Chapter II: Part 2

To encourage employees to cultivate flower and vegetable gardens, the company agrees to fence free of cost each house-lot owned by it. The company also engages to provide suitable bath houses and club houses for the use of employees at the several mining camps.

The other document is an “Industrial Constitution,” setting forth the relations of the company and its men. The Constitution stipulates, among other things, that “there shall be a strict observance by management and men of the Federal and State laws respecting mining and labor,” and that “the scale of wages and the rules in regard to working conditions shall be posted in a conspicuous place at or near every mine.”

Every employee is protected against discharge without notice, except for such offenses as are posted at each mine. For all other misconduct the delinquent is entitled to receive warning in writing that a second offense will cause discharge, and a copy of this written notice must be forwarded to the office of the president of the company at the same time it is sent to the employee.

The constitution specifically states that “there shall be no discrimination by the company or any of its employees on account of membership or non-membership in any society, fraternity, or union.” The employees are guaranteed the right to hold meetings on company property, to purchase where they choose, and to employ check-weighmen, who, on behalf of the men, shall see to it that each gets proper credit for his work.

Besides setting forth these fundamental rights of the men, the Industrial Constitution seeks to establish a recognized means for bringing the management and the men into closer contact for two general purposes:

First, to promote increased efficiency and production, to improve working conditions and to further the friendly and cordial relations between the company’s officers and employees; and,

Second, to facilitate the adjustment of disputes and the redress of grievances.

In carrying out this plan, the wage-earners at each camp are to be represented by two or more of their own number chosen by secret ballot, at meetings especially called for the purpose, which none but wage-earners in the employ of the company shall be allowed to attend. The men thus chosen are to be recognized by the company as authorized to represent the employees for one year, or until their successors are elected, with respect to terms of employment, working and living conditions, adjustment of differences, and such other matters as may come up.

A meeting of all the men’s representatives and the general officers of the company will be held once a year to consider questions of general importance.

The Industrial Constitution provides that the territory in which the company operates shall be divided into a number of districts based on the geographical distribution of the mines. To facilitate full and frequent consultation between representatives of the men and the management in regard to all matters of mutual interest and concern, the representatives from each district are to meet at least three times a year--oftener if need be--with the president of the company, or his representative, and such other officers as the president may designate.

The district conferences will each appoint from their number certain joint committees on industrial relations, and it is expected that these committees will give prompt and continuous attention to the many questions which affect the daily life and happiness of the men as well as the prosperity of the company. Each of these committees will be composed of six members, three designated by the employees’ representatives and three by the president of the company.

A joint committee on industrial coöperation and conciliation will consider matters pertaining to the prevention and settlement of industrial disputes, terms and conditions of employment, maintenance of order and discipline in the several camps, policy of the company stores, and so forth. Joint committees on safety and accidents, on sanitation, health and housing, on recreation and education, will likewise deal with the great variety of topics included within these general designations.

Prevention of friction is an underlying purpose of the plan. The aim is to anticipate and remove in advance all sources of possible irritation. With this in view a special officer, known as the President’s Industrial Representative, is added to the personnel of the staff as a further link between the president of the corporation and every workman in his employ. This officer’s duty is to respond promptly to requests from employees’ representatives for his presence at any of the camps, to visit all of them as often as possible, to familiarize himself with conditions, and generally to look after the well-being of the workers.

It is a fundamental feature of the plan, as stated in the document itself, that “every employee shall have the right of ultimate appeal to the president of the company concerning any condition or treatment to which he may be subjected and which he may deem unfair.” For the adjustment of all disputes, therefore, the plan provides carefully balanced machinery.

If any miner has a grievance, he may himself, or preferably through one of the elected representatives in his camp, seek satisfaction from the foreman or mine superintendent. If those officials do not adjust the matter, appeal may be had to the president’s industrial representative. Failing there, the employee may appeal to the division superintendent, assistant manager, or general manager, or the president of the company, in consecutive order.

Yet another alternative is that, after having made the initial complaint to the foreman or mine superintendent, the workman may appeal directly to the joint committee on industrial coöperation and conciliation in his district, which, itself failing to agree, may select one or three umpires whose decision shall be binding upon both parties to the dispute.

If all these methods of mediation fail the employee may appeal to the Colorado State Industrial Commission, which is empowered by law to investigate industrial disputes and publish its findings.

So as adequately to protect the independence and freedom of the men’s representatives, the Constitution provides that in case any one of them should be discharged or disciplined, or should allege discrimination, he may resort to the various methods of appeal open to the other employees, or he may appeal directly to the Colorado State Industrial Commission, with whose findings in any such case the company agrees to comply.

The company is to pay all expenses incident to the administration of the plan, and to reimburse the miners’ representatives for loss of time from their work in the mines.

