BANCROFT LIBRAJPCf 
 
REPORT 
 
 ON THE 
 
 .abor Laws and Labor Conditions 
 
 OF FOREIGN COUNTRIES 
 
 In Relation to Strikes and Lockouts 
 
 Prepared for the information of His Excellency 
 GOVERNOR JAMES N. GILLETT 
 
 BY 
 
 HARRIS WEINSTOCK 
 
 Special Labor Commissioner 
 
 SACRAMENTO: 
 
 W. W. SHANNON, : : : : SUPERINTENDENT STATE PRINTING 
 
 1910. 
 
u. c. 
 
 5ADEMY OF 
 CIFIC COAST 
 HISTORY 
 
 Bancroft Library 
 
 CONTENTS. 
 
 PAGE. 
 
 LETTER OF TRAXSMITTAL 5 
 
 REPORT ON LABOR LAWS AM) LABOR CONDITIONS OF FOREIGN 
 
 COUNTRIES 7 
 
 ITALY 7 
 
 RUSSIA 13 
 
 AUSTRIA 19 
 
 GERMANY IT, 
 
 BELGIUM :;:: 
 
 FRANCE :>!) 
 
 ENGLAND Hi 
 
 VICTORIA. AUSTRALIA .' H7 
 
 NEW SOUTH WALKS. AUSTRALIA 74 
 
 AUSTRALIA 90 
 
 NEW ZEALAND : Its 
 
 CONCLUSIONS AND RECOMMENDATIONS . 14.'. 
 
LETTER OE TRANSMITTAL. 
 
 To His Excellency, GOVERNOR JAMES N. GILLETT, 
 State Capitol, Sacramento, Cal. 
 
 DEAR SIR : I have the honor to hand you herewith my report in the 
 execution of the commission I hold from you as Special Labor Com- 
 missioner to examine into the labor conditions and labor laws of foreign 
 countries, and to report thereon to you, the Executive of the State of 
 California. 
 
 I have, during the past fifteen months, visited Italy, Russia, Austria, 
 Germany, Belgium, France, England, the British Colonial States of 
 Victoria, and New South Wales, in the Commonwealth of Australia, and 
 the Dominion of New Zealand, and have investigated their labor laws 
 
 and labor conditions. 
 
 I have now the honor to submit this as my report covering these 
 
 various investigations, and to embody in a final chapter such general 
 conclusions as I have been enabled to reach, and such recommendations 
 for proposed legislation as in my opinion is likely to lessen strikes and 
 lockouts in the Commonwealth of California. 
 Eespectfully yours, 
 
 HARRIS WEINSTOCK. 
 January 10, 1910. 
 
REPORT ON 
 
 LABOR LAWS AND LABOR CONDITIONS 
 
 OF FOREIGN COUNTRIES. 
 
 ITALY. 
 
 In my investigations of the labor laws and the labor conditions of 
 Italy, I find from inquiries made of Dr. Marchetti of the Government 
 Labor Bureau, which is a branch of the Ministry of Agriculture, Manu- 
 factures and Commerce, that labor legislation in Italy is much occupied 
 just now with the problem of legalizing and regulating collective 
 "bargaining as between associations of workers and associations of 
 employers, more especially in its bearings on agricultural labor con- 
 tracts, agricultural labor having attained a high degree of organization 
 in Italy, the unions numbering 270,000 members, plus sixty or seventy 
 thousand organized outside the federation. In the National Council 
 of Labor, on which the government is represented, there is a strong 
 current in favor of introducing into such collective bargaining a clause 
 enforcing compulsory arbitration in labor disputes, but su?h a measure 
 requires careful study before being concreted, as there is strong oppo- 
 sition to it, especially on the part of the workers themselves, who think 
 their interests are better safeguarded by avoiding all such compulsory 
 intervention. 
 
 Three private bills will be brought into the House of Deputies by the 
 lions. Bissolati, Nicolini, and Alessio, in favor of a law r for compulsory 
 arbitration, and the government has promised to study them and 
 incorporate the principle in a measure of its own initiative; but it is 
 easy to foresee that months, if not years, will have to pass before such 
 a project is concreted. There already exists in most trades permanent 
 arbitration bodies, known here as "Probiviri," chosen half amongst 
 the workers and half amongst the employers, elected at fixed intervals, 
 generally every two years, to whom disputes arising as to the interpre- 
 tation of a contract can, if desired, be submitted both by masters and 
 men, and it is proposed to extend such boards. Avhose awards are taken 
 
8 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 into consideration by the courts should the dispute be carried into them, 
 to agricultural labor. 
 
 UNIONISM. 
 
 It would seem that unionism is a comparatively young movement in 
 Italy, the first labor unions and Chambers of Labor (Camere di Lavoro) 
 having been formed in industrial centers in 1892, though they only 
 assumed real importance after the great labor and political difficulties 
 of 1898. The organization of the peasantry into leagues of resistance 
 is still more recent, dating back only to 1901, when it started in the 
 province of Mantua after an unusual outbreak of strikes and lockouts 
 in rural districts. The movement was started and directed by the 
 Socialist leaders and is still almost entirely in their hands, though in 
 Komagna some strong organizations are in the hands of the Republican 
 party. These organizations differ widely in different provinces in their 
 aims and methods. In many parts they aim at regulating the phenom- 
 enon of the internal emigration of farm laborers from one province to 
 another, which has assumed very large proportions in Italy. In other 
 regions, and more especially in Emilia, such organization takes the form 
 of the collective leasing of farms which are exploited on a cooperative 
 basis; this feature has attained great developments and yielded many 
 interesting and valuable results. Since the creation of the agricultural 
 unions, which have given rise to many big and closely contested strikes, 
 there has been a marked advance in the wages paid to farm hands, 
 raising them in some districts from thirteen cents per day to sixty-five, 
 or a gain of about five hundred per cent, and nearly everywhere the 
 pay has nearly or more than doubled, but it is not even claimed by the 
 unionists that this marked difference is wholly due to organization. 
 In many r%ions, notably in the southern provinces, emigration is 
 mainly responsible, as labor has become very scarce and can command 
 its own price ; in other parts where the emigration phenomenon has not 
 made itself felt, factors have been the high degree of prosperity which 
 has prevailed in Italy as elsewhere for the last few years, the higher 
 price commanded by many products, migrations to cities, due to the 
 increased industrial activities, and the general increase in the cost of 
 living due to the diminished purchasing power of money. The oppo- 
 nents of unionism indeed maintain that there is little relation between 
 the growth of unionism and the increase of wages other than that of 
 coincidence, but it is generally admitted that unionism has had its share 
 in raising the standard of living. 
 
 The statistics published by the Labor Bureau show that unionism has 
 not had much influence on the length of the working day, though in 
 some places it has brought about this change: That pay, instead of 
 being by the day as formerly, is by the hour, which has tended to put 
 
ITALY. 9 
 
 a premium on long rather than on short hours, due to the desire of the 
 workers to make a large wage. Many farm laborers work as many as 
 fourteen hours a day in the busy season in those regions where they 
 live on the fields they till ; in other provinces the working day is of nine 
 and one half hours, as the laborers live in villages often at a consid- 
 erable distance from their work, and the difference of time is largely 
 taken in going to and from their homes. 
 
 LABOR SAVING DEVICES. 
 
 The increased cost of farm labor has tended to promote the intro- 
 duction of better methods of farming, als the landowner has had to 
 have recourse to this means of increasing the yield of his land as an 
 offset to the larger slice now given to labor. So far as conditions 
 permit labor saving devices are being introduced, and this without, as 
 a rule, exciting the opposition of the unionists, whose organizations, 
 largely controlled by the Socialists, can not consistently object to the 
 application of machinery. Many such devices, however, are not of 
 practical utility in many regions where the acreages are generally very 
 small and cultivated intensively, as in Tuscany, for instance, where on 
 a small farm olive trees and vines are cultivated in the same field as 
 the corn, which is sown in narrow strips between them. Also large 
 areas are hilly or mountainous, and there again machines, such as 
 reapers or mowers, would be impracticable. But in Lombardy, Emilia, 
 Latium. and elsewhere, there is an increasing demand for agricultural 
 machinery, and in some districts there is a tendency towards cooper- 
 ative purchase and operating of same. 
 
 It might be presumed that the highly increased cost of labor would 
 have diminished noticeably the returns cashed by the landowners and 
 thus have tended to depress land values. It would appear, however, 
 that the reverse has taken place. This is due in the first place to the 
 improved methods of farming introduced, partly as the result of the 
 increased cost of labor and partly owing to the active educational prop- 
 aganda carried on by the Italian government by means of traveling 
 chairs of agriculture, experimental fields, etc., and also to the decline 
 in the capitalization value of money. The value of many products has 
 also risen considerably. Another determining factor is the land-hunger 
 of the Italian emigrants who return home with their savings and who 
 are keen bidders for available land, which they are willing to acquire at 
 almost any price to gratify their ambition to become landowners on 
 however so small a scale. 
 
 CONDITION OP THE LABOR MARKET. 
 
 It is feared that should commercial depression in America continue 
 and lead to the return on a large scale of Italian emigrants, such return 
 
10 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 / 
 
 would tend to overload the labor market, and might seriously disturb 
 recent prosperity and check the advance in wages, prices, and land 
 values which has been continuous of late. So far, however, the official 
 returns received by the Labor Bureau show that although large numbers 
 of emigrants have returned, no bad effects have as yet been felt; and 
 indeed their return is welcomed in many districts where the scarcity 
 of labor has begun to be so seriously felt as to constitute a cause of 
 impoverishment to the southern provinces and to compromise their 
 economic prosperity. 
 
 STRIKES. 
 
 In a conversation with Professor Giovanni Montemartini. Director of 
 the Labor Bureau, I made some inquiries as to the nature of the great 
 agricultural strike now being fought in the province of Parma, which 
 is focusing the attention of Italians of all parties on the problems con- 
 nected with labor, and I elicited from him that Parma and the neigh- 
 boring districts of central Italy are hard affected by the emigration 
 movement, which has done so much to raise wages in other parts of 
 Italy, and consequently the agricultural laborers have had to resort to 
 organization and strikes in order to improve their conditions. Recently 
 the peasant organizations of the province of Parma have come under 
 the influence of the "Syndicalist" section of the Socialist party, which 
 is in favor of direct economic as opposed to parliamentary action, and 
 favors a policy of harassing the landowners by continual strikes, boy- 
 cotts, etc., in the hope that they will at last find it impossible to carry 
 on their farming operations, and will thus be willing to rent their lands 
 to unions of peasants, who would propose to exploit them collectively. 
 This is the theory underlying the syndicalist movement, but in practice 
 the strike has been fought with the usual peaceful methods on the side 
 of the peasants, and the whole dispute has turned on a question of the 
 failure of the landowners to comply with certain clauses of an agree- 
 ment stipulated between them and the peasantry in 1905. But, on the 
 other hand, the landowners have organized and are now conducting the 
 strike in an aggressive spirit with the object of breaking up the organ- 
 izations, and enforcing the principle of the "open shop." Twenty 
 thousand organized peasants arc involved in this strike, which has 
 already lasted over a month, and the termination of which it is impos- 
 sible to foresee. The landowners have succeeded in migrating their 
 live stock, one of the principal assets of the province, to other parts of 
 the country, the peasants on their side are sending away their children, 
 who are gratuitously received and cared for by the organized workers 
 in the towns all over the peninsula. The government so far has pre- 
 served an absolutely neutral attitude. 
 
 The agricultural laborers' organizations are federated, and the na- 
 
ITALY. 
 
 11 
 
 tional federation counted over :if>0.000 members a few years ago. its 
 membership is now reduced to 270.000, as the organizations which have 
 come under the syndicalist influence, such as those of Parma, have 
 seceded. ' 
 
 (COMPULSORY ARBITRATION. 
 To my inquiries as to how the question of compulsory arbitration 
 as viewed in Italy, Professor Montemartini replied that public opinion 
 on the question is directed along three currents, one favoring the 
 creation of permanent arbitration boards, to which the parties to a 
 dispute could voluntarily have recourse at any time ; another in favor 
 of compulsory conciliation boards, to which all disputes Avould have to 
 be submitted before either masters or men could declare hostilities; 
 and a third in favor of compulsory arbitration. The serious dimensions 
 assumed of late by strikes, such as those of railway employees, and 
 more especially the gravity of many agrarian strikes in some of which 
 the military have been called out and many lives lost, has strongly 
 influenced public opinion in this direction. It is easy, however, to 
 resee that great difficulties would arise in enforcing any such measure, 
 e measure which the Socialist deputy. Hon. Bissolati. intends placing 
 fore the Chamber, proposes to penalize manufacturers who refuse to 
 ey the award of the arbitration board by closing their establishments, 
 t no penalties are proposed for the workers who offer no security, 
 e measure supported by the If on. Xicolini proposes to keep back as 
 urity for the workers a certain proportion of their wages till the 
 initiation of the agreement under which they are engaged, but this 
 again would be impracticable, except in certain classes of labor. On the 
 whole, it may be said that there is a tendency among employers in 
 industry to oppose compulsory arbitration, while the landowners would. 
 as a rule, favor it. The Director of the Labor Bureau himself is 
 opposed to the principle of compulsory arbitration, as he considers it 
 wrong in principle and impracticable, except perhaps in those few 
 industries which are government monopolies and in which it is possible 
 to know the exact cost of production, and which have nothing to fear 
 from foreign competition. He fears that in practice it might often 
 have the effect of ruining an industry and increasing lack of employ- 
 ment. Undoubtedly the general public is, however, in favor of some such 
 measure, as also certain sections of the Socialist party, though opinion 
 there is very divided, as is seen by the fact that the railway workers' 
 union has rejected the offer of compulsory arbitration. The Prime 
 Minister. Giolitti, has made declarations in the Chamber to the effect 
 that he does not favor for the present any project for compulsory 
 arbitration, and that he considers it premature to talk of incorporating 
 the labor unions, as is proposed in one of the measures to be brought 
 before the Chamber. 
 
12 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 Dr. Carroncini, also of the Labor Bureau, informs me that next 
 month a law will come into operation for regulating the conditions of 
 labor of workers in the rice fields in the provinces of Verona, Pavia, 
 and Ferrara, and this law contains a clause for compulsory arbitration 
 of disputes which may arise in this special industry. The board of 
 arbitrators is to consist of three umpires selected by the masters and 
 three by the men, presided over by the pretore or local magistrate, and 
 its decisions are to be final and without appeal. Any refusal to obey 
 the award will be punished by fines, amounting in the case of the 
 workers to from 30 to 40 lire and in that of the employers to from 300 
 to 400 lire. In the case of the workers it is proposed to garnishee their 
 wages in payment of the fines. The initiative of this law was taken by 
 the government at the instigation of the landowners, and has met with 
 much opposition on the part of the workers, and it is foreseen that it 
 will be enforced with difficulty. The disputes w r hich it will be called to 
 decide upon will be mostly on minor questions concerning chiefly the 
 interpretation of contracts. Should the law be successful in operation, 
 it is likely to be broadened so as to cover other categories of agri- 
 cultural work. Dr. Carroncini does not himself believe compulsory 
 arbitration practicable or desirable, and remarks that in agricultural 
 struggles it is wished for by the landowners, but opposed by the workers 
 themselves. He considers that in all strikes the government should 
 observe strict neutrality, limiting its action to preserving peace, and 
 he considers that the conditions in agricultural struggles are such that 
 when the government merely confines its action within these limits, it 
 is already exercising pressure in favor of the landowners. 
 
 Nineteen hundred and seven was a record-breaking year for strikes 
 in Italy, as they attained the number of 2,500, as against 900 for 1906 
 and 600 for 1905; it is probable now that the number will tend to 
 decrease. 
 
13' 
 
 RUSSIA. 
 
 have found that at this particular time it can hardly be said that 
 Russia, like other countries, has a labor problem. It has solved this 
 problem in rather an unique way, and yet not in a way that I should 
 care to recommend to the government of California or to any other 
 government. Prior to 1905 the government did not legalize the forma- 
 tion of labor unions. During the period of the revolutionary movement 
 of that year, the government, in addition to granting a constitution and 
 other concessions, also gave to labor the privilege to organize. The 
 workingmen in all industrial parts of the empire promptly availed 
 themselves of this concession, and powerful labor unions were speedily 
 formed. 
 
 In Russian Poland, where are located the great manufacturing cen- 
 ters of Warsaw and Lodz, the industrial workers have been largely 
 recruited from the peasantry. This element, when brought into the 
 cities and away from home restraints, became more or less savage. 
 Once organized and led, as many of them were, by Socialists and polit- 
 ical leaders, who seemingly meant to use these organizations for revo- 
 lutionary purposes, they became most unreasonable in their demands, 
 and when these demands were denied, did not hesitate to resort to the 
 knife and the revolver. In consequence, many violent strikes took 
 place, and for a time a reign of terror existed in these centers. This 
 situation, as I will presently show, played directly into the hands of 
 the government. 
 
 It would seem that the Czar had yielded most unwillingly to the 
 policy of granting a constitution and other concessions in the direction 
 of personal and civil liberty. That these privileges were granted was 
 due to the government overestimating the strength of the revolutionary 
 party. The moment the Czar felt sure of the army and a slight weak- 
 ness was shown on the part of the revolutionists, he immediately 
 instituted a reactionary policy. A "pogrom" was arranged in secret 
 by the " higher ups" of the government circles which was to go into 
 effect simultaneously all over the empire, and which was to include a 
 massacre of the revolutionists and those presumed to be in sympathy 
 with them. 
 
 These massacres were to be conducted by a body since become known 
 as the "Black Hundreds," the rank and file of which were made up 
 of outcasts and criminals, known in Russia by the English title of 
 "Hooligans." These Hooligans were to receive the protection, and did 
 
14 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 receive the protection of the military and the police. And under the 
 direction and protection of these governmental forces, thousands of 
 innocent men, women, and children were butchered and slaughtered 
 in many cities, towns, and villages throughout the empire for several 
 days, and the contents of their homes and shops were looted and carried 
 away by these freebooters with the fullest knowledge and consent of, 
 and aided and abetted by, the military and the police. 
 
 The charge has been made that the Czar himself was at the head of 
 this movement that in advance he had promised to pardon every mem- 
 ber of the Black Hundred who might be convicted of any crime com- 
 mitted during the proposed massacre. 
 
 What lends color to this charge, and what is maintained to be abso- 
 lute proof of his complicity in these murders, is the fact that he has 
 seemingly kept faith, and that he has actually pardoned every man 
 since convicted in the courts of murder, arson, outrage, incendiarism, 
 and all the other dreadful crimes committed during the days and nights 
 of terror. Just at this writing, and as additional proof that the Czar 
 was at least in perfect sympathy with the acts of the Hooligans, comes 
 a wire dated at St. Petersburg, and published in a London journal, 
 reading as follows: "It having been proposed to lessen the term of 
 punishment inflicted on all the people condemned for being implicated 
 in the Kieff 'pogrom.' the Czar has granted them a complete amnesty." 
 
 The statement was made to me by a prominent lawyer in Moscow 
 who had carefully investigated the matter, that out of the thousands 
 who took part in these massacres in various parts of the empire and 
 who shed untold quantities of innocent blood, there is not one single 
 offender to-day, despite hundreds of convictions, to be found m the 
 prisons of Eussia. 
 
 On October 30, 1905, the Czar in his proclamation to the people 
 among other things said, "We lay upon our government the duty of 
 executing our inflexible will by giving to the people the foundations 
 of civil liberty in the form of real inviolability of personal rights, free- 
 dom of conscience, freedom of speech, freedom of public assembly, and 
 freedom of organized association." 
 
 SUPPRESSION OF LABOR ORGANIZATIONS. 
 
 In consistence with the policy of reaction begun by the Czar imme- 
 diately on the heels of this generous and liberal declaration, steps 
 were taken to suppress all labor organizations. The labor leaders 
 who permitted or encouraged violence on the part of union strikers 
 played directly into the hands of the government by furnishing the 
 needed pretext for the suppression of unionism, and despite the 
 claim made that only a percentage of the unionists committed acts of 
 violence, all unions were suppressed. According to the unrepealed 
 
HI 'SSI A. 15 
 
 laws of Russia, labor is permitted to organize, but as a matter of fact, 
 no labor meeting is permitted to take place without the consent of the 
 chief of police, which consent is never obtainable. In consequence, 
 labor unionism in Russia for the time being is paralyzed, and owing 
 to lack of organization and also to lack of strike funds, strikes of any 
 duration are practically impossible. 
 
 The statement was made to me by a leading Russian professor of 
 political economy, who is an authority on the Russian labor question, 
 that the Minister of the Interior refused to grant a certain employer 
 permission to make certain wage concessions to his employees on the 
 ground that to do so would encourage other wage-earners to make 
 demands and thus lead to possible strikes. 
 
 At one of the great iron mills in southern Russia, after a lengthy 
 interview with several wage-earners in the presence of the manager, 
 I said to them, "Am I to understand that if you have grievances and 
 hold a meeting to discuss them, agree upon them, set them forth on paper 
 and appoint a committee to present them to your employer for his 
 consideration, that you would be liable to punishment at the hands of 
 the authorities?" "If we do all that you say," they answered, "the 
 members of such a committee would speedily find themselves on the 
 road to Siberia." 
 
 Appealing to the employer I asked if he did not think that such 
 treatment of labor on the part of the authorities was most cruel and 
 unjust. He answered saying that labor was not the only factor liable 
 to such summary treatment. "I do not know what moment I, as an 
 employer, may be thrown into prison by the order of the governor 
 general of this province, who is all powerful, being in supreme control, 
 and from whose judgments there is no appeal kept there indefinitely, 
 and, perhaps, finally transported to Siberia without even being informed 
 of the nature of my offense or given an opportunity for a hearing or a 
 fair trial." 
 
 In this wise, labor organizations in Russia have been terrorized by 
 the government, and while secret unionism more or less prevails, its 
 possibilities are enfeebled, and it can serve little or no practical pur- 
 pose, for the reason that the members, and more especially the leaders, 
 are subject to arrest, imprisonment, and exile as soon as they show 
 their heads. 
 
 DIMINISHED EFFICIENCY OF RUSSIAN LABOR. 
 
 In the face of these conditions one would be led to believe that Russia 
 should be the manufacturers' Mecca. Here, at least, he may be per- 
 mitted to conduct his business without interference on the part of the 
 labor picket or the walking delegate. Here he need now have no fears 
 of arrogant labor committees calling on him and making unreasonable 
 
16 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 demands which he dare not refuse without the risk of a strike which 
 might destroy his business. 
 
 I think it was Herbert Spencer who once said that if you strike a 
 blow with a hammer on a smooth sheet of tin you will find a dent 
 therein; but if you turn the sheet of tin over you will find a corre- 
 sponding elevation on the other side. The same law of cost and com- 
 pensation is working its way out with the Russian labor situation. 
 Instead of Russia, because of the suppression of labor unions, being the 
 manufacturers ' Mecca, it is proving to him a Waterloo. 
 
 Every Russian manufacturer with whom I spoke, and I had the 
 opportunity of speaking with some of the largest in the empire, 
 informed me that the diminishing efficiency of the Russian workman 
 was becoming so serious that it was getting to be more and more of a 
 problem as to how they could retain their business against the com- 
 petition of foreign manufacturers who had the advantage of more 
 efficient labor, and who were successfully invading their territory. 
 
 "Is the charge true that is made by employers that the efficiency of 
 the Russian workman is declining?" I asked a group of intelligent 
 Russian wage-earners whom I was interviewing. 
 
 " It is with regret that we must admit it to be true, ' ' they replied. 
 
 "Why is it true?" 
 
 "Because," they answered, "our employers are in league with the 
 government to oppress and to suppress us. We have had locks put on 
 our lips and manacles on our hands. We are helpless and almost hope- 
 less. Surely, under these conditions, we can not be expected to be wildly 
 enthusiastic over our employers' interest, nor can we be expected to 
 give forth our best in return for treatment which is the worst. What 
 have we to gain by working ourselves down to the bone? Nothing, 
 absolutely nothing. We can hope neither for appreciation nor for 
 more pay, and so it is only natural for us under these circumstances 
 to give in return the least we can. 
 
 This object lesson effectively demonstrates the human law, that the 
 governmental policy which destroys freedom of organized association, 
 as in Russia, destroys at the same time the spirit of the worker also as 
 in Russia, and turns the willing workman into an unwilling workman, 
 thus making it impossible for such nation to advance or even to maintain 
 its industrial position among the industrial nations of the world. 
 
 There is no other country in the world, the United States not excepted, 
 that is so rich in material resources as the empire of Russia. Its hills 
 and its mountains, its mines and its valleys, contain the hidden treasures 
 of all the Indies. Yet, in the face of all this undeveloped but potential 
 wealth, untold millions of Russians go hungry from the cradle to the 
 
 grave. 
 
 Under an honest, wise, and beneficent administration. Russia could 
 
RUSSIA. IT 
 
 become the wage-earners' Mecca, and Russian labor could be made 
 happy and prosperous to a degree not to be surpassed in any other 
 land. But as it is, the present condition and the future outlook for 
 Russian labor is most gloomy and discouraging. 
 
 STRIKES. 
 
 In consequence of the strikes of 1905 and 1906, wages have risen from 
 fifteen per cent to thirty per cent, but the cost of living has risen pro- 
 gressively, so that as a matter of fact, the absolute wages of the work- 
 ingman have not increased, and where in the absence of organization 
 no increase in wages took place, the wage-earner because of the increased 
 cost of living is worse off than ever. 
 
 The only real advantage gained through strikes, and still enjoyed by 
 many wage-earners, is the shortening of the hours of labor. The legal 
 Russian working day is eleven and one half hours ; the general working 
 day at this time is ten hours, but many of the iron works have a nine- 
 hour day, and some of the municipal undertakings have an eight-hour 
 day. 
 
 WAGES. 
 
 Owing to the numerous religious and other holidays there are only 
 from two hundred and eighty to two hundred and eighty-five labor days 
 in the year. This, of course, militates against the earning power of the 
 wage-earner, who, as a rule, is paid by the hour or by the working day. 
 
 The average wages of Russian workingmen will run from one hundred 
 to one hundred and fifty dollars per annum. The cost of food for a 
 Russian workingman is about four dollars and a half a month. His 
 diet consists of bread, vegetables, and groats, meat rarely if ever being 
 in reach of his meager earnings. 
 
 The condition of the peasants is even worse than that of the indus- 
 trial workers. Professor Oseroff of the University of St. Petersburg, 
 one of Russia's greatest political economists, is my authority for the 
 statement that the average wage of peasant women who do the hardest 
 sort of manual field labor is at the rate of ten cents for a day, which 
 begins at four a. m. and does not end till eight p. m., and out of this 
 pittance she must furnish her own food. Moreover, he went on to say 
 that at times there are multitudes of women who stand in line waiting 
 for an opportunity to secure work on these pitiable conditions. In the 
 villages I have seen peasant girls employed as domestics for as little 
 as one dollar a month, and seemingly glad of the opportunity to get 
 food and shelter which their own homes do not afford. 
 
 Male peasants in summer earn from fifteen cents to fifty cents a day, 
 and in winter from six cents to twenty cents a day, according to the 
 quality and the strength of the worker. 
 
 The need for saving in the summer on the better wage rate in order 
 
 2 
 
18 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 not to starve in the winter when there is not enough employment to go 
 round, when there are great armies of unemployed peasants, is so 
 imperative that a farmer employing a goodly number of peasants 
 informed me that, as a rule, most of his peasant men and women work 
 all the summer without spending one single penny for personal needs 
 outside of food. 
 
 The manufacturing employers seem to feel that their inability to 
 compete successfully with foreign manufacturers is due to the short- 
 ened hours of labor and the increased wage brought about by strikes. 
 Now that strikes, because of the attitude of the government, have 
 become almost impossible, they are taking steps to make a united effort 
 to lengthen the working day and to cut down wages. All this in the 
 face of increased cost of living from which the wage-earner can not 
 escape. 
 
 In the opinion of a disinterested investigator such a policy, if suc- 
 cessfully carried out, can but make a bad industrial condition much 
 worse. Longer hours and cuts in wages must further add to the dis- 
 content and misery of the Russian wage-earner, and tend to make him 
 still more inefficient, thus making it less and less possible for the 
 Russian manufacturer to maintain his business even in his own home 
 market, to say nothing of the markets of the world. 
 
 CONDITION OF RUSSIAN WAGE-EARNER. 
 
 The lot of the Russian wage-earner is the most unhappy in all the 
 Occident, and so long as it remains the policy of the Russian govern- 
 ment to put a premium on ignorance, to discourage the education of 
 her masses, to deliberately encourage, as she does on every hand, vice 
 and immorality, in order to divert the thought and the energy of the 
 people from politics, so long as the declaration of the Czar of October 
 30, 1905, that it is his inflexible will to give to the people, among other 
 things, the freedom of organized association, remains a byword and a 
 barefaced, empty lie, so long must the condition of the Russian wage- 
 earner remain the most unhappy in all the Occident. 
 
 Russia has nothing to offer in the way of hints or suggestions as to 
 the most scientific method of preventing strikes and lockouts, other than 
 by the most brutal use of force, by the exercise of arbitrary power and 
 by robbing the wage-earner of the freedom of organized association. 
 
 Russia, however, by her mediasval and brutal methods in the treatment 
 of labor, stands out as a most valuable object-lesson to the world how 
 best to degrade the working classes, how best to arouse in them hatred 
 and ill will, how best to fill their hearts with disloyalty to the govern- 
 ment under which they live, how best to destroy their efficiency by 
 killing the best within them and bringing out the worst within them, 
 and how best to make it impossible, despite boundless natural wealth, to 
 become a prosperous industrial nation. 
 
AUSTRIA. 19 
 
 AUSTRIA. 
 
 I 
 
 As Vienna is regarded by Austrian wage-earners as the city where 
 the conditions for Austrian labor are the most favorable, and as Vienna 
 is also the capital of the empire where are to be found the head centers 
 for all information concerning labor and labor laws, I confined the 
 limited time at my command to that city, where I was enabled to make 
 a fairly exhaustive investigation and to get many different points of 
 view on the question under investigation. 
 
 Through the courtesy of our American Ambassador, Charles D. 
 Francis, I was enabled to meet the State Minister of Commerce, 
 Dr. Alfred Grunsberger, and the State Minister of Public Works, 
 Dr. Albert Gessmann, to both of which gentlemen I am indebted for 
 much information. 
 
 Opportunities were also afforded me to have an audience with Mayor' 
 Lueger of Vienna, to meet with the secretaries of the Federated Trades 
 and the Employers' Association, with several members of the Austrian 
 Parliament who are also labor leaders, with editors of labor papers, and 
 with various groups of workingmen. Opportunity was also given me 
 to visit numerous homes of wage-earners and to talk directly with the 
 occupants, so that on the whole my investigations were of a character 
 to give me many different points of view on labor conditions and labor 
 laws. I found some of these points of view most conflicting, as the 
 interests of the informants happened to conflict. I followed the plan, 
 however, of reaching conclusions by facts presented rather than by 
 opinions offered. 
 
 CONDITION OF AUSTRIAN WAGE-EARNER. 
 
 Compared with his fellow-worker in Russia, I found the condition 
 of the Austrian wage-earner most enviable. On the whole, the Austrian 
 orkman is better off than ever before, though there is very great room 
 or further improvement in his condition. The Austrian wage scale 
 has for several years been upward, until the recent depression, which 
 naturally checked this tendency; but, as yet, there have been few 
 instances where wages have been cut, and unless trade conditions grow 
 materially worse, there is no present likelihood of wages declining. I' 
 found, however, that this upward trend of wages in recent years was 
 largely confined to those branches of industry which have become 
 unionized. 
 
20 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 There has also been a progressive increase in the cost of living, so 
 that unorganized labor, which has not participated, as a rule, in 
 increased wages, has been badly pinched by the increased cost of rent 
 and of foodstuffs. 
 
 The legal hours for a day's labor in Austria are eleven. The actual 
 average working hours, however, are nine and a quarter. 
 
 The average earnings of an industrial worker are $240 a year, out of 
 which he contributes $20, or eight per cent, to the funds of labor unions. 
 According to the statement of Dr. Max Kaiser, the secretary of the 
 Employers' Association of Austria, $2,800,000 of such funds had been 
 used for political purposes in supporting the work of the Social Demo- 
 crats, and $400,000 were used for strikes. 
 
 LABOR IN POLITICS. 
 
 Labor has largely concentrated its efforts on politics. Under the 
 name of "Social Democrats," it wields important political power, hav- 
 ing eighty-seven representatives in the lower house. By voting as a 
 unit, this labor party has made itself keenly felt, especially since the 
 .representatives of the capitalistic and employing classes are split 
 up into numerous political parties, thus minimizing their political 
 strength. 
 
 TAXES. 
 
 In addition to contributing eight per cent of his earnings to labor 
 unions, the Austrian workman is obliggd to pay direct state taxes 
 equivalent to about nine per cent of his income. This reduces his 
 purchasing power to a sum on which it would seem impossible to the 
 American workman even to exist, especially in the face of the stern 
 fact that in the last few years the cost of living in Austria has increased 
 from twenty-five to thirty-five per cent. As a consequence, even the best 
 paid Austrian wage-earner does not enjoy the comforts, the conveniences, 
 nor the standard of living within the reach of the ordinary American 
 unskilled laborer. A workingman in Vienna, however favorable his 
 conditions, rarely, if ever, occupies more than one room and a kitchen 
 for self and family, no matter how large his family. I have visited the 
 homes of skilled wage-earners in Vienna, consisting of a room and 
 kitchen, which were occupied by families of as many as nine persons. 
 There are multitudes of wage-earners who occupy but one room for 
 self and family. 
 
 WAGE-EARNER'S DIET. 
 
 The wage-earner's diet, as a rule, consists of bread, vegetables, and 
 coffee, and if his family is not too large, of scrap meat for Sunday 
 dinner. 
 
A 1 "STRIA. 
 
 21 
 
 SICKNESS AND OLD AGE PENSIONS. 
 
 He enjoys, however, this advantage over the average American work- 
 man. In the event of sickness he is furnished by the State with free 
 medical treatment and free medicine, and also an amount from the state 
 sick fund, equivalent to sixty per cent of his annual wages, to which 
 his employer has contributed one third and he has contributed two 
 thirds. This allowance is given him for a period of twenty weeks. In 
 the event of a disabling accident, he likewise receives a State allowance 
 equivalent to sixty per cent of his annual earnings, to which he has 
 contributed ten per cent and his employer ninety per cent. 
 
 The question of old age pensions is also being agitated at this time, 
 and the Austrian Parliament has such a measure now under advisement. 
 
 STRIKES. 
 
 The rapid increase in the ranks of union labor has tended to an 
 increase in strikes. The official record for recent years stands as 
 follows : 
 
 Number of strikes in 1902 246 
 
 Number of strikes in 1903 324 
 
 Number of strikes in 1904 414 
 
 Number of strikes in 1905 686 
 
 Number of strikes in 1906 1083 
 
 RECOGNITION OF UNIONS. 
 
 The great fight that is being made by Austrian labor is to obtain 
 recognition at the hands of the employers. By virtue of its growing 
 strength it has commanded recognition on the part of the smaller 
 employers, which, as a rule, now recognize the labor unions. The larger 
 employers, however, do not, as a rule, recognize labor organizations, 
 and are uniting more and more with the view of collectively refusing 
 to recognize union labor. Aside from the carpenters' union of Vienna, 
 the "open shop," as a rule, prevails throughout Austria. Austrian 
 labor unionism, it is claimed by its leaders, stands for temperance, for 
 the intellectual development of the wage-earner, and for a faithful 
 observance of labor contracts. 
 
 Wherever labor unionism is recognized, the tendency of employers 
 and of unions is in the direction of making contracts running from 
 three to five years. The labor federation insists upon the strict observ- 
 ance of these contracts on the part of unionists, a clause being gen- 
 erally inserted in such contracts to the effect that the federation agrees 
 to withhold support, financial and otherwise, from any union that 
 violates its contract, and, if need be, to expel such union from the 
 federation. 
 
 The labor unions in Austria, as in America, are opposed to the unions 
 
22 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 incorporating, on the ground that to become legal bodies would lay 
 them open to becoming perpetual victims of legal proceedings instituted 
 by the Employers' Association with the view of disrupting the labor 
 organizations. 
 
 In order to prevent the selfish among the labor leaders from need- 
 lessly prolonging strikes in their own interests and at the cost of capital 
 and labor, and in order also to prevent the union members from being 
 terrorized by radical unionists, the rule is faithfully followed during a 
 prolonged strike of taking a weekly secret ballot on the question, ' ' Shall 
 the strike be continued ? ' ' 
 
 EFFICIENCY OF AUSTRIAN LABOR. 
 
 Austrian government officials, who have carefully studied the Aus- 
 trian wage-earner, confess that the same man when transplanted to 
 American soil becomes much more efficient. In this connection Dr. 
 Alfred Griinberger, connected with the Ministerial Department of 
 Trade, made the interesting statement that shortly after the recent 
 panic struck the United States, news came that thousands of Austrian 
 wage-earners were on their way back to Austria. This information 
 caused great uneasiness, and committees were hastily formed and 
 employment offices organized in order better to deal with what w r as 
 expected to be a horde of returning suffering refugees. The surprise of 
 the committees was great when they found the women among the return- 
 ing emigrants decked out in fashionable garments, with hats decorated 
 with ostrich plumes reaching high up in the air, the men, as a rule, 
 wearing creased trousers, and all of them wearing an astonishing air 
 of prosperity. They were further surprised when the offered employ- 
 ment at eighty or ninety cents a day was laughed at by the returning 
 wanderers, who informed the committees that they had plenty of money, 
 that they were not seeking employment, and that they had simply 
 availed themselves of the slack time to take a junketing trip home where 
 they intended to remain until there was a revival of American trade, 
 when they proposed to return to the United States. I was further 
 informed that there is not one case on record where employment was 
 accepted at the wages offered. 
 
 The increased effort and energy of the Austrian workmen when 
 transplanted to American soil is ascribed largely to the better general 
 social and economic conditions that prevail in America, because of its 
 boundless resources, the higher esteem in which labor is held, the far 
 greater opportunities and possibility of advancement, and the progres- 
 sive spirit of the American employer, who is ever ready to discard 
 old methods and introduce the most modern methods obtainable. 
 
AUSTRIA. 23' 
 
 STATE INTERVENTION IN LABOR DISPUTES. 
 
 While the State has made no legal provision to deal with strikes and 
 lockouts, it often happens that officials holding high places take the 
 initiative of bringing the conflicting parties in labor disputes together 
 for the purpose of conciliation. One such official, Government Coun- 
 cillor Hitter von Heutl, a particularly tactful official of the province of 
 Lower Austria, has in this wise been the means of settling successfully 
 forty labor disputes, averting that many strikes and lockouts. 
 
 This method has grown into such favor that the conflicting parties 
 now frequently appeal to such mediators to arbitrate existing differ- 
 ences. 
 
 COMPULSORY ARBITRATION. 
 
 Of the many who were invited to express an opinion as to the wisdom 
 and practicability of compulsory arbitration, only three expressed 
 favorable opinions, His Excellency Dr. Gessmann, Minister of Public 
 Works; Herr Frederick Elsinger, a prominent manufacturer, and 
 Stadthalter von Heutl. The latter specially favors compulsory arbi- 
 tration, expressing the belief that the activity of a court of compulsory 
 arbitration and the precedents created by the same, might be instru- 
 mental in effecting and maintaining industrial peace. 
 
 On the other hand, however, I found that Austrian employers and 
 employees, as a rule, are much opposed to compulsory arbitration. 
 Austrian employers are opposed not only to compulsory arbitration, but 
 to interference of any sort in labor disputes on the part of the State, 
 on the grounds 
 
 a. That the State officials are likely to be in sympathy with labor, 
 and are likely to use their influence to get concessions in favor of labor, 
 in order to least inconvenience themselves and in the interest of indus- 
 trial peace. 
 
 &. Because compulsory arbitration in time of industrial disputes 
 would compel the employer to expose in court his private affairs for 
 the information of the court and at the same time also for the informa- 
 tion of watchful competitors, while labor on the other hand would 
 stand simply on its demands. 
 
 c. Because compulsory arbitration, the employers claim, would rob 
 them of their liberty, and would compel them to accept the dictates of 
 perhaps a hostile court. 
 
 Austrian labor is opposed to compulsory arbitration 
 
 a. Because it fears that capital with its tremendous power would 
 
 intimidate the arbitration courts ; and 
 
 fr. Because compulsory arbitration would rob labor of the right to 
 
 strike, which it regards as its most formidable weapon, and which it 
 
 will not surrender under any conditions. 
 
24 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 Labor declares further by its representative, Hueber Broun, editor 
 of the Arbeiter Zeitung, the Social Democratic paper of Vienna, and 
 Representatives Beer, Hannsch, and Schrammel, members of the Lower 
 Austrian House, that it would combat any attempt to deprive it by 
 law of the power to strike and would employ all means at its command, 
 resorting, if necessary, to the extreme of fighting therefor in the very 
 streets. 
 
 Professor Kobatsch, a recognized authority on economic and labor 
 questions of Austria, maintains that compulsory arbitration can not 
 be adapted to the economic and social conditions of Continental Europe, 
 and that even in England, the most progressive industrial country of 
 Europe, the proposal was recently rejected with the enormous majority 
 of 660,000 votes. 
 
 STRIKE REMEDIES. 
 
 The consensus of opinion in Austria on the part of officials, employ- 
 ers, and labor leaders is that the best remedies against strikes and 
 lockouts are 
 
 a. Organizations on both sides, as powerful as they can be made, on 
 the theory that mutually strong organizations with the power to inflict, 
 .if need be, great punishment on the opposing side, will tend to greater 
 mutual respect and to greater mutual restraint. 
 
 b. On the part of labor leaders, it is held that the recognition of labor 
 unions and collective bargaining makes for greater industrial peace. 
 
 c. The bringing together of the conflicting parties for the purpose 
 of reaching a better mutual understanding. 
 
 d. The making of long contracts, say from three to five years, between 
 employers and employees in order to establish a condition of steadiness 
 and to enable employers safely to plan for the growth and development 
 of their business. 
 
 The feeling seems to be growing in Austria, especially in labor 
 circles, that more is to be gained by peaceful measures in labor disputes 
 than by strikes and lockouts, and the present labor tendency is to leave 
 nothing undone to maintain peace before the extreme measure is 
 resorted to of declaring a strike. 
 
GERMANY. 
 
 25 
 
 GERMANY. 
 
 Germany in the past two or more decades has made tremendous 
 industrial strides. Since the introduction of technical schools some 
 twenty years ago, and coincident with the introduction of a State pro- 
 tective trade policy and a more paternal State interest in the welfare of 
 its working people, Germany has grown to be the greatest Continental 
 industrial producer and a keen and steadily growing competitor to 
 Great Britain in the markets of the world. 
 
 By virtue of the splendid training the German workman receives in 
 his elementary and technical schools, to say nothing of the discipline 
 he undergoes in his three years' compulsory army service, his standard 
 of efficiency has been materially raised and he makes a far more capable 
 and intelligent workman than did his father or his grandfather. These 
 qualities, together with the fact that though all German workmen drink 
 beer, and some of them consume a great deal of it, few, if any, get 
 drunk, and from the further fact that few. if any, German workmen 
 are addicted to the vice of gambling, enable him. despite his compara- 
 tively small earnings, to show a good bank account. 
 
 CONDITION OP GERMAN WAGE-EARNERS. 
 
 While the average earnings of the German workman are not more 
 than half the earnings of the wage-earner in the United States, there 
 is a marked absence of the extreme poverty that greets the eye in British 
 or American cities. There are no slums to be found in the cities of 
 Germany. Nor are there to be found city districts where are to be 
 seen the so-called submerged tenth. Even the poorest quarters of the 
 German cities are kept scrupulously clean, the tenements outwardly 
 present an attractive appearance, and inwardly, as a rule, will bear a 
 searchlight inspection. This is not only due to the absence of drunken- 
 ness on the part of the wage-worker, but also to the deep and sincere 
 interest manifested on the part of the authorities in the physical well 
 being of the working classes. 
 
 EFFICIENCY OF GERMAN PUBLIC OFFICIALS. 
 
 Unlike our American cities, burgomeisters (mayors) and city officials 
 are specially trained for their work and render the highest quality of 
 efficiency. Moreover, such a thing as municipal graft is unknown in 
 Germany. 
 
26 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 The Germans can not understand what seems to them a paradoxical 
 condition in our country. They ask, "How is it that individually you 
 Americans, as a rule, are the soul of honor, yet collectively in your 
 municipal administrations you seem to be a pack of thieves ? ' ' 
 
 In consequence of the efficiency of the German municipal officials and 
 the absence of municipal graft, Germany has the best governed and 
 the best kept cities in the world. The German taxpayer, as a rule, gets 
 a hundred cents worth on the dollar in municipal service and in munic- 
 ipal conditions, as illustrated in a measure by the following statement 
 taken from a recent issue of the Berliner Lokal-Anzeiger: 
 
 At a sitting of the Berlin municipal council held on Friday, Dr. Steiniger, the 
 city chamberlain, announced that the financial year had closed with the substantial 
 surplus of ten and a half million marks. 
 
 Direct taxation has brought 4,300,000 marks more than the estimates. Econ- 
 omies and increased revenue from the City Loan Department realized 1,500,000 
 marks. The carrying out of public works had been accomplished for 2,500,000 marks 
 less than had been anticipated. 
 
 There are yet other reasons why, despite the fact that the average 
 earnings of the unskilled workman do not exceed $5.50 per week and 
 the skilled workman $7.00 per week the year round, that he can, as a 
 rule, keep a savings bank account. 
 
 A German workman occupies for himself and family but one room 
 and kitchen for which he pays a rental of about $6.00 a month, which 
 is less than half the rental paid, as a rule, by the workman in our 
 American cities. His wife is often also a breadwinner, and if his 
 children are over fourteen, they likewise as breadwinners add to the 
 family income. In addition to all this, the paternal form of govern- 
 ment exercised by Germany makes provision for the care of the wage- 
 earner and his family in the event of sickness, permanent infirmity, 
 accident or old age. 
 
 GOVERNMENTAL PATERNALISM. 
 
 Perhaps the greatest of all the great achievements of Bismarck was 
 the founding of the sick, the accident and the old age pension funds 
 which he initiated. One reason why so few beggars are to be seen in 
 Germany is because the sick and the old are well cared for. And this 
 is done in a way not to destroy the self-respect of the man. He is in no 
 way pauperized by being given what may be termed uncharitable 
 charity. He himself must contribute in the days of his health and 
 strength to the creation of a fund that in the days of sickness and old 
 age will place him beyond the need of charity, and insure him the 
 best medical treatment for his physical ailments and a roof over his 
 head when his days of physical usefulness are over. All this is accom- 
 plished at so trifling a tax upon him that he scarcely feels it. The lowest 
 paid wage-earner contributes to this fund less than two cents a week and 
 
GERMANY. 27 
 
 the highest paid wage-earner pays a little less than five cents a week. 
 Equivalent amounts are also paid into the fund by the employers as 
 their contribution to the sick and pension fund for employees. 
 
 These trifling payments afford an annual income for the city of Berlin 
 alone, to say nothing of the rest of the empire, of $2,500,000, not includ- 
 ing a further income of about $500,000 interest on the reserve fund of 
 $18,500,000 which has been accumulated since its creation. The reserve 
 sick and pension fund for Germany as a whole is over $375,000,000, and 
 the fund is scarcely more than eighteen years old. 
 
 Out of such funds have been erected for the exclusive use of working- 
 men, some of the finest sanatoriums in the world. In fact, the sana- 
 torium for the workingmen of Berlin, located in a magnificent forest 
 about an hour 's ride from the city, is regarded as the finest in the world, 
 and accommodates twelve hundred patients. The German workingman 
 feels that these sanatoriums are his, built partly with his own contribu- 
 tions, and that it can no longer be said that only the rich can enjoy the 
 comforts and the blessings afforded by these modern institutions for the 
 sick. In addition to being cared for at these superb sanatoriums where 
 the highest medical skill is employed, the family of the sick workman, as 
 long as he is an indoor patient, is assisted out of the insurance fund, in 
 amounts, according to the contribution that he has made to the imperial 
 insurance fund, equivalent to from one quarter to three quarters of his 
 full wages. In the city of Berlin alone there are five hundred thousand 
 persons who contribute to the imperial insurance fund. Berlin alone 
 now has over two thousand workers over seventy years of age who are in 
 receipt of old age pensions and about twenty-five thousand persons who 
 receive infirmity pensions. 
 
 The total number of workers insured in the German empire as far 
 back as 1903 was 10,914,333. 
 
