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D.C.) Industrial conference (1919-1920 : Washington.

Report of Industrial conference called by the President. March 6, 1920 online

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1 COSFERESCE


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" THE PRESIDENT





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r William B. Wilson, Chairman
H'erbert Hooves, Vice Chairman




Martin H. Glynn Oscar S. Straus
Thomas W. Gregory Henry C. Stuart
Richard Hooker William O. Thompson
Stanley King Frank W. Taussig
Samuel W. McCall Henry J. Waters
Henry M. Robinson George W. Wickersham
Julius Rosenwald Owen D. Young
George T. Slade




WiLLARD E. HOTCHKISS,

Henry R. Seager,

Executive Secretaries




March 6, 1920



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REPOR 1


of


I S DUS IRIAL


COSFERESCE


called by


THE PRESIDENT


March 6, 1920



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TABLE OF CONTENTS.

PAGE

I — Introduction 5

,vf> II — Prevention of Disputes 9

'* * Joint Organization Through Employee Representation 9

III — Plan for Adjustment of Disputes 13

General Description 13

1. Procedure When Both Sides Voluntarily Submit Disputes

for Adj ustment 13

2. Procedure When There is no Voluntary Submission 14

Details of the Plan 15

1. National and Regional Boards 15

2. National Industrial Board 15

3. Regional Chairmen and Vice-Chairmen 16

4. Panels of Employers and Employees for Regional Boards. 16

5. Detailed Procedure of Regional Adjustment Conference.. 17

Cognizance of Disputes 17

Submission 17

Selection of Representatives 18

Selection from the Panels 18

Formation of Regional Adjustment Conference 18

Ascertainment of Facts 18

6. Powers and Duties of Regional Board of Inquiry 19

Organization of Regional Board of Inquiry 19

Right to Subpoena and Examination 19

Reports 19

Right of the Chairman to Vote 19

7. Transformation of the Regional Boards of Inquiry Into

Regional Adjustment Conferences 19

8. Umpire 20

J 9. Combination of Regions 20

10. Time of Reporting Findings 20

> 11. Effect of Decision 21

J 12. Application of Awards 21

A 13. Procedure on Failure to Comply with an Award 21

■^ 14. Relation of Boards to Existing Machinery for Concilia-

|p tion and Adjustment 22

w 15. General Provisions 22

16. Basis of Decisions 23

17. Protection of Information 24

Public Utilities 24

Public Employees 27

IV — Other Problems Affecting the Employment Relationship 29

1. The Development of Industrial Relations 29

2. Collective Bargaining 30

3. Hours of Labor 32

4. Women in Industry 34

5. Child Labor 34

6. Housing 36

7. Wages 37

8. Profit Sharing and Gain Sharing 38

9. Thrift Agencies 39

10. Inflation and High Cost of Living 40

11. Public Employees 41

12. Agriculture 44

13. Unemployment and Part Time Employment 45

14. Public Employment Clearing House 51

V — Conclusion 51

188602



REPORT OF INDUSTRIAL CONFERENCE.
I. INTRODUCTION.

The Industrial Conference was convened by the President on De-
cember 1, 1919. Under date of December 19th it issued for publication
on December 29th, a tentative plan of machinery to adjust disputes in
general industry by conference, conciliation, inquiry and arbitration.
Criticism and constructive suggestions from the public were requested.

The tentative report provided for the adjustment of disputes rather
than their prevention. The purpose of the Conference in publishing
that report was to obtain at the earliest moment constructive criticism
of the plan for adjustment, while the Conference was engaged in the
further development of methods of prevention.

The Conference reconvened on January 12, 1920. It has received
a vast amount of helpful comment from individuals and organizations
in all parts of the country and it has also had the assistance of leading
representatives of capital and labor, speaking for large numbers of
employers and employees, who have come before it in frank con-
sultation. This material has been carefully weighed.

