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“Echoes from the Recent Pennsylvania Coal Strike,
on Behalf of the Mine Owners and Operators”
by
George F. Baer, President of the Philadelphia & Reading Coal and Iron Company
Cassier’s Magazine, 23(April 1903): 727-735
I think there is, from lack of thought, much
confusion in the minds of many people as to the rights, powers and
duties which properly belong to industrial organisations, including both
capital and labour organisations. In general, no one denies the right of
men to organise for any lawful purpose; but the right to organise, and
the power of the organisation when organised, must still be governed and
controlled by the general law of the land under which individual and
property rights are protected.
We constantly hear the phrase: "Capital organises. Why may not labour organise?" As if
this settled the problem. But capital cannot organise for an illegal
purpose. Organised capital is subjected to sharper scrutiny than any
other kind of organisation. A possible violation of individual rights is
at once seized upon by the public as requiring some new and drastic law,
if existing laws are not sufficient to meet public expectations. For
example, may capital organise in such a way that one manufacturer may
employ pickets to surround the establishment of another competing
manufacturer to prevent ingress or egress to the works, or interfere
with the sale of its commodities by intercepting its customers, or
interfere with the transportation of its products and the orderly
conduct of the rival business? We concede to organised
labour the same rights that we claim for organised capital. Each must
keep, within the law. There cannot be one law for citizens and
corporations and another law for labour organisations.
The lawlessness in the coal regions was the direct
result of mistaken theories of the rights of the Mine Workers. It will
not do to say that the leaders have not encouraged violence and crime.
It is true, no doubt, that they did not directly advise it. They at
times counseled against it and issued paper proclamations calling for
peace, and at other times they have expressed regrets for it.
Nevertheless, they are legally and morally responsible for the situation
they created, and from which this violence and crime resulted.
They complain bitterly of the decisions of the
legally constituted courts whereby riotous conduct, unlawful destruction
of property and interference with legal rights of citizens are simply
restrained. They even demand of their political supporters the passage
of laws which will place trades unions above and beyond the customary
and the ordinary jurisdiction of the courts. They blindly refuse to see
that the peace and prosperity of the community and the rights of the
citizen can be maintained only through the supremacy of the law and its
just and equal administration. The overthrow of the civil power, whereby
whole communities are at the mercy of the mob, so delights them that
they cry out lustily against the soldiers who are sent to protect life
and property. Why this denunciation of courts, of police, and of
soldiers, if the measures to support a strike are to be only peaceful
and persuasive? The law is a terror only to evil‑doers. In the
exercise of lawful acts we need fear neither courts, police, nor
soldiers.
We have been told time and again how boys to the
number of over twenty or thirty thousand in the coal regions have been
admitted to membership in the Mine Workers' organisation; how
foreigners, without reference to the fact as to whether they are or are
not American citizens, -‑foreigners of many nationalities and
speaking diverse tongues, -‑with the boys, compose a majority of
this organisation. These boys, like most boys, have not been disciplined
to reverence law and order, and we do not expect boys to behave very
well unless they are under strong restraint. The foreigners, many of
them, have been governed in their old homes by stringent police
regulations, The law, in the person of a policeman or a gendarme,
confronted them everywhere. They have come to this country with confused
ideas of what free government means. The distinction between liberty
regulated by law, and license, is practically unknown to them.
Therefore, when a powerful organisation of which they are members, led
by men who are upheld and encouraged in a respectable community, tells
them that. Force may be used to compel men to join their union, that
scabs should be ostracised, that they are given power to suspend
operations at a colliery where the employees do not join the union, is
it not a direct invitation, -nay, more, a command to commit the violence
and crime that characterised the reign of terror in the mining regions?
Men who teach these false doctrines, pose as they
may, are inciting to riot. Every day they saw the results of their work
in outrages against persons and property. They made no reasonable effort
to restrain the violence. They even ease their conscience with the
fallacy that until a man is convicted in the courts he is guilty of no
crime, and, therefore, they can shut their eyes to what is going on
around them.
The legal responsibility they incur gives them little
concern. They assume that juries selected from among their own members
or sympathisers will not find them guilty. They will not become
incorporated for fear of civil suits resulting in heavy damages. Still,
the moral and legal responsibility exists, even though there is at times
no adequate remedy for its enforcement.
We
do not object to our employees joining labour organisations. This is their privilege.
