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BY
PROF. L. L. PRICE
Of Oriel College, Oxford
An Address delivered to the Jcottish Jociety of Economists
at Edinburgh on the 7th October 1904 p
3printet fig
WILLIAM BLACKWOOD AND SONS
ED INBURGH : MCMV -


TAZAZ A&AE CAE AW 7 Aſ/S 7TO A Y O Aſ
AV/O US 7TA’ſ A / AAFA CAE.
AT the opening of the twentieth century the commercial
and industrial supremacy of this country, once unchallenged,
has been called in question. Of our actual business rivals
the Americans and Germans have taken the front rank.
Either nation is impelled by an ambitious resolution to play
a leading rôle in the large drama of the world’s affairs.
Both peoples are endowed with qualities of mind and char-
acter which justify these aspirations. Yet the spectator can
hardly doubt which of the two is the more formidable com-
petitor. For neither in natural resources nor in racial
characteristics can any convincing reason be discovered why
the inhabitants of these islands should not contend success-
fully in trade and industry with the diligent but cautious
Teuton. He spares, indeed, no pains to fit himself by suit-
able preliminary training for work which will make no
unforeseen demand upon the initiative of the individual
workman. A disciplined obedience to the enlightened
orders of absolute officials is agreeable to his habits and
his disposition. It is a characteristic of his institutions.
By such means, which are not to be rated lightly, the
German empire has achieved conspicuous results in industry
and trade;" and its progress since 1870, in these essentials
of a prosperous career, has been as rapid and remarkable as
in the other main constituents of national vitality. But in
many respects we may advance a claim to equality, or even
to superiority. In wealth of natural resources these islands
cannot be regarded as inferior to the area now included in
United Germany, if we limit our attention to the obvious
present needs of manufacturing and commercial enterprise.
If, on the other hand, we look forward to the future, when
electricity has taken the place of steam as motive-power, it
* Cf. “The German Empire of To-day,” by Veritas.
204089
2
is no idle fancy to lay stress on the comparative abundance
of that potent force at the command, it may be, of islanders
like ourselves, in the tides of the seas around our shores.
Nor does it seem presumptuous to declare that man for man
the Anglo-Saxon excels the Teuton in resourceful independ-
ence. In an unforeseen emergency he is more prone to look
to his own strength and skill for an escape from the pre-
dicament in which he finds himself. He has, in fact, the
“qualities” of his “defects”; for his disregard of method
and of preparation is partly due to a belief that it would
be gratuitous to anticipate perplexities which will be over-
come as they arise.
A different problem is presented by the business rivalry
of the United States. It is more menacing and arduous.
Perhaps, indeed, it is incapable of satisfactory solution
unless the unit on our side can be enlarged until it com-
prehends the Empire as an industrial and commercial whole.
For the American is no less independent than the English-
man or Scot, and he is as appreciative as any German of
the uses of an educational system. He will grudge no
trouble to provide the best equipment for successful busi-
ness; and so far is he from being a servant to prescribed
routine or rigid training, that by nature and by habit he is
prone to welcome what is new. He is enterprising and
inventive. He is not repelled by uncommon risk. He is
not bewildered by an unfamiliar situation. And in the
United States he occupies a country of great richness, placed
favourably for commerce with the older European and
the newer Asiatic world. In short, the destiny of North
America to be conspicuous in the commercial and industrial
transactions of the twentieth century is shown by signs
which cannot be unnoticed or misread. As inhabitants of
the United Kingdom we are bound to find the competition
of the States more formidable to confront. Partly for the
special reasons mentioned, and partly because, regarded gen-
erally, the Americans resemble us more nearly in their
customs and their institutions, lessons of greater value can
most probably be drawn from a study of their methods
than from a copy of the German models presented to us
3
in the last few years for imitation by not a few peremptory
instructors.
Yet in one particular at least our own industrial arrange-
ments seem obviously superior to those prevailing on the
other side of the Atlantic, and we may inform rather than
seek information from the United States. This superiority
is connected with certain indispensable conditions of per-
manent success in business enterprise. For friction between
employers and employed hardly conduces to prosperity or
progress. Industrial peace is a chief contributory cause,
if it is not an absolute requirement, of industrial welfare.
And yet, when we read a suggestive volume recently pub-
lished by Mr Graham Brooks, a well-known American
economist, entitled ‘The Social Unrest, we can see by how
great a distance his countrymen are severed from the stage
attained in our chief industries in the methods of composing
or preventing needless noxious strife. The general feeling
hinted, and the actual facts presented, in that book recall
conditions almost obsolete through a large area of British
industry. As we examine the details of the picture, looks
and gestures characteristic of our masters and our men a
quarter or, it may be, half a century ago seem to be repro-
duced before our eyes. We recall features, once familiar,
which now belong to fading recollections; but we have no
reason for deleting them from a faithful presentation of
conditions actually prevailing at this moment in the United
States. Even if the colouring be exaggerated the drawing is
scarcely incórrect. The significant conclusion is suggested
that some deduction should be made from common estimates
of the inevitable triumph over British industry which is
reserved for our American competitors. For the employers
of the States seem fated to pass through a troublous and
perhaps protracted period of strife with their employees
before their own position will compare with that of the
employers of this country. A few quotations may suffice
to establish this contention. *
“The most concrete impulse that now favours socialism”
in America, Mr Brooks observes,” “is the inane purpose to
1 P. 63.
4
deprive labor organizations of the full and complete rights
that go with federated unionism. Capitalism claims and
gets what it refuses to labor. One of the grandees in the
business world, who has publicly insisted upon ‘the rights
of labor to organize, was asked in my hearing if he were
favorable to trade unionism. ‘Yes,’ he said; “I have
always been its friend, but of course the union must be
taught its proper place. It has nothing to do with the
employer's business. If it dictates, it is out of its sphere.
