Betterment work in American industries / by Helene Eleanore Doty.

1020 H. E. Dot-y Be.-tte.rme.nf Work in American Lndusfrt&s i I BETTERMENT WORK IN AMERICAN INDUSTRIES BY HELENE ELEANORE DOTY A. B. University of Illinois, 1918 THESIS Submitted in Partial Fulfillment of the Requirements for the Degree of MASTER OF ARTS IN ECONOMICS IN THE GRADUATE SCHOOL OF THE UNIVERSITY OF ILLINOIS 1920 YD CO UNIVERSITY OF ILLINOIS THE GRADUATE SCHOOL A9&0 I HEREBY RECOMMEND THAT THE THESIS PREPARED UNDER MY SUPERVISION BY^J^^±±==i £^*-^^-*^ BE ACCEPTED AS FULFILLING THIS PART OF THE REQUIREMENTS FOR THE DEGREE OF ^2^0 o^JL*^ cm£_ C^A^J^L Head of Department Recommendation concurred in* Committee on Final Examination* ''Required for doctor's degree but not for master's Digitized by the Internet Archive in 2013 http://archive.org/details/bettermentworkinOOdoty TABLE 0? CO IT EFTS PAST ONE FUNDAMENTAL PRINCIPLES. Chapter I. Causes of Unrest Page 1 Chapter II. History of Development of Betterment Plans in Industry 20 PART TWO BETTERMENT PLANS IN AMERICAN I1®D8TRY. Chapter I. Health Measures for Employees 75 Chapter II. Physical Comforts for Employees 49 Chapter III. Indoor and Outdoor Recreation 56 Chapter IY. Educational Activities 64 Chapter V. Economic Betterment Plans 69 Chapter VI . Social Betterment Extended to Employees' Families .. 76 PART THREE ADMINISTRATION. Chapter I. Administration of Betterment Plans 80 Chapter II. Employee Participation in Management 68 LIST 0? SEPARATE PIATES. dumber I. Chart showing States in the United States having factory legislation 28 2. Chart showing States in the United States having sweat shop and bake shop Regulations 29 3. Establishments having first-aid equipment and emergency hospitals, and average number of cases treated monthly, by industries 37 4. Establishments report ing wash and locker facili- ties, by character of equipment and by industries 51 5. Establishments having restaurants, cafeterias, and lunch rooms, and number of employees using them, and character of management, by industries 54 6. Establishments granting rest periods and number of employees to whom rest periods are granted, by industries 57 7. Establishments having rest and recreation rooms and number of employees using such rooms, by industries 58 8. Establishments having Clubhouses , gymnasiums, and other recreation facilities, by industries 61 9. Establishments having social gatherings, lectures, music, etc. by industries 61 10. Establishments having: outdoor recreation facilities and outings for employees, by industries 63 11. Establishments reporting number of volumes in their libraries by industries 66 12. Benefit associations, number of members, classified dues and benefits, and proportion of expenses paid by companies, shown by industries 69 13. Number of benefit cases and amount of benefits paid by associations, shown by industries 70 14. number of pension funds, number on pension rolls, and amount of pensions, by industries 70 15. Functions of all business 83 16. Trend of organization in Industry today 83 PLATE TITLE OPPOSITE PAGE Humber 17. functional chart of a Personnel Department in Industry 84 18. Administration of welfare work and its effect upon time lost and stability of the force by industries 85 19. Functions performed by the management or employees or jointly in thirteen establishments showing marked predominance of joint action in modern organization 86 PART I. FBHiiioarEAii priitciplbb. CHAPTER ORE CAUSES OF UNREST . Page 1. Lack of universal panacea for unrest 1 2. Study of causes of unrest aid in finding remedies 1 3. Tracing history of incentives through changes from 1750 to date will aid us in getting working man's viewpoint, for today he lacks incentives • 2 4. War advertised significance of worker to industry; hence he grows restless 3 5. General causes of unrest analyzed 3 6. Specific causes of unrest analyzed 12 1. CHAPTER I. CAUSES 0? UITHEST. "The World War, in the last analysis, is but the expression upon a world scale of conflicting forces also at work in the relations in Industry." (1) Those who are involved in industrial relations problems at the present time will appreciate the aptness of the statement. And one who does not think long on it will be apt to say that if all industry would adopt profit-sharing, or build »homes for employees, or improve to the utmost working conditions in plants and mills, or whatever scheme he has found so successful to solve his labor troubles, there will be no more such troubles. However, we need not look far to find here an exceptional employer who has no problems with dissatisfied laborers, there one for whom profit-sharing utterly failed, there another for whom no factory improvements helped, and so on, which makes it all too evident that no universal cure for labor troubles can exist. With conditions in one shoe factory, for example, varying widely from conditions in a second, and a still greater variance between two shops of different industries, it is evident that one universal panacea would not be possible. To determine means for handling such problems then we must first survey the causes of labor unrest, and in applying any remedies, analyze first which causes appear in the particular situation to be handled, and what remedies logically are demanded. Any situation is obviously a complex of several causes*, consequently, even with causes analyzed, no set rule for solution can be said to exist. (1) W.L. Mackenzie King, Introduction to "Industry and Humanity". \ 2. Since today's unrest grew out of conditions of yesterday, a short historical review of the working man's life will perhaps aid us in understand- ing why he is dissatisfied. Such a review Dean L.C. Marshall of the University of Chicago outlines somewhat as follows (1) : Before 1750 the workman was the owner of his own tools, following his apprenticeship with some master in his trade. Each worker's future was to be exactly what the master was, both financially and socially. The period of apprenticeship was willingly served, for the worker's future was desired and assured. Demand for production was moderate, and production met demand satisfactorily, leaving therefore, no cause for unrest. In 1750 came the Industrial