Chapter LI: Section 4: provides that ‘Any difficulty or disagreement (2)

"Section 3.
That in all actions hereinafter brought against any such
common carrier by railroad under or by virtue of any of the
provisions of this Act to recover damages for personal
injuries to an employee, or where such injuries have resulted
in his death, the fact that the employee may have been guilty
of contributory negligence shall not bar a recovery, but the
damages shall be diminished by the jury in proportion to the
amount of negligence attributable to such employee:
_Provided_, That no such employee who may be injured or
killed shall be held to have been guilty of contributory
negligence in any case where the violation by such common
carrier of any statute enacted for the safety of employees
contributed to the injury or death of such employee.

"Section 4.
That in any action brought against any common carrier under or
by virtue of any of the provisions of this Act to recover
damages for injuries to, or death of, any of its employees,
such employee shall not be held to have assumed the risks of
his employment in any case where the violation by such common
carrier of any statute enacted for the safety of employees
contributed to the injury or death of such employee.

"Section 5.
That any contract, rule, regulation, or device whatsoever, the
purpose or intent of which shall be to enable any common
carrier to exempt itself from any liability created by this
Act, shall to that extent be void: _Provided_, That in
any action brought against any such common carrier under or by
virtue of any of the provisions of this Act, such common
carrier may set off therein any sum it has contributed or paid
to any insurance, relief benefit, or indemnity that may have
been paid to the injured employee or the person entitled
thereto on account of the injury or death for which said
action was brought.

"Section 6.
That no action shall be maintained under this Act unless
commenced within two years from the day the cause of action
accrued.

"Section 7.
That the term ‘common carrier’ as used in this Act shall
include the receiver or receivers or other persons or
corporations charged with the duty of the management and
operation of the business of a common carrier.

"Section 8.
That nothing in this Act shall be held to limit the duty or
liability of common carriers or to impair the rights of their
employees under any other Act or Acts of Congress, or to
affect the prosecution of any pending proceeding or right of
action under the Act of Congress entitled ‘An Act relating to
liability of common carriers in the District of Columbia and
Territories, and to common carriers engaged in commerce
between the States and between the States and foreign nations
to their employees,’ approved June eleventh, nineteen hundred
and six."

_Statutes of the United States of America
passed 1st at Session of the 60th Congress, 1907-1908,
part 1, chapter 149._

LABOR PROTECTION: HOURS OF LABOR:
Judicial Limitation of Police Power to regulate them
in the United States.

By a decision from the Supreme Court of the United States, in
April, 1905, an Act of the Legislature of New York, limiting
the hours of labor to be exacted from workmen in bakeries, was
pronounced unconstitutional. The law in question provided that
"no employee shall be required or permitted to work in a
biscuit, bread or cake bakery or confectionery establishment
more than sixty hours in any one week, or more than ten hours
in any one day, unless for the purpose of making a shorter
work day on the last day of the week; nor more hours in any
one week than will make an average of ten hours per day for
the number of days during such week in which such employee
shall work." The New York Court of Appeals had passed on this
enactment and declared it constitutional, as a measure for the
protection of public health. A majority of the Supreme Court—
five to four—rejected this view, saying, in the opinion
written by Justice Peckham: "We think the limit of the police
power has been reached and passed in this case. There is, in
our judgment, no reasonable foundation for holding this to be
necessary or appropriate as a health law to safeguard the
public health or the health of the individuals who are
following the trade of a baker." In the dissenting opinion of
Justice Harlan, Justices White and Day concurring, it was
said: "The rule is universal that a legislative enactment,
Federal or State, is never to be disregarded or held invalid
unless it be, beyond question, plainly and palpably in excess
of legislative power. If there be doubt as to the validity of
the statute, that doubt must therefore be resolved in favor of
its validity, and the courts must keep their hands off,
leaving the Legislature to meet the responsibility for unwise
legislation."

LABOR PROTECTION: LIMITATION OF WORKING HOURS FOR TRAINMEN.

See (in this Volume)
RAILWAYS: UNITED STATES: A. D. 1907.

{400}

LABOR PROTECTION: THE "ENGLISH COAL MINES (EIGHT HOUR) ACT."

The Act so called, passed in 1908, came into force on the 1st
of July, 1909, except as respects mines in the counties of
Northumberland and Durham, where its operation was deferred
until the 1st of January, 1910. The Act provides that "a
workman shall not be below ground in a mine for the purpose of
his work, or of going to and from his work, for more than
eight hours during any consecutive twenty-four hours"; but
this is qualified by the condition that "no contravention of
the foregoing provisions shall be deemed to take place in the
case of a workman working in a shift if the period between the
times at which the last workman in the shift leaves the
surface and the first workman in the shift returns to the
surface does not exceed eight hours." This rule, it is said,
makes the nominal working day of eight hours "one that will
vary, according to local conditions, from eight and a half to
nine hours." On the other hand, the Coal Owners’ Association
of South Wales and Monmouthshire, in a manifesto issued
shortly before the Act became operative, declared: "The Act
does not permit eight hours’ work underground, but a
considerable portion of this time is taken up in travelling to
and from the actual place of work, and in many of the older
collieries not more than 6½ hours’ effective work will be
performed. The owners are strongly of opinion that it will be
found impossible to work such collieries and maintain them in
repair with all the pumping of water, boilers, engines,
horses, officials, and attendants necessary for 24 hours per
day on 6½ hours’ productive work, especially in view of the
fact that in South Wales a much larger proportion of the
collier’s time is occupied in other work than in producing
coal than is the case in most other coalfields."