 The apprehension that the sick and old age pensions in Germany 
 would paralyze the spirit of thrift, predicted by those who in the begin- 
 ning opposed the measure, has not been realized, as shown, for example, 
 by the colossal increase in the German savings banks deposits from 1894 
 to 1904. In 1894 the savings deposits in Germany were $980,556,375. 
 In 1904 they were $1,902,436,560, nearly double. 
 
 As pointed out by a recent writer : 
 
 It is held in Germany that the state does not exist merely to afford protection 
 to the better situated, but also to watch over and to administer to the requirements 
 of the working classes. The first step taken was to ward off the weight of the 
 consequences accruing from accidents and sickness, and the result of the labor in this 
 direction was the passing of the workman's sickness insurance and the workman's 
 accident insurance bills. 
 
 The German government is unceasingly occupied with the problem of providing 
 for the comfort and well being of the sixty million Germans now living in Germany 
 and is not leaving to succeeding generations unaided, the task of continuing the 
 solution of this problem. 
 
28 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 In addition to the provisions made by the government for the well- 
 being of its working people, many employers voluntarily cooperate. 
 They not only pay into the state insurance funds the amounts required 
 by law. but many, especially among the large employers, have private 
 pension funds, and have erected model workingmen's dwelling houses, 
 workingmen's free libraries and bathing houses. Thus, do we find the 
 State, the employers, and the employees cooperating together for fur- 
 ther industrial progress and advancement. 
 
 While the provisions against sickness and old age have in nowise 
 lessened disputes between capital and labor, they have nevertheless 
 bettered the conditions of wage-earners and insured them in case of old 
 age, sickness, or misfortune from becoming objects of charity. 
 
 On the other hand, as stated in his recent report by American Consul 
 Harris of Chemnitz : 
 
 Experience has shown in Germany as elsewhere, that the more the manufacturer 
 learns to differentiate between a man and a machine, the more he is likely to reduce 
 the danger of strikes. 
 
 In her sincere interest in the welfare of the working people, Germany 
 has given the world a great object lesson by which others nations are 
 sure to profit. Austria now has under advisement an old age pension 
 act, and the latest advices from England tell that Parliament has just 
 passed an old age pension bill. 
 
 I venture the prediction that the day is not far distant when the 
 United States will likewise see the wisdom of insuring its work people 
 against sickness and old age, thus minimizing much misery and suffer- 
 ing, to say nothing of saving the great waste ever going on in the way of 
 duplicated and mismanaged private American charities supported for 
 the relief of the sick and the old. 
 
 The possible argument that we do not want paternalism in our 
 government will in my opinion not hold in this connection, for the 
 reason that, in a measure, we are already paternalistic, as evidenced by 
 our free dispensaries and free county hospitals, which, however, tend 
 to pauperize because they are conducted in the nature of public 
 charities. The compulsory contributions made by German employers 
 and employees removes the thought in Germany that the recipient is an 
 object of charity. 
 
 WAGES AND COST OF LIVING. 
 
 As elsewhere in Europe, the tendency of German wages in recent 
 years has been upward until checked by the recent depression, which 
 has been keenly felt in the industries of Germany. The cost of living, 
 however, has also progressively increased, but not as much as the rise 
 
 m wages. 
 
GERMANY. 29 
 
 LABOR ORGANIZATIONS. 
 
 Organization has gone forward with rapid strides in recent years 
 among employers as well as among employees. The organization which 
 corresponds with the American Federation of Labor now numbers 
 1,888,000 members, and is still growing. 
 
 In common with the Austrian wage-earner the workingmen of 
 Germany take an active interest in politics, and under the title of 
 "Social Democrats" wield considerable political power. 
 
 Because of the fact that the government is anti-socialistic, and because 
 of the further fact that the labor unions and the Social Democratic 
 party are composed practically of the same membership, the government 
 is not very friendly to labor unions. The government at times has 
 shown its hostile spirit toward labor unionism, but thus far has not been 
 able to cripple labor organizations by the passing of unfriendly legis- 
 lation. 
 
 While many of the smaller employers, as well as the employers in 
 the printing, bookbinding and building trades, have been compelled to 
 recognize the unions, the great German employers of labor, including 
 the employers in the coal, the metal and the textile industries, have 
 steadily and persistently refused to deal with or to recognize unionism. 
 Employers in these industries, with three million wage-earners on their 
 aggregate pay rolls, are strongly organized and persistently refuse to 
 deal with or to recognize labor organizations. They contend that union 
 wage-earners, as a rule, are also members of the Social Democratic 
 party, which has persistently and needlessly antagonized capital and 
 capitalists, and that so long as this condition prevails they will refuse to 
 recognize unionism. Exceptional cases are found where large employ- 
 ers will recognize unions composed of .their own workmen. For example, 
 Messrs. D. Peters & Co. of Elberfeld, manufacturers of woolen and cot- 
 ton stuffs, have a council composed of nine employees, four of whom are 
 nominated by the employers and five are elected by the workmen, with 
 a member of the firm as president, who, however, has no vote. All differ- 
 ences arising in relation to hours of labor or wages are referred to this 
 council, whose decisions have ever been accepted by both parties. This 
 plan seems to have worked to the satisfaction of all concerned. 
 
 STATE INTERVENTION IN LABOR DISPUTES. 
 
 The State has thus far refrained from even attempting to exercise any 
 coercion in forcing settlements in labor disputes. It is a strong believer, 
 however, in the exercise of conciliatory measures. With this end in 
 view a law went into effect in 1907, creating what has since become 
 known as the arbitration courts for trade disputes. There are between 
 four hundred and four hundred and fifty such courts throughout Ger- 
 
30 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 many. The court in Berlin has eight departments with a judge for each 
 department. These courts have three separate and distinct functions: 
 
 a. To decide disputes between individual workmen and their em- 
 ployers. 
 
 b. To conciliate in disputes between bodies of workers and their 
 employers. 
 
 c. To give expert information and opinions, in reference to trade 
 questions to legislators and to state executives. 
 
 Under the law the court awaits the registering of a complaint by either 
 party to a trade dispute, but it also has the power to take the initiative 
 and to summon both parties to a hearing, subject to a fine of twenty-five 
 dollars for failure to respond to such summons. 
 
 There is no penalty for either side refusing to answer questions put 
 by the court or for refusing to enter into negotiations with the other 
 party, even at the instance of the court. 
 
 The theory of the law is that one half the battle in a labor dispute is 
 won in the direction of peace if both parties can be brought together 
 by a third party, who in this instance is the court, who is disinterested 
 and in whom both sides can place confidence. 
 
 I was informed by Herr Gustav Melisch, Chief Secretary of the Indus- 
 trial Court of Berlin, that seventy per cent of the disputes are submitted 
 to this court and that as a rule the decisions rendered are accepted, 
 although under the law there is no obligation to do so, but that most cases 
 are settled by compromises effected between the parties in dispute, 
 while the case is in course of investigation and prior to the court decision. 
 
 Herr Melisch made the further statement that mutual deference and 
 respect is shown in the discussions of labor questions before the court 
 between the representatives of employers and employed, and that the 
 labor contracts frequently resulting from these court investigations, 
 some of them for a period of three to five years, are mutually respected. 
 
 STANDING OF GERMAN LABOR LEADERS. 
 
 Herr Melisch took occasion to speak in high terms of the German 
 labor leaders with whom his official duties have brought him into con- 
 tact. He spoke of them as being men of the highest integrity and char- 
 acter, and as being universally respected even by large empk^ers whose 
 policy it is not officially to recognize them. 
 
 ATTITUDE OF EMPLOYERS TOWARD STATE INTERVENTION. 
 
 The large employers of labor as a rule will not recognize this court of 
 arbitration and conciliation, and its labors generally have been thus 
 confined almost wholly to minor employers and to individual cases. An 
 exceptional case happened recently, however, which was in the nature of 
 a great stroke of good work on the part of the court. A national strike in 
 
GERMANY. 31 
 
 the building trades was threatened throughout Germany. Through the 
 efforts of this court a hearing was held at which representative building 
 contractors and wage-earners from various parts of Germany were pres- 
 ent. The conference continued for many days, and finally, through the 
 good offices of the court, mutual concessions were made and an agree- 
 ment for a period of years entered into, which insures industrial peace 
 in the building trades for a long time to come. 
 
 OPEN SHOP. 
 
 Excepting in the printing trades, the open shop prevails throughout 
 Germany, though in many shops where the great majority are union 
 workers it is said that life by them is made a burden to the nonunion 
 worker. 
 
 COMPULSORY ARBITRATION. 
 
 I find that in Germany, as in Austria, employers and employees, as a 
 rule, are opposed to compulsory arbitration. Official Germany seems 
 likewise opposed to compulsory arbitration. 
 
 Herr Delbruck, Minister of Commerce and Labor, made the statement 
 that the State does not favor compulsory arbitration for fear that it 
 might find itself unable to enforce its decisions, and that a failure to do 
 so would bring the administration into contempt. 
 
 German labor leaders are opposed to compulsory arbitration on the 
 grounds that they feel that the State is not in sympathy with labor 
 unionism, and that therefore the leanings of a compulsory court would 
 most likely be toward the interests of the employers. 
 
 Nor are labor leaders here in favor of labor unions becoming incor- 
 porated for fear of .being legally harassed by employers' associations. 
 
 German employers, as a rule, oppose compulsory arbitration because 
 they want the State to keep hands off from their disputes with labor, 
 believing as they do that in the end they can get better results and secure 
 better terms for themselves without State interference. 
 
 CHAMBERS OF LABOR. 
 
 His Excellency Delbruck, the Minister of Commerce, stated that the 
 draft of a law is under consideration regarding so-called ' ' Chambers of 
 Labor." These chambers of labor are to serve as courts of arbitration 
 wherever special arbitration courts for trade disputes do not exist, or if 
 the employers and employees are engaged in the districts of several 
 existing arbitration courts, or if no agreement can be reached concerning 
 a dispute in the ordinary court for trade disputes. 
 
 The composition for the proposed labor councils, their functions and 
 powers, have not yet been fully determined upon, beyond the general 
 idea that they are to be composed partly of employers and partly of 
 employees. 
 
32 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 TAXES. 
 
 By permission of American Vice-Consul General Charles A. Kisdorf 
 of Frankfurt, Germany, I include the following statement in this report 
 as showing the burden of taxes imposed by the several countries named 
 therein on their respective consumers : 
 
 FOOD TAXATION IN THE UNITED KINGDOM, FEANCE, GEBMANY, AND THE UNITED STATES. 
 
 In view of the various projects of taxation in Germany, an essay with the above 
 title by S. Rosenbaum seems worthy of interest. The author examined into the 
 duties on groceries, sugar, tobacco and food of all kinds and the internal taxation 
 on liquors, tobacco and food in the several states, and comes to the following results : 
 
 The burden of taxation is shown in the following schedule, the figures meaning 
 dollars per capita of the population 
 
 United United 
 
 Kingdom. France. Germany. States. 
 
 1870 $6 35 $3 60 $4 55 
 
 1875 6 55 5 01 $1 45 3 59 
 
 1880 . 5 92 5 60 1 79 3 54 
 
 1885 6 07 5 59 2 58 3 40 
 
 1890 5 92 5 97 3 40 3 74 
 
 1895 6 02 6 22 3 01 2 77 
 
 1900 6 85 6 50 3 54 4 61 
 
 1903 7 82 6 22 3 54 4 28 
 
 1906 7 29 6 17 3 79 4 27 
 
 This table, covering a period of thirty-six years, shows interesting details. Thus, 
 in America, the burden of taxation has decreased; the Americans now pay less per 
 capita than in the year 1870. The development in England is quite similar, but it 
 has been disturbed by the financial effects of the war in Transvaal. Even so the 
 increase is moderate in this country of free trade. 
 
 Quite different results are shown in France and Germany, where the military 
 preparations have been multiplied since 1871. In France this taxation has increased 
 about one hundred per cent, and in Germany also there is a rapid rise. These figures 
 form a good argument for the friends of peace. 
 
 The author also calculates the amount of taxes derived from food, liquors and 
 tobacco in different countries. 
 
 Food and 
 
 Groceries. Liquors. Tobacco. 
 
 England $1 58 $4 22 $1 50 per capita. 
 
 France 1 99 2 28 1 84 per capita. 
 
 Germany 2 38 1 07 34 per capita. 
 
 United States _ 83 2 58 87 per capita. 
 
 According to this schedule, the taxes on food are higher in Germany than in any 
 other state. Still there is a fault in this calculation : only the revenue is taken 
 into consideration and no allowance is made for the increase in prices of domestic 
 products caused by high customhouse duties. The amount of duty collected for corn 
 does not show the real burden of taxation resting on the population ; the entire 
 consumption of corn should be taken into consideration, and then we find quite 
 different results in France and Germany, and even more benefit to England and 
 America. It must also be borne in mind that Germany is a federal state, and that 
 the states, countries, and communities frequently impose taxes on meat, beer, bread, 
 etc., which are not included in this calculation. 
 
BELGIUM. 33 
 
 BELGIUM. 
 
 Though one of the smallest nations in Europe, Belgium per capita 
 is the greatest industrial country in the world. With a population of 
 only seven millions, it does a foreign import and export business 
 aggregating $14,000,000,000. Its industrial army numbers 1,500,000 
 ouls, and is steadily growing. Over sixty per cent of all its manual 
 workers are engaged in industrial pursuits, which are the main support 
 of the nation. 
 
 Unlike the German and Austrian workers, strong drink has a grip on 
 the wage-earner of Belgium. As a consequence, slums are to be found 
 in its larger industrial centers, more especially in Brussels, where the 
 lower order of wage-earners are more or less dissolute and thriftless. 
 Many parents among them spend their week's earnings in drink and 
 permit their children to go neglected and uncared for. 
 
 There is also much illegitimacy among this element of the population. 
 The interesting feature in this connection, however, lies in the fact that 
 as a rule these children are later legitimatized by marriage. 
 
 The Belgium nation is composed partly of French and partly of 
 Flemish. A goodly part of what is now known as Belgium came under 
 the dominion of Holland and the remainder under France prior to 1830, 
 when the kingdom was brought into independent existence. 
 
 The Flemish wage-earners are hardworking, but stolid and obstinate ; 
 fully half of them are illiterate and largely governed by the priesthood. 
 The French workman, who represents nearly two thirds of the industrial 
 force of Belgium, on the other hand is exceedingly bright and clever. 
 
 LABOR UNIONS. 
 
 The Belgium labor unions have, many of them, established for them- 
 selves the reputation of being contract breakers. This has done much to 
 destroy the confidence of employers in them and has greatly added to the 
 normal difficulty usually experienced by labor unions the world over, in 
 getting recognition from employers. 
 
 Labor leaders in Belgium have become awake to this fact, and some 
 the central labor organizations have adopted the German system of 
 withholding support from such local unions as violate their contracts 
 with employers. 
 3 
 
34 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 WAGES. 
 
 The general tendency of wages has been upwards. For example, the 
 increase in wages of textile workers has been about twenty per cent. In 
 the iron trades the increase in wages during the past ten years has been 
 from thirty to forty per cent. Despite all this, the wage standard of 
 Belgium is lower than that of most other European industrial countries. 
 To illustrate this, in Brussels, where wages, generally, are the highest 
 in Belgium, skilled workers, as a rule, earn an average of eighty cents a 
 day, and unskilled workers an average of sixty cents a day. 
 
 In the iron industries the rate is somewhat higher, skilled workmen 
 averaging ninety cents a day, and unskilled seventy cents a day. 
 
 Street car employees in Brussels earn a minimum of sixty-five cents a 
 day, and after several years' service a maximum of ninety cents a day, 
 with a small pension after twenty years ' service. 
 
 Saleswomen employed in the great cooperative department store of 
 Brussels, which claims to pay higher wages than its noncooperative com- 
 petitors, earn at the start $1.50 a week and after three months' service 
 $2.25 a week, with an increase of $2.50 a month for every two years ' 
 additional service until a maximum wage is reached of $6.70 a week; 
 this, after a service of fourteen years. 
 
 A male head of department in this same enterprise, which position 
 carries with it much responsibility and demands years of training, earns- 
 about $11.00 a week. 
 
 Despite the advance in Belgium wages during the past several years, 
 the wage standard of Belgium is lower than that of France and other 
 European countries. I was informed by a manufacturer who has a 
 large plant in Belgium and one also in France, that his Belgium wage 
 rate was thirty-five to forty per cent lower than that paid by him in 
 France. 
 
 Belgian employers successfully fight foreign competition with low 
 wages. Collective wage bargaining is rarely met with in Belgium. 
 Aside from the building trades, where a minimum wage is fixed by the 
 trade, the bargaining between employer and employee, as a rule, i& 
 individual. 
 
 COST OF LIVING. 
 
 The cost of living during the past several years has steadily been 
 upw r ard. The consensus of opinion among those who have made inves- 
 tigations along these lines is that the increased cost of living is fully 
 twenty-five per cent. Nevertheless, it is maintained that food products 
 are cheaper than in France or elsewhere on the Continent, due to the 
 fact that, aside from customs' duties placed on a few luxuries, Belgium 
 is practically a free trade country. 
 
BELGIUM. 35 
 
 GROWTH OF UNIONISM. 
 
 Labor unionism presents a steady and constant growth. Organized 
 labor now has a membership of about 300,000. 
 
 Some of the industries are better organized than others. The best 
 organized industries are the building trades, the textile industries, and 
 the iron workers. 
 
 Belgian union labor is divided into two main camps, the Socialists 
 and the Christian Labor party. The former represents about ninety 
 per cent of organized labor, and the latter about ten per cent. 
 
 To quote the statement made by the secretary of the Christian Labor 
 party: 'The socialistic labor unions stand for anti-capitalism, col- 
 lectivism and aggressiveness in dealing with employers; the Christian 
 Labor party stands for individualism, conciliation and arbitration in 
 labor disputes." 
 
 The Christian Labor party is five years old, and now numbers between 
 thirty and forty thousand members. During that period, according to 
 the statement of its secretary, it has had twelve labor disputes, all of 
 which were settled by arbitration. It has yet to deal with its first strike. 
 
 The Socialist Labor members are commonly know r n as the "Beds" 
 and the Christian Labor members as the ' ' Yellows. ' ' Many among the 
 Socialists claim that the Christian Labor party is fathered by the 
 Catholic Church and by the employers, both of whom are regarded by 
 the Socialistic members as enemies to socialism. 
 
 The feeling between the "Reds" and the "Yellows" is more or less 
 unfriendly, if not bitter. As a consequence, when "Reds" and 
 "Yellows" are thrown together on the same job, there is friction. The 
 ; 'Reds" will work with the "Yellows" only when compelled to, and 
 then, if they happen to be in the majority, things are often made most 
 unpleasant for the ' ' Yellows. ' ' While there are few, if any, employers 
 who will recognize the ' ' Reds, ' ' there are many who will recognize and 
 deal with the "Yellows." 
 
 Though the latter represent but about ten per cent of the organized 
 Belgian labor unionists, it is claimed by them that they are steadily 
 growing in strength, and that in a few years they will outnumber the 
 'Reds." The "Reds" seem to apprehend this and support a literary 
 bureau for the express purpose of controverting the claims of their 
 rivals. 
 
 Yet another marked difference in the policy of the two labor factions 
 
 that the "Reds" believe that the betterment of labor conditions 
 
 .ust come largely through political effort. Much of their time and 
 energy has therefore been devoted to political campaigning, and they 
 now have a showing of seven members in the Upper House and thirty 
 members out of one hundred and sixteen in the lower legislative body 
 of the realm. 
 
36 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 SUFFRAGE. 
 
 The "Reds" are making an heroic effort to have the existing law of 
 suffrage changed, which provides for cumulative votes ; that is, all males 
 twenty-five years of age have one vote, if married they have two votes, 
 and if also taxpayers they have three votes. This provision they con- 
 tend militates against the wage-earner, and is in favor of the class who 
 can afford to marry early in life and who have something on which to 
 pay taxes. The ' ' Reds ' ' want the law of ' ' one man, one vote, ' ' without 
 further qualification. The 'Yellows," on the contrary, are firmly 
 opposed to mixing labor problems with politics, and steadfastly oppose 
 such action on the part of their membership. 
 
 APPRENTICES. 
 
 As in the United States, the Belgium labor unions limit the number 
 of apprentices to be admitted to any one trade. This policy it is 
 claimed by President Carlier of the Brussels Children's Society has 
 tended largely to increase juvenile criminality, which in Belgium, as 
 elsewhere, is becoming a very grave problem. An effort is being made 
 to meet this problem by the establishing of technical schools. 
 
 RELATION OF EMPLOYERS AND MEN. 
 
 The relations between employers and employees in various industries 
 are getting more strained. Notable exceptions are the building and the 
 iron trades where the relations are cordial. There has not been a strike 
 in the iron trade for thirteen years. 
 
 EMPLOYERS' ASSOCIATIONS. 
 
 The Belgian employers have many and varied associations. These, 
 as a rule, have for their main purpose the interchange of ideas on com- 
 mercial questions. No systematic plan has as yet been adopted by 
 them for defense against strikes, except in special cases, when tem- 
 porary organization has been effected to meet particular cases. The 
 idea of organizing to meet strikes is growing and will probably 
 crystallize in the near future. Labor leaders express satisfaction at the 
 thought of employers organizing for the purpose of defense measures 
 against strikes, claiming that such action on the part of employers 
 would afford stronger ground for appeal to labor to organize more 
 widely. 
 
 OPEN SHOP. 
 
 Aside from the printing and diamond cutting trades, "open shop" 
 prevails throughout Belgium, although in the glass industry it is 
 claimed that nonunion workers are persecuted by unionists. 
 
BELGIUM. 37 
 
 STRIKES. 
 
 During 1907 strikes were more frequent in Belgium than in previous 
 years, but since the depression has set in, from which Belgium in com- 
 mon with other European countries is suffering, they are diminishing. 
 
 Unionists seem to hold a grievance against the government because 
 of its policy to furnish troops in anticipation of a strike. It has been 
 noted that the older and wealthier unions oppose strikes, while the 
 younger and financially weak unions favor them. 
 
 It was interesting to get the views of various labor authorities as to 
 the best remedy against strikes. Mr. Carlier, a large coal mine owner, 
 and one of the most intelligent employers in Belgium, gave it as his 
 opinion that the remedy lies in higher education of the wage-earner, 
 and in legislative measures that will establish labor union responsibility 
 for the protection of employers, and for the protection of such other 
 wage-earners as are innocently injured by senseless and needless strikes. 
 The secretary of the iron workers' union gave it as his opinion that the 
 remedy for strikes lies in profit sharing. Minister of Labor Hubert 
 expressed the opinion that withholding a part of the wages as a guar- 
 antee of good faith tends to diminish strikes, and pointed out that in the 
 Belgium glass industry employers withhold one fifth of the wage with 
 good results. The secretary of the Christian Labor party believes that 
 arbitration is the missing link, and the editor of a leading Belgian 
 socialistic paper expressed the opinion that collective contracts of from 
 one to three years would tend to make strikes much more infrequent. 
 
 COMPULSORY ARBITRATION. 
 
 Nearly every one interviewed in Belgium seemed opposed to com- 
 pulsory arbitration as a strike remedy, some going so far as to say 
 that to take away from the wage-earner the right to strike, which would 
 follow under compulsory arbitration, would lead to endless rioting if not 
 to open rebellion. 
 
 Wage-earners opposed compulsory arbitration on the grounds that 
 they could not hope for a fair deal at the hands of courts who, they 
 believed, as a rule, are in sympathy with capitalistic employers; and 
 employers opposed compulsory arbitration on the grounds that the 
 State should keep its hands off labor disputes, and partly because they 
 did not believe that the public would generally stand behind and sup- 
 port the court decisions, and partly because they did not believe that 
 the court decisions could be enforced against a great body of workmen 
 who, as a rule, would accept the decisions only if they happened to be 
 in their favor. One exception to this point of view was Prof. Emile 
 Waxweiler, Director of the Solway Institute of Sociology in Brussels, 
 one of the greatest Belgian authorities on questions of this character. 
 
38 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 He expressed the opinion that the only logical and ultimate remedy for 
 strikes and lockouts is compulsory arbitration, and that it was only a 
 matter of time when society would find itself obliged in self-defense to 
 adopt this method in order to maintain industrial peace and to prevent 
 the enormous economic losses, to say nothing of the physical suffering 
 and misery to which countless innocent people are subjected by strikes 
 and lockouts, many of which are the result of individual self-seeking or 
 passion, or bad judgment, rather than a desire to obtain equity and 
 justice for the many. 
 
 The organized wage-earners of Ghent who number about fifteen thou- 
 sand, and who rank among the most intelligent workmen of Belgium, are 
 another exception. This was the first organized labor body that I had met 
 in all my travels through Europe which is in favor of compulsory arbi- 
 tration. On mentioning this to the secretary, he answered that the Ghent 
 wage-earners had for years carefully followed and studied the labor 
 struggles of the British wage-earner, and they had noted that despite all 
 the losses and all the sacrifices made on the part of the English workman 
 in conducting his strikes, he was not much better off than he was in the 
 beginning, and that the conclusion had been forced on the Ghent 
 workman that on the whole the strike is not the way through which 
 the wage-earner can hope to improve his condition, that the losses 
 he suffers often more than offset his gains, and that labor disputes, 
 like civil disputes, should be settled in a peaceful manner without need- 
 less loss to employer or employee. Existing conditions and general 
 sentiment in Belgium make it very improbable that any attempt at legis- 
 lation having compulsory arbitration for its end is likely to succeed. 
 Professor Waxweiler and the Ghent labor unions in their views seem 
 far in advance of the ideas of the rest of those in Belgium who are inter- 
 ested in labor problems. Some arbitration legislation is contemplated 
 and is likely to be brought before the Belgian Parliament at an early 
 day, but so far as I could learn, the proposed arbitration is to be purely 
 voluntary in character, despite the fact that experience, the world over, 
 has demonstrated that purely voluntary arbitration for the settlement 
 of labor disputes has been a failure. 
 
PRANCE. 39 
 
 FRANCE. 
 
 The organization of labor in France is still in a very rudimentary 
 condition. Sixty years ago, when trades unions in England were already 
 free from legislative control, it was still an offense against common law 
 for a handful of French workmen to take joint action with a view to 
 obtaining better conditions from their employer; and it is only since 
 1884 that trades unions in France have been recognized. In some 
 countries this might have been a sufficiently long period to permit of 
 a fair amount of settling down ; but the testimony of practically all the 
 experts whom I have consulted shows that the conditions in France are 
 peculiarly unfavorable to the efficient working of the machinery. The 
 French workman's strong aversion to discipline and restraint tends, 
 in the first place, to keep him outside of any organization, and the 
 result is that the disciplined forces of labor represent only a small 
 fraction of the great body of workers. Side by side with impatience of 
 control there appears to be, in the French workman 's character, a deep- 
 rooted mistrust of those in authority, whether his own elected repre- 
 sentatives or government officials. No real confidence is placed in any 
 one man or small body of men. There are innumerable splits and dis- 
 sensions, but there is little united action. 
 
 No other country in Europe faces so difficult a situation as does 
 France in dealing with labor problems. This is due not only to the 
 fact that politics and labor questions in France are hopelessly mixed, 
 but also because of the peculiar temperament of the French employer 
 and the French wage-earner. 
 
 The leading French labor leaders frankly admitted to me that the 
 French workman is mercurial, excitable, impetuous, hasty, lacking in 
 self-control, and. therefore, very hard to discipline. A most conserva- 
 tive and level-headed French labor leader said to me that the tendency 
 of the French wage-earner is first to delegate power to his leaders, and 
 then at the supreme moment to snatch it out of their hands. This 
 peculiar temperament leads to many reckless and ill-advised strikes. 
 
 The attitude and the temperament as a rule of the French employer 
 also adds no little to the difficulty of the situation. A leading authority 
 on the question, says, "French employers and employees, as a rule, 
 don't know each other and don't trust each other. Employers, as a 
 rule, are unwilling to discuss with workmen, and workmen are unwilling 
 to respect arrangments made in their name. ' ' 
 
 The result under these circumstances can not be otherwise than very 
 strained relations between employers and their workmen. 
 
40 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 SOCIALISM. 
 
 The labor question in France is hopelessly entangled with socialism,, 
 and socialism in that country stands for political action. 
 
 At the last general French election the Socialists cast 896,000 votes 
 and they have to-day seventy-six representatives out of five hundred 
 and eighty-four members of the lower house. This has brought about 
 a tendency on the part of the French workman to devote his energies 
 to politics rather than to economic unionism, and this in turn has led 
 to much disappointment on the part of many socialistic wage-earners 
 who expected much in the way of a betterment in their material con- 
 ditions as the result of political action, and who now advocate the direct 
 and sudden strike instead of looking for relief to politics. This strong- 
 leaning in the direction of the strike is encouraged by the anarchistic 
 elements among the Socialists and the unionists. 
 
 WAGES. 
 
 The tendency of wages in France since 1906 has been upward in the 
 printing and building trades, and either stationary or downward in all 
 the other trades. 
 
 The average wage for an unskilled workman in Paris is eighty to 
 ninety cents a day and for skilled labor from $1.60 to $2.00 a day. The 
 average wage for all of France in the printing trades is ninety cents a 
 day. The building trades pay sixteen to eighteen cents an hour, with 
 ten hours work a day in summer, and about one hundred and ten hours 
 work a month in winter. Pick and shovel men earn from 75 cents to 
 $1.10 a day in the provinces. In Paris, owing to the extraordinary 
 demand caused by the building of the subway, these workers have been 
 receiving from $1.25 to $1.50 a day. Paris wages, however, are not 
 a guide for the wages in France. 
 
 The secretary of the Labor Federation made the statement that in the 
 making of clay pipes, for example, at Omar, a town about one hundred 
 and twenty miles from Paris, a team of three, consisting of a man, 
 woman and boy, will earn collectively but $5.60 a week, with a working 
 day of twelve hours. A strike is now on in this industry for an increase 
 in wages for the team of five cents a day. He also stated that women 
 are employed in the provinces in making watch chains, for example, 
 for which they receive twenty-five cents a day, while the same sort of 
 work in Paris commands a wage of $1.50 a day. 
 
 HOURS OF LABOR. 
 
 The legal working day in France is twelve hours, though the iron 
 workers have a ten-hour day, and the printing trades as the result of a 
 national strike in 3906 have a nine-hour day. 
 
FRANCE. 41 
 
 COST OF LIVING. 
 
 All sides agree that the cost of living in France has increased mate- 
 rially, some authorities placing the increase at from ten to fifteen per 
 cent, and some putting it as high as from twenty-five to thirty per 
 cent. Figures published during my sojourn in Paris by the Assistance 
 Publique, or Poor-Law Department, which manages the public hospitals 
 and is consequently a very large buyer of all kinds of food supplies, 
 show that the cost of living for foodstuffs has increased by eighteen per 
 cent during the last four years. 
 
 LABOR UNIONS. 
 
 The situation in France of labor unions is unlike that of any other 
 country in Europe. The governmental attitude toward labor unions 
 seems eccentric and illogical. To illustrate: On the one hand we find 
 the municipality of Paris, so far back as 1891, erecting a splendid and 
 costly labor temple, which has since been occupied by two hundred and 
 fifty labor unions, not only free to them of all expense, but with an 
 annual subsidy of $22,000 for the conduct of a free labor bureau. This 
 would indicate that the political authorities are in sympathy with 
 organized labor, and desire to aid and encourage it. On the other hand, 
 however, labor unions are not permitted under the law to own prop- 
 erty. The only explanation offered for this strange attitude is that the 
 authorities fear that the ownership of property would give too much 
 strength and power to the unions. 
 
 The absurdity of this provision seems to have forced itself on the 
 attention of legislators, some of whom are now endeavoring to have 
 this law repealed, but strange to say, labor unionists, as a rule, do not 
 want the law changed. They prefer that unions shall not own property 
 in order to remain legally irresponsible. 
 
 It is difficult to get reliable information about the actual strength of 
 labor unions in France. The government depends for its information 
 upon the unions, who in recent years have adopted the policy of either 
 withholding or giving misleading information in order to hide their 
 real strength. However, from statements made to me by labor union 
 secretaries, it is safe to say that there are from 800,000 to 900,000 
 organized wage-earners in France, out of which number there are r 
 perhaps, 500,000 in the General Federation of Labor. 
 
 The increase in the membership of the General Federation of Labor 
 for this year of 140,000 has been unusually large, due to the fact that 
 50,000 coal miners enrolled themselves as members. Even the opponents 
 of unionism in France concede that it is growing, but some of them 
 maintain that such growth is not so rapid as in other countries. 
 
 The labor unionists in France are far more revolutionary than those 
 of Germany or Italy, and their more recent aggressive methods in 
 
42 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 endeavoring to obtain favorable labor legislation and to enforce their 
 demands upon employers, have at times led to serious riots, all of which 
 have tended to antagonize public sentiment and to create a growing 
 hostility toward organized labor. 
 
 The claim is made by employers that French labor leaders strive to 
 foment trouble by frightening employers and by dominating labor. The 
 further claim is made by employers that there are those among the 
 "Reds" (the Socialists) who are constantly preaching to wage-earners' 
 that they should diminish their output 
 
 a. Because they say that a small wage deserves only a small effort. 
 
 &. To make work for more hands. 
 
 c. In order to cripple and ultimately destroy capitalistic industries, 
 and thus sooner pave the way for socialism. 
 
 As a rule, employers do not recognize the labor unions and per- 
 sistently refuse to deal, or to discuss matters with their representatives. 
 
 EMPLOYERS' ASSOCIATIONS. 
 
 During the past three years there has been a very pronounced move- 
 ment on the part of employers to organize in order collectively to meet 
 strikes. Several mutual strike insurance associations have been organ- 
 ized among employers. One of these associations within two years has 
 accumulated a strike fund of $3,000,000, and another association carries 
 strike risks of over $7,000,000. When an employer has a strike he is 
 allowed, during the life of the strike, a daily amount to cover his 
 operating expenses, minus the pay roll of the strikers. 
 
 It is claimed that the organization of employers and the existence of 
 the strike insurance fund have had an important influence in restraining 
 what would otherwise have been many reckless and unwarranted strikes. 
 
 CLOSED SHOP. 
 
 The "closed" shop, that is, the shop where union workmen exclusively 
 are employed, is hardly known in France. Every shop, as a rule, is 
 "open," and the employer engages union or nonunion help at his 
 
 pleasure. 
 
 PIECEWORK. 
 
 Piecework has been introduced in more recent years with seeming 
 success. The managing director of one of the largest iron works in 
 France made the statement that he had adopted the piecework system 
 with the result of an increased labor efficiency of fully thirty-three 
 per cent. 
 
 COLLECTIVE BARGAINING. 
 
 Individual bargaining between employer and employee seems to be 
 the rule in France. Collective bargaining has as yet made little 
 progress, and by many employers is regarded as impracticable in 
 France, due for one reason to the fact that under the law labor unions 
 
FRANCE. 43 
 
 are forbidden to own property, thus destroying their financial responsi- 
 bility. The printing trades are an exception to this rule. In 1906 they 
 entered into a five years' collective contract with their employers, which 
 thus far has been faithfully observed. 
 
 STRIKES. 
 
 Strikes in France have steadily increased. Mons. Calliard in his 
 report to the Labor Committee of the Chamber of Deputies, December 
 27, 1907, calls attention to the following comparative facts : 
 
 No. of No. of No. of 
 
 Strikes. Establishments. Strikers. 
 
 1897 356 2,568 68,875 
 
 1907 1,275 8,364 197,894 
 
 Before 1899 the average yearly strikes in France were 438, involving 
 79.000 strikers. From 1899 to 1906 the average yearly strikes numbered 
 801, involving 192,000 strikers. 
 
 He (Mons. Calliard) makes the statement that one explanation for 
 this increase in the number of strikes is the fact that the anarchistic 
 elements among the wage-earners have largely joined the labor unions 
 since 1899. This element regards the strike as the chief means of 
 education toward political revolution. While not disdaining partial 
 strikes they prefer general strikes as conducive to more speedily bringing 
 on a general revolution. 
 
 The Anarchists. Calliard goes on to point out, use economic questions 
 as pretexts for strikes, their main purpose being political revolution. 
 He calls attention to the fact that through the agitation of the 
 anarchistic element among the labor unionists, a general strike through- 
 out France was declared for an eight-hour day on May 1, 1906 ; 295 
 strikes took place on that day involving 202,507 workers and causing 
 a loss of 3.507.033 days of labor, with disastrous results to labor and 
 to many of their unions. 
 
 Another cause for strikes is the attitude of the French employer who, 
 as a rule, follows the policy of treating labor aggressively instead of in a 
 conciliatory manner. Yet another cause for the excessive number of 
 strikes is the lack of any restraining influence on local labor unions. 
 
 In the United States, as a rule, a local union can not declare a strike 
 without the approval of the central body. This has been found to be a 
 powerful restraining influence on the hotheads of local organizations. 
 In France, as a rule, a majority of those present at a meeting can 
 declare a strike without reference to the central body, which, however, 
 is obliged to support the strike, even though the strike in its judgment 
 may have been ill advised and unwarranted. 
 
 In the electrical labor union the conditions are even more radical, the 
 power to declare a strike being placed in the hands of a secret committee 
 of three, who are supreme in the matter, and whose orders must be obeyed. 
 
44 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 These methods lead to numerous strikes being declared as a result of 
 passion rather than reflection, and in a measure explain why so many 
 strikes in France fail, as is shown, for example, by the following report 
 for the month of April, 1908, the latest available record : 
 
 Strikes won 12 
 
 Strikes compromised 36 
 
 Strikes lost . 51 
 
 Total number of strikes 99 
 
 It is interesting to note the remedy for this condition offered by some 
 of the different parties in interest. The remedy suggested by one promi- 
 nent labor leader was that employers should modify their harsh attitude 
 toward employees. The remedy suggested by one employer was that all 
 employers should refuse to deal with any but their own employees. 
 
 Yet another employer stated that what he had found to be an efficient 
 remedy was to divide his workers into logical groups and to ask each 
 group to appoint delegates with whom he was ready and willing to deal, 
 and who were to be the only parties he would recognize. 
 
 ARBITRATION. 
 
 Arbitration, voluntary or compulsory, has comparatively few advo- 
 cates among French employers or employees. The French employer 
 does not take kindly, as a rule, to the idea of arbitration because this- 
 involves the acknowledgment on his part that labor has a right to a voice 
 in determining w^ages and hours of labor. It seems most difficult for 
 the French employer, as a rule, to bring himself into a frame of mind 
 that will concede this right. 
 
 Wage-earners seem to be averse to arbitration on the theory that the 
 arbitrator with whom would rest the final decision in labor disputes, 
 would be apt to belong to the class in sympathy with employers, and 
 hence the wage-earner would not be likely to get a square deal. 
 
 The unfavorable attitude of both sides to arbitration is emphasized 
 by the fact that in 1892 a law was enacted which provides that in labor 
 disputes the local magistrate may intervene as a conciliator and arbi- 
 trator. The law, however, has remained practically a dead letter as 
 neither side has, as a rule, availed itself of this medium for the peace- 
 ful settlement of their differences. 
 
 The marked difference between the attitude of American labor union- 
 ists and French labor unionists in labor disputes lies in the American 
 policy of resorting to the strike only after every effort for conciliation 
 and arbitration has failed, and the French policy of using the strike as. 
 an immediate resort if the employer refuses promptly to grant the con- 
 cessions demanded. 
 
 Employers and labor unionists in France are a unit in their opposition 
 to compulsory arbitration in the settlement of labor disputes. Labor 
 
FRANCE. 45 
 
 is opposed to it because it claims it would rob it of the right to strike, 
 which it regards as its chief weapon of defense. Employers are opposed 
 to it because they resent any interference in labor disputes on the part 
 of the State, and because, as was pointed out by the editor of the Labor 
 Record, published by the Ministry of Labor, a judge in deciding civil 
 cases is aided .by the law, whereas, in cases of arbitration, he has no 
 such guide, and hence it is almost impossible for the arbitrator to 
 render equitable decisions. 
 
 Despite the pronounced opposition to State intervention in labor 
 disputes on the part of employers and wage-earners, strikes are growing 
 so numerous and so threatening in their revolutionary character in 
 France that the political party in power contemplates introducing a 
 Mil at the next session of Deputies having a mild species of compulsory 
 arbitration in view. This measure is known as M. Millerand's bill for 
 the amicable settlement of disputes regarding labor conditions. 
 
 The bill provides that where the employer does not accede to the 
 demands of the workers, the latter shall state their claims in writing. 
 The employer shall "within forty-eight hours send a written reply giving 
 the names of the arbitrators he selects. Failing in this, the wage- 
 earners may legally declare a strike. 
 
 If, on the other hand, the employer names arbitrators, the workmen 
 in turn shall within forty-eight hours make known the names of the 
 arbitrators chosen by them. If the decision of the arbitrators be not 
 made known within six days, the workmen may legally strike. No 
 strike to be declared unless a secret ballot has been taken. A strike 
 being declared, the labor council (which is a body consisting of repre- 
 sentatives of employers and employees, previously elected by their 
 respective sides) shall be called in to settle the dispute, and their 
 finding shall rank as an arbitrator's award. 
 
 A failure to abide by the decision shall be penalized by the loss for 
 a, period of three years of the "right to vote for, or to be elected as the 
 representative of any labor body, or chamber of commerce, or com- 
 mercial courts, or the superior labor council. In case of a second offense 
 the loss shall be for six years. 
 
 The party in power, which is fathering this measure, having a 
 majority in the house, it is believed that the bill will carry. 
 
 The fact, however, that while a penalty is provided for a failure to 
 abide by the decision of the arbitrators, this penalty is so mild in 
 character as likely to have little or no restraining influence, and the 
 further fact that no penalty is provided for a failure on the part of 
 employers or employees to observe the initial steps in the proposed 
 settlement of the dispute, would make it plain that the measure, should 
 it become law, is likely to prove inefficient and ineffective. 
 
46 REPORT OP SPECIAL LABOR COMMISSIONER. 
 
 ENGLAND. 
 
 One can not investigate the labor laws and labor conditions in England 
 without soon discovering that British workmen and employers have 
 long since passed through the stages now being experienced by both 
 in other European countries. The fact is speedily forced on one's 
 attention that most continental countries, in the matter of dealing with 
 labor problems, are to-day where England was, say. forty years ago. 
 The English wage-earner, as a rule, is far more amenable to reason 
 than is his fellow-worker on the continent. "While the English worker 
 can not be driven, and, so long as he believes himself in the right, 
 fights with a bulldog tenacity, yet when his reason is appealed to and 
 the right way pointed out, he is, as a rule, easily led by those in whom, 
 he has confidence. 
 
 LIVING CONDITIONS OF BRITISH WORKMEN. 
 
 The conditions under which the British workman, as a rule, lives 
 are better than are the conditions generally under which the continental 
 worker lives. The English policy of free trade means cheap and abund- 
 ant food for its people, due to the fact that the food producers of every 
 clime are in constant competition with each other for the English trade. 
 Most continental countries, on the other hand, having large agricultural 
 interests, have deemed it essential to establish for their protection high 
 tariffs against foreign foodstuffs, thus enhancing the cost of living of 
 their wage-earners. 
 
 While there are yet tens of thousands of British workmen, especially 
 among the nonskilled, who live in congested and unsanitary districts 
 in the large British cities, such as London, GlasgOAV, Liverpool, and 
 Manchester, there are many other tens of thousands who are more com- 
 fortably housed than are the continental wage-earners. Even in thickly 
 populated London miles upon miles of streets are lined with wage- 
 earners' cottages where, at a reasonable rental, each one may live, with 
 his family, under comfortable and sanitary conditions. Single cottages 
 for wage-earners are almost unknown in the large continental cities 
 where great numbers of workingmen are housed in tenements with but 
 two, and rarely three, rooms to a family, however large the family 
 may be. 
 
 LABOR UNIONS IN POLITICS. 
 
 Some fifteen years ago the tendency began on the part of British 
 labor to enter politics as an independent political body. To-day the 
 
ENGLAND. 47 
 
 wage-earners have fifty-seven representatives out of a membership in 
 Parliament of six hundred and seventy. While these labor represen- 
 tatives differ radically on many political issues, yet when it comes to 
 labor legislation, as a rule, they vote as a unit. Thus, often by holding 
 the balance of power, they have been able to obtain much legislation in 
 recent years favorable to labor. The most notable achievement along 
 these lines was the passage by Parliament of the "Trades Disputes Act' 
 of 1906, section four of which reads as follows: "An action against a 
 trade union, whether of workmen or masters, or against any members 
 or officials thereof on behalf of themselves and all other members of 
 the trade union in respect to any tortious act alleged to have been 
 committed by or on behalf of the trade union, shall not be entertained 
 by any court." Mr. D. J. Shaneleton, labor member of Parliament, 
 who was chiefly instrumental in passing this measure through Parlia- 
 ment, which absolutely exempts the funds of labor unions against court 
 judgments, informed me that Parliament was persuaded to pass this 
 law, radical as it is, because he had been able to prove to its satisfaction 
 that employers were violating the statute against blacklisting. This 
 measure was therefore enacted in order to give workmen a counter 
 protection. 
 
 CHARACTER OF BRITISH LABOR LEADERS. 
 
 It is interesting to learn of the exceeding care exercised by the British 
 labor unionist in the selection of his trade union officials and political 
 representatives. Such a scene would have been impossible in England 
 as was witnessed some years ago in the city of New York, when the 
 notorious Sam Parks, the corrupt labor leader, convicted of taking 
 bribes in consideration of his declaring strikes in order to injure rival 
 contractors, immediately upon his release from prison was welcomed 
 by many trade unionists as a hero and a martyr, chosen as marshal of 
 the Labor Day parade and greeted en route by deafening cheers from 
 labor admirers and labor sympathizers. Nor would it have been possible 
 in England to elect for a second and a third term, to high public office, 
 largely by labor votes, such a notorious scoundrel and bribetaker as 
 Eugene Schmitz, the ex-mayor of San Francisco, or his coterie of 
 bribetaking labor union board of supervisors, who, by their infamous 
 and corrupt conduct, dragged the good name of organized labor through 
 the gutters, and in the minds of many of their fellow citizens and in 
 the minds of many in foreign lands, tended to establish an unfavorable 
 opinion of American labor unions in general. 
 
 While at a gathering at which happened to be present a number of 
 directors and also the general manager of one of England's largest 
 railway lines, I had occasion to mention that I had just come from an 
 interview with the secretary of the Amalgamated Railway Employees' 
 
48 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 Union. All present commented upon the secretary's high character, 
 fair-mindedness and spotless integrity. They said these things despite 
 the fact, as they themselves explained, that at times they differed most 
 radically with him on the questions of wages, hours of labor, etc. 
 
 Without exception the opinion of all the employers and officials whom 
 I met while in England was to the effect that British labor leaders are 
 tried men who, because they are honest and dependable, have the confi- 
 dence of employers and workmen. Even opposing employers freely 
 admitted that British labor leaders have developed into able diplomats 
 and business men of high order. In this connection ex-Prime Minister, 
 A. J. Balfour, is quoted as saying: "Trade disputes in England have 
 been carried on with a wisdom and moderation on both sides which can 
 not be paralleled by any other industrial community. Surely it must be 
 admitted that these admirable results are in no small degree due to the 
 statesmanship, the moderation and the wisdom which have, on the whole, 
 guided the leaders of the trades unions in dealing with the difficult 
 problems which must from time to time arise in industrial society. ' ' 
 
 Graft and grafters find no lodgment in British labor unions. This, 
 together with the care and the good judgment exercised in the selection 
 of honest and capable leaders, has won the esteem and the respect of the 
 British public for the labor movement and has added much to its influ- 
 ence and usefulness. 
 
 WAGES IN GREAT BRITAIN. 
 
 The latest British government report shows that in 1906 and in 1907 
 wages increased in every group of trades, but that this upward tendency 
 was arrested early in 1908. 
 
 According to the fifteenth report of the British Labor Department 
 for 1907 the prevailing wages in England in various industries were 
 
 as follows: 
 
 Compositors : $9.00 per week. 
 
 Bookbinders $7.75 per week. 
 
 Bakers $9.25 per week. 
 
 Dock laborers 16 cents per hour. 
 
 Street car conductors 10 cents per hour. 
 
 Street car motormen $1.18 per day. 
 
 Laborers $5.00 per week. 
 
 Painterg $6.75 per week. 
 
 Letter carriers.-. $4.50 to $7.50 per week, according to length of service. 
 
 Policemen $8.50 per week. 
 
 Farm laborers $4.00 to $5.00 per week. 
 
 Iron founders $10.00 per week. 
 