Revolution and from then until approximately 1880 markets expanded and production to meet the increase in demand expanded enormously until finally it exceeded demand. It then became the logical concern of manufacturers to find ways of reducing the cost of production which would then reduce the price of the product , giving such goods the better chance of sale in the limited markets. In other words, competition between producers set in to a great degree. From 1880 to date it has there- fore been the concern of manufacturers to experiment in Scientific Management schemes, profit-sharing plans, trust organization and the like. The result has been the speeding-up devices of today, the splitting up of jobs into smaller and smaller divisions, taking from the worker steadily any responsibility of think- ing as he works. This is only one of the many results, all of which have tended to blind the worker to any possibilities of a better future. Lost in a maze of speeding output he has no means or time to plan how to progress, and in such a condition the seed of unrest is sown. (1) Address before the Chicago Council of the National Industrial "Relations Association, March 1, 1920, "Incentives in Output." 3. All that was necessary to turn that unrest into dissatisfaction was the "world-wide advertising scheme for informing the worker how essential in any process of production he is" which was what the war may well be called, for no deliberate campaign to emphasize the workers' significance and necessity in industry could have been planned which would have succeeded better in arriving at this result. Conscious of his importance, and restless under modern de- velopments, what more natural than that decreased effort, indifference, or even antagonism develop in his mind ? And what are the "modern developments" acting as causes for unrest ? They may be enumerat ed under two heads, general causes and specific causes, and tabluated somewhat as follows: I. GrEEJEBAL CAUSES - OR THOSE PREVALEIW THROUGHOUT TH^ Ifl^USTRTAL S^3TErZ. (a) High cost of living with slow increase in wages. (b) Inequality in wage scales in different occupations, establishments and localities. (c) Faulty distribution of the labor supply and absence of any machinery to improve it. (d) A demand for a shorter working day. (e) The monotony and blind alley character of numerous occupations today. • (f) Spread of the philosophy of "Internationalism." (g) Distant or "absentee" ownership and control of industry. (h) Autocratic government of industry. (i) Inadequate means for settling labor disputes, (j) Prevalence of profiteering. Some of these phases we are perfectly familiar with and need no explanation; some may be emphasized by statistics, and others made clear by brief defini- tions . A study of how high the cost of living has gone, for example, is astonishing, when these figures are surveyed: Year Index T.o . of ( 1 ) Index To. of (2) (October of) Retail food prices 'Vholesale prices 1915 100 101 1914 103 99 1915 101 102 1916 119 134 1917 154 181 1918 179 205 1919 180 226 Retail prices determine family budgets. Consequently the increase for the years 1914-19 was felt greatly: (3) Average High Low Pood • 75% 91% 60.7% Rent 16% 51.5% 1.9% Clothing 128% 157% 93.9% Fuel & Light 45% 69% 16.6% Furniture 129% 154.4% 110.6% Sundries 71% 83.7% 59.1% The 50 fare was raised in 238 cities, or for one third of the population - eleven millions of people ( in the United States and Canada ). Summarized, the increase in the cost of living from 1916 to 1919 was 75.7%. That inconE* has not ^ept pace with cost of living is evident from the following study com- paring average weekly earnings in Kew Yorlc State factories with Retail food prices in United States: (1) United States Bureau of Labor Statistics Monthly Review October, 1919, Page 96. (2) Ibid Page 78. (3) Compiled from data on 18 centers all over United States. United States Bureau of Labor Statistics Monthly Review, September 1919, Page 50-52. (Figures indexed with June 1914 as 100) (1) (Figures for October of years quoted ) Average Weekly Earnings "Retail Food Prices in United States 1914 97 106 1915 105 104 1916 118 122 1917 136 159 1918 176 163 1919 188 194 Inequalities of earnings to food prices are too glaringly obvious in such a table to allow us to think for a second that the income is keeping pace with necessary expenditure for living. A glance at the increase in wages for United States railroad employees shows the same deficiency. United States Rail Wage Table July 1919 (For Class 1. roads employees) (2) Number of Average monthly Compensation % of Increase Employees -per employee - July July December Calender year : :December Monthly avge .Calender yea 1919 1919 1917 1917 1917 1917 1,894,287 §119.38 $89.83 $83.64 32.9 42.7 With the increase in the cost of living totalling 77$, a 42^ wage increase is far from adequate.— T^his increase is further proven inadequate to the increase in the cost of living when we study Union wages, for example, throughout the country in relation t o the retai 1 price of food: (3) Year Rates of wages Rates of wages Retail food per hour per week 1913 100 100 100 1914 102 102 102 1915 103 102 101 1916 107 106 114 1917 114 112 146 1918 1919 152 (1) United States Bureau Labor Statistics Monthly Review, October 1919, P. 146. (2) Chicago Daily Tribune Thursday February 12,1919, Part 1, Page 2. (3) United States Bureau Labor Statistics, Bulletin No. 247, Page 43-50. 