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THE PERSONAL RELATION IN INDUSTRY

by

JOHN D. ROCKEFELLER, JR.


[Illustration: Logo]






Boni and Liveright
Publishers      New York

Copyright, 1923, by
Boni and Liveright, Inc.

Printed in the United States of America

First printing, December, 1923
Second printing, January, 1924




PUBLISHER’S NOTE


The following material by Mr. John D. Rockefeller, Jr., consists, with
one exception, of addresses delivered by him on various occasions and
amidst the demands of many varied interests. These addresses are left
practically as they were delivered, and no effort has been made to
change their form. Slight repetitions of certain points may be noted in
these addresses, a condition which is expected in arguments or subjects
of the character of those contained in this book.

The publishers, in obtaining Mr. Rockefeller’s permission to publish
these addresses, believed that by presenting his views in this form
there would be made a substantial contribution to the ever-important
subject of industrial relationships.




CONTENTS

CHAPTER                                         PAGE
  I. COÖPERATION IN INDUSTRY                       9

 II. LABOR AND CAPITAL--PARTNERS                  38

III. THE PERSONAL RELATIONS IN INDUSTRY           63

 IV. REPRESENTATION IN INDUSTRY                   83

  V. TO THE EMPLOYEES                             90

 VI. TO THE PEOPLE OF COLORADO                   107


APPENDIX

  I. REPRESENTATION OF EMPLOYEES                 123

 II. DISTRICT CONFERENCES, JOINT COMMITTEES
     AND JOINT MEETINGS                          129

III. THE PREVENTION AND ADJUSTMENT
     OF INDUSTRIAL DISPUTES                      136

 IV. SOCIAL AND INDUSTRIAL BETTERMENT            145




THE PERSONAL RELATION IN INDUSTRY




I

COÖPERATION IN INDUSTRY


I

To-day the world is passing through a period of reconstruction.

As we address ourselves to the grave problems which confront us,
problems both national and international, we may look for success in
their solution just in so far as we continue to be animated by the
spirit of coöperation and brotherhood. The hope in the future lies in
the perpetuation of this spirit, and unless increasingly it is made the
foundation of the political, social, and industrial life of the world,
there will not be permanent peace and good will among men, either
nationally or internationally.

In no one of these spheres of human relations is the spirit of
coöperation more essential than in industry, since industry touches
almost every department of life. Moreover, there is no problem
pressing more urgently upon the attention of the world to-day than
the industrial problem, none more important, none more difficult of
solution. There are pessimists who say that there is no solution short
of revolution and the overturn of the existing social order.

Surely the nations which have shown themselves capable of such lofty
sacrifice, which have given themselves so freely, gladly, unreservedly,
during these past years of struggle, will bring to bear in the solution
of this great problem powers of head and heart, not less wise and
unselfish than those exhibited in dealing with the problems of the war;
surely a way out of the impenetrable maze will be found.

Almost countless are the suggested solutions of the industrial problem,
which have been brought forth since industry first began to be a
problem. Most of these are impracticable; some are unjust; some are
selfish and therefore unworthy; some have merit and should be carefully
studied. None can be looked to as a panacea.

There are those who believe that legislation is the cure-all for every
political, social, and industrial ill. Much can be done by legislation
to prevent injustice and encourage right tendencies, but legislation
of itself will never solve the industrial problem. Its solution can
be brought about only by the introduction of a new spirit into the
relationship between the parties to industry--the spirit of coöperation
and brotherhood.

It is this theme, _coöperation in industry_, that I desire to develop.

We must ask ourselves at the outset certain fundamental questions:

First, what is the purpose of industry? Shall we cling to the
conception of industry as an institution, primarily of private
interest, which enables certain individuals to accumulate wealth, too
often irrespective of the well-being, the health, and the happiness of
those engaged in its production? Or shall we adopt the modern viewpoint
and regard industry as being a form of social service, quite as much as
a revenue-producing process?

Is it not true that any industry, to be permanently successful, must
insure to labor adequately remunerative employment under proper
working and living conditions, to capital a fair return upon the money
invested, and to the community a useful service?

The soundest industrial policy is that which has constantly in mind
the welfare of the employees as well as the making of profits, and
which, when human considerations demand it, subordinates profits to
welfare. Industrial relations are essentially human relations. It is
therefore the duty of everyone entrusted with industrial leadership to
do all in his power to improve the conditions under which men work and
live. The day has passed when the conception of industry as chiefly
a revenue-producing process can be maintained. To cling to such a
conception is only to arouse antagonisms and to court trouble. In the
light of the present every thoughtful man must concede that the purpose
of industry is quite as much the advancement of social well-being as
the production of wealth. It remains none the less true, however, that
to be successful, industry must not only serve the community and the
workers adequately, but must also realize a just return on capital
invested.

Next we must ask ourselves, who are the parties to industry: The
parties to industry are four in number: capital, management, labor, and
the community.

I am, of course, well aware of the social theories and experiments that
seek to merge capital and labor, either through ownership of capital
by the state or by the workers themselves. But the difficulties that
confront the realization of these plans are vast and the objection to
many of them fundamental.

Under our present system, capital is represented by the stockholders,
and is usually regarded as embracing management. Management is,
however, an entirely separate and distinct party to industry; its
function is essentially administrative. It comprises the executive
officers who bring to industry technical skill and managerial
experience. Labor consists of the employees. Labor, like capital, is an
investor in industry, but labor’s contribution, unlike that of capital,
is not detachable from the one who makes it, since it is in the nature
of physical effort and is a part of the worker’s strength and life.
Here the list usually ends.

The fourth party, namely, the community, whose interest is vital and in
the last analysis controlling, is too often ignored. The community’s
right to representation in the control of industry and in the shaping
of industrial policies is similar to that of the other parties. Were it
not for the community’s contribution, in maintaining law and order, in
providing agencies of transportation and communication, in furnishing
systems of money and credit and in rendering other services, all
involving continuous outlays, the operation of capital, management,
and labor would be enormously hampered, if not rendered wellnigh
impossible. The community, furthermore, is the consumer of the product
of industry, and the money which it pays for the product reimburses
capital for its advances and ultimately provides the wages, salaries,
and profits that are distributed among the other parties.

Finally we must inquire: what are the relations between the parties to
industry? It is frequently maintained that the parties to industry must
necessarily be hostile and antagonistic; that each must arm itself to
wrest from the others its share of the product of their common toil.
This is unthinkable; it is not true; the parties to industry are in
reality not enemies, but partners; they have a common interest; no one
can get on without the others. Labor must look to capital to supply the
tools, machinery, and working capital, without which it cannot make
its vital contribution to industry; and capital is equally powerless
to turn a wheel in industry without labor. Management is essential
to supply the directing force, while without the community as the
consumer, the services of the other three parties would have no outlet.
Just what the relative importance of the contribution made to the
success of industry by the several factors is, and what their relative
rewards should be, are debatable questions.

But, however views may differ on these questions, it is clear that the
common interest cannot be advanced by the effort of any one party to
dominate the others, arbitrarily to dictate the terms on which alone
it will coöperate, or to threaten to withdraw if any attempt is made
to thwart the enforcement of its will. Success is dependent upon the
coöperation of all four. Partnership, not enmity, is the watchword.


II

If coöperation between the parties to industry is sound business
and good social economics, why then is antagonism so often found in
its stead? The answer is revealed in a survey of the development of
industry. In the early days of industry, as we know, the functions
of capital and management were not infrequently combined in the one
individual, who was the employer. He in turn was in constant touch with
his employees. Together they formed a vital part of the community.
Personal relations were frequent and mutual confidence existed. When
differences arose they were quickly adjusted. As industry developed,
aggregations of capital larger than a single individual could provide
were required. In answer to this demand, the corporation with its many
stockholders was evolved. Countless workers took the place of the
handful of employees of earlier days. Plants under a single management
scattered all over the country superseded the single plant in a given
community. Obviously, this development rendered impossible the personal
relations which had existed in industry, and lessened the spirit
of common interest and understanding. Thus the door was opened to
suspicion and distrust; enmity crept in; antagonisms developed. Capital
not infrequently used its power to enforce long hours and low wages;
labor likewise retaliated with such strength as it had, and gradually
the parties to industry came to view each other as enemies instead of
as friends and to think of their interests as antagonistic rather than
common.

Where men are strangers and have no contact, misunderstanding is apt to
arise. On the other hand, where men meet frequently about a table, rub
elbows, exchange views, and discuss matters of common interest, almost
invariably it happens that the vast majority of their differences
quickly disappear and friendly relations are established.

Several years ago I was one of a number of men who were asked two
questions by a Commission appointed by the President of the United
States to deal with certain labor difficulties.

The first was: “What do you regard as the underlying cause of
industrial unrest?” The second: “What remedy do you suggest?”

I stated that in my judgment the chief cause of industrial unrest is
that capital does not strive to look at questions at issue from labor’s
point of view, and labor does not seek to get capital’s angle of
vision. My answer to the second question was that when employers put
themselves in the employee’s place and the employees put themselves in
the employer’s place, the remedy for industrial unrest will have been
found. In other words, when the principle adopted by both parties in
interest is: “Do as you would be done by,” there will be no industrial
unrest, no industrial problem.

It is to be regretted that there are capitalists who regard labor as
their legitimate prey, from whom they are justified in getting all
they can for as little as may be. It is equally to be deplored that
on the part of labor there is often a feeling that it is justified in
wresting everything possible from capital. Where such attitudes have
been assumed, a gulf has been opened between capital and labor which
has continually widened. Thus the two forces have come to work against
each other, each seeking solely to promote its own selfish ends. As a
consequence have come all too frequently the strike, the lockout, and
other incidents of industrial warfare.

A man, who recently devoted some months to studying the industrial
problem and who came into contact with thousands in various industries
throughout the United States, has said that it was obvious to him from
the outset that the working men were seeking for something, which at
first he thought to be higher wages. As his touch with them extended,
he came to the conclusion, however, that not higher wages, but
recognition as men, was what they really sought. What joy can there
be in life, what interest can a man take in his work, what enthusiasm
can he be expected to develop on behalf of his employer, when he is
regarded as a number on a pay-roll, a cog in a wheel, a mere “hand”?
Who would not earnestly seek to gain recognition of his manhood and the
right to be heard and treated as a human being, not as a machine?

Then, too, as industry has become increasingly specialized, the workman
of to-day, instead of following the product through from start to
finish and being stimulated by the feeling that he is the sole creator
of a useful article, as was more or less the case in early days, now
devotes his energies for the most part to countless repetitions of a
single act or process, which is but one of perhaps a hundred operations
necessary to transform the raw material into the finished product. Thus
the worker loses sight of the significance of the part he plays in
industry and feels himself to be merely one of many cogs in a wheel.
All the more, therefore, is it necessary that he should have contact
with men engaged in other processes and fulfilling other functions in
industry, that he may still realize he is a part, and a necessary,
though it may be an inconspicuous, part of a great enterprise. In
modern warfare, those who man the large guns find the range, not by
training the gun on the object which they are seeking to reach, but
in obedience to a mechanical formula which is worked out for them.
Stationed behind a hill or mound, they seldom see the object at which
their deadly fire is directed. One can readily imagine the sense of
detachment and ineffectiveness which must come over these men. But
when the airplane, circling overhead, gets into communication with
the gunner beneath and describes the thing to be accomplished and
the effectiveness of the shot, a new meaning comes into his life. In
a second he has become a part of the great struggle. He knows that
his efforts are counting, that he is helping to bring success to his
comrades. There comes to him a new enthusiasm and interest in his
work. The sense of isolation and detachment from the accomplishments
of industry, which too often comes to the workers of to-day, can be
overcome only by contact with the other contributing parties. In
this way only can common purpose be kept alive, individual interests
safeguarded, and the general welfare promoted.

While obviously under present conditions those who invest their
capital in an industry, often numbered by the thousand, cannot have
personal acquaintance with the thousands and tens of thousands of
those who invest their labor, contact between those two parties in
interest can and must be established, if not directly, then through
their respective representatives. The resumption of such personal
relations through frequent conferences and current meetings, held for
the consideration of matters of common interest, such as terms of
employment and working and living conditions, is essential in order
to restore a spirit of mutual confidence, good will, and coöperation.
Personal relations can be revived under modern conditions only through
the adequate representation of the employees. Representation is a
principle which is fundamentally just and vital to the successful
conduct of industry. It means, broadly speaking, democracy through
coöperation, as contrasted with autocracy.

It is not for me or anyone else to undertake to determine for industry
at large what specific form representation shall take. Once having
adopted the principle, it is obviously wise that the method to be
employed should be left, in each specific instance, to be determined by
the parties interested. If there is to be peace and good-will between
the several parties in industry, it will surely not be brought about
by the enforcement upon unwilling groups of a method which in their
judgment is not adapted to their peculiar needs. In this, as in all
else, persuasion is an essential element in bringing about conviction.

With the developments in industry what they are to-day, there is sure
to come a progressive evolution from the autocratic single control,
whether by capital, management, labor, or the community, to some form
of democratic coöperative control participated in by all four. The
whole movement is evolutionary. That which is fundamental is the idea
of coöperation, and that idea must find expression in those forms which
will serve it best, with conditions, forces and times what they are.

In the United States, the coöperation in war service of labor, capital,
management, and Government afforded a striking and most gratifying
illustration of this tendency.

After all, the basic principles governing the relations between the
parties to industry are as applicable in the successful conduct of
industry to-day as in earlier times. The question which now confronts
us is how to reëstablish personal relations and coöperation in spite
of changed conditions. The answer is not doubtful or questionable,
but absolutely clear and unmistakable: it is, through adequate
representation of the four parties in the councils of industry.


III

Various methods of representation in industry have been developed,
conspicuous among which are those of labor unions and employers’
associations. As regards the organization of labor, it is just as
proper and advantageous for labor to associate itself into organized
groups for the advancement of its legitimate interests as for capital
to combine for the same object.

Such associations of labor manifest themselves in collective
bargaining, in an effort to secure better working and living
conditions, in providing machinery whereby grievances may easily and
without prejudice to the individual be taken up with the management.
Sometimes they provide benefit features, sometimes they seek to
increase wages, but whatever their specific purpose, so long as it
is to promote the well-being of the employees, having always due
regard for the just interests of the employer and the public, leaving
every worker free to associate himself with such groups or to work
independently, as he may choose, they are to be encouraged.

