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temporary, thereby securing fees more frequently.

Xew York, Commission on Unemployment, 1911, pp. 11, 56.
Moreover, the agencies have frequently taken means to reduce the length of
engagements in order to secure additional fees. This is done, first, by hold-
ing up offers of better employment to those already employed. A striking
form of this is seen in what is called "stealing men." The agency, in this case,
induces men who are already employed to leave their position and accept
another position. The International Labor Agency in Chicago, according
to the statement of its manager, in the summer of 1911 had fourteen repre-
sentatives in the field attempting to secure laborers; these representatives
went as far as New Orleans and New York; they secured laborers from
the mines and factories of Pennsylvania; in some cases by arrangements
with interpreters they induced entire gangs to leave work on one railroad
and take positions on other railroads in the vicinity. Secondly, some agencies
shorten engagements by making arrangements with employers or foremen
to dismiss the employes after they have worked for a short time and to
hire others; the fees are then divided between the agency and the employer
or foreman.

New York, Report of Commission of Immigration, 1909, pp. 118-20;
California, 9th Biennial Report of Bureau of Labor Statistics, 1899-1900,
p. 73; Colorado, 12th Biennial Report of Bureau of Labor Statistics, 1909-
10, p. 200; Kellor, op. cit., pp. 194-95; 27th Annual Convention of Inter-
national Association of Officials of Bureaus of Labor, 1911, p. 78.
In Chicago the Chicago City Railway Company, the Rock Island Railway
and the George W. Jackson Construction Company asked the assistance of
the inspector of private employment agencies in breaking up this custom,
for it was demoralizing their labor forces; several of the foremen were fined
and discharged for this, and the next year the Santa Fe and the Chicago, Mil-
waukee and St. Paul Railway Companies were assisted in the same way.

Illinois, llth Annual Report of Free Employment Offices, 1909, pp.
108, 112.

Private employment agencies differ greatly in regard to the local limita-
tions of their work. Many of them, however, limit their work to a particular
locality, and thus it is possible that they may have applicants for positions
whom they can not place, though there are many vacancies of the kind desired
outside their area of operations.. Other agencies do a great deal of work in
sending labor outside the city or the state. The following figures show some-
thing of the extent of such operations by the agencies for immigrant con-
tract labor in New York: Sixty-one agencies of this type sent out from that
city 40,737 men in the period from May 1, 1904, to July 31, 1906, of whom
10,596 were sent to other parts of New York State, 11,597 to fourteen other
northern states, and 18,544 to twelve southern states; of the entire number,
55.0 per cent were sent to railroad construction work, 8.5 per gent to coal
mines, and the rest to miscellaneous positions; they were sent to 643 different
localities, and 92 per cent of them to towns with a population less than
50,000.

New York, Report of Commission of Immigration, 1909, pp. 120-21.



REPORT OF THE MAYOR'S COMMISSION ON UNEMPLOYMENT 113

Of the private agencies in Chicago which handle immigrant labor, 68
per cent had no offers of work except at long distances.

Grace Abbott, The Chicago Employment Agency and the Immigrant

Worker, American Journal of Sociology, 14:293, Nov., '08.

But these figures are not in themselves adequate evidence of the organiza-
tion of the labor market. It is necessary to know also what becomes of
these workers. Very few of these private agencies have branches or agents in
other communities; they merely find opportunities for employment in other
localities and do nothing to keep the workers in employment. Consequently,
when the workers finish the engagement to which they are sent, they are left
without direction in regard to opportunities for employment, and are com-
pelled to drift back to the cities in which there are agencies, or to wander
about without guidance in the search for work. In some states there are
laws which limit the activities of the agencies to the cities in which they
are licensed, and it is necessary that workers return to those cities before the
agencies can do anything to assist them, even though the agencies may
know of positions in the localities in which the workers were previously
engaged.

New York Statute on Employment Agencies; National Employment

Exchange, 1st Annual Report, 1910, pp. 24-25.

