Copyright
John D. (John Davison) Rockefeller.

The Colorado industrial plan online

. (page 1 of 5)
Online LibraryJohn D. (John Davison) RockefellerThe Colorado industrial plan → online text (page 1 of 5)
Font size
QR-code for this ebook


THE COLORADO
INDUSTRIAL PLAN



BY
JOHN D. ROCKEFELLER, JR.




ID



INCLUDING A COPY OF THE PLAN OF
REPRESENTATION AND AGREEMENT
ADOPTED AT THE COAL AND IRON
MINES OF THE COLORADO FUEL AND
IRON COMPANY

1916



THE COLORADO
INDUSTRIAL PLAN



BY

JOHN D. ROCKEFELLER, JR.




INCLUDING A COPY OF THE PLAN OF
REPRESENTATION AND AGREEMENT
ADOPTED AT THE COAL AND IRON
MINES OF THE COLORADO FUEL AND
IRON COMPANY

1916



U. Q. I

fcDCMY OF I
IFIC COASTI
HISTORY j



NOTE

THIS booklet contains a complete
copy of the Plan of Employes' Rep-
resentation or "Industrial Constitu-
tion M and the Agreement between
the Company and its employes, adopted
at the coal and iron mines of the Colo-
rado Fuel and Iron Company.

In order that the scope and purpose
of the Plan may be the more clearly
understood, there are also included an
article entitled "Labor and Capital
Partners," reprinted from the Atlantic
Monthly for January, 1916, and two
addresses delivered by John D. Rocke-
feller, Jr., while in Colorado in Oc-
tober, 1915.



CONTENTS

PACK

I. " LABOR AND CAPITAL PART-

NERS" .............. 7

(From Atlantic Monthly, January , IQI6)

II. ADDRESS TO EMPLOYES OF THE
COLORADO FUEL AND IRON
COMPANY ............ 32

(At Pueblo, Colo., October 2, 1915)

III. ADDRESS TO THE PEOPLE OF

COLORADO ............ 49

(Before Denver Chamber of Commerce,
October 8,



IV. THE "INDUSTRIAL CONSTITU-
TION" (or, PLAN OF EMPLOYES'
REPRESENTATION) ....... 63

V. AGREEMENT BETWEEN THE
COLORADO FUEL AND IRON
COMPANY AND EMPLOYES . 89



LABOR AND CAPITAL-
PARTNERS

BY JOHN D. ROCKEFELLER, JR.

(From Atlantic Monthly, January, 1916)



Labor and Capital are rather abstract
words with which to describe those vital
forces, which working together become pro-
ductively useful to mankind. Reduced to
their simplest terms Labor and Capital are
men with muscle and men with money
human beings, imbued with the same weak-
nesses and virtues, the same cravings and
aspirations.

It follows, therefore, that the relations of
men engaged in industry are human rela-
tions. Men do not live merely to toil ; they
also live to play, to mingle with their fel-
lows, to love, to worship. The test of the
success of our social organization is the ex-
tent to which every man is free to realize
his highest and best self; and in consider-
ing any economic or political problem, that
fundamental fact should be recognized. If
in the conduct of industry, therefore, the
manager ever keeps in mind that in dealing
with employes he is dealing with human
beings, with flesh and blood, with hearts and

[7]



THE COLORADO INDUSTRIAL PLAN

souls; and if, likewise, the workmen realize
that managers and investors are themselves
also human beings, how much bitterness will
be avoided!

Are the interests of these human beings
with labor to sell and with capital to em-
ploy necessarily antagonistic or necessarily
mutual? Must the advance of one retard
the progress of the other? Should their
attitude toward each other be that of ene-
mies or of partners ? The answer one makes
to these fundamental questions must con-
stitute the basis for any consideration of the
relationship of Labor and Capital.

Our difficulty in dealing with the indus-
trial problem is due too often to a failure
to understand the true interests of Labor
and Capital. And I suspect this lack of un-
derstanding is just as prevalent among rep-
resentatives of Capital as among represen-
tatives of Labor. In any event the concep-
tion one has of the fundamental nature of
these interests will naturally determine one's
attitude toward every phase of their rela-
tionship.