But organization is not without its dangers. Organized capital
sometimes conducts itself in an unworthy manner, contrary to law
and in disregard of the interest of both labor and the public. Such
organizations cannot be too strongly condemned or too vigorously dealt
with. Although they are the exception, such publicity is generally
given to their unsocial acts that all organizations of capital, however
rightly managed or broadly beneficent, are thereby brought under
suspicion.

Likewise it sometimes happens that organizations of labor are
conducted without just regard for the rights of the employer or of
the public; methods and practices are adopted which, because unworthy
or unlawful, are deserving of public censure. Such organizations
of labor bring discredit and suspicion upon other organizations
which are legitimate and useful, just as is the case with improper
organizations of capital, and they should be similarly dealt with. We
ought not, however, to allow the occasional failure in the working of
the principle of the organization of labor to prejudice us against the
principle itself, for the principle is fundamentally sound.

In the further development of the organization of labor and of large
business, the public interest as well as the interest of labor and of
capital will be furthest advanced by whatever stimulates every man to
do the best work of which he is capable and to render useful service,
by a fuller recognition of the common interests of employers and
employed, and by an earnest effort to dispel distrust and hatred and to
promote good-will.

Labor unions have secured for labor in general many advantages
in hours, wages, and standards of working conditions. A large
proportion of the workers of the world, however, are outside of these
organizations, and unless somehow represented are not in a position
to bargain collectively. Therefore, representation of labor to be
adequate must be more comprehensive and all inclusive than anything
thus far attained.

Representation on the employers’ side has been developed through
the establishment of trade associations, the purpose of which is to
discuss matters of common interest and to act, in so far as is legally
permissible and to the common advantage, along lines that are generally
similar. But here also representation is inadequate. Many employers do
not belong to employers’ associations.

In the United States during the war, the representation of both labor
and capital in common councils was brought about through the War Labor
Board, composed equally of men from the ranks of labor and capital,
together with representatives of the public. When differences arose in
industries where there was no machinery to deal with such matters, the
War Labor Board stepped in and made its findings and recommendations.
In this way, relatively continuous operation was made possible and the
resort to the strike and lockout was less frequent.

In England there have been made during the past years various important
Government investigations and reports, looking toward a more complete
program of representation and coöperation on the part of labor
and capital. One is the well-known Whitley Report, which owes its
distinction to a single outstanding feature, namely, that it applies
to the whole of industry, the principle of representative government.

The Whitley Plan seeks to unite the organizations of labor and capital
by a bond of common interest in a common venture; it changes at a
single stroke the attitude of these powerful aggregations of class
interest from one of militancy to one of social service; it establishes
a new relation in industry.

“Problems old and new,” says the report, “will find their solution in a
frank partnership of knowledge, experience, and good-will.”

Another investigation and report was made by a Commission on Industrial
Unrest, appointed by the Prime Minister. This Commission made, among
others, the following interesting recommendations:--

(1) that the principle of the Whitley Report as regards industrial
councils be adopted;

(2) that each trade should have a constitution;

(3) that labor should take part in the affairs of industry as partners
rather than as employees in the narrow sense of the term;

(4) that closer contact should be set up between employers and employed.

A third report was prepared by the Ministry of Labor. This report deals
with the constitution and operation of works committees in a number of
industries. It is a valuable treatise on the objects, functions, and
methods of procedure of joint committees.

Light has been thrown on the general questions treated by these
inquiries in an able report by the Garton Foundation on _The Industrial
Situation after the War_. This report is a study of the more permanent
causes of industrial friction and inefficiency, and of the means by
which they may be removed or their action circumscribed.

Mention of these several reports, taken at random, is made simply as
indicative of the extent and variety of the study which has been given
to the great problem of industrial reconstruction in England. All point
toward the need of more adequate representation of labor in the conduct
of industry and the importance of closer relations between labor and
capital.


IV

A method of representation similar to the Whitley Plan, though less
comprehensive, and which is constructed from the bottom up, has been
in operation for varying periods of time in an ever increasing number
of industries in the United States. This plan of representation
is worthy of serious consideration. It begins with the election
of representatives in a single plant and is capable of indefinite
development, to meet the complex needs of any industry, and of wide
extension, so as to include all industries. Equally applicable in
industries where union or non-union labor or both are employed, it
seeks to provide full and fair representation to labor, capital, and
management, also taking cognizance of the community. Thus far it has
developed a spirit of coöperation and goodwill which commends it to
both employer and employee.

The outstanding features of this plan of industrial representation,
varied to meet the special needs of each plant or company in which it
has been adopted, are as follows:

Representatives chosen by the employees in proportion to their number,
from their fellow workers in each plant, form the basis of the plan.

Joint committees, composed of equal numbers of employees or their
representatives and of officers of the company, are found in each plant
or district.

These committees deal with all matters pertaining to employment and
working and living conditions, including questions of coöperation and
conciliation, safety and accident, sanitation, health and housing,
recreation and education. Joint conferences of representatives of
employees and officers of the company are held in the various districts
several times each year.

There is also an annual joint conference, at which reports from all
districts are received and considered.

Another important feature of the plan is an officer known as the
President’s Industrial Representative, whose duty it is to visit the
plants currently and confer with the employees’ representatives, as
well as to be available always for conference at the request of the
representatives.

Thus the employees, through their representatives chosen from among
themselves, are in constant touch and conference with management and
representatives of the stockholders in regard to matters pertaining to
their common interest.

The employees’ right of appeal is the third outstanding feature of the
plan.

Any employee with a grievance, real or imaginary, may go with it at
once to his representative. The representatives not infrequently find
there is no ground for the grievance and are able so to convince the
employee.

But if a grievance does exist, or dissatisfaction on the part of the
employee continues, the matter is carried to the local boss, foreman,
or superintendent, with whom in the majority of cases it is amicably
and satisfactorily settled. Further appeal is open to the aggrieved
employee, either in person or through his representative, to the higher
officers and to the president.

If satisfaction is not to be had from the company, the court of last
appeal may be the Industrial Commission of the State, the State Labor
Board, or a committee of arbitration.

Experience shows that the vast majority of difficulties which occur in
an industry arise between the workmen and the foremen who are in daily
contact with them. Foremen are sometimes arbitrary, and it is by their
attitude and action that the higher officers and the stockholders are
judged. Obviously the right of appeal from the decisions of foremen and
superintendents is important, even if seldom availed of, because it
tends of itself to modify their attitude.

A further feature of the plan is what may be termed the employee’s Bill
of Rights.

This covers such matters as the right to caution and suspension before
discharge, except for such serious offenses as are posted; the right to
hold meetings at appropriate places outside of working hours; the right
without discrimination to membership or non-membership in any society,
fraternity, or union; and the right of appeal.

Where this plan has been in operation for a considerable length of
time, some of the results obtained are:--

First, more continuous operation of the plants and less interruption
in the employment of the workers, resulting in larger returns for both
capital and labor;

Second, improved working and living conditions;

Third, frequent and close contact between employees and officers;

Fourth, the elimination of grievances as disturbing factors;

Fifth, goodwill developed to a high degree;

Sixth, the creation of a community spirit.

Furthermore, the plan has proved an effective means of enlisting the
interest of all parties to industry, of reproducing the contacts
of earlier days between employer and employee, of lessening
misunderstanding, distrust, and enmity, and securing coöperation in
the spirit of brotherhood. Under its operation, the participants in
industry are being convinced of the soundness of the proposition that
they are fundamentally friends and not enemies, that their interests
are common, not opposed. Based as the plan is upon principles of
justice to all, its success can be counted on so long as it is carried
out in a spirit of sincerity and fair play.

Here, then, would seem to be a method of providing representation
which is just, which is effective, which is applicable to all
employees whether organized or unorganized, to all employers whether
in associations or not, which does not interfere with existing
organizations or associations, and which, while developed in a single
industrial corporation as a unit, may be expanded to include all
corporations in the same industry and ultimately all industries.

Just what part labor organizations and employers’ associations can best
take in such a plan remains to be worked out, but certain it is that
some method should be devised which will profit to the fullest extent
by the experience, the strength, and the leadership of these groups.
While, doubtless, defects will appear in this plan and other methods
more successfully accomplishing the same end may be developed, at least
it is proving that in unity there is strength and that coöperation in
industry is not only idealistically right, but practically workable.

If the points which I have endeavored to make are sound, might not the
four parties to industry subscribe to an Industrial Creed somewhat as
follows:--

(1) I believe that labor and capital are partners, not enemies; and
that their interests are common, not opposed; and that neither can
attain the fullest measure of prosperity at the expense of the other,
but only in association with the other.

(2) I believe that the community is an essential party to industry and
that it should have adequate representation with the other parties.

(3) I believe that the purpose of industry is quite as much to advance
social well-being as material prosperity; that in the pursuit of that
purpose, the interests of the community should be carefully considered,
the well-being of employees fully guarded, management adequately
recognized, and capital justly compensated, and that failure in any of
these particulars means loss to all four parties.

(4) I believe that every man is entitled to an opportunity to earn a
living, to fair wages, to reasonable hours of work and proper working
conditions, to a decent home, to the opportunity to play, to learn, to
worship and to love, as well as to toil, and that the responsibility
rests as heavily upon industry as upon government or society, to see
that these conditions and opportunities prevail.

(5) I believe that diligence, initiative, and efficiency, wherever
found, should be encouraged and adequately rewarded; that indolence,
indifference, and restriction of production should be discountenanced;
and that service is the only justification for the possession of power.

(6) I believe that the provision of adequate means of uncovering
grievances and promptly adjusting them is of fundamental importance to
the successful conduct of industry.

(7) I believe that the most potent measure in bringing about industrial
harmony and prosperity is adequate representation of the parties in
interest; that existing forms of representation should be carefully
studied and availed of, in so far as they may be found to have merit
and are adaptable to conditions peculiar to the various industries.

(8) I believe that the most effective structure of representation is
that which is built from the bottom up, which includes all employees,
which starts with the election of representatives and the formation of
joint committees in each industrial plant, proceeds to the formation
of joint district councils and annual joint conferences in a single
industrial corporation, and admits of extension to all corporations in
the same industry, as well as to all industries in a community, in a
nation, and in the various nations.

(9) I believe that to “do unto others as you would that they should
do unto you” is as sound business as it is good religion; that the
application of right principles never fails to effect right relations;
that “the letter killeth, but the spirit giveth life”; that forms are
wholly secondary, while attitude and spirit are all important; and that
only as the parties in industry are animated by the spirit of fair
play, justice to all, and brotherhood, will any plan which they may
mutually work out succeed.

(10) I believe that that man renders the greatest social service who so
coöperates in the organization of industry as to afford to the largest
number of men the greatest opportunity for self-development and the
enjoyment of those benefits which their united efforts add to the
wealth of civilization.


V

In these days the selfish pursuit of personal ends at the expense
of the group can and will no longer be tolerated. The reign of
autocracy has passed. Men are rapidly coming to see that human life
is of infinitely greater value than material wealth; that the health,
happiness, and well-being of the individual, however humble, is not
to be sacrificed to the selfish aggrandizement of the more fortunate
or more powerful. Modern thought is placing less emphasis on material
considerations. It is recognizing that the basis of national progress,
whether industrial or social, is the health, efficiency, and spiritual
development of the people. Never was there a more profound belief in
human life than to-day. Whether men work with brain or brawn, they are
human beings, and are much alike in their cravings, their aspirations,
their hatreds, and their capacity for suffering and for enjoyment.

What is the attitude of the leaders in industry as they face this
critical period of reconstruction? Is it that of the standpatters, who
ignore the extraordinary changes which have come over the face of the
civilized world and have taken place in the minds of men; who, arming
themselves to the teeth, attempt stubbornly to resist the inevitable
and invite open warfare with the other parties in industry, and who say:

“What has been and is, must continue to be; with our backs to the wall
we will fight it out along the old lines or go down in defeat!”

Those who take such an attitude are wilfully heedless of the fact that
its certain outcome will be financial loss, general inconvenience
and suffering, the development of bitterness and hatred, and in the
end submission to far more drastic and radical conditions imposed by
legislation, if not by force, than could now be amicably arrived at
through mutual concession in friendly conference.

Or is their attitude one in which I myself profoundly believe, which
takes cognizance of the inherent right and justice of the coöperative
principle underlying the new order, which recognizes that mighty
changes are inevitable, many of them desirable, and which does not
wait until forced to adopt new methods, but takes the lead in calling
together the parties to industry for a round-table conference to be
held in a spirit of justice, fair play, and brotherhood, with a view to
working out some plan of coöperation, which will insure to all those
concerned adequate representation, will afford to labor a voice in
the forming of industrial policy, and an opportunity to earn a fair
wage under such conditions as shall leave time, not alone for food and
sleep, but also for recreation and the development of the higher things
of life?

Never was there such an opportunity as exists to-day for the industrial
leader with clear vision and broad sympathy permanently to bridge the
chasm that is daily gaping wider between the parties to industry, and
to establish a solid foundation for industrial prosperity, social
improvement, and national solidarity. Future generations will rise up
and call those men blessed who have the courage of their convictions,
a proper appreciation of the value of human life as contrasted with
material gain, and who, imbued with the spirit of coöperation, will
lay hold of the great opportunity for leadership which is open to them
to-day.

In conclusion, let it be said that upon the heads of those leaders--it
matters not to which of the four parties they belong--who refuse to
reorganize their industrial households in the light of the modern
spirit, will rest the responsibility for such radical and drastic
measures as may later be forced upon industry, if the highest interests
of all are not shortly considered and dealt with in a spirit of
fairness.

Who, then, will dare to block the wheels of progress and to let pass
the present opportunity of helping to usher in a new era of peace and
prosperity throughout the world, brought about through coöperation in
industry?




II

LABOR AND CAPITAL--PARTNERS[1]


I

Labor and Capital are rather abstract words with which to describe
those vital forces which working together become productively useful
to mankind. Reduced to their simplest terms, Labor and Capital are men
with muscle and men with money--human beings, imbued with the same
weaknesses and virtues, the same cravings and aspirations.

It follows, therefore, that the relations of men engaged in industry
are human relations. Men do not live merely to toil; they also live to
play, to mingle with their fellows, to love, to worship. The test of
the success of our social organization is the extent to which every
man is free to realize his highest and best self; and in considering
any economic or political problem, that fundamental fact should be
recognized.

If in the conduct of industry, therefore, the manager ever keeps in
mind that in dealing with employees he is dealing with human beings,
with flesh and blood, with hearts and souls; and if, likewise, the
workmen realize that managers and investors are themselves also human
beings, how much bitterness will be avoided!

