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books for ten years, was never utilized. The reasons are very sim-
ple and easQy discovered:

(a) The balance of power lay entirely with the railway mana-
gers; many of the strikes were complete faQures; the unions were
on the defensive.

(b) Both sides in the labor controversies of the time were poorly
organized. No principles or methods of dealing between labor and
capital had yet been worked out. There were no established habits
of procedure, but each strike or dispute was an event in itself, sepa-

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270 The Annals of the Amebican Academy

rate and distinct from all others. We were in the "rule of thumb"
stage of opinion on labor controversies.

For these reasons the decade 1888-1898, and even to 1905,
represents an era in which arbitration was not the habitual but the
most unusual thing to do.

The second law, known as the Erdman Act, was passed in 1898
and provided that the federal officers, on learning of a serious inter-
state dispute, should attempt to mediate in the method already
described. Failing in this they should, if possible, persuade the
parties to sign a contract, the terms of which were fixed by the law
itself. This contract provided for the submission of the dispute
to a board of arbitration composed of three members chosen by the
parties themselves. The award made by this board should be bind-
ing for a definite period. An appeal might be taken from the
board's decision to the federal courts. It is a remarkable fact that
only one case was brought up under this law in the first eight years
of its history. This shows clearly that the parties concerned, and
public opinion in general, had not yet developed to the point where
arbitration was a natural and instinctive method of settlement.
In the one case that was presented during this time the railways
declined arbitration and the government system failed. The em-
ployes voted to strike by an almost unanimous ballot, whereupon
the managers conceded the substance of the union's demands, — a
settlement that could have been easily made by arbitration. Mean-
while in the period from 1901 to 1905 there were 329 strikes affecting
the railways, with only this single case of attempted arbitration
above described, and it a failure. This would seem to show con-
clusively that the unwiUingness to make use of the previous act
was not due to the weakness of the law, but to the lack of experience
of the parties and the backward state of public opinion.

Beginning with 1905, however, a complete reversal in conditions
took place. Despite the failure of several abortive attempts, the
unions had finally got a firm grip upon all the labor supply of the
interstate trains. With this there had come a parallel devdopment
in the control of railway capital; mergers had taken place; railway
systems had been more firmly cemented together; the "community
of interest" between competing lines had become a familiar feature
of transport management. In 1902 the public had received that
dramatic proof of the possibiliti^ Qf arbitration which we still refer

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Abbitration and Mediation 271

to as "the" anthracite coal strike. This was probably the last
great controversy in which the mining companies felt assured of
success in a contest with labor organizations, and when victory was
within their reach it was wrested from them by the national execu-
tive who forced arbitration. It is difficult to exaggerate the spec-
tacular effect of this case. It established once for all the fact that
arbitration on a grand scale in a crisis of national proportions is
possible. The similarity of the issues with those arising on the
railways was also helpful. This striking demonstration removed
the chief obstacle to the use of the Erdman Law, and in the next
dght years there followed in rapid succession a series of 61 cases,
most of which were finally solved by mediation, there being only 12
in which arbitration was necessary.

The third act, known as the Newlands Law, was passed in
July, 1913. It differs from the Erdman Act in only two important
points, — ^the boards of arbitration under the Erdman Act were con-
sidered too small by the railway managers; under the Newlands
Act they may, by consent of the parties, be doubled to six members
instead of three. The new law also provides that the work of me-
diation shall be undertaken by a special, permanent commissioner
of mediation acting with one or two other federal officers, to be des-
ignated by the President, and forming a "Board of Mediation and
Conciliation." Following the 61. eases presented for settlement
under the Erdman Act, 60 more have already been brought up under
the Newlands Law, that is, in the last three years as many contro-
versies have been submitted and settled as in the entire preceding
twenty-five years. Of these 60 cases, 51 have been settled by me-
diation and 9 by arbitration.

Taking the entire results of the Erdman and Newlands Laws
since 1906, that is, since arbitration has become an accepted method,
we observe that a total of 121 cases have been submitted. Of these
over 70 were settled by mediation. Of the remainder, 21 cases
were settled by arbitration, or by arbitration combined with me-
diation. In the remaining cases, the services of the mediators were
either refused or a direct settlement made without resort to arbi-
tration. This is an astonishing record. Two features stand out
with especial prominence — ^the rapid increase in effectiveness of
mediation, and the great importance and breadth of the problems
submitted to arbitration. Mediation settled more than half of the

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2^2 Thb AnnaIs of thb Auss&ican AcADSirr

controversies brought up to the board under the &dman Law, and
over four-fifths of those brought in the last three years under the
Newlands Act. Among the matters subjected to arbitration were
issues ranging from the most minute point up to the entire terms of
employment on over 40 railroads; from the discharge of an electric
motorman for disobedience of orders to the settlement of pay and
basic hours of work per day for many thousands of men.

