Herbert Hoover Part 11

We could thus stabilize building industry to some degree and also bring the American-owned fleet into better balance, if each time that the government sold three or four emergency constructed cargo vessels it gave an order for one s.h.i.+p of a better and faster type. This would make reduction in our s.h.i.+p-building steadier and would give the country the type of s.h.i.+ps we need.

Our joint engineering committees have examined with a great deal of care into the organization of and our expenditure on public works and technical services. These committees have consistently and strongly urged the appalling inefficiency in the government organization of these matters. They report to you that the annual expenditure on such works and services now amounts to over $250,000,000 per annum, and that they are carried out today in nine different governmental departments. They report that there is a great waste by lack of national policy of coordination, in overlapping with different departments, in compet.i.tion with each other in the purchase of supplies and materials, and in the support of many engineering staffs.

They recommend the solution that almost every civilized government has long since adopted, that is, the coordination of these measures into one department under which all such undertakings should be conducted and controlled. As a measure practical to our government, they have advocated that all such bureaus should be transferred to the Interior Department, and all the bureaus not relating to those matters should be transferred from the Interior to other departments. The Committee concludes that no properly organized and directed saving in public works can be made until such a re-grouping and consolidation is carried out, and that all of the cheeseparing that normally goes on in the honest effort of Congressional committees to control departmental expenditure is but a t.i.the of that which could be effected if there were some concentration of administration along the lines long since demonstrated as necessary to the success of private business.

Another matter of government organization to which our engineers have given adhesion is in the matter of the national budget. To minds charged with the primary necessity of advance planning, coordination, provision of synchronizing parts in organization, the whole notion of our hit-or-miss system is repugnant. A budget system is not the remedy for all administrative ills, but it provides a basis of organization that at least does not paralyze administrative efficiency as our system does today. Through it, the coordination of expenditure in government department, the prevention of waste and overlapping in government bureaus, the exposure of the "pork barrel," and the balancing of the relative importance of different national activities in the allocation of our national income can all be greatly promoted. Legislation would also be expedited. No budget that does not cover all government expenditure is worth enactment. Furthermore, without such reorganization as the grouping of construction departments, the proper formulation of a budget would be hopeless. The budget system in some form is so nearly universal in civilized governments and in completely conducted business enterprise, and has been adopted in thirty of our States, that its absence in our federal government is most extraordinary. It is, however, but a further testimony that it is always a far cry of our citizens from the efficiency in their business to interest in the efficiency of their government.

Another great national problem to which every engineer in the United States is giving earnest thought, and with which he comes in daily contact, is that of the relations.h.i.+p of employer and employee in industry. In this, as in many other national problems today, we are faced with a realization that the science of economics has altered from a science of wealth to a science of human relations.h.i.+ps to wealth. We have gone on for many years throwing the greatest of our ingenuity and ability into the improvement of processes and tools of production. We have until recently greatly neglected the human factor that is so large an element in our very productivity. The development of vast repet.i.tion in the process of industry has deadened the sense of craftsmans.h.i.+p, and the great extension of industry has divorced the employer and his employee from that contact that carried responsibility for the human problem. This neglect of the human factor has acc.u.mulated much of the discontent and unrest throughout our great industrial population and has reacted in a decrease of production. Yet our very standards of living are dependent on a maximum productivity up to the total necessities of our population.

Another economic result is, or will be yet, a repercussion upon the fundamental industry of the United States, that is, agriculture. For the farmer will be unable to maintain his production in the face of a constant increase in the cost of his supplies and labor through shrinkage in production in other industries. The penalty of this disparity of effort comes mainly out of the farmer's own earnings.

