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National Conference on Industrial Conciliation (19.

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men against reductions, regarding which there are
many points of view. There is the large view that
efficient labor is worth more than inefficient labor,
and I hold that it is impossible to get the premium
output without the premium wage, just as impossible
as for the manufacturer to get an efficient workman



122 INDUSTRIAL CONFERENCE.

for an inefficient workman's pay. Again, a union
gets an increase of wages by a strike. The men have
no guarantee that the increase will be maintained,
but they do not refuse to take it on that account.
I maintain that an increase gained by the premium
plan is more secure than by any other, because for the
increase the men give an equivalent. The workman is
still further safeguarded by the fact that the acceptance
or refusal of the terms offered always lies with him. The
system is not compulsory and cannot be made so.
The employer offers a certain amount (premium) for
each hour saved, and this the workman may accept
or reject, as he sees fit. In this the plan is, I believe,
unique, and this feature alone is, I believe, enough to
safeguard the workman against cuts in the rates.
At bottom, this system simply systematizes the
recognition of merit. Instead of, as usual, leaving
that recognition to general observation, with possi-
bilities of favoritism on the part of foremen, it sys-
tematizes the matter and pays each one in accordance
with his merits. It is a commonplace of the system
that it discovers the good men. I have been repeat-
edly surprised at the broad views held by many em-
ployers regarding this question of wages. I have
been told repeatedly: "Wages are secondary.
What we want is output."

MR. MOSELY: I understood you to say the unions
as a whole object to the premium system because it
leads to the cutting of price. Is that your experi-
ence?

MR. HALSEY : That objection is legitimate as against
piece-work, but not as against the premium system,



INDUSTRIAL CONFERENCE. I2S

which was devised expressly to avoid such cutting.
Piece-work is, on its face, a system of rewards, but
in point of fact it is a system of punishments, and
worse still, a system of punishments for doing well.
A workman under piece-work does the best he can,
and when he gets his wages beyond a certain limit
his piece rates are cut. He is then compelled to work
harder than before for the old income, and this is the
direct result of his efforts to do well.

.THE CHAIRMAN : Along the same line the next
speaker will be Mr. James O'Connell, president of the
International Association of Machinists.

JAMES O'CONNELL: Mr. President and Gentlemen
You have listened to the reading of two papers
this morning, one by Mr. Commons on the limitation
of output, incidentally touching upon the proposition
of piece-work; and the other by Mr. Halsey, on the
premium plan.

I trust, therefore, you will bear with me for a few
moments, for as a practical man having spent
twenty years in the machine shop and knowing
something of the practical side of these questions, I
feel that I can speak from the standpoint of one who
has experienced the bad effects of piece-work, and
representing as I do an international organization
which has had much to do with questions of piece-
work, premium plans and so-called restrictions of
output.

I have had not only an opportunity of investigating
these questions in the United States, but I have also
visited England, Ireland and Scotland, and while



124



INDUSTRIAL CONFERENCE.



there made some investigation as to the conditions
prevailing in those countries.

We have among us those who espouse certain ideas
as panaceas for the cure of all diseases and ills to
which the human family is liable. In our political life
we have various forms of political parties, each be-
lieving it is right. The prohibitionists believe
that if the liquor traffic was abolished all would be
plain sailing; the populist believes that we should
walk in the middle of the road ; the socialist has his
own theory, and the anarchist still another, but an
practical e very-day life we must have facts, and the
best evidence of our success in the future must be
to a large degree governed by the history of the past.

This morning we have listened to two gentlemen
whose ideas very largely differ as to the practical
method of operating the workshops of this country.
One cites a limitation of the output in the machine
shop and believes that restrictions exist, and that the
piece-work system might successfully be put in opera-
tion. The other believes that the piece-work system
would not bring about the desired result, but recom-
mends a premium plan or profit-sharing. Both believe
they are right, but in my opinion, both are wrong.

