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Experience vdth works
councils in the United
States

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Presented to the

UNIVERSITY OF TORONTO
LIBRARY

by the

ONTARIO LEGISLATIVE
LIBRARY

1980

Experience with Works Councils
in the United States

Research Report Number 50
May, 1922

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National Industrial Conference Board

THE CENTURY CO.
NEW YORK
PUBLISHERS

National Industrial Conference Boarl

10 EAST 39th street, new YORK CITY

BRANCH OFFICE
SOUTHERN BUILDING, WASHINGTON, D. C.

HE National Industrial Conference Board is a co-operative
body composed of representatives of national and state in-
ilustrial associations and is organized to provide a clearing house |
of information, a forum for constructive discussion, and ma-
chinery for co-operative action on matters that vitally affect
the industrial development of the nation.

Frederick P. Fish Chairman

LoYALL A. Osborne Vice-Chairman

Albert G. Duncan Treasurer

Magnus W. Alexander Managing Director

AFFILIATED ORGANIZATIONS
American Cotton Manufacturers' Association
American Electric Railway Association
American Hardware Manufacturers' Association
American Malleable Castings Association
American Paper and Pulp Association
Electrical Manufacturers' Club
Institute of Makers of Explosives
Manufacturing Chemists' Association of the U. S.
National Association of Cotton Manufacturers
National Association of Farm Equipment Manufacturers
National Association of Finishers of Cotton Fabrics
National Association of Manufacturers
Nation'al Association of Sheet and Tin Plate Manuf'rs
National Association of Wool Manufacturers
National Automobile Chamber of Commerce, Inc.
National Boot and Shoe Manufacturers' Association.
National Electric Light Association
National Erectors' Association
National Founders' Association
National Industrial Council
National Lumber Manufacturers' Association
National Metal Trades Association
Rubber Association of America, Inc.
The American Pig Iron Association
The Railway Car Manufacturers' Association
The Silk Association of America
Tobacco Merchants' Association of the United States

Associated Industries of Massachusetts
Associated Industries of New York State, Inc.
V Illinois Manufacturers' Association
Manufacturers' Association of Connecticut, Inc.

-IMT*

EXPERIENCE WITH WORKS

COUNCILS IN THE

UNITED STATES

542S

Research Report Number 50
May, 1922

National Industrial Conference Board

THE CENTURY CO.
NEW YORK
PUBLISHERS

■a^ A'>m^*r:^-: ■^i.:^

-Copyright, 1922
National Industrial Conference Board

Foreword

THE present report supplements the two previous publica-
tions of the Board dealing with Works Councils, by an
analysis of experience with such organizations up to date, as
revealed in statements of employers, foremen and employees.
In view of the growth in the number of Works Councils during
the past two years and of the increasing attention they are
receiving from industrial management, it is felt that this report
will be of timely and general interest to industrialists and to
the public. A larger number of organizations is covered in this
report than in any study so far made in this country.

It must be remembered that this investigation concerned
itself only with the study of Works Councils and their effects.
No attempt was made to deal with the question as to whether
other methods might not achieve the same results. The con-
clusions embraced in the report are not to be interpreted as the
opinion of the National Industrial Conference Board as to
whether or not Works Councils should be established in indus-
trial concerns. This is a question which only the individual
employer, in conjunction with his own employees, can properly
determine. It is indeed conceivable that where management
takes a personal, intelligent and broad-gauged interest in the
questions that arise in the relations between employer and
employed in an estabhshment, no mechanism or plan of any
kind may prove to be necessary; but so far as adequate contacts
have not been established in other ways between employer and
employees. Works Councils, as this report indicates, have dem-
onstrated their value in improving industrial relations.

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CONTENTS

PAGE

Introduction 1

Terminology 1

Scope of Investigation 3

General Summary 4

PART I

Representative Committee Systems Which Have
Been Discontinued

CHAPTER

I, National War Labor Board Shop Committees. 15

II. Works Councils Initiated by Employers and

Since Abandoned 25

PART II
Works Councils in Operation

III. Changes Made in Works Council Plans 35

Increase in Power of Committees 35

Separate Meetings of Employee Representatives 43
Simplification of Works Councils of the "Indus-
trial Democracy" Type 45

Assistant Foremen Allowed to Vote for and Be

Elected as Employee Representatives 49

Deputy Representatives 49

Formation of Small Joint Committees 50

Addition of a "Committee of Adjustment". .... 50
Absorption of Employees' Organizations by a

Works Council 50

Regular Meetings 51

Elimination of "Collective Economy Dividend" 51

IV. Disposal of Employees' Complaints and

Grievances 53

V. Suggestions Toward Increasing Productive

Efficiency and Personal Contentment. . . 63

VI. Subjects Discussed and Meetings Hjeld by

Works Councils 79

Contents — continued

PAGE

VII. Attitude of Works Councils Toward Reduc-

tions IN Wages and Changes in Work
Hour Schedules 86

VIII. Effect of Works Councils on the Relations

Between Management and Employees .... 102

IX. Attitude OF Foremen Toward Works Councils 111

Foremen in Favor of Councils from their Incep-
tion 112

Foremen Who at First Regarded Works Councils
with Disfavor but Have Come Later to See '

Their Effectiveness 1 14

' Foremen Who Have Remained Indifferent to
Works Councils 118

X. Effect of Works Councils on Relations Be-
tween Foremen and Employees 122

XI. Character of Employee Representatives 126

XII, The Effect of Works Councils on Labor

Turnover 132

XIII. Attitude of Organized Labor Toward Works

Councils 138

PART III

Employers' Opinions as to the Value of Works
Councils in Industry

XIV. Introducing the Plan 150

XV. Importance of Employers' Interest 16^

XVI. Importance of Workers' Interest 170

XVII. Importance in Large Organizations 180

Appendix: Industrial Concerns Having a Form of

Employee Representation 184

Experience with Works Councils
in the United States

INTRODUCTION

In August, 1919, the number of Works Councils in industrial
concerns in the United States was 225, according to a survey
made at that time by the National Industrial Conference Board
for its first report on the Works Council movement, which gave
an account of substantially all that were then functioning.
Since then, a number of employers have abandoned their em-
ployee representation plans, but a much larger number of
employers have instituted Councils in their plants, so that in
February, 1922, there were approximately 725 such organiza-
tions in operation in this country.

The great majority of the Works Councils covered in the
Board's first report on the subject^ had at the time of its pub-
lication been functioning on an average for not more than one
year. This was a year of business prosperity; production was
in demand, labor was scarce and wages were high. Following
this came a period of business adversity; the demand for goods
fell off, working forces were reduced, and wages declined.
Widespread interest was manifest as to how Works Councils
would stand the strain of such a period of depression. Were
employee representation plans practicable only in times charac-
terized by high wages and high prices ? Would employees lose
interest in the Councils when wage reductions became neces-
sary ? These and similar questions were raised as to the status
and value of Works Councils during a period of decreased
production and falling wages.

In order to answer these questions adequately, and ascertain
the practical experience of employers with their Works Councils
during such a period, the National Industrial Conference Board
conducted a country-wide investigation. The great majority
of the Works Councils treated in the present report have been
in operation for periods varying from two to five years. An
account of industry's experiences with these Works Councils
during that period is presented herewith.

Terminology

The term Works Council as used in this report is taken to
mean

"a form of industrial organization under which the employees of an
individual establishment, through representatives chosen by and
'"Works Councils in the United States." Research Report No. 21, Boston, October,
1919.

from among themselves, share collectively in the adjustment of em-
ployment conditions in that establishment."'

Various forms of Works Councils or employee representation
plans exist, but they may be conveniently classified into two
types:

(1) The "Industrial Democracy" type.'"*

(2) The "Committee" type.

The ^''Industrial Democracy'^ Type

This type of Works Council follows the pattern of the United
States Government and provides for a Cabinet, Senate, and
House of Representatives. In some cases the latter two bodies
alone are provided; in others the Senate and House are merged
into one joint body of foremen and employees; in others only
mass meetings of the employees are provided. Where the plan
is in operation in its entirety, the Cabinet is composed of the
higher officers of the plant, the Senate is made up of the foremen,
and the House of Representatives consists of elected employee
representatives. A number of plans of the "Industrial Democ-
racy" type have as an auxiliary feature a "Collective Economy
Dividend," which is defined as:

". ..a form of bonus paid periodically to the employees of any
department which exceeds in production the standard prevailing at
the time the plan was introduced. Fifty per cent of any such increase
is distributed among the employees, the employer retaining the other
. 50%."3

This "Collective Economy Dividend" while originated in
connection with the "Industrial Democracy" plan, is not neces-
sarily a part thereof, and can function without it or with other
plans of employee representation.

The ''Committee" Type

"This type follows the ordinary committee .form of organization,
sometimes being a single committee and sometimes comprising a
hierarchy of committees. The committee or committees may con-
sist of employees alone, who confer with representatives of the man-
agement, or they may be joint committees embracing in their mem-
bership representatives of both employees and employer."*

"Limited" Works Council

Works Councils which do not include among their activities
bargaining over working conditions, hours of labor and wages,
are designated in this report as "Limited" Councils.

"Company Unions"

Another kind of Works Council is that which is based upon a
"Company Union," that is, a Council subsidiary to an associa-

'National Industrial Conference Board. "Works Councils in the United States.*' Re-
search Report No. 21, October, 1919, p. i.

'The term "Industrial Democracy" has been substituted for the term "governmental"
as used in Research Reports Nos. 21 and 26, to avoid confusing this type of Works Council
with any governmental agency.

'"Works Councils in the United States," op. cit., p. 19.

*Ibid., p. 20.

tion embracing in its membership part or all of the employees
of the establishment. Such a Council may be of the "Industrial
Democracy" type or of the "Committee" type.

Shop Committee

Unless otherwise specified the term "shop committee"
as used in this report refers to the type of committee introduced
into plants by the late National War Labor Board.

Scope of Investigation

This report embodies the results of an investigation com-
menced in April, 1921. Various manufacturers' associations
and chambers of commerce rendered the National Industrial
Conference Board their assistance in making the list of firms
with industrial representation plans as nearly complete as
possible. The report takes cognizance of practically all Works
Councils known to have been organized up to February, 1922.
. In most cases the information was drawn from the detailed
questionnaires submitted to the manager or other executive of
such industrial establishments. This was often amplified by
further correspondence where necessary. In about twenty-five
cases, embracing the principal forms of Works Council and
establishments which have had extended experience, additional
information was secured through investigation in the field.
Employee representatives, other employees, trade union offi-
cials, foremen and other plant executives were interviewed.

GENERAL SUMMARY

The statements of employers, foremen and employees in
answer to the inquiries or the National Industrial Conference
Board furnish a basis for certain conclusions as to the value of
employee representation in industry. These conclusions have
been formulated after an impartial examination of the data
collected in the present investigation.

In considering the experience in American industry with plans
of employee representation, a clear distinction must be made
between plans that grew out of, and whose creation was forced
by, the war necessity, and those that developed later in conse-
quence of it and by voluntary action of the two parties in the
employment relation.

Most of the "shop committees" established by the National
War Labor Board, as well as those set up by the Shipbuilding
Adjustment Board during the World War, have ceased to func-
tion. The explanation of this lies in the fact that the commit-
tees were established in plants by order of an outside body and
not through a desire on the part of employers and employees.
Employers, as a rule, were opposed to this outside intervention
and, under such circumstances, the life of the "shop commit-
tees" could not be long.

Another factor that militated against any likelihood of con-
structive work by these committees was that their establishment
usually followed a dispute between employer and employees.
Due to the fact that they were organized at a time when indus-
trial relations had been severely strained, the committees were
usually composed of the radical element among the workers.
With employers and employees suspicious and distrustful of
each other, genuine cooperation was impossible, and, as a con-
sequence, the committees were allowed to disintegrate.

Some representation plans voluntarily introduced by em-
ployers and employees have also been abandoned but these
cases are relatively few in comparison with the number of such
plans that are still functioning to mutual satisfaction. Various
reasons caused their discontinuance. The most common cause
seems to have been either the failure of management to "sell"
the plan to the employees, or the opposition of trade unions
within or without tne plant.

Careful investigation has brought out the fact that, whatever
changes have been made in Works Council plans, that is in em-
ployee representation plans voluntarily organized by management
and men, since the time they were first introduced into indus-
trial concerns, they have not altered the essential nature of the
Councils. Where there have been changes, these have been

mainly minor improvements in operating details to fill require-
ments which were unforeseen at the time of the formulation of
the plans. Conditions to be met have differed in different plants
and the changes made in Works Councils plans exhibit, there-
fore, a wide diversity. The feature which may be said to be
common to all the changes is the reason for which they were
made; namely, in order better to fit the plans to the organiza-
tions in which they operate. How this could best be done was
a question that only the employer and the employees jointly in
each individual plant could decide.

This experience brings out the important factor, so often lost
sight of in the consideration of employee representation plans,
that there is no "model" Works Council plan which may be
applied indiscriminately to all industrial concerns. It fur-
ther indicates that rigidity in a plan of employee representation
is to be avoided; a Works Council plan should be flexible enough
to admit of ready adaptation to new requirements as they arise.

Another major point revealed by the investigation is that
usually, when a Works Council is first installed in a plant, there
is a tendency for employees to use it chiefly for presenting com-
plaints and grievances. The feature of the plan that appeals
especially to the workers is the opportunity it affords of obtain-
ing a hearing and decision in cases where they think they are
suffering an injustice. In a few instances this remained the
principal use which the employees made of the Works Council
plan, even after it had been in operation for a year or more.

Where this had been the case, the explanation was found in
the failure of management to take an active interest in the
Works Council. Management apparently considered that its
responsibility for the, success of the plan terminated once the
Works Council had been established and employee representa-
tives had been elected. The Works Council was looked upon
by management as a safety valve — valuable whether used or
not. But little effort was made to enable men and management
to arrive at a better understanding of each other's point of view,
•by holding re gular meetings of the works committees at which
a free exchange of ideas and suggestions could take place; nor
was an effort made to direct the interest of employees upon
subjects of a constructive nature. The committees functioned
only when the employees had a complaint or grievance to bring
before the management.

In times when wages were low and labor plentiful, the workers
were naturally more concerned with retaining their jobs than
with the correction of minor maladjustments in the plant and
the committees lost their effectiveness even as a means for the
hearing and adjustments of complaints and grievances. More-
over, the initiative in the choice of subjects with which the
Works Council should deal was left entirely in the hands of the

employees. When economic conditions imposed a restraint
upon the readiness of employees to provide the works committees
with subjects for discussion the committees became lifeless.

As the Works Council became better understood, so most
employers reported, there took place a gradual decrease in the
use which the employees made of the works committees for
the presentation of complaints and grievances, and a correspond-
ing increase in the interest which they manifested in general
business conditions and plant efficiency. This was, however,
not the result of a policy of discouraging the discussion of com-
plaints and grievances, for the employers recognized that, unless
complaints and grievances have timely consideration and set-
tlement, they usually lead to serious disturbances and even to
strife and strikes. But such matters were not allowed to beconie
the chief topic for the consideration of the works committees,
and meetings were not held for this purpose alone. Management
took an active, not a passive interest in the Works Council.
Periodical meetings providing an opportunity for the discussion
of subjects of mutual interest were held in which exchange of
opinions and suggestions brought management and workers
closer together. Each came to know the other better and to
appreciate the other's point of view. Management realized
that, to gain the confidence of its employees, it had to provide
a means of regular intimate contact with them, and had to
strive to obtain their good will. The Works Council was not
regarded as an agency, the mere establishment of which would
automatically result in obtaining the cooperation of the em-
ployees. Where this was appreciated by management, where
the attention of the works committees was directed upon definite
factory problems of common concern, the result was an increas-
ing interest on the part of employees in the efficient and eco-
nomical operation of the plants in which the Works Councils
functioned.

The extent to which employees take an interest in increasing
productivity efficiency appears to be directly related to the
extent to which they have confidence in the fairness of man-
agement in its dealings with them, and to the degree to which
they are convinced that it is to their interest that production
be maintained and efficiency kept up. These are objectives
difficult of achievement; the statements of employers furnish
evidence, however, that employee representation plans have
been valuable as instruments for gainmg them.

Experience of those firms which have had the most note-
worthy success along these lines, indicates that in addition to
treating its employees fairly and justly, management must carry
on a campaign of education in sound business economics to
counteract the teachings of those individuals and groups who
preach restriction of production as a real advantage to the
workers.

Employers who have in their plants Works Councils of the
"Industrial Democracy" type with the "Collective Economy
Dividend," reported that this feature acts as a direct incentive
to employees to assist in economical and efficient production,
because it brings to them a direct reward in dollars and cents
for their efforts in this direction. There is, however, a tendency
for the employees to lose interest in their representation plan
when business conditions necessitate the elimination of the "Col-
lective Economy Dividend."

An outstanding feature of the Conference Board's investiga-
tion is the fact that proposals for wage reductions or changes
in work-hour schedules made by employers have, in every
instance of which the Board has learned, been approved and
accepted by the employee representatives on the Works Councils,
when they were furnished with an explanation of the reasons
necessitating such measures. In these instances employers
utilized the Works Councils to keep their employees informed
of business conditions, as they affected both the companies
concerned and the country as a whole; thus they prepared the
minds of the employees for retrenchments which were believed
necessary. Employers stated that wage reductions or changes
in work-hour schedules were put into effect in this way with
much less misunderstanding and friction than would otherwise
have been possible. This was the case because employees were
in a position to realize that the economies which were made did
not originate from a ruthless desire on the part of the employers
to lower the employees' standard of living, but arose from the
pressure of economic forces against which the employer as well
as the employee was more or less helpless. Employees expressed
appreciation of the manner in which wage reductions or changes
in work-hour schedules were handled, because they were told
why such adjustments were necessary.

In practically every plant covered by the present Investiga-
tion the effect of Works Councils upon relations between man-
agement and men was reported as beneficial. Statements of
employers and employees were in unanimity with reference to
this. The improvement in the relations between management
and men was attributed to the opportunity afforded by a Works
Council for an employer and his employees to come into direct
and intimate contact with each other and to learn each other's
views. The employees are thus furnished the means of com-
munication with the higher executives of a company and enabled
to meet them as "man to man." Where Works Councils are
in operation foremen no longer exclusively interpret to the
employees the aims and policies of management; employees
learn from management itself its attitude toward them.

This exchange of ideas and suggestions and the appreciation
of each other's difficulties has had the effect of breaking down

mutual suspicion and distrust, and where both parties have been
inspired by a desire to be fair, goodwill, confidence and coopera-
tion have resulted. Kmployers reported that employees
appreciated the frank, open policy adopted by management.
Their appreciation was manifested in the fairness and impar-
tiality with which they discussed points of difference in the
Works Councils meetings, and by the manner in which proposals
of economies in wages were received by employee representatives
on the Councils. In the few cases in which an unfavorable
effect on the relations between management and employees
through their Works Councils was reported, the reason was
found in the lack of employer interest in the Council.

The information collected by the Conference Board concerning
the attitude of foremen toward Works Councils showed a grow-
ing tendency on their part to regard the organization with favor.
This tendency was based, in general, on the conception that
the works committees, by creating better feeling and thus
more successful cooperation between foremen and workers, and
by relieving the foremen of the onus of settling disputes, would
leave them free to devote more time to questions of production.

Where foremen have been antagonistic toward employee
representation plans at the time of their installation, it has
nearly always proved to be due to ignorance regarding the
effect which the plan would have upon the relation between
them and their subordinates. With few exceptions, either
experience or education has had the effect of changing this non-
cooperative attitude on the part of the foreman to one of support
and cooperation. The feeling which in nearly every instance
induced antagonism on the part of the foreman, was a fear of
curtailment of their authority by the Works Councils, but it has
been possible, except in a negligible number of cases, to convince
foremen that fair dealing with the workers would not result in
any wrongful interference with their authority by the Works
Councils. Where continued antagonism to employee repre-
sentation has been reported, the causes have been traced either
to the character of the foremen or to the attitude of the higher
executives toward the Works Council plan. Since the attitude
of foremen tends to reflect that of management, a lack of interest
and support of the plan on the part of management tends to
produce a like attitude in the foremen.

One of the outstanding benefits of employee representation,
according to opinions collected by the Conference Board from
employers, employee representatives and foremen, has been the
better spirit fostered by it between the foremen and workers.
On foremen who had heretofore been arbitrary in dealing with
the men under them, the Works Council has been a check in that
it has made their decisions subject to review and change by
the works committees. This fact has- helped to introduce more
careful consideration and greater fairness into the foreman's

dealings with his subordinates. In cases where a change of
this sort has been effected, a corresponding transformation has
been noted in the attitude of the workers, manifesting itself in
greater contentment and in a spirit of cooperation not hitherto
apparent. Employees laid particular emphasis upon this as
one of the outstanding benefits of employee representation,
namely, the marked improvement in the relations between the
foremen and themselves.

Practically all employers reported that in the main very good
judgment has been used by employees in their choice of repre-
sentatives on Works Councils. Men with long service in the
company's employ, tho§e of sound judgment, who were fair
and impartial in their decisions, those who manifested a desire
to assist management in the development of mutual understand-
ing and goodwill — such were the type of men who had mostly
been elected as employee representatives. Some employers
reported a tendency for the employees to be indifferent or care-
less at the time of the first elections for representatives, but
practical experience with the operation of a plan showed the
employees the necessity of electing the best men available. In
some cases shop politics, whereby the popular rather than the
able man was chosen, were reported to have played their part
in the employees' selection. These men were often not the
leaders among their shopmates, but the broadening influence
of Works Councils deliberations eventually made them leaders
and because of their popularity, strong leaders among their
fellow employees. Instances of men with radical views having
been elected were also reported; usually, however, the respon-
sibility placed upon these men as representatives, together with
the education they received in the Works Council meetings,
have had the effect of moderating their views.

On account of many other contributing influences, it has not
been feasible to determine accurately what effect employee
representation plans have had upon labor turnover. Employers
in their statements to the Conference Board were of the opinion,
however, that although no definite measure of direct influence
could be credited to Works Councils, a large part of the credit
for reduced labor turnover, where this had occurred, was no
doubt attributable to the Councils. Labor turnover was
believed to have been reduced as a result of the close contact
and better understanding developed between men and manage-
ment. The elimination of petty, irritating details through dis-
cussion and settlement by the works committees was felt to
have reduced to a considerable extent the number of workers
formerly leaving their employment because of misunderstanding.

Although it is known that organized labor is ofiicially opposed
to any system of representative committees that does not provide
for full recognition of trade unions, individual members of the
union, the investigation has shown, have in many instances

heartily supported, and taken an active interest in, Works
Councils. Where trade unions have been actively opposed
to employee representation plans, this antagonism has expressed
itself in various ways. In some cases trade unions* efforts to
hamper the effectiveness of Works Councils have been restricted
to attempts to ridicule the plans; in others, trade unionists
have refused to take part in the Works Councils' activities; in
others, strikes have been called against plants in which Works
Councils were put into operation, in an effort to break up such
committee system. Very little definite information is available
as to the success or failure which has attended organized labor's
opposition to Works Councils. In a, few cases, trade unions
have been successful in alienating the employees from their
support of the Councils; in others, the employees' confidence
in the fairness of management and their belief in the effectiveness
of the Works Council as a means for the adjustment of differences
and the promotion of mutual understanding, have formed an
insuperable barrier to the antagonistic activities of the unions.

The study of the experience with employee representation
plans indicates clearly that certain conditions are essential in
order for such organizations to function successfully and to
bring about a satisfactory degree of cooperation between em-
ployer and employee. In the first place, both management
and men must be in favor of an employee representation plan
as a means for the adjustment of their differences and for the
betterment of their industrial relations. The Works Council
is an organization that depends for its success upon the active
interest and support of both employer and employees. It can-
not function with any measurable degree of success where either
party is antagonistic or indifferent toward it, no matter how
well adapted the plan may be to the establishment within which
it operates.

It has been found that both beneficial and detrimental results
have followed the introduction of representation plans. This
indicates that the success or failure attendant upon such plans
is attributable not so much to the plans themselves as to the
direction in which their activities are guided. Without the
support of the workers and of management, including the super-
visory force as well as the higher officials of a plant, a Works
Council will not only fail to function successfully, but may
become a disturbing element in the relations between employer
and employee.

For this reason, therefore, in considering whether Works
Councils should be established in industrial establishments, it is
of paramount importance to determine first, the attitude of man-
agement toward the proposition. Where management is not
thoroughly sold to the idea, where it is believed that the desired
cooperation and goodwill of the employees can be better

obtained in other ways, — experience shows that a Works Council
should not be formed.

In the second place, it must be recognized that the machinery
of any plan is but a means to an end; the desired objects will be
accomplished only if there is present mutual confidence and
wholehearted support by those for whose benefit the plan is
established. The history of the National War Labor Board
"shop committees" furnishes striking proof of the futility of
any system of employee representation as a means of bettering
industrial relations, unless such scheme has the moral support
of both management and men. Joint interest in and support
of a plan of employee representation by employer and employee
cannot be created by enactment or decree; it must spring from
natural desire.

Of the two types of plans, the "committee" type is simpler
in form than the "Industrial Democracy" type. As shown
elsewhere in this report, a number of employers using plans of
the "Industrial Democracy" type found that the business of
the Councils was much expedited by the elimination of the
"Senate," the body composed of the foremen. In this way
there has been an approximation to the "committee" type of
plan.

As distinguished from the "Industrial Democracy" type, the
"committee" ty^e provides for joint consideration of questions,
although provision may be made for the employee representa-
tives to meet apart from those of management following such
joint discussion. The "Industrial Democracy" type of plan
on the other hand, by setting up separate bodies of representa-
tives of management and men does not provide for joint dis-
cussion until after each of the bodies — "Senate" and "House of
Representatives" — have formulated their opinion regarding the
subject at issue. An exchange of ideas and opinions before a
definite stand has been taken by either side is of value, since
there is a natural human reluctance to change once such a stand
has been taken. From this point of view, the procedure followed
in the "committee" type seems to be preferable. However,
the experience of some employers has been that it is impossible
to obtain full and frank discussion by employees in a meeting
at which representatives of management are present. They
have found it advisable to form separate bodies of representa-
tives of employees and management, and in this way there has
been an approximation to the "Industrial Democracy" type.

It is to be noted that the "Collective Economy Dividend"
which is usually a feature of plans of the "Industrial Democracy"
type is not an integral part of such plans, and that it may equally
be incorporated in plans of the "committee" type.

In the third place, after an unbiased study of the Works
Council movement one cannot fail to lay emphasis upon the

importance of the manner in which a Works Council is intro-
duced into a plant. The unanimous opinion of the Board's
correspondents is to the effect that a Works Council should not
be established in a plant without giving the employees a voice
in its formulation. The reason given for this is the belief that
in this way any suggestion of paternalism or exploitation on the
part of management is avoided. Employees are inclined to
regard a plan which has been formulated and set up by manage-
ment alone as a device of the employer "to put something over
on them." Where employees are consulted with reference to
the structure of the plan before it is adopted, and where they
are given an opportunity to decide whether they wish to put it
into effect, their active interest in the plan is gained at the outset.
This method of introducing a Works Council into an establish-
ment is based upon a recognition of the fact that such an
organization is dependent for its success upon the support
and interest of employees, as well as of management. It is
accordingly considered better to determine whether the em-
ployees approve of the Works Council before the plan is set up
than to introduce the plan only to find cut later that there is
no willingness on the part of the employees to utilize it. The
best results are likely to develop out of plans which are natu-
rally evolved through carefully conducted experiments. Often
some already existing group of employees may .well be used as
a nucleus with which to make a beginning.

Finally, it must be realized that the employer who looks to
the W^orks Council as a means of gaining the confidence and
goodwill of his employees, cannot expect to secure these unless
he gives the Works Council constant and sympathetic support.
Employee cooperation can only be secured at a price; the
employer must keep in close and active touch with the repre-
sentation plan and must be frank and sincere in his dealings
with and through it. Experience shows that where management
adopts this attitude toward a Works Council, the latter proves
a valuable instrument for securing the cooperation of the
workers.

Interest in the Works Council plan on the part of management
and the latter's willingness to deal fairly with its employees
tend to call forth a corresponding interest on the part of the
employees as well as a willingness to be fair and impartial in
the consideration of points of difference brought up in the
Council meetings. The motto adopted by one firm — "Fairness
Begets Fairness" — is applicable to the experience which most
employers have had with their Works Councils. But experience
shows just as clearly that where management takes no interest
in the Works Council after it is introduced into a plant, where
it does not "play the game," according to the rules of the plan,
the Council becomes at best a mere grievance committee with
the probability of its having a destructive rather than a con-

structive effect -upon the relations between the employees and
management.

The increase in the number of employee representation plans
in the United States in the last decade to approximately 725
shows a slow but steady growth of this movement with in-
creasingly satisfactory results. This growth is all the more
significant when it is remembered that practically all of the
"shop committee" plans set up by the National War Labor
Board and the Shipbuilding Labor Adjustment Board, are no
longer in existence. The increase in the number of Works
Councils does not indicate, however, that this movement has
assumed really national proportions, for there are many
thousands of establishments whose size might warrant the
organization in each of a Works Council of one kind or
another. But in so far as the movement has progressed, it
gives clear evidence of its growing service and value in the
employment relation.

Works Councils that have been properly conceived, intro-
duced and conducted have proved a valuable aid in gaining the
confidence and goodwill of employees and thus in improving
production, reducing labor turnover and other waste, and
generally in benefiting alike all those engaged in the common
enterprise.

Looking upon the Works Council movement in its broader
and more fundamental aspects, the results of the Conference
Board's study seem to reaffirm the basic contention that the
labor problem within the plant, that is the problem of the
relationship of employer to employed, is after all primarily a
management problem. From this it follows naturally — and the
experiences of employers related in this report are ample evi-
dence of this — that unless . management in each individual
establishment adopts an enlightened attitude toward the labor
problem and concerns itself personally with the various phases
of the problem and with their adequate solution, the most
elaborate and highly perfected plan will fail of its purpose.

The Works Council is at once an organism and a mechanism;
it must, therefore, carry in itself the elements that will make
for gradual and definite growth, and it must be guided and
operated by an intelligent and understanding mind. But
because that mind — management — is supposed to be intelligent
and understanding, it must not be expected necessarily to accept
and adopt any one employee representation plan as the
universal panacea for a set of conditions in which the human
equation must always play so large and important a part.

PART I

Representative Committee Systems Which Have
Been Discontinued

This section deals with "shop committees" introduced into
concerns by the National War Labor Board, with Shipbuilding
Labor Adjustment Board Committees, and with employee
representation plans voluntarily initiated by employers, but
which have been abandoned for various reasons. Because the
majority of the committees established by both the National
War Labor Board and the Shipbuilding Labor Adjustment Board
were in existence for a comparatively short period, and because
nearly all of them were discontinued three years ago, the
National Industrial Conference Board has met with considerable
difficulty in obtaining information regarding the value of these
committees during their rather brief existence, and the reasons
for their discontinuance. This was especially true with refer-
ence to the committees formed by the Shipbuilding Labor
Adjustment Board.

Questionnaires were addressed to twenty firms in which Ship-
building Labor Adjustment Board Committees had been
formed. In three of these the committee systems established
by the Labor Adjustment Board have since been replaced by
agreements with labor unions. As trade union committees are
not regarded as Works Councils, the committee organizations
in those plants do not come within the scope of this report.
Six firms in which Shipbuilding Labor Adjustment Board
Committees were organized, did not reply to the Board's
inquiries; and eight concerns in which the committee^ have
been discontinued wrote that nothing further was to be added
to their statements furnished the Conference Board in 1919.
The latter were included in the National Industrial Conference
Board's first report on the subject.^ Three firms reported that
the committee systems as introduced by the Shipbuilding Labor
Adjustment Board had been retained by them with modifications
aimed better to adapt the committees to the plants.

Information regarding the results obtained from National War
Labor Board Committees and Works Councils voluntarily
introduced into plants by employers, showing what the com-
mittees accomplished, why they were discontinued, and giving
in some instances the employers' opinions as to the advantages
or disadvantages of such organizations, is presented in this
part of the report.

•"Works Councils in the United States," op. cit., pp. 87-94.

CHAPTER I

NATIONAL WAR LABOR BOARD SHOP
COMMITTEES

Among "the principles to be observed and the methods to be
followed by the National War Labor Board" in exercising the
powers conferred upon it by President Wilson in his proclama-
tion of April 8, 1918, was that of the right of the workers to
organize and "to bargain collectively through chosen repre-
sentatives."^ To make this condition effective in plants where
labor unions were not already organized, the Labor Board,
commencing in July, 1918, made provision in a large number
of its awards for committees of elected employee representatives
to deal with their employers. The first firm in which "shop
committees" were instituted by the Board was the Pittsfield
plant of the General Electric Company. In its award the Board
directed that departmental committees should be formed "to
present grievances and mediate with the company." From the
members of the departmental committees was to be chosen a
"committee on appeals" of three members, whose function it
was to meet with the management for the adjustment of dis-
putes which the departmental committees failed to settle.
Certain regulations were laid down for securing a fair election
and the War Labor Board's examiner was to see that minority
representation was provided for.

Following the precedent established in the above case, the
Board uniformly upheld the right of workers to organize for
collective dealing and made provision for it in the majority of
its decisions in the following terms:

"As the right of workers to bargain collectively through committees
is recognized by the Board, the company shall recognize and deal
with such committees after they have been constituted by the em-
ployees."*

The Board did not always specify, as in the case of the General
Electric Pittsfield plant, the manner of the constitution of the
committees. In some instances it merely directed that em-
ployers should meet with committees of their employees. In
other cases the Board appointed a permanent committee of a
specified number of employees which was to adjust all differ-
ences that might arise between men and management. In
October, 1918, the joint chairmen of the War Labor Board
formulated a standard plan for the selection of "shop commit-
tees" which was generally but not uniformly stipulated in

'National War Labor Board. "Principles and Rules of Procedure," Washington, I9i9-
'National War Labor Board Dockets Nos. no, iioa, nob, 169, i74. 176, etc.

subsequent awards. This plan provided for the election by
secret ballot of one member of the committee for each hundred
employees in each shop department. Under the supervision of
the examiner of the Board the election was to be held "in the
place where the largest total vote of the men can be secured,
consistent with fairness of count and full and free expression of
choice, either in the shop or in some convenient public building."
The examiner was to select as his assistants in conducting the
election and counting the votes two or more employees from
the department in which the election was to be held. An
employee named by the employer was to be present to identify
the voters as actual employees, but foremen or other officials
of the plant were not to be present at the election. Provision
was made for reports of the shop committees to their respective
constituencies from time to time.

The functions designated for "shop committees" covered a
wide field. In some of its awards the Board merely stated that
the committees should endeavor to adjust all disputes that
might arise. In other awards the Board specifically designated
the functions of the committees. In general it may be said that
the National War Labor Board Committees were "bargaining
committees" dealing mainly with such questions as hours,
wages, rates, piecework and overtime.

In studying the accomplishments, and the reasons for the
abandonment, of the National War Labor Board Committees,
due recognition must be given to the unusual wartime condi-
tions that prevailed when these committees were formed.
Moreover, as in almost every instance, the awards of the Labor
Board followed disputes between an employer and his employees,
the more or less strained relations within the plant were not
such as to favor the formation of committees which would
have the confidence of both management and workers. The
committees were introduced into industrial concerns, not as the
result of a slowly developed desire within the plant for such
committees, but by order of an outside body which super-
imposed its will upon both employer and employees. More
particularly, this, was done at a time when employer and em-
ployees were mutually suspicious and distrustful. The plan
was not the product of their joint efforts toward finding a means
of maintaining industrial harmony. Rather was it imposed
upon the organization as a result of the strife that existed.
Where this element of coercion was present apd where neither
the employer nor the employees favored the formation of the
committees, it was inevitable that they should fail to function
effectively. These seem to be the outstanding reasons for the
failure of such a large number of the National War Labor Board
Committees.

A study of what was accomplished by the National War

Labor Board Committees and why they were abandoned in
so many plants confirms these deductions.^ In the greater
proportion of cases the employers in whose plants the
National War Labor Board Committees were formed, were
opposed to them. This was true, as a whole, of the concerns
in Bridgeport, which were party to the award of the Board in
November, 1919, providing for the election of employees*
committees, under a scheme which became known as the "Bridge-
port plan. "2 Although over sixty firms were party to the award
of the Board, a number of the employers were so. opposed to
"shop committees" that they did not set up the committees as
called for in the award. A company official of a Bridgeport
plant stated regarding the attitude -of the employers toward
the "shop committees": '

"... the plan was practically forced upon the manufacturers, and
in many instances against their will and better judgment. Naturally,
the moment the armistice was signed, if not before, many of the
managements which were not in favor of such a method immediately
permitted its disintegration and death."

Another official of a Bridgeport plant which was included
in the award of the Board, said that the "shop committees"
were

"... really shoved down the throats of the manufacturers of Bridge-
port.

"... It is quite apparent that neither the management of the several
plants interestedn or the workers were very much in sympathy with
the idea, for had they been so, the Works Councils that had been
established would not have died out as they have practically all
done."^

The management of that particular plant, which employed
two thousand persons; of whom a large percentage were foreign-
ers, "was not in very great sympathy with the plan at the outset
so it died a natural death." It is evident that the conditions
which this officer considers essential for the successful operation
of an employee representation plan, namely that an interest
be taken in it on the part of the management, and that "it should
come from the workers themselves, and at least have their
major support," did not obtain with respect to the "shop com-
mittees" introduced into that plant by the National War Labor
Board.

Another Bridgeport employer reported that the plan was
introduced into his plant "neither as the result of the employees
desiring it, nor the management feeling any particular benefit
would be derived from it." It was felt there was no "real

'Fifty-nine firms furnished information regarding the success or failure of their National
War Labor Board Committees. In forty-nine of these firms the committees have been
abandoned. Five only have retained the committees as instituted by the Labor Board.
Five other firms in which committees were installed by the Board later voluntarily adopted
representation plans.

'"Works Councils in the United States," op. cit., p. lo.

'Five companies out of the sixty-two that were party to the Board's award in Bridgeport
have retained their employee representation plans.

17 .

reason or purpose for an employees' committee." Many other
correspondents wrote in the same strain.

The opposition of the employers to the National War Labor
Board Committees was in many instances based on their belief
that employees' committees were not necessary in their plants
because of the close personal contact that already existed
between the management and the workers. It was felt that the
order of the Labor Board for the introduction of the committees
was not based upon a thorough knowledge of conditions within
the plant. The employees already had the right of presenting
their grievances to the management at all times, and it was not
seen that any need existed for committees to secure for the
workers what they already possessed. This was the attitude
not only of employers, but in many cases of employees.

The president of an eastern machine company wrote that
the only reason assignable for the employees' committee never
holding a meeting was that

"... we never employed over 25 men at any time, and as the
writer was at all times in personal touch with them so that any griev-
ance could be brought to him direct, the men felt as if there was no
necessity for them holding meetings."

In another eastern concern employing seventy workers at
the time the "shop committee" was organized by the National
War Labor Board, "the employees themselves," wrote an
executive, "did not wish for a committee of this character as
they have been at all times able to come in direct touch with
the executives and in this manner raise any question they had
to add to their welfare." This correspondent stated that the
employees preferred "individual bargaining rather than col-
lective."

In a plant employing three hundred workers a company
official stated regarding the "shop committee" established
by the Labor Board:

"... there seemed to be nothing for it to do and eventually it went
out of existence.

"Our plant is a small one and we are able to keep closely in touch
with our people at all times, and we believe that is the cause of a
lack of interest among our employees for any kind of a committee."

As already stated, "shop committees" were in most instances
established within a plant following a dispute between the em-
ployer and his employees or a group of his employees. In some
cases the employees had gone on strike. Thus the decision of
the War Labor Board, which in dealing with the dispute pro-
vided for the election of employees' committees, was made
when opposition rather than cooperation existed between
management and men. At such a time it was extremely likely
that the more radical element among the employees, those who
had been the leaders in fomenting trouble, would be elected to
the committees. These men, often of the agitator type, viewed

industrial problems within the plant chiefly with an eye to
what advantages might be obtained for their trade unions, re-
gardless of the cost to the employer or the effect upon the
industry itself. Where such was the case, neither their attitude
toward the management nor the management's attitude toward
them was changed by merely grouping the men into committees.
The retention of this hostile attitude toward each other made
cooperation impossible. That the relations between manage-
ment and employees at the time of the initiation of representa-
tive committees has a determining effect upon the success of
such committees is shown by the experiences of a middle
western firm. In this company the National War Labor Board
Committee installed, following disputes between management
and men which culminated in a strike, was unable to accomplish
anything of value, while a Works Council installed at a later
date, when relations between employers and employed were
more harmonious, has since functioned satisfactorily.

In this plant, a middle western shop with nine hundred work-
ers, the National War Labor Board Committee was formed as
the result of a strike by a small group of employees. The com-
mittee, composed largely of the radical element that had been
the instigators of the strike, was dominated by outside labor
interests. The company had no confidence in the committee,
nor did the committee trust the company. The result was that
the committee accomplished nothing, and was maintained, by
the management merely in a perfunctory way until the jurisdic-
tion of the Labor Board should cease.