VII

Such in outline is this Industrial Constitution. Some have spoken of it as establishing a Republic of Labor. Certain it is that the plan gives every employee opportunity to voice his complaints and aspirations, and it neglects no occasion to bring the men and the managers together to talk over their common interests.

Much unrest among employees is due to the nursing of real or fancied grievances arising out of the daily relations between the workmen and the petty boss. Such grievances should receive attention at once, and this plan provides that they shall.

Just as in the case of bodily wounds, so with industrial wounds, it is of prime importance to establish a method of prompt disinfection, lest the germs of distrust and hatred have opportunity to multiply.

This plan is not hostile to labor organizations; there is nothing in it, either expressed or implied, which can rightly be so construed; neither membership in a union nor independence of a union will bring a man either preference or reproach, so far as the attitude of the company is concerned.

The fact is that the Colorado Fuel and Iron Company Constitution does not restrict in any way the right of the employees to regulate their own lives, nor does it abridge their right to join any organization they please. At the same time it does insure the men fair treatment and an opportunity to make their voice heard in determining the conditions under which they shall work and live.

The plan does not deny to the representatives the right to act in concert; it does not deny to the men the right to employ counselors or advisers to assist them in formulating their views as to any situation. Indeed, the door is left wide open for the natural exercise of any right or privilege to which the men are entitled.

There is nothing in the plan to prevent the men holding open or secret meetings as often as they like, either in the separate camps, the districts, or as representing the whole industry. Such meetings are not specifically provided for because all those who are connected with the corporation are considered to be partners in the enterprise, and their interests common interests.

The plan provides a channel through which not only may the men confer with the management, but through which also the officers may lay their purposes, problems, and difficulties before the employees.

It provides a medium of adjustment, as between employer and employees, of the problems which constantly arise in the conduct of business, while in regard to the relations of both it recognizes that the voice of public opinion is entitled to be heard.

The acts of bodies of men in their relations with other men should always be illuminated by publicity, for when the people see clearly what the facts are, they will, in the long run, encourage what is good and condemn what is selfish.

Some may think that the form which the organization of labor takes must necessarily be originated and developed by Labor. If, however, a workable method of coöperation between managers and men is actually developed, which is satisfactory to both, is its authorship of consequence, provided only its provisions are adequate and just and it proves to be an effective instrument through which real democracy may have free play?

The Colorado Plan has been devised for the employees of the Colorado Fuel and Iron Company, and without reference to the employees, or organizations of employees, in other companies. Some people will maintain that the men’s interests cannot be adequately protected or their rights at all times enforced without the support of their fellows in similar industries.

This may be true where Labor and Capital do not generally recognize that their interests are one. But when men and managers grasp that vital point, as I believe this plan will help them to do, and are really awake to the fact that when either takes an unfair advantage of the other the ultimate interests of both are bound to suffer, they will have an incentive to fair dealing of the most compelling kind.

It is clear that a plan of this kind must not overlook the interests of the stockholders, for no plan which disregards their rights can be permanently successful. The interests of Capital can no more be neglected than those of Labor.

At the same time I feel that a prime consideration in the carrying on of industry should be the well-being of the men and women engaged in it, and that the soundest industrial policy is that which has constantly in mind the welfare of the employees as well as the making of profits, and which, when the necessity arises, subordinates profits to welfare.

In order to live, the wage-earner must sell his labor from day to day. Unless he can do this, the earnings of that day’s labor are gone forever.

Capital can defer its returns temporarily in the expectation of future profits, but Labor cannot. If, therefore, fair wages and reasonable living conditions cannot otherwise be provided, dividends must be deferred or the industry abandoned.

On the other hand, a business, to be successful, must not only provide for Labor remunerative employment under proper working conditions, but it must also render useful service to the community and earn a fair return on the money invested.

The adoption of any policy toward Labor, however favorable it may seem, which results in the bankruptcy of the corporation and the discontinuance of its work, is as injurious to Labor which is thrown out of employment, as it is to the public, which loses the services of the enterprise, and to the stockholders whose capital is impaired.

This plan is not a panacea; it is necessarily far from perfect, and yet I believe it to be a step in the right direction. Carefully as it has been worked out, experience will undoubtedly develop ways of improving it.

While the plan provides elaborate machinery which of itself ought to make impossible many abuses and introduce much that is constructively helpful, too strong emphasis cannot be put upon the fact that its success or failure will be largely determined by the spirit in which it is carried out.

The problem of the equitable division of the fruits of industry will be always with us. The nature of the problem changes and will continue to change with the development of transportation, of invention, and the organization of commerce.

The ultimate test of the rightness of any particular method of division must be the extent to which it stimulates initiative, encourages the further production of wealth, and promotes the spiritual development of men.