The piece-work question when presented to the
American workman is like waving a red flag before a
mad bull. History shows that piece-work means to
the workman increased output, coupled with a re-
duction in wages, unfavorable conditions of employ-
ment, unsanitary conditions, cultivation of man's
selfishness, loss of desire to co-operate with his fellow
shopmates in a word, the whole history of the piece-



INDUSTRIAL CONFERENCE. 135

work proposition in this country has been unfavorable,
because of the enforced hardships under which the
men worked and the inevitable reduction in their
wages.

We are told that the employers want to be fair in
this matter, and I desire to say here that we have
many fair employers in fact, thousands of them
but I have yet to find an employer of labor who has
introduced the system of piece-work, profit-sharing,
gang system, or any other means whereby the men
worked by the piece, who has not at some time during
the life of such a system reduced the rate of wages,
and who has not sought to pit the swiftest, strongest
and ablest man against the poorest and weakest one.
The man who is beginning to grow old is, naturally,
a little slower, sight beginning to fail, finds himself
in the position of having his living dictated by the
more speedy and younger man; his rate constantly
decreasing because of the speed-maker or pace-maker
against whom he is pitted.

To illustrate: In the city in which we are now
holding this meeting a very large manufacturing es-
tablishment , employing thousands of workmen , has
had a profit-sharing system in vogue for a number
of years. The system provided that if it took ten
days for ten men to build a certain machine and these
ten men built a machine in nine days, they were given
one day's profit. If the next machine they built
took eleven days, one day was charged against them
on the books and the next time they gained another
day the books were balanced. The result of this
method of paying the men was, that, although they



126 INDUSTRIAL CONFERENCE.

had never belonged to an organization of labor and
had no use for one (as it is true where you find piece-
work you find very little organization), the men
struck for the abolition of the system after having
worked under it for several years, and no labor leaders
had anything to do with their trouble. They sent
for Mr. Gompers and myself to come to New York
and try and straighten the matter out for them. We
did so, and succeeded. We found upon investigation
that the men in that factory had not taken out of
the company's coffers one cent in premium or profit
for several years, but the books of the company
showed that the men were indebted to the firm
$47,000, and therefore no premium on work per-
formed by the men could be secured until the in-
debtedness had been paid and the books balanced.

Do you expect men to accept a system of that kind
freely and without question?

Another firm in the State of New York adopted
what Mr. Halsey is pleased to call the "premium
plan." They say to a man, if it takes you ten hours
to do ten pieces of work and you will do these ten
pieces in nine hours, then we will allow you one
hour's premium, to be divided between you and us.
It worked out as follows: If a man was averaging
25 cents an hour and he secured one hour's premium
the firm would allow him 12^ cents extra for his
hour and keep 12% for itself. What right, I ask, has
any firm to take 1 2\ cents from my hour's labor that
I have honestly earned? What right have they to
fine me 12^ cents for my increased production?
What right has Mr. Halsey to say to me, because I



INDUSTRIAL CONFERENCE. I2 ;

am a young, active, energetic machinist, if I increase
my output 10 per cent, that I am to be fined 50
per cent, of the output for my efforts? The firm is
at no loss because of the increased output; its fixed
charges are no greater, while on the contrary a very
great saving must come to the company in fixed
costs. It is absurd that because of special energy
and increased effort on my part I should be fined
50 per cent, of my earnings for the ambition I had
shown in increasing the output. But when we com-
plain to the firm they say to us, Have you not been
robbing us in the past ? You have been loafing; you
have not produced as you should; when my back
was turned you idled the time away. I desire to
say without fear of contradiction that this is abso-
lutely untrue. The employer who makes these state-
ments acknowledges the weakness of his- position and
asserts that the superintendency of his business has
been of the very worst character. In my opinion,
the entire fault with the whole question of so-called
limitation of production or output is in the superin-
tendency of the plants. Not the fault of the men nor
the employer. In our growing institutions of to-day,
the owners know but little of the real workings of
their business inside the factory or workshop. They
are the financiers, but the practical side of their work-
shop is unknown to them; they are unacquainted
with their workmen; seldom visit inside their fac-
tories or workshops, but are constantly engaged in
financiering their business.

