# Corporations, Their Employés, and the Public

North American Review, Vol. CXXXVIII, No. 327 (February, 1884), pp. 101-119. Schurz had recently dissolved his connection with the New York Evening Post due to differences with his associates over the paper's editorial positions on the relationship between corporations and their employees (see “No Longer an Editor; Carl Schurz Severs his Connection with the 'Evening Post'.” The New York Times, December 11, 1883).
CORPORATIONS, THEIR EMPLOYÉS, AND THE PUBLIC.
The great railroad strike of 1877 will not easily be forgotten. Riotous outbreaks of terrible violence startled the country, and the interruption of the transportation of persons and goods on some of the most important railroad lines caused general alarm. The business community suffered great damage by the disturbance of its arrangements and calculations, and the sudden difficulty of personal communication between different localities put all classes of society to very serious trouble and inconvenience.
Last summer, in July, there was an extensive strike of the employés of the Western Union Telegraph Company. The strikers generally conducted themselves as law-abiding citizens should, and no disturbance of the peace took place. But, as the Western Union Company had been doing by far the larger part of the telegraphing in the country, an interruption of its service to a great extent deprived the business community and the people generally of the means of that rapid exchange of intelligence which, in many important respects, has become one of the necessities of modern life.
In each case, the extreme of disaster was averted by timely arrangements putting railroad and telegraph in motion again.
But, leaving aside the question whether the striking railroad employés in 1877 and the striking telegraph operators in 1883 were right or wrong, the attention of the public mind was very forcibly directed to certain facts of great importance in the present organization of society. The rapid transportation of persons and goods and the rapid transmission of intelligence, it is hardly necessary to say, have become functions of so essential a nature in our social organism, that their interruption, only for a few days, cannot fail to bring upon a multitude of people great losses and very serious inconvenience, and their suspension for a long period would result in incalculable confusion and disaster affecting the whole community. These functions are, in our country, exercised through private corporations which, on their part, keep the machinery of their business going through a large number of employés who work for wages. With the pay and the treatment they receive, these employés are sometimes dissatisfied, whether in most cases with or without good reason, it is in this place unnecessary to inquire. For the promotion of their general interests and, among other things, to enforce the demands they occasionally make upon their employers, they have formed “unions,” “brotherhoods,” and the like. The membership of these associations they seek to extend over all classes of laboring people who might compete with them for the same employment, and by thus controlling them they expect to neutralize that competition and to overcome all resistance to their demands on the part of the employers in case of strikes, the object naturally being to make the filling of their places difficult, if not impossible.
In this way the employés of railroads and of telegraph companies have, like other working-men, organized themselves in large compact bodies, to be controlled by a common will, for the purpose, among other things, of enabling themselves to arrest, by general and sudden stoppage of work, all railroad transportation and all telegraphing, if the corporations refuse to comply with their demands with regard to wages and treatment. On the other hand, the corporations are frequently disposed to resist such demands, be it for the reason that the latter are really extravagant, or that they themselves seek to increase their profits by following an unjust and oppressive policy in the treatment of their employés.
It may be said that the conflicts thus ensuing will, as between employers and employés, in the long run, be decided
according to the condition of demand and supply in the labor market. When the employés strike for the purpose of obtaining higher wages, or to prevent a reduction, or for other reasons, the employers may find persons willing to serve upon the conditions offered or, failing in this, they may think it for their interest to suspend their business in order to starve the strikers into submission. To find a new set of persons for the vacated places will be difficult and require time when skilled men are needed, or when the strikers, by their organizations, are able to exercise control over those who might replace them. The attempt to starve the strikers into submission will result in a trial of endurance, the duration of which will depend on the state of preparation of the strikers, the means accumulated or the aid they receive for their support while out of work, and, on the other hand, upon the views the employers take of their own interest as to the length of time during which they can permit their business to be suspended. Finally, operations will be resumed upon the terms of the more enduring party, or, it may be, on the basis of a compromise. But in all these cases there is, unless one or the other party instantly succumbs, a temporary cessation of work. When such a thing happens in a cotton mill, or an iron foundry, or a tobacco factory, or a similar line of business, the incidental suspension of work may be a very important matter to the parties immediately concerned, but it will be of comparatively little interest to the general public. But when, in consequence of a disagreement between railroad or telegraph corporations and their employés, railroad travel and transportation are obstructed by extensive strikes, or the telegraph ceases to speak, and the business machinery of the country is struck with partial paralysis and millions of people are subjected to grievous inconvenience, then, however great the losses of the corporations may be in profits and of the employés in wages, the general public will be the principal sufferer. It is evident, therefore, that the relations between the railroad and telegraph corporations and their employés, so far as the working of the agencies of rapid transportation and transmission of intelligence depends upon them, are not only a matter of concern to the corporations and employés themselves, but a matter of the greatest possible concern to the whole community. They are not a mere private but a public interest. It is equally evident that, as to the necessary protection of that public interest, the problem is not how the interruptions of the railroad and telegraph business, which are caused by strikes, can in each case be ultimately brought to a close by proper adjustment, but how they can be altogether prevented; for, as it is through the temporary suspension of the running of railroad trains and of the working of telegraph wires that the public suffers, so it is only by preventing the occurrence of such suspensions, — that is, by preventing not the success but the breaking out of strikes, — that the public can be protected.
