by legal enactment, which may or may not be constitutional. We offer this as a method that establishes justice to those employees who seek to be stockholders, in a form which is sound and within the keeping of the provisions of our Federal Constitution. We do not favor any method that will require the passage of a constitutional amendment taking many years of time. The same can be said with great force with reference to Government purchase of the railroads, after condemnation. It would take many years of litigation, since it is inconceivable that the thousands and thousands who have ownership in the railroad properties will ever come to a voluntary agreement with the purchaser as to what shall be the price at which the property is to be acquired. The views of the league are otherwise indicated by the inclosed leaflet, issued in July, 1917, and given circulation throughout this Nation and to some extent in Great Britain. We inclose booklet of the league. LUTHER O. DAY, President. INDUSTRIAL PEACE WITH JUSTICE. [By Stephen A. Day.] Any method for the solution of the problems of our industrial conflict must be founded upon justice and a square deal to all of the elements involved. The. average American citizen is so fundamentally fair-minded and is so devoted to the practice of fair play that no considerable part of our population can be won to the indorsement of any program that is not just. In the solution of this problem there are three cardinal elements or factors: First, the public; second, the employers, and third, the employees. Of these three the paramount interest is that of the public, but the public is not willing to have its problem decided unless full justice be done to both of the other elements. We must approach any proposed solution with this idea firmly in mind. The problem presents two great features which may be designated as, first, the obtaining of industrial peace, and, second, industrial justice, and neither can be obtained without the other. In working out some method of avoiding the costly strikes and lockouts which are disastrous to the Nation's welfare, and especially cruel to the great mass of our people who are not involved in the dispute, it is proposed to adopt a method of arbitration as fixed by congressional statute. The exact details of the method have not been fully developed, but it is safe to say that some method of cooperative arbitration can be discovered, and which will be fair and just to both the employers and their employees. The settlement of industrial disputes by arbitration would insure industrial peace of full justice were done. The right to strike is fully recognized by law and it is an effective weapon. The wage earners, by force of necessity, must bargain collectively for their wages, and in the present state of our economic development it is the only effective weapon that the wage earners have. They are organized into unions and the heads of the unions bargain with the employers for a fair wage scale. The point I wish to emphasize is, that if we take away the right to strike and substitute therefor a fair method of arbitration, we have accomplished only one part of the solution of our problem. There still remains the duty of giving to the wage earners something to insure the obtaining of justice on their part. What follows is an attempted solution of this part of the problem to be taken together with the arbitration feature, and with the hope that the accomplishment of both will go a long ways toward insuring industrial peace with justice. The conflict between capital and labor as a purely economic struggle is of long duration, and in many of its aspects has not been fully thought out. In the establishment of a new industry in the first instance, it is necessary to make an outlay of capital. The plant must be built, the machinery installed, and before a cent is earned, in many instances, enormous sums must be provided in advance. On the one hand, we hear the argument that there would be nothing for the wage earners if it were not for the capital which employers had provided; and on the other hand, it is urged that after the capital was provided there would be nothing in the way of earnings and profits for the employers without the labor of the wage earners. Of course, we can readily see that both capital and labor contribute in their several ways to the success of the enterprise. Under our present economic development, the wage earners take as their compensation only wages, except in some instances where there are profitsharing plans which permit the wage earners to purchase stock in the corporation. But the method of treatment is purely individual, the wage earner being regarded purely as a prospective stockholder and paying for his stock just as any other stockholder. In this profit-sharing plan the collective feature. which at the root of the bargaining for the wage scale, does not exist. What is desired is to work out a method under which the wage earners collectively can become stockholders in the corporation. To the same extent that the individual wage earner is impotent to bargain for his daily wage, the individual wage earner is likewise unfit to become a purchaser of stock. The right should be granted to the wage earners, collectively, as a union, to have a proportion of the stock in the corporation. In addition to the wages which they would earn from their labor, they would also be profit sharers as they receive the dividends upon the stock which they own. So long as the wage earners receive only wages it is natural that disputes should constantly be arising because of the