6. This shows at once how prices outran income since 1916. A study of index numbers of the purchasing power of Union wages as measured by food prices shows this tendency of prices to outrun incomes since 1914. Year Rate of Wages Hate of Wages ( as to how much it would buy ) per hour per week 1913 100 100 1914 100 99 1915 101 101 1916 94 93 1917 76 77 A survey of family budgets guaranteeing a living made for New York and Seattle to indicate a coast to coast condition of astonishing increase again emphasize the heights to which the costs of living have risen: (1) New York budget for 1917 Seattle budget for 1917 Pood $607.02 $576.38 Clothing 207.07 240.70 Housing 174.14 211.51 Fuel & Light 62.21 73.19 Furniture 43.58 73.87 Miscellaneous 252.62 593.45 $1346.64 (a bare minimum) $1569.10 Such minimum for New York for example rose as follows: A minimum in 1907 $900. " " 1914 876. " M " 1916 845. " " " 1917 1380. " " 1918 1760. With such universality of high costs and lower wages, workers are certain to be restive. And when those in one community discover that their rate is not as high as that of similar workers in other communities the situa- tion becomes all the more aggravated. This latter situation is ofttimes cre- ated by over-supply of labor in the low-paid territory, while a shortage exists in the higher paid locality. Until some machinery for handling such inequali- ties in supply can be devised, this inequality in wage will continue to be a sore point with labor. This the Federal and State employment agencies are (1) United States Bureau of Labor Statistics, Bulletin No. 247, Page 43-50. 7. trying to do. " The work of the Federal and of the co-ordinated State free employment offices in controlling the distribution of idle men, and in placing men where they are most needed, together with all of the other functions which the department must perform to accomplish these results is reducing the number of men who lay off with or without assent to take a look at another j'ob. '."e realize what an enormous and difficult task this Department has before it. We know how scarce are the trained men needed actually to execute the work which has been planned. We are gratified as well as amazed at the progress which has been made, but we v/ould respectfully suggest that as soon as the service can be enlarged to make the plan possible, all advertising for men by private enterprises be stopped and this work carried on altogether by the agencies of the Department of Labor." (1) Mr. Meeker of the Department of Labor (2) says the same thing. " If you will quit stealing each others men, quit advertising in the newspapers, quit patronizing private employment agencies which are play- ing the devil with you, and rely on the public employment offices, you will get laborers who will stick. Don't expect miracles too soon - but enable Federal and State Governments to put more funds at the disposal of their officers. Then go to them with the demand: 1 Here are our various orders for labor. There are the kinds we want - so many hundreds of this, that and the other. ?ive hundred Class A Mechanics, and so on'. And, eventually inequalities in labor distribu- tion will be eradicated." That there is a demand for a shorter working day which will allow a man more opportunity for family life and some recreation, which is essential to keep both mind and body healthy and up to maximum production power, is evi- dent from an incident occurring recently in the steel industries. Most steel mills are operating on an eight hour shift, but the Illinois Steel used the ten (1) United States Bureau of Labor Statistics, Bulletin Ho. 247, Page 30. (2) Ibid, Page 49. hour, and in a few cases, the twelve hour shift, until they realized that they were losing laborers to the shorter-hours companies. To compete for labor consequently they have been obliged to initiate an increase in wages of 10% (January 1920) as an inducement to hold workers. What constitutes a minimum in recreation and rest must be ascertained, but we know we haven't reached it. That monotony and the blind alley character of labor are natural though not inevitable results of machine and large scale industry is explained in Dean Marshall's historical analysis. No man down to the lowest worker in industry will be content to work from day to day, never knowing either where his efforts will get him, either in the plant or in the social world outside, or when his opportunity to work will cease because his strength will give out or his employer cease to need him any longer. Such an incessant indefinite state of existence - for indeed it may not be called living - creates unrest in itself. This coupled with the endless monotonous repetition of a single movement or a very small number of grouped movements which scientifically simplified machine operation involves becomes a cause of intense dislike to the worker who is conscious of its deadening nature. In this state of mind workers see only a vast organization of capitalists pressing down upon them to hold them forever at that one job, and organized labor groups to bargain away from such conditions seems the one hopeful escape. Out of such a situation the philosophy of "Internationalism" takes root and spreads. Those workers throughout the world who do not believe in the grouping of peoples into nations, but would carry the idea of the "Brotherhood of Man" to the complete demolishing of Nations and to the estab- lishment of a Universal Nation - or "Internationale "- form the mass now (1) See article by Dr. Gordon 3. Y/atkins on this subject in American Political Science Review for February 1920, from which this analysis is taken. 9. promoting its concepts. Out of such teachings it is impossible to justify war, for how can a Nation war against itself ? On the basis of this theory therefore, groups of foreign workers during the World War refused allegiance to America alone - and since the war, the same group it is that "wars" upon trades and crafts union leadership and preaches the end of such form of unionism, and the establishment of industrial unionism, or organization based on industry, rather than on trades or skill alone. The latter is a larger and universally more inclusive unionism by far, and thus it harmonizes with the "Internationale" i dea. The spread of Internationalism must not oe confused with the spread of radicalism in any sense. The philosophy of the Communist party, the radical wing of the Socialist party in America at the present time (1) paralleling in doctrine and aims the Russian Bolshevik movement as led by Lenine, will inevitably appeal to a mass of unskilled workers. Unlike the trades' or crafts' unions which are grouped by similarity in skill or occu- pation, this group of unskilled are molded together by the fact alone that they are machine operators and as such they form the mass of workers from which industrial unionism will be evolved. They will be the group opposing the American Federations of Labor, who would initiate the universal world strike to accomplish as Bolshevism has, the concentration of the machinery of production in the hands of the few and the establishment of a complete proletarian dictatorship. Forces are at work both abroad and in America to accomplish this industrial Revolution " To marhsall the forces of the militant1*" ii . masses American Communism has determined to function through local ana dis- trict units of the two parties assigned to the task of establishing intimate (1) See article by Dr. Gordon S. Watkins on this subject in American Political Science Review for February 1920, from which this analysis is taken. 