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across more indications of works dealing
with industrial conciliation and arbitration
than I have found it possible to refer to.
This has led me to form a bibliography of
all the works bearing on the subject, of
which I know the titles, and it will be found
in an appendix to this essay. To many
of the more important works I have added
short notes, indicating what the reader may
expect to find in them. Details of the
intentional omissions from the bibliography
will be found in the appendix.

Before passing on to the subject proper,
the pleasant duty remains for me to ex-
press my best thanks to various gentlemen
for facilities afforded me in writing this
essay, and in particular for the loan or gift
of reports, books and papers : — Professor
S. J. Chapman ; Hon. W. P. Reeves, Agent-
General for New Zealand ; the late Hon
Henry Copeland, Agent-General for New
South Wales ; Hon. H. B, Lefroy, Agent-
General for Western Australia ; Sir W. Peace



xxiv PREFACE.

K.C.M.G., Agent-General for Natal ; Colonel
Carroll D. Wright, Commissioner of the
United States Department of Labour ; Mr.
John McMakin, Commissioner of the New-
York State Department of Labour ; Mr. B.
F. Supple, Secretary of the Massachusetts
State Board of Arbitration ; Mr. K. B.
Murray, Secretary of the London Labour
Conciliation and Arbitration Board; Mr. W.
J. Davis, Secretary of National Amalgama-
tion of Brass Workers ; Signor C. Hannan,
Director of the Commercial Museum of
Milan ; Mr. John Smethurst, Secretary of
the Federation of Master Cotton Spinners'
Associations; Mr. Ealph M. Easley, General
Secretary of the National Civic Federation of
America ; Mr. Frank Popplewell, B.Sc. ; and
Mr. F. G. Ewington, Auckland.

Since it has been decided to publish this
essay, which was originally prepared for the
Shuttleworth Scholarship at the University of
Manchester, I have further to express my
obligations to Professor Chapman for kindly
writing the Introduction, and to my father for
the great assistance given me in getting the
manuscript through the press.



INDUSTRIAL CONCILIATION
AND ARBITRATION.



CHAPTER I.

INDUSTRIAL DISPUTES : THEIR CAUSES AND
THEIR SETTLEMENT.

" An absolutely fair rate of wages belongs to
Utopia." These words of a great Englisli economist*
really give the keynote to the whole of this essay. All
industrial disputes do not arise over questions of
wages, but nevertheless this is the predominating
cause of strife, as figures produced below will
show. There is little hope that in the immediate
future an entirely satisfactory solution of the newest
of the great economic problems, the wages problem,
will be found, and consequently anything, such as the
subject-matter of this essay: "Industrial Conciliation
and Arbitration," which helps to remove the difficulty,
is not to be considered as an object of passing interest
only, but rather as one of the few existing solutions
of the problem, however imperfect they may be,
which have come to stay as long as the problem itself
remains. It cannot be recognised too clearly that
the great economic problems, as we know them to-day,
have not existed for more than a few centuries at the
most, and that even at the beginning of the nineteenth

* Professor Alfred Marshall in the Preface to Price's
Industrial Peace, p. ix,

B



2 CONCILIATION AND AEBITRATION.

century the force of custom was still often stronger
than the force of competition. Adam Smith clearly
recognised the problem of prices, Ricardo for the
first time correctly explained the problem of rent,
but it was not till well into the second half of the nine-
teenth century that the problem of wages received a
correct treatment. It must not be thought that these
problems did not exist before the time they were
correctly explained, just as the laws of gravitation
existed before they were explained by Newton ;
but whilst these latter are fundamental laws, which,
as far as we know, always have been and always will be
true, the laws governing economic phenomena have
varied during the course of centuries, and cannot
be universally applied even at the present time.

Little more than a century ago the wages problem
did not exist as it exists to-day, but was to a large ex-
tent merged in the problem of prices. The subject-
matter of an industrial bargain was commodities, not
labour. Many a workman, generally assisted by his
family, made the goods in his house and sold them
either to travelling merchants or sometimes to manu-
facturers, who delivered them to other workmen to
undergo a further process of manufacture. The only
point to be settled was the price to be paid for the com-
modities, and just as at present no seller would think of
denouncing a would-be purchaser as a " sweater " of
labour because he refuses to buy at a certain price, so
in the eighteenth century no workman was discon-
tented if a merchant refused to buy his yarn at any
particular price he chose to fix. Hence disputes



INDUSTRIAL DISPUTES. 3

about the price to be paid did not arise, althougb of
course disagreements about the quality and quantity
of the goods delivered, might occur.