It was, however, the belief of the vice-president of the com-
pany that employees' committees elected at a time when no
labor difficulties existed and when the matter could be fully
explained to the employees, could be made a success. Two
years after the establishment of the National War Labor Board
Committees, during which time the more radical element within
the plant had been eliminated, the company introduced a repre-
sentation plan under very different circumstances. The relations
between men and management were harmonious and the plan
was presented to the employees as a sincere effort on the part
of the management "to improve the relationship between em-
ployer and employee." The company devoted considerable
time to an educational campaign among the workers before the
plan was introduced, explaining it to them, giving them an
opportunity to discuss it, and answering any questions they
put regarding it. The employees were then allowed to vote as
to whether they wanted the plan or not, and by a large majority
they voted to adopt it.

The men elected by the employees to represent them were
not of the "firebrand" type, but the recognized leaders in each
department, men whom the employees knew they could depend

upon, and whom the management found willing to cooperate
in securing harmony within the plant. Although fully cognizant
of the fact that in its operation there are improvements yet to
be made, the management after eighteen months' experience
reported the plan to be "working very satisfactorily." Employee
representatives interviewed by a field investigator expressed
themselves as well satisfied with the way in which the plan is
working, and cited several improvements in working conditions
that had been obtained through the Works Council. The em-
ployees, they said, had confidence in the management because
they believed they were being treated "fairly and squarely."

The National War Labor Board Committees initiated by the
decree of an outside body against the wishes of the management,
at a time when industrial relations within the plant had been
severely strained, had failed to function, while the representa-
tion plan approved by both parties and formed at a time when
the relations between men and management were harmonious,
functioned to the satisfaction of all.

The circumstances surrounding the formation of the two
sets of committees had their corresponding results. When
management and employees distrusted and suspected each
other, cooperation was impossible. The representatives elected
by the employees to the National War Labor Board Commit-
tees, sought to strengthen the influence of outside labor interests
irrespective of the eflfect of such a policy upon industrial rela-
tions within the plant. Management learned from its ex-
perience with these committees that nothing of a constructive
nature could be expected unless the employees were willing to
work with it toward a better mutual understanding. Under
the representation plan installed later, the cooperation of the
employees was obtained at the outset. They were given an
opportunity to vote as to whether they wanted the plan, and by
a large majority expressed their approval of it. This attitude
of the employees was reflected in the kind of representatives
elected by them. These representatives, unlike those elected
to the Labor Board Committees, devoted their energy to the
development of better industrial relations within the plant, and
not to increasing the prestige of labor unions.

Several other firms have stated that they found it necessary
to discontinue the meetings of their "shop committees" because
of the character of the representatives elected. Instead of work-
ing to assist the management in the adjustment of disputes and
the elimination of strife, it was found that they were endeavoring
to stir up trouble. The furtherance of the influence of trade
unionism was of more importance to them than the betterment
of industrial relations within the plant.

In one firm in the Middle West the representatives on the
"shop committee," who "were picked from the strictest union

agitators," carried this policy to such an extreme that eventually
there occurred between the management and the committee a
clash which resulted in a strike. A company official wrote that
at the end of three weeks the men came back on the company's
terms, and realizing "that the committee they had elected was
not one from whom they could expect harmony or constructive
work, they denounced the men who had been placed on this
committee and abandoned them."

Similar considerations were mentioned by an eastern machine
company as the reasons why the activities of their "shop
committees" "quickly and promptly ceased." One of the
officials of the company stated in the following terms the manner
in which the situation was dominated by union influence:

"We feel that the first and most important policy that assisted in
destroying any practical use or effectiveness of these committees, was
the personnel of the employees' representatives serving on the shop
committees. In the majority of cases, they were the most pronounced
agitators in the shop. Some of them were holding positions in the
union and the committee's actions and methods of approaching each
and every problem was, we feel, based upon definite instructions
received from the higher officials of the local union, without regard
to the best interests of the public, the corporation, and in some cases
the employees, themselves, but to the best interests of the union.

"We found that the shop committees were trying to classify the
non-union men lower than union men in our shops, but we, of course,
were extremely careful to look after and fully protect the non-union em-
ployees. Regardless of what action was taken by the company that
resulted in better conditions for the employees, the shop committees
would go into great detail explaining that any concessions granted by
the company were due to the influence of the War Labor Board and
the shop committees."

The propaganda which the labor agitators in the plant directed
against the National War Labor Board Committee was given
by the president of another eastern machine company as the
reason why the committee was "a total failure." After holding
one or two meetings, it

"... was discouraged and brought into disrepute with the rest
of the help by a few agitators or radicals, who wished, instead of
having a committee to represent the whole of the employees, that a
self-elected committee of themselves would dictate to the management
and the rest of the help."

Whether acting on the- committee, or working within the
plant, the influence of this type of men was the same. The
committees in their opinion were useful in proportion to the
degree that they were instrumental in securing in the plant
the application of those principles in which they believed.

Although it is true that the most carefully drawn up plan of
representation will fail unless it be supported by the mutual
interest of both employees and employer, and although too much
emphasis is often laid upon the machinery of the plan, it is
nevertheless essential that the plan itself be one that fits the
plant or industry in which it is to operate. Obviously it should

secure true representation of the employees of that plant, since
otherwise the management and the elected representatives will
be working at cross purposes.

The results of the failure to provide for such representation
in certain of the plans as laid down by the Labor Board, are
shown by the experiences of two plants. In each of these the
plan called for the holding of the election of representatives
outside the plant.

At the time of the award of the Board the management of a
western plant expressed their willingness and desire to meet
with a committee of employees if this committee were selected
within the works and by secret ballot. Instead of this, the
committee was elected outside the plant and was composed
entirely of union men.

"... the. election was held In the Armory on Sunday afternoon,
and as the employees passed into the Armory, they were handed a slip •
on which was printed the names of seven of our employees who were
up for election on the shop committee, and of course, these seven men
were elected, so that we felt that it was not a secret ballot."

These representatives of the labor agitator type "spent most
of their time in going from department to department and
keeping things upset generally." The result was a strike.
After the strike the employees asked for the retention of the
committee system and this was granted, with this difference,
that the elections for representatives were held within the plant.

"Under this present plan the Conference Committeemen do not feel
that it is their duty to go around the plant looking after different
things, but have been very willing to bring up suggestions which
have been called to their attention, and in all cases have been very fair
in all our dealings with them."

A similar instance is that of a middle western canning factory.
Under the plan of the Labor Board as applied to this company

"... the employee elections were held uptown in the union head-
quarters hall, and those employees who did not belong to the union
were not given very much consideration .... Furthermore, the in-
dustrial organizers who did not work in the plant were very particular
to pick out radical employees and work on the rest of the employees
so that these radical ones would be elected to committees, and after
this was done, of course, the committees could be controlled and in-
fluenced by the outside organizers."

After the jurisdiction of the War Labor Board ceased, this
arrangement was changed by the company and elections were
held within the plant. A company official wrote that several
other changes also were made, because

"... the representation plan as introduced by the War Labor
Board in June, 1918, was so ridiculous and so unfair to our industry."

One of the changes made in the plan of the War Labor Board
was the appointment by the management of judges and tellers
for counting the ballots at the time of elections. This had been
prohibited by the Labor Board. It "allowed the elections to be

run by the employees only, and we know the elections were not
fair."

Another change was the annulment of that clause in the
Labor Board's plan which provided for arbitration by an in-
dividual acceptable to both parties in cases where the manage-
ment and the employees could not settle the matter satisfac-
torily. The final court of appeal is now the management of the
plant.

The War Labor Board in its plan provided that when the
management wished to discharge an employee the approval
of the "shop committee" had first to be obtained. Under the
present plan the right to discharge is entirely within the power
of the management.

This official wrote that since the above changes had been
made, there had been no friction in the operation of the plan.

A few firms give as the reason for the discontinuance of their
"shop committees" the cancellation of their war contracts, at
which time their working force was greatly reduced. The same
thing occurred in other firms at the time of the signing of the
armistice.

The vice-president of an eastern plant wrote:

"The Works Council which we had during the war ceased at the end
of the war. The reason for discontinuing this Council was due to our
contracts being cancelled."

The number of cases in which this reason was given for the
discontinuance of the committees was very small, however,
compared to those in which opposition by the employer, lack
of interest among the employees, or the character of the elected
representatives, was assigned as the cause of the abandonment
of the plan.

A few plants reported favorably upon the "shop committees"
introduced into their plants by the War Labor Board. An
eastern machine company which discontinued its committee
because of a change in its business when its working force was
considerably reduced, reported "beneficial results" had been
obtained while the committee was in operation.

In other cases the favorable account of the activities of the
"shop committees" furnished to the Conference Board in 1919
and reported by it in Research Report No. 21, was changed
after further experience with the committees into an unfavorable
report.

One firm which reported in August, 1919, that the committees
selected by the members of the labor union had functioned
satisfactorily^, wrote in August, 1921, that they had been
abandoned later because of a strike called by the union men
over a proposed reduction in wages.

'"Works Councils in the United States," op. cit., p. 8s.

Another firm which reported in August, 1919, that "the results
altogether have been very satisfactory,"* wrote in March, 1921,
regarding its "shop committee" as follows:

"We did not find any very great advantage from it, and there were
some decided disadvantages. At any rate, we allowed the meetings to
become less frequent from time to time, and finally entirely dropped
the matter."

The "shop committees" established in concerns by the
National War Labor Board differ from the Works Councils or
employee representation plans discussed in the main body of
this report, m the vital respect that whereas Works Councils
have been voluntarily initiated by employers, and in most
instances with the consent and support of the employees,
"shop committees" were organized in plants at the order of an
outside body. They were superimposed upon concerns irrespec-
tive of the feelings of either the employer or the employees
about such committees.

In a following chapter, employers who have achieved success
in the operation of employee representation plans lay emphasis
upon the necessity of both management and men being "sold"
on the idea of employee representation. They point out that
no plan, however well drawn up and suited to the industry in
which it operates, can function successfully unless both manage-
ment and employees are enthusiastically -behind it. That
enthusiastic support was lacking in the case of the "shop com-
mittees" of the National War Labor Board. The plans were
not set up as the result of a desire upon the part of employers to
improve industrial relations within plants; on the contrary,
they were regarded either as unnecessary, or as organizations
which would result in stirring up more trouble than they allayed.
Employees either lost interest in the committees shortly after
they were organized, or the more radical element endeavored to
utilize them for the furtherance of union policies. Where either
of these conditions obtained, the life or the committees was
short.

Instead of being based upon a desire of the parties represented
to utilize them for the elimination of friction within plants, and
for the attainment of a fuller appreciation of each other's prob-
lems, the committees were founded upon the decree of an outside
organization. The awards of the Labor Board initiated the
committees, but the lack of support and interest on the part of
the management and employees terminated them.

ilbid., p. 84.

CHAPTER II

WORKS COUNCILS INITIATED BY EMPLOYERS
AND SINCE ABANDONED

Works Councils originally initiated by employers were re-
ported as having been discontinued in thirty-seven industrial
concerns. Of these, the Councils were abandoned in fifteen
plants because the plants either shut down entirely or ran with
such a small staff that the retention of the Works Councils was
no longer feasible. Where this was the case the employers
usually expressed their intention of resuming the operation of
the Councils when business again became normal.

"We expect to again take up employees' representation as
our experience has taught us that there is much benefit to em-
ployer and employee to be derived from a plan of this nature,"
wrote an official of an establishment manufacturing heavy ma-
chinery, which had discontinued its Works Council when one of
its plants was sold.

The experience of this company with its Works Council was
described by the same correspondent as follows:

"Our plan when in operation functioned, we believe, to much
satisfaction, as it brought questions concerning employer and em-
ployee through channels that made it possible to adjust differences more
speedily than by any other method, We do not mean however, that
these meetings were for the purpose of adjusting grievances only, for
the exchange of ideas towards improvement and possible changes in
materials and methods was very helpful,

"Representatives chosen by the employees were in most cases those
workmen that were above the average and upon whom employees could
depend to present their cases in the clearest possible light."

"We have implicit faith in this method of dealing with labor
and believe we shall continue this system as soon as business
conditions warrant," wrote an official of an eastern company
which, because of the reduction of its working force to ten per-
cent of the normal number, discontinued its Works Council.
In this company it had. been found that "the representative
system was an invaluable aid in avoiding labor troubles. ..."

An official in an eastern plant reported in April, 1921, that,
although the "Industrial Democracy" type of Works Council
in his establishment had not been in operation for some time
because of the reduction in the number of its employees,

"...we have, however, had such good results in the past with
this method of operation, should business pick up we shall certainly
continue."

Another eastern official wrote:

"We have used shop committees with much success. At the present
time we are not using this method of approach to our employees be-
cause our mills have been practically closed for some months.

"It is likely that when business conditions make it possible, we shall
be disposed to use the shop committees as heretofore."

A southern lumber company which introduced a plan of the
"Industrial Democracy" type into its plant early in 1920, main-
tained it in operation till December of that year. When the
mill was reopened in March, 1921, with a considerably reduced
force, the management decided not to re-establish the Council
unless the employees asked for it, which they have not yet done.
This is to be explained by the attitude of the employees toward
the plan, when it was in operation, which was described by the
secretary of the firm as "more or less indifferent, although there
was never any opposition." The attitude of the older employees
was described as one of "good-natured indifference." The same
correspondent reported:

"Our experience was that the works committees of employees were
for the most part inactive, although some practical suggestions were
occasionally made and adopted by the organization."

He also said "the general tone of efficiency is greater at the
present time than it was under the 'Industrial Democracy'
regime."

As a result of this experience with a Works Council, it is the
opinion of this executive that no advantage is to be gained from
a Works Council plan "in an establishment of moderate size,"
although there is apparently no disadvantage "if the employees
introduce such a plan on their own initiative, or can be induced
to give it active instead of passive support." The attitude of
the company toward employee representation is expressed as
follows:

"We are ready to re-establish Industrial Democracy or any other ap-
proved plan of representation whenever our employees are ready to
enter into it and carry it out. At the same time, we see no reason for
pushing such a plan on our own initiative."

Seven firms which had had representation plans of the "In-
dustrial Democracy" type in operation, reported that the un-
satisfactory results obtained had led to their discontinuance.
Various reasons were given for the failure of the plans to func-
tion.

The president of one company, employing 250 workers, wrote
that he made his first mistake in that

"... I appointed a man to inaugurate this system who is afflicted
with a 'temperament' and a 100 H. P. idea of the Golden Rule."

The result of the "Wilsonian speeches," and the "beautiful
words" posted on the bulletin board by this individual was "a
number of requests for raises in wages and rather upsetting

socialistic debates." At the first meeting of the House of Repre-
sentatives the chief subject of discussion was whether or not it
were possible "for the employees to discharge any foreman that
seemed to be unpopular and did not agree with them." The
first bill presented to the Cabinet was a request for a reduction
of hours from fifty-six to forty-eight per week "with a corre-
sponding increase in wages, so that the envelopes .would not be
any thinner."

The second mistake made, according to this correspondent,
was that

"... the constitution was prepared and presented by the House
of Representatives, acted upon and approved, then sent to the Senate,
and lastly, to the Cabinet. This meant that by the time it reached
the Cabinet, it was loaded with dangerous ideas. . . . Instead of
starting from the Cabinet and educating the Cabinet, we attempted
to allow the House of Representatives, the most ignorant employees, to
work out something the Cabinet itself had a hazy idea of."

After further consideration of the situation, the president of
the company posted a notice three months after the inauguration
of the Council that the "plan as developed could not be carried
out." Working hours were, however, reduced from fifty-six to
fifty- two per week.

It is the hope of the company to try the plan again *at some
time in the future, along lines set down by the correspondent
as follows:

"First, train the Cabinet. Then let the Cabinet draw the constitu-
tion, appoint the members of the Senate and House of Representatives
from the employees, in its opinion, best qualified to carry out the spirit
and purpose of 'Industrial Democracy'; then after they have been
thoroughly trained in the purpose of the plan, gradually allow the
employees to appoint their own House of Representatives. In other
words, try out a model organization and educate them to stand on
their own feet."

The experience of this company points out the necessity for
the executives in a concern contemplating the formation of a
Works Council to be thoroughly informed as to just what a
plan of employee representation is, and what type of plan will
best suit that concern.

An eastern furniture manufacturing concern with a working
force of three hundred employees abandoned its "Industrial
Democracy" plan after a year's operation because of the lack
of interest on the part of the employees. The plan was installed
by one of the officers of the company, who was very enthusiastic
regarding the practical results to be obtained from the applica-
tion of the principles of "Industrial Democracy," but there was
no appreciable difference noted either in production or in the
spirit of the workers. To accomplish more successfully the
objects for which the plan was instituted, the services of an
outside expert on industrial relations were secured, and an
effort was made to obtain the enthusiastic support of the em-

ployees for the plan. This temporarily aroused their interest
and an improvement in the operation of the plan was noted.
Soon, however, the interest of the employees waned, and, as stated
by one of the officials of the company, such trivial matters were
discussed at the meetings that the results of the discussions did
not compensate for the time taken from production. The meet-
ings finally became so futile that the employee representatives
requested that they either be given something worth while to do,
or that the plan be discontinued. Although pronounced a
failure, the year's test of the plan was considered to have been
worth while because it brought to the front many things which
the management had not known of before. The reason for the
failure of the plan, as stated by one of the officials of the com-
pany, was:

"Industrial democracy was in existence in the plant before 'In-
dustrial Democracy' as such was introduced."

Part of the responsibility for the failure of the plan in this
instance, however, would appear to be with the management.
At the outset the executives of the concern were not unanimously
in favor of the schemej and it is evident from the manner in
which the meetings were allowed to degenerate into mere "talk
fests" that the management did not devote sufficient attention
to the plan to make the meetings of interest to the representa-
tives. It was apparently considered that the plan could work
under its own steam, and without any assistance by the man-
agement. Experience proved this to be erroneous.

Another employer likewise attributed the failure of his plan
of "Industrial Democracy" to the inability of the management
to stimulate and maintain the interest of the employees in the
plan. The plan was discontinued in this plant, which employed
three hundred workers, after it had been in operation one year.
The president of the company wrote:

"We had great hope of it proving a success but the ability on our
part seemed to be lacking to put it across. We believe in it thoroughly
ourselves, but for some reason or other we could not seem to arouse
enthusiasm enough on the part of our employees to get busy and
profit by it. At the first considerable interest was shown and quite
perceptible savings made, but later on it began to drag, enthusiasm
waned and the savings vanished; consequently, we have given it up
and gone back to the old order of things."

It is the opinion of this correspondent that "a man of excep-
tional training and ability must be in control of the organization
to keep everything running smoothly."

One western concern found that after the leader who had
developed the "Industrial Democracy" plan left its employ, the
employees' enthusiasm and interest in the plan diminished so
greatly "that it became necessary to eliminate the employee
representation." Despite this unfavorable experience, it is the
company's belief that

"...with proper instruction and an organization which could be
depended upon to instill enthusiasm into the employees, the plan
would work out most satisfactorily."

Referring to the results of a plan of representation of the
"Industrial Democracy" type in an eastern company, the presi-
dent of the firm wrote:

"We operated a Works Council for a period of about one year with
no result that would encourage us to continue.... We do not
think a Works Council in a shop of this size, 400, is of any value to
anyone. We keep in touch personally with every one in our employ
and they are educated to bring their troubles, if they have any, to the
office."

One employer stated that as most of the representatives
elected by the employees were women there was more time de-
voted to "petty squabbling" than to matters of importance,
and this reached such an extent that the "Industrial Democracy"
type of Council in that plant was abandoned after eighteen
months' operation. The manager of the plant wrote:

"Personal matters seemed to have decided preference over all im-
portant issues that were brought up. The representatives failed to
take hold of any of the important matters. Our experience in this
matter has proven to us conclusively that the plan cannot be a success
where majority of representatives are women. That is the reason we
dropped it."

Another company reported that the "Industrial Democracy"
plan as introduced in its plant was impractical — "it was too
complicated and took up too much time." The treasurer of the
company stated that this was not to be considered as a con-
demnation of the plan itself, but merely that it was found in-
applicable to that particular concern.

The reason most commonly given by employers for the dis-
continuance of plans of the "committee" type, was the opposi-
tion of the labor unions or the attempts of the more radical
element to utilize the Works Council for their own ends.^

A western packing concern employing five hundred workers
said that the "violent opposition of the union element in our
organization" had led to the abandonment of its plan.

It is to be noted that the company had dealt for over two
years with a committee which was appointed by the local trade
union and which was called into being only when the employees
had something to discuss with the management. This commit-
tee, according to the secretary of the firm, had functioned satis-
factorily "until the organization became controlled by radicals."

Election of representatives to the Works Council, which it
was proposed should take the place of the union committee, was
held, the representatives met and adopted by-laws and methods
of procedure, but no further progress was made.

'An interesting account of the failure of a Works Council due to the opposition of or -
ganized labor is given by O. F. Carpenter in Industrial Management, January, 192 1, in an
article entitled "A Shop Committee that Failed."

"Because of the fact that half of our plant was unionized and they
positively prohibited any of their members from participating, it was
impractical to try a Works Council, so we abandoned it."

It is the intention of the company to start the plan in the
future, however. As the trade union element in the plant
walked out in January, 1921, rather than accept a wage reduc-
tion, and as there are at present no union men employed, the
correspondent stated, "we hope the plan will be more favorably
received and given an opportunity to operate." The attitude
of the company towards employee representation is expressed
as follows:

"We believe in collective bargaining, in employee representation,
but we do not believe in outside dictation. We want to deal with
our own employees, not with delegates who have nothing in common
with our employees or local business interest."

Early in 1919 a middle western company employing five
thousand workers introduced Works Councils into each of its
four plants. Shortly after the introduction of the Councils a
strike occurred in the two largest shops, and practically all of
the employees quit at the call of the national trade union. The
plan or employee representation continued in force in the two
smaller plants, but was dropped in the other larger shops until
the company was able to establish a stable force and learn more
about the character and ability of its new employees.

After fourteen months, during which time past experiences
had been carefully weighed, the management called a conference
of foremen and employees' representatives for the purpose of
drawing up new plans. The result was that a simplified plan of
Works Council was decided upon. It was the general feeling of
this conference that the simplified plan would be productive of
good results, although but 50% of the employees were ready
to approve of it. The remaining 50% were either indifferent,
preferred the trade union, or did not understand the plan.

Writing in April, 1921, the president of the company reported
that the employee representation plan

"... was abandoned because of the opposition of the unions and
radical agitators. There seems to be a tendency on the part of existing
unions to discourage movements of this kind, because they interfere
with the organization of unions."

This correspondent was of the opinion that a plan of repre-
sentation would be successful "in almost every case" if there
were no interference from the labor unions, but "because of
this interference the chances of success are about one in one
hundred — perhaps less than that." In order that "employee
representation plans may succeed at all, conditions must be
quite favorable."

The same opinion was expressed by the president of an
eastern machinery company. A Works Council was established

in this plant in 1915 and, although "regular weekly meetings
were held for about a year," the general result was that

"... not only the Works Council but all the employees more or
less ... became very independent with their employers' time and
money. . . . Under the influence of radical labor agitators sent
into the factory from outside to cause dissension, the Works Council
fell into disu.se, although the management kept in close touch with its
help, giving them uniformly fair treatment."

With reference to the effect which the opposition of the union
element has upon a plan of employee representation, this em-
ployer wrote that he did n9t believe

"... that any committee can withstand determined opposition
from labor unions who will put in their workers and destroy the
morale."

In a small eastern plant where the labor union employees
were given proportional representation on the employees' com-
mittee,

"... the union end of the committee and the few union employees
were continually endeavoring to introduce propaganda and friction
in favor of the union, and, in our judgment, against the general in-
terests of all of the employees."

After the committee and the management had arrived at an
agreement regarding certain disputed matters, the union em-
ployees refused to adhere to the agreement and insisted that a
new agreement be drawn up with the officers of the union. This
the company refused to do.

After this experience with a shop committee the company
stated:

"... we would recommend an employees' committee elected once
each year by all of the employees, without any regard to outside in-
fluences, and with a specific schedule of what the functions of the
committee were to be — what matters they were to consider and the
result of their finding to be submitted to the general manager in
writing; the committee, at all times to be representative of all the
employees and subject to recall by the employees, and to at all times
have the privilege of personal contact with the general manager."

A western company employing 550 employees, of whom only
a very small proportion were union men, reported that the
activities of the radical element and the efforts of that element
to use the Works Council as a means of securing recognition of
the trade union, led to a strike. The secretary of the company
wrote:

"For some time prior to the installation of the representation
plan, we had in our employ a few agitators. We always were an open
shop and never gave very much encouragement to union labor, as the
majority of our employees were not in favor of union organizations.
We felt that through the use of the representation plan we might
discourage labor agitators, but it seems that after the plan had been
presented and accepted by the employees, they were successful in elect-
ing as representatives, a few of the agitators.

"Through the assistance of the plan they were in a position to get
, together, hold meetings, always misrepresenting the company's side of

31 J^'^^^'^C.

ONTAHiO

the argument, and eventually secured the following of enough men
to form a labor organization. Certain demands were made of the com-
pany, through the committee, such as, requesting the company to
recognize the union, wage increases, and other demands which we
could not see fit to accept. Consequently, they ignored the employees'
representation plan and made demands on the company as a union.
"These demands were rejected, and in turn, the men called a strike.
We were successful in defeating their objects after a period of about
four months, and we are now running the same as before, as an open
shop."

The same correspondent stated the company did not con-
template re-establishing the plan at the time of writing (August,
1921), but that "should we at any time discover a plan that will
fit into our organization," it would be given proper consideration.

In "A Works Council Manual," Research Report Number 26
of the Conference Board, it was stated:

"Experience indicates that unless a Works Council comes to par-
ticipate in the adjustment of terms and conditions of employment,
such as wages and hours of work, it will not possess vitality. As mat-
ters intimately concerning the employees, these must necessarily form
a major subject of consideration in dealings between the representa-
tives of management and men."^

The experience of a middle western plant employing two
thousand workers with its Council of the committee type is a
concrete illustration of the above.

At the time of the formation of the Council in January, 1919>
questions of wages and hours were explicitly excluded from the
consideration of the single joint committee formed under the
plan, its activities being restricted to matters such as accident
prevention, factory sanitation, exchange of suggestions and
welfare work. In April, 1919, one of the company officials wrote
regarding the effect the plan had upon the employees:

"It occupies their time and keeps them from thinking of other things
to a great extent."

Writing in April, 1921, another official of the same plant
stated:

"There are so many extremely important variables in the problem
of safely operating a manufacturing enterprise, that we consider it
quite unwise to allow any committee of employees to legislate as to
hours of work, classification of men, wages, seniority rights, or promo-
tion or shop discipline. With these eliminated, the interest of shop
committees as ordinarily composed is apt to lag, and that was really
our experience, as the members of the committee were not able to pro-
duce subjects of sufficient interest to warrant the continuance of the
committee."

Only one firm reported that it had found it necessary to dis-
continue its Council because of the inability of the plan to
function during a period of readjustment. This was a middle
western rubber company employing eight hundred workers,
none of whom are members of trades unions. The "Industrial
Council" in this plant was constituted as follows:

»p. 3. •

A Factory Council consisting of one member from each de-
partment, who in turn reported to the Executive Council, made
up of three employees representing the factory, one employee
representing the foremen, and two executives, the factory man-
ager and the vice-president of the company. Problems which
could not be decided by the Factory Council were taken to the
Executive Council for their final decision.

The secretary of the company wrote:

"We found this worked out very satisfactorily up to the time when
the reconstruction period started. It was necessary for us, at that
time, to discontinue this Council in order to bring wages back to a
reasonable basis. Therefore the Council is not working at the present
time, as labor is very plentiful at very low rates."

It was further stated that

"... the reatljustment period in the rubber game needed quick
action. This could not be obtained through the Council; we therefore
advised the Council that it would be abandoned until such a time as
conditions warranted it being reorganized. This was met with ap-
proval throughout the plant."

The reasons for the abandonment of Works Councils which
were originally introduced into plants by employers vary con-
siderably. Union opposition to the plans, lack of support by
management, and failure to provide the committees with work
of vital interest to the employees, are among the influences that
have resulted in the failure of the plans to function satisfac-
torily. In other cases, however, the plans have been abandoned
only temporarily, due to a reduction in working force which has
rendered the present operation of the committees impracticable.

PART II

Works Councils in Operation

An account of the experience which employers have had with
Works Councils now in operation, is presented in the following
chapters. In this connection it is interesting to note that with
very few exceptions the employee representation plans func-
tioning at the present time, were voluntarily instituted by em-
ployers. According to the Conference Board's first report on
the subject of Works Councils, which dealt with 225 employee
representation plans, eighty-six of these were National War
Labor Board Committees; thirty-one were Shipijuilding Labor
Adjustment Board Committees; three were "Government Com-
mittees"; 105 were voluntarily instituted by employers. As
has already been shown, nearly all of the "shop committees" of
the National War Labor Board have been abandoned, as have
the larger number of the committee plans instituted by the
Shipbuilding Labor Adjustment Board. This gives added
significance to the number of employee representation plans —
approximately 725 — in existence in the United States today.
It is evident that while the Works Council movement has not
attained national proportions, it is receiving favorable con-
sideration by an increasingly large number of American em-
ployers in all parts of the country.

The most noteworthy instances of the recent adoption of
this method of handling industrial relations are afforded by the
Pennsylvania Railroad and the leading concerns in the meat
packing industry. Approval of the "industrial representation
idea" was recently expressed by the National Association of
Manufacturers.^ ,

'National Association of Manufacturers. Twenty-sixth Annual Convention, New York,
May, 1921, p. 31.

CHAPTER III

CHANGES MADE IN WORKS COUNCIL PLANS

The variations in Works Councils with respect to their
"form, constitution, procedure, elections, meetings and various
other specific features of organization" were fully described in
a previous report by the National Industrial Conference Board.*
In general it may be said that there is little evidence that
fundamental changes have been made since then, either in
the manner in which Works Councils are constituted or in the
manner in which they function. The greater number of changes
made by employers are of the nature of minor improvements
in the operating details of the plans found through practical
experience to be advisable. Just as the conditions within
different plants vary in so many ways, the changes made to
better fit the Councils to the plant organizations must also
vary. The changes outlined below are not to be taken as
indicative of the attitude of employers in general toward such
modifications; they are merely those changes that some employ-
ers have found it advantageous to make in order to secure a
more efficient operation of their representation plans.

The nature of the changes which have been made in the
great majority of Council plans is indicated in the following
statements which came from two different companies:

"We still operate along the lines originally laid down — although
of course, we are constantly profiting by our experience and changing
our operating details."

"The plan is still operating along the original lines laid down but,
of course, small changes have been made, in order to make the repre-
sentation more uniform, and to straighten out small kinks which
existed in the original plan."

Increase in Power of Committees

Several firms have made changes in their Works Councils
that are of considerable interest as showing a gradual increase
of the power and responsibility of the employees.

In some cases representation plans have developed from a
single committee which devoted itself to the consideration of
one or more aspects of shop conditions. In the beginning
this committee may have been composed of employees appointed
by the foremen, election of employee representatives coming
into effect at a later date.

This was the manner in which the Council of an eastern
paper mill was developed. From a simple and informal begin-

'"Works Councils in the United States." Researcli Report No. 2r, Boston, October, 1919,
pp. 19-56.

ning, the committees have developed into an eminently satis-
factory organization. The Council, installed in 1919, is even
now only a "limited" plan, but its scope has so increased that
it might almost be classed with plans of the "committee" type.
The employer is entirely satisfied with the development of the
scheme. To his mind, its working out has justified the manner
of its introduction and the form of its organization. In his
own words:

"We are still of the same opinion we had when we started out with
our committee, that the way to institute such a proposition is to begin
with a very informal plan, especially in small mills like our own,
and then allow the plan to become more formally organized as time
goes on and the employees become entirely familiar with such matters."

The first committee was composed of men appointed by
foremen and it concerned itself entirely with inspection of
safety measures. Later the members of the committee were
chosen by secret ballot, one from each department of the mill.
At the same time the scope of its activities was broadened to
include all matters of mutual interest. The Board's correspon-
dent stated:

"We are now using the committee for the dissemination of such
\ information as the details of the reduced wage scale, which goes into
effect May 1, (1921) and the service differential which is being estab-
lished at the same time, and we feel that the idea has been very well
accepted, that the committee is available for use in the submission
of any questions whatever which are interesting to the employees.

"We encourage suggestions, the airing of any grievances which
cannot be settled by merely speaking to the foremen, and constructive
criticisms."

It is his opinion that the limit placed upon the power of the
Council is in line with the sentiment of the employees:

"The Committee has no power of final decision or execution on any
matter — being merely a body for suggestions, and we see no reason
for granting any further power to them along these lines. In fact,
we do not think that they desire it."

The company was "entirely satisfied" with the progress that
had been made and the way the plan had worked out.

In an eastern clothing factory where a Council of the "com-
mittee" type has been operating since 1918, the employer's
opinion was in agreement with the one just quoted — that
committees at the time of installation should be organized as
simply as possible.

As originally laid out, the plan provided for departmental
committees only, each one responsible for its own department.
In the beginning "no special plans were made except to give
the committees authority as they seemed fit to use it."

Reports within the past three months show that the plan
has been considerably elaborated. In addition to the original
departmental committees, a central committee, "represent-
ing the body of the factory employees," has been organized.

This central committee has been given power beyond that
granted the departmental committee:

"The authority of the central committee shall be in the same
province as that of the departmental committees, but the central
committee shall have authority to review the decisions of the
departmental committees and to recommend changes, on request of a
chairman of a committee or on request of an individual through his
departmental committee."

According to the Board's correspondent in this plant, the
work of the various committees had been "very satisfactory."
It was stated that the scope of the committees would be extended
"in accordance with their ability to take responsibility." In
introducing a plan of employee representation it was thought
wise not to hamper the committees by many rules in the
beginning.

The vice-president of a southern cotton mill expressed a
similar opinion concerning the degree of responsibility, which
should be given the employees under a plan of representation.
This official while considering that employee representation is
". . . basically right and fundamentally constructive, reflect-
ing progress in the right direction . . ." stated that:

"Any plan or system, however, should take into account the
capabilities of the people whom it is to affect, their mental status
and moral stamina; and privileges granted should be confined to such
as in the opinion of competent and unbiased judges the people are
qualified to use properly."

Among the changes in Works Councils which have widened
their field ofjurisdiction, those made in an eastern textile plant
are of particular interest. In this concern, which has a scheme
of profit-sharing in operation, the Board of Operatives com-
posed of representatives of the employees had, when organized
in 1918, only limited and advisory power with reference to
matters of mill management. Its chief activities were con-
nected with subjects of recreation and education. It also had
full control over a number of company-owned houses. At that
time representatives of the management attended the meetings
of the Board of Operatives but some time later this was changed
so that the employee representatives met alone. At the same
time a joint committee of six members was formed, three
being appointed by the Board of Operatives and three by the
management. This joint body, the Board of Management,
hears all complaints and grievances which the Board of Opera-
tives brings before it and in case a majority of its members
fails to agree upon any matter, a seventh member is appointed
and the decision of the Board so constituted is final. In addi-
tion to this representation of the employees on the Board of
Management, the Board of Operatives annually appoints one
of its members to the Board of Directors of the company. Any
employee may attend the meetings of the Board of Operatives.

The activities of the Board of Operatives have been widened
from jurisdiction over matters of recreation, education and
housing, to include wages, hours of work, and questions of
shop discipline, and through the representation of the employees
on the Board of Management they are given a direct voice in
the management of the plant. This is evident by the fact that
when a new manager was put in charge of the plant, he was
chosen by the Board of Management. One of the officials of
the company wrote regarding the effect which the above
changes had upon the method in which the plan functioned:

". . . our plan began to be taken seriously and began truly to
function when we added the more advanced features of the Board of
Management and Board of Directors to the Board of Operatives and
the profit-sharing."

Particularly interesting are the changes made in the Works
Council of the "company union" type of a western shoe com-
pany. All the employees of the company belong to a Coopera-
tive Association to which they pay dues. In 1915 the company
provided that all employees who had been with the firm for
three years should be eligible for membership in the Associa-
tion. The company agreed that none of the members of the
Association should be discharged without the approval and
consent of the Board of Directors, the governing body of the
Association, which consisted of three executives and five
elected employee representatives. The Board of Directors
elected from their own number a president, vice-president
and secretary and selected from among the members of the
Association an "Employees' Agent." The duties of the last
mentioned, who attended all meetings of the Board but had no
vote in them, were to take up with the Board matters which
on investigation he considered required adjustment.

After a year the Association was enlarged to include all who
had been with the company for two years. This was later
extended to include all who had been in the company's employ
one year, and finally all employees were made members of the
Association.

At the same time the governing body of the Association
was changed from one committee of employee and management
representatives to two bodies, a Joint Council composed of
four representatives of the company and four of the employees,
and a Shop Committee^ composed entirely of employee repre-
sentatives.

The Joint Council elects its officers from its own membership
as in the case of the original Board of Directors, but the presi-
dent and vice-president must not be executives. Moreover the
secretary and treasurer may be elected outside of the Joint
Council.

' This is a special use of the term Shop Committee and is not to be confused with tlie
"shop committees" of the National War Labor Board.

In addition to receiving complaints, and hearing and trying
all grievances submitted to it by the Shop Committee, its
approval has to be obtained by the management before any
employee can be discharged, although the management may
suspend any employee on full pay until the question of his or
her discharge is passed on by the Joint Council. In case the
members of the Joint Council are equally divided upon any
question, that question is "immediately" submitted to a board
of arbitration of three persons, one of whom is appointed by
each of the two opposing sides, the third to be chosen by
these two and to be an entirely disinterested person.

The Shop Committee appoints the four employee represen-
tatives on the Joint Council and hears and investigates all
complaints of the members of the Association and, if necessary,
refers them to the Joint Council. All new employees hired by
the company are required to sign an application for member-
ship in the Association. This application has to be approved
within three months by the Shop Committee and the manage-
ment, or the employee is discharged. The chairman of the
Shop Committee, who is elected by the members of the Asso-
ciation from a list nominated by the Shop Committee and
approved by the Joint Council, may be either a member of
the Association or he may be chosen from outside the plant.
No member of the management can occupy this office. The
position of chairman of the Shop Committee corresponds to
that of the "Employees' Agent" of the earlier plan, with the
marked differences that he can be chosen from outside the
plant, and that when elected from among the employees he
does not remain on the company's payroll. He receives no
pay from the company direct; the Shop Committee determines
what the amount of his remuneration shall be, and this is paid
from the funds of the Association. In the case of an employee
elected chairman, that remuneration must not be less than
the weekly wage he was receiving at the time of his election.
"The chairman is to have access to every part and department of the
factory of said company; to be the direct representative of the em-
ployees of said company who are members of said association; to make
all investigations on behalf of the Shop Committee upon the application
for membership to the association; to attend all meetings of the
Joint Council; to preside at all meetings of the Shop Committee;
to take charge of all welfare work; . . . investigate all complaints
and grievances of members of said association or the management of
said company; and, after due consideration by the Shop Committee,
if by it so determined, to report all grievances and complaints for
determination to the Joint Council."

As described in the constitution of the plan, the chairman
of the Shop Committee acts as the "business agent" for the
members of the Association "in any controversy or request
which shall be brought to the Joint Council for determination."

Provision is made in the present plan of this company that
secret meetings of all the members of the Association may be

held "for the purpose of discussing matters pertaining to the
welfare, wages, working conditions, grievances or any other
matters connected with the work and employment of the
members" of the Association. At these meetings no member
of the management may be present and no minutes of the
meetings are published.

An official of this plant wrote:

"Our exjjerience with the employee representation plan in our
plant the last six years has been tnoroughly satisfactory."

According to the president of a middle western canning com-
pany with one hundred employees, the object of the company
is "to make of its business a real 'Industrial Democracy' that
is, an organization in which the employees, through their
representatives, shall manage the business."

The history of the development of the Works Council in
this company is of interest as showing how the employees made
use of the authority given them by the company. The plan
of employee representation was started in 1917, and at the
same time a profit-sharing plan was set up. At that time

"... the committee was made up of eight employees from the
factory and the four officers of the firm. Majority vote ruled. The
president of the company could veto any decision of the committee,
but a measure could be passed over his veto by two- thirds vote.
He never used his veto power. The committee could discuss anything
relating to the business. There was no limit set to its activities.
At first, however, it actually dealt only with factory problems."

At the end of 191 7 the plan was changed to provide for the
formation of two bodies — a Council and a Committee. The
Council was composed of twelve members — the manager and
assistant manager, superintendent, and assistant superintend-
ent, the foremen and forewomen. The other body, called
the Committee, was composed entirely of elected em-
ployees, twelve in number. The Committee "could dis-
.cuss anything it wished and make any recommendations to
the Council, but during I9l8 its functions were purely advisory."
The Council, composed of twelve representatives of the manage-
ment, accomplished many important things during 1918. It
reduced and increased the length of the working week several
times during the year; it decided upon the hour wage rate,
both for men and women; it placed all the employees of more
than six months' standing on salary instead of on wage,
thereby giving all such employees protection against involun-
tary unemployment. It classified all salaried employees,
except heads of departments, into A, B, C, D for men and the
same for women. A certain salary is fixed for each class.
During I9l8 two advances in the salary rates were made and
in 1919 one advance was made. In 1920 another advance
was made. Apart from their own salaries and those of the
sales force, which are determined by the Board of Directors,

the members of the Council decide all salaries. In 1918 and
1919 the Council filled several positions of foremen. In every
case, except one, the foremen were advanced from the ranks.
At the end of 1918 the Council elected the superintendent.