Since 1910 a great cycle of demands from all of the brotherhoods
has been presented to the railways. In November, 1912, the en-
gineers asked considerable increases. The substantial part of these
was granted by an award under the Erdman Act. In April, 1913,
the firemen followed. Next came the conductors and trainmen in
eastern territory in July, 1913, under the Newlands Act, and finaUy
the engineers and firemen in western territory in 1914-1915 under
the same law. In every one of these a marked and substantial
advance was scored by the employes. It has been claimed that in
a recent case the employes discovered that two members of the
arbitral board owned stock in the railway concerned. It has also
been complained that in some recent controversies the employes
have not received all that they might properly expect. These are
the only reasons made public for refusing arbitration in 1916.
Against them stand the long series of awards above described cover-
ing a period of ten years in which the most meticulous care has been
taken to preserve both the sensibilities and the substantial justice
of the employes' side of each case. Even in the controversy arising
over the discharge of a motorman, already mentioned, the arbitra-
tion board upheld the discharge on the ground of absolute public
responsibility of the railway officers to enforce obedience to train
despatchers' orders, but suggested a reinstatement after 60 days'
suspension. The same course was taken in a similar case arising
under the sixteen hours of service act.

These facts must be weighed in judging the results of our na-
tional system. For it is not sufficient that arbitration shall ''keep
the trains running." A plan of settlement to be permanent must
offer more than this. It must afford a means of securing substaxi-
tial justice. Any system which continuously raised wages in times
of business disaster or which kept them down when prosperity was
at the flood tide, would be unjust and hostile to the public interest.
If arbitration has erred from this standard it has been on the safe

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Arbiteation AKD MsDlAtlOK ^3

side, in favor of labor. Arbitration has kept the wheels turning and
has been fair to labor. It has awarded a marked increase in pay
and a reduction of the basic hours of the work day of every interstate
train employe in the country.

In the state governments the experience has been less favorable,
but shows the same general tendencies as in the national system;
Wherever, as in Massachusetts and New York, the cu$tom has arisen
to refer disputes to arbitration and mediation, the state system has
produced results. On the other hand, where public opinion on the
question is not active, the parties usuaUy prefer to fight it out among
themselves, and the mere presence of an arbitration law on the
statute book is of no consequence. This is a counterpart of the
early history of the Erdman Act. The habit of arbitration and a
public insistence on it must first be formed before an arbitral law
can produce any valuable effects.

The state acts have usually followed the Massachusetts statute
passed in 1886. It provides for a state board of conciliation (me-
diation) and arbitration. This board receives notice from the city
or town authorities of any dispute which involves more than 25
persons. The parties themselves may also send notice to the
board. Upon receiving notice it communicates with both parties
and tries to reach an amicable settlement by mediation. Failing
in this, it arbitrates. If this also cannot be secured, the board in-
vestigates and makes a report, setting forth the causes and assign-
ing the responsibility for the controversy. It may also at any time
make an investigation and public report upon any labor contro-
versy affecting the public wdf are. There are some important va-
riations in the laws of the oth^ states. In Pennsylvania and Ohio,
for examplei a single officer is entrusted with these duties. He
first mediates and, if unsuccessful, he then encourages the appoint-
ment of a special board of arbitration by the parties. In Illinois
and New York the state board itself acts as the arbitration tribunal.
In some states the legislatures have merely passed an arbitration
act and then dismissed the whole matter from their minds. In
Calif omia there is an admirable "system'' but no arbitration,
since the legislature has not even appropriated money for the

The Massachusetts and New York systems have proven the
most successful, particularly the .former. In the single year 1915

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274 The Annals of the Amebican Academt

there were 204 disputes submitted to the state board. Of these,
86 were voluntarily submitted for arbitration; 100 others were set-
tled amicably by mediation. In 18 others, mediation failed and
arbitration was refused, so. that the board used the power above
described of making a public inquiry with recommendations. These
were accepted by the parties in all except 5 cases.

A reasonably well administered state system will also greatly
shorten the life of any labor controversy. What this means to the
community as a whole can best be realized from the figures given
by the arbitration board of any large industrial state. If the dis-
pute is serious and widespread and involves the employment of
troops to preserve order, the loss to the community is a staggering
one. The Ohio board estimates the cost of the Youngstown Sheet
and Tube Company strike in 1916 at about $150,000 per day. The
value of any plan which cuts short such controversies and promotes
a just settlement, therefore, requires no comment. Here the state-
ment of the Massachusetts board in February, 1916, is especially
pertinent — ''The investigation which the board must make in com-
pliance with the statute in any strike or lockout involving 25 or
more employes substantially prevents a long drawn out contro-
versy. " This board is also called on frequently for advice by both
employers and workmen and aids in the prevention, as well as the
settlement, of controversies. It has constantly before it for media-
tion or arbitration from 20 to 40 cases, and the industries of the
state have formed a fixed habit of referring disputes either to the
state board or to local tribunals. The members of the board believe
that this habit could be strengthened by systematic advertising in
the newspapers, calling the attention. of employers and unions to
their duty to give notice to the board before resorting to a strike or

