So far I have spoken only of the constructive side of the new capitalism's labor program, its purpose to produce healthy and industrially efficient laborers so as to increase profits. "State Socialism" gives the workingman as a citizen certain carefully measured political rights, and legislates actively in his behalf as a profit-producing employee at work, but its policy is reversed the moment it deals with him and his organizations as owners and sellers of labor.

Towards the individual workers, who are completely powerless either politically or economically until they are organized, the new capitalism is, on the whole, both benevolent and actually beneficent. But it does not propose that organized labor shall obtain a power either in industry or in government in any way comparable to that of organized capital.

"Successful State Socialism," as Victor S. Clark says in writing of the Australian experiments, "depends largely upon perfecting public control over the individual."[72] But compulsory arbitration of labor disputes which reaches the wage earners' organizations, is far more important to "State Socialism" than any other form of control over individual. A considerable measure of individual liberty may be allowed without endangering this new social polity, and it is even intended systematically to encourage the more able among the workers by some form of individual or piece wages—or at least a high degree of classification of the workers—and by a scheme of promotion that will utilize the most able in superior positions, and incidentally remove them out of the way as possible leaders of discontent.

Nor is it intended to use any compulsion on labor organizations beyond that which is essential to prevent them from securing a power in society in any way comparable to that of property and capital. For this purpose compulsory arbitration is the direct and perfect tool. It can be limited in its application to those industries where the unions really occupy a position of strategic importance like railroads and coal mines, and it can be used to attach to the government those employees that are unable to help themselves. I have mentioned those weaker groups of employees who would be unable to improve their condition very materially except by government aid, and, even when so raised to a somewhat higher level, have no power to harm capitalism. Compulsory arbitration or some similar device must therefore replace such crudely restrictive and oppressive measures as have hitherto been applied to the unions.

In the United States all "dangerous" strikes are at present throttled by court injunctions forbidding the strikers to take any effective action, and boycotts are held to be forbidden by the Sherman law originally directed against the "trusts." Recently the Supreme Court decided that the officers of the American Federation of Labor were not to be imprisoned for violation of the latter statute. But the decision was purely on technical grounds, and the court upheld unanimously the application of the law to the unions. There is little question that the attorney for the manufacturers, Daniel Davenport, was right when he thus summed up the court's opinion:—

"It held that the boycott is illegal; that the victim of the boycott has the right to go into court of equity for protection by injunction; that such court has the right to enjoin any and every act done in enforcing the boycott, including the sending out of boycott notices, circulars, etc., that the alleged constitutional right of free speech and free press affords the boycotter no immunity for such publication; that for a violation of the injunction the party violating it is liable to be punished both civilly and criminally."

Against this law and the use of injunctions in labor disputes the Federation of Labor has introduced a bill through Congressman W. B. Wilson, which aims to free the unions from these legal obstacles by enacting that no right to continue the relation of employer to employee or to carry on business shall be construed as property or a property right; and that no agreement between two or more persons concerning conditions of employment or its termination shall constitute a conspiracy or an offense against the law unless it would be unlawful if done by a single individual, and that, therefore, such an act is not subject to injunctions. While neither of the great parties has definitely promised to support this particular measure, one party has made a vague promise to restrict injunctions, and the leaders of the progressive wings of both are quite definite about it. Nearly half of the House of Representatives voted for the repeal of the Sherman law as applied against union boycotts. Senator La Follette has demanded the abolition of this species of injunction, and Governor Woodrow Wilson has accused our federal courts of "elaborating a theory of conspiracy destined to bring 'the sympathetic strike' and what is termed 'the secondary boycott' under legal condemnation."

Such reforms are not as radical as might appear to Americans, for the boycott is legal in Germany, while the crime of "conspiracy" was repealed in Great Britain in 1875, and the rights of strikers were further protected in that country by the repeal of the Taff Vale decision against picketing a few years ago, and yet unions are in no very strong position there. And weak as they are, the talk of compulsory arbitration is growing, and it seems only question of time until some modification of it is adopted. And, though the abuse of injunctions and the other forms of anti-union laws and decisions now prevailing will probably be done away with in this country, there is little doubt that here also employers will use some great coal or railroad strike as a pretext for enacting a compulsory arbitration law.[73]

Similarly, as governments continue to take on new industrial functions, great importance is attached to the right of government employees, now denied, to organize and to join unions. Senator La Follette and other progressives also champion this right against President Taft, and will doubtless win their fight, but, as I shall show later a right to organize does not mean a right to strike—and there seems no probability that any government will fail to answer the effort to strike on any very large scale either by punishment for conspiracy against the State or by excluding the strikers permanently from government employment. They will doubtless be offered, as in France, instead of the right to strike, the right to submit their grievances as a body, if they wish it, to some government board (see Part III, Chapter VI).

