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The Pamphlet Collection of Sir Robert Stout: Volume 62

Annual Meeting

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Annual Meeting.

The President, in moving the adoption of the report and balance-sheet, said—Gentlemen—In moving the adoption of the report and balance-sheet submitted by the Committee, I desire with your kind permission to take advantage of the license usually accorded a retiring President to make a few remarks. You will kindly understand that what follows is not spoken in the name of the Committee, and if I should say anything with which you disagree, you will remember that the Committee is not involved in the responsibility therefor. In arranging the few matters on which I propose to address you, I have endeavored to keep on broad and general ground, and to avoid any local allusions or detailed references such as might lead to bitterness of feeling, either between the members of this Association or between us and the public. But I have thought it desirable that at the end of our first year's history, I should endeavor, very briefly, to review the causes that have led to the more or less masked antagonism between employer and workman—or, as it is sometimes falsely put, between capital and labor—which undoubtedly exists to-day the world over, and to criticise some of the proposed remedies for this unsatisfactory state of things; and I trust I may be able to state the case fairly and in such a way as to interest without over-wearying you.

Mr James Bryce, an English M.P., pronounces this latter part of the nineteenth century "an age of discontent," and Mr Gladstone declares it to be the "age of the working man." It seems to me that in these two dicta are summed up the roots of the movements which have so troubled the world of late years, and which chiefly arise from a desire on the part of the labouring classes for an improvement or amelioration in the conditions of their existence. To say that this is an ace of discontent is not to imply that the "divine" quality has been entirely lacking in mankind in previous centuries. The world must have been very young when the first poor man, lying at the first rich man's gate, pondered querulously the unequal fate which had laden his neighbour with luxury and wealth while he was left stranded, a pensioner on the bounty of his fellows. And in no period during historical times has the philosopher, politician, or humanitarian, been wanting, to bewail the seeming injustice involved in the unequal distribution of wealth.

But the discontent of to day has a character of its own, derived both from past causes and from recently discovered grievances and needs. The political history of the past forty years records the destruction of many evil, hidebound institutions. There has been a distinct gain in political liberty, in freedom of thought and speech, and an immense enlargement of the field of human activities. But these reforms have not yet yielded the fruit that was expected of them, or rather not to the extent that was anticipated. For instance, forty years ago England adopted a policy of free trade, and the immediate results were brilliantly successful. The Great Manchester Gospel of Commerce was vaunted forth as the evangel which was to introduce heaven upon earth, abolish war, and establish universal peace and happiness; and it was confidently anticipated that the conversion of the rest of the world to freetrade was only a question of a very few years. But these high hopes have been dashed to the ground, and to-day England stands almost alone in adherence to free-trade principles, nation after nation, and even colony after colony having adopted protectionist policies. Freedom of government and national independence have not resulted in a "finer type of civilisation," better moral sentiment, wiser legislation, improved social conditions-or at least progress on these lines has fallen short of what was hoped for; and hence a feeling of unrest, discontent with the present and distrust of the future, is prevalent among all classes.

But particularly is this noticeable among the working classes, who now form the political, as they have always formed the numerical, majority. Modern developments in democracy have taught the masses their power. They have been quick to learn the lessons of combination and organisation, and lacking the liberal education which should have been the forerunner of the extension of the franchise, have been deluded by a false interpretation of the meaning of democracy into an abiding belief that all virtue, all truth, all justice reside in the majority. Dreams of a perfect state of liberty, equality and fraternity have been revived, and have crystallised around a somewhat vague and shadowy theory of collectivist or communistic Socialism, which is now supposed to offer a panacea for all page 5 social and political ills. This theory has been, and is, upheld by some, no doubt, on genuinely humanitarian grounds, by others for sentimental reasons, but it has been seized upon by the masses as gratifying their passions of envy and greed, and giving promise of ease without exertion, happiness without sacrifice. And so the destructive process seems in a fair way of going on, instead of a sound constructive course being adopted. In a certain old romance the hero is represented as praying J earnestly that the heavens might fall—not because he wished to put an end to his own miserable existence, nor because he desired to involve his enemies with himself in a common destruction, but in order that he might catch the little larks. Some of the recent phases of modern destructivism seem to be about on a par in wisdom with j this interesting petition. Certain so-called reformers are apparently quite ready to undertake the destruction of the social fabric if only their own views can be put into practice and their own ends gained, having not the foresight to perceive that they themselves, their aspirations, and the classes they seek to benefit, will surely be overwhelmed in the ruins. The democratic feeling has asserted itself in a revolt of the working man majority against what they consider the aristocracy of the capitalist and employing class. It may be quite fairly contended that justification is lacking for the continuous cry for shorter hours and higher wages. It may be clearly proved that during the last half century the rate of wages has risen considerably and the cost of living fallen, so that to-day the laborer is 50 per cent, better off than fifty years ago. It may also be shown that in the same period the rates of interest and profits have fallen almost, if not quite, to an equal degree. Yet it is not to be denied that the enormous increase of wealth has apparently benefited the capitalist class chiefly, and that the above contention seems to be, in a measure, disproved by the rapid accumulations of wealth in private hands. It is only on closer investigation that the truth is learned, that the benefits have really been fairly apportioned as between class and class, and that, if anything, the workmen have had the lion's share; that the gains to the latter are less easily observed because they are widely diffused, whereas the successes among employers are comparatively rare and thereby acquire prominence.