 Carpenters IS cents per hour. 
 
 Bricklayers 20 cents per hour. 
 
 Plumbers 20 cents per hour. 
 
 Plasterers -16 cents per hour. 
 
 (Fifty hours constitutes a week's work.) 
 
 According to the same report the sliding scale of wages which for 
 years prevailed in some industries, notably in coal mining, is going out 
 
ENGLAND. 49 
 
 of favor on the theory that wages should not be dependent on selling 
 prices. 
 
 The depression of 1908 led to the cutting of wages in the iron, ship 
 building and textile industries, and some railway lines have posted 
 notices that a cut in wages is to go into effect on January 1, 1909. 
 
 t 
 
 COST OF LIVING IN ENGLAND. 
 
 The cost of living in England has increased in recent years, though 
 not in so marked a degree as in other European countries. There has 
 been an increase in wage-earners' rentals, estimated at from ten to 
 twenty per cent, during the past two or three years, and, according to 
 the latest government reports, issued by the board of trade, there has 
 been the following percentage of changes in retail prices during the 
 past ten years, of twenty-three principal articles of food in London : 
 
 1897 96.2 per cent. 
 
 1900 - 100.0 per cent. 
 
 1907 105.7 per cent. 
 
 The average increased cost in ten years was 9.87 per cent. The 
 twenty-three articles are bread, flour, beef, mutton, pork, bacon, butter, 
 eggs, milk, cheese, potatoes, currants, raisins, rice, tapioca, oatmeal, tea, 
 coffee, cocoa, sugar, jam, treacle and molasses. 
 
 TRADE UNIONISM IN GREAT BRITAIN. 
 
 According to the statement of the secretary of the British Labor Fed- 
 eration there are 15,000,000 industrial workers in Great Britain, of 
 whom 2,500,000 are unionized. It is claimed by trade union representa- 
 tives that unionism is steadily growing in Great Britain. 
 
 Unlike on the continent there is no hostility in Great Britain toward 
 labor unions and British employers, as a rule, recognize and deal with 
 labor union representatives. The exceptions to this rule are occasional 
 individual employers. 
 
 The consensus of opinion among British labor authorities is that the 
 relations between British employers and their workmen are growing 
 more cordial, due partly to the methods of conciliation which are steadily 
 growing, and due, as maintained by others, to labor going into politics 
 and thus being brought into closer contact with employers. 
 
 BRITISH EMPLOYERS' ASSOCIATION. ' 
 
 Employers' associations are said to be growing in Great Britain in 
 greater ratio than workmen's associations. One of the prime purposes 
 of such associations is to meet and deal with strikes. Strike insurance 
 fraternities among British employers are now nearly fifteen years old. 
 
 Labor seems to look with satisfaction upon these employers' associa- 
 
 4 
 
50 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 tions, since it takes away the employer's claim that he wants to deal 
 with his men individually. It also obviates, it is claimed, unpleasant 
 personalities. As a rule, the employers' associations secure the services 
 of an attorney to act as secretary. 
 
 CLOSED SHOP. 
 i 
 
 The "closed shop," that is, the shop where only union workers are 
 employed, prevails wholly among the engineers, the printing trades and 
 the textile industry. 
 
 COLLECTIVE BARGAINING. 
 
 Again, unlike the conditions prevailing on the continent of Europe, 
 collective bargaining is the common practice in Great Britain and 
 generally prevails. Much value has been added to the practice of 
 collective bargaining, and the making of contracts between employers 
 and their workmen for extended periods, because of the fact that the 
 British workman, as a rule, is not a contract breaker, and the employer 
 knows that a contract once entered into with labor unionists, even if it 
 should later prove to them disadvantageous, will, in all likelihood, be 
 respected and kept. 
 
 THE UNEMPLOYED. 
 
 The depression of 1908 has led to a great army of unemployed. The 
 problem has demanded the greatest judgment and statesmanship on the 
 part of the administration. Extensive public improvements have been 
 entered upon with the view of lessening so far as possible the consequent 
 distress. 
 
 The General Federation Trade Union, in its report for 1906-1907, 
 strongly urges, as a preventive for unemployment, the policy of regu- 
 lating and shortening hours during slack times in order to minimize 
 
 this evil. 
 
 STRIKES. 
 
 The most serious strikes in Great Britain in recent years, barring 
 the cotton trouble in October, 1908, have been in the ship building 
 trade. 
 
 Great Britain is the only country in Europe that I have investigated 
 where strikes are on the decrease. As an illustration of the marked 
 influence conciliation and arbitration in Great Britain are having in 
 avoiding industrial strife, the following figures are quoted from the 
 Government Report of 1907 on Strikes and Lockouts : 
 
 Number of Work people Duration of 
 disputes. involved. working days lost. 
 
 1897 864 230,267 10,345,523 
 
 1907 601 147,498 2,162,151 
 
 It will be noted that in the last ten years the number of disputes has 
 diminished by 34.40 per cent, the number of workmen involved has 
 been decreased by 36.03 per cent, and the number of working days 
 
ENGLAND. 51 
 
 lost, which after all is the correct unit to be considered, has been 
 reduced by 79.10 per cent. This is the most remarkable record of any 
 country I have thus far investigated. 
 
 When the increase by leaps and bounds is considered of strikes and 
 lockouts in most other important industrial countries of Europe, with 
 their consequent enormous cost and accompanying misery and suffering 
 imposed on armies of workers and their dependents, this British 
 strike record is a most powerful argument in favor of the progressive 
 methods pursued in Great Britain in recent years along the lines of 
 conciliation and arbitration. 
 
 British labor authorities, gratified as they must be with the admirable 
 showing made in the diminished number of strikes and lockouts in the 
 last ten years, are, however, looking forward to the time when Great 
 Britain may be able to point to a clean slate, and when not a single 
 day's labor will have been lost because of a labor dispute. 
 
 STRIKE REMEDIES. 
 
 Various remedies were suggested for the further diminishing of 
 British strikes and lockouts. Socialists, such as Kier Hardie, expressed 
 to me the opinion that the final remedy is socialism, and that, pending 
 the general acceptance of this remedy, relief lies in stronger organi- 
 zation on the part of labor. Other Socialists, such as Sydney Webb, 
 believe that a most potent factor for the further diminishing of strikes 
 juid lockouts is for the State to intervene to the extent of fixing a mini- 
 mum wage for every industry, less than which wage it should be a 
 penal offense for the workmen to accept or for the employer to pay. 
 The Right Honorable John Burns, labor leader and Cabinet Minister, 
 said to me that in his opinion the remedy lies in voluntary arbitration. 
 Secretary Appleton of the British Federation of Labor expressed the 
 opinion that the best remedy is the frank recognition more generally of 
 employers and workmen to the right of collective bargaining. The 
 Right Honorable Winston Churchill, Cabinet Minister and President 
 of the Board of Trade, which corresponds to our Department of Com- 
 merce and Labor at Washington, D. C., made the statement that, in his 
 opinion, the struggle between capital and labor is eternal, and that 
 perpetual industrial peace can never be established. Dr. Shadwell, 
 the labor editor of the London Times, said that, in his opinion, the 
 remedy lies in strong counter organization, so that one side may better 
 hold the other in check and by its powerful organization have a strong 
 restraining influence on the other. Another distinguished English 
 journalist, the editor of the London Chronicle, gave it as his opinion 
 that the tendency of labor to achieve its ends seemed to be in the 
 direction of electing representatives to Parliament rather than through 
 strikes. Sir Charles Furness, one of England's great shipbuilders, 
 
52 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 believes the remedy lies in copartnership, and has shown his faith in 
 such remedy by offering to sell to his workmen shares of stock in his 
 enterprise and accept deferred payments at the rate of five per cent 
 of the weekly wage, with the understanding, however, that there must 
 be no strikes or lockouts. This offer has been accepted by his employees. 
 Richard Bell, member of Parliament and a labor leader, expressed to me 
 the opinion that further relief must come along the line of compulsory 
 inquiry. 
 
 THE VALUE OF BRITISH PUBLIC OPINION IN RELATION TO 
 STRIKES AND LOCKOUTS. 
 
 The Eight Honorable John Burns placed little value on the influence 
 of public opinion in its effect on strikes and lockouts. He maintained 
 that the great growth during the past fifteen years of employers' 
 associations and labor unions has tended to make both more and more 
 indifferent to public sentiment, which he, for one, regarded as a neg- 
 ligible factor in labor disputes. This opinion was shared by Dr. Shad- 
 well, the labor editor of the London Times, and one who is regarded 
 as an eminent authority on labor questions. 
 
 As against these opinions are those, however, of such men as Richard 
 Bell, member of Parliament and secretary of the Amalgamated Railway 
 Employees' Union, the Right Honorable Thomas Burt, for forty-three 
 years secretary of the Northumberland Coal Miners' Association, Sir 
 Albert Slicer, president of the London Chamber of Commerce, George 
 Howell, Esq., ex-member of Parliament and an acknowledged British 
 authority on labor questions, whose contention is that public opinion, 
 as a rule, is the ultimate deciding factor in strikes and lockouts, C. G. 
 Hyde, Esq., member of Parliament and a great British contractor, 
 Robert Donald, editor of the London Chronicle, and others, all of whom 
 expressed themselves as regarding public opinion in the matter of 
 strikes and lockouts, more especially when taken in connection with a 
 public utility, as a factor of great force. 
 
 CONCILIATION AND VOLUNTARY ARBITRATION. 
 
 Great Britain, because of its splendid record and its achievements 
 along the line of conciliation and arbitration in labor disputes, may be 
 rightly regarded, among the countries I have thus far investigated, as the 
 nursery for peaceful methods of adjusting labor difficulties. The first 
 great step along these lines was taken by the London Chamber of Com- 
 merce which, shortly after the great strike of dock laborers some seven- 
 teen or more years ago, on the initiative of Sir Samuel Boulton, began 
 a movement for the peaceful settlement of labor disputes, which has 
 upset all preconceived notions of conciliation and arbitration methods, 
 and which has proven an unqualified success. 
 
ENGLAND. 53 
 
 It was the opinion in Great Britain then, as it is the opinion in most 
 places to-day, that in the adjustment of labor disputes by arbitration 
 there must, as a rule, be three parties (a) representatives for each dis- 
 putant; and (6) a third party to act as chairman and referee and to 
 give the casting vote. The chamber of commerce adopted an entirely 
 new principle and eliminated the third factor, namely, the referee or 
 deciding member. By consultation with the trade unions two panels 
 were elected of twelve members each, one panel from among the mem- 
 bers of the chamber of commerce and the other panel of twelve members 
 from among the trades unions. Every dispute brought before the cham- 
 ber of commerce was referred to a committee of one or two, or a greater 
 equal number, of jurors chosen from each of these two panels. No mem- 
 ber chosen, however, had any direct interest in the dispute in hand. 
 
 For seventeen years these committees, separately chosen for each case, 
 have acted on all disputes brought before them with the remarkable 
 record that their decisions, without exception, have been unanimous, and 
 with the still more remarkable record that, without exception, their 
 decisions have been accepted and carried out in good faith in every case 
 by both parties to the dispute. The labors of the chamber have been 
 confined to disputes arising in Greater London. 
 
 In addition to the foregoing movement, Parliament, in 1896, passed 
 a conciliation act empowering the board of trade, which, as previously 
 explained, corresponds to the Department of Commerce and Labor at 
 Washington, D. C., to appoint a conciliator in trade disputes and an 
 arbitrator at the request of both parties. 
 
 When contestants will not listen to arbitration, the board of trade 
 usually sends a high grade man as conciliator, who talks separately 
 with each party in the hope of reaching a common ground. Sometimes 
 this plan succeeds. Where it fails the department will send a repre- 
 sentative on the ground, who makes the best possible report based on 
 whatever information he finds available, and this report is published for 
 the benefit of the public. 
 
 As an illustration of the way the board of trade sometimes finds it 
 essential to operate may be cited, as a ease in point, the action it took in 
 1907 in averting what threatened to be the greatest railway strike in the 
 history of the United Kingdom. 
 
 A demand was made by the representative of the Amalgamated Rail- 
 way Employees' Association for a number of concessions, including an 
 increase of wages, a shortening of hours and recognition of the amal- 
 gamated association. The railway companies firmly refused to con- 
 sider the demands. A referendum vote was finally taken by the amal- 
 gamated association on the question of going out on strike, which carried 
 by an overwhelming majority. The public became greatly alarmed for 
 
54 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 fear of the traffic of the United Kingdom becoming seriously crippled, 
 if not paralyzed, for an indefinite period. The outlook grew so serious 
 that the Eight Honorable Lloyd George, then the president of the board 
 of trade, personally assumed the role of conciliator and interviewed 
 separately the representatives of each side. At first he found the situa- 
 tion apparently irreconcilable, the chief point of difference being the 
 question of recognizing the amalgamated association, which the railway 
 companies absolutely refused to consider, though quite ready and willing 
 to deal with the separate railway unions. The strike seemed apparently 
 inevitable and Mr. George found himself obliged to abandon his hope 
 of at least bringing the two contending parties face to face. As related 
 to me by one of the railway managers, Mr. George then invited the rail- 
 way managers to meet him collectively in one of the board of trade 
 rooms, and at the same time invited the labor representatives to meet 
 him in another one of the board of trade rooms. After spending hours 
 in going from one room to the other, and getting first one concession 
 from one side and then another concession from the other side, he grad- 
 ually arrived at a common ground upon which a compromise settlement 
 was effected. The railway companies remaining immovable in their 
 determination not to recognize the amalgamated association, it was 
 finally arranged that a separate agreement should be made between the 
 railway companies and the board of trade, and also between the amalga- 
 mated association and the board of trade, both parties binding themselves 
 to the board of trade to choose conciliators from among themselves to 
 whom were to be submitted all grievances for adjustment relating to 
 hours, wages, etc. In the event of the conciliators failing to reach an 
 understanding the matters were to be settled by arbitration, the board 
 of trade to appoint the arbitrators, whose award was to be binding on 
 both parties. These agreements were to hold good for a period of seven 
 years. In this wise was averted what might have proven one of the most 
 disastrous strikes in the railway history of the United Kingdom. 
 
 These slender means of intervention, says the Right Honorable 
 Winston Churchill, president of the board of trade, have been employed 
 in cases where opportunity has offered, and the work of the department 
 in this sphere has considerably increased in recent years. In 1905 the 
 board of trade intervened in fourteen disputes and settled them all ; in 
 1906 they intervened in twenty cases and settled sixteen ; in 1907 they 
 intervened in thirty-nine cases and settled thirty-two ; while during the 
 first eight months of 1908 no fewer than forty-seven cases of intervention 
 have occurred, of which thirty-five have already been settled, while some 
 of the remainder are still being dealt with. 
 
 Believing that the time has now arrived when the scale of these 
 operations deserves the creation of some more formal and permanent 
 machinery, he has decided to set up a standing court of arbitration. 
 
ENGLAND. OO 
 
 Accordingly, early in October, 1908, he nominated three panels of about 
 fifteen members each, the first panel (of chairmen) being persons of 
 eminence and impartiality, the second panel being drawn from the 
 ' ' employers ' class, ' ' and the third panel from the class of workmen and 
 trade unionists. The court will sit wherever required, composed of 
 three or five members, according to the wishes of the parties, with fees 
 and expenses to the members of the court and the chairman during the 
 sittings. This court will be nominated from the foregoing three panels 
 by the board of trade. 
 
 Many in England look with favor on this new plan and have great 
 hopes of it achieving large and important results in further reducing 
 the number of strikes and lockouts. In the opinion of some of the 
 members of the London Chamber of Commerce, who have had long expe- 
 rience with their own peculiar plan herein described, the probable point 
 of failure in the new board of trade scheme will be the panel comprised 
 of persons of eminence and impartiality from whom the chairmen are to 
 be chosen. In the opinion of the expert critics of the London Chamber 
 of Commerce the plan would be much stronger and likely to prove more 
 efficacious if, in accordance with their own plan of operations, there 
 were but two panels out of which the court was to be chosen employers 
 and workmen. 
 
 The most important factor, however, in the progress made along the 
 lines of conciliation and arbitration has been the attitude of the British 
 labor unions themselves. Article 3, rule 1 of the by-laws of the General 
 Federation of Trade Unions reads : " It is the purpose of the General 
 Federation to promote industrial peace, and by all amicable means, 
 such as conciliation, mediation, reference, or by the establishing of 
 permanent boards, to prevent strikes and lockouts between employers 
 and workmen, or disputes between trades or organizations; where 
 differences do occur to assist in their settlement by just and equitable 
 methods." 
 
 Nor have these been idle words used for "dress parade" purposes. 
 The British Federation of Trade Unions has, as a rule, acted up to 
 the very spirit of this by-law, and has left nothing undone to settle 
 labor disputes peacefully. 
 
 As the result of these various movements eighty-nine boards of con- 
 ciliation and arbitration took action in 1907. The number of cases con- 
 sidered were fifteen hundred and forty-five, out of which six hundred 
 and sixty-eight were settled without stoppage of work. Only seven 
 cases involved a stoppage of work. In seven hundred and seventy- 
 eight cases the questions in dispute were either withdrawn or settled 
 independently, eighty-eight cases being still under consideration at the 
 close of the year. 
 
 At this writing there are, according to the latest government report, 
 
56 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 two hundred and nine boards of conciliation and arbitration in the 
 United Kingdom. 
 
 The last report of the Board of Trade for 1907 states that 58.80 per 
 cent of workers' wages have been changed through the medium of con- 
 ciliation. As an illustration of the growth in the last ten years of 
 conciliation as a means for the peaceful adjustment of questions of 
 wages, the following comparative statement is taken from the 1907 
 report of the Board of Trade : 
 
 Tear. Number.* Percentage. 
 
 1898 32,514 3.2 
 
 1907 . 732,768 58.8 
 
 COMPULSORY ARBITRATION. 
 
 I found but one labor authority in my British investigations who 
 favored compulsory arbitration: The Honorable Mr. Pe.mber Reeves, 
 High Commissioner for New Zealand, through w r hose efforts, while Labor 
 Minister in New Zealand, the compulsory arbitration laws of that 
 colony were passed in 1895. To him it seemed passing strange, if not 
 incomprehensible, why British \vage-earners should oppose compulsory 
 arbitration with the record before them in New Zealand of an increase 
 in the trade union membership under compulsory arbitration of from 
 ten thousand to thirty-three thousand. He acknowledged that some 
 weak spots had broken out in the New Zealand laws during the past 
 year, but he maintained that the New Zealand legislature was earnestly 
 at work strengthening these weak spots, and that he was confident that 
 they would succeed in so amending the existing law that every decision 
 of the court of compulsory arbitration could be successfully enforced 
 against employers and workmen. 
 
 I found, however, that Mr. Reeves stands practically alone in this 
 opinion. All the other labor authorities that I was enabled to meet 
 while in England gave it as their unqualified opinion that no com- 
 pulsory arbitration law could be framed that would compel men to 
 go to work when they did not want to work, and that a compulsory 
 arbitration law was of no practical value, if labor, as well as capital, 
 could not be compelled to abide by the court decisions, and that, in 
 any event, so far as their opinions went, compulsory arbitration in the 
 United Kingdom was neither desirable nor practicable. 
 
 There seems, however, to be a growing interest on the part of the 
 British employers and workmen in the matter of compulsory inquiry 
 in dealing with cases where one side or the other, or both, are not 
 amenable to conciliation and arbitration. It is along these lines that 
 I hope to make further investigations when I reach those great experi- 
 mental grounds for modern and progressive labor legislation, Australia 
 and New Zealand. 
 
 *Number of wage-earners whose wages were arranged by conciliation boards, 
 mediation and arbitration. 
 
VICTORIA, AUSTRALIA. 57 
 
 VICTORIA, AUSTRALIA. 
 
 The commonwealth of Australia is composed of the six following 
 states: New South Wales, Victoria, Queensland, South Australia, 
 West Australia, and Transmania. The estimated population of the com- 
 monwealth at the end of 1907 was 4,197,037. This, with its area of 
 2,974,581 square miles gives it a population of 1.41 persons to the 
 square mile against a population of 28 persons to the square mile in 
 the United Stales. The most densely populated states in the Aus- 
 tralian commonwealth are New South Wales, with its 1,568,942 people 
 in 1907, and Victoria, with its population for the same year of 1,248,095. 
 
 These two states are also the most important in the commonwealth, 
 commercially and industrially. By confining the time at my command 
 to investigating the labor laws and labor conditions in these two chief 
 centers, I feel I have been able to get a more comprehensive knowledge of 
 such Australian labor laws and labor conditions as are likely to prove 
 helpful to California than if I had attempted to spread my time over a 
 wider and thinner area in the commonwealth. 
 
 I shall deal first with the State of Victoria, because it was the first 
 government to legislate on labor questions, and in some directions it has 
 been the pioneer, leading the way in industrial legislation for other 
 Australasian governments. 
 
 THE CONDITIONS OF LIFE OF THE AUSTRALIAN WORKER. 
 
 The conditions under which the Australian wage-earner lives are 
 most favorable. He enjoys a most salubrious climate, where neither 
 extreme heat nor extreme cold need be provided for. He can work out 
 in the open, rains excepted, most every day in the year. The health 
 of his people is most excellent, the death rate of Australia, 10.8 per 
 thousand, next to New Zealand, being the lowest in the world, and 
 living in one of the greatest food producing countries, he commands 
 good and abundant food at a most moderate cost, while his wage rates, 
 next to America and New T Zealand, are the highest in the world. These 
 favorable conditions, combined with his thrift, sobriety, high intelli- 
 gence and law-abiding qualities, place him among the world's wage- 
 earning aristocracy. 
 
 POLITICAL ACTIVITY OF LABOR. 
 
 Iii more recent years through the growth of unionism, the wage- 
 earners have as a labor party taken a most active interest in the 
 
58 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 political affairs of the country. At this writing there are now but two 
 political parties in the commonwealth of Australia, the Labor party and 
 the Coalition party, which latter consists of the free traders and the 
 protectionists, who within this past week have united in order to oust 
 the Labor administration from power, after it has been occupying the 
 administrative saddle for many months, where it surprised its enemies 
 and gratified its friends by the wisdom and conservativeness of its 
 administration. 
 
 CHARACTER OP AUSTRALIAN LABOR LEADERS. 
 
 The Australian labor leaders have shown unusual ability and high 
 integrity and when placed in political power, have commanded the 
 respect of even their political opponents, by their honesty, their earnest- 
 ness and the fidelity displayed to their public trust. 
 
 TRADE UNIONISM AND LABOR LEGISLATION. 
 
 The history and scope of Victorian trades unions and labor legisla- 
 tion is briefly told in the Commonwealth Yearbook for 1909, from which 
 I take the following: 
 
 DEVELOPMENT OF TRADES UNIONS IX AUSTRALIA IX GENERAL. 
 
 (Official Yearbook of Australia, p. 104.) 
 
 In Australia, industrial unionism paved the way to industrial legislation. Con- 
 ditions of employment were on the whole favorable to the investigation of industrial 
 problems and the experimental legislation was possible because of the simplicity and 
 and directness of aim of those engaged in industrial occupations. Moreover, the non- 
 existence of the complexity of the problems and of the organizations of the older 
 countries did not impose the difficulties that might otherwise have operated. Hence 
 also rapid changes in the laws governing industry occur and are likely to occur. To 
 a great extent the trades unions were responsible for these laws. They steadily and 
 continuously urged an amelioration of the condition of the workingman, and by 
 organization and discipline they presented a united front to opposing forces and 
 obtained many advantages by a recognition of the principle that union is strength. 
 Their efforts have resulted in improved conditions, particularly short hours and 
 a healthier mode of life. One great aim of present day industrial legislation has 
 been said to be to extend "The reasonable comforts of a civilized community'' to 
 those engaged in every branch of industry. Large organizations have been able to 
 obtain their ends by force of numbers, and, in the case of the great bulk of the 
 artisan and similar classes, through the solidity of their unions. The smaller and less 
 perfectly organized industries, unable to maintain an effectual struggle with hope of 
 success, are now receiving, by legislative enactment, the benefits already secured to 
 trades unions. 
 
 While the demands of the early unions have almost in their entirety been conceded 
 by the employers, unionism nevertheless continues. Industrial legislation has not yet 
 reached the stage when the conflicts between employer and employee cease. A 
 numerically strong union will sometimes obtain its end by the threat and sometimes 
 by the fulfillment of the threat of a strike. 
 
 (Yearbook, p. 1049.) 
 
 The first Melbourne eight-hour procession was held in 1S56, the trades taking 
 part being the masons, bricklayers, carpenters, joiners, plasterers, painters and 
 slaters. In the following year about 700 men took part in the function, but the 
 principle of the eight-hour day had been recognized, and new unions were quickly 
 established under the influence and guidance of the pioneers of the movement. 
 
VICTORIA, AUSTRALIA. 59 
 
 (Yearbook, p. 1064-6.) 
 
 Two systems, based on different principles, exist in Australia for the regu- 
 lation of wages and general terms of contracts of employment. A "wages boards" 
 system exists in New South Wales, Victoria, Queensland, and South Australia, 
 and an arbitration court in Western Australia. In New South Wales the Indus- 
 trial Arbitration Acts of 1901 and 1905 instituted an arbitration court. This 
 court expired on June 30, 1908, having delivered its last judgment on the previous 
 day. Wages boards were substituted under the Industrial Disputes Act, 1908. 
 There is also the arbitration court of the commonwealth, which has power, however, 
 to deal only with matters extending beyond the limits of a single state. 
 
 Wages Boards. This system was introduced into Victoria by the Factories and 
 Shops Act of 1896. The original bill made provision only for the regulation of the 
 wages of women and children, but was afterwards amended in Parliament to extend 
 the system to adult operatives of both sexes. 
 
 The act of 1896 made provision for the regulation of wages only in the clothing 
 and furniture trades, and in the bread-making and butchering trades. By the act of 
 1900 the operations of the act were extended to include all persons employed either 
 inside or outside a "factory" or "workshop" section 4, i. (a) in any trade usually 
 carried on therein. This section is now in the act of 1905. An act of 1907 extended 
 the system to trades and businesses not connected in any way with factories, making 
 provision for the appointment of wages boards for shop employees, carters and 
 drivers, persons employed in connection with building and quarrying, or the prepara- 
 tion of firewood for sale, or the distribution of wood, coke or coal. It is proposed to 
 extend the system to mines, provisions to do so being made in the mines bill intro- 
 duced into Parliament. 
 
 The regulation is made by a board, called a special board, to distinguish it from 
 the board of health. Boards for the regulation of wages in the trades specified in 
 the act of 1896 are appointed as a matter of course, and by the executive 
 other boards are appointed only if a resolution for appointment be passed by both 
 houses of Parliament. A board consists of from four to ten members who must be 
 or must have been at a recent time prior to the appointment engaged in the trade 
 concerned. Employers and employees are equally represented. If one fifth of the 
 employers or the employees object to a representative nominated for them they can 
 elect one. Originally the board was elected in the first instance, but the difficulty in 
 compiling the electoral roll led to the adoption of the present system, which has 
 proved satisfactory. The furniture board is nominated outright owing to the pre- 
 ponderance of Chinese. An independent chairman, nominated by the board, is 
 appointed by the executive. A board holds office for three years. 
 
 The board has power to determine the lowest wages or prices or rates to be paid 
 to any persons or classes of persons coming within the act, for wholly or partly pre- 
 paring, manufacturing, or repairing articles, or for other services rendered, and may 
 fix special rates for old, slow or infirm workers. 
 
 The board fixes the hours of work, and may limit the number of "improvers" to 
 be employed (usually done by prescribing the number to each journeyman employed). 
 There is no power in Victoria to limit the number of apprentices employed. Such 
 power exists in South Australia. The board fixes the wages of apprentices and 
 improvers according to age, sex, and experience, and may fix a graduated scale of 
 wages calculated on the same basis. Apprentices bound for less than three years an; 
 improvers, unless the minister sanctions a shorter period of apprenticeship on account 
 of previous experience in the trade. The minister may sanction the employment of an 
 improver over twenty-one years of age at a rate proportionate to his experience. 
 Outworkers, in the clothing trade, must be paid piece rates. Manufacturers may, by 
 leave of the board, fix their own piece rates, if calculated on the average wages of 
 time workers as fixed by the board. 
 
 Licenses for twelve months to work at a fixed rate lower than the minimum rate 
 may be granted by the chief inspector of factories to persons unable to obtain 
 employment by reason of age, slowness or infirmity. Licenses are renewable. 
 
 Determinations remain in force till altered by the board or by the court of appeal. 
 
60 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 These determinations apply to all cities and towns and to such boroughs as the 
 executive may determine, and the executive may also apply theni to any shire within 
 ten miles of a city or town, if the shire council petition to that effect. (Similar 
 provisions are in force in other states.) 
 
 The children of an employer are exempt from a determination. 
 
 The executive may direct a board to fix outworkers' rates and the rates payable 
 in allied trades. Boards are given power to fix the wages to be paid to persons 
 employed on repairs. 
 
 Penalties are fixed for the direct or indirect contravention of determinations, 
 the obedience to which is ascertained by the examination of the records of wages, 
 etc. (Section 4, i, a.) 
 
 A court of appeal, consisting of a supreme court judge, has power to review the 
 determination of the boards. The court may appoint assessors to assist the judge. 
 
 The act fixes an absolute weekly minimum wage, and evasion of this provision in 
 the case of females employed in the clothing trade by charging an apprenticeship 
 premium, is prevented by the prohibition of all such premiums in that particular 
 case. 
 
 WAGES BOARDS. 
 (Yearbook, p. 1079.) 
 
 Wages boards are appointed upon application of either employers or employees. 
 The grounds usually urged by the former is that their business is hampered by 
 unfair competitors, who pay only a sweating wage ; by the latter that they are 
 sweated or are entitled to a consideration of their wages, by reason of the prosperity 
 of the trade in which they are employed. 
 
 According to the latest Yearbook there are 146.000 industrial workers in Victoria 
 out of which the following number are employed in registered factories : 
 
 Total number of distinct trades carried on in registered factories 152 
 
 Total trades under boards 51 
 
 Total factories registered 5,003 
 
 Total employees . 71,968 
 
 Total employees under wages boards -_- 56,994 
 
 Percentage under boards 80 
 
 Number of determinations 48 
 
 The following table shows the number of convictions for disobedience to deter- 
 minations of boards (not including overtime working) : 
 
 1901 34 1905 27 
 
 1902 33 1906 52 
 
 1903 41 1907 43 
 
 1904 39 
 
 WAGES. 
 
 The tendency of wages here as elsewhere in the industrial world, has 
 during the past decade been upward. As shown by a table published 
 in the Melbourne Age of March, 1909, by Gr. M. Pendergast, labor leader 
 and member of Parliament of Victoria, the wages in sixty-two indus- 
 tries have increased on an average 15.665 per cent since the awards of 
 the wages boards dealing with these industries have gone into effect. 
 Among the wages quoted in the foregoing article is to be noted the 
 following per week: 
 
 Shoemakers $12.00 Brickmakers $11.33 
 
 Cigarmakers 8.81 Ironmolders 10.27 
 
 Printers 10.33 Saddlery S.16 
 
 Stonecutters 12.04 Tinsmith 7.7." 
 
 Woodworkers _ 10.72 
 
VICTORIA, AUSTRALIA. 61 
 
 The wages of highly skilled labor, according to Secretary Barker of the 
 Melbourne Labor Council, is from 10 to 12 shillings ($2.40 to ($2.88) a 
 day, and for unskilled labor from 7 to 9 shillings ($1.68 to $2.16) a day. 
 
 HOURS OF LABOR. 
 
 An eight-hour day was established in Victoria in the building trades 
 in 1856. The average hours in the building trades in the United States 
 so late as 1890 were fifty-four per week, and at the end of 1903, forty- 
 eight hours a week, a stage which Victoria reached fifty-three years ago. 
 
 The Commonwealth Yearbook for 1909, page 1049, tells the story of 
 the eight-hour day as follows : 
 
 COMMENCEMENT OF THE EIGHT-HOUE SYSTEM. 
 
 The first trade union in Australia was the "Operative Masons Society," established 
 in Melbourne in 1850. In 1851 a branch of the "English Amalgamated Society of 
 Engineers" was founded in Sydney. For many years practically the only unions 
 existing were those formed by the several branches of the building trades. They 
 were all subject to the English law prohibiting conspiracies and combinations in 
 restraint of trade, though it does not appear that any such law was ever put in 
 force in Australia. The main object of the early unions in Australia was the limita- 
 tion of the working week to forty-eight hours. The minor and friendly society 
 benefits that were usual among the unions of older countries were also desired ; but 
 the chief aim was the establishment of the eight-hour principle, and that aim for 
 many years was the chief link between the unions. It is difficult to obtain detailed 
 information concerning the unions prior to trade union legislation, but their early 
 history generally resolves itself into an account of the early efforts put forth by 
 metropolitan operatives to secure the limitation of the working day to eight hours. 
 
 COST OF LIVING. 
 
 During the past decade the cost of living, including rent, has advanced. 
 There are no reliable statistics to tell just what percentage of increase 
 has taken place. 
 
 From the consensus of opinions expressed by men in various walks of 
 life, I should say that while in some things, especially in the matter of 
 rent, the cost has increased beyond the increase in the wage rate, yet on 
 the whole, the gain in wages has covered the increased cost of living and 
 left a small margin besides. 
 
 THE ATTITUDE TOWARD UNION LABOR. 
 
 The attitude of the Victorian public toward labor organizations is 
 friendly. Some employers are hostile to labor legislation rather than to 
 labor unions. Other employers maintain that labor in Victoria is 
 despotic and unreasonable ; yet other employers admit that the conserv- 
 ative rich want to keep labor permanently in its place and within its 
 class, on the other hand, that labor Socialists are preaching class con- 
 sciousness. Still other employers contend that much friction and ill will 
 is caused by virtue of the fact that there is no finality to the demands 
 
62 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 of labor. Professor Moore, of the University of Melbourne, gave it as 
 his opinion that the relations between employers and their men were 
 strained and likely to become more so. Chief Factory Inspector Ord, 
 who because of his official position has an unusual opportunity of getting 
 in touch with employers and their men, expressed the view that so far 
 as the manufacturing industries of the state are concerned, the relations 
 between employers and their men are not of an unfriendly character. 
 
 EMPLOYERS' ASSOCIATIONS. 
 
 Employers are organized for the purpose of meeting and offsetting 
 claims of unionists before wages boards. Their organizations, how- 
 ever, are said to be not nearly so comprehensive or effective as those of 
 the men. 
 
 ' ' CLOSED SHOP. ' ' 
 
 There are comparatively few "closed" shops in Victoria. Union 
 and nonunion wage-earners, as a rule, work side by side. 
 
 STRIKES AND LOCKOUTS. 
 
 There were no strikes in Victoria in 1908, except of a trifling char- 
 acter or brief duration, not over 1,000 workers being involved. No 
 official record is kept in Victoria of strikes and lockouts, due to the fact 
 that there have been so few in the state during the past twelve years, 
 not over eight or nine in all. 
 
 Chief Factory Inspector Ord, in his report for 1907, says : 
 
 It has never been claimed by those in favor of wages boards that the system 
 will stop strikes, but for ten years no strike of any importance took place, and it 
 was thought that by merely bringing employers and employees together to discuss 
 wages, the chances of a strike would be greatly reduced. 
 
 Until the last Parliament there was no reference to strikes in the Factories and 
 Shops Act, but the legislature has now given the governor in council the power to 
 suspend a determination of a board or of a court, for any period not exceeding 
 twelve months, when a strike or organized industrial dispute is about to take place, 
 in connection with any trade or business, subject to the decision of a board or the 
 industrial court of appeals. 
 
 So far as employees are concerned, the only effect of such a provision is that the 
 men affected run the risk of losing the benefits of the determination of a board for 
 twelve months. 
 
 As regards the employers, however, the results are more far reaching. They are 
 at liberty to engage men at such rates as may be agreed upon, instead of being 
 compelled to pay the rates fixed by the board for, possibly, inferior and emergency 
 labor. 
 
 STRIKING AGAINST LEGAL AWARDS. 
 
 The only Victorian instance on record in twelve years of men striking 
 
 against a legal award was in the case of the Melbourne bakers, who, in 
 the end, won their strike. 
 
VICTORIA, AUSTRALIA. 63 
 
 The story of this strike is herewith told by Chief Factory Inspector 
 Ord in his report for 1907. 
 
 DKEAD BOARD. 
 
 (Chief Factory Inspector's Report for 1907, pp. 18-19, Appendix "B," Victoria Report.) 
 
 For the first time in ten years a strike of some importance took place in a trade 
 under a special board. It is a remarkable thing, however, that the strike was not 
 against the determination of the bread board, but in consequence of the court of 
 industrial appeal altering a determination of the board. The bread board on the 
 casting vote of the chairman raised the wages of journeymen from 2 10s. per week 
 of forty-eight hours to 2 14s. per week. This determination was dated 12th of 
 June, 1907, and came into force on the 5th of August, 1907. 
 
 On the 15th of August the employers' representatives on the board appealed, 
 under provisions of section 123 of the "Factories and Shops Act, 1905," to the 
 court against the increase of wages allowed by the board. 
 
 The court (Mr. Justice Hood) after hearing the evidence, reduced the wages 
 from 2 14s. to 2 10s. from the 15th of September, 1907. 
 
 It will be seen that from the 5th of August to the 15th of September the men 
 had been receiving the increased wage allowed by the board. This fact, no doubt, 
 had a great deal to do with the action of the union later on, as men do not willingly 
 submit to a reduction of wages, no matter 'how obtained, and in this case it had 
 been granted by a tribunal appointed by Parliament for the fixing of wages. 
 
 In any case as soon as the employers reduced the wages of the union men to 
 2 10s. per week, the union intimated that unless the men were paid at the wages 
 fixed by the board the members of the union would be called out. 
 
 The employers, having secured a favorable decision from the court of industrial 
 appeals, refused to give way, and the union at once called out all the men over whom 
 it had control. 
 
 The strike commenced on the 29th of September. It was not of long duration. 
 On the 2d of October the majority of the employers concerned granted the demands 
 of the union, and the strike was over. 
 
 All those who are sincerely desirous of the success of the wages board system 
 can not but regret the occurrence of this strike. At the same time it must not be 
 forgotten that the strike was not against the decision of the wages board, but against 
 that of the court of appeal. 
 
 STATE CONCILIATION AND ARBITRATION. 
 
 The only provision for State intervention in labor disputes is through 
 the medium of wages boards and an industrial court of appeals, as 
 described above. 
 
 Wage-earners are anxious to have the industrial court of appeals 
 abolished and to make the decision of the wages boards final, but there is 
 no likelihood of the abolition of this court, as employers would strongly 
 oppose such action. 
 
 COMPULSORY ARBITRATION. 
 
 Victoria has never had compulsory arbitration. Many wage-earners 
 favor its adoption on the grounds, as they claim, that it stands for 
 giving labor unionists a preference in employment, and that it also 
 limits the number of apprentices. Victorian employers, on the other 
 hand, are much opposed to the adoption of compulsory arbitration, and 
 if any attempt were made to introduce it, would bitterly fight the pro- 
 osal. Victorian employers agree that while the best conceivable con- 
 
 - 
 
64 REPORT OF SPECIAL LABOR COMMISSIONER, 
 
 dition in dealing with labor is to let the law of supply and demand 
 prevail, they are practically unanimous in the opinion that wages boards 
 from their point of view are a lesser evil than compulsory arbitration. 
 Secretary Walpole of the Employers' Association of Melbourne says: 
 Of all experimental legislation concerning wages, hours, and conditions, 
 that has been and is in force in this country, wages boards are the 
 fairest and have the best record of administration. 
 
 THE EFFICIENCY OF LABOR. 
 
 Labor representatives claim that unionism in Victoria has increased 
 the efficiency of labor. Some employers claim it has slightly decreased 
 it. Yet other employers hold that it has not affected labor efficiency 
 one way or the other. Ernest Aves in his report to the British Parlia- 
 ment under date of March, 1908, quotes a Victorian clothing manufac- 
 turer as saying that wages in his trade had increased twenty per cent 
 and that cost of manufacturing had decreased thirty-five per cent, 
 largely due to increased efficiency. 
 
 THE INFLUENCE OF VICTORIAN LABOR LEGISLATION ON THE UNSET- 
 
 TLEMENT OF BUSINESS. 
 
 While some Victorian employers contend that the labor laws have 
 tended to unsettle business, I was unable to obtain any tangible evidence 
 of this. On the contrary, so far as I could find, Victorian employers 
 have enjoyed a far higher degree of industrial peace in the past twelve 
 years than has been enjoyed by employers in Europe or in the United 
 States. 
 
 This, in my opinion, is very largely due to its existing labor legisla- 
 tion, which has furnished legal machinery for the prompt adjustment of 
 the vexed questions of wages and hours, thus preventing almost entirely 
 a resort to strikes and lockouts. 
 
 The Victorian employers who contend that its labor legislation and 
 the wages boards have tended to unsettle business, and who would prefer 
 to let the laws of labor supply and demand prevail untrammeled, do 
 not seem to realize that the most disturbing industrial elements are 
 strikes and lockouts, and that where the State fails to furnish legal 
 machinery for the settlement of labor disputes, but leaves such settle- 
 ment to the law of labor supply and demand, strikes and lockouts 
 prevail at a frightful cost to labor, to capital, and to the body politic 
 generally. 
 
 While there is nothing in the law to prevent the Victorian labor 
 unions from stepping in and disturbing the otherwise harmonious 
 relations existing between an employer and his men, there were no 
 cases brought to my notice where this had taken place. The fact that 
 
VICTORIA, AUSTRALIA. 65 
 
 the Minister of Labor, under the law, has the power to suspend for 
 twelve months wages board determinations, if an organized strike is 
 threatened or takes place, seems to have a great restraining influence 
 on hasty or thoughtless action on the part of overzealous wage-workers 
 or their leaders. 
 
 Under the wages board system there is little or no occasion for the 
 unsettlement or disturbance of industrial affairs, because with its per- 
 manent separate wages board, composed of representatives of employers 
 and workers in the trade, presided over by an impartial chairman, quick 
 action is possible, so that a congestion of cases with the consequent 
 delay in a decision of months and sometimes years, such as have taken 
 place in New South Wales and in New Zealand, under the former laws 
 relating to compulsory arbitration, becomes impossible. 
 
 Victorian labor laws do not make for absolute certainty in business 
 because the wages board has the right from time to time to increase or 
 decrease the minimum wage. On the other hand, it does make for a far 
 higher degree of certainty than where there is no legal wage established 
 and where strong unions can, without State intervention, demand an 
 immediate increase in wages. Under the wages board system, the matter 
 of an increased wage must be inquired into by a board upon which 
 employers and men are represented, an agreement reached, and a 
 decision rendered by the chairman, subject to the approval on appeal 
 to the industrial court of appeal, thus affording the employer a reason- 
 able protection against unreasonable demands, and thus also protecting 
 the wage- worker against a hasty or ill judging strike which may subject 
 him to irreparable loss and injury. 
 
 DOES THE LAW ENCROACH ON THE LIBERTY OF PERSON AND PROPERTY 
 OR USURP THE MANAGEMENT OP AN EMPLOYER 's BUSINESS ? 
 
 In common with most laws, wages boards encroach upon the liberty 
 of persons and property, but in return for this seeming loss they afford 
 the worker and his employer, as well as the community, a very high 
 degree of industrial peace. 
 
 The greatest sufferers under the law are the unfair employers who 
 endeavor for profit to evade its provisions or the determinations of the 
 wages boards, and who, when convicted, are penalized by the court. 
 
 The law so far interferes with private business management as to 
 determine the least but not the most it can pay for its labor, the 
 number of apprentices it can employ, and so on. In effect, it interferes 
 with private management to the degree that a strong American labor 
 union interferes with private management, with the difference, however, 
 that strong labor unions will frequently fix conditions regardless of the 
 views of employers; whereas, under the wages board system, the em- 
 
66 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 ployer in common with the worker has a voice in determining these 
 matters. 
 
 CAN EMPLOYEES OBTAIN EMPLOYMENT EXCEPT UPON TERMS FIXED 
 
 BY THE COURT? 
 
 The system is hardest upon the slow or inefficient worker who can 
 not make himself worth the minimum wage fixed by the wages board. 
 This sort of worker must obtain a special legal permit from the Chief 
 Factory Inspector, allowing him to work for less than the legal minimum 
 wage, which permit can be issued under the following act : 
 
 OLD, SLOW AND INFIRM WORKERS. 
 (Factories and Shops Act, 1975, clause 7, par. 99%, part IX.) 
 
 If it is proved to the satisfaction of the chief inspector that any person by reason 
 of age, slowness, or infirmity is unable to find employment at the minimum wage 
 fixed by the special board, the chief inspector may in such case grant to such aged, 
 slow or iafirm worker a license for twelve months to work at a less wage (to be 
 named in such license) than the said minimum wage, and such license may be 
 renewed from time to time. 
 
 The number of such persons licensed as slow workers in any factory shall not 
 without consent of the minister exceed the proportion of one fifth of the whole 
 number of persons employed in such factory at the minimum wage fixed for adults 
 or at piecework rates provided that one slow worker may be employed in any regis- 
 tered factory, and any person who without such consent employs any greater number 
 than such proportion shall be guilty of a contravention of this part. 
 
 In good times the slow worker is the last to be put on, and in bad 
 times he is the first to be sent off. This, as a rule, will be his experience 
 in most every country and under most all industrial conditions, but 
 since he can not make his own bargains here, it works out still harder 
 for him under a wages board law. 
 
 ARE AWARDS EQUALLY BINDING ? 
 
 No. Employers can not pay less than the amount prescribed by the 
 award. An employee, however, need not work for the minimum wage 
 if another employer is willing to pay him more. He may leave his 
 employment as an individual, but men can not leave their jobs in 
 concert (which would be equivalent to striking) without involving the 
 risk of losing their awards. 
 
 The employer can not escape by private agreement paying the wage 
 award, as is shown by the following legal provision : 
 
 (Factories and Shops Act, 1975, part IX, par. 114.) 
 
 Where an employer employs any person to do any work for him for which a 
 special board has determined the lowest prices or rates, then such employer shall be 
 liable to pay and shall pay in full in money without any deduction whatever to 
 such person the price or rate so determined, and such person may within twelve 
 months after such money became due take proceedings in any court of competent 
 jurisdiction to recover from the employer the full amount or any balance due in 
 accordance with the determination, any smaller payment or any express or implied 
 agreement or contract to the contrary notwithstanding. 
 
VICTORIA, AUSTRALIA. 1)7 
 
 HAVE THE BOARDS INCREASED THE COST OF LIVING? 
 
 This is a mooted question due to a confusion of thought on the part 
 of many as to the laws of economic cause and effect. Living has been 
 increased partly by the enhanced value of land, due to increased popu- 
 lation, and speculative discounting of future land values, thereby 
 increasing rent, and partly because of the increased world price of all 
 staples, which so largely enter into the wage-earner's bill of consump- 
 tion. These things in turn, combined with the scarcity of labor during 
 the highly prosperous period of the recent past, have led to higher 
 wages, which in turn, have had some influence in the further increase 
 in living cost. In industrial products the increased wage cost has 
 largely been offset, however, by improved labor saving devices, so that 
 despite a higher wage rate, there has, as a rule, followed a very trifling, 
 if any, increased industrial labor cost rate. 
 
 WAGES BOARDS ; HAVE THEY BENEFITED LABOR ? 
 
 If we are to let the labor unionists speak for themselves, we shall find 
 according to the statement made by the executive committee of the 
 labor council, as quoted herein under the chapter of "Wages Board," 
 that the wages boards have created favorable conditions for the workers 
 generally that would not otherwise have existed. 
 
 CAN MEN EVADE THE LAW AND STRIKE ? 
 
 Yes. If, however, a strike occurs in a trade working under an award, 
 the government in council, through the Labor Minister, may suspend 
 the whole or part of the determination affecting such trade for a period 
 not exceeding twelve months. The effect of this provision is that if the 
 men do not accept the decision of the wages board, the employers are 
 then legally at liberty to hire whomsoever they please at any wages 
 that may be agreed upon, to fill the places of the strikers. 
 
 DOES THE LAW DRIVE CAPITAL OUT OF THE COUNTRY? 
 
 The law may have a tendency to frighten away very timid investors, 
 but such investors would be still more timid and more speedily driven 
 out, in countries where there is no State intervention in labor disputes, 
 and where powerful labor unions are in a position to dictate their own 
 terms, and to enforce these terms by sudden and disastrous strikes. 
 The following figures taken from the official Yearbook of the Com- 
 onwealth of Australia for 1909, page 540, would indicate that there 
 as been a material industrial growth in Victoria from 1903 to 1907 : 
 
 h 
 
 AVERAGE NUMBER OF PERSONS EMPLOYED IN VICTORIA MANUFACTURING INDUSTRIES. 
 