The Australasian labor leaders were the first and are still the chief advocates of compulsory arbitration among the unionists, and if they find it used against them they have nobody but themselves to blame. That Labor is disappointed in the result in those countries is shown by the fact that of late years, both in Australia and New Zealand, the most important strikes have been settled outside of the compulsory arbitration acts, and Mr. Clark states that he is unaware of any important exception.

But that the workers in Australia still hope to use this legislation for their purposes is shown by the referendum of 1911, by which they sought to nationalize the State laws on the subject. At the time of the railroad strike in Victoria, Australia, in 1903, a law was passed which imposed a penalty of "twelve months' imprisonment or a fine of one hundred pounds" for engaging in a strike on government railways, and made a man liable to arrest without warrant or bail "for advising a strike orally or by publication, or for attending any meetings of more than six persons for the purpose of encouraging strikers." Even then the limit had not been reached. In 1909 the Parliament of New South Wales passed an act especially directed against strikes in any industry which produced "the necessary commodities of life [these being defined as coal, gas, water, and food] the privation of which may tend to endanger human life or cause serious bodily injury," and the penalty of twelve months' imprisonment of the Victorian law was extended to all this vast group of industries also. The law of New South Wales was most stringent, providing that any one taking part in a strike meeting under these circumstances is also liable to twelve months' imprisonment, and that the police may break into the headquarters of any union and seize any documents "which they reasonably suspect to relate to any walk-out or strike." Under this law the well-known labor leader, Peter Bowling, was sentenced to one year of imprisonment.

The unions violently denounced this enactment, but chiefly as they had denounced previous legislation, on the ground that it permitted unorganized workmen to apply for relief under the law. That is to say, while the employers were using the law to make striking a crime, they were extending such benefits as it produced to the nonunion workers who can often be used as tools for their purposes. But the astounding hold that "State Socialism" has on the Australian masses, especially on the working people, is shown by the steadfast belief that this measure can be amended so as to operate to their interest. Bowling and his unions made a serious agitation for the general strike against the coercive measure just mentioned, but it was only by a tie vote that the New South Wales Labour Congress even favored protest in the form of cancelling the agreement which the unions had made under the Industrial Disputes Acts, while in the next elections New South Wales returned a majority of labor representatives opposing Bowling's policy of radical protest. That is, the majority of the working people still express confidence in the possibilities of compulsory arbitration, and even want to extend it.

Professor Le Rossignol of the United States and Mr. William D. Stewart of New Zealand have undertaken a careful and elaborate investigation of compulsory arbitration in New Zealand.[74] A reference to a few of their quotations from original documents will show the nature and possibilities of this coercive measure as it has developed in the country of its origin. The original law in New Zealand was introduced by the Honorable William Pember Reeves, the Minister of Labor, in 1894, and was supported by the labor leaders. Mr. Reeves says: "What the act was primarily passed to do was to put an end to the larger and more dangerous class of strikes and lockouts. The second object of the act's framer was to set up tribunals to regulate the conditions of labor."

"Mr. Reeves' chief idea," say our authors, "was to prevent strikes, and a great deal more was said in Parliament about industrial peace than about the improvement in the conditions of labor which the act was to bring about. But there can be little doubt that the unionists, without whose help the act could not have been passed, thought more of the latter than of the former result, and looked upon the act as an important part of the new legislation for the benefit of the working class." Here is the contrast that we must always keep in mind. The purpose of the unionists is to see if they cannot obtain improvements in their conditions; the purpose of the employers and also of "the public" is to prevent strikes. One of the most able students of the situation, Mr. MacGregor, has shown that since the passing of the law the latter purpose has been thoroughly accomplished, since it has been used not only as was originally intended, to settle labor disputes which become so serious as to threaten to "arrest the processes of industry," but that it has practically built up a "system of governmental regulation of wages and conditions of labor in general." That is to say, the law has accomplished rather the purposes of the employers than those of the employees.