But we will not agree to turn over the management of our business
to a labour organisation because some of our employees belong to it. Our
employees, union and non‑union, must respect our discipline. It is
essential to the successful conduct of our business, and is peculiarly
necessary in mining operations to prevent accidents. We must be left
free to employ and discharge men as we please. If any of our officers
abuse this privilege, then it is our duty to hear the case and review
the action so that substantial justice may be reached. But we do not
admit the right of an organisation, the moment we exercise the power of
discipline, to coerce us, before inquiry, by strike, or interference
with our management.
The employer ought, I think, to meet his employees
personally or a representative of such employees, provided such
representative acts only for the particular employees and does not act
in the interests of persons who are not employees of the particular
colliery. To illustrate, --in a controversy as to conditions existing at
one colliery, the employees of that colliery must limit their demands to
the particular conditions affecting that colliery, and if they see fit
to be represented by some one acting as their attorney, ‑‑we
do not care what name they give him, he may be president, or a
vice‑president, or anything else, ‑‑he must be limited
in the same way, he must not inject a theory as to what would be fair
towards employees of another company a hundred or a thousand miles away.
It is on this account that we have objected to the
interference of the president of the United Mine Workers in our
business. If he simply represented our own employees and was acting
exclusively for them, there could be no
objection to dealing with him. But he represents an organisation having
for its object some Utopian scheme of uniformity of wages and conditions
in the mining of coal all over the United States. And instead,
therefore, of considering only the questions at issue between our
employees and ourselves he is considering a general proposition which
relates to all the coal miners dwelling under the sun. The fact that the
miners' organisation does restrict the quantity of coal a man may mine
is clearly proven. It is not only proven, but it is defended as a right.
Restriction on production, limiting the quantity a man may produce,
seems to be based on the theory that this is essential to give
employment to the many. The illustration given by one of the miners'
attorneys was this, that if there is only a loaf to divide, you must
divide it equally and give no one man more than his just proportion. The
illustration is fallacious in this, that it is not germane to the
subject. Labour is not a division of an existing thing. It is a power
which produces things. Labour is not the loaf, but that by which in
various forms the loaf is produced. Any restriction, therefore, on
labour must necessarily reduce the number of loaves which are essential
to feed the hungry.
To limit the right of exertion, of work, is to limit
production. It is not only a wrong done to the individual, but it is a
violation of sound economic principles, and, therefore, an injury to
society. The ultimate effect of restricting production so as to divide
employment and increase wages, must be to keep on dividing the wage fund
as often as new men seek employment. There must be a limit to an
increase of wages, but there can be no limit to the increase of workmen.
The process must inevitably lead to the destruction of the industry or
the reduction of the wages of every man to a sum barely sufficient to
sustain life. Wages can increase only when each individual is left free
to exert himself to his fullest capacity, thereby creating which, in
turn, gives new employment, --creates demand for commodities and demand
for workmen to produce them. Only in this way can the wage fund be
increased.
The country is agitated over the possible dangers to
the common welfare by combinations of capital. These combinations, or
rather consolidations of many interests into one common company, are all
based on the theory that they will result in greater economy, that the
cost of production will be decreased, and that the public will be
benefited in many ways, especially by regularity in production,
stability of employment, and reduction in cost to the consumer.
The criticisms as to over‑valuation and
capitalisation are financial questions, and only indirectly affect the
public economic questions. If men see fit to invest their money in
watered securities, that is their business, and the public is not
responsible for ultimate losses. Economic
laws will in the final windup work out the financial problem. But the
public are rightly anxious as to the effect on the consumer.
All free men oppose monopoly. It is instinctive, and
the possibilities of it alarm us. The mere fear of it suggests all
manner of devices to prevent it. It is unquestionably true that if the
recent combinations of capital, instead of proving a benefit to the
public, as their organisers honestly believe, shall prove detrimental
and result in creating monopolies guilty of extortion and oppression,
legal and peaceful remedies will surely be found to curb their rapacity
and oppression. But these large industrial combinations produce only
things which are desirable, not absolutely necessary to sustain life. If
the price of steel or any other like commodity is too high, or its
production is stopped by striking workmen, for the time being, because
of low wages, or by owners because of low profits, the public will be
put to temporary inconvenience, but it can cause no general suffering.