10 . contact with the workers in the mills, workshops and mines. It is the business of these party units to initiate and support plans for the organization of labo along the lines of the Shop Steward and Shop Committee movement in England. Moreover, Communist propagandists are to encourage the organization of the Shop Committees with Industrial Councils, District Councils, and a Central Council of all industries, as proposed under the Whitley Plan. These Com- mittees and Councils afford an effective medium for the dissemination of communist doctrines, and suggest the practicability of the administration of industry by the workers. Paradoxical as i t may seem, many employers both in Europe and in the United States have inaugurated the identical scheme of Shop Committees and Industrial Councils with the hope of satisfying the workers demands for industrial democracy and preventing the spread of Soviet philosophy There is little doubt, also, that Industrial Councils have been introduced to "break the back of trade-unionism" , precisely v/hat the revolutionary communist hopes will be achieved. However, though this radical wing in industry and politics would establish industrial unionism to place control of the world's wealth in the hands of the proletariat, this idea in no way harmonizes with the spread of the idea of "Internationalism". The former is radical and destructive. The latter is possibly radical, "out aims to secure its ends peacefully ana with no industrial or political upheaval meantime. Any reversal of power from capital to labor could only be conceived of by those seeing in the present order a distinctly class rule - the rule of money over men. They equally as radically would reverse the order, and after the realization of labor's significance in industry would make men, or labor, overrule money. In such an exchange of classes in the ruling, an impartial observer can see no improvement; . There is no guarantee that simply to continue class domination, but change the class dominating will result in a better world 11 for all. And so we are brought to face the problem that the real difficulty is caused by the remoteness of the owner and manager from the worker. Both are so far apart they do not get the motives and purposes nor values and importance of the other. Professor William James says "One half of our fellow countrymen remain entirely blind to the eternal significance of the lives of the other half. They miss the joys and sorrows, they fail to feel the moral virtue and they do not guess the presence of the intellectual ideals. They are at cross-purposes all along the line, • regarding each other as they might regard a set of dangerously gesticulating automata, or if they seek to get at the inner motivation, making the most horrible mistakes." (1) Until the two groups can be brought together and made to realize their interdependence and mutual helpfulness in the productive process, both groups as well as the public must suffer. That it is not necessary for capital to fear labor's increasing organization, nor for labor to fear capital's money possessions, Mr. Y7.L. Mackenzie King (2) emphasizes by saying " The power of good and evil in whatever pertains to human relations cannot be too clearly recognized; neither can the truth that such control as may be exercised concerning them dwells, not in things, but in human beings. There is nothing inherently beneficial or baneful in any factor, force, or form of organization to be found in the whole phenomena of Industry or the State. Everything depends upon whether its use is or is not made to accord with right ideas of social progress . " It is to men as human beings therefore that we must turn to accord forces and institutions with right ideas in industry or politics or whatever it may be. The two parti^es must get together , however, to harmonize their interests, and not continue to antagonize consciously or unconsciouly by (1) " Talks to Teachers on Psychology and to Students on some of Life's Ideals'* Page 297. (2) "Industry and Humanity" Page 9. misunderstanding each other. Mr. King warns further " The larger the potential service where a force is made to operate in accord with right ideas, the greater its power of injury where there is not this accord. Electricity uncontrolled or miscontrolled may destroy a corununity ; but properly controlled and directed, it may transform cities and towns with heat and light, rapid means of transit and c onmuni cat ion, and a thousand and one useful and ornamental aevices. The purpose and the effectiveness of the control are everything. That is why. in industry and politics . with human nature wl&t it is. c ont ro 1 should be shared in by all the interests involved; why it should be broadly representative il and no t narrowly autocratic . This is a plain statement of the necessity for provision in all industrial organi ^.tions for a systematic method of hearing and settling disputes. We plan such hearings in all other relations in orderly court processes. V/hy should we not do so then in Industry ? If such organiza- tion existed a mutual understanding would prevent any possibility of unfair treatment of ont party by the other and oppression and antagonisms resulting in profiteering and exploiting would be minimized by that understanding. "Faith would replace Pear" Mr. King says. Thus have we briefly re«Sated the ten general causes of industrial unrest. We turn then to those specific causes which tho familiar are important in increasing degree because of their accentuation under the abnormal condition of the