Much of the reasoning on this subject
proceeds upon the theory that the wealth of
the world is absolutely limited, and that if
one man gets more, another necessarily gets
less. Hence there are those who hold that
if Labor's wages are increased or its work-
ing conditions improved, Capital suffers be-

[8]



THE COLORADO INDUSTRIAL PLAN

cause it must deprive itself of the money
needed to pay the bill. Some employers go
so far as to justify themselves in appro-
priating from the product of industry all
that remains after Labor has received the
smallest amount which it can be induced or
forced to accept; while on the other hand
there are men who hold that Labor is the
producer of all wealth, hence is entitled to
the entire product, and that whatever is
taken by Capital is stolen from Labor.

If this theory is sound, it might be main-
tained that the relation between Labor and
Capital is fundamentally one of antagonism,
and that each should consolidate and arm its
forces, dividing the products of industry be-
tween them in proportion as their selfishness
is enforced by their power.

But all such counsel loses sight of the
fact that the riches available to man are
practically without limit; that the world's
wealth is constantly being developed and
undergoing mutation, and that to promote
this process both Labor and Capital are in-
dispensable. If these great forces co-oper-
ate, the products of industry are steadily
increased; whereas, if they fight, the pro-
duction of wealth is certain to be either re-
tarded or stopped altogether, and the well-
springs of material progress choked. The
problem of promoting the co-operation of
Labor and Capital may well be regarded,

[9]



THE COLORADO INDUSTRIAL PLAN

therefore, as the most vital problem of mod-
ern civilization. Peace may be established
among the nations of the world ; but if the
underlying factors of material growth
within each nation are themselves at war,
the foundations of all progress are under-
mined.

II

Capital cannot move a wheel without La-
bor, nor Labor advance beyond a mere
primitive existence without Capital. But
with Labor and Capital as partners, wealth
is created and ever greater productivity
made possible. In the development of this
partnership, the greatest social service is
rendered by that man who so co-operates in
the organization of industry as to afford to
the largest number of men the greatest op-
portunity for self-development, and the en-
joyment by every man of those benefits
which his own work adds to the wealth of
civilization. This is better than charity or
philanthropy; it helps men to help them-
selves and widens the horizon of life.
Through such a process the laborer is con-
stantly becoming the capitalist, and the accu-
mulated fruits of present industry are made
the basis of further progress. The world
puts its richest prizes at the feet of great
organizing ability, enterprise, and fore-
sight, because such qualities are rare and

[10]



THE COLORADO INDUSTRIAL PLAN

yet indispensable to the development of the
vast natural resources which otherwise
would lie useless on the earth's surface or
in its hidden depths. It is one of the note-
worthy facts of industrial history that the
most successful enterprises have been those
which have been so well organized and so
efficient in eliminating waste, that the la-
borers were paid high wages, the consum-
ing public upon whose patronage the suc-
cess of every enterprise depends enjoyed
declining prices, and the owners realized
large profits.

The development of industry on a large
scale brought the corporation into being, a
natural outgrowth of which has been the
further development of organized Labor in
its various forms. The right of men to as-
sociate themselves together for their mutual
advancement is incontestable ; and under our
modern conditions, the organization of La-
bor is necessary just as is the organization
of Capital; both should make their contri-
bution toward the creation of wealth and
the promotion of human welfare. The
labor union, among its other achievements,
has undoubtedly forced public attention
upon wrongs which employers of to-day
would blush to practice. But employers as
well as workers are more and more appre-
ciating the human equation, and realizing
that mutual respect and fairness produce

cm



THE COLORADO INDUSTRIAL PLAN

larger and better results than suspicion and
selfishness. We are all coming to see that
there should be no stifling of Labor by Cap-
ital, or of Capital by Labor; and also that
there should be no stifling of Labor by La-
bor, or of Capital by Capital.

