time the total compensation received by the employee would equal only the amount previously received by him as wages, is a very grave question, and one so grave that it is hardly to be supposed that the Commonwealth would care to make any scheme of profit sharing compulsory, no matter what the inducements held out by the bill might be. But, as has been stated, the author of the bill before us has asked to substitute a measure in which the compulsory feature is abandoned, and a system of voluntary profit sharing established under State supervision and control.* Its provisions, in general, are similar to those of the compulsory bill, and elaborate arrangements are proposed for an equitable administration of the law, as also for the extension of its benefits to partnerships as well as to corporations. Without criticising these provisions in detail, it appears to the committee that many of them might prove cumbersome or impossible in practice. The proposal for only a limited liability to creditors in the case of partnerships under the substitute, and that exempting employers who accept it from the operation of the Employers' Liability Act, may be mentioned as especially open to objection. Any provision which, for the sake of a readjustment of wage rates, modifies in any way the legal liability of any person, would prove a hindrance rather than a help in securing improved relations between employer and employee. We recognize fully the useful intent of the bill, and also the disinterested zeal with which it has been favored, but we are unable to regard it as a practical measure. Our adverse conclusion is strengthened by the fact that the bill adds nothing to the powers already existing for the establishment of systems of profit sharing between every employer and his employees if both parties so desire, as mutual agreement may now give every advantage which the cumbersome machinery of State supervision is intended to secure. In the past, all legislation which has had any positive relation to the establishment either of rates of wages or of prices has worked to the injury of the public. Profit sharing has an excellent moral effect where each party is quite ready to * See Appendix No. 1. recognize the conditions of production and the interests of the other; but as a complete solution of the wage question it is not believed that it can be generally effective. The committee therefore does not recommend the passage of the bill.* The bill, House, No. 543, which we have already discussed in its relation to profit sharing, provides also for an industrial court. It is proposed in this measure that a court shall be established, to consist of a chief justice and two associate justices, to be appointed by the Governor, with power lodged in such court to appoint the ordinary court officers. The creation of the court is suggested with a twofold object. In the first place, the court is to be given original jurisdiction to decide certain questions arising under the operation of the proposed profit-sharing law, already discussed. These questions include the determination of the prevailing rates of wages and of interest, and the fair value of the capital used in the business. Regarding this class of functions, it need only be said that, as we have already disapproved of the profit-sharing provisions of the bill, it is obvious that as to the points just enumerated we cannot recommend the establishment of such a court. But the bill now under discussion gives to the proposed court jurisdiction also in another class of subjects, and is intended to provide for the determination by the court of almost any kind of labor question, if a petition to such effect is brought either by ten or more employees of a given employer, or by the employer himself, or by the Governor of the Commonwealth, the mayor of a city or the selectmen of a town in which an industrial dispute exists. These functions of the proposed court are substantially the same as the powers now lodged in the State Board of Conciliation and Arbitration, with the exception that the Board is required to adjudicate such cases only when petitioned to do so by one or more of the actual parties to the controversy (R. L., c. 106, §§ 3, 4). We do not believe that the proposed addition of the prin * See Appendix No. 2 for State laws relating to profit sharing. ciple of petition, looking to a binding arbitration, by the public authorities, regardless of the wishes of both parties to an entirely private controversy, is in full accord with sound public policy. Arbitration, to be arbitration at all, must be a voluntary act of the parties in interest; if it be not voluntary, then it must be subject to all the methods of procedure under an ordinary process at law. Compulsory arbitration is a contradiction in terms; and, while we do not desire to lay undue stress upon a verbal distinction, we consider that the common use of such a phrase in this connection is likely to do much to diffuse an actually incorrect idea of the very nature of arbitration. In this country compulsory settlement of labor troubles has not been thought to be in accordance with that full respect for individual liberty upon which all our legal practice has been based. Few countries have attempted to put into practice plans of compulsory settlement. Those which have done so are New Zealand and New South Wales, and the experience there has excited wide attention. There is a fair concurrence of testimony that, so far as those countries have gone in the matter, the results of the