years of the war. The worker's'' consciousness of his growing significance to the Demand for output which the labor shortage during the war tended steadily to decrease at just the time when increase was most essential, enabled /htm to malce demands all the more stringent, thus widening the breach between capital and labor. it • (a) Inadequate housing and trans po rtati on faci lities . Industrial expansion induced by the war has left us with many manufacturing centers where the number of workmen has outrun the housing and transporta- tion facilities. Such conditions induce labor unrest and increase labor turnover materially. (1) ( b ) Lack of a healthful . desirable social environment in industrial ne i ghb o rho od s . This is especially true in isolated lumber camps and mining centers and capitalists are rapidly realizing that there is a definite relation between such conditions and industrial labor problems. The importance of foster- ing a community spirit through facilities for social recreational and intellectual development is receiv- ing increasing though tardy attention as a means of allaying this unrest. ( c ) Adjustment of compensation for ove rtime . ni ght wo rk holidays and Sundays . Speeding up, demanded by war shortage created a necessity for readjustment of the basic standards of pay for extra work, a demand caus- ing more unrest. War awards have left the standard with "time and a half" for night work, and "double time" for Sundays and legal holidays, except where there are shift workers. (2) (d) The practice of reducing pi ecework rates. Usually the process involves the cutting of the rate and the award of a larger bonus for pieces produced. Such a system operates to a worker's advantage, if the minimum number on which a bonus may be earned is not placed beyond a fair output basis. The establishment of a fair output basis, however, and the amount of the bonus together with the fixing of the new piece rate basis causes much dissatisfaction in industry. ( e ) Pi scri mi nation against Union employees . and the use of intimidati on and coerci on by both employers and employees. This always has been and perhaps always will be a cause for unrest so long as unscrupulous employers and dishonor- able employees care to resort to such measures to gain their ends. Sir. King's remedy of the elimination of fear and distrust and the establishment of faith and understand- ing would be a fundamental improvement to this difficulty. (1) Sixth Annual Report of Secretary of Labor 1916, Page 130-136. (2) Awards of National War Labor Board. 14. (f) Demand for recognition of the Union* This, too, is a familiar, and may be called a central cause of unrest. The right to organize and bargain collectively is now granted to both employers and employees, and when such bargaining is on a fair basis, and frankly openly conducted, the decided advantage^ of organization is appreciated. (1) (g) Undesirable conditions of employment . The absence of enough protective legislation and other labor safeguards appears as a minor cause of unrest, but no less vital to workers concerned than a major one, such as a wage consideration. "Demands for sanitary drinking fountains, lavatories, lockers and bathing facilities, and for the maintenance of them where they already exist, in sanitary condition at all times are made in increasing number in establi shme-nts when "provision for such requests from workers through proper channels ire made. (2) Demands are further made for facilities for sitting down to work, for frequent rest periods, and rest rooms, especially in the case of women and children, and regulations for the safety and protection of the health of all workers. (h) Demand for a_ minimum wage scale. With the increase in the cost of living and the lagging of wages behind the cost of living, workers are demanding not only an increase of wages to meet the condition, but the rigid observance of a minimum wage. During the war numerous awards were made on this subject; women over eighteen years of age 4 were guaranteed a minimum of 30^ an hour; men over eighteen, 40^. When women performed the same tasks as men the pay was the same. Rigid application of a minimum was not made to men, experienced help, or to people under the minimum age, preventing injustice oeing done to those not capable of earning the legally prescribed minimum. (3) (i) Employment o f w omen. To prevent the pay of men falling, when women might be found to do the same work for less, an agreement not to lomv rates for women for men's work was made . ( 4 ) (1) Report of the President's Mediation Commission. Sixth Annual report of Secretary of Labor, 1.916, Page 24. ' (2) Address before Chicago Council of Rational Pmnloyment Managers' Association: "Employee Participation in Industrial Management by A.F. Young, March 31st, 1919. (3) national War Labor Board Docket No. 4a, Page 3. (4) National War Labor Board Docket Eo. 46, Page 6. 15 (j) Deductions from wages. Employers generally are recognizing the disadvantage of cutting wages to meet medical, educational or insurance expense in the result of dissatisfaction it brings. Innumerable employers with whom the author talked in December 1919, admitted that the majority of workers preferred to receive higher wages and make their own expenditures for such items, if for no other reason than to know they were doing it themselves and not having it done for them. The benefits of the expenditure are more generally appreciated under those circumstances and there is no smack of pater- nalism in the process. Exceptions for isolated regions, where such facilities are not obtainable, providing ade- quate service for the amount deducted is rendered, must be made, logically, however. (1) (k) The use of the permit system takes two forms; (one) an employee is required to secure a permit to be transferred from one plant to another under the same management or (two) an employee must secure such a permit when leaving one company before he can obtain a position with another. The first type of permit is legal and usually causes no irritation to the worker. The second form, however, is equivalent to a black- list system and is reprehensible and a just cause for much dissatisfaction