Conrad Jorgon looked distressed, and excessively ashamed of his wife. But here a diversion was created by the opening of the folding doors which faced the salon where Anna Löser was still playing in the dark, and a well-spread supper table was displayed with two maids in attendance.

'Ach, I am hungry.' Frau Jorgon darted a keen glance at the supper table. Come, Mee-sis Carr, you shall sit by me,' and she linked her arm within that of the Englishwoman, calling to the others but not waiting for them. 'Anna, come! Marie, lower the lamps.'

One by one the ladies passed on into the supper-room, followed more slowly by Conrad Jorgon, who left the door ajar, for the maid was extinguishing the lamps in his wife's boudoir.

And the meal began with much energetic play of knives and forks and everybody talking at once-as a matter of course. The inquisitorial conversation was necessarily of a hybrid nature, shrewdly directed by practical housekeeping minds, each intent on its own particular bargain. It is needless to state that throughout the meal, and although she was looking fagged and wan, and her voice was growing hoarse and her throat ached, Marion Carr was furiously assailed with appeals and questions on a hundred and one different topics, to all of which she made answer with slow, clear, careful enunciation of every syllable. Herr Jorgon alone it was who at last put in a plea in behalf of the unfortunate Englishwoman.

'You are looking extremely tired, Mrs. Carr. Do rest a little. My wife is a perfect magpie.'

At this juncture Marion Carr was compelled to consult her watch. It was ten o'clock. She had been hard at work since four o'clock. How she managed to make her escape that night was never afterwards quite clear to her. But escape at last she did, descending the great stone staircase which led from Frau Jorgon's apartment on the first étage to the courtyard below, preceded by a sleepy maid carrying a lamp which she held high above her head. The great house door opened, then closed and locked behind her. With a stolid Gute Nacht from the maid, Marion Carr passed out into the deserted street. She breathed quickly and walked passionately, with her grave eyes fixed on the eternal stars.

'Another day's work done,' she murmured. But am I any nearer to my goal?'

KATHARINE BLYTH.

1896

ARBITRATION IN LABOUR DISPUTES

AMONG the 'hardy annuals' of the House of Commons, one of the 'most regular is the Bill for promoting arbitration in labour disputes. Every important strike, moreover, brings a whole crop of leading articles in which the journalists, of one party or another, either blame the Opposition for obstructing, or praise the Government for introducing, so beneficent a measure. Let us examine this panacea

for industrial disturbances.

The essential feature of arbitration as a means of settling the condition of employment is that the decision is not the will of either party, or the outcome of negotiation between them, but the fiat of an umpire or arbitrator. It is distinguished from that organised negotiation between trade unions and employers' associations which is now termed collective bargaining, in that the result is not arrived at by bargaining at all, the higgling between the parties being, in fact, expressly superseded. On the other hand it is not legal regulation, though it bears some resemblance to this form, because the award is not obligatory on either of the parties, and their refusal to accept it, or their ceasing to obey it even if they have promised to do so, carries with it no coercive sanction.

These characteristics of arbitration, as a method of settling the conditions of employment, come to the front on every typical occasion. We see the employers and workmen at variance with each other. Negotiations, more or less formally carried on, proceed up to a point at which a deadlock seems inevitable. To avert a stoppage of the industry, both parties agree to 'go to arbitration.' They adopt an impartial umpire, either to act alone or with assessors representing each side. Each party then prepares an elaborate ' case,' which is laid before the new tribunal. Witnesses are called, examined and cross-examined. The umpire asks for such additional information as he thinks fit. Throughout the proceedings the utmost latitude is allowed. The 'reference' is

seldom limited to particular alternatives, or expressed with any precision. The umpire, in order to clear up points, is always entering into conversation with the parties. Practically no argument,

however seemingly irrelevant, is excluded; and evidence may be given in support of claims founded on the most diverse economic theories. Finally, the umpire gives his award in precise terms, but usually without stating either the facts which have influenced him or the assumptions upon which he has made up his mind. The award-and this is an essential feature-carries with it no legal sanction, and may at any moment be repudiated or quietly ignored by any capitalist or workman.

Yet arbitration has one characteristic feature in common with the higgling of employers and workmen, which it supersedes. The arbitrator's award is a general ordinance, which, in so far as it is accepted, puts an end to individual bargaining between man and man, and thus excludes, from influence on the terms of employment, the exigencies of particular workmen, and usually also those of particular firms. It establishes, in short, like collective bargaining, a common rule for the industry concerned. We can therefore understand why the trade unionists from 1850 to 1876 so persistently strove for arbitration, and so eagerly welcomed the gradual conversion of the governing classes to a belief in its benefits. At a time when the majority of employers asserted their right to deal individually with each one of their hands,' habitually refused even to meet the men's representatives in discussion, and sought to suppress collective bargaining altogether by the use of ambiguous statutes and obsolete law, it was an immense gain for the trade unions to get their fundamental principle of a common rule adopted. During the last twenty years arbitration has greatly increased in popularity among the public, and each ministry in succession prides itself on having attempted to facilitate its application. Whenever an industrial war breaks out, we have, in these days, a widespread feeling among the public that both parties should voluntarily submit to the decision of an impartial arbitrator. But however convenient this solution may be to a public of consumers, the two combatants seldom show any alacrity in seeking it, and can rarely be persuaded to agree to refer their quarrel to any outside authority. Although arbitration has been preached as a panacea for the last forty years, the great majority of captains of industry' still resent it as an infringement of their right to manage their own business, whilst the leaders of the organised workmen, once enthusiastic in its favour, now usually regard it with suspicion. The four years 1891-95 saw, in Great Britain, four great industrial disputes in as many leading industries. But neither in cotton manufacture nor in coal-mining, neither in the great machine industry of boot-making nor in engineering, could the capitalists and workmen agree to let their quarrels be settled by an impartial umpire. What happened in each of these instances-and they were typical of many others-was the breaking off of collective bargaining, a prolonged stoppage and trial of endurance, ending, not

in arbitration but in a resumption of collective bargaining, and the conclusion of a fresh agreement under new and more favourable auspices.

