Part 6

However, the use of steam and electricity, resulting in the development of large-scale industry with its attendant economies and benefits, has of necessity erected barriers to personal contact between employers and men, thus making it more difficult for them to understand each other.

In spite of the modern development of Big Business, human nature has remained the same, with all its cravings, and all its tendencies toward sympathy when it has knowledge and toward prejudice when it does not understand. The fact is that the growth of the organization of industry has proceeded faster than the adjustment of the interrelations of men engaged in industry.

Must it not be, then, that an age which can bridge the Atlantic with the wireless telephone, can devise some sort of social X-ray which shall enable the vision of men to penetrate the barriers which have grown up between men in our machine-burdened civilization?

Assuming that Labor and Capital are partners, and that the fruits of industry are their joint product, to be divided fairly, there remains the question: What is a fair division? The answer is not simple--the division can never be absolutely just; and if it were just to-day, changed conditions would make it unjust to-morrow; but certain it is that the injustice of that division will always be greater in proportion as it is made in a spirit of selfishness and shortsightedness.

Indeed, because of the kaleidoscopic changes which the factors entering into the production of wealth are always undergoing, it is unlikely that any final solution of the problem of the fair distribution of wealth will ever be reached. But the effort to devise a continually more perfect medium of approach toward an ever fairer distribution must be no less energetic and unceasing.

For many years my father and his advisers had been increasingly impressed with the importance of these and other economic problems, and with a view to making a contribution toward their solution, had had under consideration the development of an institution for social and economic research.

While this general subject was being studied, the industrial disturbances in Colorado became acute. Their many distressing features gave me the deepest concern. I frankly confess that I felt there was something fundamentally wrong in a condition of affairs which made possible the loss of human lives, engendered hatred and bitterness, and brought suffering and privation upon hundreds of human beings. I determined, therefore, that in so far as it lay within my power I would seek some means of avoiding the possibility of similar conflicts arising elsewhere or in the same industry in the future. It was in this way that I came to recommend to my colleagues in the Rockefeller Foundation the instituting of a series of studies into the fundamental problems arising out of industrial relations. Many others were exploring the same field, but it was felt that these were problems affecting human welfare so vitally than an institution such as the Rockefeller Foundation, whose purpose, as stated in its charter, is “to promote the well-being of mankind throughout the world,” could not neglect either its duty or its opportunity.

This resulted in securing the services of Mr. W. L. Mackenzie King, formerly Minister of Labor in Canada, to conduct an investigation “with a special view,” to quote the language of an official letter, “to the discovery of some mutual relationship between Labor and Capital which would afford to Labor the protection it needs against oppression and exploitation, while at the same time promoting its efficiency as an instrument of economic production.”

In no sense was this inquiry to be local or restricted; the problem was recognized to be a world-problem, and in the study of it the experience of the several countries of the world was to be drawn upon. The purpose was neither to apportion blame in existing or past misunderstandings, nor to justify any particular point of view; but solely to be constructively helpful, the final and only test of success to be the degree to which the practical suggestions growing out of the investigation actually improved the relations between Labor and Capital.

With reference to the situation which had unfortunately developed in Colorado, it became evident to those responsible for the management of one of the large coal companies there--the Colorado Fuel and Iron Company, in which my father and I are interested--that matters could not be allowed to remain as they were. Any situation, no matter what its cause, out of which so much bitterness could grow, clearly required amelioration.

It has always been the desire and purpose of the management of the Colorado Fuel and Iron Company that its employees should be treated liberally and fairly.

However, it became clear that there was need of some more efficient method whereby the petty frictions of daily work might be dealt with promptly and justly, and of some machinery which, without imposing financial burdens upon the workers, would protect the rights, and encourage the expression of the wants and aspirations of the men--not merely of those men who were members of some organization, but of every man on the company’s payroll.

The problem was how to promote the well-being of each employee; more than that, how to foster at the same time the interest of both the stockholders and the employees through bringing them to realize the fact of their real partnership.

Long before the Colorado strike ended, I sought advice with respect to possible methods of preventing and adjusting such a situation as that which had arisen; and in December, 1914, as soon as the strike was terminated and normal conditions were restored, the officers of the Colorado Fuel and Iron Company undertook the practical development of plans which had been under consideration.

The men in each mining camp were invited to choose, by secret ballot, representatives to meet with the executive officers of the company to discuss matters of mutual concern and consider means of more effective coöperation in maintaining fair and friendly relations.

That was the beginning, merely the germ, of a plan which has now been developed into a comprehensive “Industrial Constitution.” The scheme embodies practical operating experience, the advice and study of experts, and an earnest effort to provide a workable method of friendly consideration, by all concerned, of the daily problems which arise in the mutual relations between employer and employees.

The plan was submitted to a referendum of the employees in all the company’s coal and iron mines, and adopted by an overwhelming vote. Before this general vote was taken, it had been considered and unanimously approved by a meeting of the employees’ elected representatives. At that meeting I outlined the plan, which is described below, as well as the theory underlying it, which theory is in brief as follows:

Every corporation is composed of four parties: the stockholders, who supply the money with which to build the plant, pay the wages, and operate the business; the directors, whose duty it is to select executive officers carefully and wisely, plan the larger and more important policies, and generally see to it that the company is prudently administered; the officers, who conduct the current operations; and the employees, who contribute their skill and their work.

The interest of these four parties is a common interest, although perhaps not an equal one; and if the result of their combined work is to be most successful, each must do its share. An effort on the part of any one to advance its own interest without regard to the rights of the others, means, eventually, loss to all.

The problem which confronts every company is so to interrelate its different elements that the best interests of all will be conserved.

The industrial machinery which has been adopted by the Colorado Fuel and Iron Company and its employees is embodied in two written documents, which have been printed and placed in the hands of each employee. One of these documents is a trade agreement signed by the representatives of the men and the officers of the company, setting forth the conditions and terms under which the men agree to work until January 1, 1918, and thereafter, subject to revision upon ninety days’ notice by either side.

This agreement guarantees to the men that for more than two years, no matter what reductions in wages others may make, there shall be no reduction of wages by this company; furthermore, that in the event of an increase in wages in any competitive field, this company will make a proportional increase.

The agreement provides for an eight-hour day for all employees working underground and in coke ovens; it insures the semi-monthly payment of wages; it fixes charges for such dwellings, light, and water, as are provided by the company; it stipulates that the rates to be charged for powder and coal used by the men shall be substantially their cost to the company.

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: