THE LABOUR MOVEMENT IN AUSTRALASIA A STUDY IN SOCIAL-DEMOCRACY BY VICTOR S. CLARK, PH.D. 31TY NEW YORK HENRY HOLT AND COMPANY 1906 COPYRIGHT, 1906 BY HENRY HOLT AND COMPANY Published November \ TO MANY FRIENDS IN AUSTRALIA AND NEW ZEALAND, WHOSE COURTESY, HOSPITAL- ITY, AND ASSISTANCE HAVE FUR- THERED THE PREPARATION OF THIS BOOK. 1H4081 PREFACE THE American Federation of Labour has re- cently advised the trade unions of the United States to enter the next political campaign. This action may not revolutionise our parties, but nevertheless the step is significant. It indicates maturity of sentiment in favour of political action not hitherto manifested by con- servative labour organisations. Though most American unions have opposed socialism, still, considering current phases of popular thought, they can hardly engage in politics without mak- ing socialist policies a live issue perhaps in the near future a leading issue before our people. Therefore the experience of the Australasian democracies, so closely resembling the United States, where a powerful political party has been erected upon a foundation of trade union- ism, has timely interest for Americans. This book is an attempt to describe the his- vii viii Preface tory of the political labour party of Australasia, to analyse its policy and the results of that policy so far as applied, and at the same time to make clear the differences as well as the similari- ties characterising those countries and Amer- ica, which must affect the application to our own problems of their experience. I have tried to write from the standpoint of an agnostic in social creeds. My observations were made dur- ing visits to Australia and New Zealand, in 1903 and 1904, under a commission from the Government. Allusions to more recent events are based upon correspondence and printed information. The methods of social-democracy in Austra- lasia are historically continuous with the meth- ods of political-democracy in Great Britain. In their struggle for civic freedom, the com- mons of England relied upon adjective rather than substantive law. From the Magna Charta down, every bill of rights wrung from the sov- ereign provided procedure for asserting and realising personal and political liberty, not gen- eral definitions of what that liberty was. The Preface ix measures by which popular control was ex- tended were concrete measures. Their develop- ment was not symmetrical and subordinate to a preconceived theory of government or the rights of man. They were not automatic checks upon arbitrary authority, but means by which each citizen in maintaining his own rights defended the rights of every other citizen. The social-democratic policy of the colonies is following a similar development. Austra- lasian socialism is distinguished from Conti- nental socialism by the same features that dis- tinguish the Magna Charta and the Bill of Rights from the crystallisations of political theory in the documents of the French Revolu- tion. It has been called a "socialism without doctrines." Its object is to secure instruments by which workers may control industry. It seeks tools rather than proclaims theories, and does not try to harmonise practical attainments with a preconceived ideal of society. There- fore the socialism of Australasia is unique, and worthy of study as a phase though still in- complete, and possibly not abiding of Anglo- x Preface Saxon history. Even more important from a practical standpoint is its revelation of the vital forces directing the labour movement as a world-wide phenomenon. VICTOR S. CLARK. WASHINGTON, D. C., June, 1906. CONTENTS CHAPTER PAGE I. THE COUNTRY AND ITS RESOURCES . . 1 II. PEOPLE AND INSTITUTIONS .... 16 III. WORKINGMEN AND TRADE UNIONS . . 48 IV. THE POLITICAL LABOUR MOVEMENT . . 71 V. THE LABOUR PROGRAMME .... 101 VI. A WHITE AUSTRALIA 122 VII. MINIMUM WAGE BOARDS . . . .138 VIII. INDUSTRIAL ARBITRATION ACTS . . . 154 IX. JURISTIC ASPECTS OF COMPULSORY ARBITRA- TION 182 X. ECONOMIC AND SOCIAL EFFECTS OF INDUS- TRIAL REGULATION 212 XI. THE GOVERNMENT IN BUSINESS . . .246 XII. CONCLUSION AND OUTLOOK 281 THE UNIVERSITY OF THE LABOUR MOVEMENT IN AUSTRALASIA A STUDY IN SOCIAL-DEMOCRACY CHAPTER I THE COUNTRY AND ITS RESOURCES THE term Australasia is used to include the Commonwealth of Australia and the Colony of New Zealand, lands separated by twelve hun- dred miles of water, but intimately connected in social and industrial development. Both countries lie largely in the, south temperate zone, are peopled by a race of almost pure Anglo-Saxon stock, and are governed by elect- ive parliaments modelled upon that of Eng- land. Their natural resources are broadly similar, though climatic differences exist great enough to affect the economic condition, and even to be reflected in the social condition of the 2 The Country and Its Resources inhabitants. The people have been so drawn together by their remoteness from other centres of European civilisation, and by the identity of the public problems they have had to face, that they are distinguished by close community of sentiment and opinion. Neither country could well be considered alone in any account of social movements in which either was concerned. Australia approaches in territorial extent the mainland of the United States, though the pro- portion of arable land is much smaller than in America. Of the two countries it is relatively the warmer, having more than one-third of its area within the torrid zone. The continent presents a relief somewhat like a reversed dinner plate. Along the sloping rim the land is gen- erally fertile and well watered, and forested with the ever-present but ever-varied eucalyp- tus. Here agricultural industries thrive and small homesteads are possible. The ridge of loftier country towards the interior consists of low ranges of coastal mountains, from whose highlands flow the streams that occasionally break the even beach line of the continent with The Country and Its Resources 3 narrow valleys, and whose waters brought down the gold that formed the placer deposits of the early mining days. This barrier of broken land contains valuable quartz lodes of the pre- cious metals, besides copper, coal, and yet unde- veloped iron mines. Beyond it sink the boundless plains of the interior, extending into that "Never-Never" country which alternates be- tween the aridity of the desert during drought years and the wonderful fertility of rich, re- cuperated fallow lands whenever a tardy rain- fall comes to its relief. Gradually, as the re- mote interior is approached, grazing becomes scantier. Large tracts of country are covered with drought-resisting scrub, or are entirely de- void of vegetation except in the vicinity of water-holes. Sometimes this waste area comes even to the coast, while in other places, espe- cially in the southeastern portion of the conti- nent, the breadth of an empire separates the desert from the sea. Country of no value for agriculture or grazing sometimes contains great mineral wealth. The richest gold mines of the Commonwealth are nearly four hundred 4 The Country and Its Resources miles from a constant water supply. The pos- sibilities of the continent have not been meas- ured, but the portion that will be permanently settled is pretty well defined. Probably over half its area will never be profitably habitable. Other climatic influences than rainfall affect the distribution of population. The heat and humidity of the tropical northern coast dis- courage or prevent manual labour by white men. Europeans are employed as herdsmen on the cattle stations of the interior plains, and labour in the underground workings of the highland gold mines of northern Australia. They have constructed the railways and other public works in that country. On the sugar plantations they are employed in machine cultivation and as mill hands. But such occupations must be either exceptionally profitable or of a tempo- rary character to attract white labour. Cau- casians do not engage in pioneering and home- steading, or become permanent settlers on plan- tations in those latitudes. These climatic conditions have determined the limits of present development and the po- The Country and Its Resources 5 litical geography of Australia. The Com- monwealth includes, besides the mainland, the island state of Tasmania, about one hundred miles from its southern coast, and the tropical dependency of British New Guinea, which is ruled directly by the Federal Government. Five of the six states of the Federation are upon the continent, and their boundaries are so arranged that no state is exclusively trop- ical or inland. While their respective areas vary from 87,884 square miles in case of Vic- toria, to 975,920 square miles in case of West- ern Australia, or from a state slightly larger than Minnesota to one approaching four times the size of Texas, the disproportion in the amount of arable land they contain is not re- markably large. In population and developed resources, however, New South Wales and Vic- toria far excel all the other states, and contain nearly five-sevenths of the inhabitants of the Commonwealth. Second only to climate in determining the dis- tribution of settlement, has been the physical conformation of Australia. Climate has con- 6 The Country and Its Resources fined Europeans largely to the southern and coastal portions of the continent. The ab- sence of great iuypr systems leading into the in- terior, and the presence of mountain ranges parallel with the sea, have also helped to make the people litoral dwellers. A uniform coast line and rare though sometimes excellent har- bours have caused the concentration of urban population in a few large maritime towns. The absence of navigable streams of constant vol- ume is accompanied by the rarity of reliable water-power. Therefore jn)an^ cities and manufacturing and transportation centres do not exist in Australia. The larger interior towns are mining camps or rural trade markets, relatively unimportant compared with the nearest port metropolis. Although the southern point of the continent just crosses the thirty-ninth parallel, as far from the equator as the city of Washington and northern Virginia, snow seldom falls at the sea level, and Melbourne is as warm a city in win- ter as New Orleans. Oranges grow in Victoria and almond trees blossom in midwinter at Ade- The Country and Its Resources 7 laide. There are no mountains high enough to have perpetual snow, though Mount Kosciusko, in Victoria, reaches an altitude of over seven thousand feet; but except in Queensland snow is not uncommon in the highlands during the cold season, and some of the upland districts of Victoria and New South Wales have winters as rigorous as those of our northern states. The summers are characterised by extreme heat, with humidity on the coast, though in the in- terior the dryness of the atmosphere and rapid radiation at night help to mitigate the debili- tating effects of high temperatures. Upon the^ whole, the climate of the settled portions of Aus-j tralia, except Tasmania, corresponds more^ nearly with that of our Gulf States and South- , ern California than of any other part of the Union. This influences both social and labour/ conditions in the Commonwealth. Compared with other continents, the natural resources of Australia are limited in variety, but abundant within those limitations. The fisheries are less extensive than those of coastal Europe or America, though pearl fishing af- 8 The Country and Its Resources fords some employment and supports a few set- tlements on the northern coast. The litoral regions of all the states contain forests of some economic value. But they lack the soft woods used in house construction, and these have been imported. Railway ties and heavy timber are exported from Tasmania and Western Austra- lia. The agricultural capabilities of Australia are extensive and varied, and the area fitted for cropping is probably much larger than the boundaries of present development indicate. But grazing will doubtless continue to be the more important rural occupation. The latent possibilities of mining cannot be measured. But past experience and present prospects indicate that Australia is very rich in minerals, and that their distribution probably extends into vast tracts of country yet unexplored. Gold and silver lead in value ; but the industrial met- als iron and copper abound, while ample coal fields provide for their reduction. The lo- cal supply of fuel is sufficient to encourage man- ufactures. Raw materials and power are at hand for great textile, leather, and mechanical The Country and Its Resources 9 industries when the development of the country has reached a stage encouraging the diversion of labour to these pursuits. At present the small population and the speculative induce- ments of ranching, prospecting, and exploration confine the attention of the people largely to primary production. Tasmania is an isolated and somewhat Ar- cadian island, with a farming population count- ing back for generations in the same townships. It has less centralisation of population and less speculative enterprise than other parts of Aus- tralia. Copper mining has recently become an important industry. Tasmania raises apples and pears for all Great Britain and part of northern Europe at certain seasons. The cooler climate and picturesque scenery make it a summer resort and recreation ground for the eastern states of Australia. Despite its century and more of settlement the Australian continent is yet unexplored. The full possibilities of irrigation and experimental agriculture have not been tested. Railway de- velopment has not broken highways through the io The Country and Its Resources interior. The last great land area to be occupied by civilised man, it is the most depend- ent upon scientific knowledge and organised in- dustrial effort for economic progress. New Zealand presents a marked contrast to Australia in these respects. The remoteness of the country was the only obstacle to settlement and development, and the compass of its re- sources was easily determined. The climate is equable and temperate, the rainfall reliable and sufficient for agriculture, the interior accessible to a coast provided with ample harbours ; and in many places large stretches of grassy prairie have invited occupancy in a country where white settlers found no enemy, animal or human, and endemic diseases were unknown. Some parts of New Zealand were heavily forested and occupied by warlike natives, but even here the passive opposition of nature and the active op- position of man did little to check exploration and settlement. The colony consists of two main islands, which contain more than ninety-nine per cent, of its area, a small grazing island to the south The Country and Its Resources 1 1 of these, and a number of unimportant groups in the South Pacific recently annexed by the colonial government. The North and the Mid- dle Island are the only two of industrial impor- tance, and contain practically all the European population. Their combined area is a little greater than that of New York, New Jersey, and Pennsylvania. These islands are separated by a strait so narrow that they are practically continuous territory. They lie in lower lati- tudes than Australia, their southern limit pass- ing the forty-seventh parallel. Auckland, the most northern city, is farther south than Syd- ney. The climate is cooler than that of any part of the Commonwealth except Tasmania, al- though the insular position of the country gives it the equable temperatures of the ocean. Oranges mature and a semi-tropical vegetation flourishes in the vicinity of Auckland, while the Middle Island is visited by severe snowstorms in winter, and upon the misty plains of the southern province crops sometimes fail to ripen in the fields. It is as far from Auckland to In- vercargill, at the opposite extremes of the two 12 The Country and Its Resources islands, as from New York to Jacksonville. The archipelago forms a long ribbon of land, trending southwest, with a backbone of moun- tain that crosses the central and eastern part of North Island and continues south along the western coast of Middle Island, where the high- est peak reaches an altitude of twelve thousand feet, until the range terminates suddenly at the sea in the lofty walls of a series of magnificent fiords, which present some of the grandest scen- ery in the southern hemisphere. The natural resources of the colony are chiefly agricultural and pastoral. Some dis- tricts, especially in the uplands, are fit only for grazing, and economic causes have favoured the extension of this industry. Sufficient coal is mined for domestic use, and even for occasional export. Placer gold deposits, worked by dredges, and quartz mines exist in both the islands. But the industrial metals are not abundant, and no profitable iron ores have been discovered. The fossil gum of the Kauri tree is dug for varnish, and a wild native flax yields a valuable fibre for export. The forests furnish excellent The Country and Its Resources i 3 building timbers for the domestic and Austra- lian market. There are no important fisheries, in spite of the broken coast line and insular po- sition of the colony. Wool, frozen meat, and butterjTorm the chief items of the exportjtrade, and contribute most largely to the country's wealth. New Zealand is essentially a land of rural industry. The Australians are to some extent a sea- faring people, because they inherit the instinct of sailors and are forced by local needs into this occupation. Hitherto, however, their at- tention has been turned landward by the more profitable vocation of developing the country. With longer settlement, the appropriation of the natural wealth by individuals and corpora- tions, and all the lessening opportunities of older communities, the people will probably de- vote their energies more to navigation, and utilise their advantage of position to secure a larger share of the growing commerce of the Pacific. The promise of maritime power might almost be counted among the natural resources of Australasia. 14 The Country and Its Resources Here, then, is a people occupying more than three million square miles of territory, of which probably a third will support a fairly dense population and the remainder will offer in the future isolated centres for very profitable de- velopment. These lands command a sea area that gives them virtual command of the South Pacific and part of the Indian Ocean. They are near to the crowded marts of Asia. They contain most of the raw materials necessary to supply the complex needs of modern civilisation. New Zealand and Australia supplement each other. That colony and Tasmania are a gran- ary for the mainland in time of need. Metals, fuel, and facilities for manufacturing lacking in the insular countries are abundant on the con- tinent. In many respects Australasia could become as self-contained as the United States. The nation's future depends upon the use made of these advantages. They are too great to remain unutilised. The people cannot leave their talent wrapped in a napkin. But they are now embarrassed by a problem of method. Like the Americans, the Australasians believe The Country and Its Resources 1 5 it their task to make the desert blossom like ,-i garden, turn trails into highways, log cabins into mansions, and villages into cities. But while Americans have gone ahead as individuals to accomplish this purpose, the Australasians, who started later, have begun with an awakened social consciousness. Therefore a conflict of ideals has arisen. Partisans of individual en- terprise desire that every man shall have a free hand in developing the country. But the party with a different ideal proposes that so- ciety as an organised body shall undertake this task, tolerating the individual, if at all, only provisionally. The struggle between these two policies is now at its height, and is a funda- mental issue in the labour movement. CHAPTER II PEOPLE AND INSTITUTIONS American Revolution indirectly caused the colonisation of Australia. Prior to that event British convicts had been sent to the southern plantations, and when this transpor- tation ceased the authorities sought another place for their disposal. The recent discover- ies of Captain Cook directed attention to Aus- tralia, which was chosen as the site of the new settlement. The first party, of over one thou- sand prisoners and guards, arrived in Janu- ary? 17&& the year before the first president of the United States was inaugurated and after pausing at the original destination of Botany Bay, discovered and occupied the shores of the adjacent magnificent harbour of Sydney. The colony was re-enforced by ac- cessions of convicts from England, anji in 1793 free immigrants began to arrive. After en- 16 People and Institutions 17 countering the usual hardships and struggles of pioneers in a strange and remote land, set- tlement began to spread, and a population of freemen and freedmen took root in this new home. A majority of the convicts were ordinary criminals ; but there were among them people of character gentlemen transported for political offences, and others who had violated laws long since obsolete. They included trade union leaders convicted under the old statutes against conspiracy, notably the Dorchester labourers, transported for organising the agricultural workers of England. It is to be inferred, how- ever, that skilled artisans and persons accus- tomed to regular labour were not numerous among the prisoners. They were gathered mostly from the towns and cities, and were gen- erally kept together in barracks and stations after their arrival in Australia. So the habit of town life remained with them. Convicts did the manual labour of the nascent colony. After an employing class arose they were hired out to private landholders. From 1 8 People and Institutions the first, therefore, they were an offence to free workers. Even released convicts resented the competition of their former comrades in the labour market. The prejudices thus created lasted as long as transportation continued, and even affect the present immigration policy of the government. rinfii'nigfrrnfiftn of the convict stations was necessarily autocratic. They were under a military governor, whose powers combined the authority of a commander with those of a prison warden. When settlement began to ex- tend, it was largely through grants of land to former officers of marines, who worked their estates with convict labour under military disci- pline, and themselves remained in sentiment as well as fact subordinate to their old commander. The civilian spirit was therefore slow to per- meate the structure of colonial government. For thirty-seven years military courts were the sole dispensers of justice. Local au- tonomy of plantations and parishes could not be allowed where many of the free citizens were only recently or provision- People and Institutions 19 ally released from prison, and most labour was performed by persons still under penal restraint. But if the settlers did not partici- pate in the government, neither were they taxed for its support. Roads and other public im- provements were built by the convicts. The cost of administration was paid by the home authorities. New South Wales did not become self-supporting until forty years after its estab- lishment. Supplies were brought to the col- ony by transports and naval vessels. For some years released prisoners, cultivating their own holdings, drew provisions and supplies from the I* public stores. Even free immigrants soon learned to accept centralised government and to depend upon the authorities for labour and support. Australia's inheritance from convict days is political and social, rather than individual. A thriving population in a new country cleanses itself like flowing water from the impurities of its source. If criminal tendencies predomi- nated among many of the early settlers, these have been eliminated until the people are now 2O People and Institutions more law-abiding than Americans. Convict transportation entirely ceased in all the colonies but Western Australia when the population of Australia was about one-eighth what it is at present. It never existed in Victoria, South Australia, and New Zealand. The dispropor- tion of males among the prisoners, and the con- ditions attending their confinement or assign- ment to contractors, prevented their adding greatly to the increase of population. But the political and social effect of their presence, and of institutions shaped with convict transporta- tion in view, determined the character of the government during the formative period of-co?. lonial life, influenced the public land policy, and modified conditions of rural industry and terms of employment. The influence of penal settlement is not to be measured by its positive effects alone, but also by the reaction it caused in public sentiment. The convict station ideal of a colony called forth its reverse, the conception of a new state where only the best elements of society should be gathered, where moral salubrity should char- People and Institutions 21 acterise the condition of the people, where gov- ernment should regulate for the exclusion rather than for the reception and control of social outcasts. Such a conception was evolved in the mind of Gibbon Wakefield, a settler of education and ability whom a youthful escapade had brought under the restraints of the law without giving a criminal disposition. Wake- field's theory of colonisation, which he devel- oped in various pamphlets and published arti- cles, helped to shape the conditions under which both South Australia and New Zealand were set- tled. This theory contemplated the founding of colonies as a conscious and deliberate na- tional undertaking, for the purpose of creating an ideal state. Convicts were to be excluded, and settlers chosen with a view to their fitness for the needs of an infant community. The government should possess local autonomy, on the assumption that the political requirements of colonial life could only be known to those experi- encing them. Finally and this economic the- ory had an important effect upon the actual at- tempts to carry out these ideas the land of the 22 People and Institutions colony should be public property, administered for the welfare of the State. This land was to be sold for a "sufficient price," which was vari- ously fixed at different times and places, with two purposes directly in view to provide a fund for public works and assist settlers of the labouring class to emigrate ; and to prevent la- bourers from obtaining land with such facility that their services would be withdrawn from wage-earning occupations, and capitalists thus deterred from making investments in local un- dertakings. Wakefield's plan of colonisation was therefore essentially regulative an at- tempt artificially to create economic and social adjustments that in older communities are the resultant of complex natural forces. Although the scheme was a partial failure in operation, it placed a birth-mark upon South Australia and New Zealand. In both these colonies the selection of early settlers left little to be asked. Most of them came to a new land of their own initiative. Many possessed capital and culture. The Dun- edin Colony, in New Zealand, was composed of , People and Institutions 23 Scotch Free Kirk people, and Christchurch, in the Canterbury district, was settled by the Church of England. While the pioneers of South Australia were not drawn to the same extent from any single religious community, they represented rather more than the average intelligence and enterprise of the English mid- dle classes. The public lands of Australasia have been administered under a variety of different poli- cies and statutes, but in every instance with identical results. Large estates and land mo- nopolies have characterised the country. Eco- nomic and social, as well as political causes, account for this. Relatively to the occupied area, a very large proportion of both Australia and New Zealand is suitable only for grazing. The natural market for the products of the land is Europe. In competition with the two Americas, Australasia has always laboured un- der the disadvantage of its great distance and consequently higher freights. For this reason the country could market profitably only products of large value in proportion to their 24 People and Institutions bulk and weight. Until recently, since cold storage has been perfected, fresh meat, butter, and other perishable produce could not be ex- ported. Therefore bj_a process of elimination, as well as on account of special naturaLacj- vantages, the people resorted to raising_wooL England's expanding textile industries made the demand for that commodity certain. Like tobacco in colonial Virginia, it was a cash crop. In the mild climate, no housing for sheep was necessary. The only capital required was the flock itself. Few natural enemies existed. In the interior and on the uplands pasturage was open and plentiful, and during normal years sufficient water was accessible. The task of herding sheep was not arduous, nor did it re- quire adept ability, advantages in a climate that does not invite to strenuous exertion and where labourers were recruited from unskilled and mostly inexperienced workers. The life of the bush and plains, free from social restraints and where the past is forgotten, appealed to many of the early settlers. The population was small, and the immigrants not a land-hun- People and Institutions 25 gry peasantry, such as has swarmed from Eu- rope to America coming to till farms. Con- sequently flocks multiplied faster than the peo- ple, and vast sheep stations spread over the country far more rapidly than the slow-going government facilities for land registration and control. The irregular occupation of the public do- main that followed gave the temporary holders their title of "squatters," a word borrowed from England, where it was applied to unauthorised occupiers of the commons. It has a different meaning in the colonies from that familiar to Americans. In Australia it denotes wealth and .influence, as well as the occupation of a pas- toralist, and no longer suggests a formal flaw in the holder's title to his estate. The early private land grants in New South Wales were made directly by the governor, but in 1831 sale by auction was introduced, in con- nection with a system of pastoral leases. After 1840 half the proceeds from the sale of public lands were required to be spent in assisting im- migration, and half to pay for public works. 26 People and Institutions Provision was made in 184 for three land dis- tricts, which later became New South Wales, Victoria, and Queensland. By an imperial act of 1847, squatters were given the option of leasing the lands they had appropriated, with a privilege of purchase at the end of a term not exceeding fourteen years. Knowing that the government would not dispossess them, they generally refrained from making leases until the inflow of population attending the gold dis- coveries, when they hastened to establish legal title to their holdings. Although the history of land occupation and tenures varied in the other states and New Zealand, and a vast amount of legislation upon the subject was subsequently enacted, the agra- rian question was everywhere serious by the middle of the century. An immense vested in- terest in large holdings had been created. The antagonism between the squatter and the ag- ricultural settler had arisen. The pastoralists controlled the government in their own interest, and land was not granted to promote settle- ment. Until very recently, in Western Aus- People and Institutions 27 tralia, no system of free allotments to home- steaders, under government survey, with resi- dential requirements depriving this privilege of its speculative features, has ever been at- tempted. The land laws of the colonies have consistently disregarded the interests of the la- bourer and the man without capital. Those leaseholders who did not secure free- hold titles to their estates fought stubbornly, with all their great influence in the colonial par- liaments, the efforts of the public to dispossess them in order to make way for closer settlement. This struggle gave a precedent to the later policy of resuming private estates against the will of the owners. The agricultural possibili- ties of Australasia were systematically ma- ligned by persons interested in maintaining pas- toral leases of arable territory. For years the sheep and cattle men of the Darling Downs, now one of the fairest tracts of farming land in Australia, stoutly maintained that the ground 1 would not grow a cabbage. An incident is re- \lated of an old squatter, who left his estate in charge of an enterprising young manager dur- 28 People and Institutions ing a trip to England. On his return he found thrifty fields of oats growing where formerly were wild grasses. He ordered the ripening crops burned immediately, lest they should bring agricultural settlers to the neighbour- hood. The population that flowed into Australia so freely during the gold rush was composed of .men bent on making a quick fortune and leav- ing the country. At first they did not think of acquiring estates. During the railway de- velopment that followed, when lands still owned by the government might have been rendered accessible to farmers, the interest of the great proprietors was often sufficient to direct these enterprises to their own benefit. They prom- ised ready freight and got the railroads. In- tending settlers wishing to occupy distant pub- lic lands could promise future business but no immediate returns. So conditions that caused a subdivision of land in California, only strengthened the pastoralists of Australasia in their property rights and political influence. The conditions thus established have contin- People and Institutions 29 ued until to-day. The land laws have been modified in the interest of closer settlement, but the large estates remain. Much more than one-half of the occupied land in New Zealand is in tracts of over ten thousand acres, and only about one-fifth is in holdings of less than 640 acres. One-half of the occupied land in New South Wales is in holdings of over five thousand acres. In that state about one-half of the pri- vate land is owned by 738 persons or institu- tions ; in South Australia by 1,283 ; and in New Zealand by less than 500 holders. Similar sta- tistics are not available from other states, but it is safe to assume that those quoted are fairly representative for all Australia. The monopolisation of the arable land adja- cent to transportation routes by pastoralists reduced to a minimum its power to absorb popu- lation. This favoured the growth of cities in a new and undeveloped country, and fostered what Gibbon Wakefield sought to obtain, a wage-earning population as large in proportion to the whole number of inhabitants as in the older states of Europe. A reflex effect has been 30 People and Institutions that country people have not recruited the city artisan class, and the frugal, hard-fisted spirit of the farmer has not influenced industrial workers. Small freeholders, with their conserv- ative interests, are in a political minority. The herdsmen and shearers of the stock ranches are wage-earners and trades unionists. Socialism and land nationalisation do not threaten them. Wages are lower, because labourers have not been drawn away from hired service by the op- portunity to become their own employers on a homestead. Unemployment has been greater, because no farmer's boys have left the crowded labour market for their home in the country in times of industrial depression. Much British capital has been invested in pastoral pursuits, and ideas of manorial dig- nity were early brought to the colonies from the mother country. One of the earliest projects for a constitution submitted in New South Wales provided for a colonial nobility, formed of landholders, who should constitute the upper house of parliament. Tenancy laws contain provisions favouring the landlord that were People and Institutions 31 long ago abolished in America, and date back to feudal precedents. The landlord can de- strain the chattels of his tenant for rent de- spite the prior claim of a mortgagee. The lat- ter cannot sell stock from his farm without the consent of his landlord. The tenant's right to improvements is equally limited. These laws encourage holding land for rental purposes. Whole suburbs of Sydney pay ground rent to a single proprietor. The Australian landowner leases to tenants where an American would sub- divide and sell his holdings. The labour party protests against these laws in its political plat- forms, and they foster socialist sentiment in both town and country. A tenant who has built a home, or otherwise improved a leasehold, is predisposed to question the rights of capital represented in his landlord who at the expira- tion of the lease may claim the product of the renter's industry. But the freeholder, however small his equity, considers himself a capitalist. His occupancy is not transient. The product of his labour does not pass by course of law into the possession of another. His interests be- 32 People and Institutions come more conservative with each payment on his property, while the tenant has less at stake in existing conditions as his lease draws to a //close. Land ownership, which is everywhere an / antidote for radical economic theories, is not / | diffused in Australia. A close connection has always existed be- tween the land and immigration policies of the colonial governments. As soon as large es- tates were founded, the prisoners began to be regarded as a source of labour supply. Pas- toralists strove to maintain convict transporta- tion as long as possible, in the face of vigorous opposition from other classes in the colonies. In Western Australia the landholding council voluntarily invited convict settlement after twenty years of free labour. The struggle to abolish the penal labour system left among the working people a class sentiment hostile to all immigration. Before transportation ceased, the policy of devoting half the proceeds from the sale of public lands to assisting immigrants was well established. The law was so ad- ministered as to create an abundant labour sup- People and Institutions 33 ply, nol a self-dependent rural population. So the assisted immigrant was dumped into a la- bour market already congested, to find em- ployment as best he could. Nothing was far- ther from the minds of the squatters than that he should become an independent farmer. Therefore the newcomers were not clearing fields, increasing the production of raw ma- terials and the consumption of manufactured goods, and, like European immigrants to the United States, absorbing more hired service than they furnished. Government aid was \ given persons likely to become a public charge in England, not to those with means to live at home. These immigrants were seldom agri- culturalists. They began to leave England at the time of the Chartist agitation and the bread riots. They arrived in a new country without other capital than their skill or strength, and with no disposition to employ these in unaccus- tomed occupations. So they stayed in the cities where they landed. As early as 1851, be- fore the gold excitement, Sydney already con- tained one-fourth of the inhabitants of New v-X OF THE X OF THE i UNIVERSITY \ OF / 34 People and Institutions South Wales. Therefore the newcomers de- pressed wages and increased unemployment. The working people naturally opposed this im- portation of competing labour with the aid of government funds. The system of assisting immigrants had a selective influence upon the present population of Australasia. That population is still less than five million. Incomplete returns show the number of immigrants introduced wholly or partly at the expense of the State to be over 761,000. The descendants of these people, therefore, constitute a very large fraction of the present inhabitants. As assistance was given only to British subjects, Australasia is peopled by an almost pure British stock. Three- fourths of the inhabitants were born in the colo- nies, and four-fifths of the remainder are natives of the British Islands. This homogene- ity of population has some pleasant and desir- able results. National energy is not absorbed in assimilating foreigners. Uniform stand- ards of conduct and living are easily main- tained. The community of sentiment among People and Institutions 35 the people is strong. The consciousness of na- tional kinship, the collective family spirit, is greater than in America, and for this reason communal sympathies are more active, and the socialist tendency more pronounced. But this is at the cost of some national inbreeding, and at the sacrifice of the virility and aggressive energy begotten by the fusion of kindred races, and of the greater amount of variation and wider scope for natural selection in nation building that the mingling of different peoples causes. The mental attitude of an assisted immi- grant might be that of a taker of charity, or of a man paid his expenses for his services. In either case he looked to the State for something further on continued assistance or employ- ment. He probably felt that a country so eager for men as to bring them six months' journey from home, had some occupation to offer on their arrival. If he were disappointed in this expectation, and found unemployment and distress facing him in Australasia, he had a right to complain. His grievance was 36 People and Institutions against the government. He looked at once, and with justice, to government remedies for his industrial hardships. Compare this Australasian with the average immigrant to the United States, and the con- trast helps to explain their different atti- tudes towards government. The immigrant to America is usually more self-dependent than his neighbours in Europe, a man dissatisfied with the restraints and limitations of the Old World, who trusts to his own energies to escape from them. Family ties mean less to him than to the boy who remains with his parents. Even though theoretically a socialist, he is practi- cally an individualist. This immigrant meets strange tongues and institutions in his new home, and learns to stand alone more than be- fore. Alienated from the social environment of his birthplace, and always half an alien in his adopted land, he in some respects remains a man without a country. His courses are self- determined. He does not revolve about a gov- ernment. Laws have not the sacredness of ancestral traditions, but become mere social con- People and Institutions 37 ventions. He looks to himself, and not to so- ciety, for support and direction. It is not strange then, that in America, independence; and in Australasia, interdependence, should characterise the popular attitude toward po- litical and economic problems. In Australasia the construction of highways and other public works has remained a func- tion of the central government since the days of convict labour. When railways were demanded the government undertook these enterprises for two reasons they were an extension of trans- portation routes already built and controlled by the public, supplementing but not superseding the state wagon roads ; and the colonial authori- ties could borrow capital for these undertak- ings at better rates than private corporations. But in undeveloped countries like Australia and New Zealand, building public works and carry- ing commodities are among the principal occu- pations of the people. Production is confined largely to raw materials, which are exported, and consumption is supplied by manufactured goods made in other countries. The govern- 38 People and Institutions ment, in supplying transport service for the inflow and outflow of these commodities, has become the largest employer in the colonies. Working people therefore view the State under the dual aspect of an industrial and a political superior. When the industrial functions of government are ac- cepted in principle, it is easy to extend them in detail ; and State control of all industries becomes a practical issue without a revolution in accepted ideas. Furthermore, labour