At first sight this disinclination of workmen or employers to submit their claims to an impartial tribunal appears perverse and unreasonable. Business men, it is said, almost invariably refer disputes 'between themselves to more or less formal arbitration, and would never dream of stopping their own industry, or drying up the source of their own profits, merely because they could not agree upon an impartial umpire. And if this be true in commercial transactions, where the alternative is nothing worse than an action at law, how much stronger the need must seem when the alternative may easily involve the bankruptcy of capitalists, the semi-starvation of thousands of operatives, and the temporary paralysis, if not the permanent injury, of an important national industry? Unfortunately this taking analogy, drawn from the arbitration between business firms, rests on the old confusion between interpreting an existing agreement and concluding a new one. Commercial arbitrations are invariably concerned with relations already entered into, either by existing contracts or under the law of the land. No business man ever dreams of submitting to arbitration the terms upon which he shall make new purchases or future sales.1 Arbitration in commercial matters is therefore strictly confined to questions of interpretation, both parties resting their claims on a common basis, the existence of which is not in dispute between them. Now, issues of interpretation of this kind are incessantly occurring between employers and employed, even in the best-regulated industries. In these cases, as we shall hereafter point out, whilst there is no insuperable objection to arbitration, there is no real necessity to resort to it. Nor is it for this class of disputes that arbitration is usually proposed. The great strikes and lock-outs which paralyse a whole industry almost invariably arise not on issues of interpretation, but on the proposal of either workmen or employers to alter the terms upon which, for the future, labour shall be engaged.

The position of the employers who object to the fixing of the terms of the wage contract by the fiat of an arbitrator has, from the first, been logical and consistent. In a weighty article which appeared, twenty years ago, in the official organ of the National Association of Employers of Labour, we find the case stated with perfect lucidity.

The frequently cited' Conseils de Prud'hommes' of France are strictly confined to the settlement of disputes arising out of existing contracts, or (as regards minor matters) the application of the law. In no case do they presume to fix the rate of wages for future engagements. They are indeed merely cheap and convenient legal tribunals, which make efforts to compose a dispute before proceeding to pronounce judgment upon it. We understand that this is the character also of the similar tribunals which exist in various German States and elsewhere.

VOL. XL-No. 237

3 D

The sphere of arbitration in trade disputes is strictly and absolutely limited to cases of specific contract, where the parties differ as to the terms of the contract, and are willing, for the sake of agreement and an honourable fulfilment of their engagements, to submit the points in dispute to competent men mutually chosen. Where there is a basis and instrument of agreement by the parties to which they wish to adhere, and on which arbiters have something tangible to decide upon, it is seldom difficult for impartial men to elicit an adjustment fair and equitable to both sides. Arbitration is thus constantly of use in business matters on which differences of view have arisen, and is as applicable to questions between workmen and employers where there is a specific contract to be interpreted as in any other branch of affairs. It is better than going to law, much better than running away from the contract, striking, coercing, and falling into civil damages or criminal penalties, and raising on the back of such unfortunate consequences a blatant and endless protest against 'the labour laws.' But cases in which there are specific contracts absolutely define the sphere of arbitration. To apply the term 'arbitration' to the rate of wages for the future, in regard to which there is no explicit contract or engagement, and all the conditions of which are unknown to employers and employed, is the grossest misnomer that can be conceived. It is certain that neither workmen nor employers could be bound, nor would consent to be bound, even were it possible to bind them, by such arbitrary decrees; and that the law, therefore, can never give such decrees even any temporary force, unless we are to fall back into the long obsolete tyranny of fixing the rate of wages by Act of Parliament, or by 'King in Council,' or by 'Communal Bureau of Public Safety,' or whatever the supreme power may be.

Thus, from the employers' point of view, the supersession of the higgling of the market by the fiat of an arbitrator is, on its economic side, as indefensible an interference with industrial freedom as a legal fixing of the rate of wages. But an arbitrator's award has additional disadvantages. A law would at any rate be an authoritative settlement, which disposed of the question beyond dispute or cavil. An arbitrator's award, on the other hand, even if it is accepted by the trade union, may not commend itself to all the workmen. The employers who accept it may not unnaturally feel that they have surrendered their own freedom, without securing any guarantee that the workmen, or some indispensable sections of them, will not promptly commence a new attack on which to provoke a stoppage of the industry. A law, moreover, is a common rule, enforced with uniformity on all alike. The arbitrator's award, on the other hand, binds only those firms and those workmen who were parties to it. In almost all industries there are some establishments, and often whole districts, which remain outside the employers' association, and in which masters and men persist in conducting their businesses in their own way. And there is no guarantee that some firms will not break away from the association, and join the ranks of these unfettered outsiders. If the arbitrator's award has secured better terms to the operatives than the masters are unanimously willing to concede, the good and honourable employers are

2 Capital and Labour, June 16, 1875.