The question how this can be accomplished has been answered in different ways. One line of reasoning applied to it bears mainly upon the public duties of the corporations. An eminent judge recently held as follows with regard to railroads as public highways: “Can railroad corporations refuse or neglect to perform their public duties upon a controversy with their employés over the cost or expense of doing them? We think this question admits of but one answer. The excuse has, in law, no validity. The duties imposed must be discharged at whatever cost.” It is urged that a similar rule should be applied to the telegraph, upon grounds like the following: Telegraph corporations are the creatures of law. They have received valuable franchises from the state, in consideration whereof they have to perform certain public services. It is their duty to transmit telegraphic messages promptly and correctly. This is what they are under a public obligation to do, no matter whether they have to pay the employés they need for that service high or low wages. If their employés are dissatisfied with the pay offered to them and refuse to do their work unless they get more, the corporations are in duty bound to agree to the terms insisted upon, unless they are able to fill the places vacated by the strikers so promptly that no interruption of the service occurs. The latter may be difficult, if not impossible; but, whatever they may have to pay their employés, under no circumstances can they be permitted to let the service suffer any interruption. Upon this theory, if capable of rigorous enforcement, the problem of preventing the suspension of the service might indeed be solved.
But, on the other hand, it is argued in behalf of the corporations, that if they are to be bound to pay whatever wages their employés may demand, so that the service of the railroads and of the telegraph shall remain uninterrupted, the employés may take undue advantage of this circumstance; that, in view of the practical impossibility of filling their places with other competent persons at a moment's notice, the employés might feel encouraged to ask for more and more, until finally their exactions would grow so exorbitant as to become utterly ruinous to the corporations if complied with; that, to obviate such extreme consequences, railroad and telegraph corporations must be permitted, in case of strikes, to go into the labor market and to supply themselves upon the best terms they can get, though a temporary interruption of their service, subjecting the public to damage and inconvenience, be caused thereby. Such a plea, if accepted as conclusive, would leave the matter in as precarious and unsatisfactory a state as before. But it is reënforced by another line of reasoning which bears upon the duty to the public, not of the corporations, but of their employés.
