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 THE LIBRARY 
 
 OF 
 
 THE UNIVERSITY 
 
 OF CALIFORNIA 
 
 RIVERSIDE
 
 MEDIATION, INVESTIGATION, AND 
 
 ARBITRATION IN INDUSTRIAL 
 
 DISPUTES
 
 MEDIATION, INVESTIGATION 
 ^AND ARBITRATION IN 
 INDUSTRIAL DISPUTES 
 
 BY 
 
 GEORGE E. BARNETT, Ph.D. 
 
 PROFESSOR OF STATISTICS, THE JOHNS HOPKINS UNIVERSITT 
 AND 
 
 DAVID A. McCABE, Ph.D. 
 
 ASSISTANT PROFESSOR OF ECONOMICS, PRINCETON UNIVERSITY 
 
 D. APPLETON AND COMPANY 
 NEW YORK LONDON 
 
 1916
 
 37 
 
 COPTRIOHT, 1916, HT 
 
 D. APPLETON AND COMPANY 
 
 Printed in the United States of America
 
 PREFACE 
 
 This study of Mediation, Investigation, and 
 Arbitration is based on a report submitted in 
 June, 1915, by the writers to the Commission on 
 Industrial Relations. A considerable amount of 
 illustrative material has been added, the state- 
 ments have been brought down to date, and some 
 revision has been made in the form of presentation, 
 but the argument and the proposals remain un- 
 changed. 
 
 It should be understood that the authors alone 
 are responsible for the views here expressed. For 
 convenience in comparison there are added in the 
 Appendices (II-IV) extracts from the Final Re- 
 port of the Commission, in which are presented 
 the views of the members of the Commission on 
 the matters dealt with here. 
 
 The authors wish to express their appreciation 
 of the kindness and courtesy of the many state 
 officials, employers, trade union officers, and other 
 workmen who supplied information for the orig- 
 
 V
 
 PREFACE 
 
 inal report. We are pleased to acknowledge our 
 indebtedness to Dr. L. A. Rufener for the opportu- 
 nity of examining several chapters of his thesis on 
 "The Work of the Massachusetts Board of Con- 
 ciliation and Arbitration" and for other valuable 
 suggestions as to sources of information in that 
 State. 
 
 G. E. B., 
 
 D. A. McC.
 
 CONTENTS 
 
 PART I 
 
 STATE AGENCIES OF MEDIATION, INVESTIGA- 
 TION AND ARBITRATION 
 
 PAGE 
 
 Introduction 3 
 
 CHAPTER 
 
 I. Mediation 7 
 
 Existing Law. Types of Mediatorial 
 Service. Limitations of Mediation. Char- 
 acteristics of a Successful System. 
 
 II. Investigation 66 
 
 Existing Law. Results. Plan for Boards 
 of Mediation and Investigation. 
 
 III. Arbitration 89 
 
 Existing Law. Results. Possibilities of 
 Arbitration Service by a Permanent Board. 
 Plan for a Board of Arbitration. En- 
 couragement of Formation of Special 
 Boards. 
 IV. Proposed Plan for a State System of 
 Mediation, Investigation and Arbi- 
 tration Ill 
 
 PART II 
 NATIONAL AGENCIES OF MEDIATION, INVESTI- 
 GATION AND ARBITRATION 
 
 V. Proposed New Agencies 129 
 
 The Need for New National Agencies. 
 Proposed Agencies of Mediation, Arbitra- 
 tion and Investigation. The Mediation 
 Commission. 
 
 vii
 
 CONTENTS 
 
 CHAPTEm PAGE 
 
 VI. Proposed Plan of a National System 
 op Mediation, Investigation and Ar- 
 bitration 154 
 
 Organization. Powers, Duties and Juris- 
 diction. Cooperation. 
 
 PART III 
 
 APPENDICES 
 
 Appendix I. The Newlands Act . . . .165 
 
 Appendix II. Report of the Commission on 
 
 Industrial Relations 181 
 
 Extracts from the report of Mr. Basil M. 
 Manly, Director of Research and Investi- 
 gation. 
 
 Appendix III. Report of the Commission on 
 
 Industrial Relations 193 
 
 Extracts from the supplemental statements 
 of Commissioners Lennon, O'Connell, Gar- 
 rettson and Walsh. 
 
 Appendix IV. Report of the Commission on 
 
 Industrial Relations 201 
 
 Extracts from the report of Commissioners 
 Commons and Harriman and from the joint 
 supplemental report of Commissioners 
 Weinstock, Ballard and Aishton. 
 
 Vlll
 
 STATE AGENCIES OF MEDIA- 
 TION, INVESTIGATION 
 AND ARBITRATION
 
 INTRODUCTION 
 
 A very large proportion of the American 
 States have made provision in their laws for 
 agencies of mediation, public investigation, 
 and arbitration in labor disputes. For a 
 study of these agencies, however, attention 
 can most profitably be centered on a few 
 states, since the arrangements in other states 
 are merely duplications of these few or else 
 the machinery provided by law is not in op- 
 eration to any important extent. The pres- 
 ent study is based on a survey of the agencies 
 in Massachusetts, New York and Ohio. 1 
 All three are important industrial states and 
 possess highly diversified groups of indus- 
 tries. Moreover, the present work of the 
 
 1 Since this study was begun the State of Colorado 
 has adopted a law (April 12, 1915) requiring thirty 
 days' notice of proposed changes in wages or other 
 terms of employment and forbidding strikes and lock- 
 outs until after a board of investigation appointed by 
 
 3
 
 INTRODUCTION 
 
 agencies of mediation, arbitration and public 
 investigation in these states is at least equal 
 in quality to that in the other states and these 
 states present further advantage for the in- 
 vestigator in that they were among the 
 earliest to establish agencies of mediation 
 and arbitration. 
 
 Much has been accomplished by these 
 agencies in all three of these states in the way 
 of reestablishing and promoting industrial 
 peace. As among the three kinds of activi- 
 ties of such agencies, it is clear that up to the 
 present by far the best results have been ob- 
 tained through mediation. With the excep- 
 tion of Massachusetts, state agencies of 
 arbitration have been rarely used. Public 
 investigation after failure to secure the set- 
 tlement of a strike or lockout by mediation 
 
 the State Industrial Commission has reported its find- 
 ings on the matters in dispute. This is the first law 
 of its kind in the United States but it has not yet 
 been in operation long enough to give results of value 
 for this study. 
 
 4
 
 INTRODUCTION 
 
 has also been used sparingly. It has been re- 
 sorted to very rarely in Ohio, and until the 
 last two or three years in only a few cases in 
 New York and Massachusetts. 
 
 The results achieved by the mediators and 
 arbitrators in the states studied strongly sup- 
 port the conclusion that state agencies of 
 mediation, investigation, and arbitration, if 
 properly constituted and properly manned, 
 would be of great service in all the industrial 
 states in preventing the outbreak of strikes 
 or lockouts and in bringing to an earlier con- 
 clusion a large proportion of those which 
 they are unable to prevent. This conclusion 
 is confirmed by interviews with many whose 
 difficulties the state mediators failed to com- 
 pose and who declined to submit the matters 
 at issue to arbitration by existing state 
 boards. These persons naturally emphasized 
 the desirability of having properly qualified 
 persons to act as mediators, investigators 
 
 5
 
 INTRODUCTION 
 
 or arbitrators. The vital importance of 
 the proper constitution of the agencies as 
 to personnel as well as to powers and duties 
 was otherwise made clearly evident, as will 
 appear at several points in the description of 
 the agencies and their work. 
 
 For convenience in comparison, the de- 
 scription of the systems in the three states 
 has been divided into three sections entitled 
 respectively Mediation, Public Investigation, 
 and Arbitration.
 
 MEDIATION 
 
 In discussing the subject of mediation it 
 will be most convenient to consider first the 
 existing legal provisions for mediation in the 
 three States and the results obtained under 
 these laws. That will be followed by an 
 analysis of the possibilities of state mediation 
 under proper agencies as evidenced by the 
 experience of the existing agencies. A plan 
 for the constitution, manning, and operation 
 of a state agency of mediation, which, the re- 
 sults of this study indicate, is the plan most 
 likely to lead to the realization of the possi- 
 bilities of service open to a state agency of 
 mediation, will then be outlined and ex- 
 plained. 
 
 7
 
 MEDIATION AND ARBITRATION 
 
 • • ; ( *■ t TOisiiNO law 
 
 The] \&f£^*Grs.-^I*i Massachusetts the 
 law provides that the State Board of Con- 
 ciliation and Arbitration shall exercise the 
 function of mediation. The board consists 
 of three salaried persons appointed by the 
 Governor. One member must be an em- 
 ployer or selected from an association repre- 
 senting employers, and one must be selected 
 from a labor organization. The third mem- 
 ber is nominated by the other two if they are 
 able to agree upon a third within a specified 
 time. As a matter of fact, they always have 
 been able to agree. The board has a perma- 
 nent secretary, who, in addition to his other 
 duties, often acts as a mediator for the board. 
 
 The Ohio machinery for conciliation and 
 arbitration, until 1913, was the same as that 
 of Massachusetts, except that the members 
 of the board did not receive an annual salary 
 
 8
 
 MEDIATION 
 
 but were paid at the rate of five dollars a day 
 when acting for the board, and that one of 
 the members of the board acted as secretary. 
 The act creating the Industrial Commission 
 of Ohio, adopted in 1913, abolished the State 
 Board of Arbitration and Conciliation, and 
 conferred upon the Industrial Commission 
 the duty and power of promoting voluntary 
 arbitration and mediation. The law pro- 
 vides that the commission shall designate a 
 deputy to be known as chief mediator and 
 may detail other deputies to act as his assist- 
 ants. In November, 1914, the commission 
 assigned its chief statistician to serve also as 
 chief mediator. Assistant mediators have 
 not yet been specifically appointed, but two 
 members of the staff of the Division of Sta- 
 tistics have in several cases acted in that ca- 
 pacity. 
 
 In New York the function of mediation is 
 intrusted to a chief mediator and his assist-
 
 MEDIATION AND ARBITRATION 
 
 ants, who are appointed by the Industrial 
 Commission. Prior to the recent law estab- 
 lishing an Industrial Commission (effective 
 May 22, 1915), the chief mediator and his 
 assistants were appointed by the Commis- 
 sioner of Labor. Under the new law the 
 functions formerly discharged by the Com- 
 missioner of Labor have been taken over 
 by the Industrial Commission and general 
 supervision of the work of the Bureau of 
 Mediation and Arbitration is assigned to one 
 of the members of the commission. The 
 chief mediator is also the third deputy com- 
 missioner, instead of second deputy commis- 
 sioner of labor as under the old law. Other- 
 wise the law remains unchanged. The chief 
 mediator is still in immediate charge of the 
 Bureau of Mediation and Arbitration and, 
 as for several years past, has four assistants. 
 One of these has the title of industrial medi- 
 ator and two that of assistant mediator. 
 10
 
 MEDIATION 
 
 The fourth is a special agent attached to the 
 bureau. 
 
 When Mediation Occurs. — In Massa- 
 chusetts the board is obliged by law to offer 
 mediation when notified by either party, or 
 by the local authorities, that a strike or lock- 
 out is seriously threatened or has actually 
 occurred. It intervenes as a matter of 
 course in many other cases. In fact, over 
 half its interventions are made without pre- 
 vious official notification. Its policy is to at- 
 tempt to mediate in all cases of importance 
 coming to its knowledge. The New York 
 law requires that an officer or agent of the 
 Bureau of Mediation "shall, if practicable, 
 proceed promptly to the locality" in which 
 the strike or lockout is threatened or has oc- 
 curred and "endeavor by mediation to effect 
 an amicable settlement of the controversy." 
 No strike or lockout involving a considerable 
 number of men goes on for more than a few 
 11
 
 MEDIATION AND ARBITRATION 
 
 days without an offer of mediation from the 
 bureau, if the bureau learns of the trouble 
 — and a serious disturbance would not escape 
 its knowledge long. In Ohio, the present 
 law does not specify when mediation shall be 
 offered. The mediators have acted in very 
 few disputes in which their intervention was 
 not requested. It has been the policy of 
 the chief mediator not to intervene without 
 invitation unless the case was of unusual im- 
 portance because of the number of persons 
 involved in the strike or lockout, the incon- 
 venience suffered by the public, or the out- 
 break of violence. 
 
 General Results of Mediation. — The 
 Massachusetts board, the New York bureau, 
 and the chief mediator and his assistants in 
 Ohio have done work of great value in their 
 respective States in preventing strikes and 
 securing settlements of strikes or lockouts 
 which have already occurred. Relative to 
 
 12
 
 MEDIATION 
 
 the total number of strikes and lockouts 
 in these States since the establishment of 
 mediation machinery, the number in which 
 settlements have been secured by the medi- 
 ators does not loom up large; but if the 
 cases in which the intervention of the medi- 
 ator or mediators has been followed by a set- 
 tlement agreed to in a conference called by 
 the mediator, or agreed to by each party 
 separately with the mediator acting as an 
 intermediary, be considered absolutely, the 
 value of the results obtained by mediation in 
 preventing or shortening the term of strikes 
 and lockouts is apparent. 
 
 TYPES OF MEDIATORIAL SERVICE 
 
 The experience of the Massachusetts, New 
 York, and Ohio mediators makes it clear 
 that there is an opportunity for competent 
 mediators to render several distinct types of 
 service in bringing to an agreement parties 
 13
 
 MEDIATION AND ARBITRATION 
 
 who have been unable to reach an agreement 
 by themselves. These will be taken up. in 
 order. 
 
 1. Many, if not most, strikes and lockouts 
 occur before the matters in dispute have been 
 thoroughly thrashed out and before either 
 side has indicated the utmost that it is willing 
 to concede to secure a settlement. It hap- 
 pens occasionally that the terms that each 
 side is willing to accept if it can get no bet- 
 ter terms are such as to make a settlement 
 possible, yet there are obstacles to the frank 
 negotiations which would make this clear. 
 Obviously these obstacles are more likely to 
 be present if the employer and the workmen 
 have already broken off friendly relations. 
 The strike or lockout usually throws the 
 parties apart in irritation, if not in anger, 
 and neither is in a mood for calm discussion 
 or frank bargaining. One side or both may 
 be unwilling to ask the other for a conference. 
 
 14
 
 MEDIATION 
 
 In many cases the employer is irritated be- 
 cause a strike has been called without what 
 he considers sufficient warning or discussion 
 of the workmen's demands. In other cases 
 the employer is unaccustomed to dealing with 
 a union and is irritated because union of- 
 ficials not in his employ are asking to be dealt 
 with as the representatives of his workers. 
 Employers in this frame of mind will not go 
 into conference with the workers' representa- 
 tives at the request of the latter. On the 
 other hand, the workers may be incensed at 
 what they consider the too light treatment of 
 their demands by the employer, or his failure 
 to treat their representatives with proper con- 
 sideration, and are determined to stand out 
 until the employer accepts their demands or 
 asks their representatives for a meeting for 
 the discussion of their terms. 
 
 The service which the successful mediators 
 have rendered in situations of this kind is that 
 15
 
 MEDIATION AND ARBITRATION 
 
 of getting before each party the fact that 
 there are terms which both sides are really 
 willing to accept as a settlement. The 
 method which has been followed in most cases 
 by the state mediators is that of bringing the 
 parties together in a conference with the 
 mediator and persuading them to discuss 
 their differences calmly and frankly. If the 
 terms each is willing to accept can be brought 
 out in a conference of this kind the settlement 
 by joint agreement will follow as a matter of 
 course. The task of the mediator is to over- 
 come the reluctance of one or both parties to 
 meeting the other in conference and to keep 
 them from still further irritating each other 
 when they come together. 
 
 Most of the settlements secured by the 
 state mediators have been secured through 
 such joint conferences. If the parties can 
 be induced to hold a conference of this kind 
 and a settlement results, a long step has been 
 16
 
 MEDIATION 
 
 taken toward collective bargaining for the 
 future. The fact that they have met and 
 discussed issues with each other directly and 
 have arrived at an agreement on the points 
 in dispute makes it much more likely that 
 when differences arise later the parties will 
 meet in joint conference on their own initi- 
 ative and attempt to adjust their differences 
 by negotiation. 
 
 A relatively large number of the settle- 
 ments which have been secured by mediators 
 through bringing the parties into conference 
 have been in cases in which the strike or lock- 
 out was threatened or prolonged because of 
 the refusal of the employer to confer with 
 any representative of a union. It frequently 
 happens that an employer refuses to meet a 
 trade union official on the ground that he will 
 deal only with his own employees, when, as a 
 matter of fact, the higher trade union official 
 is the one man on the workers' side who has 
 17
 
 MEDIATION AND ARBITRATION 
 
 the authority, grasp of the situation, and 
 temperament to negotiate a satisfactory set- 
 tlement. For example, the employer may 
 refuse to "recognize the union" to the extent 
 of dealing with a union officer, because he as- 
 sumes that recognizing the union necessarily 
 involves accepting the closed shop rule, al- 
 though the union may be one that is willing 
 to make an agreement without that rule. 
 Under these circumstances, if the mediator 
 can get the employer and the proper union 
 officer together in a frank conference, the 
 employer may have his fears removed and 
 find that the union officer is willing to accept 
 terms that the employer is willing to grant. 
 
 The mediator has frequently succeeded in 
 getting the parties together, after one has 
 definitely refused to confer with the other di- 
 rectly, by inviting both into conference with 
 him at the same time and place. An em- 
 ployer who has refused to confer with a trade 
 
 18
 
 MEDIATION 
 
 union officer will often come to a conference 
 with the mediator even though he knows that 
 one or more representatives of the union will 
 be there, because he feels that he is going 
 to a conference primarily with the mediator, 
 and is not dealing with the union representa- 
 tives as such. He goes as a matter of cour- 
 tesy to the mediator. A conference of 
 this kind may develop, and often has de- 
 veloped, into a direct conference between the 
 interested parties and finally into a set- 
 tlement. 
 
 Numerous instances of settlements secured 
 in this way could be given. A good illustra- 
 tive case is that of the settlement of a strike 
 of the employees of a rope factory in Auburn, 
 New York, in March, 1913. This case pre- 
 sented a familiar problem, that of the refusal 
 of an employer to deal with the representa- 
 tives of a newly formed union of his em- 
 ployees. The strike occurred because sev- 
 19
 
 MEDIATION AND ARBITRATION 
 
 eral employees who were officers of recently- 
 organized local unions of the United Textile 
 Workers were discharged. After the strike 
 had been inaugurated the strikers made wage 
 demands and also demanded the recognition 
 of their unions. The president of the 
 United Textile Workers then went to 
 Auburn to advise the strikers and otherwise 
 aid in the conduct of the strike. When the 
 state mediators arrived at Auburn they 
 found that the officials of the company were 
 unwilling to deal with either the officers of 
 the local union or the president of the na- 
 tional union, and that the strikers were firm 
 in their refusal to go back until they had re- 
 ceived concessions as an organized body. 
 The chief mediator, with the assistance of one 
 of the directors of the company, finally pre- 
 vailed on the president of the company to 
 meet the president of the national union un- 
 officially. This meeting led to a formal con- 
 20
 
 MEDIATION 
 
 ference, in which the local union committee 
 was included, and at this conference terms of 
 settlement were agreed upon. 
 
 A similar example may be taken from the 
 mediation activities of the Massachusetts 
 board. A few years ago 350 glass cutters 
 were locked out by an employer in New Bed- 
 ford in anticipation of a wage demand, and 
 the employer refused to meet the president of 
 the American Flint Glass Workers' Union, 
 who had taken charge of the dispute for the 
 men. Fortunately for the settlement of that 
 case the employers' representative on the 
 board was a citizen of New Bedford and the 
 president of the union appealed to him to use 
 his good offices to bring about a conference. 
 The member of the board secured a confer- 
 ence between the employer and the president 
 of the union and an agreement was quickly 
 reached. 
 
 After the parties have been brought into 
 21
 
 MEDIATION AND ARBITRATION 
 
 joint conference it is difficult, sometimes, to 
 keep them together. Before the parties can 
 clear up matters sufficiently to see their way 
 to an agreement, suspicions may arise on one 
 side or both as to the real motives of the other 
 in negotiating. In April, 1913, for example, 
 the Massachusetts board learned that a strike 
 of telephone operators in Boston was immi- 
 nent. After interviewing the parties sepa- 
 rately, the board was able to bring them 
 together in a three-cornered conference. 
 Such good progress was made in this confer- 
 ence that the board advised them to confer 
 by themselves until all the differences on 
 which they could reach agreement were dis- 
 posed of, and to consider submitting to arbi- 
 tration any points on which they found they 
 could not agree. The parties agreed to do 
 this and to reach a decision on the arbitra- 
 tion suggestion in two days. 
 
 But the following day, Tuesday, operators 
 22
 
 MEDIATION 
 
 began to arrive in Boston from other cities, 
 to take the places of those operators who 
 might go on strike. This threatened seri- 
 ously to put an end to the negotiations, as 
 the operators feared that the company was 
 continuing the conferences merely to gain 
 time to bring in strike-breakers. The board 
 then got in touch with the parties again. 
 The company explained that it was willing 
 to continue negotiations in entire good faith, 
 but it had to be prepared to continue its serv- 
 ice in case no agreement could be reached and 
 a strike should take place. Both parties 
 then agreed to resume the conference the 
 next day, Wednesday. At the request of 
 the workers a committee from the Boston 
 Chamber of Commerce met with the parties 
 and also acted at times as a confidential go- 
 between. The conferences lasted all through 
 Wednesday and through Wednesday night 
 until five o'clock Thursday morning, at 
 23
 
 MEDIATION AND ARBITRATION 
 
 which time a settlement was agreed to by the 
 parties. 
 
 2. In a smaller number of cases the medi- 
 ators have brought about a settlement by 
 acting as confidential intermediaries between 
 the parties. In these cases each party agrees 
 conditionally to certain terms with the inter- 
 mediary without knowing what the other 
 party is willing to concede. It frequently 
 happens that the parties, though willing to 
 confer with each other, will not disclose to 
 each other the most they will concede in order 
 to get a settlement. Each may fear that if 
 it offers a concession contingent upon the 
 yielding of some particular thing by the 
 other side, the latter will take this offer as a 
 sign of weakness and refuse to concede as 
 much as it otherwise would. Each side thus 
 allows the conferences to end without stating 
 its best terms, in the hope that the other will 
 speedily offer better terms, when, as a mat- 
 24
 
 MEDIATION 
 
 ter of fact, the most one is willing to give and 
 the least the other will take are really over- 
 lapping. 
 
 This is not likely to occur in a well de- 
 veloped system of collective bargaining. 
 Where such systems have been long estab- 
 lished, neither party will ordinarily allow the 
 conferences to end in a disagreement without 
 stating the limit it is willing to go at that 
 time to reach a settlement. In other words, 
 each side will offer as good terms to the other 
 directly as it would be willing to offer confi- 
 dentially to an intermediary. But where the 
 joint conference method of collective bar- 
 gaining is not well developed, deadlocks due 
 merely to lack of frankness are likely to 
 occur. This liability is especially great if 
 the parties are looking forward to the possi- 
 bility of arbitration in case no settlement is 
 reached in conference. Each side is then 
 fearful of offering a concession in conference 
 25
 
 MEDIATION AND ARBITRATION 
 
 which will be assumed as a starting point by 
 the other if negotiations are broken off and 
 later resumed or if the whole case is later 
 submitted to arbitration. 
 