grievances are the direct concern of the State in its relation as an employer. Large bodies of workmen can modify their terms of employment only by po- litical agitation and legislative action. The custom of appealing to the government to de- cide industrial disputes to which it is a party, makes it easier to recur to the same authority to fix labour conditions in private employment. During the decade ending with 1860 parlia- mentary government was granted to all of the colonies except Western Australia. Both legis- lative and executive authority were previously vested in a royal governor, assisted by an ad- People and Institutions 39 visory council, who exercised mild but almost despotic sway in the name of his sovereign. When representative institutions were estab- lished, the governors were retained with less- ened prerogatives, and the governor's council became the upper house of parliament. The constitution of this body was but slightly modi- fied. Prior to the introduction of popular gov- ernment, it had been composed of higher officials and a few wealthy citizens of the colony. The latter were usually squatters. In New South Wales, Queensland, and New Zealand, the mem- bers of the upper house are still appointed by the governor, and in the two former states hold office for life. Until 1891 the appointment in New Zealand was for life ; and members of the upper house were at first appointed in Western Australia, which had no parliament before 1890. In the four states of the Commonwealth where the upper house is elective, there is a property qualification for voters, and in some cases for members. Workingmen consider this limited franchise a grievance, and the councils n are less popular with the people than the cor- 40 People and Institutions responding house of American legislatures. Property influence is increased in these bodies by the fact that in New South Wales, Queens- land, and Victoria members are not paid for their services. The property qualification for electors to the lower house has recently been abolished, ex- cept in Queensland and Western Australia. Women have the franchise in federal elections, and in New Zealand, New South Wales, South Australia, Western Australia, and Tasmania. The payment of members of the lower house has been established, in most instances upon the in- itiative or with the support of the labour party. Plural voting originally existed in all the states. New Zealand was the pioneer in adopting man- hood suffrage and the "one man, one vote," the first elections under these provisions taking place in 1890. It was followed by New South Wales in 1894, and Victoria in 1899. Prior to these reforms, which are due to the democratic movement which has found expression in the labour party, a person was entitled to vote in all the election districts in which he held prop- People and Institutions 41 erty enough to qualify him as an elector. The plural vote still exists in municipal elections. Members of parliament are not required to re- side in the districts they represent. This works to the advantage of labour politicians, who usually receive their political training in met- ropolitan trades hall councils. The metropolis of each state is the capital and the seat of po- litical organisation. The predominance of city men in party councils gives them an advantage in soliciting nominations. Therefore real farm- ers are strikingly absent from legislative assem- blies. Representatives are the attorneys of their district, not part of the people they serve. The city rules the country, not the country the city. Legislation, taxation, and public works show the impress of this condition. The separation of Church and State came slowly in the colonies, and State aid was long granted to educational institutions under ec- clesiastical control. Public schools are dis- paraged in comparison with private schools. Government lands have not been used to endow State education. Partly for this reason the 42 People and Institutions scope and liberality of the school system are more limited than in the United States. New Zealand and most of the states provide primary instruction without cost to the parents, but in New South Wales and Tasmania fees are still charged. Secondary and higher institutions are aided by the government, but tu- ition is not free. Fees are also required in the technical schools. Nothing corresponding to our state universities exists in Australasia. An aristocratic sentiment and class distinctions more English than American still persist in the universities of Melbourne and Sydney. A stu- dent could not pay his way through those in- stitutions by his own labour without losing social caste. This is not true of the technical schools, where a thoroughly democratic atmosphere pre- vails. There is less faith in popular education for all the people beyond a certain standard than in the United States. Australian senti- ment in this respect is about where American opinion stood fifty years ago. In both the Commonwealth and New Zealand a boy is edu- cated for his class, as if in accordance with a People and Institutions 43 dogma of social and industrial predestination. Primary and technical instruction are strictly utilitarian. Australasian educators strive to give each pupil the kind and amount of edu- cation that will fit him to follow the footsteps of his father. This does not satisfy the demo- cratic ideal, that every youth has a right to an equal opportunity to fit himself for any career, regardless of his present rank or probable fu- ture status in society. State activity has been extended into ex 1 perimental spheres partly because Australasia has a highly efficient instrument for these en- terprises in its centralised administration and elaborate civil service. In a body politic an organ sometimes creates a function. Thou- sands of State employees, seeking their common welfare through political means, make employ- ment for themselves, and have a class interest in governmentalism. A centralised government involves a salaried administration. In America the township precedes the state historically in many sections, and has a common-law claim to residuary political authority. Local officers 44 People and Institutions are mostly unsalaried, or are not paid enough to make public service a profession. They fol- low their regular vocations and attend to offi- cial duties at spare moments. They are elected for fixed terms, expect soon to return to private life, and so do not sever their former business relations. In Australasia, on the other hand, local government is historically a concession from the colonial parliament. The powers of local units are hedged round with statutory limitations. Towns and districts do not di- rectly support or administer the public schools or the principal highways. Their financial matters are closely supervised by the state. The functions performed by unsalaried officials are few compared with those in charge of perma- nent civil employees. Serving the people in public capacities is more of a life profession than in the United States. To an American the local political units of Australia and New Zealand do not seem governing bodies at all, but rather administrative divisions of the State. This is not due entirely to historical causes. People and Institutions 45 It is partly occasioned by the sparse popula- tion and pastoral pursuits of Australasia. In the states where farming communities are most extensive, local government is most vigorous. There is now a positive movement toward en- larging the powers and responsibilities of the smaller political divisions. Australian civil servants have been charged with abusing their political influence. They are said to have held the balance of voting power in twenty-three parliamentary districts in Victoria, and to have used this power to in- crease the State's payroll several hundred thou- sand pounds. The evil was real enough to jus- tify in the minds of the people a constitutional amendment, giving government employees sepa- rate representation in parliament. Civil and railway servants elect one member to the upper house and three members to the lower house, but have no franchise in regular election districts. With the extension of State employment the conflict of interests between the tax-payer and the tax-receiver increases, and the political rights of the multitude of public servants must 46 People and Institutions be curtailed, lest they become masters of the people. The difference in the history of social move- ments in the United States and Australasia is partly due to the fact that industrial and po- litical problems that presented themselves in succession in the United States have come up for solution simultaneously in the colonies. In America, during the first half of the last cen- tury, a party composed of working people agi- tated for equal suffrage and other political re- forms for which the same classes in Australasia are now striving. The fight for the public schools in the United States was a democratic movement that might have been fused with the labour movement had it been delayed. The "Know-Nothing" party, with its jealousy of alien labour competition, marked a stage of na- tional sentiment from which Australia has not yet evolved. Because we realised so many phases of social and political equality before the great labour questions of the present became promi- nent, the latter are with us a distinct and purely industrial issue, and therefore less di- People and Institutions 47 rectly the concern of the government. If the working people of the United States were fight- ing for equal suffrage, free schools, immigra- tion restriction, and liberal land laws, at the same time as for higher wages, shorter hours, and generally better conditions of employment, trade union methods would appear to them as inadequate as they do to colonial workingmen. CHAPTER III WORKINGMEN AND TRADE UNIONS THE people of the colonies regard the Ameri- can Republic as an industrial and manufactur- ing nation, and themselves as engaged chiefly in primary production. But from the standpoint of labour conditions this is not true. Nearly twenty-seven per cent, of the bread-winners of Australasia follow manufacturing and mechani- cal pursuits, as compared with but twenty-four per cent, in the United States. Among pri- mary producers, the proportion of farmers, more than half of whom are their own employ- ers, is twice as great in America as in Australia and New Zealand. Therefore employing in- dustries are more prominent, and wage-earners have relatively more political strength in the Australasian colonies than in the American Union. The ratio of urban to rural popula- tion is also higher in Australasia, where forty- 48 Workingmen and Trade Unions 49 seven per cent, of the people reside in cities of not less than four thousand inhabitants, as compared with thirty-seven per cent, in the United States. The average concentration of working population is therefore greater in those countries, and the labour element has better op- portunities for organisation. Four main groups of occupations employ the service of most of the workers engaged in the labour movement. The incju^trial-gorkmen in the citjesL-B^eJ^-^ft^liest -organisGd and have led in political agitation. Closely allied with these and forming part of the urban labour centre are the men employed in transportation, especially seamen and waterside workers. The railway associations also have their headquarters in the metropolis. The two large non-urban bodies of workers are the miners and the shearers. The former are collected in mining camps, under conditions favourable for organisation. The shearers and station hands are an exception to the rule that trade unions are usually most powerful where workingmen are skilled and as- sociated in large bodies by the nature of their 50 Workingmen and Trade Unions employment. These men are intermittent and nomadic workers, employed under conditions somewhat similar to those prevailing among lumbermen in the United States and Canada. Their occupation is seasonal and might alter- nate with some other form of employment. They live in small groups during the shearing season, but are isolated from other society and develop class peculiarities as do lumbermen and seamen. Accustomed to comparatively short periods of strenuous labour under monoto- nous surroundings, many of them waste the sav- ings of a season in reckless dissipation when they reach a settlement. They are often obliged to live from hand to mouth, as a conse- quence of their own indiscretion or because other employment does not offer during the dull season on the ranches. This uneven economic condition breeds social.- discontent. -Xha-solir tary life fosters strong and almost fanaticfll.al- legiance to trade union ideals. Thereforejthe shearers and employees in occupations -associ- ated with shearing, form one of the most influ- ential labour organisations in Australia. Workingmen and Trade Unions 51 The general welfare of the working classes in Australasia does not differ widely from that in the United States. The hours of work are fewer in most occupations, but the wage per hour is less than in America. The cost of liv- ing is about the same in both countries. The difference in the wage of skilled and unskilled workers is much greater in our own country, where the common labourer is usually either a negro or a foreigner. This variation of wages in the United States, parallel with national and race lines, lessens solidarity of sentiment and class consciousness among workmen, as com- pared with those of Australasia, where such conditions do not exist. Not only is the touch of sympathy closer among people of the same nationality and similar economic status, but their rivalry is less keen. Where the difference between the wage of a helper and a journeyman is fifty cents a day, as in Australia and New Zealand, the former does not make the same ef- fort to drive the latter out of his position that he does when this difference is two or three dol- lars, as in America. But a marked gradation 52 Workingmen and Trade Unions of wages promotes industrial efficiency, because skilled workers therefore increase their skill, at- tention, and perseverance, in order to maintain their wage advantage over unskilled workers, and the latter for the same reason strive more strenuously to reach an equal status with the men above them. The opportunities for prog- ress within a craft afford to some extent an end of attainment an object towards which am- bition is directed inside the four corners of the industry. This ambition can be satisfied only by individual effort, by each workingman's in- creasing his personal efficiency, not by collective action. But where all those engaged in an oc- cupation receive about equal pay, the desire for improvement embodies itself in an effort to raise the wages of the entire group, and thus starts a class agitation. The level rate of wages in Australasia is ex- plained by two chief causes. The demand for unskilled workers, in proportion to artisans and factory operatives, is greater in undeveloped colonies, like Australia and New Zealand, than in an older country like Great Britain. Eng- Workingmen and Trade Unions 53 land is in so marked a degree a manufacturing country, that the British immigration to Aus- tralasia probably contained a larger proportion of skilled workers than a new country required. On the other hand, the immigrants to the Unit- ed States have been very largely land-seekers from the unskilled rural population of Europe. In the one case the new arrivals tended to lower the relative wages of skilled, and in the other of unskilled workers, by contributing in each instance to the better supplied section of the labour market. Another potent influence in raising the wages of untrained workmen in Aus- tralasia has been the high profit of primary pro- duct ion, due to natural resources large in pro- portion to population. Other things being equal, the most productive industry usually pays the highest wages. The per capita value of pri- mary products placed upon the market annu- ally is fifty per cent, greater in Australasia than in the United States. This justifies the expectation that the wages of common labour- ers, by whose work primary production is largely carried on, would be high in the Com- 54 Workingmen and Trade Unions monwealth and New Zealand. Turning to manufactures, the reverse is true. The per capita product of workers employed in this group of occupations is nearly three times as valuable in the United States as in Australasia. In the latter country the primary producer creates about $760 worth of wealth per annum, and the manufacturing operative turns out $763 worth of manufactured commodities, while in the United States the primary producer returns about $500 worth of raw mate- rials, and the manufacturing operative turns out about $2,278 worth of manufactured goods. However, the absolute wages of unskilled workers are not much lower in the United States than in Australasia. The highest pay of common labourers anywhere in the colonies is $2.50 a day, which is the prevailing rate in the Western Australian gold fields, where the cost of living is excessive. In Sydney and some other urban districts union labourers try to maintain a rate of two dollars a day, but are only partially successful. The average weekly Workingmen and Trade Unions 55 earnings of over 2,300 labourers in that city were $9.25. In many parts of the Common- wealth and in some places in New Zealand the usual wage ranges from $1.25 to $1.50 a day. This is in nearly all cases for eight hours' work. The pay of farm labourers is about the same in America and Australasia, for working days of equal length. Unskilled labourers have been well paid in America because they have had ready access to public lands or easily acquired farming property. In the colonies wages have been kept down by the land monopoly in spite of the larger product of the labourer. The rapid development of natural resources attend- ing our large immigration, and the construc- tion of railways and other means of communi- cation required by this development, have also caused an exceptional demand for labourers in America. The eight-hour day, while an ancient labour ideal, has been established in Australasia partly because of the climate. The conditions that temper the physical activity of white men in our Gulf States obtain in the greater part of 56 Workingmen and Trade Unions Australia and much of New Zealand. Frost seldom comes to tone up the relaxed energies of the manual labourer, and snow and ice never compel a rest from outdoor industries. Wheis nature works long hours, men require short hours. The propaganda for the eight-hour day antedates the present labour movement, and is a condition out of which it has arisen. Short working hours gave wage-earners leisure for organisation and political agitation. Although the winters do not interrupt labour in Australia, the not infrequent droughts are a climatic influence more important in lessen- ing employment than a protracted reign of ice and snow. They create a general depression in both rural and city industries. More than any other single cause, they account for the period- ical climaxes of distress among workmen, which have at times loomed large in the public horizon of Australasia, and have led to large loan ex- penditures for public works and other measures of government relief. These periods of forced idleness favour the spread of new social theories. Business depres- Workingmen and Trade Unions 57 sions in America have usually promoted the growth of socialist sentiment. It is the con- trast between prosperity and want, rather than the permanence of either condition, that cre- ates discontent. However stultifying habitual idleness may be, occasional and involuntary idleness makes men think if not wisely, at least intensely. The large city population, and the crippling of rural industries which drives coun- try labourers to the city in times of drought, en- courage the diffusion of novel social doctrines. The open-air speakers who take possession of the public domain at Sydney, and the corre- sponding parkway on the Yarra Bank at Mel- bourne shaded preserves that, in the genial Australian climate, invite idle workmen reach a possible fourth of the population of the Com- monwealth. These speakers are not officially recognised by labour politicians as coadjutors, but they help effectively to weave the loose strands of discontent into a fabric of radical social theories. The first trade unions in Australasia were branches of the English societies^. formed about 58 Workingmen and Trade Unions 1850 in Sydney at the time the only city in Australia important enough to support labour organisations. Soon afterwards the gold dis- coveries caused a large immigration to Victoria, and unions were formed at Melbourne, which soon rivalled the older metropolis in wealth and population. No unions were formed in the other colonies until after 1874, those in New Zealand and Western Australia being of even more recent origin. Agitation for an eight-hour day, and opposi- tion to Chinese immigration, were the first is_- sues to bring workers together in associations. The latter question had.an i because measures to restrict immigration in one colony were ineffective without the co-operation of neighbouring colonies. The effect was to create a^sense of common interests among the workmen throughout Australia. The organ i- sations of coastal seamen helped to maintain this sentiment of solidarity. As early as 1879, an iotercolQaifiLirade union congress, modelled upon a similar conference of labour organisa- tions in Great Britain, was held at Sydney* At Workingmen and Trade Unions 59 this and the following congress, which met at Melbourne in 1884, constitutional reforms, such as "one man, one votes" (ind payment of mem- bers of parliament, were agitated. No measures looking to a revolution in industrial organisa- tion were proposed, and the strictly labour de- mands were mainly inspired by the trend of trade union demands in Great Britain. But the need of supporting a programme of consti- tutional reform by political effort did not es- cape the delegates. The second congress unan- imously adopted a resolution urging the unions in different colonies to appoint parliamentary committees, to lobby in the interest of labour, and "where possible to endeavour to obtain for labour direct representation in parliament." The debate upon the motion brought out the fact that direct representation was under- stood to mean that "artisans should send artisans to parliament, and miners should send miners." In 1885 the number of organised workmen in Australia was estimated to be 150,000, in a population of 3,000,000, a proportion probably 60 Workingmen and Trade Unions fifty per cent, larger than the present ratio in the United States. At the fifth trade unioyi congress, held at Brisbane in 1888, every colony except Western Australia was represented. The proceedings reveal more or less socialist senti- ment among the delegates. This congress was the first to adopt an electoral programme, the predecessor of the present party platform. Unionists were to vote only for parliamentary candidates pledged to carry out these demands,. The trade unionists of South Australia had se- cured the return of seven out of nine candidates supported at a previous election. Although these candidates were not workingmen, and so not direct representatives of labour in the sense advocated by the earlier congress, this success gave impetus to the policy of political organ- isation. The following three years were very event- ful in the history of public opinion in Austra- lasia. The first incident that reacted strongly on popular sentiment was the great dock strike in London. That event evoked sympathy with working people and a certain social altruism Workingmen and Trade Unions 61 among all classes in the colonies. As in Amer- ica at about the same time, there seems to have been a contagious and emotional socialism of the "Looking Backward" variety abroad. Henry George had been in the colonies, and his views were receiving much attention. Austra- lasia had been seeking a land panacea for half a century. A few years later an offshoot of this movement manifested itself in an attempt to realise some of these socialist ideals in an Australian communistic settlement in Para- guay, which, like many similar enterprises in America, resulted in gradual failure. The turning point in the history of trade unionism came in 1890. The pivotal incident was a strike among the seamen in Victoria, which soon extended to other trades throughout Australia and New Zealand. The original point at issue did not relate to wages, but to the right of a ship masters' and mates' association to join the Melbourne Trades Hall. The real object of both parties, however, was to settle the relative authority of employers and unions in all lines of business. As the strike extended 62 Workingmen and Trade Unions from trade to trade, industry of every descrip- tion was paralysed. Public sympathy was di- vided. The chief justice of Victoria subscribed $250 weekly to the strike fund of the unions. When the trouble spread to New Zealand the present chief justice and former premier took the platform in favour of the strikers. But, upon the whole, people sided with employers. This was especially true in New Zealand, where the public resented having the industries of the colony tied up by a dispute originating twelve hundred miles across the ocean. The workers were completely defeated, and the seamen have not even to-day recovered the rate of wages pre- vailing before this contest. Trade unionism was for a time prostrate, especially in the larger cities. The miners' and shearers' organisations were less affected, and the latter conducted strikes of their own in Australia during 1891 and 1894. These difficulties were accompanied by disorder, especially in the back country of Queensland. Houses were burned and men were shot. The shearers formed camps in remote Workingmen and Trade Unions 63 districts, and maintained the semblance of a military organisation. In some colonies the government was sufficiently alarmed to call out soldiers, and many of the strikers were impris- oned. Men who served terms in confinement for participation in these strikes have since risen to be cabinet ministers in Australia. The se- vere measures taken by the authorities against the strikers were bitterly resented by the work- ingmen, and made them more anxious to acquire power in the government. The substitution of political methods for older forms of propaganda that followed has not superseded trade unions, though it has made them subsidiary to party organisation. For a short period after the maritime strike there was a tendency unduly to decry industrial weapons and exalt political, but experience soon sobered those labour optimists who saw in organised battalions of workingmen voters an instrument for subjugating capital. Nor did strikes cease with the defeats sustained by the unions in the early nineties. A few years later there was a mining strike in New South Wales that cost the 64 Workingmen and Trade Unions colony half a million dollars, of which $62,363 was spent for police. The most important in- dustrial disturbance of recent years was in 1904, when the government railway employees of Victoria struck, and after tying up the transportation of the state for a short period were defeated. At present trade unions are becoming modi- fied into industrial unions, which are litigious rather than militant organisations, the crea- tures and instruments of state regulation. In the old unions the principle of self-dependence was emphasised ; in the new unions state-depend- ence is made prominent. The conservative traditions of the transplanted English organi- sations still survive in such societies as the Amal- gamated Engineers, the Amalgamated Carpen- ters and Joiners, the Stonemasons, and some of the metal workers' associations. These unions retain their benefit features and possess accu- mulated funds. They seldom engage in strikes, and disparage political activity. They adopt a critical attitude towards laws passed and leg- islation proposed by the labour party, and look Workingmen and Trade Unions 65 upon the modern tendencies of the labour move- ment with the stern eye of an older faith. But the members are not numerous and they mostly assume the passive attitude of the supporters of declining doctrines. Their influence is little felt in the councils of labour. Recent laws have somewhat strengthened trade distinctions among workers, because state regulation deals only with organisations in spe- cific trades and industries. On the other hand, the exigencies of political propaganda tend to relax trade lines and favour composite unions. For when a workingmen's society becomes in one of its most important relations an organisation of voters, it naturally places a premium upon numerical strength. This makes it to the inter- est of leaders to embrace as many occupations and classes of workers as possible within the as- sociation. The Australian Workers' Union, which is the great shearers' society of the east- ern states, not only enrols all classes of ranch employees, but even country storekeepers and small farmers. One effect of industrial unionism as con- 66 Workingmen and Trade Unions . trasted with trade unionism, is to lessen the im- portance of craft skill as a qualification for membership, and to emphasise correspondingly the comparatively chance relationship of em- ployee. The State thereupon assumes the function of guaranteeing the competency of workmen, by regulating apprenticeship and fixing a graduated minimum wage for different degrees of skill and experience. A second effect, most important in shaping union policy, is the greater influence thus given unskilled workers in labour councils. So long as common labourers organise separately, they count only by association units. If in a city there are nine unions of skilled workers of a hundred members each and one labourers' union of a thousand men, the unskilled workers are outnumbered nine to one in the practical determination of labour policy. This is what class-conscious propa- gandists mean when they refer to an aristocracy of labour. But when skilled and unskilled workers are associated in the same societies, the numerical superiority of the latter makes itself felt. Control passes from the skilled minority Workingmen and Trade Unions 67 to the unskilled majority, and a democracy of labour is established. So long as highly trained workmen are sepa- rated from their less skilled fellow-employees by trade union barriers, their societies aim to secure special benefits as compensation for this training, and to limit competition by curtailing the supply of workmen ; therefore they are con- scious of interests diverse from those of lower grades of workers. Such an organisation of labour favours a marked difference in the wages of skilled and unskilled employees. Industrial unionism takes away the instrument by which highly paid workmen maintain their superior status, by fusing their interests with those of their fellow-employees, and tends to establish a comparative equality of wages throughout the v i, entire membership of the organisation. Con- versely, the level wage rate naturally prevailing in Australasia probably favours the growth of industrial unions. This condition approaches the socialist ideal. Needs rather than services become the measure of compensation. The democratic spirit raises its demand from po- 68 Workingmen and Trade Unions litical equality to economic equality. The first is made a stepping stone to the second. Indus- trial unionism, or the organisation of workers along lines of common employment, recognises a principle more collective than trade unionism, which rests upon a basis of individual skill. Co-operative service rather than individual abil- ity is its principle of classification. Trade unionism protects the class through the craft; industrial unionism protects the craft through the class. It is interesting to note how many causes may co-operate to deflect a social movement into a new channel. Unskilled labourers, who form the mass of workers in every country, are the last to be organised. They became an influen- tial force in Australasia about the time of the shearers' strikes recently mentioned. At the same time agitation for an extension of the franchise placed the political weapon in the hands of the new unions just as they were able to use it. Methods for preventing strikes de- vised by lawyers and men out of touch with practical labour matters called logically for Workingmen and Trade Unions 69 modification in workers' societies that favoured opening them to many not previously admitted. The political labour party, whose primary units are the trade societies, gave representa- tion to these associations in its councils propor- tionate to their voting strength. Finally, the Taff Vale decision, which was immediately adopted as a precedent by the courts of Austra- lasia, struck directly at the financial resources of the unions, without giving them compensat- ing protection, and by thus depriving them of their most important strike weapon forced them to adopt political methods. All of these causes co-operated within a decade to strengthen the disposition of workingmen to employ as instru- ments for remedying industrial grievances or- ganisations working in alliance with the State or a political party. At the beginning of this period their unions were hardly more radical than the British organisations from which they sprang. At its close they were committed to a programme even now far from being generally accepted by the workmen of the mother country. This period dates from the organisation of a jo Workingmen and Trade Unions labour party in Australia, and of a liberal- labour party in New Zealand, in 1891, to the adoption of compulsory arbitration in two states of the Commonwealth, after four years' trial in the sister colony, ten years later. CHAPTER IV THE POLITICAL LABOUR MOVEMENT THE failure of the maritime strike, in 1890, made the workingmen of Australasia distrust trade union methods. The disorders and busi- ness embarrassments which this disturbance oc- casioned strongly affected public opinion in the whole community. The period of depression that followed, culminating in the crisis of 1893, was accompanied by a wave of so- cial discontent. The leaders of the dis- credited labour organisations saw the need of adopting new tactics. Friendly and unfriendly advisers from all classes of society pointed out the evils of industrial conflicts, and sang the praises of legal remedies for labour grievances. The workingmen were told to go into politics and use their ballots to right their wrongs. They took the advice, and the political labour party was the result. 71 72 The Political Labour Movement In Australia the influence of the intercolonial congresses and federal unions gave at the out- set a national character to this political move- ment, but the genesis of the party and its pro- gramme and methods in different colonies were not identical. The New Zealand workingmen never formed a class party, like their Austra- lian confreres, but merged themselves in the old liberal party, recasting its platform and organ- isation, a fact to which their more immediate practical successes are largely due. A distinct labour party was formed in every instance in Australia, however, whose parliamentary rep- resentatives have been in most cases working- men. A person describing industrial legisla- tion would naturally turn to New Zealand as the pioneer in the political movement ; but a per- son whose attention is first engaged by methods and ideals, rather than by attainments, will find in the history of the Australian labour party the clearest exposition of the tactics and the ultimate programme of organised workers in the colonies. Tin- origin of the party dates from tin- par The Political Labour Movement 73 liamentary campaign of 1891. New South Wales elected the largest labour delegation and afforded the most interesting political develop- ments, although South Australia shares in a modest way the honour of launching labour into a public career. The mother colony sent thirty -five labour members to the lower house of parliament at this election, besides helping to secure the return of ten or twelve candidates who were pledged to labour measures, though not official representatives of the party. The organisation which had conducted so success- ful a campaign was called the Labour Electoral League, and its purpose was stated to be "To bring all electors who are in favour of demo- cratic and progressive legislation under one banner." The first of the sixteen planks of its platform called for the abolition of plural vot- ing, while of the other fifteen planks six related to such general measures as free and compul- sory education, the election of magistrates, a system of local government and decentralisa- tion of government functions, the federation of the colonies upon a national basis, the full tax- 74 The Political Labour Movement ation of unimproved land values, and the estab- lishment of a national bank and a national irri- gation system. Any voter was eligible to join the league by paying a subscription amounting to about a dollar a year. As measures of party discipline, candidates were required to give a pledge to resign upon demand of two-thirds of their constituents, and if elected to sit upon the cross benches. There was no provision that labour candidates should be wage-earners. The success of the new party depended upon its avoiding entangling alliances with the old parties, and subordinating the issues of former campaigns to matters of labour policy. Dur- ing a transition period, while the party was finding itself, the latter object was difficult to attain. Labour candidates were elected upon a formal platform, it is true, but this did not prevent their giving pledges to their constitu- ents to support measures not included in the platform, but prominent in old party divisions. Free trade and protection had hitherto been the leading political issue; and until workmen were taught to regard other questions as of so much The Political Labour Movement 75 greater importance to themselves as to sink this into comparative obscurity, it could not be passed over in an electoral campaign. At the first caucus of the labour delegation in the New South Wales parliament, an attempt was made to have the members sign a pledge to vote on all questions as a majority of the representatives should determine. A number of members re- fused to be bound by this pledge, and as a re- sult the party split on the tariff, and divided itself as evenly as possible between the minis- terialists and the opposition, seventeen voting on one side and eighteen on the other. The ne- cessity of sinking this issue had been foreseen, and in what might be called the policy speech of the spokesman of the party the following sen- tences occur: "Poverty, misery of every kind, lack of employment, and sweating exist in both free-trade and protection countries. If that be so, how can it make any difference to the great mass of labour which fiscal policy is uppermost ? Neither policy means a greater share or a fairer share of the wealth locally created or im- ported to the hands who work for the country 76 The Political Labour Movement or a greater opportunity of access to the sources of wealth. We have come into this house to make and unmake social conditions." The division in the party greatly weakened its influence during this session of parliament; but a new electoral law was obtained, which abolished plural voting, shortened the period of legal residence for voters, lengthened polling hours, and otherwise favoured the franchise of the working classes. Therefore the first re- forms obtained by the labour party were politi- cal rather than social. The next campaign in New South Wales was significant for the history of labour politics in the entire Commonwealth ; and when at some fu- ture date the evolution of party organisation in Australia is critically studied, the control- ling principle of important changes may be found in the tactical issue here fought out. The experience of the preceding parliament had shown that the party must have more effective control over its representatives. The division of forces in the parliament itself had been upon the tariff. The next campaign was fought The Political Labour Movement 77 with the labour platform as a nominal issue, but with the issue of party organisation equally prominent. The official labour party, or "sol- idarity" faction, had a formal platform, and required a pledge from its candidates to vote according to the decision of the caucus that is, to make their promises to the party superior to their promises to their electorates. The "parliamentary labourists," on the other hand, pledged themselves to a programme announced in their individual districts, and refused pri- mary allegiance to the general platform or the caucus. The former faction returned fifteen and the latter twelve members to a reduced house. At the following election, in 1895, the regular organisation men became the sole direct representatives of the political labour move- ment, and the principle was established that a candidate's pledge was primarily to his party, and not to his constituents. The history of the labour party in other states has few distinctive features. It has been stronger in mining and grazing communities, like Queensland and Western Australia, than in 78 The Political Labour Movement agricultural states, like Victoria and Tasma- nia. The farmers are disposed to distrust the city organisations and socialist land theories of the workingmen. Since 1891 the labour party has been pass- ing through formative processes not yet complete. These developmental phases are in- teresting not only to the student of social move- ments, but also to the investigator of parlia- mentary institutions. They relate both to platforms and ideals, and to organisation and party tactics. In each of these directions the divergence from older precedents has been pro- nounced. An American can appreciate the structural changes within the party itself bet- ter than a colonial, because they resemble changes that occurred in his own country at an earlier period. The original divergence of party organisa- tion in the United States from that of England was probably caused by the activity of town meetings in the American colonies. These township democracies retained control of their representatives by sending instructed delegates The Political Labour Movement 79 to general assemblies. They thus overthrew the principle of responsible government, where the people select trusted persons to formu- late policies for them, and substituted a system where the people formulate policies and select agents to execute them. The relative promi- nence of the personal element in the older sys- tem marks an incomplete transition from the idea of a ruling class to the idea of absolute political equality. Both are forms of democ- racy; but in the older form the people select rulers whom they obey, and in the latter they select public servants to obey popular behests. The colonial town meeting suggested the unit of American party organisation, the primary. The reluctance of the town meeting to delegate its authority to representatives in general governing bodies, except with express limitations, was reflected in the system of in- structing delegates to political conventions. Therefore the policy of defining as distinctly as possible the popular will, and enjoining it by express commands upon the representatives of 8o The Political Labour Movement the people, had a parallel development in the government and in the party organisation of the United States. Australasia, where local government is less important than in America, adopted British political institutions with little modification. But when the labour party was formed, it rose from a substratum of organised social units resembling in many respects the network of local governments upon which the American po- litical system has been erected. The working- men's