It ought to confine itself to mutual helpfulness, burial funds,
and the like.’” “But,” Mr Brooks remarks," “a degree of
strength and independence of labor organization has now
been reached in the United States which makes a new
danger.” For “the employer objects to “interference’; but
a strong labor union can scarcely exist without what most
employers would call interference.” “The signs are many
that our industrial managers will not brook the hindrances
incident to well-organized trade unionism.” And yet, “it is
not probable that employers can destroy Unionism in the
United States.” They “have,” indeed, “only to convince
organized labor that it cannot hold its own against the
capitalist manager, and the whole energy that now goes to
the union will turn to an aggressive political Socialism.”
It might, no doubt, be urged that on this side of the
Atlantic also able critics of trade unions could be found
who would express approval of the attitude ascribed by
Mr Brooks to the employers of his country. But the
position is less securely held. Such a creed as he attrib-
utes would conflict with the avowed opinions of some of
the best known actors on our industrial stage. Not a few
of the best informed spectators would pronounce that the
temper and the language which he indicates are detrimental,
if not fatal, to industrial welfare. They are certainly in
obvious contrast with the general state of feeling in in-
dustrial circles in Great Britain. I have quoted these
significant sentences from this suggestive book, not that
the author can be considered innocent of bias, or that his
opinions will command a full assent, but because, without
1. P. 36.
5
disguising varnish, he describes a sentiment which is not,
it seems, unusual among the employers of the States,
and his outspoken utterances afford a clear, and not a
blurred, reflection of an ugly situation which may cause
disquietude to the thoughtful of his countrymen. For he
is a competent and instructed critic. His knowledge is
not limited to the United States, and his examination of
that special area has been corroborated by some indepen-
dent evidence. The testimony borne incidentally by others,
such as the working-class members of Mr Moseley’s recent
Industrial Commission, points in the very same direction.
Mr Cox, for example, observes: * “In wages disputes and
the relations between employers' and workmen's organisa-
tions,” Americans “have much to learn from us; ” and Mr
Cummings similarly remarks:” “We in Great Britain are
far ahead of America upon the question of conciliation.”
The abounding wealth, in fact, and the diffused prosper-
ity of that country cannot hide from observation certain
symptoms of grave mischief. British employers could per-
haps with great advantage follow their American rivals
in the opportune encouragement bestowed on the inventive
faculties of their employees. American workmen may dis-
play a readiness to welcome new machinery and novel
processes which are sometimes greeted by British artisans
with suspicious hesitation. But, on the other hand, we
have for some years past attained, in many of our larger
industries, to a degree of rational good sense and sober
friendliness in the adjustment or prevention of disputes,
which has hardly come within the range of the practicable
ideals of acute observers in the States. It is true that the
example we have set has been followed, not without success.”
in some American industries for some while past ; and
fresh experiments are now being tried. But the total
achievement hitherto has not been so considerable, and the
environment seems certainly less favourable to the attempt.
1. Cf. Report, p. 49. 2 P. 88.
3 Cf. “Industrial Conciliation : Report of the Conference of the National
Civic Federation ; ” and also Professor W. J. Ashley’s “Adjustment of
Wages.”
B
6
The present industrial atmosphere is apparently more un-
kindly in America than in Great Britain; the mood and
temper of the interested parties seem less compatible with
a removal of the most serious impediments.
For the tolerable harmony prevailing here has been
Secured by the frank recognition of organisation on either
side, and by a willing and continuous resort to collective
bargaining between associated bodies of masters and of
men. Criticism and distrust of the methods and the aims
of British unions are not, it is true, unknown. In some
instances their injudicious action has been visited with
merited objection by observers from outside, who have been
sympathetic in their general attitude. Nor have they
always earned the praise or won the confidence of the
manufacturers and business men with whom they have
come in immediate contact. They are not, of course, in-
variably regarded as necessary defensive or aggressive
instruments of industrial war. Still less are they without
exception treated as the indispensable machinery fitted for
the preservation of industrial peace. But none the less
positively may it be affirmed that their place in the public
eye, and their ordinary relations to the masters, do not
correspond with those portrayed on Mr Brooks' pages as
familiar features of industrial society in his own country.
The coincidence is at least suggestive, that there can be
little or indeed no question that in the composition and the
hindrance of industrial disputes we have been more con-
spicuously and generally successful. In this important
matter we have passed a stage hardly yet approached by
our Transatlantic rivals.
