CHAPTER X

THE TRUSTS AND THE WORKINGMEN

F THE statements made in the preceding chapters regarding the savings of the wastes of competi

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tion are true, it is evident that industrial combinations, through these savings, create a fund from which the wages of laborers could be raised, provided it seemed wise to the managers to raise wages instead of increasing their own profits or lowering prices, or provided the laborers were able to enforce a demand upon their employers for higher wages.

Experience also seems to show that, when Trusts were first formed at any rate, the wages of their employees, in a good many cases, were raised, although later at times men have been apparently thrown out of employment arbitrarily by the sudden closing of plants. When the Whiskey Trust was first organized in 1887, the wages of several classes of employees were comparatively soon raised. Mr. Greenhut, the president of the Trust, in his testimony before the Committee of Manufacturers of Congress, testified to this effect.* He expressed the opinion that it was but just to give to the employees part of the benefits which were to come from the new form of organization. He stated further in conversation that public opinion was strongly directed against the Trusts on the whole, and that it *50th Congress, Second Session, H. R. No. 4,165 pp. 66, 67.

was perhaps wise to show that the managers of these organizations did not intend to conduct them selfishly for their own benefit solely, but that they wished to distribute the advantages fairly among those engaged in production.

It is also in evidence that the employees of the American Sugar Refining Company early had their wages increased somewhat, although as their labor is largely unskilled the increase was not at all great. Since the outbreak of the European war there has been a large increase, almost 50 per cent.

According to testimony from both the managers of the Standard Oil Company and from its opponents, that company has been in the habit of paying to all its employees regular standard wages, and in many cases of paying to those who showed exceptional diligence or skill in their work very high wages. It is certainly a fact that they often keep their employees for a series of years, and that in the case of superintendents or managers or those acquiring special skill the ablest men are usually chosen, and the wages or salaries paid are high. The company has at times increased wages voluntarily. Of late years, however, there have been a number of strikes accompanied by violence at Bayonne and elsewhere. It is evident that their wages have not been put up materially above usual rates. One may note that dividends were more than 40 per cent. in early years and that the Government prosecutions with forced changes in the form of organization of the company have apparently not lowered profits.

The combinations in the iron and steel and tin plate industries particularly have all of them in various in

stances increased the rates of wages; in 1916 three times to various groups of employees by 10 per cent. each time. At times some of these companies have also closed plants without warning. The president of the Tin Plate Company testified shortly after its organization that the average increase in wages in that industry had probably been 15 per cent. The American Steel and Wire Company had increased its wages in many cases as much as 40 per cent., and in the other related industries the wages had been increased all along the line. It is, however, just to the managers themselves to state that they did not ascribe this increase entirely, if at all, to the formation of the combination. They said rather that it was due to the prosperous condition of the business, to the facts that owing to the heavy demand, prices were high, and that the employees demanded higher wages. It seemed to them wiser to make arrangements with their employees for an increase of wages than to have trouble with them, especially in so prosperous times. In consequence, terms were made, though, in some instances at least, the demands of the workingmen were not fully granted, the increase being rather a compromise than a surrender. Some of the employers said distinctly that these increases in wages had not been given excepting as the result of demands on the part of the workingmen themselves; that the combinations made no pretences toward generosity. Shortly after the organization of the United States Steel Corporation there was a strike in many of its mills. An effort was made to compromise which had the approval of many of the labor leaders, such as Mr. Gompers, Mr. Mitchell, Mr. Keefe; but

the local leaders refused to compromise and later settled on worse terms than had been offered.

The corporation from the beginning has not as a whole been favorable to trade unions, though as we have seen they were recognized in some of its subsidiary companies. Strong efforts have been made to secure the good-will and continued service of its workingmen in other ways. To certain classes an opportunity is offered to buy preferred stock in the company at especially favorable rates. (In 1915 about 50,000 workmen out of some 240,000 were stockholders.) Bonuses are offered to many of the men in charge of plants and holding responsible positions, together with pensions for old or injured workmen. Great pains are taken in most of the plants to provide for the safety of the men; emergency hospitals are maintained in many of the plants; playgrounds for children of employees, and district nurses for the sick; sanitary water supplies and toilet arrangements are furnished; lunch rooms have been established with good inexpensive food, and every effort is exerted to see that all is done to promote the safety and welfare of the employees that can be thought of by a department whose business it is to make a study of the question, and by committees of employers and workingmen who work together to develop the general health and welfare of the men.

As a result of a threatened strike some time ago in which the workmen seemed to the management unreasonable, it was finally adopted as a policy of the corporation that it would not deal with unions as representing the men. Many of the men, the officers of the corporation say, prefer not to belong to unions, as they

are satisfied fully with their treatment, and think they are now deriving all the benefits that could come from a union. The combination avers that it intends to give freely all or more than unions can secure by organization.

It is probably true that in most cases the relations between the combinations and their employees have been and will remain substantially the same as those between the officers of any large corporation and their workingmen. In individual instances wages may be increased without special demands being made, but that will probably rarely be the case. The year 1916 has seen a number of instances of this kind like that of the United States Steel Corporation mentioned above. In other cases, while not acting till requests have been made by the men, the combinations have promptly granted the requests as did, for example, the American Smelting and Refining Company and the American Sugar Refining Company. The year 1916 is, however, so exceptional that one cannot safely draw general conclusions from its experiences. The increased wages, so easily won, have sometimes resulted, the employers state, in decreased efficiency of the men by 10 to 20 per cent. Such a result is by no means desirable.

As the combination has secured additional power in many instances over the producers of raw material, it is fair to ask whether this power will not extend also over the workingmen, so that in the event of a disinclination to meet their demands for higher wages or an inclination to lower their actual wages, the combination would not have more power in carrying out its wishes than would competing corporations. There seems to be little doubt that,