township was the trade union. The mo- tives operating in America to strengthen popu- lar control over the agents of the township or the primary, appeared in the trade unions as soon as these bodies began to associate for or- ganised effort. When the unions became pri- maries of a political party, they bound their delegates by iron-clad instructions. The mem- bers strove to direct in detail the action of their agents. Practical considerations assisted this tendency. Labour candidates were for the most part men new to political life, whose indi- vidual discretion was not always trusted. This The Political Labour Movement 81 occasioned the caucus and the solidarity pledge. As the party was young and without a policy based upon traditions and precedents, it needed a definite expression of party principles, and thus arose the platform. Labour members, might be susceptible to the novel beguilements of wealth and power, and so were required for- mally to pledge themselves to party loyalty, to resign upon the demand of their constituents, and not to accept office from opposition parties. All of these measures, dictated by the practical necessities of the labour people, helped to assure the dominance of the party organisation in gov- erning political policy. The American political system, with its elect- ive executive and fixed term of office, ma- tured harmoniously with a party system where popular platforms take the place of the personal policies of candidates. But the Australian labour party, adopting our principle of a platform interpreted by a caucus, has come into power in a country where the government is constituted upon a basis of personal leadership and discre- 82 The Political Labour Movement tionary authority. A responsible cabinet is usually in a state of unstable equilibrium. It may be overthrown by a change of a few votes in a legislative assembly, without appeal to the people. Therefore it must hold ample discre- tionary powers to contrive and execute compro- mises so as to retain its supporters. But a min- istry composed of men pledged to obey a caucus must, if the theory of party control is main- tained, consult continuously with the caucus. However, a caucus does not hold office. It is responsible to its constituents, and not likely to sacrifice even a minor point of platform alle- giance to retain in power a minority of its mem- bers, with the prospect of being held to account by the actively alert body of electors in the primary organisations. This difficulty of reconciling ministerial with party regimen was manifested immediately after a labour cabinet was formed in Western Australia. The pre- mier declared in his policy speech that in cer- tain details the cabinet did not propose to sac- rifice expediency to the party platform. This announcement was at once met by resolutions The Political Labour Movement 83 from the primaries, and by statements by la- bour members of parliament, to the effect that the ministers were violating their party pledges, and could not receive the support of the organi- sation. This issue divided and defeated the party at the next election. Similar embarrass- ments appeared in the federal labour cabinet, though they did not occasion so acute a crisis. Some labour leaders in both Australia and New- Zealand propose as a remedy to substitute an elective for a responsible executive, so that the people can choose their ministers directly, for a fixed term, at a general election. Party organisation varies in detail in the dif- ferent states, but that of New South Wales and Victoria, which is here described, is fairly typi- cal. The whole body of active voters forms a league, a term borrowed from English political nomenclature, which indicates the character of the party constitution a federation of autono- mous societies having equal power in pro- portion to their membership. These socie- ties are called branches, and any citizen over sixteen years of age may become a 84 The Political Labour Movement member by subscribing to the platform and the constitution of the league, and paying an an- nual subscription, which is fixed at two English shillings for males and half that sum for fe- males. Financial members of trade unions pay half these rates. Unions may become affiliated with the league, but they usually differ from branches because their membership is distrib- uted through several election districts, while the former correspond to electoral divisions. Manifestly it would not be possible without sac- rificing the industrial interests of trade unions, especially where compulsory arbitration exists, for these organisations to confine their mem- bership to residents of a single electorate. The branch acts as a primary in selecting candi- dates and sending delegates to conventions. Al- though a trade union precedent is followed in allowing persons over sixteen years old to be- come members, only those who have attained their majority can participate in the selection of candidates and other political duties. A person moving from one district to another changes his enrolment to the branch where he The Political Labour Movement 85 resides, but is not required to change his mem- bership in a union affiliated with a league. In very large districts, however, and in connection with the election of senators to the federal par- liament, the trade unions are practically equiv- alent to branches. More than one branch is al- lowed in the same electorate, but in such cases a convention of delegates from the branches is called to select a precinct committee. District and state committees are chosen in the same manner, and state conventions are held annu- ally, in which both branches and trade unions are represented. Party candidates are selected in the first in- stance by the branches, of which they must be members. Persons soliciting or proposed for office have their names presented by petition of not less than six members of the league residing in the electorate. No member is allowed to sign a petition for more than one candidate for the same office. An exhaustive ballot of all the members in the electorate is then taken, to de- cide which of the persons so proposed shall become the official nominee of the party. Pro- 86 The Political Labour Movement spective candidates must sign a pledge not to oppose the nominee finally chosen, to vote with the caucus, and to support the party platform. This practice of binding members not to bolt the party either before or after election makes discipline efficient and imposes at least mechani- cal harmony. The party is financed by equal levies on all the members. Successful candidates some- times pay part of their campaign expenses, as their public salaries are usually higher than their earnings as workmen ; but large campaign funds are unknown and unnecessary. The branches administer a portion of the funds col- lected from their own members, paying a pro rata assessment to the district and state com- mittees, of which account is rendered at the an- nual convention. This system of financing political campaigns seems far superior to that usual in the United States. It is but a trans- position of trade union methods to a party organisation. This well disciplined and soundly financed po- litical machine proves very superior to the The Political Labour Movement 87 loosely constituted parties previously in the field. Although the old organisations have been entrenched in political power by wealth, position, and privilege, they have yielded ground rapidly to their new opponent. This is partly because class support has been given to the labour platform; but such support was made possible in Australia only by excellent organisation. The party system adopted by the labour people strengthens political loyalty by the fra- ternal sentiment : for unions and branches bring together men of the same class, pursuits, and sympathies, much as beneficiary societies do in other countries, and combine the social with the political spirit. For five years before they reach voting age, young men and women are en- listed in party work and support, and enter po- litical life with the experience and confirmed convictions of veterans, allied with the enthu- siasm of youth. As every member contributes to the support of the party, he has a taxpay- er's interest in its honest and efficient manage- ment. He meets face to face in the branches 88 The Political Labour Movement the party leaders. The latter know the indi- vidual merit of their supporters, and where to select efficient aides. Publicity characterises party administration. The same combination of conditions that made the old town meetings produce public men of high type and training, is slowly moulding the inner life of the political labour party in Australia. Whatever one may think of the ideals that party seeks, he must acknowledge its superiority as a training school for citizens, and an instrument for political control. A party platform grew up independenily_j[n Australia, out of the resolutions adopted by trade union congresses to guide labour commit- tees asking legislation from parliament. \Yiih_ the organisation of a distinct party, the plat- form became more formal. In the earlier con- ventions, before delegates had been sobered by political experience, every man brought for- ward his pet scheme for reforming society, and usually received some recognition in the inter- est of harmony. This practice made long plat- forms, portions of which were not taken seri- The Political Labour Movement 89 ously by the voters, and so the moral advantage of a formal enunciation of party principles war lost. Therefore the custom arose of putting forward the main issues of a campaign in a concise "fighting platform," adding a more or less general platform, composed of planks of local or secondary importance, and resolutions adopted to placate the inevitable crank ele- ment of the conventions. The platform has won the party popular support. A positive programme is attractive. The promise to do new things appeals to the latent discontent of a community. Clear-cut statements count for more with the mass of electors than the philosophical and habitually accommodating and hazy policies which the old party leaders offer their constituents. La- bour voters look upon the platform as their own policy, while conservative voters must accept a policy presented to them. Besides, in a coun- try where the people have not been sobered by the tense competition of older lands, and still retain the chronic hopefulness of the prospector and the pioneer, it is harder to work up en- 90 The Political Labour Movement thusiasm for maintaining the status quo, than for a proposal to overturn it. Many re- forms espoused by the labour platform have an- swered popular demands that would have been even more urgently expressed in America than in Australia. This is particularly true of the electoral reforms which made the issue upon which the party was supported through the perils of infancy. Though these reforms were endorsed and realised by conservative ministers, the credit went to the party that had published its support most widely and prominently. Therefore the platform has served the purpose of an advertising organ, through which labour leaders have announced their projects and pro- claimed their accomplishments, and, like all effective advertising, it has brought them business. The party has been further favoured by its comparative freedom from local precedents, traditions, and inter-state jealousies, and the ready support it consequently gave the national ideal of federation. The workers of Australia had been thinking federally on matters of vital The Political Labour Movement 91 interest to them for twenty years when the old parties awoke to find the Commonwealth an ac- complished fact. Each colony had its Clintons and Adamses, men long prominent in local public life, who assumed that they would occupy the same position in the larger sphere of political activity now open to them. State rather than party lines defined the cleavage of their rival- ries. The same boundaries had in some in- stances determined divisions upon the whole fed- eral question and details of the constitution, creating hostilities and diverse views of inter- pretation which were carried over into the new government. A similar cross division existed in party policies. New South Wales had been a free-trade and Victoria a protection colony. On this question conservatives in these two states were arranged in opposition as soon as they met in a national legislature. The old parties, too, were grouped with reference to the fiscal issue in single states. But with the tariff as a national question, and its adjustment to a thousand local interests to be considered, the former party alignment was destroyed even in 92 The Political Labour Movement the same electorates. A colonial free trader be- came a Commonwealth protectionist, and the re- verse. Finally, entirely new questions, which parties organised on local lines were not pre- pared to meet, appeared on the political hori- zon, rivalling the tariff itself in immediate interest. Amid all these new conditions, so confusing to the older parties, the course of labour poli- ticians lay comparatively clear. They had long ago after their humiliating experience in New South Wales agreed to subordinate the tariff to strictly labour issues. But con- sistently with their ideas of State control of industry, they were for the most part protec- tionists, and more decidedly so with protection as a national than as a colonial policy. Their party organisation was already inter-state, so that questions of personal leadership were al- ready settled; and they had consistently sup- ported federation, so they were sympathetically disposed towards the new government. Mean- time the measures chiefly sought by the work- ing people could be most effectively secured The Political Labour Movement 93 through a central government. This had been sufficiently foreseen to determine the federal policy of their leaders. The labour party is the loose constructionist party of the Commonwealth. Workingmen as- sume this position because of the laws they ad- vocate, not from abstract reasoning upon the powers of government. This attitude is strengthened by the fact that the liberal federal franchise gives them more influence in the cen- tral parliament than in the local legislatures. But primarily it is the logic of their political platform that makes the labour people em- phasise central at the expense of state author- ity. They look to the federal government to protect them from an invasion of alien labour from neighbouring Asia. That government can more easily handle old-age pensions than the separate states, because it controls the cus- toms revenues, and can prescribe a uniform law for the entire Commonwealth. An important fraction of the workingmen engaged in mari- time trades is chiefly interested in navigation laws, which are under federal control. Most 94 The Political Labour Movement important of all, compulsory arbitration, which involves government regulation of industry and partly realises state socialist ideals, belongs properly to the authority that makes the tariff. For a local court, regulating wages and other terms of employment affecting the cost of production, must consider the conditions of competition in each industry. Over these con- ditions, so far as they relate to merchandise ex- changed among the states, it has no control. But a national government prescribing uniform conditions of domestic production can guard these by its tariff legislation. So workers think that the tariff area and the area regu- lated by compulsory arbitration should coin- cide. Such considerations as these have made the labourists the consistent ultra-federalists of Australia. The growth of the labour party has not been continuous in every state since 1891, but each campaign has increased its average strength in the entire country. At the last Commonwealth election the labour delegation in the senate rose from less than a fourth to nearly half the The Political Labour Movement 95 members, and a smaller but decided gain was made in the house of representatives. Labour is strongly represented in the lower branch of the state legislatures, and has small delegations in the upper house of Victoria, South Australia, and Western Australia, where legislative coun- cillors are elected. The large radical element in the federal senate is due to the method of election. Senators are chosen directly by the people of the states as single electorates, so the preponderance of wage-earners is fully mani- fested in the popular vote. Members of the house are chosen by districts, so the massing of the wage-earning population in cities and min- ing camps causes them to waste strength in piling up large majorities for fewer candi- dates. However, as the states are equally rep- resented in the senate, and labour senators are mostly from thinly populated states, they are elected by a smaller number of voters than the conservative senators from New South Wales and Victoria. The strength of the party in the federal house is increased by the alliance of several independent and protectionist members, 96 1'he Political Labour Movement whose political tenure depends upon the support of workingmen. Labour leaders had no opportunity to show what they would do as executive officers until 1904, when the second of the two protectionist ministries that had directed the federal govern- ment since its institution, in 1901, went out of office. A labour cabinet was then formed under Mr. J. C. Watson, a young man who en- tered politics in New South Wales, where he had previously been a compositor on a Sydney news- paper. Six of the seven other members of the ministry were workingmen, and the attorney- general was an independent politician allied with the labour party. This cabinet held office from April until the following August, when it resigned in face of a coalition of protectionists and free traders, whose compromise programme contained nearly every proposal of their labour opponents, including old-age pensions and fed- eral compulsory arbitration. Labour cabinets have been formed more recently in three states, two of which still remain. By these successes the party is gradually The Political Labour Movement 97 driving its opponents into a single organisation, / thus making the labour platform a direct issue in politics. Hitherto conservative ministers have endorsed labour legislation, in order to re- tain office. Though this legislation could not go far beyond limits set by public opinion, still these measures were not submitted directly to the people. Voters could say a direct yes, but not a direct no, to the labour platform; be- cause however they voted, they put in power a party that could carry out its policy only by making concessions to the workingmen in parliament. Radical legislation may be checked by this new condition, as with a united opposition the policy of support in return for concessions must be abandoned. Moreover the industrial pro- jects of the working people are coming more prominently to the fore with the attainment of political reforms previously engaging public attention. But these later measures are those upon which there is least unanimity of opinion, and which will therefore receive less support from neutral classes. UNIVERSITY VOF /. . .. t ^ 98 The Political Labour Movement The economic conditions in New Zealand call- ing for legislative reform, did not affect wage- earners so exclusively as those in Australia. Prior to 1890 conservative influences were pre- dominant, and had controlled the government almost without interruption for three decades. The conservatives were kept in power by fran- chise restrictions that repressed the democratic sentiment of the people. Many young New Zealanders were migrating from the country. So when the liberals, tired of being in a perpet- ual minority, allied themselves with the new force of workingmen, who had entered politics after the electoral reforms of 1889, their policy was determined by the radical wing of the party. Public sentiment was ripe for changes in both land and labour legislation, and these two classes of measures went side by side. The farmer was as fully identified with the new movement as the wage-earner. This explains why a single premier held office for fourteen years, and a "progressive" cabinet has been in power since 1891. Workingmen have not formed a class party ; but have allied themselves The Political Labour Movement 99 with the people to oppose a class party of landed proprietors. Therefore the legislative reforms they have secured are more directly en- dorsed by the voters than those hitherto ob- tained by the labour party in Australia. While progressive laws were more speedily en- acted in New Zealand, because a wider constitu- ency co-operated in their support, this broad party basis has checked many radical pro- jects. The "whole people" in a sense not strictly accurate, but generally understood in America will accompany the advanced re- former a short way with alacrity, then suddenly demand the most cautious progress. This has been so true in New Zealand that some labour leaders advocate parting from their liberal al- lies, because the latter will not grant them fur- ther concessions. But the workingmen of the colony would gain little by independent action, as their success is conditioned by the support of the rural classes. A new phase of the political labour move- ment is now appearing in both New Zealand and Australia, due to a clearer definition of issues, ioo The Political Labour Movement an awakened consciousness of the full implica- tions and consequences of labour policy, and broader reflection upon the ideals and un- derlying theories of government control of industry. CHAPTER V THE LABOUR PROGRAMME THE programme of the labour movement in Australasia is growing and is still in process of realisation. Its ultimate ends, therefore, are defined by ideals rather than by specific measures. Workmen, to be sure, are directly interested in concrete objects, which can be embodied in definite legislation or adminis- trative policies. Most of the voters who support labour measures in Australasia do not look ahead of one or two laws which they wish placed on the statute books. Yet each law enacted suggests another with still more at- tractive possibilities. So there is no finality in the programme of workingmen. But the present trend of policy can be determined by comparing the earliest attainments with the latest proposals of labour leaders. The first measure secured by the labour IOZ 102 The Labour Programme party in New South Wales was an act equalis- ing suffrage. In South Australia the party supported adult suffrage for the lower house of parliament, and is now seeking to extend the same provision to electors of the upper house. Victoria was already under a constitution more democratic than that of the other colonies. Labour members have been active in securing free schools in South Australia, and have agitated continuously for the same reform in New South Wales. Woman suffrage has come in New Zealand and four states of the Common- wealth, and been adopted in federal elections, with the support of the workingmen. Working women are usually more ardent politicians than their sisters of the well-to-do classes. Nearly every labour platform in Australasia advocates abolishing the legislative councils. There is no opposition to the federal senate, and the party has not espoused a constitutional theory hostile to bicameral legislatures. But the upper chamber of the state and colonial parliaments has regularly opposed the popular measures sought by workingmen, and is re- The Labour Programme 103 garded as hostile to democratic and labour legislation. Economy as well as expediency is said to demand a single house. The same argu- ment is advanced in support of a second proposal popular with the workingmen, to abolish the royal governors in the separate states, leaving the governor-general of the Commonwealth the only imperial official. The office is chiefly ornamental, and the salary of twenty thousand dollars or twenty-five thousand dollars, with residence and some- times with special allowances, is a considerable item in the local budgets. Many workingmen desire to abolish the governorship in New Zealand, and the ultra-radicals in Australia prefer to be without the King's representative even at the federal capital. The initiative and referendum are everywhere advocated by the party. Although the industrial demands of the la- bour people commit them to a strong central government, they favour extending town and county organisation. The interest of the party in this phase of local government is confined IO4 The Labour Programme principally to three points securing equal and universal suffrage in town elections, limiting taxation to the value of land irrespective of improvements, and empowering local authorities to establish and conduct industries. In New Zealand, where the method of taxing land for local purposes is settled by local option, a large majority of the towns have voted to make their assessments upon its unimproved value. As demands for constitutional reform are significantly absent from the federal labour platform, it is fair to assume that the organic law of the Commonwealth is in the main satis- factory to workingmen. Their political pro- gramme is only to eliminate class privilege in government. Land and taxation are prominent in the state platforms, but the federal platform does not consider them, because the Commonwealth does not control public lands, and raises its revenue chiefly by a national tariff. New Zealand took the lead in this sphere of legislation, and the measures adopted in that colony form an ideal toward which the The Labour Programme 105 party in several states of the Commonwealth is striving. Land taxation is confined to un- improved values, and mortgages are taxed against the mortgagee. In addition to the ordinary tax, there is a graduated tax upon all land having an unimproved value of more than five thousand pounds sterling. This increment has recently been increased, and now varies from one-fourth of a mill on estates not exceeding fifty thousand dollars, to over twelve mills on very large holdings. Thus the largest land- owners pay altogether over a cent and one-half taxes for every dollar they have invested in land, while the small farmer, whose real prop- erty exclusive of improvements is valued at less than five hundred pounds, or about twenty-five hundred dollars, is exempted from taxation. Such a law affords more revenue in New Zea- land, where the land is mostly held by a very few people, than it would in the United States, where land is subdivided into farms of moderate extent. Of the 115,713 land-owners in the col- ony, 22,778 pay a tax on their estate, and the remainder are exempt under the law. About 106 The Labour Programme two-sevenths of the revenue from land taxes is from the graduated tax. The old personal property tax has been abolished in New Zealand, and in its place is an income tax, which is also graduated. Incomes of less than three hundred pounds (and fifty pounds life insurance premiums) are exempt, the rate is equivalent to two and a half cents on the dollar for the first taxable thousand pounds, and five cents on the dollar for larger incomes. The principle of progressive land taxation has been applied in Victoria, South Australia, and Tasmania, and taxation is based on unimproved land values in New South Wales and South Australia. The income tax levied in several of the states is graduated, and is usually lower on incomes derived from personal exertion than upon those derived from property. These tax laws are popular with the mass of voters; but they have not revolutionised the distribution of property. The labour party favours resuming large estates for closer settlement, if necessary by condemnation. This policy was forced upon The Labour Programme 107 New Zealand, by the monopoly of arable land by a few proprietors soon after the colony was founded, and has been adopted in South Australia. Large holdings are resumed by the government in other states when offered for sale by the owners, and compulsory resumption is likely to extend. The demand for agri- cultural lands among tenant farmers and the sons of small proprietors nearly always exceeds the supply. However these laws, and those relating to public land administration, are due to agrarian rather than to labour agitation, and are more vigorously agitated in farming com- munities, like New Zealand, Tasmania, and Victoria, than in states where wage-earners are dominant. Several laws were enacted by the Australian colonies, in the last years before federation, for the purpose of encouraging co-operative land settlements and village communities. These measures contained features similar to those successfully applied by the New England col- onies in the seventeenth century. But they have not succeeded in Australasia, and though io8 The Labour Programme favoured bj the working people as political projects, have not received their support as industrial enterprises. The main feature of the land policy of the labour party is its advocacy of nationalisation. Such an attainment seems nearer realisation to an Australasian than to an American. For in the colonies much of the original public domain still belongs to the State, though occupied by private tenants. The grazing lands are largely held under pastoral leases. By not alienating more public land and repurchasing large pri- vate holdings, the labour people hope gradually to make private ownership the exception. Their plan is to allot land to settlers under leasehold and make the government the universal land- lord. Upon this issue workingmen part com- pany with the farmers. Their policy is con- sistent with the governing principle of the whole labour programme, which is public ownership of the means of production. The industrial laws advocated by the labour party look toward State control of industry by regulating conditions of employment. This The Labour Programme 109 legislation flows from two sources, parliament and boards or courts, with delegated authority in industrial matters, instituted by general statute. The activity and powers of these subordinate bodies are so great that direct leg- islation is relatively unimportant in the eyes of workingmen. Nevertheless the parliamen- tary acts constitute a code of some dimensions. The labour laws of New Zealand include fifty- six separate statutes, and form a volume of 428 pages. The most advanced of these laws, ex- cepting compulsory arbitration, is the Workers' Compensation Act, which is based upon the English statute, and imposes on employers a degree of liability for accidents to workmen not recognised in the United States. Our liability laws enable a worker to secure damages for an accident incurred in service only when his employer has been negligent ; the Compensa- tion Act makes the employer liable to a limited sum for all injuries received by workmen while engaged in his service, without regard to negli- gence. Such a law is now in force in New Zealand, Sotith Australia, Western Australia, iio The Labour Programme and Queensland. The effect is to make the employer insure his business against every claim for injuries received by his employees. Un- avoidable personal accidents become a charge upon the business, instead of upon individual workmen, resting equally on competing employ- ers, and the law is not generally felt to be a hardship. The factory legislation of the colonies is more detailed and exhaustive than our own. Laws compelling the early closing of shops and half holidays are common, and the amount of overtime that can be worked in a factory is limited. Child labour in factories is forbidden or discouraged, and the eight-hour day indi- rectly imposed even for adults. Provisions for inspection and the enforcement of the laws are more ample than in America. Factory and mine sanitation are closely regulated, though without affecting actual conditions much more than enlightened self-interest and voluntary action in America. The laws of England have been a common source of legislation for Aus- tralasia and the United States in matters The Labour Programme 1 1 1 relating to the time, form of payment, and security for wages. The two chief measures workingmen now seek are a statutory eight- hour day and minimum wage. The compara- tive moderation of these demands, which would be endorsed by trade unionists everywhere, is due to another channel for making the desires of labour effective. The real industrial ends of the labour movement are revealed in com- pulsory arbitration. The seven planks of the federal "fight- ing platform" are maintenance of a White Australia; compulsory arbitration; old-age pensions '^nationalisation of monopolies ;, citizen defence force and Australian-owned navy ; ' restriction of public borrowing ;,and navigation laws, providing among other things for the "protection of Australian shipping against unfair competition." The general platform calls for a Commonwealth bank of deposit and issue, federal life and fire insurance, and a federal patent law. None of the planks is wholly experimental. The "White Australia" policy has been adopted. Compulsory arbitra- H2 The Labour Programme tion and old-age pensions exist in two states of the Commonwealth and in New Zealand. The four following planks are based upon legislation in other countries. England has a national bank, New Zealand state life and fire insurance, and a federal patent law such as Australia desires is in force in the United States. A clause of the federal constitution gives parliament authority to provide for "concilia- tion and arbitration of industrial disputes extending beyond the limits of any one state." Another clause grants the central government the right to legislate in regard to any matter referred to it by any state or group of states, such legislation to affect only states consenting thereto. The Commonwealth parliament also has power to legislate with regard to "trade and commerce with other countries and among the states." By the imperial act constituting the Commonwealth, the British government delegates to the federal parliament authority to make laws which shall be in force "on all ships, the King's ships of war excepted, whose first port of clearance and whose port of destination The Labour Programme 1 1 3 are in the Commonwealth." Therefore the aggregate authority to legislate in industrial matters is considerable, but it is not yet de- fined by court interpretation. The constitution further gives parliament authority to provide for "invalid and old-age pensions." New Zealand enacted the pioneer old-age pension law in 1898; and has been followed by Victoria and New South Wales. All three statutes place the age qualifying a person to receive this bounty at sixty-five years, but in New South Wales a person sixty years old is granted a pension if incapacitated by sickness or injury from earning a livelihood. Pensioners must have resided in New Zealand or New South Wales twenty-five years, and in Victoria twenty years. The amount of the pen- sion varies from $8.45 a month in Victoria to a possible $10.50 a month in New Zealand to which sum it has recently been increased from $7.25 a month but may be less if a person owns property, or where a husband and wife living together are both pensioners. A pen- sioner is allowed to supplement this money in ii4 The Labour Programme New Zealand and New South Wales by the product of his own exertion, so long as his income does not exceed a pound sterling a week, or about twenty dollars a month. If he proves his ability to earn a higher wage, or has income from property, his pension is correspondingly diminished or ceases entirely. Of those qualified by age and residence to receive pensions 21 per cent, in Victoria, 38 per cent, in New Zealand, and 48 per cent, in New South Wales are upon the rolls. The number of pensioners in New Zealand has fallen from 12,776, in 1902, to 11,138, in 1905, and the expense of pensions from $1,059,001 to $968,860. The latter sum will be increased about one-half by the recent amendment to the law. The estimated cost of old-age pensions, if made universal through the Commonwealth, would be about $1.83 per capita of the population. This would make the cost to the taxpayers of such a law in the United States, if carried out on the more liberal basis of New Zealand and New South Wales, about the same as our present army pensions, for which we have paid over $1.80 per capita The Labour Programme 115 per annum for several years of the last decade. The labour party advocates lowering the age limit for pensions to sixty years, without re- quiring incapacity. They assert that a federal act would simplify the administration of these laws, place the financial burden upon the cus- toms revenues, where it would be least felt, and enable many old residents of Australia, mostly native-born, who are justly entitled to pensions but excluded because they have not resided con- tinuously in one state, to receive the benefit of this legislation. No attempt has been made to nationalise industrial monopolies in Australasia. The rail- ways are already government property. In New Zealand the government proposes to absorb the tobacco industry, and a similar project was advanced, in 1904, by the Commonwealth labour ministry. Nationalisation enterprises have more academic than practical interest for workingmen at present, because they are occu- pied with matters of greater immediate concern and political expediency. The large public debt and consequent burden of taxation must be 1 1 6 The Labour Programme lightened before radical steps can be taken towards government ownership of industries. Workers prefer for the present to control in- dustry as organised under private ownership, rather than to conduct such undertakings as public enterprises. The first platform of the labour party in New South Wales contained a plank in favour of "federation of the Australian colonies on a national as opposed to an imperial basis." This has continued to be the attitude of the work- ingmen of Australia towards imperial relations. The same considerations that make them favour a strong central government, make them look with disfavour upon too close a bond with the mother country. In this they are guided by practical interest rather than by sentiment, though the former may in time mould the latter. England is the Australian manufacturer's in- dustrial competitor. English goods may be favoured by the importer, but they mean less trade for the factory owner and less work for the operative. These antagonistic industrial interests are felt by workers. They come more The Labour Programme 117 prominently to the fore in case of immigration. Upon two occasions lately workingmen have tried to exclude from Australia British mechan- ics coming to the country under contract. One constant fear of the Australian is that he may be swamped by the competition of coloured subjects of the Empire, and toward this danger he has directed drastic legislation. Coastal seamen are jealous of the competition of British shipping, and look forward to Australian inde- pendence upon the sea. The labour party might, as readily as the conservative parties, grant preferential trade to the mother country, from a feeling of common race and sentiment with British workingmen. But it would make no concessions prejudicial to home industries, or open the gates to an immigration of British workmen coming to assured positions in the Commonwealth. While not hostile to Great Britain, the workingmen of Australasia proba- bly attach less weight to imperial ties than the conservatives. The governing classes of Eng- land have not been in sympathy with the social-democratic movement in the colonies. 