The Conference now proposes joint organization of management
and employees as a means of preventing misunderstanding and of secur-
ing cooperative efifort. It has modified the tentative plan of adjust-
ment so as to diminish the field of arbitration and enlarge the scope
of voluntary settlement by agreement. As modified the plan makes
machinery available for collective bargaining, with only incidental and
limited arbitration. The Conference has extended the plan to cover
disputes affecting public utilities other than steam railroads and it has
enlarged it to cover the services of public employees.

The present report also deals with a number of specific subjects
consideration of which should underlie any approach to the industrial
problem. Some of these are matters of current controversy.

The causes of industrial unrest are many. Among others they
include the rise in the cost of living, unrestrained speculation, spectac-
ular instances of excessive profits, excessive accumulation and misuse
of wealth, inequality in readjustments of wage schedules, release of
ideas and emotions by the war, social revolutionary theories im-
ported from Europe, the belief that free speech is restricted, the
iiiLcrmittency of employment, fear of unemployment, excessive hours
of work in certain industries, lack of adequate housing, unnecessarily
high infant mortality in industrial centers, loss of personal contact in



6 INDUSTRIAL CONFERENCE CALLED BY THE PRESIDENT.

large industrial units and the culmination of a growing belief on the
part of both employers and employees that a readjustment is necessary
to a wholesome continuity of their united effort.

For the most part causes of unrest are not the result of the war ;
'they have been accentuated by it. Much investigation and public dis-
cussion have been devoted to these matters. The relative importance
and emphasis laid on the different causes varies with each investigator.
The Conference, in Part IV, has made suggestions for dealing with
some of the conditions enumerated, and it hopes that progress toward
remedying them may be accelerated by the further development of
employee representation and by the use of the suggested machinery for
adjustment.

There is, however, a feature of the present industrial unrest
which differentiates it from that commonly existing before the war.
It cannot be denied that unrest today is characterized more than
ever before by purposes and desires which go beyond the mere demand
for higher wages and shorter hours. Aspirations inherent in this form
of restlessness are to a greater extent psychological and intangible.
They are not for that reason any less significant. They reveal a
desire on the part of workers to exert a larger and more organic
influence upon the processes of industrial life. This impulse is not
to be discouraged but made helpful and cooperative. With compre-
hending and sympathetic appreciation, it can be converted into a
force working for a better spirit and understanding between capital
and labor, and for more effective cooperation.

The wisest suggestions for the prevention and relief of industrial
unrest are to be found by interpreting the best thought and experience
of those employers and employees who, within the area of their own
activities, have most successfully dealt with the problem. The Con-
ference in making its final report has considered the interpreting of
actual achievements its most useful function. It believes that practical
experience is more useful than the views of extremists on cither side.
Such exi)criencc shows that no group of men can successfully undertake
to deal with the interests of other groups without their cooperative
participation in the methods of equitable adjustment.

The guiding thought of the Conference has been that the right
relationship between employer and employee can be best promoted by
the deliberate organization of that relationship. That organization
shoulfl begin within the plant itself. Its object should be to organize
unity of interest and thus to diminish the area of conflict, and supply
by organized cooperation between employers and cm|)loyees the ad-
vantages of that human relationship that existed between them when



INDUSTRIAL CONFERENCE CALLED BY THE PRESIDENT. 7

industries were smaller. Such organization should provide for the
joint action of managers and employees in dealing with their common
interests. It should emphasize the responsibility of managers to know
men at least as intimately as they know materials, and the right and
duty of employees to have a knowledge of the industry, its processes
and policies. Employees need to understand their relation to the joint
endeavor so that they may once more have a creative interest in their
work.

Industrial problems vary not only with each industry but in each
establishment. Therefore, the strategic place to begin battle with mis-
understanding is within the industrial plant itself. Primarily the set-
tlement must come from the bottom, not from the top.

The Conference finds that joint organization of management and
employees where undertaken with sincerity and good will has a record
of success. The general principles governing such organization are
stated at length under the title, "Employee Representation." It is not
a field for legislation, because the form which employee representa-
tion should take may vary in every plant. The Conference, therefore,
does not direct this recommendation to legislators but to managers
and employees.