It is a curious circumstance, which may deserve attention,
that with us combination among the men, especially perhaps
in recent years, has suggested, and indeed compelled, organis-
ation of the masters; but in the United States, where the
development of trusts has been pushed to a point unknown
or unusual here, and the recognition of the unions might
seem no more than an acknowledgment, dictated by a wise
and fair consistency, of a parallel formation, American
employers as a class are not disposed to concede to the
7
employed in settling wages the freedom of associated action
which they themselves claim and exercise, at any rate in
other matters. It is true that some competent observers
in America have declared that the formation of associations
of employers as such has “lagged far behind” the develop-
ment of unions among working men; and a valid distinction
can, no doubt, be drawn between the nature and the aims
of these associations and those more properly and usually
attaching to the trusts. It is also true that some of the
opinions of representative business men in the United
States, expressed at a recent conference of the National Civic
Federation, have exhibited an increasing friendliness towards
the unions. Yet the significant fact remains that American
employers are described by a shrewd observer like Mr
Graham Brooks as generally unwilling to regard associations
on both sides as equally likely and legitimate, as no less
capable of rendering useful service or liable to be abused.
The members of the unions, similarly, are, as a class, it
seems, not commonly disposed to engage in systematic
friendly bargaining on wage-adjustment with those whom
they consider joined together in a combination hostile to
themselves and regarded with no favour by the law. The
policy of the leaders of the unions appears to be more
ambitious and irresponsible, less rational and consistent,
than that adopted by the officials of the larger and older
British unions.
Such apparently is the general situation in the States,
and disputes between employers and employed are fre-
quently accompanied by an undisguised display of angry
feeling, which sometimes issues in an organised resort to
violence by the men, who are met with forcible repres-
sion by the masters aided by the military or police. With
riotous or sanguinary conflicts of this nature we are now,
with very rare exceptions, happily unfamiliar. The les-
son, indeed, which British experience teaches can be sum-
marised in a few short sentences. Successful negotiations
in industrial as in other quarrels are impossible with-
out effective representation; and representation, to be
effective, needs strong and stable organisation. For frank
8
discussion of vexed questions leading to concessions on
the one side or the other can be satisfactorily conducted
only when the number of the disputants engaged in actual
S conference is not unreasonably large ; and the power of
negotiators to make a lasting and a comprehensive bargain
depends essentially upon the trust reposed in them by the
constituents whom they represent. Combinations of
employers and employed, in fact, supported by their ad-
herents and recognised by their opponents, furnish a suffi-
cient guarantee, which has been amply tested by experience,
for the replacement of industrial war by peace. They can
supply negotiators, and can give them their credentials.
The lesson is not speedily imparted to those to whom it
is unfamiliar; it has not yet apparently been mastered in
the United States.
But our experience in this country is now not only large
but varied. The conditions of success are tolerably well
known. Its limitations are more definitely recognised;
and many extravagant hopes are prudently dismissed.
Distinctions have been drawn, illuminating what was once
obscure and disentangling what was previously confused.
Actual repeated trial has shown more unmistakably which
of the various routes, attempted formerly without discrimina-
tion, lead most directly to the desired goal; and if with
the lapse of time fresh impediments have been disclosed,
more effectual means of overcoming them have also been
discovered. Some retrogression might perhaps be noted by
acute and even friendly critics in certain special districts,
but over the whole country an advance is plainly visible.
A complete detailed survey would, no doubt, transgress
the necessary bounds of this discussion; but a brief examin-
ation of the features prominent in the landscape may per-
haps be satisfactorily accomplished.
I may be allowed to preface the inquiry with the explan-
ation that I first approached 4 the study of this question
little less than a score or so of years ago, and that since that
time I have endeavoured to observe the chief events which
1. Cf. my “Industrial Peace,” published in 1887, and based on a Report
prepared in 1886.
9
*
have occurred in connection with the pacific settlement of
industrial quarrels in this and other countries. I have tried
to notice new developments, and to appreciate and under-
stand fresh tendencies, which have become apparent in the
later history of the matter. The broad conclusion I have
formed, rightly or wrongly, is that gratifying progress has
been made. There may be some occasion for regret," but
there is more for satisfaction. The movement may some-
times have seemed to be more gradual than had been anti-
cipated, and sometimes it may appear to have been arrested
for the moment, or even to have been turned back in a
reverse direction. But, viewed from a detached position, a
distinct advance can be discerned. Disputes between em-
ployers and employed are not indeed unknown ; nor is it
now more probable than it ever was that they will disappear
from the industrial world. In this sense, it is true that
peace remains an imaginary ideal. But it may none the less
positively be stated, as an actual and admitted fact, that an
investigation of the entire area of industrial operations in
's this country would lead to the conclusion that pacific
methods of adjusting or preventing quarrels have become
at once more common and more sure. The precise direction
of the movement is perhaps not often understood, and, in
consequence, misapprehension has arisen on the nature and
extent of the real change effected. For it is not in the
adjustment so much as in the prevention of disputes that
the chief success has been attained; and that success itself
has mainly been achieved by arresting minor local differ-
ences, and not by checking, or even by composing, those
large general conflicts which attract and concentrate the
public notice. In the last Report on “Strikes and Lock-outs
in the United Kingdom,” issued by the Board of Trade for
1903* such differences as these are duly emphasised, and a
few passages from that Report may establish my contention.