 In all cases of this kind the problem of the 
 mediator is not to get the parties together in 
 conference, but to secure from each side a 
 confidential statement of the limits of its 
 position. He has then merely to get each 
 party to agree with the other to terms al- 
 ready agreed to conditionally with him. It 
 is this confidential intermediary type of 
 mediation which has proved so successful in 
 federal mediation in interstate railway dis- 
 putes under the Erdmann and Newlands 
 acts. In intrastate disputes confidential in- 
 termediary action seems most likely to be 
 successful in disputes involving recently 
 organized workers. In such cases an em- 
 ployer will often accept mediation of this 
 kind in preference to entering a joint or even 
 
 26
 
 MEDIATION 
 
 a three-cornered conference, since it com- 
 mits him to nothing. If the employees will 
 not accept the terms which he is willing to 
 grant, his own position is not weakened by 
 the public offer of concessions. 
 
 The chief mediator of Ohio has found this 
 confidential-intermediary type of mediation 
 the more acceptable type. "Joint confer- 
 ences," he states, "except in cases where the 
 employees have been organized for a number 
 of years and are accustomed to dealing with 
 their employers through committees, are 
 often productive of bitterness and for that 
 reason are seldom held by the mediators." 
 Apart from this, however, he favors the con- 
 fidential type of mediation as a matter of 
 policy because, as he puts it, "mediation 
 under this plan does not disclose to either 
 side either the weak points or the strong 
 points in the position of the opposing side." * 
 
 1 These statements are taken from a report pre- 
 
 27
 
 MEDIATION AND ARBITRATION 
 
 Mediation of this intermediary type in 
 strikes involving unorganized workers, even 
 when it is successful, is naturally less likely 
 to result in a direct agreement between the 
 parties than when the terms of agreement 
 are worked out in joint conference. The 
 Ohio mediators have, however, brought 
 about some direct agreements by inter- 
 mediary mediation in strikes of this kind. 
 
 The Massachusetts mediators generally 
 try to bring the parties together in conference 
 as soon as possible, but at times find it neces- 
 sary to secure conditional agreement to sug- 
 gested terms of settlement from each party 
 separately before bringing the parties to- 
 gether. For example, a textile strike of 700 
 operatives in two mills in Barre in March, 
 1912, was brought to an end in this way. 
 
 pared by the chief mediator, Mr. Fred C. Croxton, on 
 " Mediation of Industrial Disputes in Ohio, January, 
 1914 to June, 1916," published in the Bulletin of the 
 Industrial Commission of Ohio, Vol. Ill, No. 4. 
 
 28
 
 MEDIATION 
 
 The hours of the women workers had to be 
 reduced from fifty-six to fifty-four to con- 
 form with the new state law and the hours 
 of all employees were similarly reduced. 
 This raised the question of the rates of wages 
 to be paid. The workers demanded an in- 
 crease of fifteen per cent and the employers 
 were willing to give but five. After five 
 days there was considerable violence and ar- 
 rests were made. Four days later the board 
 was able to bring both sides to an agreement 
 through separate negotiations with each. 
 The next day both parties were brought into 
 conference with the board and the agreement 
 ratified. 
 
 3. In the above classes of cases the dispute 
 was finally terminated by an agreement 
 made between the parties. Each agreed to 
 terms directly with the other after agreeing 
 to them separately with the mediator. In 
 addition there have been cases in all three 
 29
 
 MEDIATION AND ARBITRATION 
 
 States in which the mediators have been able 
 to secure a settlement by a separate agree- 
 ment with ekch party when one party would 
 not make an agreement with the other. The 
 employer or employers may be determined 
 not to make an agreement with the strikers 
 as a body while on strike ; the strikers, on the 
 other hand, may be resolved not to. return to 
 work unless assured of certain concessions. 
 In some of these cases the mediators have re- 
 ceived guarantees from the employers that 
 certain things would be done by the em- 
 ployers after the employees had returned to 
 work, and have persuaded the men to return 
 to work on their assurance that these conces- 
 sions would be granted. 
 
 The New York mediators were able to set- 
 tle two important strikes in this way in 1913. 
 In January, 1913, 3,000 garment workers in 
 Rochester went on strike. They presented 
 no demands when they left the factories, 
 30
 
 MEDIATION 
 
 other than to complain that the factories 
 were doing work for houses in New York 
 City whose employees were on strike. Dur- 
 ing the next two days many other garment 
 workers joined the strikers and the em- 
 ployers announced on Saturday that if the 
 strikers did not return on Monday their es- 
 tablishments would be closed. As the 
 strikers did not return, the factories were 
 closed. The number of those then idle 
 reached 10,000. The state mediator came 
 into the dispute a few days later and at- 
 tempted to arrange a conference of the par- 
 ties by personal interviews, but unsuccess- 
 fully. He then attempted, by writing to the 
 parties, to get each to agree to a conference. 
 The representatives of the workers signified 
 their willingness to attend any conference he 
 might be able to arrange, but the employers 
 replied that each employer would meet a 
 committee of his own employees. Separate 
 31
 
 MEDIATION AND ARBITRATION 
 
 meetings between employers and committees 
 of their workers were then held, but these 
 were fruitless. 
 
 The strike dragged along for nearly three 
 weeks. The employers would not treat with 
 the strike leaders nor agree to concede any 
 increase in wages or reduction in hours to 
 the strikers as such. They declared that 
 they would take up any well founded griev- 
 ance the strikers might have after they had 
 returned to work, but were firmly resolved 
 not to make terms with them as a body or to 
 promise them anything while they remained 
 on strike. Finally the strike leaders told the 
 mediator that the strikers would probably re- 
 turn to work if they were assured that they 
 would be given a fifty-two hour week, a re- 
 reduction of two hours, and an increase in 
 piece prices sufficient to keep their weekly 
 wages the same, and that there would be no 
 discrimination against members of the union. 
 32
 
 MEDIATION 
 
 The mediator then made a public statement 
 that he believed these terms would be granted 
 if the strikers returned to work immediately. 
 This did not constitute the definite assur- 
 ance that the strikers insisted on and they re- 
 fused to return. The Commissioner of La- 
 bor then ordered an investigation. Two 
 other mediators came to Rochester to make 
 up a board of investigation with the mediator 
 already on the ground and the three medi- 
 ators received a promise from the manufac- 
 turers that the conditions mentioned above 
 would be put into effect in their factories im- 
 mediately. The board then assured the 
 strikers that these terms would be granted 
 and faithfully carried out, whereupon the 
 strikers voted to accept the terms and re- 
 turned to work. 
 
 On May 1 of the same year, between 2,500 
 and 3,000 employees of fifteen department 
 stores in Buffalo went out on strike. These 
 33
 
 MEDIATION AND ARBITRATION 
 
 employees had not previously been organized, 
 and the strike was called under the guidance 
 of local Socialist leaders, who, however, 
 withdrew very early. When the state medi- 
 ators intervened they found that some of the 
 strikers had returned to work but a large 
 number of clerks and drivers were still on 
 strike and had been organized as local unions 
 of the national unions in their respective oc- 
 cupations. The employers refused to confer 
 with any representatives of the two local 
 unions because the clerks and drivers had 
 gone on strike without giving adequate time 
 for negotiations and because of "the unrea- 
 sonableness of their demands." The clerks 
 and drivers refused to return to work unless 
 concessions were made to them. After sev- 
 eral days the mediators succeeded in getting 
 promises from the employers that they would 
 make certain changes in hours, wage rates, 
 and other conditions of employment, if the 
 34
 
 MEDIATION 
 
 strikers would return. These concessions 
 were then made known by the mediators to 
 mass meetings of the clerks and drivers, and 
 the strikers voted to return to work. 
 
 4. The service of the mediators has not 
 been confined to getting the parties to do 
 what each was really willing to do and would 
 have granted directly if it had been accus- 
 tomed to dealing frankly with the other side. 
 The mediators in all three States have se- 
 cured settlements by persuading one side or 
 both to concede something which would not 
 otherwise have been granted. In fact, the 
 most successful mediators in all three States 
 have seldom given up a case in which their 
 mediation was accepted, without as a last 
 resort recommending terms to the parties. 
 Sometimes concessions have been made in 
 this manner because the side which was will- 
 ing to concede preferred to accept the recom- 
 mendation of the mediator rather than to 
 35
 
 MEDIATION AND ARBITRATION 
 
 grant the same thing directly to the other 
 party, but in many cases the recommenda- 
 tions have been accepted because the em- 
 ployer or the men did not wish to prolong a 
 strike by the refusal of terms which an out- 
 sider of the experience, reputation, official 
 position and personality of the mediator had 
 decided would be a fair settlement. 
 
 In May, 1913, a threatened strike of ma- 
 chinists employed in a plant in Springfield 
 was averted through the mediation of the 
 Massachusetts board and the settlement was 
 effected principally through the acceptance 
 by the company of a suggestion made by the 
 board. The company was a member of a na- 
 tional association of employers which is op- 
 posed to recognizing the machinists' union 
 and it was alleged that a number of ma- 
 chinists had been discharged on account of 
 their activity in the formation of a local 
 union of machinists. An officer of the na- 
 36
 
 MEDIATION 
 
 tional union of machinists took up the case, 
 but was unable to secure an interview with 
 the employer. A strike was then decided 
 upon. 
 
 At this point the board intervened. The 
 employer informed the board that the man- 
 ager of the labor bureau of the employers' 
 association had full power to effect a settle- 
 ment of the difficulty and that all negotia- 
 tions must be with him. Upon interviewing 
 the manager, the board found him willing to 
 attend a conference with any representative 
 of the workers whom the board wished to in- 
 vite. A conference was then held, but no 
 agreement was reached. The board then 
 drew up a notice which it suggested that the 
 employer should sign and post in his factory. 
 This notice stated that there would be no dis- 
 crimination against any workman "because 
 of any affiliation," that the company would 
 rectify discrimination when proved, and that 
 37
 
 MEDIATION AND ARBITRATION 
 
 the company would "receive a committee 
 representing the employees of any one de- 
 partment for the purpose of a friendly dis- 
 cussion of any real or fancied grievance." 
 After consideration this was agreed to by the 
 employer. The cases of certain men who 
 had been discharged were then taken up and 
 disposed of and the proposed strike was 
 called off. 
 
 5. Sometimes the mediator's recommenda- 
 tion is one that settles the particular dispute 
 to the satisfaction of both parties, not merely 
 a recommendation that one side grant some- 
 thing to the other that it is reluctant to con- 
 cede. Neither party is asked to sacrifice the 
 point it believes to be at stake; the appar- 
 ently conflicting interests are harmonized. 
 The opportunity to render this kind of serv- 
 ice is naturally greatest in disputes between 
 parties who have not been dealing with each 
 other under a well developed system of col- 
 38
 
 MEDIATION 
 
 lective bargaining. The parties themselves 
 are not able to find a solution of the difficulty, 
 and there appears to be no settlement open 
 which does not involve the giving up by one 
 side of more than it is willing to give up with- 
 out a fight. In such cases, the experienced 
 mediator, through repeated handling of simi- 
 lar cases and an understanding of what each 
 side is trying to secure, may be able to find a 
 solution that safeguards the interests of both 
 parties. 
 
 The Massachusetts board rendered this 
 type of service in a discharge case in Boston, 
 in February, 1913. An engineer had been 
 discharged under circumstances that led the 
 engineer and his union to contend that he had 
 been dismissed unjustly. The employer re- 
 fused to reinstate the man and a strike was 
 threatened. The board suggested that the 
 difficulty be met by the company's agreeing 
 to reinstate the man on the understanding 
 39
 
 MEDIATION AND ARBITRATION 
 
 that he would immediately give notice of 
 resignation. The employer was willing to 
 reinstate him provided that he did not have 
 to continue to employ him. The engineer, 
 on the other hand, did not care to remain 
 with that employer, though he was unwilling 
 to accept the stigma of discharge. Thus 
 both parties were satisfied with the terms of 
 settlement. 
 
 Another example may be taken from the 
 recent history of the Massachusetts board. 
 A contracting company with headquarters in 
 Boston was putting up a building in another 
 Massachusetts city and had subcontracted 
 the steam-fitting work. The Boston com- 
 pany had not stipulated that the subcontrac- 
 tor should employ only union men and the 
 subcontractor had employed some non- 
 unionists. A strike was called against the 
 subcontractor, which soon included the em- 
 ployees of the company in other trades on 
 40
 
 MEDIATION 
 
 that building and threatened to spread to its 
 building work in other cities. The contract- 
 ing company was quite willing that the sub- 
 contractor should employ union steam-fitters 
 only, but under its contract it was unable to 
 force him to discharge the non-union men, 
 nor could it take away the work from him 
 without rendering itself liable for damages 
 for breach of contract. The board sug- 
 gested that on promise from the company to 
 require in all its later contracts with sub- 
 contractors that only union men should be 
 employed, the company's work on that par- 
 ticular building should.be allowed to go for- 
 ward. This compromise was accepted by 
 both sides. 
 
 6. Finally, the mediators should be able to 
 suggest settlements which do not merely dis- 
 pose of individual cases but permanently 
 compose the hitherto apparently conflicting 
 interests involved in an important issue. 
 41
 
 MEDIATION AND ARBITRATION 
 
 This is the highest type of service which the 
 mediator performs. There is much opposi- 
 tion to mediation on the ground that media- 
 tion means a mere compromise for the par- 
 ticular case, that it results merely in the 
 patching up of one break without removing 
 the difficulty which caused it and which will 
 undoubtedly cause others like it. This view 
 often leads one or both sides to prefer to fight 
 the issue out in the hope of establishing com- 
 pletely their own positions and so disposing 
 of that question for some time to come. The 
 mediator is doing constructive service of the 
 highest kind when he finds for the parties a 
 way out which is not merely a compromise, 
 but a real solution of the problem, one, for 
 example, which safeguards the workman 
 from industrial tyranny or preserves his 
 vested interest in the trade and at the same 
 time leaves the employer free to safeguard 
 himself against incompetent workers and to 
 42
 
 MEDIATION 
 
 improve in legitimate ways the processes of 
 production. 
 
 The securing of settlements of this type 
 has not been frequently achieved in the past 
 by state mediators. The example of service 
 of this kind which comes most readily to mind 
 is the work of Mr. Louis D. Brandeis in set- 
 tling the long strike in the cloak, suit and 
 skirt industry in New York City in 1910. 
 The issue on which the parties split and which 
 stood apparently hopelessly in the way of a 
 settlement was the insistence of the unions on 
 the closed shop and of the employers on free- 
 dom to employ whom they chose. Mr. 
 Brandeis brought them to agreement finally 
 on the basis of the "preferential union shop." 
 
 The chance to render service of this kind 
 will not often present itself in differences be- 
 tween parties who have been working to- 
 gether under well developed systems of col- 
 lective bargaining. It may, however, occur 
 43
 
 MEDIATION AND ARBITRATION 
 
 even there from time to time. It is only 
 rarely that the employers and the men in one 
 trade are familiar with the devices used in 
 other trades in handling the same trouble- 
 some questions, as, for example, that of dis- 
 charges. A mediator who is thoroughly ac- 
 quainted with the devices successfully em- 
 ployed in the various trades in handling the 
 particular issue involved in a serious dispute, 
 and who has faced the same problem re- 
 peatedly in other cases, should be of great 
 assistance to parties who are seeking a real 
 solution of their difficulty. The possibility 
 of rendering this high type of constructive 
 service is real, and it furnishes one of the best 
 reasons for the State's attempting to put at 
 the disposal of the industrial public the serv- 
 ices of high-class experienced mediators. 
 
 LIMITATIONS OF MEDIATION 
 
 On the other hand, too much must not be 
 expected of mediation. It cannot be ex- 
 44
 
 MEDIATION 
 
 pected that the mediators shall always pre- 
 vent the occurrence of strikes or lockouts or 
 that they shall bring all stoppages to a 
 speedy termination. The experience of the 
 mediators in the States studied indicates that 
 there are several classes of disputes in which 
 mediation is likely to be of little effect. 
 
 Successful mediation requires that the em- 
 ployer shall deal with the representatives of 
 the workers in the presence of or through the 
 mediator, and if an employer is resolved not 
 to deal with his workers as a body, either di- 
 rectly or indirectly, he will not accept media- 
 tion. If the employer is a member of an as- 
 sociation which will support him in his re- 
 fusal to treat with his workmen as a body, the 
 possibility of successful mediation is even 
 smaller. In these cases there is no chance 
 for successful mediation until the strike has 
 lasted so long that the employer is driven to 
 accept a settlement with the strikers as a 
 45
 
 MEDIATION AND ARBITRATION 
 
 body. In such circumstances a settlement 
 frequently can be secured by mediation 
 earlier than it would be sought or accepted 
 by direct negotiation. But if the workmen 
 are unable to hold out so long there is little 
 chance that mediation will be effective. 
 
 It could hardly have been expected, for 
 example, that the mediation of the Massa- 
 chusetts board would be successful at the 
 outbreak of the Lawrence textile strike in 
 1912. The representatives of the employers 
 on the ground were not accustomed to col- 
 lective bargaining ; they were not accustomed 
 to acting together; and they were unable or 
 unwilling to proceed on their own initiative, 
 without orders from those who controlled the 
 companies financially. Moreover, the real 
 strike leaders were officials of the Industrial 
 Workers of the World whom the employers' 
 agents looked upon as revolutionists and 
 were determined not to deal with or to recog- 
 
 46
 
 MEDIATION 
 
 nize in any way, directly or indirectly. The 
 strike had to go on until the employers were 
 willing to deal with the strikers as a body and 
 the latter were willing to return on terms 
 that the employers could afford to grant. 
 
 For much the same reasons, the New York 
 bureau found it impossible to bring about a 
 settlement of a lockout of steel workers in 
 Syracuse, N. Y., in May, 1913. The em- 
 ployers closed the mill because a labor or- 
 ganization had been formed among the em- 
 ployees, and posted a notice announcing that 
 the mill would remain closed until it could be 
 run by men who would signify their loyalty 
 to the company by sending in their signa- 
 tures individually. The company also in- 
 sisted that the men should give up their union 
 membership before it would employ them. 
 The men, on the other hand, refused to give 
 up their union membership or to go back 
 except in a body, though they did not insist 
 47
 
 MEDIATION AND ARBITRATION 
 
 on recognition of their union. Both sides 
 understood the issue and neither would com- 
 promise. Therefore the bureau was unable 
 to effect a settlement. 
 
 The chief mediator of Ohio recently en- 
 countered a similar situation. The Flint 
 Glass Workers' Union, in an attempt to 
 unionize a glass factory in Columbus, had 
 declared a strike. The employer refused to 
 recognize the national union, declaring that 
 he would close the factory before he would 
 settle with the union. The union, which has 
 a national wage scale made in agreement with 
 a national association of glass manufac- 
 turers, insisted that the only logical basis of 
 settlement was the agreement of the manu- 
 facturer to pay the same wages and grant 
 the same conditions as are agreed to by the 
 association. Neither side was willing to 
 compromise and the mediator could do noth- 
 ing to bring about a settlement. 
 48
 
 MEDIATION 
 
 In another class of cases mediation is not 
 likely to be successful because there is little 
 need for the kind of help that the mediator 
 brings to the situation. In this class of cases 
 the parties are accustomed to dealing with 
 each other in joint conferences and the strike 
 or lockout is resorted to only after a lengthy 
 period of conferences. Each side knows the 
 other's position, but is determined not to ac* 
 cept it, at least not without a fight. Either 
 can secure a conference at any time after the 
 strike or lockout has been inaugurated, if it 
 has any further proposal to make, and so does 
 not need the services of the mediator for 
 that purpose. If both are thus determined 
 to fight it out to a finish there is little chance 
 for a mediator to avert or cut short the strug- 
 gle unless he can find a solution acceptable 
 to both parties, and for some issues that 
 is extremely difficult. If he is unable to 
 find such a solution, he cannot hope to do 
 49
 
 MEDIATION AND ARBITRATION 
 
 more than bring the two sides into confer- 
 ence when one is so crippled as to be ready 
 to concede something but not willing to ask 
 for terms, and thus secure a settlement 
 slightly earlier than would have been pos- 
 sible without mediation. 
 
 CHARACTERISTICS OF A SUCCESSFUL SYSTEM 
 
 A plan embracing the constitution and 
 powers of a state agency of mediation is 
 here outlined with respect to the officers who 
 should mediate, the considerations which 
 should govern their appointment, and the de- 
 gree of discretion which should be left them 
 as to whether and when to offer their services. 
 
 The Officers. — Mediation should be in- 
 trusted to a person or set of persons entirely 
 distinct from those who are designated to act 
 as arbitrators or to conduct public investiga- 
 tions. The function of the mediator cannot 
 be most successfully discharged when there is 
 
 50
 
 MEDIATION 
 
 a possibility that the mediator may be forced 
 later to pass judgment on the contentions of 
 the parties. 1 The plan of having a chief 
 mediator and assistants appears to be better 
 than that of having a board of three col- 
 leagues of equal rank. The nature of the 
 work of mediation is such that, other things 
 being equal, better results can usually be se- 
 cured through one man, availing himself, if 
 necessary, of the assistance of another man 
 or two other men, but following his own 
 judgment and giving a unity to the sug- 
 gestions and recommendations made to the 
 parties. 
 
 Obviously, it is much easier to secure one 
 man with the proper personal qualifications 
 for the work of mediation than to secure 
 three. Moreover, a greater continuity of 
 policy is possible under the chief mediator 
 plan, and reputation gained through past 
 
 1 See pp. 78, 94-95. 
 
 51
 
 MEDIATION AND ARBITRATION 
 
 services is more valuable when associated 
 with the name of an individual than with that 
 of a board or bureau. Finally, one man act- 
 ing with individual responsibility in all cases 
 will accumulate more valuable experience 
 and a more intimate acquaintance with men, 
 with the industries, and with the issues that 
 arise, than he would if acting as a member of 
 a board. These are the qualifications, other 
 than personality, which make for success in 
 mediation, and that plan should be adopted 
 which aids most in the development of them. 
 Appointment of the Mediators. — It is 
 hardly necessary to insist that the creation of 
 an agency of mediation will not secure the 
 desired results unless the mediators com- 
 mand the confidence of the employers and 
 workers in their ability and impartiality. If 
 this is to be gained everything which causes 
 the industrial public to mistrust the purposes 
 for which the mediation office is conducted or 
 52
 
 MEDIATION 
 
 the motives which govern the selection of the 
 mediators must be avoided. It is, therefore, 
 very important that the offices of chief medi- 
 ator and assistant mediator should be placed 
 above the belief that these offices are being 
 used as a reward for party services, expected 
 or past, or disposed of so as to "strengthen" 
 a particular political party in any way other 
 than through the faithful and capable per- 
 formance of their duties by the incumbents. 
 One of the chief obstacles to the usefulness 
 of state agencies of mediation and arbitra- 
 tion in the past has been the belief of a large 
 number of persons, workmen as well as em- 
 ployers, to whom their services have been of- 
 fered, that the positions of the members of 
 the boards or bureaus were "party jobs" and 
 that the members were trying to justify in 
 some way the existence of their sinecures or 
 attempting to secure a settlement which 
 would redound to the advantage of their re- 
 53
 
 MEDIATION AND ARBITRATION 
 
 spective political parties. It is very difficult 
 even for mediators of proved ability, fairness, 
 and tact to realize the full possibilities of 
 usefulness while the impression now prevail- 
 ing in many quarters as to the grounds of 
 their selection and the motives which guide 
 them in their intervention remains. Fur- 
 thermore, if any employer or group of 
 workers refuses to allow the state mediator 
 or mediators to intervene in a dispute, it 
 should not be possible that a real or alleged 
 disregard for the mediator or mediators as 
 mere party spoilsmen should be accepted by 
 any considerable body of citizens as a full or 
 even partial defense of the refusal. 
 