 1903 73,229 1907 90,903 
 
 Increase, 24.10 per cent. 
 
68 REPORT OP SPECIAL LABOR COMMISSIONER. 
 
 VALUE OF PLANT AND MACHINERY IN FACTORIES. 
 
 1903.. 5,010,896 ($24,302,846) 
 
 1907 .... 6,771,458 ($32,841,572) 
 
 Increase, 35.09 per cent. 
 
 The total value of the output of factories in Victoria for 1907, accord- 
 ing to the same authority, page 552, was 29,693,634 ($144,014,125). 
 
 DOES THE LAW ENCOURAGE IMPORTS RATHER THAN LOCAL MANUFACTORIES ? 
 
 Imports have largely increased due (a) to the high degree of pros- 
 perity enjoyed in recent years leading to a consequent increased demand 
 for luxuries and grades of finer and more fashionable goods, especially 
 in wearing apparel, than the State produces; and (&) to the scarcity of 
 skilled labor, more especially female labor, thus preventing many manu- 
 facturers from increasing their capacity to keep pace with the increasing 
 demand. This point is emphasized by the Chief Factory Inspector, who 
 in his report for 1907 says : 
 
 STATE OF TRADE. 
 
 (Chief Factory Inspector's Report for 1907.) 
 
 The only complaints made by manufacturers were on account of the scarcity of 
 labor. This was more particularly the case in trades in which female labor pre- 
 dominates, and every effort was made to increase the supply, but' without success. 
 The manufacturers found it simply impossible to get sufficient labor. Many of 
 them informed me that they had advertised day after day in the newspapers for girls 
 to learn the trade without receiving a single reply. One clothing manufacturer 
 offered to pay double the legal wage to apprentices without success, though he was 
 prepared to pay a skilled worker to devote all her time to teaching the apprentices. 
 
 The industrial growth is illustrated by the Chief Factory Inspector 's 
 report of 1907, which reads as follows : 
 
 STATE OF TRADE. 
 
 (Chief Factory Inspector's Report for December, 1907.) 
 3,739 factories employing 45,178 persons were registered in 1897. 
 5,003 factories employing 71,968 persons were registered in 1907. 
 
 EFFECT OF WAGES BOARDS SYSTEM ON RURAL DISTRICTS. 
 
 The higher city wages militates, as a rule, against rural manufacturers 
 retaining their best labor. In good times it also militates against the 
 farmer holding his farm laborers in the face of city competition, in the 
 way of higher wages, but the condition is in nowise any more serious in 
 the rural districts of Victoria, than in other countries where no wages 
 boards exist. 
 
 WAGES BOARDS HOW THEY ARE BROUGHT INTO EXISTENCE. 
 
 Chief Factory Inspector Ord in his report for 1907 tells in the follow- 
 ing manner how wages boards in Victoria are brought into existence : 
 
 MODE OF CONSTITUTING SPECIAL BOARDS AND OF APPOINTING MEMBERS. 
 (Chief Inspector of Factories' Report for 1907, pp. 10-12, Appendix A.) 
 I have been so constantly asked how boards are brought into existence, the mem- 
 bers appointed, and determinations reviewed, that I think it desirable to shortly 
 
69 
 
 scribe the whole procedure. It is necessary to remember that the constitution of 
 a board and the appointment of members of a board involve two distinct procedures. 
 Before a special board is constituted, it is necessary that a resolution in favor 
 of such a course should be carried in both houses of the legislature. (Section 
 2, Act 1975. ) 
 
 It is usual for the minister administrating the factories act should move that such 
 a resolution be passed. 
 
 The minister may be induced to adopt such a course, either by representations 
 made by employers and employees, or by employees alone, or by the report of the 
 officers of the department. 
 
 The reasons alleged by the employers for desiring a board are, usually, unfair 
 competition ; and those by the employees, low wages, and often the employment of 
 excessive juvenile labor. If the minister is satisfied that a case has been made out, 
 he will move the necessary resolution in Parliament, and when such resolution has 
 been carried, an order in council is passed constituting the board. 
 
 The order indicates the number of members to sit on the board. The number 
 of members must not be less than four or more than ten. (Section 75, Act 1975.) 
 The minister then invites in the daily press, nominates for the requisite number 
 of representatives of employers and employees. These representatives must be or 
 must have been employers or employees, as the case may be, actually engaged in the 
 trade to be affected. All that is necessary is, that the full names and addresses of 
 persons willing to act should be sent in. 
 
 Where there are associations of employers or of employees, it is not often that 
 more than the number of nominations are sent in. In any case, the minister selects 
 from the persons whose names are received the necessary number to make up the 
 full board. 
 
 The names of persons so nominated by the minister are published in the Govern- 
 ment Gazette, and unless within twenty-one days one fifth of the employers or one 
 fifth of the employees, as the case may be, forward a notice in writing that they 
 object to such nominations, the persons so nominated are appointed members of the 
 board by the governor in council. ( Section 3, Act 1975. ) 
 
 If one fifth of the employers or the employees object to the persons nominated 
 by the minister, and they must object to all the nominations, and not to individuals, 
 an election is held under regulation made in accordance with the act. (Section 
 77 (3), 1975.) 
 
 Shortly stated employers may have from one to four votes according to the size 
 of the factories as regards the election of employers, but as regards a special 
 board for shops, each employer has only one vote, and each employee in the trade 
 over eighteen years of age has a vote in the election of representatives of employees. 
 The chief inspector conducts such elections, the ballot being by post, the ballot 
 papers being forwarded to each elector. 
 
 Within a few days of their appointment the members are invited to meet in a 
 room at the office of the chief inspector of factories, and a person, always a govern- 
 ment officer, and usually an officer of the chief inspector's department, is appointed 
 to act as secretary. 
 
 The members must elect a chairman within fourteen days of the date of their 
 appointment, and if they can not agree to a chairman he is appointed by the 
 governor in council. (Section 82 (1), 1975.) 
 
 The times of the meeting, the mode of carrying on the business, and all pro- 
 cedure is in the future entirely in the hands of the board, whose powers are defined 
 in sections 84-90, Act 1975, and sections 15 and 16 of Act 2137. 
 
 Vacancies in special boards are filled on the nomination of the minister without 
 any possibility of either employer or employee objecting (section 181, 1975). And 
 the same course is observed regarding all appointments of members of the furniture 
 board. (Section 78, Act 1975.) 
 
 The result of the labors of a board is called a "determination," and each item of 
 such determination must be carried by a majority of the board. 
 
 It will be seen that, unless employers and employees agree, a full attendance of 
 
70 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 the board is required, as, in case of a difference of opinion, the chairman decides the 
 matter, and he has only one vote, the same as any other member of the board. 
 
 When a determination has been finally made, it must be signed by the chairman, 
 and forwarded to the Minister of Labor. The board fixes a date on which the 
 determination should come into force, but this date can not be within thirty days of 
 its signature by the chairman. 
 
 If the minister is satisfied that the determination is in form and can be enforced, 
 it is duly gazetted. (Section 101 (1), 1975.) 
 
 In the event of the minister considering that any determination may cause 
 injury to the trade, or injustice in any way whatever, he may suspend same for any 
 period, not exceeding six months, and the board is then required to reconsider the 
 determination. 
 
 If the board does not make any alteration, and is satisfied that the fears are 
 groundless, the suspension may be removed by notice in the Government Gazette. 
 (Section 105, 1975.) 
 
 This power is not, however, likely to be used by the minister, as proceeding is 
 now made under part X of Act No. 1907, by which either employers or employees 
 may appeal to the court of industrial appeals against any determination of a board. 
 
 This court consists of any one of the judges of the supreme court sitting alone, 
 and the judges arrange which of them shall for the time being constitute the court. 
 
 An appeal may be lodged (a) by a majority of the employers' representatives on 
 a special board; (6) the majority of the employees' representatives on the special 
 board; (c) any employer or group of employers who employ not less than twenty- 
 five per cent of the total number of workers in the trade to be affected ; or, 
 (d) twenty-five per cent of the workers in any trade. 
 
 The court has all the power of a special board, and may alter or amend the 
 determination in any way it sees fit. 
 
 The decision of the court is final, and can not be altered by the board, except 
 with permission of the court, but the court may, at any time, review its own decision. 
 
 The minister has power to refer any determination of a board to the court, for 
 its consideration, if he thinks fit, without appeal by either employer or employee. 
 
 The decision of the court is gazetted in the same way as the determination of the 
 board, and comes into force at any date the court may fix. 
 
 The determinations of the board and of the court are enforced by the factories 
 and shop department, and severe penalties are provided for breaches of determina- 
 tion. (Section 119, Act 1975.) 
 
 No proceedings for breaches of the determination can be taken by any one without 
 the sanction of the department. 
 
 Any employee, however, may sue an employer for wages due him under any 
 determination, notwithstanding any contract or agreement expressed or implied to 
 the contrary. (Section 114 of Act 1975.) 
 
 HOW WAGES BOARDS ARE REGARDED. 
 
 It can not but be of interest to know how the wages boards and their 
 operations are regarded by Victorian employers, wage-earners and gov- 
 ernment officials. Accordingly, I give herewith an extract taken from 
 a paper by W. N. Pratt, Esq., read before the Conference of Australian 
 Employers' Federation and published in its report for 1905, pages 85 
 to 93, which I feel fairly represents the consensus of opinion among the 
 Victorian employers : 
 
 The one original reason for the formation of the wages boards was to prevent 
 sweating. Mr. Harrison Ord, Chief Factories Inspector, says : "The board was 
 created to prevent sweating" (1898, page 6). I can find no other real reason, and 
 the method by which this has to be done is set out in the act itself. Clause 14, 
 Act 1857, passed in 1903. says : "The board shall ascertain the average prices or 
 
VICTORIA, AUSTRALIA. 
 
 71 
 
 rates paid by reputable employers to employees of average capacity. The lowest 
 prices or rates as fixed by any determination shall in 110 case exceed the average 
 prices or rates so ascertained." 
 
 While denying that sweating existed to any great extent in the majority of trades, 
 we are obliged to admit that in a few, such as clothing, white work and where females 
 were very largely employed, sweating did exist, and to a considerable extent. A few 
 disreputable employers had forced the hands of their more humane comrades, and 
 by a constant cutting of prices, had sent wages down to a very low level. Individual 
 cases of sweating among old, slow and infirm workers could also be pointed out. 
 But it is quite certain that sweating did not exist among the strong, young and 
 active workers ; they are well able to look after themselves, and did so, commanding 
 the highest wages and most constant employment at all times, as will always be 
 the case. The act, then, was only needed for the protection of the old, slow and 
 infirm workers, and for women and children, to save them from the evils of 
 sweating. 
 
 Have the boards then accomplished the purpose for which they were established? 
 
 1. Have they put down sweating in the clothing trade? Yes, and largely in 
 trades where women are employed. But in many other trades they have increased 
 it, for the slow, old men have been driven to work at home for very low rates ; 
 while the female outworkers have been nearly swept away and the male outworkers 
 in some trades have been largely increased. 
 
 2. Have they protected those who needed protection? In the case of females they 
 have to a large extent. In the case of old, infirm and slow, they have failed to 
 protect, though the permit system now in force will possibly effect this to a certain 
 extent. 
 
 3. Have they increased employment? No ! AVhatever increase of employment 
 has taken place has been through the natural expansion of trade, an expansion 
 similar to that which took place between 1885 and 1SS9, when an increase of some 
 8,000 hands took place. 
 
 4. Have they raised wages? I .think we must say yes, as far as the average 
 per man is concerned, but not the extent that the bald figures show ; the general 
 improvement in trade is answerable for a deal of the rise, and the different circum- 
 stances of the two classes of trades those under, and those not under the boards 
 must be considered. 
 
 I may be permitted to point out where I consider them (wages boards) preferable 
 to an arbitration court : 
 
 1. They are more mobile, having simpler constitution and methods. The board 
 is easily convened, its sittings and decisions are free from red tape, and it attends 
 only to the business of its own trade, directly its business is over its sittings stop, 
 and all expenses cease. 
 
 2. The members of the board are all experts in their own trade. All intricate 
 questions and technicalities are easily understood, mistakes and delays are avoided, 
 free avenues of trade easily and quickly provided for. 
 
 3. The powers of the boards are limited and defined. They deal only with the 
 rates of wages, hours to be worked, overtime and improvers. All questions of 
 custom or privilege are outside its powers. These fruitful causes of dispute and delay 
 in the arbitration court are happily excluded from the boards. 
 
 4. Their decisions are more satisfactory. In a large number of instances they 
 are unanimous, and are accepted by the whole trade without demur. 
 
 The following extract, taken from a circular issued by the executive 
 committee of the Melbourne Trades Council, gives the consensus of 
 opinion of the Victorian wage-earners on the value of the wages boards : 
 
 They (the executive committee) are of the opinion that arbitration courts and 
 wages boards have not failed to give protection and relief to the sweated and other 
 workers, but, on the contrary, they have afforded very material and financial help, 
 and created conditions that would not have existed otherwise. 
 
72 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 And finally, I quote herewith from the Australian Yearbook, page 
 1072, to give the official opinion of the value of the Victorian wages 
 
 EFFECT OF ACTS. 
 
 The question whether the operation of the acts has bettered the monetary position 
 of the operative may be answered in the affirmative. Starting from the lowest point, 
 the provision of an absolute minimum wage per week has stopped one form of 
 gross sweating. Another case is that of the "white workers'' and dressmakers ; with 
 these the lowest form were the outworkers, who were "pieceworkers." In some 
 branches of the Victorian trade in 1897, wages paid to outworkers for all classes 
 of certain goods were only from one third to one half the wages paid in the factories 
 for the low class of productions of the same line of stuff. By working very long 
 hours the outworker could earn ten shillings (about $2.40) a week. The average 
 wage of females in the clothing trade in 1897 was ten shillings tenpence (about 
 $2.60) per week. There were, however, in that year 4,164 females receiving less 
 than a pound (about $4.85) a week, and their average was eight shillings and 
 eightpence (about $2.08). It was almost a revolution when a minimum wage of 
 sixteen shillings (about $3.84) per week of forty -eight hours was fixed by the 
 board ; when piecework rates were fixed to insure a similar minimum, and when 
 the outworkers were placed on the level of pieceworkers. Many employers refused 
 to give outwork and took the workers into the factory on time work. The sanitary 
 conditions required were far more healthy than those that could exist in poorer 
 classes of dwellings. 
 
 CONCLUSION. 
 
 Have the Victorian wages boards been a success and have they accom- 
 plished the end in view at the time of their enactment that of abolish- 
 ing sweating and establishing industrial peace ? 
 
 No impartial investigator who is seeking facts, pure and simple, can 
 render any verdict other than that the Victorian wages boards have 
 to use a colloquialism, more than ' ' made good. ' ' 
 
 They were enacted primarily to prevent sweating in the industries 
 where w r omen and children are largely employed. 
 
 The consensus of opinion of all interested parties is that wages boards 
 have so largely minimized sweating that it is no longer an evil in Vic- 
 toria, where the ' ' sweater ' ' has become a somewhat rare species. 
 
 The wages boards have not alone reduced the evil of sweating to a 
 minimum, but they have achieved other most desirable and important 
 results not exactly anticipated at the time of the enactment of the law. 
 The authors of the measure seemingly builded better than they knew. 
 
 The wiping out of the "sweater" has been a great blessing to the 
 fair employer, who is no longer compelled to compete with an unfair 
 rival who, by "squeezing" helpless labor, is in a position to undersell 
 or underbid him. 
 
 Every Victorian manufacturer starts out on an even basis, so far 
 as payment to labor is concerned. To secure the largest share of pos- 
 sible business, he must exercise his managerial ability along other lines 
 than that of "squeezing" labor. The legal minimum wage tends to 
 drive the "sweater" out of the field. Where no legal minimum wage 
 
VICTORIA, AUSTRALIA. 73 
 
 exists, the ''sweater" tends to drive the fair manufacturer out of the 
 field. 
 
 The wages boards have brought about another unexpected blessing 
 to Victorian employers, wage-workers, and to the body politic. They 
 have, for a period of over twelve years, aided in^ if not maintained, an 
 unprecedented era of industrial peace. The fact that the State had 
 provided machinery where wage-earners, having wage grievances, could 
 get a fair hearing and a fair deal at the hands of the trade experts rep- 
 resenting both sides of the issue, and the fact that the determinations 
 are enforceable against employers, left little occasion to resort to strikes 
 in order to secure what they deemed equity. 
 
 In consequence Victoria, considering the numbers industrially en- 
 gaged, has enjoyed the highest degree of industrial peace that in the 
 past decade or more has been vouchsafed to any other country in any 
 occidental government. It must, therefore, be evident that if industrial 
 peace is the test, Victoria has come more nearly discovering the missing 
 link between capital and labor than has any other modern industrial 
 land. 
 
74 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 NEW SOUTH WALES, AUSTRALIA. 
 
 The State of New South Wales is an empire in itself, covering an 
 area of 198,635,000 acres or 310,372 square miles, with less than five per- 
 sons to the square mile, embracing some of the most fertile soil in 
 Australia. 
 
 It is much the wealthiest State in the commonwealth, and stands first 
 in Australian agriculture and industrial production, and in its volume 
 of imports and exports; and with a population of about 1,500,000, its 
 wealth and purchasing power per capita ranks second only to that of 
 New Zealand. 
 
 In common with Victoria it has an ideal climate and a splendid health 
 record, less than ten deaths per thousand per annum. 
 
 A high degree of prosperity has been enjoyed by New South Wales, 
 and there is little of what in the older countries is known as poverty. 
 There are no poor rates and no workhouses in New South Wales. 
 
 It is claimed by the Intelligence Department of New South Wales that 
 its citizens are the most lightly taxed people in the world, with, so to 
 speak, no direct taxation, the profit on the government business under- 
 takings practically paying the whole of its annual interest bill. 
 
 The wage-earner living in this State, therefore, starts out with many 
 advantages. In addition to these favorable conditions, few governments 
 elsewhere have given greater attention to the amelioration of the con- 
 dition of the wage-earner, more especially to the unorganized and the 
 weaker industrial workers, than has the government of New South 
 Wales. 
 
 The State has no race problems to deal with, as nearly the whole popu- 
 lation ninety-seven and one half per cent is of British extraction. 
 
 WAGES. 
 
 In common with the rest of the world, wages during the era of pros- 
 perity have tended upward. This has been due partly to a protective 
 tariff, policy, partly to the policy of the Labor party, which has been to 
 restrict immigration in order to cause scarcity of labor and consequent 
 higher wages, and partly in the sweated and unorganized industries, to 
 the awards of wages boards and arbitration courts. 
 
 From data furnished by State Registrar Addison, I find that in forty- 
 eight occupations, dealt with by the legal authorities, wages have, 
 
NEW SOUTH WALES, AUSTRALIA. 75 
 
 through their awards, increased 16.21 per cent. These occupations have 
 been chiefly in the sweated industries. 
 
 The average wage per day for unskilled workers is seven shillings to 
 seven shillings and six pence ($1.68 to $1.80) and for skilled workers 
 ten shillings to eleven shillings and six pence ($2.40 to $2.76). 
 
 COST OF LIVING. 
 
 The cost of living has increased, due largely to the advance in the 
 world price of the great agricultural staples and also to the enhanced 
 value of city lots carrying with it a consequent increase in rent. It is 
 claimed that the increase in wages has also added to the increased cost 
 of living. This, however, is true only in a minor degree. In manufac- 
 turing industries higher wages have been more or less offset by the intro- 
 duction of greater labor saving machinery. 
 
 The Australian protective tariff has also tended in more recent years 
 to add somewhat to the cost of living. 
 
 HOURS OF LABOR. 
 
 The hours of labor in the building and generality of trades are eight 
 per day. Since the enactment of labor legislation, the hours in sixteen 
 occupations have been reduced from an average of seventy per week to 
 an average of fifty-six and one half per week. 
 
 These sixteen occupations include such as drivers of bakery and milk 
 wagons, hotel and restaurant employees, ferry employees, brewery 
 hands, shore drivers, and firemen. 
 
 Among these, for example, were such extreme cases as drivers of 
 bakery wagons, whose weekly hours were reduced from seventy-six to 
 sixty ; ferry emploj'ees whose hours per week were reduced from eighty 
 to sixty, and shore drivers and firemen, whose weekly labor was cut 
 down from eighty-four hours to forty-eight. 
 
 RELATIONS BETWEEN EMPLOYERS AND THEIR MEN. 
 
 Opinions conflict on this point. Many employers state that the rela- 
 tions are strained and unfriendly, w r hile labor leaders express the view 
 that relations are cordial and harmonious. My own opinion is that the 
 relations between employers and their employees are far more friendly 
 and cordial than they are on the continent of Europe and in some parts 
 of the United States, and more cordial than those in England except in 
 the branches of English industries where disputes are settled by volun- 
 tary conciliation and arbitration. 
 
 LABOR UNIONISM. 
 
 The effect of labor legislation in New South Wales, according to 
 Attorney General Hughes, was to increase union membership from 
 seventy-five to one hundred per cent. The report of the Government 
 
76 REPORT OP SPECIAL LABOR COMMISSIONER. 
 
 Statistician for 1907 shows that there were registered in that year 136 
 labor unions, with membership of 92,230. 
 
 It is explained that these figures do not represent the position of 
 unionism, since all unions do not register, and that particulars of unreg- 
 istered unions are not available. 
 
 STRIKES. 
 
 There are no official records kept of strikes in New South Wales. The 
 following record was furnished me by Registrar Addison from his 
 private files. The total number of strikes since 1901 was as follows : 
 
 1901 . 2 1906 29 
 
 1902 12 1907 52 
 
 1903.. 11 1908 (first 3 months) 33 
 
 1904 11 
 
 '1905 36 186 
 
 Fully half of these strikes occurred among men engaged in mining. 
 
 Out of the foregoing number there were the following instances where 
 employees struck after having obtained, and during the existence of an 
 award of the court of arbitration in an industrial dispute to which they 
 were parties, and as a refusal to obey an award : 
 
 1904 J . 2 
 
 1905 1 
 
 1906 1 
 
 1907 8 
 
 1908 1 
 
 13 
 
 One of these instances was in the case of wire netting workers ; one in 
 the case of sawmillers ; five of wharf laborers, and coal lumpers, and the 
 remaining six cases were miners. 
 
 EMPLOYERS' ORGANIZATIONS. 
 
 Employers in New South Wales are but little organized, and in the 
 nature of things here can not seem to achieve effective organization. 
 
 STATE PROVISION FOR CONCILIATION AND ARBITRATION. 
 
 After the great maritime strike of 1891 a Royal Commission was 
 appointed, who recommended that a court of conciliation and arbitra- 
 tion be created, voluntary in character. Parliament accordingly created 
 the desired legal machinery. The law, however, proved a dead letter. 
 In 1895 a legislation of compulsory inquiry was established. Under this 
 law an inquiry was held in the Victory mine trouble. The mine owners, 
 however, refused to abide by the decision and the men were helpless. 
 
 In 1901 compulsory arbitration came into effect, modeled after the 
 New Zealand law, with the penalty of imprisonment for violation of the 
 law, but the arbitration court soon became so congested that the act 
 
NEW SOUTH WALES, AUSTRALIA. 77 
 
 broke down. This led to a marked change in the law brought into effect 
 at the expiration of the Compulsory Arbitration Act in 1908. A new 
 scheme was devised in the nature of a combination of the wages board 
 system of Victoria with the compulsory arbitration system of New 
 Zealand, that will be referred to more in detail later in this report. 
 
 COMPULSORY ARBITRATION. 
 
 As mentioned in the preceding paragraph, a compulsory arbitration 
 law modeled after the New' Zealand law went into effect in 1901 for a 
 limited period of six years. The act seemingly did not work out as its 
 authors had hoped. It led to intense feeling, more especially on the part 
 of employers, whose sentiments after the act had been in operation for 
 about four years are expressed in the following extract from a paper 
 read by C. H. Austin, Esq., on the New South Wales Compulsory Arbi- 
 tration Act of 1901. before an Employers' Federation meeting held in 
 1905: 
 
 With such an example as that afforded by New Zealand before us, it would seem 
 folly to expect any more beneficial results to follow the introduction of the com- 
 pulsory arbitration system in New South Wales. Nor when we look at the facts do 
 we find that its workings there have been productive of such good as to justify its 
 existence. By the Act the power of arbitration in industrial matters is vested in a 
 court composed of a supreme court judge, as president, and two members nominated 
 one each by the industrial unions of the employers and employees, respectively, the 
 three appointed by the governor in council. I should like to say at the outset that 
 although I intend to hold up to view the workings of the Act in all its naked ugliness, 
 it is not my wish to reflect in the slightest degree upon any member of the court. 
 The court was called upon to interpret an Act, illogical in its conception, cumber- 
 some, unworkable, and mischievious in its workings and results. Mortal men in 
 my opinion could not have done better than they have done. For the Act itself I 
 have the greatest abhorrence ; for the president and members of the court I have the 
 greatest respect. The court is given power, among other things, to deal with the 
 following "industrial matters" : 
 
 (a) The wages, allowances, or remuneration of any person employed or to be 
 employed in any industry, or the prices paid or to be paid therein in respect of such 
 employment. 
 
 (6) The hours of employment, sex, age, qualifications, or status of employees, and 
 the mode, terms and conditions of employment. 
 
 (c) The employment of children, or young persons, or any person or persons or 
 class of persons in any industry, or the dismissal or refusal to employ any particular 
 person or persons or class of persons. 
 
 (rf) Any established custom or usage of any industry, either generally or in any 
 particular locality ; and 
 
 (e) The interpretation of an industrial agreement. 
 
 We have the extraordinary spectacle of the highest legal authority in the state 
 (Chief Justice Dooley), with the concurrence of his colleagues, roundly condemning 
 the Act in the following terms : 
 
 "It is also beyond a question that the arbitration Act, as in force in this state, is 
 an Act which is in derogation of the common law ; it does encroach upon the liberty 
 of the subject as regards person and property ; it creates new crimes unknown to 
 the common law or contained in any previous statute. It interferes with the liberty 
 of action of both employers and employees. It precludes the one from giving and the 
 other from obtaining employment except upon terms imposed by the Act. It deprives 
 the employer from the conduct of his own business, and vests it in a tribunal formed 
 
78 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 under the Act, and it can prescribe terms of management which, however injurious 
 they may be to the employer, he must comply with, under penalties for any breach 
 of the order of the court There are many matters to which I might refer, such as 
 the operation of the common rule upon persons who have not been before the court, 
 but it is not necessary to do so. 
 
 "Further, I think this Act is productive of the most alarming and deplorable amount 
 of litigation with its concomitant ill feeling and ill will between employer and 
 employee who are by this Act forced into hostile camps. I believe the object of the 
 legislature in passing this Act was to promote peace and good will between employers 
 and employees, but I fear it has not done so." 
 
 Against the pronounced wishes of the Labor party, which was most 
 anxious to have the compulsory arbitration measure renewed and made 
 a permanent act, the law was abondoned. In this connection it can not 
 but be of interest to note the attitude in this action of ex- Attorney 
 General Wise of New South "Wales, under w r hose direction and general- 
 ship the Compulsory Arbitration Act of 1901 was placed on the statute 
 book. The following is his statement : 
 
 The object of the Compulsory Arbitration Act was to make bargaining collective ; 
 therefore, under the Act, trade unionism was made the industrial unit. For this 
 purpose, unions were given power under the Act to make contracts and sue members 
 for fees and the court was give power to grant preferences to unionists in the giving 
 of employment, provided the union limited its right to strike, and its rules were 
 approved by the registrar so that it might not become a close corporation. This 
 implied that only the union could set the Act in motion on behalf of the men. 
 
 The Act further provides that industrial agreements made between employers and 
 men and approved by the court should be enforceable so that penalties could be 
 recovered for a breach. The award to hold for two years. 
 
 More than two thirds of the industries of the state, including thirty different 
 trades employing 150,000 men, were working under industrial agreements. 
 
 In June, 1905, the high court held that industrial agreements could not become a 
 common rule ; that is, could not be made to apply to the trade generally. The Act 
 was not amended to cover this weak spot and the most useful part of the measure 
 went by the board. 
 
 A further result was that the industries which had been regulated by agreements 
 now rushed to the court, causing great congestion and final breakdown of the tribunal. 
 
 Several other decisions were given which hampered the operations of the court 
 without the necessary amendments being made to the law. Whereas in New Zealand 
 the Act was amended seven times in the first five years of its existence. 
 
 EFFECTS OF THE ACT. 
 
 For the first five years there were no strikes. There were a few spasmodic out- 
 bursts in later years, owing to the impossibilities of getting cases heard. The case 
 of the New Castle unions, for example, was in court four years before a hearing was 
 obtained, and even then a special tribunal had to be appointed. Even in the three 
 or four actual strikes, all in coal mines or maritime trade, no support was given 
 the other unions. The system killed sympathetic strikes. 
 
 By establishing a minimum wage it abolished sweating, and it strengthened 
 unionism by establishing a preference for unionists in about half the awards. 
 
 The congestion of business, the overloading of the arbitration court with motions 
 for penalties which should have been heard by magistrates or by the registrar, caused 
 a final breakdown of the judicial machinery, the hostile administration in power 
 rendering no assistance due to its policy to destroy the Act. 
 
 The Act, however, established the principle that the public has the same interest in 
 checking industrial disputes as in preventing street brawls. The proof of this is 
 
NEW SOUTH WALES, AUSTRALIA. 79 
 
 that even the opposing political party on getting into power adopted all the essential 
 principles of the Act, and which are now in force, simply changing the method. 
 
 I never contended that the Act would absolutely prevent strikes, its purpose being 
 to prevent strikes and lockouts, and to compel both parties to operate, if they do 
 operate, in accordance with the award. But there was nothing in the law to compel 
 men to work or employers to keep their shops open if the award was not satisfactory 
 to them. 
 
 Ex-Attorney General Hughes in this connection said : 
 
 The old New South Wales compulsory arbitration law made distinctly for indus- 
 trial peace. It prevented any serious industrial outbreaks during years of great 
 prosperity when labor was well organized. Under ordinary conditions there would 
 have been conflict. 
 
 Chief Secretary Wood said : 
 
 Compulsory arbitration meant congestion and delay by appeals, and it had a 
 tendency to widen differences and cause an increased unfriendly feeling between 
 master and men. 
 
 The possible point of failure in compulsory arbitration is the inability to enforce 
 decisions against a large body of men. 
 
 Registrar Addison in this connection said : 
 
 As proof that the compulsory arbitration law did not, and does not, contemplate 
 the enforcement of its decisions, the record is cited that between June, 1904, and 
 June, 1908, there were thirteen cases where men struck work after the court award, 
 refusing to obey the awards. In only one instance were the men brought into court 
 that was in Rhonda, Northumberland and Northern extended mines and the decision 
 on a technicality was in their favor, on the ground that their agreement with their 
 employers did not stipulate that notice to quit work must be given. The award, it 
 was claimed, simply established the point that if they returned to work they must 
 do so on the terms of the award. Nothing in the award could prevent them from 
 exacting better terms if, having a monopoly of labor, they could do so. 
 
 Prime Minister Wade, on being invited to express his opinion on the 
 recent Arbitration Act, said: 
 
 The Compulsory Arbitration Act resulted in congestion of cases. The long wait 
 of one and two years for decisions led to labor unrest, resulting in numerous strikes. 
 Under the compulsory arbitration law cases were manufactured because of the 
 desire to take advantage of the ignorance of the assessors. 
 
 Preference, as a rule, being given under the awards to unionists, union member- 
 ship was increased and used for political purposes. 
 
 Prompt action in labor disputes is most important. But under compulsory arbi- 
 tration law, there were two possible appeals from the judgment of the industrial 
 court, first to the full court, and then to the high court. 
 
 To convict for violation of an award meant a jury trial with but rare instances 
 of conviction. Under our new Act there is no delay. The board consists of experts 
 and appeals are cut out by confining finality to the industrial court, which has power 
 to act summarily. 
 
 The crown initiates the prosecutions for violations of the wages boards awards. 
 
 Judge Heydon, president of the industrial court, said : 
 
 The real objection to the old compulsory arbitration court was the fact that the 
 court was congested. Provisions against strikes were severe but ineffective. The 
 strike in the New Castle coal mine showed the law to be useless. The tendency of 
 the arbitration court was to raise wages. The court was a boon, as are the present 
 wages boards, to the "sweated" workers. 
 
80 REPORT OP SPECIAL LABOR COMMISSIONER. 
 
 In this connection I am prompted to quote the following extracts 
 from a letter written by Judge Heydon in October, 1907, to Henniker 
 Heaton, Esq., M. P. : 
 
 There is a good deal of confusion of thought in the public mind as to the objects 
 to be obtained by the introduction of compulsory arbitration in industrial matters. 
 * * * Properly speaking, however, the objects aimed at are (1) the prevention 
 of sweating, and (2) the prevention or limitation of strikes and lockouts. 
 
 Of these the former is of much easier attainment, and is free from most of the 
 difficulties with which the second is beset. The sweated classes are, as a rule, the 
 weak classes, who can do little or nothing for themselves. In their case the tribunal 
 becomes one exercising protective function, and the statute creating it and clothing 
 it with the necessary powers is related to the measure by which the conditions in 
 factories, the labor of women and children, and the closing time of shops is regulated. 
 Taken altogether, they amount to no more than the imposition on the competing 
 industrial capitalists of conditions subject to which their competition is to be car- 
 ried on, conditions intended to protect the weak, and in the interest of society and 
 humanity to prevent them from being ground down in the cruel mills of intense com- 
 petition. An industrial arbitration act going only so far as this can hardly be 
 called by any one a socialistic measure. If it is, then the other legislation to which 
 I have referred is also socialistic. It no more discourages individualism and prevents 
 competition than did the law that prevents the competitor from killing his rival. It 
 permits competition and encourages individualism by giving to the competent enter- 
 prising employer the ful! reward of his industry, but, in the interests of the com- 
 munity, it lays down certain laws subject to which competition must be carried on. 
 
 I think that it can be said with considerable confidence that in this aspect of its 
 operation industrial arbitration has, in Australia and New Zealand, come to stay, 
 and will remain a permanent feature of our social life. The employment of men 
 and women under cruel condition and for grossly insufficient wages is most repug- 
 nant to public sentiment. We are united in a strong desire to prevent it, and nearly 
 every one is reconciled to the idea of preventing it by means of a tribunal whose 
 decisions shall be binding. 
 
 The second object of compulsory industrial arbitration is much more difficult of 
 attainment To forbid strikes, and compel industrial disputants to come to a court, 
 and to clothe that court with power to regulate, by a compulsory decree, the conditions 
 that prevail in every industry in which the parties are unable to agree of themselves, 
 is to intrude into a totally different sphere. If there are weak classes likely to be 
 imposed upon, and in the ordinary sense of the term, sweated, and to whom it is in 
 the highest degree just that a fair living wage should be awarded, there are also 
 strong unions able, without the assistance of any tribunal, to win for themselves 
 terms which rise as far above a fair living wage as those of the sweated classes fall 
 below it. To take away from those men the weapon of the strike, and to impose upon 
 them the compulsion of a peaceful award is to enter at once upon difficulties of the 
 gravest character. They consider that they have (as indeed they clearly have) the 
 right to the best wages they can get, and any court which imposes on them a wage 
 which in their opinion is smaller than that appears in their eyes, unless they have 
 the fullest confidence in its personnel, is an unjust tyrant. 
 
 In the humanitarian function of the court, first mentioned above, it is evident 
 that there can be no question of compelling the worker ; he is only too glad to get 
 from the justice of the community the relief which he can not win for himself. 
 Compulsion, therefore, must bear upon the employers, but a man has really no more 
 right to carry on business by paying a sweating wage than by paying no wage at all. 
 Other employers usually welcome the introduction of a uniform rule, which enables 
 them to pay a fair wage by compelling their competitors to pay it. 
 
 A battle royal took place in the New South Wales legislative assembly 
 when a new bill was brought in by Premier Wade in March, 1908, pro- 
 
NEW SOUTH WALES, AUSTRALIA. 81 
 
 viding for wages boards supplemented by an industrial court, in lieu of 
 a compulsory arbitration court, which had ceased to exist by the termi- 
 nation of the act created for six years in 1901. 
 
 The Labor party fought against overwhelming odds to retain com- 
 pulsory arbitration with its preference to labor unionists and its limita- 
 tion of apprentices, but was finally defeated. I quote the following 
 from the speeches delivered on that occasion by Premier Wade, which 
 give a most interesting and comprehensive resume of the points of 
 failure of the old act and the essential features of the new measure. 
 
 ARBITRATION COURTS. 
 
 INDUSTRIAL DISPUTES BILL. 
 (Extract from speeches by Premier Wade.) 
 
 Page 2 : We have taken as far as we can the legislation of adjoining states and 
 countries, and from our experience of the past, introduced elements which may tend 
 to make more perfect the purposes which we have in view. 
 
 Pages 3-4 : In the first place the compulsory arbitration court, in their anxiety 
 to be seized of all the history of the particular trade before them, spend a largi- 
 amount of time in being initiated and taught the element!, the A B C of the trade. 
 With these two preliminary difficulties first of all, the want of knowledge on the 
 part of the court leading to the loss of time in the educating of themselves in regard 
 to the trade, and the further loss of time involved by putting forward claims of an 
 extravagant and baseless nature, there has been an enormous amount of time con- 
 sumed in an unprofitable and expensive manner. 
 
 Page : The inexperience of the court, the extravagance of the claims made, and 
 the presence of the legal fraternity led to an immense prolongation of nearly every 
 case that came before the court. The result was necessarily an increase in expense. 
 which became very heavy in some cases. We find that during the first twelve 
 months of the life of this court it dealt with only eleven disputes, which were all 
 prolonged and some to a very great length. But at the end of a year there was a 
 list of something like seventy cases which had accumulated and were waiting determi- 
 nation by the court. 
 
 Page 6 : The court was, I might say. rushed with claims from industries of all 
 descriptions advancing grounds for redress at the hands of the court. I have actually 
 heard it stated on the part of more than one industry that their real purpose was 
 to secure preference by the court, that their condition of life was not so bad after 
 all. When the unions saw that whether they achieved success or not in the way of 
 an increase of wages, they, at all events, had the opportunity of having the prefer- 
 ence clause granted them by the court, there was naturally a rush by all the industries 
 that could do so to come before the court, and if possible obtain that result. * * * 
 Under these circumstances, by a particularly simple method, which \Vas not for a 
 moment contemplated by those who formed the act, the opportunity was given the 
 labor unions to strengthen their political organization with the disastrous results 
 to the arbitration court as an industrial tribunal of congesting its work in a most 
 deplorable way. The very first we ask for in any useful tribunal is a ready access 
 to that body in the case of trouble. It is no use to be told, "Lay down the weapons 
 of a strike ; stop your lockout ; when trouble arises, go before this tribunal of peace, 
 which will deal with your case promptly and without delay." What is the good of 
 that cry, what is the use of the remedy, when you find in the case of trouble that 
 those unions which have a real substantial grievance can not expect redress unless 
 they wait for one, or, possibly, two or more years? It is hardly to be wondered at 
 under these conditions that there might be a union with a real substantial grievance 
 which could not approach the court, and in despair took the alternative of trying 
 to redress things in its own way. 
 
 6 
 
82 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 WAGES BOARDS. 
 
 Page 20: The main points we make for this proposed wages boards bill, as I say. 
 are expedition, simplicity, finality and determination by a body of experts. 
 
 Page 27 : A separate tribunal is appointed by the bill to carry out the other 
 necessary conditions of the statute which is to enforce those awards and to punish 
 for breaches of them. And it is obvious that when you have boards, all of which 
 consist of lay members without legal experience, and the necessity of many of them 
 having as their chairman a layman also it would be unwise to provide that that 
 same body, possibly of laymen, too, should have the power of enforcing awards, 
 inflicting penalties, and possibly imprisoning persons convicted before them ; and 
 there is the further anomaly that when you have a board, or, what might be called 
 a bench, composed of employees and employers, it would lead to endless friction 
 and disastrous results if it were possible for the employees to send their employers 
 to goal by their award, or if the employers sent to goal their employees who might 
 possibly have been working in harmony with them on the same board a short time 
 before, so it became essential to make this broad dividing line : to have the making 
 of the trade conditions in the hands of the boards, and to have some other tribunal 
 as a body to enforce these awards when made. 
 
 "CLOSED SHOP/' 
 
 The law goes no further than to say that it shall not be obligatory 
 to grant any preference in its awards to members of unions. It leaves 
 the point to be determined between the parties. In consequence, there 
 are some unions, notably in the hat industry, that refuse to allow their 
 members to work with nonunionists in the same industry. These, how- 
 ever, are exceptional cases. As a rule, union and nonunion men work 
 side by side. 
 
 EFFECT OF STATE INTERVENTION ON CAPITAL IN INDUSTRIAL ENTERPRISES. 
 
 The opponents of State intervention in labor disputes maintain that 
 such intervention has made for the driving out of capital and the dis- 
 couragement of industrial undertakings. 
 
 A recent writer on this point says: "While some capital may have 
 been frightened away because of state labor legislation, such legisla- 
 tion has actually given a feeling of security and permanency to industry 
 consequent on its having rendered serious strikes improbable. As these 
 facts become more generally known, it will be conducive to inviting the 
 investment of foreign capital. ' ' 
 
 The following facts taken from the latest government report, 1909, do 
 not substantiate the charge that State intervention in labor disputes 
 affects industrial growth unfavorably : 
 
 Manufactories 1903 . 3,476 
 
 Manufactories 1907 4,387 
 
 Increase 911 26.20 per cent. 
 
 Hands employed 1903 66,269 
 
 Hands employed 1907 . 87,194 
 
 Increase 20,92531.57 per cent. 
 
NEW SOUTH WALES, AUSTRALIA. 83 
 
 WAGES BOARDS. 
 
 The act adopted in April, 1908, in lieu of the compulsory arbitration 
 act of 1901, which had expired by limitation, bears the title of "Indus- 
 trial Disputes Act of 1908." 
 
 Briefly, it includes a schedule of about eighty industries, and pro- 
 vides that on application of employer or employers of not less than 
 twenty employees, or a trade union registered under the act having a 
 membership of no less than twenty employees, or, in the absence of 
 an existing trade union, twenty employees of an industry, the industrial 
 court may recommend to the minister that a board be constituted for 
 such industry. Or, without any application, the minister on recom- 
 mendation of the industrial court may direct a board to be constituted. 
 
 Each board consists of a chairman and not less than two nor more 
 than four other members, one half employers and the other half em- 
 ployees who are or have been engaged in the industry. 
 
 The appointment of the members is made by the governor on the 
 recommendation of the industrial court, which, as a rule, accepts the 
 nominees of both parties, or in the event of the parties failing to nomi- 
 nate, makes its own recommendation to the governor. 
 
 Where the parties agree on a chairman, such party is nominated by 
 the court. Failing to agree, the governor appoints a supreme or dis- 
 trict court judge, or some person nominated by the court. The chair- 
 man, in his discretion, may appoint two or more assessors representing 
 both sides to advise on technical points, but without voice on the board. 
 Members of the board and assessors are sworn to secrecy on penalty not 
 to divulge any evidence relating to trade secrets; the profits or losses 
 or the receipts and outgoings of any employer ; the contents of books of 
 an employer or witness produced ; the financial position of any employer 
 or witness. The members of the board hold office for two years. The 
 governor fixes the fees paid board members and assessors. 
 
 Proceedings are commenced before a board, by reference to the board 
 by the industrial court, or, by application, to the board by employers or 
 employees. The board has the power to- 
 rt. Decide all disputes ; 
 
 Z>. Fix the lowest p*rices for piecework and the lowest rate of wages 
 payable to employees ; 
 
 c. Fix the number of hours and the times to be worked in order to 
 entitle employees to the wages so fixed; 
 
 d. Fix the lowest rates for overtime and holidays, and other special 
 fork; 
 
 e. Fix the number or proportionate number of apprentices, and the 
 lowest prices and rates payable to them; 
 
84 REPORT OP SPECIAL LABOR COMMISSIONER. 
 
 /. Appoint a tribunal for the granting of permits allowing aged, 
 infirm or slow workers to work at lower than regular wages ; 
 g. Determine any industrial matter; 
 h. Rescind or vary any of its awards. 
 
 The decisions of the board, subject to an appeal to the industrial 
 court, are binding on all persons engaged in the industry Avithin the 
 locality specified for the period fixed by the board, not less than for one 
 nor greater than three years. The board may conduct its proceedings 
 in public or in private, at its discretion. It may exercise in respect to 
 witnesses and documents and persons summoned, giving evidence before 
 it, the same powers conferred on a committee of elections and qualifica- 
 tions. An employer's books may be called for only in the event of his 
 claim that the profits of his business are not sufficient to enable him to 
 pay the wages or grant the conditions claimed. 
 
 No advocates are allowed to appear before the board without the con- 
 sent of the chairman. Decisions of the board, if not presided over by a 
 judge, may be appealed from to the industrial court within one month 
 by any trade or industrial union, or by any person bound or intended 
 to be bound by the award. The industrial court only may rescind or 
 vary any award or order made by the board. It may also cancel or 
 vary any recommendation made. by it. An employee may apply to the 
 industrial court within three months for an order to recover from the 
 employer the full amount of any balance due for wages as fixed by the 
 board, notwithstanding any smaller payment or any express or implied 
 agreement to the contrary. Such order is deemed a judgment for the 
 amount. 
 
 PROHIBITION OF LOCKOUTS OR STRIKES. 
 
 If any person does any act or thing in the nature of a lockout or 
 strike, or suspends or discontinues employment or instigates to or aids 
 in any of the above mentioned acts, he is liable to a penalty not exceed- 
 ing one thousand pounds ($4,850) or in default to imprisonment not 
 exceeding two months. Nothing, however, prohibits the suspension or 
 discontinuance of any industry or the working of any person therein 
 for any cause not constituting a lockout or strike. Any person commit- 
 ting a breach of an award of a board or of J:he industrial court is 
 liable to a penalty not exceeding fifty pounds ($242.50), and in default 
 of payment to imprisonment not exceeding three months, or for a willful 
 act or default of the person charged, the court may in lieu of such pen- 
 alty imprison for not exceeding three months. 
 
 To dismiss an employee because he is a member of a board or a trade 
 union, or for any other reason, having in view the evasion of an award, 
 lays the employer liable to a penalty not exceeding twenty pounds 
 ($97.00) for each employee so dismissed. In every case it lies with the 
 
NEW SOUTH WALES, AUSTRALIA. 85 
 
 employer to satisfy the judge that such employee was dismissed by 
 reason of some facts other than those mentioned. Proceedings for any 
 offense against the provisions of the act are taken before the industrial 
 court, and are heard and determined in a summary manner. 
 
 The court may order a trade union to pay out of its funds any amount 
 not exceeding twenty pounds ($97.00) of the penalty imposed upon any 
 of its members,, unless it can be shown by the union that it exercised 
 every reasonable effort to prevent its members from going on strike or 
 from taking part in a strike or instigating or aiding a strike. The 
 decision of the industrial court is final. 
 
 Employers and employees must give at least twenty-one days' notice 
 of an intended change affecting conditions of employment with respect 
 to wages or hours. . During the proceedings before a board, neither party 
 can alter the conditions of employment with respect to wages or hours. 
 ' ' Statu quo ' ' must be maintained. The foregoing, in substance, are 
 the salient points of the law enacted in April, 1908, and amended in 
 December, 1908, and known as the "Industrial Disputes Act of 1908." 
 It will be noted from the foregoing provisions of the New South Wales 
 industrial dispute act, that practically it is the Victorian wages board 
 system described in my preceding report, combined with certain fea- 
 tures of the New Zealand compulsory arbitration act. As a matter of 
 fact. Premier Wade, the framer of the act, stated that he had taken as 
 far as he could the legislation of adjoining states and countries with 
 the view of making the act more perfect for the purpose in view. 
 
 At this writing the act has been in operation less than a year. It is, 
 therefore, altogether too early to determine how nearly it is likely to 
 achieve the results aimed at by its framers, in establishing a higher 
 degree of industrial peace than was achieved under the compulsory 
 arbitration law of 1901. 
 
 ATTITUDE OP LABOR COUNCIL. 
 