Are the interests of these human beings with labor to sell and with
capital to employ necessarily antagonistic or necessarily mutual? Must
the advance of one retard the progress of the other? Should their
attitude toward each other be that of enemies or of partners? The
answer one makes to these fundamental questions must constitute the
basis for any consideration of the relationship of Labor and Capital.

Our difficulty in dealing with the industrial problem is due too often
to a failure to understand the true interests of Labor and Capital.
And I suspect this lack of understanding is just as prevalent among
representatives of Capital as among representatives of Labor. In
any event the conception one has of the fundamental nature of these
interests will naturally determine one’s attitude toward every phase of
their relationship.

Much of the reasoning on this subject proceeds upon the theory that the
wealth of the world is absolutely limited, and that if one man gets
more, another necessarily gets less. Hence there are those who hold
that if Labor’s wages are increased or its working conditions improved,
Capital suffers because it must deprive itself of the money needed
to pay the bill. Some employers go so far as to justify themselves in
appropriating from the product of industry all that remains after Labor
has received the smallest amount which it can be induced or forced to
accept; while on the other hand there are men who hold that Labor is
the producer of all wealth, hence is entitled to the entire product,
and that whatever is taken by Capital is stolen from Labor.

If this theory is sound, it might be maintained that the relation
between Labor and Capital is fundamentally one of antagonism, and that
each should consolidate and arm its forces, dividing the products of
industry between them in proportion as their selfishness is enforced by
their power.

But all such counsel loses sight of the fact that the riches available
to man are practically without limit, that the world’s wealth is
constantly being developed and undergoing mutation, and that to promote
this process both Labor and Capital are indispensable. If these great
forces coöperate, the products of industry are steadily increased;
whereas, if they fight, the production of wealth is certain to be
either retarded or stopped altogether, and the well-springs of material
progress choked.

The problem of promoting the coöperation of Labor and Capital may
well be regarded, therefore, as the most vital problem of modern
civilization. Peace may be established among the nations of the world;
but if the underlying factors of material growth within each nation are
themselves at war, the foundations of all progress are undermined.


II

Capital cannot move a wheel without Labor, nor Labor advance beyond a
mere primitive existence without Capital. But with Labor and Capital
as partners, wealth is created and ever greater productivity made
possible. In the development of this partnership, the greatest social
service is rendered by that man who so coöperates in the organization
of industry as to afford to the largest number of men the greatest
opportunity for self-development, and the enjoyment by every man of
those benefits which his own work adds to the wealth of civilization.
This is better than charity or philanthropy; it helps men to help
themselves and widens the horizon of life.

Through such a process the laborer is constantly becoming the
capitalist, and the accumulated fruits of present industry are made the
basis of further progress. The world puts its richest prizes at the
feet of great organizing ability, enterprise, and foresight, because
such qualities are rare and yet indispensable to the development of
the vast natural resources which otherwise would lie useless on the
earth’s surface or in its hidden depths.

It is one of the noteworthy facts of industrial history that the
most successful enterprises have been those which have been so well
organized and so efficient in eliminating waste, that the laborers were
paid high wages, the consuming public--upon whose patronage the success
of every enterprise depends--enjoyed declining prices, and the owners
realized large profits.

The development of industry on a large scale brought the corporation
into being, a natural outgrowth of which has been the further
development of organized Labor in its various forms. The right of
men to associate themselves together for their mutual advancement is
incontestable; and under our modern conditions, the organization of
Labor is necessary just as is the organization of Capital; both should
make their contribution toward the creation of wealth and the promotion
of human welfare.

The labor union, among its other achievements, has undoubtedly forced
public attention upon wrongs which employers of to-day would blush
to practice. But employers as well as workers are more and more
appreciating the human equation, and realizing that mutual respect
and fairness produce larger and better results than suspicion and
selfishness.

We are all coming to see that there should be no stifling of Labor by
Capital, or of Capital by Labor; and also that there should be no
stifling of Labor by Labor, or of Capital by Capital.

While it is true that the organization of Labor has quite as important
a function to perform as the organization of Capital, it cannot be
gainsaid that evils are liable to develop in either of these forms of
association.

Because evils have developed and may develop as a result of these
increasing complexities in industrial conditions, shall we deny
ourselves the maximum benefit which may be derived from using the new
devices of progress? We cannot give up the corporation and industry on
a large scale; no more can we give up the organization of labor; human
progress depends too much upon them. Surely there must be some avenue
of approach to the solution of a problem on the ultimate working out of
which depends the very existence of industrial society.

To say that there is no way out except through constant warfare between
Labor and Capital is an unthinkable counsel of despair; to say that
progress lies in eventual surrender of everything by one factor or the
other, is contrary, not only to the teachings of economic history, but
also to our knowledge of human nature.


III

Most of the misunderstanding between men is due to a lack of knowledge
of each other. When men get together and talk over their differences
candidly, much of the ground for dispute vanishes.

In the days when industry was on a small scale, the employer came
into direct contact with his employees, and the personal sympathy and
understanding which grew out of that contact made the rough places
smooth.

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?


IV

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.


V

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.


VI

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:

First, to promote increased efficiency and production, to improve
working conditions and to further the friendly and cordial relations
between the company’s officers and employees; and,

Second, to facilitate the adjustment of disputes and the redress of
grievances.

In carrying out this plan, the wage-earners at each camp are to be
represented by two or more of their own number chosen by secret
ballot, at meetings especially called for the purpose, which none but
wage-earners in the employ of the company shall be allowed to attend.
The men thus chosen are to be recognized by the company as authorized
to represent the employees for one year, or until their successors
are elected, with respect to terms of employment, working and living
conditions, adjustment of differences, and such other matters as may
come up.

A meeting of all the men’s representatives and the general officers of
the company will be held once a year to consider questions of general
importance.

The Industrial Constitution provides that the territory in which the
company operates shall be divided into a number of districts based
on the geographical distribution of the mines. To facilitate full
and frequent consultation between representatives of the men and the
management in regard to all matters of mutual interest and concern, the
representatives from each district are to meet at least three times a
year--oftener if need be--with the president of the company, or his
representative, and such other officers as the president may designate.

The district conferences will each appoint from their number certain
joint committees on industrial relations, and it is expected that
these committees will give prompt and continuous attention to the
many questions which affect the daily life and happiness of the men
as well as the prosperity of the company. Each of these committees
will be composed of six members, three designated by the employees’
representatives and three by the president of the company.

A joint committee on industrial coöperation and conciliation will
consider matters pertaining to the prevention and settlement of
industrial disputes, terms and conditions of employment, maintenance
of order and discipline in the several camps, policy of the company
stores, and so forth. Joint committees on safety and accidents, on
sanitation, health and housing, on recreation and education, will
likewise deal with the great variety of topics included within these
general designations.

Prevention of friction is an underlying purpose of the plan. The aim is
to anticipate and remove in advance all sources of possible irritation.
With this in view a special officer, known as the President’s
Industrial Representative, is added to the personnel of the staff as
a further link between the president of the corporation and every
workman in his employ. This officer’s duty is to respond promptly to
requests from employees’ representatives for his presence at any of
the camps, to visit all of them as often as possible, to familiarize
himself with conditions, and generally to look after the well-being of
the workers.

It is a fundamental feature of the plan, as stated in the document
itself, that “every employee shall have the right of ultimate appeal
to the president of the company concerning any condition or treatment
to which he may be subjected and which he may deem unfair.” For the
adjustment of all disputes, therefore, the plan provides carefully
balanced machinery.

If any miner has a grievance, he may himself, or preferably through one
of the elected representatives in his camp, seek satisfaction from the
foreman or mine superintendent. If those officials do not adjust the
matter, appeal may be had to the president’s industrial representative.
Failing there, the employee may appeal to the division superintendent,
assistant manager, or general manager, or the president of the company,
in consecutive order.

Yet another alternative is that, after having made the initial
complaint to the foreman or mine superintendent, the workman may
appeal directly to the joint committee on industrial coöperation and
conciliation in his district, which, itself failing to agree, may
select one or three umpires whose decision shall be binding upon both
parties to the dispute.

If all these methods of mediation fail the employee may appeal to the
Colorado State Industrial Commission, which is empowered by law to
investigate industrial disputes and publish its findings.

So as adequately to protect the independence and freedom of the men’s
representatives, the Constitution provides that in case any one of them
should be discharged or disciplined, or should allege discrimination,
he may resort to the various methods of appeal open to the other
employees, or he may appeal directly to the Colorado State Industrial
Commission, with whose findings in any such case the company agrees to
comply.

The company is to pay all expenses incident to the administration of
the plan, and to reimburse the miners’ representatives for loss of time
from their work in the mines.


VII

Such in outline is this Industrial Constitution. Some have spoken of it
as establishing a Republic of Labor. Certain it is that the plan gives
every employee opportunity to voice his complaints and aspirations, and
it neglects no occasion to bring the men and the managers together to
talk over their common interests.

Much unrest among employees is due to the nursing of real or fancied
grievances arising out of the daily relations between the workmen and
the petty boss. Such grievances should receive attention at once, and
this plan provides that they shall.

Just as in the case of bodily wounds, so with industrial wounds, it is
of prime importance to establish a method of prompt disinfection, lest
the germs of distrust and hatred have opportunity to multiply.

This plan is not hostile to labor organizations; there is nothing in
it, either expressed or implied, which can rightly be so construed;
neither membership in a union nor independence of a union will bring
a man either preference or reproach, so far as the attitude of the
company is concerned.

The fact is that the Colorado Fuel and Iron Company Constitution does
not restrict in any way the right of the employees to regulate their
own lives, nor does it abridge their right to join any organization
they please. At the same time it does insure the men fair treatment and
an opportunity to make their voice heard in determining the conditions
under which they shall work and live.

The plan does not deny to the representatives the right to act in
concert; it does not deny to the men the right to employ counselors
or advisers to assist them in formulating their views as to any
situation. Indeed, the door is left wide open for the natural exercise
of any right or privilege to which the men are entitled.

There is nothing in the plan to prevent the men holding open or secret
meetings as often as they like, either in the separate camps, the
districts, or as representing the whole industry. Such meetings are not
specifically provided for because all those who are connected with the
corporation are considered to be partners in the enterprise, and their
interests common interests.

The plan provides a channel through which not only may the men confer
with the management, but through which also the officers may lay their
purposes, problems, and difficulties before the employees.

It provides a medium of adjustment, as between employer and employees,
of the problems which constantly arise in the conduct of business,
while in regard to the relations of both it recognizes that the voice
of public opinion is entitled to be heard.

The acts of bodies of men in their relations with other men should
always be illuminated by publicity, for when the people see clearly
what the facts are, they will, in the long run, encourage what is good
and condemn what is selfish.

Some may think that the form which the organization of labor takes
must necessarily be originated and developed by Labor. If, however, a
workable method of coöperation between managers and men is actually
developed, which is satisfactory to both, is its authorship of
consequence, provided only its provisions are adequate and just and it
proves to be an effective instrument through which real democracy may
have free play?

The Colorado Plan has been devised for the employees of the Colorado
Fuel and Iron Company, and without reference to the employees, or
organizations of employees, in other companies. Some people will
maintain that the men’s interests cannot be adequately protected or
their rights at all times enforced without the support of their fellows
in similar industries.

This may be true where Labor and Capital do not generally recognize
that their interests are one. But when men and managers grasp that
vital point, as I believe this plan will help them to do, and are
really awake to the fact that when either takes an unfair advantage of
the other the ultimate interests of both are bound to suffer, they will
have an incentive to fair dealing of the most compelling kind.

It is clear that a plan of this kind must not overlook the interests
of the stockholders, for no plan which disregards their rights can
be permanently successful. The interests of Capital can no more be
neglected than those of Labor.

At the same time I feel that a prime consideration in the carrying
on of industry should be the well-being of the men and women engaged
in it, and that the soundest industrial policy is that which has
constantly in mind the welfare of the employees as well as the making
of profits, and which, when the necessity arises, subordinates profits
to welfare.

In order to live, the wage-earner must sell his labor from day to
day. Unless he can do this, the earnings of that day’s labor are gone
forever.

Capital can defer its returns temporarily in the expectation of future
profits, but Labor cannot. If, therefore, fair wages and reasonable
living conditions cannot otherwise be provided, dividends must be
deferred or the industry abandoned.

On the other hand, a business, to be successful, must not only provide
for Labor remunerative employment under proper working conditions, but
it must also render useful service to the community and earn a fair
return on the money invested.

The adoption of any policy toward Labor, however favorable it may
seem, which results in the bankruptcy of the corporation and the
discontinuance of its work, is as injurious to Labor which is thrown
out of employment, as it is to the public, which loses the services of
the enterprise, and to the stockholders whose capital is impaired.

This plan is not a panacea; it is necessarily far from perfect, and yet
I believe it to be a step in the right direction. Carefully as it has
been worked out, experience will undoubtedly develop ways of improving
it.

While the plan provides elaborate machinery which of itself ought to
make impossible many abuses and introduce much that is constructively
helpful, too strong emphasis cannot be put upon the fact that its
success or failure will be largely determined by the spirit in which it
is carried out.

The problem of the equitable division of the fruits of industry will be
always with us. The nature of the problem changes and will continue to
change with the development of transportation, of invention, and the
organization of commerce.

The ultimate test of the rightness of any particular method of division
must be the extent to which it stimulates initiative, encourages the
further production of wealth, and promotes the spiritual development of
men.

The Colorado Plan is of possible value in that State, and may prove
useful elsewhere, because it seeks to serve continually as a means
of adjusting the daily difficulties incident to the industrial
relationship. It brings men and managers together, it facilitates the
study of their common problems, and it should promote an understanding
of their mutual interests.

Assuming, as we must, the fundamental fairness of men’s purposes,
we have here possibly a medium through which the always changing
conditions of industry may be from time to time more closely adapted to
the needs, the desires, and the aspirations of men.

FOOTNOTE:

[1] NOTE.--This article, “Labor and Capital--Partners,” originally
appeared in the _Atlantic Monthly_, January, 1916.




III

THE PERSONAL RELATION IN INDUSTRY[2]


Heretofore the Chief Executives of important industrial corporations
have been selected largely because of their capacity as organizers or
financiers.

The time is rapidly coming, however, when the important qualification
for such positions will be a man’s ability to deal successfully and
amicably with labor. Yet how to do this is a subject which, I fancy, is
never taught or referred to in the classroom.

Like knowledge of the problems of sex, than which no department of life
is more sacred, vital or deserving of full and ennobling instruction,
an understanding of this subject is left to be acquired by experience,
often costly or bitter, or through chance information, gleaned too
frequently from ignorant and unreliable sources.