In another point of the most fundamental importance the law has become something radically different from what the labor leaders who first favored it hoped it would be. The act of 1894 was entitled: "An act to encourage the formation of industrial unions and associations and to facilitate the settlement of industrial disputes by conciliation and arbitration." By the amendment of 1898 the words, "to encourage the formation of industrial unions and associations," were left out. Thus the law ceased to be directly helpful to the very unions which had done so much to bring it about and are the only means employees possess to make the law serve them instead of becoming a new weapon for employers.

An early decision of the Arbitration Court in 1896 had declared that preference should be given to the unionists. "Since the employer was the judge of the qualifications of his employees, the unionists did not gain much by this decision," say Le Rossignol and Stewart. "In later awards it was usually specified that preference was granted only when the union was not a closed guild, but practically open to every person of good character who desired to join." These later decisions brought it about that the so-called preference of unionists became no preference at all. "The Arbitration Court, except in a few minor cases, has refused to grant unconditional preference and the unionists, realizing that preference to an open union is no preference at all, now look to Parliament for redress and demand statutory unconditional preference to unionists."

In 1905 strikes and lockouts were made statutory offenses, and a single judge was given the power practically to force the individual worker to labor. After ten years of trial the law had become almost unrecognizable from the workingman's standpoint, and from this moment on the resistance to it has grown steadily. In a decision rendered in 1906, the Chief Justice said: "The right of a workman to make a contract is exceedingly limited. The right of free contract is taken away from the worker, and he has been placed in a condition of servitude or status, and the employee must conform to that condition." Not only do judges have this power, but they have the option of applying or not applying it as they see fit, for the amendment of 1908 "expressly permits the court to refuse to make an award if for any reason it considers it desirable to do so." With a law, then, that in no way aids the unions, as such—however beneficial it may be at times to the individual workingman—and which leaves an arbitrary power in the hands of the judge elected by an agricultural majority, what has been the concrete result? Especially, what principles have been applied by the judges?

Of course the first principle has been that all the working people should get what is called a "minimum" or a "living" wage, but our authors show that merely to keep their heads above the sea of pauperism was not at all the goal of the workers of New Zealand. No doubt they were already getting such a wage in that relatively new and prosperous country, yet this was all the new law did or could offer, besides keeping existing wage scales up to the rising cost of living. Anything more would have required, not compulsory arbitration, but a series of revolutionary changes in the whole economic and political structure. "Another stumbling block in the way of advance in wages is the inefficient or marginal or no-profit employer, who, hanging on the ragged edge of ruin, opposes the raising of wages on the ground that the slightest concession would plunge him into bankruptcy. His protests have their effect on the Arbitration Court, which tries to do justice to all the parties and fears to make any change for fear of hurting somebody. But the organized workers, caring nothing for the interests of any particular employer, demand improved conditions of labor, though the inefficient employer be eliminated and all production be carried on by a few capable employers doing business on a large scale and able to pay the highest wages."

Here is the essential flaw in compulsory arbitration in competitive industries (its limitations under monopolies will be mentioned later). The courts cannot apply a different standard to different employers. On the other hand, they cannot fix a wage which any employer cannot afford to pay or which will drive him out of business. That is to say, the standard tends to be fixed by what the poorest employer can pay, the employer who, from the standpoint either of capital or of labor or of efficient industry, really deserves to be driven from business. An exception is made only against such employers as cannot even afford to pay a living wage—these alone are eliminated.

Le Rossignol and Stewart show that in view of these considerations the court has repeatedly stated that "profit sharing could not be taken as a basis of awards, on the ground that it would involve the necessity of fixing differential rates of wages, which would lead to confusion, would be unfair to many employers, and unsatisfactory to the workers themselves."