But if we are over‑anxious as to the probable
effect of these mere possibilities of monopoly (I say possibilities,
because it is not probable that in a rich, energetic country like ours
any such industrial monopolies can be either created or maintained) what
must be the measure of anxiety: as to placing the control of the fuel of
the country in one organisation, and that, too, an organisation without
capital or responsibility?
Fuel is the life's blood of our age. It is as
essential as food. Food production can never be monopolised. However low
the wages and small the reward of the tillers of the soil, the labour
reformer has not succeeded in controlling farming. The farmers know no
restriction in hours of labour.
But what of fuel? Without a dollar invested in
property, the fuel of the country has been absolutely monopolised. Not a
ton of coal could be mined in the United States without the consent of
the United Mine Workers of America unless it was mined protected by guns
and at the risk of destruction of life and property. Is this a serious
situation? The dangers from combinations of capital are mere
possibilities, but the results of the fuel monopoly are actual.
We are not left to conjecture. The facts are before
us. The United Mine Workers have created a monster monopoly. They did
shut up the anthracite mines for more than five months. They taxed the
bituminous labourers and all labourers over whom organised labour had
control to support the strike. The owners of bituminous mines, some in
self‑defence, others in the hope of gain, contributed freely to
the strike fund. The public contributed freely. More than three million
dollars were raised to carry on what they called the industrial war.
With what result? The price of both anthracite and bituminous coal more
than doubled. The supply was inadequate. The public was suffering not
only from the high price, but from the scarcity of coal. Industrial
operations closed down and men were thrown out of employment. All over
the land, except in the districts that could be supplied by the great
anthracite coal companies, the poor, the honest workman and the
well‑to‑do suffered for want of fuel. In the middle of
winter, in a land of plenty, this gigantic monopoly had the power to
create a scarcity of fuel and bring distress upon a whole nation.
It is seldom that the violation of sound economic
business rules so quickly brings with it such a series of disasters. How
far the public will take to heart the lesson that has been taught is, of
course, as it always is, an unknown problem. But this Commission
represents the dignity which ever must uphold law and order, the justice
that is inherent in righteous judgment, and the wisdom that can respect
the progress and mighty achievements of our social and business
conditions which have produced such marvelous prosperity. And, holding
fast to that which is good, it will be slow to recommend a new order of
things that may lead to the dire results which a six months' trial has
already produced.
But someone will say, "Oh, all these direful
results might have been averted by you operators." How? By a
surrender to unjust demands. Yes; the evil day could have been
postponed.
Let us not deceive ourselves. Men charged with the
management of property, conscious of no wrong‑doing, believing
they are dealing justly with their employees, ought not to surrender at
the dictation of labour leaders whose reputation and subsistence depend
upon their success in formulating impractical demands, and thereby
stirring up strife. The record shows that an honest effort was made to
convince the United Mine Workers that their demands were unjust.
The anthracite coal trade has for fifty years been a
most perplexing problem. It has, perhaps, aroused greater expectations
and caused more disappointments than any large business enterprise in
the country. To the untutored mind it seems so easy to dig coal and to
sell it at a profit. But to the men who have given their best thoughts
and years to the problem it becomes one of the most complex of all
industrial problems. Indeed, when I look back over more than thirty
years of my own connection with the Reading system and recall the
struggles of the system and the able men who have gone before me, it
seems that their labours were like those of Sisyphus.
You know that coal cannot be well stored. Bituminous
coal cannot be stored in very large quantities because it is apt to
ignite. Anthracite coal can be stored, but the cost of storing it is
very great. We have made some experiments as to storing coal and picking
it up again. The cost, with the breakage and the lowering of the grade
of the coal, amounts, as near as we can get at it, to twenty‑six
cents a ton. We have found that we cannot store coal and must not
overlook the fact that if wages go up, then materials and supplies
necessarily participate in the increase, and the general cost of mining
coal is increased. The proportion of wages on a ton of coal is about $1.45 to
$1.50 This represents the average cost under the present conditions of
producing a ton of coal, ‑‑that is, the wage labour of
producing a ton of coal, ‑‑and from 40 to 45 cents represent
the supplies that go into the cost of the coal. Our coal roundly costs us
about $2 to put on the car, and $1.45 to $1.50 represent wages.