The conditions are described as being different in the Welsh
mines from those in other British coal fields, and it seems to
have been there only that trouble arose when the Act came into
effect.

LABOR PROTECTION:
Germany’s Latest Code.

"The coal miners of Prussia have secured a legal eight-hours
day for underground work, but in industry generally the number
of hours worked is ten daily, or sixty weekly, and these hours
generally fall between six and six or seven and seven. In some
industries, and especially the textile industries, from
sixty-three to sixty-six hours per week are commonly worked by
both sexes. … Just as there was once a time when the textile
industry of the Rhineland worked to a large extent seventeen
hours a day in order to facilitate competition with England’s
more highly developed factories and more skilled workers, so
now a day of ten and eleven hours is maintained in the same
industry purely out of fear of the foreigner. … The only
limitation of hours introduced by the amendment to the
Industrial Code which was passed in 1908 applied to female
workers, and it merely fixed the rule of sixty hours, subject
to many exceptions. An investigation made in 1902 by the
Government into the hours worked by females employed in
factories and workshops showed that of 813,560 such
workpeople, employed in 38,706 works, 86,191 (in 6,768 works),
or 10.6 per cent., worked nine hours or less, while 347,814
(in 18,267 works), or 42.8 per cent., worked from nine to ten
hours (inclusive), so that over half already enjoy the
protection which the new law is to afford. The Socialists at
present demand a ten-hours day for both sexes, for the whole
country and for all industries, but they regard this no longer
as their final objective, but as a stage on the way towards
the goal of an eight-hours day, via a halfway house of nine
hours."

_William H. Dawson,
The Involution of Modern Germany,
pages 129-131
(Unwin, London; Scribners, New York, 1909)._

"On December 28 last [1908] an industrial amendment Act was
passed by the German Reichstag and became law. It introduces a
number of new and more stringent regulations for the
protection of women and children, which will have the effect
of securing a large reduction of the hours of labour in many
manufacturing industries. In its application it goes beyond
the existing factory law, which applies to _Fabriken_,
and it includes all _Betriebe_ (industrial
establishments) in which ten or more persons are employed. It
reduces the maximum number of hours for women from 11 to 10 on
ordinary week days and from 10 to 8 on Saturday. That is to
say, it reduces the statutory maximum week from 65 to 58
hours. It extends the period during which night-work is
prohibited by an hour, and fixes it from 8 p. m. to 6 a. m.,
instead of from 8.30 p. m. to 5.30 a. m. as heretofore. It
further provides that after each day’s work an unbroken
interval of 11 hours’ rest must elapse; and this also applies
to workers of both sexes under 16. The latter, who already
enjoy the daily and weekly maximum now granted to women, will
also have the statutory times of beginning and leaving off
work altered from 5.30 A. M. to 6 A. M. for beginning and from
8.30 A. M. to 8 P. M. for leaving off."

LONDON TIMES,
MARCH 15, 1909.

LABOR PROTECTION:
Japanese Legislation in Prospect.

The following report from Japan came to the American Press in
a telegram dated December 15, 1909, at Victoria, British
Columbia: Factory owners of Japan, who employ 642,000 hands,
of whom 392,000 are women and a big percentage children, are
excited over factory laws to be advocated at this session of
the Diet, according to news brought here yesterday. The law
will provide against employment of children less than twelve
years old, but those above ten now employed will be permitted
to continue. Workers under sixteen and females may not be
worked more than twelve hours a day, and must be given two
days rest each month. In days of ten hours, an hour’s rest
must be given.

LABOR PROTECTION:
Report of the United States Industrial Commission in 1902.
Recommendations for State Legislation.
Child Labor and Woman’s Labor.
The Utah Law on Labor in Mines.

"Perhaps the subject of greatest public interest to-day is
that of the regulation of the hours of labor permitted in
industrial occupations, and especially in factories. Most of
the Northern and Eastern States prohibit the employment of
persons under the full age in factories or other mechanical
establishments for more than a prescribed time per diem,
usually ten hours, and not exceeding sixty hours per week.
Obviously, Congress has no power without a constitutional
amendment to legislate directly on this subject. The
Commission are of the opinion that a uniform law upon this
subject may wisely be recommended for adoption by all the
States.
{401}
We believe that such legislation can not, under the Federal
and State constitutions be recommended as to persons, male or
female, above the age of 21, except, of course, in some
special industries where employment for too many hours becomes
positively a menace to the health, safety or well-being of the
community; but minors not yet clothed with all the rights of
citizens are peculiarly the subject of State protection, and
still more so young children. The commission are of opinion,
therefore, that a simple statute ought to be enacted by all
the States to regulate the length of the working day for young
persons in factories (meaning by 'young persons’ those between
the age of majority and 14); and in view of the entire absence
of protection now accorded by the laws of many States to
children of tender years we think that the employment of
children in factories in any capacity, or for any time, under
the age of 14, should be prohibited. The question of shops and
mercantile establishments generally appears even more subject
to local conditions than that of factories; therefore the
Commission see no need for even recommending to the States any
uniform legislation upon this subject. But child labor should
be universally protected by educational restrictions,
providing in substance that no child may be employed in either
factories, shops, or in stores in large cities, who cannot
read and write, and, except during vacation, unless he has
attended school for at least twelve weeks in each year.
Further regulation, especially in the line of bringing States
which now have no factory acts up to a higher standard, is
earnestly recommended.