With such a principle guiding the court, and it is probably a necessity under commercial competition, it is no wonder that some of the representatives of the unions have claimed that annual real wages have actually fallen. "It is not easy," say our authors, "to show that compulsory arbitration has greatly benefited the workers of the Colony. Sweating has been abolished, but it is a question whether it would not have disappeared in the years of prosperity without the help of the Arbitration Court. Strikes have been largely prevented, but it is possible that the workers might have gained as much or more by dealing directly with their employers than by the mediation of the court. As to wages, it is generally admitted that they have not increased more than the cost of living. A careful investigation by Mr. von Dalezman, the Registrar-General, shows that, while the average wages increased from 1895 to 1907 in the ratio of 84.8 to 104.9, the cost of food increased in the ratio of 84.3 to 103.3. No calculation was attempted for clothing or rent." If we take it into account that rents have risen very rapidly and are especially complained of by the working people, we can see that real wages, measured by their purchasing power, probably fell in the first twelve years of compulsory arbitration, notwithstanding that it was on the whole a period of prosperity in the Colony. For ten years, as a consequence, the complaints of the workers against the decisions have been growing, "not because the wages were reduced, but because they were not increased and because other demands were not granted."

When the unions perceived that the principles for which they have been contending were not granted, and that their material conditions were not being improved, it was suggested that the judge of the Arbitration Court should be elected by the people, in the hope that the unions might control the election, "but this would be at variance with all British traditions and could not be brought about," say our authors. No doubt British tradition has had something to do with the matter, but the impracticability of this remedy is much more due to the fact that the employees confront an agricultural and middle class majority.

At first it was the employers who were displeased, but now they are becoming converted. The employers, say Le Rossignol and Stewart, "have come to realize that they might have lost more by strikes than they have ever lost by arbitration; and, since the workers have been dissatisfied, the employers are more disposed to stand by the act, or to maintain a neutral attitude, waiting to see what the workingmen will do."

It would seem, then, that the real gain from the law has been through the abolition of strike losses, and since these had previously been borne by employers and employees alike, this saving has been pretty equally divided between the two classes, neither making any relative gain over the other. But at the bottom this is a blow to the unions, for the purpose of every union policy is not merely to leave things where they were before, but to increase the workers' relative share. Any policy that brings mutual gain requires no organized struggle of any kind. It is the workers who are the plaintiffs, and the employers the defendants. When things are left in statu quo it is a moral and actual defeat for the employees.

This is why, in the last two or three years, the whole labor movement in New Zealand has arisen against the law. In 1908 the coal miners' union refused to pay a fine levied against it, alleging that it had no funds. "In this position the union was generally condemned by public opinion, but supported by a number of unions by resolutions of sympathy and gifts of money. Finally, the Arbitration Court decided to proceed against the men individually for their share of the fine. The whole of the fine, together with the costs of collection, amounting to over 147 pounds, was recovered by means of attachment orders under the Wages Attachment Act of 1895. According to a recent decision of the Court of Appeals, the men could have been imprisoned, if they had refused to pay, for a maximum term of one year, but it was not necessary to do this, and public opinion was not in favor of imprisonment for the offense."

This and other strikes in 1907 and 1908 "caused a widespread opinion among employers and the general public that the act should be amended chiefly for the sake of preventing strikes. The laborers, as a class, were not enthusiastic about the matter, since the proposed amendments were designed to compel them to obey the law rather than to bring them any additional benefit." After having been debated for a year, a new law was passed, and went into effect January 1, 1909. This new law, though still compulsory, repeals some of the features of the previous legislation which were most obnoxious to the unions. Even this act, however, they found entirely unsatisfactory, and "during the year ending March 31, 1909, sixteen workers' unions, and a like number of employers' unions, had their registration cancelled for neglect, while two other unions formally cancelled their registration." This meant practically that these unions have withdrawn from the field of the act and expressed their disapproval of compulsory arbitration, even in its recently modified form. Not only have the unions been withdrawing, but, freed from its bondage, they began at once to win their most important strikes, indicating what its effect had been. Even the employees of the State have been striking, and successfully.

"The workers' position is embarrassing. The original act was passed for their benefit as well as to prevent strikes, but when it could no longer be used as a machine for raising wages, they were the first to rebel against it." There can be no doubt that our authors are correct, and that the working people are beginning to feel they have been trapped. In both New Zealand and Australia they have given their approval to an act which in actual practice may become more dangerous than any weapon that has ever been forged against them. The only possible way they could gain any advantage from it would be if they were able to elect the judge of the Arbitration Court, but, to obtain a political majority for this purpose, they would have to develop a broad social program which would appeal to at least a part of the agriculturists as well as to the working people, but here we turn to the considerations to be brought out in the next chapter.