Just as the first of these two themes is coming to be taught
sympathetically and helpfully in our schools and colleges, so I believe
the second, the personal relation in industry, will eventually be
regarded as an important part of those college courses which aim to fit
men for business life.

After all, is it not the personal relations with one’s fellows which,
when rightly entered into, bring joy and inspiration into our lives
and lead to success, and which, on the other hand, if disregarded or
wrongly interpreted, bring equally sorrow and discouragement and lead
to failure?

Think what the ideal personal relation between a father and son may
mean to both. Some of us have known such contact. Our lives have been
fuller and richer as a result, freer from sin and sorrow. Others of us
know from bitter experience what the absence of this relationship has
involved.

How helpful to a student is such a friendly association with some
professor who commands his confidence, respect and regard, and who is
interested in his college work, not for itself alone, but quite as much
because of its bearing on his future life’s usefulness.

What would college life be without the personal relationships which are
formed during its happy days and often continued close and intimate
through life?

Can you imagine a successful football team composed of strangers,
having no points of contact, no sympathy with each other, no common
cause inspiring them to strive for victory? Team play, the support of
one player by another, would be well nigh impossible.

Even in the army, where formerly the man who had become the most
perfect machine was regarded as the best soldier, it is coming to be
accepted that in addition to being obedient and subject to discipline,
the man who thinks, who is capable of acting on his judgment when
occasion arises, who is bound to his fellow soldiers and his officers
by personal friendliness, admiration and respect, is a far more
efficient soldier.

And whereas formerly, particularly in the armies of Europe, privates
were not allowed to have any personal association or contact with
their officers, we learn that in the World War a spirit of comradeship
was developed by the officers with their men off duty, which personal
relationship was building up rather than weakening the morale of the
armies.

What is true as to the relationships which I have mentioned is equally
true in industrial relations, and personal contact is as vital and as
necessary there as in any other department of life.

Let us trace briefly the history of the development of industry, that
we may see where this personal relationship is present, where absent,
and what is the effect of its presence or absence.

Industry in its earliest forms was as simple as it is complex to-day.

The man who provided the capital was frequently the director,
president, general manager and superintendent of the enterprise, and
in some instances actually worked with his employees. These latter
were few in number. They were usually born and brought up in the same
community with their employer, his companion in school days, his
friends and neighbors, often calling him as he did them by their first
names.

There was daily contact between employer and employee, and naturally if
any questions or causes for complaint arose on either side, they were
taken up at the next chance meeting and adjusted.

Next came the partnership, a development necessary because more capital
was required than a single individual cared to or was able to provide.
Two or more partners were thus associated together, but otherwise the
situation was not materially different from that just described, except
that more employees were required.

With the invention of the steam engine and its application to
railroads, which quickly began to make their way over the face of the
earth; with the development of the steamboat, replacing to so large
an extent the old sailing vessels and making possible the regular and
frequent transportation of the products of the soil and of industry
from one part of the world to another; with the perfecting of the
telegraph, cable and telephone, there came the need for larger
aggregations of capital in order to carry on the ever expanding
industries that were required to keep pace with this growth.

This led to the development of the corporation, the capital for which
was supplied in larger or smaller amounts by few or many individuals,
thus making possible almost indefinite financial expansion. And this
form of business has continued to grow, as commerce and industry have
become not only national but international and world wide in their
extent, until we have to-day the United States Steel Corporation, with
its 120,000 stockholders and its 260,000 employees.

It stands to reason that corporations of such magnitude have
necessarily become highly specialized.

The responsibility of an individual stockholder in a corporation is
of course in proportion to his interest, but the function of the
stockholders in general consists in casting their votes each year for
the election of directors to represent their interests.

The directors in turn are charged with the general responsibility of
developing the policies of the corporation, some of which are matured
by the officers, of selecting its officers and of seeing to it that the
corporation is properly managed.

The officers as the executives of the company carry out the company’s
policies and are charged with the actual operation of the company and
the employment of labor.

As we contrast this gigantic organization with the simple form of
industrial organization first described, it is at once apparent that in
the very nature of the case the man who supplies the money seldom if
ever comes in contact with the man who supplies the labor.

Here we note a marked and serious change. While deplorable, this
situation is practically inevitable. Frequently the industry in which a
stockholder has invested his capital is located in a far distant city.
Not only this, but often investments are made in corporations which
conduct business in other countries almost at the ends of the earth.

As a result of this lack of contact between Labor and Capital, the
personal relationship has disappeared, and gradually a great gulf
has grown up between the two, which is ever widening, so these two
great forces have come too often to think that their interests are
antagonistic, and have worked against each other, each alone seeking
to promote its own selfish ends. This has resulted in the strike, the
lockout and the various incidents of industrial warfare so regrettably
common in this day and apparently on the increase.

Reports of the United States Bureau of Labor Statistics show that for
the first eleven months of 1916 there were 3,134 strikes and lockouts
in the industries of this country, as against only 1,147 for the
corresponding period of 1915.

These industrial conflicts have in some instances come to be little
short of civil war; vast sums of money have been lost by both sides,
untold hardship and misery have followed in their wake.

The New York City street railroad strike of last summer (1916) is
estimated to have cost the companies some four millions of dollars,
not to mention the loss in wages borne by the employees or the losses
sustained by the public.

Last summer[3] four hundred thousand railroad men, constituting
the four brotherhoods, voted in favor of a strike on 225 American
railroads. If the average pay of these men had been only $2.50 a
day, which is considerably lower than the fact, such a strike would
have meant a daily loss in wages of a million dollars, not taking
into account the far greater loss to business and the inevitable
inconvenience and distress which would have been brought, directly or
indirectly, to the doors of the entire population.

I have not had access to data showing the cost to this country of
strikes and lockouts. However, the following quotation from a recent
address made by Mr. Frank A. Vanderlip, President of the National City
Bank of New York, throws light on the subject. Mr. Vanderlip said:


     The cost of the recent garment workers’ strike in New York City
     has been estimated to be in the neighborhood of fifty million
     dollars.

     The last anthracite coal strike in the short course of five
     months caused a loss of one hundred and twenty million dollars to
     employers and employees in the community.

     I have seen the statement that in a single year the losses that
     could be attributed to labor disturbances in this country total
     more than a billion dollars.


These are extraordinary figures, and though some of them are doubtless
merely estimates, they serve to show what enormous proportions the
industrial problem has assumed and how serious and vital a question it
has become.

May I add that almost beyond belief as these figures are, they do not
include those terrible mental and moral losses growing out of struggle
and conflict, nor do they take account of the depleted bank balances
of the workers, and the hunger, suffering and distress which extend
into the homes and which touch the lives not only of those immediately
concerned, but of tens of thousands of innocent women and children.

What I have said leads me to advance two ideas, both of which I
believe to be profoundly true, but which have received far too limited
consideration.


     The first is that Labor and Capital are naturally partners, not
     enemies.

     The second, that the personal relation in industry, entered into
     in the right spirit, gives the greatest promise of bridging the
     yawning chasm which has opened up between employer and employee.


The mistaken point of view in regard to the relation between Labor and
Capital exists on the part of both Labor and Capital, as well as among
the interested and disinterested public.

Too often Capital regards Labor merely as a commodity to be bought and
sold, while Labor not infrequently regards Capital as money personified
in the soulless corporation.

It might seem that technically speaking both of these definitions could
be justified, but they are far from being comprehensive and adequate.
For both Labor and Capital are men--men with muscle and men with money.
Both are human beings and the industrial problem is a great human
problem.

This is one of the first things we need to recognize, and it is
just because human nature is involved in this problem that it is so
intricate and difficult to solve.

The popular impression that from the very nature of the case Labor and
Capital are two great contending forces arrayed against each other,
each striving to gain the upper hand through force, each feeling that
it must arm itself in order to secure from the other its rights and its
just dues, is even more unfortunate than it is untrue.

I cannot believe that Labor and Capital are necessarily enemies. I
cannot believe that the success of one must depend upon the failure or
lack of success of the other. Far from being enemies, these two factors
must necessarily be partners.

Surely, their interests are common interests, the permanent well being
of neither can be secured unless the other also is considered, nor can
either attain the fullest possibilities of development which lie before
both unless they go hand in hand.

Only when the industrial problem is approached from the point of view
of a firm belief in this doctrine is there any hope of bringing about
closer, more healthful and mutually advantageous relations between
these two forces.

If, therefore, my first statement is true, namely that Labor and
Capital are partners, then certain things must follow. They must have
contact. This standing aloof one from the other must end.

Respect grows in the heart of each for the other, confidence is
developed, and they come to realize that they are working with a common
interest for a common result.

But this attitude, this relationship, is the personal relation in
industry. Nothing else will take its place, nothing else will bridge
the chasm of distrust and hatred.

It is the recognition of the brotherhood of man, of the principle of
trying to put yourself in the other man’s place, of endeavoring to see
things from his point of view. The old saying that honesty is the best
policy is often scoffed at and pronounced unpractical, but there never
was a truer saying. Honesty _is_ the best policy.

You may be able to deceive a man once or twice, or, if he is
exceptionally gullible, half a dozen times, but you cannot deceive him
indefinitely. You may be able to deceive a number of people sometimes,
but you cannot deceive all of the people with whom you have business
dealings all of the time. You may be able to make a contract which
gives you an unfair advantage of the other man, but the chances are
that you cannot do it twice.

From a purely cold-blooded business point of view, honesty _is_ the
best policy. Likewise do I say that to treat the other man as you would
have him treat you is an equally fundamental business principle.

This does not mean that you should surrender your rights or neglect
to avail of your opportunities. It simply means that in the game of
business, the same rules of sportsmanship should prevail as in a
boxing bout, in a match of golf, or a football game.

Play fair and observe the rules. Let the contest be clean, gentlemanly,
sportsmanlike, a contest always having regard for the rights of the
other man.

Assuming, then, that the personal relation is a vital factor in
successful industrial life, but recognizing the impossibility in this
day of big business of reproducing it as it existed between employer
and employee in the early days of industrial development, how can a
like result be brought about, how can personal contact be established?

Granting that it is impossible for the stockholders of a great
corporation, because of their number, because of their geographic
relations, to come into frequent or even semi-occasional contact with
their partners, the employees of a company; and that the situation
is much the same with the directors--at least it is possible, and
must be made increasingly so, for the leading representatives of the
stockholders and directors, namely the officers of a corporation, to
have such contact with the employees, special officers being appointed
for that purpose alone if necessary. Because of the vast numbers of
employees in many a company, even this is difficult and altogether too
infrequent to-day.

As the officers of our great corporations come to see more and more
that the problem of understanding their employees and being understood
by them is a vital problem, one of the most important with which the
management is confronted, they will be convinced not only of the wisdom
of devoting far more time to such contact, but of the desirability and
the advantage to themselves, and to the employees as well as to the
company, of such closer relation and intimate conference in regard to
matters of common interest and concern.

If we look into our own experience, we find that the misunderstandings
which we have had with other men have been largely the result of lack
of contact. We have not seen eye to eye.

Men cannot sit around a table together for a few hours or several days
perhaps and talk about matters of common interest, with points of
view however diverse, with whatever of misunderstanding and distrust,
without coming to see that after all there is much of good in the worst
of us and not so much of bad in most of us as the rest of us have
sometimes assumed.

But someone says, “We grant the desirability of the personal relation
in industry. Theoretically we accept your suggestion as to how this
theory can be put into practice in the industrial life of to-day, but
practically, will it work?”

I can best answer this question by saying that such a program has been
put into operation in a certain coal company in Colorado, in which my
father and I are interested and of which I am a director.

If you will pardon a personal reference, may I say that when I visited
Colorado some eighteen months ago, I had the opportunity of talking
personally with hundreds, if not thousands, of the employees of that
company. These men and many of the people of Colorado had formed their
opinion of anyone bearing the name of Rockefeller from what they had
read and heard. Because of certain industrial disturbances which had
developed in the State, bitterness and hatred had existed to a high
degree.

As I went from camp to camp I talked with the representatives of the
men individually and privately, I went into the men’s homes, talked
with their wives and children, visited their schools, their places of
amusement, their bathhouses, and had just such friendly relations with
them as any man going among them would have had.

Frequently I found points of difference between the men and the
officers, but in no single instance were the men as I met them other
than friendly, frank and perfectly willing to discuss with me, as I was
glad to discuss with them, any matters they chose to bring up.

It often occurred that there was justice in the points which they
raised and their requests were acted upon favorably by the officers.
Also frequently situations were presented in which it was impossible
for the company to meet the views of the employees. But never was a
subject dismissed until, if unable myself to make the situation clear,
the highest officials of the company were called in to explain to the
employee with the utmost fulness and detail the reasons why the thing
suggested was impossible.

No matter presented was left without having been settled in accordance
with the request of the employee, or, in the event of that being
impossible, without his having been fully convinced that the position
of the company was just and right and in the common interest.

This personal contact with the employees of the company led to the
establishment of mutual confidence and trust and to the acceptance on
their part of the premise that they and we were partners.

The men generally came to see that the man about whom they had heard
was very different from the man whom they had met in their homes and
at their work. While they distrusted the former, they believed in the
latter. Before I left Colorado, a plan of industrial representation,
providing for close personal contact between the duly elected
representatives of the men and officers of the company, was worked out
and adopted by a large majority vote of the employees.

This plan in substance aims to provide a means whereby the employees
of the company should appoint from their own number as their
representatives men who are working side by side with them, to meet
as often as may be with the officers of the corporation, sometimes in
general assembly, where open discussions are participated in and any
matters of mutual interest suggested and discussed; more frequently in
committees composed of an equal number of employees and officers, which
committees deal with every phase of the men’s lives--their working and
living conditions, their homes, their recreation, their religion and
the education and well-being of their children.

In brief, the plan embodies an effort to reproduce in so far as is
possible the earlier contact between owner and employee.

I do not venture to make any prediction as to the ultimate success of
the plan. Two interesting side lights, however, may be mentioned.

The first is that whereas the plan itself and an agreement covering
working and living conditions was adopted by the coal miners employed
by this company some fifteen months ago--since that time the same plan
and agreement, adapted to the particular requirements of the steel
workers, and also of the iron miners employed by the company, has been
adopted by both.

The second, while the company has reopened a number of mines formerly
idle and is now working quite to the limit of its capacity in the
production of coal, it has all the labor at its various mines which
it requires, and that too without having made any special effort to
attract labor to its recently reopened mining camps.