"The Supreme Court of the United States has affirmed the
constitutionality of the Utah law limiting the length of the
day’s labor in mines or under-ground workings, even in the
case of male citizens of full age. The Commission would
therefore recommend that the provisions of the Utah
constitution and statutes be followed in all the States, by
which the period of employment of workmen in all under-ground
mines or workings shall be eight hours a day, except in cases
of emergency, when life or property is in imminent danger, and
also that the employment of children under the age of 14 and
of all women and girls in mines or under-ground quarries and
workings shall be forbidden."

_Final Report (1902) of Industrial Commission,
pages 946-948._

LABOR PROTECTION:
Hours of Labor for Women.
Right of the State to put other Limitations than on Men.
U. S. Supreme Court Decision.

The constitutional right of a State to put other limitations
on the hours of labor for women than it puts on the hours of
labor for men was questioned by the proprietor of a laundry in
Oregon, and the question was carried to the Supreme Court of
the United States. The decision of that tribunal was rendered
early in 1908, affirming the right of a State to make such
distinction in labor limitations between the two sexes, and
the ground of the decision introduces a principle of enormous
importance into law. A legal limitation of the hours of labor
touches the contractual rights of the individual, and the
Court conceded that in those rights women stand on the same
plane as men; but the State, it declares, has the
constitutional right, for the public good, to limit the
contractual right of the individual, and its reasoning on the
matter before it turns therefore on the question whether the
protection of women by this special limitation of contractual
rights is or is not for the public good? On this question the
counsel for the State of Oregon, Mr. Louis D. Brandeis, had
submitted a remarkable mass of testimony, social and
physiological, which the Court accepted as conclusive, and
founded its decision thereon. This testimony the Court
declared to be "significant of a widespread belief that
women’s physical structure, and the functions she performs in
consequence thereof, justify special legislation restricting
or qualifying the conditions under which she should be
permitted to toil." Though "constitutional questions … are not
settled by even a consensus of present public opinion," yet
the Court held that "when a question of fact is debated and
debatable, and the extent to which a special constitutional
limitation goes is affected by the truth in respect to that
fact, a widespread and long-continued belief concerning it is
worthy of consideration." Applying that principle in this
case, the Court affirmed that "as healthy mothers are
essential to vigorous offspring, the physical well-being of
woman becomes an object of public interest and care in order
to preserve the strength and vigor of the race." On account of
her physical constitution, "she is not an equal competitor
with her brother." In spite of the removal of legal and other
disabilities, "she will still be where some legislation to
protect her seems necessary to secure a real equality of
right." Such legislation to defend woman, to use the Court’s
phrase, "from the greed as well as the passion of man," is not
merely for her benefit, but for the well-being of the race.

"The two sexes," said Justice Brewer, who delivered the
decision of the Court, "differ in structure of body, in the
functions to be performed by each, in the amount of physical
strength, in the capacity for long-continued labor,
particularly when done standing, the influence of vigorous
health upon the future well-being of the race, the
self-reliance which enables one to assert full rights, and in
the capacity to maintain the struggle for subsistence. This
difference justifies a difference in legislation and upholds
that which is designed to compensate for some of the burdens
which rest upon her."

LABOR PROTECTION: ORIENTAL COMPETITION:
The Force of the Objection to it in Countries under
the Protective Tariff System.

See (in this Volume)
RACE PROBLEMS; UNITED STATES.

LABOR PROTECTION: A. D. 1900-1909.
Study and Treatment of Industrial Problems in
the United States by the National Civic Federation.

See (in this Volume)
SOCIAL BETTERMENT: UNITED STATES.

----------LABOR PROTECTION: End--------

{402}

----------LABOR REMUNERATION: Start--------

LABOR REMUNERATION.
Cooperative Organization.
Pensions.
Profit-sharing.
Wages Regulation, etc.)

LABOR REMUNERATION:
The Bonus System.
Its Working in the Shops of the Bethlehem Steel Company.

"Awarding extra compensation for extra work has long been the
practice of successful manufacturing; but the particular
method of awarding a _bonus_ above referred to is of
recent origin, and fills an important need in modern systems
of management. It may be briefly described as follows:
Alternative ways of doing a piece of work are carefully
investigated by the most competent expert available and the
results recorded. The best method is determined and taught to
an ordinary workman, who is awarded extra compensation in
addition to his day’s pay for doing the work in the time and
manner specified. This method of compensation was the outcome
of an attempt to introduce in complicated work equitable piece
rates determined as nearly as possible by scientific methods."

The original working out of this method into a system is
ascribed by the writer of the above to Mr. Fred W. Taylor, in
the early eighties, he being then in the employ of the Midvale
Steel Company. After setting forth the principles involved in
the system, this writer concludes his article by stating:

"The principles above outlined were applied during the spring
and summer of 1901 to the ordnance and armor-plate machine
shops of the Bethlehem Steel Company, and resulted in a short
time in more than doubling the output of those shops. The
system is still in use substantially as introduced, and the
superintendent, Mr. Archibald Johnston, in his testimony
before the House Committee on Labor, February 13, 1902, makes
the following statement regarding it:

"This arrangement has worked very satisfactorily, both to the
men and the company, for it has enabled us to get work out
more quickly, and to add to the producing capacity of our
invested capital; while for the men it has been a great
benefit, as we have many instances of employees who have
bought homes for themselves principally from their extra
earnings on the bonus system, and from overtime work. The
system has been a stronger incentive to industry than any
other we have been able to put into effect in our plant."

_H. L. Gantt,
The Bonus System of Rewarding Labor
(American Review of Reviews)._

LABOR REMUNERATION: COÖPERATIVE ORGANIZATION:
France, Italy, etc.
Cooperative Production.