1 1 8 The Labour Programme Australasian workingmen realise this. Many of them receive their most vivid impression of the motherland from a royal governor, whose lordly revenues their taxes pay, and whose social sympathies are generally with the class oppos- ing them. But any alienation that may exist has only sentimental import. The relation of the Empire to the Australasian democracies is too sagaciously arranged to be materially af- fected by a divergence of local policies. The practical objects of the labour party are not so much socialist as social-democratic. They look toward collectivism, but recognise wages, profits, and the conditions of capitalist production as matters to be accepted in present legislation. Here the party breaks with doc- trinaire socialists, of whom there are a few in Australia and New Zealand, whose active but not very formidable opposition it is obliged to meet. Australian labour leaders know little or nothing of Marxian theories. Few of them know even by title the principal text-books of Continental socialism. The writings of Henry George and Edward Bellamy did something to The Labour Programme 1 1 9 popularise collectivist doctrines. The Knights of Labour enrolled many recruits in both Aus- tralia and New Zealand at one time, and the first progressive premier of the latter colony was a member of that body. More recently one or two English socialists have visited Australia, and Mr. Tom Mann has been employed as a salaried organiser by the Melbourne Trades Hall. But the policy of the labour party is shaped by home conditions. There is little social idealism among the rank and file of the working classes. They are mostly seeking immediate and concrete results, and, so far as any directive purpose on their part is con- cerned, it is merely an accident that the policy thus determined trends toward socialism. Nevertheless the full significance of the la- bour programme is hardly to be gathered from its formal statement. The ideals behind it, and the spirit in which laws embodying its demands would be administered by a labour party in power, are of more practical interest to the people of Australia than are the bare projects of these laws themselves. Labour leaders are 1 20 The Labour Programme fully conscious of their socialist purpose. They are perfectly candid in stating it to their sup- porters. They do not look upon their present legislative demands as final. They intend gradually to carry the principles these imply to their logical conclusion, and they would admin- ister the government so as to further this end. As they are practical politicians and have felt the responsibility of office, they are more conservative in their immediate proposals and party tactics. No red flag demonstrations, occur at their meetings. They are confessedly leaving much of their ultimate programme to their children and grandchildren. But they know where the road they are travelling leads, and are advertising their destination to the peo- ple. They are endeavouring, gradually and without violently disturbing existing conditions, to abolish private employment, and thereby, as they think, solve the economic problem of society. Few of them are communists. Most of them are sceptical as to the possibility of establishing economic equality. It is hardly necessary to say that none of them looks The Labour Programme 121 forward to making a grand division of the country's wealth among all the citizens. But they have faith that the State can in some way make it possible for every man to earn a "living wage." It is toward this end that they are experimentally proceeding. CHAPTER VI A WHITE AUSTRALIA A WHITE AUSTRALIA retains the first place in the labour platform, although laws for attain- ing that object have been enacted, and this de- claration of policy affects chiefly the adminis- tration of existing statutes. New Zealand, for historical and climatic reasons, is less concerned in this question than is Australia. The terri- tory of the Commonwealth is almost an append- age of Asia, and is set down in the vicinity of a host of petty insular associates, the Polyne- sian groups, and of the densely populated East Indies. It is embraced in an imperial connec- tion with the coolie multitudes of British India. And it possesses large tracts of strictly tropi- cal country, with the hot, humid climate, the rank vegetation, the diseases and drawbacks, and with the special agricultural capabilities of the torrid zone. The question therefore falls 123 A White Australia 123 naturally into three divisions : Chinese exclusion, intro-imperial exclusion which are both essen- tially Commonwealth questions and planta- tion labour exclusion, which at present affects chiefly and directly certain industries of Queensland, but in the course of future development will become important in the northern territory of South and Western Australia. The Chinese began to arrive in Australia in numbers sufficient to attract attention at the time of the gold excitement, fifty years ago. An act was passed in Victoria, in 1854, restrict- ing their immigration, followed shortly by sim- ilar laws in the other colonies. Notwithstand- ing these legal discouragements, the Chinese soon constituted eleven per cent, of the adult male population of Victoria and New South Wales, then, as now, the most populous and im- portant part of Australia. The opposition to them was so strong, especially after the placer diggings began to show signs of exhaustion, and miners were forced into other occupations, that in 1861 serious rioting, requiring the inter- 1 24 A White Australia vention of military authority, occurred in New South Wales. More stringent exclusion laws were subsequently passed, and the Chinese were placed under special disabilities, preventing their acquiring citizenship, owning land, or en- gaging in mining occupations. The colonial immigration laws have recently been superseded by a federal act, which excludes from the Com- monwealth, with a few unimportant exceptions, all persons unable to write from dictation and sign a passage of fifty words in a European language. Though the Chinese form a more important fraction of the population in northern Queens- land, the economic evils of their competition have been most evident in Melbourne and Syd- ney. In the former country they constitute a phase of the all-important plantation labour question. Among urban workmen they are an element apart, competing in retail trade and manufacturing, especially furniture making, where they depress wages and defy industrial regulation. This competition impresses work- men with their need of government protection, A White Australia 125 and with the racial limitations of socialism. The Chinese are social rebels. They persistently evade the measures devised by other workers to better the condition of labour. Though skil- ful at co-operation among themselves, they do not grasp the governmental ideal. They pos- sess the communal instinct which precedes mod- ern industrialism, and which is sometimes con- founded with the so-called scientific socialism of to-day. The very capacity for acting to- gether, which they have in as high a degree as the best-disciplined unionists, is used to evade government regulations. The laws of Aus- tralasia generally make every place where a Chinaman is employed a factory, so that state supervision is extended to all industrial work- ers of that nationality ; but this has little effect in changing their customs. Therefore acts to help white workmen, by shortening hours of la- bour, raising wages, and requiring more expen- sive sanitation and better surroundings, only enable the Chinese to compete to greater advan- tage. Hence it becomes a very important mat- ter with the labour party, which advocates state i 26 A White Australia regulation of industry, to eliminate from their problem this factor of cheap and largely un- controllable labour. A few Japanese have immigrated to Austra- lia, but they are not numerous enough to affect the labour situation. They are chiefly em- ployed in the pearl fisheries of the northern coast. The trade between the Commonwealth and Japan is growing, and regular lines of co- lonial and Japanese steamers ply between Syd- ney and Kobe or Yokohama. Some people in Australia anticipate that the policy of restrict- ing the immigration of Asiatics may in time occasion diplomatic difficulties with their north- ern neighbour. The immigration of coloured British subjects from India has not been large, and the effect of their presence in Australia is hardly sufficient to justify the concern of white workers. But the government enforces intro-imperial exclusion, keeping fellow-subjects out of the country re- gardless of allegiance to a common sovereign. The federal authorities recently refused to sign a mail contract with a British steamship line A White Australia 127 which employed coloured citizens of the Empire as firemen. The problem of developing its tropical terri- tories with white labour is a matter of national concern for Australia, not only because it ulti- mately will involve the direct interests of the three states whose resources lie largely in the torrid zone, but also because the federal govern- ment must bear the expense which this policy imposes. At present the only one phase of the question of practical importance is the economic effect of excluding colored labour upon the pro- duction of sugar in northern Queensland. This industry has been in existence for more than forty years, though until recently the amount of cane raised hardly exceeded the crop of a sin- gle plantation of first rank in Hawaii or Cuba. The policy of erecting central mills with gov- ernment aid was started about twenty years ago, and in 1893 the Queensland parliament passed a sugar works guarantee act which per- mitted any group of farmers to form them- selves into a company, and, by mortgaging their lands to the government, obtain capital 128 A White Australia to erect a mill. Under this act the state has become involved in the sugar business to the extent of $2,800,000, some $300,000 of which is overdue interest and redemption instalments. Therefore the people of Queensland are con- cerned in the welfare of this industry to the amount of about six dollars per capita, irre- spective of the planters and small landhold- ers, whose entire capital is engaged in cane raising. This crop has been cultivated and harvested by imported labourers from the Pacific islands, known locally as "Kanakas." These contract workmen were first introduced about the time of the civil war in America, when cotton planting flourished temporarily on account of the block- ade of our southern ports. The local demand for sugar caused cane to take the place of cot- ton when the price of the latter fell at the close of the war. Serious abuses grew up in the method of recruiting this labour. The unwill- ing and unsophisticated islanders were enticed from their homes, separated from their families, and in some instances wantonly killed when they A White Australia 129 resisted involuntary service in a strange coun- try. The evils of the slave trade were so far revived that the imperial government passed an act, in 1872, "For the Prevention and Punish- ment of Criminal Outrages upon Natives of the Islands of the Pacific Ocean." Various at- tempts were subsequently made by Queensland to regulate and mitigate the evils of this traf- fic, and at one time it was temporarily sus- pended. But, up to the present, Kanakas have outnumbered all other workers employed in the canefields, though they are relatively less im- portant now than in the early days of the in- dustry. During the fourteen years prior to 1900 sugar production increased one hundred and twenty-one per cent., while the Pacific Is- landers decreased eighteen per cent. About one-fifth of the cane raised in Queensland is produced by white labour alone, and there is one white planter for every two coloured per- sons employed in the industry. The imported labourers were closely confined to cane cultivation, partly because their serv- ice was worth more in that occupation, and 130 A White Australia partly because the laws of the colony forbade their engaging in other kinds of employment. The demand for coloured labour is not at pres- ent exigent except in tropical agriculture. The state of Queensland extends twelve hun- dred miles from south to north, with corre- sponding variations of climate. All the coun- try likely to require coloured labour lies within a few miles of the coast. Beyond these lowlands begin immediately a range of highlands, verg- ing off into the central plain, with a dry climate, cool nights, and other natural conditions not so unfavourable to Europeans. The coast lands, however, which alone are adapted to agri- culture, are extremely humid, and their mean temperature varies from seventy-two to seventy- five degrees, and the maximum reaches one hun- dred. Frost never occurs in the northern dis- tricts. All of the physical conditions of the country are unfavourable to white men. Sta- tistics from the plantations show that the wages of white workers rise and the number of days they can work in a year decreases as the north- ern limit of this coast area is approached, A White Australia 1 3 1 while the reverse occurs in case of the coloured labourer. The Commonwealth government, yielding to the demand of the labour party and of a large independent element opposed to contract labour on principle, has abolished Kanaka importation. To remedy the adverse effect of this action upon the sugar industry, a tariff of nearly thirty dollars a ton, or almost as high as that in the United States, has been levied upon imported sugar. The protective effect of this duty is cut in half by an excise tax of about fifteen dollars on home-grown sugar. But in order to encourage cane raising without coloured help, an indirect bounty of nearly ten dollars a ton is paid upon sugar grown exclusively by white labour. Australia is, therefore, following a policy that ignores to some extent natural and eco- nomic laws. The government would redeem a virgin and tropical wilderness by Saxon labour, and domicile within the torrid zone a race of workers whose physiological adjustments from remote antiquity have fitted them for colder 132 A White Australia climates. Not even when the Aryan invaders descended the valley of the Indus and estab- lished a caste supremacy in India, was this at- tempted; for subjugated races formed the raw levies of industry in the subdued land. In Aus- tralia there is no indigenous race to clear the forests and till the soil. For these tasks the native blacks are too few and too little apt at rude or protracted labour. The term White Australia is to be taken literally, and means that all the territory of the Federation, except possibly New Guinea, is to be re- served for the exclusive occupancy of peo- ple of British stock. No such vast ex- periment at acclimatisation has ever been attempted. Its success, if doubtful, can- not be disproved, because it is so novel. And Australians are not making an aggressive ef- fort to bring into use the natural resources of their tropical empire. They seem content to wait if necessary forever rather than seek another solution for the problem than the one they have adopted. A labour minister in Queensland said: "We believe northern Queens- OF * / ^^SisSES*^^ A White Australia 133 land can be developed by white labour alone; but if we knew it could not, we should prefer to let it lie idle rather than to saddle the country with a black race and a contract-labour ques- tion." Climatic causes alone do not give the coloured races command of the tropics. Broadly speak- ing, a man goes with his natural environment, it is true, and the coloured labourer is favoured by his better adaptation to a hot climate. Still the question is open, whether it is not primarily economic competition, in the industrial sense, that at present keeps white workers away from the tropics. The progress of science and in- vention applied to plantation industries, and a more rapid physiological adaptation to climate than is now anticipated, may reverse the posi- tion of the two races even in hot countries, turn- ing the balance of adaptation in favour of the worker with superior mental equipment. But Australia must meet the facts that tropical in- dustries are at present conducted by processes requiring cheap labour, and that world-wide competition, from which no country can escape, 1 34 A White Australia has fixed the wage of the labourer in the tor- rid zone far below that required by Caucasian workers. The fringe of continent which the Commonwealth possesses, bending far north to- ward the equator, still awaits the pioneer. As its capacities are tested and its resources adver- tised, the demand for its development will be- come more insistent. Australians may be will- ing to pay high prices for tropical produce to enable their fellow countrymen to labour in its fetid swamps and on its broiling plains ; but the market the few million residents of the Com- monwealth afford is limited. The growing de- mand that the modern world makes on the ma- terial resources of the globe is so exigent, that no nation can lock up in perpetual reserve large tracts of productive territory. To neg- lect material resources is to forfeit them. Not, perhaps, through foreign pressure, but from the cogency of its own internal needs, the Com- monwealth will be forced to use its entire do- main. In doing this the tropical labour ques- tion will continue a leading issue. No single statute will retire it permanently from discus- A White Australia 135 sion. A White Australia may for many years stand at the head of the labour platform, not altogether as a symbol of a conquest won, but as a national ideal. It may in time become a secure attainment, but that will be in response to changing conditions that will modify the whole process of tropical production. The attitude of the labour party toward coloured races marks the limit self-interest im- poses on the altruistic side of socialism. The working classes are seeking to realise a state of society where all members are qualified and ac- customed to participate in industrial as well as political control. This can be attained only by a process of striving which the tropical races have not yet begun. Therefore labour sympa- thy extends only to those who are consciously seeking popular ideals, or are at least restless with the spirit of reform. Discontent is the badge of brotherhood. The passive hosts of the Orient are natural enemies of socialism. They represent an impending economic peril to white workers. The labour movement is un- der one aspect a vast cosmopolitanising influ- 136 A White Australia ence. It discourages the spirit of nationality. Military armaments and warlike ideals are rec- ognised as impeding the progress of labour. The common interests of a class are more im- portant than the separate interests of different governments. But where the class ends the bond is broken. A nation without a labour movement is, in the eyes of workingmen, a social outlaw, without the seed of regeneration. As the Christians of the Middle Ages called every man brother, and slaughtered the heathen and the heretic, so modern socialists extend one hand in fellowship to class-conscious labour, and with the other draw the sword of hostile legislation against the toiler unprotesting against his lot. We can only conjecture what part the multi- tudes of the Orient are to play in coming in- dustrial changes. They may become servants of machinery devised and controlled by Euro- peans, developing the species of intelligence re- quired by modern industry while retaining the docility of a servile race. They may be stim- ulated by concrete examples of scientific attain- ment to a new era of progress. They may A White Australia 137 remain in mental stagnation, passing away like a lower organism before a race whose relative advantage in the world's competition is multi- plied by every new discovery, and whose grow- ing dominance is extended by that very process of self-perfection of which the labour movement is a part. Whichever of these possibilities is realised, or if all are realised in different de- grees, Australia believes itself more concerned than any other continent in the event. CHAPTER VII MINIMUM WAGE BOARDS VICTORIA received more immigrants at the time of the gold excitement than the developed resources of the country could profitably em- ploy. Therefore manufactures sprang up at Melbourne, under favouring legislation, to oc- cupy this surplus labour, and a permanent population of skilled workers was created. Factories extended faster than the market accessible to Australian manufacturers, and overproduction followed, with the result that the excess of workmen found no demand for their services at home, and no place within reaching distance to offer them. Consequently industrial crises occurred in which sweating and other evils affecting especially the working classes arose. Chinese competition added to the distress of white employees in some trades. These conditions finally aroused public atten- 138 Minimum Wage Boards 139 tion. Government investigations followed, which showed the unfavourable situation of the working people to be dependent on what were thought remediable industrial conditions, and modifications of the factory laws were under- taken to correct them. The problems presented by sweating and Chinese competition were so complex and re- quired so much detailed regulation that the direct intervention of parliament was likely to prove cumbersome and ineffective. Therefore authority to deal with these questions was dele- gated to subordinate bodies, called minimum wage boards, representing the trades affected, and composed of men having practical knowl- edge of the industry under their jurisdiction. The authority thus delegated was specified and limited by the Factories Act. It covered more ground than the general law that had preceded it, partly because the problems to be met were different, and partly because more powers could be entrusted to a body of specialists dealing continuously with an industry and free to revise their acts, than could be safely granted to an 140 Minimum Wage Boards administrative official, or even exercised direct- ly by parliament itself through the hard and fast provisions of a statute. The authority of the legislature in the Brit- ish colonies is not limited by a written constitu- tion. Therefore it can delegate powers copious enough to supply any necessary degree of authority to the secondary agency chosen to administer them. The wage boards might legally have been empowered to take entire control of private industry. However, their functions do not exceed in principle those ex- ercised by railway commissions in America with the important reservation that they af- fect private, as well as public and quasi-public industries. The Victorian parliament did not regulate the price of the products or services of a business, but it gave the boards authority to prescribe a minimum wage for employees in certain classes of establishments. This au- thority was granted in order to remedy a special evil a wage so low that it threatened the common interest of society in maintaining a standard of living among all classes sufficient Minimum Wage Boards 141 for healthy social progress. One motive was to protect society from the competition of a lower civilisation that of the Chinese. The law was directed against sweating on the theory that this abuse is unprofitable for all concerned in it. The average profits of manufacturers are no higher when sweating is rampant than when a fair wage is paid; and the volume of their trade is lessened by the lower consuming power of workers. Propertied interests were not op- posed to a statutory minimum wage on the ground that it was an attack upon capital. The better employers rather courted some pro- vision that freed them from the competition of less scrupulous men of their own class. More- over, though the determinations of wage boards are legislative acts, in essence amendments to the factory law, they preserve in some degree the form of a voluntary agreement. The boards who pass them are composed of an equal num- ber of delegates from the employers and em- ployees in the trade in question, under a non- partisan chairman, and their decisions are frequently compromises, formally not unlike 142 Minimum Wage Boards collective bargains made between trade unions and employers. But the members are paid for their services from the public revenues, and parliament decides what trades shall be subject to the Act. Victoria, therefore, did not intend radically to extend state regulation of industry in this effort to remedy evils recognised as of legiti- mate public concern. Similar measures might be adopted anywhere in the United States with- out exciting comment as a bold departure from our precedents and institutions. The labour people favoured but did not initiate the law. The amendment was not embodied in the factory law as an entering wedge to socialism. Its ulterior possibilities were not suspected, because its immediate purpose was so evident. But in the midst of the general movement towards state regulation of industry, this legislation has been diverted toward a development sympa- thetic with that occurring in neighbouring states and colonies. It has been moulded by the changing popular ideals, by expanding con- ceptions of the State's functions in industrial Minimum Wage Boards 143 matters, and by the persistent pressure of labour interests in its administration, until despite hostile amendments recently enacted it accords in spirit and purpose with other advanced legislation in Austra- lasia. The power of the boards is limited by statute to determining two principal matters, the mini- mum wage and apprenticeship. By implication authority to fix wages involves the right to fix overtime rates, and so gives the boards, as is further provided in the act, power to determine the length of the working day. Boards may establish rates of wages for both time and piece- work, or fix time wages and allow manufactur- ers to adjust the rates they pay by the piece to this standard. In order to curtail child labour, the boards are authorised to regulate the pay of apprentices, and the number of unindentured apprentices employed in proportion to journey- men. Formerly they could limit the number of apprentices, whether indentured or not; but a recent amendment, caused partly by a scarcity of skilled operatives since the expansion of 144 Minimum Wage Boards manufactures following federation, takes away the right to restrict the employment of inden- tured learners. Boards cannot prohibit strikes, and so are under no obligation to satisfy all the demands of labour, because workingmen are free to resort to other measures for securing more pay than the determinations grant. Therefore they dif- fer from an arbitration court, which being instituted to prevent strikes is the sole legal recourse of workers seeking to better them- selves with the growing prosperity of their employers, and consequently ought to have full authority to adjust wages to the demands of labour crises as well as to industrial crises. However, the boards would have fulfilled their original intent had they merely enforced a living wage. This would have corrected sweat- ing, and might have checked the pressure of Chinese competition. To enact a statutory wage higher than this purpose demands, was to exceed their original object and assume powers not contemplated by the legislature. But the analogy of a collective bargain seems to have Minimum Wage Boards 145 guided the representatives upon these bodies, so that they unconsciously interpreted their duty as not unlike that of an arbitration court. Therefore, a standard or union wage was usually made the minimum. In fact some of the determinations fixed the minimum higher than the average wage previously prevailing. In 1897, the year after the boards were estab- lished, protests against this were presented to parliament by the boot and clothing manufac- turers. To prevent such a compulsory increase of wages, an amendment was passed in 1904, defining the procedure by which boards are to determine what is a minimum wage. They are required to ascertain as a question of fact the average wage paid by reputable employers, and are forbidden to fix a minimum higher than the average wage as thus determined. The boards are also allowed to fix special rates of pay for aged, infirm, or slow workers. Although the late amendments are thought reactionary by labour sympathisers, they tend to assimilate wage-board laws to arbitration 146 Minimum Wage Boards laws. A necessary result of defining the pro- cedure to be used in ascertaining a minimum wage, is to clothe the boards with such quasi- judicial powers as authority to receive evidence under oath. Much more important is a new provision establishing a court of industrial ap- peals, consisting of a justice of the state supreme court, with two assessors appointed by the court from nominees by the employers and employees respectively. These assessors are technical advisers, rather than members of the court. This tribunal is authorised to hear appeals from the decision of any board, and to amend the whole or part of the board's deter- mination. The court is not limited to specified procedure in ascertaining what shall be a min- imum wage, though its jurisdiction does not otherwise extend beyond the subjects of which the boards may take cognisance. The first appeal to this court was made by a body of employers. The determinations of the boards are en- forced by ordinary tribunals, like parliamen- tary statutes, usually upon action brought by Minimum Wage Boards 147 the factory inspector. Trade unions are not recognised in the constitution of the boards or the enforcement of their decisions. Therefore, the merits and demerits of unionism do not enter into the controversy respecting them, and the law has not aroused the same class sentiment as the arbitration acts. Employers have applied for eleven of the thirty-eight boards estab- lished. Testimony as to the influence of the boards upon sweating and Chinese competition varies. Both continue to exist in Melbourne. I have seen large bundles of clothing going out of fac- tories, to be made up by contractors who were evading board determinations. In 1904 a dele- gation of workingmen petitioned the ministers to take measures to prevent Chinamen from absorbing the furniture trade in Melbourne. The number of Chinese cabinetmakers employed in that city, at the minimum journeyman's wage or over, the previous year, was four hun- dred and six, earning on an average, $12.32 a week ; while the white workers in the same trade numbered four hundred and seventy, and earned 148 Minimum Wage Boards on an average $15.84 a week. But the wages reported by Chinese employers are not reliable. Therefore the law has not eradicated the evils it was devised to meet, but nevertheless it appears to have mitigated them. Few, if any, strikes have occurred where wage determinations are in force. The workers themselves, who ought to be the best judges, commend the effect of the act. Comparing the condition of workers under the boards, and those not subject to board ju- risdiction, the wages of all female workers and of all adult male workers are higher in the regu- lated trades ; but the wages of boys and youths are higher in occupations free from govern- ment control. This is probably because the determinations of the wage boards contain pro- visions discouraging the employment of juvenile labour, and therefore boys engaged in regulated trades are fewer and are employed in relatively unimportant operations as learners, while in the unregulated trades boys do men's work, and are paid more in consequence. But if the wages of all male workers in regulated and unregu- Minimum Wage Boards 149 lated trades are compared, the average pay of those working under board determinations is $1.14 a week more than that of their fellows in other occupations. The Victorian law has recently been modified with a view to overcoming a difficulty experi- enced in dealing with slow workers. Formerly less efficient operatives were obliged to prove age or infirmity, or some similar specific dis- ability, in order to secure permits to work for a wage lower than that prescribed by the board. A late amendment to the act dispenses with this requirement, so that now the mere fact that a man is not able to earn the minimum wage in the opinion of employers qualifies him to a per- mit from the inspectors. To prevent the abuse of this provision, the law limits the number of slow workers in any one establishment to not more than one-fifth of the workers paid the full legal wage. The regulation of wages by statute is the essentially new thing in the Victorian legisla- tion. The nominal control of apprenticeship is only a comprehensive child labour enactment. 150 Minimum Wage Boards It is granted to the boards, like the right to specify the hours of labour, because the age of workers affects average wages. But the theory of state jurisdiction behind the law exceeds that of ordinary factory acts. The govern- ment assumes the responsibility of enforcing a living wage. The state of Victoria is under- taking this new function gradually, extending its control from industry to industry, but there has been no retreat from this principle. It is more clearly defined, because less confused by other issues, in minimum wage than in arbitra- tion legislation. For instance, such a theory is nowhere expressed in the New Zealand arbitra- tion law, and it has been applied through the growth of judicial interpretation, rather than by direct enactment. But in the Victorian law, as recently amended, a board not able to fix a minimum wage, under the restrictions placed on its procedure, high enough to guarantee an adequate income to the worker, is required to refer the matter to the court of industrial ap- peals, which is empowered to take freer action, so as "to secure a living wage to the employ- Minimum Wage Boards 151 ees in such trade or industry who are affected by such determination." This principle, not as yet followed out to its full implications, is a guiding idea with the labour party. The responsibility of the State for a living wage, logically leads to the respon- sibility of the State for employment at that wage. If these two functions of government are generally recognised as moral duties, and are realised in political action, the result is state socialism. For this reason the wage regulation of Australasia is not to be confounded too closely with the regulation of wages and industry in the Middle Ages, or even more recently in England and colonial America. The earlier statutes were class legislation in the interest of property. The laws just described are class legislation in the interest of labour. The for- mer were overthrown by the democratic move- ment. The second are an outcome of the democratic movement carried over into indus- try. The economic effects of such laws may prove to be the same in both instances. But 152 Minimum Wage Boards the force behind them is different. It has not been shown nor can it be shown except by experience that the difference in origin and motive may not radically modify the adminis- tration and the economic influence of regulative legislation. Nearly every group of social phe- nomena has recurrent aspects. In the history of mankind, the pendulum of political control has swung from autocracy to democracy and back again several times. Religion, art, litera- ture, almost every division of culture and mental activity, show similar repetitions. But while broadly similar, each recurring complex of conditions is not identical with its predeces- sor. This may be true of industrial organisa- tion. The modern state and the ancient and mediaeval state are not alike. The people that constitute society are not the same people. The material bases of industrial life are vastly dif- ferent. To reason from the experience of the past to the possibilities of the future, omitting all these varying conditions, is to court error. There may be general economic laws that apply in both instances. They may be sufficiently Minimum Wage Boards 153 important to predestine the experimental legis- lation of Australasia to failure. But broader knowledge and profounder study than have yet been devoted to this subject are required to give us conclusions of value. CHAPTER VIII INDUSTRIAL ARBITRATION ACTS NEW ZEALAND was the first of the colonies to pass a compulsory arbitration law; but the movement behind this legislation started in Australia. Like the labour party, its origin dates from the maritime strike of 1890. Prior to that, boards for the voluntary conciliation of industrial disputes had been formed in one or two colonies, and bills had been introduced in parliament for conciliation councils, like the conseils de prud'hommes of France; but these efforts were not successful. No organisation and no familiar procedure existed for dealing with such an emergency as the strike just men- tioned, and immediately after the conclusion of that struggle this want manifested itself in a number of projects, put forth privately and publicly, for settling disputes between work- Industrial Arbitration Acts 155 men and employers. Among these was a bill proposed, in 1890, by the Right Honourable Charles Kingston, the premier of South Aus- tralia, for the encouragement of the formation of industrial unions and the settlement of in- dustrial disputes, which is the parent of all the arbitration laws now in operation in Australasia. This bill was not enacted until 1894, on account of the strong opposition of the conservatives in the upper house of parliament, and was so amended that when it did become a law it pos- sessed formal defects that made its provisions inoperative. During the four years that the South Aus- tralian bill was under discussion, some form of conciliation or arbitration legislation was at- tempted in every colony except Tasmania and Western Australia. The legislation in New South Wales was preceded by an exhaustive investigation of measures for strike prevention in other countries, the results of which were em- bodied in a voluminous report a document drawn upon by all who made a study of this sub- ject in Australasia during this period. The 156 Industrial Arbitration Acts mother colony passed an arbitration law, in 1892, almost identical with Mr. Kingston's project and the later New Zealand act, except that it had no compulsory features. This law proved a failure, despite the energetic efforts of the officers of the court to make it a success. While it was in force a single strike occurred costing the colony half a million dollars. No effort was made to retain the law when the four years for which it had been enacted expired. The failure of this act was a severe blow to the principle of voluntary arbitration, and had more effect upon popular opinion because of its close resemblance in other respects to the com- pulsory laws. In 1892 a bill embodying many of the clauses and most of the essential features of the pro- posed South Australian act was introduced into the New Zealand parliament by the minister of labour, the Hon. W. P. Reeves, and became a law in 1894, after protracted opposition from the upper house of parliament. This act went into practical operation in 1896, and has been in force continuously since. In 1900 Western Industrial Arbitration Acts 157 Australia followed New Zealand with a compul- sory arbitration act. The original law was found defective in many details, and two years later was superseded by a revised law, which is now in operation. In 1900 New South Wales, which had been without official machinery for settling labour disputes since the lapse of the voluntary arbitration law four years before, sent a commissioner to investigate the working of the New Zealand act, and upon his report enacted a law differing in several formal re- spects, and containing even more stringent pro- visions for the prevention of strikes, than the statute in force in the latter colony. Since its passage, in 1901, this law has been in operation, with but a single amendment. In December, 1904, a federal compulsory arbitration act be- came law. This statute applies to industrial disputes extending beyond the borders of a sin- gle state. In order to meet the new conditions imposed by a jurisdiction covering a territory nearly as large as the United States, and in- cluding co-ordinate jurisdiction with state in- dustrial authorities, the organic portions of the 158 Industrial Arbitration Acts act contain important modifications not present in the state and colonial statutes. The policy of compulsory arbitration was thought out and adopted in Australasia by public men of broad popular sympathies rather than by labour leaders. The people still re- ceived their legislative projects from parliamen- tary ministers, rather than from party conven- tions. Therefore popular sentiment followed rather than led in the adoption of these meas- ures. Evidence given before a commission ap- pointed to investigate sweating in New Zealand, in 1890, and before the New South Wales strike commission, the same year, shows that a few la- bour leaders and social theorists had thought of the possibility of a state tribunal to settle in- dustrial disputes. But their random and hesi- tating proposals do not indicate a demand for government interference in strikes definite and general enough to shape legislation. Public discussion of the same subject in the United States would develop views of the same kind, equally advanced in principle and divergent in detail, and equally without the aggressive qual- Industrial Arbitration Acts 159 ity that makes such opinions politically effect- ive. The author of the New Zealand law, speaking of the final vote upon the bill, thus de- scribes the indifference that accompanied its passage: "Mildly interested, rather amused, very doubtful, parliament allowed it to become a law, and turned to more engrossing and less visionary measures." Whatever the condition of public opinion when the first of these acts was passed, indif- ference is the last word one would now use in describing the attitude of the people towards them. No other measures discussed by parlia- ment awaken more general interest, or have more influence in determining political group- ings and cabinet crises. As all of the arbitration laws are related by close ties of derivation, the machinery, proced- ure, and jurisdiction that they create are sim- ilar. The organic sections vary in essential detail if we except the federal law only so far as they relate to provisions made for con-, ciliation. The structural unit of the law is the indus- 160 Industrial Arbitration Acts trial union, or association of workers or of em- ployers. These organisations are purely vol- untary, like any company or corporation, but like the latter they must observe certain formal- ities in order to have legal existence; and they possess specified rights and responsibilities. They alone may appear as parties before the court. They nominate the lay representatives of workers and employers respectively upon that tribunal, and upon the boards of conciliation where these exist, ^s corporate bodies they possess legal jurisdiction over, and claims against, their individual members. Any trade union or organisation of employers, or asso- ciation of such bodies, is allowed to incorporate under the act simply by registering in accord- ance with its provisions. In New Zealand a body of workers not formally associated as a trade union may register as an industrial union after perfecting the simple organisation re- quired by law. While only unions or associa- tions can bring action before the boards or courts, an individual employer or worker may be summoned before the court to answer for a Industrial Arbitration Acts 161 violation of the act, or of the court's orders, and likewise in cases where such an organisa- tion is obliged to enforce discipline upon its members. New Zealand and Western Australia have provided boards of conciliation, which are com- posed of an equal number of representatives of employers and employees, under an impartial chairman. Each board has limited jurisdiction over a single one of the districts into which the colony and the state in question are divided. Originally a case had to be brought before a conciliation board before being appealed to a court of arbitration, unless both parties were agreed in their desire to lay it immediately be- fore the higher tribunal. But later amend- ments to the New Zealand law, which were adopted in the present Western Australian law, allow either party to carry the case directly to the court. As a result conciliation proceedings have fallen into practical abeyance. The arbitration court consists, except under the federal act, of a justice of the supreme court of the state or the colony, and of two lay 1 62 Industrial Arbitration Acts members, one of whom is a representative of the unions of employers, and the other of the unions of workers. A recent amendment in New South Wales, where the supreme court judges refused to serve upon the court, allows a lower judge to be president of this tribunal. The court is a court of record, with the usual powers of a civil court to determine its own procedure, re- ceive evidence under oath, maintain order, and is in other ways assimilated to the regular ju- dicial system; but it stands apart from this system in combining legislative with both civil and criminal judicial powers, and in being in- dependent of appeal to other tribunals, except on questions involving the interpretation of the act of parliament creating it. A case cannot be removed from the industrial arbitration court to any other court by certiorari or sim- ilar proceedings. Under the law a registrar is provided, who records decisions and proceedings of the court, incorporates industrial unions, and acts as gen- eral administrative officer for the court. Where conciliation boards exist, a clerk of awards in Industrial Arbitration Acts 163 each district performs duties similar to those of a registrar. To become legally binding indus- trial agreements, or collective bargains between employers and workers, must be recorded with the same officers. Provision is made for special boards of conciliation, and for expert assess- ors to act as advisers of the court in technical cases. The federal law contains several new features, devised partly to meet difficulties that have appeared in the administration of the state laws, and partly to adapt the machinery of ar- bitration to the wider territorial sphere and the different political units under its jurisdiction. As in New South Wales, the cumbersome and nearly useless boards of conciliation are dis- pensed with, and a single tribunal is consti- tuted for the Commonwealth. The new law de- parts from all its predecessors in providing that the court shall consist of a single judge, with- out lay members representing the unions of em- ployers and employees. The arbitration judge must be a member of the federal supreme court, but he may appoint as his deputy, to exercise 164 Industrial Arbitration Acts the functions of the federal court during the latter's pleasure, any justice of a state supreme court. The court may refer questions in dis- pute to a conciliation committee consisting of an equal number of employers and employees, or to a trial board, which maybe a state industrial au- thority for instance, a state arbitration court or wage board or may be a special body, con- sisting of an equal number of representatives of employers and employees, and a chairman who must be a judge of one of the higher courts of the state. The decisions of all these subor- dinate bodies become binding only as orders of the federal court. Exceeding the jurisdiction of a state court in this respect, the federal judge may take cognisance of a dispute, in the public interest, of his own volition, without awaiting an appeal from either of the parties. Procedure before conciliation boards was originally expected to be more informal than before a court, but in practice proceedings be- fore both bodies follow equally judicial methods. The boards may summon witnesses, administer oaths, receive evidence, and preserve order, the Industrial Arbitration Acts 165 same as the court; but they cannot, like the higher body, examine the books of employers in camera. Both boards and courts may inspect, in person or by agents, industrial establish- ments affected by a dispute, and interrogate employees. In New Zealand and Western Aus- tralia lawyers cannot appear for either party unless both parties consent. They may appear in the New South Wales and federal courts, but the judge is forbidden to assess their fees as costs. The court's decisions cannot be at- tacked on technical grounds; and the judge is not bound by rules of evidence, but may inform himself regarding points at issue in any way he thinks just. The conciliation boards formed under the earlier laws represent a stage in the evolution of public opinion from voluntary to compulsory arbitration. Their theory makes the decisions of the board depend on the formal or tacit con- sent of both parties. The board's recommenda- tion is formally accepted when the disputants make it part of an industrial agreement, which is enforced by the court like an award. 