The Colorado Plan is of possible value in that State, and may prove useful elsewhere, because it seeks to serve continually as a means of adjusting the daily difficulties incident to the industrial relationship. It brings men and managers together, it facilitates the study of their common problems, and it should promote an understanding of their mutual interests.

Assuming, as we must, the fundamental fairness of men’s purposes, we have here possibly a medium through which the always changing conditions of industry may be from time to time more closely adapted to the needs, the desires, and the aspirations of men.

FOOTNOTE:

[1] NOTE.--This article, “Labor and Capital--Partners,” originally appeared in the _Atlantic Monthly_, January, 1916.

III

THE PERSONAL RELATION IN INDUSTRY[2]

Heretofore the Chief Executives of important industrial corporations have been selected largely because of their capacity as organizers or financiers.

The time is rapidly coming, however, when the important qualification for such positions will be a man’s ability to deal successfully and amicably with labor. Yet how to do this is a subject which, I fancy, is never taught or referred to in the classroom.

Like knowledge of the problems of sex, than which no department of life is more sacred, vital or deserving of full and ennobling instruction, an understanding of this subject is left to be acquired by experience, often costly or bitter, or through chance information, gleaned too frequently from ignorant and unreliable sources.

Just as the first of these two themes is coming to be taught sympathetically and helpfully in our schools and colleges, so I believe the second, the personal relation in industry, will eventually be regarded as an important part of those college courses which aim to fit men for business life.

After all, is it not the personal relations with one’s fellows which, when rightly entered into, bring joy and inspiration into our lives and lead to success, and which, on the other hand, if disregarded or wrongly interpreted, bring equally sorrow and discouragement and lead to failure?

Think what the ideal personal relation between a father and son may mean to both. Some of us have known such contact. Our lives have been fuller and richer as a result, freer from sin and sorrow. Others of us know from bitter experience what the absence of this relationship has involved.

How helpful to a student is such a friendly association with some professor who commands his confidence, respect and regard, and who is interested in his college work, not for itself alone, but quite as much because of its bearing on his future life’s usefulness.

What would college life be without the personal relationships which are formed during its happy days and often continued close and intimate through life?

Can you imagine a successful football team composed of strangers, having no points of contact, no sympathy with each other, no common cause inspiring them to strive for victory? Team play, the support of one player by another, would be well nigh impossible.

Even in the army, where formerly the man who had become the most perfect machine was regarded as the best soldier, it is coming to be accepted that in addition to being obedient and subject to discipline, the man who thinks, who is capable of acting on his judgment when occasion arises, who is bound to his fellow soldiers and his officers by personal friendliness, admiration and respect, is a far more efficient soldier.

And whereas formerly, particularly in the armies of Europe, privates were not allowed to have any personal association or contact with their officers, we learn that in the World War a spirit of comradeship was developed by the officers with their men off duty, which personal relationship was building up rather than weakening the morale of the armies.

What is true as to the relationships which I have mentioned is equally true in industrial relations, and personal contact is as vital and as necessary there as in any other department of life.

Let us trace briefly the history of the development of industry, that we may see where this personal relationship is present, where absent, and what is the effect of its presence or absence.

Industry in its earliest forms was as simple as it is complex to-day.

The man who provided the capital was frequently the director, president, general manager and superintendent of the enterprise, and in some instances actually worked with his employees. These latter were few in number. They were usually born and brought up in the same community with their employer, his companion in school days, his friends and neighbors, often calling him as he did them by their first names.

There was daily contact between employer and employee, and naturally if any questions or causes for complaint arose on either side, they were taken up at the next chance meeting and adjusted.

Next came the partnership, a development necessary because more capital was required than a single individual cared to or was able to provide. Two or more partners were thus associated together, but otherwise the situation was not materially different from that just described, except that more employees were required.

With the invention of the steam engine and its application to railroads, which quickly began to make their way over the face of the earth; with the development of the steamboat, replacing to so large an extent the old sailing vessels and making possible the regular and frequent transportation of the products of the soil and of industry from one part of the world to another; with the perfecting of the telegraph, cable and telephone, there came the need for larger aggregations of capital in order to carry on the ever expanding industries that were required to keep pace with this growth.

This led to the development of the corporation, the capital for which was supplied in larger or smaller amounts by few or many individuals, thus making possible almost indefinite financial expansion. And this form of business has continued to grow, as commerce and industry have become not only national but international and world wide in their extent, until we have to-day the United States Steel Corporation, with its 120,000 stockholders and its 260,000 employees.

It stands to reason that corporations of such magnitude have necessarily become highly specialized.

The responsibility of an individual stockholder in a corporation is of course in proportion to his interest, but the function of the stockholders in general consists in casting their votes each year for the election of directors to represent their interests.

