CHAPTER XXXVIII

THE STRIKE VERSUS COMPULSORY ARBITRATION

Recent Strikes of Greater Magnitude. The Interests of the Public. Compulsory Arbitration Proposed as a Remedy. Compulsory vs. Voluntary Arbitration. Compulsory Arbitration Means State Control. Corrupt vs. Honest Government. Contrast between New Zealand and the United States of America. Compulsory Arbitration in New Zealand. Conciliation Board and Arbitration Court. Methods of Procedure. The Recognition of the Unions. Preferential Treatment of Unionists. Compulsory Arbitration and Rising Wages. Why Compulsory Arbitration can not be Generally Adopted in the United States. Possible Exceptions.

AS

S long as employers were many and unions of employees few, as long as strikes were carried on in a small way and with purely local effect, the theory prevailed that a strike was a matter of importance to the contestants only. It was believed that employers were right to buy labor as cheaply as possible and employees were right to sell their labor as dearly as possible. The haggling over the price of labor might cause a temporary cessation of work, just as a merchant and his customer might spend time in haggling over the price of a coat or a spade. The best interests of the community, it was assumed, would be subserved by permitting employer and employee to fight the matter out to their own satisfaction.

With the growth of large labor unions, however, and with the increase in the resources of individual employers and groups of employers, the interest of the public in these industrial conflicts became more vital. It was soon felt that in many strikes the public suffered more acutely than either contestant. For instance, during the recent coal strike both operators and miners commanded sufficient resources to enable them to hold out almost indefinitely, while the public would have suffered irreparable injury and untold hardship, had the strike lasted but two or three months longer. A strike of a month's duration upon all the railroads centering in Chicago

would not, perhaps, affect the bonds and stocks of the corporations more seriously than a complete failure of the crops, and the workmen themselves could bear the strain quite easily. Long before the month had elapsed, however, the country would be in the throes of a frighful crisis, and steps would probably be taken by the state or national government to put an end to a contest in which the interest of the public was not only as great as, but infinitely greater than, that of either combatant.

The only infallible remedy against strikes and lockouts is sometimes held to be the adoption of compulsory arbitration. By this is meant an obligation imposed upon employers and employees to submit their differences to an official tribunal and abide by its decision. There are, of course, other ways of avoiding strikes, but no other method, it is held, can be considered a specific. Conciliation or an attempt to avoid strikes by conferences between the two parties, with or without the intervention of a third, is frequently successful in obviating misunderstandings and preventing strikes. The same is true of voluntary arbitration, or the submission of the matter in dispute to an impartial tribunal by both parties to the controversy.

Voluntary arbitration is entirely different in its effects from compulsory arbitration. In many cases of actual industrial conflict the weaker party to a controversy is inclined to submit the matter to arbitration, while the stronger party will have nothing to do with it and says "there is nothing to arbitrate." Consequently, voluntary arbitration, while in many case a vast improvement over striking, and preferable to it, is often neither more nor less than the victory of the stronger over the weaker party to the contest; that is to say, the decision is frequently given to the side that would have won, and in proportion to what it would have won, had the issue not been submitted to arbitration, but been fought to the end through a strike or a lockout. Of course, there are many instances of voluntary arbitration in which a decision has been reached without reference to, and uninfluenced by, either the numerical or the financial strength of the contestants; although, generally speaking, what is called voluntary arbitration is resorted to only when one side is strong enough to compel the other to submit to it, or when

public sentiment becomes so thoroughly aroused that arbitration is practically forced upon the belligerents. Compulsory arbitration, on the other hand, introduces a new element-the power of the State. It is binding upon both parties irrespective of their comparative strength, and the decision or award is not in accordance with the strength or weakness of the employees, but with the wishes and purposes of the State, which compels the arbitration. Compulsory arbitration is, therefore, apart from all other questions, largely a matter of the strength, stability, wisdom, impartiality, and honesty of the government; and the experience of honest governments with compulsory arbitration cannot be conclusively cited for countries with corrupt governments or vice versa.

In the present chapter it is proposed to describe the workings of the compulsory arbitration laws passed in 1894 in the Australasian Colony of New Zealand and subsequently adopted by New South Wales and Western Australia. The author of the New Zealand law was the Honorable William Pember Reeves, Minister of Labor, and the law has been one of the most widely discussed measures ever passed by any legislature or Parlia

ment.