This cannot be set forth more clearly and forcibly than in the language used by a very able and distinguished writer in a series of articles, published a few months ago, on the occasion of the telegraph operators' strike, in an “esteemed contemporary.” The following are the principal points of the argument:
“It (the suspension of the railroad and telegraph service) would mean a suspension of business and social relations equal to that caused by a hostile invasion, barring the terror and bloodshed. It is, therefore, something to which no country will long allow itself to remain exposed. It cannot allow strikes of employés in these great public services any more than it can allow the corporations themselves to refuse to carry on their business as a means of extracting what they think fair rates of transportation. No legislature would permit this, and one or two more experiences like the railroad strike (of 1877) will cause every legislature to take measures against the other.” — “Telegraphers, railroad men, post-office clerks, and policemen fill places in modern society very like that of soldiers. In fact, they together do for society what soldiers used to do. They enable every man to come and go freely on his lawful occasions and transact his lawful business without let or hinderance.” — “The present strike (of the telegraph operators) will do much good, if it calls the attention of the public to the fact that the enormous number of persons employed by modern corporations and the relations of some of them to the public put strikes out of the question as a mode of adjusting their differences with their servants. Whether such strikes are prohibited by law or not
makes no difference. No great corporation can allow them to succeed on pain of ruin. The ten thousand to forty thousand men which some of our modern corporations now employ in telegraphic or railroad service are an army, and have to be governed on the same principles as an army, and the fundamental principles of army management are that there can be no division of authority, and that nothing, however reasonable, can be yielded to dictation. No company can be threatened into a change in its arrangements by its subordinates, or admit outsiders into a share in the control of them, without seeing its service eventually go to pieces. Doubtless this often works injustice and hardship, but it is essential to the government of large bodies of men, and this government of large bodies of men in industrial organizations is a recent phenomenon to which it is absurd to apply rules derived from the petty disputes of factories or workshops employing a few dozen or a few hundred hands. There is no manager of a corporation who knows his business and is fit for his place who will not sooner lose millions in resisting a strike than save something in yielding to one.” — “All mercantile corporations (including railroad and telegraph companies) exist for the purpose of making profits; to impose upon them conditions incompatible with profits is to convert them, against the will of their members, into philanthropic organizations — something which neither law nor public opinion has any right to do.” — “It apparently has not occurred to the strikers (referring to the telegraph operators' strike last summer) that they have any duty to the public whatever, or that they are not at perfect liberty to inflict on it any loss or damage which will help them in their war with their employers. This is certainly a queer state of mind for a large body of intelligent men.”
It would be difficult to state that side of the case more strongly, and nothing will serve better to set forth the peculiar position of the railroad employé and the telegraph operator than an analysis of this statement.
All the distinguished writer says of the injury likely to be inflicted upon society, in all its branches and interests, by strikes interrupting railroad transportation and telegraphing, is unquestionably true. It is also true that, as to the indispensable nature of the services they render to society, railroad and telegraph employés are somewhat like soldiers. But he who permits himself to be carried away by this analogy to the conclusion that therefore those employés must be governed upon army principles, forgets that the analogy fails in every other essential point. The soldier is not only rendering certain services to the public, but he is also under the care of the public, or of the political organization of the public, the state — using the word state in its philosophical sense. The state assigns to him his duties, keeps him under strict discipline and punishes him for disobedience of orders and for desertion. But the state also sees to his pay, sustenance and comfort; it protects him against maltreatment by his superiors; it has a hospital for him when he is sick and a pension when he is disabled. In one word, the soldier is in all respects under the government and protection of the same power to which he owes his duties and to which he renders his service, and his pay and treatment are regulated according to the requirements and interests of that service. On the other hand, the telegraph operator and the railroad employé, while they are to consider themselves in the service of the public and are expected to recognize themselves as in duty to the public bound to perform certain functions without interruption, so that the public may not suffer, are in other respects not under the protecting care of the public, but under the government of industrial corporations. These corporations exist not for the mere service of the public, but “for the purpose of making profits.” The way in which they “govern” their employés will, therefore, be determined not merely or mainly by the public interest, but by what they understand to be their private interest. They are not unlikely to consider it their private interest to make those profits as large as possible, and to that end to keep down the wages of their employés at as low a figure as possible. This has not infrequently happened and it is likely to happen again. In some cases, corporations may do this undisturbed by any effective competition in the labor market. Our distinguished writer tells us, for instance, that the Western Union Company enjoyed “a virtual monopoly in its line of business,” enabling it “to fix the wages of operators in this country,” which was true at the time. A corporation enjoying such advantages may, in order to increase its profits, try to cut those wages down to or even below a bare living point, and corporations less favorably situated may follow their example. A combination of the principal railroad companies might be imagined, likewise able to fix the wages of engine-drivers and other classes of employés virtually throughout
the whole country, and it may, for the purpose of increasing profits, also try to cut down those wages in the same way. How far such things have actually happened, it is unnecessary here to discuss. Nobody will pretend that they are not fairly supposable. Now what are, under such circumstances, the telegraph “soldiers” and the railroad “soldiers” to do?