 The chief mediator should not only be free 
 from reasonable suspicion that he is a party 
 spoilsman, but should also have the confi- 
 dence of the employers and workers of the 
 State as to his knowledge and fairness in 
 dealing with industrial relations. The 
 54
 
 MEDIATION 
 
 standing of the office can not be guaranteed 
 in these respects by any mechanical plan of 
 selection, but it seems wise to place the selec- 
 tion of the chief mediator in the hands of a 
 board which deals with industrial relations 
 and which represents within its membership 
 the interests of the employers and the 
 workers of the State as such, but is intended 
 as a board to be partial to neither. The in- 
 dustrial commissions which have recently 
 been created in several of the states are in- 
 tended to be boards of this character and in a 
 State in which such a board exists it should 
 nominate the chief mediator. The selection 
 of the chief mediator by a board of this kind 
 would probably secure for this officer a bet- 
 ter standing with the employers and em- 
 ployees of the State than direct appointment 
 by the governor without such nomination. 
 Once appointed, the chief mediator should be 
 regarded as the head of an independent de- 
 55
 
 MEDIATION AND ARBITRATION 
 
 partment of the State Government and not 
 made responsible to any commission or other 
 department. His term of office should be of 
 sufficient length to give him independence. 
 
 New York has furnished an example, for 
 a number of years, of a bureau of mediation 
 working under unfavorable conditions sur- 
 rounding the appointment of its members. 
 Until the creation of the Industrial Com- 
 mission in 1915, the chief mediator and his 
 assistants were appointed by the Commis- 
 sioner of Labor and for a number of years 
 that office was held by men who had previ- 
 ously been trade union officers. The last 
 Commissioner of Labor to serve was an ex- 
 president of a national union. Moreover, 
 the four assistant mediators, all of whom have 
 been in office for several years, are men who 
 have at one time or another been connected 
 with labor organizations. 
 
 In many cases neither the previous union 
 56
 
 MEDIATION 
 
 affiliation of the assistant mediators nor the 
 fact that the chief mediator held his office 
 through appointment by an ex-president of a 
 labor union made them any the less accept- 
 able to the employers, but in many other 
 cases it did. A number of employers stated 
 in interviews that they assumed that the 
 mediators merely aimed to secure from the 
 employer the most favorable possible terms 
 for the men. An employer who holds this 
 opinion is not likely to give the mediator his 
 full confidence or to accept his suggestions. 
 On the other hand, many employers stated 
 that they found the mediators very fair. 
 For example, one of the mediators who was 
 formerly an officer of a labor organization 
 has acted a number of times as the third man 
 in boot and shoe price arbitrations in Brook- 
 lyn. The first time he served at the request 
 of the employers, with the acquiescence of 
 the men, and since then he has been called 
 57
 
 MEDIATION AND ARBITRATION 
 
 on as a matter of course by both parties. 
 
 The point urged here is that previous 
 trade union affiliation does not necessarily 
 disqualify a man as mediator. Many former 
 trade union leaders have made first-class 
 mediators in those cases in which their serv- 
 ices were accepted in good faith by both 
 parties, and they have, in fact, made them- 
 selves acceptable to many employers. But 
 in many cases the trade unionist is handi- 
 capped. It is easy to see that he would prob- 
 ably be much less acceptable to an employer 
 or association of employers opposed to deal- 
 ing with labor unions than a mediator who 
 had no union affiliations. The same objec- 
 tion lies also against a mediator who has not 
 been a unionist, if he holds office at the pleas- 
 ure of a chief who has been a prominent 
 union officer. 
 
 An illustration is found also in the his- 
 tory of the Ohio board. There was always 
 
 58
 
 MEDIATION 
 
 one trade union member on the board and for 
 many years a well-known ex-president of a 
 national union served as the representative 
 of the workers. This man was personally 
 well qualified to act in most cases, but he 
 found that his former trade union connec- 
 tion prejudiced many employers against him. 
 Entirely aside from their belief that he must 
 favor union recognition, they were reluctant 
 to deal with him because they felt that in re- 
 ceiving him they would be recognizing trade 
 unionism, inasmuch as he was admittedly the 
 representative of organized labor on the 
 board. Disputes involving the refusal of 
 employers to recognize unions have not been 
 unimportant in Ohio. In its 1912 report the 
 board gave as one of the chief causes of 
 strikes and lockouts "the refusal of certain 
 employers to recognize labor unions or deal 
 with the officers, committees, or other author- 
 ized representatives of their workmen in the 
 59
 
 MEDIATION AND ARBITRATION 
 
 adjustment of differences." As the ex- 
 president of a national union was the only 
 salaried member of the board and conse- 
 quently the one who naturally first attempted 
 to get in touch with the parties, the opposi- 
 tion of so many of the employers to receiv- 
 ing him in good faith made it much more dif- 
 ficult for the board to get good results. 
 
 Similarly, a man who had been a non- 
 union employer or the representative of a 
 non-union employer or of an "open shop" 
 organization would be unacceptable to a 
 union as a mediator. It would probably be 
 even more fatal to choose such a man than to 
 choose a trade unionist. The undesirability 
 of choosing the chief mediator from the trade 
 union ranks is emphasized at greater length 
 merely because union men are actually chosen 
 much more frequently as state mediators 
 than are representatives of non-union or 
 open shop employers. 
 60
 
 MEDIATION 
 
 The chief mediator should be allowed to 
 nominate his assistants, if assistants are 
 needed. If, as is assumed, he has had no 
 previous trade union affiliations, he will find 
 it helpful to have one assistant who has been 
 a member of a labor organization and has in- 
 timate knowledge of the viewpoint and poli- 
 cies of labor organizations. On the other 
 hand, he should also have the opportunity of 
 securing the assistance of a man who has been 
 an employer, or a manager or superintend- 
 ent, and has thus had experience in employ- 
 ing and dealing with men. Until such time 
 as the chief mediator gains the full confi- 
 dence of the parties to controversies he will 
 find these men of great assistance in opening 
 the way for the acceptance of his services. 
 Even after the mediator has won the general 
 confidence of the industrial public, cases will 
 arise in which unduly suspicious or obstinate 
 parties can more successfully be brought to 
 61
 
 MEDIATION AND ARBITRATION 
 
 deal with the other party by an official who 
 it is thought understands their case. The 
 assistant mediators can be used also to make 
 the preliminary inquiries in disputes, and the 
 less serious or less difficult of these they will 
 probably be able to settle without calling in 
 the chief mediator. This plan has been tried 
 in Ohio by the chief mediator and works very 
 well. 
 
 Powers of Mediation. — It is important 
 that the mediators should be empowered to 
 offer their services before a strike or lockout 
 actually occurs, if in the judgment of the 
 chief mediator a stoppage is imminent. 
 Provision should be made that either party 
 may request intervention before a strike or 
 lockout. Both the Massachusetts and the 
 New York laws put cases in which a strike 
 or lockout "is seriously threatened" on an 
 equality, in this respect, with those in which 
 a strike or lockout has actually occurred. 
 62
 
 MEDIATION 
 
 The same is true of the old Ohio law, and 
 under the present Ohio law the chief media- 
 tor in the exercise of his discretion has 
 intervened in such cases. In all three States 
 the mediators are unanimous in the opinion 
 that many disputes which result in strikes or 
 lockouts could be amicably adjusted if the 
 mediators had knowledge of the trouble be- 
 fore the strike or lockout occurs. In all 
 three States, also, the mediators follow their 
 own judgment as to whether a strike or lock- 
 out is really seriously threatened when in- 
 formed that such is the case. That discre- 
 tion should be left them. 
 
 If mediation has not been requested by one 
 or both of the parties, the mediators should 
 be allowed to use their discretion as to 
 whether mediation should be offered, and if 
 so, at what time, even in cases in which strikes 
 or lockouts have actually occurred. It is not 
 desirable that mediation should be offered in 
 63
 
 mediation; and arbitration 
 
 all cases immediately upon the occurrence of 
 the strike or lockout. A number of strikes 
 can be and are settled by the parties involved 
 after a few days' cessation of work, without 
 any serious inconvenience to the public from 
 the stoppage. It is not desirable that the 
 state mediators should intervene in such 
 cases. On the other hand, in another large 
 class of cases attempted mediation is almost 
 certain to be fruitless in the first week or ten 
 days of the strike or lockout. Sometimes, 
 when the strikers are but newly organized, 
 the union leaders wish to keep them out for 
 several days at least, in order to further the 
 work of organization and to test their union- 
 ism under fire. In other cases, each side 
 knows the other's position and each is deter- 
 mined not to yield while it sees a good chance 
 for a complete victory. Unless a public 
 utility is involved it would seem better to 
 withhold the proffer of mediation until the 
 
 64
 
 MEDIATION 
 
 parties are in a mood to cooperate in the at- 
 tempt to secure an adjustment; nothing is to 
 be gained for the principle of mediation by 
 prematurely urging mediation upon parties 
 who are determined not to settle at that time. 
 It seems better, therefore, not to impose the 
 obligation of immediate intervention in all 
 cases coming to the knowledge of the medi- 
 ators. The mediators should be required to 
 offer their services as soon as may be prac- 
 ticable in all cases in which their intervention 
 is requested by one or both parties ; and em- 
 powered to intervene in other cases at the dis- 
 cretion of the chief mediator.
 
 II 
 
 INVESTIGATION 
 
 The treatment of public investigation and 
 public recommendation as a means of termi- 
 nating labor disputes in which mediation has 
 failed must, as in the case of arbitration, be 
 confined practically to Massachusetts and 
 New York. The present Ohio law, adopted 
 in 1913, makes no specific provision for in- 
 vestigation, and the powers conferred upon 
 the Board of Arbitration and Conciliation by 
 the old law, of making an inquiry and pub- 
 lishing a decision on the merits of every dis- 
 pute which it was unable to bring to a con- 
 clusion, were practically not exercised by 
 the board. The Massachusetts and New 
 York laws have produced a number of public 
 investigations and subsequent recommenda- 
 66
 
 INVESTIGATION 
 
 tions which have led to settlements, and these 
 results indicate that much can be accom- 
 plished by investigation and recommendation 
 if these are made by boards in which the 
 parties and the public have confidence. The 
 experience of New York and Massachusetts 
 in this field under their existing laws, when 
 compared with the results obtained in Canada 
 under the Industrial Disputes Act and 
 with the results obtained by private con- 
 ciliation boards, leads to the conclusion that 
 the work of investigation and, if necessary, 
 recommendation can most successfully be 
 performed by a special board created for 
 that purpose in each case. A plan for the 
 constitution of special boards along these 
 lines is therefore suggested. 
 
 THE EXISTING LAW 
 
 The Massachusetts law imposes upon the 
 State Board of Conciliation and Arbitration 
 67
 
 MEDIATION AND ARBITRATION 
 
 the obligation of investigation in every case 
 in which the mediation of the board is not fol- 
 lowed by a settlement, for the purpose of as- 
 certaining the cause of the strike or lockout 
 and of placing the responsibility or blame 
 for its existence or continuance. Since 1914 
 the board has also been required by law to 
 "make and publish a report finding such 
 cause and assigning such responsibility of 
 blame," "unless a settlement of the contro- 
 versy is reached." Prior to 1914 the mak- 
 ing and publication of a report stating the 
 cause and assigning blame was optional with 
 the board, though the board was under obli- 
 gation to conduct an investigation in all such 
 cases. 
 
 In New York a "board of mediation and 
 arbitration" investigates in cases in which the 
 mediators are unable to secure a settlement, 
 if ordered to do so by the Industrial Com- 
 mission. 1 For these investigations the board 
 
 68
 
 INVESTIGATION 
 
 is made up of the chief mediator and two 
 other officers of the department, designated 
 by the commission ; * as a matter of practice 
 two of the assistant mediators are chosen for 
 this duty. In both Massachusetts and New 
 York the board, when conducting an investi- 
 gation, has power to compel the appearance 
 of witnesses, to require testimony under 
 oath, etc. 
 
 RESULTS 
 
 In neither Massachusetts nor New York 
 has the power of conducting public investi- 
 gations been widely used. The great bulk 
 of the cases in which mediation fails to secure 
 a settlement have been allowed to pass with- 
 out such formal investigation and report. 
 This is because the mediators believe that in 
 these cases no useful purpose would be served 
 by a formal investigation. The members of 
 
 1 Until May 22, 1915, by the Commissioner of 
 Labor. 
 
 69
 
 MEDIATION AND ARBITRATION 
 
 the board have been averse to holding up one 
 side to public disapproval, particularly after 
 the issue has been virtually decided. They 
 have felt that unless an investigation would 
 lead to an agreement it would be bad 
 policy for a board primarily constituted for 
 mediation to hold a public investigation 
 which could serve only the purpose of find- 
 ing one side or both blameworthy. The 
 same considerations led the old Ohio board 
 to refrain from using its powers of public in- 
 vestigation and recommendation. There- 
 fore, until very recently the policy in both 
 Massachusetts and New York has been to 
 conduct no further investigation than that 
 necessarily involved in mediation, save in 
 very exceptional cases. 
 
 In the past few years the Massachusetts 
 board has been much more active in holding 
 formal investigations with public hearings, 
 in cases in which mediation has failed. It 
 
 70
 
 INVESTIGATION 
 
 was in line with this stiffening of policy that 
 the law was changed in 1914 so as to make the 
 publication of a report, as well as an inves- 
 tigation in such cases, compulsory. Even 
 now, however, the board does not conduct 
 public investigations and give its reports 
 wide publicity in all cases in which mediation 
 fails to result in a settlement. If the board's 
 more or less informal investigation and direct 
 suggestions to the parties result in a settle- 
 ment no further publicity is given the find- 
 ings as to cause or blame. For the past 
 several years it has been the policy of the 
 board to make a "recommendation" to the 
 parties after the investigation as to what 
 should be done to settle the dispute, although 
 it is not required by the law to do so. To 
 frame such constructive recommendations, 
 rather than to assign blame, has usually been 
 its purpose in conducting its investigations, 
 and in most of these cases the recommenda- 
 71
 
 MEDIATION AND ARBITRATION 
 
 tions of the board have been accepted by the 
 parties as the basis of a settlement. 
 
 The value of a public investigation and the 
 publication of its findings by the board in an 
 important strike was illustrated in the Bos- 
 ton street car strike of 1912. This strike 
 followed the discharge of a number of men 
 apparently for joining a newly formed union 
 or for aiding in its organization. The com- 
 pany replaced a large proportion of the men 
 by strike-breakers and attempted to main- 
 tain its service. It took the ground that it 
 had filled the places of the men who had left 
 and was operating its cars satisfactorily and 
 that there was no strike on its lines. It re- 
 fused, therefore, to confer with representa- 
 tives of the strikers. The board communi- 
 cated with the parties several times, but the 
 company refused to confer with the strikers. 
 The workers were willing to arbitrate but 
 the company was not. About three weeks 
 
 72
 
 INVESTIGATION 
 
 after the strike was inaugurated the strikers 
 requested the board to hold an investigation. 
 
 The board held a series of hearings and 
 about six weeks after the strike began made 
 a report. In its report the board stated that 
 the men were justified in believing that many 
 of the employees had been discharged for 
 joining the union or for activity in its forma- 
 tion, and that "many of the company's cars 
 are being operated by men whose conduct 
 does not meet the approval of the traveling 
 public." It added a recommendation that 
 the parties attempt by conference to arrive 
 at an amicable settlement. About a week 
 later an agreement was reached by the com- 
 pany and the representatives of the union, in 
 which it was provided that certain matters 
 with reference to which the parties were un- 
 able to agree should be left to the board for 
 final decision. 
 
 In 1913 the board in at least two cases sent 
 73
 
 MEDIATION AND ARBITRATION 
 
 a recommendation to the strikers, after con- 
 ducting 1 an investigation, to call the strike off. 
 In both cases the strikers were for the most 
 part immigrants who did not speak English 
 and had left their work without first formu- 
 lating and presenting their grievances. In 
 neither case did they have an organization be- 
 fore the strike, and both strikes were con- 
 ducted by leaders who represented the In- 
 dustrial Workers of the World. The 
 employer refused in both cases to deal with 
 the strike leaders. The board's recommen- 
 dation was made in both cases in the form of 
 a letter to the strikers. In one case the 
 strikers returned to work at once; in the 
 other the strike collapsed about a week after 
 the board made its recommendation. 
 
 Where the issue is more specifically one of 
 fact, an investigation is very likely to lead 
 to a recommendation which both sides will 
 accept. Two of the cases on which the 
 
 74
 
 INVESTIGATION 
 
 board made specific reports in 1914 were dis- 
 putes over discharges. In one case, involv- 
 ing milk-wagon drivers for a Boston com- 
 pany, the decision was adverse to the strikers. 
 In the other, the board recommended that 
 striking laundry workers in Brockton and 
 their employer submit the discharges in con- 
 troversy to arbitration. In both cases the 
 recommendations were accepted. In wage 
 disputes, too, an investigation is likely to 
 lead to a settlement by bringing out how the 
 wages paid compare with wages paid else- 
 where for similar work or how wages have 
 advanced as compared with the cost of living. 
 If made upon application from both par- 
 ties, a report on the facts found, which does 
 not deal with the cause of the strike nor at- 
 tempt to place responsibility, may have prac- 
 tically the effect of an arbitration. In 1914, 
 the board made a special report "in the mat- 
 ter of the joint application of" a company 
 75
 
 MEDIATION AND ARBITRATION 
 
 "and its Dye House Hands for an investiga- 
 tion and a report." This investigation cov- 
 ered wages, output of the workers, and con- 
 ditions. The board employed experts 
 nominated by the parties and "heard the 
 parties by their duly authorized representa- 
 tives" as it does in arbitration proceedings 
 on similar issues in the boot and shoe indus- 
 try. It did not recommend that any par- 
 ticular wages should be paid, but reported 
 that it found the conditions and wages at 
 least as good as those given by the company's 
 competitors and that therefore it had not 
 found that the company "pays a wage which 
 is unfair to its employees as dye-house 
 hands." Both parties accepted this finding 
 as conclusive; in fact it was understood be- 
 fore the investigation that they would. The 
 emploj T er had stated that he would give as 
 good conditions and wages as the board 
 found in the shops of other employers. This 
 76
 
 INVESTIGATION 
 
 was, therefore, an arbitration in everything 
 but name, although the employer objected to 
 accepting "arbitration." 
 
 This case suggests the possibilities of a 
 kind of informal arbitration in cases in which 
 the issue can be decided by the determination 
 of matters of fact which are in dispute. 
 This procedure is possible while a strike con- 
 tinues, whereas under the law arbitration by 
 the board is not. There is nothing in the 
 Massachusetts law, however, specifically per- 
 mitting the board to investigate and report 
 except to ascertain the cause of a strike and 
 assign responsibility or blame. 
 
 In New York, also, investigation has been 
 resorted to more frequently in the past few 
 years than in the earlier years. Commis- 
 sioner Lynch stated in his first report in 1913 
 that it would be his policy to order investiga- 
 tions in those disputes in which there is a 
 large public concern. In pursuance of this 
 77
 
 MEDIATION AND ARBITRATION 
 
 policy public investigations were held in the 
 next two years in several strikes involving 
 public utilities or affecting the main industry 
 of 'a community. A lockout of employees 
 for membership in a labor organization, also, 
 was investigated. In most of the cases a 
 settlement followed the investigation, but in 
 at least two cases the employers rejected the 
 recommendations of the board of investiga- 
 tion. In one of these the employers publicly 
 attacked the recommendation as against the 
 evidence, and declared that the board was 
 prejudiced in favor of the men. The trade 
 union affiliations of two of the three members 
 of the board and the fact that the Commis- 
 sioner of Labor who ordered the investiga- 
 tion was an ex-president of a national trade 
 union were cited as indicating that the board 
 was not impartial. In another case — the 
 lockout in the Syracuse steel mill referred to 
 above — the Commissioner of Labor ordered 
 
 78
 
 INVESTIGATION 
 
 an investigation after the mediators had 
 failed to secure a settlement. The board of 
 investigation recommended that the com- 
 pany reemploy the members of the union 
 without discrimination against them because 
 of union membership, but the company 
 ignored the recommendation. 
 
 It thus appears that the use of the power 
 of investigation has hastened settlements in 
 Massachusetts and — in a much smaller num- 
 ber of cases — in New York. This has come 
 about in two ways. The investigation has 
 settled disputed points of fact or has shown 
 the two sides that they were nearer together 
 than they thought, and has consequently led 
 to an agreement through further mediation 
 or through direct negotiation. In other 
 cases, the investigation has led one or both 
 sides, usually one side, to recede from a po- 
 sition which it did not care to maintain in 
 the full light of publicity. 
 79
 
 MEDIATION AND ARBITRATION 
 
 In some cases the threat of investigation 
 has undoubtedly led employers to accept 
 terms of settlement which they considered 
 unfair, in order to avoid having business af- 
 fairs not directly connected with labor mat- 
 ters given publicity. This danger should 
 not exist nor should coercion of this char- 
 acter be exercised. The only pressure which 
 can properly be exerted through investiga- 
 tion is that of public opinion concentrated 
 upon a recommendation believed by the 
 public to be a fair basis of settlement. 
 
 PLAN FOR BOARDS OF MEDIATION AND 
 INVESTIGATION 
 
 The experience of Massachusetts and New 
 York leads to the conclusion that it would 
 be very useful to make provision in all indus- 
 trial States for the appointment of a board 
 to hold an investigation, report on the salient 
 facts, and make recommendations in any case 
 in which such an investigation seems likely 
 
 80
 
 INVESTIGATION 
 
 to hasten a settlement. The occasion of the 
 appointment of the board, and its constitu- 
 tion, plan of action, and powers will be dis- 
 cussed in order. 
 