While it is true that the organization of
Labor has quite as important a function to
perform as the organization of Capital, it
cannot be gainsaid that evils are liable to
develop in either of these forms of asso-
ciation. Combinations of Capital are some-
times conducted in an unworthy manner,
contrary to law and in disregard of the in-
terests of both Labor and the public. Such
combinations cannot be too strongly con-
demned or too vigorously dealt with. Al-
though combinations of this kind are the ex-
ception, such publicity is generally given to
their unsocial acts that all combinations of
Capital, however rightly managed or broadly
beneficent, are thereby brought under sus-
picion. Likewise, it sometimes happens that
combinations of Labor are conducted with-
out just regard for the rights of the em-
ployer or the public, and methods and prac-
tices adopted which, because unworthy and
unlawful, are deserving of public censure.
Such organizations of labor bring discredit
and suspicion upon other organizations
which are legitimate and useful, just as is
the case with improper combinations of Cap-

[12]



THE COLORADO INDUSTRIAL PLAN

ital, and they should be similarly dealt with.
But the occasional failure in the working of
the principle of the organization of Labor
or of Capital should not prejudice any one
against the principle itself, for the principle
is absolutely sound.

Because evils have developed and may
develop as a result of these increasing com-
plexities in industrial conditions, shall we
deny ourselves the maximum benefit which
may be derived from using the new devices
of progress? We cannot give up the cor-
poration and industry on a large scale; no
more can we give up the organization of
labor; human progress depends too much
upon them. Surely there must be some
avenue of approach to the solution of a
problem on the ultimate working out of
which depends the very existence of in-
dustrial society. To say that there is no
way out except through constant warfare
between Labor and Capital is an unthinkable
counsel of despair; to say that progress lies
in eventual surrender of everything by one
factor or the other, is contrary, not only to
the teachings of economic history, but also
to our knowledge of human nature.

Ill

Most of the misunderstanding between
men is due to a lack of knowledge of each

[13]



THE COLORADO INDUSTRIAL PLAN

other. When men get together and talk over
their differences candidly, much of the
ground for dispute vanishes. In the days
when industry was on a small scale, the em-
ployer came into direct contact with his em-
ployes, and the personal sympathy and un-
derstanding which grew out of that contact
made the rough places smooth. However,
the use of steam and electricity, resulting
in the development of large-scale industry
with its attendant economies and benefits,
has of necessity erected barriers to personal
contact between employers and men, thus
making it more difficult for them to under-
stand each other.

In spite of the modern development of
Big Business, human nature has remained
the same, with all its cravings, and all its
tendencies toward sympathy when it has
knowledge and toward prejudice when it
does not understand. The fact is that the
growth of the organization of industry has
proceeded faster than the adjustment of the
interrelations of men engaged in industry.
Must it not be, then, that an age which can
bridge the Atlantic with the wireless tele-
phone, can devise some sort of social X-ray
which shall enable the vision of men to pene-
trate the barriers which have grown up be-
tween men in our machine-burdened civiliza-
tion?

[14]



THE COLORADO INDUSTRIAL PLAN

IV

Assuming that Labor and Capital are
partners, and that the fruits of industry are
their joint product, to be divided fairly,
there remains the question: What is a fair
division? The answer is not simple the
division can never be absolutely just; and
if it were just to-day, changed conditions
would make it unjust to-morrow; but
certain it is that the injustice of that di-
vision will always be greater in proportion
as it is made in a spirit of selfishness and
shortsightedness. Indeed, because of the
kaleidoscopic changes which the factors en-
tering into the production of wealth are al-
ways undergoing, it is unlikely that any final
solution of the problem of the fair distribu-
tion of wealth will ever be reached. But
the effort to devise a continually more per-
fect medium of approach toward an ever-
fairer distribution, must be no less ener-
getic and unceasing.

For many years my father and his ad-
visers had been increasingly impressed with
the importance of these and other economic
problems, and with a view to making a con-
tribution toward their solution, had had
under consideration the development of an
institute for social and economic research.
While this general subject was being studied,
the industrial disturbances in Colorado be-

[15]



THE COLORADO INDUSTRIAL PLAN

came acute. Their many distressing fea-
tures gave me the deepest concern. I
frankly confess that I felt there was some-
thing fundamentally wrong in a condition
of affairs which made possible the loss of
human lives, engendered hatred and bitter-
ness, and brought suffering and privation
upon hundreds of human beings. I deter-
mined, therefore, that in so far as it lay
within my power I would seek some means
of avoiding the possibility of similar con-
flicts arising elsewhere or in the same in-
dustry in the future. It was in this way
that I came to recommend to my colleagues
in the Rockefeller Foundation the institut-
ing of a series of studies into the funda-
mental problems arising out of industrial
relations. Many others were exploring the
same field, but it was felt that these were
problems affecting human wetf are so vitally
that an institution such as the Rockefeller
Foundation, whose purpose, as stated in
its charter, is "to promote the well-being of
mankind throughout the world/' could not
neglect either its duty or its opportunity.
This resulted in securing the services of
Mr. W. L. Mackenzie King, formerly Min-
ister of Labor in Canada, to conduct an in-
vestigation "with a special view," to quote
the language of an official letter, "to the dis-
covery of some mutual relationship between
Labor and Capital which would afford to