The wages problem as we know it, may be said to be
a child of the factory system and as this grew and as
the old order died out, labour was substituted for com-
modities in the industrial bargain. As the element
of custom which still existed was gradually replaced by
that of competition ; as the invention of machinery
to a large extent took away from the limited number
of skilled workmen the advantages they had possessed
over the numerous miskilled, and as even children
became almost their equals ; as the even balance,
which for centuries had existed between demand and
supply was rudely upset ; as the economies arising out
of the concentration of industry and capital in small
areas gradually but surely destroyed the household in-
dustries ; as the barrier separating management from
execution became greater and greater ; and, what is
perhaps the crucial point of the wages problem of the
present, as industry ceased more and more to be a
subsidiary employment for agriculture and attained to
the independent position it occupies to-day, the work-
man, finding himself isolated and no longer sup-
ported by his farm, ceased to be able to say to the
manufacturer — " If you will not buy at my price,
I will not sell at all." The workman, obliged
to live, had to sell his labour for what it would
fetch, and for a time, great as was the demand for
labour, the supply, swelled by the children of paupers
and to a large extent also by those of free labour,

b2



4 CONCILIATION AND AKBITRATION.

exceeded the demand and wages for many years
never rose above a bare living wage. Tbis im-
doubtedly was the condition of wages when Ricardo
wrote his " Principles of Political Economy " in 1812,
for he considers that the amount paid to labour as
wages is determined by the minimum of subsistence,
and it is in consequence of this principle that he holds
in another part of his work that none of the in-
cidence of a tax can fall upon the labouring classes,
for the simple reason that the whole of their wages
is absolutely necessary to them for mere subsistence.
In so far as we are dealing with one of the most
subtle changes which have taken place in economics,
it is really impossible to fix the dates of the beginning
and of the end of the period of transformation and to
say that, before a certain date, there is a problem of
prices, and that, after another date, there is a
problem of wages. Nevertheless, just as when dealing
with political history it is commonly said that the
Eighteenth Century ended in 1789 and the Nineteenth
began in 1815 after the battle of Waterloo, and that
the intervening years were occupied by the French
Revolution, so we may say, when dealing with the
history of wages, that roughly the old system ended
in 1760 and the new system began in 1824, after the
repeal of the Combination Acts, and that the inter-
vening years were occupied by the Industrial Revolu-
tion. In 1824 also, an Act was passed to amend and
consolidate the laws dealing with industrial arbitra-
tion ; * and thus one year saw, not only the
* 5 Geo. IV., Ohap. 96.



INDUSTRIAL DISPUTES. 5

commencement of the new problem of wages and
the right of labour to organise, which were so
closely connected, but also a fresh attempt on the
part of the Government to assist in the settle-
ment of any strikes which the new system might
involve. *

Ever since 1824 the close connection between the
wages problem, trade unionism, strikes and lockouts,
and industrial conciliation and arbitration has con-
tinued to exist, although for a long time the attempts
to settle industrial disputes by peaceful methods
were not attended with any great success. It is
not necessary to enter here into the history of
conciliation and arbitration, as this will be dealt
with fully further on. In this chapter, however,
we must still shortly consider the wages problem
of to-day and its relation to industrial disputes,
industrial disputes and their relations to trade
unions and employers, and lastly, trade unions
and employers, or associations of employers, in
their relation to industrial conciliation and arbi-
tration.

The first words of this essay were, that " an ab-
solutely fair rate of wages belongs to Utopia." The
reader may well ask himself, what an absolutely fair
rate of wages really is ? Professor Marshall discusses
this question at considerable length,"]* and as I do not
wish to repeat what he has said, and certainly cannot

* The legislation of both the old and the new systems
will be fully dealt with in Chapter VI.
I See Preface to Price's Industrial Peaoe.j