But there is a further reason why the personal relation in industry
is of such vital importance, and that is in order that the attitude
and purpose of the owners and directors of a company may be rightly
understood by and interpreted to their partners, the employees, and
vice versa; also that all grievances may be taken up and adjusted as
they arise.

How true it is that when some petty representative of a great
corporation makes a sharp trade with a customer, the customer at once
says, “Obviously, the president of this corporation is a dishonest and
unscrupulous man. It must be that he has directed his agents to pursue
these sharp and crooked practices.”

However high-minded the owners or directors of a company may be, it is
of the utmost difficulty to guard against such practices on the part
of an occasional representative. But it is obviously just as unfair on
such grounds to maintain that the owners and managers are unjust and
crooked in their business methods, as it would be to say that the whole
tree was bad simply because one apple on it had spots or imperfections.

The employee in any corporation must form his opinion of the owners and
directors of the corporation from the petty officer or foreman with
whom he has personal contact. Too often these men, not infrequently
promoted from the ranks, become overbearing and arrogant in their
treatment of those under them.

This very naturally is as irritating and unjust to the employee as it
is distressing to the company, and it is at this point in ninety-nine
cases out of a hundred where grievances arise.

The Colorado Industrial Plan to which I have referred has been so
drawn as to guard against the exercise of arrogance or oppression, by
providing various channels through which the employee with a grievance
can at once secure a sympathetic and friendly hearing, carrying his
difficulty to the president’s ear, if necessary.

The foreman who knows that any arbitrary or unjust action on his part
may be reviewed by his superior officers is very much more careful in
his treatment of his men, always wanting to avoid having his decisions
reversed.

If a slight scratch made on the finger with a rusty nail is
immediately cleansed with an antiseptic wash, it heals at once. On
the other hand, if the poison which has been introduced is allowed to
remain, soon inflammation sets in, the disorder spreads, and serious
menace to life may result.

And so it is with the petty grievance. If it is dealt with
sympathetically and justly, immediately it is made known, peace,
harmony and good-will are readily maintained. On the other hand, if
indifference is shown and lack of sympathy, the grievance is nursed and
from it grows the industrial disorders which later become so acute and
difficult to heal.

An ounce of prevention is worth much more than a pound of cure. In no
place is this saying truer than in dealing with human nature.

If I were to sum up in a few words what I have been endeavoring to say
to you in regard to the personal relation in industry, I should say,
apply the Golden Rule.

Every human being responds more quickly to love and sympathy than to
the exercise of authority and the display of distrust.

If in the days to come, as you have to do with labor, you will put
yourself in the other man’s place and govern your actions by what you
would wish done to you, were you the employee instead of the employer,
the problem of the establishment of the personal relation in industry
will be largely solved, strife and discord as between labor and capital
will give place to coöperation and harmony, the interests of both will
be greatly furthered, the public will be better served, and through the
establishment of industrial peace, a great stride will have been taken
toward the establishment of peace among nations.

FOOTNOTES:

[2] An address delivered at Cornell University on the occasion of
Founder’s Day, January 11, 1917.

[3] 1916.




IV

REPRESENTATION IN INDUSTRY[4]


I speak as a member of the Public Group. I hold no executive position
in any business corporation, and am not here representing any business
interest.

I have come in response to the request of the President to accept
appointment as one of the representatives of the general public in
this Conference and am considering the questions which come before the
Conference from that standpoint.

The resolution before the Conference is predicated upon the principle
of representation in industry, which includes the right to organize and
the right to bargain collectively. In supporting this resolution I beg
leave to present the following statement which, for the sake of brevity
and clearness, I have reduced to writing.

The experience through which our country passed in the months of
war, exhibiting as it did the willingness of all Americans without
distinction of race, creed or class to sacrifice personal ends for
a great ideal and to work together in a spirit of brotherhood and
coöperation, has been a revelation to our own people, and a cause for
congratulations to us all. Now that the stimulus of the war is over,
the question which confronts our nation is how can these high levels of
unselfish devotion to the common good be maintained and extended to the
civic life of the nation in times of peace.

We have been called together to consider the industrial problem. Only
as each of us discharges his duties as a member of this Conference in
the same high spirit of patriotism, of unselfish allegiance to right
and justice, of devotion to the principles of democracy and brotherhood
with which we approached the problems of the war, can we hope for
success in the solution of the industrial problem which is no less
vital to the life of the nation. Surely the men and women will stand
together as unselfishly in solving this great industrial problem as
they did in dealing with the problems of the war if only right is made
clear and the way to a solution pointed out.

The world position which our country holds to-day is due to the wide
vision of the statesmen who founded these United States and to the
daring and indomitable persistence of the great industrial leaders,
together with the myriads of men who with faith in their leadership
have coöperated to rear the marvelous industrial structure of which our
country is justly so proud.

This result has been produced by the coöperation of the four factors
in industry: labor, capital, management and the public, the last
represented by the consumer and by organized government.

No one of these groups can alone claim credit for what has been
accomplished. Just what is the relative importance of the contribution
made to the success of industry by these several factors and what
their relative rewards should be are debatable questions. But however
views may differ on these questions it is clear that the common
interest cannot be advanced by the effort of any one party to dominate
the other, to arbitrarily dictate the terms on which alone it will
coöperate, to threaten to withdraw if any attempt is made to thwart the
enforcement of its will. Such a position is as un-American as it is
intolerable.

The personal relationship which existed in bygone days is essential to
the development of this new spirit. It must be reëstablished; if not in
its original form at least as nearly so as possible.

In the early days of the development of industry, the employer and
capital investor were frequently one. Daily contact was had between him
and his employees, who were his friends and neighbors. Any questions
which arose on either side were taken up at once and readily adjusted.
A feeling of genuine friendliness, mutual confidence and stimulating
interest in the common enterprise was the result.

How different is the situation to-day! Because of the proportions
which modern industry has attained, employers and employees are too
often strangers to each other. Personal contact, so vital to the
success of any enterprise, is practically unknown, and naturally,
misunderstanding, suspicion, distrust and too often hatred have
developed, bringing in their train all the industrial ills which have
become far too common. Where men are strangers and have no points of
contact, this is the usual outcome. Much of the strife and bitterness
in industrial relations result from lack of ability or willingness on
the part of both Labor and Capital to view their common problems each
from the other’s point of view.

Representation is the principle upon which the democratic government
of our country is founded. On the battlefields of France this nation
poured out its blood freely in order that democracy might be maintained
at home and that its beneficient institutions might become available in
other lands as well.

Surely it is not consistent for us as Americans to demand democracy in
government and practice autocracy in industry.

What can this Conference do to further the establishment of democracy
in industry and lay a sure and solid foundation for the permanent
development of coöperation, good-will and industrial well-being? To
undertake to agree on the details of plans and methods is apt to lead
to endless controversy without constructive result.

Can we not, however, unite in the adoption of the principle of
representation, and the agreement to make every effort to secure
the endorsement and acceptance of this principle by all chambers of
commerce, industrial and commercial bodies and all organizations of
labor?

Such action I feel confident would be overwhelmingly backed by public
opinion and cordially approved by the Federal Government. The assurance
thus given of a closer relationship between the parties to industry
would further justice, promote good-will and help to bridge the gulf
between Capital and Labor.


     (_Resolution introduced by John D. Rockefeller, Jr., earlier in
     the session, which was not debated or acted upon but superseded by
     the resolution to which the foregoing remarks were addressed._)


WHEREAS, the common ground of agreement and action with regard to the
future conduct of industry, with the development of a new relationship
between Capital and Labor which the President sought in calling this
Conference can only be discovered as we approach the problem in the
spirit of justice, brotherhood, and of willingness to put one’s self in
the other man’s place, the coming of which means the substitution of
confidence for distrust, of good will for enmity, of coöperation for
antagonism; and

WHEREAS, this spirit can be developed only by the resumption of
personal relations between employer and employee or the nearest
possible approach thereto; and

WHEREAS, some form of representation in industry is essential in order
to make personal relations possible under modern industrial conditions;

Now Therefore be it

RESOLVED, that this Conference recognizes and approves the principle
of representation in industry under which the employees shall have an
effective voice in determining their terms of employment and their
working and living conditions; and be it further

RESOLVED, that just what form representation shall take in each
individual plant or corporation, so long as it be a method which is
effective and just, is a question to be determined by the parties
concerned in the light of the facts in each particular instance; and be
it further

RESOLVED, that any form of representation to be adequate must include:

1. Ample provision whereby the stockholders and the employees through
their respective representatives, shall give current consideration to
matters of common interest such as terms of employment and working and
living conditions;

2. Any such further provisions, if any, as may be necessary to insure
the prompt uncovering of grievances, real or alleged, and their speedy
adjustment.

FOOTNOTE:

[4] Remarks at National Industrial Conference, Washington, D. C.,
October 16, 1919.




V

TO THE EMPLOYEES[5]


This is a red-letter day in my life.

It is the first time I have ever had the good fortune to meet the
representatives of the employees of this great company, its officers
and mine superintendents, together, and I can assure you that I am
proud to be here, and that I shall remember this gathering as long as I
live.

Had this meeting been held two weeks ago, I should have stood here
as a stranger to many of you, recognizing few faces. Having had the
opportunity last week of visiting all of the camps in the southern
coal fields and of talking individually with practically all of the
representatives, except those who were away; having visited your homes,
met many of your wives and children, we meet here not as strangers
but as friends, and it is in that spirit of mutual friendship that I
am glad to have this opportunity to discuss with you men our common
interests.

Since this is a meeting of the officers of the company and the
representatives of the employees, it is only by your courtesy that I am
here, for I am not so fortunate as to be either one or the other; and
yet I feel that I am intimately associated with you men, for in a sense
I represent both the stockholders and the directors.

Before speaking of the plan of industrial representation to which
our president has referred, I want to say just a few words outlining
my views as to what different interests constitute a company or
corporation.

Every corporation is made up of four parties: Stockholders, directors,
officers and employees.

This little table (_exhibiting a square table with four legs_)
illustrates my conception of a corporation; and there are several
points in regard to the table to which I want to call your attention.

First, you see that it would not be complete unless it had all four
sides. Each side is necessary; each side has its own part to play.

Now, if you imagine this table cut into quarters, and each quarter
separated from the others, what would happen? All of them would fall
down, for no one could stand alone, and you would have no table. But
when you put the four sides together, you have a useful piece of
furniture; you have a table.

Then, secondly, I call your attention to the fact that these four sides
are all perfectly joined together; that is why we have a perfect table.
Likewise, if the parties interested in a corporation are not perfectly
joined together, harmoniously working together, you have a discordant
and unsuccessful corporation.

Again, you will notice that this table is square. And every corporation
to be successful must be on the square--absolutely a square deal for
every one of the four parties, and for every man in each of the four
parties.

I call your attention to one more thing--the table is level. Each part
supported by its leg is holding up its own side, hence you have a level
table. So, equal responsibility rests on each one of the four parties
united in a corporation.

When you have a level table, or a corporation that is on the level, you
can pile up earnings on it (_piling coins on the table_). Now, who gets
the first crack at the earnings? You know that we in New York don’t.

Here come along the employees, and first of all they get their wages
(_removing some of the coins_), every two weeks like clockwork, just
what has been agreed on; they get the first chance at the pile.

You men come ahead of the president, the officers, the stockholders and
directors. You are the first to put a hand into the pile and take out
what is agreed shall belong to you.

You don’t have to wait for your share; you don’t have to take any
chances about getting it. You know that there has never been a
two-weeks’ period that you have worked when you have not been able
to get your pay from this company; whatever happens, so long as the
company is running, you get your pay.

And then the officers and superintendents come along, and they get
theirs; they don’t get it until after you have gotten yours (_removing
more coins_).

Then come the directors, and they get their directors’ fees (_removing
the balance of the coins_) for doing their work in the company.

And, hello! There is nothing left! This must be the Colorado Fuel and
Iron Company! For never, men, since my father and I became interested
in this company as stockholders, some fourteen years ago--never has
there been one cent for the common stock.

For fourteen years the common stockholder has seen your wages paid to
you workers; has seen your salaries paid to you officers; has seen the
directors draw their fees, and has not had one cent of return for the
money that he has put into this company in order that you men might
work and get your wages and salaries.

How many men in this room ever heard that fact stated before? Is there
a man among you? Well, there are mighty few among the workers who have
heard it.

What you have been told, what has been heralded from the Atlantic to
the Pacific, is that those Rockefeller men in New York, the biggest
scoundrels that ever lived, have taken millions of dollars out of this
company on account of their stock ownership, have oppressed you men,
have cheated you out of your wages, and “done” you in every way they
could.

That is the kind of “dope” you have been getting, and that is what
has been spread all over the country. And when that kind of talk was
going on, there were disturbances in this part of the country because
the four sides of this table were not square and the table was not
level, there were those who in the streets of New York and in public
gatherings, were inciting the crowd to “shoot John D. Rockefeller, Jr.,
down like a dog.” That is the way they talked.

The common stockholders have put $34,000,000 into this company in order
to make it go, so that you men will get your wages, you officers have
your salaries, and the directors get their fees, while not one cent has
ever come back to them in these fourteen years.

If there is anyone who questions that statement, let him speak. Now,
let me put it to you men, is it fair, in this corporation where we
are all partners, that three of the partners should get all of the
earnings, be they large or small--all of them--and the fourth nothing?

Is there a man of you who would put his money in the savings bank and
leave it there for one year even, unless he was sure to get at least
four per cent. interest? Otherwise you would say that the savings bank
was trying to cheat you out of a proper return on your money.

But for fourteen years, to my knowledge--how much longer I do not
know--the common stockholders have gotten not one cent out of this
company. I just want you to put that in your pipes and smoke it, and
see if it tallies with what you have heard about the stockholders
oppressing you and trying to get the better of you. That does not sound
like oppression, like trying to get the best of the bargain!

And you cannot expect that any one of the partners will remain
indefinitely in this or any other corporation if he does not get a fair
share of the earnings, with the others. Capital is entitled to a fair
return, just the same as labor is.

Would you continue working in some mining camp for even a week, much
less a month, a year, or fourteen years, without pay? Of course you
would not. You would go to Pennsylvania, Indiana, Ohio--anywhere else
on God’s earth where you could get a fair return for your work.

Now, the stockholders have been pretty patient all this time; they have
taken a lot of abuse because people have not told the truth.

I think if we had all gotten together, as we have to-day, months and
years ago, and discussed these questions, and the facts had been fairly
presented, that there is not a man in this room but who would have said:

“That is not a square deal, and in so far as I have anything to do with
this company, whether I am digging coal, driving mules, or sitting in
an office directing operations--whatever my position, I will do what
I can to see to it that every last man in this big family here gets a
square deal.”