 The Labor Council of Sydney received the act in the most unfriendly 
 spirit. It was hostile to the measure because (a) it did not provide 
 for preference in employment to unionists ; ( b ) it did not limit appren- 
 ticeship ; (c) it provided that any twenty nonunion employees could col- 
 lectively unite in asking for a wages board, thus, in the opinion of the 
 Labor Council, making against unionism. The council agreed that if 
 nonunionists could secure wages boards there would be no incentive for 
 men to join unions, when without a union they could get the desired 
 awards. Accordingly, the Labor Council passed a resolution calling 
 upon the unions to refrain from registering under the act with the view 
 of making it a dead letter and defeating its purpose. 
 
 Unionists soon found, however, that the fears of the Labor Council 
 were groundless. In no instance thus far have applications for wages 
 
86 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 boards been made by nonunionists and unionism has continued to grow. 
 Union members soon discovered that the law afforded advantages to 
 labor in the way of establishing fair working conditions and the pre- 
 vention of sweating that labor could not afford to ignore, so that despite 
 the condemnatory resolution of its own council, unions have steadily 
 been registering under the act and making the fullest use of the legal 
 machinery provided for the betterment of labor conditions and the settle- 
 ment of labor disputes. 
 
 The official record on April 7, 1909, as furnished me by Premier 
 Wade, stood as follows : 
 
 Number of labor unions registered under the act of 1908 59 
 
 Number of applications for boards 62 
 
 Number of boards appointed 36 
 
 Number of determinations of boards 18 
 
 Number of boards sitting 4 
 
 Number of hearings not yet begun 13 
 
 Greatest number of boards sitting at one time 12 
 
 Since leaving Sydney I have been informed that the Labor Council 
 has rescinded its resolution against the wages board act, having realized 
 that it is not proving disadvantageous to unionism. On the contrary, 
 the unions have found the following advantage under the new act, 
 which they seem to value highly and which they did not enjoy under 
 the compulsory arbitration act. 
 
 Under the old act unions could get judgment against members for 
 unpaid dues, but found it almost impossible to collect such judgments. 
 Under the new act unions can get judgments from a district court, with 
 power to garnishee or attach wages or levy on the property of a delin- 
 quent member, with the penalty attached of imprisonment in default 
 of payment. 
 
 Despite the fact that the law is yet in its infancy, and too young to 
 pass upon it any definite judgment, evidences would indicate that it is 
 likely to prove successful. We have seen that, despite the hostile atti- 
 tude towards it in the beginning on the part of the Sydney Labor Coun- 
 cil, unions were not slow to avail themselves of the benefits it affords and 
 that out of about eighty industries scheduled in the act as entitled to 
 wages boards, fifty-nine unions registered under the act in the first 
 few months of its existence. On the other hand, employers have 
 expressed to me the opinion that in their judgment the wages boards 
 system is making for industrial peace, and that it is a far better system 
 than and a great improvement on compulsory arbitration, pure and 
 simple, since it prevents congestion of cases (Premier Wade stated that 
 thirty cases had been disposed of in the first' eight months of the act), 
 brings the knowledge of experts to bear on disputes, and tends to bring 
 employers and men together, making for the wiping out of prejudices 
 
NEW SOUTH WALES, AUSTRALIA. 87 
 
 and the creation of more cordial relations, the decisions of the boards, 
 as a rule, having been generally accepted. 
 
 The secretary of one employers' association said that the wages boards 
 are bringing about a higher degree of industrial peace, and the secre- 
 tary of yet another employers' association made the statement that the 
 members of his association were quite satisfied with the New South 
 Wales wages boards law, since they did not provide for preference to 
 unionists. 
 
 VIOLATION OP WAGES BOARD ACT. 
 
 There have been two important convictions for violating the provision 
 against strikes and lockouts since the act went into operation. The first 
 was against the Lithgow Iron Works, who were convicted and fined by 
 the industrial court on March 13, 1909, in the sum of $250 and $55 
 costs for a lockout ; and the second case was that of the union of rock- 
 choppers, the secretary of which unlawfully instituted a strike which led 
 a number of men in the employ of the metropolitan district water sup- 
 ply and sewerage board to discontinue their work. Prosecutions were 
 instituted against one hundred and eighteen members of the union. 
 The cases against the officers of the union charged with instigating the 
 strike were heard. The two secretaries and the executive officer were 
 fined $150 each or six weeks' imprisonment, and the president of the 
 union was fined $200 in default of two months' imprisonment. 
 
 THE MINIMUM WAGE DOES IT MAKE FOR THE DEAD LEVEL? 
 
 Despite the fact that New South Wales employers welcome the wages 
 boards in preference to compulsory arbitration, many of them contend 
 that the minimum wage which it establishes tends to create the dead 
 level among workmen and to diminish output by pulling the efficient 
 worker, by virtue of his wage being cut to the minimum, down to the 
 level of the less efficient worker. 
 
 My investigations have led me to the conclusion that where employers 
 stand upon the letter of the law and reduce the wages of the more effi- 
 cient men down to the legal minimum, it tends toward the dead level, 
 and makes for deadening the ambitions of such workers. 
 
 In the industries where unskilled labor is employed, due to the f act- 
 that the law has established a fairly high minimum ($1.75 to $1.87 
 per day) which, considering the greater purchasing power of money 
 here, is fully as high if not higher than the average wage paid unskilled 
 labor in the United States, the minimum, as a rule, becomes the maxi- 
 mum wage. The incentive for efficiency largely remains, however, even 
 among unskilled workers, due to the desire to retain employment, 
 employers naturally giving the more efficient workers a preference. 
 
 In the skilled trades, however, I found that few intelligent employ- 
 ers stand upon the letter of the law and cut the wages of highly efficient 
 men down to the minimum. 
 
88 
 
 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 At my request Premier Wade had compiled from the factory sched- 
 ules on file with the Chief Factory Inspector, the figures showing the 
 actual wages paid in registered factories. From the following table it 
 will be seen that the law does not make for the dead level and that aside 
 from foremen, over fifty-one per cent of adult workers receive more than 
 the minimum wage fixed by law, showing clearly that the merit system 
 largely prevails and that employers differentiate between their workers, 
 thus offering an incentive for higher efficiency and a larger output. 
 
 PREMIER'S OFFICE, SYDNEY, 5th June, 1909. 
 
 DEAR SIR: I have endeavored to secure the information you asked for with regard 
 to the minimum wage. The particulars, however, are not collected in that detailed 
 form which makes deductions allowable. Only a rough calculation is possible under 
 the circumstances, which I scarcely like to put forward as being able to stand the 
 test of examination. 
 
 The information so far is collated in respect of adult workers only that is. 
 foremen are excluded, also workers under twenty-one years of age, as well as old. 
 slow workers who work for loss than the minimum wage. However, I think the 
 information is so far reliable as to prove that a proportion of workers, under awards 
 of the court, do receive more thnn a minimum wage. 
 
 I forward a table that has boon prepared. I think it would be wise to take it as 
 correct on general lines and not to be relied on in detail until there has been oppor- 
 tunity of going into the question more thoroughly and at greater leisure. 
 Yours faithfully. 
 
 (Signed. I C. S. WADE. 
 
 COLONEL H. WEINSTOCK, 
 
 Special Labor Commissioner for California. 
 
 MINIMUM WAGE ARBITRATION COL'RT AWARDS. 
 
 Industries. 
 Tanners 
 
 Receiving 
 minimum 
 wage. 
 113 
 
 Receiving 
 over 
 minimum 
 wage. 
 
 350 
 
 Not 
 classi- 
 fiable. 
 
 28 
 
 Proportion 
 receiving 
 above mini- 
 mum wage. 
 
 75.6 per cent. 
 
 Brickmakers - 
 
 672 
 
 139 
 
 136 
 
 17.1 per cent. 
 
 Sawmills 
 
 330 
 
 197 
 
 118 
 
 37.4 per cent. 
 
 Ironworkers' assistants 
 
 ] 
 
 
 
 
 Kngineers (ironworks) 
 
 I 729 
 
 251 
 
 99 
 
 25.6 per cent. 
 
 Stovemakers - -- - _- . 
 
 
 
 
 
 ^'ire netting workers* 
 
 .__ j 
 
 
 
 
 Bakers 
 
 652 
 
 321 
 
 189 
 
 33.0 per cent. 
 
 Cold storage employees 
 
 52 
 
 14 
 
 20 
 
 18.4 per cent. 
 
 Tailoresses 
 
 187 
 
 1,011 
 
 9 
 
 S4.4 per cent. 
 
 Boot employees 
 
 747 
 
 495 
 
 171 
 
 39.8 per cent. 
 
 Pressers (clothing) 
 
 7<; 
 
 33 
 
 
 30.3 per cent. 
 
 Saddlers 
 
 77 
 
 80 
 
 11 
 
 51.0 per cent. 
 
 Furniture makers 
 
 99 
 
 306 
 
 36 
 
 75.5 per cent. 
 
 Wire mattress workers 
 
 11 
 
 30 
 
 17 
 
 73.2 per cent. 
 
 Gas employees 
 
 47 
 
 816 
 
 154 
 
 94.5 per cent. 
 
 Laundries 
 
 353 
 
 343 
 
 23 
 
 49.3 per cent. 
 
 Brushmakersf 
 
 
 
 
 
 
 
 
 
 
 Total 
 
 4.145 
 
 4,386 
 
 696 
 
 51.4 per cent. 
 
 Total of minimum and over 
 
 minimum wage 
 
 
 
 8,531 
 
 
 
 
 
 
 * All on piecework. 
 
 y Great majority on piecework. 
 
NEW SOUTH WALES, AUSTRALIA. S!) 
 
 CONCLUSION. 
 
 The experience of New South Wales with its labor legislation is of 
 profound interest to the investigator because of its progressive char- 
 acter. While it is yet perhaps in an experimental stage, it has made 
 important strides along the line of achieving the results aimed at, 
 namely, the abolition of sweating and the maintenance of industrial 
 peace. 
 
 In the beginning, it created legal machinery for the settlement of 
 labor disputes by voluntary conciliation and arbitration and in common 
 with other states and countries found it inefficient. It then went to 
 the other extreme and created a most drastic compulsory arbitration 
 law. This, also, it found largely ineffective, due to inherent defects in 
 the law that tended to friction, delay and great difficulty in enforcing 
 court decisions. Profiting by these experiences it sought a happy 
 medium by creating wages boards, where employers and employees can 
 be brought together under favorable and friendly conditions with every 
 incentive to come to a voluntary understanding which is legalized by the 
 court. In the event of a failure to do this, it is made possible to reach 
 a conclusion by the intervention of an impartial chairman, which con- 
 clusion i.s likewise legalized by the court, which under the law is given 
 power to enforce the decision. In this wise, a way has been found not 
 only to minimize the evil of sweating, but also to reduce possible strikes 
 and lockouts to the fewest number. The record of the first eight months 
 of the operations of the act is encouraging. 
 
 The awards of the wages boards have generally been accepted, with 
 few. if any, appeals to the court. Violations of the law have been 
 promptly and summarily dealt with by the court, and the claims and 
 counterclaims of the employers and employees have had a prompt and 
 expeditious hearing. 
 
 Doubtless Aveak spots in the act that will need attention will show 
 themselves as time goes on ; but with the present favorable attitude 
 toward the measure on the part both of employers and wage-earners, 
 no difficulty should be experienced in strengthening such weak spots in 
 an equitable manner with justice to employers and men. 
 
90 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 AUSTRALIA. 
 
 Australia is primarily an agricultural and pastoral country. In 
 1908 the area under crop was 9,355,052 acres. The estimated value of 
 production from industries in 1907 was as follows : 
 
 Agriculture, including pastoral $469,218,000 
 
 Manufactures 182,239,000 
 
 It will be seen from these figures that agriculture produces more than 
 two and one half times the value of manufactures in Australia and is 
 likely to continue doing so for an indefinite period. The sparseness of 
 its population about 1.37 persons to a square mile, or 4.197.037 people 
 in a country with an area of 2,974,581 square miles, making it substan- 
 tially as large as the United States makes it hardly possible to maintain 
 manufactories on a scale successfully to compete with the great indus- 
 trial countries of the world. In 1907, manufactories had grown suffi- 
 ciently large, however, to keep busy 12,555 factories, employing 248.841 
 hands. 
 
 STATE EFFORTS IN BEHALF OF WAGE- WORKERS. 
 
 For the past thirty-five years the Australian governments have yivcn 
 much attention to the condition of its factories workers, the first fac- 
 tories act having been passed in 1873. Much of this has been due to the 
 efforts of trade unions, whose history in Australia dates back to 1859. 
 
 In this connection the official Yearbook for 1909, page 1048, says : 
 
 DEVELOPMENT OF TRADE UNIONS IN AUSTRALIA. 
 
 Each state in the commonwealth, it may be said, has enacted with more or less 
 elaboration, legislation respecting trades unions and respecting regulation of the con- 
 ditions of industrial life, particularly those of factory employment ; and each state, 
 except Tasmania, has regulated the hours of business for the great majority of shops. 
 Some of the states have also established machinery for the regulation of wages, as 
 well as of other matters connected with employment. 
 
 At the present time there is an obvious tendency to adjust such matters throughout 
 Australia on uniform lines. The industrial conditions of any state in the common- 
 wealth naturally react quickly on any other State. This is one of the consequences 
 of a unified tariff, and of the fact that the general economic conditions of any one 
 part of the commonwealth must necessarily affect any other part. An expression of 
 the intimacy of these economic and industrial relations of different parts is seen. 
 for example, in the refusal of the arbitration court in New South Wales to fix the 
 wages in the boot trade at a higher rate than that fixed by the wages board in 
 Victoria, because of the additional burdens that such a rate would place on local 
 manufacturers. 
 
AUSTRALIA. 91 
 
 LABOR IN AUSTRALIAN POLITICAL LIFE. 
 
 Speaking of the part played in the political life in Australia by labor 
 unions, the same authority says, pages 1051-2 : 
 
 It was during the decade 1880-90 that the trades unions of Australia espoused 
 direct legislative representation and advocated state interference between employer 
 and employee. This policy has been called "new unionism." A resolution affirming 
 the desirability of parliamentary representation of labor being passed at the congress 
 of 1884, a number of members representing the special interests of the wage-earners 
 were elected to the legislatures of several states, but the unions took no steps to obtain 
 representation by men chosen from among their own ranks until after the great labor 
 trouble of 1890-92. In that time serious strikes occurred in the maritime, shearing, 
 and mining industries, and it was then that the Labor party proper was formed, 
 though a certain amount of ameliorative legislation had already forced its way into 
 the statute books of the states. Since 1890 the party has considerably influenced 
 Australian politics. In the year 1904 a labor government occupied the commonwealth 
 treasury, and again in December, 190S, a second labor government took office. The 
 second Deakin ministry had the support of the Labor party. In South Australia the 
 premier is a direct labor representative. In Queensland a third of the House of 
 Representatives are labor members. In New South Wales the election of 1907 
 strengthened the party, and it is now an important element in 'Parliament. Victoria 
 and West Australia have also elected a considerable number of direct labor repre- 
 sentatives. 
 
 Under the heading of "Limitation of Hours" the Yearbook. 1909, 
 says, page 1056 : 
 
 As already remarked, the adoption of the eight-hour system for adult males has 
 generally been the outcome of the representations made by the trades unions. Except 
 in New Zealand, there is no general legislation to enforce the principle, although there 
 is now a general recognition of it. A week of forty-eight hours is the usual working 
 week. The larger unions, however, have lately moved for a net day of eight hours 
 with Saturday a half-holiday, no loading of other days being permitted as compensa- 
 tion for Saturday afternoon. Under this scheme there are for five days equal divisions 
 for periods of work, recreation and rest, and four hours' work on Saturdays, making 
 a working week of forty-four hours. In the majority of occupations forty-eight hours 
 weekly is the recognized limit of work. On the establishment of wages boards and 
 arbitration courts, in the states where those institutions exist, the authorities thus 
 created adopted the rule as a part of their determinations and awards whenever it 
 was reasonably practicable. In some technical and specialist trades a lower maximum 
 has been fixed, such as, for example, the typesetting machine operators in Victoria, 
 for whom the maximum has been fixed by the wages boards at forty-two hours 
 weekly. Reasonable provision is made by statute or award for work performed 
 outside of the scheduled hours. Organizations of employees, however, oppose over- 
 time in any industry until all the operatives in that industry are working full time. 
 
 In speaking of "Labor Legislation," the Yearbook, 1909. says, page 
 1064: 
 
 Two systems, based on different principles, exist in Australia for the regulation of 
 wages and general terms of contracts of employment. A "wages board" system 
 exists in New South Wales. Victoria, Queensland, and South Australia, and an 
 arbitration court in West Australia. In New South Wales industrial arbitration 
 act of 1901-05 instituted an arbitration court. This court expired on the 13th of 
 June, 1908, having delivered its last judgment on the previous day. Wages boards 
 were substituted under the industrial disputes act of 190S. There is also the 
 arbitration court of the commonwealth which has power, however, to deal only with 
 matters extending beyond the limits of a single state. 
 
92 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 In 1904 the Commonwealth Parliament enacted a law known as the 
 "Commonwealth Conciliation and Arbitration Act," having for its end 
 a system of compulsory arbitration for all interstate labor disputes, 
 with the view of preventing strikes and lockouts. 
 
 The provisions of the act, in brief, are as follows : 
 
 The court has jurisdiction for the prevention and settlement of inter- 
 state industrial disputes, with power to conciliate with the view to 
 amicable agreement between the parties, failing in this, to make an 
 equitable award. 
 
 The states may refer industrial disputes to the court, and permit the 
 working's of the court and state industrial authorities to aid each other. 
 
 The la^v forbids interstate strikes or lockouts, subject to a penalty of 
 1.000 ($4,850). The award of the court is binding on all parties to the 
 industrial dispute. 
 
 Assessors, one each representing employers and employed, may be 
 appointed by the court for the purpose of advising it in relation to 
 the dispute, and to discharge such other duties as the court may direct. 
 The court has power to fix maximum penalties for any breach or non- 
 observance of an award, not exceeding 1,000 ($4,850) in the case of an 
 employer or an organization, 10 ($48.50) in the case of an individual 
 member of an association. 
 
 Power is also given the court to summon before it parties to the dis- 
 pute and witnesses and to compel the production before it of books, docu- 
 ments and things for the purpose of reference only as to matters that 
 relate to the dispute. 
 
 The court may prescribe a minimum wage and appoint a tribunal 
 which shall have the power to fix a lower rate in the case of workers who 
 are unable to earn the prescribed minimum wage. 
 
 It may direct that other things being equal, a preference be given to 
 members of labor unions. 
 
 In addition to the monetary penalty imposed, the court has the power 
 to deprive those failing to observe an award, of all rights and privileges 
 under the act, and to any official position in any organization interested 
 in the award, and all existing or accruing rights to any payment out of 
 the funds of any organization interested in the award. 
 
 Fines, fees, levees or dues payable to any labor union by any member 
 may after registration be sued for and recovered in the name of the 
 organization in any court of summary jurisdiction. 
 
 We have seen that the various Australian states have their separate 
 labor legislation. The commonwealth industrial court being empowered 
 to deal only with eases that affect more than any one state. In this con- 
 nection the Yearbook for 1909, says: 
 
AUSTRALIA. !'o 
 
 THE NEW PROTECTION. 
 
 The wide difference between the developments in the several states of the com- 
 monwealth of the regulation by state institutions of the remuneration and conditions 
 of the worker has given rise to the desire on the part of the common won 1th govern- 
 ment to secure uniformity throughout Australia by any suitable and constitutional 
 action on the part of the commonwealth. The provisions of state wages laws vary 
 considerably. In New South Wales, Victoria, and West Australia some experience 
 has been gained of their working. The wages board system is new in South 
 Australia and Queensland. Tasmania is without legislation. The desirability of 
 uniformity has, as already mentioned, been recognized by the New South Wales 
 arbitration court, which refused the bootmakers' union an award which would 
 increase the wages of its members to amounts exceeding those paid in Victoria in 
 the same trade, the expressed ground of the refusal being that New South Wales 
 manufacturers would be handicapped by the payment of a higher rate of wage than 
 that prevailing in Victoria. This attitude can not be made effective by the arbitra- 
 tion court of the commonwealth, which has jurisdiction only over industrial disputes 
 extending beyond the limits of any one state. 
 
 This desire on the part of the government, backed as it is by the labor 
 unions, is being strenuously opposed by employers and by the advocates 
 of state rights ; the former because on principle they are opposed to com- 
 pulsory arbitration, and the latter because they fear too great a cen- 
 tralization of federal power. 
 
 The Australian federal law is substantially the same as that of New 
 Zealand. The cardinal principle in both laws is that labor loses the 
 right to strike and the employer loses the right to lockout, and that the 
 court has the plenary powers to summon before it the parties likely to 
 cause industrial strife. It postulates organization. The men especially 
 must organize, hence, the law makes for unionism. 
 
 The commonwealth arbitration law has now been in existence for about 
 four years and a half. The only strike or lockout thus far calling for 
 federal intervention was at the Broken Hill mines, in New South Wales, 
 involving over 4,000 men. In dealing with the decision in this case. I 
 quote from the Melbourne Herald of March 12, 1909 : 
 
 ARBITRATION BROKEN HIM, DECISION. 
 
 Iii the first civil court to-day. Mr. Justice Higgins, president of the Common- 
 wealth Court of Arbitration and Conciliation, delivered his judgment in the case of 
 the Amalgamated Miners' Association of Broken Hill (claimants) against The 
 Broken Hill Proprietary Company, Ltd. (respondents). 
 
 The judgment constitutes an arbitration award under the conciliation and arbitra- 
 tion act, and fixes the wages and hours of the men employed by the Broken Hill 
 Proprietary Company at Broken Hill and Port Pirie. * * * Tho dispute between 
 the company and the men commenced when the directors of the company, on 
 December 7th last, posted a notice at the mine stating that the "present rate of 
 wages, less the bonus," would remain in force on and after December 21st. 
 
 The men at once accepted this notification as meaning a reduction in wages. The 
 directors of the proprietary company asserted that the wages as paid on October 31. 
 1903, under an award by the New South Wales arbitration court were still in force, 
 but that in addition a percentage increase by. way of bonus was paid under an 
 agreement made in 1906, and which expired on December 31st last. This percentage 
 increase, which placed the wages on the same scale as that paid by the principal 
 
94 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 companies in Broken Hill other than the Broken Hill Proprietary Company was 
 to be withdrawn, as from December 31st, leaving the old wage still in force. * * * 
 His honor said that the dispute was between a union or association registered under 
 the act, employed in the mining industry, and a company which before the dispute 
 employed 4,195 men at Broken Hill and Port Pirie, mostly members of the associa- 
 tion. A dispute arose between the Broken Hill companies and the union in 1903. 
 and a state award was made which lasted till 1905. A conference took place in 
 1906, and an agreement was made between the union and the twelve principal com- 
 panies, including the proprietary company. 
 
 According to the view of Mr. Justice Cohen, as expressed in the Newcastle Wharf 
 Laborers' Union against Newcastle and Hunter River Steamboat Co., Ltd., of New 
 South Wales, as he (Mr. Justice Higgins) understood it, it was the duty of the 
 company, if it objected to the wages of 1907-8, to continue paying the wages till the 
 arbitration court allowed the reduction of wages. * * * But whether this was the 
 true meaning of the federal act or not, the position was that the mine and all its 
 mills and works were closed and silent, and were picketed by the men ; that the 
 company had its immense plaut and machinery lying idle, and was losing heavily ; 
 that employees, over 4,000 in number, had been thrown suddenly out of work and 
 out of wages ; that this huge enterprise, with its hundred branches and trades which 
 had been feeding so many other dependent industries, had suddenly become paralyzed : 
 that the shopkeepers, the shipping, the railways, and incidental industries were 
 suffering ; that the resources of many families were severely strained. It was his duty 
 now to try to settle the dispute in the interests of the public. 
 
 Then followed his decision, which was in the nature of a victory for 
 the men, since he awarded them substantially the wages for which they 
 contended. 
 
 The minimum wage fixed in the schedule includes 8s. 7%d. ($2.07) per day 
 for laborers at Broken Hill and 8s. 3d. ($1.98) at Port Pirie, at 10s. ($2.40) 
 per day for miners on wages. 
 
 Forty-eight hours to constitute a week's work, overtime to be paid at time and 
 a quarter, and to include all work on the seventh day of any week, on holidays or 
 in excess of ordinary shift time. 
 
 The award to operate till December 31, 1910. The court will not order the 
 company to continue working. The higher wages for 1906-8 was declared to be an 
 increase and not a bonus. 
 
 "My duty," said Judge Higgius, "is to make such an award as to set the wheels 
 of this mammoth enterprise going again, if it is possible for me to do so with just 
 regard to the human lives concerned." 
 
 The first condition in the settlement of this industrial dispute as to wages is that 
 at the very least a living wage should be secured to these employees. The definition 
 of a living wage adopted is the money necessary to satisfy "the normal needs of an 
 average employee regarded as a human being in a civilized community." 
 
 On the point that the mine could not be conducted profitably at the higher wage. 
 Mr. Justice Higgins said : "If a man can not maintain his enterprise without cutting 
 down the wages which are proper to be paid to his employees at all events the wages 
 that are essential to their living it would be better that he should abandon the 
 enterprise. 
 
 "Unless great multitudes of people were to be irretrievably injured, and society 
 was to be perpetually in industrial unrest, it was necessary to keep this living wage 
 as a thing sacred and beyond the reach of bargaining. But when the skilled laborer 
 has once been secured a living wage he has attained nearly to a fair contractual 
 level with the employer, and, with caution, bargaining may be allowed to operate. 
 
 "When the proprietary company asks me to fix wages lower than are proper for 
 the industry as a whole, and adduces as a reason that its mine is now poor and 
 becoming poorer, I can not discern either justice or expediency in the request." 
 
 Recognizing the catastrophe of a stoppage of the big mine and his responsibility 
 
AUSTRALIA. 95 
 
 in the court, Mr. Justice Higgins said it would be untrue to say the award, by 
 fixing the wage too high, caused the stoppage. What would stop the mine would be 
 the deficiency of payable ore. 
 
 Of course it was a catastrophe that this mine should be closed down, but such a 
 catastrophe must take place in every mine at some time, and in this case must occur 
 after a very short interval. 
 
 The sliding scale of wages, being only possible with a reduction of living wages, 
 could not be put in the award, for to surrender any part of the living wage would 
 be to surrender the vital point of unionist effort on behalf of an employee. 
 
 The reduction of expenditure, 33.000 ($160,000) a half year as a result of 
 reducing wages might mean a dividend, but it would have to come out of the work- 
 men's necessaries of life, would be distributed at the cost of the workmen's breakfast 
 tables. 
 
 It would not be fair to blame the directors in their difficult position of responsi- 
 bility to the shareholders for not proceeding with milling and mining on the strength 
 of undistributed profits. He did not feel justified in ordering the company to continue 
 mining under the circumstances. 
 
 "It might be," Mr. Justice Higgins held, "that he had power under the act to 
 compel continuance of work at the mine, but he would not exercise such a power 
 except in extreme cases. It was not for the court to dictate to employers what work 
 they should carry on." 
 
 TWO SIGNIFICANT STATEMENTS. 
 
 The two significant statements in the decision of Justice Higgins are 
 (a) that a living wage must be secured to employees, a living wage 
 being defined as "the money necessary to satisfy the normal needs of an 
 average employee regarded as a human being in a civilized community" ; 
 (&) that, "if a man can not maintain his enterprise without cutting 
 down the wages which are proper to be paid to his employees at all 
 events the wages that are essential to their living it would be better 
 that he should abandon the enterprise. ' ' 
 
 These doctrines will seem to a good many people in the United States 
 and elsewhere as novel and startling, especially where labor unions are 
 not strong enough to fix and to maintain a minimum wage. To those 
 living where the law of supply and demand in the labor market fixes 
 the wage without let or hindrance, and where there is thus no downward 
 limit to wages, it will seem a most radical step for the law to step in 
 and to say to the employer in the matter of reducing wages "Thus far 
 shalt thou go but no farther. ' ' To those also who, when times are hard, 
 and to keep an industry going, cut wages below a living rate, it may 
 seem most radical for the law to say that unless living wages can be 
 paid the industry had better be abandoned. 
 
 Yet these sentiments expressed in court, and published in the press, 
 created little or no comment in Australia, and were accepted there as 
 sound and proper. 
 
 The decision caused much unfavorable criticism among many employ- 
 ers, not because of the foregoing sentiments, but because they main- 
 tained that the spirit of the decision and the spirit manifested by the 
 court in the course of the long trial, evidenced a bias in favor of the 
 
96 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 employees. The decision also caused disappointment on the part of 
 the employees, because the court did not exercise its discretionary power 
 in ordering the mine owners to resume operations in full on the terms 
 of the award. 
 
 CONCLUSION. 
 
 The sentiment of many employers throughout Australia was strongly 
 against the commonwealth compulsory arbitration act of 1904. This 
 was demonstrated by various resolutions passed on several occasions by 
 various employers' conventions, from among which I quote the following : 
 
 ARBITRATION ACT. 
 
 (Extracts from presidents' addresses before the Australian Employers' Federation 
 Conference, 1905, pages 8-9 of the report.) 
 
 Dealing with the celebrated arbitration act, I feel that the word "compulsory"' 
 should never have been left out, because it is really compulsory arbitration under 
 that statute. It is purely class legislation, and is for the purpose of strengthening 
 the unions. It is an experiment to increase the wages of the workers and to give 
 them better conditions of employment in defiance of the economic laws, and it will, 
 in my opinion as a business man, prove an utter fallacy. This act will never work. 
 We are all anxious for conciliation, but we will not accept compulsory arbitration. 
 Neither will the people. That is clearly proved by the actions of the unions in New 
 South Wales. So long as the wind blows the way they want it to, the act is all 
 right in their minds, but directly the judge decides against them the act becomes 
 a very bad one to their idea. The history of compulsory arbitration in New Zealand 
 and New South Wales leads us to the certain conclusion that it is practically 
 impossible in administration. 
 
 The act is a distinct interference with the liberty of the subjoct, and I am confident 
 that the high court, before which the question will have to be fought, will confirm 
 our opinion. 
 
 Regardless of the expressed intention of the framers of the constitution, and of 
 the emphasized opinions of eminent legal authorities that it was ultra vires, the 
 compulsory arbitration bill became an act. It was framed on the pernicious lines of 
 the New South Wales act, which the trying and humiliating experience of that 
 state has shown to be an instrument for the oppression of employers and many 
 employees, a provoker of industrial strife, a great check to progress, and a violation 
 of the very foundations of the principle of British freedom on which our nation 
 has been built up, and which cost our ancestors so much to win. It has further 
 proved itself utterly powerless to enforce decisions under it against any except 
 employers. It therefore perpetrates a national crime against the body politic, of 
 oppression on the one side and license on the other, for there is no appeal, and which 
 if continued must, by the workings of the great moral law, end in disruption and 
 destruction. 
 
 (Motion passed by Employers' Federation, page 18, 1905 report.) 
 That this conference of employers confirm the determination of the various 
 employers' associations not to register under the commonwealth conciliation and 
 arbitration act, as the act is in derogation of the common law, and, in our opinion, 
 is a violation of state rights ; and, further, that by so refraining a protest is entered 
 against the act, whereas registration might be taken to be an acceptance of its 
 obligations. 
 
 The foregoing sentiments were expressed and resolutions adopted in 
 1!)05, shortly after the commonwealth arbitration law went into effect. 
 Four years have since intervened and the disastrous results anticipated 
 have not taken place. 
 
AUSTRALIA. 97 
 
 Aside from the expression on the part of a few employers, I found no 
 .serious public sentiment in favor of abolishing the commonwealth con- 
 ciliation and arbitration act. 
 
 In my opinion the law as applied to the commonwealth has come to 
 stay in its present or perhaps somewhat modified form. The point has 
 been made that the men will abide by the awards in good times when 
 wages go up but not in bad times when wages are cut. From the atti- 
 tude of the court, and the sentiment expressed by Justice Higgins in 
 the Broken Hill case herein quoted, it must be evident that should times 
 get harder than they have been during the depression of the past twelve 
 months, there is no likelihood of wages being increased, nor is there a 
 likelihood of wages being legally cut below the minimum or so-called 
 living wage. Hence, there is little probability of the men refusing to 
 abide by the court decisions. 
 
 In the event of hard times, the poorest workers are likely to be 
 dropped, and any wage above the legal minimum may disappear. But 
 until the courts and public sentiment in Australia change their attitude, 
 the minimum wage is likely to be maintained by the federal compulsory 
 arbitration court, thus tending to the perpetuation of Australian indus- 
 trial peace. 
 
 Furthermore, state wages boards can not deal with interstate issues, 
 such as maritime matters or the grievances of the waterside workers, 
 an organization extending around the Australian continent, and hence, 
 a commonwealth or federal court is imperative. 
 
 Unless, as already stated, unexpected and serious ills, greater than 
 any thus far developed, should manifest themselves, the commonwealth 
 industrial act is likely to remain permanently on the Australian statute 
 .books. 
 
98 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 NEW ZEALAND. 
 
 There is much in New Zealand to remind the California!! of his own 
 state. He finds there the same temperate and salubrious climate, the 
 same mountainous country with great interspersing valleys, the same 
 great areas devoted to grain growing, and to pastoral pursuits. He 
 finds grown in the dominion, only in a limited way, however, the pear, 
 the peach, the apple, the plum, the quince, the apricot, the fig, the wal- 
 nut, the cherry, the gooseberry, the currant, the strawberry, the rasp- 
 berry, the orange, the lemon, the lime, the grape, and the banana. 
 Orchard planting is progressing, and if New Zealand had a market for 
 the product of its trees and vines, it would develop into a fruit countiy 
 that would rival California. 
 
 The people of New Zealand likewise remind a Californian of those of 
 his own state. He finds among the New Zealanders the same generous 
 hospitality, the same free, liberal, independent spirit, the same open 
 hand and open mind that characterize the people of the Golden State. 
 
 The area of New Zealand, including the north and south islands and 
 the group of smaller islands, is 104,751 square miles. Its present popu- 
 lation is approximately 1,000,000. 
 
 The land suited for agricultural purposes is estimated at 13,000,000 
 acres. The dominion has a coast line of 4,330 miles. In point of transit 
 it is located about four days ' sail from Australia and on a bee line about 
 seventeen days' sail from San Francisco. In the absence of direct com- 
 munication with San Francisco, the voyage via Vancouver now takes 
 about thirty days. 
 
 New Zealand is first of all a pastoral, then an agricultural country. 
 It also has abundant resources in its mines and forests. It has great 
 quantities of forests and valuable timber lands, and also much mining 
 country. Large gold and coal deposits are found here. The yield of its 
 gold mines thus far aggregates over $357,000,000. 
 
 The first settlement of New Zealand was in 1825. There has since 
 been a steady but not phenomenal growth, due to its distance and isola- 
 tion from great populated occidental centers. Its nearest neighbors, 
 aside from the Australians, are the untold millions of Asia, who, if unre- 
 stricted, would doubtless speedily overrun this land that, so to speak, 
 flows with milk and honey. 
 
 New Zealand is governed by a lower and upper house and a cabinet, 
 all modeled after the British form of government. The members of the 
 
NEW ZEALAND. 99 
 
 lower house are popularly elected for three years and receive 300 a 
 year ($1,455). The members of the upper house are appointed by the 
 party in power for seven years, and receive 200 a year ($970) . 
 
 Unlike the commonwealth of Australia or the United States, New 
 Zealand politically is treated as a unit. The Parliament legislates for 
 the dominion as if but one state. 
 
 This, as compared with the other governments just referred to, simpli- 
 fies matters materially and does not involve the consequent problems 
 of state rights nor arouse feelings of state jealousies. 
 
 No one thing that New Zealand has done has commanded for her 
 greater attention abroad than her modern legislation in dealing with 
 labor problems. This country has been bold enough to take the initia- 
 tive and to do pioneering along new and untried lines, while the rest of 
 the world has stood by and with great interest looked on. Her greatest 
 fame has come from the enactment of what has become known as the 
 compulsory arbitration laws, having in view T (a) the wiping out of the 
 evil of sweating ; ( & ) the peaceful settlement of labor disputes, in order 
 to prevent strikes and lockouts. 
 
 Her isolation, her compactness, her great wealth, her comparatively 
 small population, her miniature industrial enterprises, have made it pos- 
 sible for her to experiment along legislative lines that other countries 
 not so favorably circumstanced would hesitate even to consider. 
 
 Whatever mistakes might be made in such legislation could be rectified 
 within a reasonable time without serious loss or great dislocation of any 
 industry. Whatever financial damage might be done was not likely to 
 be serious enough to do lasting injury. 
 
 The initial labor legislative steps were taken shortly after the great 
 sympathetic maritime strike of 1890. In this year the trades unions 
 stood well financed. The seamen's union went on a strike sympathet- 
 ically with the Australian seamen, who struck because of employment 
 of Asiatic crews. The wharf laborers also went out, and were supported 
 by other unions. The coast trade was paralyzed. Public sentiment, 
 however, was against the strike. 
 
 The unions were then few in number. Rural workers came in and 
 took the strikers' places. In the end, the unions lost the strike and 
 were impoverished. This led the unionists to believe that the strike is 
 not the best way to secure their ends. It was decided by them that in 
 the future they would resort to the ballot. In consequence, with the aid 
 of labor, the first Liberal administration was brought into power, by the 
 end of 1890. 
 
 At that time it was claimed that the farmers were struggling under 
 heavy mortgages. Money lenders were grabbing the land. Interest 
 being from ten to fifteen per cent. The first act of the new Liberal gov- 
 
100 REPORT OP SPECIAL LABOR COMMISSIONER. 
 
 eminent was to borrow money at three per cent and loan it to the settlers 
 at four and one half per cent. This rate included one per cent for a 
 sinking fund to go toward wiping out in time the principal, which when 
 compounded it was able to do in a period of about thirty-two years. 
 
 The new administration also passed a factory act, seeking the welfare 
 of female and child labor. In early days the government sold land for 
 $2.50, and even as low as $2 an acre, resulting in building up a landed 
 aristocracy. The government then passed an act empowering itself to 
 buy back as much of the land as might be required from time to time and 
 dispose of it in small parcels. Later, the single land tax was adopted. 
 The government reserved to itself the right to buy land at the valuation 
 for assessment put upon it by the owner plus ten per cent. Seeing what 
 the government had done for the farmers, the workers asked ' ' What are 
 you going to do for us ? ' ' The government responded in various acts. 
 
 The result of the maritime 1890 strike led the then Labor Minister 
 Pember B. Reeves, Labor Secretary Edward Tregear and others to see 
 if there was not some other way than strikes to settle labor disputes. 
 If judges can decide matters affecting life and death and millions in 
 property, why not let them decide matters affecting wages? "There 
 is another party to labor disputes, ' ' men such as these held, ' ' the great 
 public. There are not two persons involved in a strike, but three," 
 they said. So New Zealand proposed to say, "We are not going to allow 
 you two, employers and men, to disturb and dislocate our affairs. ' ' It 
 proposed to say to the parties to the dispute, "Take your industrial 
 troubles before a disinterested tribunal who shall decide between you. ' ' 
 
 In a document issued by the Labor Department of New Zealand the 
 following appears : 
 
 SWEATING. 
 
 The New Zealand legislature decreed that all textile work should be done in fac- 
 tories, and that all workrooms employing two or more persons must be registered 
 under the act. It is also forbidden to sweat by permitting (i. e., generally, by exer- 
 cising indirect compulsion) a factory worker to take home work to finish, and so to 
 toil through unreasonably long hours in probably unhealthy surroundings. 
 
 The following is a short list of earnings and hours worked in some of the 
 sweated trades in England shown in the exhibit : 
 
 Average Average earn- 
 
 Description of work. Rates paid. working day. ings per week. 
 
 Bag making _____________ 4d. (8c) per dozen. 16 hours. 4s. Od. (96c) 
 
 Matchbox making ____ 2%s. (62c) per gross. 16 hours. 7s. 6d. ($1.80) 
 
 Boys' knickers _________ 9d. (18c) per dozen. 16 hours. 9s. Od. ($2.16) 
 
 Fur tassel work _____ Is. 3d. (31c) per gross. 10 hours. 6s. Od. ($1.44) 
 
 Skirts __________________ 5d. (lOc) per piece. 14 hours. 5s. Od. ($1.20) 
 
 Button carding _________ id. (Ic) per gross. 11 hours. 3s. Od. (72c) 
 
 Such earnings, miserable as they are, do not always represent the work of a 
 single person ; children of the most tender age are called on to assist the parent to 
 keep body and soul together. Nor are the hours limited to those above mentioned. 
 We read of women who work in such industries from 4 a. m. till midnight, or who 
 never go to bed on the same day that they get up. How is it possible to keep the 
 
NEW /KALAND. 101 
 
 home or the person in cleanliness and respectability when every moment of the 
 working day has to be devoted to ceaseless and degrading toil? Moreover, the mis- 
 erable earnings quoted above by no means represent the amount which can be 
 devoted to the sustenance of life and warmth, in food and clothing. A mother and 
 daughter working together at card hooks and eyes earn 3s. 4d. (SOc. ) weekly between 
 them, but the rent of their room is 3s. 6d. (S4c. ). Here other members of the family 
 have to help. An old woman and her brother, sitting fifteen hours daily sewing 
 buttons on cards, earn 3s. Gd. (84c. ) weekly between the two; the rent is 3s. 9d. 
 (90c. ), but the woman has some church schools to clean, so they drag along. A 
 slipper maker earning Gs. 3d. ($1.50) weekly, pays 2s. 6d. (COc. ) rent. So goes on 
 the awful story of human toil and suffering. To call a system which exists on such 
 maker earning Gs. 3d. ($1.50) weekly, pays 2s. 6d. (60c) rent. So goes on the 
 awful story of human toil and suffering. To call a system which exists on such 
 foundations a system of wage-slavery is to use an improper term and to debase 
 the word "slavery," because no slave is worked for eighteen out of twenty-four hours 
 on insufficient food by a master who values his property. 
 
 The following is taken from the New Zealand Yearbook for 1908, 
 issued by the government : 
 
 Labor Laws, page 515 : The labor laws have been passed in an effort to regulate 
 certain conditions affecting employer and employed. Their scope embraces many 
 difficult positions into which the exigencies of modern industrial life have forced 
 those engaged in trades and handicrafts. The general tendency of these laws is to 
 ameliorate the conditions of the worker by preventing social oppression through 
 undue influence, or through unsatisfactory conditions of sanitation. It will undoubt- 
 edly be found that, with the advance of time, these laws are capable of improvement 
 and amendment, but they have already done much to make the lives of operatives 
 of fuller and more healthy growth, and their aim is to prevent the installation of 
 abuses before such abuses attain formidable dimensions. 
 
 Page 516 : Sweating has almost disappeared in New Zealand by the prohibition of 
 subcontracting in the issue of textiles to be made up into garments. The factories 
 act is probably one of the most complete and perfect laws to be found on the statute 
 book of any country, and is generally appreciated by workers, while the honest, fair- 
 dealing employer is himself thereby protected from the unscrupulous proceedings of 
 the piratical competitors. 
 
 LABOR LEGISLATION. 
 
 New Zealand has now been living under its labor legislation for a 
 period of fifteen years. During this time the law has undergone many 
 modifications and changes and while the underlying principle in the 
 mind of the framer of the original law remains the same, its method of 
 administration and the scope of its usefulness are widely different from 
 the original idea. 
 
 The following excerpts from a pamphlet published by the New 
 Zealand Labor Department, give a condensed history of the legislation 
 to date : 
 
 Before the advent of the ministry, which has been continuous as the Ballauce- 
 Seddon-Ward administration, there was no truck act nor factories act, no shop and 
 office act, no arbitration act, no shearers' accommodation act, no workman's compen- 
 sation for accidents' act. It was a world in which men and women toiled under 
 relentless conditions, each worker making the best bargain with his employer which 
 necessity would permit him to do. Often the hours were long, the overtime unpaid 
 for, the holidays nil, payment made partly in goods (truck), and all the risks of 
 industrial life carried on at the worker's expense in life and limb. 
 
102 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 THE INDUSTRIAL CONCILIATION AND ARBITRATION ACT. 
 
 Page 4 : In 1894 an act to encourage the formation of unions was passed, and 
 named "The Industrial Conciliation and Arbitration Act." It provides that any 
 number of persons, not being less than seven, might form an industrial union of 
 workers or employers, and a number of unions could be registered as an association. 
 The colony was divided into industrial districts, each district having a board of 
 conciliation for the settlement of trade disputes, with appeal to the court of arbi- 
 tration having jurisdiction over both islands. The board consisted of four, five or 
 six members (generally four), to be chosen as representatives of employers and 
 workers, and these members were to elect some other person as chairman, failing with 
 selection the governor should appoint. The members of the board held office for 
 three years. Strikes or lockouts were declared illegal if taking place while pro- 
 ceedings were pending before board or court. Special boards of experts in a trade 
 could be elected by employers and workmen's unions for each dispute, but this 
 provision was never taken advantage of until quite lately. The board was to 
 endeavor to bring about amicable settlement, and if this took place an agreement 
 could be entered into. Failing settlement a recommendation was made by the board, 
 and if not accepted, any party could refer the matter to the arbitration court. The 
 court of arbitration consisted of three members, two of whom were appointed by 
 the governor, one on the recommendation of industrial associations (not merely 
 unions) of workers in the colony, and the other on a similar recommendation by 
 associations of employers. The third member was to be a judge of the supreme 
 court as president. The court could deal with all industrial disputes referred to it, 
 and make awards, of not exceeding two years' duration, binding on every person 
 declared to be bound. The awards could be enforced in the supreme court, but any 
 award within the jurisdiction of a district or magistrate's court could be taken to 
 such court. There was a. corporate limit of 500 ($2,425) for enforcement, and 
 an individual limit of 10 ($48.50). The government railway commissioners were 
 deemed employers, but not any other government department. 
 
 In 1895 the number of employers requisite to form a union was reduced from 
 seven to five; two experts (one on each side) were provided, if necessary, to sit 
 with board or court. The governor could appoint a member of a board or court 
 if unions failed to elect, and any employer, association or union could be joined 
 as a party to a dispute by a board or court. 
 
 In 1898 the title of the principal act as to its being an act "to encourage the 
 formation of unions" was selected. The court was empowered to determine what 
 constituted a breach of its own award, and the maximum penalty was fixed at 
 500 ($2,425). The court was not allowed to fix the age for commencement or 
 termination of apprenticeship. The union had to pass a special resolution before it 
 could file a dispute, while the court was permitted to prescribe the minimum wage 
 and provide for underrate permits. By the amending act of 1900 the definition of 
 industry was altered to include "any employment in which a worker is employed." 
 The office of registrar was transferred from the "Registrar of Friendly Societies to 
 the Secretary for Labor." Preference to unionists became included among the 
 industrial matters which could be dealt with. The minimum number of employers 
 necessary to form a union was reduced to two. The registrar could refuse to 
 register two industrial unions of the same business within the same industrial 
 district. Industrial agreements remaining in force until superseded or until the 
 union of workers was canceled, while parties could be added during its currency. 
 The recommendations of the conciliation board became an agreement if no objection 
 was lodged within a month. The two elected members of the arbitration court were 
 to be recommended by unions of employers and workers, not by associations. Presi- 
 dent and one member to be a quorum of the court. The maxinunn currency <>;' an 
 award was extended from two years to three, but then continued in force until a 
 new award was made. Beside the original parties to an award, such award bound 
 all persons engaging in the business while the award was in force. Power was 
 given to amend an award and to extend it in cases of one part of the colony unfairly 
 competing against another. Instead of railway commissioners the minister for 
 
NEW ZEALAND. 103 
 
 railways could enter into the Amalgamated Society of Railway Servants, but in 
 matters of the government railways the conciliation board could not interfere. 
 
 In 1901 special boards could be set up by application of any party to a dispute, 
 whereas prior to this date all parties to a dispute must apply for such special board. 
 Court received power to limit the locality of an award within an industrial district 
 or to extend it beyond that district. The registrar was empowered to cancel unions 
 if within a reasonable time no returns from the union were forthcoming. Either 
 party could refer a dispute already filed with the conciliation board direct to the 
 arbitration court. (This section is the famous "Willis Blot," and resulted in the 
 ultimate paralysis of conciliation boards.) The court could make one award 
 applicable to several trades in any one business, e, g., could make for a woolen mill 
 one award covering enginemen, dyers, sorters, weavers, etc. 
 
 By the amending act of 1903 a deputy registrar of unions could be appointed. 
 An employer was not entitled to dismiss any worker merely because that worker 
 was entitled to the benefit of an award, or because he was a unionist. Combinations 
 of employers or of unionists to endeavor to defeat an award were forbidden. 
 Inspectors of factories and inspectors of mines became inspectors of awards, and were 
 ^charged with the duty of seeing the award carried out. The arbitration court 
 emergency act provided substitutes for members of the court in case of illness or 
 other cause of absence, and pending such appointment of substitute the president 
 -could recommend the appointment of an acting member. 
 