I am daily impressed with the fact that there is but one way out, and that is again to reestablish through organized representation that personal cooperation between employer and employee in production that was a binding force when our industries were smaller of unit and of less specialization. Through this, the sense of craftsmans.h.i.+p and the interest in production can be re-created and the proper establishment of conditions of labor and its partic.i.p.ation in a more skilled administration can be worked out. The att.i.tude of refusal to partic.i.p.ate in collective bargaining with representatives of the employees' own choosing is the negation of this bridge to better relations.h.i.+p. On the other hand, a complete sense of obligation to bargains entered upon is fundamental to the process itself. The interests of employee and employer are not necessarily antagonistic; they have a great common ground of mutuality and if we could secure emphasis upon these common interests we would greatly mitigate conflict. Our government can stimulate these forces, but the new relations.h.i.+p of employer and employee must be a matter of deliberate organization within industry itself. I am convinced that the vast majority of American labor fundamentally wishes to cooperate in production, and that this basis of goodwill can be organized and the vitality of production re-created.

Many of the questions of this industrial relations.h.i.+p involve large engineering problems, as an instance of which I know of no better example than the issue you plan for discussion tomorrow in connection with the soft coal industry. Broadly, here is an industry functioning badly from an engineering and consequently from an economic and human standpoint. Owing to the intermittency of production, seasonal and local, this industry has been equipped to a peak load of twenty-five or thirty per cent over the average load. It has been provided with a twenty-five or thirty per cent larger labor complement than it would require if continuous operation could be brought about. I hope your discussion will throw some light on the possibilities of remedy. There lies in this intermittency not only a long train of human misery through intermittent employment, but the economic loss to the community of over a hundred thousand workers who could be applied to other production, and the cost of coal could be decreased to the consumer. This intermittency lies at the root of the last strike in the attempt of the employees to secure an equal division among themselves of this partial employment at a wage that could meet their view of a living return on full employment.

These are but a few of the problems that confront us. But in the formulating of measures of solution, we need a constant adherence to national ideal and our own social philosophy.

In the discussion of these ideals and this social philosophy, we hear much of radicalism and of reaction. They are, in fact, not an academic state of mind but realize into real groups and real forces influencing the solution of economic problems in this community. In their present-day practical aspects, they represent, on one hand, roughly, various degrees of exponents of socialism, who would directly or indirectly undermine the principle of private property and personal initiative, and, on the other hand, those exponents who in varying degrees desire to dominate the community for profit and privilege. They both represent attempts to introduce or preserve cla.s.s privilege, either a moneyed or a bureaucratic aristocracy. We have, however, in American democracy an ideal and a social philosophy that sympathizes neither with radicalism nor reaction as they are manifested today.

For generations the American people have been steadily developing a social philosophy as part of their own democracy, and in these ideals, it differs from all other democracies. This philosophy has stood this period of test in the fire of common sense; it is, in substance, that there should be an equality of opportunity, an equal chance, to every citizen. This view that every individual should, within his lifetime, not be handicapped in securing that particular niche in the community to which his abilities and character ent.i.tle him, is itself the negation of cla.s.s. Human beings are not equal in these qualities. But a society that is based upon a constant flux of individuals in the community, upon the basis of ability and character, is a moving virile ma.s.s; it is not a stratification of cla.s.ses. Its inspiration is individual initiative. Its stimulus is compet.i.tion. Its safeguard is education. Its greatest mentor is free speech and voluntary organization for public good. Its expression in legislation is the common sense and common will of the majority. It is the essence of this democracy that progress of the ma.s.s must arise from progress of the individual. It does not permit the presence in the community of those who would not give full meed of their service.

Its conception of the State is one that, representative of all the citizens, will in the region of economic activities apply itself mainly to the stimulation of knowledge, the undertaking only of works beyond the initiative of the individual or group, the prevention of economic domination of the few over the many, and the least entrance into commerce that government functions necessitate.

The method and measures by which we solve this acc.u.mulation of great problems will depend upon which of these three conceptions will reach the ascendancy amongst our people.

If we cling to our national ideals it will mean the final isolation and the political abandonment of the minor groups who hope for domination of the government, either by "interests" or by radical social theories through the control of our political machinery. I sometimes feel that lawful radicalism in politics is less dangerous than reaction, for radicalism is blatant and displays itself in the open. Unlawful radicalism can be handled by the police. Reaction too often fools the people through subtle channels of obstruction and progressive plat.i.tudes. There is little danger of radicalism's ever controlling a country with so large a farmer population, except in one contingency.