 Occasion of Appointment. — The decision 
 whether an investigation should be made af- 
 ter the failure of mediation ought to rest with 
 the chief mediator. This officer, after his 
 work in the case, is better qualified than any- 
 one else to decide whether investigation and 
 recommendation are likely to be helpful in 
 restoring industrial peace. Moreover, the 
 right to call for an investigation, if the par- 
 ties are inclined to be unreasonable, will give 
 him a stronger position as a mediator in 
 cases in which a settlement is delayed 
 through obstinacy rather than in defense of 
 a principle. 
 
 Constitution of Board. — Such investiga- 
 tions should be intrusted to special boards of 
 three persons. One member should be nom- 
 81
 
 MEDIATION AND ARBITRATION 
 
 inated by each party to the controversy, but 
 should not himself be involved in it, and these 
 two should select a third. If either side fails 
 to select a representative, or the two fail to 
 select a third within a specified time, the 
 State Board of Arbitration should make the 
 selection. 
 
 There are several reasons why investi- 
 gations should be conducted by special 
 boards and not by the state mediators or by 
 the State Board of Arbitration. In the first 
 place, if a public investigation results in a 
 recommendation displeasing to one of the 
 parties, the acceptability of the mediators or 
 arbitrators in the discharge of their main 
 functions may be seriously impaired. The 
 function of the mediator is of primary im- 
 portance and his reputation for fairness 
 should not be put in jeopardy by requiring 
 him to make decisions on disputes. The 
 Board of Arbitration, as is explained in the 
 82
 
 INVESTIGATION 
 
 next chapter, renders its service by passing 
 on questions submitted to it voluntarily by 
 both sides. Moreover, the mere fact that 
 mediation may be followed by an investiga- 
 tion in which the mediator will appear in 
 the role of an investigator would prevent 
 the mediator from securing those confiden- 
 tial relations with the parties which are es- 
 sential to the success of his work as media- 
 tor. 
 
 Secondly, a special board made up in this 
 way has an important advantage in that it 
 gives each side a direct representative on the 
 board. Another opportunity is thereby pre- 
 sented for representatives of the two sides to 
 agree on terms acceptable to their respective 
 sides before the investigation is carried to the 
 point of a recommendation. Practically, 
 the appointment of the special board offers 
 another chance for joint conferences between 
 persons who are representatives of the sides 
 83
 
 MEDIATION AND ARBITRATION 
 
 but not parties to the dispute. The expe- 
 rience of .trades governed by agreements 
 which provide for the reference of disputes 
 to joint committees made up of the same 
 number of disinterested persons from each 
 side shows that the possibilities of this 
 method of reference in disposing of disputes 
 are very great. Moreover, even if the two 
 representatives cannot reach an agreement 
 by themselves they may be brought into 
 agreement by the chairman acting as a 
 mediator. For this reason the board should 
 be termed a board of "mediation and investi- 
 gation," or of "conciliation and investiga- 
 tion" as in Canada. In the operation of the 
 Canadian Industrial Disputes Act the chair- 
 man of the board has in many cases brought 
 the other two members into an agreement on 
 a recommendation. The success of the 
 boards as agencies of conciliation is due 
 largely to the fact that so many of the boards 
 84
 
 INVESTIGATION 
 
 have had as chairmen persons who had pre- 
 viously acted in that capacity. 
 
 Publication of Recommendations. — If no 
 agreement results during the investigation, 
 the report of the board of mediation and in- 
 vestigation, including its recommendations, 
 should be transmitted to the parties and 
 made public. The parties should be invited 
 to a conference with the board at which the 
 recommendations are explained and the 
 grounds on which they are based stated. If 
 the parties accept the recommendations of 
 the board, provision should be made for con- 
 vening the board later if any dispute as to 
 the meaning of the terms of the recommenda- 
 tions arises. 
 
 Powers of the Board. — The board of medi- 
 ation and investigation should be given the 
 same powers of investigation as are now con- 
 ferred on boards of investigation in Massa- 
 chusetts and New York. The expenses of 
 85
 
 MEDIATION AND ARBITRATION 
 
 the investigation, including a proper per 
 diem allowance to the members of the board, 
 should be paid by the State. 
 
 In certain classes of disputes, such as 
 those affecting transportation agencies and 
 other public utilities, the public is deeply 
 concerned that there shall be no interruption 
 of service. It is not proposed to prohibit 
 strikes or lockouts in these cases but it is 
 believed that the adoption of the plan here 
 outlined would greatly minimize, if it did 
 not entirely prevent such interruptions. 
 Great pressure would rest upon both parties 
 to refrain from hostilities until after the 
 board of mediation and investigation had 
 made its report, since any other course would 
 bring public condemnation. The recom- 
 mendations made by the board would also 
 become a rallying point for public opinion, 
 if the public had confidence in the board. 
 Experience up to the present has not clearly 
 
 86
 
 INVESTIGATION 
 
 established that legal prohibitions would be 
 more effective in preventing interruptions 
 of work. Both in Australasia and in Can- 
 ada such interruptions have occurred in spite 
 of laws prohibiting them. 
 
 In 1912, Sir George Askwith, Chairman 
 of the Industrial Council of the United 
 Kingdom, who has had an extensive experi- 
 ence in dealing with industrial disputes, 
 made a study of the operation of the Cana- 
 dian Industrial Disputes Act. In his re- 
 port to the Imperial Government on the 
 subject he expressed the following views as 
 to the compulsory features of the act: 
 
 It will have been gathered from the preceding 
 explanation of the working of the Act that where 
 it was frankly accepted as a means of preventing 
 disputes it has worked extremely well, but where, 
 for reasons, some apparent and others which can 
 only be guessed at, its introduction has been re- 
 sented, it has not succeeded to the same extent. 
 In such latter cases where, by the imposition of 
 penalties, efforts have been made to enforce the 
 
 87
 
 MEDIATION AND ARBITRATION 
 
 Act the results have not been satisfactory. . . . 
 
 The question then arises, what is the real value 
 of the Act, and can any points in the Act be suit- 
 ably adapted to this country? Is the restriction 
 upon the right of proclaiming a lockout or strike 
 so much of the essence of the Act as to make the 
 Act of no effect if such restrictions were not com- 
 pulsory? And do the penalties which are pro- 
 posed to be enforced for breach of the restrictions 
 of the Act add to its value? 
 
 In my opinion the real value of the Act does not 
 lie in either of these propositions, and certainly 
 not in the second. The pith of the Act lies in 
 permitting the parties and the public to obtain 
 full knowledge of the real cause of the dispute, 
 and in causing suggestions to be made as impar- 
 tially as possible on the basis of such knowledge 
 for dealing with the existing difficulties, whether a 
 strike or lockout has commenced or not. This 
 action on behalf of the public allows an element of 
 calm judgment to be introduced into the dispute 
 which, at the time, the parties themselves may be 
 unable to exercise.
 
 Ill 
 
 ARBITRATION 
 
 Except in Massachusetts, but few disputes 
 have been submitted to the state board for 
 arbitration. In New York no case has been 
 submitted to the arbitration of the state bu- 
 reau in the past few years, and in Ohio the 
 work of the state board was confined prac- 
 tically to mediation for years before its abo- 
 lition in 1913. The present Ohio law makes 
 no provision for a permanent state board of 
 arbitration. This difference in the records 
 of the boards in favor of the Massachusetts 
 board is due in part to differences in the laws 
 constituting the boards, but in larger part 
 it is due to the activity of the board in 
 making itself useful and so establishing a 
 reputation for impartiality. An analysis of 
 the results obtained in the three States leads 
 89
 
 MEDIATION AND ARBITRATION 
 
 to the conclusion that there are opportunities 
 for a permanent board to render real service 
 and that a board of the Massachusetts type 
 would secure results worth while in the in- 
 dustrial States. 
 
 EXISTING LAW 
 
 The Arbitrators. — The Massachusetts and 
 New York laws make provision for a state 
 board of arbitration which is authorized to 
 decide all disputes voluntarily submitted by 
 both parties. Until 1913, provision was 
 made in Ohio for such a board. In Massa- 
 chusetts the board of arbitration is also the 
 board of mediation. In New York the 
 board is made up of the chief mediator and 
 two other officers of the Department, desig- 
 nated by the Industrial Commission. 1 
 
 Powers of the Boards. — In both Massa- 
 chusetts and New York the law provides that 
 
 1 Until May 22, 1915, by the Commissioner of 
 Labor. 
 
 90
 
 ARBITRATION 
 
 no case may be submitted to the state board 
 of arbitration while one of the parties is 
 maintaining a strike or lockout. It is a pre- 
 requisite that the employees shall be at work 
 and remain at work during the arbitration 
 proceedings. Both parties must agree, also, 
 to abide by the decision of the board. 
 
 The Massachusetts law empowers the 
 board, or any member of it, to summon wit- 
 nesses, administer oaths, and take testimony. 
 The New York law empowers the board to 
 subpena witnesses and compel their at- 
 tendance, take and hear testimony, and call 
 for and examine the books, papers, and docu- 
 ments of any parties to the cor trover sy. In 
 Massachusetts the hearings may be private 
 "if requested by the parties" — that is, no 
 public notice is given of the time and place. 
 It is the practice of the board not to give such 
 notice unless it is requested to do so by one 
 of the parties. In New York the period for 
 91
 
 MEDIATION AND ARBITRATION 
 
 which the board's decision is binding is not 
 prescribed in the law; in Massachusetts the 
 decision is binding for at least sixty days, 
 and for at least six months if neither party 
 gives sixty days' notice of intention not to be 
 further bound by it. 
 
 RESULTS 
 
 In New York very few cases have been 
 submitted for arbitration to a state board, 
 and in the last few years none at all. In 
 Ohio, too, in the last few years of the exist- 
 ence of the board, no cases were submitted 
 to it for arbitration. The Massachusetts 
 board, however, has acted in a large number 
 of cases. In the boot and shoe industry the 
 agreements between the Boot and Shoe 
 Workers' Union and the employers specify 
 that all questions of wages or conditions of 
 labor upon which the parties cannot agree 
 shall be submitted to the state board for de- 
 92
 
 ARBITRATION 
 
 cision. In 1913, for example, approxi- 
 mately eighty awards were made by the 
 board in this industry. These cases consti- 
 tute the great bulk of the arbitration work 
 done by the board, but they do not exhaust it. 
 Thus in 1913, the board arbitrated in seven 
 cases in other industries than the boot and 
 shoe. 
 
 Only three of the seven cases involved the 
 terms of a new agreement. Of the other 
 four, two were discharge cases; another in- 
 volved the right of the employer, under an 
 existing agreement, to employ a particular 
 person ; and the fourth, the proper classifica- 
 tion, under the terms of an agreement, of 
 workmen into wage groups. The year 1913 
 does not seem to have been an abnormal 
 year in the quantity or distribution of the 
 board's arbitration activities, except possibly 
 in the rather high proportion of cases involv- 
 ing the terms of a new agreement. Only 
 93
 
 MEDIATION AND ARBITRATION 
 
 one of the three cases in this class was sub- 
 mitted after a strike as the result of the 
 board's mediation. 
 
 The Massachusetts board exerts a con- 
 stant pressure upon all the parties which it 
 aids in reaching agreements to agree to ar- 
 bitrate points that they may be unable to set- 
 tle in the future. Largely on this account, 
 many joint agreements made in Massachu- 
 setts now contain provisions binding the par- 
 ties to refer questions in dispute to the state 
 board of arbitration, in the event of failure to 
 adjust in any other way or to agree upon 
 other arbitrators. The policy of the Massa- 
 chusetts board — and of the mediators in the 
 other two States as well — has been, on the 
 whole, to encourage the parties to submit 
 their cases to arbitrators of their own choos- 
 ing. It is only as a last resort that they 
 urge the disputants to refer questions to the 
 state board for decision. 
 94
 
 ARBITRATION 
 
 POSSIBILITIES OF ARBITRATION SERVICE 
 BY A PERMANENT BOARD 
 
 The experience of the Massachusetts 
 board in arbitration warrants the conclusion 
 that there is a proper and very useful sphere 
 of activity for a permanent state board of 
 arbitration. A number of questions arise 
 from time to time in almost all trades which 
 do not require a detailed knowledge of the 
 industry on the part of the arbitrating body, 
 as for example, questions of discharge in al- 
 leged violation of a clause in an agreement 
 covering discharges. The existence of a 
 state board makes arbitration more likely in 
 such cases than if a special board had to be 
 erected to pass on the case. There are cer- 
 tain other controversies which both sides are 
 willing to have decided by the application of 
 standards which are matters of fact ascer- 
 tainable upon investigation. For example, 
 in many piece-price controversies both sides 
 95
 
 MEDIATION AND ARBITRATION 
 
 are willing to have the questions decided on 
 the basis of what competing manufacturers 
 pay for the same operations under similar 
 working conditions, but each is unwilling to 
 accept the figures presented by the other side 
 in support of its contention. It would be 
 easier for the parties in such cases to submit 
 the questions to an existing board which 
 could appoint expert assistants to ascertain 
 the prices and conditions in competing fac- 
 tories, than to establish a special tribunal to 
 ascertain these facts. This is what the 
 Massachusetts board does in the boot and 
 shoe industry, and has done recently in at 
 least one textile case. 
 
 There are other advantages to be derived 
 from a permanent board. Members of a 
 permanent board gain experience in han- 
 dling cases and, if they do their work well, 
 accumulate prestige for the board and accus- 
 tom parties to the idea of arbitration. 
 
 96
 
 ARBITRATION 
 
 Where a permanent state board that actu- 
 ally arbitrates from time to time exists, the 
 framers of trade agreements are likely to 
 agree upon the board as a court of last re- 
 sort for the interpretation of the agreements. 
 Finally, a permanent board which has among 
 its members representatives of employers 
 and employees and yet is, as a body, impar- 
 tial can be utilized for the nomination of an 
 odd member or odd members for special ar- 
 bitration boards*' and for boards of mediation 
 and investigation, when the other members 
 of such boards fail to agree on a nomination. 
 
 PLAN FOR A BOARD OF ARBITRATION 
 
 The Arbitrators. — The experience of 
 Massachusetts suggests that the plan fol- 
 lowed in that State in the constitution of the 
 arbitration board is a good one. One mem- 
 ber should be an employer or a member of 
 an employers' association, and one a member 
 97
 
 MEDIATION AND ARBITRATION 
 
 of a labor organization; these two should 
 nominate the third, but if they are unable to 
 agree he should be appointed by the gover- 
 nor without a nomination. 
 
 The members of the arbitration board 
 should not serve as mediators. A mediator 
 in a dispute can hardly escape receiving im- 
 pressions as to what should be conceded by 
 one or both sides. Moreover, strong media- 
 tors are likely to make suggestions or even 
 recommendations as to what should be done. 
 Having gone so far into the merits of the 
 controversy they are, of course, not as accept- 
 able to the parties as arbitrators as another 
 set of men would be. Moreover, the useful- 
 ness of the mediators is likely to be greater 
 if the idea that they may later have to decide 
 the questions in controversy is not in the 
 minds of the parties. A mediator's chief 
 function is to help the parties to settle the dis- 
 pute themselves, and this will appear more 
 98
 
 ARBITRATION 
 
 clearly, and make his services more accept- 
 able at the outset, if there is no danger that 
 he will urge that he and his colleagues be al- 
 lowed to decide the terms of settlement. 
 
 The term of not more than one member of 
 the board of arbitration should expire in any 
 year. A six-year term is preferable to a 
 three-year term. A comparison of the ex- 
 perience of Massachusetts with that of Ohio 
 indicates that the annual salary method of 
 payment is preferable to that of a per diem 
 payment if men are expected to give the 
 greater part of their time to the work. Both 
 these boards, however, were also intended to 
 mediate and to investigate as well as to ar- 
 bitrate. It is doubtful if the work of a state 
 board of arbitration — with no other func- 
 tion — would occupy the greater part of the 
 time of its members, at least in the first few 
 years. The case of Massachusetts is, of 
 course, exceptional in that the arbitration
 
 MEDIATION AND ARBITRATION 
 
 agreements in the boot and shoe industry 
 specify the state board of arbitration as the 
 court of last resort. In other States it 
 would probably be better at the outset to pay 
 the members for the time actually given to 
 the work. In appointing members to the 
 board, care should be taken to select men who 
 can serve whenever and as long as they may 
 be needed. Men who are less well-known 
 and esteemed will do more effective work — if 
 honest, intelligent, and fair-minded — than 
 men of known high abilities and of high 
 reputation who would find it impossible to 
 devote sufficient time and energy to the 
 work. 
 
 Expert Assistants. — A feature of the 
 Massachusetts law, which commends itself 
 highly, is the provision made for the em- 
 ployment of expert assistants by the board 
 in arbitration cases. Each party to the ar- 
 bitration may nominate a person or persons 
 100
 
 ARBITRATION 
 
 to act as an expert assistant to the board and 
 the board may then appoint -one from the 
 nominees of each side. .-The fm^ipjiiof*. the 
 expert assistants is to obtain for the board, 
 under its direction, "information concerning 
 the wages paid and the methods and grades 
 of work prevailing in establishments within 
 the commonwealth similar to that in which 
 the controversy exists." The experts must 
 be heard by the board before its final decision 
 in the case is handed down. They are paid 
 by the State at the rate of seven dollars a 
 day and traveling expenses. 
 
 The employment of experts is confined al- 
 most exclusively to the cases submitted from 
 the boot and shoe industry, because nearly 
 all of the cases from that industry are piece- 
 price cases, while very few of the cases from 
 other industries are of this kind. The ex- 
 perts make their inquiries together and may 
 not submit any evidence to the board on 
 101 
 
 WWVEKSITY OF CAUFOKWA 
 RIVERSIDE
 
 MEDIATION AND ARBITRATION 
 
 which they are not .agreed. The success of 
 the board as a board of arbitration for the 
 boot and shoe industry,' is due chiefly to the 
 use of the expert assistants. It seems ad- 
 visable, therefore, that similar provision for 
 the employment of expert assistants nom- 
 inated by the parties should be made in any 
 plan of state arbitration. The subject mat- 
 ter of their inquiries should not, however, be 
 limited to wages paid and the methods and 
 grades of work prevailing; the board should 
 be allowed to direct them to inquire into and 
 report on any matters which the board feels 
 are pertinent to the case. 
 
 Powers of the Board. — The arbitration 
 board should be given all the powers in the 
 way of compelling the attendance of wit- 
 nesses and testimony under oath, and the 
 production of books and papers, which it re- 
 quires to secure the information necessary to 
 reach a decision. The need of compulsion 
 102
 
 ARBITRATION 
 
 will seldom arise, however, for parties who 
 submit voluntarily to arbitration will ordi- 
 narily supply the board with all the informa- 
 tion in their possession. Yet the parties will 
 be more likely to submit to arbitration such 
 questions as piece prices, if assured that the 
 board will be able to get exact data. More- 
 over, it may be desirable for the board to se- 
 cure trustworthy information as to wages or 
 working conditions in establishments not in- 
 volved in the controversy, and such data may 
 not be obtainable unless the board has the 
 powers of a court. It should be stipulated 
 that no information as to an employer's busi- 
 ness except as to wages or working condi- 
 tions shall be made public by the board unless 
 he agrees beforehand that it shall be. 
 
 ENCOURAGEMENT OF FORMATION OF 
 SPECIAL BOARDS 
 
 In all three of the States studied a prefer- 
 ence was found, in most classes of cases, for 
 103
 
 MEDIATION AND ARBITRATION 
 
 special boards over a permanent state board, 
 as an arbitrating body, and in all three 
 States the laws encourage the formation of 
 such boards. Both employers and workers 
 expressed generally a disinclination to leave 
 matters to the decision of persons who 
 "know nothing about the business." In 
 fact, the cases which are likely to be referred 
 to a permanent State board in any number 
 are limited in character — cases involving dis- 
 charges in alleged violation of agreement, the 
 interpretation of existing agreements, and 
 the settlement of piece prices when both sides 
 are satisfied to accept prices set on the basis 
 of what competing factories are paying. In 
 all these cases there is agreement between the 
 parties as to the general principles which 
 should govern the decision — it is merely the 
 application of the principle which is in doubt. 
 In such matters as the basic or minimum rate 
 of wages to be paid, the length of the work- 
 104
 
 ARBITRATION 
 
 ing day, and the ratio of apprentices, the 
 parties, if they are willing to arbitrate at all, 
 will in all likelihood continue to prefer spe- 
 cial boards constituted by themselves. In 
 Massachusetts, preference is frequently 
 shown for a special board when certain classes 
 of questions are involved, because it is felt 
 that the state board will decide these ques- 
 tions by the application of certain standards 
 which the party is not willing to accept. 
 For example, it is widely believed that the 
 board will decide a wage demand by compari- 
 son with wages paid for the same work under 
 similar conditions elsewhere in the State. 
 Workers who are receiving higher wages 
 than are paid in competing cities will, there- 
 fore, naturally avoid arbitration by the state 
 board. 
 
 One of the clearest opportunities for serv- 
 ice by the State in promoting resort to arbi- 
 tration lies in facilitating the formation of 
 105
 
 MEDIATION AND ARBITRATION 
 
 special boards of arbitration through aiding 
 the appointees of the parties in the selection 
 of the odd man or men. The state board of 
 arbitration is the logical body to perform this 
 duty for the State. The law should there- 
 fore specifically empower the state board, 
 when requested, to select a man or men to act 
 with the appointees of the parties. It 
 should also allow the state board itself to act 
 with the appointees if invited by them. 
 
 In all three of the States studied, as noted 
 above, the law encourages the formation of 
 special boards, known as "local" or "tempo- 
 rary" boards. The New York and Massa- 
 chusetts laws prescribe the constitution of 
 these boards. The New York law provides 
 that one member must be chosen by the em- 
 ployer or employers and one by the em- 
 ployees and that these two shall select the 
 third. The Massachusetts law provides that 
 the local board shall be made up in the same 
 106
 
 ARBITRATION 
 
 way or composed of "three members mutu- 
 ally agreed upon." 
 
 The New York law allows the local board, 
 through its chairman, to "subpena wit- 
 nesses, compel their attendance, and to take 
 and hear testimony." It does not give the 
 local boards the power given to the state 
 board to "call for and examine books, papers 
 and documents of any parties to the contro- 
 versy." Under the Massachusetts law and 
 the old Ohio law local boards have all the 
 powers of the state board, and as any mem- 
 ber of the board in Massachusetts has all the 
 powers of the board to summon and examine 
 witnesses, books, papers, etc., it is under- 
 stood by the state board that any member of 
 a local board has these powers also. It has 
 been urged that no member of a special board 
 should be allowed to exercise these powers 
 alone. The fact that the workmen's ap- 
 pointee on a local board has the power alone 
 107
 
 MEDIATION AND ARBITRATION 
 
 to compel the production of the employer's 
 books, or to put the employer on the stand 
 and question him, is said to deter many em- 
 ployers from submitting questions to such 
 boards. 
 