Mr. Charles Edward Russell, as the result of two visits to Australasia, has very ably summed up the Socialist view of compulsory arbitration in The Coming Nation, of which he is joint editor. Mr. Russell says:—

"The thing is a failure, greatly to the surprise of many capable observers, and yet just such a result might have been expected from the beginning, and for two perfectly obvious reasons, both of which, strange to say, were universally overlooked.

"In the first place, the court was nominally composed of three persons, and really of one. That one was the judge appointed by the government.

"The representative of the employers voted every time for the employers; the representative of the unions voted every time for the unions; the judge alone decided, and might as well have constituted the whole court.

"At first the judge decided most of the cases in favor of the policy of increasing wages. Fine, again. Many wage scales ascended.

"But the judge, as a rule, did not like his job. He desired to get to the Supreme Court as rapidly as possible; to the Supreme Court where the honors were. A succession of judges went by. At last came one that agreed with the employers that wages were too high for the welfare of the country. This had long been a complaint of the manufacturers in particular, who were fond of pointing out how high wages discouraged the opening of new factories, and consequently the development of the country. This judge, being of the same opinion, apparently, began to decide the cases the other way.

"Then, of a sudden the second fatal defect in the system opened up.

"The men grew restless under the adverse decisions of the court. That raised a new question.

"How are you going to compel men to work when they do not wish to work under the conditions you provide?

"Nobody had thought of that."

Referring, then, to the failure to prevent the strike of the slaughterers against the law in 1907, or to punish them after they had forced their employers to terms, Mr. Russell gives the Socialist opinion of the legislation of 1908, passed to remedy this situation:—

"At the next session of Parliament it amended the law to meet these unexpected emergencies and find a way to compel men to work.

"To strike after a case had been referred to the court was now made a crime, punishable by a fine, and if the fine were not paid, the strikers' goods could be distrained and he could be imprisoned. Any labor union that ordered a strike or allowed its members to strike was made subject to a fine of $500. Outside persons or organizations that aided or abetted a strike were made subject to severe penalties.

"Fine, again. But suppose the labor unions should try to evade the law by withdrawing from registry under the act? Government thought once more, and produced another amendment by which the penalties for striking were extended to all trades engaged in supplying a utility or a necessity, whether such trades were organized or not.

"You could hardly surpass this for ingenuity. 'Supplying a necessity' would seem to cover about everything under the sun and to make striking impossible. There must be no more strikes.

"Sounds like home, doesn't it? To do away with strikes. You see the employing class, which all around the world gets what it wants and controls every government, had put itself back of the arbitration law. It had discovered that the law could be made to be a good thing, so it was at the dictation of this class that the amendments were passed. What the injunction judges do in America, or try to do, the law was to do in New Zealand.

"Except that not Judge Goff nor Judge Guy, nor any other injunction judge of our own happy clime, has dared to go quite so far as to declare that all striking everywhere is a crime to be punished with imprisonment.

"How are you going to compel men to work? Why, thus, said the government of New Zealand. Put them in jail if they do not like the terms of their employment."

Mr. Russell then gives an account of the miners' strike, above referred to, which he points out was ended by the labor department paying the miners' fines. He concludes:—

"Mr. Edward Tregear, a scholar and thinker, had filled for many years the place of chief secretary for labor. It is not a cabinet office, but comes next thereto. He is a wise person and a sincere friend of the worker, as he has shown on many occasions. As soon as he heard that the ministry actually purposed to imprison the miners because they did not like the terms of their employment, he went to the minister of labor and earnestly protested, protested with tears in his eyes, as the minister himself subsequently testified, begged, argued, and pleaded. No possible good could come from such rigor, and almost certainly it would precipitate grave disaster.

"To all this the minister was obdurate. Then Mr. Tregear said that he would resign; he would not retain his office and see men imprisoned for exercising their inalienable right of choice, whether they would or would not work under given conditions.