In addition to these fundamental inadequacies and deficiencies, the
character of many of these agencies has been such that employes and em-
ployers have refused to patronize them at all, or do so only as a last resort.
Miss Kellor decided in 1904 that two-thirds of the private employment agen-
cies were dishonest and fraudulent,

Kellor, op. cit, pp. 40-41. It is not clear whether the reference is
here to the private agencies of New York City, or to the agencies in all
the cities studied, including Chicago, Boston and Philadelphia, in addi-
tion to New York City.

and more recently the Commissioner of the License Bureau of New York
City estimated that 60 per cent of the agencies were honest.

Devine, op. cit., p. 13, footnote.

Of thirteen private agencies interviewed in Chicago in 1912, two stated that
the reason they did not co-operate with private employment agencies in
other cities was that most private agencies were dishonest. The general char-
acter of these agencies may be explained in view of the fact that there is
little capital required, the clients are frequently changing, are frequently
ignorant of the customs and laws, and do not have information in regard to
what the agency is doing. The abuses are certainly not found in all agencies,
but all agencies suffer more or less from the same reputation, and the abuses
and general reputation are factors in their success in organizing the market.
On these abuses, see in particular, Kellor, op. cit., pp. 179-213; United
States Industrial Commission, 1901, I5:lxxxv ff.; Illinois, 10th Biennial
Report of Bureau of Labor Statistics, 1898, pp. 46-138; Sargent, opp. cit.,
passim; New York, Report of Commission of Immigration, 1909, pp.
111-28. Many of the reports of the state bureaus of labor statistics also
give information in regard to this.

These frauds are of the most various nature. The agencies are known to
misrepresent pay, permanency of positions and other conditions of work.

New York, Report of Commission of Immigration, 1909, pp. 80-88,
115-16; Kellor, op. cit., 193-94; Abbott, loc. cit., 14:295.
During the period from May, 1904, to February, 1909, twelve licenses
were revoked in New York City for this cause.

New York, Report of Commission of Immigration, 1909, pp. 115-16.
The fees are frequently very high, and in fact the contract labor agencies
frankly state that they charge whatever they can get.

Abbott, loc. cit., 14:296.

Very complete records have been secured in regard to the operation of the
private employment agencies of California; these records show that the fee



114 REPORT OF THE MAYOR'S COMMISSION ON UNEMPLOYMENT

which is charged is inversely proportional to the number of positions secured
in each month.

California, 14th Biennial Report of Bureau of Labor Statistics, 1909-
10, pp. 318-26.

In Chicago the fee is sometimes as high as $20 when work is scarce,
ranges most generally from $2 to $6, though in the summer, when most of
the workers are employed, no fees are charged, and inducements may even
be offered to the workers to accept positions. The average fee charged by
the firm of Clapp, Norstrom and Riley in Chicago during the year 1910,
according to their records, was $1.36; however, out of 19,908 positions secured,
no fees were paid by 2,658 persons. Though statutes in many states regulate
the fees, this has generally been interpreted to mean only the original regis-
tration fee paid before a position is secured, and to be in no case a limitation
of the right to contract.

Ex parte Dickey, 114 California 234, 77 Pac. 924; case of Hill v.
Ohio, reported in Ohio, 32d Annual Report of Bureau of Labor Statistics,
1908, pp. 18-23; Illinois, Report of Attorney General, 1903-4, pp. 277-78;
Abbott, loc. cit., 14:295-96; Oklahoma, Report of Attorney' General, re-
produced in 1st Annual Report of Oklahoma Department of Labor, 1908,
p. 174. A lower court in Oklahoma has decided that the fee of $2 is the
maximum charge that can be made in any way, either on registration or
subsequently. See, State of Oklahoma v. Welch Employment Agency,
June 22, 1911, reported in 4th Annual Report of Oklahoma Department
of Labor, 1910-11, pp. 101-02, and International Association of Officials of
Bureaus of Labor, 27th Annual Report, 1911, p. 77. Dr. L. D. Clark has
objected to the decisions on the ground that the regulation of employ-
ment agency fees is not different in principle from the regulation of
rates of interest. Bulletin United States Bureau of Labor, 91:936.
Moreover, these agencies frequently accept fees without reference to the

possibility of securing positions for applicants,

Kellor, op. cit., p. 188; Abbott, loc. cit., 14:297-99.

and, though these fees can legally be reclaimed if the applicant does not
secure employment, the ignorance of the applicants, the lack of efficient in-
spection in most states, and the long time limits within which the fee can be
held by the agency, practically mean that when a fee is paid it is lost unless
a position is secured.