In 1919 the Council, "although its actual power was increased
only a little over that of 1918," was "very much more alive
to the problems of the business and handled them with greater
firmness and skill."

Toward the end of 1919 the Council discussed the qualifica-
tions of each of its members — the general manager, the assistant
general manager, the superintendent and assistant superin-
tendent, and each foreman and forewoman.

"The one under discussion withdrew from the Council chamber
while the discussion was in progress. Later he was called back and
told of his weaknesses. Time was not wasted by telling him of his
strong points.

"During 1919 the Council appointed an assistant manager.

"At the end of 1919 the superintendent appointed the year before
by the Council was demoted by it and the assistant manager was
made superintendent. The former superintendent returned to his
position as foreman of the mechanical department. Before his
advancement to the superintendency he had been head of that depart-
ment. He accepted his demotion in good spirit. Since his return to
his old department he has done better work than before. The employee
who had been foreman of the mechanical department during 1919
became a member of the rank and file as the former superintendent
took his place. He, also, took the change in good spirit. Later he
was made foreman of the shipping department."

As a last step, the position of general manager was made
elective, and in 1920 the Council began to consider the sales
problems of the business.

The Committee, composed of twelve elected employees, did
not function during 1918 and gradually died. This was because
"there were not enough members on it who had sufficient
force to make it function." In I9l9 another Committee was
elected and during that year it accomplished many important
things. It was allowed to discuss any problem and its recom-
mendations were passed to the Council for final decision.
Members of the Council and Committee received no pay
for their services, and all meetings were held after working
hours. During 1919 the Committee elected an assistant
forewoman. "It made many recommendations for changes
of employees from wage to salary and from one class to another.
It made recommendations for positions in the office." The
correspondent added:

"It has become our settled policy to recruit all office positions
from the factory. By action of the Council all employees work the
same number of hours. The office commences and closes when the
factory does. Last year we filled the position of bookkeeper with
a factory employee. He was ^nt to school and is now in chaise of
our books. Our office women have all been workers in our factory and
have been sent to school to prepare them for office work."

In conclusion the same correspondent wrote with reference
tojhe plan in operation:

"It will be seen from the above brief outline that the government of
the business is now in the hands of our employees. At no time during
the last three years have they attempted to abuse their power. In
fact they have been far more conservative than the owners. It has
been the owners who have urged the employees to take more power."

As illustrating the last statement the following instance was
cited:

"Last fall (1919) the president of the company and the represen-
tative of 95% of the stock, asked the Council to consider an advance
in all salaries. He absented himself from the deliberation. The
Council voted against an advance at the time because 'the outlook
for the year was not good'."

Nothing regarding the company's business is concealed from
the employees.

"The Council and likewise the Committee are informed by the
president from period to period of the condition of the business and
the outlook. Nothing is concealed at any time. Each employee knows
the salary that all others are getting. At the end of the year, at
our annual dinner, salaried employees are informed in detail of the
affairs of the Company. At that dinner any matter may be discussed
by the entire body."

Recently it was decided to let not more than five members
of the rank and file attend Council meetings. The Committee
took the same action with respect to its meetings. This was
done to enable the rank and file to hear the discussions pre-
ceding the decisions of both governing bodies. A short time
ago the Committee was merged with the Council, the body
thus formed being called the Council. Membership in the
Council at the present time is open to any regular employee
who attends eight- consecutive meetings. Any member of the
Council who misses two meetings in succession is now dropped
from the Council unless he has a very good reason for his
absence.

As yet only three employees have availed themselves of the
privilege of becoming members of the Council. The president
of the company said:

"I am sorry that more members of the rank and file do not attend but
I think it would be too much to expect, perhaps, that a large per-
centage of the laboring people in any business organization would
attend meetings which call for as much sacrifice of time and as much
brain work as our meetings call for."

The effect of this method of industrial government upon the
efficiency of the plant was described by the Board's informant
as follows:

"In spite of a steadily increasing wage and salary rate our unit
cost of production has not increased at all. In 1919, due to the action
of the government in throwing a great quantity of canned goods
on the market, the canned goods trade was demoralized and our sales
were much less than they had been the year before. In spite of the
smaller output and the higher scale of salaries our unit cost of labor
was less than in 1918."

With reference to the relations between employees and
management this correspondent wrote:

"Wc know that the effects, both on the spirit and on the efficiency
of most of the employees, has been very helpful. We are convinced
that ill will has almost disappeared and that in its place have come
courage, confidence and intelligence."

Stating that the Council is not used now "for the purpose
of settling grievances" but as a managerial body which "dis-
cusses almost entirely matters pertaining to the welfare of the
firm," the president of the company wrote:

"It is now clearly known to almost all members of the Council
that the welfare of the employees is dependent upon the welfare
of the firm."

Separate Meetings of Employees' Representatives

In some instances changes have been made in Works Council
plans whereby employee representatives have been allowed
to meet separately from those of the management. Two cases
have been referred to already, ^

In the case of one firm, an eastern textile company employ-
ing six hundred workers, the original plan provided for a Plant
Council composed of employee and management representa-
tives. No separate meetings of the employee representatives
were allowed, and at the joint meetings voting was done by
roll call. At the end of eighteen months' operation of the
plan, the management suggested that the Plant Council be
divided into two bodies, a Mill Council composed of employee
representatives, and a Management Council consisting of repre-
sentatives of the management; and that these bodies meet
separately and vote by secret ballot. Provision was also made
for a joint meeting of both Councils when advisable. The
object of the management in providing for separate meetings
of the employee representatives, was to give them an oppor-
tunity to discuss freely and frankly among themselves all
matters considered by them.

The correspondent of the Board in this plant was convinced
that the change had been beneficial. Speaking after four
months' experience with the new method of holding the meet-
ings, he said:

"Previously we had to keep 'feeding' things to the employee repre-
sentatives for them to do. They didn't seem to have any initiative
in bringing up matters before the Council. Now the procedure is
reversed. They take much more interest in the plan and I believe
will not misuse the responsibility we have placed upon them."

Employee representatives interviewed in this plant were
unanimous in their approval of the change, whereby they met
by themselves. The chairman of the employee representa-
tives' body said:

See pp. 37, 39.

"We can talk out in meeting now. There is no one there but
ourselves and you don't need to be afraid that something you say
will be misunderstood or used against you. It has made a big difference
in what the employees think of the plan. Before it wasn't thought
much of, but now they are taking a real interest in it."

At the request of the employees in a middle western lumber
company, the "committee" type of Works Council, after being
in operation for over a year, was changed to a plan of the
"Industrial Democracy" type. Originally two plants of the
company elected representatives to the one Works Council,
but with the closing of one plant the personnel of the Council
suffered considerable change and the employees rather lost
interest in the plan. In order to renew their interest, the
company thought it well to change the plan according to the
following description:

"Committees were appointed from the plant itself, and it was
practically left to the employees to decide whether or not to continue
some sort of a plan and if so, what sort. We are glad to state that
the committee, composed entirely of employees, felt that the whole
general plan had been a good one and that they would rather continue
it than to drop it, but they felt that perhaps a change would be
better."

In connection with the previous Works Council, a foremen's
club had met monthly for several years.

"Under the new plan this foremen's club will operate as the Senate,
and one representative for each fifty employees will be elected from
the employees to form the House of Representatives, with the Board
of Directors as the Cabinet."

At the time of the nominations the management stated that
"there is much interest in the election and a good bunch of
delegates will be elected."

These instances are not to be taken as indicating a general
tendency on the part of employers with Works Councils of the
"committee" type to make changes in their plans to provide
for separate meetings of the employee representatives. Oppor-
tunity may be given the employee representatives to with-
draw temporarily from a joint meeting to discuss in private
some matter which has been under discussion in the joint
committee, but by far the greater majority of plans of this type
provide for joint meetings only.

In this connection it was the experience of a large concern
manufacturing electrical appliances, that after the employee
representatives had received permission to hold a meeting
apart from the representatives of the management, "so little
of interest developed that there seemed to be no desire to hold
another."

The president of the company stated that the holding of
such meetings was "at variance with the fundamental princi-
ples of our plan — that of joint conference."

"From time to time we have broached the subject to the Executive
Committee, more as a matter of policy to impress them with the
fact that we really have no objection to such meetings if there is a
demand for them. We have, however, rather encouraged the elected
members of the departmental committees to hold informal meetings
during the lunch period for the purpose of discussing among them-
selves matters of a departmental nature."

Simplification of Works Councils of the "Industrial
Democracy" Type

The changes made as described above in the Works Councils
of the "committee" type, are not to be taken as indicative of
the general attitude of employers with such Councils toward
these changes. Neither are the following changes, made in
plans of the "Industrial Democracy" type, to be regarded as
reflecting the attitude of the majority of employers with
Works Councils of that type. Where one firm finds that the
creation of separate bodies representative of management and
employees improves the effectiveness of its Council, another
firm finds that the combination of the two bodies into one, or
the elimination of the Senate composed of the foremen of the
plant, works more effectively than the maintenance of the
separate bodies.

Thus an eastern concern with Works Councils in five plants,
employing in the smallest plant seventy-five, and in the
largest, two hundred employees, is changing its "Industrial
Democracy" plan so that instead of having a Senate com-
posed of foremen appointed by the management, and a House
of Representatives composed of elected employee representa-
tives, there will be but one body, one-hau of^ which will be
elected from the workers and the other half will be foremen
appointed by the management. Under the present arrange-
ment a great deal of time is taken up in putting a "bill" through
the two bodies. It is felt that this will be remedied by the
creation of the one joint body.

As the first step in effecting this change there has been formed
an Executive or Congressional Committee

". . . made up of members of the House of Representatives,
members of the Senate and one representative from owner or manage-
ment. This change is in order that certain matters may have im-
mediate attention and that many matters of a minor nature may
be settled outside of the legislative meetings, the House of Representa-
tives and Senate simply receiving a report of the Executive Committee
for approval, these bodies passing on the basic principle rather than
on the detail of individual cases. These changes are planned because
of the delay entailed frequently in the past on matters which ought
to have immediate attention and which eventually the House of
Representatives agree to, and also because frequently matters of
very minor importance are considered exhaustively by the House of
Representatives, not only at one meeting but at many."

Other instances were reported of the elimination of the
Senate from "Industrial Democracy" plans. A middle western

plant after three years* operation of a Works Council — a modi-
fiedfplan of the "Industrial Democracy" type — also eliminated
its "Senate." It was felt that it was necessary to eliminate
"some of the machinery" in the operation of the plan, and the
Senate was accordingly abandoned. It was stated that under
the new system the business of the Council had been expedited.

A similar reason was given by a middle western clothing
company for the elimination of the "Senate" from its Works
Council plan of the "Industrial Democracy" type. "For more
expeditious work," the functions of the Senate were eliminated,
the management now acting through a Planning Board com-
posed of representatives of each of the major divisions of the
plant.

A further change made in the plan of this company placed
in the hands of a committee composed entirely of employees the
final decision as to whether management could discharge
an employee. The plan originally provided for a Board of
Review made up of two members of the House of Representa-
tives and two appointed by the management, with an additional
member who acted as Chairman and was chosen by the others.
The duties of this Board were to consider all cases of discharge
which employees referred to it. Any employee who felt that
he had been unjustly discharged could appeal to the Board,
whose decision was final as to whether the employee should be
reinstated. Where it was proven that "a rule affecting the
standards of discipline or standards of production of the work-
ing force has been violated" the Board could not reinstate the
applicant, nor could it do so where the employee applying
for reinstatement had resigned from the company or "had been
dishonest."

At the present time the duties of the Board of Review have
been taken over by the Betterment Committee, which is made
up entirely of representatives of the employees — one represen-
tative from each floor of the plant. This was done at the sug-
gestion of the House of Representatives. The procedure regard-
ing dismissals has been reversed and now, instead of being
reviewed after the employee has been discharged, the case is
reviewed before final action is taken. The decision of the
Betterment Committee is taken as final. The reason for this
change, whereby a committee of employees is allowed to decide
as to whether employees should be discharged, was given by a
company official as follows:

"The House of Representatives considered it necessary if the union
who dominated the market outside of our house was to have some
respect for our organization, and was to believe in its validity, that
no one should be discharged without their having some voice in the
mattetj particularly in a case where employees might be discharged
for activities to disrupt the organization. They felt that if the dis-
charge would come from their own body rather than from the manage-

ment it would help to give their inter-organization the prestige that
it deserved."

As to the experience of the company with this method of
allowing a committee of employees to decide who should be
discharged, the same correspondent wrote:

' "The employees did override the judgment of the management in
at least one case — a young factory worker charged with indifference
to his work. He was reinstated with back pay and put on trial.
He lasted only a few weeks when he was again up for a hearing and
discharged with the cooperation of the Betterment Committee.

"This committee has always taken this responsibility seriously and
acted fairly upon the facts presented by the management in cases of
contemplated dismissals or lay ofFs."

A southern textile mill whose plan of "Industrial Democracy"
was established in October, 1919, outlined several changes which
it felt would improve the effectiveness of the plan. These
changes have not as yet been made, the company merely
stating that it favored a modification of its plan along the
following lines. The present House of Representatives is
composed of twenty-five members, one representative to each
thirty employees or majority thereof. The company considers
that an increase in the number of constituents per representa-
tive, resulting in an attendant reduction in the size of the
House, would be of value for the following reasons:

"1. It is difficult to obtain one really capable man out of every
thirty workmen.

"2. By raising the number of constituents you place greater
responsibility upon the representative. This would result in increasing
the workman's respect for the office and would tend, further, to
engender a higher sense of duty in the incumbent.

"3. By reducing the number of representatives the body is made
less cumbersome, and business can be handled with greater dispatch.
The greater the number of representatives, the more likelihood of dwell-
ing at undue length upon comparatively inconsequential matters.
Concomitantly, also, the proclivity on the part of some to indulge
in useless tirades is encouraged by the sense of security which is
always found in numbers. This, of course, is purely incidental
and is not indicative of inherent fault in the system, but the cogency of
the first two considerations mentioned in this paragraph is readily
apparent."

Another change favored by the company would be one that
"would to some extent, democratize the Senate and reduce the
membership." This would be done by restricting the appoint-
able membership to six overseers in the plant, and having a
like number elected to the Senate by direct vote of the workers.
The reasons given for favoring such a change in the personnel
of the Senate are:

"1 . To expedite the transaction of business by reducing the number
of transactors.

"2. To remove the antipathy which exists between the House
and the Senate. This, we believe, is due to the fact that one body
is composed entirely of 'bosses,' the other solely of operatives. Further,
one body is democratic, the other is not.

"3. To infuse greater activity into the Senate, which has inclined
to lethargy and, in some cases, to reactionary resentment of the
system."

A third change desired would be "the appointment of a
permanant inter-body Committee on Constitutionality" com-
posed of two members from the House, two from the Senate
(one elected member and one appointed), and one member from
the Cabinet.

The following are given as the reasons for this proposed
change:

"1. Our system is founded upon abstract principles: Justice,
Cooperation, Economy, Energy, Service, and the application of these
principles — or, rather, the establishment of the relation which these
principles bear to practical problems or proposed measures — requires
a high order of intelligence. As men of this type are rare, we favor
limiting the size of the committee to the number specified; and as
proficiency will depend upon study and training, the Committee on
Constitutionality should be permanent.

"2. Establishment of conflict, or agreement, with the Constitution
should be arrived at through cooperative effort.

"3. When measures are declared at variance with the spirit and
intent of the constitution, the responsibility will rest upon all three
bodies jointly. Under the present system the entire onus of blame
falls upon the body which 'kills' the measure."

These changes are of course favored by the management of
this plant because of "our particular local conditions," and it
is pointed out that "it might well be that identical changes
would not be helpful in other organizations where conditions
are certain to be widely different."

That the above changes would not be applicable to all Works
Councils of the "Industrial Democracy" type is illustrated by
the statement given below of the vice-president of a western
company which has Councils of the "Industrial Democracy"
type in a number of plants. In the larger of the company's
plants the Councils are composed of a Cabinet, Senate and
House of Representatives. In smaller plants a single body
composed of foremen and employee representatives comprises
the Council, and in other plants employing only a small num-
ber of workers, mass meetings of the employees constitute the
only organized means of contact between management and
men.

"We find the plan works better in the larger plants, where we
have the full machinery. In the plants where we have just the one
body, corresponding possibly to a shop committee, if there is a mixture
of foremen and employees, we do not obtain the freedom of discussion
we like and if the committee is made up entirely of employees without
foremen, we do not have the cooperation of the foremen that we
should have. In the plants where we operate entirely through the
mass meetings, we get the poorest results of all, because of the hesitancy
of the employees to discuss matters and take responsibility."

The following changes, made in Works Council plans are those
which experience with the operation of the plans has shown

to be advisable. They are not to be considered as being
applicable in all concerns, as they have had their origin in
conditions peculiar to the plants in which the plans were
working.

Assistant Foremen Allowed to Vote for and Be Elected
AS Employee Representatives
In an eastern textile plant employing five hundred workers,
a recent amendment to the constitution governing the Works
Council provided that assistant foremen and second hands
could vote for and be elected as employee representatives.
This w^s done

". . . in recognition of the conclusion that their viewpoints and
interests were those of the men in most of the matters which came
before the mill council, such as wages, hours, working conditions and
so forth .... Under the former rules these selected and efficient
workers were not adequately represented in the management group
of representatives and had no representation in the employees' group,
and it is hoped that the change with regard to them will correct this
condition satisfactorily."

At the first election after this amendment was made two of
the sixteen representatives chosen by the employees held
positions as assistants to the foremen of the departments in
which they were employed. The change has not been in
effect long enough to enable the management to state the
results.

Deputy Representatives

Two companies reported that the constitution of their plans
had been changed to permit the election by the employees,
or the appointment by the duly elected departmental represen-
tatives, of deputy representatives in order to assist the employee
representatives in their duties and at the same time to enlarge
the circle of men who come into direct contact with th'e Works
Council and learn more of its operation. In the case of a
company with twenty-four Works Councils in operation, it
was provided:

". . . [that] the qualifications of deputy representatives shall be the
same as those of employee representatives, and the terms of office of
deputy representatives shall be the same as those of employee repre-
sentatives, and shall not extend beyond the terms of their respective
representatives."

In this company the deputy representative may, subject to
the approval of Works Council, be designated by the employee
representative, or the Works Council may provide for a special
election for this purpose. The same guaranty of independence
of action is given the deputy representatives as the employee
representatives, and their selection is revocable either upon a
petition of a majority of the employees' group which they
represent, upon recommendation of the employee representa-
tive if approved by the Works Council, or upon recommenda-
tion of the Works Council. Under the plan of this company

". . . the duties of deputy representatives shall be to assist their
representative in carrying out the purposes of this plan, as directed by
such representative or the Works Council; they may attend meetings of
the Works Council and participate in its discussions only with the
consent of the Works Council and their representative, and shall have
one vote only in the absence of such representative and then only
with the consent of the Works Council."

Another western firm with Works Councils in four plants
wrote that, although operating along the lines originally laid
down,

". . . we are finding that the informational value of the Council is
greater than the legislative. We have found . . . that at least 90%
of men desire to act rightly if they know the truth. The elected
representative has great trouble, and, in fact, finds himself up against
an impossible proposition in getting across to his constituents with
the balanced argument as he has heard it in a meeting of the Council.
Therefore, we are enlarging the size of our Council by urging council-
men to bring into the meetings deputy representatives, thus enlarging
the circle of men who are on the inside and who, therefore, when an
important decision emerges from a Council, are more receptive to the
measure."

Formation of Small Joint Committees

Under the originat constitution of the Works Council in a
large eastern concern a committee of twelve members chosen
by the employee representatives from their number met with
an equal number of management representatives as a confer-
ence committee.

"It was found after a trial that the size of this committee made
it difficult to accomplish results. The plan was then evolved of appoint-
ing small conference committees to deal with various subjects, these
committees to be composed of an equal number of members of the
works committee and of the management, and never to exceed six
members."

This has been found to be a much more satisfactory way of
transacting the business that comes before the Council.

Addition of a "Committee of Adjustment"

In the first six months of 1920 such a large number of requests
involving wage increases were brought before the Works Council
of the "committee" type in an eastern plant that

". . . it was soon realized that the Council had not provided the
necessary machinery or procedure to deal with these matters. Hence
it provided for the appointment of a Committee of Adjustment.
All matters of a controversial character have since been referred to
this committee for adjustment."

Absorption of Employees' Organizations by a Works

Council

At the time of the formation of the Works Council of the
"committee"*type in an eastern concern employing 500 workers,
the athletic activities and the Employees' Beneficial Association
were controlled by separate organizations of employees. After

the Works Council was formed, it was given control of these
organizations, and the solvency of the Beneficial Association
was guaranteed by the firm. The Board's correspondent wrote:

"This change in management has proven satisfactory and beneficial
to all parties concerned. Through the change we have been able to
divert funds formerly claimed by the Athletic Association to the
Beneficial Association for use in paying substantial sick and death
benefits at a very low cost to the employee. In connection with this
change we want to mention an interesting fact. There was apparently
a great demand on the part of our employees for a baseball team to
compete in a local industrial league. Since the Industrial Committee
has taken over the management of athletics we have discovered that
the demand for baseball was really confined to very few interested
parties and that the majority of our better men were not interested
in the firm having a baseball team, in fact, they rather opposed it
because of the present day tendency to commercialize this particular
form of sport. About one-half of the people attending the ball games
did so because of a feeling of loyalty by the men towards the firm."

Regular Meetings

In a previous report of the National Industrial Conference
Board it was stated:

"A Works Council which meets regularly tends ordinarily to do
more constructive work than one which meets only upon special
occasion. Regular meetings furnish constant opportunities for the
interchange of ideas and experiences between employees and manage-
ment."^

A concrete illustration of the above is found in an eastern
concern with a working staff of 550 employees. Under the
Works Council plan instituted in this company in I9l9, "com-
mittee meetings were held irregularly, being called only, when
occasion demanded it." This system was in effect for a period
of five months, when a change was made calling for a meeting
of the Plant Committee once every two weeks, and for a meeting
of each Group Committee every six weeks. Provision was also
made for the calling of a special meeting at any time. Writing
in April, 1921, one of the company officials stated that in his
opinion

"whatever plan may be adopted will fail unless kept alive by holding
regular meetings at the instance of the employees' representatives or
by the regular plant schedule adopted by the general committee."

Elimination of "Collective Economy Dividend"

The "Collective Economy Dividend" feature of certain Works
Councils of the "Industrial Democracy" type is described by Mr.
John Leitch in his book, "Man to Man," as follows:*

"I take the cost of a unit of production in the period preceding the
introduction of Industrial Democracy and compare that cost with
the results after democracy has gone into effect. If there is a saving,
then one-half that aggregate saving is the amount of the economy
dividend for the period and is paid to the men as an added percentage
to wages."
'"A Works Council Manual," Research Report No. 26, New York, February, !i930.
p. 14.
>p. 165.

Information was received by the Conference Board of two
instances in which the economy dividend feature was abandoned
by employers because they regarded it as unsatisfactory. One
correspondent in a middle western clothing plant, with a Council
of the "Industrial Democracy" type, wrote:

"In regard to the 'Collective Economy Dividend,' we might say-
that some six years ago we attempted to work it for about six months,
without success. We found that it did not give us the control of
the production, nor the amount of production that we desired."

A company official in an eastern shoe concern said that the
economy dividend plan had been abandoned for the following
reason:

"Under the plan, while one department may show a saving during
a certain period, it would be wiped out by some other department.
Naturally the employees in whose department the saving was made,
did not relish the idea of being made to suffer on account of some
other department falling behind."

These experiences are not to be taken as an evidence that
employers in general who have Works Councils of the "Indus-
trial Democracy" type have found the "Collective Economy
Dividend" feature of their plan unsatisfactory. On the con-
trary many employers wrote the Conference Board of having
distributed dividends ranging from 3% to 14% of the monthly
payroll. Emphasis was placed upon the dividend plan as an
incentive to the employees to increase the productive efficiency
of plants.^

The majority of the changes made in Works Council plans
are seen to be minor improvements in the operating details of
the plans. They present such a wide diversity because of the
great difference in the conditions existing within different plants.
Each plan has to be adapted to the circumstances within the
plant in which it is operating. The original plan must be so
drawn up that it may be easily changed, for no. plan, however
well thought out at the time of its installation, can make pro-
vision for all contingencies.

Another type of change made in Works Councils is that which
grants the employees a gradually increasing amount of authority
and control in management. The cases cited show that wTiere
this has been done employees have not misused their authority
but have seen more clearly than before the mutuality of their
interests and those of their employers, with the result that they
have given loyal cooperation.

"See pp. 7S-75.

CHAPTER IV

DISPOSAL OF EMPLOYEES' COMPLAINTS
AND GRIEVANCES

"Are the works committees used by the employees principally
in airing their grievances, or do the employees through the com-
mittees make contributions from their practical knowledge and
experience toward increasing productive efficiency and personal
contentment?"

This was one of the questions which the Conference Board
asked of employers, in order to learn of their experience with
employee representation plans. Distinction was drawn between
the airing of grievances and the contributions made by employees
from their knowledge and experience toward increasing produc-
tive efficiency, in that they represent different attitudes on the
part of the employees. The airing of grievances springs from
a desire on the part of the employees to secure something for
their own advantage alone. Contributions which they make
toward increasing the productive efficiency of a plant may be said
to spring, on the other hand, from a reaHzation that it is
to the mutual interest of themselves and their employer that
the industry should be run as economically and efficiently as
possible.

This is not to belittle the importance of that aspect of a
Works Council whereby employees are given the opportunity
to obtain a hearing and secure a decision in any case in which
they think they are being unjustly treated. It is of paramount
importance that there be kept open a channel of communication
whereby the employees may present to the management matters
requiring adjustment, and the management may learn of the
causes of dissatisfaction among the employees. But if manage-
ment profits by this knowledge and removes the causes of these
troubles, and if employees, as a result of the education obtained
through the Works Council, gain a deeper insight into the prob-
lems of management, there should follow a realization on the
part of the employees that it is to their interest as well as to
that of the employer that waste and inefficiency be lessened.

The ultimate object of employee representation may be
regarded as the achievement of cooperation between manage-
ment and men — the substitution of cooperation for antagonism.
Cooperation cannot be achieved so long as either party regards
industry as a battlefield occupied by two opposed camps, be-
tween whom there must be continuous warfare. This concep-
tion of industry has obtained among both employers and em-

ployees in the past because of a lack of understanding of the
part that each plays in industry. A Works Council provides an
opportunity, through the exchange of ideas and suggestions, for
both parties to come to a closer appreciation of their respective
problems and functions in industry. Suspicion and distrust
can be displaced by mutual confidence and trust.

This is of necessity a matter of education, and involves in
some cases a radical readjustment of ideas and attitude on the
part of both employer and employee. It is not to be expected
that it can be accomplished immediately following the introduc-
tion of any plan. The statements of employers furnish evidence,
however, that this mutual understanding and confidence can
be to some extent accomplished. To do so both parties must
be Interested supporters of the Works Council plan, and manage-
ment in particular must be sincere in its support of the Council
and must direct the interests of the employees along the proper
lines.

The answers received from employers to the question at the
beginning of this chapter were as varied as the plants from
which they came. The majority of employers stated that the
employees used the plan both for airing their grievances and
for making contributions toward increasing productive effi-
ciency. Others said that the plan had been used only as a means
for the presentation of grievances and complaints. It was the
experience of some that while this was the case when the plan
was initiated, conditions had gradually changed, and as the
causes of the grievances and complaints were removed, there
was an encouraging response from the employees as regards the
interest they took in the economical operation of the plant.
The settlement of a grievance or a complaint formed a precedent
for the consideration of other cases of a similar nature. A code
of decisions on such matters was built up which was accessible
to the employee representatives, and through their knowledge of
the decisions rendered in previous cases they were very often
able to dispose of complaints of the employees before they
reached the works committees. Many employers reported that
the majority of matters calling for adjustment which affected
the individual employee, were settled informally between the
foreman and the employee either with or without the assistance
of an employee representative. In this way the works com-
mittees were left to discuss matters of a constructive nature
concerning the employees as a whole, rather than individual
complaints and grievances.

Statements of employers, of which the following are exam-
ples, show that whereas employees were inclined to use the
Works Councils at the time of their initiation principally for
airing their grievances, after the plans had been in operation for
some time the airing of grievances gave place to a utilization

of the Councils for the consideration of questions of efficiency
and economy.

An official of a company with five Works Councils of the
"committee" type in operation, wrote:

"The first year this plan was used by the employees principally in
airing their grievances, but during the second year a number of
practical suggestions were made toward increasing production and
improving the quality of the product."

An eastern plant with eight thousand employees reported a
lessened attention paid to grievances by the committees:

"Works committees in the beginning were used principally for
airing grievances but now all subjects are discussed, so that increased
efficiency and personal contentment has been the result to a marked
degree."

The following came from a middle western plant manufac-
turing agricultural machinery:

"The subject matter of our discussions with the committee did
center about individual grievances such as wages, working conditions,
promotions, etc. These cases have gradually lessened in number and
importance, giving way to more general topics of discussion, such as
layoff policies, promotion policies, and other policies affecting intimate-
ly the activities of the workers as a whole."

In an eastern concern manufacturing electrical appliances,
the number of cases handled by the works committees had dimin-
ished since the introduction of the Works Council of the "com-
mittee" type, as follows:

First six months 122 cases

Second" " 60 "

Third " " 85 "

Fourth" " 34 "

Fifth " " 31 "

One of the company officials wrote with reference to the above
figures:

"Of course- the number of employees in the plant has diminished
within the last two and one-half years, but we feel that the drop
in the number of cases is natural following the growth of confidence
between management and employees."

It is interesting to note that in this plant, whenever there
are no cases of claimed injustice for a Shop Committee,^ the
Committee then takes up the following order of business:

1 . Completion of unfinished business on docket of previous meeting

2. Output

3. Quality

4. Waste labor and scrap

5. Equipment — machine tools; small tools

6. Safety

7. Sanitation

8. Working conditions

9. Expense

10. Discipline

1 1. Suggestions for improvement not coming under items 2 to 10.

*Thi8 is a special use of the term Shop Committee and is not to be confused with the "shop
committees" established by the National War Labor Board.

In this way the committee's attention has been directed
not only toward the settlement of employees' complaints and
grievances, but also toward shop policies and matters of general
interest to the employees as a whole.

Other employers reported no such change of attitude on the
part of the employees toward the committees.

It is of interest to note that in a number of the cases in which
it was reported that there was no appreciable change in this
respect, namely, the decreased use of the .committees by the
employees for the airing of their grievances, no regular meetings
were provided for in the constitutions of the plans. Meetings
were held only when the employees or the management wished
to bring up some subject for discussion, which usually meant
that meetings were held only when employees had a grievance
to bring before the management. There was apparently no
effort on the part of management to direct the activities of the
committees along constructive lines. Their educational value
was not realized and as a result they developed into grievance
committees.

The experience of one company is referred to in another
chapter.^

Another eastern concern which introduced its plan of repre-
sentation "just to be in the fashion,"^ wrote that during the three
years the committees had been in operation they had been used
by the employees principally as a means of airing their griev-
ances.

In neither of these plants were regular meetings of the com-
mittees held. Management had not sufficient interest in the
committees to devote that much time to them. They were
called only when the employees wanted something rectified.

In three other plants with plans of the "committee" type
under which no regular meetings were provided for, the activity
of the committees had drifted in the same direction.

One, an eastern shipbuilding plant, stated that the committees
were used by the employees principally in bringing to the atten-
tion of the management matters affecting working conditions
and wages with which they were not satisfied.

Because the employees' interests were not directed along con-
structive lines, the works committees in a southern iron company
were used by the workers principally for presenting grievances.
The vice-president wrote:

"Practically all grievances which have not been previously settled
in a routine manner are aired at these meetings. This seems to be
the main function of the committee. The questions of efficiency or
increasing production occupy a very small portion of their delibera-
tions, although matters of personal contentment are often discussed."

»Seepp. 167-168.
*See pp. 165-166.

It is interesting to note that the firms referred to were firms
in which committees had been originally introduced either by
the National War Labor Board or the Shipbuilding Labor
Adjustment Board.

Where employees have used the works committees chiefly
for the presentation of their complaints, the reason is usually
found in the attitude of management toward the employee
representation plan. An eastern steel company, for instance,
reported that during the two and one-half years that their Works
Council had been in operation

"... works committees were used mainly for airing employees'
grievances and very little has been done in the way of constructive
efficiency and relationship."

A visit to this plant shortly after the plan was introduced
revealed that not only was the superintendent not in sympathy
with the plan, but the employees regarded it with suspicion.
This arose from the fact that when the employee representation
plan had been introduced by the company the employees had
had no voice in its formulation. Although a vote of the em-
ployees was taken at the time it was introduced and although
the employees voted to accept it, only 50% of them voted.

A more recent visit to this plant revealed that the management
was not dealing with the employees through their elected repre-
sentatives.^ Employee representatives, when questioned, said
that the minor executives in the plant were still unsympathetic
.toward the plan, and were continually hampering the repre-
sentatives in their attempts to carry out the provisions of the
plan. Where such a condition as this exists it is evident that
management, instead of endeavoring to remove the cause of
grievances and complaints, is furnishing the employees addi-
tional ground for dissatisfaction.

In another eastern steel plant the plan when introduced was
accepted by the employees, but by only a very small majority.
The results following the introduction of the plan have not
been such as to encourage the management to support it. No
appreciable effect was noted on the relationship between the
employees and the management. The representatives elected
were described as "mediocre,"^ and management expressed an
unfavorable opinion on the subject of employee representation.'
With reference to the use of the works committees by the
employees, the superintendent of the company wrote:

"The works committees are used by the em.ployees principally in
airing their grievances with a special regard to wages. VVe have
had, however, a few contributions that were practical to the extent
of a new hour for the blowing of the whistle, etc."

Although the consideration of grievances in works com-
mittees may be taken as the secondary purpose of a plan of

>See p. 130.
'See p. 129.
•See p. 134.

employee representation, the primary purpose being that of
enhsting the employees' aid in the economical and efficient
operation of an industry following upon a realization of the
mutuality of interest existing between them and their em-
ployers, this secondary purpose is none the less important. This
was pointed out by several employers.

Thus the president of a large company with Councils of the
"committee" type in operation in five plants, while stating that
the Councils were used chiefly by the employees for presenting
their grievances, emphasized the point that this tended to
produce personal contentment.

To the same effect was the comment of the vice-president
of an eastern silk company with Works Councils of the "Indus-
trial Democracy" type in operation in two plants. The dis-
cussion of grievances was described by this executive as having
been

". . . an extremely helpful thing, because unless grievances are
thoroughly aired and discussed, injustices are bound to creep in."

The following was the answer given by a joint committee of
employees and management representatives in a large eastern
plant, to the question whether employees used the committees
principally for setting forth their grievances:

"Committees are used by the employees to obtain a hearing and
decision in cases where they think they are under an injustice and
this is a very important part of the plan. They are not used exclusively
for this purpose and when there are no cases of claimed injustice
for the committee, they have a regular order of business which gives
opportunity for any member to bring up any subject connected with
the efficiency and working conditions in the departments covered by
that committee."

In a review of one year's operation of a Works Council of the
"Industrial Democracy" type in a large middle western plant,
an officer of the company drew attention to the importance of
removing the causes of dissatisfaction among the employees.
No matter how insignificant the matter, it should receive imme-
diate and careful attention. This was provided for by the plan
of representation.

"Some people think that the representation plan brings men and
management together to discuss only picayune things and that the
plan is not worth while. It is my opinion that if men and management
are brought together and there is nothing to discuss except picayune
things, it shows a very healthy condition in the plant, and as long as
only picayune things are brought forth, it is a sign that men and
management are working together. Picayune things which are ignored
grow into larger things and cause labor trouble."

The same correspondent stated that through the "just and
reasonable requests" of the employee representatives "we have
been able to keep our fingers on the pulse of conditions in the
factory."

Examination of the manner in which grievances and com-
plaints of the employees are dealt with under representation
plans shows that the methods adopted for the treatment of such
matters tend to diminish the number of such cases.

It has been the experience of several employers that matters
regarding which employees may consider they are being treated
unjustly, gradually come to be settled between the employees
and their foremen either with or without the assistance of the
employee representatives. Most plans provide that when an
employee wishes to secure action on any subject which he con-
siders requires adjustment, he shall take the 'question up first
with his foreman. If he fails to obtain a satisfactory settlement
from the foreman, he then advises his representative, who,
before taking the matter up in the works committee, may
endeavor to arrive at a satisfactory settlement with the foreman
or department head. Only when such procedure fails to settle
the matter is it brought before the Works Council. From the
following reports of various employers it will be seen that a
large percentage of matters calling for adjustment are settled
in an informal way between the foreman and the employee
bringing up the complaint. The employee representatives may
also take part in the discussion and settlement of the case.

In a large manufacturing company with a modified Council
of the "Industrial Democracy" type, over 90% of all cases that
came up during the first year the plan was in operation were
settled thus informally. In this concern about 9% of the cases
covering major matters involving an entire department or plant
policy, such as the introduction of permanent instead of rotat-
ing shifts, were settled without much difficulty by joint con-
ferences in which an equal number of representatives of the men
acted with an equal number of representatives of the manage-
ment. Only one per cent of the disputes came before the Council
itself.

During the first year that the Works Council of the "com-
mittee" type was in operation in a large eastern company
employing ten thousand employees, 85% of the matters brought
up by the employees for adjustment, were settled by informal
conferences between the foremen and the employees either alone
or assisted by their representatives. Ten per cent of the cases
were settled at their first trial in joint shop committees com-
posed of equal numbers of employee and management repre-
sentatives. Failing settlement in the joint shop committees,
under this plan, disputes are referred to the head of the depart-
ment in which the matter arose, whereupon they are again con-
sidered by the joint shop committee. Upon a second trial, 1 .7%
of the cases were settled by joint shop committees. One per
cent were settled by the General Joint Committee on Adjust-
ment— a committee to which all cases are referred when no satis-
factory decision has been obtained in the joint shop com-

mittees. Another 2.3% of the cases were voluntarily with-
drawn by the employees at some step in the proceedings, and
only one case failed of settlement by the General Joint Com-
mittee on Adjustment and was referred to the manager of the
plant.

Other companies reported similar experiences. Employee
representatives were able to dispose satisfactorily of a great
many complaints simply through getting the foreman and the
aggrieved employee together and talking things over.

An eastern paper company with Works Councils of the "com-
mittee" type in operation in four plants gave as its experience:
"Not all grievances of employees reach a hearing in the Council,
not only because many of them are settled informally, but also
because councilmen, as they come to see the management side of the
question, refuse to bring some matters before the Council because of
lack of merit."

During the three years that nine Councils of the "Industrial
Democracy" type were in operation in the plants of a middle
western corporation, it was found that "nothing but serious
grievances get to the attention of the organized bodies." This
was because grievances of the employees are "more apt to be
settled by their own immediate representatives in their depart-
ments."

Of assistance to the employee representatives and the fore-
men in this informal settlement of disputes which may arise,
are the decisions which have been made already by the works
committees. These constitute precedents which act a^. a guide
to the employee representatives and the foremen in their han-
dling of individual cases. Consideration of decisions already
rendered enables the representatives to settle similar cases
without bringing them before the Council, and in this way the
works committees are left free to discuss matters of general
interest and to devote their time to questions of a constructive
nature.

The activities of the Works Council of the "committee" type
in a western company have developed in this way. Two gen-
eral classes of cases have been brought to the attention of the
management through the committees. At first, practically all
cases concerned individual workmen, but now discussions on
general policies relating to wages, hours of work, also economic
problems, are the main topics. There is an increasing tendency
on the part of the workers and their representatives, to handle
individual cases in accord with the precedents established in
previous cases of similar nature. As a result the individual
cases brought through the committees are exceptional, the desire
being to secure rulings or interpretations of the general policy
so far as it applies to them. It is believed that a code will even-
tually be worked out, to be known as "Written Standard Prac-
tice for Industrial Relations," as practiced or applied in the

o
o

plant. Then the chief function of the committee will be to
discuss with the management general policies dealing with the
activities of the workers, and other matters of mutual interest.

At the time of the introduction of a plan of employee repre-
sentation in the Bloetiel- Donovan Lumher Mills, of Bell-
ingham, Washington, a list of "Standard Practice Rules" was
drawn up by a joint committee of employee and management
representatives. These rules are amended or corrected from
time to time by the decisions of the Works Council. Each
decision of the Council regarding any matter requiring ad-
justment becomes a standard rule. Copies of these rules are
furnished all committee men and foremen so that they can
refer to them when any dispute arises, and in this way a
great many of the matters requiring adjustment are disposed of
without being brought before the works committees. The
method of procedure for dealing with complaints of employees
is shown in the accompanying diagram.

When Works Council plans are first established there appears
to be a tendency on the part of employees to use the committees
mainly for the presentation of complaints and grievances. The
opportunity which a Works Council plan affords the employees
to bring such matters to the direct attention of management
appeals strongly to them and unless they feel that they have this
privilege and can discuss such matters fully and frankly, little
progress can be made toward the establishment of mutual under-
standing and good will.