 In 1905 a consolidating act was passed, and is that in force as "the principal act" 
 at date ; and also a separate amending act became a law. The latter made provision 
 for binding any worker (unionist or nonunionist) employed by any employer on 
 "whom an award was binding. A more stringent section than that of 1903 dealt 
 with dismissing or suspending a worker, or with the worker discontinuing work 
 during the pendency of a dispute. The proceedings with regard to underrate permits 
 wore fully set out. Any one who joined a strike or lockout, or aided or abetted a 
 strike or lockout, was made guilty of breach of award. (Note: Previously a strike 
 or lockout was only punishable when taking place during the currency of proceedings 
 before a board or court.) A worker was deemed to be dismissed when suspended 
 for a longer period than ten days. In 1906 a short act was passed for the purpose 
 of amending the statutory position of the officer presiding over the arbitration court, 
 providing for his permanent appointment, and substituting the title of "judge" for 
 i lint of "president." A registrar of the court is also provided for. The remuneration 
 of the elected members of the court is fixed at 500 ($2,425) per annum in addition 
 to traveling expenses. 
 
 The arbitration act, difficult to follow in all these amendments, suffered from 
 this cause of absolute necessity of change, as time and experience presented new 
 difficulties to be overcome. It entered its legislative life through an utterly unknown 
 field of action, and with continually changing circumstances marking its industrial 
 path. It is, therefore, little to be wondered at that so experimental and tentative 
 a measure could not be at first guarded at every point, nor adapt itself automatically 
 -to meet every subtle evasion of its powers. 
 
 DEALING PARTICULARLY WITH THE LABOR LEGISLATION OF THE YEAR 1908. 
 
 First and foremost must be noted the changes made in the industrial conciliation 
 .uid arbitration act, the new measure coming into force on the first day of Jan- 
 uary, 1909. 
 
 Conciliation boards are abolished, and commissioners of conciliation are to be 
 appointed for three years by the government, such commissioners to promptly visit 
 any locality in which an industrial dispute is reported to exist. If a commissioner 
 is unable to settle the dispute satisfactorily, it may be referred to a council of 
 conciliation, of which the commissioner is chairman. This council consists of two, 
 four or six assessors, nominated in equal number by the parties to the dispute, 
 ^uch assessor must be engaged in the industry to which the dispute relates, with 
 the exception that one on either side may, with the approval of the commissioner, 
 toe a person not so engaged. In this council the commissioner has only a casting 
 
104 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 vote, and that for the maintenance of business before the council, not for the- 
 purpose of making an industrial recommendation. 
 
 The council has power to summon witnesses, take evidence on oath, etc., in the- 
 endeavor to bring about the settlement of the dispute, but it is not in any sense a 
 tribunal, or with any inherent powers of settlement. If the council agree on certain 
 line of action the matter is submitted to the principals on either side (employers or 
 workers' union), and ratified by these principals, an industrial agreement is filed 
 with the clerk of awards, whereupon the matter is at an end. 
 
 Should the council fail' to come to an agreement, it shall, not earlier than one 
 month or later than two months after the date fixed for hearing the dispute, notify 
 the clerk of awards. It may, however, make a recommendation, if the assessors are 
 unanimous in coming to such a conclusion, before forwarding the notification, but 
 the recommendation itself has no power to bind or restrict in any way, and may 
 be considered as only of value in minor directions, viz., as a guide to public opinion 
 in the matter and a suggestion towards settlement. The dispute, failing its settle- 
 ment by the council, goes automatically to the arbitration court. 
 
 It will at once be perceived how different the above procedure is from that 
 formerly regulating the proceedings of conciliation boards. The members of those- 
 boards were appointed for three years, and all varieties of trade disputes came 
 before them. Each representative of employer or worker on the board was expert 
 only in his own trade, and practically ignorant of the technicalities of all others. 
 Consequently, the facts of any dispute could only be elicited by the profuse evidence 
 of witnesses, and through such evidence by the temporary education of the board 
 in that particular industry. The delay, the expense, and the militant spirit invoked 
 by the public examination and cross-examination of witnesses destroyed any tendency 
 to conciliation that. the boards may have at first possessed. They grew into almost 
 universal discredit, so that it became easy to supersede them by the amendment 
 (moved in the house of representatives by a private member), which allowed either 
 party to a dispute to take it direct to the arbitration court. It was publicly said 
 to be useless to have a case heard twice, once before the board and then before the 
 court, when the court could be applied to directly. The result, however, was to- 
 congest the arbitration court with business; to delay its findings, whether in regard 
 to disputes or to breaches of awards. There would have been little dissatisfaction 
 expressed for years against the arbitration court could the serious delays and incon- 
 veniences arising from its overwork have never occurred. Had the boards fulfilled 
 the promise with which they were instituted, had it been possible for them to be 
 kept as a pure medium for amicable arrangements between disputants, then the 
 channels of the court would not have become clogged and choked with demands for 
 arbitrary judgments. 
 
 The new act provides full definition of "strike" and "lockout." These are inter- 
 preted to be the action of discontinuing work or business as modes of industrial 
 compulsion, so that they have no continuous existence as offenses, although they 
 are continuous in respect to aiding and abetting. Imprisonment for striking or for 
 abetting a strike is abolished entirely for ordinary strikes, and the penalty for each 
 worker who takes part in one not exceeding 10 ($48.50). A similar penalty falls 
 on a worker who aids or instigates a strike. Every union that instigates or aids a 
 strike is liable to a penalty not exceeding 500 ($2,425). The terms "strike" and 
 "lockout" are herewith made conditional so as to mean only strikes or lockouts 
 occurring in industries bound by an award or industrial agreement. A more stringent 
 provision is made in regard to certain special industries whose sudden cession would 
 cause deaths or injury to the health of the community in general. These include the- 
 manufacture or supply of electricity, coal gas, water, milk, meat, coal, and the 
 working of ferries, tramways, railways, etc. Persons employed in such service must 
 give fourteen days' notice of intention to strike, or are liable to summary conviction 
 before a magistrate with a fine not exceeding 25 ($121.25). Persons who aid or 
 instigate strikes in such trade are liable to a similar fine, and in the case of unions 
 up to 500 ($2,425). An employer locking out in such special trade without giving- 
 a month's notice to his employees is liable to summary conviction before a magistrate- 
 
NEW ZEALAND. 105 
 
 and a fine not exceeding- 500 ($2,425), a fine which is also liable to be inflicted 
 on any union, employer, or person other than a worker aiding or abetting a lockout. 
 An industrial union or association abetting an unlawful strike of any of its members- 
 may on conviction have its certificate of registration suspended for a period not 
 exceeding two years. The court has power to limit the area of this suspension, but 
 during the time of suspension no new industrial union of workers may be registered 
 in the same industry in the same industrial district. 
 
 Such definite and decisive enactments as these lay down certain principles as 
 absolutely necessary for the further usefulness of the act. There was in the act in 
 its first introduction in 1894 no bar against strikes or lockouts unless these took 
 place while inquiry before the board or court was pending, and this was not altered 
 until the act of 1905 made a strike or lockout a breach of award. The whole sub- 
 ject had hitherto been in a hazy or nebulous condition ; no one exactly knew what a 
 strike was, when it began or when it ended ; neither was there any consensus of 
 opinion as to what "aiding or abetting" a strike meant. We have in the new act at 
 all events a determined effort to clear the ground, and set the issues fairly, not only 
 before the employer and employed, but before the general public, who, as "the great 
 third party," generally has to pay the reckoning for both sides in industrial quarrels. 
 
 Ordinary breaches of award are to be heard before stipendary magistrates. A 
 magistrate may give judgment for the amount claimed or for more or less, as he 
 thinks fit ; such amount becoming a penalty paid to the use of the crown. An 
 appeal is allowed to the court of arbitration. No person can be imprisoned for 
 breach of award, but any penalty imposed may be recovered by deduction from wages 
 which may hereafter become due, although not to a greater amount than the surplus 
 above two pounds ($9.70) a week, if the debtor is married, or a widower or widow 
 with children, nor to a greater amount than the surplus above one pound ($4.85) 
 a week in the case of any other worker. If judgment has been given against a 
 union or other association and is not satisfied within a month the individual workers 
 are liable to the extent of 5 ($4.85) each. Inspectors of awards can move a 
 strike or lockout case (although a breach of award) directly to the arbitration 
 court, as such grave matters (with, perhaps, heavy fines) need the responsibility of 
 the highest court obtainable. 
 
 As has been above remarked, the present act has suffered through want of 
 mobility, and through being overburdened with duties caused by the collapse of 
 other portions of the act. Removing the hearing of ordinary breaches of award 
 into the stipendary magistrate's court will set the arbitration court more free to- 
 hear cases of industrial dispute at once. 
 
 Three employers (formerly two) may form an industrial union of employers and 
 fifteen workmen (formerly seven) may form an industrial union of workers. The- 
 voting power of unions in nominating members of the arbitration court is altered 
 from one vote to each union, to one vote for each fifty members of a union. The 
 court may amend the provisions of any award in the flax industry if it is thought 
 advisable, and if circumstances have changed since the award was made, but the- 
 general power to change any other award on application does not exist. In the flax 
 industry the court must satisfy itself that the wish for change is general both 
 among employers and employed before it grants any amendment. Any executive 
 officer of a workers' union, or worker who has sat as assessor in a council of 
 conciliation, or has represented his union in any negotiations, can, if dismissed soon 
 after, throw upon the employer dismissing him the weight of proof necessary to- 
 show that his dismissal has been for business reasons only, and not through any 
 objection to him as a unionist or assessor. 
 
 A worker who has accepted less than the minimum wage awarded in the industry- 
 can not claim the difference between the rate received and the award rate for a 
 longer period than three months. The age limit of apprentice is to be left to the 
 discretion of the court in making an award. Inspectors of awards are the persons 
 to issue permits to work below the minimum rate mentioned in an award, but must 
 give notice as at present to the secretary of that particular workers' union, so that 
 objection may be made if necessary to the permit being granted. No such permit 
 
106 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 shall be given to any one not usually employed in that industry, e. g., no sailor out 
 of work can do carpentry or painting of a trade character. 
 
 One of the most important sections of the new act is that which restricts the 
 definition of the word "worker" to those employed for the direct or indirect pecuniary 
 gain of the employer. Thus, a market gardener is a worker, but a private gardener 
 is a servant ; the housemaid in a lodging-house or hotel is a worker, but a domestic 
 servant in a private house is not. 
 
 The court may antedate the period at which its award comes into force, and it 
 may also refuse to make an award at all if it thinks fit. This latter provision gives 
 legislative sanction to a course the arbitration court has already followed in one or 
 two cases. Jurisdiction is given to the court to extend an industrial agreement to 
 bind a dissenting body of employers if the employer or employers who employ a 
 majority of the industry consent to such agreement. After an award or industrial 
 agreement is made its provisions will take precedence of any legislation made during 
 its currency unless the contrary is directly stated in the act so passed ; but at the 
 expiration of the time for which the award or agreement was made the provisions 
 of the law then in force must be observed. 
 
 A very large proportion of the account thus given of the new act refers to abso- 
 lutely new and original modes of legislation in the direction of conciliation and 
 arbitration. They prove the strong attempt of the government to reconcile the 
 liberty of the individual with the discipline necessary to carry on the industrial and 
 commercial life of the community, for to those who do not care to place themselves 
 under the arbitration act the utmost freedom is given, whether to work or strike, 
 but, if the benefits of arbitration are appealed for, then submission to the ordinary 
 rules of conduct governing those who have claimed its privileges must control also 
 those who feel its disadvantages. 
 
 The following clause was recently introduced by the arbitration court 
 of New Zealand into its award in the Southland timber workers' 
 dispute : 
 
 (a). The union shall do all in its power to prevent any strike by any 
 of the workers affected by the award, and if any strike shall occur, in 
 which any member of the union shall take part, such strike shall be 
 prima facie evidence that the union has committed a breach of its duty 
 thereunder. 
 
 (&). If any strike by any of the workers affected by this award shall 
 occur, then the operation of all the provisions contained in the foregoing 
 -clauses of this award shall be suspended, and in lieu thereof the following 
 provisions shall come into force, and shall remain in force until the fur- 
 ther order of the court; that is to say, the hours of work, wages, and 
 other conditions of work of all workers coming within the scope of this 
 award shall be fixed by agreement between each employer and the indi- 
 vidual workers employed by him. 
 
 (c). The court reserved leave to any party bound by this award to 
 apply to this court for an order under this clause declaring that a strike 
 has taken place, or bring into force again, after a strike has taken place, 
 the provisions contained in the foregoing clauses of this award. 
 
 Then follows this very important memorandum of the court : 
 
 This award contains a new provision with regard to strikes which the court has 
 decided to bring into general operation in future. It is necessary to explain the 
 operation of this new provision. If a strike by any of the workers affected by the 
 
NENV ZEALAND. 107 
 
 award takes place, the provisions of the award as to the hours, wages, and other 
 conditions will cease at once to operate, and thenceforth during the currency of the 
 award the respective rights of the employers and workers as to these matters 
 will have to be settled by agreements between the respective parties themselves. 
 In other words the workers by striking will deprive themselves of the benefits (if 
 any) of the award, and incidentally of the benefits of the arbitration act. They 
 will, however, during the currency of the award remain subject to the penal pro- 
 visions of the act with regard to strikes. These provisions will make it impossible 
 for an award to be treated as a stepping-stone merely in the way of enforcing the 
 demands of the workers. If, after getting an award, they strike, and the strike 
 fails, they will not be able to fall back on the award, but will have to be content 
 with whatever terms they can obtain by individual bargaining with the employers. 
 The court has reserved power to itself to bring into operation again the provisions 
 of the award after a strike has taken place. This will enable the court to obviate 
 the hardship that might otherwise result when a small section of the workers 
 affected by the award engage in a strike without the sanction or connivance of the 
 union. 
 
 ATTITUDE OF EMPLOYERS AND WORKERS TO LABOR LEGISLATION. 
 
 Prior to the adoption of the amendments to the act of 1908, which 
 went into effect January 1st of this year, there was very bitter dissatis- 
 faction on the part of employers and men with its operations. The senti- 
 ments expressed and the resolutions passed alike at labor conferences 
 and at conferences of employers were unmistakably against the admin- 
 istration of the act. Here are some of the opinions expressed emphasiz- 
 ing this point. 
 
 A labor department official- 
 Fifteen years' experience has shown this weakness in the system. Men are 
 governed by greed, hate, love, and passion and not by reason. The act has failed 
 because reason does not prevail. Labor elected as conciliator in Wellington an 
 unsteady hothead. The other side was just as badly represented. Out of twenty- 
 four cases twenty were appealed to the arbitration court leading to dissatisfaction 
 because of the useless work of the conciliation board and the board was finally cut 
 out, which led to further congestion of the court and yet more greatly emphasized 
 the consequent delays. The workers expected too much of the idea, especially since 
 during the first ten years it did much for them in shortening hours, raising wages, 
 paying for holidays and often the law gave preferences to unionists. But it could 
 not move the whole economic and individual interests. 
 
 A leading editor- 
 No doubt compulsory arbitration has done much for New Zealand. The trouble 
 has been in its administration. 
 
 Labor leader 
 
 We want the act. But we want it as originally conceived by the framer, with, 
 of course, such machinery amendments as experience has shown are essential. 
 
 A building contractor 
 
 The weakness of the act has not been so much its principle as its administration. 
 
 Sentiments of a labor leader at a labor conference 
 
 The workers had been making complaints about the act and had been endeavoring 
 by every legitimate means to impress upon the government the necessity of improve- 
 ment in the machinery of the act. One chief grievance was in the delay that 
 occurred in the hearing of the disputes. Year after they had been promised that 
 
108 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 this should be remedied, but no remedy was provided. It was entirely because of the- 
 delays of the court that the slaughtermen had taken the drastic steps they had in 
 striking for their rights, and if their action resulted in an improved act, it would 
 prove a blessing to the country. 
 
 He thought himself that the strike instead of doing what it was alleged it would 
 do, that was, break down the conciliation and arbitration act (if the lesson was to be 
 taught by a strike) instead of the strike meaning and causing the breakdown of the 
 act, it was going to be the saving of it. The legislature would then recognize and 
 he hoped it would that the position that had existed for the past eight or nine years 
 was totally unreasonable, and it was a position of affairs that could expect no 
 reasonable body of individuals to accept. He knew of cases where unions had been 
 brought into existence, had been registered, had framed their claims, had cited 
 their case, and were dead and buried long before the court had come along to hear 
 their case. * * * It was totally unreasonable to expect men to wait from ten 
 months to two years for the court to consider their cases. 
 
 ATTITUDE OF EMPLOYERS AND MEN ON LABOR LEGISLATION IN GENERAL. 
 
 The amendments to the act enacted in 1908, and that have now been 
 in force since the beginning of this year, have tended to modify the 
 hostility toward the act. Many employers and men felt that the govern- 
 ment was earnestly desiring to make the act one of the highest useful- 
 ness with the least friction, injury, or annoyance to either side, and 
 numbers on both sides have accordingly shown a readiness and a willing- 
 ness to give it hearty support and a fair trial. The utterances of Presi- 
 dent Hobbs at the conference of employers held in Christchurch in 1908 
 I think fairly represent the attitude of many New Zealand employers. 
 He said : 
 
 Now that the act is before the house for amendment or repeal it is advisable for 
 us as employers to consider whether or not we want compulsory arbitration. The 
 advantages of the system if it can be equally enforced are 
 For the worker: 
 
 Prevention of sweating ; 
 
 The securing of a fair return for his labor. 
 
 For the employer : 
 
 Security of contract ; 
 
 Settled working conditions for a stated time ; 
 Equality of working conditions ; 
 
 Security to the fair-minded employers, by prevention of undercutting of 
 prices at the workers' expense. 
 
 Any act that will secure these conditions must be beneficial to both worker and 
 employer, and should receive our support. In considering this question we have also 
 to remember that even if no act dealing with industrial disputes is on the statute 
 book, we shall not have freedom of action, because the other side is now a powerful 
 force, well organized, and able., to use the strike weapon as it never has before. 
 Open industrial warfare brings heavy losses to both winner and loser. I have for 
 some time opposed compulsory arbitration and in favor of a measure promoting 
 voluntary conciliation, because it did not seem possible to amend the law so as to 
 make compulsion effective against both sides. Equality before the law is a funda- 
 mental principle of British justice. It is a precious heritage which we can no longer 
 allow to be traduced. The government has fairly faced the position, and brought 
 down a method of enforcement which seems to have some claims of successful 
 operation. It might well be called "The last try compulsory arbitration bill." 
 and as employers I think it would be in the best interests, both of ourselves and of 
 
NEW ZEALAND. 109 
 
 the community as a whole, if we give this last try a fair trial. If it fails, the 
 matter will be definitely settled. On the other hand, if this method is not tried 
 there will always be a feeling that the failure of compulsory arbitration has not 
 been proved, and, at some future time there is no doubt that an act on the lines 
 of that now proposed would become law, and the whole trouble begun over again. 
 
 The attitude of many among the workers whom I interviewed was 
 likewise to the effect that the recent amendments would largely if not 
 entirely overcome some of the most serious objections to the administra- 
 tion of the act, that the new machinery provided would expedite cases, 
 and obviate the distressing delays previously incurred by the men in 
 their desire to obtain peaceful redress for grievances. 
 
 This does not mean, however, that there is a unanimity of feeling in 
 favor of labor legislation among employers and workers in New 
 Zealand. The feeling more especially among many employers, is that 
 such legislation has on the whole been harmful to industry and has in 
 many ways brought with it evils not before experienced. Here are some 
 of the opinions expressed by employers and secretaries of employers' 
 associations in various parts of the dominion. 
 
 A leading business man 
 
 The theory of compulsory arbitration is good, but it often miscarries and becomes 
 reduced to an absurdity. I regard it as a failure and feel morally certain that in 
 time it will be abandoned. 
 
 Another business man 
 
 The act leads to friction and ill will between employer and men. 
 
 An ironmaster 
 
 The iron industry under the workings of the act is not profitable. The arbi- 
 tration court is part of a political machine gotten up for the benefit of the workers. 
 To illustrate this, let me say that in the face of a bad showing as to profits, the 
 court raised the wages of the men ten per cent. Moreover, the tendency of the law 
 is to make for a lessened efficiency on the part of the men. 
 
 A manager of meat packing company- 
 it makes of the men mere machines. 
 
 A secretary of an employers ' association 
 
 In some trades employers have not been able to cope with the extra cost of 
 production due to the increased wages granted by the court, and hence have been 
 obliged to give up the manufacturing part of their business and increase their 
 importations. 
 
 The minimum wage is fixed too high in the majority of cases with the result that 
 the employer often makes no distinction among the various grades of his workmen as 
 regards rate of pay. This tends to reduce efficiency and takes away from the 
 capable man any ambition he may have. The relation between employers and their 
 men have been less cordial than they were previous to the operation of the act. 
 In the majority of cases both sides occupy hostile camps. Some employers are 
 harassed by what may be called "vexatious legislation." 
 
 Hardly any new industry has been started for some years and this notwith- 
 standing that the conditions of the dominion have been eminently favorable for 
 industrial enterprises. It is an undisputed fact that people having money to invest 
 -have carefully avoided any concern in which labor is the chief item of expenditure. 
 
110 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 A master baker- 
 Compulsory arbitration is a lot of rot. It did not prevent the journeymen 
 bakers here in Wellington from going on a strike. 
 
 An ironmaster 
 
 Our increased imports are due to the labor laws. The act leads to a diminishing 
 output and makes for a dead level. 
 
 A college professor- 
 Reduction in wages in hard times, even when prices come down, will cause 
 enough strikes to smash the system. 
 
 A mine owner 
 
 What is to become of our industries in bad times when we have to pay a wage 
 fixed by the court higher than the industry can stand? 
 
 A secretary of an employers' association 
 
 The result on trade of thirteen years' working of the act is that it has not been 
 advantageous. In many trades it has opened the door to importations, owing to 
 the increased cost of production, preventing the local industries from competing with 
 the open market. It is not advantageous to the community owing to the increased 
 cost of living, both in rents and commodities, resulting from its operations. 
 
 Speaking generally, therefore, the New Zealand Employers' Federation does not 
 think the industrial conciliation and arbitration act has proved beneficial to worker, 
 employer or consumer. 
 
 A manufacturer of tinware 
 
 It makes the men too damned independent. There are many annoyances to the 
 employer connected with the act. It can not prevent strikes. Although employers 
 do not try to evade awards, it needs a lawyer not to miss some of the provisions 
 and avoid getting into the clutches of the court. 
 
 A building contractor- 
 Believe it would be better if labor laws and labor unions were abolished. The 
 act is responsible for higher cost of living and for higher wages. 
 
 A secretary of contractors ' association 
 
 We were to sacrifice freedom for industrial peace under the act. Now we find 
 we have sacrificed both. 
 
 A clothing manufacturer 
 
 The chief objection I see to the act is the annoyance likely to come from the 
 government inspectors. 
 
 A manager of a meat works 
 
 The chief objections to the act are the hours established, the preference to 
 unionists, and the petty annoyances to which employers are subjected. 
 
 A master plumber 
 
 The preference to unionists clause is a thorn in the side of employers. 
 
 A secretary of an employers ' association- 
 Employers consider the act a hindrance because, 
 
 (a) It makes for the dead level among workers. 
 
 (ft) It limits apprentices. 
 
 (c) It checks industrial expansion. 
 
 (d) It destroys friendly relations between employers and men. 
 
 (e) It has raised the cost of living. 
 
 (f) It has abnormally raised wages. 
 
NEW ZEALAND. Ill 
 
 An ironmaster- 
 Feels that employers' candle is burning at both ends. Higher wages and lower 
 
 efficiency prevails because of the act. The greatest grievance is that most of the 
 
 disputes are artificial and manufactured. 
 
 An ironmaster 
 
 Instead of being a court of reference in case of dispute or misunderstanding likely 
 to result from a strike or lockout, to the detriment or loss of a community, the court 
 of arbitration has become, under the pressure of unionist importunity, a court for 
 the state regulation of industries. 
 
 A leading employer 
 
 The court has been used not as a preventive or cure, but as a convenient substitute 
 for strikes, as an instrument for giving form and substance to ambitions, which, in. 
 its absence, would probably not have developed into disagreements, and almost 
 certainly would never have culminated into serious disputes. The result is that at 
 the first real trial the system has, judged by its original intention, broken down. The 
 court can punish a man for striking, but it can not persuade him to work on terms 
 which are distasteful to him. On the other hand, it may punish an employer for 
 locking out his men, but it can not make him reopen and run his factory at a loss. 
 
 A lawyer 
 
 If there is a lesson to be learned by other countries from the experience of Xi-w 
 Zealand, it is this : That, if they want a system of arbitration for the settlement 
 of strikes and real disputes rather than one for the creation and multiplication of 
 factitious disputes, they should adopt some such system as that of Massachusetts. 
 It has been said that labor passes through three stages when it is enslaved, when 
 it is free, and when it is tyrannical. In New Zealand it has reached the third stage. 
 
 A secretary of an employers ' association 
 
 To my mind there are five unmistakable defects which have largely contributed 
 to the failure of the act to. bring about the desired results : 
 
 (1) The act has been jeopardized by its going beyond wages and hours of work. 
 
 (2) In making it far too easy for the unions to bring cases before the court. 
 
 (3) The fixing of a standard instead of a minimum wage. 
 
 (4) The holding of individual workers and unions, in place of unions only,, 
 responsible for strikes. 
 
 (5) The too frequent changes of the judges. 
 
 * * * (The act) has been a real hindrance in that it has greatly increased the 
 cost of production. The history of the colony during the past few years has been 
 increased importation and an almost stationary local output. 
 
 It (the act) has created strife, manufactured disputes, impaired the work, 
 restricted the output, increased the cost of production, put up the cost of living to 
 such an extent that a pound to-day goes no further than did sixteen shillings in 
 1894. * * * The latest statistics show the increase in wages to be from eight and 
 one half per cent to ten per cent, the increased cost of living from twenty-five to 
 thirty per cent. 
 
 A secretary of an employers' association 
 
 If the industries of the country are to progress as they ought to they must not be 
 hampered by labor legislation. I am of the opinion, after a careful study of the 
 labor matters here for nine years, that the arbitration act has hindered, and is still 
 hindering, the industrial progress of the country. 
 
 
112 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 EMPLOYERS AND OTHERS WHO FAVOR THE ACT. 
 
 It must not be presumed from the foregoing unfavorable and more or 
 less hostile opinions on the part of employers and others toward the act 
 that it has no friends. Here are the opinions of some who speak well of 
 it and their reasons why they do : 
 
 A building contractor 
 
 The act has weeded out sweating employers. So far as the building trades are 
 concerned it has not affected its progress one way or the other. 
 
 A manager of a teaming company- 
 It has helped the dominion because the act has made for a high degree of industrial 
 peace. 
 
 A clothing manufacturer- 
 It has made no difference in the clothing trade beyond driving out the sweater 
 and in doing this it has rendered very valuable service. Last year a manufacturer 
 was caught sweating and was driven out of the trade through the operations of the 
 law. Had it not been for the law, in all probability, he would by his sweating 
 methods and at the expense of labor have driven fair employers out of the trade. 
 
 A shoe manufacturer 
 
 The law makes for steadiness of wages. I could not have fulfilled my government 
 contracts for the Boer war, for example, if it had not been for the awards fixing a 
 wage for a fixed period. 
 
 Another shoe manufacturer 
 
 The act has been a great advantage in making for industrial peace. 
 
 A publisher- 
 Finds the act advantageous in his business. It has in his opinion been of great 
 advantage to the dominion. It has cut out sweating, raised the conditions surround- 
 ing the worker and has cut out payment exacted by employers for teaching apprentices 
 their trade. 
 
 Director in street railway company- 
 Blames agitators for troubled labor conditions. On the whole, labor situation 
 
 better than in England. Considers the whole system under the legislation much 
 
 better than strikes. 
 
 A waterside worker 
 
 The hours of labor have been shortened under the act, half holidays have been 
 -obtained, sweating has been minimized, and the lot of the men has been generally 
 improved, owing to the industrial legislation. 
 
 A labor member of Parliament- 
 Two thirds of the men are in favor of the act. The attitude of labor generally is 
 that the new amendments should have a fair trial. 
 
 A public official 
 
 A few agitators try to make themselves prominent by railing at the act but they 
 would abuse any measure that had become law. They are "agin" the government 
 always. The steady, silent vast majority of labor favors the act. 
 
 A contractor 's foreman 
 
 Under the old conditions men could be sweated ; under the act men can not be 
 sweated. It has had a tendency to level down the good worker to the poorer worker. 
 Despite this the general efficiency of the worker is not lower than before because 
 sweating in itself tended to diminish efficiency. 
 
NEW ZEALAND. 113 
 
 The president of a labor union 
 
 If the act were put to a referendum of workers, ninety per cent would vote for 
 its retention. It has given them fourteen years of comparative industrial pace at 
 fair wages and under good conditions. When, in their minds, they compare all this 
 with the conditions that prevail in countries where strikes are resorted to, and 
 realize the great amount of loss and suffering that strikes inflict on labor and its 
 dependents, they more keenly appreciate the blessings they enjoy under a system 
 which enables them to have all their grievances settled peaceably. 
 
 An ironmaster 
 
 The value of the law is that it prevents sweating. 
 
 A wholesale dry goods merchant- 
 Much prefer the act to strikes. 
 
 Manager of steamship company- 
 Is a strong believer in the value of the act if it is not abused. 
 
 Lumber merchant- 
 Would not be in favor of repealing any part of the act. 
 
 A sawmill owner- 
 Labor legislation of some sort is in his opinion absolutely necessary. The act 
 prevents sweating and is advantageous to fair employers. 
 
 Shoe manufacturer 
 
 The relations between employer and employee have improved under the act. 
 There is not the continual temptation for the employer to cut down wages in order 
 to undersell his competitor. 
 
 Sentiments uttered at an employers' conference 
 
 In some respects the act is admirable. It gives & measure of assurance of settled 
 conditions, and though this is finally dependent upon the loyalty and consent of both 
 parties, it is no small gain. In so far as it has been effective in preserving industrial 
 peace,, as well as securing justice to the disputants, the act may be said to have 
 justified its existence. 
 
 Dr. Findlay, attorney general of New Zealand 
 
 The act has been educative of public sentiment. New Zealand has impressed 
 obligations on both sides. The great body of workers are impressed with loyalty 
 
 the court. 
 Ex-Labor member of Parliament 
 The act cuts out the sweater, makes for steadiness of wage, and tends to estab- 
 
 fhing industrial peace. The result of the recently inflicted penalties on strikers 
 s made a repetition of strikes highly improbable. 
 An architect 
 
 The act is advantageous to employers and to the men. Believe that on the whole 
 th favor it. 
 
 b 
 
 Factory inspector 
 I find that the majority of employers and their men prefer the act rather than 
 strikes. 
 
 
 
 Mine manager- 
 Believes that the majority of the men favor the act. 
 
 President of a labor council- 
 Hard times will show the men the value of the act, by protecting them from cuts 
 in wages likely to follow an open labor market. 
 
 8 
 
114 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 WAGES. 
 
 In common with the conditions prevailing in the rest of the industrial 
 world wages in recent years have advanced in New Zealand. The rate 
 of advance, however, has not been uniform. The greater advances have 
 taken place in what has been known as the sweated industries, chiefly 
 the textile industries. Secretary Tregear of the Labor Department 
 was good enough to furnish me with a copy of data prepared by his 
 department for the attorney general, which I herewith append, and 
 which will show the change in wages and conditions in these particular 
 industries since the introduction of the act. I am of the opinion that in 
 these branches wages through the operations of the act have increased 
 more than they would have increased if left to the operation of the law 
 of supply and demand, due to the fact that the workers are chiefly unor- 
 ganized women and children. 
 
 DEPARTMENT OF LABOR, WELLINGTOX. May 19, 190s. 
 Memorandum for The Honorable, the Attorney General: 
 
 I have the honor to submit herewith a statement in regard to the rates of wages 
 paid in 1890 and those paid to-day to various classes of workers. The information 
 in regard to the early period is taken from the report of the Sweating Commission 
 which sat throughout New Zealand in 1890. From the evidence I have compiled 
 the following statement : 
 
 Trade. 1890 (per week). 1908 (per week). 
 
 Tailoresses Os. to 15s. ($3.60). 5s. ($1.20) to 25s. ($6.00> 
 
 Hosiery workers 5s. ($1.20) to 9s. ($2.16). 7s. ($1.68) to 20s. ($4.84 > 
 
 Shirt making _ Os. to ISs. 6d. ($4.44). 12s. ($2.88) to 30s. ($7.20 i 
 
 Average wage 10s. ($2.40) to 12s. ($2.88). 
 
 Dressmaking Os. to 25s. ($6.00). 5s. ($1.20) to 30s. ($7.20 i 
 
 Millinery Average wage 12s. 6d. ($3.00). 5s. ($1.20) to 25s. ($6.00 i 
 
 The commission found that work used to be taken home by workers who wished 
 to make a few extra shillings. This, as you know, has now been stopped ; all work 
 having to be done on the employer's own premises. 
 
 Apprentices used to be taken on at the above trades at nothing for a year, and 
 then either given 2s. 6d. (60c. ) per week or dismissed. Now no apprentice can be 
 taken on unless they are paid not less than 5s. ($1.20) per week, with an annual 
 increase of 3s. (72c. ) per week up to the age of twenty. Should an apprentice wish 
 to go to another employer the time served with the previous employer must count 
 in computing the wage. 
 
 Formerly employees' hours were not restricted in any way ; now the hours are 
 regulated, and only a limited amount of overtime is allowed in a year, and this 
 extra work must be paid for at special rates. 
 
 Employers were able to make their employees work in any sort of room, with 
 or without any kind of convenience. Now they must provide well lighted and 
 ventilated rooms, ample air space, special dining-room, and proper sanitary accom- 
 modation. 
 
 In 1890 a boy or girl of twelve could be employed in a factory. The age has 
 been raised to fourteen, and no boy or girl under sixteen can be employed in any 
 factory without having passed the fourth standard of education, and, further, 
 without a certificate of fitness from the inspector. 
 
 Holidays on full pay were not provided ; now a certain number of days are set 
 aside. 
 
NEW ZEALAND. 115 
 
 The following further information gleaned from the sweating commission's report 
 may be of interest: Boot machinists, sewing uppers, were paid from 12s. ($2.S2) 
 to 25s. ($6.00) per week. These workers' rates are now fixed by an award of the 
 arbitration court, and they receive a minimum of 25s. ($0.00) per week. 
 
 Young women milliners were made on Saturdays to serve as shop assistants until 
 nearly midnight. 
 
 Hairdressers worked from S a. m. to 9.30 p. m., and on Saturdays till midnight. 
 
 Women assistants in fancy goods and book shops worked from 9 a. m. till 6 one 
 night and 9 the next, and received from 10s. ($2.40) to 30s. ($7.20) per week. 
 (Braithwaite, bookseller, Dunedin (545), said he had five men, two boys and eight 
 women, and admitted he had no lavatories.) 
 
 Drapers' assistants were not allowed to sit down. The present act provides for 
 sitting accommodation for all assistants. In the dressmaking trade the hours were 
 from 9 a. m. to 6 p. m., including Saturdays. Apprentices were paid nothing to 9s. 
 ($2.1<>) per week, and adult women from 10s. ($2.40) to 15s. ($:UK)). Only best 
 hands received 25s. ($6.00). Now head dressmakers receive from 2 ($9.60) to 8 
 ($38.40) per week, while young women in charge of rooms average about 2 10s. 
 ($12.00) per week. Very few adult workers receive less than 30s. ($7.20) per week. 
 
 In confectioners' shops women assistants worked from 8 a. m. to 10 p. m. 
 always, and up to 11.30 p. m. on Saturdays, and received from 10s. ($2.40) to 
 14s. ($3.36) per week. 
 
 Boys engaged in milking began work at 3.30 a. m. and after milking delivered 
 the milk in the city. They either went to school or work until the afternoon, and 
 were engaged again at milking and work until 7 p. m. 
 
 Dr. Martin found the girls in factories were suffering from anemia through bad 
 ventilation, and also from varicose veins. Dr. Lamb made a similar statement, 
 stating that it was due to the bad ventilation and vitiated air in factories. Girls 
 were found to be working heavy sewing machines with their feet hour after hour, 
 and he considered this very injurious to their health. Dr. Stenhouse also reported 
 that anemia was very common, and in Dunedin its frequency was something 
 extraordinary. 
 
 I attach a copy of the sweated commission's report for your information. The 
 number quoted in the margin refers to the number of question in the commission's 
 report. 
 
 ED. TREGEAB, Secretary for Labor. 
 
 In a pamphlet published by the New Zealand Labor Department in 
 L907, in connection with an exhibit made at a dominion exposition, the 
 allowing in relation to wages appears : 
 
 Wages in Hours in Wages in 
 
 the United the United in New Hours 
 
 States States Zealand in New 
 
 per hour. per week. per hour. Zealand. 
 
 Blacksmiths 30c 55 34c 46 
 
 Boilermakers 28c 55 30c 48 
 
 Carpenters 34c 48 32c 45 
 
 Plumbers - 44c 48 32c 46 
 
 Painters 34c 48 30c 45 
 
 Laborers 9c 55 24c 50 
 
 Bricklayers - 54c 46 38c 45 
 
 Builders' laborers 28c 48 26c 45 
 
 The foregoing figures show that the average weekly earnings in these 
 eight industries in the United States is $16.50 and in New Zealand 
 $14.17. 
 
116 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 The American worker earns sixteen per cent more, but works about 
 nine per cent longer hours. For the same number of hours the average 
 American earnings is a fraction over six per cent greater. The average 
 New Zealand weekly wage for the unskilled worker from figures fur- 
 nished by the labor department is 48s. ($11.52) and for skilled labor 60s. 
 ($14.40) per week. According to a statement attributed to Attorney 
 General Findlay, the average wage for all labor, male and female in New 
 Zealand, is $8.64 per week. 
 
 The New Zealand Yearbook for 1908 furnishes the following figures : 
 
 Average Average Average 
 
 annual wage annual production labor cost 
 
 per worker. per worker. on production. 
 
 1900 69 6s. ($337.09) 364 ($1,766) 18.55 per cent. 
 
 1905 65 16s. ($310.09) 346 ($1,675) 19.04 per cent. 
 
 The past several years up to 1908 have been phenomenally prosperous 
 for all agricultural and pastoral New Zealand producers. In conse- 
 quence, farm wages during that period owing to scarcity of labor has 
 advanced far more than wages in other industries. This is shown by the 
 figures found in the New Zealand Yearbooks for 1895 and 1907, pages 
 164 and 505, respectively. The average increase in wages in industrial 
 undertakings working under awards from 1894 to 1906 was 19.7 per 
 cent. The wage increase to workers in agricultural and pastoral pur- 
 suits for the corresponding period is 29.3 per cent. This looks abnormal 
 until we remember that in Italy within the past few years, due partly 
 to scarcity of farm laborers as the result of immigration and partly to 
 the increased cost of farm products and living, the wages of farm labor 
 has advanced from thirteen cents a day to sixty-five cents a day, or 
 about five hundred per cent. 
 
 The wonder is not that wages in New Zealand have advanced in recent 
 years. When the advance in wages the world over is considered and the 
 increased demand for all sorts of labor in New Zealand during the pros- 
 perous years, in industry, in agriculture and in great New Zealand 
 public works absorbing many thousands of workers is borne in mind, 
 the wonder is that the advance in wages has not been greater. 
 
 COST OP LIVING. 
 
 Three causes have contributed to an increased cost of living in New 
 Zealand as elsewhere in the world 
 
 (a) Higher land values, especially in city lots; 
 
 ( 1} ) The world increase in the price of staples ; 
 
 (c) Higher wages. 
 
 The increased wage cost to my mind has been the smallest contributing 
 factor. As shown by the foregoing figures, the labor cost in New 
 Zealand production is less than twenty per cent of the gross cost. 
 
NEW ZEALAND. 117 
 
 Assuming that wages have advanced twenty per cent this would add 
 but four per cent to the gross cost, whereas rents and the price of world 
 staples have increased out of all proportion to the advance in wages. 
 I was informed by reliable authorities that city lots in the leading New 
 Zealand cities had increased in value in the last ten years fully two hun- 
 dred per cent, thus very greatly increasing rents. 
 
 The most available figures on the relative increase in New Zealand 
 wages and cost of living are to be found in an address delivered by 
 Attorney General Findlay in 1908 in which he says: "At Wanganui 
 I quoted a report from the registrar general, which showed that in 
 twelve years since the act passed the cost of living for workers based 
 on the chief articles of diet had increased 18.6 per cent while the general 
 increase of wages affected by the act in the same period was 17.9 per 
 cent. This report did not include rent or clothing, and it is admitted 
 that if these items had been included the increase in the cost of living 
 would have been greater. Probably the increase has not been less 
 throughout New Zealand than twenty per cent. ' ' 
 
 RELATIONS EXISTING BETWEEN EMPLOYERS AND THEIR MEN. 
 
 There is a pronounced conflict of opinion as to the effect the act has 
 had upon the relations existing between employers and their men. Here 
 are some of the opinions expressed pro and con : 
 
 Justice Chapman, formerly president of the arbitration court 
 The labor laws, in my opinion, do not create ill-feeling between employers and 
 their men. 
 
 A timberman 
 
 The feeling between employers and men is better now than ever before. 
 
 Labor leader in seamen 's union 
 
 The labor laws have made for a better feeling between employers and their men. 
 
 Labor member of Parliament 
 
 The feeling between employers and their men is much the same as before the 
 creation of the act. 
 
 The report of the executive committee of the trades and labor council, 
 1907- 
 
 Taken as a whole our relationship with our employers has been of an amicable 
 nature. One of the exceptions may be cited as the recent slaughtermen's strike. 
 While we may sympathize with the men in their efforts to secure increased pay and 
 better conditions, your executive committee can not help expressing its regret at 
 their hasty and ill-advised action in ignoring the remedy provided by the industrial 
 conciliation and arbitration act. We are satisfied, however, that this cloud that at 
 one time threatened to spread over the whole industrial horizon of the colony has 
 been dispersed and that the men by their ready compliance with the verdict of the 
 court are showing that the powers of the court are as potent to-day as ever they were. 
 
118 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 As against these favorable opinions there are others radically opposite, 
 which herewith follow : 
 
 Mr. George T. Booth of Christehurch, an ironmaster, in his testimony 
 before the legislative committee 
 
 Q. What is your experience with regard to the effect of our labor laws? Have 
 they promoted a good feeling between employer and employee during the time they 
 have been in operation? 
 
 A. I believe they have had the reverse effect. 
 
 Q. But do you not think that the relations between employer and employee have 
 been improved by the labor legislation? 
 
 A. No, I think it has had the opposite effect. 
 
 Secretary of builders' association- 
 Employers in the building trades say that a serious result of the act is to destroy 
 
 any prior existing- sympathetic bond between them and their men and that the gap 
 
 is widening. 
 
 A master cabinetmaker 
 
 The labor laws lead to antagonisms between employers and their men. 
 
 Mr. Tregear, the labor secretary, in this connection said that, "in 
 spite of assertions made by extremists on both sides, the relation between 
 employers and men are as good as they can ever be under the wage 
 system." He pointed out that there was friction about a year ago. 
 but that the alteration in the arbitration act last session of Parliament 
 had smoothed away the trouble. 
 
 This is a point upon which it is not possible to do more than to get 
 opinions. My own opinion is that there is less friction and a more cor- 
 dial feeling on the whole here between employers and employed than I 
 have found in countries where strikes and lockouts prevail. 
 
 LABOR UNIONISM. 
 
 The New Zealand Yearbook for 1908 gives the number of industrial 
 workers under date of April, 1906, as 56,359. The same authority, 
 page 519, gives the membership of workers' unions, not including nine 
 who failed to send in their returns, as 45,614. In 1895, when the act 
 went into operation, there were 9,370 union members. In most countries 
 in Europe the number of organized workers will not average twenty-five 
 per cent of the entire body of wage-earners. Owing to the fact that the 
 Yearbook quoted "gives the number employed industrially as under date 
 of April, 1906, and the number of union workers as under date of 
 December, 1907, it is not possible to get at the exact proportion of union 
 workers. Approximately it is safe to assume that the union workers 
 represent seventy-five per cent of the whole, which is far ahead of the 
 proportion to be found in Europe or America. It would indicate that 
 the act has certainly made for unionism. 
 
 A Labor member of Parliament, in speaking of the influence of the act 
 
NEW ZEALAND. 
 
 119 
 
 on unionism, says : ' ' The well organized unions are not so active as they 
 \\cre before the act was passed, but there are more large unions." 
 
 A government labor department official in this connection says: 
 Some say that the unions have lost their ' fighting spirit. ' I do not know 
 if that is a serious loss. It is not necessary to swagger round with a 
 belt full of revolvers if the policeman does his work properly. Our law 
 is the policeman, and so perhaps the unions get 'soft' get like you and 
 me compared with a cowboy of the 'wild and woolly west.' If by 'well 
 off ' you mean ' financially, ' when the arbitration act passed, the unions 
 had nothing at all; they were broken, flaccid, and penniless after the 
 great maritime strike in 1891. Now some of them have 800 or 1,000 
 each no great sum, but then they are only 'industrial unions'; they 
 have no trade union purposes the act fights for them, so, except to pay 
 a secretary, expenses are nil, and the funds grow. ' ' 
 
 As was stated by one of my informants, the preference to unionists' 
 clause in most of the awards of the arbitration court is a thorn in the side 
 of most employers. Under the law an employer needing a hand must 
 first of all refer to the register kept by the union secretary, and if there 
 are applicants on the list he must give such a preference over non- 
 unionists, subject in the event of failing to do this to being penalized 
 by the court. This is looked upon by employers generally as a source of 
 annoyance and a hardship. The workers, however, claim that since the 
 law takes from them the legal right to strike, they are entitled to some 
 consideration in return. The following copy of a preference clause as it 
 appears in the award made by the arbitration court for the Wellington 
 wharf laborers indicates the attitude of the court on this vexed point. 
 
 11\S 
 
 pe 
 w. 
 
 
 (Award of the arbitration court for Wellington wharf laborers. Extracts, pp. 6-7-8.) 
 
 Preference. If and so long as the rules of the union shall permit any person of 
 good character to become a member of the union upon payment of an entrance fee 
 not exceeding 2s. Gd. (60c), and of subsequent contributions not exceeding (3d. (12c.) 
 r week, upon a written application of the person wishing to join the union, without 
 ballot or other election, then and in such case and thereafter the employers shall 
 employ members of the union in preference to nonmembers, provided there are 
 members of the union available equally qualified with nonmembers to perform the 
 particular work required to be done and ready and willing to undertake it, provided 
 that a man shall become eligible for employment as if already a member of the 
 union if he shall bona fide give notice in writing to the secretary of the union of 
 his desire to join the union, and shall pay or deposit with such notice the sum of 
 J.<. (id. <(0(-.). Such notice may be given by delivering the same to the secretary 
 personally or by leaving the same at his office or by depositing the same in a box. 
 which it shall be the duty of the union to keep available for that purpose at the 
 place or one of the places appointed for th engagement of labor under clause 9 
 hereof. 
 
 Employers, in employing labor, shall not discriminate against members of the 
 union, and shall not in the engagement or dismissal of men, or in the conduct of 
 their business, do anything for the purpose of injuring the union, directly or 
 indirectly. 
 
 When members of the union and nonmembers are employed together, there shall 
 
120 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 be no distinction between members and nonmembers, and both shall work together 
 in harmony and shall receive equal pay for equal work. 
 
 Strikes. The union shall do all in its power to prevent any strike by any of 
 the workers affected by this award, and if any strike shall occur in which any 
 member of the union shall take part, such strike shall be prima facie evidence that 
 the union has committed a breach of its duty hereunder. 
 
 Memorandum. Preference to unionists has been granted by this award. In con- 
 nection with this it is desirable to make it clear that an employer will only commit 
 a breach of award if he employs a nonunionist when a member of the union, equally 
 qualified to do the particular work to be done, is at the place of engagement ready 
 to be engaged. In work such as that done in the port of Wellington, where the 
 traffic is so largely carried on by steamers running to timetable, it is essential to 
 the public interest that no delay should take place in the handling of cargo, and an 
 employer, therefore, is not bound to wait for the arrival of members of the union. 
 If they are not available when workers have to be engaged, the employer is free to 
 engage any worker who is available. 
 