It seems to be implied that the struggle for existence is more keen between employers than between the two classes. One writer estimates that of one hundred business men, ten succeed, fifty vegetate and forty fail. And if this is true it should surely not require pressure from below to cause employers to look earnestly into the matter and endeavor to re-adjust conditions so as to ensure a more equitable division of results. The influences at work have already indeed produced an effect in bringing about amalgamations, companies, syndicates, with a view to securing the advantages of aggregated capitals and minimised working expenses, and this process is now rapidly going on. But it is, after all, only a temporary relief, a phase in development which must, sooner or later, reach a terminal point beyond which it cannot be pushed profitably, and then the tale will be repeated. The laborer will continue to exert pressure on the employer, and the margin of profit will be increasingly difficult to maintain.

The spirit of discontent operating among the working classes has, perhaps, received an impulse in the direction of collectivism from the example of the company-forming tendency manifest among employers, But the prevailing bent towards Socialism is, more probably, merely the natural assertion of the democratic spirit pushed to a false extreme by the influence of sentimental reformers or agitating adventurers. The pendulum of human affairs sways this way and that. Progress is not made in a straight line but in a spiral. To quote from Herbert Spencer, "There is nowhere a balanced judgment and a balanced action, but always a cancelling of one another by opposite errors." Antagonistic forces tend to carry society to extreme Conservativism on the one hand, or to extreme Radicalism, which is revolutionism or anarchy, on the other. There is falsehood in both extremes. Weakness and ignorance are drawn by one or the other of the conflicting attractions. True strength and intelligence stand firm, and all real progress is made on the middle course.

True democracy, if it aims at anything, aims at the liberation of the individual, not his enslavement. It would place the control of public affairs in the hands of the people, in order that they might have it in their power to rid themselves of unjust burdens and irritating restrictions, and afford free play for the development of their individual aptitudes and the working out of their individual destinies. The modern revolutionist would convert the State into a prison yard and democracy into "a bludgeoning of the people, by the people, for the people," as Mr Oscar Wilde puts it.

Socialism, in the abstract, is a destructive criticism of existing political and social systems, and on its constructive side—if it can be said to have one—aims at page 6 ensuring to every individual a fair reward for his labor. This latter is ideally just, although difficulty would probably arise, as now, in deciding what should constitute a "fair reward." But the Socialism embodied in State ownership of all land and capital and State control of all labor, is nothing short of industrial tyranny with all the defects of individual or class despotism intensified. It would destroy all incentive to exertion—except so far as this might be provided in the inspector's whip. It would crush out of existence the energetic individualistic virtues which, in spite of the evils of competition—or perhaps by reason of them—have been the real sources of our national development in empire, in commerce, in art, as well as in intelligence and morality. If it could so far override nature as to induce any kind of equality at all, it would induce an equality of degradation and poverty. If it could influence human nature at all, human nature of which the present competitive system is the outgrowth and expression, it would not regenerate, but degenerate, it into a condition approaching that which obtained among primeval tribes, or which exists in the Russian village communes of the present day.

A species of socialism may be the form of government of the future, out it can be applied only in the mechanical relations of society. It may interpose to prevent oppression and injustice, and to ensure to all the members of the State equality of opportunity. But its chief and most important duty must be to guard the liberties and protect the rights of its subjects, and to remove instead of to impose, restrictions on freedom of intercourse, freedom of action, and freedom and inviolability of contract.

One of the manifestations of the Socialistic tendency is the demand that the State shall extend the area of its control, and interfere to a greater extent to regulate the relations of employer and employed, or in other words, the buyer and seller of labor. In this colony we already have State-owned railways and telegraphs, State-owned factories, and a State-directed labor agency, and recently laws have been passed to bring the employer of labor under the immediate supervision of State officials—I will not say to hasten his suppression. I will not weary you with arguments for or against the principle of State interference, but will proceed to speak of the more specific features of the antagonism between employer and workmen, and to refer briefly to certain proposed remedies.