Now, I am not here to seek sympathy for the common stockholders, but I
just want to point out to you what you ought to know: that capital will
not stay indefinitely where it does not get proper recognition and a
reasonable return.

And not one man in this room can afford to have the capital invested
in the mines of the Colorado Fuel and Iron Company become discouraged
and withdraw, because as capital gets discouraged and withdraws,
work falls off, mines are closed, wages go down, men are thrown out
of employment, and the whole enterprise is endangered, and all of
these things may result because only three of the four sides in the
corporation have received consideration.

(_Interruption by Mr. Ben Beach, superintendent of Coal Creek mine_:)

“Mr. Rockefeller, I wonder whether I may say a word right here?

“Mr. Rockefeller and Fellow Workmen: What Mr. Rockefeller has stated in
regard to the common stock I can vouch for, for about eight years ago I
bought some common stock in the C. F. & I. Co. and I have been one of
those sorry men because I never got any returns for it.”

Mr. Rockefeller: That is testimony that comes directly home. I have
been expecting to hear such expressions from the stockholders. I have
been expecting that there would be criticism, and just criticism, from
men, like our friend here, who have had no dividends on their stock all
these years. They may well say:

“What right have you to go on spending money for club houses, bath
houses and fences, for this improvement in the camps, or that, simply
to add to the comfort of the men, when we common stockholders have
never gotten a cent?” That is just the way the stockholders may well
feel. I am glad you brought up that point, Mr. Beach.

I want to show you another thing in connection with this table, this
corporation with its four sides, working harmoniously, and with
earnings piling up. When any one side says to itself:

“I am not satisfied with my fair portion; I am going to grab all I can
and let the others take care of themselves,” and thereupon commences to
reach up and lay hold of more than its fair share of the earnings, then
it happens that the earnings commence to fall off, there is trouble and
nothing is left to divide.

(_At this point, Mr. Rockefeller raised one of the legs of the table,
thereby tilting it and causing the coins piled upon it to slip off._)

There is still another thing I want to speak of in regard to this
table. Here is one of the four parties in the corporation who says:

“I am tired of doing my share, holding up my end of the game. We
wage-earners are tired of this thing, we don’t like to carry our fair
share of the burden, let us try to get all we can out of the company
and put in just as little as we can. Let us do each day just as little
work as we can and hold the job down.”

Now, you know there are men going over this country from one end to
the other who are saying to the workmen of the country:

“Your game is to get the shortest possible working day you can, to do
the least possible work that you can get away with and not lose your
job, and to get just as much as you can for what little you do.”

Any man who preaches that doctrine, instead of being your friend, is
your deadliest enemy, because see what happens. Here is the side of
Labor; it says:

“We will get out from underneath, we won’t work so hard; we will do
just as little as we can.”

And Labor’s corner begins to drop down (_lowering the corner of the
table_), the earnings fall off (_coins slip off_) and there is nothing
left for anyone (_the table is bare_).

Men, only when every man connected with that square corporation which
is on the level, is interested, unselfishly, not in what he can get
out of the corporation, but what he can put into it for the benefit of
every man in the concern, will that man himself get the most out of it.

And I think there is no one thing that threatens greater harm to the
interests of the workingmen of this country than that pernicious, that
wicked, that false doctrine, that a man should do just as little work
in a day as he possibly can, and just as poor work as he possibly can,
and hold on to his job.

We see, then, what this company ought to be, what any corporation ought
to be: a concern that is square, and always on the level, with every
man doing his part. You do not need to take my word for it, you see
from the illustration of the table that the interest of every man is
sacrificed when any other principle governs.

Now--the problem which lies before the Colorado Fuel and Iron Company
is to so interrelate the different elements in the company that
the best interests of all will constantly be conserved, and the
wage-earners, seeing the situation as it is here shown, must say and
will say--because they are square men:

“We only want a square deal; we only want what is our fair proportion
of return from this corporation; we will do our best to make it a
success because we know that our success is dependent upon the success
of all our partners.”

The officers must say:

“Our interest is to have every man that works with us realize that we
are his friends, not his enemies; that there is no reasonable thing
that he may want to talk about which we will not gladly discuss with
him and explain.”

The directors must, on their part, give their best energies and efforts
to the devising of policies which will be in the interest of all.
The common stockholders must be patient yet awhile as they look at
that empty table from which the rest of you have rightly taken your
earnings, and they will be patient, I am sure, if they feel that all of
the other elements in the company are earnestly coöperating to bring
about the highest success of each and to secure a fair deal all around.

This meeting has been called to-day for the purpose of seeing whether
we can work out and agree upon, among ourselves here, some plan which
will accomplish what I feel sure we all want to accomplish. I have been
asked to explain the plan which is up for our consideration.

I may say, men, that for years this great problem of Labor and Capital
and of corporate relationships has engaged my earnest attention and
study, while for the last eighteen months I have spent more of my time
on the particular problems which confront this company than I have put
on any other one interest with which I am related.

I have talked with all of the men whom I could get in touch with who
have had experience with or have studied these vital questions. I have
conferred with experts, and I have tried in every way to get the best
information I could, looking toward the working out of some plan which
would accomplish the result we are all striving to attain.

Nearly a year ago the officers of the company, after having studied
this question with us in New York, introduced, as you know, the
beginning of such a plan, namely, the selection by the men at each camp
of duly chosen representatives, to confer with the officers of the
company in regard to matters of common interest.

That was the beginning, and Mr. Welborn, in discussing the plan with
you men, told you that it was only the beginning, that as rapidly
as it became clear what further steps should be taken in order to
conserve the common interest, those steps would be jointly discussed
and introduced as soon as agreed upon. And so, in conjunction with
Mr. Welborn and other able advisers, we have worked out a further
development of the plan adopted last fall.

Then I said to myself: nothing shall be said about this plan, nor will
we undertake to complete it until I have myself seen every mining camp
operated by the company.

And now I have visited every camp, with the exception of those on the
western slope, and lack of time alone has prevented my getting over
there to see you men.

I have gone, as you know, to every camp in the southern fields, have
talked privately with every superintendent, except one who was away,
and with all of the representatives at each camp with the exception of
some two or three who were not available at the time; I have gone into
scores of your homes and I met your wives and children, and have seen
how you live; I have looked at your gardens, and in camps where fences
were only recently built have seen how eagerly you have planted gardens
the moment opportunity was afforded, and how quickly you have gotten
the grass to grow, also flowers and vegetables, and how the interest in
your homes has thereby been increased.

I inquired specifically about the water supply at each camp; I went
down into several of the mines and talked with hundreds of the miners;
I looked into the schools, talked with the teachers, inquired what
educational advantages your children were getting.

I asked what opportunities you men, my partners, had for getting
together socially, and I visited some of your club houses and saw plans
for others. I went into your wash houses and talked with the men before
and after bathing.

As you know, we have pretty nearly slept together--it has been reported
that I slept in one of your nightshirts--I would have been proud had
the report been true.

If any man could have gone more carefully, more thoroughly, into the
working and living conditions that affect you, my partners, I should
be glad to have had him make me suggestions as to what further I might
have done.

Now, it was only after that careful and exhaustive personal study that
I was willing to go on with the plan of representation and undertake to
complete it for presentation to you. And, frankly, every waking moment
since I left you men in the Fremont district last Saturday, practically
every daylight hour of this last week has been spent with the officers
of this company in constant, careful, earnest thought looking toward
the development of such a plan as would serve our common interest in
the best possible way.

I have made a very lengthy introduction, and will now proceed to the
explanation of the plan. I shall be glad if Mr. Welborn, Mr. Weitzel,
Mr. Matteson, or Mr. King, whose assistance has been of the greatest
value in working out this plan, will correct me as I go along in case I
make any mistake or omit any features.

(_Mr. Rockefeller then explained the plan in detail, calling attention
to the fact that if it met with the approval of the representatives and
officers in the meeting, together with an agreement respecting wages,
working and living conditions, both would be submitted on the one hand
to a vote of the men in the camps, and on the other to the directors of
the company, and if then approved, the agreement would be signed and
become binding until January 1, 1918. Mr. Rockefeller went on to say:_)

I want to stay in Colorado until we have worked out some plan that we
all agree is the best thing for us all, because there is just one thing
that no man in this company can ever afford to have happen again, be he
stockholder, officer, or employee, or whatever his position, and that
is, another strike.

I know we are all agreed about that, every last man of us, and I
propose to stay here if it takes a year, until we have worked out among
ourselves, right in our own family, some plan that we all believe
is going to prevent any more disturbances, any more interruption of
the successful operation of this great company in which we are all
interested.

I have been hoping that the votes in all the camps could be taken early
next week, so that we would know without delay what the spirit and
wish of the men and the directors is. I speak of this point so that in
explaining the matter to the men in your camps you representatives will
make it clear to them why we are proceeding a little more rapidly than
we would if I lived here all the time, and if I was not so desirous of
seeing some agreement reached before I go away.

There will be a meeting of the Board of Directors on Monday next, and
if this meeting should accept this plan and recommend its adoption, the
Board will act on that day. I should hope that meetings could be held
in the various camps on Monday, Tuesday and Wednesday. You men can
explain the plan to the men in the camps privately and in little groups
so that they will be ready to consider it fully and then vote on it by
the middle or toward the latter part of next week.

FOOTNOTE:

[5] Address at the joint meeting of the officers and representatives of
the employees of the Colorado Fuel and Iron Company, Pueblo, October 2,
1915.




VI

TO THE PEOPLE OF COLORADO[6]


Of all the many cordial receptions which have been accorded me since I
was so fortunate as to enter your hospitable State, none has been more
gratifying or more deeply appreciated than the one which you citizens
of Denver have to-day tendered me. And I count it a most gratifying
climax to my visit to Colorado that I should have this opportunity of
meeting so splendid a gathering of the representative business men and
citizens of this fair State.

As I have traveled about Colorado the past three weeks I have been
charmed with the beauty and grandeur of the scenery; I have been
inspired by the invigorating climate, the clear air, the blue sky. I
have been impressed with the fertility of your soil, with the vast
extent and richness of your mineral wealth. But above all, I have been
captivated by the cordiality of your people.

And so I am very happy to have this opportunity to-day of expressing
to you, and through you to the people of Colorado, my deep appreciation
of the many kindnesses and courtesies which have been shown me during
my stay among you.

These I have accepted as intended partially for myself, but largely for
my father, whose representative I am, and in whose name as well as my
own I thank you.

My father has been for many years a good friend of the people and State
of Colorado. His friendship for you, his belief in you, his confidence
in the future of this State, have been clearly shown by his having put
considerable sums of money into the steel and coal industries of the
State through his investments in the Colorado Fuel and Iron Company;
and, as many of you know, during the fourteen years since he made his
first investment in that company, except for one payment made on the
preferred stock on account of an accumulation of dividends, there has
not come back to him or the common stockholders one single cent of
return.

And yet my father has not lost his faith in the State of Colorado nor
in the people of Colorado; he believes in you, and the fact that his
interest in this company continues to be a very substantial one is a
sure proof of his attitude.

I wish very much that he were here to-day himself. I have often had
that wish as I have gone among you during these weeks.

Some of the papers have mentioned my democratic spirit. If my father
had been among you as I have been, no comment in regard to my attitude
would have been made, for of all men he is most democratic and
approachable, as hundreds of those who know him will testify, and in
that atmosphere of democracy I have been reared. Born and brought up in
the country, at an early age he learned what hard work meant.

When his period of schooling had been completed he went into active
business for himself, and during the many years following, when he was
actively engaged in business, he was constantly in close personal touch
with the working classes, among whom he found many of his best and
truest friends.

At his country place on the Hudson there are constantly employed
several hundred men of different nationalities; many of these employees
he knows by name; he is constantly mingling with them in their work,
interested in their progress and in their home life, and it is not an
infrequent sight, at the close of the day’s work, to see him returning
home in his automobile with half a dozen or a dozen Italian and
Hungarian workingmen crowded about him on the seats and standing on the
running board as he gives them a lift on their way home.

When motoring about the country he may frequently be found talking with
a group of men at the country store in a little village, and when he
comes upon school children returning from their school he delights to
load as many of them into his automobile as possible and give them a
ride on their way.

I recall not long since the death of a colored teamster who had for
some years been in my father’s employ. My father was among the first to
visit the bereaved family in their humble home above the work stable,
that he might express his sympathy with them in their sorrow, and as he
stood at the grave his tears were mingled with the tears of the other
mourners as he paid his last tribute of respect to a faithful employee
and a true friend.

When called as a witness in New York by the Industrial Relations
Commission last winter, my father stated very clearly his attitude
toward workingmen.

Briefly, these were the three points that he made:

That he believed that Labor and Capital were partners, not enemies.

That in any industry with which he was connected he would gladly
welcome the workers as stockholders, and further:

That it would be his wish that those who work with their hands be given
representation upon the Board of Directors, so that they might come to
have a closer knowledge of the problems with which the management of
the corporation is confronted.

The word “fear” is not found in my father’s vocabulary, nor does he
know what the sensation is, and yet he has the gentleness and the
tenderness of a woman.

Although he has been accustomed to think in world terms in the
development of the business and philanthropic enterprises to which his
life has been devoted, there is no person in his household too humble
to receive his frequent kindly and personal thought.

Criticized, maligned, and condemned these many years, not only for his
business success achieved through his ability to gain the confidence
and coöperation of men, to bring all parties into harmony and to effect
economies in every possible way, but also because of his philanthropic
endeavors, there is still not the slightest trace of bitterness in his
character and he holds in his heart nothing but good-will toward every
man.

And if, in their kindness of heart, the people of Colorado have found
in me anything that may have seemed admirable, that, and whatever else
I am or may be, I owe to my sainted mother and my honored father,
whose training and example I regard as a priceless heritage. And so
again I say I wish that my father were here that he might meet you men
personally and be confirmed in the view which he has held during past
months of unrest and conflict, to the effect that many of the evil and
censorious reports which have been spread about the country in regard
to this great State and its people are untrue; that you, on the other
hand, coming to know him, might realize the injustice and the cruelty
of the things that have been said and written about him during these
many years.

And again, in his absence, on his behalf, as well as for myself, I
thank you for your kindness and the evidences of your friendship to
him and to me, which have been countless during these days of my happy
residence among you.

There has been so much said with regard to the views which my father
and I have held and do hold in regard to the organization of labor, and
also in regard to the relations which should exist between the various
parties in any company or corporation, that it is perhaps not unfitting
for me to state in a few words just what those views are.