That contingency is from a reflex of continued attempt to control this country by the "interests" and other forms of our domestic reactionaries.

The mighty upheaval following the world war has created turmoil and confusion in our own country no less than in all other lands. If America is to contribute to the advance of civilization, it must first solve its own problems, must first secure and maintain its own strength. The kind of problems that present themselves are more predominantly economic--national as well as international--than at any period in our history. They require quant.i.tative and prospective thinking and a sense of organization. This is the sort of problems that your profession deals with as its daily toil. You have an obligation to continue the fine service you have initiated and to give it your united skill.

APPENDIX III

ADDRESS OF MR. HOOVER BEFORE THE BOSTON CHAMBER OF COMMERCE (MARCH 24, 1920)

As you are aware, a report has recently been issued by the Industrial Conference, of which I have been a member together with Governor McCall and Mr. Hooker of your State. The conference embraced among its members representatives from all shades of life including as great a trade unionist as Secretary Wilson. I propose to discuss a part of the problem considered by that commission. There is no more difficult or more urgent question confronting us than constructive solution of the employment relations.h.i.+p. It is not sufficient to dismiss the subject with generous and theoretic phrases, "justice to capital and labor," "the golden rule," "the paramount interest of the people," or a score of others, for there underlies this question the whole problem of the successful development of our democracy.

During last year there was a great deal of industrial unrest throughout the entire world. This has somewhat moderated during the last few months, but the underlying causes are only slumbering. Because the country is not today involved in any great industrial conflicts, we should not congratulate ourselves that the problem of industrial relations has been solved. Furthermore, the time for proper consideration of great problems does not lie in the midst of great public conflict but in sober consideration during times of tranquillity.

There is little to be gained by discussion of the causes of industrial unrest. Every observer is aware of the category of disturbing factors and every one will place a different emphasis on the different factors involved.

There is, however, one outstanding matter that differentiates our present occasion from those that have gone before. It cannot be denied that unrest in our industrial community is characterized more than ever before by the purposes and desires that go beyond the demand for higher wages and shorter hours. The aspirations inherent in this form of restlessness are to a great extent psychological and intangible. They are not, for this reason, any less significant. There is perhaps in some local cases an infection of European patent medicines, and the desire to use labor for political purposes. Aside from this, however, they do reveal a desire on the part of the workers to exert a larger and more organic influence in the processes of industrial life. They want better a.s.surance that they will receive a just proportion of their share of production. I do not believe those desires are to be discouraged. They should be turned into helpful and cooperative channels. There is no surer road to radicalism than repression.

One can only lead up to consideration of these problems by tracing some features of our industrial development even though they may be trite to most of you. One underlying cause of these discontents is that with the growth of large plants there has been a loss of personal contact between employers and employees. With the high specialization and intense repet.i.tion in labor in industrial processes, there has been a loss of creative interest. It is, however, the increased production that we have gained by this enlargement of industry that has enabled the standard of living to be steadily advanced. The old daily personal contact of employer and employee working together in small units carried with it a great mutuality of responsibility. There was a far greater understanding of the responsibilities toward employees and there was a better understanding by employees of the economic limitations imposed upon the employer. Nor can the direct personal contact in the old manner be restored.

With the growth of capital into larger units, there was an inequality of the bargaining power of the individual. Labor has therefore gradually developed its defense against the aggregation of capital by counter-organization. The organized uses of strike and lockout on either side and the entrance of their organization into the political arena have become the weapons for enforcement of demands. The large development of industrial units with possible cessation of production and service, through strikes and lockouts, penalizes the public. The public is not content to see these conflicts go on, for they do not alone represent loss in production, and thus lowering of the standard of living, but also they may, by suspension of public service, jeopardize the life of the community.

But the solution of the industrial problem is not solely the prevention of conflict and its losses by finding methods of just determination of wages and hours. Not only must solution of those things be found out but, if we are to secure increased production and increased standard of living, we must reawaken interest in creation, in craftsmans.h.i.+p and contribution of his intelligence to management. We must surround employment with a.s.surance of just division of production. We must enlist the interest and confidence of the employees in the business and in business processes.