 The New York law requires that for a 
 local board to be constituted under the law 
 with the powers described above, each mem- 
 ber must sign an agreement to serve and must 
 take an oath to discharge his duties faith- 
 fully and impartially. The Massachusetts 
 law does not require that formal notice of 
 the formation of the board shall be given. 
 If each party selects its representative and 
 these two select a third, they may proceed 
 forthwith to exercise all the powers of the 
 state board. 
 
 The New York law makes no provision 
 for the payment of members of local boards 
 of arbitration. The Massachusetts law pro- 
 vides for payment of the arbitrators by the 
 108
 
 ARBITRATION 
 
 local unit of government, but payment is to 
 be made only with the approval in writing of 
 the local authorities, and the remuneration is 
 only three dollars a day for each day of 
 actual service, which may not exceed ten 
 days. The old Ohio law contained a similar 
 provision. The local authorities in Ohio at 
 times refused to pay, however, and the state 
 board repeatedly urged that the law be so 
 amended as to compel payment of the per 
 diem and traveling expenses due, upon cer- 
 tification of the amount by the state board. 
 
 On the whole, these provisions seem to be 
 of doubtful value in promoting resort to ar- 
 bitration. If the State facilitates the forma- 
 tion of special boards by helping the parties 
 to get a chairman it has done all that can 
 reasonably be expected of it. The parties 
 should themselves pay the members and 
 defray the expenses of the proceedings. 
 There seems to be no good reason for giving 
 109
 
 MEDIATION AND ARBITRATION 
 
 these special boards the powers of a state 
 board in compelling testimony under oath or 
 the production of books. If the issue hinges 
 on a matter of fact which is ascertainable 
 only by court procedure it should be submit- 
 ted to the state board. If the issue is a mat- 
 ter of industrial policy the special board 
 should contain within itself sufficient infor- 
 mation as to the industry, or be able to get it, 
 without using the powers of a court to decide 
 the question before it.
 
 IV 
 
 PROPOSED PLAN FOR A STATE SYSTEM OF 
 MEDIATION, INVESTIGATION, AND AR- 
 BITRATION 
 
 The following plan contains the essential 
 provisions necessary to give the foregoing 
 suggestions legal effect. 
 
 I 
 
 There shall be a chief mediator, who shall 
 be appointed by the governor on the nomi- 
 nation of the Industrial Commission for a 
 term of seven years. He shall receive an 
 annual salary of five thousand dollars and 
 his necessary traveling expenses. 
 
 The chief mediator may appoint not more 
 
 than two assistant mediators. Each shall 
 
 perform such duties as are assigned to him 
 
 by the chief mediator. The term of office 
 
 111
 
 MEDIATION AND ARBITRATION 
 
 of each assistant mediator shall be one year. 
 Each shall receive an annual salary of not 
 less than two thousand nor more than three 
 thousand dollars, to be determined for each 
 by the chief mediator, and his necessary 
 traveling expenses. 
 
 Whenever a strike or lockout occurs within 
 the State, or an industrial dispute arises 
 which seriously threatens to terminate in a 
 strike or lockout, the chief mediator shall, if 
 requested by one or both of the parties to the 
 dispute, endeavor to bring about a settlement 
 of the controversy. Whenever the chief 
 mediator has knowledge, otherwise than 
 through a request for intervention from one 
 or both of the parties to the dispute, that a 
 strike or lockout or an industrial dispute 
 which threatens to terminate in a strike or 
 lockout exists within the State, he shall make 
 inquiries as to the nature of the dispute and 
 of the number of persons involved, and if in 
 112
 
 PLAN FOR A STATE SYSTEM 
 
 his judgment an offer of mediation is advis- 
 able he shall offer his services or those of one 
 or more of the assistant mediators to the 
 parties and endeavor to secure an amicable 
 settlement of the controversy 
 
 ii 
 
 If the chief mediator is unable to bring 
 about an agreement in any industrial dispute 
 or an agreement to arbitrate the dispute, and 
 no settlement is otherwise reached, and if in 
 his judgment it is advisable that a special 
 board of mediation and investigation be ap- 
 pointed to endeavor to secure a settlement of 
 the dispute, he shall make application in due 
 form to the State Board of Arbitration for 
 the appointment of such a board, and the 
 State Board of Arbitration shall proceed 
 forthwith to the establishment of such a 
 board of mediation and investigation. 
 
 Every board of mediation and investiga- 
 tion shall consist of three persons, to be ap- 
 113
 
 MEDIATION AND ARBITRATION 
 
 pointed by the State Board of Arbitration 
 upon application made in due form by the 
 chief mediator of the State. 
 
 Upon receipt of such application the State 
 Board of Arbitration shall notify each 
 party to the controversy that such a board 
 is to be established and request each party 
 to nominate in writing one person not a party 
 to the controversy to serve as a member of 
 such board. If such nomination is made 
 within three days the State Board of Arbi- 
 tration shall appoint the person so nominated 
 a member of the board of mediation and in- 
 vestigation, and if either party fails to nomi- 
 nate a person within three days, the State 
 Board of Arbitration shall appoint a prop- 
 erly qualified person to serve. The two per- 
 sons so appointed shall nominate a person to 
 serve as the third member of the board and 
 the person so nominated shall be appointed a 
 member of the board by the State Board of 
 114
 
 PLAN FOR A STATE SYSTEM 
 
 Arbitration, and shall act as its chairman. 
 If within three days after the appointment 
 of the first two members no nomination of a 
 third person is received, the State Board of 
 Arbitration shall proceed to appoint a third 
 member of the board of mediation and in- 
 vestigation and the person so appointed shall 
 act as chairman of the board. 
 
 The chairman of the board of mediation 
 and investigation shall convene the board as 
 soon as may be practicable, in the locality in 
 which the strike or lockout has occurred or 
 is threatened, or if more than one locality 
 within the State is affected, in that locality 
 which in his judgment is most advisable, 
 and the board shall proceed to ascertain the 
 causes of the dispute and other facts perti- 
 nent to the failure of the parties to agree 
 upon an amicable adjustment, and endeavor 
 to secure an amicable settlement of the dis- 
 pute. 
 
 115
 
 MEDIATION AND ARBITRATION 
 
 If the board of mediation and investiga- 
 tion is unable to secure an amicable settle- 
 ment of the controversy it shall make a writ- 
 ten report stating the causes of the contro- 
 versy and such other facts as in its judgment 
 are responsible for the failure of the parties 
 to agree upon a settlement, and shall recom- 
 mend what should be done by each of the 
 parties to the controversy. A copy of the 
 report shall be transmitted to the governor 
 of the State and a copy filed with the mayor 
 or clerk of each city or town in which the 
 controversy exists, to be open to public in- 
 spection. A copy of the report shall also be 
 transmitted to each of the parties to the con- 
 troversy. 
 
 The board may, if it deems advisable, ap- 
 point a time and place for a conference with 
 each of the parties on the terms of its recom- 
 mendations. Either party to the original 
 controversy may at any time within one year 
 116
 
 PLAN FOR A STATE SYSTEM 
 
 from the date of the first report of the special 
 board apply to the chairman of such board 
 for a reconvening of the board to decide any 
 dispute arising as to the meaning of any of 
 the terms of the written recommendations 
 made by the board, provided that such party 
 has previously agreed in writing to be bound 
 by such recommendation for a period of at 
 least six months, and the chairman shall en- 
 deavor to reconvene the board forthwith for 
 this purpose. 
 
 Before entering upon their duties the 
 members of the board shall be sworn to the 
 faithful performance thereof. The board 
 shall be empowered to compel the appearance 
 of witnesses and to administer oaths to wit- 
 nesses and to compel the production of books 
 and papers which it believes to contain in- 
 formation pertinent to the matters in dispute. 
 The fees of witnesses for travel and attend- 
 ance shall be the same as those for witnesses 
 117
 
 MEDIATION AND ARBITRATION 
 
 before the highest court of the State. The 
 board may hold sessions in any locality 
 within the State where it deems such sessions 
 necessary. The board may also appoint 
 properly qualified expert assistants, one 
 upon nomination made by each party, to ob- 
 tain and report to the board information 
 necessary to the proper discharge of its 
 duties by the board. The board may also ap- 
 point such other expert assistants as it may 
 judge necessary. The expert assistants 
 shall receive seven dollars a day for each day 
 of actual service, and their necessary travel- 
 ing expenses. 
 
 Each member of the special board of medi- 
 ation and investigation shall receive ten dol- 
 lars for each day of actual service, and his 
 necessary traveling expenses. 
 
 in 
 There shall be a State Board of Arbitra- 
 tion, consisting of three persons, to be ap- 
 118
 
 PLAN FOR A STATE SYSTEM 
 
 pointed by the Governor. Of the three 
 members first appointed one shall be ap- 
 pointed for a term of six years, one for four 
 years, and one for two years, and thereafter 
 the term for each member shall be six years. 
 One member of the board shall be an em- 
 ployer, or shall be selected from an associa- 
 tion representing employers of labor, one 
 shall be selected from a labor organization, 
 and the third shall be appointed upon the 
 recommendation of the other two. If these 
 two members fail to nominate a third at least 
 thirty days prior to the expiration of a term 
 or within thirty days after the occurrence of 
 a vacancy, the Governor shall then appoint 
 a third member without such nomination. 
 The third member shall act as chairman of 
 the board. Each member shall, before enter- 
 ing upon the duties of his office, be sworn 
 to the faithful performance thereof. The 
 board may appoint, and remove, a secretary, 
 119
 
 MEDIATION AND ARBITRATION 
 
 who shall not be a member of the board, and 
 who shall receive an annual salary of not less 
 than two thousand dollars nor more than 
 three thousand dollars, as may be determined 
 by the board. 
 
 Any industrial dispute existing within the 
 State, which involves twenty-five or more 
 persons and seriously threatens to result in a 
 strike or lockout, may be submitted by the 
 parties to the State Board of Arbitration for 
 decision. The application shall be signed by 
 the employer and by a majority of his em- 
 ployees in the department in which the con- 
 troversy exists, and if signed by an agent 
 claiming to represent a majority of the em- 
 ployees, the board shall satisfy itself that he 
 is duly authorized to do so; but the names of 
 the employees giving the authority shall be 
 kept secret. The application shall contain 
 a concise statement of the existing contro- 
 versy and a promise not to resort to a strike 
 120
 
 PLAN FOR A STATE SYSTEM 
 
 or lockout pending the decision of the board, 
 if given within two weeks of the date of the 
 filing of the application, and to accept such 
 decision as binding for a period of one year 
 or until sixty days after written notice has 
 been given to the other party, and to the 
 board, of intention not to be bound by it. 
 
 Upon receipt of such application or appli- 
 cations signed by both parties to the contro- 
 versy, the board shall proceed as soon as may 
 be practicable to hear the parties or their 
 duly authorized representatives and to take 
 such other testimony, examine such books 
 and papers, and institute such other inquiries 
 as it may deem necessary for the proper dis- 
 charge of its duties, and shall then make a 
 written decision stating what shall be done or 
 submitted to by each party to the contro- 
 versy. A copy of the decision shall be trans- 
 mitted to each of the parties and a copy en- 
 tered in the records of the board. If either 
 121
 
 MEDIATION AND ARBITRATION 
 
 applicant fails to perform the promise made 
 in the application the board shall proceed no 
 further toward a decision unless requested in 
 writing by the adverse party. 
 
 In all arbitration cases above described the 
 board shall have power to summon witnesses, 
 administer oaths and to compel the produc- 
 tion of such books and papers as the board 
 may believe to contain information bearing 
 directly upon the matters in dispute. But 
 no information as to the business of any em- 
 ployer other than as to wages or conditions 
 of employment shall be received publicly or 
 made public by the board without the con- 
 sent of such employer. The fees of wit- 
 nesses before the board, for attendance and 
 travel, shall be the same as those of witnesses 
 before the highest court of the State. 
 
 In all arbitration cases submitted to the 
 board each party may nominate in writing 
 fit persons to act as expert assistants to the 
 122
 
 PLAN FOR A STATE SYSTEM 
 
 board and the board may appoint one from 
 among the persons so nominated by each 
 party. Such expert assistants must be 
 skilled in and conversant with the business or 
 trade in which the controversy exists. They 
 shall be sworn by the board to the faithful 
 performance of their duties and shall, under 
 the direction of the board, obtain and re- 
 port such information as the board may 
 judge necessary to the decision of the case, 
 and they may submit to the board at any 
 time before a final decision is given any facts, 
 advice, arguments, or suggestions which they 
 may consider applicable to the case. No de- 
 cision shall be announced by the board in a 
 case in which expert assistants have acted, 
 without notice to them of a time and place 
 for a conference with the board on the mat- 
 ters included in the proposed decision. 
 
 The board may appoint such additional 
 expert assistants as it deems necessary, with- 
 123
 
 MEDIATION AND ARBITRATION 
 
 out nomination by the parties, which as- 
 sistants shall be qualified in like manner and 
 shall perform, under the direction of the 
 board, duties similar to those performed by 
 experts who are nominated by the parties. 
 The expert assistants shall receive from the 
 State seven dollars each for each day of 
 actual service and their necessary traveling 
 expenses. 
 
 It shall be the duty of the State Board of 
 Arbitration to proceed immediately upon ap- 
 plication in due form by the chief mediator 
 of the State, to the establishment of a special 
 board of mediation and investigation as pro- 
 vided in the act governing the establishment 
 of such boards. 
 
 The members of the Board of Arbitration 
 shall receive from the State ten dollars each 
 for each day of actual service, and their 
 necessary traveling expenses. 
 124
 
 PLAN FOR A STATE SYSTEM 
 
 IV 
 
 Any parties to an industrial dispute ex- 
 isting within the State, who have agreed in 
 writing to submit the matters in controversy 
 to a board of arbitration to be made up of 
 one or more persons chosen by each of the 
 parties and one or more persons to be selected 
 by the persons appointed by the parties, may, 
 upon the failure of their appointees to agree 
 upon an additional person, make a written 
 application which shall be signed by both 
 parties, or their duly authorized representa- 
 tives, to the State Board of Arbitration, stat- 
 ing these facts and requesting the State 
 Board of Arbitration to nominate a person 
 or persons to act as an additional member or 
 members of such board. Such application 
 may also be made by the persons chosen by 
 the parties to act as members of the board. 
 The State Board of Arbitration shall within 
 125
 
 MEDIATION AND ARBITRATION 
 
 three days of the receipt of such application 
 nominate a person to act as the additional 
 member of the board. If requested by both 
 parties the three members of the state board 
 may act with the appointees of the parties 
 as a board of arbitration, but when acting as 
 members of such a board they shall exercise 
 none of the powers of the State Board of Ar- 
 bitration.
 
 n 
 
 NATIONAL AGENCIES OF MEDI- 
 ATION, INVESTIGATION 
 AND ARBITRATION
 
 PROPOSED NEW AGENCIES 
 THE NEED FOR NEW NATIONAL AGENCIES 
 
 The results achieved under the Erdmann 
 and Newlands acts naturally suggest that 
 provision should be made for national media- 
 tion and voluntary arbitration of the kind 
 provided for in the Newlands Act in fields to 
 which that act does not apply. Under the 
 Newlands Act the mediators may offer their 
 services only in disputes involving railroad 
 employees actually engaged in train move- 
 ment. There are four large fields in which 
 national mediation and national provision 
 for arbitration seem desirable, to which the 
 Newlands Act does not extend: (1) dis- 
 putes involving railroad employees not en- 
 129
 
 MEDIATION AND ARBITRATION 
 
 gaged in moving trains; (2) disputes involv- 
 ing the employees of agencies of interstate 
 commerce other than railroads; (3) disputes 
 involving workmen and employers in two or 
 more States; (4) disputes in which the inter- 
 vention of the President of the United States 
 has been requested in order to protect against 
 domestic violence. The creation of a na- 
 tional agency of mediation and voluntary ar- 
 bitration, with power to act in disputes in all 
 four of these fields, would serve highly de- 
 sirable ends. 
 
 At the present time mediation in disputes 
 in all of these fields is possible through of- 
 ficers of the Department of Labor. The 
 Act of March 4, 1913, creating the depart- 
 ment, provided that: 
 
 The Secretary of Labor shall have power to act 
 as mediator and to appoint commissioners of con- 
 ciliation in labor disputes wherever, in his judg- 
 ment, the interests of industrial peace may require 
 it to be done. 
 
 130
 
 PROPOSED NEW AGENCIES 
 
 The work of the department in this respect 
 has been considerably handicapped by lack 
 of funds to secure experienced mediators. 
 There is reason to believe, however, that 
 mediation in these fields would be much 
 more effective if carried out along the lines 
 of the Newlands Act than it can be made by 
 the Department of Labor. The reasons for 
 this will appear below. Moreover, it is de- 
 sirable that certain provisions should be in- 
 cluded, such as those for assistance in con- 
 stituting boards of arbitration and for the 
 formation of boards of mediation and investi- 
 gation, which are not found in the present 
 law and which are not likely to be most ef- 
 fective if their administration is vested in the 
 Department of Labor. 
 
 If effective provision is to be made for 
 
 mediation and arbitration in disputes of the 
 
 kind indicated above, it must be national. 
 
 It is evident, from an examination of the 
 
 131
 
 MEDIATION AND ARBITRATION 
 
 facts, that state agencies of mediation, arbi- 
 tration, and investigation cannot be expected 
 to meet the need. Even if effective state 
 agencies were available in all the industrial 
 States, as it is hoped that they soon will be, 
 they could not be expected to secure settle- 
 ments in disputes which are interstate in ex- 
 tent. State mediators are practically help- 
 less, for example, in the face of a strike of 
 railway shopmen which extends over the line 
 of an interstate road, as such strikes tend 
 more and more to do. The report of the 
 State Board of Arbitration of Ohio for 1910 
 related a case in point. Trouble arose be- 
 tween the machinists and the Baltimore and 
 Ohio Railroad Company at the Mt. Clare 
 shops in Baltimore, over the attempt of the 
 company to extend the piece-work system. 
 Conferences were held between the national 
 officers of the machinists' union and the gen- 
 eral officers of the company, but they failed 
 132
 
 PROPOSED NEW AGENCIES 
 
 to result in a settlement, and after a referen- 
 dum vote a general strike of machinists in 
 the shops of the Baltimore and Ohio Rail- 
 road was inaugurated. The machinists at 
 the shops in Newark, Ohio, were involved, 
 among others, and the Ohio board found it- 
 self helpless to secure a settlement there. 
 The board reported as follows: 
 
 The men at the Newark shop made no complaint 
 as to wages, working conditions or other matters. 
 They went out in obedience to the order of the 
 union as they did at all other shops and were 
 powerless to settle the matter. The strike in- 
 volved twelve (12) shops and about nine hundred 
 (900) men in Pennsylvania, Indiana, and West 
 Virginia and six (6) shops and two hundred (200) 
 men in Ohio. The strike was interstate in charac- 
 ter and we were officially informed could only be 
 settled by the general officers of the company and 
 the national officers of the machinists' organiza- 
 tion. 
 
 The same problem is presented in many 
 labor disputes involving agencies of inter- 
 133
 
 MEDIATION AND ARBITRATION 
 
 state commerce. A strike by organized 
 workers against such a company is likely to 
 extend beyond the limits of one State and to 
 involve issues which both sides wish to have 
 disposed of in a single settlement. This has 
 been the case, for example, in several strikes 
 on the Great Lakes. In at least one of these 
 cases the mediators of several States met 
 and acted jointly in offering mediation. 
 Their mediation, however, was unavailing. 
 
 There is another class of disputes, which, 
 though they do not involve interstate 
 agencies, resemble the class of disputes just 
 considered, in that they affect plants and 
 workers in more than one State and a settle- 
 ment must be made for all at once. For ex- 
 ample, the strike inaugurated in 1909 by the 
 Amalgamated Association of Iron, Steel and 
 Tin Workers and the Tin Plate Workers' 
 Protective Association against the American 
 Sheet and Tin Plate Company affected mills 
 134
 
 PROPOSED NEW AGENCIES 
 
 in several States, and the attempts of state 
 mediators to reach a settlement in the mills 
 in their respective States were necessarily 
 doomed to failure; the strike had to be set- 
 tled as a whole. If any one of the large sys- 
 tems of national or district trade agreements 
 should be interrupted by a strike affecting all 
 the plants a similar case would be presented. 
 If, for example, the Sanitary Potters' Asso- 
 ciation or the National Brotherhood of Op- 
 erative Potters should resort to a lockout or 
 strike against the other party at the expira- 
 tion of an agreement, the mediators of one 
 State — Ohio, for example — could not expect 
 to secure settlements in the sanitary ware 
 potteries in that State while the strike was 
 still unsettled in New Jersey. In all likeli- 
 hood no settlement would be reached for any 
 until a settlement was made for all. The 
 greater experience in dealing with disputes 
 of more than local character that a national 
 135
 
 MEDIATION AND ARBITRATION 
 
 mediator would be expected to have, and the 
 fact that he would be an officer of the United 
 States and not merely an officer of a State, 
 would give him a much better chance of 
 bringing about a settlement than a state 
 mediator would ordinarily have. 
 
 Within recent years, the President of the 
 United States on several occasions has been 
 called upon to protect the people of a State 
 against domestic violence growing out of an 
 industrial dispute. It appears clear that 
 such disputes should be included within the 
 scope of the activity of a national agency of 
 mediation, arbitration, and investigation. 
 At such times the state agencies are not in 
 a position to exercise effectively their func- 
 tions and if mediation or investigation is to 
 be carried on it can only be carried on by a 
 national agency. 
 
 The desirability of providing a national 
 agency of mediation and of assistance in ar- 
 136
 
 PROPOSED NEW AGENCIES 
 
 bitration, to be available in the four classes of 
 cases enumerated above, turns on the ques- 
 tion as to whether the work of such an agency 
 would be likely to be sufficiently effective to 
 make its establishment worth while. The 
 desirability of securing the settlement of such 
 disputes by joint agreement or through sub- 
 mission to arbitration brought about through 
 voluntary governmental mediation — if set- 
 tlements can be secured in this way — is as- 
 sumed to be beyond question. The expe- 
 rience under the Erdmann and Newlands 
 acts, and that of state mediators in the three 
 States in which the work of state agencies 
 has been studied, indicates the strong proba- 
 bility that a national agency such as the one 
 proposed could be of great service. 
 
 It is not to be expected, of course, that the 
 
 great success of the federal mediators under 
 
 the Erdmann and Newlards acts would be 
 
 duplicated in the other fiel is which it is pro- 
 
 137
 
 MEDIATION AND ARBITRATION 
 
 posed to cover. The seriousness of the re- 
 sults which would follow immediately from 
 the interruption of railway train service gives 
 the mediators an assistance, in securing a 
 settlement or inducing the parties to submit 
 to arbitration, that would not ordinarily be 
 present in these other cases, as, for example, 
 that of a threatened or actual strike or lock- 
 out of railway shopmen. In this latter class 
 of disputes there are, however, several dis- 
 tinct ways in which efficient mediators can 
 aid in bringing about a settlement which will 
 prevent a threatened strike or lockout, or in 
 bringing an interruption of work to a close 
 much earlier than would otherwise be the 
 case. These types of possible mediatorial 
 service have been described above in connec- 
 tion with state agencies of mediation and 
 need not be further discussed here. 1 
 
 Provision for national mediation in the 
 
 1 See pages 9-46. 
 
 138
 
 PROPOSED NEW AGENCIES 
 
 fields outlined above logically carries with it 
 provision for the creation of special boards 
 of arbitration in order to encourage the arbi- 
 tration of disputes in these fields, which the 
 parties are otherwise unable to settle. Ex- 
 perience under the Erdmann and Newlands 
 acts has established the value of making in 
 advance such facilitating arrangements for 
 arbitration. 
 
 Finally, provision should be made for the 
 formation of special boards of mediation and 
 investigation in cases where mediation by the 
 regular staff of mediators has failed to result 
 in an agreement or in arbitration, and in 
 which mediation by a special board is likely 
 to promote a settlement, or in which a public 
 investigation followed by a public report 
 is deemed desirable. This conclusion is 
 based on the results obtained through in- 
 vestigation and recommendation in Massa- 
 chusetts and New York, 1 and, to a much 
 139
 
 MEDIATION AND ARBITRATION 
 
 greater extent, upon the results obtained 
 under the Canadian Industrial Disputes Act. 
 
 PROPOSED AGENCIES OF MEDIATION, ARBITRA- 
 TION, AND INVESTIGATION 
 
 The plans proposed for new federal 
 agencies of mediation, arbitration, and in- 
 vestigation will be outlined in that order. 
 The proposals include also the creation of 
 an industrial council which it is believed will 
 greatly further the work of mediation and 
 will be of service also in the formation of 
 boards of arbitration and boards of medi- 
 ation and investigation. The composition 
 and functions of the proposed council will be 
 outlined in connection with the plan for a 
 mediation commission. 
 
 THE MEDIATION COMMISSION 
 
 To carry out the work of national medi- 
 ation, a mediation commission should be cre- 
 
 1 See pages 65-76. 
 
 140
 
 PROPOSED NEW AGENCIES 
 
 ated, consisting of three persons, to be ap- 
 pointed by the President. The duties now 
 discharged by the board of mediation under 
 the Newlands Act should be transferred to 
 the commission. The commission should be 
 empowered to appoint assistant mediators as 
 occasion may require. It is desirable to have 
 three members of full rank, not in order that 
 they should act together as a board in dis- 
 putes, but to make sure that a member of 
 the board may be available to act promptly 
 if two or three important disputes should 
 arise simultaneously. Each of the me- 
 diators should therefore be a person of rec- 
 ognized impartiality in industrial issues and 
 without affiliations which would make him 
 unacceptable to either side in labor contro- 
 versies. 
 
 It is hardly necessary to say that the of- 
 fice of mediator should in no way be re- 
 garded as a political office. To avoid even 
 141
 
 MEDIATION AND ARBITRATION 
 
 the appearance of party bias the term of 
 office of the mediators should be long — at 
 least six years — and the mediation commis- 
 sion should be distinct from any other depart- 
 ment of government, as are the Interstate 
 Commerce Commission and the Trade Com- 
 mission. It is for this reason that the medi- 
 atory functions of the Department of Labor 
 should be turned over to the mediation com- 
 mission. The mediators should not be ap- 
 pointed by a cabinet officer, nor attached to 
 any department under a political head. 
 
 The danger of having agencies of media- 
 tion administered by the party head of a de- 
 partment of government was clearly stated 
 by the President of the Board of Trade in 
 Great Britain in 1911 : 
 
 One disadvantage of the existing system is 
 undoubtedly that it brings into action and prom- 
 inence the parliamentary head of the Board of 
 Trade, who is necessarily a politician, though, 
 in my opinion, none the worse for that, and a 
 
 142
 
 PROPOSED NEW AGENCIES 
 
 member of the Government, into disputes and 
 conciliation which ought to be purely industrial. 
 — If the action of the department in these mat- 
 ters could be still further removed from the 
 sphere of politics or the suspicion of politics, it 
 would give even greater confidence and there would 
 be greater willingness by the parties to a dispute 
 to seek the assistance of the Board of Trade. 
 
 There is an additional reason for not at- 
 taching the national mediation agency to the 
 Department of Labor. It is generally un- 
 derstood that the Department of Labor is 
 the department of government charged with 
 studying the conditions and needs of the 
 wage-earners and the best methods of legiti- 
 mately advancing their interests. This 
 makes employers generally feel that the of- 
 ficers of that department are more familiar 
 with and naturally more sympathetic with 
 the wage-earners' viewpoint than with that 
 of the employer. It may be noted that when 
 the legislation embodied in the Newlands 
 Act was pending, both the representatives of 
 143
 
 MEDIATION AND ARBITRATION 
 
 the workers' organizations and the repre- 
 sentatives of the railroad companies opposed 
 the inclusion of the board of mediation within 
 the Department of Labor. 
 
 The commission should be given consider- 
 able discretion in the determination of the 
 salaries of the assistant mediators. It is 
 highly desirable that the commission should 
 be free to appoint assistant mediators who 
 may have other occupations. The commis- 
 sion would thus be able to avail itself of the 
 services of persons who have a knowledge of 
 conditions and the confidence of employers 
 and workers in particular localities or par- 
 ticular trades, but who would not be willing 
 to give up their other occupations to accept 
 permanent service with the commission. 
 
 The commission should be empowered to 
 offer mediation in any case in which it is re- 
 quested by one or both parties, or upon its 
 own initiative in any case in which a strike or 
 144
 
 PROPOSED NEW AGENCIES 
 
 lockout has occurred or is seriously threat- 
 ened. As has been noted in a preceding sec- 
 tion, 1 there are several classes of disputes in 
 which provision for a national agency of 
 mediation appears to be of primary impor- 
 tance, and it is to be expected that in these 
 classes of disputes the mediation commis- 
 sion will find its chief activity. It appears 
 desirable, however, to leave the commission 
 free to decide for itself in what disputes it 
 will intervene. 
 
 It is important that the commission should 
 be empowered to act before a strike or lock- 
 out has actually occurred. It is also very de- 
 sirable that the commission be allowed to act 
 without waiting for a request for its inter- 
 vention. Experience under the Erdmann 
 Act clearly established this fact and the New- 
 lands Act removed the limitation upon the 
 action of the mediators to cases in which the 
 
 1 See pages 125-133. 
 
 145
 
 MEDIATION AND ARBITRATION 
 
 intervention was requested by one or both of 
 the parties. The experience of state medi- 
 ators also leads to the conclusion that the 
 mediators should be free to act on their own 
 initiative. 
 
 The commission should also be empowered 
 to organize a staff of trained investigators. 
 These officers could be employed to make 
 preliminary inquiries in cases in which strikes 
 or lockouts have occurred or are threatened 
 and in which the proffer of mediation is be- 
 ing considered, and to gather for the com- 
 mission necessary information as to condi- 
 tions in industries in which serious dis- 
 turbances have occurred or are threatened. 
 
 The commission should also be empowered 
 to organize a sufficient staff to gather and 
 collate such information as to conditions of 
 employment and industrial relations as it 
 deems necessary to have for the proper per- 
 formance of its functions. In order for the 
 146
 
 PROPOSED NEW AGENCIES 
 
 commission to be of the highest possible serv- 
 ice, it is necessary that it should have at hand 
 information as to the wages and conditions 
 in the various industries and localities and 
 the cost of living in different communities. 
 Some of this information could be obtained 
 from agencies already in existence, but more 
 would have to be obtained through its own 
 agents. In order to avoid duplication and 
 to secure uniformity in methods of collecting 
 and compiling statistics bearing upon these 
 matters, the commission's staff should co- 
 operate with the Bureau of Labor Statistics, 
 other federal agencies, state labor bureaus, 
 and other state agencies engaged in similar 
 work. 
 
 The commission should also have on its 
 staff persons who are familiar with the 
 methods and devices employed in the various 
 trades in which joint agreements have 
 worked out successfully, as well as with the 
 147
 
 MEDIATION AND ARBITRATION 
 
 pitfalls which experience shows must be 
 avoided. The commission would thus be in 
 a position to advise employers and em- 
 ployees, state mediators, and other persons 
 engaged in the promotion of the amicable 
 settlement of labor controversies. 
 
 Industrial Council. — As a part of the 
 plan, it would be desirable to establish an in- 
 dustrial council to consist of an equal num- 
 ber of representatives of employers' associa- 
 tions and labor organizations. The Presi- 
 dent should designate at least ten leading 
 employers' associations and ten leading or- 
 ganizations of employees, each of which 
 should elect a member of the council. The 
 duties of the council would be to advise the 
 mediation commission and to advise the 
 President and Congress on matters affecting 
 mediation, arbitration, investigation and in- 
 dustrial relations generally. The council 
 should prepare a panel of arbitrators from 
 148
 
 PROPOSED NEW AGENCIES 
 
 which the mediation commission should 
 choose the members of boards of arbitration 
 in cases in which the members of such boards 
 selected by the parties fail to agree on the 
 two other members. It should in similar 
 manner select a panel from which the medi- 
 ation commission should select the members 
 of boards of mediation and investigation in 
 case the parties to the disputes do not name 
 members or the members so named do not 
 agree upon a chairman. The council should 
 be convened at least once a year by the 
 chairman of the mediation commission, but it 
 should have an organization independent of 
 the commission and elect its own chairman 
 and secretary. 
 
 Boards of Arbitration — In the event that 
 the parties to an industrial dispute agree to 
 submit a dispute to arbitration, application 
 may be made to the mediation commission 
 for the formation of an arbitration board. 
 149
 
 MEDIATION AND ARBITRATION 
 
 The arbitration provisions in the plan here 
 proposed are the same as those of the New- 
 lands Act, 1 except that if the members of the 
 board appointed by the parties fail to agree 
 on the additional member or members, these 
 shall be appointed by the mediation commis- 
 sion from a list prepared by the industrial 
 council. It is desirable to keep the media- 
 tion commission as free as possible from any 
 connection with any board which passes pub- 
 lic judgment on the merits of a dispute. 
 This is advisable in order to avoid anything 
 which may make either party to a contro- 
 versy feel that the mediators favor the other 
 side, and also to secure for the mediators full 
 frankness from both parties as to the terms 
 they will accept, when the mediators are en- 
 deavoring to settle a dispute by acting as in- 
 termediaries. The further the commission is 
 
 1 The arbitration provisions of the Newlands Act 
 are given in Appendix I. 
 
 150
 
 PROPOSED NEW AGENCIES 
 
 removed from the arbitration to which the 
 parties are to be urged to submit if they can- 
 not be brought to an agreement, the more 
 frank the parties will be, in all likelihood, 
 and the greater will be the chances of sub- 
 mission to arbitration if no other solution is 
 found. Under the plan proposed the only 
 connection of the mediation commission with 
 the boards of arbitration will be the selection 
 of the members necessary to fill out the board 
 from a panel agreed upon in advance by the 
 industrial council. 
 
 Boards of Mediation and Investigation. — 
 Provision should be made for the appoint- 
 ment of a -board of mediation and investiga- 
 tion in any dispute involving interstate com- 
 merce in which the mediation commission 
 fails to bring about a settlement or an agree- 
 ment to submit to arbitration, and in which 
 the commission judges that the appointment 
 of such a board would be expedient. Such a 
 151
 
 MEDIATION AND ARBITRATION 
 
 board should also be formed in those cases in 
 which an industrial dispute has led to 
 domestic violence and to an application to 
 the President of the United States for pro- 
 tection, provided the President of the United 
 States directs the mediation commission to 
 form such a board. 
 
 These boards should be made up of one 
 member appointed by each party to the dis- 
 pute and a third selected by these two. The 
 persons nominated by the parties should be 
 familiar with the business and the issues in 
 dispute, but should not be parties to the con- 
 troversy. If either side fails to nominate a 
 member within a specified time, or the two 
 fail to agree on a third, the mediation com- 
 mission should select the member or mem- 
 bers. 
 
 The function of the board is to inquire into 
 the nature and causes of the dispute and en- 
 deavor to bring the parties to a settlement or 
 
 152
 
 PROPOSED NEW AGENCIES 
 
 to an agreement to submit to arbitration. 
 If the board fails in this, it is to make a pub- 
 lic statement of the salient facts and a recom- 
 mendation of the terms which should be ac- 
 cepted as a settlement of the dispute. 
 
 The boards of mediation and investiga- 
 tion should have power to compel the at- 
 tendance of witnesses and their testimony 
 under oath and the production of books and 
 papers which it believes to contain informa- 
 tion pertinent to the controversy under in- 
 vestigation. It should have power to con- 
 duct investigations outside its own sittings, 
 through expert investigators. It is not pro- 
 posed, however, to give the board power to 
 enforce its recommendation or to prohibit the 
 parties' resorting to a strike or lockout either 
 before or after its investigation and recom- 
 mendations.
 
 VI 
 
 PROPOSED PLAN OF A NATIONAL SYSTEM 
 OF MEDIATION, INVESTIGATION, AND 
 ARBITRATION 
 
 ORGANIZATION 
 
 1. Mediation Commission. — A mediation 
 commission shall be created, consisting of 
 three members appointed by the President 
 with the advice and consent of the Senate. 
 The members shall be impartial in their re- 
 lations to capital and labor. The members 
 shall serve for terms of six years. 
 
 2. Industrial Council. — The President of 
 the United States shall designate at least ten 
 leading organizations of employers and ten 
 leading organizations of employees to ap- 
 point representatives to act as an advisory 
 body to the President, to Congress, and to 
 
 154
 
 A NATIONAL SYSTEM 
 
 the mediation commission. This body shall 
 be known as the Industrial Council. It shall 
 give advice regarding the duties of the com- 
 mission, the administration of its affairs, the 
 selection of mediators, and shall make rec- 
 ommendations regarding legislation. The 
 council shall also prepare lists of persons who 
 may be called upon to serve on boards of 
 arbitration and on boards of mediation and 
 investigation. The council shall be called 
 together at least once a year by the chairman 
 of the mediation commission ; it shall have an 
 organization independent of the commission 
 and elect its own chairman and secretary. 
 The commission may appoint the members of 
 the council to assist in its work in the same 
 way as it appoints its subordinate officers. 
 The members of the council shall be paid 
 traveling and other necessary expenses and 
 such compensation as may be determined 
 upon. Provision shall be made for the re- 
 155
 
 MEDIATION AND ARBITRATION 
 
 moval of members by the organization which 
 they represent. 
 
 3. Subordinate Officers and Assistants. — 
 The commission shall have power to appoint, 
 remove at pleasure, and fix the compensation 
 of a secretary (and a limited number of 
 clerks). The appointment of other officers 
 and assistants, such as mediators, examiners, 
 investigators, technical assessors, experts, 
 disbursing officer, clerks, and other em- 
 ployees, shall be subject to the Civil Service 
 rules. The commission shall select a com- 
 mittee from its own membership which the 
 Civil Service Commission shall include in 
 the Board of Examiners for conducting ex- 
 aminations and preparing lists of eligibles 
 for such subordinate officers and employees 
 as are required to have special knowledge or 
 training. Such examinations shall include a 
 thorough investigation of the education, 
 training, and experience of the applicants, 
 156
 
 A NATIONAL SYSTEM 
 
 their success in handling men, and their 
 ability in executive affairs, in order to de- 
 termine their relative capacity and fitness for 
 the office or position to which they seek to be 
 appointed. If so required, applicants shall 
 appear before the Board of Examiners for 
 an oral examination. Additional rules and 
 regulations concerning such examinations 
 may be made by joint action of the Civil 
 Service Commission and the committee of 
 the Mediation Commission. Employees of 
 the commission who are to act as mediators 
 shall be permitted to accept appointments as 
 officers of state or local governments if the 
 duties thereof do not interfere with their 
 duties to the commission. The commission 
 shall be authorized to appoint, without re- 
 gard to Civil Service rules, officers of state 
 or local governments to represent the com- 
 mission. An employee of the commission 
 shall be permitted to continue with his pri- 
 157
 
 MEDIATION AND ARBITRATION 
 
 vate business if the duties thereof are not in- 
 consistent with his duties to the council. 
 
 POWERS, DUTIES, AND JURISDICTION 
 
 4. In Interstate Commerce. — a. Medi- 
 ation. Whenever a controversy concerning 
 conditions of employment arises between em- 
 ployer and employees engaged in interstate 
 commerce, either party may apply to the 
 chairman of the Mediation Commission for 
 its services in the bringing about of an 
 amicable adjustment of the controversy. 
 Or the chairman of the commission shall be 
 authorized to offer, on his own initiative, the 
 services of the commission. If efforts to 
 bring about an amicable adjustment through 
 mediation should be unsuccessful, the com- 
 mission shall at once, if possible, induce the 
 parties to submit their differences to arbitra- 
 tion. 
 
 b. Arbitration. Procedure shall be simi- 
 lar to that outlined in the Newlands Act. 1 
 158
 
 A NATIONAL SYSTEM 
 
 If it is necessary for the mediation commis- 
 sion to appoint arbitrators, they shall be 
 taken from a list prepared by the industrial 
 council. 
 
 c. Boards of mediation and investiga- 
 tion. If the parties to the controversy can- 
 not be induced to arbitrate, and if the contro- 
 versy should threaten to interrupt the busi- 
 ness of employers and employees to the detri- 
 ment of the public interest, the commission 
 shall be authorized to provide, at its discre- 
 tion, for the creation of a board of mediation 
 and investigation consisting of three mem- 
 bers. Of the three members of the board, 
 one shall be selected by the employers, one 
 by the employees, and a third on the rec- 
 ommendation of the members so chosen. 
 The members selected by the employers 
 and employees shall not have any direct 
 financial interest in the dispute. If either 
 
 1 This act is given in Appendix I. 
 159
 
 MEDIATION AND ARBITRATION 
 
 side fails to recommend a member, he shall 
 be appointed by the commission. If after 
 a stated time the third member is not 
 recommended, the commission shall select 
 him. Appointments to boards of mediation 
 and investigation shall be made by the com- 
 mission from a list prepared for this purpose 
 by the industrial council. The board of 
 mediation and investigation shall offer its 
 friendly offices in bringing about a settle- 
 ment of the dispute through mediation. If 
 mediation should not be successful and if the 
 parties to the controversy refuse to arbitrate, 
 this board shall have power to make an in- 
 vestigation of the controversy, and shall be 
 required to submit to the commission a full 
 report thereon, including recommendations 
 for its settlement. This report and recom- 
 mendation shall be given adequate publicity, 
 d. Compulsory Powers. A board of 
 mediation and investigation shall have power 
 160
 
 A NATIONAL SYSTEM 
 
 to administer oaths, to subpena and compel 
 the attendance of witnesses and the produc- 
 tion of books,, papers, documents, etc., to con- 
 duct hearings and investigations, and to ex- 
 ercise such other powers as may be necessary. 
 They shall not have power to prohibit, or to 
 impose penalties for, strikes or lockouts. 
 
 5. Not in Interstate Commerce. — It shall 
 be provided that the commission, or a board 
 of mediation and investigation created by it 
 may exercise the foregoing powers, except 
 the compulsory powers under Subdivision d 
 of Proposal 4, for settling industrial contro- 
 versies between parties not engaged in inter- 
 state commerce. 
 
 6. On Request of the State in which the 
 Controversy Exists. — A board of mediation 
 and investigation may exercise all the fore- 
 going powers for settling industrial contro- 
 versies within any State, if the legislature or 
 the executive of the State has requested pro- 
 
 161
 
 MEDIATION AND ARBITRATION 
 
 tection against domestic violence and the 
 formation of such a board by the mediation 
 commission has been directed by the Presi- 
 dent of the United States. 
 
 COOPERATION 
 
 7. Cooperation with State and Local 
 Authorities. — The commission shall be au- 
 thorized and directed to cooperate with 
 state, local, and territorial authorities and 
 similar departments of foreign countries 
 which deal with the adjustment of industrial 
 disputes. 
 
 8. Cooperation with Other Federal 
 Agencies. — The commission, as far as prac- 
 ticable, shall coordinate its activities with and 
 cooperate with other Federal departments in 
 the performance of their duties. The Secre- 
 tary of Labor and Secretary of Commerce 
 should be ex-officio advisors to the commis- 
 sion. 
 
 162
 
 m 
 
 APPENDICES
 
 APPENDIX I 
 
 THE NEWLANDS ACT 
 
 An Act Providing for mediation, conciliation, and 
 arbitration in controversies between certain employers 
 and their employees. 
 
 Be it enacted by the Senate and House of Rep- 
 resentatives of the United States of America in 
 Congress assembled, That the provisions of this 
 Act shall apply to any common carrier or car- 
 riers and their officers, agents, and employees, ex- 
 cept masters of vessels and seamen, as defined 
 in section forty-six hundred and twelve, Revised 
 Statutes of the United States, engaged in the 
 transportation of passengers or property wholly 
 by railroad, or partly by railroad and partly by 
 water, for a continuous carriage or shipment 
 from one State or Territory of the United States 
 or the District of Columbia to any other State or 
 Territory of the United States or the District of 
 Columbia, or from any place in the United States 
 to an adjacent foreign country, or from any place 
 in the United States through a foreign country 
 to any other place in the United States. 
 165
 
 APPENDIX I 
 
 The term "railroad" as used in this Act shall 
 include all bridges and ferries used or operated in 
 connection with any railroad, and also all the road 
 in use bj any corporation operating a railroad, 
 whether owned or operated under a contract, 
 agreement, or lease; and the term "transporta- 
 tion" shall include all instrumentalities of ship- 
 ment or carriage. 
 
 The term "employees" as used in this Act shall 
 include all persons actually engaged in any ca- 
 pacity in train operation or train service of any 
 description, and notwithstanding that the cars 
 upon or in which they are employed may be held 
 and operated by the carrier under lease or other 
 contract: Provided, however, That this Act shall 
 not be held to apply to employees of street rail- 
 roads and shall apply only to employees engaged 
 in railroad train service. In every such case the 
 carrier shall be responsible for the acts and de- 
 faults of such employees in the same manner and 
 to the same extent as if said cars were owned by 
 it and said employees directly employed by it, and 
 any provisions to the contrary of any such lease 
 or other contract shall be binding only as be- 
 tween the parties thereto and shall not affect the 
 obligations of said carrier either to the public or 
 to the private parties concerned. 
 166
 
 APPENDIX I 
 
 A common carrier subject to the provisions of 
 this Act is hereinafter referred to as an "em- 
 ployer," and the employees of one or more of 
 such carriers are hereinafter referred to as "em- 
 ployees." 
 