The production of coal is one of the few industries
in which there are three parties to be considered: ‑‑first,
the operator, because he controls the business, ‑‑for the
present at least; second, the workmen; and third, the consumer. In most
industrial operations the consumer is only indirectly interested. He
need not purchase the things if their cost is too great; but coal he
must purchase. If he is a manufacturer, he requires it for power, and
everyone needs it to cook his breakfast and warm his home. The price
cannot be arbitrarily fixed. It is undoubtedly true that the mine
workers must receive an adequate compensation, measured by like wages
under similar conditions in other industries, and, I take it,
‑‑with some hesitation, ‑‑that the operator may
be permitted, under a normal condition of society, to have a little
profit on the capital and work lie bestows in the business. If the
anthracite mine operator fixes the price on anthracite coal so high that
the manufacturer cannot use it, the manufacturer will do one of two
things, -‑purchase bituminous coal, or, if in the locality of his
manufactory that cannot be had to advantage, he will abandon the site of
his manufactory and go to a more favoured locality where fuel is cheap
and plentiful. In this problem of manufacturing, fuel is the foundation
of everything. It, therefore, becomes a business duty and a business
necessity to see that manufacturers are given coal at a reasonable
price. If they cannot get it, they will be driven out of business. And
if they are driven out of business, then the sources of trade for the
railroads fail.
These are problems that captains of industry in these
days must consider, and must daily consider, ‑‑how to
increase the wealth of the community they are serving by increasing its
prosperity, --because only in that way can they add to their revenues;
how to return to their stockholders a just payment for the money they
have invested, and how to give honest wages, fair and full wages, to the
men they employ. These are burdens. You may think they are light; but to
a man who is charged with responsibility they become terrible realities.
What, then, can be done practically? If you increase
wages, what will you accomplish? If
they are too low, increase them; it will pass on to the consumer, and
that consumer will be the rich and the poor. If they are just, then let
them alone.
What evidence have you that they are unjust? We were
led to believe, when an attack was made upon the horrible conditions in
the anthracite fields, that a condition existed whereby men were being
oppressed. Attention, however, has been called to the fact that on the
basis of wages supposedly being paid in the anthracite regions, the
advance claimed makes less than the wages that have actually been paid.
Now, that the wages are fair we demonstrated by a
number of things to which I want to call your attention. You will
remember that it has been said that one of the evils in the coal region
is that there is too much labour there. What does that indicate? Why,
that labour there is attractive. There is plenty of work in the United
States, and those men could get employment elsewhere. Are you going to
increase the rate of wages, and attract still more people there to sit
down and wait in the hope of getting enough money in a day to support
them for a week? Will you improve the congested labour condition in the
anthracite fields by raising the price of wages so as to attract all
unemployed labour into that field and bring on a worse condition of
things?
Remember how easily the trade of anthracite
mining is acquired. There is no apprenticeship, such as in ordinary
trades; no such conditions as many of us went through when, as boys, we
served as apprentices, working night and day to acquire a trade, with
little or no remuneration.
Under the mining laws of Pennsylvania a man, of
course, must be a certified miner. But each year hordes of strong men
come from over the sea. They come as labourers and obtain work in the
mines. They are paid larger wages than they ever dreamed of in their own
countries, ‑‑from $1.50 up to $1.75 or $2 a
day. They work as labourers for two years in the mines receiving this
pay, and at the end of two years they can become certified miners. This
is the only apprenticeship they serve. After that they can go into the
mine early in the morning and drill their hole and blast their coal, and
at eleven o'clock walk out to smoke their pipe and enjoy leisure.
It is no skilled trade. There is no apprenticeship
such as prevails in the arts, -‑with the carpenter and the mason
and the bricklayer and all artisans, and, above all, the machinist, who
has to devote years to acquiring great skill. Are these men who work
five and six hours a day, and earn the sums of money we have shown you
that they do earn, to become public pensioners at the expense of every
honest workingman in this city and in all the cities of the seaboard?
Shall he be made to buy coal to keep himself warm and to cook his meals
at an unfair price?
If there is any sociological question involved here
it requires you to consider most carefully whether, in trying to do some
favour to the coal miners in the anthracite regions you are not only
going to work injustice to the operators, but you are going to do a
wrong to every consumer of coal.
I have heretofore called attention to the sliding
scale. I intended to discuss the question of eight hours a day; but I
will let that go. Enough has been said upon that subject. I do not
believe in the theory. There are some trades where eight hours are
enough, but there ought to be no limitation on work in the collieries.
