National Industrial Conference Board. European com.

Problems of labor and industry in Great Britain, France and Itay; a report of the European commission of the National industrial conference board online

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JAN 3 1 1964




THE LIBRARY

OF

THE UNIVERSITY

OF CALIFORNIA
LOS ANGELES



National Industrial Conference Board

IS BEACON STREET, BOSTON, MASS.



BRANCH OFFICE
724 SOUTHERN BUILDING, "WASHINGTON, D. C.



THE National Industrial Conference Board is a co-operative
body composed of representatives of national and state in-
dustrial associations, and closely allied engineering societies of a
national character, and is organized to provide a clearing house
of information, a forum for constructive discussion, and ma-
chinery for co-operative action on matters that vitally affect
the industrial development of the nation.



Frederick P, Fish Chairman

Frederic C. Hood Treasurer

Magnus W. Alexander Managing Director



MEMBERSHIP

American Cotton Manufacturers' Association

American Hardware Manufacturers' Association

American Paper and Pulp Association

American Society of Mechanical Engineers

Electrical Manufacturers' Club

Manufacturing Chemists' Association of the U. S.

National Association of Cotton Manufacturers

National Association on Finishers of Cotton Fabrics

National Association of Manufacturers

National Association of Wool Manufacturers

National Automobile Chamber of Commerce

National Boot and Shoe Manufacturers' Association

National Council for Industrial Defense

National Electric Light Association

National Erectors' Association

National Founders' Association

National Implement and Vehicle Association

National Metal Trades Association

RuuuER Association of America, Inc.

Silk Associatk^n of America

The Railway Car Manufacturers' Association

United TvponiKTi^ ok America

ASSOCIATE MEMBERSHIP

Associated Industries of Massachusetts
Associated Manufacturers and Merchants

OF New York State
Illinois Manufacturers' Association
Manufacturers' Association of Connecticut, Inc.



PROBLEMS

OF LABOR AND INDUSTRY

IN

GREAT BRITAIN, FRANCE

AND ITALY



REPORT

OF THE

European Commission

OF THE

National Industrial Conference Board



Copyright 1919



National Indlstrial Conference Board

15 -Beacon Street
■ osTON, Mass.



f^:}



Foreword

^T^HE accompanying report on "Problems of Labor and
-*- Industry in Great Britain, France, and Italy" by
a special Commission of industrialists appointed by
the National Industrial Conference Board, is the result
of first-hand observation of industrial conditions in these
countries during the readjustment period following the
cessation of hostilities. It was the belief of the Board
that such a report on labor and industrial issues abroad
would be of direct and substantial service to American
industry in the consideration of its own problems of
industrial readjustment. This expectation, the Board
feels, is amply justified by the report.

The Commission was composed of the following:

Charles W. Asbury, Chairman,

Vice-President and Treasurer The Enterprise Manufacturing

Company of Pennsylvania,

Philadelphia, Pennsylvania.

S. Pemberton Hutchinson,
President The Westmoreland Coal Company,
Philadelphia, Pennsylvania.

J. Laurence Laughlin,

Professor Emeritus of Political Economy, University of Chicago,

Boston, Massachusetts.

Oliver S. Lyford,
Vice President Finance and Trading Corporation,
New York City, New York.

LoYALL A. Osborne,

Vice-President Westinghouse Electric and Manufacturing Company,

New York City, New York.

William H. Van Dervoort,

President Root & Van Dervoort Engineering Company,

East Moline, Illinois.



1244119



In the course of their inquiries in Europe, members of
the Commission visited leading industrial centers in Great
Britain, France, and Italy, and interviewed a large number
of prominent industrialists, government officials, and labor
leaders, all of whom showed the Commission every
courtesy. An Interim Report of the European Commis-
sion was published by the National Industrial Con-
ference Board in July, 1919. The full report herewith
presented gives, in a more extended form, the essential in-
formation gathered and the conclusions of the Commission.

The report presents the findings of the European Com-
mission, and not an expression of the official position of
the National Industrial Conference Board on the various
vital subjects discussed. The Board commends the report
to the careful reading of manufacturers and business men
in the United States, and of students of industrial problems
generally.

The report deals primarily with the fundamental phases
of the various problems discussed. At the time the Com-
mission was making its field observations, industrial
conditions in the countries visited were in a state of flux
and some changes have since occurred. The Commission
has endeavored, by correspondence, and by interviews
with prominent European industrialists who have visited
this country or with American industrialists who have
visited Europe subsequent to the survey made by the
Commission, to keep advised of the significance of these
changes.