The directors in turn are charged with the general responsibility of developing the policies of the corporation, some of which are matured by the officers, of selecting its officers and of seeing to it that the corporation is properly managed.

The officers as the executives of the company carry out the company’s policies and are charged with the actual operation of the company and the employment of labor.

As we contrast this gigantic organization with the simple form of industrial organization first described, it is at once apparent that in the very nature of the case the man who supplies the money seldom if ever comes in contact with the man who supplies the labor.

Here we note a marked and serious change. While deplorable, this situation is practically inevitable. Frequently the industry in which a stockholder has invested his capital is located in a far distant city. Not only this, but often investments are made in corporations which conduct business in other countries almost at the ends of the earth.

As a result of this lack of contact between Labor and Capital, the personal relationship has disappeared, and gradually a great gulf has grown up between the two, which is ever widening, so these two great forces have come too often to think that their interests are antagonistic, and have worked against each other, each alone seeking to promote its own selfish ends. This has resulted in the strike, the lockout and the various incidents of industrial warfare so regrettably common in this day and apparently on the increase.

Reports of the United States Bureau of Labor Statistics show that for the first eleven months of 1916 there were 3,134 strikes and lockouts in the industries of this country, as against only 1,147 for the corresponding period of 1915.

These industrial conflicts have in some instances come to be little short of civil war; vast sums of money have been lost by both sides, untold hardship and misery have followed in their wake.

The New York City street railroad strike of last summer (1916) is estimated to have cost the companies some four millions of dollars, not to mention the loss in wages borne by the employees or the losses sustained by the public.

Last summer[3] four hundred thousand railroad men, constituting the four brotherhoods, voted in favor of a strike on 225 American railroads. If the average pay of these men had been only $2.50 a day, which is considerably lower than the fact, such a strike would have meant a daily loss in wages of a million dollars, not taking into account the far greater loss to business and the inevitable inconvenience and distress which would have been brought, directly or indirectly, to the doors of the entire population.

I have not had access to data showing the cost to this country of strikes and lockouts. However, the following quotation from a recent address made by Mr. Frank A. Vanderlip, President of the National City Bank of New York, throws light on the subject. Mr. Vanderlip said:

The cost of the recent garment workers’ strike in New York City
has been estimated to be in the neighborhood of fifty million
dollars.

The last anthracite coal strike in the short course of five
months caused a loss of one hundred and twenty million dollars to
employers and employees in the community.

I have seen the statement that in a single year the losses that
could be attributed to labor disturbances in this country total
more than a billion dollars.

These are extraordinary figures, and though some of them are doubtless merely estimates, they serve to show what enormous proportions the industrial problem has assumed and how serious and vital a question it has become.

May I add that almost beyond belief as these figures are, they do not include those terrible mental and moral losses growing out of struggle and conflict, nor do they take account of the depleted bank balances of the workers, and the hunger, suffering and distress which extend into the homes and which touch the lives not only of those immediately concerned, but of tens of thousands of innocent women and children.

What I have said leads me to advance two ideas, both of which I believe to be profoundly true, but which have received far too limited consideration.

The first is that Labor and Capital are naturally partners, not
enemies.

The second, that the personal relation in industry, entered into
in the right spirit, gives the greatest promise of bridging the
yawning chasm which has opened up between employer and employee.

The mistaken point of view in regard to the relation between Labor and Capital exists on the part of both Labor and Capital, as well as among the interested and disinterested public.

Too often Capital regards Labor merely as a commodity to be bought and sold, while Labor not infrequently regards Capital as money personified in the soulless corporation.

It might seem that technically speaking both of these definitions could be justified, but they are far from being comprehensive and adequate. For both Labor and Capital are men--men with muscle and men with money. Both are human beings and the industrial problem is a great human problem.

This is one of the first things we need to recognize, and it is just because human nature is involved in this problem that it is so intricate and difficult to solve.

The popular impression that from the very nature of the case Labor and Capital are two great contending forces arrayed against each other, each striving to gain the upper hand through force, each feeling that it must arm itself in order to secure from the other its rights and its just dues, is even more unfortunate than it is untrue.

I cannot believe that Labor and Capital are necessarily enemies. I cannot believe that the success of one must depend upon the failure or lack of success of the other. Far from being enemies, these two factors must necessarily be partners.

Surely, their interests are common interests, the permanent well being of neither can be secured unless the other also is considered, nor can either attain the fullest possibilities of development which lie before both unless they go hand in hand.

Only when the industrial problem is approached from the point of view of a firm belief in this doctrine is there any hope of bringing about closer, more healthful and mutually advantageous relations between these two forces.

If, therefore, my first statement is true, namely that Labor and Capital are partners, then certain things must follow. They must have contact. This standing aloof one from the other must end.