If the breaker time is reduced to eight hours per day, the output of
coal would be so restricted that the cost of coal would be increased
enormously. Of course, the answer would be, "Build new breakers and
sink new shafts." That is easily said. Expend another half million
dollars at each colliery, and then the public would have to pay the
cost. It is one of the things that you cannot help. If you are oppressed
in one direction, and the price has to go up, the public is the
forgotten man; but there is where it falls all the time. The consumer
pays for it. And those of us who stand up to protect the consumer, who
represents the average man in the community, are always to be treated as
merciless, tyrannical men.
That brings me to say one word in defence of our own
companies. I submit that the companies I represent, the Philadelphia
& Reading Coal and Iron Company and Lehigh & Wilkesbarre Coal
Company, have suffered the most at the hands of these people, in that a
number of our collieries are destroyed. Where is the evidence of our
wrong‑doing? What have we done? Have we ill‑treated our men?
Have we wronged them in any way? Is there any testimony here to cast a
shadow of doubt on the integrity and the honesty and the fairness of
these companies in dealing with their men? Who is there that will dare
to say, or has said, that the humblest man in our employment has been
refused redress or consideration of any complaint?
Superintendents tell you that they hear every
complaint and treat it justly. Such is their instruction. This company
is too big to be dishonest. It means to deal fairly with all men. It
means it because its management is honest and its policy is honest. And
I protest that nothing has been more unfair than to drag us here into a
controversy of this kind, without showing that there was any wrong done,
or that anything in our system needed to be corrected.
Now, then, what is the practical suggestion that I
have to make? I would gladly see a return to the sliding scale.
For some reason or other the sliding scale meets with little
favour among, labour leaders. You are asked to fix the price of coal
practically for three years. I am not a prophet. I do not know what the
business conditions of the next three years will be.
I can hope that the general prosperity of the country
will continue so that wages can be even increased. But I know, as a
business man, that I am not willing to commit myself to the payment of
wages for three years based upon the existing condition of things. I do
not know the day nor the hour when a break may come, and, as a cautious
man of the world, charged with grave responsibilities, I want some
system adopted that will work like the governor on an engine and
regulate the speed at which we go.
I want to say that, while it is entirely true that
some of the men have not been as prompt as we wished them in working on
holidays, and some of them have shut down the breakers at one colliery
and another to go to a funeral, and sometimes in times of great distress
they would not work when we thought they ought to work, I will say that,
taking the whole situation through, the behaviour of men in our
companies since the strike is over has been admirable. They have
rendered efficient work, and produced all the coal which, under the
circumstances, could be produced, unless they had worked on these
exceptional holidays, and while that would have been desirable, you
cannot ignore the conditions and the traditions of people. These
foreigners come here with many holidays. They have been accustomed to
observe all their holidays. I am not going to find fault with a man who
keeps his native holiday, even though it does deprive us of a little
coal. There are some things that must be allowed to individual freedom,
and this is one of them.
Now,
what is my proposition? That
the rate of wages now paid shall be the minimum basis for the next three
years.
That
from the first of November to the first of April, 1903, all employees,
other than contract miners, shall be paid an additional five per cent.
That on and after April, 1903, for each five cents in
excess of $4.50 per ton on the average price realised for white ash coal
in the harbour of New York, on all sizes above pea, wages shall be
advanced one per cent.; the wages to rise or fall one per cent. for each
five cents increase or decrease in prices; but they shall never fall
during the next three years below the present basis.
Now, before I give the result, let me just explain
what that means. We will take the risk of guaranteeing for three years
the present basis of wages. I say risk. We take a great risk in doing
that. It means that the price of coal must be kept in New York harbour
$4.50, or otherwise we are carrying on operations at a loss. We are
willing to take that risk, and to pay, in addition, one per cent.
increase in wages for each five cents increase on coal, taking the
prices at New York harbour, which eliminates all calculations, as a
basis.
The average price for each region to be ascertained
by a competent accountant, to be appointed by judge Gray, chairman of
the Commission, or by one of the United States Circuit judges holding
courts in the City of Philadelphia, the compensation of the accountant
to be fixed by the judge making the appointment, and to be paid by the
operators in proportion to the tonnage of each mine; each operator to
submit a full statement each month to said accountant of all the sales
of white ash coal, and the prices realised therefrom, f. o. b. New York,
with the right of the accountant to have access to the books to verify
the statement.
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