We have devoted ourselves for many years to the intense improvement of the machinery and processes of production. We have neglected the broader human development and satisfactions of life of the employee that leads to greater ability, creative interest, and cooperation in production. It is in stimulation of these values that we can lift our industry to its highest state of productivity, that we can place the human factor upon the plane of perfection reached by our mechanical processes. To do these things requires the cooperation of labor itself and to obtain cooperation we must have an intimate organized relations.h.i.+p between employer and the employee and that cannot be obtained by benevolence; that can only be obtained by calling the employee to a reciprocal service.

Therefore it has been the guiding thought of the conference that if these objects are to be obtained a definite and continuous organized relations.h.i.+p must be created between the employer and the employee and that by the organization of this relations.h.i.+p conflict in industry can be greatly mitigated, misunderstanding can be eliminated, and that spirit of cooperation can be established that will advance the conditions of labor and secure increased productivity.

It is idle to argue that there are at times no conflict of interest between the employee and the employer. But there are wide areas of activity in which their interests should coincide, and it is the part of statesmans.h.i.+p on both sides to organize this ident.i.ty of interest in order to limit the area of conflict. If we are to go on with the present disintegrating forces, these conflicts become year by year more critical to the existence of the State. If we cannot secure a reduction in their destructive results by organization of mutual action in industry, then I fear that public resentment will generate a steadily larger intervention of the Government into these questions.

In consideration of a broad, comprehensive, national policy, the Conference had before it four possible alternative lines of action.

First, the attempt to hew out a national policy in the development of the progressive forces at work for better understanding in industry under such conditions as would maintain self-government in industry itself; or, secondly, to adopt some of the current plans of industrial courts, involving summary decision with jail for refusal to accept, such as that initiated in the State of Kansas; or, thirdly, the nationalization at least of the services upon which the very life of the community depends; fourthly, to do nothing.

In a survey of the forces making for self-government in industry, the Conference considered that definite encouragement must be given to the principles of collective bargaining, of conciliation, of arbitration, but that such forces could not develop in an atmosphere of legal repression. There is but little conflict of view as to the principle of collective bargaining and its vital corollary, fidelity to the bargain made. There has been conflict over the methods of representation on both sides. The Conference, therefore, has proposed that the Government should intervene to a.s.sist in determination of the credentials of the representatives of both sides in case of disagreement, and that such pressure should be brought to bear as would induce voluntary entry into collective bargain. Furthermore, it was considered that the large development of conciliation and arbitration already current in connection with such bargaining should be encouraged and organized under a broad national plan that would give full liberty of action to all existing arrangements of this character and stimulate their further development.

The Conference has therefore proposed to set up a small amount of governmental machinery comprising Chairmen covering various regions in the United States, with a Central Board in Was.h.i.+ngton, as a definite organization for the promotion of these agencies. It has believed that this is a step consonant with the normal development of our inst.i.tutions and the progressive forces already in motion, and that in such steps lie the greatest hope of success. No one is compelled to submit to the machinery established but where the employer and employee refuse to enter into, or fail in, bargaining, then through the use of this machinery the public stimulates them to come together under conditions of just determination of the credentials of their representatives. The plan is, therefore, a development of the principle of collective bargaining. It is not founded on the principle of arbitration or compulsion. It is designed to prevent the losses through cessation of production due to conflict but, beyond this, to build up such relations.h.i.+p between employer and employees as will not only mitigate such disaster but will ultimately extend further into the development of the great mutual ground of interest of increased production and under conditions of satisfaction to both sides. It is a part of the conception of the Conference that only in bargaining and mutual agreement can there be given that free play of economic forces necessary to adjust the complex conditions under which our industries must function.