Respect grows in the heart of each for the other, confidence is developed, and they come to realize that they are working with a common interest for a common result.

But this attitude, this relationship, is the personal relation in industry. Nothing else will take its place, nothing else will bridge the chasm of distrust and hatred.

It is the recognition of the brotherhood of man, of the principle of trying to put yourself in the other man’s place, of endeavoring to see things from his point of view. The old saying that honesty is the best policy is often scoffed at and pronounced unpractical, but there never was a truer saying. Honesty _is_ the best policy.

You may be able to deceive a man once or twice, or, if he is exceptionally gullible, half a dozen times, but you cannot deceive him indefinitely. You may be able to deceive a number of people sometimes, but you cannot deceive all of the people with whom you have business dealings all of the time. You may be able to make a contract which gives you an unfair advantage of the other man, but the chances are that you cannot do it twice.

From a purely cold-blooded business point of view, honesty _is_ the best policy. Likewise do I say that to treat the other man as you would have him treat you is an equally fundamental business principle.

This does not mean that you should surrender your rights or neglect to avail of your opportunities. It simply means that in the game of business, the same rules of sportsmanship should prevail as in a boxing bout, in a match of golf, or a football game.

Play fair and observe the rules. Let the contest be clean, gentlemanly, sportsmanlike, a contest always having regard for the rights of the other man.

Assuming, then, that the personal relation is a vital factor in successful industrial life, but recognizing the impossibility in this day of big business of reproducing it as it existed between employer and employee in the early days of industrial development, how can a like result be brought about, how can personal contact be established?

Granting that it is impossible for the stockholders of a great corporation, because of their number, because of their geographic relations, to come into frequent or even semi-occasional contact with their partners, the employees of a company; and that the situation is much the same with the directors--at least it is possible, and must be made increasingly so, for the leading representatives of the stockholders and directors, namely the officers of a corporation, to have such contact with the employees, special officers being appointed for that purpose alone if necessary. Because of the vast numbers of employees in many a company, even this is difficult and altogether too infrequent to-day.

As the officers of our great corporations come to see more and more that the problem of understanding their employees and being understood by them is a vital problem, one of the most important with which the management is confronted, they will be convinced not only of the wisdom of devoting far more time to such contact, but of the desirability and the advantage to themselves, and to the employees as well as to the company, of such closer relation and intimate conference in regard to matters of common interest and concern.

If we look into our own experience, we find that the misunderstandings which we have had with other men have been largely the result of lack of contact. We have not seen eye to eye.

Men cannot sit around a table together for a few hours or several days perhaps and talk about matters of common interest, with points of view however diverse, with whatever of misunderstanding and distrust, without coming to see that after all there is much of good in the worst of us and not so much of bad in most of us as the rest of us have sometimes assumed.

But someone says, “We grant the desirability of the personal relation in industry. Theoretically we accept your suggestion as to how this theory can be put into practice in the industrial life of to-day, but practically, will it work?”

I can best answer this question by saying that such a program has been put into operation in a certain coal company in Colorado, in which my father and I are interested and of which I am a director.

If you will pardon a personal reference, may I say that when I visited Colorado some eighteen months ago, I had the opportunity of talking personally with hundreds, if not thousands, of the employees of that company. These men and many of the people of Colorado had formed their opinion of anyone bearing the name of Rockefeller from what they had read and heard. Because of certain industrial disturbances which had developed in the State, bitterness and hatred had existed to a high degree.

As I went from camp to camp I talked with the representatives of the men individually and privately, I went into the men’s homes, talked with their wives and children, visited their schools, their places of amusement, their bathhouses, and had just such friendly relations with them as any man going among them would have had.

Frequently I found points of difference between the men and the officers, but in no single instance were the men as I met them other than friendly, frank and perfectly willing to discuss with me, as I was glad to discuss with them, any matters they chose to bring up.

It often occurred that there was justice in the points which they raised and their requests were acted upon favorably by the officers. Also frequently situations were presented in which it was impossible for the company to meet the views of the employees. But never was a subject dismissed until, if unable myself to make the situation clear, the highest officials of the company were called in to explain to the employee with the utmost fulness and detail the reasons why the thing suggested was impossible.

No matter presented was left without having been settled in accordance with the request of the employee, or, in the event of that being impossible, without his having been fully convinced that the position of the company was just and right and in the common interest.

This personal contact with the employees of the company led to the establishment of mutual confidence and trust and to the acceptance on their part of the premise that they and we were partners.

The men generally came to see that the man about whom they had heard was very different from the man whom they had met in their homes and at their work. While they distrusted the former, they believed in the latter. Before I left Colorado, a plan of industrial representation, providing for close personal contact between the duly elected representatives of the men and officers of the company, was worked out and adopted by a large majority vote of the employees.