The Report notices—and the point should be remembered
* Cf. a paper on “Industrial Conciliation : a Retrospect,” read before the
British Association in 1898 (printed in the ‘Economic Journal’ for December
1898. Vol. viii. No. 32, pp. 461, &c.)
* Cd. 2112, p. 12.
10
when the actual amount of interruption of industrial work
caused by strife between employers and employed is esti-
mated—that the “number of persons affected by trade dis-
putes in any one year forms but a small percentage of the
total number of persons industrially employed throughout
the United Kingdom.” In 1903 it amounted to only 1.2
per cent of all trades, excepting alone agricultural labourers
and seamen, who had indeed “been scarcely affected by
trade disputes” during the whole of the last five years. For
the whole of those five years the percentage for all trades,
with the same exceptions, was but 2, and in no single group of
trades besides coal-mining did the particular percentage rise
appreciably above the general average. In that trade the mean
percentage for the five years from 1899 to 1903 amounted to
12:4. Similarly the “aggregate duration of disputes in
working-days” in 1903, which might be “roughly estimated”
at about 2,338,668, was “less than one-thousandth of the
total" number of working-days “available for the whole
industrial population,” similarly estimated at “about
2,900,000,000.” “Spread over the entire body of work-
people the amount of working time consumed by disputes
in 1903 was less than a quarter of a day per head,” and the
“average for the five years 1899-1903 was little more than
one-third of a day annually per head, -an amount,” the
Report added, “which would be further reduced if agricul-
tural labourers and seamen were included.” “The number
of persons affected and the aggregate number of working
days lost in 1903 were less than in any ” of the sixteen years
since 1888, for which figures had been recorded and the
reports have annually been issued."
The low figure for 1903 of 387 disputes, concerning
116,901 people, compared with an annual average for the
previous ten years of 724 disputes and 371,000 workpeople
affected, was, it should be noticed, due, according to the
Report,” to a fact which is, as we shall see later, significant
in its bearing on the entire question. That fact was this.
The year 1903, like the four immediately preceding, was
1 P. 3. 2 P. 10.
11
“free” from the “large general disputes" which occurred in
some earlier years.
Of the 387 disputes occurring in 1903, 26, “affecting
directly or indirectly * 21,768 workpeople, “were brought
to a close,” the Report states," by “conciliation — i.e., by
the mediation of a third party or Board—or by reference
to arbitration.” “The number of disputes so settled was
somewhat less, but the number of workpeople affected
greater, than in any of the previous four years.” Of the 26
disputes during 1903, six were settled under the Concilia-
tion Act of 1896 by the agency of the Board of Trade,
seven were dealt with by Conciliation and Arbitration
Boards, and thirteen were arranged by individuals.
But, the Report proceeds to add,” “the most important
function” of the permanent boards of conciliation and
arbitration is, the settlement not of “strikes and lock-
outs,” but of “questions which might otherwise lead to a
stoppage of work.” In 1903 the “total number of cases
known to have been considered by 73 permanent Boards”
was “1633, as compared with 1462” “considered by 67 Boards
in the previous year.” Of these cases “785 were reported
to have been withdrawn, referred back, or settled independ-
ently of the Boards, and 60 as still under consideration at
the end of the year. The remaining 788 cases were settled—
506 by the Boards or Committees, and 282 by arbitrators or
umpires appointed by them.”
Nor indeed does the action thus recorded of these boards
exhaust the work accomplished by conciliatory methods;
for arrangements exist in the engineering, the cotton, and
other trades, which do not come within the “limits of what
is ordinarily known as a Conciliation Board.” The cotton
trade has, in fact, been placed by competent observers like
Mr and Mrs Sidney Webb,” in the very forefront of illustra-
tive examples of the prevention and adjustment of industrial
disputes. In the effectiveness of the machinery provided as
a whole, and in the careful adaptation of its separate parts
to the special work they are intended to accomplish, this
trade furnishes a noticeable instance of what good sense and
1 P. 38. 2 P. 40. * Cf. “Industrial Democracy,” Part II., chap. ii.
12
Systematic forethought can achieve in the avoidance or
reduction of unnecessary friction. And the Report of the
Board of Trade for 1903 states” that the “Brooklands agree-
ment provides for the reference of disputes in the cotton-
spinning trade over a large portion of Lancashire to the
Secretaries of the local employers' and operatives' organisa-
tions in the first instance, or to a joint-committee of these
Organisations, and finally, failing settlement, to a joint-com-
mittee of the Federation of Master Cotton-Spinners' Associ-
ations and the Amalgamated Association of Operatives'
Unions. Only a few cases were brought before these joint-
committees in 1903, but a considerable number were dealt
with by the secretaries of the associations of employers and
workpeople.”
This quotation indeed aptly indicates the special region
of industrial life in which pacific methods of preventing
or composing strife have been employed most widely and
effectively. Those large general quarrels, the scale of which
has lately been increased by the augmented size of the
combinations formed on either side, fix the attention of the
public, which is tempted to ignore the less obvious, but not
less important, need of the harmonious settlement of minor
differences continually occurring. Thus the Report of the
Board of Trade observes” that the cases dealt with by the
permanent Boards in 1903 “ vary very greatly in import-
ance.” The “372 cases settled by the Durham Joint-Com-
mittees in the Coal Trade affected in most instances very few
workpeople. On the other hand, one case determined by
the Conciliation Board for the coal trade of the Federated
Districts of England and Wales affected 270,000 workpeople.”