Reduction of conflict in industry is the phase that not only looms large in the public mind, but conflict is the public exhibit of the greatest mark of failure in industrial relations. The imminence of conflict is evidence of failure to have discussion or to arrival at mutual agreement. Therefore, under the plan of the Conference that mutual agreement is the best basis for prevention of conflict, the second step in the Conference proposals is that there should be a penalty for failure to submit to such processes. That penalty is a public inquiry into the causes of the dispute and the proper ventilation to public opinion as to its rights and wrongs. The strength of the penalty is based upon the conviction that neither side can afford to lose public good will. Pressure to rect.i.tude by government investigation is distinctly an American inst.i.tution. It is not an intervention of public interest that is usually welcomed. In the plan of this Conference, this general repugnance to investigation is depended upon as a persuasive influence to the parties of the conflict to get together and settle their own quarrels. They are given the alternative of investigation or collective bargain under persuasive circ.u.mstances. In order to increase the moral pressures surrounding the investigation, either one of the parties to the conflict may become a member of the board of investigation, provided he will have entered on an _a priori_ undertaking that he is prepared to submit his case to orderly and simple processes of adjustment. Thus his opponent will be put at more than usual disadvantage in the investigation. If both sides should agree to submit to normal processes of settlement, the board of investigation becomes at once the stage of a collective bargain and the investigation ceases.

I will not trouble you with the elaborate details of the plan, for they involved a great deal of consideration as to many difficult questions of selection of representatives, provision for action by umpires, for appeal to a board in certain contingencies, the character of questions to be considered, methods of enforcement, standards of labor, and so on.

The point that I wish to make clear is that the Conference plan is fundamentally the promotion of collective bargaining under fair conditions of representation by both sides and the definite organization of public opinion only as a pressure on the parties at conflict to secure it. It is therefore basically not a plan of arbitration, nor is it an industrial court. It is stimulation to self-government in industry. The plan contains no essence of opposition to organized labor or organized employers. It involves no dispute of the right to strike or lock out, nor of the closed or open shop. It simply proposes a sequence of steps that should lead to collective bargain without imposing compulsions, courts, injunctions, fines, or jail. It is at least a new step and worth careful consideration before employees and employers subject themselves to the growth of public demands for the other alternatives of wider governmental interference.

The Conference has set out the critical necessity of the development within industry itself of a better basis of understanding as having the great values that all prevention has over cures. There have been hopeful developments in American industry during the past two or three years in this direction. The first unit of employment relations.h.i.+p is each industrial establishment, and if we would battle with misunderstanding and secure mutual action it must be at this stage. It takes its visible form in the organization in many establishments under various plans of shop councils, shop committees, shop conference, all of which are based on the democratic selection of representatives of employees who shall remain in continuous open and frank relation and conference with the employer in the interests of both. Where this development has had success it has had one essential foundation; that is, that it must be conceived in a spirit of cooperation for mutual benefit and it has invariably lost out where it has been conceived solely to bargain for wages and conditions of labor. It does not necessarily involve profit-sharing, but it does involve a human approach to the problems on both sides and a mutual effort at betterment.

It is the organization of such contact between employer and employees which distinguishes this advance from the previous drift in large industry. This type of organization has met with success not only in non-union shops but in unionized shops, and in the latter case it has imported the spirit of mutuality in addition to sheer negotiation of grievance as to conditions of labor. It cannot, in our view, succeed if it is to be conceived in a spirit of antagonism either to employer or to union organization.

The trade unions of the United States have conferred such essential services upon their members.h.i.+p and upon the community that their real values are not to be overlooked or destroyed. They can fairly claim great credit for the abolition of sweat shops, for recognition of fairer hours in industry, reduction of overstrain, employment under more healthful conditions, and many other reforms. These gains have been made through hard-fought collective bargains and part of the difficulties of the labor situation today is the bitterness with which these gains were accomplished. In my own experience in industry I have always found that a frank and friendly acceptance of the unions' agreements, while still maintaining the open shop, has led to constructive relations.h.i.+p and mutual interest.

In the early days trade unionism was dominated mainly by the economic theories of Adam Smith, and union labor at that time adopted as one of its tenets that a decrease of productive effort by workers below their physical necessities would result in more employment and better wage.