The Board desires to express its deep appreciation of
the generous sacrifice made by members of the Commission
of their time and convenience in order to make this in-
vestigation. It would especially acknowledge the valuable
services of Dr. Laughlin, who not only carefully outlined
the plan of the investigation, but who is largely responsible
for the co-ordination of material and the preparation
of the report itself. The Board feels that American
industry is under a real obligation to the members of
the Commission f<jr the services thus rendered.



November 12, 1919.

The National Industrial Conference Board,
Fifteen Beacon Street,

Boston, Massachusetts.

Gentlemen: We offer to you in this book the results of our
observations, interviews, and research on industrial, and parti-
cularly on labor, conditions in Great Britain, France, and Italy.
The subject is too vast to be dealt with comprehensively or in
full detail, but in so far as we have been able to do so, we have
given the essence of the situation. Many problems suggested
by our investigations must be left undeveloped; many opinions
and convictions, which we were not able for lack of time and
opportunity fully to demonstrate by facts, must be left un-
expressed.

It is our conviction that great new forces have been let loose
on the world which will affect every phase of human life,
industrial no less than political and social. Great Britain,
France, and Italy have been earlier and more deeply influenced
by these forces than our own country, and yet the problems
on both sides of the sea are in many ways strikingly analogous.
We feel, therefore, that it is peculiarly important for American
industrialists to know more about these forces in order that
they may learn valuable lessons from European experience.

Our industrial institutions are Anglo-Saxon in character;
American industry is a transplanted British industry, developed
and made unique by the ingenuity, the enterprise, and the
daring of our American pioneer spirit. Your Commission has,
therefore, given a very large portion of its attention to the labor
problems of Great Britain. What we could learn and under-
stand of the temperament and institutions of the Latin peoples
in France and Italy, that had an interesting bearing upon the
general industrial situation, has been included.

We want to acknowledge here the honor conferred upon us
in being chosen for this mission. The results of our labors
we shall leave to justify themselves.

It is our desire also to mention the cordial and generous
co-operation which we received everywhere. Business men
and officials showed us an earnest and sincere desire to help in
every way possible. In many cases we have expressed an
appreciation personally, but we wish to make this permanent
record of it.

Very sincerely yours,

Charles W. Asbury, Chairman
S. Pemberton Hutchinson
J. Laurence Laughlin
Oliver S. Lyford
LoYALL A. Osborne
William H. Van Dervoort



Itinerary

Your Commission sailed March 1, 1919, and returned
May IS, 1919. It visited establishments in the north of
England, in Scotland, in Wales, and in the Midlands.
About April 1st the Commission went to France and
studied conditions in the industries in the neighborhood of
Paris, Lille, Douai, Lyons, and Saint-Etienne. Two
members of the Commission went to Italy and visited
industries in Genoa, Milan, and Turin. In each country
high officials and executive managers furnished freely all
available information on the points of inquiry, and no
difficulty arose in seeing industrial works of all kinds.
In general it was attempted to get the point of view of
government officials, of employers, and of labor leaders.