If the joint organization of management and employees in the plant
or industry fails to reach a collective agreement, or if without such joint
organization, disputes arise which are not settled by existing agencies,
then the Conference proposes a system of settlement close at hand and
under governmental encouragement, and a minimum of regulation.
The entrance of the Government into these problems should be to
stimulate further cooperation.

The system of settlement consists of a plan, nation wide in scope,
with a National Industrial Board, local Regional Conferences and
Boards of Inquiry, as follows :

1. The parties to the dispute may voluntarily submit their differ-
ences for settlement to a board, known as a Regional Adjustment
Conference. This board consists of four representatives selected by
the parties, and four others in their industry chosen by them and
familiar with their problems. The board is presided over- by a trained
government ofificial, the regional chairman, who acts as a conciliator.
If a unanimous agreement is reached, it results in a collective bargain
having the same effect as if reached by joint organization in the shop.

2. If the Regional Conference fails to agree unanimously, the
matter, with certain restrictions, goes, under the agreement of submis-
sion, to the National Industrial Board, unless the parties prefer the
decision of an umpire selected by them.



8 INDUSTRIAL CONFERENCE CALLED BY THE PRESIDENT.

3. The voluntary submission to a Regional iVdjustment Confer-
ence carries with it an agreement by both parties that there shall be
no interference with production pending the processes of adjustment.

4. If the parties, or either of them, refuse voluntarily to submit
the dispute to the processes of the plan of adjustment, a Regional
Board of Inquiry is formed by the regional chairman, of two em-
ployers and two employees from the industry, and not parties to the
dispute. This Board has the right, under proper safeguards, to sub-
poena witnesses and records, and the duty to publish its findings as a
guide to public opinion.' Either of the parties at conflict may join the
Board of Inquiry on giving an undertaking that, so far as its side is
concerned, it will agree to submit its contention to a Regional Adjust-
ment Conference, and, if both join, a Regional Adjustment Conference
is automatically created.

5. The National Industrial Board in Washington has general over-
sight of the working of the plan.

6. The plan is applicable also to public utilities, but in such cases,
the government agency, having power to regulate the service, has
two representatives in the Adjustment Conference. Provision is made
for prompt report of its findings to the rate regulating body.

The Conference makes no recommendation of a plan to cover
steam railroads and other carriers, for which legislation has recently
been enacted by Congress.

7. The plan provides machinery for prompt and fair adjustment of
wages and working conditions of government employees. It is
especially necessary for this class of employees, who should not be
permitted to strike.

8. The plan involves no penalties other than those imposed by
public opinion. It does not impose compulsory arbitration. It does
not deny the right to strike. It does not submit to arbitration the
policy of the "closed" or "open" shop.

The plan is national in scope and operation, yet it is decentralized.
It is different from anything in operation elsewhere. It is based upon
American experience and is designed to meet American conditions. It
employs no legal authority cxce])t the right of iiujuiry. Its basic idea
is stimulation to settlement of difTi'rences l)y the jxartics in conflict,
and the enlistment of public opinion toward enforcing that method
of settlement.



INDUSTRIAL CONFERENCE CALLED BY THE PRESIDENT.



II. PREVENTION OF DISPUTES.

JOINT ORGANIZATION THROUGH EMPLOYEE
REPRESENTATION.

Prevention of disputes is worth more than cure. The Conference
feels that a new basis of industrial peace may be found in the further
development of the democratic organization of the relations of em-
ployers and employees, now widely in progress through the country.

Modern industry, as conducted in large plants, has caused a loss
of personal contact between employers and employees. It has also
caused, through high specialization and repetitive mechanical processes,
a loss of creative interest. But it makes possible a greater production
of the material things which contribute to the common resources of
the people. Upon these resources an advancing civilization, with a
higher common standard of living, must depend.