For, it must be remembered, “ the Conciliation Boards in
the coal trade which control the general level of wages
are entirely distinct from the local joint-committees. The
latter,” we are told, “are concerned with questions arising at
the individual pits, many of the cases relating to the adjust-
ment of prices for particular work affecting only a very few
men.” And yet, we are reminded, the “Northumberland
and Durham Joint-Committees contributed between them
1 P. 43. * P. 41.
13
441 cases, or rather more than one-half of the total number
known to have been settled in 1903 by permanent Con-
ciliation Boards.” This result may perhaps seem more
modest than that which filled the thoughts or stirred the
hopes of the original advocates of such conciliatory devices.
And yet it is a great achievement. For not only may a
tiny local quarrel unadjusted grow into the large dimen-
`sions of a general trade dispute, but these minor differences
are constantly occurring. Added together, they might easily
represent an interruption to continuous work no less in-
jurious to trade than one or perhaps two quarrels of great
magnitude and long duration happening at more distant
... intervals. At any rate, the rapid satisfactory adjustment
of these smaller local differences by the habitual use of a
machinery adapted to the purpose, working speedily and
Smoothly, brings distinct advantage to industrial operations.
It is a performance which has justly earned the commenda-
tion of observant students of the subject. It is an accom-
plished incident of the actual present. It is not an imaginary
possibility of a dim and distant future.
This experience indeed has led to more exact discrimina-
tion in the literary treatment of the subject. At one time
the two terms “conciliation * and “arbitration ” were inter-
changeable. They were regarded loosely as alternatives or,
by a worse confusion of thought or misuse of language, as
identical. Little or no attempt was made to part their
functions. It became impossible in consequence to settle
the direction in which the greater promise of success was
open to either of the two respectively. An amended ter-
minology has since, by slow degrees, been introduced; and,
although the complete acceptance of a fixed interpretation
has not replaced shifting meaning or varying use, intel-
lectual clearness and practical utility alike have gained by
fuller definition and more minute and accurate distinction.
... An American writer, Mr Gilman, has indeed suggested."
that arbitration should be applied alone to the explanation
of the terms of a past agreement, or to their detailed
adaptation to special circumstances; and he has argued
* In his ‘Methods of Industrial Peace,’ chap. iv.
14
that it should not extend to the conclusion of arrange-
ments for the future, even when effected by external inter-
vention. If this restriction be regarded as unduly narrow,
it may serve to recommend a practical injunction, which
may be embodied in the rule that the intervention in
industrial quarrels of a third or neutral party, usually
described in general terms as “arbitration,” whatever be
the special aim in view, is most possible and useful when
a settlement which has been reached by negotiation between
the parties interested needs authoritative interpretation in
detail.
The introduction, similarly, of the new term “mediation,”
to indicate occasions when the neutral intervener from out-
side tries to bring the disputants together and to smooth
negotiations rather than pronounce authoritative decisions,
corresponds to a fresh development of actual practice. For
unsuspected opportunities have recently appeared for deal-
ing satisfactorily with awkward situations which seemed
formerly to defy pacific handling. The writer I have quoted
would distinguish further between “conciliation ” and “col-
lective bargaining.” He would regard the latter as the more
general term, of which the former was a particular species
or the occasional practical embodiment. His terminology
aspires perhaps to an exactitude impossible in ordinary
industrial life. But it cannot be denied that the common
description, adopted in the Board of Trade Report, of
“Boards of Conciliation and Arbitration * is a misnomer,
if the erroneous notion is conveyed that these Boards them-
selves “arbitrate’’ in fact, or could discharge duties analogous
to arbitration, as the term is strictly understood. They are
more generally occupied with collective bargaining or, at
any rate, with conciliation. In any event, these and similar
discussions have served to fix a plain distinction between
the conclusion of an arrangement for the future and the
interpretation of a past agreement. An intelligible line of
cleavage has been drawn, separating a collective bargain
made by the representatives of the massed bodies of masters
and of men meeting together in formal or informal con-
ference, from the detailed application of the arrangement
15
thus concluded for an entire trade or district to the special
circumstances of localities or individuals comprised within
the area concerned. The firmer grasp of these essential
differences has ensured a fuller understanding alike of the
possibilities and the limitations of industrial peace.
The additional clearness and exactitude of view thus
reached in the scientific treatment of the subject has
checked unwarrantable indulgence in excessive hope. It
has served equally to prevent an unnecessary surrender to
extravagant despair. It also lends support to the analogy
which has been drawn between industrial and military
contests. For it is not uninteresting or uninstructive to
observe that in the larger sphere of international disputes
between armed peoples the new place lately won for arbitra-
tion as a substitute for war does not differ greatly from the
achievement which has been accomplished in the preser-
vation of industrial peace. Sanguinary conflicts between
nations have not ceased to happen, as present events remind
us; but the series of important treaties recently concluded
between various leading countries and ourselves afford cor-
roboration of the hope, which may now be entertained, that
arbitration can fulfil a useful office in settling minor differ-
ences. For it can thus remove the smaller pretexts for
commencing actual war. Such arrangements do not, it is
true, meet the higher aspirations of those who nurse a
sanguine but irrational belief in universal peace, but they
afford a solid basis for a more sober and effective creed.