[16]



THE COLORADO INDUSTRIAL PLAN

Labor the protection it needs against oppres-
sion and exploitation, while at the same time
promoting its efficiency as an instrument of
economic production."

In no sense was this inquiry to be local
or restricted; the problem was recognized
to be a world-problem, and in the study of
it the experience of the several countries of
the world was to be drawn upon. The pur-
pose was neither to apportion blame in ex-
isting or past misunderstandings, nor to
justify any particular point of view; but
solely to be constructively helpful, the final
and only test of success to be the degree to
which the practical suggestions growing out
of the investigation actually improved the
relations between Labor and Capital.



With reference to the situation which had
unfortunately developed in Colorado, it be-
came evident to those responsible for the
management of one of the larger coal com-
panies there the Colorado Fuel and Iron
Company, in which my father and I are in-
terested that matters could not be allowed
to remain as they were. Any situation, no
matter what its cause, out of which so much
bitterness could grow, clearly required
amelioration.

It has always been the desire and pur-

[17]



THE COLORADO INDUSTRIAL PLAN

pose of the management of the Colorado
Fuel and Iron Company that its employes
should be treated liberally and fairly. How-
ever, it became clear that there was need of
some more efficient method whereby the
petty frictions of daily work might be dealt
with promptly and justly, and of some ma-
chinery which, without imposing financial
burdens upon the workers, would protect'
the rights, and encourage the expression of
the wants and aspirations of the men not
merely of those men who were members of
some organization, but of every man on the
company's payroll. The problem was how
to promote the well-being of each employe ;
more than that, how to foster at the same
time the interest of both the stockholders
and the employes through bringing them
to realize the fact of their real partnership.
Long before the Colorado strike ended,
I sought advice with respect to possible
methods of preventing and adjusting such a
situation as that which had arisen; and in
December, 1914, as soon as the strike was
terminated and normal conditions were re-
stored, the officers of the Colorado Fuel and
Iron Company undertook the practical de-
velopment of plans which had been under
consideration. The men in each mining
camp were invited to choose, by secret bal-
lot, representatives to meet with the execu-
tive officers of the company to discuss mat-

[18]



THE COLORADO INDUSTRIAL PLAN

ters of mutual concern and consider means
of more effective co-operation in maintain-
ing fair and friendly relations.

That was the beginning, merely the germ,
of a plan which has now been developed into
a comprehensive "Industrial Constitution."
The scheme embodies practical operating
experience, the advice and study of experts,
and an earnest effort to provide a workable
method of friendly consideration, by all con-
cerned, of the daily problems which arise
in the mutual relations between employer
and employes.

The plan was submitted to a referendum
of the employes in all the company's coal
and iron mines, and adopted by an over-
whelming vote. Before this general vote
was taken, it had been considered and unani-
mously approved by a meeting of the em-
ployes' elected representatives. At that
meeting I outlined the plan, which is de-
scribed below, as well as the theory under-
lying it, which theory is in brief as follows :

Every corporation is composed of four
parties : the stockholders, who supply the
money with which to build the plant, pay
the wages, and operate the business; the
directors, whose duty it is to select execu-
tive officers carefully and wisely, plan the
larger and more important policies, and gen-
erally see to it that the company is pru-
dently administered; the officers, who con-

[19]



THE COLORADO INDUSTRIAL PLAN

duct the current operations; and the em-
ployes, who contribute their skill and their
work. The interest of these four parties is
a common interest, although perhaps not an
equal one; and if the result of their com-
bined work is to be most successful, each
must do its share. An effort on the part of
any one to advance its own interest without
regard to the rights of the others, means,
eventually, loss to all. The problem which
confronts every company is so to interrelate
its different elements that the best interests
of all will be conserved.