What can be done by inspection is seen in the fact that in Chicago
fees amounting to $4,040 were refunded during the year 1910-11 through
the assistance of the inspectors and without prosecution. Illinois, 13th
Annual Report of Free Employment Offices, 1911, pp. 102, 109. In New
York City six licenses were revoked for refusal to refund fees during
the period from May, 1904, to February, 1909. New York, Report of Com-
mission of Immigration, 1909, pp. 115-16.

In New York one agency was found which maintained, under another name,
a guarantee bureau, from which the applicants were required to secure state-
ments of character, for which an additional fee was paid.

New York, 17th Annual Report of Bureau of Labor Statistics, 1899,
pp. 1223-24.

Some agencies have sent applicants to the free employment agencies, charging
them a fee for this service,

An employment agency in Virginia sent a gang of laborers from
there to Kansas Free Employment Agency, charging for this a fee of $20
for each person, llth Kansas, Annual Report of Director of Free Em-
ployment Bureau, 1911, p. 3.

and to large firms which were hiring many employes, without direct knowl-
edge of whether additional workers were needed at the time; in this case
the agency had nothing to lose and there was a possibility that the applicant
might secure a position. Applicants are frequently sent to distant places and



REPORT OF THE MAYOR'S COMMISSION ON UNEMPLOYMENT 115

when they arrive find no work and have no funds on which to return to the
^employment agency.

Abbott, loc. cit., 14:297-99.

These agencies are interested primarily in securing the fees from appli-
cants, and so fail to adjust the applicants to positions, but place them in any
available position, even though it is certain that such applicants must soon
be dismissed, thus causing trouble both for the employes and the employers.

W. S. Wollner, A Plan of Organization for a Track Labor Depart-
ment, Railway Age Gazette, 52:494-96, March 15, '12.

They frequently have no knowledge of the kind of positions to which appli-
cants are sent,

New York, Report of Commission of Immigration, 1909, p. 114; Kel-
lor, op. cit., pp. 57-58, 78 ff.

and frequently place applicants in positions in which there is known to be
brutal treatment and peonage.

Kellor, op. cit., pp. 207-10; New York, Report of Commission of Im-
migration, 1909, p. 122. See, also, the case against the Corn Products
Company in the Chicago daily papers, December 16, '08.

Both unwittingly and intentionally, sometimes directly and sometimes through
their "runners,"

New York, Report of Commission of Immigration, 1909, pp. 114,
118-19.

they place young women in disreputable houses; investigators for the New
York Commission of Immigration in New York City and Buffalo, and for the
Vice Commission in Chicago found agencies which were willing to send girls
to disreputable houses, even when the agencies were informed of the character
of the positions;

New York, Report of Commission of Immigration, 1909, p. 118; Re-
port of Chicago Vice Commission, 1911, pp. 218-21.
ten licenses were revoked for this cause in New York from 1904 to 1909,

New York, Report of Commission of Immigration, 1909, pp. 115-16.
and three Chicago agents were prosecuted for this offense in 1911.

Illinois, 13th Annual Report of Free Employment Offices, 1911, p. 102.
Moreover, these agencies are directly and indirectly responsible for vice and
immorality by such office arrangements as failure to segregate the sexes,

New York, Report of Commission of Immigration, 1909, 118; Kellor,
op. cit., p. 28.

by keeping open until late at night with disreputable characters permitted
in the offices.

New York, Report of Commission of Immigration, 1909, p. 118.
by connection with saloons, gambling-dens, fortune tellers, palmists, mid-
wives and similar classes,

Kellor, op. cit., pp. 21-22, 77, 181-83; New York, Report of Commis-
sion of Immigration, 1909, p. 117.
and by conducting agencies in living rooms.

New York, Report of Commission of Immigration, 1909, pp. 114-16;
Kellor, op. cit., pp. 20-26; Abbott, loc. cit., 14:291.

Moreover, their quarters are frequently dark, badly ventilated and extremely
dirty and vermin-laden.

Kellor, op. cit., pp. 8, 20-28.

Finally, these agencies .have been connected in many ways with the
padrones who have assisted in changing the workers frequently from position
to position, have secured commissary concessions, have violated the spirit,
if not the letter, of the contract labor law, and have misrepresented work
conditions.