That is embodied in the sage opinion that by the early
application of good sense, and the seasonable provision and
habitual use of mechanism suited for the purpose, success
may be achieved in the harmonious prompt determina-
tion of irritating petty questions between nations otherwise
not unfriendly. Treated in this spirit the Hague Conven-
tion constitutes a notable advance. In the industrial sphere
the analogous arrangement of individual differences and
local quarrels by joint-committees, as in the coal trade, or
by the expert and authoritative action of the secretaries of
the masters' associations and the men's unions, as in the
cotton-spinning industry, is an achievement of which those
A
16
A
who are responsible for the results accomplished may de-
servedly feel proud. It is a permanent contribution to
industrial peace.
Even in the larger and more arduous enterprise of con-
cluding by pacific methods wage-arrangements for the future
of great industries or extensive districts as a whole, some
advance has latterly been made, if some fresh obstacles have
been discovered. The system, automatic during its continu-
ance, which once prevailed through no small section of our
coal and iron industries, has, it is true, been generally aban-
doned. That system provided, by the mechanism of a “sliding
Scale,” for an adjustment of wage-rates to alterations in the
price of the commodity, in extracting or manufacturing which
the wage-earners were engaged. This peculiar method of
industrial peace has certainly not realised the hopes formed
by those who called it," by no very auspicious a comparison,
“the greatest discovery in the distribution of wealth since
Ricardo's enunciation of the law of rent.” But the disap-
pointment which has been thus occasioned should not be
exaggerated. For the obvious feature of the sliding-scale
arrangement was a correspondence of fluctuations of wages
to fluctuations of prices; and this principle still meets with
common recognition in the discussions and agreements of
those wages boards which are now the usual substitutes for
the less elastic, if more automatic, method of the scale.
Nor is the prescription of a minimum limit to the fall of
wages, which, in the popular demand for a “living wage,”
has undoubtedly been the main occasion for the general
dissatisfaction felt recently by working men with sliding
scales, irreconcilable with an adequate recognition of the
broad principle we have described. They can be combined
in an arrangement of an enduring nature with no less ease
than that which has attended the analogous adoption, in
some scales, of a maximum limit to the rise.
Nor, lastly, was the sliding scale itself at any time in
actual fact more than a rough-and-ready mode of establish-
ing a satisfactory relation between the earnings of the men
* E.g., the late Professor J. E. C. Munro in his ‘Sliding Scales in the Iron
Industry,’ p. 26.
17
and the gains of their employers. A correspondence between
wages and prices, which was its obvious feature, was a con-
venient means of securing this ulterior object. The dis-
favour with which the scale is now regarded in the coal
trade of this country has not prevented the recent pro-
posal in the cotton industry of a more ambitious plan for
accomplishing the same result." Owing to an inability to
reach agreement on all the details of the scheme the attempt
has, for the time at any rate, proved abortive; but its essen-
tial feature was the recognition of a more definite and direct
relation between the wages of the men and the profits of the
masters than was possible under the sliding scale in its usual
form. An automatic movement of the two in correspondence -
was contemplated. The fundamental aim of the sliding scale vº
was, in effect, to be carried to a more complete development;
and the circumstance that such a scheme was thought not
only fair but feasible by both the interested parties, and that
the preliminary negotiations failed on points of particular
detail, may be taken pro tanto as indicative of ultimate de-
velopment in this or some similar direction. The general
abandonment, therefore, of the sliding scale, with the dis-
appointment of the large promise which it seemed to offer,
do not afford sufficient reason for despair; and even its dis-
appearance from the important district of South Wales and
Monmouthshire, where it had lingered after its disuse else-
where, was followed by the formation of a conciliation
board.
The last few years, it must be confessed, have seen the
prominence of some obstinate descriptions of industrial dis-
putes which were not unknown before, but were less common
or important. “Demarcation * quarrels are not easy to
adjust, and in recent times have caused annoyance in
different trades. They are concerned with the right answer
to the uncertain question raised by the conflicting claims of
various trades to particular kinds of work. From the nature
of the case the settlement of such vexed problems must be
arduous; for the trades are ea hypothesi allied to one another,
j.
* Cf. “Conciliation in the Cotton Trade,”—a paper by the present writer 12
in the ‘Economic Journal’ for June 1901.
18
and the difficulty is caused by the occurrence of some small
alteration in the nature of the work, due perhaps to some
new process in its execution, which, in the opinion of one
or other of the disputing parties, removes it to the further
side of the line dividing the respective spheres within which
they aspire to exercise exclusive rights. Yet in spite of such
occasions—more or less legitimate—for stubborn disagree-
ment, the Report of the Board of Trade states 1 that in 1903
the “Boards in the engineering and shipbuilding trades con-
tributed 76 cases,” or almost 10 per cent of the total number
of 788 which were settled by conciliatory methods in that
year, and that the “majority of these cases related to the
demarcation of work between different trades in this group,
nine permanent Boards dealing with questions of this nature
being in existence.” The recognised machinery of industrial
peace has thus by no means proved incapable of handling
such perplexing problems.
