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this particular time there was undoubtedly less co-operation, more friction and, therefore, less production and higher labour costs," than in any similar shops. Nevertheless, the difficult circumstances were accepted and the experiment began. Local cooperative committees were set up, consisting of representatives of the management and of the craft unions, to consider constructively an agreed list of matters essential to economical and efficient management. Their success was striking and immediate, and the machinery for co-operation was quickly extended to the 22,000 shopmen in the many repair shops of the Baltimore and Ohio system.
Later, it was introduced by Sir Henry Thornton into the Canadian National Railroad, and was adopted by the Chesapeake and Ohio Railway, and by the Chicago and North-Western. At present, something like 50,000 craftsmen work under this cooperative scheme. The railway management speak in its praise, pointing to a decline in grievances and appeals. In the two larger systems, where it has been more effectively tried, grievances have been reduced 50 per cent. and the appeal cases which are not adjusted by the local committees have declined 75 per cent. The procedure has " released the latent ideas" of the workmen. Large numbers of suggestions have been put forward, the analysis of a year's experience showing that 81 per cent. of these came from the workers. Only 8 per cent. were dropped because they were considered impracticable, whilst nearly 80 per cent. were adopted immediately and put into practice. It is estimated that nearly 38 per cent. of these could be classified as directly benefiting the management, 51 per cent. as a benefit to the railway men, the remainder being either of equal benefit or in some other way unassignable. In addition, employment has been made more regular and the average yearly earnings increased. Further, the earning power of the railway has gone up sufficiently to enable the management to give a welcome increase in standard rates of pay. So satisfied are the railway shopmen, that they have retained an expert consulting mechanical engineer who combines a knowledge of railway management with an "appreciation of the human problems of industry."
In the recent discussion of railway wages before the new Railway Board of Mediation, one interesting item of evidence demonstrates the connection between increased efficiency and a
real spirit of co-operation. A freight despatcher in one of the Baltimore and Ohio yards testified that in January, 1926, his men had handled more freight-trains than in the same month of the previous year, and had done so in fewer working hours. When asked to account for this increase in efficiency, the witness replied: In my yards there is the very best co-operation between the men and the railroad officials. There is a real desire on the part of the men to give better service. When we have done a good day's work it is the common practice to have the trainmaster post a notice commending the men for their work.
Concrete evidence of the uniform success of this general attitude of co-operation is to be found in the figures of industrial disputes. The years 1925 and 1926 have been singularly free from trouble. For 1925 the number of strikes and lock-outs reported to the U.S. Department of Labour was only 35 per cent. of those for 1916, which was a year of great business activity. The average number of workers involved in each dispute in the later year was only 70 per cent., and the total hours lost only 50 per cent. of the corresponding figure for the earlier year. The year 1926 has been even more peaceful, presenting the smallest number of industrial disturbances for any year since 1914. Whilst British figures are not on quite a comparable basis, they demonstrate indubitably a profound difference between the two countries in the matter of industrial harmony. Whereas industrial relations have become more peaceful in the United States, they have become increasingly more militant in Great Britain, culminating last year in an attempt to overthrow the present industrial system.
Confirmation of the views expressed in this article, which is based upon knowledge obtained through three years' residence in America, supplemented by a visit in 1926, is found in the reports on American labour conditions issued by official missions. A German trade union commission visited the country in the latter part of 1925 and made an exhaustive enquiry into trade unionism, labour banks, American social life and the economic organization of the United States. The International Labour Office obtained a report from its Deputy Director, Mr. H. B. Butler, in the early part of 1927. The visit and report of the British delegation will be fresh in the memory of all.
In the view of all these reports, American employers believe in high wages. They have realised how high earnings stimulate
both demand and production, and have come to regard good wages as both an incentive to output and a bulwark to prosperity through the creation of purchasing power. Accordingly, when production costs tend to rise, American employers seek to avoid wage reductions, preferring to find a remedy for their troubles in increased efficiency or in the reduction of other costs than labour. They have demonstrated that increased earnings are quite consistent with reduced production costs. They have done this by the development of machinery and by more efficient organization in factory and office. Mechanical methods are used "in aid or in replacement of human effort," and have made possible a marked increase in production without any increase in the number of workers, but with a considerable reduction in the average length of the working day. The difference in unit output per man-hour as between an English and an American workman is not a matter of greater individual efficiency it is a question of machinery and of industrial organization. The German trade union commission, which conducted a careful enquiry into relative intensity of work, gives interesting evidence in proof of this conclusion.