A large pump manufacturing company, now a part
of the American Pump Company, introduced a plan



I2 8 INDUSTRIAL CONFERENCE.

similar to Mr. Halsey's premium plan, and said to the
men, commencing on a certain date every workman
who produced one-tenth more than formerly will be
given fifty per cent, in excess of his former rate.
The men did not quite understand the proposition,
but went on in their usual way, put forth an increased
effort to enlarge the output for a given time. At
the end of a week an increase was shown, but the
workmen received for it only fifty per cent, of the
increased output, the firm taking fifty per cent, to
itself, thus practically imposing a fine upon the men
for increasing the production of the plant. There
had been no additional costs to the company in
operating its plant nor for the superintendency
thereof. As a result of all this, the men refused to
work longer under the system and a strike was in-
evitable, but * the company avoided this by agreeing
to return to the day system.

Piece-work, premium plan, gang-profit-sharing,
etc., when boiled down all mean the same thing; in-
creased production, decreased wages. We go to the
employer and say, "We don't wane to accept the piece-
work system; we are willing to do a fair day's work
for a fair day's pay, and we are perfectly willing that
you should speed your machine to suit yourself. We
further agree that you should furnish such tools as
you believe will best operate your plant and we will
agree to operate such machinery, but we are not
willing to work under a system which we know will
tend towards reducing our wages." The employer re-
plies, "We don't want to reduce your wages ; we are
trying to increase your wages." That is given to us



INDUSTRIAL CONFERENCE.



129



on every hand, "we want to increase your wages.'*
Then why not increase our wages on the day basis
and stimulate us in this way ? Why not stimulate us
by saying, "We will increase your wages ten per cent,
and allow you to continue working on the day basis,
with the hope that increased wages and better con-
ditions will stimulate you to greater things." We
believe that with this incentive and proper superin-
tendency of the works there would be no necessity
for piece-work, premium plan, or any other system
that is obnoxious to the men in order that we may
be capable of competing for the world's markets.

More strikes have resulted in this country against
vhe introduction of the piece-work and similar sys-
tems than, perhaps, against any other one system in
the history of our country. Mr. Mosely said in his
address yesterday afternoon that he believed that we
had to a greater extent piece-work in this country
than existed in Great Britain. I desire to say that
Mr. Mosely is mistaken. Piece-work, premium sys-
tem and other plans outside of the day system do
not exist to nearly so great an extent in this country
as in Great Britain. In all the great railroad systems
throughout North America there are not over three
systems where piece-work is in operation, and there
are but two that I know of where the system has
been in operation for a number of years. The Bur-
lington system in the West and the Pennsylvania
system in the East are two railroad corporations
where piece-work in the mechanical departments
is being operated. Just before leaving my office in
Washington on Saturday, I received a telegram from



1 30 INDUSTRIAL CONFERENCE.

the men in the West, who are working under the
piece-work system, and who, by the way, are unor-
ganized, requesting that assistance be sent at once
to bring about the organization of the road, in order
that an effort might be made to abolish the piece-
work system. They said, "Send some one to help
us; help us to straighten this matter out; we are
becoming slaves; our conditions are becoming more
burdensome; we are employed long hours; produce
excessively to make the ordinary wages that a few
years ago we could earn in a much more reasonable
time and with much less exertion on our part." These
men are willing to go out on .strike in midwinter as a
protest against the system under which they have
been employed for several years. When men pro-
test to this extent who have worked under a system
of that kind for a long time, and when that protest
is made in midwinter and they are willing to go on
strike for the abolition of the system, there is some-
thing back of it. There is something else other than
the fact that the men may have an opportunity of
earning a few dollars extra per year. It is because
the system has proven unprofitable to -them; it is
because the system under which they have been
working has become burdensome.