Most employers have considered, however, that to allow
Works Council plans to be used mainly or exclusively for this
purpose would be to fail to achieve the end for which the plans
were instituted. Through the medium of regular meetings,
through the establishment of sub-committees to whom definite
work is allocated, and more particularly through active support
of the plan, managements have been successful in diminishing
the extent to which grievances and complaints are discussed in
the works committees. The employee representatives, through
their knowledge of the manner in which previous cases have been
treated and their ability to make satisfactory adjustment of
disputes between foremen and employees, have been of note-
worthy assistance to management in this work of relieving the
committees of the discussion of individual cases and directing
their attention upon questions of interest to the employees as a
whole.

In those cases where there has not been a change in the atti-
tude of the employees toward the committees, where after two
or more years of operation the committees are used mainly or
exclusively for the discussion of complaints and grievances, the
explanation is found to lie in the failure of management to show
the employees the possibilities of the plan along other and more
constructive lines. •

CHAPTER V

SUGGESTIONS TOWARD INCREASING PRODUCTIVE
EFFICIENCY AND PERSONAL CONTENTMENT

Suggestions which employees make with reference to their
work may be divided into two main classes — those made with
the object of improving their working conditions and those which
aim at increasing production on a job. The two kinds of sug-
gestions represent different attitudes on the part of the em-
ployees. Suggestions that a new drinking fountain' be installed
or that a roof be repaired are made for the purpose of adding to
the comfort or increasing the safety of the employees. This is
primarily a personal matter, though production may indirectly
be increased thereby. Suggestions which enable the company
to perform a job more economically or efficiently, on the other
hand, reveal a direct interest on the part of the employees in
the efficient running of the plant.

It has been shown in the preceding chapter, that where man-
agement does not devote attention to the plan in order to direct
the activities of the works committees along broader lines, such
organizations usually serve no other purpose than to settle
complaints and grievances of employees. The investigation of
the Conference Board shows that to a much greater extent, even,
does the interest of the employees in improving production and
making economies depend upon the attitude of management
toward the Works Council.

The first essential in securing for an industry the benefit of
the practical knowledge and experience of its employees, is the
confidence of the employees in the fairness of the management
of that industry. The second is the utilization by management
of the opportunity furnished it through the works committees
to direct the interests of the employees toward efficiency and
economy. The employees cannot be expected to take the lead.
Leadership is a function of management.

Perhaps the first thing management has to do is to make its
foremen. more receptive toward suggestions from employees.
Foremen frequently are inclined to resent any such suggestions,
regarding them as reflections upon the manner in which their
duties as administrators are being carried out. This attitude
has to be altered before employees may be expected to take any
interest in improving the operations on which they are working.
With this accomplished, and the employees convinced that they
will receive due consideration from the supervisory force when
they present a suggestion for increasing productive efficiency,

management should institute among the employees a campaign
of education in the economics of business. If through this
means employees are led to appreciate that it is to their interests
as well as those of the management that improved production
be carried on in the most economical way possible, suggestions
for the accomplishment of this object will be forthcoming from
them. The experience of employers who have expended time
and effort toward this end, bears this out.

This is not to say that in every case where employees have
failed to contribute from their practical knowledge and expe-
rience toward increasing production, it is solely because manage-
ment has not endeavored to utilize the plan as a means of show-
ing employees the oneness of their interests with those of the
employer, in having the industry run as efficiently as possible.
The realization of this on the part of employees requires time.
It means a readjustment of ideas and the casting out of false
conceptions of industry. Not only have employees in some cases
considered industry as a field of conflict between two opposing
groups, but employers also have held this opinion. The need for
education is common to both parties. The employees must have
confidence in the management. This can come about only
through management's constantly showing the workers that
they have their interests at heart. If time is required for man-
agement to convince workers that it is sincere in providing em-
ployee representation, it is still more certain that time is required
to educate employees to realize that their interests and those of
management are one, so far as the efficient and economic opera-
tion of industry is concerned.

This point was brought out by the vice-president of a mid-
western plant where a Works Council of the "committee" type
was recently organized. The plan of employee representation in
this plant is looked upon largely as an educational institution —
educational in both directions, employer and employee. The
plan was said to have clearly established ". . . the inter-
dependability of all elements in industry — not only as between
employer and employee but also with relation of those two ele-
ments to the public and to that other general branch of industry
not often considered in its full relative importance, namely,
the selling force." The greatest effect had been on the employee
representatives; these had disseminated some of the spirit which
their work had induced in them and ". . . in so far as this
result has been felt by the rank and file, just that far has the
true fundamental mission of employee representation been ac-
complished."

The Board's correspondent pointed out that only the future
can show the real worth of the representation plan:

". . . The future will prove that we cannot measure fully the
service of employee representation to industry if our standard of

measure be too minutely subdivided . . . Long time results must
be looked for — and then only as fundamentals are affected.

"I care less about what an employee representation plan does at
any of its meetings than about the spirit which dominates the pro-
cedure. Even the spirit is not an infallible guide to accurate judg-
ment, but rather the spirit today as compared with six months or a
year ago. Taken singly, an act, or the spirit of the assembly, may to the
outsider appear blameworthy. It may appear narrow, selfish and
evpn high-handed. To him, however, who studies the trend of the
assembly's acts, that same incident may hold out most promising
indications of substantial progress."

The same correspondent wrote of the education afforded the
management by an employee representation plan:

". . . The employer and his representatives have on more than
one occasion felt the effect on employer viewpoints of employee
counsel. The intimate relationship which develops is such that without
the slightest doubt the employee is enabled to mould employer senti-
ment quite as truly as that the employer is enabled to guide employee
thought. The composite, resulting from these reciprocal relations has,
and if rightly conceived and effected, must lead to mutual and highly
desired advantages."

Apart from the instances described in the preceding section,
in which the works committees were used principally by the
employees for airing grievances and complaints — a condition
for which management is largely to blame — very few cases were
reported in which no suggestions, or very few, had been made
by the employees for increasing productive efficiency.

An eastern concern employing three hundred workers, whose
Council of the "committee" type has been in operation for three
years, wrote:

"The works committees are used by the employees principally
as a means of bettering personal contentment through recommenda-
tions regarding working conditions, hours of work, etc."

A visit to this plant revealed the fact that the employees had
but little confidence in the plan . Management had not made use
of it to keep the workers informed of business conditions. When
retrenchment became necessary in this company, management,
although it had promised to consult the Works Council, effected
necessary economies without discussing them with the com-
mittees. This fact and others resulted in the employees' losing
all interest in the Council other than as a means for improving
their own conditions. In short, management had failed to
direct the interest of the employees along the lines of economic
production.^

The replies received from the great majority of employers with
Councils of the "committee" type, indicated that while much
had been achieved, still more remained to be accomplished.
There was a realization that the development of such an attitude
on the part of the employees required time.

•See pp, 163-16S.

The president of an eastern company with three hundred and
fifty employees wrote:

"It seems to me it is the duty of every industry to thoroughly
inform its workers, more or less, of the problems of the manage-
ment. It is a very tedious proceeding that has to be carried on with
great care. When the men in the factory or any member of the
organization understand the problems that have to be solved in an
organization, they become more sympathetic toward the management."

He also pointed out that the nature of the suggestions and
recommendations made by employees depend upon the attitude
of the management.

"The suggestions that are submitted at first are for small things,
and it is a question of education to lead them to suggestions of more
importance. That is about all there is to it. You reap only as you
sow."

A correspondent in an eastern brass works reported that
although there had been a great number of suggestions, "some
of them of considerable merit," received from the employees,
"... there were none of revolutionary character, but we feel that
such a thing as this would be the exception, and it is the small improve-
ments throughout a plant that this system will really bring out. . . .
"We believe there is a feeling which is growing that the employees'
interests and the employer's interests are identical to a certain degree.
Of course such a movement is very slow in its growth and it is subject
to violent reversal at times. In all these matters we do not look for
anything extraordinary but rather slow growth by education."

A southern shoe company with a Works Council of the com-
mittee type which was installed in the summer of I9l9 reported
an increased interest among the employees in production methods,
but it was realized that much was still to be accomplished along
this line. Writing in August, 1921 , a company official stated:

"During the last twelve months, we have stressed economy in
every way we could, both through the shop committees and in other
ways. The response has been very noticeable in cutting down damage,
waste, and particularly damaged shoes, which we call "cripples."

". . . We had no definite system for suggestions, except a general
invitation through the employees' handbook, to make suggestions
looking toward safety, efficiency and economy. This was rather
haphazard and not followed up, and consequently the response was
negligible.

"Since, however, we have had the shop committee system, the
representatives of the employees particularly, in the past twelve
months, have shown a disposition to try to make suggestions helpful
to their particular departments. We cannot say, however, that so far
any revolutionary or epoch-making suggestions have been made; most
of them have been of a minor though, at the same time, constructive
nature.

"We will say, however, that the shop committee system did distinctly
op)cn up a channel through which the employees, through the repre-
sentatives, can sit around the table informally with members of the
management and suggest and criticise in a helpful way. The repre-
sentatives were at first a little ill at ease and silent, but now have
gotten over this and are not bashful about opening up and discussing
matters. We are frank to say that so far the majority of their sugges-
tions and requests have been of a rather pseudo-selfish nature, that
is, they seem to have asked for and suggested things which would

benefit the employees, rather more than the company itself. This we
believe is natural and we have encouraged it, at the same time, we
have tried to guide them into thinking of things from the company's
standpoint."

The same correspondent wrote that while development had
been slow, it had been sure. It was felt that if the same pace
were kept up "the standard of intelligence and efficiency" and
also the labor turnover would be greatly improved.

Apart from those concerns in which there is paid to the
employees, through a "Collective Economy Dividend," one-
half of the savings which they make in production, the replies
from the majority of employers were of a similar strain. Con-
siderable had been accomplished toward securing the coopera-
tion of the employees in improving production, but this devel-
opment had been slow. The extent to which the interest of
the employees had been stimulated in this direction, varied
in different plants. A number of employers simply said that
employees, in addition to making use of the committees for
airing grievances, had taken "an interest" in the efficient
and economical operation of the plant. One employer said
that although the employees made "constant contributions
towards increasing efficiency" few of the suggestions "were of
great value, although occasionally we receive one that is."
Another employer said that although there had been a great
increase in the number of suggestions received from the em-
ployees after the Works Council was initiated, the majority
of these suggestions dealt rather with working conditions —
"heat, light, ventilation, etc., all of which go to affect produc-
tion indirectly, rather than suggestions dealing directly with
increasing the production of a job."

A large middle western rubber firm reported that the Works
Council had not resulted in any "marked increase" in the
number of suggestions received from the employees, but stated
that the Council had been a good influence "in having men
realize that the interests of the company and the men are
mutual." The company felt that there was still a great deal
to do in this line, stating that "it is not possible in all cases
to get men to heartily approve economies resulting from reduc-
tion in wages."

An official in a western concern with twelve hundred workers,
stated that although the employees showed an interest in
making suggestions toward the economical operation of the
plant,

". . . generally speaking these suggestions are ones that have
been thought out and worked out before and not proven successful,
although I feel that suggestions received, although perhaps ones
that are not applicable, are valuable because of the interest they do
show."

A western shipping company, while stating that the com-
mittees were used oy the employees for the airing of grievances,
a process that was highly desirable "as a scientific method of
sublimating the bellicose instinct," reported:

"The larger part of the discussions carried on in the committees
cover such subjects as adjustments of working conditions for greater
output per man hour, also clear definitions of rules covering working
conditions; suggested methods for reducing fatigue; and other like
subjects constructive in their nature."

This company pays its employees a bonus wage "for pro-
duction efficiency exceeding a standard set by mutual agree-
ment with them." This has had the effect of imbuing the
employees with the idea

". . . that it is to their own ultimate advantage to assist the com-
pany in the efficient and economical operation of the plant."

A striking instance of the interest taken by employees in
lowering production costs, came from a large western corpora-
tion which has Works Councils of the "committee" type in
operation in several of its plants. One of the Councils affects
the employees of a railroad owned by this company. At one
of the Council meetings in February, 1921, an employee repre-
sentative stated in effect that up to that time the employees
seemed to have made all the requests, and that he would
welcome an indication from the management of some way in
which the employees might reciprocate. His suggestion was
promptly met by the superintendent, who invited a com-
mittee of the employees to meet with him and discuss the
matter. This was accepted by the employees, who designated
Sunday afternoon for the meeting time. The result was the
compilation of a report by the "Committee on the Good of the
Service," which was endorsed by all the employees. The
report urged employee representatives to draw the attention
of the employees in their respective departments to the "extreme
need of conservation of supplies of all kinds." Engineers and
firemen, freight house employees, the track and car depart-
ment workers, all were requested to effect every possible
economy consistent with safety in the operation of the railway.
The committee expressed its confidence in the management in
the following terms:

"We are of the opinion and have found that the officials of the
company in their dealings with the employees, wish to be fair and just,
therefore each employee by following the above recommendations and
in addition giving close attention to their respective duties, avoiding
any waste time, can to a great extent help to overcome, the present
difficulties which we now face."

At another plant belonging to this company, the employee
members of the Council suggested that in order to reduce the
amount of scrap losses, a regular "spoiled work" or "scrap"
committee should be appointed in the Council to make investi-
gations of methods of manufacture and to recommend changes

in practice wherever they would help reduce such losses.
Employees were also to be encouraged by this committee to
make suggestions which might result in definite savings to
the company. The Board's correspondent wrote that

". . . the committee functioned very actively from the time it was
formed until the plant closed down, and it should be credited in
large degree for the good showing made last year over previous years
in the redCiction of scrap losses."

A representation plan, worked out by management and
employees together, was installed in a middle western plant
with five hundred workers, after one year had been devoted
by the management to the education of the employees in
business economics. The classes, which were attended by
over two hundred of the employees, dealt with such subjects
as the evolution of modern business, the elements of a com-
pany balance sheet, etc. All possible phases of the company's
business and industrial relations were covered by the classes.
At the end of a year's time the subject of employee represen-
tation was discussed, with the outcome that the present plan —
a modified Council of the "Industrial Democracy" type —
was adopted.

To direct the interest of the employees along constructive
lines, committees composed of employee representatives are
appointed to deal with the following subjects: education and
publication; wage rates and compensation; health, sanitation
and safety; employment and discharge; economies, suggestions
and improvements; production- control; time and motion study;
spoiled work; machinery and tools; attendance and tardiness;
sales cooperation; pride and interest in work. A special
"eight-hour committee" dealt with the request of the employees
to reduce the working hours, first from ten to nine, and then
to eight per day. Through the work of this committee and
that on production control new quotas of production were
established and the men produced as much in eight hours as
they had previously produced in tee. The company reported
that through these various committees productive efficiency
has been greatly increased. Spoiled work has been greatly
reduced; machinery and tools have been improved; absenteeism
has been eliminated to a large extent, and in other ways em-
ployees have cooperated with the management to reduce
inefficiency.

One of the company officials, in commenting upon the extent
to which a Works Council may be successful in increasing
productive efficiency, stated that this depends a great deal
"upon the original committee appointments and the methods
under which they operate."

"To stimulate the employees' interest in efficient and economical
operation of a plant to the extent that they will make suggestions
which would assist in the accomplishing of that object, in. my mind it

is very necessary that some method of stimulating and maintaining
interest be initiated.

"This can be handled in various ways. Particularly I have in mind
a pubHcity committee in the Works Council and operating in con-
junction with the educational department of the firm, that is with the
industrial relations department. If the firm endeavors to interpret
knowledge from the 'handed down' attitude, it will fail, but if this
matter is given to the Works Council for consideration, various kinds
of educational work can be successfully handled.

". . . We first endeavored to interpret to the employees company
policies and conditions with which the management had to cope.
In the meantime the majority of the employees acquired the funda-
mentals of business organization, so that we were able to progress in
our work. There is no question but that when you have acquired the
individual's interest, you have awakened a thirst for knowledge,
and such was the case here.

"To take the average worker into the problems of management was
somewhat of a radical step from the usual industrial educational
work. In our efforts we laid before the employees all matters of
company interest, and by that I mean, matters pertaining to pro-
duction, finance, distribution, etc. We worked down from the
fundamentals to the practical problems and solicited suggestions
from the employees when holding our representation meetings.

"Through the constructive suggestions pertaining to engineering
and production improvement, we v/ere able to establish production
quotas of which we knew nothing prior to the installation of our
Works Council. ... Of course, assistance was rendered in the im-
provement of production control, machine improvemnet, along with
engineering betterment. The value of the group suggestions made was
in the ability of the firm to improve conditions pertaining to production
which had not been overcome in the past."

At the present time monetary awards are paid for sugges-
tions, but a similar system in effect before the Works Council
was organized did not arouse the marked interest of the em-
ployees in improving production that has been manifest since
the present plan was installed.

"The old style system of suggestions was not productive of general
improvement in any sense as compared to the marked increase under
the plan now in operation. In my opinion we have been able to have
our workers realize that the interests of the company and themselves
are mutual and that it is to their advantage to assist the company
in the efficient and economical operation of our plant.

"This is best emphasized by their willingness to assist when retrench-
ment moves were necessary. These moves have been handled through
our Works Council and we believe it has been the crucial test in the
operation of such a plan." 1

Particularly significant in this connection is the fact that
the interest of the employees in lowering production costs in
this plant is not associated with the payment to them of one-
half the savings they may make — there is no "Collective
Economy Dividend" feature in the plan.

The attitude of this company towards its educational work,
which is carried on with the object of having the men "under-
stand what they were doing and why," is described in a com-
pany pamphlet thus:

'See pp. 87-88.

"Our work is never done. Almost every week we have some
pamphlet to pass out. We are keeping at it constantly. We believe
that the more education a man gets the more he wants, and we aim
to keep him supplied with all the information available on timely
subjects."

Another large middle western concern employing over five
thousand workers, in which the employees have taken a keen
interest in production methods, stated that in order to interest
the committees to this point, it was first necessary "to estab-
lish confidence on the part of the men in the committees
together with an understanding of fundamental economics."
A Works Council of the "committee" type has been in opera-
tion in this concern since 1915. The works committees "were
originally formed for the purpose of making contacts between
management and men, and for educational purposes."

"Through these committees the employees are taught to see the
necessity of production and to look for the means of securing it eco-
nomically. They are taken fully into the confidence of the manage-
ment and given an insight into managerial problems with every
opportunity to follow them up in detail and make suggestions, if the
employees so desire. 'The cards are put on the table' and the problems
as they confront the management are discussed by a representative
of the management at the committee meetings. Charts and tables
are permanently posted in the committee rooms for study and refer-
ence."

The experience of this company in dealing with works com-
mittees leads them to believe that "increased productivity
and efficiency will be brought about if employees are encouraged
through their committees or Works Councils to make sugges-
tions for increasing production and making operations more
economical." The Board's correspondent wrote:

"On one occasion the men of one particular department complained
as to the condition of castings coming to them to be machined. In
another case, men complained of material not coming to them fast
enough.

"These suggestions only came after having worked with the com-
mittees for a number of months in order to acquaint them with the
underlying fundamentals of industry, the suggestions indicating
that the men understood that in order for them and the industry to
go ahead, efficiency must be kept up, and production continue un-
interrupted, they seeming to understand that methods and processes
should necessarily be changed.

"These are only two of the many suggestions that have been brought
to the attention of the management.

"There is nothing provided for by the management of this company
as an award for employees making suggestions, but they are encour-
aged to make these suggestions with the thought constantly before
them that their positions and future are just as secure as they make
them and that they cannot prosper if the company does not prosper,
and the company cannot prosper if production is not of high standard
with the greatest amount of efficiency practiced."

On another occasion management requested from the various
committees of the employees, suggestions as to better methods
of production in their departments.

"Before we had completed visiting all the committees, suggestions
were so numerous and so varied in thought, that same were compiled
and we now have them typewritten, and bound. The management
has often stated that a person could take these suggestions secured
through the shop committees and run a factory."

The excellent results so obtained in this company led one of
the company officials to state:

"It is indeed encouraging and interesting to learn the keen interest
displayed in production methods. The writer is very much of the
opinion that much relief from our present industrial condition will be
brought about by greatly lowering production costs through co-
operation and suggestions of Works Councils or employees' com-
mittees."

The key to the situation as it exists in this plant is summarized
in a company publication in this way, "the management and
the men have the utmost confidence in each other, each having
always played fair."

Suggestions made by the employees in a middle western
arsenal in which there is a Works Council of the "committee"
type, greatly lowered the cost of production. A list of such
suggestions furnished the National Industrial Conference Board
by the commanding- officer of the arsenal, showed that the
savings effected the Government ranged from $70 to $3,574
on the operations covered by the suggestions. The employees
who made the suggestions were given a reward not exceeding
ten per cent of the savings to the Government during the
first year after the suggestion was used.

A company official of an eastern concern which employs
seven hundred workers, said that the Works Council had been
a valuable means of placing information before the employees
regarding the problems of management, and that there had
been a gratifying response from the employees in their endeavor
to assist management in reducing costs.

"While our suggestion plan was in operation two years before the
formation of the employees' Association, we did not notice any
increase in the number of suggestions submitted as the result of the
formation of the Association. We do know that of those submitted,
a number of the ideas were the result of discussions held in the meetings
of the Association.

"The employees' Association has been a valuable means of talking
matters over with the employees to give them an idea of the problems
of management and to explain how they might assist in solving them.
Our factory superintendent has taken various occasions to show
examples of high costs of manufacture and get them to join in the
analysis for the reasons that made these costs excessive. The response
has been very gratifying in a number of ways. Interest has been stim-
ulated in the jobs assigned and there has been more alertness on their
part to cut down waste of time and material. There have been many
instances where the Council representatives have reminded their
fellow employees of the desirability of staying 'on the job' and putting
honest effort in the day's work. They have also responded to the
advice of their associates to use greater care in the handling of company
property and other expensive material, giving as arguments that if the
worker were to expect high wages he must do his share to reduce the

cost of production and operation that the company would be_ in a
position to maintain satisfactory wage rates."

A large eastern corporation wrote after two years' experience
with its plan of representation that the plan had had the
effect of stimulating the employees' interest in the efficient
and economical operation of the business, and that numerous
suggestions had been made by the employee representatives
with a view to increasing the efficiency of their work. No
system was employed by this company whereby suggestions
made by employees were paid for. Through the regular joint
meetings with management, employee representatives were,
reported to have come to realize that "the interests of the
company and themselves are mutual." The result was that
they had freely given to management "the benefit of their
advice and counsel with respect to a number of operating
problems." The plan of employee representation was described
by the management as a ". . . splendid medium for empha-
sizing the mutuality of interests and where this idea can be
inculcated in the minds of workers, the natural reaction is one
of thoughtful cooperation on their part."

A middle western paint company with a Council of the
"Industrial Democracy" type, found that although the num-
ber of suggestions received from the employees gradually
decreased in number, they became of greater value. There
is no "Collective Economy Dividend" feature in this plan.

"There is no question but that the employee representation plan is
a big factor in stimulating suggestions, providing, of course, the plan
is handled properly. We find that we are getting some of our best
suggestions today, and while we are still using the suggestion blank,
many of the members of our organization prefer bringing the sugges-
tions in direct and not asking for any compensation. Whether this
is unusual with our organization I cannot say.

"We find it necessary, of course, from time to time to post bulletins
and encourage the members of our organization to contribute to the
suggestion box, but this is no different than any other problem and
it all depends upon how enthusiastic and sincere the executives are,
for they are responsible for results. This enthusiasm is naturally re-
flected throughout the entire organization and has to be constantly
kept up.

"When we first introduced the suggestion idea the suggestions
offered were great in number, but as the years went on the numbers
dropped off but the suggestions offered were of greater value, proving,
of course, that the plan of Industrial Democracy was producing
because the men were thinking on a higher plane, and this could
only be accomplished if the men realized that the interests were
mutual."

One of the officials of a western steel company wrote:

"Th^re is no question in the mind of the writer, and those who
have watched this representation plan, that it has had a marked
tendency to create discussions that lead to suggestions for increasing
production. In fact, the perusal of our minutes indicates that quite a
considerable part of the time at each meeting is devoted to these
helpful suggestions.

"We did have, previous to the installation of this system, various
methods for getting suggestions of this character. I do not believe on
the whole that any of them have produced the same results or brought
the number of suggestions that have been brought by these meetings
of our Workmen's Committee."

An eastern concern with eleven hundred employees reported
that its Works Council of the "committee" type had developed
in many of its employees a realization that their interests and
those of the company are mutual.

"We are confident that our employee representatives after a short
time of service, are convinced that it is to the mutual advantage of
themselves and the company to assist the company in an efficient
and economical operation of our plant."

Concerns with Councils of the "Industrial Democracy" type
embracing the "Collective Economy Dividend" feature,
attributed to some extent the interest of the employees in
lowering piroduction costs to the financial return they received
for all savings made in production. Some employers were of
the opinion that the dividends which the employees received
formed the primary motive in their interest in lowering the
costs of production, \yhile others thought their interest was
due rather to the greater measure of confidence and trust that
the employees had in management as a result of the mutual
understanding brought about by the representation plan.

An eastern film manufacturing company, whose plan has
been in operation less than a year, reported "remarkably
gratifying results in stimulating the interest of our employees
in the efficient and economical operation of our work."

"We are now receiving many valuable suggestions from employees,
the average being at least one good idea every day. Some of these
deal with big operations and some with details of a minor character,
but we consider the latter fully as important as the former because
nothing is too trifling, in the minds of the employees, if it promises to
make our plant more efficient."

Previous to the installation of the representation plan, the
company had on several occasions tried a suggestion box plan
whereby rewards were paid for all suggestions used.

"The result was always a failure. The interest, if any, died down
within a few days. Today the contrary is true. Instead of dying
down, the interest is growing. Only recently one of the employees
disclosed an invention which he has kept under cover for several
years because he was afraid someone might take it from him. Though
we had always treated our people as well as we could, according to our
light, we really did not have their full confidence and trust until
Industrial Democracy brought us closer together. . . .

"They are using their heads and hands where formerly they used
only their hands. Knowing the details of our plant operation much
more intimately than we can ever hope to know it ourselves, it is only
natural that they can and do find more ways and means of improving
it than we can or do find.

"They knew these things before we installed Industrial Democracy,
but they did not do anything about it. Today they are doing every-

thing they can to help. They not only check up on each other to
eliminate waste of material and labor and improve product, but they
actually check us up to make sure that we are not wasting any of our
own money. For example, on a recent occasion, our work threatened
to be tied up because a sewer became clogged and made it impossible
to continue operations. Rather than wait for us to get a contractor
and go through the ordinary routineof letting the job, they jumped into
the job themselves, dug the sewer, drained away the water that was
rapidly accumulating because of the clogging, and then went back to
their regular jobs. On another occasion they called our attention to
the fact that by installing water hydrants in one or two place's not
already protected we could cut down our insurance premium. Recently
they showed us that we were running the risk of killing strangers
and involving ourselves in heavy damage suits because of an un-
protected driveway that runs through our property. A simple in-
expensive fence, which they suggested", did away with this. They have
shown us how to use fewer rubber gloves and other materials necessary
in the work of our laboratory, even getting down to scientific exactness
the number of rubber bands absolutely necessary for the proper
conduct of our business.

"The great beauty back of it all is the fact that there is not the least
taint of paternalism in it. Nor is there the slightest hint of speeding
up or driving. We have found fine qualities in them which we never
took the trouble to seek before. They, on the other hand, have found
that we are simply two-legged men and not Simon Legrees. It follows,
as a matter of course, that nothing but good could come from a mutual
revelation of this sort."

Another company with a Council of the"Industrial Democ-
racy" type, stated that the interest displayed among the
employees with reference to the economical operation of the
plant was due chiefly to the "Collective Economy Dividend"
feature of the representation plan.

"The real force or influence is the prospect of a bi-weekly dividend,
and there is a tendency on the part of a fairly small minority of
workers — even when dividends are being paid regularly and in sub-
stantial amounts — to lose whatever zeal they had and play the part of
a 'passenger' on the rest of the workers, but in spite of this our
production has increased very considerably and the economies effected
by means of increased carefulness in handling materials have been
quite large."

Another eastern company with a Council of the same type,
which had a suggestion system in operation before the Works
Council was installed, found the number of suggestions received
from the employees increased considerably after the represen-
tation plan was set up.

"Previous to the installation of this system, we made small awards
for usable suggestions but found that the increased cooperation has
led to a very satisfactory increase in the number of suggestions and
especially in the proportion of practical ones. At the present time, the
person making a suggestion is given only a small reward, while the
balance of the saving is split fifty-fifty between the company and the
dividend fund paid to all employees. In some cases, this has made an
appreciable increase in the dividends, which was explained to the
employees and in turn offered them a further incentive for letting us
have all practical ideas to use."

With reference to the number of suggestions received from
employees, the experience of a western company with repre-

sentation plans of the "Industrial Democracy" type in nine
plants, is of particular interest. It aiitributes the increased
number of these suggestions received since the initiation of
its Works Council, not to the "Collective Economy Dividend"
feature of its plan, but to the fact that the suggestions are
reviewed by a joint committee of the employees and the fore-
men, instead of by management alone as was the case pre-
viously. According to the vice-president, the greatest diffi-
culty experienced under the old system of giving rewards for
valuable suggestions, was to convince the man who made a
suggestion that it was not always a practicable idea. Under
the present plan by which the suggestions are passed on by a
suggestion committee of the House of Representatives and the
Senate, who are not prejudiced

". . . in favor of the suggestion, the impossibilities of a great
many of- the suggestions are more quickly grasped, and the man who
makes them seems to accept the judgment of the joint committee more
readily than the judgment of the management, as under the previous
plan."

The vice-president stated:

"We think this has more to do with increased numbers of suggestions
than the reward, because as a matter of fact, the rewards under our
new plan are not anywhere near on as high a scale as they were before."

A joint committee of employee and management representa-
tives, in an eastern plant with a plan of the "committee" type,
drew attention to the same factor in its reply to the Conference
Board regarding the number of suggestions received from the
employees:

"The suggestion plan functions largely through its contact with
and participation in the plan of representation. Every suggestion is
passed on by the shop committee, or committees, representing both
the man making the suggestion and the shop affected.

"This has the effect of inspiring the confidence of the employees in
the plan, because they know that their suggestions receive the con-
sideration of their shopmates, whom they have elected to represent
them, as well as the company representatives.

"Many of the shop committees appoint a sub-committee to
personally investigate the suggestion so referred to them and their
reports are sound and thorough because they deal with facts and con-
ditions with which they are familiar."

One of the officials of this company stated that the influence
which the shop committees have had on employees "to make
them realize that the interests of the company are mutual
with their own" has been

". . . one of the main benefits derived from the committee system,
in that as soon as employees are given the opportunity to realize the
above, one great stride has been taken towards reaching that goal
toward which we all aspire, that is, cooperation between management
and employees."

It is evident from the foregoing that employers consider
representation plans have a stimulating effect upon the interest
taken by employees in productive efficiency. The extent to

which that interest is aroused and stimulated appears to be
dependent in large degree upon whether management has been
able to convince employees of its desire and purpose to bef
fair in its dealings with them. Experience further shows that
valuable results are obtainable from educational work in which
employees are taught business economics in which they are
shown the mutuality of interest that exists between them and
their employers in maintaining a high level of productive
efficiency.

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CHAPTER VI

SUBJECTS DISCUSSED AND MEETINGS HELD BY
WORKS COUNCILS

The Conferdnce Board has obtained from a number of
employers a detailed statement with regard to the activities
of their Works Councils over a period of from one to two
years. These are of value as showing the number of meetings
held by the various committees established under the represen-
tation plans, and the nature of the subjects discussed by them.

The Bethlehem Steel Company has courteously placed at
the Board's disposal the chart reproduced on facing page
showing the classification according to subject groupings and
settlement of the various cases with which the Works Councils
in its five plants dealt during the two years October, 1918, to
October, 1920.

It is seen from the chart that wages and working conditions
were the major subjects discussed by the Works Councils,
wages constituting 30.3% and working conditions 28.7% of
the total number of cases dealt with under the representation
plan.

The recapitulation of the cases according to the way in
which they were settled shows that 70.5% were settled in the
affirmative — that is, in accordance with the wishes of the
employees — while only 16.9% were settled in the negative.

RECAPITULATION

Cases settled in the affirmative 737
Cases settled in the negative
Cases withdrawn
Cases compromised
Cases pending

Total cases 1,045

The following list shows, by subject groupings, the percen-
tages of the cases settled in accordance with the wishes of the
employees:

Wages, piecework^ bonus tonnage schedules 46.3%

Employment and working conditions 71.1%

Practice, methods and economy 89.5%

Safety and prevention accidents 95.0%

176

■■

■

Health and works sanitation 85.4%

Employees' transportation 90.5%

Housing, domestic economies and living conditions 46.6%

Pensions and relief 83.5%

Athletics and recreation 55.5%

Education and publication 100.0%

Rules, ways and means • 80.0%

Continuous employment and conditions of industry 100.0%

Under the plan of representation of the Bethlehem Steel
Company, employees' committees are established in each plant
for the consideration of the following subjects:

Rules

Ways and means

Safety and preven ion of accident

Practice, methods and economy

Employees' transportation

Wages, piecework, bonus and tonnage schedules

Employment and working conditions

Housing, domestic economies and living conditions i

Health and works sanitation

Education and publications

Pensions and relief

Athletics and recreation

Continuous employment- and condi ion of industry

In addition there is a general committee which considers all
matters not falling within the scope of the committees provided
for above. This committee when jointly composed acts as a
committee on appeals.

These committees meet regularly once a month; special
meetings are held as occasion requires. All meetings are held
within the plant and on company time, committee men receiv-
ing from the company "payment commensurate with their
average earnings." On alternate months the committees meet
as joint committees, that is, with an equal number of man-
agement representatives.

Data are not at hand regarding the number of meetings held
by the various committees during the two years to which the
above information applies, but during the year October, 1919,
to October, 1920, there were 193 meetings of employees'
standing committees separately and 136 meetings of these
committees sitting with equal numbers of management repre-
sentatives. During that year there were 74 meetings or all
the employee representatives in each of the five plants. On
four occasions the management's representatives, individuals
in each plant who represent the plant management in negotia-
tions with employees, met together.

The General Electric Company, West Lynn, Mass., gave
the following analysis of the cases handled under its plan of
representation for the year ending December, 1919:

Subjects of Cases

Wages 59% Layoff 5%

Transfer 17% Discipline 4%

Miscellaneous 11% Discharge 4%

Under the General Electric Company's plan, if a Shop
Committee,' of which there is one for each department, com-
posed of equal numbers of employee and management repre-
sentatives, renders a unanimous decision either in favor of or
against an employee, that settles the matter; if the decision is a
majority decision against the employee he may appeal the
question to higher committees.
The above cases were decided in the following manner:
46 % Unanimous decisions favorable to employees

1.3% Majority decisions favorable to employees
52.7% Unanimous decisions adverse to employees

During the year ending December, 1920, the cases handled
by the shop committees in this company were as follows:

Wages 38.9% Discipline 5.3%

Time study 5.3% Layoff 5.3%

Discharge . 8.4% Transfer 1.1%

Discrimination 12.6% Miscellaneous 23.1%

The above cases were disposed of in the following manner:
37.9% settled by unanimous decision favorable to employee

2.1% settled by majority decision favorable to employee
24.2% settled by unanimous decision adverse to employee

2.1% settled by majority decision adverse to employee
15.8% referred to higher committees for action
17.9% withdrawn by employee at some step in proceedings

A summary of the matters discussed in the Works Councils
of the "committee" type of an eastern corporation from April 1,
1918, to December 31, 1920, shows, as in the case of the Beth-
lehem Steel Company, that the discussion of wages, hours
of work, and conditions constituted the greater part of the
Council's activities. The classification below includes sub-
jects discussed by seven Works Councils. Five of these are
situated rn industrial establishments; the other two are com-
posed of representatives spread over a considerable area,
including those employees who are engaged in the distribution
of the company's products. The subjects discussed by the
Councils have been classified by the company as follows:

Wages 35.0% Sanitation 4.0%

Hours 13.0% Housing 3.0%

Method of payment 3.0% Social 2.0%

Promotions 4.0% Vacations 2.0%

Discharges 2.0% Industrial representa-

Working conditions 10.5% tion plan 10.5%

General 11.0%

In each of the plants in which the plan is operating, commit-
tees of employees, elected from divisions or departments into
which the plants are divided, meet with an equal number of
management representatives. In certain of the plants an
executive council has been formed which acts as a court of
appeal from the divisional conferences. In addition, pro-

•This is a special use of the word Shop Committee, not to be confused with the ''shop
committees" installed by the National War Labor Board.

vision is made for joint conferences of all representatives, both
employee and management, in each plant. In the case of the
two Councils which represent the men engaged in the distribu-
tion of the company's products, provision is made for meetings
of an equal number or employee and management representa-
tives at regular intervals. On account of differences in organ-
ization, the meetings of these Councils are not classified as are
the meetings of the Councils in the five plants of the company,
but are included separately in the totals.

During the period to which the above information refers
there were held a total of 217 meetings. These were as follows:

Divisional
Conferences

Executive
Council

Works Joint
Conference

Total

Plant No. 1

31
8
8

5
7
8

22
23
18
28
29

Plant No. 2

Plant No. 3

Plant No. 4

Plant No. 5

Area No. 1 ■.

29
16

Area No. 2

•

120

217

A western concern manufacturing agricultural machinery
and employing two hundred people, furnished the Conference
Board the following summary of the work accomplished by
its Works Council of the "committee" type during the year
March, 1919, to March, 1920:

By Whom

Brought Up Suggestion

Employee Inequality wage rates of certain

moulders
Employee Drinking fountains main shop

needed
Employee Change in method of paying off

main shop desired
Management Exhaust fan for jointer, main

plant, needed
Employee Suggested starting foundry core

oven one hour earlier
Employee Better tools needed in machine

shop

Employee Wheel trucks for foundry bull

ladles needed
Management Cleanup on Saturday nights

needed
Council' Smoking regulations needed

*Most of these matters were originated by the meinagement.

Action Taken

Adjusted satis-
factorily
Same provided

Change made

Installed

Carried out

Equipment recom-
mended by fore-
man purchased

Provided

Carried out
Provided

By ff^kom

Brought Up Suggestion

Dept. i6 Asked investigation why cut off

painters from monthly bonus

Employee Air hoist elevator in foundry
unsafe-

Employee Men uncertain as to time allowed
for washing up

Council^ Wanted Saturday afternoons off

with adjustment of wages to
compensate

Council' Advised cutting out of 10% six

month bonus and adjustment
of all piece rate

Employee Surface grinder for dies in ma-

chine shop needed

Employee Certain men in Building "E"

lost bonus on account of time
clock

Employee Wire tops on elevators needed

Employee

Council*

Employee
Employee
Employee
Employee
Council' ,
Employee

Roof over die racks needed

Advise discontinuance of Thrift
Club

Piecework should be put on
better basis

Suggested paying off the Bldg.

"E" through foremen
Suggested change in gating feed

case patterns
Brewery floor unsafe

Foundry desired to go on 6-day
basis

Desired going back to work
Saturday afternoons

Air pump in paint shop danger-
ous

•Most of these matters were originated by the management.

Action Taken

Bonus awarded
and improve-
ment in han-
dling time slips
adopted

Attempt made to
safeguard same;
later, belt-
driven elevator
installed

Bulletin posted
and practice
started of blow-
ing warning
whistle

Satisfactory ar-
rangements
made

Carried out satis-
factorily as far
as possible

Purchased and
installed

Investigation
made and bonus
paid; clock sent
away for repairs

Ordered and in-
stalled as fast as
possible

All but hammer
die racks covered

Club dropped

Company agreed
that hereafter
prices would be
adj us ted to
satisfaction of
both parties
every summer;
prices to be
guaranteed from
Aug. 1 to Aug. 1

Carried out

New timbers

placed
Carried out

Carried out

New governor
ordered and
installed

By Whom

Brought Up Suggestion

Employee Emery stand needed for clutch

assembly
Employee Adjustment of wages desired by
shippers

Management Potatoes fFered for sale to em-
ployees

Employee Suggested reaming plow bush-

ings elsewhere than in ma-
chine shop

Employee Suggested secretary of Aid

Society post notices

Employee Asked for more heat in foundry

wash room

Employee Improvement on drill footboard

brace suggested

Council' Suggested addition of pattern

shop group

Employee Stock room too cold

Employee Wage adjustment suggested in

pattern shop

Employee Platforms needed in pattern

shop
Employee Adjustable lights in pattern shop

needed

Management Personal work on company time

or company material
Employee Suggested use of better coke

Employee Reported men in foundry kept

overtime

Employee Adjustment of some day and

piecerates in forge shop de-
sirable

Action Taken
Finally installed

Investigation and

adjustment

made
Carried out and

price in town

lowered
So ordered

Carried cut

Radiators in-
stalled

Investigated and
will try out

Carried out

Broken radiator

replaced
Investigation and

adjustment

made
Provided

Changes started
and some com-
pleted

Proper procedure
adopted

Poor coke all that
could besecured;
good grade on
order

Investigated and
report made,
showing men
left before five
oftener than
after five on the
average.

Same carried out

During the year there were sixteen meetings of the Council.
The meetings are usually held after working hours, each of the
employee representatives receiving fifty cents as remuneration;
hourly rates of pay are paid employees if special meetings are
held during working hours.

An eastern corporation reported that during the calendar
year 1920, 4520 subjects were discussed by the Councils of
the "committee" type in fourteen of its plants. They were
classified as follows:

*Mo3t of these matters were originated by the management.