During the past twenty-five or thirty years, this economic error has been steadily diminis.h.i.+ng in American trade unions and while it may be adhered to by some isolated cases today it is not the economic conception of large parts of that body. The great majority have long since realized that an increased standard of living of the whole nation must depend upon a maximum production within the limits of proper conservation of the human machine. We find, during the past few years, many of the unions embracing the further principle of actual cooperation with the employer to increase production. I believe the development of this latter theme opens avenues for the usefulness and growth of trade unionism of greater promise than any hitherto tried. I am aware of the current criticism in some union quarters of the development of the shop council idea for this purpose, and there are perhaps isolated cases that give merit to this opposition. The strongest argument of union labor against the shop council system should lie in the fact that nation-wide organization of labor is essential in order to cope with the unfair employers, but I believe that if they embrace encouragement to shop council organization they open for themselves not only this prevention of unfairness but the whole new field of constructive cooperation and the further reduction of industrial conflict.

Attempts by governments to stop industrial war are not new. The public interest in continuous production and operation is so great that practically every civilized government has time and again ventured upon an attempt at its reduction. There is a great background of experience in this matter, for the world is strewn with failure of labor conferences, conciliation boards, arbitration boards, and industrial courts. This Conference, of course, had in front of it and in the experience of its members this background of the past score of years. I understand that recently you have had ably presented to you the industrial solution that has been enacted into legislation by the State of Kansas. I think some short discussion of this legislation may be of interest in illuminating the difference in point of view between the industrial conference and that legislation. The Kansas plan is, I believe, the first large attempt at judicial settlement of labor disputes in the United States. With the exception of one particular, it is practically identical with the industrial acts of Australasia of fifteen to twenty years ago. It comprises the erection of an industrial court, the legal repression of the right to strike and lockout under drastic penalties, the determination of minimum wage, and involves a consideration of a fair profit to the employer. The Kansas machinery goes one step further than any hitherto provided in this particular of placing more emphasis on fair profits and it also provides for the right of the State to take over and conduct the industry in last resort.

Under the enumerated industries in the Kansas law, probably two thirds of Ma.s.sachusetts industry would be involved. No man can say that this legislation may not succeed in Kansas or under American conditions. The experiment is valuable, and if it should prove a success to both employees and employers Kansas will have again taken the initiative in service to her sister states.

I will not be taken as a carping critic if I point out the difficulties in its progress on the basis of Australasian experience. It may, as did the Australasian acts, have a period of apparent success, and the workers benefit by an initial service in planing out the worst injustices. So far as I can see today, there is no reason why it will not run the same course as in Australia, where the amount of strikes and dislocation was ultimately as great under these laws as in countries without them. In periods of industrial prosperity, the advancing wage usually adjudicated by the industrial courts prevents strikes, but in times of industrial depression decisions against the work people give rise to the old form of resistance.

No one denies the right of the individual to cease work. The question involved in this form of legislation is the right to combination in common action by strike. Whatever the right may be, it is a certainty that the working community of the civilized world adheres to this right as an absolute fundamental to their protection. They believe that the aggregation of capital into large units under single control places them at an entire disadvantage if they cannot threaten to use their ultimate weapon of combined cessation of labor. While it may be argued that the State may intervene in such a manner as to subst.i.tute the protection of justice for the right of strike and lockout, the belief in the right to strike has become imbedded in the minds of the laboring community of the world to an extent that it will not receive with confidence any alternative in driving its own bargains.

There are other difficulties in compulsory adjudication of disputes. The workings of such law necessarily result in ultimate determination of minimum wage for all crafts and industries. Every different industrial unit will claim a different minimum based upon its local economic surroundings. Otherwise the compet.i.tive basis upon which industry is established will be undermined. No court has ever yet adequately solved these differentials and some dislocation of industry results. I would expect to see develop out of this type of minimum wage the same phenomenon that existed in some parts of Australia, where certificates of inability to earn the minimum, and therefore permission to undertake employment at less than this wage had to be issued in order that employment might be found for the aged and disabled. The employers will naturally in face of a minimum wage retain in employment that quality of worker that can give the maximum effort. Another difficulty is the tendency for wages of all workers, regardless of their ability, to fall to the minimum, for the employer naturally reduces the good to average with the poor worker. I would not want to be understood to necessarily oppose the possibilities of a minimum wage for women over large areas, as distinguished from craft minimums for men, because certain social questions enter that problem to an important degree.