conflict in interest. The wage earner has no ownership, is purely a hireling, and to him the most important element in the balance sheet is the fund appropriated for the payment of wages. In his view this fund should be entirely adequate and, in mang instances, the sum which the wage earners think should be paid as wages is disproportionate to the other items in the budget. On the other hand, the employer feels that the most important item in the balance sheet is the net profits distributed as dividends, and it is to his interest to see that the wage fund be kept as small as possible. With the two interests thus diametrically opposed, as a question of mathematics, it is safe to say that there can be no industrial peace simply because we have a peaceful method of settling the dispute. The disputes will still occur with too great frequency, and if we intend to solve this problem we must work out some method whereby full justice is done so that there will be no need of a dispute. It is recognized by all those who favor profit-sharing plans that something more should be given to the wage earners than mere wages. They should be taken into the business and prosperity passed around. What is herein proposed is a method for a just distribution of the profits. Originally corporate charters were granted only to corporations which were to engage in a public service. The modern private corporation is a distinct departure from the fundamental idea, but the various States which grant the privilege of corporate life retain the full and complete right to alter and amend the corporate charters as the public interest may require. The important thing to remember in this connection is that all corporations are purely permissive, and before they are organized, sworn statements must be filed with the State authorities outlining the business that is to be performed; the amount of the capital stock; the amount paid in on the shares, and various other questions must be answered before the State authorities will grant the charter. Together with this thought, we must bear in mind that in the infancy of the business it is always purely a promotion. The business man who is about to purchase stock in a new enterprise must be convinced by an examination of the plans that he is to receive a square deal for the amount which he puts in. The distribution of the earnings must be fair. The man who puts up the capital is entitled to a fair return, and every other element in the new enterprise must be given equally fair treatment. In the preliminary plans no regard is had for any portion of the profits which might be earned or set aside for the wage earners. We all recognize the justice of including the wage earners at this stage of the business. Why not provide by law that when the promotion is launched that in addition to the amounts which will be outlayed as capital and the return on such capital is fixed, that a fair proportion of the stock be set aside for the wage earners, as a matter of law, not as a question of charity or generosity The State is vitally interested to know that the new corporate existence, for which it is giving its permission to live, be at all times dominated by fair dealing in its operation. The Government, in the interest of the public, having seen fit to provide a method of arbitration and to take away the effective weapon in the form of strikes from the wage earners, should see that the wage earners collectively obtain justice on the financial basis of the enterprise. We have in the various States to-day corporation commissions which require those or ganizing a new corporation to state specifically what they intend to do and how they intend to divide their earnings, and it is not difficult to go a step farther and to have a national corporation commission determine what will be a fair proportion of the stock to be set aside for the wage earners so that they can share in the profits and become coowners as well as coworkers in the enterprise. The exact proportion that might be thus set aside might differ in different corporations. To overcome the conflicts between various State laws that exist, to insure uniformity, and, above all, to do the work adequately, a national corporation law should be passed, to carry out the ideas herein set forth. To-day numerous sums are collected from the wage earners as strike-defense funds, and such money is purely wasted because it is consumed in controversy. If a method of arbitration were established there would be no need of accumulating these funds for purely controversial purposes, and, such money could be used to purchase stock in the corporation. The important element in this method is that it seeks to obtain industrial peace with justice. If the Government is to compel arbitration it ought also to compel a fair economic distribution of the profits. There is no question of the power of the Government to do this and no great difficulty is presented why such a plan should not be adopted. It is merely a question of working out the method. The thought is right because it is founded upon justice and fair dealing. Furthermore, this method is an absolute preventive of socialism, and if carried out we would hear no more of socialism. It retains private enterprise, but insures that such enterprise be just. CHICAGO, ILL., July, 1917. PAMPHLET ISSUED BY THE LEAGUE FOR INDUSTRIAL JUSTICE. [Headquarters, Chicago, Ill., 37 South Wabash Avenue.] The true interest of both employers and employees rests in mutual understanding and closer relations of genuine cooperation. One of the difficulties in obtaining industrial