This plan in substance aims to provide a means whereby the employees of the company should appoint from their own number as their representatives men who are working side by side with them, to meet as often as may be with the officers of the corporation, sometimes in general assembly, where open discussions are participated in and any matters of mutual interest suggested and discussed; more frequently in committees composed of an equal number of employees and officers, which committees deal with every phase of the men’s lives--their working and living conditions, their homes, their recreation, their religion and the education and well-being of their children.

In brief, the plan embodies an effort to reproduce in so far as is possible the earlier contact between owner and employee.

I do not venture to make any prediction as to the ultimate success of the plan. Two interesting side lights, however, may be mentioned.

The first is that whereas the plan itself and an agreement covering working and living conditions was adopted by the coal miners employed by this company some fifteen months ago--since that time the same plan and agreement, adapted to the particular requirements of the steel workers, and also of the iron miners employed by the company, has been adopted by both.

The second, while the company has reopened a number of mines formerly idle and is now working quite to the limit of its capacity in the production of coal, it has all the labor at its various mines which it requires, and that too without having made any special effort to attract labor to its recently reopened mining camps.

But there is a further reason why the personal relation in industry is of such vital importance, and that is in order that the attitude and purpose of the owners and directors of a company may be rightly understood by and interpreted to their partners, the employees, and vice versa; also that all grievances may be taken up and adjusted as they arise.

How true it is that when some petty representative of a great corporation makes a sharp trade with a customer, the customer at once says, “Obviously, the president of this corporation is a dishonest and unscrupulous man. It must be that he has directed his agents to pursue these sharp and crooked practices.”

However high-minded the owners or directors of a company may be, it is of the utmost difficulty to guard against such practices on the part of an occasional representative. But it is obviously just as unfair on such grounds to maintain that the owners and managers are unjust and crooked in their business methods, as it would be to say that the whole tree was bad simply because one apple on it had spots or imperfections.

The employee in any corporation must form his opinion of the owners and directors of the corporation from the petty officer or foreman with whom he has personal contact. Too often these men, not infrequently promoted from the ranks, become overbearing and arrogant in their treatment of those under them.

This very naturally is as irritating and unjust to the employee as it is distressing to the company, and it is at this point in ninety-nine cases out of a hundred where grievances arise.

The Colorado Industrial Plan to which I have referred has been so drawn as to guard against the exercise of arrogance or oppression, by providing various channels through which the employee with a grievance can at once secure a sympathetic and friendly hearing, carrying his difficulty to the president’s ear, if necessary.

The foreman who knows that any arbitrary or unjust action on his part may be reviewed by his superior officers is very much more careful in his treatment of his men, always wanting to avoid having his decisions reversed.

If a slight scratch made on the finger with a rusty nail is immediately cleansed with an antiseptic wash, it heals at once. On the other hand, if the poison which has been introduced is allowed to remain, soon inflammation sets in, the disorder spreads, and serious menace to life may result.

And so it is with the petty grievance. If it is dealt with sympathetically and justly, immediately it is made known, peace, harmony and good-will are readily maintained. On the other hand, if indifference is shown and lack of sympathy, the grievance is nursed and from it grows the industrial disorders which later become so acute and difficult to heal.

An ounce of prevention is worth much more than a pound of cure. In no place is this saying truer than in dealing with human nature.

If I were to sum up in a few words what I have been endeavoring to say to you in regard to the personal relation in industry, I should say, apply the Golden Rule.

Every human being responds more quickly to love and sympathy than to the exercise of authority and the display of distrust.

If in the days to come, as you have to do with labor, you will put yourself in the other man’s place and govern your actions by what you would wish done to you, were you the employee instead of the employer, the problem of the establishment of the personal relation in industry will be largely solved, strife and discord as between labor and capital will give place to coöperation and harmony, the interests of both will be greatly furthered, the public will be better served, and through the establishment of industrial peace, a great stride will have been taken toward the establishment of peace among nations.

FOOTNOTES:

[2] An address delivered at Cornell University on the occasion of Founder’s Day, January 11, 1917.

[3] 1916.

IV

REPRESENTATION IN INDUSTRY[4]

I speak as a member of the Public Group. I hold no executive position in any business corporation, and am not here representing any business interest.

I have come in response to the request of the President to accept appointment as one of the representatives of the general public in this Conference and am considering the questions which come before the Conference from that standpoint.

The resolution before the Conference is predicated upon the principle of representation in industry, which includes the right to organize and the right to bargain collectively. In supporting this resolution I beg leave to present the following statement which, for the sake of brevity and clearness, I have reduced to writing.