The agitation in New Zealand for some form of arbitration law dates from 1890. In that year there occurred the Maritime Strike, a labor conflict which spread sympathetically from the shipping world to all forms of industry in Australasia and practically divided the society of the continent into two hostile camps. In order to obviate experiences of this sort in the future, the New Zealand Minister of Labor made a special study of efforts to avoid strikes in England, France, Germany, and the United States, and finally came to the conclusion that neither conciliation nor voluntary arbitration would suffice, but that the only practicable remedy for his country was compulsory arbitration. Attempts to secure the passage of a compulsory arbitration law failed in 1892 and 1893, but were successful in 1894, when a bill providing for compulsory arbitration passed the colonial Parliament.

The law as passed in 1894, and as subsequently amended, applies only

to those industries wherein trade unions are established, but permits a trade union to be formed in any industry by the action of any seven workmen. The law does not in any way hinder conciliation or prevent voluntary arbitration, and only after conciliation has been exhausted is resort had to compulsory arbitration. The obligation to arbitrate, however, is final and conclusive whenever the two parties do not come to an agreement voluntarily, and a breach of the award may, in the discretion of the Arbitration Court, be visited by fine or imprisonment.

The method of procedure in New Zealand is as follows: there is in each of the seven districts into which the colony is divided a Board of Conciliation composed of from four to six men chosen by the unions and by the associations of employers, together with a chairman elected by all, who is usually an outsider and casts the deciding vote. There is only one Court of Arbitration for the country, this court consisting of three persons appointed by the governor for three years. Of these three members one is a judge of the Supreme Court, and the others, nominees of the unions and of the employers respectively. In cases of unusual difficulty, or requiring exact and technical knowledge, two experts may be chosen, one from each side. From the Board of Conciliation an appeal always lies to the Court of Arbitration, but the action taken by the Court of Arbitration is final and without appeal. "No award or proceeeding of the court," says the act, "shall be liable to be challenged, appealed against, reviewed, quashed, or called in question by any Court of Judicature on any account whatsoever."

Neither the Board of Conciliation nor the Court of Arbitration may take the initiative in any dispute between employers and employees, but each acts only when called upon by one or the other of the parties. This, however, does not detract from its powers, since any single aggrieved employee may bring the matter in controversy before the Board and ultimately before the Court and secure an award. These awards, moreover, are made binding not only upon the particular employer or association of employers involved, but also upon all employers in the same district or even in the

entire colony. The court thus establishes uniform rules for the whole industry for the period of one, two, or three years.

The scope of the Court of Arbitration in making such general or common rules is not limited. Since 1894 the act, which was originally intended chiefly to prevent strikes, has been extended continually in its scope and jurisdiction, until it is now used as a means of establishing minimum rates of wages, maximum number of hours, and such general conditions of labor as the relations of union to non-union men, the use of safety appliances, the prohibition or permission of Sunday work, and regulations for the health of workers. The court, according to the act as amended, is allowed to settle all disputes about industrial matters, by which are meant "all matters affecting or relating to work done or to be done by workers, or the privileges, rights and duties of employers or workers in any industry, not involving questions which are or may be the subject of proceedings for an indictable offense." Besides other matters, the court has jurisdiction over wages, allowances or remuneration of workers; piece prices; hours of employment; sex, age, and qualifications of workers; modes, terms and conditions. of employment; employment of children or young persons or of any other class of persons; dismissal or refusal to employ particular persons or classes of persons; preference of union over non-union men, together with all established customs or usages in an industry, whether in the whole colony or in a particular district. The commission thus practically has power to decide all questions relating to the wage contract and practically to legislate for existing factories as well as for those to be established during the life of an award.

The law not only prevents strikes or lockouts during the time of the award, but prevents recourse to such measures when made for the purpose of escaping the jurisdiction of the court. No man may discharge his employees on the eve of their appeal to the Board of Conciliation, and a strike may not be called for a similar purpose. There is no compulsion upon any workingman to join a union, but if he does join he may leave it only upon three months' notice. One of the most interesting phases of the awards