 It will be noted from the foregoing award that the court establishes 
 the "open door" for the union, and that under the ruling it becomes 
 impossible for a union to discriminate against applicants or to estab- 
 lish a monopoly of labor in any particular trade. It will also be noted 
 that the court fixes a nominal entrance fee to the union as well as 
 nominal w r eekly dues, so that it also becomes impossible for a union to 
 fix a prohibitory fee with the view of limiting membership. This, of 
 course, is a very different sort of unionism from that which prevails in 
 other countries where unions can create a monopoly of labor by limiting 
 membership, fixing prohibitory entrance fees or exacting impossible 
 examinations as to technical trade merit. While under the award the 
 shop, so to speak, may be "closed" the door of the union must be kept 
 "open." This largely minimizes the objection of many American 
 employers to the ' ' closed ' ' shop. 
 
 The attitude of the court on this point does not, however, meet with 
 approval of some unionists as may be gathered from the following taken 
 from the Waterside workers ' report of New Zealand for 1906 : 
 
 Preference to Unionists. Mr. McLaren said that what they were asking for was 
 that preference should be granted by Parliament, and not by the court. It was 
 marvelous to him to find how the different trades unions had been satisfied with the 
 position so long. The industrial conciliation and arbitration act was a direct 
 encouragement to nonunionism as it now stood. Why should the nonunionist not 
 share the responsibility of the unionist if he participated in his benefits? The act 
 allowed the unions to bear the responsibility, and the leaders of the unions to bear 
 the odium and censure, and sometimes boycott, and yet gave power to the court of 
 its own free will to divide the benefits equally between the unionist and nonunionist. 
 
 * * * Mr. Young maintained that * * * trades unionism was a Christian 
 work, and far greater Christian work was being done by the unions than by large 
 number of the churches. The unionists of this country had sacrificed the issue of 
 strikes, and in sacrificing that they had given to the employer absolute security for 
 his capital. He could invest the capital wherever he chose in this country, knowing 
 that it was absolutely safe against strike. He could arrange his contracts at a 
 certain figure knowing exactly what he had to pay for his labor * * He (the 
 
 speaker) was aware of certain dangers surrounding the proposal of compulsory 
 preference to unionists. Say that they had 1,000 men employed on the Wellington 
 wharves, of whom 700 were unionists and 300 were not. Immediately they had 
 
NEW ZEALAND. 121 
 
 compulsion these 300 would come in, if they desired to get employment, but the 
 employer had exactly the same grounds of operation as he had before they joined, 
 when he took his choice, and thus the preference benefit immediately went. That 
 could only be overcome by giving a union the right of excluding any one it thought 
 fit. They must have the right to exclude, because if they got all the men into the 
 ranks of the union, no preference could exist. 
 
 The following report of proceedings before an industrial council taken 
 from the Auckland, New Zealand, Herald of May 10, 1909, will indicate 
 how this vexed question of preference to unionist is dealt with by both 
 parties and how by a method of compromise an agreement on the point 
 is reached : 
 
 A KNOTTY POINT VIEWS ON PREFERENCE. 
 
 The preference clause, to which the Auckland Butchers' Industrial Union of 
 Workers asked the master butchers to agree at the sitting of the conciliation 
 council yesterday, occasioned a good deal of discussion. The clause in question was : 
 "Throughout all the departments recognized by this award preference of employment 
 shall be given by employers to members of the Auckland Butchers' Industrial Union 
 of Workers. When a nonunionist workman is engaged by an employer in conse- 
 quence of the union being unable to supply a workman willing to undertake the 
 work, at any time within twelve weeks thereafter the union shall have the right to 
 supply a man capable of performing the work, providing the workman first engaged 
 declines to become a member of the union. This provision shall also apply to those 
 nonunion workmen already employed." 
 
 Mr. C. Grosvenor (employers'- representative) asked what objection there was to 
 the clause in the old award that "preference shall be given to members of the 
 butchers' union, all things being equal?" 
 
 The commissioner (Mr. T. Harle Giles) said that possibly the brevity of the 
 clause might lead to confusion. His interpretation was that, providing the union 
 was prepared to find a man he must be taken if he was competent to do the work. 
 
 Mr. Grosvenor : That is so. 
 
 Mr. W. E. Sill (employees' representative) : If the employer says the man is not 
 competent? 
 
 The Commissioner : Then it is for the union to prove that he is. 
 
 Mr. Sill: That is very difficult to do. Continuing, Mr. Sill said the unionists' 
 grievance was that employers were prejudiced, and nine times out of ten would 
 choose a nonunionist. It would always be an open question when the union and an 
 
 I employer differed as to the competence of a man which was right. 
 Mr. S. Wing (employers' assessor) : What about the men who refuse to join the 
 union on conscientious principles? 
 Mr. Sill : I never met such a man. 
 Mr. Wing : I have. 
 Mr. Sill : I think it highly improbable there are such men. I met one who was 
 supposed to have such principle, but I found the reason he did not join the union 
 was that he thought the union would not do anything for him. as he was earning 
 more than the award wages. He did not recognize that the union fixed a minimum, 
 and that he could earn more than that if an extra good man. 
 
 The commissioner said he did not think employers wished to refuse to recognize 
 the unions, which were of great benefit to the workers. 
 
 Mr. R. Salmon (employers' assessor) : I think the time will soon arrive when 
 all workers will be compelled to contribute to the union, and employers will be 
 responsible for taking the contributions off their wages. 
 
 Mr. Grosvenor : A clause quite as rational as one of preference to unionists 
 would be one that no man should work for an employer not a member of the 
 master's union. 
 
 Eventually it was agreed that the clause should not apply to nonunion workmen 
 already employed, and that the time during which the union could object to a 
 nonunionist be confined to a week. 
 
122 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 STRIKES. 
 
 For many years New Zealand was heralded throughout the world as 
 "the country without strikes." Literally, this is not true. There have 
 been strikes in New Zealand since the act went into force, but so few of 
 them, comparatively, that it would be entitled to be called "the country 
 with few strikes." 
 
 In New South Wales it is illegal to strike under any circumstances. 
 Not so in New Zealand. The right to legally strike is not denied if cer- 
 tain formalities are gone through first, such as getting the union can- 
 celed. A man need not work, nor need an employer give him work if he 
 does not wish to do so, but if either employers or workers agree or con- 
 spire together to commit a strike or a lockout while under an award, that 
 is an offense. It is concerted action after having benefited by the privi- 
 lege of going under an award that is reprehended. 
 
 Labor Secretary Tregear furnished the following statement of strikes 
 since the act went into effect in 1894 : 
 
 There have been twenty-five strikes in New Zealand since the inception of the 
 industrial conciliation and arbitration act, involving approximately 1,14(5 strikers 
 and rendering idle approximately 2,389 men. The total number of days the men 
 were idle from their respective employments was approximately 318. As far as can 
 be ascertained the total loss of wages to the workmen concerned approximated 
 17.679 ($85,744). while the loss to the employers was about 15,750 ($75,418). 
 
 In addition to these cases, there have been two or three disturbances since one 
 affecting the miners employed by the Taratu Coal Company, but it really was not 
 a strike at all. as the men. being dissatisfied with the wages awarded by the court, 
 simply left the service of the mine on a Saturday afternoon and did not return to 
 work on the Monday morning, when the award became operative. The mine man- 
 agement subsequently filled their places with other miners in the district. In January 
 there was a small strike of employees at the Paki Freezing Company's works, in 
 which seventeen men were involved. The strike arose out of a dispute between 
 the manager and the fellmongers as to the spell in the morning and afternoon in 
 which to smoke. It was really a very trivial affair, but the men were proceeded 
 against by the department and fined 1 ($4.85) each in the magistrate's court. 
 There was also a strike of twelve butchers employed at the Picton Freezing Works 
 in March of this year for higher wages. As these employees were not registered 
 under the industrial conciliation and arbitration act it was not an offense. The men 
 were only idle a very short time and accepted the wage of 11*4 d. (22i,4c. ) per hour, 
 the same rate as paid to the Canterbury men. They wore formerly paid 10%d. (21c.) 
 and struck for Is. (24c.) per hour. 
 
 You will see then that for a period of fifteen years, we have not averaged two 
 strikes per year, and no doubt after the perusal of the facts furnished, you will 
 come to the conclusion that some of the disturbances hardly deserve the name of a 
 strike. 
 
 I may say that as far as the department can ascertain on the result of the strikes 
 twenty-two were favorable to the men, namely, the men succeeded in getting their 
 terms or something approaching them, and in three cases the employers were suc- 
 cessful in defeating the demands of the men. 
 
 Most of the strikes which have taken place since the act went into 
 effect were due, it is claimed, to the imperfect machinery provided for 
 the administration of the law. The conciliation board provided for in 
 
NEW ZEALAND. 123 
 
 the original bill proved ineffective and was finally abandoned. This 
 threw so much work on the arbitration court that it became hopelessly 
 congested. Cases were kept on the court calendar for months and some 
 of them for years. Meanwhile, the dissatisfaction of the men who could 
 get no redress was intensified and they were goaded on to a final viola- 
 tion of the law. 
 
 Some of the testimony of labor representatives who appeared before 
 the legislative labor bills committee in 1908, when the amendments since 
 adopted,, were under discussion emphasize this point. One labor repre- 
 sentative said : 
 
 We consider that a number of the strikes that have taken place in New Zealand 
 would never have taken place had there been machinery in existence whereby the 
 disputes could have been settled without the delays that have occurred in the past. 
 * * * We say, however, that no matter how drastic the clauses of an act may be. 
 it would be impossible to prevent strikes altogether. You may lessen them by good 
 legislation, but it would be impossible to prevent them. 
 
 Another labor representative spoke as follows : 
 
 It has to be remembered that no act passed by any legislature prevents crime. 
 You can not stop the committal of murder, although a man can be hanged for it. 
 You can not stop strikes by arbitration, although you can minimize them by means 
 of arbitration, and we contend that the present act has done that. 
 
 Q. Are you aware that the majority of the workers are in favor of the arbitration 
 act? 
 
 A. Y'es, I do not think there is any doubt about it. Because a certain number 
 like to override an award it does not follow that any one believes in strikes. No one 
 believes in strikes that I know of. 
 
 In a speech delivered by Attorney General Findlay of New Zealand 
 in Wellington in July, 1908, referring to the effect the act has had on 
 strikes, he said: 
 
 * * * I contend that for many years the act had prevented strikes, and that if 
 reasonably used in the spirit intended by its framer it would always prevent them. 
 This contention has been adversely criticised. I submit these considerations to 
 unbiased critics: (a) There were in 1906 290,000 wage-earners of all kinds in New 
 Zealand, and the average number throughout the career of the act would be over 
 250.000; (b) Up to the present time there have been eighteen strikes in thirteen 
 years. 
 
 Eighteen strikes have taken place in New Zealand, really all small and short lived, 
 and only twelve of these have been illegal, since in six the act had no application. 
 In these six there was no union award or binding agreement. In these illegal strikes, 
 74O men all told engaged, that is less than one third per cent of the above average 
 total of wage-earners in this country, and of those engaged in strikes, legal and 
 illegal, not one half per cent of these 250,000 workers. The days of idleness of 
 workers due to these strikes were very few. In some cases the strike lasted only a 
 day or two. 
 
 Now compare these figures with our motherland's experience. From 1891 to 
 1900. that is, ten years, there were 7,931 labor conflicts in Great Britain, involving 
 2.732.169 workers. It is estimated that the total wage-earners of Great Britain of 
 all classes was in 1906 14,640,000, and during the decade in question would be 
 about 12,700,000. Thus, during this decade over twenty per cent of the British 
 workers were at some time or other directly concerned in a labor conflict, as com- 
 pared with less than one half per cent in New Zealand in thirteen years. 
 
124 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 The total number of days the British workmen were idle in these ten years 
 owing to strikes (i. e., multiplying the days idle by the number of men idle) was 
 106,192,528, making an average idleness of about thirty-eight days per man. 
 
 To treat the act as a disabled and useless machine because a few short-lived 
 strikes have taken place, and a few very noisy gentlemen have declared that they 
 will have none of it is therefore error. But let us be just before we are serious. 
 Follow the career of the court and the act since their inception, follow the court's 
 work to-day with a fair mind, and you will admit that it has done and is doing 
 splendid work, discharging one of the most difficult tasks with fairness, ability, and 
 patience. I claim that the act has done immense service in this country in the 
 cause both of industrial peace and fair wages. That it is capable of improvement 
 (as I hope to show) should not belittle that service. 
 
 Judge Sims, the president of the court of arbitration, said that there 
 had been no real illegal strike in New Zealand for eleven months, and 
 that in his opinion the new law will make for fewer strikes. 
 
 The president of the arbitration court in common with the government 
 has made it plain that workers can not strike and have an arbitration 
 act at the same time. They must choose between the two and with this 
 point made clear and emphasized by recent inflicted penalties for illegal 
 striking, there is every probability that unions will prefer to abide by 
 the law. Labor leaders throughout the dominion are of this opinion. 
 One of the most intelligent and aggressive among them said to me that 
 under the amended law strikes will diminish, if not entirely disappear 
 for the reason that to strike now means to lose the benefits of an award 
 and to be fined besides. 
 
 A prominent public official said : "Public sentiment is against strikes, 
 as it feels that it is 'welching' on the part of labor to strike after the 
 good for labor that has been accomplished for it by the act and by the 
 
 court. ' ' 
 
 EMPLOYERS' ASSOCIATIONS. 
 
 There has been a marked growth of these institutions since the act 
 first went into force. In 1895 there was but one employers' association 
 with a membership of 65. In 1906, the latest available figures, there 
 were 113 employers' associations, with a membership of 3,276. Each 
 center has its own organization under the direction of a capable secre- 
 tary, and all of them are federated under a very capable general sec- 
 retary, Mr. Pryor, who makes his headquarters in the capital city of 
 Wellington. Such of the employers' associations secretaries as I had 
 an opportunity of meeting impressed me Avith their intelligence, earnest- 
 ness, and fidelity of purpose. The employers' associations secretaries 
 usually act as the employers' representative before the industrial com- 
 mittees and before the arbitration court, where the unions are represented 
 by their secretaries. The secretaries on both sides have developed into 
 capable lay lawyers on labor laws. At such sessions of the arbitration 
 court and industrial committees as I was enabled to attend, I w r as im- 
 pressed with their knowledge of the law and their ability to expound it. 
 
NEW ZEALAND. 125 
 
 The following copy of an industrial council held in Auckland is taken 
 from the Auckland Herald of May 18, 1909. It will illustrate the 
 methods pursued at these conferences for the arriving at an agreement, 
 and the part played in them by the union secretary, the secretary of the 
 employers' association and by the commissioner, who under the law has 
 no vote and acts simply as chairman of the conference : 
 
 TRIUMPH OF CONCILIATION ANOTHER DISPUTE SETTLED THE BUTCHERING TRADE. 
 
 The conciliation council met yesterday to deal with the dispute between the 
 Auckland Butchers' Industrial Union of Workers and the Master Butchers' Union 
 of Employers. A conference had been held between the parties and agreement 
 reached on all points except the wages of order men and general hands, hours and 
 preference. Mr. T. Harle Giles, conciliation commissioner, presided, and the em- 
 ployers' assessors were Messrs. J. W. Marks, S. Wing, and R. Salmon, and the 
 employees' assessors were Messrs. G. Graulty, G. Lubbock, and J. Lindsay. Mr. W. E. 
 Sill appeared for the employees and Mr. C. Grosvenor for the employers. 
 
 Mr. Sill stated that the union was not willing to make any concession on the 
 points which were in dispute. Its final demands outstanding were that order men 
 should be paid 2 12s. Gd. per week, general hands 2 10s., and that preference 
 should be granted to unionists, as in recent awards. As regards the half-holiday 
 the employees stuck to the clause in their original demands as follows : "Employers 
 during any week in which a holiday or holidays occur may give their workers the 
 extra time off necessary to comply with the limit as to hours fixed by the award 
 during such holiday week, or the next following week." If these demands were 
 granted the union w r ould be willing to allow the whole agreement to go forward as 
 the recommendation of the council ; if not, it would withdraw the whole agreement. 
 A new clause the union wished to have added was that overtime should be paid for 
 at time and a half for other than preservers. This new clause was agreed to. 
 
 Mr. Wing suggested, on behalf of the employers, that a sliding scale be agreed 
 upon for order hands, 2 5s. being paid for men from twenty-one to twenty-three 
 years of age, and 2 12s. 6d. for men over tw T enty-three. 
 
 After some discussion, Mr. Lindsay, on the commissioner's suggestion, offered on 
 behalf of the union to accept 2 5s. .for order men up to twenty-two years and 
 2 12s. 6d. thereafter. 
 
 Considerable debate took place on the question of hours. The men had originally 
 demanded a forty-eight-hour week, while the employers held for a fifty-nine-hour 
 week. The parties eventually narrowed the margin down to one hour, one side 
 holding for fifty-six and the other for fifty-seven hours, and the court adjourned 
 to allow the parties to deliberate. 
 
 On resumption it was agreed to compromise on wages and hours as follows : 
 Order men between twenty-one and twenty-three to receive 2 7s. 6d., and over 
 that age 2 12s. 6d. ; general hands, 2 10s. per week, the number of weekly hours 
 being fifty-six. 
 
 Late in the afternoon all the clauses were agreed to, and the agreement will be 
 sent forward to the arbitration court as the recommendation of the council. 
 
 At the conclusion of the sitting Mr. Sill remarked that to the commissioner was 
 due the entire credit for bringing the matter to so satisfactory a termination. 
 
 Mr. S. Wing said had it not been for Mr. Giles no agreement would have been 
 arrived at. He moved a hearty vote of thanks to the commissioner. 
 
 Mr. Lubbock seconded the motion, which was carried with acclamation. 
 
 In returning thanks the commissioner said it was the toughest dispute he had 
 yet met. 
 
 On the motion of the employers' representatives, a motion appreciative of 
 Mr. W. E. Sill (workers' representative) was passed, and, on the motion of the 
 employees' representatives, a similar vote was passed to Mr. C. Grosvenor, employers' 
 representative. 
 
126 REPORT OP SPECIAL LABOR COMMISSIONER. 
 
 THE AGREEMENT. 
 
 The following is the full list of weekly wages agreed upon : First shopman. 3 ."is. : 
 second shopman, 2 15s. ; small goodsmen, 2 12s. and 2 5s. ; cellarmen and packers. 
 2 15s. and 2 5s. ; bacon-curers, 2 15s. and 2 7s. 6d. ; 'head, feet, and tripe hands. 
 2 7s. 6d. and 2 2s. ; boners, 2 7s. 6d. ; men in charge of hawking carts, 2 17s. <Jd. : 
 drivers, 2 6s. to 2 10s. ; ordermen, 21 to 23, 2 7s. 6d. over 23, 2 12s. 6d. ; general 
 hands, 2 10s. Boys and youths over 14 and under 15 years, 10s. per week; 15 and 
 under 16, 12s. 6d. ; 16 and under 17, 15s. ; 17 and under 18, 20s. ; IS and under 1ft. 
 25s. ; 19 and under 21. 30s. 
 
 Meat preservers, 3; extractors (first), 2 5s.; extractors (second), 2 2s.: 
 cutters, 2 6s. ; fillers, 2 6s. ; sealers, 2 2s. ; toppers, 2 2s. ; pressers, 2 2s. : 
 solderers, 2 5s. ; solder spiriters, 1 12s. ; tin-cleaners, 1 12s. ; tin-washers, 1 12s. 
 Casual labor (adult) to be paid at a minimum rate of 10s. per day for ordinary 
 days and 12s. for Saturdays. 
 
 When a public holiday occurs on any day other than Saturday, employees may 
 be called upon to work up to three p. m. on such Saturday holiday. 
 
 The award will apply to the whole of the northern industrial district outside 
 Poverty Bay, and shall remain in force until December 31, 1911. 
 
 ARBITRATION COURT AWARDS. 
 
 The following report prepared by the Labor Department for the Min- 
 ister of Labor gives the history of the awards granted by the court of 
 arbitration : 
 
 The Hon. the Minister for Labor. 
 
 The following figures have been compiled for the award return which I sent you 
 last week, and may prove of interest and service to you. 
 
 At the beginning of September 303 awards or agreements were enforced through- 
 out New Zealand, and were divided among the several districts as follows : Northern 
 district (Ak.), 69; Wellington, 63; Canterbury, 73; Otago and Southland, 70: 
 Taranaki, 6; Marlborough, 2; Nelson, 9; Westland, 11. 
 
 In no less than 102 awards or agreements the arbitration court gave either an 
 increase of wages or less hours over the conditions given by previous awards. In 
 some cases both increased pay and shorter hours were granted. These awards 
 which gave better conditions are divided into districts as follows : Northern, 28 : 
 Wellington, 23; Canterbury, 26; Otago and Southland, 24; Westland, 1. 
 
 In 90 of the 102 awards increased wages were given to journeymen, and the 
 average increase is estimated at ten per cent over rates paid under original awards. 
 (It must be remembered that the wages paid prior to the act coming into force were, 
 generally speaking, less than the amounts subsequently given by the boards and 
 court. ) 
 
 The increased wages amounted in one case (tailoresses, Auckland) from 17s. 6d. 
 ($4.20) (awarded in 1897) to 25s. ($6.00) per week (awarded in 1904) a rise 
 of 43 per cent. 
 
 The lowest increase was that given to the timber yards and coal carters of 
 Canterbury (Ashburton). who received an increase of Is. (24c.) per week on an 
 average wage of 44s. ($10.56) or about two and a third per cent. 
 
 The greatest drop in hours worked is shown in the Auckland city drivers' award 
 from fifty-four hours in 1899 to forty-seven and a half hours in 1906. The division 
 of hours under the various awards and agreements in force are approximately as 
 follows : Not fixed, 26 ; 44 hours and under, 60 ; 48 hours and under, 242 ; 52 hours 
 and under, 26 ; 60 hours and under, 41 ; 70 hours and under, 9. 
 
 In several awards the hours worked by men and women vary. Both classes are 
 included in this return. The hours above 52 are those fixed for such callings as 
 cooks and waiters, cabmen, drivers, dairymen, grocers, butchers, hairdressers, etc. 
 
 The figures show that there are 302 cases where the hours have been fixed at 
 forty-eight per week and under, while there are 76 cases fixing fifty-two hours and 
 
NEW ZEALAND. 1 '2 I 
 
 under, therefore, almost seventy-five per cent of the existing awards fix an eight- 
 hour day or less. 
 
 Comparing the rates of weekly wages paid in the various awards, the result is 
 as follows: ($9.60) 40s. and under, 13; ($10.80) 45s. and under, 95; ($11.52) 48s. 
 and under, 73; ($13.20) 55s. and under, 150; ($14.40) 60s. and under. 123: 
 <xi. 1.84) 66s. and under, 44; ($16.80) 70s. and under, 23; ($18.00) 75s. and 
 under, 12; ($19.20) 80s. and under, 7. 
 
 In cases where different wages are paid under one award (such as the typo- 
 graphical, bakers, butchers, coal miners, etc.) the various minimum wages are 
 included: for instance, bakers, first hand, 63s. ($15.10) ; second hand, 53s. ($12.72) : 
 third hand, 48s. ($11.52), are shown in respective columns. Seamen, cooks and 
 stewards, waiters, slaughtermen, shearers, wharf laborers, and others, have not 
 been dealt with, as the rates paid are (1) very low; (2) employment is inter- 
 mittent ; or (3) piece rates are paid. 
 
 In 181 cases the wages paid are 48s. ($11.52) and less; while in 3.19 cases an 
 average of 55s. ($13.20) and over is paid, or in other words, fifty per cent of the 
 awards compared show that a weekly wage of 55s. ($13.20) and over is fixed as 
 the minimum. 
 
 In fifty instances the awards of the court have remained stationary, that is. 
 neither the hours nor the wages have been altered by subsequent decisions. Ten 
 awards are classified as being difficult to compare with similar awards given pre- 
 viously, and in 136 cases one award or agreement only exists. The court has in 
 five cases awarded less favorable conditions, i. e., lower wages, or increased hours. 
 
 THE EFFICIENCY OF NEW ZEALAND LABOR. 
 
 Much complaint is heard among New Zealand employers to the effect 
 that one evil consequence of the act is the diminished efficiency of labor, 
 for which, as a rule, employers hold the act responsible. 
 
 In the evidence offered by employers before the labor bills committee 
 of Parliament in 1908, the following testimony was brought out, bearing 
 on this point. 
 
 Mr. Prior, secretary of employers' association, said: 
 
 I was recently conducting a case for the employers before the arbitration court, 
 and got it from a witness on oath that the secretary of the union had gone around 
 among the workers and told them not to hustle, as the award fixed their wages, the 
 \\ ages were not dependent upon the amount of work they did. 
 
 111*. 
 
 f 
 
 A builders ' representative testified as follows : 
 
 We find in our particular business that although the worker's wages have not 
 increased more than about ten per cent on what they were twelve or fourteen years 
 
 ;o, his efficiency or the amount of work we get done is not more than fifty per cent 
 of what it was twelve years ago. I will tell you why, if I may mention an 
 instance. About fourteen years ago I had a contract and allowed 6s. ($1.44) per foot 
 
 r labor on raw material, made a profit of 6d. (12c. ) out of that, while I have 
 requently allowed ten shillings now ($2.40) for the same amount of work and 
 made a loss, although it is exactly the same class of work. That simply goes to 
 
 ow that there is fess work being done by the worker now than there was twelve 
 years ago, while the wages have not increased probably more than ten per cent. 
 That accounts in a very large degree for the increased cost of building. 
 
 The testimony of Mr. George T. Booth, an ironmaster of Christchurch. 
 
 was as follows : 
 
 I am quite sure that the cost of the arbitration system has resulted in a loss of 
 industrial efficiency far greater than ever resulted from strikes, or than was likely 
 to result during the period the arbitration system has been in operation. 
 
128 . REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 
 
 Q. Do you mean to say that the moral fiber of workmen generally has deteriorated? 
 A. Yes, it has been deteriorating for many years past. 
 Q. Are there any causes outside of what you have been discussing? 
 A. Yes. 
 
 Q. Can you name them? 
 
 A. I think that some of the false social ideals that are being preached here have 
 had a considerable amount to do with it. 
 
 Mr. Booth further testified before this legislative committee that in 
 his trade, the engineering, there had been a falling off in the workman's 
 efficiency of twelve per cent in 1905 as compared with 1901. He gave 
 facts and figures to prove his statement, taken from the New Zealand 
 government reports which give the wages paid and the output. 
 
 On the other side statements are made by labor representatives deny- 
 ing these charges. One labor representative pointed out that the present 
 competition among the workers is keen enough to insure that each 
 worker is required to put his utmost into the day's work. At a trades 
 council conference one of the delegates said : 
 
 Some years ago, when I was working in the timber industry, we thought it was 
 an extraordinary tally for a man to turn out 8,000 feet a day that was 1,000 feet 
 an hour. Later on men turned out 10,000 feet a day for a month. I took the tally 
 myself and the average was 10,000 feet a day for the nineteen days that the mill 
 worked. There is a practice of playing one mill off against another, and if one mill 
 turned out a large quantity another would try to beat it. We heard of one man 
 turning out 16,000 feet, and that record stood for a considerable time, but eventually 
 we had a benchman who turned out 22,000 feet, and when the case was being tried 
 at Invercargill la,st week, we heard the extraordinary story . of a benchman who 
 turned out 28,000 feet. 
 
 Q. Is the general average about 8,000 feet a day? 
 
 A. The average per day is very much in excess of what it was many years ago. 
 
 Labor Secretary Tregear, on being invited to express an opinion on 
 this point, said: 
 
 This is a vexed question. Some employers declare that the act has diminished 
 the efficiency of labor, and quote figures to prove their assertions. I doubt both 
 their alleged facts and figures, preferring to take the official figures in the Yearbook. 
 This states, 190S (page 346), that the wages in factories rose in five years at the rate 
 of thirty-five per cent, and that the value of the produce or output in these factories 
 (top of page 347) rose thirty-one per cent. This slight difference may be accounted 
 for thus.: The employment of some thousands more of hands does not always mean 
 a proportionate increase of output. If you employ a hundred men in your factory 
 and they give you an income of 1,000 a year, it does not follow that by putting 
 on two hundred men you can get 2,000. There may not be the machines to work 
 on or the market to sell the goods. So, likewise, it does not follow because you can 
 get ten knots an hour out of a steamer by burning one ton of coal an hour that you 
 can get thirty knots by burning three tons. I consider thirty-one per cent rise in 
 production a very fair equivalent for thirty-five per cent rise in wages. It seems 
 to me this settles the question both of efficiency and of the "going easy" accusation 
 against New Zealand workers. 
 
 The figures above quoted by Secretary Tregear would show a decline 
 of over eleven per cent,' which rather supports the contention made by 
 Mr. George T. Booth before the legislative committee that there had 
 
t] 
 
 i 
 
 NEW ZEALAND. 129 
 
 a decline in efficiency in the engineering business in five years of 
 velve per cent. The Yearbook figures would indicate that this decline 
 ould apply generally. 
 
 While the facts show that there has been a diminished efficiency in 
 ecent years on the part of the worker in New Zealand, the cause for 
 his result, as I shall endeavor to show later in this report, is not cor- 
 rectly understood. I hope to be able to make clear that this diminished 
 efficiency has little or no relation to the labor legislation enacted in New 
 Zealand. Diminishing efficiency is complained of in trades and indus- 
 tries in New Zealand that do not come under the act. A big bridge 
 uilder and contractor in New Zealand made to me the statement that 
 is men are not unionized nor are they working under an award, yet he 
 finds a diminishing output compared with previous years of fully ten 
 per cent. 
 
 HAS THE ACT MADE FOR STEADINESS IN BUSINESS. 
 
 There are those who claim the act has unfavorably affected the steadi- 
 ness of business. I could find no evidence of this; on the contrary, it 
 seemed so far as I could discover, to have the opposite effect and to 
 establish conditions that afford a higher degree of protection to the 
 employer than is found in most other countries. The awards are gener- 
 ally made for extended terms, usually for two or three years and the 
 court does not favor frequent or violent charges. In countries where 
 strikes and lockouts prevail the employer has no such protection. An 
 award once made, the New Zealand employer can safely rely on the 
 wage established for the life of the term of the award, subject of course 
 in good times to competition among employers for labor of higher effi- 
 ciency, which often commands a premium over the minimum wage. 
 
 THE CREATION OP NEW CRIMES. 
 
 One criticism that I frequently heard made on the act is that it has 
 created new crimes. It is true that the law makes the strike or the 
 lockout a punishable offense. In return for this the employer, the 
 worker, and the public get a higher degree of industrial peace than is 
 found in other countries. 
 
 PREVENTING MEN PROM WORKING EXCEPT ON COURT TERMS. 
 
 The act of course prevents men from working except on terms fixed 
 by the court. This is hardly avoidable under any system of collective 
 bargaining, whether such collective bargaining be legalized by the 
 state or established by a strong union. The system is likely to work a 
 hardship on the few inefficient or slow workers, but it tends to insure 
 a fair wage to the great body of workers. Thus making for the greatest 
 good to the greatest number. As previously explained, the slow worker 
 
 9 
 
130 REPORT OP SPECIAL LABOR COMMISSIONER. 
 
 is not ignored by the law, but a provision is made whereby he can be 
 given a certificate permitting him to work below the fixed wage. It is. 
 pointed out that this is a far safer plan than to permit the few to 
 endanger the wage rate of the many. 
 
 INTERFERENCE WITH PRIVATE MANAGEMENT ON THE PART OF THE COURT, 
 
 This is another criticism that the investigator frequently hears 
 brought up against the act. It is admittedly true that to the extent 
 of fixing wages and conditions under which men shall work there is an 
 interference on the part of the court. Under modern labor unionism 
 no employer can longer hope to be supreme in dictating the wage the 
 worker shall receive or the conditions under which he shall work. When 
 these matters were solely in the hands of the employers, experience has. 
 shown that the unfair among them abused the privilege and crowded 
 the worker down oppressively, compelling his fairer minded competitor 
 to follow his example or go out of business. The question then remains, 
 shall the wages and conditions be fixed almost solely by the worker 
 through his union, which is often the case where the union is strong, 
 or shall a fair-minded and disinterested court hear both sides and fix 
 a wage fair to both, and working conditions fair to both ? Aside from 
 wages and working conditions the arbitration court does not in any way 
 interfere with private management or control. 
 
 CAN THE DECISIONS AGAINST THE MEN BY THE ARBITRATION COURT BE 
 
 ENFORCED ? 
 
 Wherever the question of compulsory arbitration came up for dis- 
 cussion in the countries .of Europe where I made my investigations r 
 the point was invariably made that compulsory arbitration Avas doomed 
 to ultimate failure, because in the nature of things the court decisions 
 could be enforced against the employer because he is a responsible party, 
 but that they could not be enforced against the worker because he is 
 financially irresponsible, nor could he be made to work by any court 
 anywhere if he did not want to work. The facts are that the decisions 
 can not be enforced against the employer if he chooses not to continue 
 operating for the reason that the decision of the court is likely to make 
 his venture unprofitable and no arbitration court would attempt to 
 punish him for this. While it is true on the other hand that the court 
 can not compel the members of a union to work if they choose not to 
 work, the court can penalize them for collectively quitting work in order 
 to evade the award. Instances were brought to my notice where the 
 Wellington union, the Waihi gold miners, and the federated seamen went 
 on Avith their work despite the fact that they considered the court award 
 hostile to them. 
 

 
 NEW ZEALAND. 131 
 
 Ample evidence was also furnished to prove that the court can and 
 has punished men for striking. In the slaughtermen's strike of 1907, 
 266 men were fined for striking illegally, and 123 men paid their fines in 
 full. The total amount collected in this strike to date is $3,776. And 
 the end is not yet. Nearly two years have elapsed since the strike took 
 place, but the administration is unrelenting in following 1 up the fugi- 
 tive strikers, as will be noted from the following clipping taken from 
 the Auckland, New Zealand, Herald under date of May 14, 1909 : 
 
 THE SLAUGHTERMEN'S STRIKE. 
 (By Telegraph Press Association.) 
 
 CHRISTCHUBCH, Thursday. 
 
 Order for attachment of the wages of two slaughtermen who took part in the 
 slaughtermen's strike and failed to pay the fine imposed by the arbitration court 
 were to-day made absolute by Mr. Day, S.M. In one case the order amounted to 5 
 and in the other to 2 10s. 
 
 On the other hand, the administration just as readily brings the 
 defaulting employer to time, as may be noted from the following clip- 
 ping which, by a striking coincidence, appeared in the same issue of the 
 same paper: 
 
 FLAXMILLEBS TROUBLES. 
 (By Telegraph Press Association.) 
 
 PALMERSTON NORTH, Thursday. 
 
 The Department of Labor has notified Messrs. Broad and Neaves, flaxmillers, 
 that it is intended to take legal action against them for alleged breaches of the 
 Manawatu flaxmill employees' award: (1) For dismissing men because they were 
 entitled to the benefits of an award ; (2) for breach of the preference clause in 
 taking on nonunionists when unionists were available. The department also pro- 
 poses to apply to the court for interpretation to test the validity of contracts signed 
 to scutch flax at a lower rate than is provided by the award. The cases will be 
 heard by the arbitration court. 
 
 The Black Ball coal miners' strike on the west New Zealand coast 
 was a case where the men tried to evade the penalty imposed upon 
 them for illegal striking. Their effects were sold by the sheriff. There 
 were, so to speak, no bidders as the men were determined to try and 
 defeat the law. The entire effects of the strikers realized at the sale but 
 $3.00. The full penalty was, however, finally collected by attaching 
 the wages of the individual workers and amounted to $1,820. 
 
 The Wellington bakers' union struck against a court award and lost 
 the strike. The union was fined and paid a penalty of $485. So far as 
 I could learn the court has in every instance enforced its awards against 
 the men. 
 
 DISCOURAGING THE INVESTMENT OF CAPITAL UNDER THE ACT. 
 
 This was another criticism frequently made against the act. Men, 
 I was told, would not invest their money where such drastic labor laws 
 prevailed. Hence the growth of industry had been checked to the 
 
132 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 injury of the worker and the dominion. Doubtless there have been 
 instances, possibly fairly numerous ones, where men have refrained 
 from investing in industrial enterprises in New Zealand because of 
 its labor laws. If so, New Zealand has not a monopoly of this experience. 
 England has no legal minimum wage nor has it a compulsory arbitra- 
 tion law, yet the same complaint on a far greater scale is made there, 
 as is evidenced by the following statement quoted by Secretary Broad- 
 head, of the Christchurch Employers' Association. 
 
 THE WANT OF CONFIDENCE. 
 
 In a recent speech in the House of Lords, Lord Cromer referred to the present 
 want of confidence in Great Britain. He said there never was a larger amount of 
 capital in the country to be invested. Among competent authorities the lowest 
 estimate was 250,000,000 ($1,200,000,000) a year, and yet that vast accumulation 
 of capital was not invested in industrial concerns in the country. Mr. Haldane, a 
 member of the British Cabinet, when speaking a few months ago, declared his con- 
 viction that at the root of future British prosperity lay the question whether they 
 could hold their own in the scales of nations. At that moment he said there was 
 plenty of capital available, had the people only confidence. 
 
 How often do we hear men of means in our own State of California, 
 as well as in other states of the union, say that they would not think 
 of putting money in to any enterprise requiring much labor, because 
 of the alleged tyranny and despotism of labor unions. And yet, we 
 have no legal minimum wage nor compulsory arbitration laws in our 
 country. 
 
 That there has been material growth in New Zealand industries since 
 1901 is demonstrated by the following figures taken from the New 
 Zealand Yearbook for 1908 : 
 
 Value of land, machin- Hands 
 
 ery and buildings, employed. Output. 
 
 1901 . 8,408,564 46,847 17,853,133 
 
 1905 12,509,286 56,359 23,444,235 
 
 The same Yearbook, page 522, gives the bank deposits for 1880 as 
 18 per head of the mean population, and 19.92 per head in 1890, 
 and 20.39 in 1900, and 25.59 per head in 1907. 
 
 Secretary of Labor Tregear made the statement that private wealth 
 in New Zealand rose from 170,000,000 in 1896 to 304,654,000 in 1906. 
 "A pretty good rise in ten years," Secretary Tregear adds, "for a 
 place where capital is being driven away." In this he quotes the 
 figures shown on page 537 of 1908 Yearbook. 
 
 THE EFFECT OF THE ACT ON IMPORTS. 
 
 Another criticism made against the act is that it has increased imports 
 out of proportion to the home production. There is no doubt that 
 imports, as a rule, have grown faster than factory products in New 
 Zealand. The cause, however, so far as I could ascertain has little to 
 
NEW ZEALAND. 133 
 
 do with the act. The reasons for this growing difference between 
 imports and home production vary in different industries. In the 
 products of steel and iron, where this gap is quite noticeable, the point 
 was made by an ironmaster, who is most unfriendly to the act, that 
 after visiting the United States a year or two ago and inspecting some 
 of the colossal machine works of that country where they specialize on 
 a very few things and grind them out by the tens of thousands, he 
 realized how impossible it is, even in the face of a fairly high tariff, 
 for the New Zealand ironmaster successfully to compete with those 
 conditions. 
 
 In the course of my investigations I met several manufacturers who 
 assured me that since the introduction of the act the manufacturing 
 end of their business had declined and their imports had increased, 
 notably in machinery, textile fabrics, and wearing apparel. This is 
 made very plain by the following figures quoted by Secretary Broadhead 
 of the Christchurch Employers' Association and taken from the New 
 Zealand Yearbooks of 1895 and 1905. 
 
 Tables showing total value of importations of three important manu- 
 factures for the years 1895 and 1905, the value of similar goods manu- 
 factured in New Zealand, and the percentage of increase in importations 
 since 1895, as compared with the percentage of increase of New Zealand 
 
 manufactures : 
 
 IMPORTS. 
 
 Goods. 1895. 1905. Increase. 
 
 Boots and shoes 127,985 300,134 172,149 134 per cent. 
 
 Woolens 254,580 479,986 225,406 88 per cent. 
 
 Machinery (including agricul- 
 tural implements) 258,799 768,550 509,751 190 per cent. 
 
 NEW ZEALAND MANUFACTURES. 
 Goods. 1895. 1905. Increase. 
 
 Boots and shoes 357,806 501,065 143,259 39 per cent. 
 
 Woolens 302,423 397,348 94,925 31 per cent. 
 
 Machinery and implements 102,054 199,741 97,687 95 per cent. 
 
 It will be seen from above that the excess per cent of importations 
 local manufactures in 1905, as compared with 1895, was as follows : 
 
 Boots and shoes __. 95 per cent. 
 
 Woolens 57 per cent. 
 
 Machinery and implements 95 per cent. 
 
 I am of the opinion as the result of my investigations, that had there 
 been no act, substantially the same results would have followed. New 
 Zealand can never within reason hope to become a great industrial 
 country. Her possible market is too limited to permit her to specialize 
 on a sufficiently large scale successfully to compete with the world's 
 great industrial centers. Only by putting on a burdensome and pro- 
 hibitive tariff can she hope to keep out foreign manufactures. Such pro- 
 
134 REPORT OP SPECIAL LABOR COMMISSIONER. 
 
 hibitive tariff would largely defeat its purpose by so greatly raising 
 the price of things as to limit the demand. The great increase in 
 the import of woolens is largely due to the years of great prosperity 
 which materially increased the purchasing power of the people and 
 created a demand for finer and more fashionable goods than can be 
 satisfactorily produced in New Zealand. Most retail dealers want 
 exclusive styles, such as the home manufacturer is not in a position to 
 give, hence orders are sent abroad in preference. To illustrate, in 
 speaking with the leading merchant tailor of one of the New Zealand 
 cities, I asked whether New Zealand produced a good quality of wool- 
 ens; he replied that it did. "Are the prices reasonable?" I further 
 inquired. "Quite so," he assured me. "I presume, then, that you 
 confine your purchases of woolens altogether to New Zealand pro- 
 ductions, ' ' I ventured. ' ' Not at all. ' ' he replied. ; ' Most of my woolens 
 are imported from England and elsewhere." Expressing my surprise 
 at this statement, he explained that if he confined himself to New 
 Zealand woolens, he would, so to speak, be eating out of the same pan 
 with his competitors. Whereas, in his business, it was very important 
 that he should be able to show designs not obtainable elsewhere. To 
 enjoy this advantage he must buy abroad, where the assortments were 
 so varied that he could get exclusive patterns. Yet another illustra- 
 tion. In speaking with a prominent New Zealand shoe manufacturer, 
 I asked if the act was responsible for the fact that the local manufac- 
 turing of shoes had not kept pace with imports. He answered, saying 
 "the act had nothing to do with it. It is this way," he went on. 
 "Despite the fact that we have one of the largest shoemaking plants 
 in the dominion, we can not in many lines, even with the protective 
 tariff, compete with American or European specialty manufacturers. 
 Why, in your country I have been in factories where thousands of 
 hands are employed making nothing else but shoes to be retailed at 
 three dollars a pair. How can we hope to compete with such condi- 
 tions, in the face of our limited market, which compels us in our one 
 factory to make everything from a baby's shoe to a plough shoe? 
 Furthermore, we are faced by this insurmountable condition. A local 
 dealer will agree to give us an order if we will promise to give him the 
 exclusive sale of a particular last for his city, explaining that other- 
 wise he would be thrown into competition with his next door neighbor 
 or his other competitor on the opposite side of the street, which would 
 mean that his profits would soon be cut to pieces. When we explain 
 that his output at best is too limited to justify us in confining our sales 
 for the whole city to him alone, because that would mean still further 
 minimizing our limited market, he, as a rule, declines to place the order 
 and gives it instead to the representative of some foreign manufacturer, 
 
135 
 
 has n world-wide market and whose variety of lasts is so broad, 
 that he is in a position to give each customer exclusive styles. This 
 is a condition that we can not meet nor overcome, and, as a consequence, 
 if you visit the retail shoe shops in our cities, you will find that eighty 
 per cent of the shoes on their shelves are of foreign manufacture. 
 The home factories are used by the dealers to fill in on sizes in transit 
 and for the coarser lines of goods. ' ' 
 
 ARE THE NEW ZEALAND CITIES AND TOWNS GROWING AT THE EXPENSE OP 
 
 THE COUNTRY? 
 
 Yes. This is as true here as it is in most other countries. It is not 
 clear to me how the act is responsible for this, unless it may be held 
 that the more favorable conditions for w r orkers established by law and 
 the higher wages that good times have brought have naturally tended 
 to tempt the country worker to seek these advantages in the cities. 
 
 The New Zealand government is endeavoring to counteract the ten- 
 dency of the country worker coming to the cities by its settlement 
 act, which was created for the purpose of encouraging settlement on 
 the land. Premier Ward informed me that in the last twelve months 
 the government has advanced to agricultural settlers nearly $9,000,000. 
 
 THE EFFECT OF A LEGAL MINIMUM WAGE ON NEW ZEALAND. 
 
 There are wide differences of opinion in New Zealand as to the 
 Tesult of the legal minimum wage. The "pros" and the "cons" on the 
 subject are as opposite in their opinions as to the effect of the minimum 
 wage as it is possible for men to make them. Here are the views of some 
 opponents of the idea: 
 
 A leading business man 
 
 The minimum wage drives out the slow worker and pulls down the efficiency and 
 the earning power of the man above par. 
 
 A secretary of a builders ' association 
 
 Where a low minimum wage is fixed, as in the grocery trade, there is room for 
 differentiation of wage on merit. But where the minimum wage is high there is no 
 such room, hence it makes for the dead level at the expense of efficiency. 
 
 A leading merchant 
 
 The minimum wage tends to leveling down process instead of a leveling up. 
 
 The manager of a meat company 
 
 If we pay above the minimum wage the court at the next revision of the award 
 is likely to make the maximum the minimum wage to be paid, hence we can not 
 afford to take this risk, and so the minimum practically becomes the maximum wage 
 Sit the expense of the efficient worker who is thus kept down. 
 
 A manager of a large transportation company 
 
 I believe that the minimum wage makes for the dead level and a diminishing 
 output. I pay my men strictly according to the minimum wage. 
 
136 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 A president of an employers' association- 
 Green hands, under the legal minimum wage, find it very difficult to get employ- 
 ment. The poorer workers fix the standard of output under the system ; the fast 
 workers are held back by an unwritten law. 
 
 A building contractor 
 
 The minimum wage prevents many men out of work, who would be glad to other- 
 wise accept less, from getting employment. 
 
 Attorney General Findlay, in a speech delivered at Wellington, 
 June 17, 1908- 
 
 Although the wage fixed by the court is merely the least the employer is allowed 
 to pay, it is in general practice the highest the 'employer will pay. The result of 
 this has been a marked tendency toward a uniform or dead level wage in each trade, 
 for all workers good, bad and indifferent. I need not dwell upon the evils of such 
 a tendency. It has tended to deprive skill, care and industry of the reward and 
 encouragement essential to their exercise, and the dead level wage tends to impress- 
 itself on the energy of the worker. 
 
 Here are some views that are quite the opposite to the foregoing : 
 An employer and ex-member of Parliament 
 
 The minimum wage does not make for the dead level. A goodly percentage of the 
 men receive more than the minimum wage. The dead level is created only where 
 the employer takes advantage of the legal minimum and reduces all his men to that 
 level, regardless of their efficiency. Few employers, however, are so shortsighted. 
 
 A furniture manufacturer 
 
 The dead level of wages does not exist in the furniture making business. Men are 
 paid according to their value regardless of the legal wage. But, of course, never 
 below the legal rate. 
 
 A secretary of an employers' association 
 
 The minimum wage admittedly protects the fair against the unfair employer. 
 
 A business man 
 
 The minimum wage is a safeguard against workers being sweated in hard times. 
 
 A shoe manufacturer 
 
 The minimum wage does not make for the dead level in the shoe manufacturing 
 trade. Men in this trade are paid as much above the minimum wage as they can 
 make themselves worth. 
 
 A master baker 
 
 The minimum wage checks the downward wage limit in bad times, but puts no- 
 limit on an upward wage trend in good times. 
 
 A member of Parliament (Labor representative)- 
 
 The fixing of a minimum wage does away with sweating, increases the purchasing 
 power, and has led to the general improvement of the worker. 
 
 A secretary of a labor union 
 
 The legal minimum wage is, in my opinion, alone responsible for the increase in 
 wages among unskilled workers. There is never any shortage in this class of labor, 
 and through competition the tendency was toward a gradual lowering of conditions 
 among such wage-earners. Without state intervention and the fixing of a minimum 
 wage many adults would have been forced out of the skilled trades and their places 
 filled by youths and a class of workers known as "improvers." 
 