CONTENTS

Chapter I
Introduction

PAGE

1. Upheaval of War 1

2. New Conditions 2

3. War Debts 3

4. Emphasis on Labor Problems 3

5. Causes of Discontent 4

6. Moderate and Radical Attitudes Contrasted ... 5

7. Collective Bargaining 7

8. "Labor not to be Treated as Merchandise" .... 9

9. Nationalization of Industry 13

10. Democratization of Industry 17

11. Organization of Material 18

Chapter II
Efficiency of Production

1. Dependence of the Producer on Efficiency .... 20

2. Relative Costs in America and Great Britain ... 20

3. Restriction on Output 21

4. The Network of Restrictions 22

5. Restoration of Restrictions 27

6. Bonus and Premium Systems 29

7. Piecework 31

8. Profit-Sharing and Education 34

9. Attitude toward Scientific Management 35

10. The Coal Industry 38

11. Efficiency in Shipyards 40

12. Efficiency in War Work 42

13. Conclusion 43

Chapter III
Management

1. Confused Talk on Economic Problems 44

2. Little Attention given to Management 46

3. Manager a Skilled Laborer 48

iz



PAGE

4. Directors as Managers 49

5. Science of Management 50

6. Labor demands a Share in Management 51

7. Co-operation as a Source of Managers 52

Chapter IV
Organizations of Workers and of Employers

1. Great Britain 54

2. Education of Labor Officials 59

3. French Labor Organizations 60

4. Italian Labor Organizations 62

5. Employers' Associations in Great Britain 63

6. Employers' Associations in France 66

7. Employers' Associations in Italy 67

Chapter V
Unionism in Great Britain

L Present Tendencies of Unionism 68

2. Strength of Trade Unions 68

3. Lines of Development 70

4. Industrial Unrest 77

5. Labor Definition of Collective Bargaining .... 80

6. Conciliation and Arbitration 81

7. Strikes and Lockouts 84

8. Attitude of British Employers toward Unionism . . 86

Chapter VI
Employers' Organizations

1. Basis of the Report 94

2. Impulse toward Co-operation 94

3. Demand for Representative Bodies 97

4. Method of Association 98

5. Federation of British Industries 100

6. Other Associations 103

7. Control over Members 105

8. Functions of Employers' Associations 106

9. National Alliance of Employers and Employed . . Ill

10. Some Other Purposes 114

11. French and Italian Organizations 116

12. Results 119

13. Summary 122

z



Chapter VII

Shop Stewards page

1. The Question of Outside Influence 123

2. Shop Stewards 123

3. Effect of War Conditions 124

4. Attempt to Regularize Shop Stewards 127

5. Expansion of Functions of Shop Stewards 130

6. Union to absorb Shop Stewards 132



Chapter VIII
Works Committees

1. Justification of Works Committees in Simplest Form 138

2. Kinds of Works Committees 139

3. Committees as Machinery for Settling Differences 145

4. Shop Stewards on Committees 146

5. Function of Committees 149



Chapter IX
Eight-Hour Day

1. Great Britain 151

2. France 159

3. Italy 165



Chapter X
Minimum Wage

1. In Great Britain 170

2. In France 176

3. In Italy 178



Chapter XI
Unemployment

1. In Great Britain 180

2. In France 188

3. In Italy 189

xi



Chapter XII

Housing page

1. In Great Britain 191

2. In France and Italy 199

Chapter XIII
The Co-operative Movement in Great Britain

1. Its Significance 201

2. Types of Co-operation 201

3. History and Progress 202

4. Principles behind Co-operative Movement 202

5. Entrance upon Politics 206

6. Relations to Labor Movement 207

7. Relation of British and Russian Co-operative

Societies 209

Chapter XIV
Notable Examples of Welfare Work

1. Three Prominent Instances in Great Britain . . . 212

2. Scope of Care for Employees 213

3. Education and Employment of Younger Persons . . 214

4. Working Conditions 215

5. Wages and Profit-Sharing 217

6. Hours of Labor 218

7. Housing 221

8. A French Example 223

9. Criticism 225



Chapter XV
Introduction to Political Labor Movement

1. Function of the State 228

2. Political versus Industrial Action 230

3. Labor in Parliament 231

4. Labor in the Cahinet 232

5. International Political Labor Movement 233

0. Dangers of Politics 233

7. Plan of Discussion 234

zii



Chapter^XVI

The Whitley Plan page

1. Precursors of the Whitley Plan 235

2. First Whitley Report 238

3. Second Whitley Report 242

4. Third, Fourth, and Final Reports 243

5. Government Endorsement of Whitley Plan .... 244

6. Aim of Whitley Plan Different from that of Works

Committees 245

7. Fear of Governmental Interference 250

8. Government Aid in Setting up Whitley Councils . 253

9. Ultimate Aim to Give Labor a Share in Control . 256

Chapter XVII
The National Industrial Conference

1. A Political Move 258

2. Attitude of Government at Conference 260

3. Report of Provisional Joint Committee 264

4. Report Accepted by National Industrial Conference 267

5. Meeting of Joint Committee, May 1st . 267

6. Criticism of Government Procrastination by National

Alliance 269

7. Conclusion 271

Chapter XVIII
Political Influences in French Labor Movement

1. The General Situation 272

2. Organizations of Employers and Employees .... 275

3. French Labor in the War 279

4. Methods of Organized Labor in France 282

5. Attitude of Government to Syndicats 285

6. Relation between Employer and Employee .... 287

Chapter XIX
The Political Labor Situation in Italy

1. The General Situation 293

2. Italian Labor in the War 298

3. Italian Labor Since the Armistice 303

xiii



Chapter XX

The International Political Labor Movement page

1. The International Labor Movement before the War 308

2. The International Labor Movement in the War . 312

3. The International Labor Movement and the Peace

Conference 319

4. Concluding Summary 324

Chapter XXI
Nationalization of British Railways

1. Introduction 328

2. Method of Approach 328

3. Government Control of British Railways 329

Chapter XXII
Nationalization of British Coal Industry

1. Introduction 343

2. Output 346

3. Recommendations of the Commission 362

4. Summary 370



Chapter XXIII
Nationalization of "Key Industries"