peace has been the lack of understanding of the other side's problems. The factors in industry have been working in separate councils, animated by intense feelings of mutual reprisals and class antagonism. Each side has not been willing to admit that the other is honest, and that its selfishness is not sprung from evil and vicious motives. Close personal contact between employer and employee and full and free discussion of the other's attitude with reference to the question of wages, hours, and working conditions will accomplish much in the obtaining of industrial peace, provided it is thoroughly agreed that such industrial peace will be founded upon justice and a square deal to all of the elements involved. The time has come to raise the status of the laborer from that of a wage earner to a partner in the business. It must be generally recognized that all men who work together are in a real sense partners. It is no longer subject to question that better work is done and an increased and more steady production is obtained where the workers feel with an assured confidence that they are more than mere cogs in a machine, and that their human wants are considered and appreciated in the organization of industry. Industrial peace will be more easily accomplished if the problem be approached with the sincere purpose to make the workers believe that they are a vital part of the business and that their collective representation is just as important as any other part of the enterprise. To this end, the workers should be recognized as partners and the opportunity afforded to select the best among them to lead in the voicing of their collective desires and aspirations. The large element of alien labor in American industry, which prior to the war numbered 9,000,000, must be assimilated and made loyal to American institutions. The anarchists and fanatical followers of the red flag shall find no opportunity of undermining American freedom by the criminal and poisonous dissemination of their disloyal propaganda. One of the far-reaching results of America's experience in the Great War has been a recognition of the danger that lurks in a large body of aliens who do not speak our language, and who do not love our flag. Every effort must be made to educate these aliens to become naturalized citizens of the United States and to understand the blessings of liberty regulated by law. The work of Americanization is already under way, and public sentiment must be organized to insure that the handling of this vital problem will be upon a plane of patriotic unselfishness, free from ulterior profiteering. Many of these aliens will make good citizens, and we have need of them. We must separate the devotees of the red flag from the loyal worshippers of Old Glory. We can no longer tolerate a condition of divided allegiance, and every man and woman who expects to have the right to share in American prosperity must salute the colors and swear to uphold the Constitution of the United States. It is the proper function and duty of the Government to provide the ways and means of insuring a just and peaceful conduct of industry. Not Government ownership but Government regulation, within proper limits, is the need for the present industrial situation. It is now generally recognized that the industrial conflict is not merely a private dispute. There are four sides, and each and all of them must receive full consideration if we are to reach a just conclusion. Employer, employee, management, and the public are the four sides, and we can not have a square deal unless we take into account the legitimate and reasonable claims of each of the four sides to the square. In the gradual readjustment that must come, due and proper regard must be had for the legitimate demands of all the factors in industry, and the rights of each adjusted upon the principle of justice and fair play to the rights of all the others. The Government should not dispossess the stockholders and eliminate the employers. The square deal would then become a two-sided matter, and the rights of the four elements would all be lost in a political system, not founded upon justice and fair play but upon selfish usurpation of power and partisan exploitation. The employees would cease to be free agents with full power to protect their own interests. They would become mere units in a system of petty officials and subject to the same total effacement of individuality as exists under a state of militarism. Industrial freedom would be sacrificed by the introduction of industrial slavery. Concerted action for a redress of grievances would amount to mutiny. The hope for American prosperity lies in the preservation of private enterprise The just demands of all elements must be freely recognized and the duty of the Government should be to insure that the game will be played on the square. The proper function of governmental regulation should be exercised before it is necessary to call out the military forces to suppress riots. By wise and timely safeguards it is entirely possible to keep open the channels of commerce and this is the most important function of the Government. We must complete the labors of the founders of our Republic by adding the constitution of industry to the Constitution of the United States, in the same spirit that has made and preserved us a Nation. In this new constitution of industry will be set forth the organic principles that must govern the relations that should exist between employers, employees, management, and the public. The founders of the League for Industrial Justice believe that under this