Boards of penalised by their virtue. The proceedings of the Conciliation and Arbitration' of the boot-making industry contain many complaints by employers that the awards are not enforced on rival firms, who are consequently undercutting them in the market. If our factory or mines legislation had been enforced only on specified good employers, and had left untouched any firm who objected to the regulations, so intolerable an injustice would quickly have led to a repudiation of the whole system. 6 3 If we turn from the employers to the trade unionists, we find a steadily increasing disinclination among workmen to agree to the intervention of an arbitrator to settle the terms of a new wage contract. This growing antipathy to arbitration is, we think, mainly due to their feeling of uncertainty as to the fundamental assumptions upon which the arbitrator will base his award. When the issue is whether the standard earnings' of the Lancashire cottonspinners should or should not be decreased by ten per cent., there is no basis accepted by both parties except the vague admission that the award should not be contrary to the welfare of the community. But this offers no guidance to the arbitrator. Judge Ellison, for instance, acting in 1879 in a Yorkshire coal mining case, frankly expressed the perplexity of an absolutely open-minded umpire. he can. can; but on There is no It is [he said] for (the employers' advocate) to put the men's wages as high as It is for (the men's advocate) to put them as low as he can. And when you have done that it is for me to deal with the question as well as I what principle I have to deal with it I have not the slightest idea. principle of law involved in it. There is no principle of political economy in it. Both masters and men are arguing and standing upon what is completely within their rights. The master is not bound to employ labour except at a price which he thinks will pay him. The man is not bound to work for wages that won't 3 We may cite as evidence of this antipathy some recent declarations made in the names of the three most powerful organisations in the United Kingdom. It is expressly stated (for instance, in the Derbyshire Miners' Executive Council Minutes of the 2nd of June, 1891) that it was the idea that the Royal Commission on Labour was intended to introduce a 'huge arbitration system;' that determined the whole Miners' Federation steadfastly to refuse to have anything to do with that inquiry. 'We are opposed to the system altogether,' declared Mr. Mawdsley before that Commission (Group A, Answer 776), on behalf of the Lancashire cotton operatives. And Mr. Robert Knight, giving evidence on behalf of the United Society of Boilermakers (Group C, Answer 20, 833), definitely negatived the idea of arbitration, explaining as follows: 'I speak from long experience of the working of this large organisation that I represent here to-day, and I say that we can settle all our differences without any interference on the part of Parliament or anybody else.' The same feeling is shared by smaller societies. 'Our experience of arbitration,' states the Secretary of the North Yorkshire and Cleveland (Ironstone) Miners' Association, 'was that we always got the worst of it, and so since 1877 it has been firmly refused.'-Joseph Toyn, in Newcastle Leader' Extra' on Conciliation in Trade Disputes (Newcastle, 1894), p. 9. assist (subsist) him and his family sufficiently, and so forth. So that you are both within your rights; and that's the difficulty I see n dealing with the question.4 5 But this cold-blooded elimination of everything beyond the legal rights of the parties is neither usual in a wages arbitration, nor acceptable to either side. Each of the parties implicitly rests its case on a distinct economic assumption, or even series of assumptions, not accepted by the other side, and not often expressly stated. The employers will often hold that, in order to secure the utmost national prosperity, wages should rise and fall with the price which they can obtain for their product. Or it may be urged that the wage bill must under no circumstances encroach upon the particular percentage of profit assumed to be necessary to prevent capital from leaving the trade. These assumptions would, at one time, have been acquiesced in by many leading workmen, although, perhaps, not by the rank and file. But during the last twenty years, the leaders of the most powerful organisations have definitely taken up the view that considerations of market price or business profit ought, in the interests of the community, to be strictly subordinated to the fundamental question of Can a man live by the trade?' It is urged that the payment of' a living wage' ought, under all circumstances, to be a 'first charge' upon industry, taking precedence even of rents or royalties, and of the hypothetical percentage allowed as a minimum to capital in the worst times. The skilled mechanic moreover will claim that the length of his apprenticeship warrants him in insisting, like the physician or the barrister, on a minimum fee for his services below which he cannot be asked to descend. The arbitrator's award, if it is not a mere 'splitting the difference,' must be influenced by one or the other of these assumptions, either as a result of the argument before him, or as the outcome of his education or sympathies. However judicial he may be in ascertaining the facts of the case, the relative importance which he will give to the rival assumptions of the parties can scarcely fail to be affected by the subtle influences of his class and training. The persons chosen as arbitrators have almost invariably been representative of the brain-working class-great employers, statesmen or lawyers-men bringing to the task the highest qualities of training, impartiality, and judgment, but unconsciously 4 Report of South Yorkshire Collieries Arbitration (Sheffield, 1879), p. 49. The umpire was the Judge of the Sheffield County Court. 