"Now Mr. Tregear was one of the most popular men in New Zealand, and his resignation under such conditions would raise a storm that no ministry would care to face. Hence the government was in a worse situation than ever. On one side it fronted a dangerous venture with the certainty of a tremendous handicap in the resignation of the chief secretary, and on the other hand was an acknowledgment that the arbitration law was a failure and could be violated with impunity.

"In this emergency decision was halted for a few hours while the government people consulted. Meantime, by quick and desperate efforts, the strike was ended, and the men went back to work.

"This left the fines unpaid. The labor department solved that difficulty and allowed the defeated government to make its escape from a hopeless situation by paying the miners' fines.

"To all intents and purposes it was the end of compulsory arbitration in New Zealand. Not nominally, for nominally the thing goes on as before; but actually. It is only by breaking our shins upon a fact that most of us ever learn anything; and the exalted ministry of New Zealand had broken its shins aplenty on a fact that might have been discerned from the start.

"If you are to have compulsory arbitration, you must compel one side as much as the other.

"But in the existing system of society, when you come to compelling the workers to accept arbitration's awards, you are doing nothing in the world except to compel them to work, and, however the thing may be disguised, compulsory work is chattel slavery, against which the civilized world revolts.

"This is the way the thing works out, and the only way it ever can work out. There can be no such thing as compulsory arbitration without this ultimate situation.

"If, therefore, any one in America believes in such a plan for the settlement of labor troubles, I invite the attention of such a one to this plain record.

"For my own part, years ago I was wont to blame the labor leaders of America because they steadfastly rejected compulsory arbitration, and I now perceive them to have been perfectly right. The thing is impossible."[75]

A somewhat similar act to the Australasian ones, though less stringent, has been introduced in Canada. The Canadian law, which is a compromise between compulsory arbitration and compulsory investigation, applies to mines, railways, and other public utilities. Strikes have been prevented, but let us see what benefits the employees have received. Whatever its effect on wages and hours, the law has the tendency to weaken the unions, which hitherto have been the only reliable means by which employees were able to advance their condition. Not only does it make organization seem less necessary, but it takes the most powerful weapon of the union, the ability to call a sudden strike. If we add to this the unfavorable influence on public opinion in case the unions are not contented with the rewards, and the fact that the law works against the union shop, which is the basis of some unions, we can understand the ground of their hostility.

"The Canadian Labour Disputes Investigation Act" is especially interesting and important because it is serving as a model for a campaign to introduce legislation along similar lines into the United States. Already Mr. Victor S. Clark, the author of the study of the Australian Labour Movement, to which I have referred at the beginning of the chapter, has been sent by Mr. Roosevelt and Mr. Taft to investigate into the working of the act. Ex-President Charles W. Eliot of Harvard has also advocated strenuously and at some length a similar statute, and it has been made the basis for the campaign in Massachusetts and other states. Mr. Clark reported: "Under the conditions for which it was devised, the Canadian law, in spite of some setbacks, is useful legislation, and it promises more for the future than most measures—perhaps more than any other measure—for promoting industrial peace by government intervention."

Here is the very keynote to compulsory arbitration, according to its opponents, whose whole attack is based on the fact that its primary purpose is not to improve the condition of the working people, but to promote "industrial peace by government intervention."

Mr. Clark concedes that "possibly workers do sacrifice something of influence in giving up sudden strikes," though he claims that they gain in other ways. "After such a law is once on the statute books, however, it usually remains, and in New Zealand, Australia, and Canada it has created a new public attitude toward industrial disputes. This attitude is the result of the idea—readily grasped and generally accepted when once clearly presented—that the public have an interest in industrial conflicts quite as immediate and important in its way as that of the conflicting parties. If the American people have this truth vividly brought to their attention by a great strike, the hopeful example of the Canadian act seems likely, so far as the present experience shows, to prove a guiding star in their difficulties." (Italics mine.)

In the agitation that was made in behalf of a similar law in Massachusetts, just exactly what is meant by the word "public" began to appear. It refers not only to the consumers of the article produced by the industry in which the strike occurs, but also to other dependent industries, to the merchants of the locality where the workmen live, and to the real estate interests. Here, then, are definite economic interests which are concerned primarily in the prevention of strikes and in the uninterrupted operation of the industry, and only in a secondary way in rates of wages. It is not a disinterested and non-partisan public; it is not on the side of the employers nor on the side of the employees, but it is opposed to the most effective weapons the working people have yet found to advance their interests, namely, the strike and the boycott.