law administrative officers, equally representative of employers and employees, will determine what is the proper proportion of stock which should be set aside for the wage earners, subject to purchase by them alone and to the end that the wage earners may become coowners as well as coworkers in the industries. It is entirely possible to determine what this proportion should be. By such provision the path will be freely opened to the obtaining of industrial justice and sure knowledge of this fact will rest in the minds of the wage earners. There would be no disturbance of existing methods for the payment of wages and to insure a continuation of the American standard of living, a living and wholesome wage must be paid, so long as the success of the business will warrant it. Through the ownership of stock, the wage carners will become in a genuine sense partners in the enterprise and will have a voice in the management. With representatives of the employers and representatives of the employees sitting in deliberation around the table of common counsel, in the managemen* of the corporate business, much will be achieved in the settlement of our industrial problems. Free interchange of thought and mutual consideration of the common interest-the success of the business---will give a better understanding that can not fail to make for greater profits. Open books will reveal the true state of the corporate finances and no discontent can be engendered by the suspicion that enormous profits are being concealed, and that the employers are taking greet gains at the expense of the men This might do away with the agitator, and we hope he will not be missed. Other undesirables may be eliminated from our industrial system and the true interest of the men not thereby retarded. We must oppose socialism and bolshevism in every form :S cont art to the Spirit and purpose of our Republic and as injurions to the best intereNİN of the workingmen. To do this effectively we must establish t'e entan socialism—private enterprise founded upon justice. The growth of socialism has been in a large part due to the fact that the old organization of industry has provided too many weak spots that can not be successfully defended. There has been too little recognition of the human aspects of industrial relations and too much selfishness. We have neglected to deprive the enemies of private enterprise of their destructive criticism. On the whole, the business men of America are as clean, honest, and decent meu as ever lived in any country. The difficulty with private enterprise in the past has been that the organization of industry did not furnish the requisite machinery by which to measure the square deal to all of the elements involved. Before the American people will have any toleration for socialism it must be clearly demonstrated that private enterprise is a failure. Our experience and the example of European nations has shown us that the time has come when no legitimate criticism of our industrial system must be left unanswered. Many business organizations throughout the Nation are already adjusting themselves to the basis of the square deal and as the work progresses the arguments of the Socialists will gradually lose any attraction for the unsuspecting citizen. Bolshevism is like suicide. Happy and contented people want to live and are, therefore, not Bolshevists. It is our duty to carry the message of encouragement and a willingness to hear the other man's just complaints and to answer them in the spirit of mutual benefit and sincere helpfulness. We must establish the principle of justice to women in industry and to see that women are compensated upon the same basis as men where they perform like services. The protection of the health of women and safeguarding their means of subsistence is but insuring the integrity and happiness of the home and the future of the race. It needs no argument to accept the principle that women in industry should receive fair play and where their labor is necessary to see that it is equally rewarded with the like services of men. It is also our duty to see that the labor of children be abolished and that their young bodies be given an opportunity to grow into full health and stature. It is a living reproach to the present industrial system that the labor of children of tender years should ever be required or permitted. All reasonable measures to promote the health of workingmen and to protect them against the destructive elements of industry should be encouraged and particularly does this apply to women in industry. Hon. JOHN J. ESCH, LEAGUE FOR INDUSTRIAL JUSTICE, Chairman Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. MY DEAR MR. CHAIRMAN: Please accept my thanks for your kind letter of the 20th instant. I inclose herewith elaborated features of the stock-purchase portiens of our plan. The benefit of such a method lies largely in the fact that all the terms of purchase are definite and fixed by law and can be readily understood by all. Furthermore, there is no attempt to tell the men what they are to do with their own money. The whole scheme is purely voluntary, as no one need purchase the stock unless he wants to. This method will provide an investment, guaranteed in a sense by Uncle Sam, at least to the extent of honest values, that the men will be glad to make use of. When they realize that the stock is right and the ternis of sale are clearly defined by law, they will cease to feel as they do now about all railroad securities. Again thanking you for your courtesy in this behalf. Respectfully, yours, STEPHEN A. DAY. |