Let us suppose, then, they find it very hard, if not impossible, to submit; they cannot live as decently as they ought to live; they can, perhaps, scarcely live at all upon what is offered them. First they try the way of petition to the managers of the corporations, but without success. They petition and entreat more urgently; still in vain. At last, they think themselves driven to the conclusion that, petition and entreaty being unavailing, they have to resort to stronger means, and in sheer desperation they resolve to strike. The announcement of this resolution causes great apprehension of confusion and trouble among the public. Now, suppose somebody to come forward as the spokesman of the public and to exclaim: “You, railroad and telegraph employés, cannot be permitted to strike. You are in the service of the public. If you stop work, the public will suffer great damage and inconvenience. Your relations to society are very like those of soldiers, and you should know that a soldier who deserts his post commits a great crime. It is true other working-men have a right to resort to such means as strikes to protect their interests. But you, as railroad or telegraph employés, must not think of such a thing. Your duty to the public debars you from it. That public duty you should understand. It commands you to go on with your work, so that the public may not suffer.”
The answer of the employés will be very simple: “We have petitioned and begged for what we cannot do without, but in vain. We cannot go on as we are. Our petitions having been without avail, we think no other remedy remains but striking. Now, you tell us that, while all other classes of working-men have the right to use that means for the protection of their interests, we are debarred from it by our duties to the public. Very well, then, if we are in the service of the public; if that public service precludes us from the use of those means for the redress of our grievances which are open to all other working-people; if we are, in duty to the public, bound to do our work
without interruption, will not then also the public be in duty bound to see to it that we be properly paid and treated?”
This might seem calculated to stagger our spokesman of the public; but, nothing daunted, he replies thus: “You are quite unreasonable and altogether ‘in a very queer state of mind for a large body of intelligent men.’ The public have nothing at all to do with your pay and treatment. That is the concern of the corporations under which you serve. Those corporations ‘exist for the purpose of making profits,’ and ‘neither law nor public opinion has any right to convert them, against their will, into philanthropic organizations.’ All we can say to those corporations is that, if they understand their business, they will govern you on the same principles on which an army is governed, and ‘rather lose millions in resisting your strike than save them by yielding anything, however reasonable, to your dictation.’ And all we have to say to you is that you are in duty bound, unless the corporations can at once procure good substitutes for you, which is not likely, to stick to that work which cannot be interrupted without great damage and inconvenience to us, the public, though what you ask for and what is denied to you be ever so reasonable; no matter whether you get living wages and decent treatment or not.”
This may be vigorous language, but the railroad or telegraph employé can scarcely be expected to accept it as just and conclusive. He will rather think it somewhat brutal as well as inconsistent. The more intelligent and the more capable of logical reasoning he is, the more strenuously and consistently will he cling to the doctrine that if, as a railroad or a telegraph employé, he is to be debarred from certain means of righting his wrongs, which are open to other working-men, he must be entitled to some kind of protection to compensate him for this; that, if he is bound in duty to the public in the matter of service, he should not be left altogether at the mercy of a private corporation organized for private profit in the matter of pay and treatment. And it is difficult to see how any sane mind can dispute the correctness of these conclusions. The working-man may justly demand that the two sides of the question of duties and rights be regarded in a spirit of fairness. If it is urged that the corporations are organized, not for philanthropic purposes but for the purpose of making profits, so it must be considered that the employés work, not for philanthropic purposes but for the purpose of making a living; and the laboring men, almost all of whom are poor, should certainly not be asked to be more philanthropic than the corporations, most of whose members are rich. The laboring man with his wages should surely not be held to more onerous duties to the public than the corporation with its profits; for, while a reduction of profits means to the capitalist smaller dividends, a reduction of wages may mean to the laboring man want and distress. If railroad and telegraph employés can be required to stick to their work for the convenience of the public, no matter whether their wages are sufficient for a decent living or not, the corporations may certainly be required to keep their men at work, no matter whether the wages they have to pay permit the making of large profits or not. It will scarcely be denied that, if there is a difference between the two as to the degree in which they owe obligation to the public, it springs from the fact that the corporations are in the enjoyment of valuable public franchises which carry public duties with them, while their employés are simple wage-workers who, as a class, have been favored by the public or the state not a whit more than other working-people in private employment.