The experience through which our country passed in the months of war, exhibiting as it did the willingness of all Americans without distinction of race, creed or class to sacrifice personal ends for a great ideal and to work together in a spirit of brotherhood and coöperation, has been a revelation to our own people, and a cause for congratulations to us all. Now that the stimulus of the war is over, the question which confronts our nation is how can these high levels of unselfish devotion to the common good be maintained and extended to the civic life of the nation in times of peace.

We have been called together to consider the industrial problem. Only as each of us discharges his duties as a member of this Conference in the same high spirit of patriotism, of unselfish allegiance to right and justice, of devotion to the principles of democracy and brotherhood with which we approached the problems of the war, can we hope for success in the solution of the industrial problem which is no less vital to the life of the nation. Surely the men and women will stand together as unselfishly in solving this great industrial problem as they did in dealing with the problems of the war if only right is made clear and the way to a solution pointed out.

The world position which our country holds to-day is due to the wide vision of the statesmen who founded these United States and to the daring and indomitable persistence of the great industrial leaders, together with the myriads of men who with faith in their leadership have coöperated to rear the marvelous industrial structure of which our country is justly so proud.

This result has been produced by the coöperation of the four factors in industry: labor, capital, management and the public, the last represented by the consumer and by organized government.

No one of these groups can alone claim credit for what has been accomplished. Just what is the relative importance of the contribution made to the success of industry by these several factors and what their relative rewards should be are debatable questions. But however views may differ on these questions it is clear that the common interest cannot be advanced by the effort of any one party to dominate the other, to arbitrarily dictate the terms on which alone it will coöperate, to threaten to withdraw if any attempt is made to thwart the enforcement of its will. Such a position is as un-American as it is intolerable.

The personal relationship which existed in bygone days is essential to the development of this new spirit. It must be reëstablished; if not in its original form at least as nearly so as possible.

In the early days of the development of industry, the employer and capital investor were frequently one. Daily contact was had between him and his employees, who were his friends and neighbors. Any questions which arose on either side were taken up at once and readily adjusted. A feeling of genuine friendliness, mutual confidence and stimulating interest in the common enterprise was the result.

How different is the situation to-day! Because of the proportions which modern industry has attained, employers and employees are too often strangers to each other. Personal contact, so vital to the success of any enterprise, is practically unknown, and naturally, misunderstanding, suspicion, distrust and too often hatred have developed, bringing in their train all the industrial ills which have become far too common. Where men are strangers and have no points of contact, this is the usual outcome. Much of the strife and bitterness in industrial relations result from lack of ability or willingness on the part of both Labor and Capital to view their common problems each from the other’s point of view.

Representation is the principle upon which the democratic government of our country is founded. On the battlefields of France this nation poured out its blood freely in order that democracy might be maintained at home and that its beneficient institutions might become available in other lands as well.

Surely it is not consistent for us as Americans to demand democracy in government and practice autocracy in industry.

What can this Conference do to further the establishment of democracy in industry and lay a sure and solid foundation for the permanent development of coöperation, good-will and industrial well-being? To undertake to agree on the details of plans and methods is apt to lead to endless controversy without constructive result.

Can we not, however, unite in the adoption of the principle of representation, and the agreement to make every effort to secure the endorsement and acceptance of this principle by all chambers of commerce, industrial and commercial bodies and all organizations of labor?

Such action I feel confident would be overwhelmingly backed by public opinion and cordially approved by the Federal Government. The assurance thus given of a closer relationship between the parties to industry would further justice, promote good-will and help to bridge the gulf between Capital and Labor.

(_Resolution introduced by John D. Rockefeller, Jr., earlier in
the session, which was not debated or acted upon but superseded by
the resolution to which the foregoing remarks were addressed._)

WHEREAS, the common ground of agreement and action with regard to the future conduct of industry, with the development of a new relationship between Capital and Labor which the President sought in calling this Conference can only be discovered as we approach the problem in the spirit of justice, brotherhood, and of willingness to put one’s self in the other man’s place, the coming of which means the substitution of confidence for distrust, of good will for enmity, of coöperation for antagonism; and

WHEREAS, this spirit can be developed only by the resumption of personal relations between employer and employee or the nearest possible approach thereto; and

WHEREAS, some form of representation in industry is essential in order to make personal relations possible under modern industrial conditions;

Now Therefore be it

RESOLVED, that this Conference recognizes and approves the principle of representation in industry under which the employees shall have an effective voice in determining their terms of employment and their working and living conditions; and be it further

RESOLVED, that just what form representation shall take in each individual plant or corporation, so long as it be a method which is effective and just, is a question to be determined by the parties concerned in the light of the facts in each particular instance; and be it further

RESOLVED, that any form of representation to be adequate must include:

1. Ample provision whereby the stockholders and the employees through their respective representatives, shall give current consideration to matters of common interest such as terms of employment and working and living conditions;

2. Any such further provisions, if any, as may be necessary to insure the prompt uncovering of grievances, real or alleged, and their speedy adjustment.