The British delegation was impressed by the large part management plays in securing that internal organization which makes work flow easily and that confidence on the part of labour which, in the judgment of the delegation, is the real secret of the higher productivity of the American worker. In America, management is tending to become a distinct profession. It is recognised that the provision of capital is not a sufficient ground for participation in management. Management hires capital and is given a free hand to earn a reasonable percentage of profit, to that end coveting earnestly the co-operation of labour in order to secure the best results. Much consideration is given to the technique of management. New technical developments are eagerly sought; efficiency is promoted through wide publicity in all matters affecting industry. Executive officers are selected for ability, knowledge and experience, and promotion to the highest posts is open to the rank and file. Among the more important of these executives is one specially entrusted with industrial relations, to whom all decisions affecting workers are referred before they are put into operation.
The official missions were much interested in American industrial relations, and in the divergent attitudes of employers
towards trade unions. On the one hand are employers strongly opposed to union organization, who have started " company unions or instituted "employee representation plans as an alternative. Their aim in so doing is to set up within each establishment an organization for the settlement of grievances promptly and on the spot, and for the promotion of better understanding and better conditions. The writer of this article found corporations and employers that had signed agreements with company" unions, covering wages and other matters, identical in nature with the regular trade union agreement. He was forced to the conclusion that such employers were not setting up a new and typically American form of industrial organization, but only keeping the place warm" for the orthodox trade union. The official delegations express a doubt whether "company" unions will survive wage reductions, or a severe trade depression such as Great Britain has experienced. On one of the New York underground systems, where an agreement with a company" union was in operation and where the men were opposed to its renewal in the form desired by the company, a strike occurred last year, in no way different from any other strike in either its ground or its method.
With regard to the unions, the official missions were impressed by the experiments for closer co-operation between labour and the management. They note that the principal labour organizations are encouraging production, provided that standard wages and conditions are guaranteed and that the worker receives a fair share of his increased production as his reward. Organized labour "attaches the utmost importance to the efficiency of management," and in such trades as clothing has entered into "the technique of business." It believes in co-operating with management to use capital for their joint advantage, and has started labour banks with that belief in mind. It is erroneous to regard such a development as a proof that it is "capitalistically inclined"; its approach to the matter of industrial relations is based upon a different theory of industrial development from that which governs the minds of British and continental labour. There is great insight in the judgment of M. Siegfried upon the result of this co-operation and in the contrasts he makes with Europe :
Thus by the concerted action of the government, the manufacturers, the workmen, the consumers and the general public since the war, the
United States has been able to put under way a doctrine of production adapted to the economic needs of the time. Germany is the only other country that has tackled the problem with the same forethought, method and daring. England, in spite of her excellent craftsmen, is hindered by her trade unions, and France by her politicians. (“ America Comes of Age," p. 170.)
But American prosperity has other sources than those which are so largely industrial. The dynamic energy of an alert and ingenious people is the well-spring from which flow the results to which attention has hitherto been given. In a free, democratic land, where class is of little account, and where inherited wealth in few cases induces a life of cultured ease, work is respected and attracts a wide range of talents and ability. Business and industrial life are ventures full of excitement and risks, but transmuted by the possibilities of what seem almost dazzling rewards. The millionaire is not the only beneficiary, nor his million of dollars the only measure of success. Keen, able administrators, in positions for which salaries are paid far beyond those for similar posts in Great Britain, wield great power and exploit entrancing possibilities. The joy of the chase and the glory of the prize combine to make hard work seem worth while. Men who have won through are emblems of success and models for millions of youths. Press and platform repeat the stories of their lives. This has its reaction upon the wishes and desires of the people, and is an influence in creating the contrast between the individualism of America and the more socialised and socialistic sentiment of Great Britain.
Nevertheless, America is not without its problems. Wages are not uniformly high throughout the country: they sink in certain sections to levels that approach relative poverty. Unskilled workers, even in the prosperous trades, often do not earn more than from 20 to 25 dollars a week. The rates for common labour, which the writer of this article found to vary from 40 cents per hour in Philadelphia to 50 cents in Buffalo and Detroit, are quoted by Mr. Butler for the Southern States at 30 cents per hour. Further, the absence of State provision against unemployment, sickness, old age and other industrial risks diminishes the real value of wages and the general well-being of the worker. Though in such States as Massachusetts and Illinois the 48-hour week is compulsory, and boys and girls may not enter factory employment before their sixteenth year, in the south hours are long