VL

The industrial machinery which has been
adopted by the Colorado Fuel and Iron
Company and its employes is embodied in
two written documents, which have been
printed and placed in the hands of each em-
ploye. One of these documents is a trade
agreement signed by the representatives of
the men and the officers of the company, set-
ting forth the conditions and terms under
which the men agree to work until January
1, 1918, and thereafter, subject to revision
upon ninety days' notice by either side.
This agreement guarantees to the men that
for more than two years, no matter what
reductions in wages others may make, there
shall be no reduction of wages by this com-

[20]



THE COLORADO INDUSTRIAL PLAN

pany; furthermore, that in the event of an
increase in wages in any competitive field f
this company will make a proportional in-
crease.

The agreement provides for an eight-hour
day for all employes working underground
and in coke ovens; it insures the semi-
monthly payment of wages ; it fixes charges
for such dwellings, light, and water, as are
provided by the company; it stipulates that
the rates to be charged for powder and coal
used by the men shall be substantially their
cost to the company. To encourage em-
ployes to cultivate flower and vegetable gar-
dens, the company agrees to fence free of
cost each house-lot owned by it. The com-
pany also engages to provide suitable bath
houses and club houses for the use of em-
ployes at the several mining camps.

The other document is an "Industrial
Constitution/' setting forth the relations of
the company and its men. The constitution
stipulates, among other things, that "there
shall be a strict observance by management
and men of the federal and State laws re-
specting mining and labor," and that "the
scale of wages and the rules in regard to
working conditions shall be posted in a con-
spicuous place at or near every mine."
Every employe is protected against discharge
without notice, except for such offenses as
are posted at each mine. For all other mis-

[21]



THE COLORADO INDUSTRIAL PLAN

conduct the delinquent is entitled to receive
warning in writing that a second offense will
cause discharge, and a copy of this written
notice must be forwarded to the office of
the president of the company at the same
time it is sent to the employe.

The constitution specifically states that
"there shall be no discrimination by the com-
pany or any of its employes on account of
membership or non-membership in any so-
ciety, fraternity, or union." The employes
are guaranteed the right to hold meetings
on company property, to purchase where
they choose, and to employ check-weighmen,
who, on behalf of the men, shall see to it
that each gets proper credit for his work.

Besides setting forth these fundamental
rights of the men, the industrial constitu-
tion seeks to establish a recognized means
for bringing the management and the men
into closer contact for two general pur-
poses: first, to promote increased efficiency
and production, to improve working con-
ditions, and to further the friendly and cor-
dial relations between the company's officers
and employes; and, second, to facilitate the
adjustment of disputes and the redress of
grievances.

In carrying out this plan, the wage-earners
at each camp are to be represented by two
or more of their own number chosen by
secret ballot, at meetings especially called

[22]



THE COLORADO INDUSTRIAL PLAN

for the purpose, which none but wage-earn-
ers in the employ of the company shall be
allowed to attend. The men thus chosen
are to be recognized by the company as au-
thorized to represent the employes for one
year, or until their successors are elected,
with respect to terms of employment, work-
ing and living conditions, adjustment of dif-
ferences, and such other matters as may
come up. A meeting of all the men's rep-
resentatives and the general officers of the
company will be held once a year to consider
questions of general importance.

The Industrial Constitution provides that
the territory in which the company operates
shall be divided into a number of districts
based on the geographical distribution of
the mines. To facilitate full and frequent
consultation between representatives of the
men and the management in regard to all
matters of mutual interest and concern, the
representatives from each district are to
meet at least three times a year oftener
if need be with the president of the com-
pany, or his representative, and such other
officers as the president may designate.

The district conferences will each ap-
point from their number certain joint com-
mittees on industrial relations, and it is ex-
pected that these committees will give
prompt and continuous attention to the many
questions which affect the daily life and hap-

[23]



THE COLORADO INDUSTRIAL PLAN

piness of the men as well as the prosperity
of the company. Each of these committees
will be composed of six members, three
designated by the employes' representatives
and three by the president of the company.
A joint committee on industrial co-opera-
tion and conciliation will consider matters
pertaining to the prevention and settlement
of industrial disputes, terms and conditions


1 3 4 5

Online LibraryJohn D. (John Davison) RockefellerThe Colorado industrial plan → online text (page 1 of 5)