The upshot of all this is, that as soon as we assume the performance of a certain service to be necessary for the public convenience, and that those who undertake that service are in duty to the public bound not to cause or to permit that service to be interrupted, we must admit at the same time that the public becomes in duty bound to afford them a corresponding measure of protection in the performance of that service. Inasmuch as any disturbance of the relations between corporations and their employés is apt to become an obstruction to that performance, it is not only the concern of the parties immediately involved, but it is the concern of the public. It must be evident to the dullest mind, therefore, that the employés of railroad and telegraph corporations cannot, under such circumstances, be “governed on the same principles as an army,” and that especially “the fundamental principle of army management that there can be no division of authority” is in this case utterly inadmissible. There being a duty to the public on the one hand, there must be a duty incumbent upon the public on the other to see as far as possible justice done between the corporations referred to and their employés, so that the public interest may be enforced without wronging either of them.
How is this to be accomplished? In view of the fact that the railroad and the telegraph are, in the modern organization of society, exercising functions as essential to the well-being of the people as the work done by the post-office and the police — that, indeed, they are already, in a large measure, doing the business of the post-office, and are an almost indispensable aid to the police,— the thought suggests itself that the state (in the general sense) should entirely control them, and that thus the employés of the railroads and telegraphs should pass under the government and care of the public, the same power to which they are to owe duty and render service. They would thus be relieved of their double allegiance and their position would become logical and plain. But whether the problems which these new elements in our social organism have brought upon us will, in this country as well as in others, eventually press for solution in the direction of state ownership or not, it is very certain that such a thing, at least as regards the railroads, cannot be undertaken here without great danger to the character and working of our institutions, as long as the purely administrative functions of government are not so entirely divorced from party politics that an enlargement of its administrative machinery will cease to mean an increase of the patronage and political power of the ruling party, and as long as this divorce has not grown so completely into the general ways of thinking and the political habits of the people as to be looked upon as a finally settled thing. We have, indeed, made a hopeful beginning in civil service reform, but it is only a beginning. We have a civil service law which is good as far as it goes. But some of the most important strongholds of patronage are not touched by it. And how little the spirit of it has affected the ways of party politics appears from the fact that the Democratic majority in the House of Representatives and the Republican majority in the Senate, at this session of Congress, treated the offices of their respective houses as party spoil in the same matter-of-course way which had prevailed before. It is true, the machinery of the telegraph service requires throughout skilled labor of a peculiar kind, so that it could easily and effectively be brought under the operation of the existing civil service law. The administration by the national government of a telegraph system as a branch of the post-office may, therefore, be looked upon as fairly a subject of discussion. But to intrust the Government as it now is with the administration of a large number of railroads, involving the building of new lines, to be determined upon by Congress with its log-rolling practices, is a thought sufficiently appalling to discourage any one from seriously proposing it.
We shall have, therefore, still to deal in this matter with corporations and their employés, and to look for the prevention of strikes by the intervention of the public in another direction. The next thing suggesting itself is the establishment by law of tribunals of arbitration, with a sufficient range of jurisdiction. How naturally this suggestion comes to men's minds is illustrated by the fact that even the distinguished writer above quoted, in the same article in which he affirms that railroad and telegraph employés must be treated by the corporations on army principles, the fundamental one of which is that there can be no division of authority, speaks of the arbitration plan thus: “If the conclusion is deliberately reached by the public that the servants of corporations are unable to take care of themselves or make their own contracts, the proper way for protecting them is to establish boards of arbitration whose decision would be binding on both parties.” The distinguished author seems to have forgotten for a moment that army government and arbitration in this sense cannot possibly go together; for, if there is anything in the world utterly incompatible with government on the army principle, the “fundamental principle of undivided authority,” it is arbitration by an outside tribunal to decide differences between those who command and those who have to obey. Army government knows the court-martial composed of officers; but it is entirely unacquainted with courts of arbitration composed of civilians to intervene between officers and men. The interference of tribunals of arbitration between corporations and employés would be just as inconsistent with the principles of army government as the interference of trade-unions. It is therefore safe to say, that he who means army government cannot mean arbitration, and he who means arbitration cannot mean government “on the principle of an army.” Which of the two things the author did mean may be concluded from the following paragraph: “But the difficulty in the way of this legislation (providing for boards of arbitration) is and always will be the sympathy of all business men with anybody
who is prevented, by law, from managing his business in his own way and, above all, from fixing the rate of wages he can afford to pay. Whenever wages begin to be fixed by government boards, every employer of labor will quake in his boots.” This being, unquestionably, intended to show why boards of arbitration will not and ought not to be established, the spirit of army government after all emerges from the confusion of incongruities. But the quotation will be of service to us as a fair statement of the most important objections urged against the arbitration plan.
