^r Cornell University Library HV 23.N7D4 Organized charity ="'{j|jj™n&^^ 3 1924 014 006 757 ^tuJitta t« ^nrial Wavk ^umbet 2 ORGANIZED CHARITY AND INDUSTRY A CHAPTER FROM THE HISTORY OF THE CHARITY ORGANIZATION SOCIETY OF THE CITY OF NEW YORK BY EDWARD T. DEVINE Stlir l^tm ^avk ^tifoal of pi;Umitt|riipg UNITED CHARITIES BUILDING NEW YORK CITY fJV22) Studies in Social Work Number 1. Social Work with Families and Individuals: A brief manual for investigators. By PoETBB B. Lee Single copies five cents; 25 copies $1.00 postpaid. ORGANIZED CHARITY AND INDUSTRY A STATEMENT BY EDWARD T. DEVINB PREPARED FOR THE UNITED STATES COMMISSION ON INDUSTRIAL RELATIONS AND SUBMITTED TO THE COMMISSION ON FEBRUARY 6, 1915. Although now engaged mainly in university teaching and in directing a professional train- ing school, I assume that it is rather because of my eighteen years ' connection with the Charity Organization Society that you have invited me to appear here ; and that the particular topic on which you may want information or opinion from me is the relation, if any, between industry and the kind of philanthropy which that soci- ety, and organized charity generally, repre- sents. If so, what I would like to point out especi- ally is that this society has been among the first and foremost to realize that poverty is largely due to industrial maladjustments and that charity of itself is no cure, and never can be, for industrial evils. As recent and pertinent illustrations, it may not be inappropriate to call attention to the fact that the Secretary of the Charity Organization Society was a member of that group of social workers and economists to whom Mrs. Harri- 4 ORGANIZED CHARITY AND INDUSTRY man referred in a recent newspaper interview, on whose initiative the President recommended, and Congress enacted, the law by which the pres- ent commission was created; that I was chair- man, in fact, of the improvised committee which prepared a memorandum on the subject at the President's request for use in his message, drafted the bill, interested Senator Boraii, Rep- resentative — now Senator — ^Hughes, and Repre- sentative — now Secretary — -Wilson, and others in the plan, arranged the hearings on the sub- ject, and carried on an active campaign in Congress and in the country at large for the appointment of the commission. Dr. Lindsay, who was also in the service of the Charity Or- ganization Society as a member of the staff of The School of Philanthropy, and myself devoted a large part of our time for several months to securing this legislation, and this was done, of course, so far as our part in it is concerned, with the full knowledge and approval and in constant consultation with the President and Central Council of the Society, I do not wish to be misunderstood. This committee of econo- mists and social workers would not of course claim any of the credit for the actual work of the commission, but only for its opportunity, for the fact of its existence. In the next place, it was one of the standing committees of the New York Charity Organiza- ORGANIZED CHARITY AND INDUSTRY S tion Society which conceived, planned, and car- ried through the Pittsburgh Survey, concerning which Mr. Manly said in Washington in Decem- ber, 1913: Some five years ago the community was rudely awakened by the Pittsburgh Survey and shocked into a realization that thou- sands of human beings were employed un- der conditions which required them to labor seven days a week. Public feeling was deep- ly aroused and calls for immediate action for the correction of this evil were many and loud. It will be admitted that Mr. Manly is a com- petent witness, not only because of his present relation to this commission but because he was the expert of the United States Labor Bureau who, immediately after the Pittsburgh Survey had, as he says, aroused public feeling on the subject, conducted an official and authoritative inquiry into the steel industry which confirmed the findings of our survey. The general char- acter and results of that survey are too well known to require discussion. A third evidence of the interest which the so- ciety has long taken in industrial conditions and their relation to poverty, is the establishment and publication until some two years ago of the weekly periodical originally called Chabities, then Chabities and The Commons, and now 6 ORGANIZED CHARITY AND INDUSTRY The Subvey. This periodical since October, 1912, has had no official connection with the Charity Organization Society. It never has been the official organ of the society as that phrase is generally understood. It never has been "controlled", except by its editors, and it has never since its earliest days given particu- lar attention to local relief work. Nevertheless, during the fifteen years in which it was pub- lished by the society, we had full responsibility for it, moral and financial. For several years, before this change was made as well as since, The Stjbvey has given continuous and searching attention to industrial warfare and industrial peace, to evolutionary changes in industry on the one hand and to mal- adjustments and adverse conditions on the other. This has been done fearlessly, without the slightest reference to the interests or invest- ments of the directors, contributors, or members of the society which published it. While the Pittsburgh Survey was in progress and its find- ings were being published, the name of Mr. J. Pierpont Morgan, who is supposed to have been an important factor in the steel corporation,, appeared on the periodical, as required by state law, as the treasurer of the society which pub- lished it ; and Mr. Andrew Carnegie was a con- tributor whose name appeared with the amount ORGANIZED CHARITY AND INDUSTRY 7 of his contribution each year in our published annual report. When The Survey published its first careful and certainly plain-spoken study of conditions, in the mines and steel mills of Colorado — Feb- ruary 3, 1912 — Mr. Eockefeller was a contribu- tor to the society. I think it absolutely correct to say that no one in the office of The Survey considered this fact or was expected to do so by the ofiScers or Central Council of the society or, so far as we ever had any evidence, by Mr. Eockefeller or his advisers. Later, but while The Survey was still pub- lished by the society — April 20, 1912 — a study was published of the actual operation of the Board of Conciliation