The specific claims of the workmen then are for higher wages and shorter hours of labor. With the latter we are not particularly concerned in this colony. With the former, we, to some extent, are. Failing compliance on the part of employers, the levers applied to enforce it are the boycott and the strike. And the unfortunate employer finds himself on a veritable bed of Procrustes, crushed on the one hand under the demands of his workmen, and strained on the other to the adoption of all kinds of devices to meet competition and to provide for the numberless exigencies of business. It is not to be wondered at that employers are inclined to meet the strike with the lockout, or the boycott with the black list, and practically to make I he appeal to starvation. But it cannot be consoling to the pride of employers as a class, that their united intelligence has not been able to devise some means of acquiring and retaining the confidence and loyalty of their men. It is true that attempts have been made to secure industrial peace by co-operation, or to settle specific disputes by arbitration or conciliation. But such attempts have almost invariably been made either by the men themselves or by the masters under pressure from the men.

The time seems to have arrived when employers must make advances if it is hoped to supersede the wasteful and barbarous warfare of the strike and the lockout. It is hardly necessary to dwell upon the evils attending this warfare. The financial loss incurred by both sides is of itself sufficient to show its disastrous results. A return made by the United States Labor Bureau shows that for the six years ending December, 1886, on less than 3902 strikes occurred in that paradise of labor, the United States of America, affecting 22,000 establishments and nearly one and a half millions of men, and inflicting money loss upon the men of £12,000,000 and upon the masters of £7,000,000. And as showing that this terrible strife leads to no finality it is stated that of these strikes 46 per cent, succeeded, 14 per cent, partially succeeded, and 40 per cent, failed. Admitting that the advantage is on the side of the men, will any be found to assert that the gain was worth the sacrifice? I do not know if any estimate has been made of the losses involved in the worldwide strikes of 1890, but the figures must be appalling.

Boards of Conciliation and Arbitration have had a fair trial and a measure of success. Their most notable successes, however, have been won "where resort to this expedient was entirely free to both parties" and was not had by appeal to the State. Boards of Conciliation in the manufactured iron trade of the North of page 7 England have been in existence for nearly twenty years, and up to March, 1886, had considered about 800 disputes. All but seventeen of these were adjusted by the Standing Committee privately and without formal reference to the Board. In France and Belgium about 70 per cent, of the trade disputes are settled by local Boards, composed of one master and one workman, notwithstanding that the decisions of these Boards are open to appeal to a legally constituted Bureau General. But it must be apparent at a glance that conciliation and arbitration are merely external remedies and not radical cures. Allow me to quote from a work by Nicholas Pain Oilman, to which I shall also make reference presently:—" Arbitration is infinitely preferable to industrial war, with all its waste of human effort and excitement of class hatreds. But it is essentially a makeshift—as a truce between two hostile armies is a makeshift. Out of it may come the better understanding between the workman and the employer which must be the basis of any future re-adjustment of their relations; but arbitration contains in itself no logical principle to determine what that re-adjustment shall be. The strike or the lockout, actual or threatened, is the plain system of disease in the industrial body, a sign that it is not in harmony with its present environment. Arbitration, applied to the part where inflammation is most violent, is an excellent poultice, but a poor regimen. The malady, expelled from the surface in one place soon breaks out elsewhere. Until some searching remedy shall restore health, arbitration cannot be recommended too earnestly or be tried too patiently. But to rest upon it as a final solution would be a confession of impotence, which modern civilisation can scarcely make and retain its self-respect."

Co-operation is looked upon by some as the miracle which is to solve all difficulties by making the men their own masters and liberating them from their demoralising subjection to arrogant employers and grasping capitalists. But although co-operative distribution has made wonderful strides, both in this colony and in older countries, co-operative production has admittedly been a failure. The Chairman of the last Cooperative Congress, held at Lincoln, England, in May last, said in the course of his address:—"With regard to co-operative production many hopes had been expressed that in the industries of this country generally participation of the profits would be found to be the solution of the labor difficulties, and that thus the interests of the master and man would become identified. It could not be said that either abroad—though there were a few remarkable instances on the Continent—or at Home, those hopes had been widely realised. During the last few years, in proportion to the vastly growing wealth and industries of the country, the minutest progress in co-operative production had been made." This failure seems to be due to very simple causes. Workmen cannot as a rule command sufficient capital without invoking the aid of outside capitalists. They are apt to insist upon the immediate distribution of profits, and dislike taking the risks of loss. They do not make sufficient provision for capable management and are disinclined to allow a manager absolute control of a business. Under such conditions co-operative production can never succeed. Democratic institutions are out of place in a modern factory.