1 66 Industrial Arbitration Acts It is tacitly accepted when they allow it to lie, without appeal to the court, for thirty days af- ter being recorded by the board, and thus to acquire the force of an award. But the later law, in New South Wales, omits every provision for conciliation, and the recent federal act simply borrows from the dormant South Aus- tralian law a clause requiring the judge to rec- oncile the parties to a dispute, if possible, be- fore allowing it to come to trial. However, at a conference of employers and employees at Sydney, in May, 1906, to propose amendments to the arbitration law in New South Wales, a project found favour for estab- lishing conciliation boards in each trade, like the minimum-wage boards of Victoria, to consider and, if possible, settle disputes before referring them to a court. Such representative bodies, composed of employers and workmen in the trade in question, would have a better technical knowledge of the case than either the court or the older conciliation boards, which are usually composed of men having no practical familiar- ity with the business they regulate, and as law- Industrial Arbitration Acts 167 yers would be excluded, proceedings would be cheaper. The latter argument appeals to la- bour unions, whose court expenses sometimes reach $3,000 a year. The powers of a court of arbitration exceed those of conciliation boards. Its decisions are binding on the parties for a specified time usu- ally three years without their acceptance. The court can amend an award after due hear- ing, to remedy defects or to give fuller effect to its provisions, without the consent of the par- ties, while in case of an industrial agreement or a board recommendation, which represent a contractual relation, the consent of all parties is necessary to modify the terms of the instru- ment. The court may extend an award to parties not appearing in the original dispute; that is, the judge can, at his discretion, make the orders of the court a common rule applying to part or to the whole of an industry. Con- versely the court can limit the application of an award to any district, as to an urban or rural community, or to any employer or union. The court also defines what shall constitute a breach 1 68 Industrial Arbitration Acts of an award, and fixes penalties for breaches. In New Zealand the court may try cases and im- pose fines for violating the penal provisions of the act prohibiting strikes. The other laws make strikes and lock-outs indictable, and the arbitration judge, therefore, grants leave to prosecute these offences in the criminal courts. The boundaries of an arbitration court's ju- risdiction in industrial matters are defined by the act creating it ; but in practice they depend largely upon the body of precedent contained in existing awards. The decisions handed down by higher courts and by the supreme court of the Commonwealth, upon appeals questioning the powers of the arbitration courts under the constitution and the acts of parliament estab- lishing them, also define their jurisdiction. Their powers are limited by the industries and the classes of workers made subject to the acts, and by the degree of control within each industry granted to the court. The two spheres of au- thority may be termed respectively the exten- sive and the intensive jurisdiction conferred by the law. Industrial Arbitration Acts 169 The keyword describing the scope of an arbi- tration court's extensive jurisdiction is either "worker" or "industry," according as the one or the other of these terms is fundamental in the definitions forming the interpretative clauses of the act. A decision of the arbitration court of New Zealand, disclaiming jurisdiction in dis- putes brought by grocer's clerks, street railway employees, and similar workers, on the ground that their occupations were not properly indus- tries, occasioned an amendment, passed in 1901, defining worker to mean any person doing skilled or unskilled manual or clerical work for hire or reward. This makes the jurisdiction of the court unlimited, so far as private employ- ment is concerned. The original act in West- ern Australia defined worker so as to exclude clerical labour, apprentices, and persons work- ing under monthly contracts ; but the law sub- stituted in 1902 extended this definition so as to bring all classes of service under the control of the court. The law in New South Wales makes government railway servants and other public employees subject to the supervision of the 170 Industrial Arbitration Acts court, but domestic servants are expressly ex- cluded from its control. The federal law, by its definition of industry, excepts from the court's jurisdiction domestic servants and per- sons engaged in farming occupations. The intensive jurisdiction of the court using the term to mean the degree to which it may enter into the detailed regulation of a busi- ness is determined to a far greater extent by the rulings and precedents of former decisions than is the question of the industries and indi- viduals to which the awards may apply. The general intent of the law is to give the court power to settle every point that might cause a strike or lock-out. All matters included in collective bargains in the United States are proper subjects for the court's consideration. But the impossibility of defining these in detail has occasioned controversy, relating not only to the declared powers given the court by act of parliament, but also to the definition of these powers as derived from their formal statement. Authority to fix wages is a recognised element of jurisdiction, and carries with it the right to Industrial Arbitration Acts 171 fix rates for overtime, and indirectly as well as directly to determine the hours of a working day and to establish holidays. The courts as a rule construe this power liberally, so as to in- clude the right to prescribe a fair or standard, and not merely a living wage. The equity of this interpretation comes from the purpose of the act to prevent strikes, implying authority to deal with all the issues of a strike, and there- fore to fix wages in relation to profits as well as to the cost of living. Frequently the court raises wages that is, prescribes a minimum above the average previously prevailing. The only exception to this practice is in Western Australia, where both wages and the cost of liv- ing are falling with the waning gold excitement, and the court has adopted the practice in some cases of fixing a minimum no higher than the probable earning power of the poorest employee. This construction of its authority, borrowed from wage board rather than arbitration court reasoning, proves impossible in application, as was shown when several thousand lumbermen struck successfully to raise wages, in defiance 172 Industrial Arbitration Acts of the court's order. No democratic country can make a strike penal without providing legal recourse for obtaining the ends of a strike when justifiable. The law provides that the court may set a rate of pay lower than the minimum for slow and infirm workers. The regulation of piece- work and contract payments is under the con- trol of the court; but the judge in Western Australia has refused to exercise control over agreements made by workingmen for payment by the job. The courts have authority to regulate ap- prenticeship and the proportion of juvenile and female labour employed in relation to adult male labour. This is also a power which, on grounds of expediency, the court in Western Australia has refused to exercise. The chief point in dispute regarding the in- tensive jurisdiction of arbitration courts relates to preference of employment to unionists, a point not foreseen when the New Zealand law went into operation. The question is nomi- nally, but not really, the same as the closed shop Industrial Arbitration Acts 173 controversy in America. An industrial union and a trade union are different organisations in several important respects and chiefly in the different degree of control they have over the admission of members. An industrial union, under the arbitration law, exists by virtue of an act of parliament and is fostered by the policy of that act. The title of the first New Zealand law, which was borrowed from the original South Australian bill, stated that one purpose of the act was to encourage the formation of industrial unions. Under this clause of the title the arbitration court of that colony, sup- ported by a decision upon appeal from the su- preme court, in some of its awards, granted preference of employment to members of unions. A subsequent amendment to this law, and the original statute in New South Wales, expressly state that the court shall have power to give unionists preference of employment, though this is not mandatory. In Western Australia a similar clause was defeated by the protracted opposition of the upper house of parliament. In the federal law the power is granted con- 174 Industrial Arbitration Acts ditionally, but it is required that the union shall not engage in political activity while enjoying preference, and that this privilege shall be given only when, in the opinion of the court, a ma- jority of the workers in the occupation regu- lated by the award approve of the claim for preference. The practice of the court in New Zealand has established its right not only to prescribe that unionists shall be given prefer- ence to non-unionists in engaging new hands, but that non-unionist workmen already em- ployed when the award goes into operation shall join the union as a condition of retaining their positions. On the other hand, the court usu- ally provides that the union shall have prefer- ence only so long as it admits any applicant of good character to membership, without ballot or other formality likely to hamper his enrol- ment, upon payment of moderate fees fixed by the court. This is called enforcing the closed shop and open union. The economic effect of such a policy is not important, because the range of choice of employers in choosing men is not lessened so long as the workmen they select Industrial Arbitration Acts 175 can obtain admission to the union. From the standpoint of members, the equity of the demand that employees join the union is based upon the provisions of the law and the awards. The stronger organisations had enforced the closed shop in Australasia before the court was estab- lished, and refuse to relinquish what they con- sider a vested right. They further claim the privilege of raising the issue in court, because it is a recognised issue in strikes. The men also assert that preference is just, because only unionists incur the expense, and the odium with employers, of securing awards, and are liable to penalties for breaking the awards. Unless unionists are granted legal preference, non- unionists obtain real preference. For many employers show their resentment of an award by discharging members of the organisation responsible for its adoption. The most important objection to granting preference to unionists arises from the organic connection between the unions and the political labour party. Preference to unionists is pref- erence of employment to members of a political 176 Industrial Arbitration Acts organisation. Under the secret ballot no union can force a man to vote the labour ticket, but it can coerce members by effective moral duress to give financial support to the party and other- wise obey its dictates. The percentage of workers enrolled in unions increases where arbitration laws are in force, whether or not preference of employment is granted. Over one-third of the persons en- gaged in mining in New South Wales, and more than thirty per cent, of those so employed in Western Australia, belong to unions regis- tered under the arbitration acts. Still the pro- portion of the whole population in such unions hardly exceeds three per cent, in New Zealand and does not reach seven per cent, in Western Australia. Therefore the section of workers administering and directly profiting by these laws is not a large fraction of the whole people, and of itself hardly constitutes a dominant po- litical force. For the sake of formal equity, though the provision has no practical importance, the law authorises the court to order that members of Industrial Arbitration Acts 177 employers' unions shall have preference of serv- ice from members of workers' unions. This feature of the law has not elicited any discus- sion or public interest. The sections of the arbitration acts defining the powers of the court contain a "general wel- fare" clause, giving authority to regulate and enforce any established custom or usage of an industry, whether general or local. Where this clause is construed loosely, as in New Zealand and New South Wales, the court assumes un- der it very broad powers of industrial regula- tion. The following sentence, from an award in the former colony, indicates that the right of the judge to prescribe the working conditions of an industry is limited only by his own dis- cretion: "This court is not justified in making a radical change in the manner in which em- ployers may conduct their business, unless the party desiring that change proves by prepon- derating evidence that it is necessary in the in- terests of justice, and fair and equitable to make the change." The chief justice of New South Wales, in giving judgment upon an ap- 178 Industrial Arbitration Acts peal case involving an interpretation of the powers of the arbitration court, said of the act : "It deprives the employer of the conduct of his own business, and vests the management in the tribunal formed under the act." Under this clause the court has considered such ques- tions as the speed at which machines are to be run, the number of men to be employed to a machine, and whether men working in the open air, or their employer, shall decide when it is too wet to labour. The intensive jurisdiction of the federal ar- bitration court is about the same as that of the colonial and state courts. But contention has arisen as to the extent of its control over indus- tries and persons. The purpose of those who inserted in the federal constitution the clause providing for compulsory arbitration, was to meet such emergencies as the maritime strike, when industrial disputes necessarily extend be- yond the borders of a single state. The sea- men, and possibly the shearers, were the only organisations likely to occasion such disputes. But under the pressure of the labour party the Industrial Arbitration Acts 179 law has been extended to cover by implication state railway employees. This is a bold intru- sion on state rights, as an order of the federal court raising the wages of railway servants would be tantamount to an order to the state parliaments to provide for these increased wages in their budgets. The debate upon the bill de- veloped the further fact that many labour members contemplate extending almost any dis- pute across state lines by means of federal unions, whenever an advantage is to be gained by bringing it before the federal author- ities. In determining the minimum wage, the arbi- tration court may take into consideration three classes of evidence. The first two relate to the cost and standard of living, and to the custom- ary wage paid in the industry. When an award is under litigation both sides usually pre- sent evidence showing prevailing wages, and workers often support their claims by testimony as to house rent and the cost of staple household articles. The principle of a living wage is therefore fully established in arbitration pre- 180 Industrial Arbitration Acts cedents. The judge usually follows the theory that such a wage is a first charge upon an in- dustry, to be imposed if the business is to con- tinue in operation. The third class of evidence relates to the ability of employers to pay a higher wage, irrespective of previous rates and the necessary expenses of workmen. When an award is under consideration, the books of the firms interested are often inspected by the judge in camera, and dividends and other evidence of the earning power of a business are admitted as having a bearing upon an equitable wage for employees. The court thus fixes the share of the profits of an industry which the worker shall enjoy. This last assumption of State authority flows from the purpose of the law, and is not directed toward a socialist ideal, in the same way that the more modest authority of a wage determina- tion conforms to the object of a factories act. One is to prevent strikes, the other to prevent sweating. But as the Victorian law has com- mitted the state to the doctrine that the gov- ernment should enforce the right of workers to Industrial Arbitration Acts 181 a legal living wage, so the New Zealand law and its successors commit the state to the still broader principle, that the government shall regulate the distribution of profits from private enterprises. CHAPTER IX JURISTIC ASPECTS OF COMPULSORY ARBITRATION ARBITRATION acts are corporation laws en- forced by equity procedure. The court deals in first instance only with organised workers or employers. Its own constitution depends upon the existence of industrial unions. Corporation law suggests the reciprocal adjustment of responsibilities and privileges which forms the philosophical basis of this legislation. The Right Honourable Charles Kingston, the author of the parent arbitration law of Australasia, said "Our arbitration laws applied to labour are company law. When you allow capital to organise, it is subject to certain State require- ments, and you submit the incorporating individuals to special legal liabilities and re- strictions in return for the rights you give them ; so should you do with labour if you allow 182 Aspects of Compulsory Arbitration 1 8 3 it to organise. You require capital to incor- porate in order to exercise certain capitalistic powers; you should require labour to incorpo- rate in order to exercise certain collective labour powers. Every argument based on social grounds that you can advance for the one, is equally applicable to the other." The theory of the law does not allow one individual to interfere with the business of an- other individual. But it recognises the right of the employers or the employees of an indus- try as a class, when organised to exercise their collective will, to enforce that will in the admin- istration of the industry through government agencies. The awards are a definition of cor- porate rather than of individual rights. A violation of an award is prosecuted against a society when workers are defendants, and in behalf of a society when they are plaintiffs. The damages suffered by either party through a violation of an award are damages to a corporation in the first instance, and are re- coverable from or in behalf of a corporation. Single employers offending against an award 1 84 Aspects of Compulsory Arbitration are sometimes sued individually, but even here the ultimate responsibility rests upon the union, which has legal authority to discipline its members. In original proceedings, to secure awards, employers always appear as organi- sations. The true functions of an arbitration court are sometimes clouded by the forms of proced- ure and the nomenclature of the acts. The court is a representative rather than a purely judicial bodv. It does not possess the freedom from bias that our laws require of a petty jury, but rather represents a balance of opposing interests under the control of a judicial officer. This representative character of the court sug- gests that it is a legislative as well as a judicial authority. Its decisions and orders are legisla- tive acts, that may amend, modify, and sup- plant existing factory laws and industrial legislation, and create new laws governing industrial relations. It fixes holidays, compen- sation for accidents, physical conditions of employment, and other matters already forming items of legislation, and enforces a minimum Aspects of Compulsory Arbitration 185 wage and an eight-hour day, which it has been proposed to embody in parliamentary enact- ments. The higher courts of New South Wales have held that an arbitration court can amend existing statutes relating to workers so as to improve their condition, but that it cannot repeal the provisions of such statutes, by im- posing conditions upon labour more onerous than those permitted by parliament. The union of legislative and judicial author- ity in the same body is unwise ; for the court is called upon not only to interpret its own laws, but also to punish violations of its laws that de- pend upon its own interpretation. An interpre- tation may amount virtually to an amendment of an award. This not only leaves to the discretion of the judge the prevention of evils that might better be avoided by a different distribution of authority, but it encourages litigation. The arbitration courts have been more occupied with enforcing equitable conditions of employment than with establishing them. Appeals to the court are encouraged, because a prosecution for a breach of an award may secure an amending 1 86 Aspects of Compulsory Arbitration interpretation of the court's previous order, made more stringent by the constructive disre- gard of his authority then prominent in the mind of the judicial officer. The legislative function of the court accounts in part for the uncertain position it holds in public opinion possessing neither the dignity of a judicial tribunal nor the frankly popular character of a parliamentary body. As a law- maker, the court is the mark of virulent and partisan criticism, and its orders are subject to the same public comment and discussion as other legislative or administrative acts, while in its purely judicial capacity it receives the respect usually shown to a dispenser of justice. During the proceedings in an important mining case in Western Australia, while an award enacting terms of employment in the most important industry in the state was under con- sideration, a newspaper commented editorially upon the merits of the issues involved. The paper was warned that it rendered itself liable to punishment, under a clause of the arbitration act prohibiting the publication of anything Aspects of Compulsory Arbitration 187 likely to interfere with a matter before the court. The freedom of the press is thus curtailed by applying to legislative body pro- tective canons of law devised to procure uninfluenced and unimpeded channels for the ad- ministration of justice. However, in response to practical considera- tions, arbitration laws are evolving toward a separation of judicial and legislative powers. Strikes have become indictable offences, prose- cuted before criminal tribunals. Breaches of awards are prosecuted under an action of mixed civil and criminal character, and the defendant, if convicted, is adjudged to pay costs, and an additional sum partaking of the nature both of a fine and of an award of damages. Such a "penalty" is made payable directly to the plain- tiff, and in the statute the defendant is defined as a judgment debtor. The earlier acts, in New Zealand and Western Australia, left the arbi- tration court exclusive jurisdiction over such offences, much as an American court punishes violations of its own injunctions. The New South Wales law takes a step towards sepa- 1 8 8 Aspects of Compulsory Arbitration rating judicial and legislative functions, by making the orders of the arbitration court en- forceable by a court of petty sessions, with appeal to the former tribunal. Action is brought under the Small Debts Recovery Act. The federal law recognises a more purely punitive element in these penalties, by author- ising the court to order them paid into the public treasury, instead of to an individual or organisation a provision which employers are now trying to secure in New South Wales. This law also provides for the recovery of fines for breaches before civil magistrates. The congestion of business before the court is a potent influence forcing the transfer of its judicial functions to other tribunals. In New South Wales applications for awards form less than ten per cent, of the issues considered by the court, and the number of such applications filed but still unheard rose from thirty-eight to sixty-two between June, 1903, and April of the following year. A similar accumulation of busi- ness has occurred in New Zealand, and is not entirely absent in Western Australia. This Aspects of Compulsory Arbitration 1 89 would be remedied if the court's action were confined to its primary object of determining conditions of employment, leaving its orders to be enforced by regular course of law. Arbitration acts derive their authority from the police powers of government. They are measures to prevent industrial disorder, which is a form of social disorder, and their main interest lies in their application to this purpose. Each new enactment contains a clearer defini- tion of this object and more direct means for attaining it. The New Zealand law prohibits a strike or lock-out only when one of the parties to the dispute appeals to the court. If both parties prefer to settle their difficulties by a strike, the law permits them to do this. The statutory prohibition of strikes and lock-outs covers only actions done while proceedings re- lating to the dispute are pending, and for a sufficient time beforehand to allow either party to begin proceedings if he so desires. When giving judgment, the court may define in the award what shall constitute a violation of its provisions, and fix a penalty for such violation. 1 90 Aspects of Compulsory Arbitration During the first period the strike or lock-out is prohibited by statute; after the award is in force, it may be forbidden by the court. Nei- ther the statute nor the award becomes operative unless invoked by one of the parties to the dis- pute. There are two exceptions to this rule. The law prohibits strikes and lock-outs among workers and employers in related industries. Parliament has defined all building trades as related industries. The court may extend this provision to other groups of employments. Con- sequently, if an award has been given in the bricklaying trade, for instance, the mortar- mixers or the hod carriers cannot tie up that trade by a strike, although unwilling to lay their case before the court. The second contingency bringing parties in- voluntarily under the act is where an award has been given in their industry limited to some other portion of the colony. The employers or workers subject to the award might be injured in such instances by the competition of employ- ers or workers in the districts not subject to its provisions. If so, they may have the award Aspects of Compulsory Arbitration 191 extended to establishments in the competing district. The purpose of this extension is not to prevent strikes, but in equalising competition they are incidentally prohibited. The New South Wales act, passed five years after the New Zealand law went into operation, unconditionally prohibits strikes and lock-outs prior to and pending the consideration of the dispute by the arbitration court, whether the parties apply for an award or not, and makes such disturbances a misdemeanour. Although as indictable offences these crimes are tried before criminal courts, leave to prosecute must first be obtained from the arbitration judge. There was some doubt in New South Wales whether a strike retained its criminal character if begun after an award had been given. The court can define in an award what shall constitute a viola- tion and fix a penalty therefor. The state attorney-general, who is author of the act, appears to have thought that the court penalty superseded the statutory penalty in this case. But when a body of coal miners working under an award struck, early in 1904, the arbitration 192 Aspects of Compulsory Arbitration court granted authority to the attorney-general to prosecute under the penal provisions of the law, thus affirming the continued criminality of the offence. The latest Western Australian and the new federal act prohibit strikes and lock-outs un- conditionally, without regard to whether they are begun prior or subsequent to giving an award. The federal law, in addition to a fine of nearly five thousand dollars, makes a person guilty of these offences ultimately liable to three months' imprisonment. The strike pro- vision of the earlier New Zealand law, then, is analogous in effect to an injunction pending proceedings, while in the Australian laws it becomes a penal enactment. The original intent of the law was to enforce arbitration, rather than unconditional conti- nuity of employment. Those who projected this legislation appear to have thought that the State was competent to prescribe just terms of employment, which because they were just would be accepted voluntarily by those for whom they were intended. But the development of this Aspects of Compulsory Arbitration 1 9 3 idea is toward assuming that conditions of em- ployment prescribed by the State are just, and that it is therefore wrong not to accept them. The increasing stringency of the law is tem- pered by the discretion of the court. In Western Australia the judge has held that an employer who discharges all his hands, with the purpose of engaging an entirely new force, is not guilty of a lock-out. The court in New South Wales has held that no strike has been committed when a body of men terminate service after giving the fourteen days' notice previously customary in their occupation. Second in obvious importance only to strike prevention, and even more significant in ulterior effects and legal implications, is the relation of compulsory arbitration to the right of private contract. The development of this aspect of the law has been parallel with that described in case of strikes. New Zealand initiated these acts by assuming that the State might regulate the collective bargain between employers and employees. The industrial agreement, which is a voluntary instrument, is recognised in all 194 Aspects of Compulsory Arbitration arbitration laws as the desirable form of set- tling terms of employment. These agreements are enforced by the court the same as its own orders. But while the original theory of the law was that the State might enforce collective bargains, the practical outcome of the New Zealand law in operation was that the State made collective bargains. However, in that colony the government steps in to prescribe the contract of service only when invited to do so by one of the interested parties, and when they fail otherwise to agree. The court does not intrude its good offices upon either employers or employees, except to prevent strikes in related industries or to equalise competition in adjacent districts. But when brought into operation, the action of the court is in every instance pos- itive and mandatory. Conditions of employ- ment already existing, while recognised as precedents in making awards, have no legal standing prior to the court's declaration. Not until the court has made an award prescribing conditions of employment, or these conditions have been registered in an industrial agreement, Aspects of Compulsory Arbitration 195 do they become part of the law of the land. The New South Wales court, in its first decision, made a sweeping extension in the regulative principle here implied. It prohibited any change in existing conditions of employment, unless by the agreement of both parties or by its own orders. In other words, the court undertook to enforce every existing contract of service, whether written, oral, or implied, just as if it had been an award. It was held, to quote from the official report of the first case heard, that : "The right of freedom of contract has been considerably modified by the Industrial Arbitration Act. Though parties may still make voluntary agreements, existing terms and conditions of employment cannot be disturbed at the will of one party alone." The New Zea- land court, then, can enforce only a contract which it itself has made or approved; the New South Wales court can enforce any contract of service unconditionally, and its jurisdiction extends by statute to all workers and employers in the state, whether voluntarily subject to the act or not. 196 Aspects of Compulsory Arbitration Compulsory arbitration also impairs the right of private contract under another aspect. An equitable award must apply to all persons engaged in an industry subject to similar con- ditions of production and the jurisdiction of the court. Therefore the court is empowered to make its orders a common rule, applying to all parties coming under this description. The master tailors and the tailoresses of Auckland were working under a voluntary agreement. Against their will, and with both workers and employers joined as defendants, upon the ap- plication of employers and employees in the southern cities of the colony, the arbitration court substituted for this agreement an award changing conditions of employment. Wherever compulsory arbitration is in force, the court finds it necessary simi- larly to annul or modify existing contracts of service, against the will of the parties, though these contracts are not in themselves illegal. An industrial agreement is a contract ap- proved and sanctioned by the court, and might Aspects of Compulsory Arbitration 1 97 therefore be supposed to enjoy special immu- nity from alteration. In Western Australia the court has held that it cannot modify an indus- trial agreement without the consent of all the signatory parties. But elsewhere the court has amended these contracts, or substituted awards in place of them. Upon the ground that the relation of employ- er and employee must exist in order to bring the parties under the jurisdiction of the law, the supreme court of the Commonwealth has given a decision on appeal, to the effect that the arbitration court cannot regulate contracts for the performance of a specific piece of work. This principle applied where a number of la- bourers agreed to do certain work as co-contract- ors. This decision defeats the act in some cases, and to meet this difficulty legislation has been proposed limiting still more the right of private contract. The previous considerations apply only to the contract of service. But the contract of pur- chase and sale is equally dangerous to effective State regulation of industry. The reason for & TH'E ^"\ DIVERSITY) ^ss4/ fcifcniLiiiL y 198 Aspects of Compulsory Arbitration this is that a service may be embodied in a commodity, and transferred as an element or quality of a material object. To illustrate con- cretely, an arbitration court may fix a day rate to be paid to saddlers, and a piece-work rate for every operation of making a saddle ; but its jurisdiction does not extend to regulating the sale of the leather, saddle-tree, and other materials out of which a saddle is manufac- tured, or to the sale of a completed saddle. Therefore, a manufacturer may sell these ma- terials to a workman, and the latter may sell the finished product to the manufacturer at a higher price than the materials cost, but at a lower price than the cost of making prescribed by the court plus the cost of the materials. Where such transactions are conducted under a system of weekly or monthly credits, the differ- ence between the relation thus established and ordinary industrial service is merely nominal. Yet technically they are not the same. In the one instance work is sold, in the other commodi- ties. The court has no jurisdiction over the latter contract. Aspects of Compulsory Arbitration 1 99 The right of the government to make certain contracts illegal is well recognised. A working- man cannot lawfully contract out from the ben- efits of an employers' liability act. But in this case the interests of third parties of the fam- ily of the worker are directly and chiefly affected by the action of the employee. The wife and children suffer if the husband and father has no recourse for injuries incurred in service. The same logic may be stretched to cover all contracts governing wage relations. They all affect the third parties forming the worker's family. But this protection is not the primary purpose of these latest limitations upon the contractual freedom of the individual. Industrial regulation to be effective must be uniform. It must establish uniform conditions of production, if it is to establish uniform con- ditions of service. But private contract, wheth- er for labour or for commodities, means varia- tion of wages and prices beyond the control of the regulating authority. These variations may prevent the conditions of production from becoming uniform, and so defeat the efforts of 2OO Aspects of Compulsory Arbitration the court to enforce equal terms of employment throughout an industry. Therefore compulsory arbitration and private contract are in the widest sense contradictory. Their mutual op- position continually creates new problems for legislators. Compulsory preference of employment to unionists has been mentioned in its historical relation to arbitration laws. This subject also presents interesting legal aspects. The court prescribes membership in an organisation as a condition of obtaining or retaining employ- ment. Equity requires the court to exercise increasing supervision over these organisations, to enforce the responsibilities that accompany their privileges. The unions are no longer vol- untary associations. The worker, because he is a worker, enters into a new social relation. He is required to submit to quasi-public regula- tion not imposed on all citizens. His privileges and disabilities are those of a class. A legal recognition of class underlies these laws, and they revive the old historical struggle between contract and status. They reverse the pro- Aspects of Compulsory Arbitration 20 1 cess of evolution of private rights in European and British law. As State administrative units, the industrial unions resemble in principle the Roman collegia more than they do trade unions, though their connection with the latter organisations domi- nates their form and methods. Like the early Anglo-Saxon guilds the members are jointly re- sponsible for the offences of their members, in so far as they incur penalties imposed by the arbitration court. This frank-pledge revival is not the only instance where legal right to employment is made to depend upon assuming financial obligations to a union. Since the in- dustrial union is an administrative unit created by the government for public ends, its support is a public function, and a contribution toward such support in reality a public tax. The maxi- mum limit of this tax, under the name of fees and dues, is fixed by the arbitration court, and that court enforces the payment of this obli- gation. Arbitration laws not only regulate the re- lation of the individual to the union, but also 2O2 Aspects of Compulsory Arbitration the relation of unions among themselves. A union should not embrace more than one indus- try, and within that industry must consist exclusively of employers or of employees. The craft guild will never reappear under an indus- trial arbitration act. The trade union principle survives, because the derivation of the indus- trial union from the former makes this histor- ically necessary; but the cross-division thus established is an inconvenience. For instance, the carpenters are organised as a trade into a single association, but industrially they are divided into a number of bodies, engaged in building operations, in factory occupations, and upon public works. The conditions under which they labour as tradesmen are not uni- form ; but the conditions under which they work as employees in a single industry or group of industries are nearly the same. As industrial servants, the court finds it easy to fix terms to employment applying to any one class of car- penters; but when carpentering as a trade is under consideration, the regulations must be modified in great detail to apply to the varying Aspects of Compulsory Arbitration 203 conditions of different industries of which it forms a part. This lack of a consistent princi- ple of classifying unions also causes conflicts of jurisdiction. The theory of the law allows but a single organisation in an industry. The court may refuse registration to a society if the members can conveniently belong to a union already registered. Rival unions have occa- sioned some of the most bitterly contested issues under the arbitration laws. The bogus union, formed by a small group of employees disaf- fected with the existing organisation, with the connivance of employers, and used to defeat or hamper the operation of the law, has been the subject of parliamentary investigations in New South Wales. Therefore the State is forced, in its increasing control over labour societies, even to limit the right of free association among workingmen. For although workers may or- ganise for purely beneficiary purposes without regard to the arbitration law, they cannot attain the important industrial ends of such association without the consent and support of that law. So the tendency is for a single union 204 Aspects of Compulsory Arbitration to monopolise each industry. This does not restrict the labour market, and the freedom of workers to circulate from one occupation to another, because the doors of admission to the union are held open by the court. But the total effect is to make the condition of status more rigid. For a multiplicity of organisations al- lows greater self-direction and contractual freedom than a limited number of organisa- tions. The larger the group of men submitted to identical regulation, the more that group resembles a caste. The Australasian legislator has not been re- stricted in enacting arbitration laws by consti- tutional limitations such as exist in the United States. To create a new law-making body with the extensive powers of an arbitration court is virtually to amend the constitution. An Ameri- can legislature could not enter the new field of regulating wages in private employment with- out express authority from the people. In most States no power exists to create a tribunal with the right, without a trial by jury, to punish misdemeanours, impose a fine of nearly five Aspects of Compulsory Arbitration 205 thousand dollars, or even as a last resort to imprison offenders. Although an American legislature might declare certain classes of con- tracts in the future illegal, no law could be made so sweeping as to deprive all citizens of the right of making individual contracts of service, with- out causing a revolution in our system of jurisprudence that would encounter the veto of the higher courts. American judges hold that the legislature cannot make laws affecting the interest of a particular class set apart from the whole body of citizens. These decisions have prevented laws in favour or against mem- bers of trade unions, and might apply to pre- vent compulsory preference of employment even to members of a quasi-public society like an industrial union. The history of arbitration laws shows how rapidly society will adopt a new attitude toward legal rights and State functions. The colonies did not enter on this legislation with clear foresight and purpose. The form and effect of these experimental statutes were not pondered with the care devoted to a revolutionary pro- 206 Aspects of Compulsory Arbitration gramme. The proposer of the New Zealand law stated in the debates upon the bill, that a vast majority of the disputes coming before the authorities would be settled