It is not at all probable that all business men, or even a large number of them, would regard the establishment of tribunals of arbitration for the purpose of adjusting differences between railroad and telegraph corporations and their employés with any disfavor. The reason is very simple. When railroad transportation or telegraphing or both together are interrupted by extensive strikes, the business men of the country are the first and largest sufferers. Any effective method by which such strikes can be prevented will, therefore, be most welcome to them. They know that the methods so far employed have not been effective. They know that strikes are not prevented by merely crying out that these things must be stopped and by shouting for the police. They not only feel that the talk of governing working-men upon army principles has a very strange and irritating sound in this country, but they are beginning to perceive that the expectation of preventing the recurrence of strikes by merely resisting them at any sacrifice, and the hope of destroying the power of the trade-unions or brotherhoods by stubbornly refusing to recognize them in their representative character, springs from a lamentable misapprehension of facts.
Nothing would indeed seem better calculated to discourage strikes for all future time than the history of strikes in times past. The number of successful ones has been so small, in proportion to the quantity of wealth wasted and the amount of wages lost to the working-people themselves by temporary cessation of work, not to speak of the demoralization and consequent misery caused by periods of idleness, that laboring men might well shrink from another attempt. Nor are these things unknown to them. On the contrary, they have been discussed among them often and quite intelligently. The immense advantage the capitalist has in point of endurance over the
working-man is no mystery to the latter. It has practically demonstrated itself by too many triumphs over well-organized and very determined strikes, not to be recognized. And yet, in spite of all these disastrous experiences, strikes are again and again resorted to, and the unions and brotherhoods which organize and lead them are constantly growing in membership and influence. Every new defeat seems, in fact, to have not a discouraging but a stimulating effect. How is this persistency under circumstances so adverse to be explained? In many cases it may, indeed, be the result of unscrupulous demagogy on the part of the leaders and of miscalculating ignorance on the part of the followers. But generally there is a deeper cause.
Every unsuccessful strike impresses the working-man more and more with the superior strength of the power he has to contend with. At the same time he knows, under present circumstances, of no other means than the strike to enforce his demands when petition and entreaty have failed. This last resort he is, therefore, in default of anything better, unwilling to give up. It occurs to him that, if strikes have heretofore so frequently miscarried, it was because they were not well enough organized and not general enough, and that they might be made much more effective by being organized on a larger scale. He also finds that corporations and employers generally are very reluctant to recognize the committees of unions or brotherhoods as the legitimate representatives and organs of the working-men, and that many show a peculiar hostility to them. From this he concludes that these organizations are the things the employers are most afraid of. For these and similar reasons unsuccessful strikes, instead of producing discouragement as to the efficacy of this method of enforcing demands, are regularly followed by efforts to enlarge the labor organizations and by preparations for greater unity of action. The object in view is gradually to ascertain and to reach the scale upon which strikes must be organized to overcome all opposition. That point may be ever so far off yet, and the efforts to reach it may be ever so ill-advised and bungling, still those efforts will result in more and more strikes, and thus the evil complained of will grow worse and worse as long as it is treated in the old way. Sensible business men see this very clearly. They understand also that if we want wage-workers to desist from strikes, and especially if we want the employés of railroad and telegraph corporations to
recognize, on their part, a duty to the public forbidding them to resort for the redress of their grievances to sudden stoppages of work, we must put within their reach for the righting of their wrongs another means more rational and more efficient. That tribunals of arbitration will be apt to answer the object is scarcely denied. There is every reason to believe, therefore, that the business community at large would, with genuine satisfaction, see differences between railroad and telegraph corporations and their employés referred to boards of arbitration instituted by law. And it is not unlikely at all that a good many other employers, instead of quaking in their boots, would be found inclined to apply the same plan to their own concerns, for the simple reason that it would be apt to relieve them of many of their troubles.