A book published in 1905, entitled "Labor Problems," by T. S.
Adams and Helen L. Sumner, gives an interesting account of
coöperative associations for contract labor in France, of
which there were 296 on the 1st of January, 1901, seemingly
having considerable success, 106 of the number being in the
building trades. Similar organizations were reported in Italy
and New Zealand. In France, the law provides for dividing
public contracts, and for making payments on them in such ways
as to bring them within the means of these associations of
workmen. In Germany and Holland there is said to have been a
less degree of success in organizing this mode of productive
coöperation.

LABOR REMUNERATION: GREAT BRITAIN:
The Coöperative Union and Coöperative Congress.
Recent Statistics of Membership, Organizations, and Operations.
Rapidly increasing Coöperation in Agriculture.

As reported at the annual Coöperative Congress of 1905, the
Coöperative Union of Great Britain had then a membership of
2,200,000, conducting coöperative undertakings with a total
capital of £36,500,000 and a trade of £92,000,000. At that
meeting a proposition to act with the Labor Representation
Committee, for increasing the representation of labor
interests in Parliament, was defeated by 801 votes against
135.

Four years later, at the Congress held in May, 1909, the
reported membership of the Coöperative Union had increased to
2,516,194, in 1560 affiliated societies. Among other
statistics reported for the previous year were the following:

"The two large wholesale societies—one in England and the
other in Scotland—had a membership of 1414 in 1908, or a
decrease of three as compared with the total for 1907; the
shares held amounted to £1,984,676, a rise of £190,131; the
loans were £5,114,201, an increase of £382,990; the sales for
the year amounted to £32,433,968, an increase of £43,940, and
the interest on capital was £96,350, an increase of £5,498.
The year’s trading, however, resulted in a decrease of profits
amounting to £137,197, the total profits being £731,124. There
were 1428 distributive societies, a decrease of 15, but the
membership rose to 2,404,595, or 81,217 more; the shares held
went up to £30,037,352, an increase of £998,703; the loans
amounted to £4,558,021, a rise of £212,377; the sales
increased by £1,635,749, the total being £60,783,278; but the
profits dropped to £10,773,005, or a decrease of £126,327.

"Coöperative production forms a large and important branch of
the movement. Some facts relating to it are given from the
last annual report of the Chief Registrar of Friendly
Societies in order to supplement the figures of the central
board. According to the Chief Registrar’s report, 1251
societies, including distributive, wholesale, and productive
societies, made returns showing that, they carried on
production to the extent of £16,989,764 in the year,
calculated on wholesale prices. The workpeople employed in
production numbered 44,188—men, 25,809; women, 12,212; boys,
6167—and the wages paid to these (exclusive of bonus) amounted
to £2,324,674. The board’s annual summary of the operations
carried on by the productive societies and the productive
departments of the two wholesale societies shows a total
production in 1908 of £11,112,220. To this is added an
estimated production of £7,750,000 by the distributive
societies, making the total production of the coöperative
movement for the year about £18,862,000. The number of
productive societies to which the Board’s returns relate is
122, a decrease of five as compared with the total for the
previous year. The number of people employed by these
societies during the year was 28,575, an increase of 1637; the
capital invested was £4,610,072, an increase of £259,137; the
trade, as stated above, was £11,112,220, an increase of
£450,802; the profits amounted to £352,398, a decrease of
£15,317; and the losses amounted to £68,650, as against £8336.

{403}

"Among the industries engaged in coöperative production, corn
milling had a trade last year amounting to £4,564,706, which
was considerably higher than the total for the previous year.
Increases were also recorded in the cotton, linen, silk, and
wool industries, and by societies engaged in woodwork,
building, and quarrying, printing and bookbinding, baking, and
laundry-work. But the societies producing boots, shoes, and
leather, metal and hardware, and various other goods had a
reduced trade."

In an article on "The Coming of Coöperation," in Agriculture,
the London _Times_ of May 3, 1909, made the following
statements: "The coöperative movement, on which more than
anything else the success of all small farmers and many big
farmers depends, is advancing with a rapidity very little
realized even by farmers themselves.

"The position at present is this. In Ireland, in Scotland, and
in England exist three organization societies which decided in
July of last year to amalgamate for certain purposes. Under
the lead of Sir Horace Plunkett the three societies decided
that joint action would be effective in all the three branches
of cooperative trade—

‘(1) The acquisition of farmers’ supplies of the best
quality at the lowest price;

(2) the marketing of produce in the most economical manner; and

(3) the interchange of certain products.’

"Into this third attribute of cooperation it is worth while
inquiring closely. The idea, which may mean an immense advance
in the production of the farm, small or great, has not become
familiar even to some of the best local coöperative societies
we have. A few examples will illustrate the possibilities. No
one will doubt the value of geographical knowledge to the
farmer. One of the biggest successes made on the Fen farms in
recent years resulted from the accident that a Fen farmer went
to shoot snipe in Ireland, and there came upon a potato which
proved to be exceptionally suited to the Fen soil. Many small
fortunes have been made in potato farming by the use of Scotch
seed. To-day, of course, every one is aware of its excellence,
due partly to the red soil, partly to the wise custom of the
Scotch farmer in digging his potatoes before they are mature.
But this knowledge penetrated very slowly. …

"An admirable instance, illustrating the same point, may be
found in the unpublished history of the French wheats recently
introduced into England. The whole tale is full of suggestions
for English farmers and for the organization societies. French
farmers, as we all know, are very closely federated; and every
sort of work—in buying, in marketing, and in advancing
money—is carried on by the local and federated syndicates.
Some years ago the leaders of these syndicates came to the
conclusion that their wheats greatly improved by a year or two
in English soil. They preferred their own varieties, but found
them more prolific when the seed was imported from England.
Several difficulties met them. They had first to persuade
English growers to grow these varieties, and secondly they had
to compel them to keep the stock pure. The second difficulty
might have been insuperable without joint action, but it was
soon overcome by the syndicates.