on the part of the worker. It has therefore been declared illegal. (2) (1) Discounting orders for money advanced to workmen is often used as a means of overcharging on the rate of interest. Over-drawing pay is a misfortune to a worker whether he does it because of his own mismanagement or through unex- pected legitimate expense caused by sickness or the like. But such misfortune should in neither instance be a cause for exploitation of workmen by employers, and when it exists and is discovered it is a highly justifiable cause of complaint. Higher wages and education could appreciably diminish this evil. (3) (m) The apprentice system. Organized labor, groups among skilled workers have- well defined apprenticeship rules which tend to regulate the labor supply. It is to the employers' advantage to break down these rules accord- ingly, and when they do, much dissatisfaction arises. Machine methods tend to eliminate the need for appren- ticeship, which tends therefore to oppose the system. Consequently, a need for an understanding as to the period of learning a trade and pay while learning often form the basis of an arbitration award, to eliminate the growth of misunderstanding ana unrest it might cause. (4) (1) National War Labor Board Docket No. 12, Page 3. (2) Ibid ( 3 ) I b id (4) Ibid Docket No. 40, Page 4. I ! 15. ( n ) Demand for sp ec if ic and more frequent pay-days. To workers earning relatively little, and living up most of their earnings immediately, this is a vital consideration. Hence the value of an agreement on the subject to eliminate increasing unrest. ( o ) The polyglot character of the wo rking force. Several industries, typically mining, have a veritable race problem in their midst, drawing as they do on the unskilled labor from the complex races of Europe. "The Industry Arizona Copper Mining contains within itself the Balkan problem on a small scale. In other camps, even where there was not great racial diversity, large numbers were non-English speaking, particularly Mexicans. The seeds of dissension among workers render difficult their cohesion, and the presence o f non-English speaking labor tends even to greater misunderstanding uetween management and men than in the usual American Industry.** (1) Over-emphasis seems perhaps to have been placed by this analysis upon the specific causes of industrial unrest. However, we have so long emphasized the more general irritants such as low wages, long hours, and lack of recognition of the unions that we may well emphasize these less noted causes of unrest for their significance is in no sense minor. Industrial unrest i s in itself a symptom and not a disease, and back of these causes of unrest lie industrial conditions not "American" in intent, which therefore the army of skilled and unskilled in American labor will not accept. Removal of such conditions is a primary step to industrial peace. Probably such unrest will crop out to varying degree always, and for this reason, machinery for settling labor disputes is as essential as the correction of each funda- mental evil now existant. In no other way can we effectively deal with causes instead of effects, and allay the threatening evils of Bolshevism or similar revolut ionary proposals in industry, for fundamentally the elimination of such evils is effected when the now opposing factions in industry "get together". Each party is essential to production, and each equally so - and both must realize it. (2) (1) Report of President's Mediation Commission. Sixth Annual Report of Secretary of Labor 1918, Page 3. (2) Credit is here given to Dr. Gordon S. Watkins, department of Economics, m_mm _ (Cent .Page 17) Cont . from Page 16 . (2) of the Uni vers i ty of Illinois, for this analysis of the general and specific causes of labor unrest. The analysis was presented in a series of lectures before a class in Labor Problems in the Spring quarter of 1918-1919, of which class the writer was a member. We cannot lay too much stress on this point. An appeal to the purse is alv.ays universal, hence an illustration of the. tangible, concrete benefits derived from such a "getting together" for both employers, employee and the public, may serve to emphasize this idea. The increased production of essential commodities during the war involving unusually high prices was accepted by the public as part of their fortunes of war. But now that those days are past, a continuous agitation to lower the high cost of living has followed. Laborers lay the blame for high prices on the employers who they claim are "profiteering". Employers put all the responsibility upon labor for making "excessive demands" for higher wages with shorter hours. Uo doubt there are cases in which both statements are true; bht the final solution for high prices is a simple application of the old law of supply and demand, and an aclaiowledgment by all factors in industry - the employer, employee and the public - that the way to bring results is to increase production first and then economize consumption. Economy in consumption carries a two-fold meaning. It means both economy in quantity used, and in quality used. In both respects, the article which a manufacturer decides to produce is determined by the public's demand. To a great extent, of course, quantity proiuced depends upon labor's co-operation in the process. But as for quality, manufacturers realize and the public must realize that what was three years ago considered luxury now has Become necessity. Consequent ly, shortage exists in high-grade stuffs, so that continued demand in that direction only acts to further in- crease prices. The public then should shift its demand to cheaper though durable qualities. Exactly this situation is very evident when we consider wool prices for varying gradesbefore and after the war. The figures quoted by Mr. William Wood, President of the American Woolen Company, clearly indicate the increase in price on higher grades as demand shifted to them. (1) Before the war. December 1919. Low grade wool (per lb.) $ .75 $ .55 Pell Medium n " " " 1.25 1.75 Rose 40% High " " " » 1.65 2.75 Rose ttfcf The high grade wool is Australian wool of which there is a great shortage, while the low grade wool is a