The mere obligation to put their differences before such a board may have a tendency on the one hand to make employers more careful and considerate in the treatment of their workers, and on the other hand to deter, at least, the most self-respecting among the working-men from countenancing foolish demands, for the reason that it would be distasteful to either of them to see their conduct publicly condemned by an impartial tribunal. Some people stand more in dread of an argument than of a fight. But whether that effect be to any large extent produced or not, the determination of a conflict by authoritative decision would at least not be preceded by a suspension of work, causing a loss of profits to one party, a loss of wages to the other, and, as in the case of railroad or telegraph strikes, much larger damage to the general public. It is not asserted that many of the great corporations will favor the establishment of such tribunals. Those of them which virtually enjoy or hope to enjoy a monopoly in their lines of business, enabling them to fix the rates of wages, will probably not approve of it. But the great mass of business men and employers of labor are neither so situated nor so minded. Indeed they have in many instances voluntarily resorted to the expedient of arbitration for the prevention of strikes, and frequently, if not usually, with excellent effect. A more regular and extended introduction of some method of this kind, we are confident, is only a question of time. The practice of deciding matters of difference between employers and wage-workers by mere trial of strength and endurance, is scarcely less wasteful and barbarous than wars waged between peoples and duels fought by individuals to decide questions of interest or honor. It is characteristic of that early period in the
struggle with new social problems, when current notions as to the nature of those problems, as to the ends to be reached and the means to be employed, are still in a crude state, and when the impulse to master existing difficulties by mere assertions of power most readily possesses men's minds in default of anything better. Methods more civilized, less costly, and better calculated to bring forth just results, will inevitably be found and adopted, as the nature of the trouble, the insufficiency of the remedies so far tried, the correspondence of rights and duties on one side and the other, and the direct interest of society at large in the relations between employer and laborer, as in the case of railroads and telegraphs, are more clearly understood and appreciated.
But the more generally the practice of arbitration is introduced, the more likely its effect will be to reach beyond the mere adjustment of occasional controversies about wages. We have seen only the beginning of the complications which accompany the industrial developments of our times. The difficulty of dealing with them will, as is usually the case, greatly depend upon the spirit in which they are approached, and in which the parties immediately concerned endeavor to understand each other. The modern methods of production, and the consequent large aggregations of wage-workers under great industrial organizations, have fostered a tendency among the working-people to think of themselves as an entirely separate and distinct social order, having separate and distinct interests of their own in contradistinction, if not absolute antagonism, to those of all other classes, and being obliged to cultivate a distinct and peculiar set of economic and political doctrines. An impression is growing upon them — in this country, perhaps, less than in others, but here also to a perceptible extent — that their interests can be protected only by a general organization of their forces and by constant preparation for some sort of violent contest. This is a state of mind most apt to lead men into strange misconceptions as to the world they live in, and thus to breed all sorts of extravagant schemes. Such a condition of things is, of course, full of mischief. While the great majority of the working people are not only honest but well-meaning and sensible, there are unquestionably among them a good many dreamers who cherish, with profound faith in their practicability, certain fanciful schemes for the sudden and radical reformation of all human things by revolutionary action; and there are also not a few self-seeking and artful demagogues who try to acquire leadership by playing upon the passions of the excitable and the credulity of the ignorant. The first thing the demagogues aim at always is to alienate the working-people as much as possible from the other classes of society, and thus to shut out what influence the latter might exercise upon them. Nothing could be better calculated to play into the hands of the demagogues in this respect than an impression created among the working-people that the capitalists are determined to treat all matters of difference between employers and wage-workers as a mere question of power. Nothing will please the demagogue better than to hear the capitalist say to the laborer: “Whenever you attempt to try conclusions with us by a refusal to work on our terms, we are resolved, however reasonable your demands may be, to show you that we, with our wealth, can stand a suspension of work a good deal better and longer than you poor fellows with your dependence on wages.” The maintenance of such an attitude on the part of employers will naturally strengthen among laboring people the belief that they have nothing to depend on for the protection of their interests but a strong organization of power on their side, and eventually a complete transformation of the social structure. When such a state of mind is produced, the demagogues and extremists will have easy sway.