"At present Ireland is a long way ahead of England, and
England of Scotland, in co-operative organization; but
certainly in England, as well as Ireland, co-operation has
advanced more rapidly in the last year or two than seemed at
all likely at the beginning of the century. The Agricultural
Organization Society, which was formed for propaganda work, is
already able to give proof of valuable results from joint
action towards what may be called the self-sufficiency of
Britain. The advance has been made possible by the new
federations of farmers, as well as by the multiplication of
local co-operative societies."

LABOR REMUNERATION:
Exhibition of Coöperative Productions.

An exhibition of coöperative productions was opened in August,
1909, at the Crystal Palace, London, in connection with a
National Co-operative Festival. On the one side goods were
shown from the various co-partnership productive societies,
including boots and shoes, baskets, cloth, velvets, cutlery,
watches, and printing; and on the other side were specimens of
the Co-operative Wholesale Society’s goods, such as working
exhibits of sweet-boiling, soap-milling, and cigar and
cigarette making. In addition to the exhibits from workshops,
the Tenant’s Housing Societies showed plans of their houses
owned on the coöperative principle by groups of workmen and
others. It was pointed out by the promoters of the exhibition
that such houses may be completely equipped for habitation
with articles produced under cooperative conditions.

LABOR REMUNERATION: India:
Rapidity of the Movement.

"The co-operative movement in India, which was started five
years ago by the passing of the Cooperative Credit Societies
Act, has made steady and satisfactory progress in all the
Provinces, and there are now 2,000 societies with 185,000
members and a working capital of over half a million sterling.
Each Province has its official registrar and staff of
inspectors, whose business it is to preach the benefits of
co-operation, to encourage the formation of new societies, to
help each society to draw up its by-laws, to check and audit
its accounts free of charge, to point out mistakes, and to put
things right. The ordinary type of co-operative society is the
village bank of from 50 to 100 members, all residents of the
same neighbourhood, who know intimately each other’s needs and
resources, and, above all, each other’s character."

_Correspondent London Times,
December 17, 1909._

LABOR REMUNERATION: New Zealand:
The Labor Group Method.

"What distinguishes New Zealand as a State is the way in which
governmental powers have been used, not to stop competition in
the socialistic sense, but to force a higher and fairer level,
on which it acts for the many rather than for the few. Every
startling step has been of this nature. New Zealand is
democratizing competition. If the public is there threatened
with monopoly prices in coal or in insurance, the State acts
competitively for the whole people. Our great interest in this
method is that it may have immeasurable development without
landing us in Socialism. It has the soul of democracy in it
while preserving great areas on which those forms of private
property may be maintained which Socialism usually attacks.
Even more significant is the other illustration which New
Zealand offers.

{404}

"It is the allotment of work to labor groups under the
co-operation method. It unifies at once the political and the
industrial practice. If the digging and laying up of a cellar,
a section of roadway, or the foundations of a bridge are
assigned to twelve laborers for the sum of fifty pounds, they
elect their own manager, agreeing upon the distribution of the
work. A standard of efficiency is set, which the inspector
enforces. The lump sum of fifty pounds is assumed by the
authorities to give first a ‘fair wage,’ but beyond that a
margin is given which extra zeal and fidelity may very
materially increase. Under private contractors working for
profit, this is of course a very old story. It is not an old
story for the State or town to do it, with the express purpose
of avoiding certain evils of competition, like insecurity and
lack of work."

_John Graham Brooks,
Industrial Democracy
(The Outlook, November 17, 1906)_.

LABOR REMUNERATION: Russia: A. D. 1903.
Statistics of Consumers’ Associations.

In 1903 "the number of co-operative consumers’ associations in
Russia was 824. In order to compile some statistics, in regard
to these, the ‘Permanent Commission for Co-operative
Associations’ sent out some inquiry blanks which, in 204
cases, were properly filled out and returned. From these
reports is gathered that the 204 associations had together
91,417 members and 26,402 annual subscribers, making a total
number of about 118,000 customers. The average membership of
the associations was 577. The number of employees was 3258, or
16 per association, and the expenses for wages and maintenance
of these amounted to 1,131,307 rubles, or averaging 5515
rubles for each association. The total capital reached a sum
of more than 4,000,000 rubles, which item was counterbalanced
by a total indebtedness of nearly an equal amount. Of the
entire net profit,—1,270,000 rubles,—256,539 rubles were
distributed as dividends on shares, 590,857 rubles as premiums
on purchases, and 68,155 were paid into the government as
taxes."

_Herman Rosenthal
(American Review of Reviews)._

LABOR REMUNERATION: United States:
Coöperative Distribution and Coöperative Production.

"Today in Utah are eighty-seven coöperative distribution
societies and in California sixty; and elsewhere are signs
that the excellent principles of united effort may soon enter
upon another and very likely its most notable revival. In San
Francisco before the earthquake the coöperators had a large
wholesale store doing a good business. At Lawrence,
Massachusetts, the flourishing Arlington Store Society, an
admirably conducted Rochdale venture, has 4,360 members and
does an annual business of more than $500,000, and at
Lewiston, Maine, is a store managed on lines of modified
coöperation with annual sales of more than $600,000. Through
the country the coöperative stores number about 250, with
60,000 or more members and $7,000,000, of annual business; a
showing that looks small compared with the gigantic operations
of the British societies. But with the development of the
Cooperative Association of America, a new enterprise managed
by men like Frank Parsons, B. O. Flower, Charles E. Lund and
other advanced thinkers, there is likely to be in the next few
years a new and very different story to tell of coöperation in
America.