General Service

Thrift, restaurant, suggestion system, salesroom, housing,

smoking rooms, general service to employees 524

Health

Health hospital, physical examinations, first aid, lighting,

ventilation, dentists, etc 473

Wages

Bonuses, increases, pay, piece rates, time studies, vacations

with pay, economy bonus, reduction o": pay 442

Equipment

Buildings, time clocks, (installation of) working equipment,

elevators, lasts, lockers, drinking fountains, etc 417

Safety

Accident, guard, safety, fire drills 360

Employment

Employment, curtailment of employment, hours of work, labor
disputes, transfer and promotion, factory instructions and rules,

vacations and holidays (not with pay), shutdowns 354

Production Problems

Production waiting for stock, work incomplete, delivery of

stock, economy, working conditions 330

Education

Americanization, educational courses, instruction, library,

service squad 238

Quality

Quality of material poor, efforts toward improvement of quality. .221
Recreational Activities

Outings, entertainments, noon hour recreation 203

fVork Ticket

Split tickets, poor distribution of work on ticket, illegible, etc .... 148
Sanitation

Sanitation, conditions of factory (cleanliness) 136

Methods of Manufacture

Methods of, improvement of, rack system, etc 131

Benefits and Insurance

Benefits, subscriptions, pensions, insurance, mutual aid, etc. . . .118
Athletics

Baseball, basketball, bowling, etc 117

Publicity

Charts for interesting worker, factory papers 115

Scrap

Damaged goods, scrap, waste material 93

Absentees 82

Organization Changes

By-laws, etc 18

Total 4520

The Conference Board has learned of one instance in which
a Works Council of the "Industrial Democracy" type appointed
a committee of employee representatives to deal with the
problem of unemployment. This committee worked in con-
junction with the labor department of the company to determine
to what extent unemployment might be reduced.

CHAPTER VII

ATTITUDE OF WORKS COUNCILS TOWARD RE-
DUCTIONS IN WAGES AND CHANGES IN WORK
HOUR SCHEDULES

The investigation of the Conference Board shows that where
employers have discussed with the employee representatives
on their Works Councils the reasons for a proposed reduction
in wages, a curtailment of the working force, or a change in
work hour schedules, the representatives in a vast majority of
cases have appreciated the cogency of the circumstances neces-
sitating such measures of retrenchment and have concurred
with the employers in the proposed changes.

In plants where employers had used their Councils as a means
of keeping the representatives, and through them the employees,
informed of the business outlook both for the country as a
whole and for their individual concerns, the management was
able to prepare the minds of the employees for acceptance of
the economies in wages that would sooner or later have to be
effected.

This method of procedure — the explanation to the employees
of the reasons necessitating wage reductions — was stated by
employers to be better than that of merely posting a notice to
the effect that wages would be reduced a certain amount. It
enabled them to show the employees that the need for such
economies was the result of the pressure of economic forces,
against which both employer and employees were helpless.
When this was done, it was found that much less dissatisfac-
tion and ill feeling were shown than would have otherwise
occurred. Employers expressed thefriselves as being glad of
the opportunity to explain directly to the representatives of the
men the reasons that necessitated reductions in wages, and they
also said that the representatives were of great assistance to
them in placing that information before the employees through
personal contact with them. The general opinion was that wage
reductions and changes in work hour schedules were effected
much more satisfactorily in this way than if the Works Council
had not been used in informing the employees of the reasons
for such measures.

The experience of a large company manufacturing agricul-
tural machinery is of particular interest in connection with the
handling of wage reductions and changes in work hour sched-
ules, as it has Works Councils in operation in twenty-four
plants. Writing in April, 1921, one of the company officials
stated:

"It has been our unfortunate experience within the past thirty days
to be required to reduce wages of day and piecework employees of
our factories by 20 per cent, and to reduce the salaried factory em-
ployes 10 per cent. We have alo been obliged to shorten the weekly
hours of operation, and in some cases to curtail production to a
point approximating a complete shut down of the plant. In all of
these instances the management has very frankly discussed all of the
conditions which necessitated such changes with the employee repre-
sentatives, an 1 they have loyally cooperated with the management
in placing these reasons before the rank and file of factory employees.

"The reductions in wages and schedules were in all cases approved
by the employee representatives' section of our Works Councils, in
many cases after long and frank argument, and we feel that the
matter has been much more satisfactorily handled as the result of
the actions of the Works Councils than would otherwise have been
possible."

The following method was adopted by the management of an
eastern concern employing 150 workers, when it became neces-
sary to effect a reduction in wages:

"The management called a meeting o^ the shop committee and all
the department heads and outlined to the assembly the exact status
of conditions, namely, the amount of business scheduled, the prospects
(or rather lack of them) for immediate new business, the keenness
of competition and the necessity for lowering selling costs a given
percentage in order to meet competition.

"The various factors entering into a manufacturing business —
labor, material, and overhead — were analyzed with the shop com-
mittee so that they could see the necessity for reducing the cost of
production and calculate the percentage it would be necessary to
decrease the rates of pay to meet the contingency.

"In short, the shop committee, and through them, the employees
in general, were made to feel that the management was asking of
them their help and cooperation in a matter of mutual interest, and
the cut in wages decided upon was taken gracefully by all."

Another firm which has a Works Council of the "Industrial
Democracy" type outlined its procedure in making a reduction
in wages, as follows:

"During the month of December, 1920, the company informed its
operatives through the medium of their representatives that the
outlook for business resumption would probably make a wage reduc-
tion necessary. Index figures of Bradstreet's, Dun's, National
Industrial Conference Board as well as United States Labor Depart-
ment, were submitted to indicate that the cost of living had gone
down and that we were warranted, without seriously injuring living
conditions of employees, in following the downward trend, stating
that we could not guarantee to obtain enough business to occupy the
plant, but it was more likely that we could with wage reduction than
otherwise.

"As a consequence, the Council, or as it is known with us (the
House), decided to accept our recommendations and left the matter
in the hands of the management. The management increased the
working hours from 47^ to 50 and decreased the wages 15%, making a
net reduction in earning power of 10%. From this there was no dissent
and these wages went into effect at the beginning of January."

In a middle western plant with a Council of the "Industrial
Democracy" type, "... it became necessary to reduce the
hours of work from six days a week, 44^ hours working time,

to five days a week, 40 hours working time, and to reduce the
force by about 20 per cent. Each of these moves was made
after a committee of the employees' Congress had gone into
the matter thoroughly and concurred with the management
in the course taken."

In the case of the men laid off, a joint committee of repre-
sentatives of the employees and the management reviewed
three lists of the employees — one list from the production
records of the company, one list based on the general impres-
sions of the foremen, and another list prepared by a committee
of employee representatives. The joint committee discussed
each individual name with the object of determining whether
or not it should be on the layoff list. The company stated:

"In this way we have accomplished a shrinkage and the men them-
selves were able to suggest just who should or should not be affected."

Further retrenchments becoming necessary, a committee
from Congress was called into conference with the Cabinet and
presented with facts and figures pertaining to relationship
of production and sales. After a full discussion and study of
the facts presented, the committee made a brief investigation
of inventories of raw and process material and finished stock
which was shown to be increasing to a point that was causing
the company to borrow large amounts of money to finance.

The committee's report was to the effect that "in justice to
the owners of the company the only recommendation they
could make was a complete shutdown of the plant until such a
time as the abnormal inventories might be sold."

This was approved by Congress, but the Cabinet offered
the alternative of a three-day week without change of hourly
rates. This was approved by Congress and put into effect.
With reference to this method of handling such questions the
company wrote:

"The value of handling a matter in this way cannot be overestimated.
The investigations and reports of workmen carry weight with their
co-workers and stimulate confidence in the management. The men
realized they were getting the best deal possible under the existing
circumstances."

When it became necessary to carry out still further measures
of retrenchment because of reduced output and heavy overhead
the management placed before the employee representatives
"all possible information regarding the operation of the com-
pany's business."

The recommendation finally made by the Cabinet to the
Congress, that the company change from a three-day week to
full time basis of 44^ hours per week, with an average wage
reduction of 20%, was accepted by the Congress, and a joint
committee was appointed to obtain all the information needed
for reclassifying the men according to efficiency and length of
service.

With reference to the method adopted, the company stated:

"While no one likes to have their income reduced, our men were so
thoroughly informed of the conditions that made a wage reduction
necessary that it was accepted in a spirit of fairness as a result of their
knowledge of the facts."

Other employers stated that the representatives had been
very fair in their consideration of the proposals of the manage-
ment when they fully understood them. Having agreed with
the management that retrenchment should be carried out,
emphasis was placed on the value of their services in then
explaining to the rest of the employees the necessity for man-
agement's action and the reasons for the reductions. Such a
case was that of a middle western plant with two hundred
employees. One of the officials of the company wrote regard-
ing this assistance from employee representatives:

"The wage reductions which were made necessary by the revision
of our selling prices, were determined by the management. The
method of determination and other information pertaining to the
subject was presented to the works committee and the whole matter
discussed and explained to them so that they understood the reason
for the reduction and the method by which we arrived at the amount
of reduction. We then announced our decision and the committee
gave us their full cooperation in explaining our position to the rest of
the employees.

"The matter of reduction of working hours was similarly handled.
Our men could see that our warehouses were being filled with surplus
product and it was very evident to all that a reduction in hours must
eventually be put into effect. When the time arrived when we felt that
we could not afford to put any more material into stock, we called the
works committee into conference and explained to them two methods
of reduction which we felt would be fairest to the company in maintain-
ing this organization and in manufacturing to the greatest efficiency,
and to the men in supplying them with the greatest possible weekly
wage. One of these methods was adopted and the necessary announce-
ments made."

Another company wrote:

"We are very pleased to state that the attitude of the conference
committee, when it has been necessary to call them together for the
purpose of a wage reduction, has been very fair. All they wish to
know is that there is a good reason for the proposed reduction or change
in any work schedule. We have always found that by taking such
matters up with the conference committee and they, in turn, with
the men before any reduction in wages is made, the men accept any
such change with very much better grace than they would otherwise."

Another western concern stated:

"We have no complaint to find with the attitude of the employees'
committees relative to the reduction in wages, working schedule,
etc., whenever the committees had full information upon which to
base their action."

One of the company officials of an eastern plant with nine
hundred workers wrote:

"The representatives have been of much assistance to us in reducing
wages, and hours of work. They have carried our messages through-
out the shops and have worked with us conscientiously and consis-
tently all through our depression."

A correspondent of the Board in an eastern brass works
wrote that, although the employees were not enthusiastic about
a wage reduction, a great deal of misunderstanding had been
cleared up through being able to explain to them the necessity
for the reduction.

In a western coal and iron company the proposal for a 20% re-
duction in wages made by the management was met by the em-
ployees with a counter-proposal asking that the reduction be
only 15%, with a promise on their part that if their suggestion
were accepted they would make up for the difference by
increased efficiency. This proposal was accepted by the man-
agement. Four months after the 15% reduction had been
made, it was stated that there had been a distinct improvement
in efficiency and apparently management and men were on the
whole satisfied with the agreement.

A western watch company had a similar experience when
the question of a change in working hours came up. The
factory had been working forty-eight hours a week and as
summer came on the employees began to evidence a desire to
have Saturday afternoon off. This was at a time when
management was urgently striving to increase production,
and as it was rather anxious to keep up the full schedule of
time the Advisory Council was informed accordingly. The
management further suggested that if the employees felt that
they must have the Saturday afternoons off, they might be
willing to start working one half hour earlier in the morning,
and in this way make up a good portion of the time which
would be lost by the closing of the factory at noon on Saturday.
With this suggestion before them the Advisory Council went
into the matter, questioning a great many of the employees
before making any recommendation. The final decision was to
the effect that the employees desired the Saturday half holiday
and did not wish to start work earlier in the morning, thus
cutting down the total weekly hours from forty-eight to forty-
four and a half.

The vice-president wrote:

"This, of course, was distinctly opposite to the suggestion of the
executives, but we believed that the Advisory Council was acting in
good faith, and we depended on their statement that the employees
would put forth such effort to increase their production that the result
of the change in the hours would be no loss in the total product for the
week. The plan was therefore put into force and has worked very well,
the employees having come up to their promise of turning out as much
work in the new forty-four and a half hour week as they did in the
old forty-eight hour week."

The employee representatives in a western oil company also
presented a counter-proposal to the management when the latter
laid before the Works Council, in February, 1921, a proposal
that wages be reduced from 3% to 18%, to restore the wage
scale which had been in effect in 1920. The Council pro-

posed to the management that wages be reduced 10% straight
through, basing their request upon the fact that wages had
been readjusted rather than increased in 1920. The manage-
ment accepted the suggestion of the employees and, although
in this instance there was no promise on the part of the em-

Eloyees to make up by increased efficiency the difference
etween the two proposals, the management expressed them-
selves as well satisfied with the results.

In an eastern plant making printing machinery the manage-
ment, while not receiving a counter-proposal from the Works
Council regarding the method in which economies should be
effected, laid two proposals before the employees and put into
effect the one which the Council favored. The company's pro-
posals were:

". . . to continue on the 44-hour week with an actual 10% reduc-
tion in weekly wages and hourly costs, or to return to the 48-hour
week, which had been in effect a year and a half ago, with the same
weekly pay as on the 44-hour week, but thus making a 1C% hourly re-
duction.

"While many of the employees were very reluctant to abandon the
44-hour week, the Council preferred to work the 48 hours with the
same weekly pay as on the 44-hour week. Accordingly, the change
was made."

In reducing the hours of certain departments previous to
this reduction, the company had also taken into consideration
the desires of the employees.

"The employees requested through the Council that the working
force be kept intact and that everybody work part time rather than
make a drastic reduction in the working force, and allow the remainder
to work full time. The working schedule of the various departments
was arranged to suit the desires of the men."

Summing up their experience with a Works Council during
a period of readjustment, this company wrote:

"Although some of the employees at times have been out of sympathy
with the policies which were necessarily adopted, the majority of the
employees and the Council have remained steadfast in their support."

When an eastern concern with three thousand employees
changed its working hours from forty-four to forty-eight per
week, with a readjustment in hourly and piece work rates with
the approval of the Works Council, organized labor endeavored
to pull the men out on strike. The trade union workers
announced that instead of quitting work at 5:30 p. m., as had
been agreed to by the management and the employee repre-
sentatives, they would quit at 4:45 p. m. On learning of the
intended action of the trade union members in the plant, the
employee members of the Works Council in secret session
passed unanimously a resolution opposing any such action on
the part of the employees. Copies of this resolution were
posted throughout the plant, and not more than a dozen out
of the three thousand employees responded to the strike call.

In order that the company might underbid other firms for a
government contract, the employees of a middle western shoe
company with a Works Council of the "company union" type,
voted by a large majority to accept a wage reduction of 10%
during the process of making the shoes, should the company
be successful in securing the order. Through this expression
of cooperation on the part of the employees the company was
able to get the order, and the 10% reduction was put into
effect.

"During the months of November and December, 1920, wage
questions were naturally very much in the background, for the reason
that our employees were well aware of the fact that the inevitable
reaction had set in and that it was going to be a fight on the company's
part to keep wages where they were, let alone make any advances.
"Just before the first of December we deemed it advisable to put
in a bid for a large government contract and took the matter up
frankly with our employees through the regular channels of the
Association regarding the situation, which was this:

"We were practically out of orders for civilian shoes and it meant
a shutdown for perhaps several months if we did not receive the
government order. With this in mind, also the fact that many of our
competitors were at that time shut down and undoubtedly could
re-employ their employees at much less wages than heretofore, our
Association took the matter under consideration and after taking a
secret ballot decided very nearly unanimously to accept a 10 per cent
reduction during the process of making the government shoes if the
company should be successful, this proposition being made to the
company in order that the company might make its bid lower than
it otherwise could and, therefore, stand a better chance of getting
the order.

"This action on the employees' part did in fact enable the company
to get the order and this 10 per cent reduction is now in effect."

Some employers reported that from their experience they
did not consider it wise to place the matter of a reduction in
wages before the employee representatives in such a way that
they would be put in the position of voting their approval or
acceptance of the reduction. It was found that this sub-
jected the representatives to much adverse criticism by their
constituents, and that the representation plan was thereby
brought into disfavor among the employees. This was the
experience of an eastern electrical concern. Although the
employee representatives had not agreed to the wage reduction
proposed by the company, the employees were under the
impression that they had done so and the result, according to
the president of the concern, was very disturbing. He wrote:

"With regard to adjustment of wages downward, the committees
have been of considerable help in handing down explanations as to
why reductions were desirable. We have been very careful not to
place committeemen in the embarrassing position of appearing to
recommend reductions in wages as we believe it to be the responsibility
of the management to make adjustments of this sort when necessary,
and only depend on the employees to assist to the extent of explaining
the need. Notwithstanding our care in this connection, the committees
have received quite a considerable amount of criticism from their fellow-
workers due to the fact that they thought that the committees agreed

to a reduction in wages, which was not the case. We have spent
considerable time and energy in straightening out this misapprehen-
sion."

A southern foundry company with four hundred workers
reported that, because of the criticism which was aroused by
the "request" of the employee representatives for a wage
reduction, in the future it would use the Works Council only
as a means of explaining to the employees the necessity for
measures of retrenchment. In this plant, in which there is a
modified plan of the "Industrial Democracy" type, the body
of the employee representatives is called the Junior Board.
An official of the company wrote:

"The reduction in wages (16%%) was made at the request of our
Junior Board after the suggestion of the company that it would be
a means of continuing the employment of a larger number of men. Our
experience is such that an intelligent explanation of such conditions
to the employees themselves is the most logical manner to bring about
readjustment of conditions through a Works Council plan."

In six plants of a western packing company the employee
representatives who composed a special committee to deal
with the subject, while recognizing that a wage reduction was
necessary and while convinced that management's proposal
was fair and equitable, did not definitely vote for a reduction,
but referred the proposal back to management for final decision,
with the statement that in their opinion management would
give the employees every consideration possible. The report
of the committee to the Works Council in one of the plants was
worded thus:

"1 . It is the personal opinion of the entire committee that, consider-
ing all circumstances, the proposed reduction is necessary and fair,
but in so expressing themselves the members of this committee desire
it to be understood that they are not definitely voting for a reduction.

"2. It is a matter of such importance to the employees as well as
to the company that this committee prefers to refer it back to the
Assembly for such action as may seem proper to the Assembly.

"3. It is naturally distasteful to all employees to have their wages
reduced, but after a thorough review of the entire matter we feel that
a reduction in operating expenses is necessary, and suggest, therefore,
that the president's letter of November 15th, 1921, containing a
definite proposal for a reduction, be received and filed without further
action for or against the proposition by the Assembly, thereby leaving
the matter in the hands of the management.

"It is thought this method of handling will be more acceptable to
the representatives of the employees.

"This committee regrets that this matter had to come up so early in
the life of the Assembly, but we are impressed with the possibilities of
close relationship through the representation plan."

In explanation of this report the secretary of the committee
made the following statement:

"I, for one, and the rest of the committee, and, I think, all the rest
of us, wish to avoid being put in a position of definitely voting for
a reduction of wages. We do not want to be in a position where we
must answer for that. We believe that the duty of reducing wages
belongs to the management. The information we have convinced me
and the other members of the committee that a reduction is necessary

and inevitable, but we feel that we ought not to be asked to vote for
a reduction of wages of the men with whom we work every day. If the
management feels that it is necessary, it should be done by an official
act and the Assembly relieved."

The Assembly unanimously adopted the report. One of
the employee representatives then made the following motion,
which was also adopted unanimously:

"We, the members of the Assembly, in session November 18, 1921,
hereby express a vote of confidence in the management as to their
fair and impartial dealing with their employees and we feel that the
final decision in the matter of wage adjustment will be rendered with
the thought in mind that their employees are given every consideration
possible."

A company official, writing with reference to the manner in
which the employee representatives left the matter in the
hands of management for executive action, stated:

"Thiswas done, we are informed, because of threats of annoyance
from the outside leaders of a small minority of organized employees."

In eight other plants of this company the employee repre-
sentatives voted upon the merits of the reduction proposed and
"in every case accepted the same by a vote well over the
necessary two-thirds, the vote varying with the different plants
from 72.7% up to 100%." The average vote in favor of
reduction in these plants was 80.6% and out of a total of
297 votes cast in the fourteen plants, 265 were in favor of the
reduction, and 32 opposed.

The Board's correspondent, commenting upon the two
methods of handling reduction of wages, stated:

"It is quite natural that in the early stages of exercising their
responsibilities as representatives .of the employees, they should be
timid about taking responsibility on a major issue in some cases; yet
they have functioned fully on many important matters other than
wages during the last seven months. The process is essentially an
educational one and the main thing, in our opinion, is not the 'vote,
though that was obtained beyond any doubt, but the conviction
prevalent through all the thirty thousand employees that they were
treated justly and that they were supplied with ail the facts in the
matter."

Another middle western paper company, with Works Coun-
cils of the "committee" type in four mills, reported that
although the employee representatives were convinced that
the proposed wage reduction of 20 per cent was fair, a num-
ber of them were afraid to vote for it in the Councils because
of the reception they would receive from their fellow employees.

Individual councilmen, however, who voted unfavorably admitted
later that they were personally convinced that 20 per cent was fair but
they did not dare face their constituents with anything but the record
of an unfavorable vote. It was the unanimous opinion of the Council,
however, that some wage reduction was necessary.

Another employer who believes that the employee represen-
tatives should not be put in a position where they formally

accept the proposals of the management regarding wage
reductions, bases this upon his experience with a request made
by the employees for a 48-hour week. At the time the request
was made the employee representatives, after consultation
with the management, voted against introducing a working
week of forty-eight hours. This caused great dissatisfaction
among the employees, and the Works Council was brought
into disfavor. After this experience, the employer in this
plant did not ask the employee representatives to approve of
his announcement of a wage cut. The matter was simply
explained before the Council, and the employee representatives
then put the facts before the employees. The manager of the
plant stated that the Council was "a very convenient and
satisfactory medium" for this purpose.

The statement of a company official of a western rubber
company with a Works Council of the "Industrial Democracy"
type, is interesting in this connection. In his opinion, the
success of a representation plan is dependent- upon the amount
of responsibility placed upon the committees organized under
the plan. In this company,

"... the committee from the Congress on production dividends,
bonuses and wages, composed of three senators, three representa-
tives and a member of the Cabinet acting in an advisory capacity,
submitted a report to the Congress recommending a reduction of 2C%
in the earnings of the men in the factory. They explained to the
Congress that such a course was necessary in order that labor might do
its share in assisting the company to meet severe competition. This
report was unanimously adopted by the Congress and accepted by
the entire organization with assurances on every hand . . . that ■
every effort would be made toward increasing efficiency in order that
unit labor costs might be still further lowered."

Writing with reference to the approval which the emplpyees
gave to the recommendation of this committee, the same
correspondent stated:

"It has been our experience that the success of the various activities
of the Industrial Congress is about in direct proportion to the amount
of responsibility placed upon the committee having that particular
activity in charge. With our plan a committee's recommendations,
to become effective, must be ratified by the Industrial Congress, with
any action of the Congress subject to veto by the president. As a
matter of fact, veto by the president has in our experience never been
necessary. We find that the committeemen, in their zeal to prove
themselves fair-minded and free of radicalism, are most apt to err on
the side of being ultra-conservative, but these committeemen are will-
ing to accept responsibility for their recommendations and, while some-
times criticized, are in the main loyally supported by the organization
at large. If freedom of action and the responsibility for that action
is withheld and the committees function only as agents for the man-
agement, employee representation does not exist and Industrial
Democracy is a misnomer."

A company official in a large concern with twenty-four
Works Councils in operation in as many plants, discussing the
subject of whether an employer should solicit the employee

representatives' approval of a wage reduction, wrote that it
depended

". . . entirely upon the attitude which the plant management
and company executives have taken toward Works Council procedure,
and with just what degree of frankness they are actually seeking to
bring about a real intimacy of contact and how far they are willing
to go in assuming a joint and mutual interest in the business between
employees and management."

In this company the management had solicited the employee
representatives' approval of proposed wage reductions. This
correspondent stated:

"Our own experience has been a very happy one, and the method we
used in accomplishing the wage reductions has certainly very definitely
strengthened the Council plan and heightened the morale of the shops."

With reference to the so-called "voluntary" voting of reduc-
tion of wages by employees themselves, an examination of
such instances shows that the use of the word "voluntary" is
somewhat misleading. In the sense that there was no coercion
by the management to force the employees to accept the
proposed reduction, the action of the employees may be termed
"voluntary." But when it is remembered that the alterna-
tives to accepting the proposals of the management (except
in those cases noted above, where the employees made a
counter proposal and promised to make up for the difference
between their proposal and that of the management by increased
efficiency and economy) were either the closing down of the
plant or the loss of their jobs, the term "voluntary" cannot
be correctly applied to the action of the employees.

This was well brought out by an eastern employer in whose
plant a reduction in wages, made in January, 1921, was
reported in the press as "voluntary" by the employees. Refer-
ring to the magazine interview, regarding which this executive
stated he had "evidently been misquoted," he wrote:

"In December, 1920, we were already experiencing very poor busi-
ness. Decreases in wages had been effected by certain of our competi-
tors which would have inevitably placed us at a serious disadvantage
if we had not taken steps to meet them. Under these conditions I per-
sonally went before the joint committees of employers' and employees'
representatives and explained that in order to compete, I felt that we
must reduce wages. I suggested a 10% horizontal reduction and the
temporary elimination of all overtime pay, as well as a revision of the
differential rates paid for certain classes of both skilled and unskilled
jobs.

"Personally, as well as on behalf of the management, I expressed
regret at the condition which seemed to require this action, and while
those present agreed that it was bitter medicine, everyone showed the
heartiest good feeling and one of the employees' representatives even
suggested that they were perfectly willing to cooperate with the man-
agement to any extent that the latter felt necessary to get business to
keep the plants going. He even suggested that the employees would
be willing to take a 15% instead of a 10% reduction if that would
increase the prospect of business, and concluded by a statement that
the management could depend on the employees of the organization to

make every necessary contribution, but that the employees would in
turn look to the management to get the business after the wage scale
had been adjusted to what was agreed to be a fair basis."

Going on to state that the so-called "voluntary" voting of
wage reductions by employees themselves is misleading, this
correspondent continued:

"In the first place the average worker does not know, except upon
the advice of the management, whether or not and to what extent
a wage reduction is necessary. At the time of our reduction the plants
were practically shut down and it was common knowledge that
at least one important competitor had reduced wages. Our organiza-
tion frankly stated when the proposition was put up to them that they
had anticipated that some such action would be necessary and they felt
rather relieved to have the matter put into concrete shape in order to
get it cleared up as quickly as possible. There was no suggestion of
coercion from the company to force acceptance of this reduction, but
business conditions certainly indicated the necessity for it in terms that
could not be mistaken by any person of ordinary intelligence."

In another company with Works Councils of the "Industrial
Democracy" type in operation in two plants, where the employee
representatives had unanimously accepted the wage reduction
announced by the management, the president of the company
stated that such action could not be described as a "voluntary"
reduction on the part of the employees. He said:

"There is no such thing as a 'voluntary' wage reduction by em-
ployees. It's against human nature. Employees may, when convinced
of the necessity of a wage reduction vote that they will accept it, but
to state that they do so 'voluntarily' is not correct. They vote to accept
the reduction because they know if they don't they will be out of a
job. It is simply a case of accepting half a loaf when they can't get a
whole one."

A large western rubber company, in its account of the man-
ner in which wage reductions had been carried out through
its Works Council, also drew attention to the fact that the
acceptance of the reductions by the employees was not vol-
untary. One of the company officials wrote:

"The House and Senate did not favor wage reductions with any
great enthusiasm, I may assure you. They realized, however, after
listening to the management that in times like these there was little
else that could be done, as economies were absolutely forced upon us.

"The subject arose in a very natural way. When the management
felt it was necessary to make wage reductions, they so announced to
the Assembly, answering all questions, patiently discussing all details
and finally putting the wage reduction into effect. Unanimous approval
of the employees does not necessarily mean hearty satisfaction. They
do feel, however, I think, that we are doing our best to preserve our
labor policies and to keep our wages as high as is commensurate with
the business problems involving competition and refinancing, with
which we have been confronted."

Another employer with Works Councils of the "committee"
type in operation in five plants, commented upon the influence
of economic conditions in connection with the manner in which
the employees had accepted reductions in wages and changes
in hours. m^^^^ /

97 ^m^m^m ^

ONTARIO

". . . We secured the acquiescence of the conference committees
to the proposed changes, and we believe that their influence throughout
the plants was of value in having the changes readily accepted. We,
of course, believe that the pevailing conditions of unemployment had
much influence in having the suggestions so readily accepted. This
perhaps, however, is only another way of saying that the changes
suggested were reasonable and proper."

The Conference Board has learned of three instances in
which the action of the employee representatives with refer-
ence to wage reductions and changes in work hour schedules
may be properly termed "voluntary." In one case, that of
a film manufacturing company with a Works Council of the
"Industrial Democracy" type, the employee representatives
on their own initiative requested the management to reduce
the working week from five and one-half to five days with a
corresponding reduction in pay. They also promised they
would endeavor to produce seventy thousand additional feet
of film per week.

The resolution, passed at a mass meeting of the employees,
follows:

WHEREAS, We, the employees of the Company realize

that the industrial conditions which exist throughout the country at
the present time have decreased the demand for our product, thereby
necessarily decreasing our production, without a corresponding
decrease in our operating cost; therefore

BE IT RESOLVED, That, in order to show in a practical way the
cooperative spirit of the organization, we, the people, in Mass Meet-
ing assembled, this Thursday, June 2, 1921 , do request the company
to cut off from the working schedule of the plant, until further notice
from the management, one half-day each week; namely, Saturday
morning for the day-shift, and a corresponding reduction for the
night-shift, reducing proportionately from our pay for the time thus
saved, and,

BE IT FURTHER RESOLVED, That we endeavor to produce
seventy thousand additional feet per week.

Note: This is in no way to interfere with Saturday morning work

whenever the management finds it necessary.

It is interesting to note that approximately 80% of the
employees in this plant are members of the local trade union.

In the other instances the representatives of the employees,
before any wage reductions had been made, assured their
employers of the willingness of the employees to share with
them whatever economies the period of readjustment should
render necessary. Both of these plants, southern textile com-
panies, have profit-sharing plans in operation. The resolutions
adopted by the Board of Operatives — the representatives of
the employees — in November, 1920, and presented to the
management, expressed the employees' appreciation of "the
Co-Partnership and Profit-Sharing Plan and its successful
operation." Reference was made to," the liberal profit-sharing
checks which have been distributed in the community and the

spirit of harmony, cooperation and good will which has been
developed thereby."

The employees expressed "grateful thanks" that the "war-
time" wage scale and operations had been sustained, but real-
ized that such favorable conditions could not continue under
the depresssion in the cotton market, and stated that

". . . in the spirit of our cooperation we wish all to stand together
in adversity as well as in prosperity. Therefore, we hereby express
our confidence in the management and pledge our full sympathy and
united support in taking whatever steps may be found necessary in
serving the best interests of all parties concerned."

In only two instances, so far as the Conference Board has
learned, did employers meet with opposition from either the
employee members of Works Councils or the employees them-
selves in connection with proposed wage reductions. In the
first case, that of an eastern textile plant in which there is a
Council of the "Industrial Democracy" type, conditions during
the summer of 1920 became such that the company could
operate only three days per week. In October the company
proposed that the House of Representatives should discuss a re-
duction in wages, which they were informed was necessary if the
factory was to be kept running till the end of the year. It was
explained that the company did not need to continue produc-
tion, as they had sufficient in stock to take care of all orders.
The only object in keeping the factory going was to provide
the employees with work. The management did not present
a proposal to the House of Representatives as to what amount
wages should be reduced, but simply asked the employee
representatives to consider the matter and let the management
know what they would do about it. The representatives
showed no willingness to cooperate with the management,
though they reluctantly stated that they thought a reduction
of 10% would be fair. A greater reduction than that, they
said, would not be satisfactory to them. "Owing to this
lack of willingness on the part of the employee representatives
to cooperate with us, we then decided to close the plant,"
stated one of the executives of the company.

Accordingly the factory was closed for the months of Novem-
ber and December. When the employees received notice that
this was to be done, they informed the management that their
representatives had not truly expressed the sentiments of the
mass of the employees. To this the management replied that
the way to prevent the recurrence of such a condition of affairs
was to see that at the next election they elected representatives
who really would represent them. At the first of 1921, the
plant resumed operations with new rates of pay which were
20% below the base rate of October, 1920. The new rates
also involved an increase of production over that of October.
It is to be noted in this instance that management did not

present the Works Council with any definite plan regarding
the proposed reduction in wages.

When the management of a western agricultural machinery
company, with a Works Council of the "committee" type,
took up the question of a wage reduction with the employee
representatives, the representatives asked that a referendum
vote be taken among the employees. The employees voted
not to accept the reduction and stayed away from work while
the matter was being discussed in the Council.

At the end of four days another vote was taken and the
management's proposals were finally accepted, whereupon the
employees returned to work. One of the company officials
wrote that had the proposal for the reduction not been made
so suddenly, and had the management not exerted undue
pressure to make it effective at once, it was questionable
whether there would have been any trouble.

The proposition submitted by the management and finally
accepted by the men on January 15, 1921, was:

"(a) The present tvage scale to continue in effect until February
16, at which time there will be a reduction of 15% in wages.

"(b) To work cooperatively to increase the collective average of
production 25%.

"(c) No change in the reduced wage scale for a period of six
months after February 16."

The Board's informant, writing in April, 1921, said: "Our
25% increase in production was realized." Referring to the
strike this correspondent stated:

"We do not consider the strike in any way attributable to defects in
the plan of representation. Instead, we think it was entirely due to
the suddenness with which the proposal was brought out, for had the
original plan, as laid down by our manufacturing executive, and which
plan was the one finally acted on, been proposed, there is every likeli-
hood that the announcements would have been received by the men
without any disturbance to production while the terms and conditions
of the proposal were being discussed by the management and the
committee."

A few days after the wage reduction had been put into effect,
international representatives of the pattern makers' and the
moulders' unions protested to the management against the cut
and endeavored to carry on separate negotiations for the
members of their unions. The management in each case
referred the organizers to the central committee. In the case
of the pattern makers the committee convinced them they
had been mistaken in their action in departing from the unani-
mous agreement, and after being absent for five days they
returned to work on the same terms as the other employees.
There was no cessation of work on the part of the moulders,
the local moulders' union agreeing that because of the "har-
monious relations which had so long existed between this
company and its employees, they would permit their members

100

who were employed there to work on a rate which has been
reduced 15%." In the other shops in the vicinity, the mould-
ers would not accept any reduction amounting to more than
10%.

Summing up their conclusions on the usefulness of employee
representation, the same correspondent wrote:

"I think the above experience shows that employee representation,
when it is truly representative, is very useful and helpful to both
parties; whereas, when special or group interest is allowed to take pre-
cedence over the mass interest, it is not satisfactory to either side.
The ideal which we seek to maintain at all times is that, with regard
to any proposition, 'if it is fair for one, it is fair for all — and if it is not
fair for all, it is not fair for any one'."

It is interesting to note that some time after the 15% reduc-
tion in wages, this company found it necessary to reduce their
working schedule to five days per week. At the time this was
done management "received hearty cooperation from the com-
mittee on this proposal."

The significance of the experiences of the employers quoted
above, who took up the question of wage reductions and
changes in work-hour schedules with the members of their
Works Councils, lies in two things. The first is the casting
out of the false gods of secrecy by employers, and the second
the reaction of the employees to this policy. Instead of being
kept in the dark as to the reasons why economies which aflfected
their pockets had to be made, employees were given a full
explanation of the reasons necessitating such action. That
this method was successful in avoiding the misunderstandings
that might otherwise have arisen, is proven by the statements
of employers given above. Employees appreciated the con-
sideration of their feelings shown by employers. They appre-
ciated being taken into the counsels of management. As an
employee in an eastern mill said:

"Being told why you have to accept a cut in wages seems to soften the
blow. It shows that the management thinks it worth while to go to the
trouble to explain things to us. That's a whole lot better than merely
posting up a notice Saturday night saying wages will be cut so much
starting Monday morning."

Employees saw that economic forces exerted a pressure upon
their employer gs well as upon themselves. They realized
that economies had to be made if plant operations were to be
maintained, and to the extent that this realization was achieved,
they saw that their interests and those of the employer were
mutual. Both had to work for the survival of the industry,
both had to accept their share of the sacrifices necessary for
this to be done. Where this realization prompted the employees
in accepting necessary economies, the Works Council may be
said to have made its contribution towards bringing about a
realization on the part of employer and employees that their
interests are fundamentally one.

101

CHAPTER VIII

EFFECT OF WORKS COUNCILS ON THE RELATIONS
BETWEEN MANAGEMENT AND EMPLOYEES

In nearly every case covered by the present investigation
by the Conference Board, the opinions of executives and workers
have coincided regarding the effect of the installation of Works
Councils on the relations existing in industrial plants between
managements and their employees. Viewed from either angle
experience has proved the organization to be an eminently
satisfactory means of disposing of those difficulties which so
often arise because of misunderstanding on the part of either
party of the other's point of view.

Prior to the development of employee representation, the
lack of any machinery for explaining contemplated changes
which, through ignorance of their necessity, were often stub-
bornly fought by the employees, created and maintained a
reciprocal attitude of "antagonism, suspicion and distrust,"
often developing into strikes. The fact also that the foremen's
decisions in all cases of employees' grievances were final, admit-
ting of no appeal to a higher authority, was productive of ad-
ditional discontent. According to the reports of many company
officials and employees, the unsatisfactory relations due to the
foregoing conditions have been greatly improved by Works
Councils.

Where employers have lived up to the spirit of the representa-
tion plan, they have adhered to the policy of keeping the workers
informed, through their elected representatives on the com-
mittees, of the status of the business, a proceeding which has
been one of the strongest factors in overcoming their erstwhile
attitude of antagonism. This has been especially true, as has
been seen, in times when business depression made the future
uncertain in the matter of continuous employment and steady
wages.

Furthermore, increased good will toward the company has
been shown by employees because of the opportunity afforded
them by the representation plans to come in contact with com-
pany officials other than their foremen. The knowledge that
they could take their grievances to the management direct,
even though they seldom availed themselves of the privilege,
has been a source of satisfaction in many instances, while in
other cases the mere fact of acquaintance with these repre-
sentatives of the management has been sufficient to improve
relations.

102

According to a company official in a large middle western
concern operating a plan of the "Industrial Democracy" type,
the primary object of their Works Council was the improvement
of the relations between employer and employed. It was stated
as follows:

"The purpose of employee representation as introduced in our plant
was to obtain a means of understanding our men and having our men
understand the management, to quickly get problems ironed out and
get each other's point of view."

Almost without exception employers who discussed the effect
of the Works Council on the relations between them and their
employees said that the purpose, as summarized above, had been
accomplished. Where relations had been unsatisfactory pre-
vious to the installation of the Council, and had undergone no
change after its organization, the reason was to be found in the
failure of the management to fulfill its paVt of the obligation.

Various concerns operating representation plans of the
"Industrial Democracy" type had almost identical experiences
in this respect. Some of their reports follow:

A mid-western firm manufacturing paint wrote:

"We have found that Congress has done a great deal towards bringing
a closer cooperation and a better feeling and relationship between man-
agement and the workers."

An eastern silk mill gave a similar report:

"There is an apparent better understanding between management
and workers."

A mid-western printing concern wrote:

"The relationship between the management and the workers is one
of absolute cooperation. Each extends to the other whatever assis-
tance can be rendered in promoting greater efficiency and contentment
for both sides."

From a western rubber company came:

"Employee representation has brought about, through the committee
work where there is free discussion and interchange of ideas, closer
relations between management and workers."

In discussing the effect of employee representation on the
relations between management and employees, employers
operating Works Councils of the "committee" type reported
experience similar to that quoted under the "Industrial Democ-
racy" plan.

From an eastern electric company, whose employees number
ten thousand, came this statement:

"We think that the plan of representation has made better relations
between the management and the workers, due to better understanding
of each other's difficulties and points of view. The opportunities for
close understanding have, in themselves, made better relations."

From an eastern metal concern:

"We believe the general relation between management and workers
is better on account of the plan acting as a medium for both employees
and management to state their positions."

103

From a western lumber company came:

"The relationship between management and workers . . . has been
very pleasant. The tendency is for fair debate on all questions instead
of threats or strikes as heretofore."

The report of a southern power company was:

"Our employees' committee plan has been instrumental in bringing
about a feeling between the employees and the management of mutual
good faith and fairness."

From a mid- western company manufacturing machinery:
"The effect on the relationship between the management and the
workers has been to increase discipline and increase loyalty to the man-
agement. We are working 'with' each other instead of the men work-
ing 'for' us."

Of special interest are the detailed statements given by some
employers regarding the beneficial effect of the Works Council
on the relations between them and their workers.

An eastern paper company having a Works Council of the
"committee" type employs three thousand men. One of its
company officials reported that the Council had had an im-
portant influence, in that it gave to both management and
employees an increased sense of responsibility.

"It is difficult to judge accurately the effect of our works committee
upon the relationship of management and workers, as this is a very
intangible sort of thing. We believe, however, that it has done a great
deal to put across to the employees the idea that the company — its
success, its policies and its reputation — belongs as much to them as it
does to the management. Perhaps more important is the broadening
of the point of view of the management, by making them feel that their
responsibility is to the employees as well as to the directors, and that
it is the welfare of the company, including its employees, its manage-
ment and its customers, that is their real objective, rather than present
profits."