6 CONCILIATION AND ARBITRATION.

improve upon it, I shall content myself witli taking a
short phrase of his and tacking on to it what I have
to say : " The popular notion is, that there should
be given a ' fair day's wage for a fair day's work.' "*
This sentence clearly shows us, that a fair day's wage,
even in the popular notion, is something mutual, so
that an absolutely fair rate of wages may be described
as one entirely satisfactory to both parties. No doubt
the reader will say, that there never were two men,
one paying and one receiving a wage, who were both
entirely satisfied with the arrangement ; it must be
remembered, that in Professor Marshall's words
" an absolutely fair rate of wages belongs to Utopia."
The ideal or absolutely fair rate of wages is one which
is practically never attained, and in daily life we
always find one party gaining an advantage at the
expense of the other. The advantage or disadvan-
tage may be very slight, but it may become so great,
that the party at the disadvantage refuses to continue
work upon those terms. The two points at which
the employer on the one hand and the workman on
the other refuse to continue work may, for brevity's
sake, be called the " locking out " point and the
" striking " point respectively. These two points
must be conceived as changing their position
according to the condition of trade, and also in the
case of the " striking " point in some degree according
to the cost of living. Thus, when a depression of trade

* The words quoted here are from a long sentence, and
the Uberty has been taken of altering theu' order, so as to
make one short sentence out of the first part of it.



INDUSTRIAL DISPUTES. 7

follows a time of prosperity, wages, if tliey have re-
mained stationary, become more and more favourable
to the workpeople, or, in other words, the " locking
out " point is being approached, and if the work-
people do not consent to a reduction of wages a lock-
out will inevitably follow. In the same way, when trade
is improving, the wages paid, if they have remained
stationary, become more and more favourable to em-
ployers ; whilst on the other hand the workmen's
*' striking " point is steadily being reached and,
unless the employers concede a rise in wages, a strike
will follow.

The large number of industrial disputes caused
by unsuccessful attempts to raise or reduce wages,
has already been referred to and will be illustrated
by figures below. The cause for this must now be
pretty evident to the reader. When attempting
to make a new industrial bargain, it is exceedingly
difficult for each party to estimate the striking or
locking out points of the other party. Employers
and workmen each put a difierent estimate upon
the increase in wages, which an improvement in trade
will bear ; and it is exactly the same with reductions,
when trade is becoming depressed. Generally, each
party is successful in feeling whether the other
party will give way or not, and insists or withdraws
accordingly ; but in certain cases the one misjudges
the other, or, the employers, wishing to cut down
their output in times of depression, insist upon an
unnecessarily large reduction of wages, in order to
bring about a strike or lockout. The only satisfactory



8 CONCILIATION AND ARBITRATION.

solution for disputes arising out of increases
and reductions of wages is a board of conciliation,
where masters and men meet in a friendly spirit and
quietly talk matters over. This will be referred to
again later in the essay, and we will now pass from in-
dustrial disputes caused by an alteration in the level of
wages to a discussion of industrial disputes in general.
It is most important to recognise that there are
two distinct classes of labour disputes. The first
class arises out of the interpretation of existing
contracts. These disputes are generally individual,
and are particularly suited for settlement by arbitra-
tion, if no settlement can be efiected by any other
method. The second class is caused by difficulties
about the terms of future contracts, and these dis-
putes are usually characterised by their collective
nature. In making future contracts, two distinct kinds
have to be recognised, which have been called vertical
and horizontal contracts. The former are concerned
with the relation which the wage of any one class of
workmen bears to itself at difierent times ; the latter
are concerned with the relation which the wage of
one class of workmen bears to that of another at any
given time. Though the horizontal contract is some-
times a source of trouble, it is generally the vertical
movement which leads to disputes. It will be easily
seen that disputes of the second class are not suit-
able for decision by arbitration ; and, shortly, the
distinction between the two classes may be well ex-
pressed by saying, that the former is of a judicial
and the latter of an essentially legislative character.



INDUSTRIAL DISPUTES. 9

From the nature of industrial disputes it re-
quires a small step only to turn to the number of the



TABLE SHOWING THE NUMBER OF STRIKES AND
LOCKOUTS IN THE UNITED KINGDOM, 1894-1903.*





Number of


Workpeople




Year.


Disputes.


Affected.


Days Lost.