by conciliation, without recourse to the court. The function of the latter body was not regarded as legislative but as purely judicial or rather as also con- ciliatory. The purpose of the law was to bring men to a voluntary agreement. It was to fur- ther, not to annul, the principle of private contract. Even the decisions of the court, it was thought, would derive their authority, ex- cept in extreme cases, from the consent of the parties. State intervention was justified upon the ground that existing contractual rights would be interpreted and enforced by the court, not that new rights would be created. Public authorities were expected to enforce collective bargains between employers and employees; it was not prominently before the minds of the people that in most cases they would be called upon to make those bargains. Therefore, the presence of the conciliation boards in the earlier statutes was a historical necessity. Com- Aspects of Compulsory Arbitration 207 pulsory arbitration was considered something that would make conciliatory procedure more effective, that would influence the parties to disputes to settle their difficulties amicably, that would supplement and not supplant concilia- tion. Experience has shown that the two principles are antagonistic. The compulsory survive at the expense of the voluntary features of the law. The forms of judicial procedure that have been embodied in this legislation are a result of the same disappointed anticipations. It was not originally proposed to legislate regarding all the conditions of employment, even where conciliation failed. Those conditions were as- sumed to be already established by custom, tra- dition, and mutual agreement. The projectors of these acts appear to have thought that a body of common law was lying latent some- where in industrial practices, that only needed the interpretation of a judicial tribunal to be called into active manifestation. Canons of equity were to regulate the contractual rela- tions of masters and servants. By repeating a 208 Aspects of Compulsory Arbitration very ancient legal fiction, a jus naturale oper- ariorum was conjured into existence, which was to guide the court in giving decisions. The law was supposed to be already in being, but awaiting application; the rights of the parties were supposed to be already created, but await- ing definition and enforcement. These assump- tions were natural corollaries of the conception of an arbitration law as primarily a means for enabling disputants to settle their differences. Judicial procedure satisfied the original intent of the statute. The development of this 'legislation, however, has been in another direction. The arbitration court has become an agent for regulating indus- try. Its action has been mandatory rather than conciliatory, not because the judge desired to assume this attitude, but because his duties and responsibilities forced it upon him. The work- ers regard the court as an instrument for social betterment as a substitute for strikes. But the economic and social improvement of workers can only be realised by changing existing con- ditions. There is no body of industrial tradi- Aspects of Compulsory Arbitration 209 tions and precedents that satisfies these de- mands. The mutual agreements of the past are no criterion upon which to pattern the mutual agreements of the future. The worker's rights in the past are not, in his opinion, a limit upon his rights for all time to come. Even granting that there was, before the arbitration acts were passed, a body of trade custom somewhat like the body of common law, the growth of that body of custom, its adaptation to changing conditions, could only continue through freedom of contract. But freedom of contract was abridged, and practically abolished, by the arbitration court. That court assumes a con- trol over the development of this hypothetical law which an ordinary civil tribunal does not exercise over the common law. Moreover, the demand for changes in trade customs is sup- ported by a homogeneous class with identical interests. This demand is more insistent, con- stant, and aggressive than any demand for modification of the common law. So the court has become an agency for industrial reform. Workingmen have applied for nearly all the 2 1 o Aspects of Compulsory Arbitration awards granted in New Zealand and Australia. Their demands, when they file an application before the court, are not guided by past condi- tions. They are not such as are likely to be conceded by employers without a struggle. Each party would rather trust to the decision of the court than compromise the issues thus advanced. Therefore the court is obliged to make orders covering many points for which no pre- cedents exist. It must decide upon demands made by workers for new rights. Statutory or customary law is not at hand to guide its decisions, and so must be enacted. But a new body of legislation cannot be made at first self-consistent. It requires constant amend- ment to correct the contradictions and omissions that reveal themselves in practice. The legisla- tive activity of the court is consequently stimu- lated from two directions, by the increasing demands of workers for better terms of employ- ment, and by appeals from both parties to have conditions previously imposed made more workable. Aspects of Compulsory Arbitration 2 1 1 The public, observing these extending func- tions of the court, has apparently adopted the view that it should control a very broad sphere of industrial administration. While it is still nominally a court, its legislative functions have been accepted. At present there is little disposi- tion to limit its regulative authority. The divergence between the original theory and purpose of industrial arbitration, and its pres- ent development, is overlooked or disregarded. The final effect of this new institution upon private law and theories of government is not considered, because the popular attitude to- wards this legislation is opportunist and prac- tical. But the labour party, which is the most active supporter of industrial arbitration, fancies that it is a step towards state socialism. CHAPTER X ECONOMIC AND SOCIAL EFFECTS OF INDUSTRIAL REGULATION THE economic effects of government regula- tion of industry are still a matter of contro- versy in Australasia. This is partly because these effects are obscured by their complex relation to other social phenomena, and partly because they are first felt by employers, who are not the direct beneficiaries of regulative legislation. The contention that the capitalist is benefited by having wages fixed and other conditions of employment determined by a government authority, is sometimes sup- ported by plausible arguments; but it is con- tradicted by the attitude of most employers towards these laws. As a body, they op- pose compulsory arbitration and minimum wage boards. Their interests are distinctively eco- nomic, and their opposition centres itself in the is Effects of Industrial Regulation 213 assertion that the economic effects of such laws are bad. On the other hand, this legislation is supported by the workers, who are primarily interested in its social effects. To them the economic effects, except so far as they react upon social conditions, are of secondary impor- tance. Therefore, the positive arguments in favour of these laws are largely social, and the arguments advanced against them are economic. The philosophical advocates of compulsory arbitration justify, their position upon the ground that industrial disputes between em- ployers and employees adversely affect the general welfare, and compromise the rights of third parties. Especially do they bring suffer- ing upon the weaker members of the community, the wives and children of strikers and all those dependents and semi-dependents whose well- being is conditioned by a normal degree of local prosperity. In strikes and lock-outs, might makes right, Justice miscarries, the procedure does not satisfy the moral sense of society. Historical analogy predicts that State jurisdic- tion may sometime be extended to such disputes. 214 Effects of Industrial Regulation Under one very important aspect, social prog- ress is but a record of the process by which successive classes of controversies have been withdrawn from the sphere of private settle- ment and made subject to public adjudication. All matters now brought into court were once decided by the club or the sword. Property rights were first established and maintained by force, then settled by voluntary arbitration, and last of all determined by the judgment of a public tribunal. Roman legal actions retain traces of all three of these stages of procedure. Whenever state interference has been extended to cover a new class of disputes, it has been in response to the same considerations that apply to strikes and lock-outs. The justification for such extension has been found in public policy the need of maintaining peace in the commu- nity, and of protecting third parties from inter- ference and inconvenience as well as in the ideal end of securing abstract justice for the disputants. None of these arguments is dis- tinctively economic, although material prosper- ity is doubtless furthered by industrial peace. Effects of Industrial Regulation 2 1 5 The favourable attitude of labour toward compulsory arbitration is not uninfluenced by the fact that workers have found it easier to better their economic position in relation to their employers by appealing to the court than by engaging in a strike. Nevertheless, they, like most other Australasians, are probably willing to pay a price in material welfare for the increase in social and moral welfare which they think these laws have brought them. But as they do not concede to the opponents of this legislation that State regulation has lessened industrial prosperity, the main controversy with regard to compulsory arbitration has been as to its economic effects. Probably the influence good or bad of State regulation upon the prosperity and devel- opment of industries has been exaggerated. The general welfare of Australasia depends principally upon the export market for certain raw materials, especially wool and provisions, and upon local climatic conditions. These two factors are so preponderant that all others sink into relative insignificance. A third com- 2 1 6 Effects of Industrial Regulation modity contributing largely to the wealth of those countries is the mineral product, which provides a cash income of gold and silver for Australia larger in proportion to the popula- tion than that from the same source of any other country. This is a steadying industry, nearly independent of climatic conditions and ordinary market fluctuations. Labour condi- tions naturally influence all these forms of primary production ; but those imposed by an arbitration court are not a determining factor in their prosperity. Indeed State regulation applies to the industries that are the main source of national income only to a very limited extent. During the eight years preceding the enact- ment of the compulsory arbitration law, the total exports of New Zealand increased from $35,308,290 to $44,663,781, or less than twen- ty-seven per cent., and during the eight years following that event, from the latter sum to $71,062,030, or more than fifty-nine per cent. Only six per cent, of the latter amount repre- sents the product of manufactures, but these Effects of Industrial Regulation 2 1 7 increased more rapidly than the total exports, or from less than a million dollars to $4,362,- 295, during eight years of arbitration, though they had decreased during the preceding period. Secondary production is mostly conducted under arbitration awards and primary pro- duction under free contract. However, manu- facturing enterprises have been carried along by the growing prosperity of the farmers. This prosperity is due to good seasons and an exceptional demand for New Zealand produce, caused partly by the South African war and several years of disastrous drought in Aus- tralia. For the Commonwealth, where climatic con- ditions have been the reverse of those in New Zealand, similar figures are either not available or not fairly representative. The states have not adopted uniform industrial legislation, and arbitration laws have been enacted so recently that statistical evidences of their effects are still lacking. Since the passage of the oldest of these laws, the Victorian minimum wage act, federation has been accomplished, and a 2 1 8 Effects of Industrial Regulation national tariff with free trade throughout the Commonwealth has been substituted for a local tariff and free trade only within the borders of the colony. This enlarged market has caused a great expansion of manufacturing in Victoria. The exportation to other states of twenty- four classes of locally made articles, increased over one hundred and forty-seven per cent, during the first two years after the national tariff went into effect. During that period, the exports of garments rose from $663,880 to $1,636,724, and of boots and shoes from $284,231 to $1,144,294. This has stimulated the demand for factory operatives and raised wages in many skilled occupations. Meanwhile a protracted drought decreased the purchas- ing power of the people, and threw agricultural labour out of employment. Consequently, this manufacturing prosperity has been accom- panied by a large emigration to South Africa and the Western Australian gold fields. The evidence, therefore, does not show that the Australasian countries have received a gen- eral setback from government regulation of Effects of Industrial Regulation 2 1 9 industries. The investment of foreign capital may have been checked by the novelty and uncertainty of this legislation, but local capital has been found to meet the demand of growing enterprises. The impression the country makes upon a visitor is not that of a land where industry is paralysed and business stagnated, but rather the reverse. Permanent and costly buildings are being erected in the larger cities, public improvements are going forward, the wharves are crowded with shipping, the railway service is fully occupied. In 1903 the building improvements in Sydney were valued at $14,- 544,030, and those in Boston at $15,264,940. During that year 2,379 cottages and 611 larger residences were built in the Austra- lian city, which ranks about equal in popu- lation with the New England metropolis. There are few evidences of excessive unemployment. To a person studying conditions in Australasia, the economic argument that a country will be industrially ruined by State regulation is not convincingly demonstrated. But this does not prove or disprove the advisability of the laws 220 Effects of Industrial Regulation embodying these experiments : for the argument in question is too general to be valid. The prosperity or depression of a country's business rests upon a broader basis than an industrial arbitration act. A detailed study of the effects of this legisla- tion leads to more suggestive results. All untried laws, especially in a new field of experi- ment, develop features that need amending. Though their total influence may be good, the benefits they confer are qualified by disadvan- tages. The positive objections to industrial regulation are supported by facts of the latter character. These matters of complaint relate to features in the application of the law that is, to errors in awards to features of the law itself, which might be remedied by amending existing statutes, and to principles inherent in State industrial regulation, and therefore, cer- tain to characterise any future development of these laws. A detailed criticism of award errors would not throw much light on the administration of these acts, because such errors usually relate Effects of Industrial Regulation 221 to technical matters, and their force appeals only to experts in the trade affected. But their occurrence, admitted with equal frankness by all parties, calls attention to a weakness in the law itself. Neither the judge nor the lay mem- bers of the court have expert knowledge of the technical matters which control the provisions of an award, so they must form their opinions upon the authority of others. Even if they are assisted by expert assessors and the latter agree, which seldom happens they must en- dorse the findings of these advisers upon faith. It is impossible to give an arbitration court a course in technology with each new set of pro- ceedings. Yet the theory of a decision upon testimony in industrial matters implies ability not only to weigh the facts intelligently, but also to discriminate and weigh industrial and technical principles, as a judge discriminates and weighs principles of jurisprudence in a legal decision. For this the judge has no pre- vious training. Indeed he may be particularly disqualified by his legal prepossessions for con- sidering practical problems of industrial ad- 222 Effects of Industrial Regulation ministration. In casting about for principles of equity similar to those governing personal and property rights, he may read into indus- trial regulation theories that do not correspond with facts. While, as a dominant influence in the legis- lative activity of the court, the judge is often a failure, his presence upon the arbitration bench facilitates its judicial functions. His experience in administering court procedure and sifting evidence is as valuable in an arbitra- tion as in a civil tribunal. His training also assists him to formulate general rules governing the action of the court in like situations in different cases, and thus gives consistency of statement and principle to the clauses of awards, and enables intending litigants to esti- mate beforehand the probable attitude of the arbitration authorities toward certain claims, thus sparing them unnecessary expense and effort in prosecuting false issues. The experi- ence of the judge is also required to provide against erroneous interpretations of the act constituting the arbitration court, and fre- Effects of Industrial Regulation 223 quent and unnecessary appeals to higher tri- bunals. The Victorian system, of a representative board of experts in each trade to formulate conditions of employment, secures better legis- lative results. The errors in determinations are not so frequent as errors in awards, although interested parties do not have a hearing before a board as they do before a court. A judge may amend the orders of the court, and there- fore remedy serious mistakes. But the total effect of award errors is not to be measured by the obvious cases reconsidered by the au- thorities. The court's decisions seldom adapt themselves perfectly to working conditions, and continue to be a chafing shoe upon the feet of industry. The economic effects of an award exceed those of a collective bargain, because the latter, in addition to being compulsory, is less flexible than a voluntary agreement. A bargain can be adjusted to changing local conditions with the consent of all parties more readily than an award, which is the law of the land, and retains 224 Effects of Industrial Regulation its usefulness only so long as it is rigidly en- forced. A union lax in requiring every detail of an award to be observed, establishes a pre- cedent prejudicing its future claims before the court. Employers vigorously oppose the power of granting preference to unionists, upon the ground that it limits their choice in selecting men, takes away their control over their work- men, and so increases the labour cost of pro- duction. But this complaint has not been sufficiently substantiated by specific instances of these effects to prove the assertion. Employers fear that an industrial union may exercise the monopolistic powers of a trade union, without considering that it is a creature of the arbitra- tion court, and cannot close the labour market or control its members like an independent organisation. Every award awaiting decision is pending legislation, which directly affects some of the most important conditions under which a busi- ness is conducted, and indirectly, through the precedents it establishes, influences the probable Effects of Industrial Regulation 225 course of similar legislation governing other enterprises. A dispute before a court is less serious than a strike. It does not cause a cessation of industry, with its attendant loss of production, acute ill-feeling between employers and employees, and other economic and social evils. But these suits occasion expense and loss of time, and check industry so far as they render uncertain future conditions of produc- tion. There are single employers in Austra- lia who work under as many as seven awards. The total effect of having these disputes con- stantly at issue and they may await decision a year or more resembles that of an agitation for tariff revision in the United States. Litigation is multiplied, because workmen will bring a case before the court where they would not risk a strike. So great is this evil that the court in New South Wales has recently adopted the policy of giving artificially created disputes no standing in fact. It has been proposed to require the consent of a large num- ber of workers to start a dispute. But these are palliatives, not remedies. The force that 226 Effects of Industrial Regulation sets arbitration machinery in motion is a class impulse, and would manifest itself under any conditions established by an act that would work that is, that would prevent strikes. The judge may make the terms of an award a common rule, applying to all employers in a district or a state, because justice demands that conditions of production be as uniform as pos- sible for all producers. This power is not mandatory. The judge is allowed to establish differential awards. Still the tendency of in- dustrial regulation is to standardise terms of employment, and therefore to enforce the com- mon rule wherever possible. An economic effect of this policy, in industries producing articles capable of wide distribution, is to favour partic- ular establishments. Theoretically there are a few points in the area regulated where the uniform conditions prescribed by the court can be most economically applied. Under the more flexible system of private contract, mutual com- pensation occurs between different places. One manufacturing centre counterbalances a local Effects of Industrial Regulation 227 disadvantage by some favourable condition not possessed by its competitors. Transportation facilities may be limited in a small town, but rents and wages may be lower than in a city. Therefore, were the court to apply absolutely uniform awards equalising wages, a wide redis- tribution of industrial plants would follow. But if an award is not uniform, friction and bicker- ing ensue over the adjustment of special privi- leges to different employers or localities. The same considerations apply to large as compared with small establishments. Uniform conditions of employment favour either the big or the little proprietor more than his competitor. But to allow differentials in wages or modifica- tions in apprentice conditions, to meet the varying requirements of these two classes of em- ployers, involves the court in endless difficulties. Large merchants and manufacturers are said to have entered into collusive agreements with their employees to secure orders from the court detrimental to their smaller competitors. These large employers and the urban employers' unions exert an active influence to prevent 228 Effects of Industrial Regulation differential awards, and are supported by the court's natural desire to simplify its orders. They are more aggressive in presenting their claims before the court, and find it easier to procure evidence. Often they can grant con- cessions to their men that small employers and country manufacturers cannot meet. Their representations and interests therefore prepon- derate in shaping the awards. Consequently, an economic tendency of industrial regulation is to centralise industry. Upon the workers' side, also, there is a division of interests. This is likewise over the question of differentiation or uniformity. The advantage of more skilful workmen, who are capable of earning the highest wage, lies in having awards flexible and adaptable to the different industrial capacity of workers. They are favoured by division of labour and piece- work schedules. The average or mediocre worker, on the other hand, desires rigid award conditions. The division of labour injures him, because he is employed in less profitable opera- tions and therefore receives a lower wage. Piecc J Effects of Industrial Regulation 229 work is to his disadvantage, because he accom- plishes less than rapider workmen whose product influences the average rate of payment. He instinctively seeks to obtain awards that pre- scribe time wages and the least possible division of factory operations. As these average work- ers are in a majority and control the unions, the conflict between them and the more com- petent minority seldom comes to the surface in an arbitration court. They dictate the form that applications for awards shall take, and so their influence alone shapes the policy of the arbitration authorities from the side of the working-men. This influence secures conditions of employment that discount exceptional abil- ity, and deaden the enterprise of more ambitious workers, though the effect is less in mining and unskilled or semi-skilled occupations than in other fields of labour. For where it is made difficult for an employer to place adequate incentives before his exceptional men, to induce them to apply their utmost abilities to their task, the workmanship and output of the latter adjust themselves to their remuneration as 230 Effects of Industrial Regulation gauged by the wage, workmanship, and output of the average employee. The value of their potential excess of service is thus lost to them- selves and the community. This tendency is sometimes accentuated by the attitude of employers toward the minimum wage. When the court prescribes a minimum equal to or above the average wage previously paid, the employer may meet this change by two different policies. In order to keep his payroll down, he often lowers the pay of his more competent hands, to compensate himself for the higher rate he is obliged by law to give his poorer workers. This brings about a level wage for all employees. Such effect has been remarked by a royal commission investigating the operation of the wage boards in Victoria, and has been commented upon in the decisions of the arbitration court in New Zealand. Sta- tistics indicate that in probably a third of the occupations regulated by the court in that colony, the maximum wage does not exceed the minimum fixed by the award. The greatest vari- ation usually occurs in industries requiring the Effects of Industrial Regulation 231 highest degree of skill. In such industries the employer, in order to maintain a gradation of wages among his workmen, usually discharges his less efficient employees. If he can secure more competent hands to fill their places, his labour expense, in proportion to product, is not affected by the court's orders. However, slow workers, who are not a negligi- ble element in the industrial army, then become a social problem. They form from ten to twenty per cent, of all workmen, and their distress is an evil greater than ordinary unem- ployment. Some manufacturers in Victoria dismissed sixty or seventy hands as soon as the minimum wage went into effect in their business. All the Australasian laws give the regulating authority power to fix a lower rate of pay for slow, aged, and infirm workers; but this is not a sufficient remedy. Employers refuse to receive slow workers in their shops, because they slacken the pace of other workmen. More- over, the formalities required to secure slow- worker permits embarrass both employee and employer. 232 Effects of Industrial Regulation Therefore, State regulation of industry places a burden upon the weaker members of society. The labour party proposes to remedy this evil by old-age pensions. To absorb her surplus labour, New Zealand has undertaken great public works, paid for from loans. Western Australia has until recently possessed a growing field of employment in the newly dis- covered gold districts. New South Wales and Victoria have not enjoyed these exceptional conditions, and in the latter state especially the problem of the slow worker has been serious. But nowhere in Australasia has there been the special difficulty that America encounters from the large immigration of foreign workmen, who possess little skill and are accustomed to a different industrial system and a lower standard of living than the resident population, and are therefore worth less to employers than native workmen. Slow workers thrown out of employment by the minimum wage sometimes open shops in basements and attics, where they make goods which they peddle directly to retail dealers, Effects of Industrial Regulation 233 or sell to factories at prices lower than the ordinary cost of manufacture. This has oc- curred in boot and harness trades, and to some extent in cigar-making. However, only a few industries lend themselves to this process of dispersion. No handworker can compete with the products of power machinery. All regulations restricting the freedom of employers in conducting their business probably add to the cost of production. Some arbitra- tion awards have caused dealers to import where they formerly manufactured. Such a result is especially apt to occur in infant industries. This outcome of arbitration suggests another respect in which State regulation has been simpler in Australasia than it would be in the United States. The industries affected by these laws seldom encounter free competition from other countries. Where awards increase the cost of production so as to hamper manufac- tures, the profit of the producer is maintained by a higher tariff. But a country exporting manufactures does not have this remedy. The 234 Effects of Industrial Regulation increased cost of production must be paid out of profits, as prices cannot be raised to con- sumers in other countries without sacrificing trade to foreign competitors. If such laws were in operation in exporting countries, these considerations would influence the court not to impose terms upon employers essentially more burdensome than those in competing countries where no government regulation existed. There- fore, the awards would be little more than a statement of terms of employment already prevailing. If through an error of unwise altruism, the court did seriously modify condi- tions of production, the speedy loss of foreign orders would lessen employment, and make further intervention necessary to remedy this second evil. In the collieries of New South Wales, which export a large share of their product, coal-cutting machinery was introduced to compensate the added cost of production and difficulty of labour administration caused by an award. A similar remedy might avail for a time where regulated manufactures were obliged to compete with free industries in Effects of Industrial Regulation 235 other countries. But such a palliative would be but temporary, until the competing country adopted the same mechanical economies. These considerations apply only to industries supplying commodities for interstate or inter- national commerce. Where the workers whose terms of employment are fixed by the court are engaged in producing articles for exclusively local use, distant competition does not directly modify the economic effectiveness of the awards. The builder, the grocer, the employing baker, blacksmith, custom tailor, butcher, and other purveyors to domestic needs simply add the increased cost of production to the price of the service or the article they furnish, and thus subtract it from the income of their working- men consumers. In both New Zealand and Aus- tralia many definite instances have occurred where prices have been raised as a direct and acknowledged result of the awards. Employers have entered into collusion with their employees to enforce an industrial agreement, or to secure an award for the purpose of justifying a rise of prices. Employers are compelled by the arbi- 236 Effects of Industrial Regulation t ration laws to form unions, and they employ these organisations to restrict competition among themselves. The rules of an employers' union in Western Australia impose a fine on any member cutting union prices or dealing with a person who sells under these prices, and provide that such fines shall be recovered before the arbitration court, the same as other legal claims against the members. Many employers fix their profits at a certain per cent, of their business expenditures, and so are benefited by an award that raises the cost of production. Therefore industrial regulation increases the cost of living. This has been so marked in New Zealand that parliament was asked officially to remedy an evil by which "the advantages be- stowed by progressive legislation are gradually being nullified and will eventually be destroyed." A similar demand has been made in Victoria, where it is claimed that so long as the govern- ment fixes wages, it should also fix prices; for the free manipulation of the latter may render ineffective any regulation of the former. The same suggestion has been voiced as a future Effects of Industrial Regulation 237 possibility by the leader of the labour party in New South Wales. The rise in prices following the application of awards to local occupations is a tax on all labour. This tax is distributed it falls upon the independent worker, the farmer and the manufacturing artisan, as well as upon the wage-earner. The secretary of labour in New Zealand says that "It has helped to mimimise any advance in the workers' wages." The farmer cannot recoup himself for the tax placed upon him by the increased cost of serv- ices and local supplies, by adding to the price of his produce, for that is determined in the London markets. His enterprise must therefore bear the full burden of industrial regulation. Likewise the factory operative whose manufac- tures are exported, or meet the competition of imported articles, cannot employ an arbitration law to raise his nominal wages without lessening employment and defeating his own end of social betterment. But he, like the farmer, must pay the increased price for local services and prod- ucts which such a law occasions, and thus his 238 Effects of Industrial Regulation real wage is lowered by the very legislation thai was devised for his welfare. The discretion of the judge checks man] economic evils that might result from Statt regulation of industry. The increase of price! is beyond the court's control. But the mail features of awards are determined by practica exigencies, and adapted to actual situations They are, therefore, modified, like voluntary agreements and trade customs, by the thousanc influences that determine the trend of industria life. The court cannot create the atmosphere ir which it works. It cannot reverse the laws oi gravity and enable the working people to rais< themselves by their bootstraps to a higher eco nomic plane. Its orders must conform t( economic law, or be speedily rendered ineffect ive by contact with stubborn facts. Conse quently, awards ultimately become mere forma statements of average conditions of employ ment. The chief economic benefit worker* derive from them is that they render conditions of production sufficiently uniform in different establishments to keep unfair employers fron Effects of Industrial Regulation 239 obtaining a competitive advantage by oppress- ing their employees. Although the court's influence upon the average economic condition of the working people may be unimportant, it can effectively prevent unwholesome inequalities in their condition. The social effects of State regulation of in- dustry respond more directly to the purpose of this legislation than the economic effects, and so must answer for its success. The object of arbitration laws is to prevent strikes; and they may fairly be said to have discouraged strikes. A few of these disturbances have occurred in each state and colony where arbitration is in force. Even before the New Zealand act was passed, the relations of employers and employ- ees in that colony were normally so harmonious that it is difficult to show positively that the industrial peace at present prevailing is due to legislation. In New South Wales and West- ern Australia strikes of some consequence have occurred in defiance of the court. Those of the former state were in the collieries. In Western Australia some three thousand lumbermen and 240 Effects of Industrial Regulation sawmill employees ceased work to enforce de- mands made on their employers for concessions not granted in the award, and compelled a com- promise modifying the court's order. The labour unions prudently withdrew from official participation in these troubles, and their funds were not at the disposal of the strikers. The sympathetic strike has been rendered prac- tically impossible by the law. It has become difficult to finance a protracted struggle be- tween workingmen and employers. All the advantage which labour receives in such diffi- culties from permanent organisation and mu- tual support is lost. Petty disturbances, which might continue indefinitely without organised support, the court can suppress. Large strikes cannot be prolonged without more ma- chinery than labour possesses since the court has obtained control of the organisations. Strikes are crimes, with penalties attached. Theoretically all persons, and in practice lead- ers, can be fined or imprisoned for engaging in them. The moral effect of this prohibition is considerable, and the amount of real compulsion Effects of Industrial Regulation 241 exercised by the community to repress strikes may be increased through existing machinery to any required degree. An arbitration law does not, however, rest equally upon employers and employees, because the former are held to its strict observance by their financial responsibility, while workers can. evade many of its provisions. In minor matters, the sanction behind the court's orders, so far as it applies to workmen, will always remain to a large extent a moral one. But possibly this appeal to the honour and civic responsibility of the worker is a more adequate influence in favour of industrial peace than harsher meas- ures. These laws do appear in spite of the occasional defiance of their orders to increase the law-abiding spirit. The public opinion of workingmen supports their observance as a matter of principle. Whether the strike as an instrument for enforcing labour demands falls into absolute disuse or not, this spirit is a social gain. The court has assumed a sympathetic atti- tude toward labour, and has been disposed to 242 Effects of Industrial Regulation concede any claim tending toward social better- ment. In both New Zealand and New South Wales, its orders have decreased child labour and sweating. Indirectly the awards maintain standards of workmanship, by regulating ap- prenticeship and the pay of improvers, and requiring that only journeymen shall do certain grades of work. These regulations, however, are inspired by social rather than economic or industrial motives, it being the primary desire of the authorities to discourage the employment of children rather than to maintain craft standards. In some forms of manufacturing, the awards in New South Wales, and the de- terminations of the wage boards in Victoria, have also favoured the employment of men instead of women. They have shortened the hours of labour and made them uniform throughout the same industries, and by overtime regulations discouraged Sunday work. The total social effect of industrial regula- tion is to increase the control of labour over the conditions of production. The positive action of Effects of Industrial Regulation 243 government authorities is guided by the claims of workers. They determine largely the extent and character of the issues that come before the court. Merely by securing the consideration of these claims, they create precedents extend- ing and establishing more securely their right to intervene in the administration of industry. As the awards also regulate profits in a de- gree, the indirect administration thus enforced might secure nearly every practical object that would be attained by direct government ad- ministration of industry. However, if the State were the employer, the whole body of citizens would be equally inter- ested, and in theory equally active in directing its industrial operations. Under the present system employers and employees determine working conditions. The arbitration judge is in a sense the people's representative; but by virtue of his position and the demands of ju- dicial procedure, he is a passive rather than an active influence in shaping the course of indus- trial regulation. So at present the government orders business to be conducted according to 244 Effects of Industrial Regulation the demands of particular classes. The inter- ests of classes rather than of the public are consulted. But in time the people who are not employers or wage-earners, especially the rural population, may resent paying high prices for services and commodities, in order that employ- ers and employees may enjoy State-protected privileges. A popular demand may then arise for more regulation, for some method to pro- tect the rights of the consuming public the farmer, the professional man, and the person of small property. This might manifest itself first in laws to control prices, already sug- gested, or for the State housing of citizens recently inaugurated as a remedy for conditions caused in part by arbitration awards in New Zealand or for the erection of State industrial establishments to compete with those reaping a large profit under tariff protection and award control. But if State regulation clearly fails to benefit wage-earners, the country will proba- bly return to free private administration of industry. The essential fact is that the present condition is unstable. The workers are still Effects of Industrial Regulation 245 confident that State regulation does help them, and will continue to do so. Therefore, the limited experience with compulsory arbitration up to the present suggests the possibility of a further development toward State socialism. CHAPTER XI THE GOVERNMENT IN BUSINESS THE State industries of Australasia have no historical connection with the political labour movement. They were mostly undertaken in early days, in response to peculiar local condi- tions, and often by conservative ministries. But they are now popularly regarded as examples of successful collectivism, and therefore as to some extent justifying the labour programme. Government ownership is confined to what are known in American law as public industries and "business clothed with public interest" that is, to supplying services of exceptional and imme- diate concern to the whole community. In the United States we recognise such interest by regulating a business of this kind through com- missions or administrative officers. In Austra- lasia these industries were assumed by the State as logical extensions of its primary functions 246 The Government in Business 247 and this was made easy by the concentration of those functions in a central government. Im- portant railways have from the first been built and operated by public authorities, as extensions of the earlier state wagon roads ; telegraphs and telephones have developed as part of the postal and railway service ; land banks and other forms of assisted settlement are part of a complex machinery for administering the public domain and promoting land sales. Docks and wharves are owned by the government as subsidiary to the transportation system. The State coal mines of New Zealand were justified by the fact that the government railways are the largest consumers of coal in the colony. In the same colony, government life insurance has been in operation well toward forty years, and was or- ganised when there was no other apparent way to protect the people from the unreliable