In this respect, any measure, like the establishment of boards of arbitration so constituted as to command the confidence of the working-people, would be calculated to produce a very wholesome effect. It would show that society does not mean to leave the decision of differences between employers and wage-workers dependent upon a mere superiority of power and endurance on one side or the other, and that therefore the preparations for the setting on foot and the maintenance of strikes or for other forms of a conflict of forces are neither the only nor the principal thing to be looked to for the enforcement of their just demands and the redress of their grievances. It would assure them that, whenever they ask for anything reasonable, there will be a way far more peaceable and far less wasteful than a strike to obtain it, even if the employers should at first refuse. They would also understand that, in order to succeed, the justice of their claims must be supported with good reasons, instead of a mere array of force. In this circumstance they would find a very strong inducement to look at the two sides of a question
before pressing it, to keep the actual condition of things and its possibilities carefully before their minds, and to thus appreciate the world they live in. It would not bring about the discontinuance of the labor-unions — nor is it desirable that they should be dissolved, for there are many good objects which they are capable of serving — but it would be very apt greatly to diminish the ability of unscrupulous leaders to make a mischievous use of those organizations. The great mass of working-men will not easily be seduced into violent and wasteful proceedings when they see a fair and trustworthy method offered to them through which they may expect to obtain justice peaceably and at little, if any, cost. In one word, the relations of the different classes of society will be the less subject to disturbance the more extended the middle ground is upon which they can meet for the discussion and adjustment of clashing interests. By the establishment of tribunals of arbitration, that middle ground would be materially enlarged. In this direction they would be apt to produce their most important effect. Discussion is the best safety-valve of democratic society. Its influence is especially salutary when it leaves the domain of mere generalities and occupies itself with practical details, as it would have to do in the consideration of specific cases of difference about wages and the like. Ample opportunity and inducement for such discussion are especially necessary, when different social classes, upon whose harmonious coöperation their own prosperity and to a great extent the well-being of the whole community depend, are by the nature of their relative situations liable to become distrustful of each other's motives and aims, and thus apt to drift into unwholesome irritations and dangerous conflicts.
For these and similar reasons the institution of boards of arbitration under the sanction of law, to decide differences between railroad and telegraph corporations and their employés, is much more likely to be approved than to be objected to by the bulk of the business community, even at the risk of seeing the arbitration plan, if it works well, more extensively applied in the course of time. Whenever, for the determination of a conflict of interests, peaceable conference and debate are substituted in the place of a contest of brute forces, mankind has reason to congratulate itself upon an advance in true civilization. Prudent business men will be among the first to recognize this, for they will not be slow in
discerning its economical value. They will also understand that, while the demagogues, the instigators of discontent, the advocates of revolutionary violence may, as they gain influence with large masses of people, become dangerous to the public peace and order, their most efficient helpers in mischief are found among those who stubbornly resist just demands and necessary reforms.
It is, of course, not intended to present the establishment, by law, of tribunals of arbitration as a new discovery, or as a sovereign remedy for all the difficulties which the new methods of industrial production have brought upon society. It will only help in overcoming some of them. The measure of its success in accomplishing this end will depend much upon the manner in which those tribunals are constituted, so that they may enjoy the respect and confidence of all concerned, and upon a careful definition of their jurisdiction. In this respect, a valuable guide may be found in the experience gathered from the many cases in which, here and abroad, arbitration has been successfully applied, as well as from occasional instances of failure. Our present purpose, however, has been only to discuss the general principle. Even if the institution of such tribunals by law and the adjustment of their jurisdiction be looked upon as a difficult experiment, as almost everything must be looked upon that is proposed for the solution of these modern problems, it will be admitted that it is a necessary one, in view of the anomalous position of certain classes of employés who are to owe duty and service to the public while they are under the government of private corporations. Nor can it be denied that it will be a rational and, therefore, a promising experiment — an important step in the direction of justice, and therefore of peace and general benefit.
* Carl Schurz
This work was published before January 1, 1929, and is in the public domain worldwide because the author died at least 100 years ago.
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