domestic product of which there i s an over- supply. Consequently, it is perfectly clear that if the public would use the lower grades and cease to demand the high grade, prices would inevitably be lowered. TTow, if producer and consumer would "get together or. the subject of wool supply and make demands accordingly, it would not take so long to bring appreciable results in lowered prices. That an increase of production must come is verified in the follow- ing incident. Mr. Capper, of Capper & Capper Company of Chicago sent two men abroad during the shortage in the United States, following the war, to see what purchases in men's furnishings they could make. After a short stay Mr. Capper received the following cablet " Shelves bare Returning home". Such incidents repeated many times daily throughout the world leave no room to doubt that high prices will continue until supply is increased to meet the demand, and that will happen only when labor and capital unite to increase production. If there were only a consciousness of the necessity of both factors to industrial output, which consciousness could be established if the two factors would get together on the process i t would not take long to bring down prices. (1) Statistics published in a Daily Trade 17ews for December 1919. Such an illustration of the benefits of mutual co-operation in industry rather than antagonism applies not only to the problem of reducing the high cost of living but to all the innumerable causes of unrest we have attempted to explain. i?ar sighted employers have realized this and have under- taken the introduction of betterment plans of various forms in industry. They have gotten the workers point of vie;/ and are attempting to meet it fairly. They appreciate that an increase in money wages alone is not what the workers want, for increased wages have not served to satisfy their unrest. Improvement in conditions at work, better living conditions in their homes, and some as- surance that old age for themselves and their families is not to be spent in ignorance, misery and proverty - all these and many more can replace the old lost incentives to work, and calm the present growing unrest* CHAPTER TWO HISTORY OF THE DEVELOPMENT OP BETTERMENT PLANS IN INDUSTRY. Page 1. Solutions for unrest are Betterment Plans 20 2. History of the development of Betterment work (a) Origin of fundamental institutions in present day factory organization 21 (b) Origin of factory legislation 22 (c) Factory Acts, 1802 to date 23 (d) Administration of present laws with table of such laws 28 (e) Regulations of health and safety 29 (f) The future of factory legislation 30 3. Motives prompting initiative beyond the requirements set by law 31 4. New era of Industrial Betterments dates from 1910 33 20. CHAPTER II. EFT 0? BETTSPJMT gyUjjg I IT INDUSTRY. Por our purposes then we shall say that any plans in industry which attempt to alleviate or remove these causes of industrial unrest Are properly to be termed "Betterment Plans". Consequently they cover a large field, the detailed analysis of which is the purpose of this text. It is not practicable to study a specific remedy for a specific ill because, as we said before, any ill is the result of a complex of causes. But bearing in mind our tabulation of general and specific causes of unrest, we shall organize remedies into two groups, the first to be called Improvement Plans in industry. This will be treated in Part Two of the text, and will include the study of health measures and physical comforts for employees, indoor and outdoor recreation, education, economic betterment plans, and soc ial bett erment extended to employees' families. The second group will comprise studies of the various types of employee participation in management, operative naar in the United States. Part Three of the te*t will be devoted to it. And in the study of all these forms of betterment work in industry, we will attempt to indicate that cause of unrest which they alleviate or eradicate and attempt also an evaluation upon the success in that direct ion which they attain. It is altogether fitting that to study the history of this work, we begin to trace it from the advent of the factory system, for with its beginnings, the bringing together of large numbers of workers with its attend- ant need of regulating their conditions of work, came. As early as the time of Adam Smith (1723-90) thought was directed toward the problem of labor's and capital's relation in industry, and Smith aimed sarcasm and criticism upon manufacturers and spent his sympathies on the "downtrodden workers i'( 1) He is sometimes considered the herald of the (1) Gide and Ri st "History of Economic Doctrines" Page 66. 21. economic transformation known to history as the Industrial Revolution, which consiste\d in the rapid substitution of machine production for the old domestic regime. Though industry gained during this period by the invention in 1765 of Hargreaves' Spinning Jenny and in 1761 of Arkwright's Water Frame, and later Watt's steam engine and Crompton's "mule", a combination of Hargreave and Arkwright's devices, the significance of these inventions was not apprecia- ted till some two centuries later. Smith worked out at that time, the now well-known theory of the Division of Labor recognizing both benefits mis- fortunes of machine industry with, its specialization of jobs and simplifica- tion of tasks set each man, which increased production resulting latter, and was more appreciated than at the time of its announcement. It is not the purpose of this feeart to give any detailed history of the development of these plans, but a survey of such development is valuable as a means of determining the progress so far made, and in noting what general tendencies the movement represents, as an indication of its future possibilities. '< With the permanent establishment of machine production the modern factory system may be said to have been established. Fowever, a few briefly-stated facts bear witness that institutions which today are of pri- mary importance in the industrial organization of the factory and the cause of many of the present evils are derived from ancient times. In the reign o f Henry I. colonies of