5 Mr. Mawdsley (Amalgamated Association of Cottonspinners) is very emphatic on this point. 'If we had arbitration we should have much less wages than we are getting now. Arbitrators generally go in for a certain standard of profit for capital -generally speaking, it has been 10 per cent. Mr. Chamberlain has always said that capital ought to have 10 per cent. If the arbitrator went in for 10 per cent. in the cotton trade, we should have a very big reduction of wages; and we are not going to have it.'-Evidence before Royal Commission on Labour, Group C, Answer 774. We believe the case to which Mr. Mawdsley referred is Mr. Chamberlain's award in the South Staffordshire Iron Trade in 1878. imbued rather with the assumptions of the class in which they live than with those of the workmen. The workmen's growing objection to arbitration is, we believe, mainly due to their deeply rooted suspicion that any arbitrator likely to be accepted by the employers will, however personally impartial he may be, unconsciously discount assumptions inconsistent with the current economics of his class. There is however one industry in which, for five and twenty years, arbitration has been habitually resorted to, for the settlement of the terms of new wage contracts. This one exception to the usual dislike of arbitration will, we think, prove the correctness of the foregoing analysis. 'The Board of Conciliation and Arbitration for the Manufactured Iron Trade of the North of England,' which has existed since 1869, has long been the classical example of the success of arbitration. Besides providing by the machinery of a standing committee for the settlement of interpretation differences, and by half-yearly board meetings for discussing general questions, the rules direct the reference of intractable disputes to an outside umpire. On twenty separate occasions during the last twenty-five years this provision has come into operation with regard to the settlement of the conditions of future wage contracts; and on every occasion the arbitrator's award has been accepted by both employers and employed. It is an interesting confirmation of the view we have taken that, in this one industry in which arbitration has achieved a continued success, we find the workmen and the employers agreeing in the economic assumptions upon which wages should be fixed, and upon which therefore the arbitrator is asked to proceed. It has for more than a generation been traditional among ironmasters that the wages of the operatives ought to vary with the market price of the product. Since the formation of the board, in 1869, this assumption has been accepted by both parties as the main, and often as the exclusive, rule for the settlement of wages. In the reports of the arbitration proceedings we find both parties constantly reaffirming this principle, each in turn resorting to other considerations only for the sake of argument when the main assumption is for the moment calculated to tell against them. 'We entirely agree,' declare the operatives in 1877, that our wages should be regulated by the selling price of iron.' Next time it is the employers who assert the same rule. The eight years sliding-scale arrangement,' states their spokesman in 1882, 'we believe was the principle of determining wages by the selling price of iron, and it would be extremely difficult, if not dangerous, permanently to depart from that.'7 There is, in fact, as a careful student observes, 'a general understanding running through the cases and pleadings, both of masters and men, that • Report of Arbitration before Mr. (now Sir D.) Dale, July 1877. wages should follow the selling prices of iron.' This was expressly stated by Dr. R. Spence Watson in the letter which accompanied his fifth award as arbitrator for this board. Whilst observing that the wages paid in the Staffordshire district, which competes with the North of England in the employment of ironworkers, as well as to some extent in the trade itself, is a factor which cannot be disregarded, [he declares that] in the course of the arguments it was admitted on both sides that .. the realised price of iron, as shown by the figures taken out by the accountant to the board, may be considered the principal factor in the regulation of wages. It is upon this statement [he continues] and these admissions that I am called upon to give my award.9 It will be apparent that arbitration on issues of this kind comes really within the category of the interpretation or application of what is, in effect, an agreement already arrived at between the parties. The question comes very near to being one of fact, answered as soon as the necessary figures are ascertained beyond dispute. It