This company has evolved, in connection with its Council,
some rather striking plans which might have some bearing on
the improved relationship between the management and the
workers. Before the institution of the employee representation
plan, the company had formed what was practically a true
industrial partnership. Preferred stock owned by outside in-
vestors gave to its owners a fixed return. This stock was voting
stock only when the business failed to pay this regular dividend.
Each year the profits remaining after dividends on all out-
standing stock had been paid, were reinvested in the business
and against this investment shares of stock were issued called
"Industrial Partnership Stock." Two-thirds of this was voting
stock and was issued to such executives as principal foremen,
chief clerks, principal salesmen, etc., in proportion to their
relative salaries.

Before the installation of the works committees, the employer
wished to give the workers some share in the profits, but had
been able to evolve no satisfactory scheme. After its intro-

104

duction at the factory the Works Council appointed a special
committee which, after four months of deliberation, drew up an
"Employee Industrial Partnership Plan," which was unanimous-
ly adopted. This plan provided for a fund njade up of one-third
of the profits remaining each year after the fixed dividends on
all the preferred stock outstanding had been paid. This fund
was to be distributed in the form of non-transferable, non-
voting stock among the employees, the amount varying with
length of service. While workers have no share in the direct
control of the company,

"... all non-managerial employees . . . participate with the
Managerial Industrial Partners in the management of the company
through their representative in the General \Vorks Committee. . . .
This committee is free to discuss any factory problem or policy and to
make recommendations in regard thereto for the approval of the man-
agement. In practice it has become an active and important factor
in management and through it all non-managerial employees partici-
pate in the direction of the company."

The same concern has in operation a carefully thought-out
unemployment plan. This plan was worked out by the Works
Council. The company has set aside certain definite sums of
money to be used, as long as they last, for the relief of distress
due to unemployment. Control of this fund is in the hands of
a committee of four, two appointed by the management and
two by the Works Committee. Employees are kept informed
regarding the condition of the fund.

A company official of a mid-western concern which operates a
Council of the "committee" type, believes in employee repre-
sentation as a means of producing a closer relationship between
management and employees and of insuring a "square deal" for
all:

"We believe where employee representation exists there is a closer
understanding between employer and employee which eliminates a
number of dissatisfactions. We are frank in stating that our experience
with this Advisory Board has been of mutual benefit both to the em-
ployer and the employee. It paves the way for closer cooperation,
avoids misunderstandings and disputes and insures for everyone a
square deal."

In a western company employing thirty thousand men and
operating a Council of the "committee" type in twenty-four
plants, an official reported that he was especially gratified over
the relations maintained between management and employees
during the period of business depression. During the two
years that the Councils have been in operation in this
company's plants — years which have been marked by
turbulence in industrial relations in the whole country — it
was stated that "There has been no loss of direct contact
between the men and the management at those plants where
Councils have been established."

Another western concern, manufacturing machinery, found
that through its "committee" plan a highly desirable contact,

105

with important results, had been established between manage-
ment and employees. On more than one occasion the employer
and his representatives felt the effect on their viewpoints of
employee council.. The intimate relation that developed was
found to be such that the employee moulded employer senti-
ment quite as truly as the employer was enabled to guide
employee thought.

An eastern company employing 46,000 men and having a
CouDcil of the "committee" type, found employee representa-
tion essential for securing a right relationship between manage-
ment and workers. One of the company officials wrote:

"There is no doubt but that it has, through the establishment of a
better understanding of each other, improved the relationship between
the management and the workers. There is no doubt in my mind but
that some sort of a plan of employee representation is not only desirable
but quite essential in any large industry if the relations between the
management and employees are to be such as to insure the success of
all parties concerned."

The commanding officer of a mid-western arsenal whose
Works Council, of the "committee" type, has had an especially
interesting history, gave a detailed report on the improvement
in relations between management and employees effected by
employee representation:

"The effect upon the relations between the management and the
workers . . . has been to produce a very much better understanding
of the viewpoint of both sides."

Especially from the worker's point of view has he found the
effect on relations between management and employees good:

"If John Jones has a grievance or suggestion or idea to propose which
he must get off his chest, the Works Organization as outlined here pro-
vides a place for John Jones to go. The standing committees as com-
posed will not stand for any foolishness and a waste of time or a display
of trivial matters is not tolerated by them. The fact that a means is
provided to the man with an invitation so to speak, if he must make a
statement, oftentimes satisfies the man because he realizes that he is
not forbidden but invited to bring matters up and then, consequently,
he does not desire to do it. In other words, if John Jones has the priv-
ilege of telling 'the old man' or his duly authorized representative, any-
thing he wants to he usually doesn't want to tell him. The present
procedure in the Works Council reminds me very much of the scheme
embodied here and used by the Fire Department. They have red
arrows located at various places around the arsenal which indicate the
direction to the nearest fire alarm box, and all the man has to do is not
to stop and think where the box is but to run like the dickens the way
the arrows point and he is bound to run into a box. If John Jones will
only go the way the arrows in the Works Council Organization point
he is bound to get the matter that is in his mind given consideration
and a prompt decision arrived at."

A company official in a large western rubber concern, operat-
ing a Works Council of the "Industrial Democracy" type,
outlined what had been accomplished there after one year of
experience with employee representation:

106

"We have used the plan in both directions between men and man-
agement. It has benefited the men sometimes in increases in wages, and
in many other ways. It has benefited the management in many par-
ticular instances where we have wanted the men's point of view. It
has benefited the management in cases of labor trouble. For instance,
we have had occasions where men have stopped work during the night
shift. Next morning we have been able to call in the representatives and
say, 'We have a grievance and expect you to get the men who stopped
work together and tell them that that isn't the way the law of this com-
pany operates.' And in that way we have been able to explain how
the Assembly has the power to correct wrongs and that to stop work is
an old-fashioned, harmful practice."

In two instances reports stated that the employees had given
material evidence of the good will which employee representa-
tion had created toward their employers. The vice-president
of the first concern, an eastern silk company, operating two
Works Councils of the "Industrial Democracy" type, told the
following story:

"After a wage reduction in one of our plants the company had to
close down. The employees were told, on leaving, that when the plant
reopened they would be taken back at the reduced rate which they
were then receiving. During the time the plant was closed a new firm
opened up, securing some of our employees. This concern paid them
higher wages than they had been receiving from us. When we opened
up again these employees were told that although they would be taken
back at the rate that prevailed before the shutdown, there would have
to be a reduction in a short time. Despite this fact ninety-five per cent
of them came back."

The president of another concern, an eastern hosiery mill
operating an "Industrial Democracy" type of Council, also was
obliged on account of business depression to close some of his
plants. Some of his employees showed their confidence in and
good will towards their employer by offering him the use of
^60,000 of their savings. Others stated that they were willing
to work without being paid immediately. This employer gave
the credit for the greatly improved relations which exist between
him and his workers to his employee representation plan.

In several instances employee representatives were inter-
viewed regarding their ideas of the effect of employee repre-
sentation on the relations between them and their employers.
It is interesting to note that in every case the workers favored
the plan as a channel of communication with the management.

In an eastern paper company, where the "committee" type
of Works Council is in operation, an employee representative
who was also a trade-union man placed emphasis .upon the
opportunity afforded the employees to get in touch with the
executive officers. As another representative in the same plant
put it:

"Before we had a Council we were always in the dark. Foremen
delighted in telling us nothing. Now we are satisfied. We have a way
of getting straight to the management."

In an eastern silver company, operating a Council of the
"committee" type, the employee representatives interviewed

107

were highly in favor of the plan because of the opportunity it
afforded them to come in contact with the management. They
appreciated the insight they were obtaining into the business
through talks given by the company officers. The information
they received in this way was passed on to the employees, who,
in this present time of uncertainty, were eager to learn all they
could about the company's position and the outlook for the
future.

In an eastern steel company, whose Works Council also is of
the "committee" type, employee representatives expressed
satisfaction regarding the improved relations following the
institution of employee representation, as follows:

"We get acquainted with the officials now — can speak to them as
man to man."

"We find a much better feeling among the employees now. They are
doing a day's work for a day's pay."

"When both sides play fair this collective bargaining is the best thing
yet."

"Before the plan was in effect there wasn't a very good feeling be-
tween the company arid the men. If the men wanted anything they
didn't see how they could get it. The foremen stood between them and
the company officials."

One of the officials of a middle western machinery company
operating a Works Council of the "committee" type reported
an interesting experience along this line. He found that, unless
employee representatives were wisely chosen and were distinctly
representative of their constituents, they prevented contact
between the management and the workers by misrepresent-
ing each to the other. Under these circumstances em-
ployee representation, as a means for improving industrial
relations, would naturally be a failure. He says:

"Whether the shop committee principle brings the workers and the
management closer together or further apart is a question that we can-
not answer conclusively at the present time. If it is a fact that the em-
ployees' representatives can be considered as the employees themselves,
then we can say that the plan brings the two bodies together. This will
be true when the representatives are truly representative. We have
occasion, however, to note that the shop committee did not represent
the employees directly in all questions, on some occasions, but rather
prevented the management getting in direct contact with the em-
ployees' affected. In such cases the shop committee is a hindrance to
the management and does not benefit employees."

This correspondents' opinion as to the advisability of introduc-
ing Works Councils into industrial plants was as follows:

"Whether or not we would advocate a shop committee for every or-
ganization would depend to a large extent on the following circum-
stances: if there is no marked sentiment for such a body in an organi-
zation, we certainly would not advocate it. If there was a strong
tendency for one in a shop we would advise the management to dis-
courage it until their control functions are in good working shape. I

108

refer particularly to careful cost records, personnel records, etc. If
these records are in first class condition so that the controlling factor of
the business can be determined accurately and promptly and the em-
ployees' records are adequate to determine the status of an employee,
then the organization should be in good shape to arrive at considerable
benefit from a shop committee plan. Otherwise the committee men
would be in a strong position to override the policies of the management
because of the management's lack of facts to support their policies."

The feeling of employees in this plant with regard to the plan
has been well expressed by the following article, drawn up by
the chairman and the secretary of the works committee:

"It is our opinion that the success of the plan of employee representa-
tion now in practice at the plant of the . . . company, is contingent on
fair and impartial understanding.

"Its failure or success depends entirely upon the attitude of fairness
on the part of the management and its representatives, so as to bring
about a spirit of confidence in the employees, which in turn shall pay
for itself by way of hearty cooperation.

"While our viewpoint is somewhat localized, it is the consensus of
opinion of the Central Committee that this plan would be a failure
where organized labor is prohibited or discriminated against. Our
reason for advancing this view is based upon the spirit of independence,
which is born of trades union affiliation.

"We recognize that a satisfactory way to maintain harmonious rela-
tions between the employer and the employee is through committee
representation. At the time of the mutual acceptance of this plan, we
had neither set rules nor precedents to be governed by. And while it
is not by any means perfect, we have found by our past experience that
all rules of procedure must be elastic enough to absorb the various
. phases of the different cases presented. This has here been brought
about by open discussion and thorough analysis of the causes and
effects either individual or general. In our opinion it is essential to the
success of this plan, that all agreements entered into or understandings
reached, be accepted and lived up to, or the confidence of the entire
organization cannot be maintained.

"We find that where this plan is recognized, as by the management
of the . . . company, wherein all grievances of employees, individual
or collective, as well as all matters pertaining to reduction or increase in
working force — wherein all adjustments of wages and conditions
throughout the plant are openly and generally discussed and prear-
ranged through the representatives of the management with the com-
mittee representing the employees — and wherein all conditions and
understandings of such conferences are faithfully respected and ad-
hered to — wherein no discrimination is shown relative to affiliation of
employees with labor organization — also, wherein the proper regard is
given the employer by the employee in the protection of his investment
and in cordial cooperation to maintain scheduled production — wherein
the employee promotes the welfare of the industry at all times and
realizes that the success of the industry depends largely upon the
coordinated support of the workers — there the plan of representation
can be carried on with much success."

In cases where firms reported that employee representation
had had no effect upon the relations between management and
employees, an explanation of the circumstance was usually to
be found.

The correspondent of the Board in a southern foundry whose
Works Council is an "Industrial Democracy," and who stated

109

that he did not see any change in relations between management
and workers, said, in a later discussion, that he had not yet
succeeded in getting his workers to see the real meaning of em-
ployee representation.

Another correspondent, in an eastern steel company, operating
a Council of the "committee" type, after having said that there
had been no appreciable effect of their employees' committees
in the relationship between management and workers, admitted
that he himself was not in favor of employee representation.

Information was received from 361 plants regarding the
effect which employee representation had had on the relation-
ship between management and workers. The Works Council
plans in twenty-four of the plants were of the "Industrial
Democracy" type, and 337 were of the "committee" type plants.

Reports regarding 356 plants stated that the effect of the
Councils on these relationships had been a beneficial one. Five
firms, four having "committee" plans and one an "Industrial
Democracy" plan, said that employee representation had had
no effect upon the relations between employer and employee.
In both groups the condition was accounted for.

In view of the figures shown it may be concluded that the
effect of Works Councils on the relationship between manage-
ments and their men is, in general, a beneficial one.

110

CHAPTER IX

ATTITUDE OF FOREMEN TOWARD WORKS
COUNCILS

In considering the attitude of foremen toward employee
representation, it is well to note that a Works Council is a
distinct check on his authority, in that it deprives him of the
right of final decision on the grievances and complaints of em-
ployees, which has heretofore been his, and also of the exclusive
privilege of defining the attitude of the management to the
workers. In spite of this apparent contraction of power, how-
ever, a considerable number of foremen have signified approval
of the works committees as soon as their institution was con-
templated.

The restriction of the authority of foremen, however, is largely
only apparent, because it lies within the power of the foremen,
by the exercise of wisdom and fairness in dealing with his men
under Works Councils rules, to retain his prerogatives. The
Council usually makes no change in the initial procedure of
settling complaints. As before, the dissatisfied employee goes
first to his foreman, but at this point the Council outlines a
departure from the former method. If the foreman's decision is
not acceptable to the worker concerned, the latter has the right
to refer the complaint, through his representative on the com-
mittee, to that committee for review and settlement. But if
the foreman has, to the best of his ability, been fair in his
judgment and "human" in his manner of delivering it to the
employee, there is a fair chance that the dispute will end there,
or, if not, that the committee will uphold the foreman's decision.
This would obviously tend to be true only in plants where
foremen, prior to the institution of the Councils, had, to
some extent at least, held the confidence of the men under them.

In this investigation the Conference Board has recorded a
large number of instances where the foremen have, for various
reasons, opposed the plans at the time of installation, but have
later reversed their opinions and supported them. A few
objected to them simply because they knew nothing about
them, but the great majority did so because they feared a
lessening of their authority. The fact that, through education,
so many of the foremen in this class have been converted to
favor of the Works Council plans, would seem to support the
theory, advanced in other chapters of this report, that the "sell-
ing" of the employee representation idea to the supervisory
force and workers alike, before its introduction into the plant,
is an important essential in its successful establishment.

Ill

The number of foremen whose aversion to the idea of works
committees has persisted is negligible, and these cases, accord-
ing to testimony of the employers concerned, are ascribable to
the character of the men.

In view of his position in the plant, the importance of the
foreman's attitude toward the Works Council, especially at its
inception, cannot be too strongly stressed. His loyal support
can go a long way toward making, and his determined oppo-
sition towards breaking, the organization.

In the words of one of the company officials of a western
lumber concern:

"The attitude of the foreman ... is the most important matter in
a plan of employee representation. . . . Unless they see the necessity
and value of such a plan it will be seriously handicapped, and if their
lack of understanding leads to opposition, a shop committee is almost
certain to fail."

The various attitudes which foremen have taken towards
employee representation plans are discussed below under the
three classes into which they naturally fall: Those that have
been in favor of the plans from their inception; those that have
regarded the idea at first with disfavor, but have come later to
see its effectiveness; and those that have remained indifferent
to it. No case was reported in which foremen who were favor-
ably inclined towards the Works Council at its installation,
later found reason to change this attitude.

Foremen in Favor of Councils from Their Inception

In a great many instances employers have experienced no
difficulty whatever in their foremen's acceptance of the Works
Council. Some, of a higher intelligence than their fellows,
have seen at once where the plan could support and assist them.
Others have found that it lightened the burden of settling dis-
putes. Still others have considered it wise to adopt the attitude
indicated to them by the management.

Those foremen whose favor of the plan at its inception was
due to an intelligent appreciation of its merits have seen in the
committees a means of insuring a permanent understanding
between management and employees, a way to make employees
see that their interests are one with those of their employer.
Of this point of view an eastern concern employing 46,000
men, and operating its Works Council under a "committee"
plan, reported:

"The attitude of our foremen towards the plan has been one of cordial
acceptance, as it is pretty generally realized that the object of the plan
is to assure and further the relationship between employee and manage-
ment upon a definite and durable basis of mutual understanding and
confidence — an accomplishment in which the foremen have a responsi- •
bility and are keenly interested."

A company official of a large shoe concern having employee
representation plans of the "committee" type in three factories,

112

found his foremen appreciating the increased interest of the
employees in general plant problems.

In two concerns of the "committee" type where foremen
favored the Works Council from its inception, they felt that it
relieved them of the onus of handling complaints. While all
cases came to them first, they were glad to have their decisions
reviewed by the committee, when they proved unsatisfactory to
the workers. A fair decision would seldom be reversed, and the
man who had gone back to his work disgruntled at his foreman's
settlement of the case and convinced of the unfairness of his
superior, was more likely to be satisfied with the decision reached
by fellow workers whom he himself had been instrumental
in electing. There seemed also to be a finality about these
decisions. They settled the question raised for all time. They
had been settled by employees and the man not satisfied got
little sympathy from his comrades.

Some employers found the number of grievances brought
forward by the employees decreasing under the employee repre-
sentation plan. However, the fact that fewer complaints are
brought to the attention of the foreman does not necessarily
mean that fewer employees are finding fault. Many plans
suggest that the employee discuss his trouble with one of his
representatives before he makes a formal complaint regarding
it to his foreman. A wise representative is often able to satisfy
his fellow worker and thus relieve his foreman of the settlement
of a case.

In this connection the Board's informant in a southern steei
company, whose plan is of the "committee" type, said:

"The foremen like it very much as it assumes much of their respon-
sibilities which make for friction and discontent and also releases them
to a little more time for the questions of production."

In an eastern concern manufacturing machinery, where the
Works Council is of the "committee" type, a foreman who
was interviewed said that employee representation had greatly
lessened the number of petty disputes and grievances brought
to him for settlement. He accounts for it in the following
manner:

"When a fellow comes at me with a red hot complaint, both of us are
pretty sure to go off the handle. When he takes it to the representative
it's different. They are both workers and the representative will take
time to smooth him down and talk things over with him. A good many
times they settle it up between them and I never hear of it. But if it
does come on to me, by the time I get it half the punch has gone out
of it."

In one or two cases where foremen have been reported as
favoring the employee representation plan from the time of
its installation, they have been given to understand that it was
"up to them" to adopt the policy of the management on this
question. This idea was made very clear by a company official

113

of a western lumber company whose Works Council is of the
"committee" type:

"Our foremen work in close harmony with the committees and with
ourselves. It is clearly understood between ourselves and our foremen
that foremen who do not take the same broad view of this organization
as we do, are not the type of foremen which we want. The attitude of
the foremen in questions of this kind is largely the attitude of the man-
agement of the plant."

In line with the same policy the manager of another western
lumber concern, operating a council of the same type, found
his foremen trying to adopt the attitude indicated to them by
the management:

"Our foremen as a rule have worked in line with the spirit evidenced
by the management, and, so far as they could, have overcome habits
formed under another system. We have had no fault to find with their
attitude."

Reports, regarding 352 employee representation plans show
the foremen in favor of the Works Council plan from it;s in-
ception. Of these, twenty-three were of the "Industrial Demo-
cracy" type, while 329 were of the "committee" type.

Foremen Who at First Regarded Works Councils

WITH Disfavor but Have Come Later

TO See Their Effectiveness

An interesting variety of reasons has been given for the
disfavor with which the foremen in a large number of firms
regarded the Works Councils when they were first installed,
and for the subsequent change of this attitude to one of support.
One of those most frequently put forward was the fear of a
curtailment of their authority. In a concern where foremen
have been accustomed to do the right as they saw it, the ease
with which this feeling could be overcome is obvious. Under
most plans all individual grievances must be taken up first with
the foreman, and if possible settled by him. When he is fair in
his dealings with his men, he is fairly sure to make acceptable
decisions. These close the cases, his prerogatives remain intact,
and he sees that employee representation has not lessened his
authority.

In no instance has a Works Council operating under the
"Industrial Democracy" plan reported that the foremen were
at first against employee representation because they feared
an abridgment of their authority. This was accounted for as
follows by an eastern firm whose Council was modeled after
this plan:

"Any tendency on the part of the foremen to feel their authority
lessened by the Works Council is checked in an 'Industrial Democracy.'
Under the 'committee' plan only a limited number are active members
of the Council, but in our organization every foreman has a place. Our
'Senate' is made up of the entire foreman body."

114

Several concerns of the "committee" type, however, reported
that fear lest their authority would be abridged, caused opposi-
tion among foremen at first, while the elimination of this fear
brought loyal support.

From an official of an eastern steel plant came the following:
"The foremen at first were afraid the committee system might abridge
their authority, but as all disputes and grievances of a personal char-
acter must first be taken up with the foremen the latter have come to
regard the committees as valued assistants in smoothing out annoy-
ances ... I am sure that 95% of our foremen would oppose giving up
the committee system."

A western lumber company expressed a similar opinion:

"Foremen as a rule do not take kindly to employee representation,
and we have experienced some difficulty in getting them to work in the
proper spirit to make the plan the success it should be. This is par-
ticularly a matter of education and the situation in this respect is better
than when we first started the plan. In my judgment it will always
be a source of more or less friction. The man who has advanced from
the ranks to the position of authority is inherently more or less jealous
of any machinery of influence which may curb his authority. It de-
pends, of course, upon the breadth of the man as to how promptly he
recognizes the desirability of working through committees and falling
in line accordingly."

In an eastern canning factory the slightly authoritative atti-
tude assumed by some of the employee representatives at the
time of the installation of the Council, had the eflfect of stimu-
lating in the foremen the feeling that their authority was being
curtailed and their discipline slipping away. In the words of
one of the company officials:

"When the committees were first formed some of the members
showed, unconsciously perhaps, that they felt they had assumed some
authority. The foremen were naturally on the lookout for such signs
and made a mental note of each incident that tended to show this feel-
ing. There was an idea also in the minds of the foremen that perhaps
they were being criticized in the eyes of the committee. The foremen
felt that perhaps they were missing some of their authority and for that
reason were not enthusiastic about the employee representation plan.
These ideas have since been dissipated, and while the foremen are not
eager to see the committee plan continued, they have no objection to its
existence."

Among those who reported that their foremen regarded the
plan of employee representation with disfavor at the time of its
inception, but later rallied to its support, a fair number of em-
ployers found that their foremen distrusted the innovation
generally, fearing it as something about which they knew noth-
ing. A little knowledge of its benefits, a little experience with
its working, were all that was necessary to change their attitude
from opposition to cooperation.

A western rubber company, whose Works Council is of the
"Industrial Democracy" type, stated that its foremen were

"... skeptical at first, with a gradual awakening to the commit-
tee's possibilities in simplifying the problems of supervision. Complete
cooperation at pre§ent."

115

Similarly a large western pump factory, operating under the
"committee" plan:

"At first the foremen were very skeptical about the works commit-
tees, but when the most ardent objector was elected as president he
became one of the workers of the committees. The foremen themselves,
after they got to know what the committees stood for, were very much
in favor of them and have done everything they could to help them
along."

From a western lumber company, also with a "committee"
plan:

"When this plan was first put into effect we had some trouble with
our foremen working in harmony with the committees, but just as soon
as they found out the beneficial effects we have found that they are
only too glad to work with these committees."

In view of the fact just brought out, the question arises of
having a regular plan for the education of the foremen, in con-
nection with the works committee. Many employers already
have organizations which supply this need. Foremen's clubs
or conferences where instruction is given in such subjects as
industrial methods, industrial relations, business administra-
tion, etc., are not uncommon in modern concerns. Others have
started organizations of this sort in connection with the Works
Councils. Still others have conducted informal discussions.
In these meetings foremen have been given, usually by some
company official, a thorough understanding of the employee
representation plan, its organization, its functions, and the
principles which underlie it.

In every instance where organizations of this kind were re-
ported, employers were enthusiastic over their experience with
them. The consensus of opinion was that such a method for
the education of the foreman to the Works Council idea had
made him a hearty supporter of the plan.

One of the company officials in a large western concern
engaged in the manufacture of farm machinery, whose Works
Council, operating under the "committee" plan, has had an
especially interesting and successful evolution, has accomplished
the desired result by means of foremen's meetings:

"The committee men undoubtedly come between foremen and their
workmen. The effect on our foremen has been that they resented the
authority that the committee exercised and took steps to combat it.
We have successfully overcome this difficulty by foremen's meetings.
The two bodies now thoroughly understand each other's prerogatives
and there is little friction between them."

An Ohio concern has reported success along this same line:
"Through extensive training we have developed our foremen along
the lines of economics and business administration so that they can see
the importance and need of closer cooperation between the men and the
management and committees in Congress. Foremen, in a number of
cases, serve on committees and also in Congress. They were elected
thereto by the employees who had faith in their judgment to protect
their interests."

116

An eastern steel company, with thirty thousand employees
and a representation plan of the "committee" type which has
been in operation for three years, has found the attitude of its
superintendents and foremen increasingly favorable as they
have become accustomed to the plan. The company deemed
it advisable to outline to their foremen what they regarded as
the important features of employee representation, and to sug-
gest methods for enlisting the interests of every new employee
in it.

The following instructions, "Hints to Foremen in Meeting
the New Employee" are placed in the hands of every foreman.
The first section expresses appreciation of the importance of
the foremen's position in the plant and the influence of their
attitude on production and working conditions. Regarding
the importance of the foremen's attitude, as a reflection of
that of the management, the instructions say:

"To the employees the foreman reflects the attitude and policy of the
management, and is viewed by the employees as the personal represent-
ative of the management. The reception accorded makes a marked
and lasting impression on the new employee, and if the foreman is to get
the necessary cooperation of his men, it is essential that they be fully
cognizant of the company's labor policy from the beginning of their
employment."

In order to impress on the foreman the attitude of the man-
agement towards the Works Council, and to assist him to make
a supporter of that organization out of every employee, a set
of suggestions follows:

"The plan of employees' representation, which is designed to bring
the management and the men closer together, is one of the most im-
portant policies of the company, and in order that the foreman may
have a clear idea of the best way to acquaint the new employee with
the company's interest in him the following hints are offered:

"1. Hand to the new employee a copy of the plan of employees*
representation.

"2. Introduce him, when possible, to the elected employees* repre-
sentatives of the department in which he is to work.

"3. Explain that his representative was elected at the preceding
election by the employees, by secret ballot, and that he will have an
opportunity to vote at the next election (providing he is in the employ
of the company 60 days).

"4. Explain that with a growing organization, the company desires
to retain that close personal relationship with its employees that it had
when the plants were much smaller, and in order that it may have a
clear idea at all times of the employees' working conditions, has adopted
the plan of employees' representation as a means of accomplishing this
end.

"5. Explain that the new emploj^ee may take up with you any mat-
ter which in his opinion requires adjustment, and that if you are unable
to effect a settlement, the plan of employees' representation provides a
means for him to take the matter up higher, either in person or through
his representatives.

"6. Impress upon the new employee the idea that the plan of repre-
sentation is not merely for the purpose of handling grievances, but is
rather a medium of bringing the management and employees closer

117

together and that the company will welcome suggestions from the
employees for the betterment of plant and working conditions.

"7. We would suggest that you read the plan over very carefully,
and we will welcome any suggestions or inquiries you may care to make
regarding its provisions."

Still another phase has been noted in the attitude of foremen
who at first regarded the employee representation plan with
disfavor, but came later to see its effectiveness. Several cases
have been reported where the attitudes of foremen in the same
plant varied all the way from open opposition to hearty support
of the idea.

Individuals in these cases could, in all probability, be placed
in the various classes previously discussed. Those who adopted
the idea at once would be the more intelligent among the fore-
men. Those who were slower to be converted to it could be
classed as fearful of a curtailment of their authority or in need
of education to its merits.

In every case of this kind reported there was a tendency on
the part of those indifferent to it to become supporters of the
plan. This was true of a paper concern with a Works Council
of the "committee" type, whose employees number three
thousand. An official of the company wrote:

"When the works committee was first established the foremen re-
garded it in various ways. Some were thoroughly sold, others were
merely passive, and some were openly antagonistic. Little by little
the last group has come over at least to the middle group, and by far the
larger number of the plant to-day have come to depend upon the works
cornmittee representatives in their work in dealing with employees.
This change of sentiment has been brought about not only by the
splendid spirit which the works committee in general have shown, but
also by the absolutely wholehearted support of the plan by the man-
agement."

An eastern electric company whose employees exceed ten
thousand and whose Works Council is operating under the
"committee" plan, reported a similar experience:

"Some foremen saw the possibilities and advantages of the plan at
once. Others saw only difficulties and what they thought to be the
curtailment of authority in their position. We think that the first
group is steadily increasing and the second group steadily diminishing."

Reports concerning seventy-two employee representation
plans stated that at first foremen regarded the employee repre-
sentation plan with disfavor but later came to see its effective-
ness. Of these, fifteen were of the "Industrial Democracy"
type, while fifty-seven were of the "committee" type.

Foremen Who Have Remained Indifferent
TO Works Councils
In tracing the reasons for opposition or indifference to em-
ployee representation on the part of the foremen, we naturally
look first on the character of the men employed in these posi-
tions. The man who is arbitrary, and who carries this char-

118

acteristic into the handling of his men, naturally does not favor
an organization which is going to limit his power. If he has
been in the habit of using his disciplinary power in an absolute
manner, there is more than a chance that his employees are
"going after" every decision he renders when the Works Council
gives them their chance. It is difficult, too, to persuade a man
of this kind to give the representation plan a fair trial. He is
not a progressive type, and he would be able to see in the organ-
ization only an attempt to take from him his position as "boss."
Unless foremen of this character can be educated to at least a
tolerant attitude towards a plan of this sort, it is impossible
to achieve a high type of success. The cooperation of all parties
concerned is essential.

Some employers have so far failed to accomplish this result.
The vice-president of a western lumber concern of the "com-
mittee" type gave this as its experience:

"Among the men of limited vision and arbitrary disposition both
among our foremen and superintendents we found opposition at first,
and it still exists in one form or another in certain places."

A mid-western motor car company, operating a Works Council
of the "committee" type, found the foremen resented the plan
because it gave the workers a direct avenue of approach to the
management. While they have not openly opposed it, their
antagonism has been so apparent that the vice-president of the
company feared an attempt to retaliate on the employee repre-
sentatives. He has taken measures to eliminate such a con-
dition and has succeeded in so doing. But he has failed, so
far, to overcome his foremen's objections to employee repre-
sentation. His statement of the case was as follows:

"Our foremen did not see where the plan held any assistance for
them and apparently they were afraid that their authority would be
curtailed by the plan. This last is the fundamental reason for the
resistance that they have given. . . . They have guarded very jeal-
ously against any effort on the part of the management to take part in
the hiring and discharging of men, and in becoming interested in the
relations of the men to the company. The foremen wanted to be the
sole avenue of approach between the men and the company. ... I
am inclined to believe that the foremen will never look with favor upon
the plan. . . .

"For fear of retaliation by the foremen against committeemen I have
kept in very close touch with the situation and when I would hear com-
plaints and opinions expressed by the foremen antagonistic to the men's
committee, I always took steps to make it very plain that any foreman
would be discharged who mistreated any of the men on the committee.
A number of times men on the committee reported the foremen as
being antagonistic and I was always able to change the conditions
before any serious consequences were brought about. ... I made it a
rule that no man was to be paid off without my O.K., also every man
discharged was to have an opportunity to sign a statement as to the
reasons why he was leaving. . . .

119

"I have always found the men more than fair. ... I am of the
opinion that there would be practically no trouble at all should the
managers use anything like as good judgment as is used by the men."

A few cases remain where employers have not traced the
reason for the indifferent attitude of their foremen towards
their Works Councils. Among these is a company official of
an eastern foundry. Enthusiastic himself over his "Industrial
Democracy," he has not been able to inspire his foremen with
a like feeling. He reported as follows:

"Foremen tolerate the Works Council but their action is passive
rather than active. They do not seem to have got warmed up to the
plan."

Attempts made by the same firm to inspire in the foremen a
real interest in the organization have been so far unsuccessful.
The Board's correspondent, however, is not discouraged and
has planned a further campaign with this object in view.

An official of an eastern textile mill having an "Industrial
Democracy" plan said that the attitude of his foremen towards
the Council was "only partially satisfactory." A statement
made by him in a later discussion might account, in part, for
this attitude on the part of the foremen. When asked whether
by reason of his experience with it, he would recommend the
introduction of a Works Council plan into any plant which was
under his management, he said:

"It is doubtful whether or not I should recommend the introduction
of the Works Council in an organization over which I had control."

Employers who are not wholly and sincerely in favor ot
employee representation will naturally find that their foremen
do not support the plan. The attitude of the foremen towards
any plant matter tends to be a reflection of that of the man-
agement. They are quick to detect a lack of sincerity or of
enthusiasm towards the organization and to govern themselves
accordingly.

Sixteen plants reported that their foremen had remained
indifi^erent to the employee representation plan. Of these,
eight were organized after the "Industrial Democracy" type,
while eight were operating under the "committee" plan.

Reports regarding the attitude which foremen had adopted
toward their employee representation plans were received from
440 plants. In 352 of these it was stated that their foremen
had been in favor of the plan from its inception. In 72 they
had regarded it at first with disfavor but had come later to see
its effectiveness. Only 16 reported continued indifference to
the plan.

A glance at these figures will show the trend of feeling in
this quarter regarding employee representation. The majority

120

have fallen in with the idea at once, whether from a real appre-
ciation of its meaning to industry or from a feeling that this
course was the wise one to pursue. Of those who met the plans
with indifference, by far the greater number have come later
to favor them. Their fears regarding its effect on their positions
have been allayed by their experience with it or their education
to it. The relatively small number of firms whose foremen
have remained indifferent to the plan, leaves the balance well
on the side of those who have favored employee representation.

121

CHAPTER X

EFFECT OF WORKS COUNCILS ON RELATIONS
BETWEEN FOREMEN AND EMPLOYEES

One of the most satisfactory results produced by employee
representation has been the improvement effected, in many
cases, in the relations between the foremen and the workers.
In nearly every instance covered by the present investigation
of the National Industrial Conference Board, where friendly
relations did not exist between the two groups prior to the
institution of the Works Council, employers reported that the
employee representation plan changed the feeling between
them from autocratic authority on one side and unquestioned
obedience on the other, to relations ranging all the way from
mutual tolerance to cooperation with a common objective.

In many industrial plants the conception of the foreman's
position formerly took little consideration of the human element.
His attitude tended to be an absolute one; orders were orders,
and as such they were not to be questioned. The complaints
of the workers were often treated in an arbitrary way; decisions
might be fair, but were frequently rendered in such a way as
to antagonize the employees concerned. In a plant where a
plan of employee representation has the sincere support of the
management, it is not possible for the foremen to deal with
those under them in this arbitrary manner. The works com-
mittees act as a check on the foremen, and, where necessary,
effect a change in their methods of dealing with their men, with
a resulting change in the workers' attitude toward them. The
decisions of a foreman in matters brought to him by dissatisfied
employees are subject, under the committee system, to review
and possible reversal by the Works Council. It is possible
for him to keep the bulk of the departmental discipline in his
own hands only by the exercise of fairness and tact in the making
and rendering of his decisions.

Company officials, foremen, and employees in various plants
were interviewed on this phase of employee representation.
In the great majority of cases the opinions of all three classes
coincided. With the introduction of Works Councils foremen
had, in varying degrees, seen the wisdom of adopting the method
of treating their subordinates outlined above, with a resulting
increase of good will on the part of the workers. A working
force satisfied that it is getting a "square deal," and, therefore,
more or less contented with its environment, naturally tends
to do better work and to achieve more and better production
than one which feels it is being treated unjustly.

122

Several employers reported that workers had found their
foremen more approachable as a result of the employee repre-
sentation plan, and a better feeling toward them had ensued.
An eastern steel company, with a Works Council of the
"Industrial Democracy" type, said:

"Our men tell us the foremen have been civilized since we started
the committee."

The Board's correspondent, while characterizing this as
"imaginary," stated that there was a noticeable change in the
feeling of the men toward the foremen, who, as he states, were
no longer regarded as "little tin gods."

The president of an eastern hardware concern having a Works
Council of the "committee" type, found employee representa-
tion freeing his workers from the domination of the arbitrary
foremen. Following this came an improvement in the relations
between the two:

"There is quite an advantage with this committee in the relationship
between the foremen and the workers. They know that they have an
influential spokesman to champion their cause, and are not subject to
the will and whim of their foremen."

Statements made by employees who were interviewed as to
their views on Works Councils bore out the opinions expressed
on this subject by the employers. In an eastern silver company
under the "committee" plan, employees said:

"Foremen have been made more approachable by the Works Council.
All employees receive better treatment from them."

In a steel company where a "committee" plan is in operation,
affecting 30,000 men, employee representatives who were inter-
viewed, thought the organization a good thing. Several favored
it because of the change in their foremen. In their own words:

"The foremen are more reasonable, none of this 'if-you-don't-like-it-
get-out' business. That can't be done any more.

"In the old days the foremen used to say 'Ich weiss; du weiss nicht.'
They are more willing to be considerate with the men now because they
know the company is behind the men to see that they get a square deal."

The following statement was made by a man who had been
in the employ of the company for forty-two years:

"There is a great difference in the foremen. They don't 'dog' the
men any more. The representative is not ignored or slurred by the
foremen."

Foremen, also, in nearly all cases said that they found a new
spirit of cooperation among the workers as a result of the rep-
resentation plan.

Foremen were interviewed in an eastern silk company which
operates two Councils of the "Industrial Democracy" type.
They had found that the "Collective Economy Dividend,"
which is a feature of this type of employee representation plan,
had been a powerful factor in improving the employees' attitude
toward- their work:

123

"Their interest in their work increased by leaps and bounds. When
they found that what they saved in production was split 50-50, and
they got some instead of the boss all, they were constantly figuring
how they could do more in less time. Any fellow who 'sojered' on the
job was accountable to them because he was losing money for them,
and they soon told him 'where he got off.' The plan has brought about
an entirely different feeling toward their work."

The Works Council has been a means of improving the rela-
tions between the foremen and the workers in still another way.
Every progressive employer welcomes suggestions from the
"man on the job," who is in an excellent position to make them.
Whether he makes the valuable suggestions depends on his
attitude toward his job, and this is determined in large measure
by his relations with his "boss." In some plants short-sighted
foremen have discouraged suggestions by the workers. Instead
of seeing in them a means to increase the output of the depart-
ment, they have looked upon them simply as criticisms of their
management.

One of the company officials of a western steamship line,
whose Works Council is of the "committee" type, stated:

"Previous to the installation of our dock committee, which is the
term we use for our Works Council, it was assumed that the men would
make suggestions to their foremen and the foremen to the superintend-
ents, and so on, but no such suggestions were made. They had no
interest in the company; and they felt if they made any suggestions
that they were intruding. Indeed, their experience taught them this
because, as a rule, the foreman would resent constructive suggestions as
an interference in his business. ... I am afraid he rebuffed rather
than encouraged suggestions, meeting such suggestions with the atti-
tude that they were adverse criticisms of his administration."

A New England shoe company having an "Industrial Democ-
racy" plan, reported the same experience. In both of these
cases the introduction of the Works Council, with its machinery
for making suggestions, has, perforce, overcome the hostile
attitude of the foremen. The resulting increase in suggestions
has been gratifying.

The steamship company's representative, in a later discussion
said:

"On the installation of our committees and when we invited sugges-
tions, a great many were received. It was shown that the men had
been thinking along these lines and that they had good constructive
ideas which they had long desired to express. As time goes by we find
that the shop knowledge in the minds of these men is a very valuable
asset to the company — a mine of information under our very streets,
that of course we knew nothing about."

Information was received from 334 plants concerning the
effect of Works Councils on the relations between foremen and
workers. Of these, 327 found that since the installation of the
Council this relation had improved, the opinions varying all
the way from "slightly better," to "relations have been brought
to a point that leaves little to be desired." In twenty-seven of

124

the plants the Works Councils were of the "Industrial Democ-
racy" type, while three hundred were operating plans of the
"committee" type.

Seven firms, five having plans of the "committee" type and
two of the "Industrial Democracy" type, reported that the
relations between their foremen and their workers had always
been pleasant and that there had been no change under the
Works Council.

One plant operating a plan of the "Industrial Democracy"
type and three having plans of the "committee" type, stated
that there had been no change in the relations between foremen
and workers.

One firm, whose Council was of the "committee" type, found
it "difficult to judge" whether or not the installation of the
Works Council had caused any change in the relations Between
foremen and workers.