In my own personal experience of twenty years in
the machine shops, I have seen piece-work, premium
plan, and other so-called methods of increasing the
output tried. I recall in one instance in a shop where
I was at work the men were asked to take certain
pieces of work on the piece plan. They were given a
guarantee that the prices would not be cut for a



INDUSTRIAL CONFERENCE. I3 !

year. " We will not interfere with you," said the firm,
"for one year; go ahead; make all you can; any new
tools you desire to get up let us have your ideas and
we will have them made for you." The men, being
unfamiliar with the piece-work and its inevitable re-
sults, believing that it was an opportunity of a life-
time, accepted it. They pitched in and worked and
worked and worked. I remember very well those
who spent the noon hour chatting over their lunch
began to separate from each other. There was no
more shaking of hands and bidding each other the
time of day. It was now a case of hustle, hustle,
hustle. In fact, the opportunity for attending to
nature was neglected during working hours. There
were no more discussions as to measures pending in
Congress ; whether the President of the United States
was doing right or wrong; whether the Congressman
representing the district was the proper man or not;
what the United States Senators were doing; ques-
tions of legislation affecting the welfare of all the
people had no concern with the piece-workers any
more They were being taught only to work and
hustle; you could see them watching as a cat would
a mouse the time the engines would start, so that the
machines would be pufc in operation. Men's avarice
for the almighty dollar was cultivated to such an
extent that in less than three weeks the shop that
had been a home-like place, relations pleasant, men
working as brothers, all interested in the advance-
ment of each other, became a hell on earth. A strike
resulted; they never had one before; they have
never had one since; piece-work is abolished. Not-



1 3 2 INDUSTRIAL CONFERENCE.

withstanding the abolition of the system this shop
has grown to be one of the great manufacturing insti-
tions of our country; no piece-work, premium plan
or its like has entered its doors since that time. And
so it can be cited in thousands of other cases where
the piece-work, premium or other plan has been in-
troduced. They have been driven out because of the
unholy state of affairs under which men were com-
pelled to work, notwithstanding the apparently
splendid inducements held out for them by their
employers.

Mr. Halsey tells us that about forty-five firms in
the United States and Great Britain are operating
their plants under the premium plan. What per
cent, is this of the total number of manufactories
in the United States and Great Britain? Just
think of it! The per cent, is so small that it is
scarcely noticeable, and yet Mr. Halsey has been
working upon his plan, to my knowledge, several
years. How many firms in the United States are
operating their plants on the piece-work system?
The number is so small as compared with the total
number to be scarcely recognized. More firms have
given up the plan and gone back to the day work
system than are now working under the piece sys-
tem or premium plan. How many firms are work-
ing the gang-profit-sharing system? You can
probably count them on your finger ends. Mr.
Barnes mentioned yesterday a condition existing
in one of the works that he had visited which was
deplorable. I have not spoken to Mr. Barnes since
he has been in this country, but I will wager any-



INDUSTRIAL CONFERENCE.



133



thing that I can name the works he had in mind.
It is the Baldwin Locomotive Works of Philadelphia.
Might I ask him if this is correct?

MR. O'CONNELL: I knew it. We can spot them
wherever they are located. We know them. We
can lay our fingers on the piece-work shops every
time. Of course there are exceptions to the con-
ditions existing in the piece-work shops. Here and
there we find an institution where the tendency is
to treat the workmen fairly. I have in mind a model
institution the president of the company is at-
tending this meeting the system of piece-work is
in operation in Mr. Patterson's factory, and I have
every reason to believe that he has always en-
deavored to treat his workmen fairly because he is
interested in the happiness of his employees; but
as a general rule, when the employer comes to us and
says he is desirous of raising our wages and intends
to introduce some plan whereby the output may be
increased we are always skeptical, for fear the in-
tention is to introduce the piece-work system, be-
cause we have suffered much under its baneful in-
fluences upon the various trades and the inevitable
conditions following the introduction of this or
similar systems.