116 REPORT OF THE MAYOR'S COMMISSION ON UNEMPLOYMENT

G. C. Speranza, Charities, 11:26-28, 1903; G. C. Speranza, in 3rd
General Report of New York Department of Labor, 1903, pp. 199-203;
Survey, 29:283, Dec. 7, '12; New York, Report of Commission of Immigra-
tion, 1909, pp. 115-16, 121-28.

There has not been great success up to this time in preventing these
abuses in the private agencies; only eighteen states have any legislation for
this purpose, and of these states less than half have any inspection for the
purpose of enforcement of the law. The state regulations are supplemented
somewhat by municipal ordinances and police control. The system of control
has been especially inadequate in regard to the interstate work of such agen-
cies; it is reported that the New York State Bureau of Industries had hun-
dreds of such cases which required federal control.

Frances A. Kellor, Interstate Immigration, Land and Labor Prob-
lems, Survey, 29:326, Dec. 14, '12.

Consequently, it may be concluded that the private employment agencies
have failed very signally in organizing the labor market, and that a general
organization of the labor market, such as is desired by the students of unem-
ployment, would be very foreign to their purpose. They are business enter-
prises, working for profits, and therefore have found it impossible to co-
operate with other private agencies or with other types of employment
agencies; on the other hand, they have been in the most aggressive competi-
tion in so far as they have been engaged in the same kind of work. They
have found it profitable to specialize in a particular kind of work, and have
set up various occupational, national or racial, local and other limitations:
particularly they have specialized in the field of short-time employments, and
have attempted to make engagements as short as possible in order to increase
the frequency of the fees. Consequently, they have been centers which are
distinct, and thus have divided the labor market into relatively separate parts,
between which there has been little communication. They have organized
certain parts of the labor market, but it has been done in such a way as to
present a series of conflicting and segregated organizations, instead of the
one central and all-inclusive institution in which all demands and supplies
might be represented. And they have acquired, either justly or unjustly,
such a reputation for fraud and dishonesty that general patronage by employ-
ers and employes is not conceivable. Moreover, the helplessness of the
applicants for employment and the consequent great possibility for fraudulent
and dishonest practices have convinced the students of unemployment that
the general organization of the labor market can not be expected to result
from the private employment agencies.

The employment agencies maintained, either formally or informally, by
department stores, typewriter companies, business colleges and saloons are
similar to the private agencies in that such agencies are maintained primarily
for financial gain, though the gain is indirect and in the form of advertise-
ment or increased patronage. Some of the typewriter companies and business
colleges are of benefit to a particular and small group of workers, but the
saloons have been subject to much criticism because of the necessity of
spending considerable sums of money before positions can be secured. A
strike of 7,000 grain handlers in Buffalo from February 25 to May 22, 1899,
is said to have been caused principally by the fact that they were forced to
secure employment through a saloon.

New York, 18th Annual Report of Bureau of Labor Statistics, 1900,
p. 1003.

The cooks and waiters of Chicago made frequent complaints during the
winter and spring of 1913 because they were compelled to secure their posi-
tions through four saloons, which had become recognized employment agen-
cies, though not operating under that name.

Eight organizations of cooks and waiters in Chicago, after failing to
secure relief by appeals to the inspector of private employment agencies,
the mayor and the state's attorney, passed a resolution that private em-
ployment agencies of any kind be made illegal, and that the state extend



REPORT OF THE MAYOR'S COMMISSION ON UNEMPLOYMENT 117

the system of public employment agencies. This resolution was passed,
also, by the Chicago Federation of Labor on March 2, 1913, and turned
over to the legislative committee of the Federation in order to secure
the passage of such legislation.

Such agencies, operating indirectly for financial gain, are very restricted
in their importance, are confined to small classes of workers and have been
able to accomplish almost nothing in the general organization of the labor
market. Moreover, they have made no attempt to solve the general problem
of unemployment, but have merely used this condition of the workers as a
means of increasing their own profits.

The newspaper "want ads" are another means of organizing the labor
market. The manager of the Chicago Daily News stated in 1912: "No em-
ployment agency can do more than put the employers and employes in
contact with each other, and the newspaper 'want ads' do that." It is, there-
fore, necessary to determine the extent to which they have succeeded in
organizing the labor market, and to interpret them in connection with the
general solution of the problem of unemployment.