The “sympathetic” strike, as it is called, is another ex-
ample of an old variety of quarrel which has lately gained
new prominence. It may be noticed that, in some formal
compacts for the pacific settlement of disputes in the United
States, a clause has been inserted * providing definitely for
the exclusion of such “sympathetic" strikes from the scope
of the agreement; and it is tolerably plain that those rational
considerations, to which recourse may satisfactorily be had
in the adjustment or prevention of industrial quarrels of a
normal character, cannot be applied with ease to so un-
reasoning a movement as a “sympathetic” strike. The
reassuring feature in the situation is the rarity of the
occurrence. Such strikes are the exception, not the rule,
of industrial life; and, similarly, those “demarcation ” differ-
ences to which we have referred are for the most part
limited to a few particular trades.
A more perplexing problem, from which an escape is not
so readily accomplished, has been always present in the
background of industrial peace. All the varieties of method
hitherto adopted in this country have been voluntary in
character. They imply the frank acceptance of that funda-
1 P. 42. * Cf. “Methods of Industrial Peace,’ chap. iv.
19
mental axiom to which we called attention at the outset.
Successful negotiation, on which as a preliminary the pre-
servation of industrial peace depends, is not possible apart
from satisfactory representation, and such adequacy really
hinges on the presence in full force of combinations. It is
the strength of the associations, whether of masters or of
men, which in the last resort supplies a guarantee for the
observance of agreements. It is in the control which they
can exercise over the action of their individual members
that the final sanction of collective bargaining is found.
But experience has plainly shown that a troublesome dilemma
may arise. The primary object for which these associations
have been formed is the protection of their members. In
their origin they were aggressive, in their development they
remain defensive, bodies. The motive of hostility to sup-
posed opponents is the main force which attracts and keeps
adherents. It is not, then, unnatural that the substitution
of continuous peace for recurring conflict, which has been
the unexpected work of powerful organisations, should exert
a weakening influence on the allegiance of their members.
For they may argue that the raison d'être of the associations
is withdrawn, and that, now that they are busied with un-
intended functions, they no longer call for any active sacri-
fice in their support. A conscious or unconscious slackening
of conviction thus arising may be forced into deliberate
neglect or open opposition by the exercise of the authority
of the body as a whole in a mode or for an object unpopular
with single individual members or with an important quota
of their number. They may endeavour to remove beyond
the reach of its compelling or restraining influence; or they
may flatly disobey unwelcome orders issued by officials whom
they themselves previously elected.
That subtle influences like these may sap the strength of
powerful organisations has been proved by definite experience.
The danger is appreciable, though no less evident has been
the gratifying circumstance that the officers of such associa-
tions are prepared to force, if necessary, unwilling individuals
to comply with the conditions of a general compact, and are
ready in emergencies to undertake the yet more arduous
20
business of compelling large and influential sections of their
own supporters, on whose votes they themselves depend for
a continuance of their authority, to recognise the binding
obligations of an agreement made by their accredited repre-
sentatives. The strain, however, may sometimes pass the
limits of endurance; and a disposition has been shown on
Some occasions latterly to deny negotiators the full liberty
and status of plenipotentiary ambassadors. This unwilling-
ness is not unnatural, but it impedes the conduct of the
bargaining and lessens the chances of an enduring settlement.
Nor, indeed, in view of these significant considerations is the
provision made for resort to an external arbitrator, invested
with the power of free decision, a complete escape from the
deadlock which ensues should negotiators disagree. For
obedience to the award of such an umpire rests on no other
guarantee than that which sanctions the agreements of
collective bargaining and supplies negotiators with their
credentials.
This risk, which accompanies all voluntary arrangement,
has suggested a resort to the compelling power of the State;
and recent years have seen a series of experiments in this
direction in our Australasian colonies. In our own country
the intervention of the State has been confined to a response
to invitation or to a suggestion that the friendly mediation
of a conciliator chosen by a Government Department should
be accepted by the disputants. Even in such cases recom-
mendation and inquiry rather than compulsion are the
methods usually employed. Yet it should be noticed that in
the United States, where the individualistic spirit is so strong
that it has proved in fact an obstacle to that recognition of
trade unions which is essential to collective bargaining, the
intervention of the President himself was welcomed in a
recent obstinate dispute. A feeling is becoming more pro-
nounced among American observers," — and echoes of the
opinion in which it is expressed may be heard by listeners in
* The opinion of the second conference of the National Civic Federation
held at Chicago in 1900, “that for the United States, at least, the proper line
of progress should be in the direction not of compulsory arbitration but of
voluntary conciliation,” may be contrasted with Mr Gilman's views.
21
Great Britain,_that, where such a necessity of economic life
as the transportation of men and goods is involved in an
industrial dispute, the State should compel the quarrelling
parties to compose their differences, and to resume without
delay, or even to continue without interruption, the pursuit
of their necessary work. In such cases, it is urged, the
public may not only claim the power, but may be forced to
exercise the right, of intervention. Nor is the line of sever-
ance very clearly marked which separates the privileged pro-
vision of Some public service, like railway communication,
from the enjoyment, permitted or conferred, of a monopoly
of production or of sale; and, similarly, differences in the
relative necessity of goods or services shade into one another
by degrees which are not easily discerned or justified.