It is said that if the workers lose the right to strike, the employers lose the right to lockout. It has been customary to set the lockout over against the strike as being of equal importance, but this is not the truth. Employers can discharge their workingmen one at a time when they are dissatisfied with a limited number; and they can often find a business protest for temporarily shutting down or restricting their output. To abolish strikes, then, is to take away the employees' chief means of offense or defense; while to pretend to abolish strikes and lockouts is to leave in the hands of the employers the ability to discharge or punish in other ways the men with whom they are dissatisfied.

When it was proposed to introduce the Canadian law in Massachusetts, no unionists of prominence indorsed it, but it was favored by a very large number of employers, while those employers who objected did so for widely scattered reasons. Mr. Clark is probably right in suggesting that, while such a law will not be enacted in the United States as things are now, it is very probable that it can be secured after some industrial crisis—and there is little doubt that President Eliot and perhaps also Mr. Roosevelt, for whom Mr. Clark was investigating, and many other influential public men, are expecting this time to arrive soon.

The attitude of a large minority of British unions and of a considerable part of the British Socialists is similar to that of the Canadian and Australian majority. When in 1907 the railway employees of Great Britain were for the first time sufficiently aroused and organized, and on the point of a national strike, a settlement was entered into through the efforts of Mr. Lloyd George and the Board of Trade (and it is said with the assistance of King Edward) which involved an entirely new principle for that country. A board was constituted to settle this and future strikes of which the Master of Rolls and other British functionaries were the leading elements. Actually the workers consented for several years to leave in the hands of the judges over whose election and appointment they have only an indirect and partial, if indeed any, control, complete power over their industrial life. The executive of the Fabian Society issued a manifesto congratulating the government on this "progressive" settlement, though few prominent labor leaders were willing to give it their full indorsement. The Fabian manifesto said that the advance in wages which could be secured by the settlement "will undoubtedly have been secured on the trade-union program, through the trade-union organization, by the trade union's representatives, and finally, in the argument before the arbitrator, by the ability of the trade union's secretary." But this settlement had nearly all the features of the Canadian law which I have just mentioned, and especially in failing to give any recognition to the unions, left the strongest possible weapon in the hands of their enemies. Nevertheless, more than a third of the members of the British Trade Union Congress voted since that time for a compulsory arbitration act, and British radicals like Percy Alden, M.P., to say nothing of conservatives, agitate for a law along New Zealand lines. The railway strike of 1911 has decreased the popularity of this proposal among unionists and Socialists, but has augmented it in still greater proportion among nearly all other classes. In the meanwhile, in spite of the employees' efforts, and external concessions by the employers, the power in the newest railway conciliation scheme lies also in the hands of the government (see Part III, Chapter V).

Statements by President Taft and other influential Americans lead us to believe it will be a very short period of years before similar legislation is applied to this country, in spite of the hostility of the unions, or perhaps with the consent of some of the weaker among them, which have little to gain by industrial warfare. While Secretary of War, Mr. Taft predicted a controversy between capital and labor which should decide once and for all how capital and labor should share the joint profits which they created. In this and many similar utterances there is foreshadowed the interference of the State. Indeed, the settlement of the Pennsylvania coal strike in 1903 was a clear example of such interference, and there is no question that the precedents established will be followed up on the next occasion of the kind by some arrangement even less advantageous to employees who now almost universally feel, as the present demands of the miner's union show, that they got the worst of the former decision.

The railway and mining situations in Great Britain, and the demand for the government to take some measure to protect employees against the "trusts" in this country (to say nothing of the menace of a great coal strike), promise to make compulsory arbitration an issue of the immediate future. Mr. Roosevelt, who now proposes that the government should interfere between monopolies and their employees, is the very man who is responsible for the coal strike tribunal of 1903, which not only denounced sympathetic strike and secondary boycott, but failed to protect the men against discrimination on account of their unionism. Were he or any one like him President, the institution of government wage boards would be dreaded like the plague.