"Coöperative production has already made a different story,
although even that is flecked with enough of failure. … So far
back as 1868, in Minneapolis, four journeymen coopers had
formed a cooperative society, steadily enlarged as the milling
interests increased. In 1874, when the flour output was about
500,000 barrels a year, so many coopers had come to town that
the Coöperative Barrel Manufacturing Company was formed and
twelve years afterwards two-thirds of all barrels made in
Minneapolis were made in coöperative shops. And then somehow
the things began to decline. Of seven great coöperative shops
existing in 1886 only three survive. … In other lines of
productive effort Coöperation has often achieved notable
success. The coöperative creamery, for instance, has been a
boon to millions of farmers. Of such creameries in the United
States there are about 3,800 with a membership in their
associations of more than 300,000 and an annual product worth
more than $80,000,000. In Minnesota six-sevenths of all the
creameries are coöperative; six hundred have been organized in
the last ten years with a membership of 50,000. The idea is
steadily gaining; it is very strong in all the Western States,
and even in Massachusetts twenty-eight of fifty creameries are
coöperative. In the operation of these societies there has
been almost uniform success. The farmers indeed have done far
more than the workingmen to show the benefits of union. There
are in the United States about 4,000 farmers’ purchasing and
distributing societies with 500,000 members. Fruit growers’
associations have been formed in nine states and have now more
than 100,000 members. The Southern California Fruit Exchange,
organized in 1891, handles more than half the orange business
in California. It has seventy associations with 4,000 members.
One third of all the fruit grown in California is now handled
coöperatively.

"There are also coöperative bee keepers, coöperative sheep
herders, coöperative poultry raisers, cattle breeders, wool
growers, cotton growers and milk-dealers, and in six states
are flourishing coöperative grain elevators. …

See above,
LABOR ORGANIZATION: UNITED STATES: A. D. 1906.

Of coöperative insurance companies we have about 3,800,
including mutual life, fire, hail and live-stock insurance.
Three thousand of these are among the farmers, with a total
membership of 2,700,000 and total risks reaching the amazing
sum of $3,000,000,000. Premiums among the farmers’ coöperative
insurance companies average twenty-four cents for each $100 of
insurance against an average among all companies, as reported
by the United States census, of $1 for every $100 of
insurance. In Michigan, Iowa, Indiana, Kansas, Nebraska,
Minnesota, Wisconsin, and the Dakotas farmers’ coöperative
telephone companies have had a phenomenal growth and have
effected in some degree a transformation of rural life. …
Coöperative distribution … has lately been revived in America
through the well-considered efforts of the Coöperative
Association of America, and still more recently through the
Golden Rule Fraternity.
{405}
The Coöperative Association began in Lewiston, Maine, in 1900,
as ‘A Trust for the People.’ It has utilized the ordinary
trust machinery towards communal good instead of personal
profit. There is a holding company called the ‘Co-Workers’
Fraternity’ and this owns a controlling interest in stock of
the Coöperative Association of America, in the National
Production Company of New Jersey, in the Massachusetts
Coöperative Society, and is to own a similar control in the
other coöperative societies now being formed. On this modern
and comprehensive basis coöperation is being reformed and
reorganized in America. Its pitfalls hitherto have been
chiefly those of management. On the new plan of organization
these should be avoided. … The revived prospects of
Coöperation in America are due chiefly to the altruistic
efforts of a certain band of thoughtful men and women that
believe this to be the first step towards a cure of the
national evils."

_Charles D. Russell,
The Uprising of the Many,
pages 30-37 (New York, Doubleday, Page & Co., 1907)._

"I spent nearly four weeks, from March 3 to March 27, [1908]
visiting a chain of co-operative stores, fifty-five in number,
in the vicinity of Minneapolis, Minnesota. These stores are
organized on the famous Rochdale plan, for the benefit of the
consumer instead of the capitalist. The profits are divided in
proportion to purchases, except that the general public who
have not yet chosen to become members or shareholders receive
only half-dividend or benefit. Goods are not sold cheaper; it
is aimed to create capital by earning good profits. An
accounting is had and the profits ascertained once in three or
six or twelve months. These profits are then distributed
between a surplus fund, an educational or propaganda fund, and
dividend on purchases, which is paid in cash if the shareholder
has paid in full, or credited on his share if only part paid.
This is the nub of the Rochdale System, departures from which
have been the cause of a long and almost unbroken line of
failure in American attempts in co-operative stores.

"These Minnesota and Wisconsin stores have all been organized
on a nearly uniform plan by a propaganda organization known as
the Right Relationship League, consisting of three active
officers, two additional directors, eight field organizers,
and an associate membership of all the store shareholders who
pay a fee of one dollar. The stores are incorporated by
counties; when there are several stores in one county, they
are ‘departments’ or branches. For example, the Polk County
(Wisconsin) company has ten stores, the Pepin County company
nine stores, and each has a general manager and a joint
warehouse. Instead of starting a new store with a new manager
and no established trade, the newly organized co-operative
company buys out the best or next best general store in the
town and continues the former owner as manager.