1894


929t


325,248t


9,529,010t


1895


745t


263,1231


5,724,670t


1896


926t


198,1901


3,746,368t


1897


8G4


230,267


10,345,523


1898


711


253,907


15,289,478


1899


719


180,217


2,516,416


1900


648


188,538


3,152,694


1901


642


179,546


4,142,287


1902


442


256,667


3,479,255


1903


387


116,901


2,338,668



* Compiled from the Annual Reports on Strikes and
Lockouts.

f It is only since 1897 that disputes involving fewer than
10 workpeople and those which lasted less than one day have
been omitted, except when the aggregate duration exceeded
100 working days. The figures quoted above are those
altered to the new basis, as given in the Report on Strikes
and Lockouts for 1899. The original figures for 1894, 5 and
6 were as follows : —



Year.


No. of
Disputes.


Workpeople
AfEected.


Days lost.


1894
1895
1896


1,061

876

1,021


324,245
263,758
198,687


9,322,096
5,542,652
3,748,525



It is also very possible that after the original reports were
pubhshed, new iaformation came to hand, and that this was
embodied ia the revised figures,



10 CONCILIATION AND ARBITRATION.



TABLES SHOWING THE NUMBER OF TRADE DISPUTES
TERMINATED IN GERMANY AND THE METHODS
OF ADJUSTMENT, 1899-1903.*





1899.


1900.


1901.


1902.


1903.


No. of trade dis-












putes terminated


1,311


1,468


1,091


1,106


1,444


No. of work-












people affected


116,486


141,121


68,191


70,696


135,522


Method of adjust-












ment : —












Direct agree-












ment between












the parties


542


635


392


413


*56


Intervention of












trade organi-












sations -


206


233


170


186


338


Industrial courts












acting as boards












of conciliation


65


45


32


43


55



* Compiled from the German Reports " Streiks imd Aus-
sperrungen (Statistik des Deutschen Riechs)" which have been
published annually since 1899, and which are quoted in the
Labour Gazette.

TABLE SHOWING THE NUMBER OF STRIKES AND
LOOKOUTS IN FRANCE, 1894-1903.*



Year.


Number of
Disputes.


Workpeople
Affected.


Days Lost.


1894


391


54,576


1,062,480


1895


406


45,809


617,669


1896


476


49,851


664,168


1897


356


68,875


780,944


1898


368


82,065


1,216,306


1899


744


177,081


3,550,734


1900


903


222,769


3,761,227


1901


523


111,414


1,862,050


1902


512


212,704


4,675,081


1903


571


123,957


2,443,219



* Compiled from " Statistique des Greves et des Recours k
la Conciliation et ^ I'Arbitrage." Office du Travail, annually ;
and quoted in the Abstract of Foreign Labour Statistics and
the Labour Gazette. x



INDUSTRIAL DISPUTES.



11



TABLE SHOWING THE NUMBER OF STRIKES IN THE
UNITED STATES, 1891-1900.*







Number of


Employees


Average


Year.


Strikes.


Establish-


thrown out of


Duration.




ments.


Employuieut.


(Days).


1891


1,717


8,116


298,939


34-9


1892


1,298


5,540


206,671


23-4


1893


1,305


4,555


265,914


20-6


1894


1,349


8,196


660,425


32-4


1895


1,215


6,973


392,403


20-5


1896


1,026


5,462


241,170


22-0


1897


1,078


8,492


408,391


27-4


1898


1,056


3,809


249,002


22-5


1899


1,797


11,317


417,072


15-2


1900


1,779


9,248


505,066


23-1



TABLE SHOWING THE NUMBER OF LOCKOUTS IN THE
UNITED STATES, 1891-1900.*



Year.


Number of
Lockouts.


Number of
Establish-


Employees
throwia out of


Average
Duration.




ments.


Employment.
31,041


(Days).


i»ji


69


546


37


8


1892


61


716


32,014


72





1893


70


305


28,842


34


7


1894


55


875


29,619


39


7


1895


40


370


14,785


32


3


1896


40


51


7,668


65


1


1897


32


171


7,763


38


6


1898


42


164


14,217


48


8


1899


41


323


14,817


37


5


1900


60


2,281


62,653


265-1



same. In recent years tlie importance of strikes and of
their influence, has been so well recognised, that in all
four of the greatest industrial countries — the United
Kingdom, the United States, Germany and France —
ofl&cial reports are periodically published dealing
with the same. I On the preceding pages I have

* Compiled from the 10th and 16th Annual Reports of the
U.S. Commissioner of Labour.

t The English Reports on Strikes and Lockouts have been
published annually since 1888. The French Reports,
" Statistique des Greves et des Recours a la Conciliation et a