In Ohio the results are also excellent, although not as remark-
able as in Massachusetts. Local boards are also frequently called
on in that state. In the last two and one-half years, 26 industrial
disputes have been taken up under the provisions of the act. The
number of employes concerned has varied from a mere handful to
over 9,000. During this period not a single case of arbitration has
occurred, but the state officials have secured settlement through
mediation. This has been successful in 11 of the 26, but these 11
include all of the larger and more important cases, except those in

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Abbitbation and Mediation 276

which the chief or sole question was that of hours. Here mediation
has been less successful.

At first glance this result seems rather small, but it must be
remembered that only the most difficult cases come to mediation
in Ohio. Where both sides are well organized and accustomed to
dealing with each other, trade agreements or voluntary settlements
are the rule, and state settlements are only sought in absolute dead-
locks or where organization is weak. It is also notable that violence
is almost eliminated during the time that mediation is in progress.
Both sides defer all ''last resort" measures pending the state at-
tempts to effect a settlement. Mediation has shown a notable in-
fluence in removing the bitterness that often occurs in such disputes.
This is in part due to the invariable policy followed by mediation
boards of seeing each side separately. The Ohio board, in its report
for 1916, says on this point: ''In mediating strikes in Ohio during
the period covered by this report, the representatives have seldom
been brought together in conference, but instead confidential con-
ferences have been held first with one side and then with the other
until the facts in the case were secured and a satisfactory basis of
settlement determined upon by the mediators. Usually the final
terms of settlement have come not as a proposal from either side,
but as a proposal from the mediators with the definite understand-
ing that unless it was accepted without change by both sides, the
proposition would be withdrawn by the mediators and each side
would be in exactly its former position. Mediation under this
plan does not disclose to either side either the weak points or the
strong points in the position of the opposing side."

If, despite all these results, it should be urged that a new type
of demand is now arising on the railways viz., for a reduction of
hours, and that this cannot be settled by compromise, such objection
must be weighed against all that we now know of the possibilities of
arbitration. Undoubtedly the matter of hours requires an imme-
diate remedy. The present situation on this point is no longer

The writer has before him the time record of a man who for
12 continuous months in 1915 worked over 11 hours a day, seven
days a week, and there are numerous examples of ten-hour, seven-
day men. The hours problem is one that requires an immediate
solution, whether arbitration succeeds or fails. But that it can

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276 Thb Annalb of thb Ambbican Acadbmy

succeed on this very point may be seen from the merest glance at
the arbitration awards under the Erdman and Newlands Acts.
Hours of work have frequently come up in the demands of the rail-
way brotherhoods, and the establishment of the ten-hour day as a
basis of payment on the railways is itself the result of these very
arbitrations. Every scintilla of evidence that can be collected
shows the ability of the arbitration system to handle this question
justly and fairly on the railways. There is no type of demand
which today finds so cordial a response in the public mind as the
cutting down of working hours to reasonable limits. This definite
change in ideas is now a well established part of our social customs;
it is thoroughly familiar to the public, and is in line with what may
be called our general social policy. It is precisely by inquiry, public
report and arbitration that this progress can now be best realised.
In the minds of many persons our present system falls short
because it does not provide a legal compulsion for the settlement of
disputes in public service indu3tries like the railways. Economic
war, they say, is antiquated and should be prevented by the same
method that was long ago adopted to stop private war — a compul-
sory tribunal. Accordingly they ask that either arbitration should
be absolutely required by law in public industries or else that, as in
Canada, a strike should be forbidden until due notice of the dispute
has been given to the public authorities and a period of 30 days al-
lowed for public investigation and report. There is much force,
particularly in the latter view. We are undoubtedly approaching
a time when it shall be necessary for the parties in interest to stop
and at least listen to public opinion before they resort to force.
Every consideration of public interest seems to dictate an enforced
period of this kind, to be devoted to impartial inquiry and the pub-
lication of the facts with an unbiased proposal for the settlement of
the dispute. But it is equally clear that we have not yet arrived
at this point. Our public opinion has not yet been expressed in
definite, unmistakable terms, nor are we willing to enforce any form
of compulsion. We must first have some striking and dramatic
proof of the need of compulsion before we shall be in earnest about
it. There is only one way to force arbitration by law or even to
prevent a strike by law pending an investigation and report — ^that
is to punish by fine or imprisonment the violators of the law. Can
we in the present state of public opinion prevent men from entering