But a regular resort to the compulsion of the law in the
adjustment of industrial quarrels is as yet peculiar to New
Zealand and Australia. It suits the socialistic tendency of
recent legislation in those colonies. It agrees with the ideas
of that labour party, which is either dominant, or at any rate
very influential, in the politics of those communities. In its
actual working, if not in its intention, it has been connected
closely with the aim of guaranteeing by official regulation
certain minimum conditions of employment. As yet it has
not undergone the testing trial of decisions adverse to the
wage-earner, for trade has been improving and wages have
been rising. Nor are the limited area and the small scale of
industrial operations to which the system has been confined
to be neglected in deciding on the possibility or benefit of its
extension to the larger sphere of the greater undertakings of
the mother-country. Yet the experiments merit close atten-
tion," and they have produced some noteworthy results.
It is a circumstance of some significance that, although the
compelling power of the law was at first removed to the
position of a last resource, a tendency to bring it from the
background to the front has become apparent. The suc-
cessive opportunities for voluntary agreement offered at pre-
liminary stages have failed to recommend themselves to
* Cf. “State Experiments in Australia and New Zealand, by W. Pember
Reeves, vol. ii. chap. i.
22
would-be litigants. The knowledge that recourse is open
to the law, if no arrangement be effected previously, has
prompted premature employment of this ultimate expedient.
On the other hand, the favour shown to combination by the
grant of exclusive legal privilege to those who are combined,
has been a general characteristic of the legislation. The
adoption of the principle in practice has in fact not only been
encouraged, but has even been enforced. Collective bargain-
ing through trade unions and employers' associations has been
recognised as the appropriate method of negotiation in indus-
trial arrangements; and, excepting only the final compulsion
vested in the law, it has been publicly proclaimed as the most
effective guarantee of peace. In the actual provisions of the
Several schemes adopted voluntary agreement is accordingly
assigned no insignificant position. It is given peculiar
prominence; and only in the last event, when preliminary
overtures have proved of no avail, are voluntary methods
superseded.
Such, apparently, is the intention of the law, although the
exigencies of practice may have occasioned departure from the
original design. In the earlier stages, it is true, the attend-
ance of witnesses, and the production of certain varieties of
important evidence, can be enforced by those who are exam-
ining the facts. But even when the case is brought at last
to the arbitration of a court, the attempt is not abandoned to
conduct the hearing with informality, and to admit as little
of the fixed routine and rigid technicalities of law as may be
possible. Assessors, who enjoy a knowledge of real business,
are associated with a judge, and the services of professional
advocates are not treated as necessary, or perhaps as usual.
In short, the legislation shows throughout an evident desire
to combine that machinery of voluntary bargaining between
free agents joined together in associations, which has accom-
plished valuable and even marvellous results in our own
country, with the provision, limited to the minimum re-
quired, of that motive-force ensuring ultimate adjustment,
which can only be supplied by the compelling power of
the law. Further experience will show whether the two
elements thus placed in contact can be permanently united,
23
or whether the one will steadily encroach upon the province
of the other.
We may not perhaps think it likely that the means thus
adopted in Australia and New Zealand of escaping from the
deadlock which must always threaten voluntary negotiation
will be speedily, or even ultimately, transplanted to the
mother-country. But we are nevertheless compelled to recog-
nise the chance that the natural impatience manifested by
the public, when in notorious conflicts the disputants are
unable or unwilling to arrive at an agreement without pro-
longed delay, may find an outlet in fresh developments of
intervention in the near or less near future. The recent
history of our trade unions suggests at any rate new pos-
sibilities. For a series of important judgments delivered in
the Courts during the past few years has impaired the privil-
eged, if not unique, position of civil irresponsibility for the
acts of their officials or their individual members, which
the unions formerly considered to be granted by the Legis-
lature. Without attempting to investigate the legal issue
here, we may perhaps indulge in speculation on the sequel of
these judgments. On the one hand it seems improbable that
new legislation should restore in its integrity, as they imagined
it, their previous status to the unions. On the other hand,
their former unwillingness to become legal corporations, from
a fear of risks and liabilities, from which they thought they
were immune, may not impossibly be weakened by the de-
cisions of the Courts. But, with this obstacle removed, the
recommendation made some years ago by certain members of
the Royal Commission on Labour that organisations both of
masters and of men should be allowed to obtain the rights
and take the responsibilities of legal corporations, if they
pleased, seems more applicable to the present situation than
the Commissioners themselves considered it to be when they
put forward the suggestion. As legal corporations, such
associations would be able to supply an additional guarantee
for the preservation of industrial peace; for this would be
furnished by a liability to be sued at law for damages for the
breach of an agreement, and by a corresponding power to sue.
It may be noted that by some of that remarkable recent
24 .
, legislation of our Australasian colonies, to which we have
referred, an incorporation, limited to this special purpose,
has been provided. . Such a provision might perhaps be made
in the mother-country also. . In this case, as often before,
unforeseen events may lead to unlikely consequences, and
great effects may follow from small causes. A new chapter of
industrial peace may even now be opening in Great Britain.
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