The profits resulting from this department, both directly from the charges
for insertions, and indirectly from the increased sale of the papers, are evi-
dently the explanation for its maintenance. Consequently, co-operation with
other agencies would mean the loss of those profits, and co-operation between
newspapers and other employment agencies would be expected no more than
it would be expected that private employment agencies would co-operate to
form a central agency. In St. Louis the newspapers have looked on the
public employment agency as a competitor, have charged it the highest rate
for insertions, and one paper which had made a contract for about $100 worth
of advertising refused to carry out the contract.

Conner, op. cit., p. 46.

Moreover, these "want ads" are confined to a relatively few occupations;
a few trades, clerical positions and miscellaneous odd jobs form the largest
part of the legitimate positions offered. Thus, because of the inherent oppo-
sition to co-operation with other agencies and the restricted patronage, the
"want ads" have been merely another distinct center in the labor market.

These "want ads" are, also, a wasteful and expensive method of organiz-
ing the labor market in so far as they are successful. The well-known rushes
for positions and the instances in which hundreds of applications are made
for a single position show the overlapping and the waste of efforts. This
kind of agency does not attempt to control the distribution of labor in an
organized way.

The "want ads" do not discriminate adequately between positions offered,
from the standpoint of the probable moral effect. Disreputable houses, which
can not legally secure the assistance of private employment agencies, can
secure help through the newspapers. The inspector of private employment
agencies in Illinois has stated that the newspapers are more frequently of-
fenders than the private employment agencies in assisting disreputable houses
to secure help.

While a private employment agency in Chicago was being prosecuted
in 1912 for sending two girls to a disreputable house, the girls were at-
tempting to find employment. They secured a position through the col-
umns of one of the newspapers, but the position proved to be in a more
notoriously disreputable house than the first.

Moreover, the "want ads" do not furnish definite and accurate informa-
tion in regard to the demand for labor. The "want ads" contain many mis-
leading, vague and "fake" advertisements; a large proportion of the "want
ads" in the newspapers are in either an open or a concealed form, merely
advertisements of civil service instruction, offers of wares concealed as sam-
ples or outfits, "work to be done at home," with a prerequisite that the raw
materials be purchased from the advertisers, advertisements for solicitors,
canvassers or others who are not offered work for wages but a commission
to be paid after the work is done.
Devine, op. cit., pp. 130-58.



118 REPORT OF THE MAYOR'S COMMISSION ON UNEMPLOYMENT



It was found that on the average 53.7 per cent of the "want ads" in two
of the large newspapers of New York were "fake ads" and the proportion of
such advertisements increased as the amount of unemployment increased, and
that in the depression of 1908 more than 50 per cent were of this nature.

Devine, op. cit., pp. 135-42.

The employment agencies maintained either formally or informally by trade
unions have served to organize the market still further,

On trade union employment agencies, see the constitutions and regu-
lar publications of the various national organizations; Devine, op. cit.,
pp. 159-80; United States, Report of Industrial Commission, 1901, Vol.
XVII, pp. Ixi and 1-324; E. Stewart, Documentary History of the Early
Organizations of Printers, Bulletin U. S. Bureau of Labor, No. 61, pp.
857-1033, Nov., '05; Chicago City Club, Sub-Committee on Labor, Un-
published Report on Trade Union Employment Agencies, 1911.
and the Chicago Federation of Labor, in a resolution passed in 1911, claimed
that the trade union employment agencies were "the most extensive and effi-
cient employment agencies in the city." But the trade unions have shown no
indication of a purpose to solve the general problem of unemployment in the
establishment of their offices. They are interested primarily or exclusively
in securing work for their members, and thus of keeping the non-members
unemployed; only in the weaker unions, except in emergencies, are non-
members assisted in securing positions. The Brewery Workers' Union pro-
vides that a local union which furnishes non-union help to employers shall
be fined and may be suspended; if there are no unemployed members in the
locality it is necessary for the union to secure union members from some
other locality.

Constitution, Art. ix, Sec. 18.

As early as 1802 some of the unions required their officers, and within a
few years their members also, to take an oath to procure employment for


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