Much has been said about the restriction of output.
It is intimated that organized labor stands for re-
striction, or in other words, that we say to our mem-
bers you must only do so much work per day. This
opinion is absolutely without foundation. They say
we won't allow our members to run more than one
machine; that we won't permit them to work under



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INDUSTRIAL CONFERENCE.



the piece-work system, hence we restrict the output.
Then again we are charged with limiting or restrict-
ing the number of apprentices. Now the fact is
that these restrictions are to a great extent imagi-
nary from the standpoint of the employer, and es-
pecially do they exist only in the mind of the theorist
or the men who, with a lead pencil, who have no
practical knowledge, would lay down a policy for the
employer and the employee to work under. These
professional theorists make a good living by going
around the country injecting their peculiar ideas
and theories into the minds of the employer, and in
a large degree prejudicing the minds of the manu-
facturers against their workmen, constantly setting
forth that the workmen are restricting the output,
hence not performing their proper duty. Mr. Hal-
sey says to the manufacturer: "Introduce my
system into your factory and you will largely in-
crease your output, reduce the cost of operating
your plant, and in a small degree raise the total
earnings of your employees. ' ' The piece-work ad-
vocate tells the employer that he is being fleeced;
that his workmen are not producing as they should,
and by the introduction of the piece-work system
the full capacity of the plant could be procured.

Organized labor restricts only when it is found
that the employer is arbitrary and will not meet the
workmen or their representatives with a view to
entering into a joint agreement. We believe if the
employer proposes to change the day system of em-
ployment to some other system, that the workman
has a perfect right to say whether he shall work



INDUSTRIAL CONFERENCE.



135



under such a system or not. We believe also if the
employer introduces modern machinery and insists
on the workmen operating a large number of ma-
chines, that the employees have a right to say how
many machines they shall operate. We believe
also that we have a right to say to the employer
that only a reasonable number of apprentices shall
be employed in any factory as compared to the total
number of journeymen employed, in order that such
apprentices may have a fair and reasonable oppor-
tunity to learn the trade.

I have the honor to represent a large organization
of highly skilled workmen. This organization says
to its members, You cannot work piece-work. We
won't allow our members to introduce piece-work
in a factory where the practice has not been in
vogue. We say to our members you can work under
the system for the time being in a factory where it
does exist because it is already there, but when you
come into our Association you must not introduce
the system. This applies alike to other systems,
namely, premium plans, gang-profit-sharing, or the
contract system. We also say to our members,
"You can operate a number of machines of certain
classes, but there are other classes of machines
of which you can operate only one." There are
thousands of machines in the factories and work-
shops of the United States where the men are oper-
ating more than one of them. This is certainly not
a restriction on output. Automatic machines of
every character have been introduced in the work-
shops of this country and there has been no re-



136



INDUSTRIAL CONFERENCE.



striction placed upon them at all. On the contrary
we have encouraged, by our own genius and in-
vention, the modern and improved up-to-date
machine, in order that we maybe able to compete
for the markets of the world.

The mere fact that labor dares to question certain
things in the modern factories of to-day is looked
upon at once by the employer and the professional
systematizer as a restriction on output, but if it
were not for the position taken by organized labor
the men and women who are the bone and sinew of
our country would be walking the streets and the
boys and girls would be performing the work in the
factories," workshops, etc.

If you want evidence of the non-restriction of out-
put go into the shoe factory. Where a few years
ago a shoemaker was employed now he is only part
of a shoemaker, and to a very large degree men
have disappeared from the shoe factory. Women,
boys and girls are found there now. Go into a nail
factory, where a few years ago nails were made by
hand. To-day they are forged by a machine faster
than the human mind can count them. Does this
look like restriction of output? Many of these
machines are operated by little boys and girls, and
in many of the factories the larger number of ma-
chines are being operated by girls. There has been
no effort towards restriction of the machines. There
may have been an isolated case, but as a whole organ-
ized labor stands for improved, modern and up-to-
date appliances for operating the American work-



Online LibraryNational Conference on Industrial Conciliation (19Industrial conference → online text (page 9 of 25)