is therefore not surprising to learn that, during eight of the twentyfive years of the board's existence, variations of wages were automatically determined by a formal sliding scale, and that even during the intervals in which no definite scale was adopted the board itself was able, on eight separate occasions, to agree to advances or reductions without troubling the arbitrator at all. We need not discuss whether the acceptance by employers and operatives alike of the assumption that wages must follow prices is, or is not, advantageous to the workmen, or to the industry as a whole. But it is evident that the continued success of arbitration in the North of England Iron Board, dealing, as it does, mainly with the interpretation or application of an existing common basis of agreement, affords no guide to other trades in which no such common basis is accepted, and in which the claims of the respective parties rest on opposite assumptions. But the success of the North of England Manufactured Iron Board, whilst it gives no real support to arbitration as a panacea for strikes, seems at first to open up a new field of usefulness for the arbitrator in the settlement of issues of application or interpretation. These questions of interpretation or application to particular cases are always arising, even in the best-regulated trade, and to provide machinery for their peaceful and indisputable decision is of great importance. Here we have not merely identical assumptions by the two parties, but a precise bargain by which both agree to be bound. Unfortunately it is just in these issues, for which arbitration seems a natural expedient, that its adoption has been found, in practice, most difficult. The application of a general agreement to the earnings of 8 Industrial Peace, by L. L. F. R. Price (London, 1887), p. 90. Letter and award of the 28th of November, 1888; Report of Wages Arbitration before R. S. Watson, Esq., LL.D. (Darlington, 1888). particular individuals, or to the technical details of particular samples or processes, is at once too complicated, and of too little pecuniary importance, to make it possible to call in an outside arbitrator.10 The intractable questions, to take one trade as an example, which perplex the local boards in the boot and shoe industry relate only to a few shillings, and frequently concern only one or two workmen. For such issues it is obviously impossible to obtain, either for love or money, the services of any personality eminent enough to command the respect of the whole body of employers and workmen. Where the standard of earnings of large bodies of men, or the prevention of a serious industrial war, are concerned, public spirit will induce men of the calibre of Lord James or Dr. Spence Watson to spend whole days, without fee or reward, in bringing about an adjustment. In commercial arbitrations which involve considerable sums, recourse is had to eminent lawyers, who are paid large fees for mastering the intricate details of each case. This sort of arbitrator is far too expensive a person to be available for the application of general wage contracts to particular cases, and the statesman or philanthropist cannot spare the time. On the other hand, if, as in the boot and shoe trade, recourse is had to some one engaged in the industry, it is difficult to avoid the suspicion of class bias. The big employer from another district, whose services are usually called in, can hardly be expected to content the workmen. The employers, on the other hand, will not consent to be bound by the decision of an operative. It is fortunately unnecessary for the employers and workmen to get into this dilemma. The correct analogy from the commercial world for all these issues of interpretation is not the elaborate and costly reference to arbitration, but the simple arrangements for taking an inventory, in connection with a contract of purchase or hire. Instead of calling in an outside authority, eminent enough to be known and trusted by both sides, each party is represented by an inexpensive expert habitually engaged on the particular calculations involved. The two professional men seldom find any difficulty in agreeing upon an identical award. This corresponds exactly to the 10 Thus, when in 1891, in an arbitration between the West Cumberland Iron and Steel Company and their workmen, the arbitrator (Dr. Spence Watson) was asked to fix the actual rates at which particular men were to be paid, he declined the task as one outside the possible capacity of any arbitrator. 'What has always happened,' said Dr. Spence Watson, 'in every arbitration I have had hitherto? There has been a general question of percentage. The principle of the thing is the thing to leave to arbitration. The detail of the thing, as to how it is to affect this or that or the other, never can be left to arbitration. Already over this matter I have given up several nights to go through these papers and work them in this way and that way, but I have not the knowledge, and you cannot give me the knowledge. Surely the question of individual payment is a question for the manager of the works and the men of the works, and not for a third party.'-MS. proceedings. We are indebted to Dr. Spence Watson for permission to examine these and other papers, and for many valuable suggestions and criticisms. ... |
