress in safety has been in part the result of continued agitation and education, but has proceeded most rapidly and satis- factorily since the enactment of workmen's compensation laws, which render unsafe working conditions expensive to the employer.

4. The movement has also been largely promoted by the forma- tion of safety committees composed of officials and workmen, and by the creation of joint conferences of employers and employees to assist and advise State officials in the administration of the law and in the formulation of safety rules.

5. The campaign for safety needs, however, to be greatly ex- tended as rapidly as possible. The annual list of accidents, approxi- mately 35,000 fatalities and 700,000 injuries involving disability of over four weeks, can not be regarded complacently. From one-third to one-half of these accidents have been estimated by competent au- thorities to be preventable by proper safeguards, inspection, and control.

6. The advance in the sanitation of workshops has been less rapid, because not only are the dangers less obvious, but there is no financial liability for diseases or deaths occurring as the result of improper sanitation. Future progress in sanitation demands attention not only to cleanliness and ventilation but to occupational diseases.

7. The most direct incentive for the promotion of sanitation would be the adoption of a proper system of sickness insurance.

It is suggested that the commission recommend :

1. The creation of a bureau of industrial safety (except that the section providing a museum of safety is not indorsed). Proper steps should be taken to provide for the coordination of the work of all Federal bureaus whose work is concerned with industrial safety.

2. The appropriations of the Public Health Service for the investi- gation and promotion of industrial sanitation should be increased.

HOUSING.

It has been found in the course of the commission's investigations :

1. The present provisions for the housing of workmen are gen- erally bad, not only in the large cities but in industrial communities of every size and in rural districts.

2. Xot only are the houses and tenements which are available for workers largely insanitary and unfit for habitation but they are in- adequate, resulting in high renjs, overcrowding, and congestion.

3. Such conditions make not only for discomfort and unhappiness, but for disease and degeneration.

4. The ordinary method of supplying houses through their erec- tion by private capitalists for investment and speculation has rarely, if ever, been adequate.

5. Excellent plans for the housing of workmen have been put into effect by a number of firms and corporations, but such measures have not at all affected the general situation, and being dependent upon the volition of individuals can not be regarded as likely to greatly influence progress.

6. The tenement-house acts, as well as the health ordinances and building regulations of municipalities, while generally productive of good effects, are at best surface remedies and can never cure the evils of the present housing situation.

REPORT OF COMMISSION ON INDUSTRIAL RELATIONS. 71

7. In every important European country Government aid and direct intervention to curb speculation have proved to be necessary for the promotion of any real progress.

8. Governmental action in Europe has chiefly taken the following forms :

(a) Extension of credit to voluntary nonprofit-making associa- tions.

(&) Construction by the Government of buildings which are leased for long periods on easy terms.

(c) Exemption from taxation and other subsidies for homes con- structed for occupancy by their owners.

(d) Legislation designed to prevent the holding of land out of use and to secure for the Government a part of the " unearned in- crement."

It is suggested that the commission recommend :

1. The Federal and State Governments should institute investiga- tions directed not so much to ascertaining existing housing condi- tions as to formulating constructive methods by which direct sup- port and encouragement to the promotion of improved housing can be given. Actual experiment in the promotion of housing should proceed as rapidly as proper plans can be drafted.

2. Special attention should be given to taxation, in order that land should as far as possible be forced into use and the burden of taxa- tion be removed from home owners.

3. The municipalities should be relieved from all State restrictions which now prevent them from undertaking the operation of adequate housing schemes and from engaging in other necessary municipal enterprises.

II. WOMEN AND CHILDREN IN INDUSTRY.

The investigations and hearings of the commission justify the conclusions :

1. As a result of their unprotected condition, women and children are exploited in industry, trade, domestic service, and agriculture to an extent which threatens their health and welfare and menaces the well-being of future generations.

2. The competition of women and children is a direct menace to the wage and salary standards of men.

3. Under present conditions, children are permitted by their par- ents to go to work largely because their earnings are necessary for the support of the rest of the family. The restrictive legislation of the past quarter century, although admirable in purpose and ultimate results, has thrown a heavy burden upon the fathers and mothers, who, at existing wages, have been barely able to support their fami- lies. The evidence shows that the burden of child-labor legislation has rested upon the wage earners rather than upon employers. It is the testimony of enlightened employers that the employment of children is unprofitable, and that the effect of excluding children from factories has been to increase rather than decrease profits. In the