1. Shipping and Shipbuilding 373

2. Nationalization of "Key Industries" 378

3. Significance of Key Industries and Key Men . . . 381



Chapter XXIV
Property Rights

1. Introduction 382

2. Social Legislation Affecting Property Rights Prior

to the War 384

3. War Measures and Claims 385

4. Demands for Control 388

xiv



Chapter XXV

Findings of European Commission page

1. Industrial Unrest 395

2. Efficiency of Production 395

3. Management 396

4. Unionism 397

5. Employers' Organizations 398

6. Shop Stewards and Works Committees 398

7. Eight-Hour Day and Minimum Wage 399

8. Unemployment 399

9. Housing 400

10. Co-operative Movement 400

11. Political Labor Movement 400

12. Nationalization 402

13. Coal Industry 402

14. Key Industries 403

15. Property Rights 403

16. Points to be Emphasized 403



CHAPTER I
INTRODUCTION

§ 1. Upheaval of War

It was just at the critical period of readjustment,
while the ravages of war were still glaringly evident,
while its shadow still darkened the minds of men
and while its passions still stirred their hearts, that your
Commission arrived in Europe. It was permitted us
to observe great peoples struggling back to a normal
living basis. Accepted institutions seemed loosened
from their old-time mooiings; radical ideas were every-
where rife; great untried changes seemed to find almost
reckless acceptance. In all of this upheaval of war, your
Commission has centered its attention on economic pro-
blems, and particularly upon the problem of industry and
labor as affecting the relationship of employers and
workmen.

In the countries visited it was evident that the eco-
nomic life of the people had been greatly disturbed by
the war. Laborers had been withdrawn from industry to
a much greater extent than in America; new laborers, —
women, those formerly unemployed, and foreigners, —
had been introduced to fill urgent needs; the working of
demand and supply in all directions had been interfered
with; new machinery and processes had been devised to
aid unskilled labor; in many instances labor organiza-
tions had for patriotic reasons given up old restrictions on
output; production was shifted to the making of muni-
tions and articles needed for war; great changes in
industrial organization resulted; governmental control of
industry on a vast scale was inevitable; control by Govern-
ment Boards and price-fixing of most needed articles fol-
lowed; many new factories were built for war production,
and private concerns became "controlled"; shipping was
taken over by the State; and foreign trade, both exports
and imports, commerce in food and raw materials, espe-
cially in coal, became entirely deranged. These and other
considerations caused a mighty upheaval in industry.

1



This industrial unrest was partly psychological, partly
social, partly political, and partly economic. It was
psychological in so far as it was a nervous reaction from the
strain of long hours of labor, the anguish, anxiety, and
suffering due to the war, and the more abstract clash of
new interests and ideals with old conventions. It was
partly social in that labor claimed a new economic po-
sition in society. It was tinctured with politics, because
the greatly increased strength and unity of labor organiza-
tions had caused socialist parties and political leaders
inside and outside of the trade unions to seek their support.
It was largely economic in that the cost of living was
pressing hard upon the workpeople in spite of greatly in-
creased wages. All in all, it was a time of violent readjust-
ment in all phases of life.

§ 2. New Conditions

The fighting was some time past when your Com-
mission reached Europe; the problems of reconstruction
had already become practical issues. These problems
are not only of tremendous importance, but also exceed-
ingly difficult and delicate to handle. The process of
reconstruction needs time and wisdom. The long strain
of war and of prolonged physical exertion in the shops
and offices has led to an inevitable nervous reaction.
Irritation now develops on slight provocation. To this
have been added difficult economic influences, chief of
which has been the rise in cost of living to over 100 per
cent of pre-war prices. While members of different social
classes have come to value one another more highly through
common service in the trenches, yet there was evident a
tendency to settle back into the old social conventions.
The laboring classes, however, have won new prestige by
valiant conduct in the war, and their organizations have
increased in membership. Then, too, it was to be expected
that political parties would maneuver to secure leadership
over an electorate stirred by new issues. In all these
countries political forces have played a very large part in
the questions of labor and industry.