12 CONCILIATION AND ARBITRATION.

quoted some of the more recent figures for eacli of
these countries. Unfortunately, the manner in which
the statistics are quoted difiers in the various countries,
so that comparison becomes difficult. It is not even
possible to compare the number of disputes in the
different countries, for after allowing for the size
of the industrial populations, it is probable that
what is included under the head of strikes and
lockouts in one country, is omitted as too small
and unimportant in another ; and besides this,
the completeness of the figures for the difierent
countries is very liable to differ. All that can be
compared are the figures for any one country in
difierent years, and as that is done in the con-
cluding chapter, where an attempt is made to show
whether peaceful methods of settling disputes is
on the increase or not, I shall not dwell upon this
question here, but shall content myself with pointing
out one or two of the more striking characteristics

r Arbitrage," have appeared annually since 1893 ; but ever
since 1852 attempts have been made to estimate officially
the number of strikes, though only from 1882 onwards can
the figures be said to be rehable. The German pubhcation,
" Streiks und Aussperrungen(Statistik des Deutschen Reichs)''
commenced in 1899 only and has appeared annually since.
In the United States strikes and lockouts are dealt with
periodically in the Annual Reports of the Commissioner of
Labour. The 3rd Report, issued in 1888, dealt with the
strikes and lockouts from 1881-1880. The Report of 1894
brought these figures down to June 1894 and the 16th Report,
published in 1901, deals with the disputes from June 1894
till December 31st 1900. It may be mentioned, by the
way, that the German Reports give figures only for the dis-
putes terminated in any one year, and in America the figures
for strikes and lockouts are quoted separately.



INDUSTRIAL DISPUTES. 13

which the figures reveal. In the case of the
statistics for the United Kingdom, one cannot fail
to notice the very large number of days lost in
some years. The explanation generally is, that the
figures have been enormously increased by one or
two particularly big strikes.* In 1894, for example,
70,000 Scotch coal miners were on strike for an
aggregate duration of working days of no fewer than
5,600,000. In 189.5, 46,000 boot and shoe opera-
tives lost 1,564,000 days, whilst during 1897 and
1898, 47,500 engineers were on strike for an aggregate
duration of, approximately, 6,850,000 days. In 1898,
100,000 South Wales coal miners lost 11,650,000
days, and again in 1902, 102,612 pit lads and other
colliery workers from the Federated districts lost
872,000 days. These few strikes explain to a large
extent the height of the United Kingdom strike
statistics. The French figures, on the other hand,
seem to show that France is remarkably free from
large disputes. In Germany there appear to be a
large number of strikes, each involving on an average
only very few people. The United States figures
fluctuate in a very high degree, and the abnormal
number of lockouts of great duration in 1900 is
particularly noticeable.

It is really quite impossible in a few short para-
graphs to deal adequately with a subject like strikes
and lockouts, and no attempt is made to do so, but

* A complete list of the great disputes of the United
ICingdom from 1888 till 1902 will be fouud in an appendix
to the Report on Strikes and Lockouts for 1903.



T4 CONCILIATION AND ARBITRATION.



a word about them had necessarily to be introduced
into an essay, the subject-matter of which is a solution
for industrial disputes. From our point of view,
however, it is more important to understand the
causes which lead to strikes, than their numbers ; as
before any remedy of an evil can be discussed, it is
necessary to know the cause of the evil. The statistics
quoted on the next pages refer to the causes of
disputes in the United Kingdom only, but as far as the
importance of the question of wages is concerned,
they may be taken as typical of all great industrial
countries.

TABLE SHOWING THE CAUSES OF THE DISPUTES
IN THE UNITED KINGDOM AND THE NUMBER
OF WORKMEN DIRECTLY AFFECTED, 1899-1903.*



Principal Cause. t


Number of Workpeople directly affected by
Disputes beginning in :


1899


1900


1901


1902


1903


Wages :
For increase
Against decrease -
Otlier - - - -


73,696

6,826

14,129


57,269
7,385

18,249


19,886
14,852
24,127


15,208
26,053
15,472


14,412
12,019
23,126


Total -


94,651


82,903


58,865


56,733


49,557


Hours of labour :
For decrease
Otlier - - - -


1,069

2,788


487
231


1,464
2,734


203
2,841


99

4,009


Total -


3,857

8,187

17,895

5,130

8,338


718


4,198


3,044


4,108


Employment of particular


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