I NEW ZEALAND. 137 
 
 It can readily be seen how difficult it would be for an investigator 
 from abroad to reach an intelligent conclusion from these widely con- 
 flicting opinions, all of them I am sure given in good faith and express- 
 ing the honest opinions of the speakers. There were no facts available 
 to demonstrate what were the actual results on the question as to whether 
 or no the minimum wage made for the dead level of wage, and as to 
 whether it was true that the good worker was discouraged by being 
 pulled down to the level of the poor worker. From talking with 
 employers of unskilled workers I became reasonably satisfied that in 
 the unskilled trades the minimum wage, as a rule, became the maximum 
 wage. This, however, I could readily understand from the fact that 
 the legal minimum fixed by New Zealand law is, so far as I know, the 
 highest average wage paid in the world for unskilled labor. The rate 
 being about two dollars a day or an average of twenty-four cents an 
 hour, against an average in the United States of nine cents an hour 
 for general laborers and twenty-eight cents an hour for building 
 laborers or a general average for both of sixteen and one half cents 
 an hour. 
 
 I also became reasonably satisfied that the minimum became, as a 
 rule, the maximum wage in the shipping trades and on street car lines. 
 In the case of the latter employment, however, the law provides an 
 increasing scale based on years of service. 
 
 I further became fairly well satisfied that in the building trades a very 
 large proportion, say, seventy-five per cent of the workers, received the 
 minimum wage. The very conflicting opinions as to factory wages 
 made it impossible to reach an intelligent conclusion in that direction. 
 In my perplexity I appealed to the Secretary of Labor, Edw. Tregear, 
 who kindly offered to have the factory schedules on file in his depart- 
 ment, which give the number of factory employees, the wage fixed by 
 law and the actual wage paid, compiled, so that the actual facts would 
 be made available. The following results were a revelation to all inter- 
 ested parties : 
 
 DEPARTMENT OF LABOR, WELLINGTON, 20th May, 1909. 
 Dear Colonel Weinstock. 
 
 In respect to the figures which we are getting out in regard to the payment of the 
 minimum wage, I may say that the following totals have been ascertained for the 
 four chief centers of New Zealand : 
 
 AUCKLAND CITY. 
 
 Total number of employees, excluding underrate workers and young persons. _ 2,458 
 
 Number receiving the minimum wage 948 
 
 Number receiving in excess of the minimum 1,510 
 
 Per cent receiving in excess of minimum 61 
 
 Trades not comparable : Boat building, bread and pastry baking, brick and tile 
 manufacturing, butchers' small goods, flour milling, and freezing works employees. 
 
138 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 WELLINGTON CITY. 
 
 Total number of employees, excluding underrate workers and young persons. . 2.066 
 
 Number receiving the minimum wage 876 
 
 Number receiving in excess of the minimum 1,190 
 
 Per cent receiving in excess of minimum 57 
 
 Trades not comparable : Aerated waters, bacon curing, blacksmithing and farriery, 
 brass founding, bread and pastry baking, brickmaking, butchers' small goods, engi- 
 neering, fellmongering, gas manufacturing, meat freezing, and wax vesta manu- 
 facturing. 
 
 CHBISTCHUKCH CITY. 
 
 Total number of employees, excluding underrate workers and young persons.- 2,788 
 
 Number receiving the minimum wage 1,127 
 
 Number receiving in excess of the minimum 1,661 
 
 Per cent receiving in excess of minimum 59 
 
 Trades not comparable : Aerated waters, blacksmithing, bread and pastry baking, 
 brewing and malting, butchers' small goods, general engineering, flour milling, gas 
 manufacturing, and rope and twine manufacturing. 
 
 DUNEDIN CITY. 
 
 Total number of employees, excluding underrate workers and young persons.. 1,637 
 
 Number receiving the minimum wage 792 
 
 Number receiving in excess of the minimum 845 
 
 Per cent receiving in excess of minimum 51 
 
 Trades not comparable : Bread and pastry baking, butchers' small goods, engi- 
 neering (all branches except molding and boilermaking), flour milling, gas manu- 
 facturing, meat freezing, and sail and tent manufacturing. 
 
 Full details of each trade will be published in the annual report of the department, 
 which should be ready about a month hence. I thought these totals would be suffi- 
 cient for your purpose until the report itself is issued, when (if you will give me 
 your address) I shall send you a copy. 
 
 The result appears to me to be very satisfactory, showing as it does that a 
 larger number of employees receive above the minimum wage than the minimum 
 itself, in the manufacturing industries of New Zealand. 
 
 Believe me, yours very faithfully. 
 
 EDW. TBEGEAE, Secretary for Labor. 
 
 These facts make plain that in the industries covered by the fore- 
 going advance report, over fifty-eight per cent receive a higher wage 
 than that fixed by law, thus exploding the criticism that in New Zealand 
 the minimum wage makes, as a rule, for the dead level, thereby pulling 
 the efficient worker and his wages down to the level of the poorer worker. 
 
 No figures are available at this writing to show the percentage of 
 increase in wages above the minimum received by these fifty-eight 
 per cent of factory workers. From data furnished by the president 
 of the shoe manufacturers' association of New Zealand I was enabled 
 to work out this information for the shoe industry and found that it 
 averaged 16.4 per cent. That is, some shoemakers receive as little as 
 five per cent above the minimum and some as high as fifty per cent above 
 said minimum. The average for all being as stated 16.4 per cent. 
 
 It must, therefore, be evident that in the manufacturing enterprises 
 
NEW ZEALAND. 139 
 
 in New Zealand the merit system largely prevails, and while the employer 
 under the law can not pay less than the legal wage, many pay above 
 the legal wage, thus holding out a strong incentive for higher efficiency. 
 
 HAS THE ACT INCREASED THE TAX BURDENS OF THE PEOPLE? 
 
 Critics of the New Zealand act take much satisfaction in pointing 
 to the seemingly abnormal increase in the debt of the dominion since 
 the creation of the act in 1894 and maintain that this is due to the 
 desperate efforts of the administration to create public work in order 
 to relieve the labor market of unemployed so that the wages fixed by 
 the awards might be successfully maintained. These critics call atten- 
 tion to the fact that in 1894 the dominion debt was 38,000,000 or a 
 per capita debt of 57 8s. lOd. ($278.57), whereas in 1908 the debt of 
 the dominion had grown to 66,000,000 or a per capita debt of 66 
 ($320) . I took pains to have these statements analyzed with the follow- 
 ing results : I found that in 1894 out of the debt of 38,000,000 there 
 was invested in productive works 17,162,000 leaving a non-productive 
 debt of 21,838,896 ($105,914,300) on which the people had to pay 
 interest, whereas in 1908 the investment in productive works aggre- 
 gated 47,416,743 leaving a non-productive debt of 19,047,154 
 ($92,378,697). So that as a matter of fact the debt on which the 
 people have to pay interest had, in the intervening years diminished 
 by $13,535,603. The productive investments yield the dominion an 
 income of from three to seven and one half per cent and go a good way 
 toward lightening the tax burdens in other directions. 
 
 Following are the productive investments for the two foregoing 
 periods as furnished by Colonel Collins of the treasury department 
 at Wellington: 
 
 1894. 1908. 
 
 Railways 14,600,000 27,000,000 
 
 Advance to settlers 4,100,000 
 
 Advance to workers 205,000 
 
 State lands 1,300,000 5,890,000 
 
 Advances to municipal bodies 2,881,000 
 
 Bank of New Zealand 500,000 
 
 Coal mines 10,000 100,000 
 
 Telegraph and telephone 680,000 1,196,000 
 
 Cash on deposit in London . 114,743 
 
 Water works, gold mines 572,000 815,000 
 
 Cash on hand 1,015,000 
 
 Reserve fund securities 865,000 
 
 New Zealand consuls 478,000 
 
 Land purchases 2,247,000 
 
 17,162,000 49,406,743 
 
 ($83,236,700) ($229,922,704) 
 
140 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 CONCLUSIONS. 
 
 Before beginning my investigations of the operation of the New 
 Zealand act, I compiled a statement of all the adverse criticisms that 
 had come to me from various sources in and out of New Zealand. 
 
 I then undertook the task to verify and analyze these adverse com- 
 ments, which in brief were as follows : 
 
 The act has made 
 
 (a) For an abnormal increase in wages; 
 
 (&) For an increased cost of living; 
 
 ( c ) For friction between employers and their men ; 
 
 (d) For diminished efficiency on the part of workers; 
 
 (e) For lessened output; 
 (/) For increased taxes ; 
 
 (g) For increased imports out of proportion to home manufacture ; 
 
 (h) For driving capital away from investment in industrial under- 
 takings ; 
 
 (i) For a refusal on the part of the workers to abide by unfavorable 
 court decisions; 
 
 (j) For penalties against the men for violations of awards, which 
 the court can not enforce. 
 
 These criticisms looked most formidable, and if found to be true criti- 
 cisms, it must be obvious that the law is a serious detriment to the 
 dominion and sooner or later must go. 
 
 My investigations, however, forced on me the conclusions that many 
 of these criticisms were unfair to the act and held it responsible for 
 results with which it was in nowise related, as in other parts of this 
 report I have endeavored to point out. 
 
 Passing them in final review, it must be said that while wages have 
 gone up in New Zealand, the act has been responsible for putting up 
 wages almost entirely in the sweated industries, where the weak and 
 the unorganized were being helplessly exploited and where wages should 
 have been put up. 
 
 In other branches of trade, the act has had very little effect on the 
 upward trend of wages which had risen the world over, and which 
 would have risen in New Zealand, act or no act, because of great pros- 
 perity and a greatly increased demand for labor. 
 
 Cost of living would likewise have gone up, act or no act, because of 
 the greatly enhanced world price for all agricultural staples and the 
 abnormal advance in city land which materially increased rents. 
 There is some friction between employers and men but not nearly so 
 much as is to be found in countries where strikes and lockouts prevail 
 and cause endless strife and bitterness that leave scars behind for 
 indefinite periods. 
 
NEW ZEALAND. 141 
 
 The government reports show a diminished efficiency of about twelve 
 per cent in the last several years on the part of the New Zealand 
 workers. If New Zealand was the only country in the world where 
 this condition prevailed it might be laid at the doors of the act. The 
 fact, however, remains that a diminishing efficiency is a universal 
 complaint through Europe and even the United States is not free 
 from this complaint. Hence, this evil can not justly be laid to the 
 act. If there is a cry to "go slow" among the New Zealand workers, 
 it is done quietly and secretly, whereas throughout Europe the cry 
 of diminishing output is shouted, so to speak, from the house tops. 
 Wherever socialism in Europe has made itself felt, and it has achieved 
 this in most all continental industrial countries, where ninety per cent 
 of the organized wage-earners, are members of the Social Democratic 
 party, there you hear the cry sent forth, loud and deep and burnt into 
 the hearts of the workers that it is a crime against labor for the worker 
 to put forth his best. The Socialist proclaims aloud to the wage-earner 
 in those countries that he should practice a diminishing output, first, 
 because it means more work for more hands; secondly, because under 
 the capitalistic system, the worker, at best, gets a small wage, and that 
 a small wage is entitled only to a small return, and finally, because a 
 diminishing output means crippling the profits of capital and thus 
 hastening the day when capital will be wiped out and socialism placed 
 in the saddle. Wherever a diminishing output is met with in New Zea- 
 land, it can far more readily be traced to the preachments of such Social- 
 ists as have found their way to New Zealand than to any influence of 
 the act. 
 
 One of the bitterest opponents and critics of the act is J. MacGregor, 
 M.A. of Dunedin, New Zealand. In a pamphlet published by him in 
 1902, under the title of "Industrial Arbitration in New Zealand. Is 
 it a Success?" he pronounces the act a dismal failure, and dwells 
 particularly on the point that it makes for a saddening degree of dimin- 
 ishing efficiency on the part of the w r orkers, and he makes a plea therein 
 for voluntary arbitration as being infinitely better in its effects on 
 worker, employer, and community than compulsory arbitration. 
 
 Unwittingly, however, he quotes the following illustration of an 
 incident said to have happened in England, where voluntary arbitra- 
 tion is depended on for the settlement of labor disputes and where 
 neither the legal minimum wage nor compulsory arbitration is on the 
 statute books. This incident shows how much greater must be the 
 degree of diminishing efficiency and lessened output in England, 
 despite the absence of the laws Mr. MacGregor complains of, than in 
 New Zealand: "Sir Hiram Maxim gave an instance of a small gun 
 attachment which the labor union committee classified as a day and 
 
142 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 a quarter job. He invented a machine to make it, but the men would 
 produce the piece in a day and a quarter even with the machine. He 
 then hired a German workman who easily produced thirteen pieces a 
 day." 
 
 I think I have shown conclusively by the figures furnished by the 
 treasury department of New Zealand, that the tax burdens have 
 decreased rather than increased since the act has been created. I hope 
 I have also made it plain, in an earlier part of this report, that if 
 home production has not kept pace with imports it is due to causes 
 other than the creation of the act. 
 
 The New Zealand government reports show clearly that capital has 
 had sufficient confidence in New Zealand and its labor legislation to 
 increase its investment industrially in that dominion nearly fifty per 
 cent in the five years from 1901 to 1905, and that private wealth 
 increased from 1896 to 1906 over seventy-eight per cent. The records 
 further show that since the new amendments of 1908 have come into 
 force, men have generally obeyed the awards of the court and that 
 where they have failed to do so, the court has been able to inflict and 
 to enforce penalties. 
 
 Unfriendly critics are fearful lest in bad times when wages are cut 
 by the court the men will not yield and strikes will follow. The answer 
 to this contention is that for the past eighteen months New Zealand, 
 in common with the rest of the world, has undergone a period of more 
 or less severe depression that has been keenly felt, industrially and 
 commercially. This is pointed out in the latest report of the Welling- 
 ton Chamber of Commerce, where attention is called to the fact that 
 in consequence of the financial collapse in the United States in the 
 fall of 1907, the New Zealand exports for the year 1908 declined eighteen 
 per cent. Just enough to take the "velvet" out of profits generally 
 and has brought to New Zealand consequent hard times. Yet despite 
 these hard times the court has not cut wages in any of the industries 
 whose awards in the intervening months have come up for revision, 
 because of the fact that in good times the court has not fixed wages in 
 accordance with the large profits earned by employers, but rather on the 
 basis of the cost of living, and so in bad times it declines to consider 
 diminished profits, but continues to take the cost of living as a basis. 
 Should hard times continue long enough to bring about a material reduc- 
 tion in the cost of living, only then is the court likely to consider the 
 necessity of cutting wages correspondingly. The question remains, Avhen 
 that extreme condition is reached whether the men will submit without 
 resort to strike. My opinion is that the time will never be at hand 
 when it will be possible to guarantee that there will be no strikes in 
 New Zealand or elsewhere. But I venture the opinion that with the 
 
NEW ZEALAND. 143 
 
 restraining influences created by the revised New Zealand laws of 
 1908, strikes, even in the hardest times, will be fewer than ever before 
 in that dominion. 
 
 Mine was the interesting experience of pointing out to the severest 
 New Zealand critics of the act the fact that they were permitted to 
 enjoy a degree of industrial peace unknown in Europe or America, 
 where workers may legally strike and employers legally lockout, for 
 any cause or for no cause. 
 
 Despite the fact that for general intelligence and all round ability 
 the New Zealander will compare favorably with any set of men I have 
 met in all my travels, he did not seem to be well informed on existing 
 industrial conditions in other countries. When these were pointed 
 out to him they seemed a revelation, and out of the scores of those I 
 interviewed, I do not recall one who was finally willing to consent to 
 exchange the industrial conditions of New Zealand under its labor laws 
 with those prevailing in Europe or America. 
 
 Many who in the beginning of the interview were most bitter in their 
 denunciation of the act were in the end frank enough to admit that they 
 had condemned it out of their ignorance of the unfortunate industrial 
 conditions existing in the outside world, where the state does not inter- 
 vene in industrial disputes, and they acknowledged that they had not 
 sufficiently appreciated the industrial advantages that the act had 
 brought with it. 
 
 I can not better conclude this report than with the editorial pub- 
 lished in the Wellington Evening Post of April 15. 1909, dealing with 
 a paper read the preceding day before the Chamber of Commerce in 
 that city by Secretary Broadhead of the Christchurch Employers' 
 Association in which he roundly condemned the act : 
 
 Mr. H. Broadhead, secretary of the Canterbury Employers' Association, took rather 
 a gloomy view in the paper which he read to the delegates of Chambers of Com- 
 merce yesterday. "Does the Arbitration Act Hinder Industrial Progress?" was the 
 text of the address, and by a course of reasoning, peculiar and very controversial 
 in parts, the speaker arrived at the answer "Yes." The conference thanked him for 
 his thesis, but did not commit itself to any approval or disapproval of the pessimistic 
 doctrine. Practically, the arguments remain the opinions of one delegate, and are 
 consequently robbed of much of their importance. It seems evident that Mr. Broad- 
 head has confused the purpose of the industrial legislation with mistakes and 
 weakness in the administration. We have repeatedly contended, and we repeat that 
 contention now, that notwithstanding recent occurrences, the arbitration law is as 
 good and useful as ever it was. All the disputes and all the strikes are trifling in 
 comparison with the real and lasting good that the law has done during a dozen 
 years in founding and consolidating industry. It was not the act, but the admin- 
 istration of the act, that broke down. Must a good machine be smashed because an 
 engineer does not appreciate the difference between a "governor'' and a "crank?" 
 Mr. Broadhead, in effect, suggests a reversion to the old order. We are sure, 
 however, that if the issue was put straight out to the employers of New Zealand 
 an appreciable majority would vote against a retrogression to the regime of the old 
 days before the mind of the Hon. W. P. Reeves saw a way leading towards peace. 
 
144 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 The spirit of this legislation is calculated to go for the benefits, not of any one class, 
 but the welfare of New Zealand as a whole. Employers, of course, have approved 
 the theory, but some have complained at the effect of the practice. Yet they must 
 remember that the sorrow which came to them was rather due to the weakness and 
 timidity of the administration than to the law, though the law may not have been 
 perfect. 
 
 The amendments enacted by Parliament in 1908 have removed from 
 the act the chief objections pointed out by its critics. Since these 
 amendments have gone into operation, early this year, a much better 
 feeling has prevailed between such employers and workers as have since 
 had occasion to renew their demands or to adjust differences. The 
 industrial peace enjoyed throughout New Zealand during the past year 
 promises now to be the normal condition of the future, with every 
 probability that New Zealand will actually become "a country without 
 strikes. ' ' 
 
CONCLUSIONS AND RECOMMENDATIONS. 145 
 
 CONCLUSIONS AND RECOMMENDATIONS. 
 
 At this point I desire to express to your Excellency my appreciation 
 for the honor conferred in issuing to me the commission to investigate 
 the labor laws and the labor conditions of foreign countries, and to 
 report to you as the Chief Executive of the State. 
 
 The work has been to me in the nature of a rare educational oppor- 
 tunity. It has brought me in touch with many men in many lands 
 whom it was a pleasure and a privilege to meet and whom I wish through 
 this medium to thank for the many courtesies extended and the valuable 
 information so cheerfully furnished. 
 
 For obvious reasons I can not give the names of all who rendered me 
 assistance, but I shall ever retain in grateful remembrance the many 
 acts of kindness and the courtesy shown me throughout my long and 
 varied journeyings in quest of information, by men in various walks of 
 life, voicing widely different points of view. 
 
 I found that in most countries the labor problem is regarded as one 
 of the great problems of the day. It is commanding the best thought 
 of many of the world's best minds. 
 
 Statesmen, great captains of industry, political economists, labor 
 leaders, journalists and humanitarians, the world over are earnestly 
 striving to better the condition of the wage-earner and his dependents 
 and to find a way peacefully to settle the inevitable disputes constantly 
 arising between employers and employees and likely to continue to arise. 
 
 That the labor problem is commanding the attention of many of the 
 world 's best minds, speaks well for the wage-earner and well for society 
 generally. It is not likely that capital, except in isolated cases, would 
 of its own volition, have shortened hours, increased wages and improved 
 working conditions, and thus at least in its own opinion, lessened 
 profits. It therefore speaks well for organized labor that through its 
 initiative much has been done to bring about these bettered conditions. 
 It speaks well for society generally because, unless the initiative of the 
 worker to better his condition had been aided by statesmen, legislators, 
 political economists, writers, and the more progressive and sympathetic 
 employers backed by an intelligent public sentiment that had largely 
 been educated by organized labor, the great betterment in the condition 
 of the wage-earner which in the last decade or two has taken place, 
 would not have been possible. 
 
 10 
 
146 REPORT OP SPECIAL LABOR COMMISSIONER. 
 
 Much of the wage-earner 's improved condition has been brought about 
 through industrial war. In the beginning, the worker had to battle to 
 command recognition. 
 
 For generations the employer had been led to feel that he was the all 
 in all, in industrial matters, that the mere circumstance of his furnish- 
 ing employment made him labor 's benefactor, that it was for him, wholly 
 and solely, to dictate terms and conditions of labor, and for labor grate- 
 fully to accept. 
 
 The idea of the worker being entitled to a voice in the matter of 
 wages, hours of labor, or conditions of employment, seemed to the 
 employer an impossible thought, and for the worker even to hint at such 
 a right on his part was regarded as a bit of arrogance and a decided 
 impertinence meriting instant dismissal. Conditions, however, have 
 changed. Labor unionism has done much to educate the employer to 
 the fact that the worker is entitled to a voice in all things affecting his 
 own welfare. Trade unionism has through hard fought battles involv- 
 ing at times great industrial wars, with their frightful consequent suf- 
 ferings to both sides and to society generally, forced upon even the most 
 aristocratic and arrogant among employers the fact that it is a power 
 to be reckoned with. 
 
 Providence has not given all the virtues nor all the human weaknesses 
 either to the man who pays or to the man who receives wages. Both 
 being human are likely in common to have the same virtues and the 
 same failings. And so, when the employer believed himself the sole 
 arbiter, he made, as a rule, the most of his opportunities to exploit the 
 worker ; when in turn organized labor believed itself to be in the saddle, 
 it followed the example of the employer, and often became just as 
 despotic, just as tyrannical and just as ready to exploit the wage-payer. 
 
 So long as industrial wars were petty in character and involved but 
 few combatants, society generally felt little concerned in them, but when 
 the tremendous growth of industrialism in recent decades led to colossal 
 industrial wars that frequently affected the welfare of whole communi- 
 ties and at times of great nations, society, whether it would or no, found 
 itself, as a matter of self-defense, obliged to take the deepest interest in 
 these industrial conflicts with the view of preventing them if possible. 
 
 Great and mighty governments that in the past looked upon the 
 manual worker as mere cattle in times of peace and as so much food for 
 the enemy's powder in time of war, have been compelled by his solidarity 
 and his aggressive agitation to devote much thought and attention to 
 the consideration and adjustment of his grievances. 
 
 The question then is, have we not reached a stage when industrial war, 
 having served its purpose in conunanding for organized labor its just 
 recognition, may be relegated to the dead past 1 I hold that the time is 
 
CONCLUSIONS AND RECOMMENDATIONS. 
 
 147 
 
 here when labor, and capital, may put aside the munitions of industrial 
 war, the strike and the lockout, with their incalculable cost which is for- 
 ever lost to society. Who will oppose reason and equity taking the 
 place of the brutal strike and the heartless lockout, if, by the recogni- 
 tion of the organization of labor, a way can be found to insure the exer- 
 cise of reason and equity in the settlement of labor disputes? 
 
 I hold that the time is ripe when the suffering and misery brought 
 upon untold numbers of innocent people by strikes and lockouts should 
 cease. 
 
 I found that men and governments the world over believe that such 
 a time is here and many among them have been and still are earnestly 
 striving to find a practicable and equitable way of peacefully settling 
 labor disputes, so that the strike, labor's deplorable weapon of offense 
 and defense, and the lockout, capital's equally deplorable weapon, may 
 be safely laid aside. 
 
 The first governmental step along these lines was the creation of 
 machinery that would aid and encourage voluntary arbitration on the 
 part of employers and men. Among the countries who legislated along 
 these lines are Great Britain, France, Belgium, The Netherlands, Ger- 
 many, Austria, Italy, and many of our American states. The results 
 have, however, been insignificant and disappointing. 
 
 Here is a summary of the net outcome for some of these countries as 
 shown in Bulletin No. 60, September, 1905, issued by the Bureau of 
 Labor, Washington, D. C. : 
 
 No. of No. of state Per- 
 
 Years. Country. strikes. interventions. centage. 
 
 1896 to 1903. Great Britain 4,952 154 3.11 
 
 1901 to 1904. Netherlands 529 59 11.15 
 
 1902 - 1903. Germany 2,636 318 12.06 
 
 1894 to 1902. Austria 2,390 573 23.97 
 
 1897 to 1899. Italy 732 . 16 2.18 
 
 1893 to 1903. France 5,874 1,413 24.05 
 
 1896tol900. Belgium 610 35 5.74 
 
 17,723 2,568 14.49 
 
 AMERICA. 
 
 No. of No. of state Per- 
 
 Years. State. strikes. interventions. centage. 
 
 1901 to 1904. Canada 490 33 6.73 
 
 1896 to 1900. New York 6,189 390 6.30" 
 
 1886 to 1900. Massachusetts 2,628 563 21.42 
 
 1893 to 1900. Ohio 878 103 11.73 
 
 1895 to 1900. Wisconsin 195 53 27.17 
 
 1897 to 1900. Indiana 183 82 44.80 
 
 10,563 1,224 11.59 
 
 Europe . 17,723 2,568 14.49 
 
 Totals . - 28,286 
 
 3.972 
 
 14.04 
 
148 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 The foregoing figures show that in thirteen European countries and 
 American states where the government had. created machinery for the 
 voluntary adjustment of labor disputes such intervention had in the 
 course of years been applied in only 14.04 per cent of cases. 
 
 From the only available figures afforded by Bulletin No. 60, from 
 which the foregoing data are taken, to show in how many instances such 
 state intervention occurred before a strike or lockout took place, I take 
 the following, figures : No of No of state Per . 
 
 strikes. interventions. centage. 
 
 France 5,874 61 1.04 
 
 New York 6,189 32 0.51 
 
 Massachusetts 2,628 419 15.93 
 
 Ohio 744 13 1.74 
 
 Wisconsin 53 6 11.13 
 
 Indiana 82 2.68 
 
 15,570 533 3.42 
 
 It is safe to assume that if the figures of the other countries and 
 states were available, they would show substantially the same average 
 percentage of state interventions before cessation of work. These figures 
 must convince the most pronounced advocate of voluntary arbitration 
 with or without state intervention that it is largely a failure the world 
 over, so far as being a prevention for strikes or lockouts. 
 
 It is to be deplored that this is so, since the ideal way of adjusting 
 labor disputes is for both sides to get together voluntarily, in the hope 
 of reaching an understanding. Failing in this, then to submit the dis- 
 pute to a disinterested arbitrator or arbitrators and accept the decision. 
 
 However ideal this plan may be, the world experience shows that it 
 can not be relied upon as a prevention, except in a very trifling per- 
 centage of cases, even when the state assumes the task of relieving both 
 parties to an industrial dispute from taking the initiative. 
 
 The next logical step for state intervention is the one generally 
 adopted by the Australasian governments, where the state not only com- 
 pels the disputants to get together but also compels them, if they can 
 not agree between themselves, to abide by the decision rendered by the 
 court. This has led to the colonies enjoying the highest degree of indus- 
 trial peace the modern industrial world has seen, as evidenced by the 
 following number of strikes which in the last fifteen years have taken 
 place in the three principal industrial governments of Australasia : 
 
 Victoria 9 
 
 New South Wales 186 
 
 New Zealand . 25 
 
 Total - 220 
 
 or an average for the three governments of less than fifteen strikes a 
 vear. When it is remembered that even this insignificant number of 
 
CONCLUSIONS AND RECOMMENDATIONS. 1-49 
 
 strikes was largely due not to any weakness in the principle of compul- 
 sory state intervention, but to defects in the administration of the law, 
 because of inexperience, the showing is the most remarkable in modern 
 industrial history. 
 
 With the perfected laws recently enacted as the result of past 
 experience, the next fifteen years are likely to show a still more remark- 
 able result along the lines of industrial peace. 
 
 The Australasian system has proven the most powerful check on the 
 greed of the unfair among employers and the most effective restraint 
 against the selfish and unreasonable demands of the unscrupulous among 
 labor unionists, that the legislative mind has ever devised. 
 
 It has protected the worthy wage-earner against his fellow r -worker 
 who was willing to work for a starvation wage and also against the sweat- 
 ing employer who, if he could, would compel him to work for a starvation 
 wage. It has also protected the worker from the hasty and ill-judged 
 action of well-meaning but overzealous or hot-headed labor leaders in 
 precipitating strikes that to the worker and his family might spell ruin 
 and starvation. 
 
 It has further protected the wage-earner from the unscrupulous 
 among labor leaders who for selfish reasons might deliberately, to the 
 worker's ruin, bring about unwarranted strikes. It has protected the 
 fair employer from his unfair competitor, who by exploiting labor 
 could underbid and undersell him and in the end compel him likewise 
 to become unfair to labor or go out of business. It has succeeded in 
 maintaining the highest degree of industrial peace known in modern 
 times, for the good of the worker, employer, and the body politic. For 
 all these reasons a fair-minded inquirer must pay the highest tribute to 
 the Australasian statesman in having rendered a great service to his own 
 people and in having at the same time given the world a valuable object 
 lesson in demonstrating the importance and the practicability of state 
 intervention in the settlement of labor disputes. 
 
 Given the same conditions, I could not serve my commonwealth better 
 than to recommend to it the adoption of the Australasian system for 
 the settlement of labor disputes and the prevention of sweating. But 
 owing to widely different conditions I do not see my way clear to make 
 such recommendations. 
 
 The success of the Australasian labor laws is dependent primarily 
 upon two things : 
 
 (a) The confidence of employer and worker in the fairness of the 
 industrial court. 
 
 (&) The compactness of its industrial centers. 
 
 The Australasian courts command confidence because their life tenure, 
 subject to good behavior, makes them independent. They are not placed 
 
150 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 in a position where to retain office they must favor friends or punish 
 enemies. 
 
 In the course of my Australasian investigations I heard many criti- 
 cisms on the judgment of the courts, but I never heard the slightest 
 whisper, even on the part of the severest critics, that reflected on the 
 honesty or the good intentions of the court. 
 
 I believe that the judiciary of California for honesty and integrity 
 will compare favorably with that of any in the land ; the fact remains, 
 however, that under the law our courts are elective and being elective 
 this must tend largely to destroy the absolute confidence in the court, so 
 essential in the adjustment of labor disputes. Labor is likely to contend, 
 when decisions are rendered against it, that the court has been swayed 
 or bought up by the power of capital ; and capital is likely to feel, when 
 decisions are rendered against it, that the court has been intimidated 
 by labor, or to get votes, has toadied to labor. Such an inevitable atti- 
 tude on the part of one side or the other or both, must in the end cripple 
 the usefulness of the court and defeat the purpose of the law. 
 
 Furthermore, the success of the legal minimum wage and the legal 
 maximum hours of labor,' fixed by Australasian courts, having in view 
 the wiping out of sweating, depends largely upon the centralization of 
 industry. In New Zealand the entire dominion is treated as a unit 
 and the one administration can regulate and control every part of the 
 colony. Of the six states of the commonwealth of Australia, five have 
 laws regulating wages and hours of labor; the sixth state, Tasmania, 
 has but small industrial interests. 
 
 Our country has nearly fifty States, each with its sovereign and inde- 
 pendent right to fix a legal minimum wage and maximum hours of 
 labor. If uniform legislation among all or most all of the States could 
 be enacted it might be possible legally to kill sweating. Otherwise, such 
 legislation would simply mean driving the sweater from one State across 
 the border to some other. 
 
 For these reasons I do not see my way clear to recommend to your 
 Excellency the advocacy of the Australasian labor laws in their entirety. 
 In the interest of industrial peace, however, I do earnestly believe in the 
 adoption of the principle of State intervention in labor disputes to the 
 fullest degree consistent with our conditions and with our form of gov- 
 ernment. 
 
 That some state intervention has been deemed essential is shown by 
 the states on our own continent and the various industrial countries of 
 Europe, who in recent years have created legal machinery for the peace- 
 ful settlement of labor disputes. That such legal machinery has prac- 
 tically failed is due altogether to the fact that its use was made 
 voluntary in character. For the state to serve any useful purpose in 
 
COXCU 'SIGNS AND RECOMMENDATIONS. 151 
 
 such sphere of activity, it must go a step farther and follow as nearly 
 as its conditions will permit, the pioneering footsteps of the Austral- 
 asian colonies. I had practically reached this conclusion many months 
 ago while making my investigations in Europe. 
 
 The contact with many of Europe's keenest and ablest minds in all 
 walks of life, who were high authorities on labor problems, had crystal- 
 lized my thoughts on the question as they never could have been crys- 
 tallized as a mere student of book-knowledge, or even as a fairly large 
 employer of labor coming in contact with men and conditions and 
 experiences only in my own country. 
 
 I soon realized that voluntary arbitration the world over was largely 
 a failure, and for the reasons already named I also realized that com- 
 pulsory arbitration would not fit the conditions of our commonwealth. 
 My knowledge of conditions generally and my observations in various 
 lands had forced upon me the conclusion that the weak spot in the 
 adjustment of industrial disputes was the fact that, as a rule, the side 
 that believed itself to be the stronger refused to meet or to treat with 
 the other side. If it was labor that believed itself to be the stronger, it 
 was likely to take the position that the employer must concede all its 
 demands or none. When capital felt itself to be the stronger, its answer 
 to all appeals for a conference made by labor or by voluntary inter- 
 veners was to the effect that it was quite satisfied with existing condi- 
 tions and that there was nothing to arbitrate. And so the struggle 
 would go on, the victory often going, not necessarily to the one that had 
 right and justice on its side, but to the one having the longer purse or 
 the greater endurance, such victory often being bought at a terrific cost 
 to the victor, to say nothing of the disaster to the loser and the injury 
 to the State. 
 
 The problem then seemed how to compel the unreasonable, the unfair, 
 and the stubborn on both sides to get together in the hope that by con- 
 ciliation, and, if need be, by the intervention of a third disinterested 
 party, an agreement might be reached. 
 
 It is generally conceded that public opinion is a most important 
 factor in the settlement of labor disputes, more especially w r hen they are 
 of a character likely to affect public convenience or comfort or profit. 
 It is rarely if ever that a strike or a lockout can succeed that has public 
 sentiment against it. The problem, however, has ever been how 
 properly to enlighten public opinion and how to place before it the 
 actual facts involved in a labor dispute as found by a disinterested 
 inquirer in whom the public w^ould have confidence. Bancroft 
 
 "With these thoughts in mind it seemed to me that an important stride 
 would be made in the direction of industrial peace, if legislation was 
 created calling for a public inquiry in labor disputes before they had 
 reached the serious stage of strike or lockout. 
 
152 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 I realized, however, that any legislation along such lines, in a country 
 such as ours, must at best be experimental. While in that stage I feel 
 that the proposed legislation should be confined to disputes likely to 
 arise in the conduct of public utilities, since it is strikes and lockouts 
 in these activities that, as a rule, more seriously affects the public wel- 
 fare. Should the proposed legislation after a fair trial prove a success, 
 it would then be in the interest of all concerned to broaden it so that all 
 industries might be brought under its influence. 
 
 This conclusion having finally been reached on my part, I formulated 
 it on paper while in Brussels, Belgium, in the nature of a rough draft 
 of a proposed law. 
 
 On arriving in Paris a few days later I found awaiting me there a 
 packet of printed matter sent me by the Canadian Labor Department 
 through the courtesy of Mr. Dougherty of the Canadian Department of 
 Agriculture, whom some months before I had met while in Rome. 
 
 Looking over this printed matter, I was surprised to find that my 
 idea had been anticipated by the Deputy Labor Minister of Canada, 
 McKenzie King, who had recently formulated and had succeeded in 
 getting the Canadian Parliament to pass a public inquiry act. My sat- 
 isfaction can be understood when I found among other documents in 
 this collection the first annual report just issued by the Canadian Labor 
 Department of the operation of the Act which showed that ninety -seven 
 per cent of the labor disputes submitted to a public inquiry had been 
 amicably adjusted, and that in only three per cent of cases inquired into 
 had there been strikes after an award was made. 
 
 Here we have a most striking illustration of the difference in effect- 
 iveness between voluntary arbitration and public inquiry. Under 
 VOLUNTARY ARBITRATION, having behind it all the machinery 
 and influence of the State, there are strikes and lockouts in about ninety- 
 seven per cent of cases and peaceful settlement without cessation of work 
 in about three per cent of cases. Under PUBLIC INQUIRY we find 
 the very first year of its trial in Canada, when at best the system could 
 not yet have been perfected, ninety-seven per cent of peaceful settle- 
 ments without cessation of work and but three per cent of strikes. What- 
 ever doubts or misgivings I may have had as to the desirability or the 
 practicability of the proposed public inquiry law were removed by the 
 showing made by Canada as the result of an actual application of the 
 principle. Surely, if in California we can, through the medium of pub- 
 lic inquiry adjust peacefully ninety-seven per cent of labor disputes, we 
 shall have accomplished a most important work and shall have come as- 
 near establishing industrial peace as under our system of government 
 is possible. 
 
 Sailing from Egypt to India, it was my good fortune to meet Mr. 
 
CONCLUSIONS AND RECOMMENDATIONS. 153 
 
 McKenzie King, the framer of the Canadian public inquiry act, to 
 whom I am indebted for valuable hints and suggestions embodied in the 
 following recommendations, which I have the honor to submit herewith 
 to your Excellency. 
 
 A BASIS FOE A PROPOSED LEGISLATIVE ACT TO LESSEN STRIKES AND LOCKOUTS. 
 
 Whereas labor can be divided into two distinct classes 
 
 (a) That employed in private enterprise. 
 
 (&) That employed in public utilities a public utility being under- 
 stood to be any undertaking patronized by the general public, for which 
 a public franchise has been granted by the state or by the municipality. 
 
 And whereas, the general public is much concerned in the continuous 
 and uninterrupted service of said public utilities, and in the event of a 
 strike or lockout, is collectively a greater sufferer than the employees of 
 such public utility and their employers combined ; be it therefore 
 
 Resolved, that the following legislation be recommended to the law- 
 making power for enactment, with the view of bringing about peaceful 
 settlements of labor disputes arising between employers and employees 
 engaged in said public utilities, in order to prevent strikes and lockouts. 
 
 1. It is hereby enacted that any public utility corporation or any 
 corporation or contractors doing contract work for any city, county, or 
 for the State, which shall have had a dispute with their employees which 
 can not be settled may, or that shall have decided to lockout its or their 
 employees, must before declaring such lockout, furnish the state labor 
 commissioner with a written statement to the effect that it has or they 
 have found it impossible to have a conference with its or their employees 
 or their representatives, or, having had a conference with said employees 
 or their representatives, an agreement has been found impossible. Said 
 statement must also set forth the points of existing differences to be 
 settled and agreed upon. Any body of workmen employed by a public 
 utility corporation, or by any company or contractors doing contract 
 work for any city or county, or for the State, which shall have a dispute 
 with their employers which can not be settled, may, or having voted to 
 go on a strike, shall, before declaring such strike, furnish the state labor 
 commissioner with a written statement to the effect that they have been 
 unable to hold a conference with their employers, or, having had a con- 
 ference, it has been found impossible to agree. Said statement shall 
 also set forth the points of existing differences to be settled and agreed 
 
 upon. 
 
 2. Immediately on receipt of such notice, the said labor commis 
 sioner shall interview the parties to the dispute, separately, or in his 
 discretion, collectively, as mediator and conciliator, with the view of 
 bringing about an agreement between them. Failing in this, within 
 
154 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 three days he shall notify both sides to the dispute each to submit to 
 him in writing, within three days, the name of a representative who is 
 or has been engaged in the industry, and who is willing and ready to 
 act on a board of inquiry. These names are to be placed forthwith by 
 the said labor commissioner in the hands of the governor, who shall 
 appoint said nominees. 
 
 3. In the event of a failure on the part of either or both parties to the 
 dispute to conform to the above provision within the specified time, the 
 labor commissioner shall notify the governor of such failure, whereupon 
 the governor shall appoint within three days a representative or repre- 
 sentatives of his own choice, for said party or parties, who has or have 
 been engaged in the industry. 
 
 4. These two representatives of the parties to the dispute shall meet 
 immediately after their appointment, and shall proceed to elect a third 
 party as chairman of said board of inquiry. Having chosen a chairman, 
 such party shall be appointed chairman of the board of inquiry by the 
 governor. In the event of the two representatives being unable to agree 
 upon a third party as chairman within three days, they shall notify the 
 governor to that effect, who shall within three days after such notifica- 
 tion himself select and appoint a chairman. 
 
 5. Said board of inquiry shall have power to summon the parties to 
 the dispute to appear before it, and in its discretion may talk with each 
 of the parties separately and privately in the hope of finding common 
 ground for agreement, and shall have such other powers in the sum- 
 moning and examining of witnesses, books, and documents as are vested 
 in the superior courts of the state in the trial of civil cases. The mem- 
 bers of the board must, before proceeding to the examination of said 
 books or documents, make oath that any information gained from said 
 books or documents shall be confidential and shall not be used for any 
 purpose other than the inquiry. The board shall endeavor to effect a set- 
 tlement of the differences between the parties, and if successful, shall 
 in writing report the terms of such settlement to the labor commissioner. 
 Failing to effect such settlement, the board shall draw up a findings or 
 report setting forth what, in the light of the evidence adduced, would in 
 its opinion be a fair and equitable basis of settlement of all the matters 
 in dispute. 
 
 6. A certified copy of the findings of the majority of the board, 
 together with a certified copy of the minority report, should there be one, 
 provided that the minority report is signed within forty-eight hours 
 after the majority report is signed, shall be delivered to the state labor 
 commissioner, who in turn shall immediately deliver copies thereof to 
 each of the parties to the dispute. 
 
CONCLUSIONS AND RECOMMENDATIONS. 155 
 
 7. Such findings shall not be binding on either party unless signed by 
 both parties or by their representatives, or the award may be used as a 
 basis for an agreement and may contain such penalties for violation by 
 either party as may be mutually agreed upon. In the event of a settle- 
 ment being reached between the parties the terms thereof shall not be 
 made public if either party objects to such publication. 
 
 8. In the event of the employers declaring a lockout before complying 
 with the foregoing provisions, or prior to the receipt of the findings of 
 the board of inquiry transmitted by the labor commissioner, said 
 employers shall be liable to a fine of $25 for each employee locked out 
 for each day during which said lockout continues, said fine in no event to 
 be less than $1,000. Said fine shall become a lien against the property 
 of said employers and shall be collectible as are other court judgments. 
 
 9. In the event of workmen employed by public utility corporations, 
 or by corporations or others doing public or contract work for cities, or 
 counties, or for the State, going out on strike without complying with 
 the foregoing provisions or prior to the receipt of the findings of the 
 board of inquiry transmitted by the labor commissioner, said workmen 
 shall be liable to a fine of $1.000. In the event of said workmen having 
 no common funds, then, and in that event, in lieu of the foregoing pen- 
 alty, every workman going out on strike shall be liable to a penalty of $25, 
 said fine to be a lien against the property or the wages of said workman 
 anywhere within the State at any time within twelve months and shall 
 be collectible as are other court judgments. Violations of the foregoing 
 provisions to be dealt with summarily by the superior court. 
 
 10. Attorneys or any other counsel or advocates are to be barred from 
 taking part in the proceedings before the board of inquiry. 
 
 11. The inquiry may, in the discretion of the board, be held in public. 
 
 12. At the request of either party to the dispute, the board may be 
 reconvened at any time during the life of the agreement to which there 
 has been mutual assent, to interpret the meaning of any disputed point 
 in said agreement. 
 
 13. It shall be unlawful to strike or to lockout until seven days after 
 the board award and the objections thereto of either party have been 
 filed with the labor commissioner. In the event of a strike or a lock- 
 out taking place after said seven days the labor commissioner shall on 
 demand furnish to the press and to others copies of the said findings. 
 
156 REPORT OF SPECIAL LABOR COMMISSIONER. 
 
 I herewith give a statement of reasons which should appeal to capital, 
 to labor, and to the general public, for supporting the creation of the 
 proposed board of public inquiry. 
 
 REASONS WHY EMPLOYERS SHOULD FAVOR THE PROPOSED BOARD OF 
 
 PUBLIC INQUIRY ACT. 
 
 1. It will restrain the unfair among labor men from making unfair 
 demands. 
 
 2. It will tend to prevent labor from resorting to force to secure 
 unreasonable demands, where labor is unwisely led. 
 
 3. It will ward off the tendency to establish compulsory arbitration, 
 which is likely to follow if no other means of relief are afforded the 
 public to protect itself against the loss caused it by what are often 
 reckless and needless strikes and lockouts in connection with public 
 utilities. Compulsory arbitration would mean that a court would fix 
 for the employer wages and conditions of labor. 
 
 4. It will tend to ensure continuous service with all that this means 
 in respect to contracts. 
 
 5. It will tend to reveal to the owners the efficiency or inefficiency of 
 company officials. 
 
 6. It will tend to avert all the evils of a strike. 
 
 REASONS WHY LABOR SHOULD FAVOR THE PROPOSED BOARD OF 
 
 PUBLIC INQUIRY. 
 
 1. By diminishing strikes and lockouts it will prevent needless waste 
 of the workers' time, money and energy, and tend to obtain justice for 
 labor without loss of income. 
 
 2. It will gain for labor intelligent public sympathy, by affording it 
 an opportunity to present its grievances before a public tribunal whose 
 object it is to get at the facts. 
 
 3. It will afford labor the opportunity to make good its oft repeated 
 claim that because of the uniform reasonableness and justice of its 
 demands it courts public investigation. 
 
 4. It will tend to prevent prejudgment of the merits of labor disputes 
 on the part of an interested and possibly hostile press. 
 
 5. It will compel unfair or unwilling employers who usually take 
 the position that they have nothing to arbitrate, to get together with 
 and to meet their men, and will force them to talk about the merits of 
 the dispute and to listen to the claims of the other side. 
 
 6. It will tend to prevent unfair or unreasonable employers from act- 
 ing in a way which must of necessity mean suffering and loss to other 
 people who are not to blame. 
 
CONCLUSIONS AND RECOMMENDATIONS. 157 
 
 7. When an investigation is made, it will not be possible to keep 
 back anything that is likely to prove helpful to the cause of labor. 
 
 8. The many little things that sometimes crop up and cause serious 
 trouble, b^ an impartial investigation, are likely to be adjusted and 
 settled. 
 
 9. Organized labor stands committed to the doctrine that it does 
 not want to strike in order to enforce its demands, if the consideration 
 of them can be attained without recourse to that drastic remedy. A 
 board of inquiry will afford the remedy. 
 
 10. Organized labor is not blind to the fact that in every great indus- 
 trial struggle, in connection especially with public utilities, the public 
 has a large interest as well in the result as in the means adopted to 
 reach that result. The board of inquiry would assure a hearing under 
 the fairest possible conditions and bring out the facts. 
 
 11. The creation of a public board of inquiry is calculated to postpone 
 hasty action in the direction of strikes and lockouts and will tend to 
 the settlement of disputes as the result of reason rather than as the 
 result of passion or feeling. 
 
 12. It withal will not take away the final right to strike. 
 
 REASONS WHY THE GENERAL PUBLIC SHOULD FAVOR THE PROPOSED BOARD 
 
 OF INQUIRY ACT. 
 
 1. In all great strikes, especially in connection with public utilities, 
 the public has more at stake than both the disputants combined. 
 
 The board of inquiry will represent the public equally with the other 
 parties in interest, which will thus be given the voice in the matter to 
 which it is entitled. 
 
 2. It will make for reason and equity, for law and order taking the 
 place of heat and passion, disorder and violence in the settlement of 
 labor disputes. 
 
 3. It will make for labor disputes being peacefully settled before a 
 tribunal without interruption to public service. 
 
 4. In the event of either party to a labor dispute refusing to abide 
 by the findings of the board of inquiry, the publication of such findings 
 will present the facts and enable the public intelligently to give its sup- 
 port to the party having right on its side. 
 
 5. It will tend to reduce to a minimum strikes and lockouts with 
 their consequent tremendous loss and injury to the public. 
 
 I have the honor to subscribe myself, 
 Respectfully yours, 
 
 HARRIS WEINSTOCK, 
 
 Special Labor Commissioner.