FOOTNOTE:

[4] Remarks at National Industrial Conference, Washington, D. C., October 16, 1919.

V

TO THE EMPLOYEES[5]

This is a red-letter day in my life.

It is the first time I have ever had the good fortune to meet the representatives of the employees of this great company, its officers and mine superintendents, together, and I can assure you that I am proud to be here, and that I shall remember this gathering as long as I live.

Had this meeting been held two weeks ago, I should have stood here as a stranger to many of you, recognizing few faces. Having had the opportunity last week of visiting all of the camps in the southern coal fields and of talking individually with practically all of the representatives, except those who were away; having visited your homes, met many of your wives and children, we meet here not as strangers but as friends, and it is in that spirit of mutual friendship that I am glad to have this opportunity to discuss with you men our common interests.

Since this is a meeting of the officers of the company and the representatives of the employees, it is only by your courtesy that I am here, for I am not so fortunate as to be either one or the other; and yet I feel that I am intimately associated with you men, for in a sense I represent both the stockholders and the directors.

Before speaking of the plan of industrial representation to which our president has referred, I want to say just a few words outlining my views as to what different interests constitute a company or corporation.

Every corporation is made up of four parties: Stockholders, directors, officers and employees.

This little table (_exhibiting a square table with four legs_) illustrates my conception of a corporation; and there are several points in regard to the table to which I want to call your attention.

First, you see that it would not be complete unless it had all four sides. Each side is necessary; each side has its own part to play.

Now, if you imagine this table cut into quarters, and each quarter separated from the others, what would happen? All of them would fall down, for no one could stand alone, and you would have no table. But when you put the four sides together, you have a useful piece of furniture; you have a table.

Then, secondly, I call your attention to the fact that these four sides are all perfectly joined together; that is why we have a perfect table. Likewise, if the parties interested in a corporation are not perfectly joined together, harmoniously working together, you have a discordant and unsuccessful corporation.

Again, you will notice that this table is square. And every corporation to be successful must be on the square--absolutely a square deal for every one of the four parties, and for every man in each of the four parties.

I call your attention to one more thing--the table is level. Each part supported by its leg is holding up its own side, hence you have a level table. So, equal responsibility rests on each one of the four parties united in a corporation.

When you have a level table, or a corporation that is on the level, you can pile up earnings on it (_piling coins on the table_). Now, who gets the first crack at the earnings? You know that we in New York don’t.

Here come along the employees, and first of all they get their wages (_removing some of the coins_), every two weeks like clockwork, just what has been agreed on; they get the first chance at the pile.

You men come ahead of the president, the officers, the stockholders and directors. You are the first to put a hand into the pile and take out what is agreed shall belong to you.

You don’t have to wait for your share; you don’t have to take any chances about getting it. You know that there has never been a two-weeks’ period that you have worked when you have not been able to get your pay from this company; whatever happens, so long as the company is running, you get your pay.

And then the officers and superintendents come along, and they get theirs; they don’t get it until after you have gotten yours (_removing more coins_).

Then come the directors, and they get their directors’ fees (_removing the balance of the coins_) for doing their work in the company.

And, hello! There is nothing left! This must be the Colorado Fuel and Iron Company! For never, men, since my father and I became interested in this company as stockholders, some fourteen years ago--never has there been one cent for the common stock.

For fourteen years the common stockholder has seen your wages paid to you workers; has seen your salaries paid to you officers; has seen the directors draw their fees, and has not had one cent of return for the money that he has put into this company in order that you men might work and get your wages and salaries.

How many men in this room ever heard that fact stated before? Is there a man among you? Well, there are mighty few among the workers who have heard it.

What you have been told, what has been heralded from the Atlantic to the Pacific, is that those Rockefeller men in New York, the biggest scoundrels that ever lived, have taken millions of dollars out of this company on account of their stock ownership, have oppressed you men, have cheated you out of your wages, and “done” you in every way they could.

That is the kind of “dope” you have been getting, and that is what has been spread all over the country. And when that kind of talk was going on, there were disturbances in this part of the country because the four sides of this table were not square and the table was not level, there were those who in the streets of New York and in public gatherings, were inciting the crowd to “shoot John D. Rockefeller, Jr., down like a dog.” That is the way they talked.

The common stockholders have put $34,000,000 into this company in order to make it go, so that you men will get your wages, you officers have your salaries, and the directors get their fees, while not one cent has ever come back to them in these fourteen years.

If there is anyone who questions that statement, let him speak. Now, let me put it to you men, is it fair, in this corporation where we are all partners, that three of the partners should get all of the earnings, be they large or small--all of them--and the fourth nothing?