The (jfn'crnrncnts were forced by the exigencies of war
to deal with large groups rather than with individuals;
thus organization among both workers and employers
was stimulated. Organized labor, especially in Great
Britain, has come out of the war greatly impressed by its

2



increased political and industrial power. A closer co-
operation among all the factors of production was neces-
sitated by a common danger during the war. This was
an element of strength which in some cases will continue,
but which cannot now be definitely counted upon. In-
deed, the rising tide of discontent among the laboring
classes has been aided, no doubt, by an international
propaganda springing from extreme elements of disorder.
New and often extreme demands are being made for
nationalization of leading industries and for a larger share
of control. With industry crippled by the war, these
demands have obviously aggravated what must in any
event have been, after so great a disturbance, a very
difficult situation.

§ 3. War Debts

Moreover, the huge war debts and the public credit of
European countries touch intimately all industrial con-
ditions. Industry and employment of labor cannot begin
effectively unless machinery, equipment, building, and
raw materials can be paid for. Indeed matters of public
credit seem to lie at the very basis of early reconstruction
and the restoration of normal labor conditions.

§ 4. Emphasis on Labor Problems

The problem to which your Commission devoted most
attention was to find the causes and significance of that
great seething unrest among the workpeople of Great
Britain, France, and Italy. The major emphasis is upon
conditions in Great Britain, because the problems there
are obviously most analogous to our own. We found
that the most significant aspect of this labor unrest and
its fundamental reason was the challenge being thrown
down to the present system of industry. Labor is aiming
at a vast extension of public ownership and a larger
measure of control over the management under which
industry is carried on. Through public ownership it
anticipates that the economic waste of competition will
be eliminated and, together with the profits now realized
by individuals, will be made available to the workers in
the form of higher wages.

Out of these demands has arisen the present tangled,
serious, and complex labor situation in Great Britain,
France, and Italy. To the outsider its most prominent

3



characteristic is the large increase in industrial disturb-
ances. The Shop Steward movement is in part responsible
for this in Great Britain. In France, the General Con-
federation of Labor, with its local and district organiza-
tions, has become greatly active since the armistice. In
Italy, although only a small per cent of the laborers are
organized, these are dominated by extremists. Here, too,
as is true to a less extent in France, the problem is a
general social one and is not at all confined to industrial
questions.

Statistics of disputes show that the year 1918 was one of
great industrial disturbance, most of the demands being
for advances in wages. The first five months of the present
year, however, have been very much more unsettled. A
comparison in Great Britain between the first five months
of 1918 and the same period in 1919 shows that disputes
have been 25 per cent more numerous, the number of work-
people involved more than three times greater and the
working days lost more than four times greater. Most of
these troubles have been in coal mining, the engineer-
ing and the shipbuilding trades. In France and Italy the
strike curve has the same tendency.



§ 5. Causes of Discontent

It was obvious that there was a widespread discon-
tent among the workers in all industries and in all
countries. Discontent in itself may not be a sign of
danger; on the contrary, it may be a healthy sign of
progress, morally and materially, towards a higher
standard. With such an attitude of mind there may be
general sympathy. In the present difficult conditions of
reconstruction, however, the inevitable discontent has
been magnified by a propaganda carried on by extreme
elements opposed to the proper conduct of orderly govern-
ment. The British Minister of Labour, Sir Robert Home,
explained that:

The industrial unrest was clue, anions many things,
mainly to the following causes: the long strain of the war;
the nervous effect produced by the extreme industrial efforts
of the nation; the disturbance of normal economic life; the
rise in the cost of living; and, in a certain measure, an
absorption into l'",nglish thinking oi the revolutionary move-
mf-nts fif i'"urope.

4



The cause undoubtedly having the most practical im-
port is the high cost of living, due not only to a scarcity
produced by the emergencies of war, but to the high
rates of wages which have in turn added to the costs
of production. In addition, there must be considered
the effects of the depreciation of the monetary standard



Online LibraryNational Industrial Conference Board. European comProblems of labor and industry in Great Britain, France and Itay; a report of the European commission of the National industrial conference board → online text (page 1 of 38)