Direct personal contact in the old manner cannot be restored. It is
necessary, therefore, to find the best possible substitute through demo-
cratic representation. Employees need an established channel of expres-
sion and an opportunity for responsible consultation on matters which
afifect them in their relations with their employers and their work.
There must be diffused among them a better knowledge of the indus-
try as a whole and of their own relation to its success. Employee rep-
resentation will not only enable them better to advance their own inter-
ests, but will make them more definitely conscious of their own con-
tribution, and their own responsibilities.

Employee representation has been discussed under different names
and forms, such as shop committees, shop councils, works councils,
representative government in industry and others. But representation
is a definite principle rather than a form. The Conference, therefore,
prefers the generic term "employee representation." In using this
term the Conference has in mind the successful application of the
principle to various activities outside, as well as within, the purely
industrial field.

From both employers and employees the Conference has received
thoughtful and helpful suggestions as to the possibilities, under proper
conditions, of employee representation. These suggestions clearly
proceed from a genuine desire that this movement may spread in ac-
cordance with sound principles and be kept from perversions which
would threaten its lasting usefulness by making it an agency of attack
rather than a means to peace.

Employee representation organizes the relations of employer and



10 INDUSTRIAL CONFERENCE CALLED BY THE PRESIDENT.

employee so that they regularly come together to deal with their com-
mon interests. It is operating successfully under union agreements in
organized shops. It is operating in non-union shops, and it is operat-
ing in shops where union and non-union men work side by side. In
plants working under union agreement, it adds to collective bargain-
ing an agency of cooperation within the plant. It is itself an agency
of collective bargaining and cooperation where union agreements do
not obtain.

It is idle wholly to deny the existence of conflicting interests between
employers and employees. But there are wide areas of activity in
which their interests coincide. It is the part of statesmanship to
organize identity of interest where it exists in order to reduce the area
of conflict. The representative principle is needed to make effective
the employee's interest in production, as well as in wages and working
conditions. It is likewise needed to make more efifective the em-
ployer's interest in the human element of industry.

The idea of employee representation has aroused opposition from
two sources. On the one hand, in plants too large for direct per-
sonal contact, employers who still adhere to. the theory that labor is
a commodity, hold ofif from any form of cooperation with employees.
This view is steadily disappearing and will, it is hoped, wholly dis-
appear. On the other hand, a number of trade union leaders regard
shop representation as a subtle weapon directed against the union.
This thought is apparently based on the fear that it may be used by
some employers to undermine the unions. Conceived in that spirit no
plan can be a lasting agency of industrial peace.

But occasional misuse of employee representation and the conse-
quent hesitancy of organized labor to endorse it otTicially, are based
on a misconception of the possible and desirable relations between the
union and the shop committee. This relation is a complementary, and
not a mutually exclusive one. In many plants the trade union and
the shop committee arc both functioning harmoniously. In some estab-
lishments the men are unionized, and the shop committees are com-
posed of union men. In others, some men belong to the trade union
while all belong to the shop organization.

The union has had its greatest success in dealing with basic working
conditions, and with the general level of wages in organized and
partially organized industries and crafts. It has also indirectly ex-
erted an influence on standards in unorganized trades. There is no
reason to suppose that in the future this influence will not continue.

Local problems, hf)wever, fall naltn-ally within the ])rovincc of shop
committees. No organization covering the whole trade and unfamiliar
with special local conditions and the questions that come up from



INDUSTRIAL CONFERENCE CALLED BY THE PRESIDENT. 11

(Jay to day, is by itself in a position to deal with these questions ade-
quately, or to enlist the cooperation of employer and employee in
methods to improve production and to reduce strain. Except for
trades in which the union itself has operated under a system of em-
ployee representation, as it does in shipbuilding and in the manufacture
of clothing and in other trades, these internal factors are likely either to
be neglected or to be dealt with in a way which does not make for
satisfactory cooperation.

The existence of employee representation in plants operating under
union agreement does not necessarily reduce the scope of the union
representative's work. But matters are more likely to come to him as
questions of the application of an agreement rather than as mere griev-
ances. In other words he has greater opportunity for service in
negotiation of an essentially conciliatory nature. The fortunate results
of such development have been evident in industries in which employee
representation and trade unions have for some time been functioning
harmoniously.