"Of the old guard who wrote and hoped for co-operation twenty
to thirty years ago, all gave up the fight long since, myself
excepted. Edward Everett Hale, Richard T. Ely, Carroll D.
Wright, Washington Gladden, E. W. Bemis, John R. Commons, will
be glad to know that the lost cause is reviving and may yet,
in their lifetime, justify their early faith and repay their
labors."

_N. O. Nelson,
The Co-operative Movement in the United States
(The Outlook, July 4, 1908)._

In February, 1909, it was reported that the stores of the
above League had increased in number to seventy-six; that the
membership and capital had been doubled within a year, and
that a wholesale company had been formed, each store
subscribing $1000.

In "Labor Problems," by T. S. Adams and Helen L. Sumner, a
considerable number of successful undertakings in producers’
co-operation in the United States are enumerated, including
establishments operated by labor unions in the iron, glass,
garment and cigar-making, box-workers, wood-workers, building
trades, etc., east and west; besides co-operative laundries
and restaurants. The most interesting of these organizations
appears to be that of the Workers’ Coöperative Association of
Boston, formed in 1900 by members of the building trades.

LABOR REMUNERATION:
The "New Protection": Australia: A. D. 1907-1908.

The "New Protection," so called, introduced in Australia, "is
an extension of the principle of the Wages Boards Acts, which
aim to preserve for the workers a certain assured
remuneration. Under the New Protection, the field of this
minimum wage legislation is extended to the trades subsidized
or assisted under protective duties, so as to compel the
manufacturers to share the accruing advantage with their
employees. The Tariff Excise Act is the first installment of
the new legislation. It came into force on January 1, 1907,
and was specially intended to protect the agricultural
implement industry from American and Canadian competition. It
placed upon imported harvesters a duty of sixty dollars. The
Federal Labor party supported the manufacturers in obtaining
the duty, on condition that there was inserted a clause
imposing upon locally produced harvesters an excise duty of
half the amount of the import duty. Manufacturers would,
however, be exempt from the payment of this excise upon
showing proof that their workmen had been paid ‘fair and
reasonable remuneration.’

"At the close of the manufacturing season one hundred and
twelve manufacturers of harvesters filed applications for
exemption from excise duty." This, at once on a test case,
carried the question, what is a "fair and reasonable
remuneration" for wage-paid labor into the Court of
Conciliation and Arbitration, and its judge, much against his
will, was required to determine it. He decided that not less
than $9.50 per week, in Australia, for the lowest class of
unskilled labor, could be regarded as a "living wage." "This
formed the basis of the entire Tariff Excise scale, since from
it the court calculated the rates of payment for all other
employees. This was the easier because there was but little
difference of opinion between the employers and the respective
unions as to the proportionate wages to be paid to various
classes of skilled labor, and, with the price for unskilled
labor raised, a similar increase followed in all the skilled
trades in the business of manufacturing harvesters.

"The Harvester legislation is only the fore-runner of plans
for extensive control over industry to be brought forward as
soon as the import duties under the recently introduced tariff
are decided.

{406}

"In this the three objects to be gained are not always easily
reconciled, and the detail work, besides, of drafting rules
and regulations to result in a moderately practicable working
Act will be enormous. These objects are:

1. To conserve the market for the Australian manufacturer.

2. To insure fair remuneration to the employee.

3. To protect the consumer by placing a limit upon the
price which may be charged.

The rough outline of the proposals is as follows: All dutiable
goods bearing the Commonwealth Trade-Mark (a sort of universal
label) as a guarantee that they have been manufactured under
fair and reasonable conditions as to remuneration of labor
will be exempt from excise. A board of excise, to consist of
three members, to be appointed to give effect to these
proposals. All goods manufactured under conditions which are
in accordance with the State or Commonwealth industrial award
or agreement, or which are declared to be fair and reasonable
by the newly created board of excise, will be entitled to have
the Commonwealth Trade-Mark affixed."

_Alice Henry,
Australia’s "New Protection"
(The Outlook, February 8, 1908)._

The constitutionality of the Tariff Excise Act was soon
brought to a test, and the Federal High Court decided in June,
1908, that wages could not be regulated in the method
proposed. In the following October proceedings were opened in
Parliament to secure such an amendment of the Constitution as
would empower the desired legislation.

LABOR REMUNERATION: Pensions:
The German State-aided System.

See (in this Volume)
POVERTY, PROBLEMS OF: PENSIONS.

LABOR REMUNERATION:
System adopted by American Railroad Companies.

On the 10th of November, 1909, announcement was made by the
New York Central Railroad Company that it had adopted an
employees’ pension system, by which 100,000 men would be
affected. Under the plan, employees reaching the age of
seventy years are retired. If they have been continuously in
the service of the company for at least ten years preceding
their retirement, they will be entitled to a pension. An
employee who has been at least twenty years in continual
service and has become unfit for duty may be retired with a
pension, although he has not reached the age of seventy. The
amount of the pensions is 1 per cent, for each year of
continuous service, based upon the average rate of pay
received for the ten years next preceding retirement. The
pension system became effective on January 9, 1910.

The latest government report on the number of railroad
employees puts the total for the country at 1,672,074. "Of
these," says the New York _Evening Post_, "approximately
665,000, or about 40 per cent., serve the roads which have
pension systems. These companies are the New York Central, the
Rock Island, the Pennsylvania, the Buffalo, Rochester and
Pittsburg, the Chicago and Northwestern, the Illinois Central,
the Atchison, Topeka and Santa Fe, the Union Pacific, Southern
Pacific, and their affiliated lines, the Delaware, Lackawanna
and Western, the Baltimore and Ohio, the Atlantic Coast Line,
the Reading, and the Central of New Jersey."