The position I took when called before the Subcommittee of Mines and
Mining of the House of Representatives in Washington two years ago,
in regard to the right of every American workingman to work for whom
he pleased and upon such terms as he pleased, has been frequently
misunderstood and misrepresented.

It has been construed as indicating that my father and I were not only
opposed to the organization of labor, but that we were persistently and
continually fighting it. No such inference is correct, for absolutely
the contrary is the fact.

I can, perhaps, present in the briefest and clearest way the views
which we hold on these two subjects by referring to several paragraphs
from a statement which I read before the Industrial Relations
Commission in New York last January:

“First, with reference to my attitude toward labor unions: I believe
it to be just as proper and advantageous for labor to associate itself
into organized groups for the advancement of its legitimate interests,
as for capital to combine for the same object.

“Such associations of labor manifest themselves in promoting
collective bargaining, in an effort to secure better working and
living conditions, in providing machinery whereby grievances may
easily and without prejudice to the individual be taken up with the
management. Sometimes they provide benefit features, sometimes they
seek to increase wages; but whatever their specific purpose, so long
as it is to promote the well-being of the employees, having always due
regard for the just interests of the employer and the public, leaving
every worker free to associate himself with such groups or to work
independently, as he may choose--I favor them most heartily.

“Combinations of capital are sometimes conducted in an unworthy manner
contrary to law and in disregard of the interest both of labor and the
public. Such combinations cannot be too strongly condemned nor too
vigorously dealt with.

“Although combinations of this kind are the exception, such publicity
is generally given to their unsocial acts that all combinations of
capital, however rightly managed or broadly beneficent, are thereby
brought under suspicion.

“Likewise, it sometimes happens that combinations of labor are
conducted without just regard for the rights of the employer or the
public, and methods and practices adopted which, because unworthy
or unlawful, are deserving of public censure. Such organizations of
labor bring discredit and suspicion upon other organizations which are
legitimate and useful, just as is the case with improper combinations
of capital, and they should be similarly dealt with.

“I should be the last, however, to allow the occasional failure in the
working of the principle of the organization of labor to prejudice me
against the principle itself, for in that principle I strongly believe.

“In the further development of the organization of labor and of large
business, the public interest, as well as the interest of Labor and
Capital alike, will, it seems to me, be best advanced by whatever
stimulates every man to do the best work of which he is capable; by a
fuller recognition of the common interest of employers and employed;
and by an earnest effort to dispel distrust and hatred and to promote
good-will.

“I believe that the ultimate object of all activities in a republic
should be the development of the manhood of its citizens; that such
manhood can be developed to the fullest degree only under conditions
of freedom for the individual, and that industrial enterprises can and
should be conducted in accordance with these principles.

“I believe that a prime consideration in the carrying on of industry
should be the well-being of the men and women engaged in it, and that
the soundest industrial policy is that which has constantly in mind the
welfare of the employees as well as the making of profits, and which,
when the necessity arises, subordinates profits to welfare.

“A business to be successful must not only provide to labor
remunerative employment under proper working conditions, but it must
also render useful service to the community and earn a fair return on
the money invested.

“The adoption of any policy toward labor, however favorable it may
seem, which results in the bankruptcy of the corporation and the
discontinuance of its work, is as injurious to labor which is thrown
out of employment, as it is to the public which loses the services of
the enterprise, and to the stockholders whose capital is impaired.

“I believe it to be the duty of every citizen to do all within his
power to improve the conditions under which men work and live. I
believe that that man renders the greatest social service who so
coöperates in the organization of industry as to afford to the largest
number of men the greatest opportunity for self-development, and the
enjoyment by every man of those benefits which his own work adds to the
wealth of civilization.

“In order to live, the wage-earner must sell his labor from day to day.
Unless he can do this, the earnings from that day’s labor are gone
forever. Capital can defer its returns temporarily in the expectation
of future profits, but labor cannot. If, therefore, fair wages and
reasonable living conditions cannot otherwise be provided, dividends
must be deferred or the industry abandoned.

“I believe that a corporation should be deemed to consist of its
stockholders, directors, officers and employees; that the real
interests of all are one, and that neither Labor nor Capital can
permanently prosper unless the just rights of both are conserved.”

It was in line with these views that the plan of industrial
representation recently proposed by the Colorado Fuel and Iron Company,
and already adopted by the directors and by a majority vote of the
employees of the different camps, was developed.

The underlying principle is that of coöperation, the theory being that
the interests are common interests, and this leads to the development
of the committees called for in the plan, as joint committees, on each
of which the representatives of the workers have equal place with the
representatives of the officers of the company.

In contrast with this spirit of coöperation is the spirit which too
often has been in evidence in some organizations of labor. There,
seemingly, labor is arrayed against capital. It is war! And apparently
success cannot come to either party except failure or harm comes to the
other.

I need not point out to you men the fact that in this day and
generation we cannot hope for industrial peace, we cannot hope for
prosperity in this fair land, until labor and capital join hands and
recognize that their interest is a common interest, that what hurts one
hurts the other, that what develops the well-being and the prosperity
of one must of necessity develop the well-being and prosperity of the
other.

May I also point out the spirit of democracy which underlies this
plan? All of the employees in the corporation are entitled to join in
it, regardless of whether they are or are not members of any society,
fraternity or union, as contrasted with any plan, where only those who
elect to join an organization are eligible to the benefits which come
from it.

Every man in the camps of the Colorado Fuel and Iron Company is
considered in this industrial plan, is represented and can be heard,
and his complaint, be it great or small, can be carried from one
officer to another until it reaches the ear of the president of the
company.

Those who have coöperated in the development of this plan recognize
that it is far from perfect, that it will have to be changed and
adapted to the requirements of the company in which it has been adopted.

On the other hand, it is the earnest hope of all who are associated in
the plan that it may point the way toward a closer coöperation between
the employees and the other parties in interest in this company, that
it may so establish relations of friendship and of mutual confidence,
that it may so benefit the workers, the officers and the stockholders
of the company, that there may never come a day when there will be
repeated the industrial disorders which have occurred in the past in
this company and in other companies in this State.

And it is our hope that toward that end all of the citizens of the
State will coöperate, for, as I have said to the representatives of
the workers of the Colorado Fuel and Iron Company, to many of the men
themselves, as well as to the officers and directors of the company,
there is one thing which must never happen again in that company, and
that is a strike. Wantonly wasteful of human life and human property,
no parties in interest are benefited thereby, but all seriously and
permanently harmed as well as the public and the citizens of the State.

The way to prevent war is to cultivate and develop those qualities of
head and heart which promote happiness and peace, and it is with that
purpose in mind that this plan, to which I have referred, has been
developed.

The time has come when the business man of this State and county must
think in terms of the laboring man, and the laboring man must think in
terms of the business man; when each must strive to imagine himself in
the other’s place; when the teaching that every man is his brother’s
keeper should no longer be a dead letter but a living reality; when
coöperation and not conflict should be the watchword.

The opportunity to lead the nation in the permanent establishment of
industrial peace is yours; if you will lay hold upon it, the name of
this fair State will be written large in the history of the nation; if
you let it pass, you and your children and your children’s children,
will never cease to regret this day.

And if in any smallest way my coming to Colorado may prove to have been
of service to you in approaching the solution of this world problem
of industrial relations, I shall feel a sense of satisfaction and
gratitude beyond expression.

FOOTNOTE:

[6] Address at the Chamber of Commerce Luncheon, Denver, October 8,
1915.




APPENDIX




THE INDUSTRIAL CONSTITUTION

PLAN OF REPRESENTATION OF EMPLOYEES IN THE COAL AND IRON MINES OF THE
COLORADO FUEL AND IRON COMPANY OF COLORADO AND WYOMING




I

REPRESENTATION OF EMPLOYEES


     _1. Annual meetings for election of employee’s representatives._

Employees at each of the mining camps shall annually elect from among
their number representatives to act on their behalf with respect to
matters pertaining to their employment, working and living conditions,
the adjustment of differences, and such other matters of mutual concern
and interest as relations within the industry may determine.


     _2. Time, place and method of calling annual meetings, and
     persons entitled to be present and participate in the election of
     representatives._

The annual meetings of employees for the election of their
representatives shall be held simultaneously at the several mining
camps on the second Saturday in January. The meetings shall be
called by direction of the president of the company. Notices of the
meetings, indicating their time and place, as well as the number of
representatives to be elected, shall be publicly posted at each camp a
week in advance, and shall state that employees being wage-earners in
the employ of the company at the time of the meeting and for at least
three months immediately preceding, but not salaried employees, shall
be entitled to be present and vote. Special meetings shall be similarly
called when removal, resignations, or other circumstance occasions a
vacancy in representation.


     _3. Method of conducting meetings, and reporting election of
     representatives._

Each meeting for the election of employees’ representatives shall
choose its own chairman and secretary. At the appointed hour,
the meeting shall be called to order by one of the employees’
representatives, or, in the absence of a representative, any employee
present, and shall proceed to the election of a chairman and secretary.
The chairman shall conduct, and the secretary record, the proceedings.
They shall certify in writing to the president of the company the
names of the persons elected as the employees’ representatives for the
ensuing year.


     _4. Basis and term of representation._

Representatives of employees in each camp shall be on the basis of one
representative to every one hundred and fifty wage-earners, but each
camp, whatever its number of employees, shall be entitled to at least
two representatives. Where the number of employees in any one camp
exceeds one hundred and fifty, or any multiple thereof, by seventy-five
or more, an additional representative shall be elected. The persons
elected shall act as the employees’ representatives from the time of
their election until the next annual meeting, unless in the interval
other representatives may, as above provided, have been elected to take
their places.


     _5. Nomination and election of representatives._

To facilitate the nomination and election of employees’
representatives, and to insure freedom of choice, both nomination
and election shall be by secret ballot, under conditions calculated
to insure an impartial count. The company shall provide ballot boxes
and blank ballots, differing in form, for purposes of nomination and
election. Upon entering the meeting, each employee entitled to be
present shall be given a nomination ballot on which he shall write the
names of the persons whom he desires to nominate as representatives,
and deposit the nomination ballot in the ballot box. Each employee may
nominate representatives to the number to which the camp is entitled,
and of which public notice has been given. Employees unable to write
may ask any of their fellow employees to write for them on their
ballots the names of the persons whom they desire to nominate; but in
the event of any nomination paper containing more names than the number
of representatives to which the camp is entitled, the paper shall not
be counted. The persons--to the number of twice as many representatives
as the camp is entitled to--receiving the highest number of nomination
votes shall be regarded as the duly nominated candidates for employees’
representatives, and shall be voted upon as hereinafter provided. (For
example: If a camp is entitled to two representatives, the four persons
receiving the largest number of nominating votes shall be regarded
as the duly nominated candidates. If the camp is entitled to three
representatives, then the six persons receiving the largest number,
etc.)


     _6. Counting of nomination and election ballots._

The chairman shall appoint three tellers, who shall take charge of
the ballot box containing the nomination votes, and, with the aid of
the secretary, they shall make out the list of the duly nominated
candidates, which shall be announced by the chairman. The meeting shall
then proceed to elect representatives by secret ballot, from among
the number of candidates announced, the same tellers having charge of
the balloting. If dissatisfied with the count, either as respects the
nomination or election, any twenty-five employees present may demand a
recount, and for the purposes of the recount the chairman shall select
as tellers three from the number of those demanding a recount, and
himself assist in the counting, and these four shall act, in making the
recount, in place of the secretary and the tellers previously chosen.
There shall be no appeal from this recount, except to the president of
the company, and such appeal may be taken as hereinafter provided, at
the request of any twenty-five employees present and entitled to vote.


     _7. Appeal in regard to nomination or election._

The chairman of the meeting shall preserve for a period of one week
both the nomination and election ballots. Should an appeal be made
to the president within seven days in regard to the validity of the
nomination or election, upon request in writing signed by twenty-five
employees present at the meeting, the chairman shall deliver the
ballots to the president of the company for recount. Should no such
request be received within that time, the chairman shall destroy the
ballots. If after considering the appeal the president is of the
opinion that the nomination or election has not been fairly conducted,
he shall order a new election at a time and place to be designated by
him.


     _8. General proceedings at meetings._

At annual meetings for the election of representatives, employees may
consider and make recommendations concerning any matters pertaining
to their employment, working or living conditions, or arising out of
existing industrial relations, including such as they may desire to
have their representatives discuss with the president and officers of
the company at the Annual Joint Conference of the company’s officers
and employees, also any matters referred to them by the president,
other officers of the company, the Advisory Board or Social Joint
Committee appointed at the preceding annual joint conferences of
officials and employees of the company. A record of the proceedings
shall be made by the secretary of the meeting and certified to by the
chairman, and copies delivered to each of the representatives, to be
retained by them for purposes of future reference.




II

DISTRICT CONFERENCES, JOINT COMMITTEES AND JOINT MEETINGS


     _1. District divisions._

To facilitate the purposes herein set forth, the camps of the company
shall be divided into five or more districts, as follows: the Trinidad
District, comprising all mines and coke oven plants in Las Animas
County; the Walsenburg District, comprising all mines in Huerfano
County; the Cañon District, comprising all mines in Fremont County; the
Western District, comprising all mines and coke oven plants located
on the Western Slope; the Sunrise District, comprising the iron mines
located in Wyoming.


     _2. Time, place and purpose of district conferences._

District conferences shall be held in each of the several districts
above mentioned at the call of the president, at places to be
designated by him, not later than two weeks following the annual
election of representatives, and at intervals of not more than four
months thereafter, as the operating officers of the company, or a
majority of the representatives of the employees in each of the
several districts, may find desirable. The purpose of these district
conferences shall be to discuss freely matters of mutual interest and
concern to the company and its employees, embracing a consideration of
suggestions to promote increased efficiency and production, to improve
working and living conditions, to enforce discipline, avoid friction,
and to further friendly and cordial relations between the company’s
officers and employees.


     _3. Representation at district conferences._

At the district conferences the company shall be represented by its
president or his representative and such other officials as the
president may designate. The employees shall be represented by their
elected representatives. The company’s representatives shall not
exceed in number the representatives of the employees. The company
shall provide at its own expense appropriate places of meeting for the
conferences.


     _4. Proceedings of district conferences._

The district conferences shall be presided over by the president of
the company, or such executive officer as he may designate. Each
conference shall select a secretary who shall record its proceedings.
The record of proceedings shall be certified to by the presiding
officer.