Employee representation must not be considered solely as a device
for settling grievances. It can find success only if it also embodies co-
operation in the problem of production. Whatever subjects the rep-
resentatives come to feel as having a relation to their work, and
their effectiveness as members of the plant, may come within the field
of committee consideration. It is a thing to be undertaken, if at
all, in a thoroughgoing way. Representatives must be selected by
the employees with absolute freedom. In order to prevent sus-
picion on any side, selection should be by secret ballot. There must be
equal freedom of expression thereafter. All employees must feel abso-
lutely convinced that the management will not discriminate against them
in any way because of any activities in connection with shop commit-
tees. Meetings should be held frequently and regularly, not merely
when specific disputes are threatened. Both sides must be prepared
to study the oroblems presented and must give them patient, serious
and open-minded consideration. There should be made available
those facilities and facts essential to the formation of soundly based
conclusions.

Employee representation offers no royal road to industrial peace.
No employer should suppose that merely by installing some system
of shop representation he can be assured, without continued efifort.
of harmony and increased production. Doubtless there will be failures
where the plan is adopted as a fad or a panacea. It is only a means
whereby sincerity of purpose, frank dealing and the establishment of
common interests, may bring mutual advantage.

The development and maintenance of right relations between
employer and employee require more than mere organization.



12 INDUSTRIAL CONFERENCE CALLED BY THE PRESIDENT.

Intelligent and wise administration is needed of all those prob-
lems of production that directly touch the employee. Conditions
affecting human beings in industry were, during the last genera-
tion, largely in charge of men whose special training had been devoted
to the mechanical side of production. ^luch study was given to the
machinery and processes upon which men worked. But the factors
that contribute to the broader human development and satisfaction
of the employee and that lead to increased productivity were too
nearly neglected. The elimination of human friction is, even from
the point of view of increased production, at least no less important
than the elimination of waste in materials, or in mechanical power.

Establishments in which the ultimate management is of necessity
widely removed from the employees, require provision for specialized
study of industrial relations. But the right concept of human relations
in industry, w^hich should be the primary impulse of management, is of
full value only when it permeates the entire administrative force. Far-
sighted executives testify to the advantage gained from careful and
painstaking efforts to encourage and educate their foremen in the
proper attitude toward employees.

A large proportion of men trained in our engineering and technical
schools now pass into executive positions. It is, therefore, desirable
that these schools should provide courses of instruction in which the
psychological and industrial background for human relations work
shall be developed. But no amount of education outside the plant
will remove the need for the systematic training of the force within.

Some industries have extended the principles of employee repre-
sentation beyond the individual plant. The voluntary joint councils
which have thus been set up in the clothing industry, in the printing
trade, and elsewhere are fruitful experiments in industrial organiza-
tion.

'J'he Conference has had the benefit of testimony from both em-
ployers and employees who have had experience of the results of em-
ployee representation. An enthusiasm has been shown which comes
from a sincere feeling of substantial progress in the development of
human relations.



<^,



I 1/. -^■^'



INDUSTRIAL CONFERENCE CALLED BY THE PRESIDENT. 13

III. PLAN FOR ADJUSTMENT OF DISPUTES.

GENERAL DESCRIPTION.

1. PROCEDURE WHEN BOTH SIDES VOLUNTARILY SUBMIT
DISPUTES FOR ADJUSTMENT.

The United States shall be divided into a specified number of
industrial regions, in each of which there shall be a chairman.

Whenever a dispute arises in a region, which can not be settled
by existing machinery, the regional chairman may request each side
to submit the dispute to a Regional Adjustment Conference, to be
composed of two representatives from each side, parties to the dispute,
and 1^0 representatives to be selected by each side from the panels
herein provided for. The regional chairman shall preside but not


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Online LibraryD.C.) Industrial conference (1919-1920 : WashingtonReport of Industrial conference called by the President. March 6, 1920 → online text (page 1 of 5)