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Arbitration and Mediation 277

into a combination of this kind? Let anyone who thinks that this
is possible without a strong change in pubUc opinion, first picture
to himself the scene in court when a union official were to be sen-
tenced to fine or imprisonment for promoting a strike. To secure
a conviction we must first have borne in upon the public mii3id the
strong belief that a fair and impartial method of settlement was
possible, and that a great public calamity had been brought about
by the refusal of the accused to resort to this tribunal. When we
have established these two points beyond disputed in popular opinion,
we shall be ready for a Canadian plan, but not until then. In the
cdebrated Bucks Stove & Range case, the three union leaders in-
volved, escaped largely by reason of their prominence, their uli-
doubted high character and ability, and the peculiar nature of the
dispute in which they were involved. But it was unquestionable
that they had violated the law. When the meat packers were
accused of entering into a combination to manipulate prices, con-
trary to the Sherman Act, the government secured an immense
amount of evidence which it considered unanswerable. Yet it
could not secure a conviction. The trial lasted several months and
cost nearly one million dollars. The jury rendered a verdict of not
guilty. Aside from the technical difficulty of proving a combina-
tion, whetha: to promote a strike or to manipulate prices, there is
a lack of strong, definite, clear-cut opinion as to what is permissible
under the rules of the game of business.

It is useless to multiply laws, writs and compulsory processes,
until the public has definitely and unmistakably set its face towards
the enforcement of the law. A compulsory statute might be praise-
worthy as the expression of a pious wish, but it would settle no con-
troversies. During our present attitude of indecision can any one
imagine a department of justice or a federal administration which
would attempt to enforce such a law without the support of strong
public opinion? This applies not only to the railways, but to the
state systems of arbitration as well. No prominent association of
manufacturers has advocated compulsory settlement. As for the
workers, the union heads positively repudiate the idea in unmistak-
able terms.

In order to maintain the right to strike, the union heads feel
that all forms of compulsory arbitration or compulsory postpone-
ment of strike must be defeated. Mr. Gompers has said: ''Arbi-

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^8 The Annals of thb Amsbican AcADEMt

tration is only possible when voluntary. It never can be success-
fully carried out unless the parties to a dispute or controversy are
equals or nearly equals in power to protect or defend themselves. "
During this transition period we must get along without compulsion.
We jhuat wait until, through the inconvenience; the loss and the
sufifering of a great railway strike, we are all convinced — ^not of the
advisability — ^but of the necessity of a compulsory system.

And now to consider the last of the questions with which we
started, — what additions, if any, should be made to our present
government plan of settlement? The tentative suggestion offered
here is to maJ^e nothing compulsory but investigation, and to leave
this in the control of the President in interstate disputes, and in the
judgment of the state boards of mediation in local cases. But, it
will be asked, how would such a simple provision have prevented a
general railway strike? Was not an ultimatum delivered to the
President that something must be done before Labor Day or traffic
would be paralyzed? And was not the Adamson Act passed as the
only avenue of escape from this catastrophe? The answer is to be
found in certain facts which, for some reason, have never been
pressed home upon the public — perhaps because of the distractions
of a presidential election.

(a) The unions never demanded the passage of the Adamson
Act; they were on the whole rather opposed to any law on the sub-

(b) Their demands were not made on the first of September,
but in the preceding spring and were definitely formulated for public
consumption as early as May.

(c) At the time of writing, December, there are large numbers
of brotherhood members who do not know what the real provisions
of the Adamson Law are, — ^some even think that it limits work to
eight hours per day.

(d) Many of those who do understand the act are extremely
dissatisfied with its provisions and some even violently opposed to

(e) A very considerable proportion of freight trainmen are
employed for much longer hours than the public would approve.

If the above is a fair statement of the conditions, it will api>ear
that there was abundant time for an investigation before the pas-
sage of the law; that such an investigation would have immediately

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^ Abbitration and Mediation 279

turned up certain facts and grievances which would have been rem-
edied in the natural course of events, just as all other unreasona-
ble conditions in railway employment have been remedied when
made public or arbitrated; that such a substantial change could
have been made in these conditions as to remove all possibility of
a strike or of public support for a strike if one had been ordered,
and that all real danger of a conflict would have been averted. The
proper remedy then was not a compulsory arbitration, nor a com-
pulsory suspension of the right to strike, but a compulsory investi-
gation and. public report of facts with a proposed settlement. If
the President possessed and would use this authority, the chief
cause of railway strikes woufd be removed.

Digitized by




Donald, W. J. A. The Canadian Iron and Sted InduOry. Pp. xv, 376. Price,
$2.00. Boston: Houghton, Mifflin Company.

A study of the eoonoznic history and problems of the Canadian iron and steel
industry undertaken with the secondary purpose of throwing light on the rela-

Online LibraryHenry Rogers Seager American Academy of Political and Social ScienceAnnals of the American Academy of Political and Social Science → online text (page 27 of 91)