     _5. Joint committees on industrial relations._

The first district conferences held in each year shall select the
following joint committees on industrial relations for each district,
which joint committees shall be regarded as permanent committees to
be intrusted with such duties as are herein set forth, or as may
be assigned by the conferences. These joint committees shall be
available for consultation at any time throughout the year with the
Advisory Board on Social and Industrial Betterment, the president,
the president’s executive assistant, or any officer of the operating
department of the company.

(a) Joint Committee on Industrial Coöperation and Conciliation: to be
composed of six members.

(b) Joint Committee on Safety and Accidents: to be composed of six
members.

(c) Joint Committee on Sanitation, Health and Housing: to be composed
of six members.

(d) Joint Committee on Recreation and Education: to be composed of six
members.


     _6. Selection and composition of joint committees._

In selecting the members of the several joint committees on industrial
relations, the employees’ representatives shall, as respects each
committee, designate three members and the president of the company or
his representative, three members.


     _7. Duties of Joint Committee on Industrial Coöperation and
     Conciliation._

The Joint Committee on Industrial Coöperation and Conciliation may, of
their own initiative, bring up for discussion at the joint conferences,
or have referred to them for consideration and report to the president
or other proper officer of the company at any time throughout the year,
any matter pertaining to the prevention and settlement of industrial
disputes, terms and conditions of employment, maintenance of order and
discipline in the several camps, company stores, etc.


     _8. Duties of Joint Committee on Safety and Accidents._

The Joint Committee on Safety and Accidents may, of their own
initiative, bring up for discussion at the joint conferences, or have
referred to them for consideration and report to the president or
other proper officer of the company at any time throughout the year,
any matter pertaining to the inspection of mines, the prevention of
accidents, the safeguarding of machinery and dangerous working places,
the use of explosives, fire protection, first aid, etc.


     _9. Duties of Joint Committee on Sanitation, Health and Housing._

The Joint Committee on Sanitation, Health and Housing may, of their
own initiative, bring up for discussion at the joint conferences, or
have referred to them for consideration and report to the president
or other proper officer of the company at any time throughout the
year, any matter pertaining to health, hospitals, physicians, nurses,
occupational disease, tuberculosis, sanitation, water supply, sewage
system, garbage disposal, street cleaning, wash and locker rooms,
housing, homes, rents, gardens, fencing, etc.


     _10. Duties of Joint Committee on Recreation and Education._

The Joint Committee on Recreation and Education may, of their own
initiative, bring up for discussion at the joint conferences, or
have referred to them for consideration and report to the president
or other proper officer of the company, at any time throughout the
year, any matter pertaining to social centers, club houses, halls,
playgrounds, entertainments, moving pictures, athletics, competitions,
field days, holidays, schools, libraries, classes for those who speak
only foreign languages, technical education, manual training, health
lectures, classes in first aid, religious exercises, churches and
Sunday schools, Y. M. C. A. organizations, etc.


     _11. Annual and special joint meetings._

In addition to the district conferences in each of the several
districts, there shall be held in the month of December an annual
joint meeting, at a time and place to be designated by the president
of the company, to be attended by the president and such officers of
the company as he may select and by all the employees’ representatives
of the several districts. At this meeting reports covering the work of
the year shall be made by the several joint committees and matters of
common interest requiring collective action considered. A special joint
meeting of any two or more districts may be called at any time upon the
written request to the president of a majority of the representatives
in such districts or upon the president’s own initiative, for the
consideration of such matters of common interest as cannot be dealt
with satisfactorily at district conferences. Notice of such special
joint meetings shall be given at least two weeks in advance.




III

THE PREVENTION AND ADJUSTMENT OF INDUSTRIAL DISPUTES


     _1. Observance of laws, rides and regulations._

There shall be on the part of the company and its employees, a strict
observance of the Federal and State laws respecting mining and labor
and of the company’s rules and regulations supplementing the same.


     _2. Posting of wages and rules._

The scale of wages and the rules in regard to working conditions shall
be posted in a conspicuous place at or near every mine.


     _3. No discrimination on account of membership or non-membership
     in labor or other organizations._

There shall be no discrimination by the company or by any of its
employees on account of membership or non-membership in any society,
fraternity or union.


     _4. The right to hire and discharge, and the management of the
     properties._

The right to hire and discharge, the management of the properties, and
the direction of the working forces, shall be vested exclusively in the
company, and, except as expressly restricted, this right shall not be
abridged by anything contained herein.


     _5. Employees’ right to caution or suspension before discharge._

There shall be posted at each property a list of offenses for
commission of which by an employee dismissal may result without notice.
For other offenses, employees shall not be discharged without first
having been notified that a repetition of the offense will be cause
for dismissal. A copy of this notification shall, at the time of its
being given to an employee, be sent also to the president’s industrial
representative and retained by him for purposes of future reference.
Nothing herein shall abridge the right of the company to relieve
employees from duty because of lack of work. Where relief from duty
through lack of work becomes necessary, men with families shall, all
things being equal, be given preference.


     _6. Employees’ right to hold meetings._

Employees shall have the right to hold meetings at appropriate places
on company property or elsewhere as they may desire outside of working
hours or on idle days.


     _7. Employees’ right to purchase where they please._

Employees shall not be obliged to trade at the company stores, but
shall be at perfect liberty to purchase goods wherever they may choose
to do so.


     _8. Employees’ right to employ checkweighmen._

As provided by statute, miners have the right to employ checkweighmen,
and the company shall grant the said checkweighmen every facility to
enable them to render a correct account of all coal weighed.


     _9. Employees’ right of appeal to president of company against
     unfair conditions or treatment._

Subject to the provisions hereinafter mentioned, every employee shall
have the right of ultimate appeal to the president of the company
concerning any condition or treatment to which he may be subjected and
which he may deem unfair.


     _10. Duty of president’s industrial representative._

It shall be the duty of the president’s industrial representative
to respond promptly to any request from employees’ representatives
for his presence at any of the camps and to visit all of them as
often as possible, but not less frequently than once every three
months, to confer with the employees or their representatives and
the superintendents respecting working and living conditions, the
observance of Federal and State laws, the carrying out of company
regulations, and to report the result of such conferences to the
president.


     _11. Complaints and grievances to be taken up first with foremen
     and superintendents._

Before presenting any grievance to the president, the president’s
industrial representative, or other of the higher officers of the
company, employees shall first seek to have differences or the
conditions complained about adjusted by conference, in person or
through their representatives, with the mine superintendent.


     _12. Investigation of grievances by president’s industrial
     representative._

Employees believing themselves to be subjected to unfair conditions
or treatment and having failed to secure satisfactory adjustment of
the same through the mine superintendent may present their grievances
to the president’s industrial representative, either in person or
through their regularly elected representatives, and it shall be the
duty of the president’s industrial representative to look into the same
immediately and seek to adjust the grievance.


     _13. The right of appeal to the superior officers of the company
     against unfair treatment, conditions, suspensions or dismissals._

Should the president’s industrial representative fail to satisfactorily
conciliate any difference, with respect to any grievance, suspension
or dismissal, the aggrieved employee, either himself or through his
representative--and in either case in person or by letter--may appeal
for the consideration and adjustment of his grievance to the division
superintendent, assistant manager or manager, general manager or the
president of the company, in consecutive order. To entitle an employee
to the consideration of his appeal by any of the higher officers herein
mentioned, the right to appeal must be exercised within a period of two
weeks after the same has been referred to the president’s industrial
representative without satisfactory redress.


     _14. Reference of differences in certain cases to Joint Committees
     on Industrial Coöperation and Conciliation._

Where the president’s industrial representative or one of the higher
officials of the company fails to adjust a difference satisfactorily,
upon request to the president by the employees’ representatives or
upon the initiative of the president himself, the difference shall
be referred to the Joint Committee on Industrial Coöperation and
Conciliation of the district and the decision of the majority of such
joint committee shall be binding upon all parties.


     _15. Representation on joint committees to be equal when
     considering adjustment of differences._

Whenever a Joint Committee on Industrial Coöperation and Conciliation
is called upon to act with reference to any difference, except by the
consent of all present the joint committee shall not proceed with any
important part of its duties unless both sides are equally represented.
Where agreeable, equal representation may be effected by the withdrawal
of one or more members from the side of the joint committee having the
majority.


     _16. Umpire to act with joint committees in certain cases._

Should the Joint Committee on Industrial Coöperation and Conciliation
to which a difference may have been referred fail to reach a majority
decision in respect thereto, if a majority of its members so agree, the
joint committee may select as umpire a third person who shall sit in
conference with the committee and whose decision shall be binding upon
all parties.


     _17. Arbitration or investigation in certain cases._

In the event of the Joint Committee on Industrial Coöperation and
Conciliation failing satisfactorily to adjust a difference by a
majority decision or by agreement on the selection of an umpire, as
aforementioned, within ten days of a report to the president of the
failure of the joint committee to adjust the difference, if the parties
so agree, the matter shall be referred to arbitration, otherwise it
shall be made the subject of investigation by the State of Colorado
Industrial Commission, in accordance with the provisions of the statute
regulating the powers of the commission in this particular. Where a
difference is referred to arbitration, one person shall be selected
as arbitrator if the parties can agree upon his selection. Otherwise
there shall be a board of three arbitrators, one to be selected by
the employees’ representatives on the Joint Committee of Industrial
Coöperation and Conciliation in the district in which the dispute
arises, one by the company’s representatives on this committee, and a
third by the two arbitrators thus selected.

By consent of the members of the Joint Committee on Industrial
Coöperation and Conciliation to which a difference has been referred,
the Industrial Commission of the State of Colorado may be asked to
appoint all of the arbitrators or itself arbitrate the difference.
The decision of the sole arbitrator or of the majority of the Board
of Arbitration or of the members of the State of Colorado Industrial
Commission when acting as arbitrators, as the case may be, shall be
final and shall be binding upon the parties.


     _18. Protection of employees’ representatives against
     discrimination._

To protect against the possibility of unjust treatment because of any
action taken or to be taken by them on behalf of one or more of the
company’s employees, any employees’ representative believing himself
to be discriminated against for such a cause shall have the same right
of appeal to the officers of the company or to the Joint Committee on
Industrial Coöperation and Conciliation in his district as is accorded
every other employee of the company. Having exercised this right in
the consecutive order indicated without obtaining satisfaction, for
thirty days thereafter he shall have the further right of appeal to
the Industrial Commission of the State of Colorado, which body shall
determine whether or not discrimination has been shown, and as respects
any representative deemed by the Commission to have been unfairly dealt
with, the company shall make such reparation as the State of Colorado
Industrial Commission may deem just.




IV

SOCIAL AND INDUSTRIAL BETTERMENT


     _1. Executive supervision._

The president’s executive assistant, in addition to other duties,
shall, on behalf of the president, supervise the administration of the
company’s policies respecting social and industrial betterment.


     _2. Coöperation of president’s executive assistant with joint
     committees in carrying out policies of social and industrial
     betterment._

In the discharge of his duties, the president’s executive assistant
shall from time to time confer with the several Joint Committees, on
Industrial Coöperation and Conciliation, on Safety and Accidents,
on Sanitation, Health and Housing, and on Recreation and Education,
appointed at the annual joint conferences, as to improvements or
changes likely to be of mutual advantage to the company and its
employees. Members of the several joint committees shall be at liberty
to communicate at any time with the president’s executive assistant
with respect to any matters under their observation or brought to their
attention by employees or officials of the company, which they believe
should be looked into or changed. As far as may be possible, employees
should be made to feel that the president’s executive assistant will
welcome conferences with members of the several joint committees on
matters of concern to the employees, whenever such matters have a
direct bearing on the industrial, social, and moral well-being of
employees and their families or the communities in which they reside.


     _3. Advisory Board on Social and Industrial Betterment._

In addition to consulting, from time to time, the several joint
committees or their individual members, the president’s executive
assistant shall be the chairman of a permanent Advisory Board on Social
and Industrial Betterment, to which may be referred questions of
policy respecting social and industrial betterment and related matters
requiring executive action.


     _4. Members of Advisory Board._

The Advisory Board on Social and Industrial Betterment shall be
composed of such of the company’s officers as the president may
designate.


     _5. Regular and special meetings of Advisory Board._

The Advisory Board shall meet at least once in every six months, and
may convene for special meetings upon the call of the chairman whenever
he may deem a special meeting advisable.


     _6. Powers and duties of the Advisory Board._

The Advisory Board shall have power to consider all matters referred
to it by the chairman, or any of its members, or by any committee or
organization directly or indirectly connected with the company, and may
make such recommendations to the president as in its opinion seem to be
expedient and in the interest of the company and its employees.


     _7. Supervision of community needs by president’s executive
     assistant._

The president’s executive assistant shall also exercise a general
supervision over the sanitary, medical, educational, religious, social
and other like needs of the different industrial communities, with a
view of seeing that such needs are suitably and adequately provided
for, and the several activities pertaining thereto harmoniously
conducted.


     _8. Method of carrying out improvements._

Improvements respecting social and industrial betterment shall, after
approval by the president, be carried out through the regular company
organization.


     _9. Hospitals and doctors._

In camps where arrangements for doctors and hospitals have already been
made and are satisfactory, such arrangements shall continue.

In making any new arrangement for a doctor, the employees’
representatives in the camps concerned, the president’s executive
assistant, and the chief medical officer shall select a doctor, and
enter into an agreement with him which shall be signed by all four
parties.


     _10. Company periodical._

The company shall publish, under the direction of the president’s
executive assistant, a periodical which shall be a means of
communication between the management, the employees and the public,
concerning the policies and activities of the company. This periodical
shall be used as a means of coördinating, harmonizing, and furthering
the social and industrial betterment work, and of informing employees
of the personnel and proceedings of conferences, boards and committees
in which they are interested. It shall record events pertaining
to social and industrial activities, and be a medium for making
announcements with reference to the same, and for diffusing information
of mutual interest to the company and its employees.


     _11. Cost of administering plan of representation and of
     furthering social and industrial betterment policies._

The promotion of harmony and good-will between the company and its
employees and the furtherance of the well-being of employees and their
families and the communities in which they reside being essential to
the successful operation of the company’s industries in an enlightened
and profitable manner, the expenses necessarily incident to the
carrying out of the social and industrial betterment policies herein
described, and the plan of representation, joint conferences and
joint meetings, herein set forth, including the payment of traveling
expenses of employees’ representatives when attending joint conferences
and annual joint meetings, and their reimbursement for the working
time necessarily lost in so doing, shall be borne by the company. But
nothing herein shall preclude employees of the company from making such
payment to their representatives in consideration of services rendered
on their behalf as they themselves may voluntarily desire and agree to
make.