for- eign companies who largely controlled colonial business. In some cases the government has en- tered business as a competitor, in order to break the hold of a monopoly upon the community. Financial conditions have favoured the ex- 248 The Government in Business tension of government industries. As ex- pressed in interest rates, the credit of the State has been so much better than the credit of pri- vate corporations, that the latter were at a com- petitive disadvantage. Less money has been sent away from Australasia to pay for the use of capital than would have been sent for an equal investment in private enterprises. Contrary to what seems to be the general im- pression in America, municipal trading is rela- tively unimportant in Australasia, because there local government is in every sphere subordinate to central government. No one of the larger Australian cities owns and operates its traction system. The electric lines of Sydney and other cities in New South Wales are a department of the state railways. Of the four chief cities of New Zealand, two own and operate street rail- ways, but in one of these cities there are also three private companies. The largest city in the colony, Auckland, depends on a regulated private corporation for its traction service. Water works, harbour works, and city lighting plants are usually administered by trusts or The Government in Business 249 commissions, independent of the regular civil service. There are public baths, markets, li- braries, schools, hospitals, and charities, much as in American cities of equal size. Melbourne, in the state of Victoria where local government is active conducts the most extensive municipal enterprises. The city sup- plies electric light to private customers, and owns a cold-storage plant in connection with the principal market, where meats and produce are stored for merchants. Part of the space is leased to the state commission department, which stores and ships abroad farmers' produce, in accordance with a policy, elsewhere de- scribed, of promoting diversified agriculture. In New Zealand and all the states except Vic- toria and South Australia, there are relatively unimportant private railways, the longest, with 629 miles of track, being in Western Australia. These roads do not operate in competition with government lines, nor do they afford data for comparing the relative economy of public and private ownership. A candid comparison of Australasian railways with those of the United 250 The Government in Business States requires so much qualification as to have little value unless for experts. In Australia the extremely sparse population, the peculiar dis- tribution of population with reference to traffic, the commodities carried, the climate and topog- raphy, the cost of construction, and the system of financing, are all different from those of America. On account of the arid interior, the trunk lines are parallel with the coast, and com- pete for through traffic with water carriage. The lines leading inland are stubs, ending in a desert, and carry no freight that does not orig- inate along their courses. The population is so concentrated in a few coast cities that sub- urban passenger traffic is relatively more im- portant, perhaps, than in any other country. Railway materials are imported burdened with heavy freights, and the cost of unskilled labour employed in construction and maintenance is very high. The railways are state, not federal, enterprises ; and their gauge varies from 2 feet 6 inches in Tasmania, which has only 462 miles of government track, to 5 feet 3 inches in Vic- toria and a part of South Australia. Finally, The Government in Business 251 as complicating financial comparisons, these systems are administered under seven different methods of accounting, and afford only a modi- cum of comparable data for obtaining averages for them as a group. In Australia or New Zealand no government could remain in office that did not provide fairly good transportation facilities for its constitu- ents. The passenger service is not so luxuri- ous, but is as adequate to demands of the country as is that of the United States. Sepa- rate cars or compartments are furnished for first- and second-class passengers. In the United States the average charge for carrying a passenger a mile is 2.06 cents ; in Tasmania it is 2.21 cents ; and in South Australia it is 1.8 cents. In Western Australia, where all prices are very high and the cost of operation is more expensive than elsewhere, the average local fare is estimated on a basis of 3.8 cents a mile for single-trip, and 2.8 cents a mile for return tickets. But these rates are lowered very much, when reduced to general averages, by cheap through, season, workingmen's, and sub- 252 The Government in Business urban tickets, so that the average fare prob- ably does not greatly exceed two cents a mile. Suburban passengers, within twenty-two miles of Sydney or other large towns in New South Wales, pay but .953 cents a mile. Tipping railway servants is as common as in the United States. Sleeping-car prices are slightly higher than in America, and the accommodations are not so good. There are fewer accidents in proportion to the number of passengers carried than in the United States. In our own country one pas- senger out of every 1,622,267 is killed; in Vic- toria one out of 14,779,025; and in New South Wales one out of every 17,567,075. But of the 59,116,103 passengers carried in Victoria the last year reported, 54,570,598 were sub- urban passengers in Melbourne; and of the 35,158,150 passengers carried in New South Wales, 31,180,769 made trips within twenty- two miles of Sydney and the other cities. Con- sequently the average trip is much shorter than in the United States. In South Australia, for instance, the average passenger journey is The Government in Business 253 11.68 miles, as compared with 30.6 miles in America. Even making allowance for this, however, it is evident that the risk of travelling is three or four times greater in the United States than in Australasia. Freight charges are higher than in America. This is due to three principal causes : the traf- fic is not as dense, the average haul is shorter, and the lines and their equipment are lighter than in the United States. In South Australia the number of tons of freight hauled a mile for every mile of line is 115,635; in New South Wales it is 139,669, while in the United States it is 829,476 a density probably six times as great as the average in Australasia. In New South Wales the average haul is 68 miles, in South Australia 120 miles, and in the United States 244 miles. The gauge in New Zealand, Western Australia, Queensland, and for 1,238 of the 1,744 miles in South Australia, is but 3 feet 6 inches. New South Wales has a 4 feet 8 inch guage, but in 1905, the average weight of trains was only 80.5 tons, as compared with nearly 308 tons in America. In the United 254 The Government in Business States the average charge for hauling a ton of freight a mile is .78 cents ; in New South Wales, exclusive of terminal charges, it is 2.17 cents ; in South Australia, 2.069 cents, and in Tas- mania, with its 2 feet 6 inch gauge, 3.69 cents. In New South Wales the average charge for hauling a ton of grain or flour a mile is .87 cents; for coal or coke, 1.247 cents; and for chilled or frozen meat, 1.97 cents. For the same length of haul, these charges are lower than in the United States. For a haul two miles shorter than the average in New South Wales, from Mobile to Jonesboro, Arkansas, the rate per ton mile for wheat is 3.4 cents, or about four times the average in the Austra- lian state; and the rate from Fergus Falls, Minnesota, to St. Paul, a distance of 187 miles, is 1.55 cents a ton mile or double the Austra- lian rate, although the haul is nearly three times as long. The tariff on anthracite coal from Pottsville to Baltimore, 179 miles, is 1.12 cents a ton mile ; and from the same point to Perth Amboy it is 1.16 cents a slightly lower rate than in New South Wales, but for an aver- The Government in Business 255 age distance at least three times as great. From Memphis to Jonesboro, again, the rate on packing-house products is 5.13 cents a ton mile, or considerably more than two and a half times the rate in the Australian state just men- tioned. Therefore, although average freight rates are higher than in America, for corre- sponding service the roads of New South Wales supply their customers with cheaper carriage. The average charges in the United States are lessened by the low cost of a through traffic, often competing with inland waterways, that does not exist in Australia. Although there are no secret rates or rebates on government railways, the authorities give preference in the open rates to localities where competition exists with the railways of other states. This rate-cutting in border districts has caused several interstate conferences and agreements for the purpose of regulating charges, none of which at least until very re- cently has been successful. Victoria gives preference to large shippers, under the name of trader's rebates, to the extent of five per cent. 256 The Government in Business upon freight bills amounting to $4,866; and also issues free transportation two annual passes over all lines to shippers paying $97,- 333 a year for freight service, and three passes to shippers paying $146,000. Similar privi- leges are given in other states. However, these preferences are open, and equal to all under like conditions being printed in the published rate books issued by the railway departments. The hours worked by railway servants in Australia and New Zealand are considerably less than in the United States and are often limited to eight or nine a day. In Victoria locomotive engineers work eight hours, but are obliged to take extra "engine time" amount- ing to something less than an hour a day for preparing their locomotives for the road. Su- perannuated employees are pensioned, and all skilled employees usually have an annual leave of absence, with passes over the lines for them- selves and families. In the United States the wages of engineers and conductors average $3.61 and $3.04 respectively, as compared with $3.21 and $2.44 in New South Wales ; on the The Government in Business 257 other hand, in America firemen receive but $2.03 and track labourers but $1.18,as compared with $2.21 and $1.75 in the latter country. The safety of employees is better protected in Aus- tralia than in America. In the United States, the last year reported, one railway worker was killed for every 357 employed, and one injured for every 19 employed ; in New South Wales one was killed for every 949 employed and one in- jured for every 18 ; and in South Australia, of the 3,519 men working, none was killed and but one in every 195 injured. Considering all con- ditions of employment, wages, hours of labour, safety, leaves, pensions, and other privileges, railway servants are better off in Australasia than in the United States. The cost of construction and equipment, in- cluding rolling stock, machinery, workshops, and furniture, varies in the different states and New Zealand, from some $30,000 to nearly $64,000 a mile, according to the gauge of the railroad, the topography of the country, the distance of the lines from the coast, and also the date when the railways were built. But none of the state 258 The Government in Business systems in Australasia represents as high an in- vestment as the railways of the United States. The Victorian roads, which have the widest gauge and are about as well equipped as most lines in America, cost $59,188.40 a mile; those of New South Wales, with several expensive bridges, tunnels, and mountain grades, cost the most of any in Australasia, or $63,879.86 a mile. The capitalisation of American railways is $64,265 a mile.* The ratio of operating expenses to earnings has varied widely in Australia and New Zealand at different periods ; but is not increasing, and in most instances has fallen of recent years. Operating charges include the replacement of rolling stock which in Victoria amounted to nearly one- fourth of these expenses the last year reported and relaying track; but they appear not to include the sums paid in pensions to superannuated employees. In the different states the last year reported the per cent, of the gross revenues used for running the railways was as follows: Victoria, 52.23; New Zealand, * "Coat" and "capitalisation,' of course, are not comparable. The Government in Business 259 56.85; South Australia, 57.86; Queensland, 58.67 ; New South Wales, 59.5 ; Tasmania, with its light and narrow mountain lines, 74.3, and Western Australia, which nevertheless paid a profit on capital, 80.33 per cent. In the United States, in 1903-4, the ratio of operating expenses to revenue was 67.79 per cent., and therefore higher than the average in Austra- lasia. These figures, however, cannot be taken as final, as no two accountants exactly agree in the items they respectively charge to operating expenses and capital. The economy of government railways to the public involves other factors than the cost of transportation. Nowhere in Australasia are the people taxed unfairly, in the price they pay for commodities, by monopolies created through railway favouritism. Such public services as the transportation of mails and packages prob- ably cost less than in America under the same conditions. The government does not have to pay mileage for its employees. "Non-paying," that is, government traffic, to the value of some $250,000 pter annum appears in the Queensland 260 The Government in Business railway report; and of 1,968,331 tons of freight carried in Western Australia, 173,312 was transported free for the public. States, counties, and towns have paid no bonuses to se- cure railways or competing lines. Finally, the capital to build the railways of Australasia has been borrowed at better rates considering the dates and periods of loans than capital em- ployed for the same purpose in the United States. The people of Australasia own their railways only conditionally subject to a bonded indebtedness approaching their capital value. The interest on this debt is well under four per cent. 3.83 per cent, in New Zealand, 3.58 in New South Wales, and but 3.32 in West- ern Australia. However, the desire of the government to keep freight and passenger rates as low as pos- sible, and the political inexpediency of raising rates even when too low, often prevent the roads from paying interest on their capital. In 1904-5 the interest charge of the New South Wales railways was 3.58 per cent., and the net revenue over operating expenses 3.46 per cent., The Government in Business 261 leaving .12 per cent, to be made up directly by the taxpayers. New Zealand operated at a loss of .53 per cent, of its railway capital, which had to be covered from taxation. The Victo- rian railways paid full interest upon their debt in 1903-4- and 1904-5; but these were the first years they had done so since 1888-9. Even then no return was paid on some $19,000,000, including about $14,000,000 proceeds from the sale of public lands, which the state has in- vested in railways out of public revenues. Western Australia, however, has usually made a profit, above interest charges, on both its bor- rowed capital and the state's own investment. Nevertheless railway deficits are the rule as post-office deficits sometimes are in the United States and are estimated by Australasian au- thorities to have exceeded profits by $66,000,- 000 during the decade ending with 1904. To this annual burden of some six and a half mil- lion dollars must be added, in comparing the relative economy of public and private lines, the loss of over $4,000,000 yearly taxes, which would have been paid into the Australasian treas- 262 The Government in Business uries by the railways, if in private hands as- suming the rate of taxation to be $5.37 per $1,000 valuation, paid by such corporations in the United States. This makes a balance of about ten and a half million dollars a year on the debit side of gov- ernment ownership in Australia and New Zea- land, which if the account is to stand even must be compensated by a lower charge for service than private lines would make, and by social and political advantages, such as the bet- ter condition of employees, fewer accidents, and the absence of railway corporations from poli- tics and from the larger spheres of industrial and commercial intrigue. Some of the states operate steam tram lines and electric and horse railways in cities and suburban districts. But most of the city trac- tion of Australasia is in the hands of private corporations. So far as fares and service are concerned, with one or two exceptions, the or- dinary patron finds little to distinguish private from public lines. Probably the poorest serv- ice at present is given by a few private horse- The Government in Business 263 car lines, operating under an expiring fran- chise, in Australia but until recently there were municipal lines with equally poor equip- ment and service in New Zealand. The Mel- bourne cable lines, which are conducted by a private corporation, under a contract by which the city ultimately receives the track and equip- ment as payment for the franchise, charge a six-cent fare for all distances which is the highest rate, for equivalent service, in Aus- tralasia. In most places there is a "penny," or two-cent, fare for each section of one or two miles, a new fare being collected when the sec- tion limit is passed, as on country trolleys in the United States. Comparing Melbourne and Sydney, the two largest cities, the government traction service of the latter is much better and cheaper than the private service of the former. But the electric service of Sydney is not better than that of Brisbane or Auckland, under pri- vate ownership, and the fares are the same. The Sydney lines probably the model govern- ment system of Australasia do not give better or materially cheaper service than those of 264 The Government in Business Baltimore, the city nearest the same size in America. Though the average fare is but 2.8 cents, several fares are collected from the same passenger, especially in the comparative ab- sence of transfers, for what would be a five-cent ride in the United States. These section fares have the bad effect of checking the dispersion of urban population, by making it cost more to get to the suburbs than to nearer city districts though in Sydney this influence is more than counteracted by cheap suburban railway serv- ice. On some Sydney lines the cars are as crowded at certain times of the day as are those in America. Fatal accidents appear to be relatively more numerous than in the United States. In 1902 the government tram lines of New South Wales killed 32 persons and in- jured 545 ; and in 1903 they killed 37 persons and injured 594. The average for these two years was one passenger killed for every 12,- 419,562 fares collected, as compared with one for every 18,015,894 passengers carried in the United States; and one passenger injured for every 869,378 fares collected, as compared with The Government in Business 265 one for every 178,876 passengers carried in the United States. As many passengers pay sev- eral fares for the same trip in Australia, these figures would be still more unfavourable for New South Wales were they exactly comparable with those in the latter country. One wage- earner was killed out of every 1,484 employed, as compared with one out of every 1,095 in America, and one injured out of every 15.3, as compared with one out of every 36.1 in America. The Sydney electric railways represent a lower investment than those of the United States. They cost, including shops, rolling stock, and other equipment, $140,000 per mile of track ; while the net capital liabilities of the Baltimore railways are $182,009 per mile, and the average in cities of 500,000 population or over in the United States is $182,775 a mile. The lines paid 2.9 per cent. over operating expenses upon their capital. In 1905 the total deficit, including operation and interest, amounted to about $8,000; but this year a profit of over $200,000 is reported. 266 The Government in Business The telegraphs and telephones of Australasia are public enterprises, operated in connection with the post-office and the railways. They do not pay interest on the investment in Australia, though they have recently done so in New Zea- land. But the rates are lower than for the same service in the United States. A telegram of sixteen words costs twelve cents in Melbourne, eighteen cents in Victoria, and twenty-five cents (an English shilling) if sent to another state. The annual rental of business telephones is $43.75 in Melbourne, and $34 in country towns. A residence telephone in Melbourne costs $24.33 per annum. The service is as good as in America. State aid for settlers government mort- gages on agricultural land was started in New Zealand and Western Australia in 1904, and has since then been adopted in all the states ex- cept Queensland. The authorities loan at low rates to farmers desiring money to improve their farms, usually requiring repayment in instalments, together with the interest. The loans are confined to lands suitable for agricul- The Government in Business 267 tural improvement, and in some states the money is turned over to the borrower in amounts only sufficient to pay for the improvements as made. In New Zealand the loans are au- thorised by a board of trustees, similar to the loan committee of a bank, on appraisements made by special officers appointed for this pur- pose. The system is essentially the same in other states. No loan is made for less than about $125, or for more than $14,600. Fees for appraising and examining title are low the cost of securing a loan in New Zealand aver- aging considerably less than one-half of one per cent. South Australia does not loan more upon land than its assessed value for taxes. New Zealand borrows money in London at three and a fourth or three and a half per cent., and reloans it at five per cent. South Australia issues mortgage bonds for such amounts as it requires for this purpose, usually running for five years, which are taken up readily by the local banks at three and a half per cent.; and charges the borrowers four and a half per cent, interest. The Western Australian Agricultu- 268 The Government in Business ral Bank keeps an account of the improvements made with funds borrowed from the govern- ment. The loans outstanding in 1903 amounted to about $800,000, with which improvements assessed at nearly $1,350,000 had been made. These included, besides other things, clearing 76,306 acres of forest land and ring-barking 76,205 acres, bringing 56,853 acres under cul- tivation, and fencing 35,353 acres. The au- thorities report that the only loss in ten years of operation was $35 interest written off their books. The operations in New Zealand have been much more extensive, over $20,000,000 hav- ing been loaned, of which some $13,000,000 is outstanding. About two-thirds of the applica- tions for loans have been granted. The cost of administering the department is less than .16 per cent, of the capital employed, and the gov- ernment made a net profit of $223,000 out of these operations the last year reported. The prevailing rate of interest on real estate mort- gages fell from seven to five per cent. or the level of the government rate during the first ten years the law was in operation. Bankers in The Government in Business 269 New Zealand interviewed as to the effect of the law spoke of its results without disfavour, seem- ing to think that it might have stimulated busi- ness. Some of the states have engaged in other financial operations for the purpose of bene- fiting the farmers. Queensland as mentioned in an earlier chapter loans money to planters to erect sugar mills upon the security of their land. The same state has levied a special tax on dairy cows, to be used as a bounty for en- couraging creameries, and a similar tax on other live stock for the purpose of encouraging packing companies. South Australia and Vic- toria have undertaken more directly to promote agricultural welfare by establishing govern- ment commission agencies for marketing abroad some kinds of farm produce. South Australia was the pioneer in this enterprise, and the mo- tive of the authorities was to finance the crop movement promptly and cheaply, as well as to encourage diversified farming. Private capi- tal had refused the risk of marketing some of the experimental crops. Therefore the gov- 270 The Government in Business ernment undertook to supply cold storage and export facilities at first for butter, then for mutton, wine, apples, and rabbits. The de- partment slaughters the animals, chills and ships the meat, and manufactures fertilisers of the refuse. It forwards crates and paper, and advances freights to apple raisers, charging against sales ; but an attempt is now being made to have private merchants take up this business. Formerly the state advanced twenty-four cents a gallon upon wine received under inspection, but has recently turned this business over to a private syndicate. The government maintains a sales depot at London, and handles about $370,000 worth of produce annually. It charges for its services, sometimes includ- ing railway transportation, against receipts. There is no attempt to make this industry pay a revenue, the net returns being about one per cent, on the cost of the plant. This de- partment, which is not regarded by its officers as necessarily a permanent institution, has served its purpose of stimulating the sale of South Australian produce in Great Britain. The Government in Business 271 South Australia and Western Australia have provided public batteries for the reduction of ores, and in some districts the latter state sub- sidises private batteries to reduce ores for small miners. These enterprises have been started principally to encourage prospecting and de- velopment in very arid or remote regions, that might not otherwise be explored, and to protect the small miner in districts where large syndi- cates control all the smelting facilities, and might use this advantage to "freeze out" the prospector without capital. They about pay expenses, and appear to suit the peculiar con- ditions under which they were instituted. Government life insurance was established in New Zealand long before the question of state and municipal trading became prominent, and is by no means a monopoly, as the department issued but 41,291 of the 94,429 policies in force in the colony in 1905, and but $47,411,563 of the $114,694,811 insurance carried. The as- sets of the department are $17,570,218, and the expense of management is 20.71 per cent, of the income from premiums, and 13.9 per cent, of 272 The Government in Business the gross receipts. Seventeen Australasian com- panies do business in the colony, four of which have lower expenses in proportion to gross receipts, and two less expense in proportion to income from premiums, than the government de- partment. The largest of these, the Austra- lian Mutual Provident Association, has a man- agement expense as low as 13.58 per cent, of its premium income, and 9.03 per cent, of its gross income. In 1903 a state fire insurance department was organised in New Zealand, but the results of its business are not yet available. However, insurance rates are said to have been lowered from ten to thirty-three per cent., on different classes of risks, since its establishment. The government of New Zealand also con- ducts a public trustee office, which is a sort of administrative development from the probate or orphan's court, to manage the estates of intes- tates, orphans without guardians, and others not competent to control their property. The office has in charge nearly four thousand estates, with an aggregate value of more than $17,000,- The Gavernment in Business 273 000. There is little if any hostile criticism among the people of the colony either of this office or of the life insurance department. New Zealand owns and operates two govern- ment coal mines, both of which have been opened recently and are still undergoing development. Their aggregate output the last year reported was 94,033 tons, which was sold for $528,000. The profit on operation was about $10,000, but this failed, by nearly the same sum, to pay in- terest on the debentures issued to purchase and develop the property. One naturally turns to the financial status of the Australasian governments as indicating something of the profit, or apparent profit, of the various business enterprises undertaken by public authorities. In a broad way, the credit of those countries has not been impaired by their extensive borrowing for reproductive un- dertakings. At least they are now able to se- cure money on better terms on an average than at any previous period. In 1890, when the public debt of New Zealand the colony now most committed to state trading was in 274 The Government in Business the neighbourhood of $185,000,000, the interest was about 4.7 per cent; while in 1905, with an indebtedness approaching $235,000,000, the rate of interest was a trifle over 3.8 per cent. Probably, also, a larger share of the public se- curities is held locally than ever before. There are several reasons why this should be so. The population and the net assets of both the Com- monwealth and New Zealand are increasing, those of the latter country in a remarkable de- gree. During the first five years of the cen- tury even Australia, which suffered a large emi- gration during the recent drought, increased its population from 3,777,535 to 4,068,789. Ac- cumulated wealth is growing and at the same time its distribution. During twenty years the proportion of persons dying in Australia who have left estates has risen twelve per cent. In New Zealand the per capita private wealth has increased $268 within a decade. Furthermore, even in the latter colony, whose public debt has advanced by leaps and bounds since 1890, the revenues have grown even more rapidly. Dur- ing the five years ending with 1902, the per The Government in Business 275 capita debt increased from $293 to $319, but the proportion of the revenues absorbed by debt charges, including sinking fund, fell from 34.28 per cent, to 29.8 per cent. In comparing the indebtedness of Austra- lasia with that of American communities, two important reservations have to be made. In the first place, about one-half the public debt represents investments in railways, telegraphs, land purchased for re-sale to settlers, and money loaned on farm mortgages all of which, as has been seen, returns some income, and therefore is not a dead weight on taxpay- ers. In the second place, a large amount of public indebtedness that in the United States is distributed among local bodies, such as cities, counties, and townships, in Australasia is part of the state or colonial debt. The expenditures for highways and bridges, court-houses and jails, school buildings, and even for street rail- ways, sewers, and water works, are thus in- cluded in state obligations. Part of the state debt consists of money reloaned to local bodies nearly twelve million dollars of the New Zea- 276 The Government in Business land debt is thus accounted for. Finally, in estimating the ability of taxpayers to carry this burden, it must be remembered that they have to support no national war debt, no army pension list, no heavy army, navy, or diplomatic appropriations. New Zealand has her customs revenues, and the states in Australia have a share of the federal customs, turned over to them by the Commonwealth government. There- fore it is not surprising that their budgets often show a surplus that of New South Wales ap- proaching a million pounds sterling the present year. Of late New Zealand has regularly en- joyed a surplus, that of the last year reported being over half a million dollars so that the government has accumulated a credit balance, from excess of revenue, of more than $3,500,- 000, besides appropriating a portion of these accumulations to public works. During the last fiscal year Queensland had an excess of rev- enues over expenditures of $2,652,790. West- ern Australia only, of the states whose last year's finances have been reported, shows a def- icit of something less than $100,000. The Government in Business 277 In New Zealand the per capita revenue is $41.85, and in the Commonwealth taking an average of all the states $41.26. But only $16.62 of the former sum and $15.08 of the lat- ter are raised by taxation, the remainder being receipts from posts, telegraphs, public lands, and other sources. The direct taxes, exclud- ing customs, are $3.63 per capita in Australia and $5.61 in New Zealand. Local taxes, which are not here counted, are relatively light, be- cause the state pays directly for many local ex- penses. Therefore the people manage without much hardship to carry a public debt ranging from $250 per capita in Tasmania to nearly $400 per capita in Queensland and nothing in present conditions indicates that the public fi- nances of the country are not sound. There is no general sentiment in Australasia adverse to government ownership of railways and telegraphs, and very little opposition to the other enterprises that have been described. They form part of the industrial environment in which the people have grown up. The state coal mines, in New Zealand, were opened not 278 The Government in Business with the idea of establishing a government mo- nopoly, but in order to regulate prices of a commodity of which the government was a chief consumer. Some jealousy of this undertaking was manifested by partisans of individual en- terprise, in which the principle of government ownership was attacked, but this opposition could hardly be said to be a general sentiment. The disposition among Australasians is to judge each operation of the government on its individual merits and it is rare to find an or- dinary citizen willing to discuss state trading in the abstract, as having any bearing on the gov- ernment industrial activities with which he is familiar. Government ownership, so far as it has extended, is accepted as a matter of course and is regarded as a debatable policy only in relation to new undertakings. There is always criticism, inspired either by political motives or by real dissent as to meth- ods, of the administration of government in- dustrial departments. This is not to be confounded with attacks upon government own- ership as a policy. Yet in Australia the two The Government in Business 279 might easily be confused by a casual in- quirer. There is also growing up a certain purely political opposition to government ownership, especially in Australia itself, among those who distrust the labour pro- gramme, and wish to draw a clear line be- tween individualism and anything that even looks toward socialism. But those who take this position, in their opposition to the labour party, are not yet a numerous contingent in the larger body of conservatives. A conclusion reached by an outsider as to the utility of government ownership, from the ex- perience of Australasia, must be so largely qualified as to be almost negative. Public railways, telegraphs, and land banks have suc- ceeded and have responded to the peculiar needs of the states where they were established or they would long since have ceased to ex- ist. There has been no exigent demand for state life insurance, or the system would surely have extended beyond New Zealand during the thirty-six years it has been in existence in that colony. Private railways thrive in the shadow 280 The Government in Business of preponderating government systems. Pri- vate and public street railways are operated harmoniously in the same cities, or in neigh- bouring towns and states, and neither drives the other from the field. Private banks and sav- ings institutions are able to place their funds securely and profitably in spite of government competition. South Australia, with a state commission and export department, has also one of the largest co-operative farmers' commis- sion companies in the Commonwealth, which does a business for its members five times as great as that done by the government, though in more varied lines. An outside observer, un- less a faddist on government ownership, would probably come away from Australasia with a feeling that, after all, this issue is less important as affecting the social and economic welfare of the people than those who theoretically dis- cuss the subject suppose. Government owner- ship does not bankrupt the state, deaden pri- vate enterprise, and kill prosperity ; neither does it bring with a bump a nation into an indus- trial millennium. CHAPTER XII CONCLUSION AND OUTLOOK THE labour movement in Australasia pre- sents two opposite aspects. On the one hand, Australasian workingmen seek political reforms because behind them lie economic reforms. They use government instruments to obtain wages and hours of labour more favourable than they can secure by private agreements. The rank and file of the party hardly look beyond their own day and generation nor do they theorise about the functions of government. On the other hand, many leaders of the labour party, and even a select body of their followers, are inspired by the unselfish idealism of reform- ers. They see in the labour movement a phase of a world-wide progress toward socialism, economic equality, the abolition of poverty by collective action, and have a conscious theory of social justice that denies the validity of the 281 282 Conclusion and Outlook present industrial system. When questioned as to the influence of this theory upon their political purposes, they say that socialism is an aspiration for which society must be prepared gradually, but which demands that the govern- ment be administered in sympathy with the ideal it proposes. This combined appeal to self-interest and sen- timent, strengthens, but at the same time limits, the labour movement. From the ideal side, a limitation is set by the conceivable fallacy of socialism itself. Socialists make two assump- tions which can be proved only by experience that their conception of a coming social state is correct, and that they can direct the process by which it will be attained. The logic of social- ism, its appeal to right and justice, do not prove that it is practicable. The problem of collective production and distribution which it proposes is as unsolved as the navigation of the air. Socialism is as yet a faith, but not a science. It has not been experimen- tally demonstrated, and a failure to prove its claims, either at home or abroad, may check Conclusion and Outlook 283 or divert the course of the labour movement in Australasia. The practical projects of labour leaders en- counter the more immediate difficulty of har- monising individual and social interests, and class and public interests. The labour party seeks legislation in behalf of a section of the community. Even among wage-earners its policy requires the minority to make sacrifices for the majority. The diversity of interests between classes of producers, as between farm- ers and wage-earners, also creates a sectional sentiment. The latter favour land nationalisa- tion, because this is in harmony with their general doctrine of State control of the sources of production. The farmers are sturdy parti- sans of freehold tenure and the sale of the State domain to settlers. The wage-earner is the direct beneficiary of the minimum wage; the farmer pays the increment to the cost of pro- duction resulting from laws and awards, di- rectly to his own hands, and indirectly in a higher price for commodities. The wage-earn- ers favour public works as a source of employ- 284 Conclusion and Outlook merit, the taxpaying farmers as a source of revenue. One seeks costly city improvements for his urban constituents, the other transpor- tation and irrigation enterprises. The small landholder has, upon the whole, socialist sym- pathies. He supports the existing system of State railways and telegraphs, State aid to settlers and a government bank, and State trad- ing in agricultural produce. He is open to a certain amount of political bargaining with city workingmen, like them giving support in return for concessions. But he never forgets his distinct class interests, which now appear threatened by the policy of the labourists. The farmers of New Zealand and Victoria, where the rural classes are relatively the most influen- tial, have already organised an active campaign in opposition to the labour party. The average wage-earner, when he becomes a thoroughgoing socialist, has no ships to burn behind him. Not only is his material stake in the country small, but in exchanging private for State employment he sacrifices no individual freedom. Independent, or self -employ ing work- Conclusion and Outlook 285 ers, on the other hand, usually have property interests that make them averse to social changes; and they have something that they probably value still more, though it may not consciously determine their sentiment on social questions that is, their power of self-direction. A man who has been his own boss, whether a farmer, mechanic, or merchant, resents the restraint of official supervision. This sentiment is latent, because it lacks means for expression. But it is widely diffused among the more pros- perous working people of Australasia. The labour party is only one section of manual workers ; but it dominates the class, be- cause its members are organised and have the inspiration of a positive programme. They are followers of what is to them a true faith. Their leaders have the aggressiveness and the self- confidence of proselyters. This inspires them with devotion to their cause, but prevents prac- tical compromises at the sacrifice of abstract social principles. The desire of workers to give collective enter- prises good repute manifests itself in legisla- 286 Conclusion and Outlook tion, but not always in industrial service. Men who advocate government administration of in- dustry are not necessarily better employees of the government. The investigating commis- sions of parliament have found that public are more expensive than corresponding private undertakings, and that men do not work as well for the State as for private employers. Noth- ing illustrates the last fact more significantly than that the usual term among Australasians for an easy-going pace of working is "the gov- ernment stroke." Successful State socialism depends largely upon perfecting public control over the individ- ual. The powers of government must be ex- tended to correspond with its functions, even in opposition to democratic principles which limit government authority. Australasian labour leaders, however, do not proclaim such an inten- tion. They do not anticipate that the State will be made an industrial policeman the moment it becomes an industrial director. Rail- way servants resent the control of govern- ment commissioners as much as other workers Conclusion and Outlook 287 resent the restraints of private employers. A strike of public employees, in 1903, tied up the transportation of Victoria. This disturbance was accompanied by incidents that would have rendered the strikers liable to penal punishment in America, and would have been discounte- nanced by our trade unions. Trains were de- serted by their crews wherever they chanced to be when the strike began, stranding passengers and perishable merchandise in out of the way places, and endangering life and property. The public answered this challenge to its au- thority by a strike law more drastic than any legislation ventured by Americans in the most acute crises of their civil war. This law im- posed a penalty of nearly five hundred dollars or twelve months' imprisonment for engaging in a strike on government railways, and made men liable to arrest without warrant or bail for advising a strike orally or by publication, or for collecting funds for the support of strikers, or for attending any meeting of more than six persons for the purpose of encouraging strikers. Almost automatically the responsibilities of an 288 Conclusion and Outlook employer were supported by the powers of an employer, re-enforced by the most