125

CHAPTER XI

CHARACTER OF EMPLOYEE REPRESENTATIVES

The present investigation by the National Industrial Con-
ference Board shows that in the larger proportion of cases
employees have exercised good judgment in choosing their
representatives. Employers almost without ex'ception spoke
in words of high commendation of the men elected to the
Councils. Several employers used, without qualification, the
following terms in describing the employee representatives —
"the best available," "best type of men and women in respective
departments," "as good as could be chosen." Two companies
reported that, had they had the option of choosing the employee
representatives, they would have chosen the identical men
elected by the employees themselves. Several other employers
stated that "with but few exceptions" or "in almost every
case" they would have chosen the same representatives as did
the employees.

Eleven companies with Works Councils in forty-five plants
reported that the employee representatives were, for the most
part, chosen from the older employees, who had had several
years of service with the firms. The experience of a company
manufacturing agricultural machinery is of particular interest
in this connection. This company has Works Councils in
operation in twenty-four plants, the majority of which were
instituted in 1919.

"From the very inception of the plan the employees have continu-
ingly elected men and women long in the service of the company, of
mature age and high standing in the community as their representa-
tives. At its inauguration the average age of employee representatives
was 38 years, the average length of service 7 years, andSSpercent of the
representatives were married. To-day, with an increased number of
employee representatives, due to the establishment of new Councils
and as the result of semi-annual and special elections, the personnel of
the employee representatives has the same percentage of married men
and women (namely, 85 per cent), the average age is 39 years, 1 month,
and the average length of service 8 years, 9 months."

Another large concern reported that of a group of 314 elected
representatives in fourteen plants in which Works Councils
were operating, the average age was 37.9 years and the average
length of service 12.6 years.

Another group of employers commented in particular upon
the fact that the employees chose as their representatives men
of more than average intelligence.

"The representatives chosen by the employees are undoubt-
edly the most intelligent people in the mill," reported the pres-

126

ident of a silk mill with a Works Council of the "Industrial
Democracy" type.

Another characteristic of the employee representatives
referred to by employers, was their fairmindedness and ability
to form correct and impartial judgments upon the problems
discussed in the Council meetings. Thus an official of a western
plant employing 750 workers, wrote:

"The representatives chosen to our Congress are those who have
proven themselves of sound judgment and who have been fair and
impartial in all decisions. They have been elected for the work they
can do and not on personal popularity."

Other employers wrote that the saner, more conservative
type of employees had been chosen as representatives. Seven
lumber companies, situated in Pacific Coast states, where the
I. W. W, element was quite strong and had endeavored to dis-
rupt the employee representation plans, were unanimous in
their statements to this effect.

Similarly an eastern concern employing 8,200 employees,
wrote :

"In 85 per cent of the committeemen elected we feel that their selec-
tion was very good from the standpoint of selecting older employees,
who are fairly conservative, married, with education, etc."

On the other hand, some employers stated that the employees
had in some cases elected men more for their popularity than
for their ability as leaders. One plant wrote that even where
representatives has been so chosen, the education which these
men obtained through the Council had developed them into
capable leaders. A company official of this concern, which has
a Works Council of the "committee" type, and which employs
1,200 men, wrote:

"By the elections, leaders among the men are brought to the fore.
That element of leadership in the beginning may be but popularity.
However, given a man who in the eyes of his comrades is trusted and
admired, wonders can be worked by a little patient, careful, and unim-
peachably honest education — information regarding the employer's
side of the case."

Three plants reported that where men who were proven
unfit had been elected to the Councils, the employees them-
selves took steps to remove the representatives at the earliest
opportunity. This was done either by recalling them, or by
not returning them to the Council when their term of office
expired. An eastern plant in which a Works Council of the
"Industrial Democracy" type is operating, wrote that although
the representatives were on the whole "of high grade, being in
many cases the ones that would have been placed in the House
if the management had made the choice, there had been 'cases
where popularity was the basis of choice.* " An especially glar-
ing example of this occurred in one mill, where the workers

127

realized that they had made a mistake and recalled three of
their representatives.

The following came from an eastern textile plant, employing
700 employees, in which there is a Works Council of the "In-
dustrial Democracy" type:

"When the plan was first introduced two or three representatives of
'Bolshevik' turn of mind were selected, but the workers later insisted
upon their discharge. Since that time representatives have been
chosen because of their capacity for leadership and working qualifica-
tions."

A number of employers reported that when the Works Council
was initiated the employees used less discrimination in their
choice of representatives than they did later, when the plan had
been in operation for a longer time.

A Pacific Coast steamship company with a Works Council
covering its warehousemen, longshoremen, dock clerks, coopers,
etc., wrote:

"The first representatives were radicals chosen because of their noise,
and because of their promises of what they could do if given a chance to
tell the management where to head in. At the first following election,
workers by their votes began to indicate their desire to elect saner,
more conservative men to represent them, and this indication grows
more marked with each subsequent election, so that we have now in
our committees elected by the men, workers who are conservative, but
sanely constructive, and we are just entering an era of real constructive
growth toward highly improved relations."

One of the objects of a Works Council is to enable the em-
ployees, and more particularly the representatives of the
employees, to learn at first hand the reasons why management
believes that certain things should be done. They are shown
"the other side" of the case. What may have appeared wholly
unnecessary, perhaps unjust, on the part of the management,
assumes an entirely different aspect when the representatives
are shown the why and the wherefore of such measures. It
has been the experience of many employers that a marked
change takes place in the attitude of men with radical views,
after their election to the Works Council. This was explained
by one employer as follows:

"Men are sobered by responsibility. They are steadied. The new

light strikes them. They carry to their constituents the new thought.

They materially ameliorate viewpoints, radical and loose thinking and

thereby, of course, improve conditions and add to the sum total of

employee satisfaction."

One company reported that of the few radicals elected by the
employees, all had become conservative except one. In the
same company "one radical was defeated for re-election because
he became too much of a company man."

Another eastern company with 1,700 workers, said that
although a minority of the representatives were so radical "that
nothing can be done with them, generally speaking these men

128

are strong characters and when faced with responsibility of
decision they have somewhat receded from their ultra-radical
views."

"Thq more radical, complaining type of representative has
been converted by the saner key men who have always pre-
dominated," wrote the president of a middle western concern
manufacturing heavy machinery.

On account of the opportunity which the Works Council
afforded an employer to come in direct contact with the repre-
sentatives and place before them facts regarding the industry,
of which they had been in ignorance previously, the president
of a large concern with Works Councils in four plants, stated:

"We are inclined to welcome the latter type (the radical) as we prefer
to have them out in the open to present their imaginary grievances and
complaints before their fellow members at the meetings where the man-
agement has an opportunity to place the subject in the proper light
before the committee."

After an experience with the "worst grouches and kickers"
who were elected to the Council by several departments,

"... partly to put them in a place where they could see for themselves
what was going on and partly because no other men wanted to take the
jobs and have these kickers in their department to report to,"

the vice-president of an eastern concern wrote:

"We should encourage the election of such men in the organization
for the good it does them and the whole organization. The election
of these malcontents proved far more wise than we dreamed of at the
time. These men have got into a position where they have responsi-
bility and where they see more of the problems than they could other-
wise have seen and they are making not only good representatives, but
are becoming much better men themselves."

Another plant, with a Council of the "committee" type,
wrote that it found the representatives of the radical type "the
most successful in presenting to their 'constituents' the views
of the management."

Three firms alone out of 150 furnishing information regarding
the type of employee representatives elected by the employees,
reported that they had been wholly unsatisfactory. In one
steel company employing 700 workers, when the plan of the
"committee" type was submitted to the employees for their
approval in 1919, "the majority wishing the Works Council
was very small." The Board's correspondent in the plant,
writing that the Works Council was not instituted as the result
of labor troubles, stated:

"We have had mediocre representatives chosen by employees, and in
several instances we have been unsuccessful in choosing other than the
original delegates, even though the Council has been functioning
approximately two years, while elections are held each six months."

129

A second company characterized the employee representatives
as "the most radical type, or rather their leaders."

The third company, employing 2,000 men, whose Council
of the "committee" type was formed in December, 1918,
reported :

"Rather light-weight representatives have been chosen by employees
and not the substantial backbone of the personnel of the works."

The vice-president of this company wrote that because "the
elected representatives do not 'draw much water' either with
the men or with the company," the management,

"... when desiring to take up anything with the men, in a construc-
tive manner of consultation, finds it necessary to make selection of older
and more suitable employees, at the same time giving recognition to the
Executive Committee of the Board of Representatives, so that they
shall not be left out of it."

When the Works Council was introduced into this plan the
employees were not given a voice in its formulation, and, al-
though they voted to accept it, only 50% of the employees
cast ballots. The union employees regarded it as a plan to dis-
organize labor organizations, and did not give their support.
Employee representatives who were interviewed said the
employees as a whole had lost interest in the plan because of
the opposition of the superintendents toward it. They expressed
confidence in the general manager of the plant, but the minor
officials had put so many things in the way of the successful
operation of the plan that the representatives found it almost
impossible to get anything done. This was their explanation of
the election in some cases of men whom the employees knew to
be incapable. They had come to lose all confidence in the plan
and so made a joke of the elections.

The procedure adopted by the management of the company,
as outlined by the vice-president, would seem to furnish an
additional stimulus to the employees for electing men of small
calibre as their representatives. Apparently no effort was
made by the management to educate the representatives to the
responsibilities which were theirs as members of the Council.
Instead of doing this, the company dealt with other employees
in the plant when it wished to discuss matters requiring adjust-
ment. This disregard for the wishes of the employees, as ex-
pressed in their selection of representatives, could not but
affect them as it did. Ample evidence has been given above of
the changed viewpoint which employee representatives have
usually adopted after their election to the Councils. There is
of course, the possibility that men of such small intelligence and
biased ideas might be elected, that it would be impossible to
develop them into fair-minded and capable leaders, but most
employers have found that the representatives want to be fair
and do the right thing. From the evidence at hand it appears

130

that the attitude which the management in this plant adopted
toward the representation plan was the determining factor with
regard to the type of employees who were elected as represen-
tatives.

From the statements quoted above, it is evident that em-
ployees in the vast majority of cases have exercised good dis-
crimination in their choice of representatives. While it is not
universally true that the representatives selected have been of
the highest type, it is of particular interest to learn that in
many cases men who have been chosen primarily on account of
their popularity have developed into leaders, through the
education they have received as members of the Councils.
This is especially so with regard to men whose views, radical at
first, have been modified after serving on the Councils.

131

CHAPTER XII

THE EFFECT OF WORKS COUNCILS
ON LABOR TURNOVER

The effect of employee representation on labor turnover in
industrial plants is difficult to measure because of various
complicating factors which might account for the result inde-
pendently. A reduction in turnover at a time of high production,
when work is plentiful, wages high and labor scarce, like the
war period, and that which immediately followed it, might be
traceable to conditions within the plant which would offer more
to employees than competing concerns could hold out, such as
higher wages and superior benefitis, in which a successfully
operating Works Council might be included. Only conclusive
evidence, however, would justify giving the credit for a reduced
turnover exclusively to such an organization in a time of extreme
industrial depression with resulting unemployment like that
through which the country has since been passing.

Even when employees' committees are said to affect labor
turnover favorably, the result is usually produced indirectly.
That is, certain conditions are present in the plant because of
the Works Council, and because of these conditions employees
are content to remain. It may be that the organization has
improved the relations between management and employees;
that each has learned the other's viewpoint, with a result of
greatly increased harmony and contentment. The workers'
grievance can be discovered and settled by executives before it
becomes serious enough to lead him to seek employment else-
where. And often that which under other conditions would
have been a grievance disappears when the worker knows his
employer's side of the question.

There is frequently present also, as part of many Works
Council plans, an additional incentive to remain on the job —
the financial one. The "Industrial Democracy" type of council
usually includes the "Collective Economy Dividend," which is
a return to the workers of one-half of the savings made in the
cost of production, following the formation of the Works
Council. With this system in effect employees come to realize
the disadvantage of a large labor turnover, because it affects
their own earnings. It is also possible to make labor turn-
over one of the determining factors of the amount to be paid in
these dividends, as in the case of an eastern silk mill:

"Reduction of labor turnover was accomplished through including
this factor in the 'Collective Economy Dividend.' The employees were
anxious that only employees who were likely to remain with the com-

132

pany should be employed. This resulted in a considerable reduction in
the turnover."

Various other influences in addition to those already men-
tioned must be taken into consideration as bearing on labor
turnover. Reports from industrial concerns describe such
•stabilizing features as life insurance, sick and accident benefits,
pensions for retired employees, plans for stock ownership for
employees, etc.

In view of these facts little information of a positive or
statistical nature can be given on this subject. The statements
which follow are the carefully weighed opinions of the employers
interviewed. The discussions are of so varied a nature that no
attempt has been made to classify them.

In a western packing company, where a Council of the
"committee" type is in operation, the question of the influence
of the plan on labor turnover was discussed by an employee,
the chairman of the Works Council. In his opinion the value of
the organization in this phase of the industrial question lay in
the production of contentment among employees, by disposing
of their grievances:

"Our labor turnover is very small at this time due to the general con-
dition of unemployment. However, considering the past, we would say
that the Works Council in its work has been able to reduce the turnover
considerably, settling disputes among individuals, and departments as
a whole."

The report given by one of the company oflicials of another
western concern manufacturing agricultural implements and
having Works Councils of the committee type in operation in
twenty-four plants, covered the efi^ect of these organizations on
labor turnover during the period of industrial depression. In
his opinion the influence had been a favorable one:

"It is difficult to state what has been the effect of Works Councils
upon labor turnover as there are many different factors bearing on this
figure. The Works Councils have now been established two years —
years which have been marked by turbulence of industrial relations in
the world and country at large, as well as in the individual communi-
ties in which our factories are operated. During this time there has
been no loss of direct contact between the men and the management of
the . . . company at those plants where Councils have been estab-
lished.

"There can be no question but that the intimate contact established
through the Works Council has operated to heighten the morale of the
employees as well as to increase continuity of service."

An eastern concern, where printing machinery is manu-
factured, employs three thousand men and operates a Council
of the "committee" type. An official of this company was of
the opinion that the better understanding between management
and employees, created by the establishment of employees*
committees in the plant, had greatly decreased the number of
men quitting because of personal grievances:

133

"We cannot say that the employees* committee, as a whole, has
reduced labor turnover, for the reason that the general conditions have
been changed to such an extent that there is little labor turnover now
as compared with a year and two years ago. We do know, however,
that we have very few leaving now, so far as the relationship between
the management and the workers is concerned, for the reason that
grievances are taken up with the department shop committee, and are
usually settled by them with the foreman, unless some principle is
involved, when the department shop committee usually takes it up with
the works manager, and settlement is readily obtained."

The vice-president of a western public service concern reported
the successful operation of a "company union" among the
employees. It was his opinion that the workers had been
brought thereby to a realization of their 'personal interest in
the business, to the extent of decreasing the number of dis-
satisfied workers, and so lowering the labor turnover:

"The industrial plan under which all of the labor required for this
utility and its associated properties works, has exerted an important
influence in reducing labor turnover and in promoting individual and
group efforts to get the maximum output and accordingly, with a given
scale of wages, the lowest unit costs. The plan is designed to develop
and emphasize the mutuality of the interests that exist between rank
and file of the workers, supervisory force and the employer."

An official of a western lumber concern where a Council of
the "committee" type is in operation, believed that employee
representation, with its humanizing effect on both executives
and workers, had been in large measure responsible for the
decrease in labor turnover noted in the plant:

"We do not give all the credit for the decrease in turnover to any of
these committees, nor to any other one thing. The organization has
brought about a better feeling between the employer and employee.
Each party has become more considerate of the other; each under-
stands the other better. In some organizations and at some times
both employer and employees vie with each other to see which can be
the most unselfish, and it is all these things and many others coming
from better human relationship that have not only reduced the labor
turnover but have had a tendency to better all conditions for both em-
ployer and employees. It seems to us it does not take figures or
detailed research to establish this fact."

In a section of the country where labor turnover, due to local
conditions, has always been high, an eastern glove factory
believed that its Works Council, of the "committee" type had,
to some extent, lowered turnover by the better relations created
between executives and workers:

"The greater part of the fine gloves made in the United States are
made in this county, and since there are so many firms all using the
same class of labor, it is easy for labor to change employment at the
slightest provocation. We feel that the percentage of such changes
from our factory has been largely reduced because of the better under-
standing obtained, as between management and worker, through the
medium of our Works Council. We believe that the clearer view of
shop methods and the necessity for certain rules obtained by the
worker through his representative in Council has effectually killed
unnecessary dissatisfaction and, therefore, it has in many cases pre-
vented the impulse to change jobs."

134

A southern oil company, operating a Council of the "commit-
tee" type, has felt its influence on lahor turnover in a rather
roundabout way. Various welfare provisions within the plant,
instituted by the company, tended to stabilize the employee
body. But the company was of the opinion that the employee
representation plan had not only served to impress upon the
workers the safeguards with which the company had surrounded
them, but also to induce an appreciation of them from a mone-
tary standpoint.

Less definite than those opinions already quoted, was the
statement regarding the influence of an employee representation
plan on labor turnover, submitted by the president of a southern
cotton mill, whose Works Council, of the "Industrial Democ-
racy" type, has been operating for upwards of two years. In
this case also so many other elements in the plant — a flourishing
industrial Y. M. C. A., new dormitories, group insurance, and
special educational courses, to mention only a few — were
regarded as contributing factors, that it was impossible to
determine how much bearing any one of them has on the
improved stability of the employee body.

The opinion given by the treasurer of a western furniture
plant, whose Council is of the "Industrial Democracy" type,
that "the labor turnover has been reduced since the organization
of this Board," was later explained and qualified by the same
official as follows:

"We do not give our Board of Cooperation all of the credit for hold-
ing down our turnover. We are under the impression that it is as
much due to the fact that there is so much unemployment, therefore
more of a desire to hold their jobs. Our men are also much interested
in our group life insurance, which is increased annually, as well as the
fact that they are covered by health and accident insurance while in
our employ."

One of the company officials of an eastern firm, operating a
representation plan of the "committee" type, was unable to
state what percentage of the reduction in turnover in the plant
was due to the advent of the Works Council plan, and what
part should be credited to other forces at work in the factory.
He stated, however, the fact that this decrease was coincident
with the organization of the representation plan, would seem
to point to a connection between the two. One point in this
connection not mentioned before was brought out by this official
in his report. He had found the Works Council making a strong
appeal to his skilled workmen, and, by raising their morale,
increasing their length of service. In his own words:

"Labor turnover has been reduced about 50%, the big item in this
respect being that instead of half of our turnover being skilled men
it is changed to such an extent that 90% of the turnover is made up
of unskilled men. Through the committee we have been able to
create and maintain a family spirit that holds the higher grade man
after we have trained him, in other words, made him a specialist in
our- line of work."

135

The reduction of labor turnover following the introduction of
a Council of the "Industrial Democracy" type in a western
rubber concern was mainly due, according to the report of a
company official, to the financial gain afforded the employees
by the bonus feature of the plan.

In a chapter which follows, a detailed report received from
one of the company officials in a western printing concern
gives a record of a large amount of constructive work accom-
plished by the employees' committees.' Some of this work,
performed by two of the sub-committees of the Council, has
resulted in a reduced labor turnover. The statement of one of
the company officials was:

"The activities of our attendance and tardiness and our employment
and discharge committees have had a bearing on the reduction of labor
turnover.

"Through records obtained by the attendance and tardiness com-
mittee information is at hand showing the efficiency lost by employees
being absent or tardy. After pay day absenteeism has been closely
checked and recommendations offered where chronic absentees were
concerned. Personal investigations have been conducted by this
group and great cooperation extended to department heads in establish-
ing better conditions. Their aim is to prevent loss of time which is
harmful to bigger Congressional workings. The absentee habit is not
tolerated in this plant.

"The committee on employment and discharge is charged with the
responsibility of keeping up the high class of men we now have em-
ployed. If a dissatisfied employee leaves the service it is the duty of
this committee to analyze the cause and decide as to the justice of the
case. They have so decided in the past on matters of this kind that our
employees know their positions cannot be taken away from them with-
out due cause. But when a real cause is present the committee will be
the first to suggest the dismissal of one who is not up to our standard."

The vice-president and general manager of a western motor
car company having a Council of the "committee" type, was
inclined to give most of the credit for the fact that "turnover
has been almost eliminated" in the plant, to his representation
plan. This had been accomplished, he believed, by the new
spirit of cooperation which the management had been able to
arouse in the workers by recognition of their importance in the
efficient functioning of the plant. As a means for eliminating
that friction which was caused by small grievances and often
resulted in labor turnover, the Works Council had proven
worth while:

"In my opinion the reason the organization of the men's committee
caused a reduction in the labor turnover is due to the fact that a large
number of small matters which ordinarily cause friction in the shop
were brought up by the men's committee and disposed of quickly.
Another thing, when some man would begin to talk about leaving the
plant and going elsewhere, the men's committee would bring the matter
to my attention and I would take steps to hold the man, if possible.
* See p. 177.

136

"I really believe that . . . the close contact between the manage-
ment and the men and the elimination of petty irritating items was
the real reason for the reduction in the labor turnover. In other
. words, I do not consider it was the men's committee itself, nor do I
consider that it was my attitude which caused this reduction, but it was
due to a medium being established where all matters could be quickly
handled.

"I am firmly convinced that the recognition means more to the men
than anything else. In other words, in most concerns the management
is firmly intrenched, of course, and inclined to be arbitrary and indiffer-
ent if conditions are such that they can be so. Furthermore, the old
style idea was for both sides to be very antagonistic. My opinion is
that the men are more than anxious to cooperate and also that they
are wanting to take a bigger part than simply working in the shop.
They know how vitally important it is for the company to have their
good will and cooperation, and in return for this they want to have the
satisfaction of reasonable recognition from their management."

Information was received regarding the effect which 349 em-
ployee representation plans had had on labor turnover. In the
foregoing chapter the opinions quoted are representative of
those employers who believed that employee representation
had had a favorable influence on labor turnover.

In twenty-five concerns employers stated their inability to
determine whether or to what extent their Councils had been
instrumental in decreasing turnover. While their committees
were functioning successfully and their turnover had, in nearly
every case, been cut, there seemed to be so many other causal
factors that an opinion on the subject could not be risked.

In fourteen plants executives have not been able to trace any
decrease in labor turnover for which employee representation
might be responsible. In a few of these cases the turnover had
always been negligible, therefore eliminating the necessity for
the Council to function along this line.

137

CHAPTER XIII

ATTITUDE OF ORGANIZED LABOR TOWARD
WORKS COUNCILS

Organized labor Is officially against all plans of industrial
government that do not provide for union recognition, though
it does not object to a system of employees' committees elected
within a shop if those committees are supplemental to a trade
union agreement. At the Atlantic City convention of the
American Federation of Labor in 1919, "company unions," as
Works Councils were termed, were condemned as "a delusion
and a snare,"^ set up by employers "for the express purpose of
deluding the workers into the belief that they have some
protection and thus have no need for trade union organization."
The trade union was stated to be the "only kind of organization"
fitted for the purpose of collective bargaining, and all trade
unionists were advised "to have nothing to do" with "company
unions."

This attitude toward employee representation plans still
characterizes the speeches and writings of the leaders of the
American Federation of Labor, and a general propaganda against
Works Councils has been constantly conducted by the Federa-
tion.

In the discussion of the cases that follow, it will be noted that
in spite of this fact, individual trade unionists in many instances
have taken part in Works Council activities, and have not
followed their leaders in the latter's opposition toward "company
unions."

Most representation plans make no discrimination against
employees because of membership in a labor organization.
Trade union employees are eligible for election as representatives
— not as representatives of an outside labor organization, but
as representatives of the employees in the plant. In some
instances trade unions have been successful in creating com-
mittees composed entirely of union employees, and this has
often been followed by an endeavor to secure benefits for the
unions irrespective of the effect upon the industry. In some
cases plans have had to be abandoned because of the determina-
tion of trade unions to utilize the committees for their own ends.''

This has not been true, however, in the majority of plants.
Employers have reported that members of trade unions as
employee representatives have been quite as satisfactory as

» American Federation of Labor. Report of the Proceedings of the Thirty-ninth Annual
Convention, June, 1919, pp. 249, 250. The other quotations in this and the following par-
agraphs are from the same source.

«See pp. 29-3 1-

138

non-union employees. They have appreciated the benefits
that accrue from a Works Council animated by a spirit of fair-
ness on both sides, and have not attempted to convert the
Councils into organs for the propagation of trade union prin-
ciples.

The experience of a large company with Works Councils in
twenty-four plants, is of particular interest in this connection.
No direct attempts have been made by organized labor to under-
mine or overthrow the Works Councils at any of the plants.
The only direct influence exerted by organized labor has been
"the general propaganda of the American Federation of Labor
on the subject." One of the company officials stated that
probably "fully 50% of our employee representatives are
union men."

"There has never been any indication from their attitude or acts in
Council that they were not as fully in accord with the principle underly-
ing the plan as have been those employee representatives who are not
members of trades unions."

A western coal and iron mining company reported a varied
experience with regard to the attitude of the employee repre-
sentatives who were members of trade unions. The Councils
in the five plants of this company were first formed in 1915,
following a, serious strike. Both the United Mine Workers and
trade unions connected with the steel industry have endeavored
to induce the employees to ignore the representation plan, and
in some instances these attempts have met with a temporary
success. At the time of the steel strike in 1919, the employee
representatives at one of the company's plants were largely
union men and "apparently interested in promoting union
policies." This condition has not prevailed since the steel
strike, although, wrote a company official, "probably some of
the representatives are members of unions."

Despite the action of the National Machinists' Union, who
decided to oppose the Works Council of the "committee" type
in a mid-western arsenal, the individual machinists have taken
an active part in the Council's activities. The chairman and
vice-chairman and one other member of the joint conference
committee are machinists. It is noteworthy that the other
trade unions represented in the arsenal have "lent their support,
interest and cooperation to all moves in connection with the
Council."

In an -eastern plant in which a number of local unions are
represented, the union employees have taken the lead in securing
representatives on the works committees. The Works Council
was introduced into this plant under exceptionally trying
circumstances following a strike. The National War Labor
Board, . under whose jurisdiction the case came, ordered the
formation of "shop committees." A carefully prepared plan

139

of representation drawn up between representatives of the
employees and the management, was agreed to by both parties
and has been working successfully since its inception in 1919.
Some of the employees who led the strike which precipitated
the intervention of the War Labor Board, are now ardent
supporters of the Works Council. These men are trade unionists
and occupy prominent positions in the local trade union move-
ment. The company reported itself as well satisfied with the
type of employees elected as representatives, 90% of whom are
trade unionists. Management characterized them as "the
recognized leaders in each department." One of the employee
representatives, who is also an official in the local Trades and
Labor Council, gave his opinion of the relation between the
Council and the union as follows:

"In a plant where the employer won't recognize the unions and
won't deal with them, I think the unions should make all the use they
can of a Works Council. It's the only way we have of getting in touch
with the management and why shouldn't we use it ? There is nothing
to be gained by standing off and refusing to take part in the Council.
"We see to it that union men are elected to the committees. We
can bring up before the management in that way the things we want
them to do. If we didn't make use of the Council plan our point of
view wouldn't receive *any consideration at all."

A different attitude was found to characterize the business
agent of one of the local trade unions. The plan was assailed
by this union official as being simply a means of getting union
employees to drop their memberships in the unions. Those
representatives who were trade unionists were accused of
having "sold out" to the company; they were getting in well
with "the boss," so as to get a "white-collared" job. An inter-
national officer of the same union attacked the plan on the
ground that it broke down the workers' solidarity, leaving them
powerless and at the mercy of the employer. In the eyes of
this official the workers would sooner or later see through the
employers' "little game" and then there would be an immense
rush to join the trade unions again. In August, 1919, the plant
was said to be 90% unionized. Since that time, however, a
large number of the employees have dropped their union
memberships, till at the present time it is believed that not
more than 60% of the employees belong to trade unions.

In another plant with a plan of the "Industrial Democracy"
type, the president of the company, writing with regard to the
relations between the trade unions and the Works Council,
stated there was a constant tendency

". . . for questions which might come under union action to be re-
ferred directly to the union by the House of Representatives previous
to discussion by the House on the matter."

Investigation at this plant revealed that a certain group of
the employees was well organized into a local union. This
union did not pay for the services of a business agent, the mem-

140

bers selecting their officers from among their own number. At
the time of elections for the House of Representatives in this
plant, these employees nominated certain of their numbers in
different departments and from those who were elected were
chosen the officials of the union. In this way the union always
had some of its members in the House of Representatives. At
the regular union meetings, those who were members in the
House of Representatives reported to the rest of the union
employees the proceedings of the House.

The union employee representatives interviewed at this
plant spoke highly of the plan. They did not believe that it
had been introduced in order to do away with the union. On
more than one occasion the president of the plant had urged
employees to take a real interest in the union if they were
members, to attend the union meetings, and to give it their
support.

In one company where it was stated that there had been no
noticeable opposition on the part of the union employees to the
representation plan, trade unionists are allowed to choose
representatives equal in number to those chosen by the non-
union employees.

A western company, on the other hand, reported that there

was a desire among the union men in the plant, to "convert the

shop through its union representatives on the shop committee'

into a closed union shop." One of the company officials wrote:

"There has been no well-organized attempt to do this, but the desire

exists. Organized labor is not opposed to our shop committee and,

in fact, the strong union men in our shop are the ones who first pro-

Eosed it and served as charter members. I believe that union mem-
ers understand thoroughly that there will be no recognition of the
union in our shop and therefore we expect their activities along this
line to gradually lessen, as they have already done."

A serious crisis in the history of this Council occurred shortly
after it was formed, when nearly all of the local industries were
tied up with a general strike. Although a large percentage of
the employees belonged to trade unions and pressure was
brought on them from outside the plant to join the strike, the
employee representatives unanimously refused to take part in it.
In addition the Works Council members appeared before the
local trades and labor council, and their statement of the issues
involved was so convincing that the strike was soon called off.
Recently, when a wage reduction was made in this company,
the efforts of local unions to call their members out on strike
was unsuccessful.^

In some plants trade unionists have been unwilling to act as
employee representatives. Whole departments of employees,
the majority of whom belonged to unions, have sometimes

'This is a special use of tlie term Shop Committee and is not to be confused with the
"shop committees" established by the National War Labor Board.
«See p. lOo.

141

refused to take any part in the activities of the Council. This
has been changed in some instances, after the plan has been in
operation for some time, and the employees came to realize
they were depriving themselves of benefits which were theirs
for the asking. This was the case in an eastern silk mill
where, when the plan was introduced, a certain group of highly
organized workers refused to take any part in the Council.
The representation plan in this concern is of the "Industrial
Democracy" type, and the "Collective Economy Dividend", is
included in it. After three months' operation of the plan,
during which time the other employees had received dividends
amounting to 5% of their weekly wages, the trade unionists
who had refused to take part in the Council requested the
management to allow them to share in the dividends, expressing
a desire to take their place along with the rest of the employees
under the representation plan.

In a western motor concern, one department which consisted
almost entirely of union employees refused to elect any repre-
sentatives, and maintained this attitude for over two years.
Recently, when a wage reduction was necessary in that plant,
those employees refused to accept it and were accordingly dis-
charged. The employees hired to take their places have mani-
fested an interest in "the Council and have joined the rest of the
employees in supporting it.

An eastern tanning company, which introduced its repre-
sentation plan at the time the local union was endeavoring to
enforce the closed shop, reported that union men who were
elected representatives refused to serve as such. Shortly
after the plan was put into operation a union agitator caused
trouble in the plant, and, on his refusal to have the matter re-
ferred to the Works Council, was discharged. The union de-
manded his reinstatement, but the company refused to do so
unless the case was submitted to the Works Council. This the
discharged employee refused to have done, and a strike was
called against the plant. After one week's time the strike was
called off by the union. Since that time,

". . . several officials of the union have worked for us in various de-
partments and expressed satisfaction with the relationship existing
between employer and employees here."

In an eastern plant the introduction of a Works Council of
the "committee" type was followed by an energetic campaign
to organize the machinists in the plant, and 90% of these em-
ployees joined the union. Although they had elected a repre-
sentative on the Council, they also set up a separate committee
and asked for an increase in wages, along with recognition of
the trade union. The company placed the matter before the
Works Council, who appointed a special committee to investi-
gate and report. The employee representatives took the stand
that the machinists, who comprised one electoral division, were

142

unfair to the representative they had elected. The special
committee recommended that all the machinists should be paid
up in full, and that they should not be rehired, "until they were
willing to pledge themselves that they would give the com-
mittee system a fair trial before calling on the union for help."
The committee stated that in their minds

". . . the firm had no ulterior motive in introducing the committee
system and that so long as the management was 'on the level' there
was no need of a business agent to speak for the men and create
dissatisfaction."

Regarding this, an official of the company stated:

"It will be noted that the action of our committee was not because
our men were opposed to labor unions, but rather because the action
of the unionized men in the machine shop did not line up with the
committee's idea of a square deal all around. As one of our old em-
ployees told the writer at the time: 'Quarreling and striking is old stuff.
It may be necessary in some plants, but none of it for me, so long as
the boss shows himself willing to meet me halfway. Reasonable men
should be able to compose their differences without a strike that
nearly always ends in a compromise. Why not compromise at the
start' ?"

Other instances have been furnished the Conference Board,
in which the efforts of trades unions to induce employees to
abandon Works Councils have failed, because of the spirit of
loyalty among the workers toward their representation plan.

An eastern steel company reported:

"Efforts were made from time to time by labor organizations to
get a foothold here, but the men gave very little heed to them, our
plant committee saying that 'if we can't get along together amongst
ourselves there would be little use for any outsiders to come in to try
to accomplish anything.' At the time of the steel strike in 1919 the
plant committee stood loyal to the company and refused to affiliate
with the outside labor organization."

The vice-president of a middle western textile company wrote:
"Organized labor has talked against our plan, but our people are so
well sold on the system that 'unionism' as at present constituted, is
not at all in favor, especially since the committee system has been
attacked. Awhile ago I took up a vote of our men and found that
only 5 out of 175 favored a closed shop with no committee. Our
women are almost all opposed to unionism. We employ 550 women."

A middle western machinery company wrote that the efforts
of the local union to organize its foundry failed because the
men preferred the Works Council organization to the trade
union. The president of the company stated:

"We have i-eally done some remarkable things in this small town
community in the way of staving off unionization of the foundry.
This was done in the face of determined efforts by the union to organ-
ize the entire town. We have at least one union man on our com-
mittee of six or eight, but the union gave up in despair when they found
they had not only the management of the organization to fight, but
also the men."

One company with representation plans of the "Industrial
Democracy" type in four plants, whose committee system has

143

been the object of continual opposition on the part of organized
labor, said that it considered the failure of either employees
or management to live up to the requirements of the plan was
much more dangerous than opposition directed against the plan
from outside.

"There has been constant knocking of our plan by representatives
of organized labor, but we cannot see that it has had any material effect
up to the present time. We feel that such opposition is not a bad
thing as it keeps us studying all the while to make our plan more
potent. We feel that the dangers from within, the hazards which
arise from arbitrary measures, lack of consideration, etc., are more
to be feared than the hazards from without."

A middle western rubber company with a plan of the "In-
dustrial Democracy" type, related the following experience in
connection with an attempt of the local machinists' union to
call a city-wide strike. The machinists employed in this
company presented their demands to the management, who in
turn referred them to the "Industrial Assembly." The latter
agreed to deal with the machinists after they had stated they
came as "company employees, and that they were not being
guided by outside influences." The grievance committee of the
Assembly recommended that rates be increased, and that over-
time be paid on the basic eight-hour day instead of on the forty-
eight hour week. This recommendation was accepted by the
management, who immediately put a large force of men at
work reviewing the rates with a view to giving a higher rate to
all men deserving it.

The Industrial Assembly then called a mass meeting of
machinists and explained what had been done. In addition, each
machinist was visited personally by a member of the Assembly
and informed what his new rating was, or was given a reason
why he did not receive a new rating. When the city-wide
machinists' strike was called, 60% of the company machinists
upheld the action of the representatives whom they had elected
to the Industrial Assembly, and remained at work.

One firm reported that at the time of a city-wide strike which
affected the union employees working in two departments of
the plant, not only did its union men remain at work, but they
denounced the wage demands of the union as being "excessive."'

In another plant the action of the Works Council in con-
demning a general strike was said to be responsible for the
failure of the strike.

"About a year ago, when a general strike was ordered by the Mill-
workers' Union of this city, our House of Representatives, composed
largely of union men, went on record against it, giving their reasons,
and sent a copy of the resolutions to both of our daily papers, and
their action killed the general strike in the city. At the time of this
action of our House of Representatives, I think at least 95% of our .
men belonged to this union, although we run an open shop."
>Cf, p, 91.

144

Distinct from these cases in which trade unions directed strikes
against plants where Works Councils were operating, are the
experiences of another group of employers who reported or-
ganized labor as confining itself to an attempt to ridicule the
plans. This was often done only when the plan was introduced.
After it was seen that the plans were satisfactory to the em-
ployees, no further action was taken by the trade unions. A
western construction company stated that while there had been
no direct and open attempt made by organized labor to discredit
the Works Council, there had been, for over six months after
the plan was initiated, "a whispering campaign" which was
"rather annoying and difficult to overcome." This had been
successfully met, however, with the result that the great ma-
jority of the workers had accepted the Works Council "as an
entirely satisfactory substitute for the labor union organization."

Organized labor, while opposed to the formation of "company
unions," does not object to a system of employees' committees
elected within the shop if those committees are supplemental
to a trade union agreement. This was the subject of the resolu-
tions of the Executive Council of the American Federation of
Labor at the annual convention of the Federation in 1918.
The Executive Council placed itself on record as being in favor
of a "regular arrangement" in all "large, permanent shops"
whereby:

"First, a committee of the workers would regularly meet with the
shop management to confer over matters of production; and whereby:

"Second, such committee could carry, beyond the foreman and the
superintendent, to the general manager or to the president, any im-
portant grievance which the workers may have with references to
wages, hours and conditions."

These demands were predicated upon "the basic principle of
the right and opportunity of workers to organize and make
collective agreements."

Three instances have come to the attention of the Conference
Board, of Works Councils in firms which have agreements with
labor unions covering wages and working hours.

At the time the "Industrial Democracy" type of Council was
introduced into an eastern shoe company, the company had
an agreement covering wages and working hours with the
United Shoe Workers of America. The original constitution of
the Council provided for the discussion of wages and working
hours. This provision was not looked upon favorably by the
employees, nearly all. of whom belonged to the trade union.
Consequently the subjects of wages and working hours were
removed from the jurisdiction of the Works Council.^ With
this change made, the company reported that the employees
took much more interest in the committee system.

'Contrast this with the case cited on p. 46, in which union influence had a directly op-
posite effect upon the jurisdiction of the Worlcs Council in cases of discharge.

145

In the case of another company, an eastern fishery, the
"committee" type of plan works in conjunction with a union
agreement covering wages and working hours. The company
reported the elected representatives were "a very fair type of
men." With regard to the attitude of the employees towards
the committees which discuss neither rates of pay nor hours of
work, a company official stated:

"The employees who are union members do not look to the com-
mittees to secure changes or to protect them against cuts, but rather
continue to look to the unions. The non-union men are content to let
their fellow union workers make arrangements with the unions and
accept any changes made. The non-union workers do not . . . take
any more interest in the representation plan than do the union men."

No attempt has been made by organized labor to induce the
employees to abandon the plan, "principally because our
method does not come in contact with the union." The com-
pany feels, however, that if a firm is obliged to deal with the
union,

". . . the employees' conference will not have as much importahce
in the eyes of the workers as it would if the company dealt directly
with the employees."

In another plant, a.n eastern printing company, agreements
as to hours of work and conditions are made with a trades
council made up of representatives of the several trade unions
working in the plant, and wage agreements are made with each
one of the local unions. The employees' committees

". . . do not discuss union matters such as base ratesor hours of labor,
but frequently do take up matters such as a particular job, where a
special element enters not common to other jobs."

The committees are not permanent, "but are appointed when
a matter comes up for discussion." Each committee is composed
as follows: A representative of each department affected (this
representative being chosen by the members in that depart-
ment), the representative of the particular union involved, the
works manager representing the firm, and the employment
manager, who is a neutral member. The "representative of the
union involved" is usually the president of the local trade
union. These committees have been functioning since 1915.
One of the company officials wrote that they had functioned
satisfactorily and had been helpful "in establishing a co-
operative feeling between management and workers."

In view of the reluctance of employers to furnish information
regarding the attitude adopted by trades unions towards Works
Councils, it has been difficult to form an accurate judgment as
to the relative number of cases in which organized labor has
opposed Councils and those in which it has made no attempt
to discredit the plans. The Conference Board has found that a
large number of employers either disregarded the question, or
simply stated that if any steps to oppose the plans had been /

146

taken by labor organizations, such steps had not been obvious
or had been unsuccessful.

Field investigation, moreover, showed that in some cases
the accounts given by employers of the attitude of local unions
towards Works Councils were at variance with the statements
of union officials themselves. Although the local unions may
not have endeavored to disrupt the Councils by any organized
assault upon them, it was found that they regarded the Councils
very unfavorably and were doing much to induce employees to
put no faith in them. The common belief among union officials
was that, under a Works Council system, the work of organizing
the employees was made more difficult; employees tended to
drop their union membership because they could gain ad-
vantages through the Works Council that cost them nothing,
whereas there was a fee demanded of them from the unions.