in the anthracite coal in- dustry. In general the machinery established in 1903 had maintained peace, but our study led us to believe that in certain particulars — six different points there were, I believe — it worked hardship to the miners. Subsequently the conciliation plan was modi- fied to remove most or all of these hardships, but what I wish to point out is that prior to such change, as a result of our own independ- ent study, the grievances of the miners were brought before the general public and their claims to a modification of the existing agree- ment supported, in the periodical published by the society. In pursuance of our usual custom. S ORGANIZED CHARITY AND INDUSTRY we sent the manuscript of the article which we expected to publish to trade union officials and also to officers of the coal and the coal-carrying companies — among others to Mr. Robert W. de Forest, who is Vice-President of the Central Eailway of New Jersey. We thought that the fact that Mr. de Forest is also President of the Society and was chairman of the committee in charge of The Suevey should not prevent our getting his criticism. His only suggestion was that we should get the criticism of a gentleman to whom we had in fact already sent it and whose criticisms we had. The instances which I have cited are entirely typical of the freedom from external control and the moral support which the editors of The Survey always received from organized charity while they were officially associated. I would like next to mention our discussion in Charities and The Commons and in The Sur- vey of endowments and foundations. The sub- ject was first taken up seven years ago in an editorial on July 6, 1907, entitled The Danger of Endowments. Speaking of the Sage Founda- tion, the General Education Board, and the Carnegie pension fund for college teachers, we said, if I may be permitted to read the conclud- ing sentences: ' ' The brutal power of concentrated wealth is ever present in these endowments. If ORGANIZED CHARITY ANU INDUSTRY used judicially, wisely, with breadth of sym- pathy, with sufficient safeguards against abuse and incidental injury, they may be in all ways beneficent. If used carelessly, with class prejudice, or personal favoritism, or in disregard of the social effects of mak- ing or withholding grants, then neither the good intentions of the donors nor the possi- ble balance of good accomplished will pre- vent their becoming also malefactions to the extent of their misuse." I believed then and I believe now that the present trustees of these funds are intelligent and public-spirited men, who conceive their trust in a broad national sense. I believed then and believe now that if these trustees cease to do this and use their funds in such a way as to discourage honest research, or to encourage the dissemination of particular views on such sub- jects as the tariff, or control of corporations, trade unionism or socialism, merely because these views are acceptable to the founder or to the trustees, they would at once forfeit any claim to be considered philanthropic or educa- tional institutions; and that the democracy of that time, whenever it may come, will find some appropriate way to deal with such abuses. However, when the Rockefeller Foundation was proposed, some three years later, and a bill for its incorporation was pending in Congress, we subjected that measure to a searching cri<> 10 ORGANIZED CHARITY AND INDUSTRY icism, which was followed by prolonged discus- sion and the ultimate withdrawal of the bill. While I have always regretted that the founda- tion did not obtain its charter from Congress, rather than from a state legislature, I have had no reason to regret the criticism. Endowments in perpetuity, managed by closed corporations, ac- cumulating either simple or compound interest as the directors may please, seemed to me then and seem to me now contrary to the spirit of American institutions and fraught with possible danger. The bill as originally introduced in Congress very properly provided for annual reports with financial statements. The charter later obtained from the state of New York does not, I believe, contain this provision. The biU in its original form made the charter subject, as federal chart- ers always are made subject, to alteration, amendment, or repeal at the pleasure of Con- gress. I thought these two safeguards, valuable as they are, did not go far enough. In The Survey of March 12 and of March 26, 1910, and again on January 14, 1911, this last article writ- ten after Mr. Eockefeller had caused the bill to be amended so as to incorporate some of our suggestions in a modified form, I gave reasons for believing that the public should have a voice in the selection of trustees, that the indefinite increase of endowments through the accumula- ORGANIZED CHARITY AND INDUSTRY 11 tion of income should be prevented, and that there should even be provision for the gradual expenditure of any given endowment, principal and interest, within a specified period. The pro- posed charter then pending in Congress, as amended, though the amendments did not go quite so far as I had suggested, was I believe the most enlightened and progressive proposal ever made before a legislature for the management of a great foundation. If enacted it would have created a precedent of the greatest value and influence. The necessity and desirability for public con- trol of foundations is one of the subjects on which Mr. de Forest, the President of the Char- ity Organization Society, and myself have not fully agreed. His opinion is that the reserved right to amend the charter includes in effect all of the other restrictions and that it is therefore useless to specify them. Mr. de Forest never offered the slightest objection to my stating my own views as frequently and emphatically as I liked, but in order to prevent any mistaken in- ference that I was speaking for him also — since we were intimately associated in many ways — he made a brief statement of his own views which you will find in The Survey of January 14, 1911. We published several communications on the subject, reprinted one or two editorials from The New York Times replying to our own. 12 ORGANIZED CHARITY AND INDUSTRY and also reprinted from the Congressional Ree- ord the statement by Mr. Starr J. Murphy tak- ing up the points in which we had suggested that the charter be amended. If it is decided that it