 Sec. 2. That whenever a controversy concern- 
 ing wages, hours of labor, or conditions of em- 
 ployment shall arise between an employer or em- 
 ployers and employees subject to this Act inter- 
 rupting or threatening to interrupt the business 
 of said employer or employers to the serious 
 detriment of the public interest, either party to 
 such controversy may apply to the Board of Me- 
 diation and Conciliation created by this Act and 
 invoke its services for the purpose of bringing 
 about an amicable adjustment of the controversy; 
 and upon the request of either party the said 
 board shall with all practicable expedition put it- 
 self in communication with the parties to such 
 controversy and shall use its best efforts, by medi- 
 ation and conciliation, to bring them to an agree- 
 ment; and if such efforts to bring about an 
 amicable adjustment through mediation and con- 
 ciliation shall be unsuccessful, the said board shall 
 at once endeavor to induce the parties to submit 
 their controversy to arbitration in accordance 
 with the provisions of this Act. 
 167
 
 APPENDIX I 
 
 In any case in which an interruption of traffic 
 is imminent and fraught with serious detriment to 
 the public interest, the Board of Mediation and 
 Conciliation may, if in its judgment such action 
 seem desirable, proffer its services to the respec- 
 tive parties to the controversy. 
 
 In any case in which a controversy arises over 
 the meaning or the application of any agreement 
 reached through mediation under the provisions of 
 this Act either party to the said agreement may 
 apply to the Board of Mediation and Concilia- 
 tion for an expression of opinion from such board 
 as to the meaning or application of such agree- 
 ment and the said board shall upon receipt of 
 such request give its opinion as soon as may be 
 practicable. 
 
 Sec. 3. That whenever a controversy shall 
 arise between an employer or employers and em- 
 ployees subject to this Act, which can not be set- 
 tled through mediation and conciliation in the 
 manner provided in the preceding section, such 
 controversy may be submitted to the arbitration 
 of a board of six, or, if the parties to the contro- 
 versy prefer so to stipulate, to a board of three 
 persons, which board shall be chosen in the follow- 
 ing manner : In the case of a board of three, the 
 employer or employers and the employees, parties 
 168
 
 APPENDIX I 
 
 respectively to the agreement to arbitrate, shall 
 each name one arbitrator ; and the two arbitrators 
 thus chosen shall select the third arbitrator; but 
 in the event of their failure to name the third ar- 
 bitrator within five days after their first meeting, 
 such third arbitrator shall be named by the Board 
 of Mediation and Conciliation. In the case of a 
 board of six, the employer or employers and the 
 employees, parties respectively to the agreement 
 to arbitrate, shall each name two arbitrators, and 
 the four arbitrators thus chosen shall, by a ma- 
 jority vote, select the remaining two arbitrators; 
 but in the event of their failure to name the two 
 arbitrators within fifteen days after their first 
 meeting the said two arbitrators, or as many of 
 them as have not been named, shall be named by 
 the Board of Mediation and Conciliation. 
 
 In the event that the employees engaged in any 
 given controversy are not members of a labor or- 
 ganization, such employees may select a committee 
 which shall have the right to name the arbitrator, 
 or the arbitrators, who are to be named by the 
 employees as provided above in this section. 
 
 Sec. 4. That the agreement to arbitrate — 
 
 First. Shall be in writing; 
 
 Second. Shall stipulate that the arbitration is 
 had under the provisions of this Act; 
 169
 
 APPENDIX I 
 
 Third. Shall state whether the board of arbitra- 
 tion is to consist of three or six members ; 
 
 Fourth. Shall be signed by duly accredited rep- 
 resentatives of the employer or employers and of 
 the employees; 
 
 Fifth. Shall state specifically the questions to be 
 submitted to the said board for decision ; 
 
 Sixth. Shall stipulate that a majority of said 
 board shall be competent to make a valid and bind- 
 ing award; 
 
 Seventh. Shall fix a period from the date of the 
 appointment of the arbitrator or arbitrators nec- 
 essary to complete the board, as provided for in 
 the agreement, within which the said board shall 
 commence its hearings ; 
 
 Eighth. Shall fix a period from the beginning 
 of the hearings within which the said board shall 
 make and file its award: Provided, That this 
 period shall be thirty days unless a different pe- 
 riod be agreed to ; 
 
 Ninth. Shall provide for the date from which 
 the award shall become effective and shall fix the 
 period during which the said award shall continue 
 in force; 
 
 Tenth. Shall provide that the respective par- 
 ties to the award will each faithfully execute the 
 same; 
 
 170
 
 APPENDIX I 
 
 Eleventh. Shall provide that the award and 
 the papers and proceedings, including the testi- 
 mony relating thereto, certified under the hands 
 of the arbitrators, and which shall have the force 
 and effect of a bill of exceptions, shall be filed in 
 the clerk's office of the district court of the United 
 States for the district wherein the controversy 
 arises or the arbitration is entered into, and shall 
 be final and conclusive upon the parties to the 
 agreement unless set aside for error of law ap- 
 parent on the record ; 
 
 Twelfth. May also provide that any differ- 
 ence arising as to the meaning or the application 
 of the provisions of an award made by a board of 
 arbitration shall be referred back to the same 
 board or to a subcommittee of such board for a 
 ruling, which ruling shall have the same force and 
 effect as the original award; and if any member 
 of the original board is unable or unwilling to 
 serve another arbitrator shall be named in the 
 same manner as such original member was named. 
 
 Sec. 5. That for the purposes of this Act the 
 arbitrators herein provided for, or either of them, 
 shall have power to administer oaths and affirma- 
 tions, sign subpenas, require the attendance and 
 testimony of witnesses, and the production of such 
 books, papers, contracts, agreements, and docu- 
 
 171
 
 APPENDIX I 
 
 merits material to a just determination of the mat- 
 ters under investigation as may be ordered by 
 the court; and may invoke the aid of the United 
 States courts to compel witnesses to attend and 
 testify and to produce such books, papers, con- 
 tracts, agreements, and documents to the same ex- 
 tent and under the same conditions and penalties 
 as is provided for in the Act to regulate commerce, 
 approved February fourth, eighteen hundred and 
 eighty-seven, and the amendments thereto. 
 
 Sec. 6. That every agreement of arbitration 
 under this Act shall be acknowledged by the par- 
 ties thereto before a notary public or a clerk of 
 the district or the circuit court of appeals of the 
 United States, or before a member of the Board 
 of Mediation and Conciliation, the members of 
 which are hereby authorized to take such acknowl- 
 edgments ; and when so acknowledged shall be de- 
 livered to a member of said board or transmitted 
 to said board to be filed in its office. 
 
 When such agreement of arbitration has been 
 filed with the said board, or one of its members, 
 and when the said board, or a member thereof, 
 has been furnished the names of the arbitrators 
 chosen by the respective parties to the contro- 
 versy, the board, or a member thereof, shall cause 
 a notice in writing to be served upon the said arbi- 
 172
 
 APPENDIX I 
 
 trators, notifying them of their appointment, re- 
 questing them to meet promptly to name the re- 
 maining arbitrator or arbitrators necessary to 
 complete the board, and advising them of the 
 period within which, as provided in the agreement 
 of arbitration, they are empowered to name such 
 arbitrator or arbitrators. 
 
 When the arbitrators selected by the respective 
 parties have agreed upon the remaining arbitrator 
 or arbitrators, they shall notify the Board of Me- 
 diation and Conciliation ; and in the event of their 
 failure to agree upon any or upon all of the nec- 
 essary arbitrators within the period fixed by this 
 Act they shall, at the expiration of such period, 
 notify the Board of Mediation and Conciliation of 
 the arbitrators selected, if any, or of their failure 
 to make or to complete such selection. 
 
 If the parties to an arbitration desire the recon- 
 vening of a board to pass upon any controversy 
 arising over the meaning or application of an 
 award, they shall jointly so notify the Board of 
 Mediation and Conciliation, and shall state in 
 such written notice the question or questions to 
 be submitted to such reconvened board. The 
 Board of Mediation and Conciliation shall there- 
 upon promptly communicate with the members of 
 the board of arbitration or a subcommittee of such 
 173
 
 APPENDIX I 
 
 board appointed for such purpose pursuant to the 
 provisions of the agreement of arbitration, and 
 arrange for the reconvening of said board or sub- 
 committee, and shall notify the respective parties 
 to the controversy of the time and place at which 
 the board will meet for hearings upon the matters 
 in controversy to be submitted to it. 
 
 Sec. 7. That the board of arbitration shall 
 organize and select its own chairman and make 
 all necessary rules for conducting its hearings ; 
 but in its award or awards the said board shall con- 
 fine itself to findings or recommendations as to the 
 questions specifically submitted to it or matters 
 directly bearing thereon. All testimony before 
 said board shall be given under oath or affirma- 
 tion, and any member of the board of arbitration 
 shall have the power to administer oaths or af- 
 firmations. It may employ such assistants as may 
 be necessary in carrying on its work. It shall, 
 whenever practicable, be supplied with suitable 
 quarters in any Federal building located at its 
 place of meeting or at any place where the board 
 may adjourn for its deliberations. The board of 
 arbitration shall furnish a certified copy of its 
 awards to the respective parties to the contro- 
 versy, and shall transmit the original, together with 
 the papers and proceedings and a transcript of 
 174
 
 APPENDIX I 
 
 the testimony taken at the hearings, certified un- 
 der the hands of the arbitrators, to the clerk of 
 the district court of the United States for the dis- 
 trict wherein the controversy arose or the arbitra- 
 tion is entered into, to be filed in said clerk's 
 office as provided in paragraph eleven of section 
 four of this Act. And said board shall also fur- 
 nish a certified copy of its award, and the papers 
 and proceedings, including the testimony relating 
 thereto, to the Board of Mediation and Concilia- 
 tion, to be filed in its office. 
 
 The United States Commerce Court, the Inter- 
 State Commerce Commission, and the Bureau of 
 Labor Statistics are hereby authorized to turn 
 over to the Board of Mediation and Conciliation 
 upon its request any papers and documents here- 
 tofore filed with them and bearing upon mediation 
 or arbitration proceedings held under the provi- 
 sions of the Act approved June first, eighteen hun- 
 dred and ninety-eight, providing for mediation and 
 arbitration. 
 
 Sec. 8. That the award, being filed in the 
 clerk's office of a district court of the United 
 States as hereinbefore provided, shall go into 
 practical operation, and judgment shall be entered 
 thereon accordingly at the expiration of ten days 
 from such filing, unless within such ten days either 
 175
 
 APPENDIX I 
 
 party shall file exceptions thereto for matter of 
 law apparent upon the record, in which case said 
 award shall go into practical operation, and judg- 
 ment be entered accordingly, when such exceptions 
 shall have been finally disposed of either by said 
 district court or on appeal therefrom. 
 
 At the expiration of ten days from the decision 
 of the district court upon exceptions taken to said 
 award as aforesaid judgment shall be entered in 
 accordance with said decision, unless during said 
 ten days either party shall appeal therefrom to 
 the circuit court of appeals. In such case only 
 such portion of the record shall be transmitted to 
 the appellate court as is necessary to the proper 
 understanding and consideration of the questions 
 of law presented by said exceptions and to be de- 
 cided. 
 
 The determination of said circuit court of ap- 
 peals upon said questions shall be final, and, be- 
 ing certified by the clerk thereof to said district 
 court, judgment pursuant thereto shall thereupon 
 be entered by said district court. 
 
 If exceptions to an award are finally sustained, 
 judgment shall be entered setting aside the award 
 in whole or in part; but in such case the parties 
 may agree upon a judgment to be entered dispos- 
 ing of the subject matter of the controversy, 
 176
 
 APPENDIX I 
 
 which judgment when entered shall have the same 
 force and effect as judgment entered upon an 
 award. 
 
 Nothing in this Act contained shall be con- 
 strued to require an employee to render personal 
 service without his consent, and no injunction or 
 other legal process shall be issued which shall com- 
 pel the performance by any employee against his 
 will of a contract for personal labor or service. 
 
 Sec. 9. That whenever receivers appointed by 
 a Federal court are in the possession and control 
 of the business of employers covered by this Act 
 the employees of such employers shall have the 
 right to be heard through their representatives in 
 such court upon all questions affecting the terms 
 and conditions of their employment ; and no reduc- 
 tion of wages shall be made by such receivers with- 
 out the authority of the court therefor, after no- 
 tice to such employees, said notice to be given not 
 less than twenty days before the hearing upon the 
 receivers' petition or application, and to be posted 
 upon all customary bulletin boards along or upon 
 the railway or in the customary places on the 
 premises of other employers covered by this Act. 
 
 Sec. 10. That each member of the board of 
 arbitration created under the provisions of this 
 Act shall receive such compensation as may be 
 
 177
 
 APPENDIX I 
 
 fixed by the Board of Mediation and Conciliation, 
 together with his traveling and other necessary ex- 
 penses. The sum of $25,000, or so much thereof 
 as may be necessary, is hereby appropriated, to 
 be immediately available and to continue avail- 
 able until the close of the fiscal year ending June 
 thirtieth, nineteen hundred and fourteen, for the 
 necessary and proper expenses incurred in con- 
 nection with any arbitration or with the carry- 
 ing on of the work of mediation and conciliation, 
 including per diem, traveling, and other necessary 
 expenses of members or employees of boards of ar- 
 bitration and rent in the District of Columbia, 
 furniture, office fixtures and supplies, books, sal- 
 aries, traveling expenses, and other necessary ex- 
 penses of members or employees of the Board of 
 Mediation and Conciliation, to be approved by the 
 chairman of said board and audited by the proper 
 accounting officers of the Treasury. 
 
 Sec. 11. There shall be a Commissioner of 
 Mediation and Conciliation, who shall be ap- 
 pointed by the President, by and with the advice 
 and consent of the Senate, and whose salary shall 
 be $7,500 per annum, who shall hold his office for 
 a term of seven years and until a successor quali- 
 fies, and who shall be removable by the President 
 only for misconduct in office. The President 
 178
 
 APPENDIX I 
 
 shall also designate not more than two other offi- 
 cials of the Government who have been appointed 
 by and with the advice and consent of the Senate, 
 and the officials thus designated, together with the 
 Commissioner of Mediation and Conciliation, shall 
 constitute a board to be known as the United 
 States Board of Mediation and Conciliation. 
 
 There shall also be an Assistant Commissioner 
 of Mediation and Conciliation, who shall be ap- 
 pointed by the President, by and with the advice 
 and consent of the Senate, and whose salary shall 
 be $5,000 per annum. In the absence of the Com- 
 missioner of Mediation and Conciliation, or when 
 that office shall become vacant, the assistant com- 
 missioner shall exercise the functions and perform 
 the duties of that office. Under the direction of 
 the Commissioner of Mediation and Conciliation, 
 the assistant commissioner shall assist in the work 
 of mediation and conciliation and when acting 
 alone in any case he shall have the right to take ac- 
 knowledgments, receive agreements of arbitration, 
 and cause the notices in writing to be served upon 
 the arbitrators chosen by the respective parties to 
 the controversy, as provided for in section five of 
 this Act. 
 
 The Act of June first, eighteen hundred and 
 ninety-eight, relating to the mediation and arbi- 
 179
 
 APPENDIX I 
 
 tration of controversies between railway com- 
 panies and certain classes of their employees is 
 hereby repealed : Provided, That any agreement of 
 arbitration which, at the time of the passage of 
 this Act, shall have been executed in accordance 
 with the provisions of said Act of June first, 
 eighteen hundred and ninety-eight, shall be gov- 
 erned by the provisions of said Act of June first, 
 eighteen hundred and ninety-eight, and the pro- 
 ceedings thereunder shall be conducted in accord- 
 ance with the provisions of said Act. 
 Approved July 15, 1918.
 
 APPENDIX II 
 
 REPORT OF THE COMMISSION ON INDUS- 
 TRIAL RELATIONS 
 
 The report of Mr. Basil M. Manly, Director of 
 Research and Investigation, contained the follow- 
 ing statement and recommendations tenth reference 
 to agencies of mediation, investigation, and arbi- 
 tration. 1 
 
 The result of the very extensive investigations 
 which have been made regarding the agencies for 
 mediation and arbitration in this country and 
 abroad have been embodied in the plan for legis- 
 lation which is attached hereto. The plan as pre- 
 sented is limited to a National System, but it is 
 recommended that the State legislatures should 
 enact legislation along the same general lines. 
 The general principles which have governed 
 in drawing up this plan may be stated as fol- 
 lows: 
 
 1 Final Report of the Commission on Industrial Re- 
 lations, 1915, pp. 194-201. 
 181
 
 APPENDIX II 
 
 1. The Mediation Commission should be inde- 
 pendent of, and definitely divorced from, every 
 other department of the State or Federal Gov- 
 ernment. Its only power grows out of its im- 
 partiality and this can not be secured if it is 
 subordinate to any other body whose sympa- 
 thies either with labor or with capital can be 
 questioned. 
 
 2. Mediation should be entrusted to a person as 
 far as possible distinct from those who act as 
 arbitrators or appoint arbitrators. 
 
 3. The office of mediator should be placed beyond 
 the suspicion that the office is being used as a 
 reward for party services. 
 
 4. The mediator should appoint his own subordi- 
 nates. 
 
 5. It is desirable in the event of the failure of 
 mediation by an official mediator, that the par- 
 ties should be asked to consent to the appoint- 
 ment of a Board of Mediation and Investiga- 
 tion consisting of three persons, one selected by 
 each party and the third by these two. Such 
 a board, it appears, would be able to secure an 
 agreement in many cases where the mediator 
 fails. These boards should have power to sum- 
 mon witnesses and compel the production of 
 papers. In the event that the board could not 
 
 182 '
 
 APPENDIX II 
 
 secure an agreement during the investigation, 
 it should be empowered to make a public report 
 stating the terms on which, in its judgment, 
 the parties should settle. 
 
 6. In those cases in which the parties are unable to 
 agree on the third member of the Board of Me- 
 diation and Investigation, he should be ap- 
 pointed in the State Systems by the State 
 Board of Arbitration, and in the National Sys- 
 tem by the mediators, from a list prepared in 
 advance by an Advisory Board, consisting of 
 ten representatives of employers' associations 
 and ten representatives of trade unions. 
 
 7. National Boards of Mediation and Investiga- 
 tion are to be formed only in disputes involv- 
 ing interstate commerce and in those cases in 
 which the legislature or the executive of a State 
 has requested the intervention of the Federal 
 Government. 
 
 8. The Secretary of Labor, or in the States the 
 official, bureau or commission which is created 
 for the protection of the workers, should be 
 empowered to appear before the Board of 
 Mediation and Investigation, when it is holding 
 public hearings, either at the request of the 
 board as amicus curiae, in the ascertainment of 
 facts regarding labor conditions, or, if ap- 
 
 183
 
 APPENDIX II 
 
 pealed to, as the spokesman for the employees 
 in the presentation of their case. 
 
 PROPOSED PLAN OF A NATIONAL SYSTEM OF 
 
 MEDIATION, INVESTIGATION AND 
 
 ARBITRATION 
 
 ORGANIZATION 
 
 1. Scope of Authority. 
 
 The National Mediation Commission should be 
 given exclusive authority to intervene, under the 
 conditions hereinafter defined, in all industrial dis- 
 putes involving any corporation, firm, or estab- 
 lishment except public service establishments, 
 which is engaged in interstate commerce or whose 
 products enter into interstate or foreign com- 
 merce. 
 
 This provision differentiates its functions from 
 those of the Mediation Commission existing at 
 present under the Newlands Act. It is consid- 
 ered desirable for the present to provide for the 
 existence of the two commissions, at least until the 
 proposed commission has been thoroughly tested. 
 It is believed to be wise, however, to provide for 
 their close cooperation from the very beginning, 
 with the idea that they will ultimately be consoli- 
 dated. 
 
 184
 
 APPENDIX II 
 
 It will be noted that this provision also will 
 have the effect of supplanting the mediation pow- 
 ers which are now vested in the Department of 
 Labor. There is no desire to criticise or belittle 
 the past activities of the mediators operating un- 
 der the Department of Labor, for such criticism 
 is absolutely unwarranted. It is also freely ad- 
 mitted that the Department of Labor has not had 
 either the time or the resources necessary for the 
 proper development of this function. The pro- 
 posal is made, however, primarily upon three 
 grounds which seem to be sound and, in fact, com- 
 pelling: First, the function of mediation depends 
 absolutely upon the permanent assurance of im- 
 partiality. The Department of Labor was cre- 
 ated to represent the interests of labor and it 
 seems not only inevitable but desirable and proper 
 that the Secretary of Labor should always be 
 drawn from the ranks of organized labor. The 
 function of mediation may be administered with 
 absolute impartiality under any particular Secre- 
 tary, or even under every Secretary, and yet it 
 seems impossible, even under such conditions, to 
 create that absolute assurance of impartiality 
 which is the prime essential. Second, it is the pre- 
 rogative and duty of the Department of Labor 
 to act, aggressively if need be, for the protection 
 185
 
 APPENDIX II 
 
 of the workers at all times, and to utilize every re- 
 source at its command to give them that protec- 
 tion. The Department must necessarily be 
 greatly impeded in such frankly partisan action, 
 it would seem, if it must at the same time preserve 
 either the substance or the shadow of impartiality 
 in carrying out its function of mediation. Third, 
 in the bitterest disputes, where the public interest 
 most strongly demands intervention, mediation is 
 seldom successful, and a stage is quickly reached 
 where the most vital necessity is for the full and 
 exact facts regarding the dispute, in order that 
 public opinion may be intelligently formed and di- 
 rected. Experience has shown that such facts can 
 best be secured fully, quickly, and effectively 
 through the medium of public inquiry. This 
 means that the inquiring body must have power to 
 summon witnesses, compel the production of 
 books and papers, and compel testimony, or the 
 proceeding is worse than a farce. It may be re- 
 garded as certain that such powers will never be 
 entrusted to the Department of Labor. 
 
 #. Membership. 
 
 The members of the Mediation Commission 
 should be appointed by the President with the ad- 
 vice and consent of the Senate. The members 
 186
 
 APPENDIX II 
 
 should represent in proper balance the interests 
 of employers, employees, and the public. The 
 members should serve for terms of six years. 
 
 8. Advisory Board. 
 
 The President of the United States should 
 designate an equal number of leading organiza- 
 tions of employers and leading organizations of 
 employees to appoint representatives to act as an 
 advisory body to the President, to Congress, and 
 to the Mediation Commission. This body, desig- 
 nated hereinafter the Advisory Board, should give 
 advice regarding the duties of the commission, the 
 administration of its affairs and the selection of 
 mediators, and be empowered to make recom- 
 mendations regarding legislation. The Advisory 
 Board should also prepare lists of persons who 
 may be called upon to serve on boards of arbitra- 
 tion and on boards of mediation and investigation. 
 The Advisory Board should be called together at 
 least once a year by the Chairman of the Media- 
 tion Commission; it should have an organization 
 independent of the commission and elect its own 
 chairman and secretary. 
 
 The members of the Advisory Board should be 
 
 paid traveling and other necessary expenses and 
 
 such compensation as may be determined upon. 
 
 Provision should be made for the removal of 
 
 187
 
 APPENDIX II 
 
 members by the organizations which they repre- 
 sent. 
 
 If.. Subordinate Officers and Assistants. 
 