comprehen- sive police powers of the State. This experi- ence shows to what extent public control of industry involves public control of workers. Industrial service ceases to be voluntary. The attitude of the individual employee towards his task is not determined by civic virtue, but by a self-interest whose ultimate motive is to avoid positive pains and penalties, however disguised by forms of procedure. Workers will have ex- changed masters, not have abolished them. The economic advantage of this to the work- ing people will depend upon the efficiency of administration. The labour leaders emphasise distribution at the expense of production. They reason that if the wealth at present pro- duced were equitably apportioned, poverty would be abolished. The question of production enters into their calculation chiefly when they consider non -producers, who under the new system would be compelled to share the burden of profitable labour. However, a very slight percentage of waste, of decreased industrial efficiency, of Conclusion and Outlook 289 unwise application of public capital and col- lective effort to production, might more than counterbalance these advantages, and leave the total economic condition of society worse than before. The vital question, therefore, is one of man- agement. In no country does ability to secure office necessarily imply ability to administer office. The man best fitted to make State enter- prises pay, might be least popular with his employees. The latter would constitute a rela- tively small body of men intensely interested in opposing him, while the public benefiting by his administrative ability would be a good- natured but inefficient supporter. The experi- ence of democracy, in Australasia as well as America, goes to show that the personal interest of a public captain of industry would lie in conciliating his employees, at the expense if necessary of the whole body of citizens. Semi- occasionally there might be a spasmodic era of reform, when the public woke up to find its welfare seriously compromised by the conven- tional infidelity of its servants ; but the restrain- 290 Conclusion and Outlook ing motive of these crises would be but tempo- rary, while the influence of the employees would be constant and insistent. The labour movement of Australasia is a manifestation of national introspection a cen- tring inward of the life of the people. It has nothing to do with wider world interests. The Australasians are not exactly a hermit nation, but they are in some respects a shepherd nation. Remote from other communities of their own kindred, aloof from active contact with the problems of other countries, thrown upon them- selves in the isolation of the southern ocean, they have pondered upon the phenomena of their peculiarly separate social existence. They have a trifle of the idealism sometimes generated in the solitude of the bush. They are aiming whether wisely or not at national self-perfec- tion. The nation, like the individual, finds it hard to reconcile this ideal purpose with prac- tical activities. Immigration, wholesale mate- rial development, national aggrandisement in the industrial or political world, are not with them matters of supreme concern. The labour Conclusion and Outlook 291 leaders seem almost to fear the corrupting in- fluence of too great prosperity. They do not wish to experience an expansion of wealth and well-being that would reconcile the people of the country to what they consider a vicious system of social organisation. Like all self-centred movements, the labour programme presents from an international viewpoint an egoistic aspect. None of that altruistic attitude toward the industrially op- pressed of Europe, which has been a common sentiment in the United States, has developed among the Australasian populace. They nei- ther welcome the stranger from other lands as a permanent resident, nor are inspired with the enthusiasm of an international propaganda. Protection and exclusion are the means they ad- vocate to maintain what some of their opponents call a "White and Vacant Australia." Some- thing of a Chinese jealousy of the outside world, of the parochial spirit extended to a con- tinent, conditions the labour movement and weakens its moral basis. But while the international sympathies of 292 Conclusion and Outlook Australasian socialism are limited, within the confines of the country its interests are all- inclusive. The neighbourly spirit is extended to the entire people. The fraternal sentiment which is the basis of trade unionism is promi- nent in the labour party, and not wholly absent from workers as a class. A workingman con- tended that if he could load ten tons of coal a day and a smaller comrade could load but five tons, nevertheless the wage of the two should be equal; for they both gave to their task equal time and effort, according to their respective ability. Yet the socialist dictum, "From every man according to his ability, to every man according to his needs," is not accepted with- out qualification by many labourists, who ap- preciate the difficulty of applying this princi- ple to a practical administrative policy. However, all Australasian socialists regard labour as a duty, and subsistence as a right, and therefore deny that personal service is to be treated on an economic basis. They do not ad- mit that the evolutionary process should con- trol the economic adjustments of the individual Conclusion and Outlook 293 within society. It should not profit a man that he is stronger, or quicker, or more skilful than his comrade. His superior endowments as a producer he must share with the weaker brother. Social progress is not to be by the selection and survival of the fittest, but by the collective efforts of all, united in a common lot and lim- ited to a common rate of advance. The motive of those more fortunately adapted by nature to special exertion is no longer to be material wel- fare, but social and moral satisfaction the consciousness of adding to social well-being. As the amount of his salary does not determine the gallantry of an officer in the charge, or the material emoluments of his office the fidelity of a statesman in his trust, so, it is assumed, when the State insures against dependence in old age and infirmity, the wage of the worker will not determine his industry and application to the task that will then have become a civic duty. How far the material gains of labour in the colonies have affected its economic condition is not easy to determine; for this must depend 294 Conclusion and Outlook upon comparisons with previous conditions in Australasia and contemporary conditions in other countries. Occasionally colonial workers are subject to greater economic distress from the point of view of numbers affected, if not of the intensity of suffering of individuals than occurs in the United States. According to the state inspector of charities, during the year ending with June, 1904, nearer one-fifth than one-tenth of the entire population of Vic- toria received charitable aid from either private or public sources, and over one-tenth had been assisted by public institutions. The previous year, in the midst of the drought, out of 1,200,- 000 inhabitants, 70,540 were inmates of insti- tutions, and 114,341 received outdoor charita- ble relief, while 11,500 received old-age pensions from the state. The Commonwealth and New Zealand, with an aggregate population less by nearly 300,000 people than that of Illinois, spend annually about $13,000,000 upon public charity, hospitals, and old-age pensions for which want of means is a necessary qualifica- tion. Upon the whole, the workingman in the Conclusion and Outlook 295 Comonwealth and New Zealand is richer in leisure but poorer in money than the working- men of America. The wage per hour, at least in factory occupations and skilled trades, is lower in Australasia than in the United States, and on account of the longer working day in the latter country, the total earnings of work- men are much larger than in the colonies. In this comparison, the cost of living is not suf- ficiently different to make real wages vary appreciably from nominal wages. Real wages and the standard of living are rising, and are now higher than ever before in both Australia and New Zealand. Australasian workingmen show a fair degree of thrift, but the trend of small investment is different from that in the United States. Sav- ings banks are frequently government institu- tions, so that deposits may be made through the post-office, and this convenience and security make them more popular than in America. The number of depositors is therefore three times as large in proportion to the population as in the United States, though the average deposits are 296 Conclusion and Outlook only two-fifths what they are in the latter country. The relatively larger city population in Australia influences these averages. Home investments appear to be more common in America, but in the colonies there are no sta- tistics positively to verify this surmise. A comparison of the more elusive elements of social welfare is still more difficult. The work- ing classes of America and Australasia present no marked differences in general culture. Such figures as are at hand indicate that the average Australian or New Zealander spends a larger share of his income for tobacco and liquor than the average American. But crime, and especially deeds of violence, are less common than in the United States. The birth rate in Australia and New Zealand is lower than in the United States, but the statistics of the latter country are too defective to allow a comparison with the birth rate of native whites alone. The same qualification applies to positive informa- tion regarding illegitimacy though there are some grounds for believing that children are more commonly born out of wedlock in the col- Conclusion and Outlook 297 onies than in America, but that divorces are relatively rarer. The most casual observation shows that gambling especially betting on horse races is more common in Australasia than in our own country, and is not viewed with the same disfavour by public opinion. Nearly all classes of people buy chances on the principal turf events. Not only is the use of the mails permitted to pooling firms, but legal enactments exist regulating race-course gam- bling and giving official sanction to the forms under which it is conducted. What are consid- ered fraudulent schemes or lotteries in the United States, and as such are discouraged by law and excluded from the use of the mails, in Australasia are looked upon as legitimate busi- ness. This attitude is probably due in part to survivals of the speculative spirit from the gold days. The extensive hold these forms of gam- bling have on the community is a misfortune, but it equally affects all classes, and is not justly attributable to the labour movement, or to any sentiment or condition confined exclusively to the working people. 298 Conclusion and Outlook Australasian workingmen lack the cosmopoli- spirit, that in American workshops is con- ferred by rival nationalities. Foreigners have brought the industrial wisdom of the entire world, the benefits of European travel, and the experience of the Wander jahr to American me- chanics teaching them not only trade methods, but also the social and political condition of other countries. Thus has been created a habit of thought, an open attitude of mind towards strange men and customs, that is in itself an element of culture. American workers there- fore appear to have a wider range of interest and a more inquisitive spirit than Australa- sians. But this again is a product of long- standing conditions quite independent of the la- bour movement. Fairly considered, no results of the socialist spirit prevailing among the working classes of Australasia, or of the partial realisation of their programme through legislation except- ing, perhaps, their attitude toward strikes are so obvious as to be assigned directly to that spirit and legislation as a cause. There is no Conclusion and Outlook 299 evidence to show that the average material con- dition of the working classes has been modified as yet by the laws enacted for them. The cor- rection of individual instances of specific and acute abuse has little observable effect when distributed over the whole body of workers. The ethical standards and the culture of the present generation were determined prior to the rise of the labour party and the spread of socialist theories among the people. Employers I give evidence to show that the efficiency of wage- earners has been lessened by their habit of relying upon government aid rather than their own exertions. If this is so, the general effect, as covering all producers, has not yet revealed itself in decreased production or the statistics of national wealth. Still, socialist theories react on the beliefs and principles of the persons holding them, and may be gradually and imperceptibly changing the substratum of popular sentiment and morals. These theories set up a new standard of prop- erty right. Their realisation would withdraw the motive for thrift and accumulation. They 300 Conclusion and Outlook temper the incentive to industry. By centring attention upon unjust features of the present industrial system, and making labour the badge of a new servitude, they foster among thought- less men an impression that work is in itself an evil. The deepest philosophy of socialism is misunderstood by those that make it a religion of idleness or confiscation. But the deepest philosophy of every new movement is misunder- stood by a considerable portion of its followers. Progress is partly built upon error. The fallacies of the labour party resemble the fallacies of those inventors who seek a primum mobile, and fancy that by mechanical devices they can create force and achieve perpetual motion. Wealth cannot be created by a process of administration, no legislative panacea for poverty exists, the laws behind production are not enacted by parliament. Many labourists conceive society as an all- potent entity, with a magic horn of plenty upon which individual members may draw without limit; vastly overestimate the effect on the economic condition of the masses, of the con- Conclusion and Outlook 301 centration of capital in the hands of private administrators, and the benefits that would ensue to the latter if profits were added to wages ; and assume that classes at present idle would produce a large share of the wealth of the anticipated socialist state. This rea- soning inclines workers to believe the industrial service they render society either unnecessary or unjust. Conceiving themselves as members of a class rather than of the community, they accept the status of workers as permanent, and do not aspire or strive to leave that class with the same ardour that they would if they ac- cepted the present state of society as just or final. To become an employer would be to desert their cause, and to cast their lot with an enemy over whom they anticipate victory. The industrially ambitious worker runs counter to the general opinion of his associates, and can better his status only by incurring the odium of a traitor to his class. This class consciousness, so much more evi- dent in Australasia than in America, is a cause rather than a consequence of the labour move- 302 Conclusion and Outlook ment. Race solidarity, the predominance of the unskilled over skilled occupations and of employing over independent industries, the minor importance of the small farmer, either as a worker or as a recruit in the urban labour market, have all contributed to produce this result. But the labour movement, instead of dissolving class distinctions, has fixed them in the very structure of the government. It is here that the socialism of Australasia parts company with democracy ; for the essence of the latter is equality of opportunity for all which implies absolute self-direction and conse- quently the utmost diversity of careers and ac- complishments while the essence of socialism is equal attainment for all, which imposes uni- formity of condition, and re-establishes in a degree the institution of status. The most impressive feature of the growth of socialist-labour sentiment in Australasia lies not so much in its character as a local phenome- non, as in its striking identity with the evolution of similar ideals in other countries. The signifi- cance of this identity is the greater because Conclusion and Outlook 303 New Zealand and Australia are geographically remote, industrially distinct, and politically and socially widely different from those older lands of Europe where socialism had its birth and maintains its present stronghold. No im- portant current of influence plays back and forth between the colonies and England. Great Britain is a tardy follower rather than a leader in these doctrines. Independently Australasia has worked out a programme of social reform coinciding in principle, and to a great extent in detail, with that of European propagandists. The political features of this movement are as suggestive as the purely economic features, because they respond to an even greater variety of conditions. In all modern countries, the in- dustrial system is practically uniform, and the wage-earner stands in the same relation to the employer. But political systems present the widest diversity. Nevertheless the political programme of the German, French, Italian, and Spanish socialist is essentially the same as that of the Australasian labourist. One would abol- ish royalty, the other royal governors; the 304 Conclusion and Outlook European would do away with a privileged upper house, and so would his Australasian confrere. All support the referendum. The principle of party loyalty and mass control of representatives is equally realised in the or- ganisation of the social-democratic party in Germany and the labour party in Australia. No qualified democracy will satisfy the ends of the new movement. It demands the extreme of popular government, both in the constitutional and in the voluntary organs through which it expresses its will. Colonial labour leaders and continental so- cialists both challenge the justice of the pres- ent industrial system, and demand the abolition of the wage relation so far as it treats labour as a commodity subject to ordinary market con- ditions of demand and supply. Both regard progress towards socialism as an evolutionary rather than a revolutionary process. But they do not use the same means to attain their pur- pose. Australasians possess that phase of British political genius which enables them to secure public ends by involved processes. Their Conclusion and Outlook 305 leaders have adapted rather than abolished existing institutions and have seized upon the old organic forms of social and political life to serve their ends. By a sort of legislative acci- dent the labour party has discovered in compul- sory arbitration a way to realise State control of industry. Employing the analogies of a court, and corporation law, and judicial pro- cedure, it has created machinery by which the government administers private business. However, the masses have not followed their leaders in Australasia as closely as in Europe. Most voters as yet support practical projects leading to socialism rather than the doctrine these projects imply. But every measure they secure commits them still further to the logical theory behind the law. Like a man whose capi- tal has become involved in expanding enter- prises, each new investment requires another to support it. The popular attitude toward indi- vidual laws becomes later an endorsement of a settled policy, and finally the acceptance of a new social doctrine. An American has fair reason to ask why a 306 Conclusion and Outlook movement so universal, and so strongly mani- fested in a nation akin in race and institutions to our own, and with so similar a natural en- vironment, should not have made its appear- ance as an important influence in the national life of the United States. Probably it has been retarded, rather than averted, by condi- tions that have been partly touched upon in previous chapters. No urgent demand for con- stitutional changes has secured wide popular support among us, so as to enlist the co-opera- tion of democratic forces in a mixed policy of social and political reform. Our large land- holding and farming population controls the government, and arrays us against consistent socialism although it may be no check upon practical measures of socialistic import. The comparative absence of bureaucracy in public administration, the diffusion of political au- thority among a vast number of petty elective officers, the intricacy of our governmental sys- tem, the careful provision made for the protec- tion of local authority, and the popular jeal- ousy of any encroachment upon the rights of Conclusion and Outlook 307 local government, all create conditions unfa- vourable to public control of industry. By natural selection and temperament, our people are individualists. A very large majority of them have no class consciousness. They do not possess the socialist sentiment, and when they advocate what might in other countries be con- sidered socialist legislation, it is with a view to protecting rather than to restricting the sphere of their own individual enterprise. The variation of wages and marked economic diversity in the condition of workers in the United States, and the democratic spirit in which industrial administration is conducted, by multiplying stratification among employees, and making the difference between many of the latter and employers less than that between employees among themselves, have given an in- dividualist character to our labour movement. Not class interests, but trade interests or group interests, constitute the motive of that move- ment. America illustrates the fact that the indus- trial justification of socialism, according to its 308 Conclusion and Outlook theoretical exponents, is not self -demonstrative to a nation. According to these advocates, socialism is an outgrowth of industrial condi- tions that have possibly reached their maximum development in the United States. Nowhere else are methods of production more modern. Machinery is utilised to the greatest possible extent, capital is aggregated in immense ac- cumulations for specific purposes, the control of industries is highly centralised, the worker is individually impotent before the stupendous organism of material wealth, presided over by perfected and intelligent administration, which he must serve. Yet this condition has not yet appealed to American workingmen as a body in such a way as to commit them to socialism. They have met organisation with organisation, perfected administration with perfected admin- istration, and have depended upon their own strength to cope with the strength of their em- ployers. This is the record of conditions and policies of the past and present. But the socialist sen- timent may grow rapidly in the future. Hith- Conclusion and Outlook 309 erto the radical as well as the conservative citi- zen has been found among the farmers. The mainstay of rock-ribbed republicanism and the stronghold of socialistic populism have been equally in rural communities. But now social- ist doctrines are permeating the conservative organisations of workingmen. The propaga- tion of these doctrines has been retarded by inefficient organisation. Inaugurated among foreigners, who lack a quick grasp of our national characteristics, misapprehend local conditions, and are untrained in compromise, faction and personal divisions have helped to make the socialist movement a negligible factor in our political life. We are not a nation of theorists. No doctrinaire programme will ever appeal to our people with sufficient force to accomplish an industrial revolution. Any socialism a large section of the nation accepts, will be American. We shall probably arrive at it, if at all, in much the same way as the Aus- tralasians, by adopting one law after another, each for a particular purpose, modifying our conception of government with the exigencies 310 Conclusion and Outlook of practical legislation, and thus by attempting to remedy specific social evils come to accept a theory of treatment. Socialists are said to aspire to control the trade unions of America by gradual propa- ganda among their members, not by supplanting them with rival organisations. This means a conflict of methods in the labour movement, and keen criticism of their respective results. Every unsuccessful strike will be an argument for the socialist. Every legislative privilege to an employer, or refusal of laws for the pro- tection of employees, will be cited as a reason why organised labour should enter politics. The corporation lobbyist will be the involuntary but forceful advocate of socialism. The in- creasing publicity of industrial methods will furnish material for this propaganda. The evils affecting workers that strikes and collect- ive bargains cannot remedy, will be called prominently to the attention of trade unionists. Socialists aim to show the inefficiency of past methods and remedies, and they have the im- mense advantage of all destructive critics. Conclusion and Outlook 3 1 1 They are not called upon to justify their own theories by practical results obviously beyond their reach, but they will be heard when they point to the lengthening list of partial failures that mark the path of their opponents. Sooner or later we are likely to experience some crisis like that which accompanied the maritime strike in Australasia. This will bring to the test the faith of workers in their present or- ganisation. No power in society is strong enough to stop the progressive betterment of labour. If workers fail to accomplish their object by one means, they will try another. If organised labour enters politics, constitu- tional as well as industrial changes may result. A labour party upon a trade union basis would recover something of the town meeting spirit. Methods of nomination would probably change, and voters would control their delegates more strictly. The relation of the federal to the state governments would be modified by a strong socialist party, in order that the central au- thority might more effectively control large corporations and industries. A labour party, 312 Conclusion and Outlook therefore, would probably adopt a loose con- struction policy. Urban workers would have to compromise government ownership in its appli- cation to the land question, in order to concili- ate our predominant rural population. Possi- bly they would content themselves with limiting the size of farms, or enforcing a system of graduated taxes that would make large or idle holdings unprofitable. Probably the persons least able to gauge the force and direction of present tendencies in the United States are the radical socialist and the ultra-conservative employer, placid by virtue of his social obtusity. The former sees in America the same conditions that prevail in other lands. The European-bred agitator underestimates the tenacious conservatism of our Anglo-Saxon prejudices. Many anti-socialist conditions in the United States are organic and temperamen- tal. They have been bred into our institutions from the lifeblood of the pioneer, and selected and fostered by the whole course of our national history. No emotional crusade is likely to over- throw them. Socialism can succeed only by Conclusion and Outlook 3 1 3 enlisting the individualism of Americans. If these theories ever prevail, it will be because they protect rather than repress the self -direc- tion of the individual. Socialism will hardly be the original purpose of the practical measures by which that object may finally be attained. Therefore the man who is already a socialist in America is usually by habit of thought out of sympathy with popular sentiment, and so in- capable of appreciating the true value of the forces that shape our national destiny. On the other hand, the practical and philis- tine politician or employer, whose thoughts flow unchangingly through the petrified channels of his mind, fails equally to grasp the significance and possibilities of the history that is being made around him. He reasons into the future solely from the past, and assumes the perma- nency of the status quo. The bases of society are to him geologic, and its changes secular. No enlightenment dawns upon him from the ex- perience of kindred people, and if he anticipates new conditions, which to him must be evil, it is to meet them by antiquated tactics of industrial 314 Conclusion and Outlook and political warfare. He does not see that the real conflict is a conflict of ideas. No matter how many strikes he wins, each one is a Pyrrhic victory if it changes the men who may be his opponents on a temporary issue, but his allies in a greater contest, into permanent adversa- ries in the ranks of socialism. Such employers are the negroes on the safety valve, who raise the pressure of resisting social forces to the danger pitch. Those who wisely defend the present social system will be people who see the imminence of possible change in that system, or at least of a strong effort at radical innovation. So far as lies in their power they will keep open the paths of social progress. They will weaken the force of the attack upon our fundamental in- stitutions, by enlisting in their own ranks many who might be enrolled among their op- ponents. They will recognise that those institu- tions can stand only so long as they satisfy the reasonable demands of all classes for social betterment. The privileges and well-being of the worker of to-morrow cannot be scaled to Conclusion and Outlook 3 1 5 the standard of to-day. A glance at the past century of industrial history teaches this to every observer. If existing institutions respond adequately to each new adjustment of class relations, they will probably stand unmodified; but if they fail to do so, we shall doubtless ex- periment with other institutions, designed to accommodate themselves more flexibly to a wid- ening distribution of industrial control and emolument. Australasia has been able to concentrate al- most undivided attention upon industrial legis- lation because the imperial government relieves the colonies of a foreign policy. Even com- merce with other nations is of minor importance, for exports go mostly to the mother country. Such a condition cannot occur in the United States, where international responsibilities will always share in shaping public opinion. But such inferences as we can draw from Australia indicate that a labour party in America would be anti-imperialist, favourable to limiting world activities, that full attention might be devoted to internal questions. 3 1 6 Conclusion and Outlook Socialism can hardly prevail in the United States without a revolution in the dominant in- terests of the nation. We have centred our energies as a people upon problems of produc- tion. Our undeveloped natural resources have acted upon the nation like a chemical reagent, making each man seek to externalise himself in material nature. The pioneer, conceiving the rough forest as undulating meadow and waving grain, set forth his energies to realise that ideal. His neighbour did the same, until a thousand pioneers, each working toward his individual end, created a contagion of productive activity. The popular faith has been that every man should work out his own economic salvation, and that the welfare of the community was in direct ratio to the energy of its members. The intense pursuit of material welfare through self-di- rection and individual exertion has, therefore, become a national trait of Americans. They have exalted production alone, assuming that if enough were produced for all, all would have enough. This sentiment is due to the predominance of Conclusion and Outlook 317 independent producers among the working population, and the conditions that have fos- tered it may in time lose their present impor- tance. The experience of Australasia suggests that it is not the degree to which the primary wealth of a country is developed, but the extent to which it remains within reach of the people, that determines the popular attitude towards questions of production and distribution. Our natural resources, though as yet hardly touched for development, are rapidly being appropri- ated. As the heritage of the nation becomes private property, the class definitely excluded from this patrimony multiplies in an increasing ratio. These industrial aliens have no personal interest in production except as a condition of receiving wages. The incentive to work is less- ened, because the product of extra exertion is not so obviously as before a direct benefit to the labourer. Therefore the growing body of wage-producers turns its attention to ques- tions of distribution. To these the great evil is, not that too little wealth is produced, but that it is not equitably shared. Consciously 3 1 8 Conclusion and Outlook predestined to a propertyless state, they be- come socially introspective. If they seek relief through political action, the result will neces- sarily be some form of socialism. Every social movement results in compromise. Action and reaction compensate each other as truly in politics as in physics. While the la- bour movement in Australasia will certainly attain its material ends, it may not realise in practice its socialist ideals. The people have advanced more rapidly in legislation than in doctrine. But no error could be more pernicious than to assume that these laws have fully jus- tified themselves by economic and social results. They represent progress, but not a final solution of the problems they were devised to meet. The coming story of the labour party will re- cord failure as well as success, and its adversa- ries will share in the duty of shaping future policies of the government. Nevertheless la- bour has won to its main proposals the support of all political parties, and of the great mass of the people. No party now opposes compulsory arbitration or old-age pensions. More impor- Conclusion and Outlook 3 1 9 tant still, the labour party has become a vehicle to express the aspirations of the working people, and an instrument through which they hope to realise their ends. It is a law-abiding agency, and the forces that in other countries threaten to disrupt society, in Australasia serve only to strengthen social bonds. THE END INDEX Administration of state in- dustries, why difficult, 289. Apprenticeship, regulated by wage boards, 143; regulated by courts of arbitration, 172. Arbitration, see Compul- sory arbitration. Arbitration court, see Court of arbitration. Arbitration, voluntary, a failure in New South Wales, 156. Australia, climate, 4, 6; natural resources, 7; dis- tribution of population in, 3-6; topography, 2. Awards and collective bar- gains compared, 223. Award errors, 220, 223. Birth rate, 296. Bureaucracy, promotes governmentalism, 43. Cabinetmakers, wages of, 147. Centralised government in Australia, 44. Chinese, evade industrial regulation, 125. Chinese immigration, 123. Christchurch settlers, 23. Class consciousness in Aus- tralasia, 301. Coloured British subjects, excluded from Common- wealth, 126. Common rule, 196, 226. Compulsory arbitration, centralises industry, 226; causes slow workers to open attic shops, 232; eco- nomic influence on labour conditions limited, 234, 238; evolution of public opinion regarding, 205 ; and exports, 233-234; his- tory of, in Australasia, 154-157; increases con- trol of workers over in- dustry, 242; increases cost of living, 236; not equally effective in all in- 321 3 22 Index dustries, 234-235; philo- sophical justification of, 213; strikes lessened by, 239; and the tariff, 94; and uniform wage rates, 228-229; unsettles busi- ness conditions, 224-225. Compulsory arbitration law, proposed amend- ment in New South Wales, 166; a form of corporation law, 182; the federal, 163; not initiated by workingmen, 158. Compulsory resumption of large estates, 106-107. Conciliation boards, 161 ; in the evolution of arbitra- tion laws, 206; powers of, 164; unsuccessful, 161. Constitution, does not limit authority of legislature, 140, 204; the federal and industrial legislation, 112. Constitutional government in Australasia, 38-39. Contract and industrial regulation antagonistic, 199. Contract labour excluded, 117. Contract of sale defeats compulsory arbitration, 198. Contract of service, cur- tailed by compulsory arbitration, 193-195; nec- essary to make parties subject to jurisdiction of arbitration court, 197. Convicts, see Penal settle- ment. Coolies in Queensland, abuses in recruiting, 128. Cosmopolitan spirit, lack- ing in Australasia, 298. Court of arbitration, con- gestion of business be- fore, 188; expanding functions of, 208-210; ex- tensive jurisdiction of, 169; intensive jurisdic- tion of, 170; jurisdiction how denned, 168; legis- lative functions of, 184; organisation of, 161-162; organisation criticised, 221-222; powers of, 167; public criticism of, 186; registrar of, 162; regu- lates conduct of business, 177-178; a representative body, 184; sympathetic with labour demands, 241 ; unites legislative and judicial power, 185- 187. Court of industrial ap- peals, 146. Crime, 296. Index 323 Droughts, economic and social effects of, 56. Dunedin settlers, 22. Education, 41. Eight hour day, not re- sult of modern labour movement, 55. Employers, oppose indus- trial regulation, 212. Exports, from New Zea- land, 216; from Victoria, 2ia Factory laws, 110. Farmers and workingmen, 283-284. Foreign policies, freedom of Australasia from, 315. Gambling, 29T. Government coal mines in New Zealand, 273. Government insurance in New Zealand, 271-272. Government ownership, conditions favouring in Australasia, 247-248; limits of, 246; not gov- ernment monopoly, 280; public sentiment regard- ing, 277. Government railways, acci- dents, 252; average haul, 253; cost per mile, 258; finances of, 261; freight rates, 254; freight traf- fic, density of, 253; gauges, 250, 253; inter- est upon investment, 260; labour conditions on, 256; operating expenses and earnings, 258; pas- senger fares, 251; pref- erence to large shippers, 255; public services per- formed by, 259; unique conditions attending op- eration, 250. Government stroke, 286. Henry George, 61, 119. History of social move- ments in Australasia and the United States com- pared, 46. Industrial agreements, 163, 165, 193, 196. Industrial arbitration, see Compulsory arbitration. Industrial unions, see Unions. Immigration assisted, eco- nomic effect of, 33; ex- tent of, 34; social effect of, 35. Imperial relations, labour attitude toward, 116. Intro-imperial exclusion, 126. Japanese, 126. 324 Index Kanakas, 128, 131. Kingston, Right Honour- able Charles, author of compulsory arbitration in Australasia, 155; quoted in relation to law, 182. Knights of Labour in Australasia, 119. Labour cabinets, 96. Labour movement, indus- trial ideals and political methods, 304; political ideals, 303; similar in all countries, 302. Labour party, financial ad- ministration, 86; and federation, 90 ; loose con- structionist, 93; controls candidates, 77 ; method of nomination, 85; or- ganisation, 78, 81, 83. Labour platform, history of, 88; constitutional re- forms, 101-102; indus- trial reforms, 103; planks of fighting plat- form, 111. Land ownership, 29. Lands, public; how first granted, 25; and immi- gration, 32; large estates created from, 26; na- tionalisation of, 108; railways and, 28; squat- ters oppose settlement of, 27; reforms sought by labour party in ad- ministration of, 106-107. Maritime strike, 61-62. Melbourne, municipal own- ership in, 249. Minimum wage, see Wage. Municipal ownership, not extensive in Australasia, 248. Municipal traction, 248; accidents, 264; cost of, 265; fares and service, 263; profits, 265. Nationalisation of monop- olies, 115. New South Wales, political labour party in, 73. New Zealand, description of, 10; natural resources, 12; political labour move- ment, 98-99. Occupations of the people in Australasia and the United States, 48. Occupations represented in the political labour move- ment, 49. Old-age pensions, 113-114. Party history in England and the United States, 78-79. Index 3 2 5 Penal settlement, 17; auto- cratic administration of, 18; character of con- victs, 17; economic influ- ence of convicts, 17; influence on present population, 19; reaction from, 20. Police power of govern- ment, and strike preven- tion, 189. Political labour movement, causes and origin, 59, 60, 68, 71, 72. Prices, demand that gov- ernment regulate, 236 ; rising prices a tax on all labour, 237. Production per capita in Australasia and the United States, 54. Profits, regulated by court of arbitration, 180. Progressive party in New Zealand, 98. Public charities, cost and number dependent on, 294. Public finances of Austra- lasia, 273-277. Public industries, attitude of employees toward, 38. Public trustee in New Zea- land, 272. Public works, why under- taken by government, 37. Queensland, climate and topography, 130; see Sugar, Kanakas, Coolies. Race limitations of social- ism, 135. Reeves, Hon. W. P., intro- duces arbitration act in New Zealand, 156. Savings banks deposits in Australasia and the United States, 295. Sheep raising, why profit- able, 24. Slow workers, 231. Slow workers and immigra- tion, 232. Socialism, doctrinaire in Australasia, 118; race limitations of, 135. Socialist ideals of the la- bour party, 119, 281-282. Socialist propaganda in the United States, 310. Socialist tendencies re- tarded in America, 306- 309. Squatters, 25. State aid to settlers, 266- 268. State batteries, 271. State socialism and com- pulsory arbitration, 243- 244. State trading in farm produce, 269-270. 326 Index Strike, dock, in London, 60 ; in defiance of court of arbitration, 239; lessened by compulsory arbitra- tion, 240; of miners and shearers, 62-63; of rail- way employees in Vic- toria, 287. Strike law in Victoria, 287. Strikes and lockouts, de- fined, 193; evolution of preventive legislation, 189-192; not prohibited in New Zealand, 189; prohibited in Austra- lasia, 191-192. Suffrage laws, 40. Sugar industry, in Queens- land, 127, 129; state aid for, 128, 269; protected by tariff and bounties, 131. Sweating, in Victoria, 138. Sydney, building statistics, 219; first settlement at, 16. Tariff issue, divides labour party, 75. Tasmania, 9. Taxation, of land in New Zealand, 105; of incomes, 106. Telegraphs and telephones, charges, 266. Teuancy laws, 31. Trade unions, see Unions. Trade unionists, see Union- ists. Tropical labour in Aus- tralia, 132-133. Unions, industrial, classi- fied by common employ- ment, or by trades, 202; equalise wages, 66-67 ; historical analogies of, 201 ; part of arbitration machinery, 160; social in- fluence, 66. Unions, rival, 203. Unions, trade, compared with industrial unions, 64 ; become composite unions, 65 ; congresses, 58-60; early in Austra- lasia, 57-58. Unionists, preference of employment for, 172,200, 224 ; number in Australia, 59; proportion of popu- lation, 176. Wages and hours of work in Australasia and the United States, 51, 54, 295. Wage, equal in different occupations, 51-52; liv- ing, enforced by the gov- ernment, 150; minimum and standard, 230; mini- Index 327 mum, determined by evidence, 145, 179; reg- ulation in Australasia distinct from that in Europe and colonial America, 151. Wage boards, why estab- lished, 139; enforce determinations, 146-14.7; influence on sweating and Chinese competition, 147; influence on wages and child labour, 148; and a living wage, 150; and slow workers, 149; and the theory and practice of a minimum wage, 144-145. Wakefield, Gibbon and his. colonial theories, 21. Watson, J. C., first federal labour premier, 96. Workers' Compensation Act, 109. Workingmen favour com- pulsory arbitration, 215. FOURTEEN DAY USE RETURN TO DESK FROM WHICH BORROWED LOAN DEPT. This book is due on the last date stamped below, or on the date to which renewed. Renewed books are subject to immediate recall. "4 1P56OJ nr i*'56TS VJC'v I 1 "' JAN 2 1957 E - Rr*rv IJD UEC C rioG u ^ r '6lBS TJi'C" D LD rci-w i-* npu i I i Mr" 1 I IOV 1 . 1 ) -J I . .' .1! I ihr.iry I iiiM-rsir of ( .ilitorni.i HiTki-k-y YB 19039 UNIVERSITY OF CALIFORNIA LIBRARY