LABOR REMUNERATION: Profit-sharing:
Plan of Furness, Withy & Company.

One of the greatest of the British ship-building and shipping
concerns, that of the incorporated firm of Furness, Withy &
Co. of which Sir Christopher Furness is the managing director,
announced in the fall of 1908 that it could not continue its
business unless the constant troubles between itself and its
employees over wages questions could be brought to an end.
With that view it was proposed to the workmen that they should
become partners in the business by taking shares of the
company’s capital stock and paying therefor by a five per cent
reduction of their wages until the price of their shares
should be covered. Additional shares of stock would be issued
for the purpose, on which four per cent of dividend would be
paid, whether the company divided any surplus on the general
stock or not. A certain percentage of the earnings of the
business would be allotted to capital, and to cover
depreciation and development, over and above which the
employee-partners would participate in all profits. With
reference to these allotments, to capital, etc., Sir
Christopher Furness, speaking to a Labor Union meeting on the
subject of his proposal, said: "I am aware that a section of
working-men criticise the amounts laid aside by some companies
for these various purposes as if they were devices for
stealing the real earnings of the company from their
employees, but, take my word for it, these allotments cannot
be dispensed with, that is to say, if the directors have any
regard for the continuance of the company with a reasonable
hope of prosperity. Possibly an arrangement might be reached
that nothing beyond a definite percentage on an average of
years should be put aside."

Importantly in connection with the arrangement of
profit-sharing co-partnery, Sir Christopher planned to
organize what he called a Works Council, to be composed of an
equal number of representatives of the workmen and
representatives of the company. It would be, he said, a kind
of Court of Reference and Committee of Counsel rolled into
one. The proposals of the firm were accepted by its employees
and the co-partnery arrangement was carried out.

A year and a half later, on May 22, Sir Christopher Furness
and two others purchased an extensive colliery, the Wingate
Colliery, and made a similar proposition to the workmen there,
offering them one quarter of the shares of the company to be
formed, on the same terms of payment as in the case of the
ship-building company. This gave evidence that the plan had
worked satisfactorily thus far in its earlier trial.

On the 15th of December, 1909, the secretary of the Company
addressed a letter to its Employé Shareholders, saying: "I
have to acquaint you that my board have had under
consideration the working of the company since the adoption of
the co-partnery scheme, and I am directed to say that they
consider the results, from every point of view, to be very
satisfactory." The substantial results to the employees were
thus stated:

"On the financial side you will also be pleased to hear that
the working results are equally satisfactory. The audited
accounts up to September 30 last, and the estimated results
from that date to the present time, show such a balance as
enables the directors to declare a dividend. They propose
therefore, to make a distribution on the agreed basis of the
scheme—viz., the guaranteed 4 per cent. to the _employé_
shareholders, the fixed 5 per cent. to the Ordinary
shareholders, with a bonus of 5 per cent. to both classes of
shareholders. This will yield to the _employé_
shareholders a return at the rate of 9 per cent. per annum,
and to the Ordinary shareholders at the rate of 10 per cent.
per annum, for the nine months ending December 81, 1909.

{407}

"For better convenience it has been decided by my board to
make the financial year end on December 31.

"The amount due to each _employé_ shareholder will be
paid at the offices of the company at the respective
ship-yards on the pay-day, Friday, December 24."

Promising as this plan of profit-sharing appeared, it did not
prove satisfactory to the employés, and, on the 1st of April,
1910, they voted against its continuance, complaining that
their expectation of full employment had not been realized,
and that the system tended to break up trade unions, which are
labor’s surest support and defence.

LABOR REMUNERATION:
The Plan of the United States Steel Corporation,
and other Great Corporations.

"An occurrence of tremendous and far-reaching importance is
the success of the United States Steel Corporation’s
wage-earners’ investment and profit-sharing plan. When this
plan was announced, January 1, [1903], every thoughtful man in
the country gave it close attention. … With all, the question
of questions was, Will it succeed? … We have not been
compelled to wait long for the answer. The directors of the
Steel Corporation offered 25,000 shares of stock to their
168,000 employees. The books were to be kept open thirty days.
No one dared believe that within this month, while the plan
was so new, while all sorts of prejudices or fears might deter
subscribers, and while the great mass of employees would still
be studying and thinking about the offer which to them must
have seemed somewhat novel and complicated, all or even
one-half of the proffered stock would be taken up. Yet, when
the books closed Saturday evening, January 31, it was found
that the 25,000 shares offered had been subscribed for more
than twice over. Twenty-seven thousand six hundred and
thirty-three employees had subscribed for 51,125 shares. …

"The company’s proposal was to share profits with all
employees who would demonstrate their interest and thrift by
buying the company’s stock. Consequently, the great bulk of
the stock set aside for purchase by employees was offered to
the men who earn the smallest salaries. This was done by
dividing the 168,000 employees into six classes, according to
their salaries—Class A, over $20,000 a year; Class B, $10,000
to $20,000, down to Class E, $800 to $2,500 a year, and Class
F, under $800 a year—and then by limiting the amount of stock
employees could take to the following proportions of their
annual salaries: Class A, 5 per cent.; Class B, 8 per cent.;
Class C, 10 per cent.; Class D, 12 per cent.; Class E, 15 per
cent.; and Class F, 20 per cent. It will thus be seen why 90
per cent. of all the stock subscribed for in January goes to
the two classes of mechanics and workmen whose salaries are
under $2,500 a year.