There is another feature of the Kansas Act that should be given a great deal of consideration, and that is its essential provision that in the determination of wage disputes it shall be based on a fair profit to the employer. This must ultimately lead to a determination as to what a fair profit consists of, just as minimum wage will need be found for every craft and every establishment. I do not a.s.sume that any employer will contend for an unfair profit, but the termination of what may be a fair or unfair profit in respect to the hazards involved in the inst.i.tution of a business, in its conduct over a long term of years, its necessary provisions for its replacement and future disasters, is a matter that has not yet been satisfactorily determined by either theoretic economics, legislation, or courts. In compet.i.tive industry the processes of business determine this matter every day, and owners will only claim such determination by the State when the compet.i.tive tide is against them. We have long since recognized the rights of the State to determine maximum profits in case of a monopoly, but the determination of minimum profits (for fair profit is a minimum as well as maximum) may deliver large burdens to the people. Moreover, I doubt whether labor will ultimately welcome such determination, for an unsuccessful plant, instead of abandoning its production to its compet.i.tors, will claim wage reductions from the courts, and the general level of wages can thus be driven down and the State, at least morally, becomes a guarantor of profits in overdeveloped industry. This plan in the long run subst.i.tutes government control of industry for compet.i.tion.

As to whether such acts will not tend to crush out initiative, credit, and curtail the proper development of industry, can only be determined with time. Generally, it should be clearly understood that compulsory settlement of employment at best only a.s.sures continuity of production through just wages, hours and profits. It does not approach the problem from the point of view of upbuilding a relation in industry that will, if successful, not only eliminate strikes and lockouts, but make constructively for greater production and cheaper costs.

The economic repercussions from such regulation do not all lie in favor of either capital or labor. To curtail the activities in one is not necessarily a favor to the other.

I am sure you would, upon consideration, view the entry of the Government on a nation-wide scale into the determination of fair wage and fair profit in industry, even if it could be accomplished without force, with great apprehension. There are some things worse in the development of democracy than strikes and lockouts, and whether by legislative repression we do not set up economic and social repercussions of worse character is by no means determined. They have also the deficiency in that they undermine the real development of self-government in industry and that, to me, is part of the growth of democracy itself. Courts and litigation are necessary to the preservation of life and property, but they are less stimulus to improved relations among men than are discussion and disposal of their own differences.

The whole world is groping for solution to this problem. If we cannot solve it progressively, our civilization will go back to chaos. We cannot stand still with the economic and social forces that surround us.

There has never been a complete panacea to all human relations.h.i.+ps so far in this world. The best we can do is to take short steps forward, to align each step to the tried ideals that have carried us thus far. The Conference has endeavored to find a plan for systematic organization of the forces that are making for better relations.h.i.+ps, to encourage the growing acceptance of collective bargaining by providing a method that should enable it to meet the objections of its critics and to aggregate around this the forces of conciliation and arbitration now in such wide use. It has sought to do this without legal repression but with the organized pressure of public opinion.

To me there is no question that we should try the experiment of the perhaps longer road proposed by the Industrial Conference for the development of mutuality of relations.h.i.+p between employer and employee, rather than to enter upon summary action of court decision that may both stifle the delicate adjustment of industrial processes and cause serious conflict over human rights. We must all agree that those deficiencies in our social, economic and political structure which find solution through education and voluntary action of our people themselves are the solutions that endure. To me, the upbuilding of the sense of responsibility and of intelligence in each individual unit in the United States with the intervention of government only to promote the development of these relations, the suppression of domination by any one group over another, is the basis upon which democracy must progress.