Similarly Mr. Winston Churchill, in Great Britain, recognizes the extreme seriousness of the situation. His position is ably summed up by the Saturday Evening Post:—

"Winston Churchill has propounded a capital-and-labor puzzle to his British constituents.

"To a modern state, he says in substance, railroad transportation is a necessity of life—and how literally true this is of England was shown in the general strike of last August, when the food supply in some localities ran down to only a few days' requirements. So the government cannot permit railroad transportation to be paralyzed indefinitely by a strike. It cannot sit by and see communities starve. A point will soon be reached where it must intervene and force resumption of transportation.

"Strikes, however, form one of the modern means of collective bargaining between employer and employees. They are, in fact, the workmen's final and most effective resource in driving a bargain. Denied the right to strike, labor unions would be so many wooden cannon at which employers could laugh. If the employer knew absolutely that the men could not strike, he might offer any terms he pleased. In wage bargaining the men would not stand on a level footing, but be bound and gagged.

"If, then, the government takes away, or seriously restricts, the right of the men to strike, isn't it bound to step into the breach and readjust the balance between them and the employer, by compelling the employer to pay them fair wages? There can be no free bargaining if it is known that at a certain point the government will intervene on one side. Must it not, then, also be known that at a certain point the government will intervene on the other side and compel payment of adequate wages?

"Mr. Churchill carries his puzzle only that far. On our own account we add, How far will that leave us from regulation of wages as well as of rates by the government, and how far will that leave us from government ownership?"[76]

In a word, Mr. Churchill's remedy for the evils of "State Socialism" is more "State Socialism"—and undoubtedly there is an inevitable trend in that direction. But the government railway strikes of France, Austria, Italy, Hungary, and other countries ought to show him that his remedy, advantageous as it may be from many standpoints, is scarcely to be considered even as a first step towards the solution of the labor problem. As long as capitalists continue to control government, "State Socialism," on the contrary, makes the strike more necessary, more decisive, and invaluable, not only to employees, but to every class that suffers from the government or the economic system it supports.

The most representative of American Socialists, Eugene V. Debs, has given us an excellent characterization of this movement as it appears to most Socialists.

"Successful leaders are wise enough to follow the people. For instance, the following paragraph is to the point:—

"'Ultimately I believe that this control of corporations should undoubtedly, directly or indirectly, extend to dealing with all questions connected with their treatment of their employees, including the wages, the hours of labor, and the like.'

"And what Socialist made himself ridiculous by such a foolish utterance? No Socialist at all; only a paragraph from his latest article on the trusts by Theodore Roosevelt. Five years ago, or when he was still in office and had the power, he would not have dared to make that statement. But he finds it politically safe and expedient to make it now. It is not at all a radical statement. On the contrary, it is simply the echo of E. H. Gary, that is to say, John Pierpont Morgan, president of all the trusts.

"Mr. Roosevelt now proposes that Bismarck attempted in Germany forty years ago to thwart the Socialist movement, and that is State Socialism, so called, which is in fact the most despotic and degrading form of capitalism.

"President Roosevelt, who is popularly supposed to be hostile to the trusts, is in truth their best friend. He would have the government, the capitalist government, of course, practically operate the trusts and turn the profits over to their idle owners. This would mean release from responsibility and immunity of prosecution for the trust owners, while at the same time the government would have to serve as strikebreaker for the trust owners, and the armed forces of the government would be employed to keep the working class in subjection.

"If this were possible, it would mark the halfway ground between industrial despotism and industrial democracy. But it is not possible, at least it is possible only temporarily, long enough to demonstrate its failure. The expanding industrial forces now transforming society, realigning political parties, and reshaping the government itself cannot be fettered in any such artificial arrangement as Mr. Roosevelt proposes. These forces, with the rising and awakening working class in alliance with them, will sweep all such barriers from the track of evolution until finally they can find full expression in industrial freedom and social democracy.

"In this scheme of State Socialism, or rather State capitalism, Mr. Roosevelt fails to inform us how the idle owners of the trusts are to function except as profit absorbers and parasites. In that capacity they can certainly be dispensed with entirely and that is precisely what will happen when the evolution now in progress culminates in the reorganization of society."[77] (My italics.)

[72] Victor S. Clark, "The Labour Movement in Australasia."