plan have fairly equalled expectations. It should be borne in mind, however, that the industrial conditions of the colonies mentioned, differ radically from those prevailing in this country; and their experience under compulsory arbitration laws, so called, has been as yet so brief, that to draw a positive conclusion as to the applicability of their labor legislation to our far more complex conditions would, to say the least, be unsafe. An award of an industrial court which could not be enforced would be worse than no award at all, and would go far to discredit the administration of justice, together with the whole principle of arbitration. It is not to be imagined that under the Constitution of the United States any court of last resort would attempt to enforce specific performance by employer or employee of the terms of an industrial settlement involving personal services.* New South Wales stands alone in this matter of requiring actual performance of the decree, New Zealand contenting herself with the im * See Appendix No. 3. position of damages in behalf of the injured party in the event of failure of either side to observe the award of the court. We think it is clear that this latter course is as far as an American court could or would go in the practical enforcement of so-called compulsory arbitration; and we believe that compulsion in such form would inevitably in many cases fail of its object, and embitter still further the feeling of the original parties to the controversy. It would therefore do much to bring the present extensive and beneficial use of voluntary arbitration into disrepute. The representatives of both employers and employees appearing before the committee were emphatic in their opposition to any scheme of compulsory arbitration, although the author and some of the supporters of the bill providing for an industrial court gave testimony in favor of such compulsory proceedings as the bill provided. In Massachusetts the work of arbitration is by statute entrusted to a State Board, whose functions, though difficult and delicate, have been increasingly useful. We consider that in the matter of labor difficulties this increasing voluntary use of the principle of arbitration is of great promise for the future, and that the State, in providing efficient machinery for the carrying out of the wishes of the parties to a controversy who may desire to arbitrate their differences, is performing invaluable service. Everything should be done to maintain and increase the efficiency of the Board provided by the State for the purposes of arbitration, and to encourage and make easy the submission of industrial differences to it. Whether substitution of the form of an industrial court for the Board as at present constituted would lead to a larger and a more general use of the opportunity afforded is purely a practical question, and may admit of doubt. The committee sees no reason to suppose that the change to judicial form would increase the confidence now felt by the public in the present Board of Arbitration, or increase the number of cases submitted for adjudication. We recommend, rather, the continuance of the present Board, with such modifications in the statutes relating thereto as may seem directly to increase its dignity and usefulness, as well as the simplicity and ease of method in the submission of matters brought before it. Believing, as we do, that purely judicial enforcement of any decree which could be rendered under a system of compulsory arbitration would be impracticable at the present time in Massachusetts, it would appear that the effectiveness of such decree would depend almost entirely upon the force of public opinion. While it is true that the courts could hardly attempt to lay down conditions of labor and compel an employer to carry on his business under the terms laid down, or the employee to give his services against his will, it may be conceived that in many instances the decision of the court would have a weight before the public as to the merits of the controversy, so great as to go far towards securing the settlement of the case. It is obvious that controversies do from time to time arise whose effect upon the public interest is so momentous as to make the public to all intents and purposes a third party to the controversy. This is especially true where the difficulties in question involve the production or distribution of the necessaries of life or the transportation of the people. In such instances we are far from believing that the State should be precluded from some form of intervention by a reluctance, however justifiable in principle, to interfere in private disputes. We are of the opinion, however, that compulsory investigation on the part of the State, supplemented by a public finding as to the merits of the case, will accomplish the object, through its appeal to the public, fully as effectively, and without the objectionable interference with private rights and the often futile attempt at judicial enforcement which must characterize the attempt at arbitration under compulsion. Such investigation in cases where the controversy is such as to threaten the public interest is already provided for by the statutes of Massachusetts, and furnishes an important part of the duties of the State Board of Conciliation and Arbitration. The statute creating that Board provides in section 2 as follows: If it appears to the mayor of a city or to the selectmen of a town that a strike or lockout described in this section is seriously 1 |