 The Mediation Commission should have power 
 to appoint, remove at pleasure, and fix the com- 
 pensation of a secretary (and a limited number 
 of clerks). The appointment of other officers and 
 assistants, such as mediators, examiners, investi- 
 gators, technical assessors, experts, disbursing of- 
 ficer, clerks, and other employees, should be sub- 
 ject to the Civil Service rules. But arrangements 
 should be made to have the examination include 
 experience and other proper qualifications, and to 
 give the Mediation Commission power to examine 
 all candidates orally. 
 
 POWERS, DUTIES, AND JUBISDICTION 
 
 5. In Interstate Commerce. 
 
 (a) Mediation: Whenever a controversy con- 
 cerning conditions of employment arises between 
 employer and employees engaged in interstate 
 commerce other than public service corporations, 
 either party should be able to apply to the chair- 
 man of the Mediation Commission for its services 
 in the bringing about of an amicable adjustment 
 of the controversy. Or, the chairman of the com- 
 188
 
 APPENDIX II 
 
 mission should be authorized to offer, on his own 
 initiative, the services of the mediators of the 
 commission. If efforts to bring about an ami- 
 cable adjustment through mediation should be un- 
 successful, the commission should at once, if pos- 
 sible, induce the parties to submit their differences 
 to arbitration. 
 
 (b) Arbitration: Procedure should be similar 
 to that outlined in the Newlands Act. If it is nec- 
 essary for the Mediation Commission to appoint 
 arbitrators, they should be taken from a list pre- 
 pared by the Advisory Board. 
 
 (c) Boards of Mediation and Investigation: 
 If the parties to the controversy can not be in- 
 duced to arbitrate, and if the controversy should 
 threaten to interrupt the business of employers 
 and employees to the detriment of the public in- 
 terest, the commission should be authorized to re- 
 quest the two parties to consent to the creation of 
 a Board of Mediation and Investigation. If the 
 consent of the parties to the controversy is se- 
 cured, the commission shall form such a board. 
 Of the three members of the board, one should be 
 selected by the employers, one by the employees, 
 and a third on the recommendation of the members 
 so chosen. If either side fails to recommend a 
 member, he should be appointed by the commis- 
 
 189
 
 APPENDIX II 
 
 sion. If after a stated time the third member is 
 not recommended, the commission should select 
 him. Appointments to boards of mediation and 
 investigation shall be made by the commission 
 from a list prepared for this purpose by the Ad- 
 visory board. The Board of Mediation and In- 
 vestigation should offer its friendly offices in 
 bringing about a settlement of the dispute through 
 mediation. If mediation should not be success- 
 ful and if the parties to the controversy refuse to 
 arbitrate, this board should have power to make 
 an investigation of the controversy, and should 
 be required to submit to the commission a full re- 
 port thereon, including recommendations for its 
 settlement. The commission should be empow- 
 ered to give this report and recommendations ade- 
 quate publicity. 
 
 (d) Powers to Secure Evidence: A Board of 
 Mediation and Investigation should have power to 
 administer oaths, to subpena and compel the at- 
 tendance and testimony of witnesses, and the pro- 
 duction of books, papers, documents, etc., and 
 to conduct hearings and investigations, and to 
 exercise such other similar powers as might be 
 necessary. It should not have power to pro- 
 hibit, or to impose penalties for, strikes or lock- 
 outs. 
 
 190
 
 APPENDIX II 
 
 6. Not in Interstate Commerce. 
 
 It should be provided that the commission, or 
 a Board of Mediation and Investigation created 
 by it, may exercise the foregoing powers except 
 the compulsory powers under subdivision "d" of 
 Proposal 5, for settling industrial controversies 
 between parties not engaged in interstate com- 
 merce, if they are requested to do so by the Gov- 
 ernor or legislature of a State, or by the mayor, 
 council, or commission of a municipality. 
 
 7. The Secretary of Labor and the Secretary 
 of Commerce should be authorized to bring to the 
 attention of the commission any dispute in which 
 the intervention of the commission seems desir- 
 able. The Secretary of Labor, or such officer as 
 he may designate, should also be authorized to 
 appear before any Board of Mediation and Inves- 
 tigation, either at the request of the board as 
 amicus curiae for the ascertainment of facts re- 
 garding labor conditions, or, if appealed to, as a 
 spokesman for the employees in the presentation 
 of their case. 
 
 COOPERATION 
 
 8. Cooperation with State and Local 'Authorities. 
 
 The commission should be authorized and di- 
 191
 
 APPENDIX II 
 
 rected to cooperate with state, local, and terri- 
 torial authorities and similar departments of for- 
 eign countries which deal with the adjustment of 
 industrial disputes. 
 
 9. Cooperation with Other Federal Agencies. 
 
 The commission should, as far as practicable, 
 coordinate its activities and cooperate with other 
 Federal departments in the performance of their 
 duties. 
 
 The report of Mr. Manly as a whole was signed 
 by Chairman Frank P. Walsh, and Commissioners 
 John B. Lennon, James O'Connell, and Austin B. 
 Garretson. All of those signing the report of 
 Mr. Manly wrote also supplemental statements 
 which contain refetences to the section of the re- 
 port relating to agencies of mediation, investiga- 
 tion, and arbitration. The sections of these sup- 
 plemental reports dealing with the subject are 
 contained in Appendix HI,
 
 APPENDIX III 
 
 REPORT OF THE COMMISSION ON INDUS- 
 TRIAL RELATIONS 
 
 The supplemental statement of Commissioners' 
 John B. Lennon and James O'Connell contains the 
 following passage relating to the subject: * 
 
 EXTENT OP UNREST 
 
 The principal duty imposed, under the law cre- 
 ating the commission, was to seek to ascertain 
 the causes of industrial unrest and offer such rec- 
 ommendations as we believe might alleviate that 
 unrest. There can be no question but that un- 
 rest exists, in some instances, to an alarming ex- 
 tent. Thousands and tens of thousands of our 
 people feel that they are deprived, under existing 
 conditions in industry, of an opportunity to se- 
 cure for themselves and their families a standard 
 of living commensurate with the best ideals of 
 manhood, womanhood, and childhood. They re- 
 
 1 Final Report of the Commission on Industrial Re- 
 lations, 1915, pp. 283-286. 
 
 193
 
 APPENDIX III 
 
 sent the fact that the existing system of the dis- 
 tribution of wealth creates at one end of our 
 industrial scale a few multi-millionaires and at the 
 other end thousands and tens of thousands of 
 men, women, and children who are at all times in 
 a situation where they are uncertain as to where 
 their next meal will come from. Hungry, poorly 
 clothed, and without the opportunities that a 
 fully rounded life requires, they become filled with 
 a sullen resentment that bodes no good for the fu- 
 ture of our Republic. 
 
 We have found men and women who are inclined 
 to ascribe this condition to the fact that the Gov- 
 ernment exercises no power of mandatory char- 
 acter to prevent strikes and lockouts. Many 
 have been the propositions submitted to us for 
 compulsory arbitration or, at least, compulsory 
 investigation with power to recommend a settle- 
 ment. Some have proposed an elaborate machin- 
 ery to be set up by the general Government, and 
 of a similar character by the States, providing 
 for conciliation, mediation, arbitration, and inves- 
 tigation, all of which, while without definite com- 
 pulsory features, establish a legal machinery that 
 must of necessity exercise an influence in that di- 
 rection. 
 
 The plan for the creation of an industrial com- 
 194
 
 APPENDIX III 
 
 mission, both National and State, proposes to 
 assign to a commission of three members the ad- 
 ministration of all labor laws of either State or 
 Nation, giving to them powers far in excess of 
 those exercised by the President of the United 
 States, or the Governor of any State. This we 
 believe to be Bureaucracy run mad, and a subver- 
 sion of Democracy dangerous to the civil and so- 
 cial liberty of all citizens. We hold that all 
 power should be in the final analysis with the 
 people, and we therefore, dissent from any such 
 plan. 
 
 NEW GOVERNMENTAL. MACHINERY UNWISE 
 
 The activities of such a commission supple- 
 mented by the proposed advisory committees of 
 employers and labor representatives would be so 
 balanced as to prevent substantial progress, and 
 tend to perpetuate present conditions. Such a 
 plan conceives of labor and capital as static forces 
 and of the relations between them as always to re- 
 main unchanging. 
 
 We believe that the work now being done by 
 the Department of Labor in industry generally, 
 and by the Board of Mediation and Conciliation, 
 dealing with interstate public utilities, is better 
 than any that could be expected of any additional 
 195
 
 APPENDIX III 
 
 board that has been suggested to this commis- 
 sion. We believe that the Department of Labor, 
 with further experience and larger appropria- 
 tions, will develop a high state of efficiency in ad- 
 justing labor disputes that are capable of being 
 adjusted by any one other than the parties di- 
 rectly interested, and will adequately carry on the 
 work provided by the law creating the Department 
 of Labor, to wit : 
 
 Section 1. The purpose of the Department 
 of Labor shall be to foster, promote, and de- 
 velop the welfare of the wage earners in the 
 United States, to improve their working condi- 
 tions, and to advance their opportunities for 
 profitable employment. 
 
 Section 8. The Secretary of Labor shall 
 have power to act as mediator and to appoint 
 commissioners of conciliation in labor disputes 
 whenever in his judgment the interests of indus- 
 trial peace require it to be done. 
 We favor the extension of the Newlands Act to 
 cover all employees engaged in interstate com- 
 merce, such as the railroad telegraphers, the shop 
 and track men employed by railroads, the em- 
 ployees of express companies, of the Pullman 
 Company, of commercial telegraph and telephone 
 companies, and other public utilities performing 
 196
 
 APPENDIX III 
 
 interstate service that, in the interest of the Na- 
 tion, must be continuous. 
 
 The evidence submitted to this commission is 
 substantially to the effect that where trade union 
 organization exists among the workers, there, at 
 the same time, exists the least amount of indus- 
 trial unrest of a character that is dangerous to 
 the peace and welfare of our nation. It is true 
 that the union men and women are not satisfied 
 with their conditions ; they are not, however, de- 
 spondent as to the possibility of securing better 
 conditions ; they know what the unions have accom- 
 plished, and they have an abiding faith that their 
 further desires can be attained. 
 
 Instead of any elaborate machinery for the 
 prevention of strikes or lockouts we are convinced, 
 from the testimony gathered by this commission, 
 that the most effectual course that can be pur- 
 sued to bring about general contentment among 
 our people, based upon a humane standard of liv- 
 ing, is the promotion of labor organization. The 
 most casual investigator will soon discover that in 
 those lines of industry where organization of labor 
 is the strongest, there is the least danger of in- 
 dustrial revolt that would endanger the fundamen- 
 tal principles of our Government and the main- 
 tenance of a nation with respect for law and or- 
 197
 
 APPENDIX III 
 
 der. Where organization is lacking, dangerous 
 discontent is found on every hand ; low wages and 
 long hours prevail; exploitation in every direc- 
 tion is practiced; the people become sullen, have 
 no regard for law or government and are, in real- 
 ity, a latent volcano, as dangerous to society as 
 are the volcanoes of nature to the landscape sur- 
 rounding them. 
 
 The supplemental statement of Commissioner 
 Austin B. Garretson contains the following pas- 
 sages relating to the subject: l 
 
 My signature is appended to the Report of 
 Mr. Basil M. Manly, Director of Research and 
 Investigation of the United States Commission on 
 Industrial Relations, submitted to the commission 
 and transmitted herewith, as to the findings of fact 
 contained therein. 
 
 I am in general agreement with the recommen- 
 dations contained in that Report except as to 
 the formation of the system of State and Fed- 
 eral Commissions and a Federal Industrial Coun- 
 cil. 
 
 On this recommendation I neither approve nor 
 condemn. But out of regard for the opinion of 
 
 1 Final Report of the Commission on Industrial Re- 
 lations, 1915, p. 291. 
 
 198
 
 APPENDIX III 
 
 the great body of intra-state labor most directly 
 affected, I dissent. . . . 
 
 I am favorable to the extension of the provi- 
 sions of the Newlands Act to all classes of inter- 
 state employees who can constitutionally be 
 brought under its provisions and would favor the 
 enlargement of the body administering it to meet 
 the added responsibilities which would thereby be 
 placed upon it, but limiting the powers thereof to 
 the settlement of industrial disagreements and to 
 the gathering of information germane to their mis- 
 sion. 
 
 I favor the creation of state commissions, simi- 
 larly constituted and acting in corelation and un- 
 derstanding with the Federal Board. 
 
 I heartily concur with the Report of Commis- 
 sioners Lennon and O'Connell except on those 
 points where disagreement is herein noted. I dis- 
 sent in whole from the report rendered by Commis- 
 sioner J. R. Commons. 
 
 The supplemental statement of Chairman 
 Frank P. Walsh contains the following passage 
 relating to the subject : 1 
 
 Although I have signed the report prepared 
 
 1 Final Report of the Commission on Industrial Re- 
 lations, 1915, p. 302. 
 
 199
 
 APPENDIX III 
 
 by Mr. Basil M. Manly, Director of Research and 
 Investigation, because I believe it represents an 
 unassailable statement of the existing industrial 
 situation, because it fully complies with the re- 
 quirements of the Act of Congress creating the 
 commission, and because the recommendations are 
 as a whole wise and necessary for the welfare of 
 the Nation, I, nevertheless, desire to record my 
 dissent on the following points — 
 
 1. The recommendation for new administra- 
 tive machinery for mediation and arbitration in 
 the form of a special commission. I believe that 
 the commission created by the Newlands Act, and 
 the Department of Labor, if their powers are en- 
 larged and they are adequately supported, will be 
 fully able to deal with the situation. . . .
 
 APPENDIX IV 
 
 REPORT OF THE COMMISSION ON INDUS- 
 TRIAL RELATIONS 
 
 The report of Commissioners John R. Com' 
 mons and Florence J. Harriman contains the fol- 
 lowing recommendations relating to mediation, *»- 
 vestigation, and arbitration. 1 
 
 MEDIATION AND MINIMUM WAGE 
 
 The Industrial Commission (State or Federal) 
 shall appoint, remove and fix the compensation 
 of a chief mediator of industrial disputes. The 
 chief mediator to hold his position until removed 
 by the Industrial Commission and to appoint such 
 assistants as may be needed, and to fix their com- 
 pensation with the approval of the Industrial Com- 
 mission. He should appoint temporary mediators 
 for special cases, without requiring them to give 
 up their private business or offices. 
 
 The chief mediator and all assistant mediators 
 
 1 Final Report of the Commission on Industrial Re- 
 lations, 1915, pp. 364-366, 376-377. 
 201
 
 APPENDIX IV 
 
 to be selected from an eligible list prepared by 
 the Civil Service Commission on a nonassembled 
 examination, with the assistance of the Industrial 
 Commission and the Advisory Council. 
 
 The chief mediator and his staff to have no 
 powers whatever of compulsory testimony and to 
 be prohibited from arbitrating any dispute, from 
 making any public recommendation, or from re- 
 vealing in any way, directly or indirectly, any 
 information which they may have secured from 
 any parties relative to an industrial dispute. 
 Any violation to be sufficient ground for im- 
 mediate removal by the Industrial Commission. 
 The powers of the mediators to be those solely 
 of voluntary mediation or conciliation but the 
 chief mediator shall offer his services in confi- 
 dence to both sides of a dispute which, in his 
 judgment, is of public importance. 
 
 The chief mediator and his staff to be wholly 
 independent of the Industrial Commission, except 
 as to appointment and removal, to the extent that 
 they be prohibited from reporting any facts or 
 recommendations whatever to the Industrial Com- 
 mission or any other authority, relative to the 
 merits of any industrial dispute. 
 
 In case the mediator is unable to secure an 
 agreement through conciliation, he shall recom- 
 202
 
 APPENDIX IV 
 
 mend arbitration to both parties, and if both con- 
 sent to abide by the decision of arbitrators he 
 shall proceed to assist them in selecting a board 
 of arbitration in any way, and consisting of any 
 number of members, that both sides may agree 
 upon. If agreement is not reached within a speci- 
 fied time on the third party to the board of media- 
 tion, the chief mediator shall appoint the same. 
 
 In case both parties do not consent to arbitra- 
 tion the mediator shall recommend the appoint- 
 ment of a board of mediation and investigation, 
 which shall have power to make public its find- 
 ings and recommendations, but such recommenda- 
 tions shall not be binding on any person. If 
 both parties shall consent to such a board the 
 mediator shall assist them in creating the same, 
 and shall appoint the third member if the par- 
 ties can not agree on the same within a speci- 
 fied number of days. 
 
 In case both parties accept either a board of 
 arbitration or a board of mediation and investi- 
 gation, such board, as the case may be, shall have 
 power of compelling testimony. The "Newlands 
 Act" and the Department of Labor act should be 
 so amended that all mediation and conciliation, 
 whether on railways or in other industries, shall 
 be consolidated under the mediator of the Fed- 
 203
 
 APPENDIX IV 
 
 eral Industrial Commission. The Federal Com- 
 mission should cooperate with State mediators. 
 
 In the case of women and children, minimum 
 wage boards should be created by the state indus- 
 trial commissions. 
 
 The foregoing recommendation is intended to 
 provide for strictly "voluntary" methods of 
 mediation and arbitration. When engaged in this 
 branch of its work the commission is not only pro- 
 hibited from using its compulsory powers, but its 
 mediation work is so rigidly separated from its 
 other work that it can not even be suspected of 
 using the coercive power of Government to favor 
 either side. The mediator and his staff are to 
 be strictly confidential advisors to the opposing 
 interests, without the power of Government, or 
 even the threat of using that power, to coerce 
 either side of a collective dispute. If coercion 
 is used in the form of " compulsory testimony" 
 it is only with the previous voluntary consent of 
 both sides. . . . 
 
 After considering all forms of Governmental 
 compulsion in collective disputes and even admit- 
 ting their partial success in other countries, we 
 conclude that, on the whole, in this country, as 
 much can be accomplished in the long run by 
 strictly voluntary methods as by compulsory meth- 
 204
 
 APPENDIX IV 
 
 ods of avoiding strikes and lockouts. It can not 
 be expected that strikes and lockouts can be abol- 
 ished altogether. Even countries with compulsory 
 systems have not succeeded in preventing all of 
 them. In our country, the voluntary method in 
 collective bargaining avoids the much more serious 
 evil of discrediting the agencies of Government 
 which must be looked to for impartial enforcement 
 of laws affecting the individual labor contract. It 
 is to the enactment and enforcement of laws pro- 
 tecting laborers as individuals that we must look 
 for the removal of underlying causes of indus- 
 trial unrest and for the eventual reduction of 
 strikes that now spring from the cumulative abuses 
 that individuals suffer without other effective 
 remedies. But the removal of these abuses can 
 not be accomplished without the efficient and non- 
 partisan administration of laws, and this is the 
 main purport of our recommendation for indus- 
 trial commissions to regulate the individual labor 
 contract. 
 
 The report of Commissioners Commons and 
 Harriman was signed also by Commissioners Har- 
 ris Wemstock, S. Thurston Ballard, and Richard 
 H. Aishton. Commissioners Weinstock, Ballard, 
 and Aishton made also a joint supplemental re- 
 205
 
 APPENDIX IV 
 
 port in which the following passage relating to the 
 subject occurs: 1 
 
 We concur in the report prepared by Commis- 
 sioner Commons, dissenting, however, on the two 
 following points, and supplementing it by cer- 
 tain other findings and recommendations following 
 herewith. . . . 
 
 Second. We further dissent from said report 
 in its limitation of public inquiry in labor dis- 
 putes only to cases where both sides invite such 
 inquiry. We believe that in the public interest 
 there are times when compulsion in labor dis- 
 putes is thoroughly justified. We feel, with or- 
 ganized labor, that there should be no restriction 
 put upon the right to strike, realizing as we do, 
 that the strike is the only weapon which, in the 
 interest of labor, can be effectively and legally 
 used to aid in bettering its conditions. We feel, 
 also, that there should be no restriction placed 
 upon the employer in his right to declare a lock- 
 out in order to better protect what he regards as 
 his interest, and we therefore would not favor any 
 plan that would inflict penalties upon the worker 
 or upon the employer for declaring a strike or 
 lockout. 
 
 1 Final Report of the Commission on Industrial Re- 
 lations, 1915, pp. 407, 409-411. 
 206
 
 APPENDIX IV 
 
 Where the two sides to a labor controversy are 
 fairly well balanced in strength, the winning side 
 must depend, in the last analysis, upon the sup- 
 port of public opinion. Public opinion, there- 
 fore, becomes a most important factor in the in- 
 terest of industrial peace. Such public opinion, 
 however, to be of value, must be enlightened. 
 Under prevailing conditions this is almost im- 
 possible. All that the public is now able to get, 
 as a rule, are garbled and ex parte statements, 
 more or less misleading and unreliable, which sim- 
 ply tend to confuse the public mind. 
 
 Where strikes and lockouts take place on a 
 large scale, and more especially in connection with 
 public utilities, the public inevitably becomes a 
 third party to the issue, in that it has more at 
 stake than both parties to the dispute combined. 
 For example, if the street railways of a large 
 city are tied up, the loss to the railway com- 
 panies in the way of revenue, and to the workers 
 in the way of wages, is great, but this loss be- 
 comes insignificant compared with the loss in- 
 flicted upon the rest of the community, to say 
 nothing of the annoyance, inconvenience, and men- 
 ace to life and property, which not infrequently 
 occur in such industrial disputes. The public, 
 therefore, as the third party to the issue, is jus- 
 207
 
 APPENDIX IV 
 
 tified in demanding that an investigation take 
 place, and that the facts be ascertained and pre- 
 sented in an impartial spirit to the general pub- 
 lic, so that ways and means may be found of ad- 
 judicating the dispute or of throwing the influence 
 of a properly informed public opinion on the side 
 which has the right in its favor. 
 
 We, therefore, earnestly recommend that in the 
 case of public utilities, the proposed industrial 
 commission shall not only have power to mediate 
 and conciliate, but also, at the request of either 
 side to a dispute, or upon the initiative of the com- 
 mission itself, should have the power, all volun- 
 tary methods having failed, to undertake a com- 
 pulsory public inquiry when, in the discretion of 
 the commission, public interest demands it; that 
 it be given the fullest powers to summon wit- 
 nesses, place them under oath, demand books and 
 documents, all with a view of ascertaining the 
 underlying causes of the dispute and the issues 
 involved, to the end of making recommendations 
 that, in the judgment of the board of inquiry, con- 
 sisting of three members, one to be chosen by 
 each side and the third to be chosen by these two, 
 would be a fair and reasonable settlement of the 
 points in dispute. It being understood, how- 
 ever, that neither side is obliged to accept such 
 208
 
 APPENDIX IV 
 
 recommendations, but may continue to strike or 
 lock out, as the case may be. Meanwhile, how- 
 ever, the public will have ascertained in the most 
 reliable way, the issues involved, the facts as they 
 have been found by the board of inquiry, and the 
 basis upon which a fair settlement can be estab- 
 lished, thus enabling the public more intelligently 
 to throw its support where it rightfully belongs. 
 
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 ■JJJjERN REGIONAL LIBRARY FACILITY 
 
 AA 000 029 963 6