flemish weavers grew up. In 1301 the city o f Manchester became famous for its fulling mill. Simi- larly Halifax and Bradford in Yorkshire became centers and, " in the neigh- borhood of these, other building often gathered in time where cloth - still spun and woven at home might be dyed and subjected to other processes or where possibly all processes of manufacture might occasionally be accumulated in a single establishment; and in such a one, accommodating a congerie of free workmen in the service of the capitilist employer, we have the germ of * c~, , the modern facto ly system." (1) The first factory with machinery driven by outside power was introduced from Italy by Sir Thomas Lombe who copied a plant there. Hence the modern large structure for production was an evolution of many years. Details of organization show the same long iStfe. The origin of sweatshop work fell in the TTorman Conquest period when home work: on cloth was the occupation o f many Flemish families. The modern institutions of foremen, guild systems or unions in manufacturing industry are also of very ancient derivation. Their history dates back to the early Roman days. Unionism was first found in their Fabrica or Military forge at Bath. M To prevent any abuse in this important branch of military economy and to ensure its proper and methodical arrangement no person was permitted to forge arms for imperial service unless he were previously admitted to the Society of the Fabri " (2) This was in one of Rome's Colonies, but closer oonds even existed in Italy. "Slaves operated factories there who were in charge of foremen whose only duty was to keep them at work and in order". ,(3) This slavery or the guild syst em operated both in government industry and in private alike . Hence the evils resulting from factory manufacture must have had years' in which to develop and fasten themselves menacingly upon industry. That protection to the worker is necessary is a result of the system of equal if not greater importance than the increased productivity the system gives. It is our purpose first to trace the development of such protection to workers to show what has been accomplished; then to state briefly the present law of f:\ctories for that indicates the minimum requirements for the cart of workers today. It may rightly be called enforced Betterment Work. (1) Cooke Taylor "The factory system and Factory Acts" Page 10. (2) Ibid Page 7. ' (3) Ibid Page 8 ; CO • Earliest regulations of conditions of work were directly opposed, in spirit to present-day concepts of factory legislation. The statute books from the fourteenth to the eighteenth century are crowded with acts whose gener- al proscriptions were "no less than a tv/elve-hour day" attempts at wage regu- lation, all lacking in means of enforcement, (l) Out of such chaos the need was felt for protection to the over-worked factory and mill-hands, especially in the cotton and textile industries, and finally in 1795 a committee headed by Dr. Perceval was appointed to investigate in Manchester , v/hose report or. January 25, 1796, set forth what later became the principle of the early factory acts. After a detailed report on the unhealthy conditions under which children, especially, work in cotton mills, the evils of night work, and the necessitated lack of education accompanying such a life, the report says "from the excellent regulations which subsist in several cotton factories, it appears that many of these evils may be obviated, and we propose an application of parliamentary aid to establish a general system of laws for the wise, humane, and equal govern- ment of all such works." (2) As a result of continued agitation the first factory act was passed in England in 1802, being "An act for the preservation of the health and of the morals of apprentices and others employed in cotton and other mills and cotton and other factories'.' (3) Since mills were at this time still Id isolated locations it provided for the workers' housing. Statements of neces- sary clothing and of religious and educational training to be given show the ultimate relation existing between employer and employee which, today is so entirely lacking. However, it was a step away from the laissez-faire doctrine , (4) propounded and supported loyally by Smith. (5) (1) Cooke-Taylor "The factory system and Factory Acts" Page 52-3 (2) Ibid Page 34 (3) Industrial Commission report V. 16 , 1901, Page 80 (4) P.J. Stimson " Labor in its Relations to Law " Page 14-15 (5) "History of Economic Doctrines", G-ide & Hist, Page 410-413. Subsequent developments in factory legislation are intensely- interesting, but space is lacking to incorporate them. A brief resume giving the date of each act ana its chief provisions must suffice for our purposes. In 1819 the next step was taken in an Act which though it applied only to cotton mills limited for the first time the age at which children were permitted to work. Such ages were nine, and for those under sixteen the work- ing day was not to exceed twelve hours, exclusive of meal times. Subsequent Factory Acts were passed in 1820, 1825, 1629 , 1831, and 1833. The only significant feature of the first three was the provision to shorten work on Saturday, which survived any future alterations in the Acts. The Act of 1831 repealed all former acts and "was the first Factory Act which was, at least to some extent, carried out, and which gave rise to still further agitation" . (1) Its only advance was to prohibit night work to children under sixteen. But the Act passed in 1833 was the best so far and still may be con- sidered a good model. It distinguished between "children" and "young persons" definitely; required the attendance of children at school at least two hours daily, and no more than nine hours of work daily; it extended application of the law beyond cotton and woolen mills to worsted, hemp, flax, tow, linen or silk factories, where steam or water or any other mechanical power is or shall be used to propel the machinery. Finally it provided for four factory inspec- tors to enforce the Act. (2) This was the first definite step toward actual enforcement of the Acts taken. The first general Factory Act following 18 33 was that of 1844,