comes within the prov- ince of the commission to make recommenda- tions on this subject, my suggestions would be that federal charters are to be encouraged rather than state charters; that, after the donor's death, or before with the donor's consent — and I think the donor should have the right to choose his own trustees during his life time if he so de- sires — the government should have a voice in the selection of trustees as vacancies occur ; that annual reports with financial statements, and an opportunity to audit and test such state- ments, should be insisted upon ; that the accumu- lation of income should be prevented, subject of course to reasonable latitude as to working balances at the end of the year ; and that there might be some legal limitations, as in the case of Savings Banks, over the character of the in- vestments. I think that public supervision and participation is justified not only by the exemp- tion from taxation, which should be continued as long as any educational, religious, and charit- able enterprises are exempted, but also by the legitimate public interest in the results of their activities. Such supervision and participation should not be hostile or hampering but, as in ORGANIZED CHARITY AND INDUSTRY 13 the case of the Smithsonian Institution or the American Red Cross, sympathetic and bene- ficial. I do not believe that it would discourage large gifts for public purposes, but on the con- trary that it would encourage them. If there is any one thing which is likely to deter a gener- ous modern giver from establishing a founda- tion for a particular purpose it is doubt as to the possibility of foreseeing future needs, a lurking fear lest the good he would do may be- come an unintended injury, or at least less bene- ficial than he intended. If he is assured that the future generations will be free to change the terms of his bequest to meet their needs as they see them, not only in case of extreme ab- surdity but gradually by actually sharing the re- sponsibility for its administration, this will I think act reassuringly by the removal of the ground of such doubts. If such supervision were to become political control, or arbitrary interference with the free exercise of proper discretion by trustees within their own province, the result would undoubted- ly be to discourage such gifts. The possibility of hostile public control has no doubt already had such effect in some instances. Any recom- mendations as to public supervision and repre- sentation should therefore be so framed as to make it clear that it is not intended to divert trust funds from legitimate public purposes or 14 ORGANIZED CHARITY AND INDUSTRY from the particular purposes which the donor intends, if such purposes are consistent with the public welfare. Something can be said in favor of the radical proposal that perpetual endowments should cease altogether, and that all donations or be- quests for social and philanthropic purposes should be on a plan by which within a given period — ^fifty or a hundred years — ^principal and interest must be expended. If it were a mere question of advising an individual donor, I would not hesitate to urge this form of bequest, but I do not believe that there is justification for restrictive legislation in this direction. Per- petual endowments in education on the whole seem to have justified themselves. We cannot say that expenditures of the principal over a term of years might not have brought even bet- ter results, but until further experiments have been made in that direction a conservative policy of public supervision and participation would seem better than any legislative restric- tion of the life or the amount of endowments. The Charity Organization Society a dozen years ago established a committee on the pre- vention of tuberculosis. This committee in its earliest years gave particular attention to the industrial aspects of the disease, pointing out the particular trades in which it is most pre- valent and the conditions in those trades which ORGANIZED CHARITY AND INDUSTRY 16 were believed to be responsible for the excess. The committee established close relations with the Central Federated Union, and issued edu- cational leaflets bearing the joint imprint of both their Committee on Sanitation and our own. We worked for the establishment of hos- pitals and sanatoria, for better factory laws and better housing conditions, and insisted on the bad effects of low wages and high rents as causal factors in this disease of the masses. Even earlier we had a tenement house com- mittee, which secured a new and more radical tenement house law and a municipal department to enforce its provisions. Earlier still, before my own connection with the Society, the plan was inaugurated for a Provident Loan Society, a pawnshop for mak- ing loans on pawn pledges at half the legal rate of interest. This agency, although organized by our society and still electing each year one director on the nomination of the society, has been from the beginning — as The Sxtevby is now — because of the character of its work, entirely independent in its operations. It has been an important influence in keeping in check by com- petition the unquestionable abuses and extor- tions of the old time pawnshops. The subject of a minimum wage is now under investigation by a legislative commission in this state. I have personally appeared before that 16 ORGANIZED CHARITY AND INDUSTRY commission in advocacy of a legal minimum wage to be fixed by special boards in particular industries and localities whenever the condi- tions are found to be such as to make it neces- sary. I have consistently supported child labor legislation, workmen's compensation and insur- ance, the prohibition of manufacturing in tene- ments where factory conditions cannot be main- tained because both oflScial inspection and trade union influence are absent. The elimination of strikes and look-outs, boy- cotts and black lists, by the elimination of their causes, the maintenance of just and mutually satisfactory relations between employing cor- porations and wage earners, is a problem of the greatest interest to the Charity Organization Society, as to all social agencies. If the com- mission solves it, you wiU deserve eternal grati- tude from all of us. The poverty directly due to industrial controversies is hot perhaps as ex- tensive as that due to some other causes. But it is least excusable.