I am convinced that remedies for the constantly recurring labor difficulties, and the friction between employers and employed, must be evolutionary and not revolutionary. I have but little sympathy with any reform which involves disruption or dislocation, and no hope of salvation in any arbitrary readjustment of the functions of the individual, the class or the State. Sound reforms must work from within outwards, and must be in accordance with the principles of growth and development and the "eternal fitness of things." Labor and capital must be be so organised and their relations so adjusted as to increase the total production of wealth before either the master or the workman can hope for a larger proportionate reward. It is clearly the ease that when the employer prospers so does also the workman, and when one suffers the other must suffer likewise. "The best trade union," says Professor Jevons, "is the union of employer and employee."

The present wages system has served a good purpose. It is convenient, and under it the condition of the workman has undoubtedly improved vastly during the last fifty years. But it lacks the element of elasticity or variability, which is essential if it is to prove permanently satisfactory. I believe this element may be introduced by a system of profit sharing, which while leaving the employer with the absolute control of his business, and guaranteeing the workman an average wage, yet will give the latter a direct interest in the prosperity of the business by assuring to him a certain share of whatever net profit may be made. It may be objected that this would practically amount to the employer voluntarily reducing his profits by the value of the bonuses distributed among his men. But if it can be shown that the net profits are increased by say 25 per cent., the employer page 8 clearly must still be a gainer even if he distributes the greater part of this as extra wages. And experience of profit sharing in France and the United States has been eminently satisfactory as showing that such is the case. Mr Oilman, in his exceedingly able and interesting work on Profit Sharing, thus sums up the arguments in favor of this system:—"Profit sharing, the division of realised profits between the capitalist, the employer and the employee, in addition to regular interest, salary and wages, is the most equitable and generally satisfactory method of remunerating the three industrial agents." It advances the prosperity of an establishment in the following ways:—(A) It increases the quantity of the product, (B) It improves the quality of the product, (C) It promotes care of implements and economy of material, (D) It diminishes labor difficulties and cost of superintendence, (E) It tends to secure industrial peace. For elaboration of his arguments I must refer you to his book. I will only add that his conclusions are fairly drawn from his arguments, and are supported by the experience of a number of firms who have adopted profit sharing schemes, details of which are fully set forth.

One other suggestion and I have done. In times, happily long past so far as the British nation is concerned, the feudal lord held absolute sway over the lives of his de pendants. He controlled their actions in peace, and commanded their services in war. They were practically his slaves, and the autocratic manner came naturally, and perhaps rightly, to him. But the feudal lord is a thing of the past, and so is the slave. If political might is social right, the slave is now the master, or bids fair very soon to be, the world over. The autocratic manner, however, it is to be feared, remains, a taint in the blood of a small proportion of those who occupy positions of control. And although even this may be a good thing in its time and place, it ought not to be allowed to manifest itself in the attitude of an employer towards his workmen, still less his workwomen. We have, through long ages of ignorance, strife and ill will, come to know that all the world is akin, that the same blood flows in the veins of king and peasant, that the passions of men and their desires are diversified only by environment, and do not differ in essential characteristics. Whether it bring solace to our souls or not, we must recognise every honest man as our brother, and must treat him at least as a fellow human being, subject to the same laws and having equal rights and privileges as ourselves. Equally naked we issued out of the darkness of the past, and equally naked we shall disappear into the darkness of the future. What lieth behind and what before knoweth not any man. And while, like the sparrow flying through the Saxon hall, we tarry for a moment in the light and heat of the hearth fire, we should surely do what we can to increase the sum of Human happiness, and should avoid bringing distress or disappointment to any. You will tell me perhaps that this is pure sentiment, fit for the church or for Sunday, but not suited to the matter-of-fact work-a-day world. I tell you that our lives are ruled by sentiment much more than by law or the fear of consequences, and until we recognise this and apply it in our dealings with our employees as well as among ourselves, we shall sigh in vain for social or industrial peace.

The adoption of the report and balance-sheet was seconded by Mr Cunningham, and carried.

The election of the Executive Committee was the next business, and the following were elected:—Messrs John Anderson, jun., W. Acton-Adams, George T. Booth, W. Boag, G. H. Black well, A. W. Beaven, P. Cunningham, W. Chrystall, P. Duncan, J. Deans, J. A. Frostick, C. P. Hulbert, A. G. Howland, A. Kaye, G. Lambie, G. F. Martin, W. Reece, George G. Stead, R. Struthers, J. L. Scott, C. W. Turner, A. Tyree, J. Triggs, E. C. Brown.

It was resolved, on the motion of Mr W. D. Meares, seconded by Mr Triggs—"That a cordial vote of thanks be accorded to the officers of the Association for their labors during the past year."

Mr Booth, in returning thanks, referred to the desirability of keeping the Employers' Association alive, so that their organised services would be always available to avert troubles should they arise.

At a meeting of the Executive Committee held subsequently, Mr G. G. Stead was elected as President, and Mr W. Reece as Vice-President.