In view of this reluctance on the part of employers to furnish
information and of the discrepancies found between the infor-
mation furnished the Board and that gained by investigation
in the field, no reliable statement can be made as to the extent
to which trades unions have combated Works Councils.

147

PART III

Employers' Opinions as to the Value of Works
Councils in Industry

The testimony of employers regarding their Works Councils
indicates the various factors which are important influences in
determining the success or failure of any plan of employee
representation.

First, there is the manner of its introduction. It has been
found in many plants that employees have a tendency to oppose
new ideas of which they have no previous knowledge. This
tendency may be overcome in various ways. Employers may
institute a regular educational campaign in which, by instruction
in industrial methods, economics, etc., they may convince the
workers of the need for the proposed plan, and also of the
sincerity and fair-mindedness of the management in offering it.
Or the Works Council idea may be submitted to the employees,
their decision to be the final one as to whether or not it shall
be introduced, and theirs to be the responsibility of organizing
it. By this method the plan originates with them and is, there-
fore, fairly sure of their support. This manner of installing
committee systems has been tried out with a high degree of
success in some instances. There are plants where the under-
standing between management and employees is such that
an elaborate "selling" of the plan is unnecessary. But even in
these the wise executive will give his men a vote on its intro-
duction, and a hand in its organization. Various methods for
introducing employee representation, successfully tried out by
as many concerns, are outlined in the chapter which follows.

A second important factor in the success of a Works Council
plan is the attitude toward it of both the parties concerned.
Its activity, especially at the outset, is dependent on the amount
of interest displayed in it by the management. If it is not used
by them for the dissemination of information concerning busi-
ness conditions, whether these conditions be good or bad, for
the encouragement of practical suggestions by workers in the
shops, for getting the collective opinion of the employee body
on matters where this opinion counts, the Council tends to be
dormant, or at least to degenerate into a grievance committee.
If, on the other hand, the executives display an active interest
in the organization, the resulting reaction on the part of the
employees is practically certain to be a favorable one. With
this foundation a satisfactory channel of communication between
management and employees is assured.

148

With regard to what has been accomplished by employees'
committees, some employers have been content with the de-
gree of usefulness just outlined. The improved understanding
of each other's viewpoint, the increased sense of a common
interest in business, has justified the organization in their minds.
But in other cases the possibility has been demonstrated of
developing that sense of common interest in the worker to a
point where committees will do valuable constructive work.
It lies, to a large extent, within the power of the management
to extend the committees' usefulness in this direction. It is
they who must prove to the workers that what is done to im-
prove efficiency or increase production redounds to the ultimate
good of employed as well as employer. And when this point
has been reached, encouragement must come from every execu-
tive to those working under them, stimulating new ideas for
inducing either more productive efficiency or more personal
contentment within the plant.

All these points, and various others which do not fall within
these classifications, have been illustrated by the concrete
examples which follow.

149

CHAPTER XIV

INTRODUCING THE PLAN

One of the points most frequently stressed by employers in
their reports was that of "selling" the idea of employee repre-
sentation to the employees before attempting to install it in
the plant. It has been found that the worker is inclined to be
suspicious of any innovation suggested by the management.
Even though it seems to be greatly to his benefit he is con-
stantly looking for the "joker in the pack." In the words of
one of the company officials of a machinery concern:

"Instituting a Works Council or any form of employee representa-
tion is bound to cause a great deal of suspicion and distrust in the
early stages of its growth."

A similar comment was made by the head of an eastern
hosiery firm:

"Employees are never keen for benefits offered by the management.
They distrust them. They are constantly on the alert to discover
what the company is .getting out of it."

Various employers, whose Works Councils are operating suc-
cessfully, strongly favored the plan, but were emphatic in their
statements that no degree of success could be attained unless
the workers wanted the plan.

The vice-president of an eastern watch company employing
3,500 men, whose Works Council is of the "committee" type,
said:

"In view of our experience we would most certainly advocate the
establishment of some sort of Works Council or advisory committee
in every large factory, if the organization is worked out by the em-
ployees themselves so that they will have a real interest in it."

A company official of an eastern silk concern, having in
operation two Councils of the "Industrial Democracy" type,
voiced a similar opinion:

"From our experience we believe that the proper way to institute a
Works Council plan in an establishment is to present the plan to the
employees and leave it for them to decide whether or not they wish to
take up the work. It is a well established fact that any organization
superimposed by the management would surely prove a failure."

In a western coal company, employing twelve thousand men
and having a Works Council which has been operating for seven
years under the "committee" plan, experience has dictated the
wisdom of "selling" employee representation to superintendents,
foremen and employees.

"I would favor the introduction of a Works Council plan, preferably
after preparing the foremen and superintendents for it in advance,
and after having had the employees elect representatives to help draw
up the plan."

150

Some employers, who place considerable stress on this idea,
have gone so far as to suggest methods by which the repre-
sentation plan may be "sold" to the employees. Some of these
are merely general suggestions as to the method of approach,
but in one or two instances, elaborate schemes have been planned
and executed, usually with a good measure of success.

A company official of a New England textile plant, operating
a Council of the "Industrial Democracy" type, gave from his
experience the following opinion of how a Works Council
should be launched:

"We would first endeavor to build a foundation of good will between
ourselves and the workers, then gradually disclose a scheme of "Indus-
trial Democracy", and if there was any response we would call for a
meeting of workers' representatives and outline the plan to them so
that they could report at a later date whether a large majority of
workers were receptive to the idea; if so, then a meeting of all em-
ployees would be called and after further explanations of the system,
a ballot would be taken."

One of the company officials in an eastern concern which em-
ploys 46,000 men and operates a Council of the "committee"
type, was of the opinion that "some sort of a plan of employee
representation is not only desirable, but quite essential in any
large industry," for the maintenance of right industrial relations.
He gave also his idea of the ideal introduction of such a plan:

"It seems to me that the ideal way of introducing any such plan in an
establishment is to merely convey the idea to the workers and then
let them work out the details of the plan, presenting it to the man-
agement for acceptance or rejection when they have finally decided
what they want. If this is done in the proper manner, in nine cases
out of ten the management will be able to accept the plan developed
by the workers without fundamental change."

An eastern paper company having three thousand employees,
operates a Works Council of the "committee" type. The
organization has a partnership plan and an unemployment
fund which must be considered as important factors in the
pleasant relations existing between the company and the
employees. These have been fully outlined in a previous
chapter.^

A company official stated that the danger in establishing a
representation plan is that of handing it down ready-made to
the employees, rather than letting it be developed by the em-
ployees themselves. In this particular company the construc-
tion of the works committee plan and the development of all
its details was the work of the employees; the management's
only part was to approve the work of the committee. That the
committee did its work well can be judged by the fact that but
few changes have been found necessary in the plan as originally
adopted.

» See p. 104.

151

It is believed that it is due to the spirit of partnership growing
up in the company that dealings between the management and
the employees, as represented in the "works committee," rarely
show the characteristics of competitive negotiations. The
Board's informant stated:

"In a large majority of cases the works committee and the man-
agement; have sat down together in a spirit of confidence and under-
standing and tried to work their problems out together from the point
of view of the company as a whole."

The president of the company said:

"The works committee plan by providing for the adjustment of
grievances, has made them rare; by providing a committee of repre-
sentatives it has made possible government with the consent of the
governed; and by providing joint committees for the thorough and
thoughtful investigation of specific subjects it has secured to us the
opportunity to create continuously those new plans for efficiency and
contentment which will make sure our steady progress in the future."

In an eastern hardware manufacturing plant where the
Council is of the "committee" type, a company official found
that the value of the plan lay in the means which it provided
for creating confidence between management and employees.
It is interesting to note that this firm has entrusted to its com-
mittee the right of final decision on the matters which come
within its province, and that the committee has proven itself
entirely worthy of this trust:

"We allow the vote of our employees' representative committee to
be final instead of being merely recommendations, as in so many of
the other establishments. We put this in purposely, as we felt that
it gave the committee more punch, and showed the committee that
the firm had confidence in it.

"Our employees had been educated two years on the 'square deal'
before an employees' representative committee was formed. It
would be very inadvisable for a firm starting out on welfare and per-
sonnel work with a dash, thinking that by putting in all these things
in a few weeks, they would cure all their ills. If such a firm gives the
employees full power, especially if the men have been ill treated
before the change of policy, in ail probability the employees will use
the committee to the detriment of the firm.

"Our people realized the power they had and never abused it. As
a matter of fact, I think I can safely say their tendency was to make
sure that the firm was treated right."

The same correspondent emphasized the necessity of starting
wisely. He found his method for installing the Council emi-
nently satisfactory:

'In any plant where the number of employees is too large to make
it possible to have an intimate acquaintanceship with each and every
employee, we would certainly advocate an employees' representative
committee. Before starting this, however, we would take several
months to educate the employees to the idea. We would then appoint
the first committee to serve six months. At the end of that time we
would hold a general election and have the members elected by the
employees. This is the way we started our Employees' Representa-
tive Committee, and found it to be successful."

152

The comrtianding officer of a mid-western arsenal has been
very successful with a Works Council of the "committee" type.
His experience has made him strongly in favor of employee
representation. He has laid down two rules, the rigid adherence
to which he has found necessary to the success of such a plan.
The first, which concerns the support and interest which the
employer himself must give to the organization, is discussed
in another chapter.^ The second relates to the method in which
the Works Council is introduced. This officer was at such great
pains to get the employee representation idea to his men, that
up to the present time they oelieve that the whole scheme was
originated by them. He states:

"The one thing in connection with the Council which I cannot bring
out too strongly is this — the establishment of it must not be at the
suggestion of the management. In other words, it must not be forced
on the men. The management can accept any proposed scheme and
then let the men have it through representatives that can be trusted,
but in no sense must the scheme be presented to the men with an
ultimatum telling them that this is what must be put in. American
working men, especially those in government employ, have minds of
their own. They think and carefully consider the problems that
interest them personally and they can no more be forced to take a
constructive part in a works organization than a horse can be forced
to drink when you bring him up to the drinking trough."

One of the company officials of an eastern firm operating a
Works Council of the "committee" type, furnished an interesting
example of a plan in which

". . . the request for representation came from the men in the factory,
and the scheme was worked out independently from company influ-
ence even to the calling of preliminary meetings of all the employees
to consider the matter and the formation of the constitution, which
was framed entirely by them and adopted intact by the company's
management."

An attempt by the management to install a Council proved a
failure. Just prior to the time when the subject of employee
representation was broached, certain unions were especially
active in the shop, and although the management did its part
towards the maintenance of friendly relations with these
organizations, an unfavorable situation developed. Despite
this, however, the company fostered the idea of employee repre-
sentation, and after several meetings had been held in which
the scheme was explained to the employees, the company
called for a vote on a plan that had been drawn up. The result
was three to one against the plan. In view of this it was de-
cided that the company would take no further action in the
matter until the general sentiment of the employees should be
in favor of the idea, and until they should take the initiative.

Later the employees themselves began to feel the need of
some channel or communication with the management. Their
views came to the company through a request made to the

» See p. 162.

153

personnel superintendent that the company permit some form
of employee representation.

"The committee appointed by the employees, when asked concerning
their object, made the statement to the effect that it was their opinion
that the only way to insure industrial harmony was to have some
definite channel of communication between the men and the man-
agement, that the men might secure a better idea of the plans and
policies of the company, and that the management might secure the
viewpoint of the employees."

The management neither granted nor refused this request at
once, but "put up" to the committee the formation of a definite
plan of organization to be submitted, on its completion, to the
company for a decision. The committee undertook the pro-
motion of an organization on this basis. Assistance was rendered
by management in providing the committee with outlines of
representation plans and advice was given whenever requested,
but the decision was left to the committee. One of the company
officials stated that the committee acted in "a very fair-minded
manner to both employees and management." The outcome
was considered "a great success," and although there are small
factions that display only a slight interest in the organization
this is evidenced by only a few, mainly clerical workers.

In the opinion of, the superintendent, the Works Council has
more than justified itself. From his experience two conditions
must accompany the successful development of an employee
representation plan:

"1. An attitude of sincerity on the part of the management for
square dealing in everything.

"2. An appreciation of the benefits to be derived from such a plan
on the part of the employees."

The executive's conclusion with regard to employee represen-
tation was:

"We believe that there is no one plan that can fit all conditions,
that the machinery for organization is not so important as honesty
of purpose and frankness in dealing with situations pertaining to both
the management and employees. We do not believe that the man-
agement should give up the right of final decision on points affecting
the control and the administration of the company's affairs, but we do
believe that valuable cooperation and assistance can be secured from
the workmen when they are given the opportunity of a fuller under-
standing of conditions that affect them directly."

Failure to create a desire for representation among the em-
ployees in his plant before attempting to install a plan might
account, in part, for the unqualified disapproval of the Works
Council expressed by an official in an eastern iron and steel
company, operating a representation plan of the "committee"
type. The workers were allowed to vote on the introduction of
a Council, but the management failed to profit by the indiffer-
ence expressed in the vote. They proceeded to install the coun-
cil without attempting to "sell" the idea to the lukewarm and
opposing members of the employee body:

154

"Our Works Council was instituted voluntarily on the part of the
management after allowing the employees to voice their opinion with
a ballot. The majority wishing the Works Council was very small.
There was no demand for the Works Council due to any labor troubles
whatsoever."

The use of the committees mainly for the airing of complaints
and grievances/ and the poor type of worker chosen to represent
the employers on the committees- have been fully described
in other chapters of this report.

A representation plan of the "committee" type has functioned
for more than two years, to the satisfaction of the management,
in the Union Construction Company, a shipyard located at
Oakland, California.

An interesting aspect of this particular case is the method by
which the Council was installed. No step in its institution was
taken without the knowledge of the employee body. A carefully
planned attempt was made to "sell" the idea thoroughly to
every worker in the company's employ.

The concern, from the time of its organization in 1918, had
been provided with a personnel department, the functions of
which were hiring and discharge, the taking of precautions for
safety, the running of the restaurant, etc. The Board's cor-
respondent was of the opinion that this department had been an
influencing factor of value in the development of the works
committee system.

In January, 1919, the management reached the decision that
it was desirable to install in the plant a plan for employee
representation. The first step in this direction was the posting
in various parts of the yard, of charts, illustrating a simple
Works Council plan, announcing the management's wish for
the system, and outlining the method by which the employees
might elect representatives and work out the details of organiza-
tion. (See Chart 1.)

The twenty-five journeymen mechanics (Chart 1 (a) ) were
nominated by the management. To each of these a letter,
drawn up by the executives, was sent. This letter expressed
the dissatisfaction which the company had experienced in
dealing with representatives of the unions; it stated the need
for an organization that should be truly representative of the
shipyard employees, and it outlined the following three duties
for the successful candidates for the committee:

"First: Prepare a plan for a permanent representative organization,
and supervise the putting of it into effect.

"Second: Adjust grievances which the workmen have been unable
to adjust through their foreman in the regular way.

"Third: Assist the management in such other ways as experience
shows to be possible and advisable."

Five foremen were selected by the management and appointed
to the committee (Chart 1 (c) ). A letter to each of these gave

» See p. 57.
• See p. 29.

155

reasons for the installation of the employee representation plan
and explained the machinery by which any workman could get
his grievance or suggestion to the management (Chart 2.)
The theory upon which the works committee was organized
was stated as follows:

"(a) The service manager— who is the chairman of the works com-
mittee— is the personal representative of the general manager, from
whom he gets his instructions. He therefore represents the interest
of the management.

"(b) The five foremen are to be selected from among the group of
yard executives, which is responsible for production and for the prac-
tical administration of the yard.

"(c) The five workmen represent the workers in the yard."

This arrangement provided a committee which, except for
the service manager — who ordinarily has no vote — was divided
equally between the yard management and the workmen. It
was expected that this would lead to decisions based on justice
both to the men and to the company.

After the nomination of the twenty-five journeymen me-
chanics (Chart 1 (a) ), the company posted a notice bearing
the names of the nominees and instructions for voting on them.
The vote was taken by secret ballot as the men came to work in
the morning. The assistant manager made the following com-
ment on this first election:

"Approximately one-half of the men in the plant voted at this first
election, which we considered very satisfactory in view of the suspicion
with which the men looked upon the whole movement."

With the announcement of the election, a letter expressing
the company's hope that through this organization the co-
operation of the workers might be secured, and impressing upon
the representative the responsibility of his position in helping
to bring this about, was signed by the president and sent to
each of the five candidates elected.

In order that they might feel that their interest had been ap-
preciated, another letter, also signed by the president of the
concern, was sent to each of the twenty unsuccessful candidates
for the committee.

The names of the ten members of the temporary works com-
mittee (five workers elected, five management representatives
appointed) were posted, together with the following outline of
their duties.

"(1) To appoint craft representatives. (Chart 1 (d).)
"(2) To adjust grievances which the workmen have been unable
to adjust through their foreman in the regular way.

"(3) To prepare a plan for a permanent representative organiza-
tion and supervise the putting of it into effect in about ninety days.
"(4) To assist the management in such other ways as experience
shows to be possible and advisable."

The first act of this temporary works committee was the
appointment of the craft representatives. (Chart 1 (d).)
This representation was provided for in the management's

156

(Chart 1)

^ WORKS COUNCIL <=v.

WORKMEN

CRAFT I CKAFT I CRAFT I CRAFT I CRAFT I CRAFT I CRAFT I CRAFT

EEPIIEEPMKEEM'REPM'REPUEEPI TEEB lEEPI

FOREMEN

5ERVICEDEPI

WORKS COMMITTEE

•SERVICE MGR.- CHAIRMAN-

FIVE FOREMEN
FIVE WORKMEN

— • • NOTICE • • --

In accordance wiih. Ihe labor policy of \h\s Company (as posted in Ihis Yarxi),
we desire to set up a simple plan of represenlalion for our workmen, to serve
as a medmm of adjustment between ourselves and our workers, and to act
upon matters of mutual interest.

The plan proposed and presented in the diagram is simple, and is to be consid-
ered the starUna point from which the Company and its employees may de-
velop as extensU'e a plan as may be mutually acceptable.

In order to create an organizing committee (to serve for mnety, days), the follow-
ing proaram is announced

(a) On January 15th, the Company will nominate twenty- five Journey men me-
chanics in groups of five, representing five mam departments <X the "Plant, and
will also appoint an election commilfee of three mechanics.

(t>) On January 17th. the Company will call for the election, by secrel bal-
lot under the direction of the election committee, of five journey men-one
from each oroup.

Cc) On uanuary 19ih, the Company will announce Ihe result of the elecuon.
and appoint five foremen or quartermen to serve wtlh the five elected
representatives, thus forming the temporary Worlts Commillee.

(d) The Company will then turn over to the temporary Work.3 Commitlee
the responsibility for the appointment of temporary craft representatives, for the
development of by-laws. etc.. and the arranaemenls for pullincr the final plan
into operation, in accordance with the by-^aws as finally aaopled.

UNION CONSTRUCTION CO

President

157

(Chart 2)

WORK^ COUNCIL

UNION C0N5TR.UCT10N CO.

IndividualWorka\en

Representative

: ® FOREMAN ^ :
DEPARTiH£NT HEAD

SeryiceT^nager-

■{CHAIILMAN)

WORR^ COMMITTEE

FIVE FOREMEN (?FIVE WORKMEN

I3PEC COMM.I i^PEc conni I3PEC connj

PROCEDURE BY WORKMAN
ANY COMPLAINT OR OTHER MATTER. UPON WrtlCrt AN EMPLOYEE
WI5AE5 TO GET ACTION, CAN BE HANDLED AS FOLLOWS:
(1) Take up ihe queslion (eiiher in person or with the help of your represenla.tiv«)
wiih your foreman, <5-1hen if necessary with your Department Mead
{2) 1| you are still unable to Oet satisfaction place your case before the Service
Manager who will either make an acceptable settlement ot else refer you to the
Works Committee whose Decision is final .

For complete information concernind the Works Council refer to the Constitution
G-By laws, a copy of which can be <^ained from the 5erVicc Manaider'.

NAME OF WORKA^AN NAME <

WORKSTOMMITTEE

F WORKMAN- MA«E OF WOBKrtAN • NAME OF WORKMAN ■ NAME OF WORKMAN ■ NAME OF WORKMAN

■w^ CLERICAL DEPAnTMENT<^-
NAME OF WORKMAN - NAME OF WORKMAN

SMIPFITTING DERAR.TAVENT
MATERJAL YARD NAME OF WORKAWN

MOLD LOFT
PLATE 3M0P

AN6LE SHOP (INCL. 3LABMEN.ETC)
CRANE OPERATORS. PLATE HANGERS
ERECTORS - -

SHJPFITTERS
MATERIAL CHECKERS
ANGLESMrTMS ON BOATS
BURNERS XU<D WELDERS
TOOLROOM. FOBGEMEN. HOSEMEN. Ere. ;

RIVETING a- DRILLING DEPARTMENl"
PIECE COUNTERS O- TIMEKEEPERS
BOLT RECOVERY (J CLEANUP
BOLTERS * PACKERS

HEATER a PASSERS . -

CHIPPER. CAULKERS <J TESTERS

BIVETEI15 A MOLDERS ON ...

DB>l UERS

CRAFT REPRESENTATIVES

MACHINERY DERftRTMENT

MARINE MACHINIST
BLACKSMITH
MACHINE SHOP
BOILERMAKER,

WOOD WORKING DEWiHTMENT
JOINERS
MILLMEN

MISC MECHANICAL DERARTMENT
LABORERS
STOREROOM
RIGGERS
PAINTERS
ELECTRICIANS
COPPERSMITHS
PIPEFITTERS

NA/nC or WORKMAN

158-

plan "for the purpose of securing a representative on the job
in each department." Appointment was made by a letter to
each, signed by the chairman of the temporary works committee
and containing, together with such sections of a constitution
and by-laws as the committee had been able to get into shape,
an outline of the duties of the craft representative.

At the first meeting of the works committee it was decided
that one alternate member of the committee should be ap-
pointed by the management, and one should be chosen from
among the unsuccessful candidates of the last election. Letters
were accordingly sent, one to the defeated employee candidate
who had received the highest vote, and one to the chosen al-
ternate foreman. Their standing on the committee was defined
as follows:

"These two members are to have all the rights and privileges of full
membership in the works committee, except that they do not vote
except in the absence of any foreman or a workman, as the case may
be."

With the completion of this organization the company posted
a chart which explained to the workman with a grievance how
to get it settled (Chart 2). To this chart was later appended
the lower section showing the names and working numbers of
members of the works committee and the various craft repre-
sentatives.

This chart, with minor changes, was later painted on bulletin
boards which carried the permanent works committee or-
ganization notices. The Board's correspondent remarked the
following as worthy of note, as an indication of the feeling of
the men towards the organization:

"These permanent notices are still up in the yard and have only
received a moderate amount of defacement. To anyone who is
familiar with the shipyard workers the fact that these notices have
received only a moderate amount of defacement is an indication that
they have been looked upon by a great majority of the men with reason-
able respect and that the men as a whole approve of the thing that
these signs explain."

Since craft representatives did not meet with the works
committee, but had as their duties the handling of grievances
in their departments and the reporting of business transacted
by the committee to their co-workers, the need was felt for a
means by which the action taken by the works committee could
be communicated to the craft representatives, in order that
they, in turn, might be in a position to keep their constituents
informed. Accordingly a weekly letter was issued, a copy of
which was sent to each craft representative. After the organiza-
tion was completed, the constitution adopted, etc., this weekly
letter was replaced by a weekly paper called Works and fVaySy
also published by the works committee.

A company official's endorsement of the employee repre-
sentation plan, which has been so carefully built up in his plant,

159

was strong. He made enthusiastic comparison of the first
election held and the last one:

"At the time the first election was held the average attendance was
2,500 and the total number of ballots cast was 1,200, giving a 48% of
the men voting. The elections come every six months and at the last
election nearly 70% of the men in attendance on the voting day depos-
ited legal ballots. At the time of the first election there was naturally
a suspicion on the part of many of the men that the whole performance
was more or less a joke or fad, and many of them who were perhaps
in sympathy with the idea refrained from voting for fear of being
made fun of by the other men. At the last election, however, the sit-
uation was entirely different. Campaign signs were placed up all over
the yard, election cards were printed and handed out in a true Amer-
ican fashion, and speeches were made by some of the candidates. We
were particularly pleased at the spirit of the last election because it
made us feel that the men as a body had accepted the works com-
mittee and had entered into the spirit of the thing."

The Council is now on a good financial basis. On two occa-
sions it hired the local theatre and sold the house to the em-
ployees, making in each instance about $350. An arrangement
made with a local hospital association whereby that association
has the exclusive right to solicit in the yard, and whereby the
men can insure at reduced rates, nets the Council a commission
of 5% on all premiums collected. In addition the company
pays fifty cents against every dollar spent by the Council out
of money raised by the men in the yard. The bank balance of
the works committee now varies from $750 to $1000.

Monthly joint meetings of the craft representatives and the
works committee are held which are also open to any workman
from the yard who wishes to attend. The discussions are free
to anyone with an opinion which he wishes to express. The
interest taken in these meetings is shown by the fact that from
150 to 175 men attend them.

The foregoing statements of employers' experience with
Works Council plans for periods varying from two to seven
years are unanimous with respect to the manner in which a
representation plan should be introduced into a plant. Before
establishing a plan management should determine whether the
employees favor it. A plan formulated by management alone
and submitted to the workers as an established organization
will have the result of arousing the employees' distrust and
suspicion. This will have a serious effect upon the functioning of
the plan. Opinion differs as to whether the employees should
work out the plan alone and submit it to the management for
review, whether the plan should be the joint work of employees
and management, or whether the employees should be allowed
to vote to accept or reject the plan. There is no deviation from
the opinion, however, that management should in one of these
ways learn before the plan is set up whether the employees
are in favor of working under it.

160

CHAPTER XV

IMPORTANCE OF EMPLOYERS' INTEREST

Many employers who gave favorable opinions of employee
representation, based on personal experience with it, found that
it was necessary for the management, if not the head of the
concern himself, among other things to keep in close touch with
the Council. They have discovered that if the scheme is to
function with any degree of success, it must hold the interest
and confidence of the workers, and that this requires the constant
and conscientious attention of the executives. In this connec-
tion, the Conference Board has obtained not only the stories of
Councils in concerns where the close interest of the management
has been attended by the successful functioning of the plans,
but also a record of experiences where the failure of the execu-
tives to convince the workers of the sincerity of their intentions
has been followed by an absolute loss of confidence in the
scheme on the part of the employees.

A mid-western paint company has a Works Council of the
"Industrial Democracy" type. Employee representation has
functioned successfully in this plant for eleven years, with never
a record of an unsatisfactory decision rendered. The vice-presi-
dent emphasized the necessity for close contact and fair deal-
ing between management and employees:

"If we were to do the work over again we would start using the same
plan, as we find it enables us to bring up any question, regardless of
what its nature is, through the Congress, and in no time during the
eleven years have we had any reason to complain of the final decision
or vote on serious questions brought up, such as wages, working hours
and differences that affected everybody in the organization. Of
course it is necessary for the management to keep active and in close
touch with the Congress, and above all to be absolutely frank, playing
the cards open and above board."

An interesting opinion of similar purport was given by a
company official in an eastern concern employing three thousand
men. A Works Council of the "committee" type is in operation
there. Emphasis was laid not only on the importance of the
management's keeping in close touch with the committee, but
also on the wise choice of the officials who were to maintain this
contact:

"In so far as the Works Council plan in our establishment is con-
cerned, our attitude is that we would continue, in view of the good
results obtained. The writer personally feels that it is the only plan,
regardless of conditions. It is necessary to be a success that the atti-
tude of the management be right toward the shop committee, also
the personality of the individual who is in direct contact with the
employees. Tact and confidence must be established between the

161

management and the shop committee if any good results are to be
obtained. If this is not used, the committee is of no value.

"The entire proposition is simply one of human engineering, and
regardless of shop committee plan, the direction must be on the basis
of confidence, and the understanding of human nature. Arbitrary,
careless, and inconsiderate decisions not giving the employees a fair
deal, make for trouble. On the other hand, discipline and strict en-
forcement of r jles, is necessary to establish firmly in the minds of the
worker the proper requirement, or need?, in operating any business,
and this is not difficult when properly organized."

The vice-president and general manager of a western motor
car company, whose Council is of the "committee" type, went
so far as to say that an employee representation plan could
not function successfully without the close personal attention
of the chief executive of the firm:

"We are well pleased with the operation of the present plan in our
shops. Wish to say that the writer expresses the opinion that the
plan cannot be worked as in operation here without the active cooper-
ation and participation of the executive head of the company. There
is so much petty opposition to the plan that when handled by a minor
official it would have poor chance for success. The writer has given
the matter a great deal of attention and feels well repaid for all the
effort the plan has required."

In a large, eastern electric company where a Council of the
"committee" type is in operation, employee representation has
proved of material value to the executive end of the concern.
The management realizes that the worker, through his practical
experience, is in a position to see places where time or labor,
and thus, money, may be saved. The Works Council, function-
ing successfully, has furnished him with both the incentive and
the machinery for getting his ideas to the management. In this
plant:

"An important outcome of the plan has been the disclosure of weak

points in the management, which has resulted in many improvements

in organization,"

One of the company officials was of the opinion that without
the support of the head of the plant the plan must be a failure:

"Any plan of representation must have the conscientious support
of the higher executive of the plant in order to be successful. It is,
of course, obvious that the executive must show patience and must
expect that any plan of representation which is founded on a square
deal will show up weak points in his organization which must be
accepted, and afterwards rectified.

"If the executive takes the stand at the beginning that nothing can
be wrong in his part of the organization, he might better refrain from
installing any plan of representation. If a foreman is right, he should
receive the utmost support. If, however, he is wrong, it should be
acknowledged and the matter rectified. The plan merely calls for
firmness with justice."

The commanding officer of a mid-western arsenal, whose
Council is of the "committee" type, believes his success with his
employee representation plan, as a solution of the problem of
industrial relations, to be due, in large measure, to two things.

162

One of these, discussed in another chapter,^ was to the effect that
the establishment "must not be at the suggestion of the manage-
ment— must not be forced on the men." The other was in line
with the opinions just quoted — that a Works Council requires
the painstaking attention of the management. The latter was
expressed by the officer as follows:

"The other point about the Works Council is that it must have
the unquestioned support and interest of the management if it is
adopted. It can be killed quicker by indifference, lack of support
and obstruction to its workings on the part of the management than
in any other way, and my sincere advice to any concern contemplating
the installation is to ask the question of themselves — 'Are you willing
loyally to give the Works Council your support, interest and aid ?*
If this can be answered in the affirmative, then put it in. If it can-
not be answered in the affirmative without reservation, leave the
Works Council idea alone.

"The Council here is a success. It has produced contentment among
the employees to a very marked degree and I feel that with the proper
support of the management it will continue a success."

The opinion of a company official of an eastern chemical
concern, where a Council of the "committee" type is in opera-
tion, coincided with those just cited, but went one step farther.
It was his belief that the management, in order to hold the
workers' interest in the plan, must not only give it attention
and support, but must also grant the committees the right of
final decision on matters handled by them:

"From the experience which we have had with employee represen-
tation we would not hesitate to recommend the adoption of some
sort of a plan, providing the management actually believed in it and
was willing to show the sincerity of that belief by authorizing the
committees a sufficient degree of power to make final decisions. If
there are strings tied to the power which is invested in the committees,
the members will eventually lose interest."

How this system would work out in the case of reductions in
wages or working hours has not yet been demonstrated in this
concern, as

". . . both committees have so far avoided the consideration of
questions concerning wages, changes in hourly schedules, etc., al-
though the plan contains no limitation which would prevent them
from doing so."

Like various other employers., this official has felt the necessity
for a watchful avoidance of any prejudice against employee
representatives because of any stand taken by them in the
performance of their duties as such.

A general statement of his opinion of the plan showed hope
for its further development:

"While we are not exactly satisfied that our plan is showing the best
possible results, we would not care to abandon it, bur rather to experi-
ment with certain changes in the plan with a view to improving it."

The story of the Works Council, a "committee" type, of an
eastern concern, forms an interesting antithesis to those just

*See p. IS3.

163

related. The case is one where, according to foremen and other
employees interviewed, the Council is gradually degenerating
because the management has failed to fulfill its obligation to
the organization.

The method of introducing the plan was favorable to its
success. To quote one of the officials of the company:

"I believe that the method of introducing a Works Council which
was used by this company was excellent. It consisted in discussing
the matter first with the foremen, then with all employees who had
been in the company more than five years, and finally with the entire
personnel of the plant at a mass meeting."

Three Councils have been elected since the plan was started.
The first, composed almost entirely of foremen and minor
executives, was fairly successful. The second, with fewer fore-
men on it, accomplished less. The present one, made up almost-
entirely of the rank and file, is accomplishing very little. The
employees placed the blame for this on the unwillingness of the
management to meet them half-way. They put it this way:
"We bring up a proposition to the management and in order to test
us to see how much we really want anything, the management puts
up all sorts of arguments as to whether or not it should be granted."

In other words, the management, instead of cooperating with
the employee representatives, makes it as difficult as possible for
them to "sell" their ideas. Two foremen who were on the first
Council attributed their success to their "nerve." "We had to
hammer it into the heads of the management," was their state-
ment. The present Council, composed of rank and file workers,
lacks this "nerve," and so the workers feel that the plan has
become more or less futile.

Employees of the company who were interviewed, were spe-
cific in their statements regarding the failure of the management
to live up to their part of the bargain. One representative cited
the cases of two reductions in staff and working hours:

"The company told the Council that business was falling off and
that although in all probability some change in hours or staff would
be necessary, immediate action was not considered likely. Ten days
after these announcements the company reduced the staff and re-
duced the working hours. The first time this happened the Council
complained, saying that the company had not kept faith with them.
The president of the company, in addressing the Council, admitted
a mistake had been made but assured them if changes should be nec-
essary again, they would receive the consideration they wanted.
The second time the same thing was repeated. That was the last
straw."

According to another employee representative, recommenda-
tions made and questions asked by the Council do not receive
any reply from the Executive Committee.

"When business was good and production was wanted, the Council
was used by the company to tell us how business was going and how
it was up to us to produce. Just now we are very anxious to know
how busmess conditions are and we can't find out. Eight months

164

ago an official, in explaining the reduction in staff that was sprung on
us, said it had to be done because of the large inventory on hand and
the smaller number of orders. He showed that they would have to
make a large number of shipments to bring things nearer normal."

In the plant cafeteria there has been for some time a chart,
placed there at the request of the Council, showing the total
number of orders received and the total number of shipments
made over given periods. To this was later added, also at the
request of the committee, postings as to the orders remaining
on the books at the end of each month. A careful examination
of these figures showed that for some time shipments had
exceeded orders; that month by month orders were falling off.
This state of affairs made employees anxious to know what the
business outlook was. From what they saw they concluded:
"Orders aren't coming in; shipments are away high. We better
go slow on the job." Accordingly they did slow up, with the
idea that this would make their jobs last longer. The Works
Council might have been used to explain that any slowing up
on their part, instead of lengthening their jobs, would shorten
them. It might have been pointed out to them that a slowing-
up process increases the cost of production, affects the selling
price of the commodities manufactured, and thus precludes
competition with firms not similarly situated, still further cutting
down orders.

The failure of the management to use the Council to take the
employees into their confidence at this time has caused both
representatives and employees at large to lose faith in the
company sincerity toward the Council and in the value of the
Council. Representatives believe that the management has
no confidence in them and does not think them intelligent enough
to understand business conditions if explained to them.

The president of the company refused to see that the manage-
ment was at fault, but stated his belief in the Council. Em-
ployees, however, showed no faith in the Council and have
gone so far as to suggest that the employee representation
plan is not worth keeping up.

A like experience was reported by a New England machinery
concern. Opinions gathered from both executives and employees
agreed that there was no demand for the plan at its installation,
from either party. Thus, at the very beginning, there was a
lack of interest. According to one of the company officials the
plan was put in "just to be in the fashion," and one of the
employee representatives corroborated this statement:

"When the plan was being talked of in the first place a meeting of
the men was called in a building not in the industrial district of the
city, but fully two miles from the section where the men lived and
worked. This showed that there was no great interest on the part of
the management. Only a few men went to the meeting, and from this
beginning it was concluded that neither men nor management cared
a great deal about it."

165

In addition, the Council was modeled after a plan which
called for no regular meetings of the committee; it being called
together only when the necessity arose. With these two
characteristics of the plan in mind, it is not difficult to explain
what followed. In reply to a request by the Conference Board
in January, 1921, for information as to what the committee had
accomplished over a certain given period, a company official
made the following significant statement, showing only three
Council meetings in one entire year:

"We find that in that period nothing was brought up for considera-
tion by the shop committee. As a matter of fact, we have had but
three conferences with our shop committee since last February. One
was in connection with the revision of by-laws, increasing the executive
committee from five to seven. Another was a conference in regard
to increase in wages, and the last one was in connection with a request
that the company see what it could do to purchase coal at a saving to
the employees."

Even though not used by either executives or employees,
the management thought the plan worth while — a good thing
to have "because it provides a channel whereby the management
can keep in touch with the employees and vice versa," — and
would not discontinue it.

The employee representatives interviewed showed an entirely
different attitude towards the organization. Several of them
said that "the men regarded it as a joke." Some showed by
their comments a lack of faith in the management's sincerity
in installing the plan. They said:

"Grievances can be redressed, but after that a foreman can make
it so uncomfortable for a man that all he can do is to leave. You
can't always prove discrimination."

"Manufacturers have put representation plans in to ward off union-
ism. That's all right, but they've got to convince the employees that
it's worth while. If not, the employees will see through it."

"Interest in it may be renewed when times become normal. Then
we can come back at the boss without fear of being out of a job. You
can't say anything now. It's 'take it or leave it.' "

"On the recent wage reduction the management said they were
going to reduce wages anyway, so what was the use of the shop com-
mittee ? We didn't feel that the cost of living had decreased as much
as the management stated, but what was the use in kicking ?"

In reviewing the cases previously reported, where manage-
ments have given painstaking attention to their Councils; have
provided for regular meetings and a meeting place; have kept the
workers fully informed as to business conditions, and as to the
likelihood of changes to come on account of these conditions;
in short, have convinced the employees of the sincerity of their
Intentions in Installing a Council, the reason for the non-activity
of this particular committee becomes apparent.

The vice-president of an eastern wire company, where a Coun-
cil of a "limited" type was organized in 1918, gave as his
opinion -of employee representation that

166

". . . the committee has two distinct advantages:
"First, it serves as a representative organization which either spon-
taneously or through direct questioning supplies the management in
good season with anything which may be disturbing the minds of an
appreciable number of our organization.

"Second, like the safety valve of a low pressure boiler, although it
may probably never be used, it is there for the use of anyone who cares
to make use of it; ... an individual in dealing with me as the man-
agement's representative in the shop can either obtain the sympathy
of his fellow workers or approach some other official of the company
if he feels that my view of his case is unsatisfactory."

Expanding further his idea, the same executive said:
"Our whole theory of the shop committee is very simply expressed,
since it seems quite stupid to attempt to handle any problem without
consideration of the factors which clearly enter into the problem.
Therefore an attempt to handle the labor problem without consider-
ing the point of view of the workmen, not as the management thinks
it is or ought to be, but as the workmen themselves express it, is a
waste of time.

"The shop committee offers a means by which the collective opinion
of the workmen may be obtained by the management at any time, or
may be expressed to the management by its men in an orderly and
recognized way. Beyond this point we do not go, and what the com-
mittee may be in any organization in the future is something which
we deliberately avoid forecasting as we wish it to take its own course
of development under whatever circumstances may arise."

Firms mentioned elsewhere have sent in records of functions
assigned and activities suggested to the committees by the
management. These efforts on the part of the executives have
produced far-reaching results. Suggestions for increasing
efficiency have been the result sometimes of more personal
contentment among the workers, and sometimes of the advent
of a feeling of a common interest with the company. To the
Works Council was given the credit for the new attitude of the
workers.

In the present instance, where value has been claimed for the
plan only as a handy machine to be used by either party should
the occasion arise, the committee has been reported for three
successive years as "dormant." No record has been received
that would point toward use of the committees by the manage-
ment, and, in the words of the vice-president: "The employees
do not seem disposed to use our shop committee."

A similar attitude on the part of the management of another
eastern concern was found to have had the same effect upon the
employees' estimation of the representation plan. The manage-
ment's attitude toward the plan was admittedly "passive, not
active." Although the employee representatives interviewed
were convinced that the plan had been of value during the time
that wage increases were obtained, during the recent period of
business depression, the plan was in their opinion "lifeless."
The management found that the employees' committees had
resolved themselves into practically nothing but a means for
the adjustment of wages:

167

"At the start, when things were booming, and the chances seemed
good to get increases in wages, the committees were quite active and
we received requests for increases from nearly all the committees. In
every case, conditions were looked into and adjustment made where
necessary. After business fell off and wages started to come down,
practically nothing was heard from the committees at all. Our rec-
ords show that there were very few matters brought up by any of the
members, with the exception of the question of wages. As the com-
mittees were formed to take care of the subjects affecting the welfare
of both employer and employees, we do not like to see it resolve itself
into a plan for the adjustment of wages."

The management of this concern is divided in its opinion as
to whether the plan as it operates at present may be termed a
success. The employee representatives interviewed spoke in
terms that left no doubts as to their estimation of it. They
said there would be no regret on their part if the whole scheme
were dropped.

This situation is directly attributable to the neglect of the
management to make the plan of vital interest to the employees.
Employees naturally would not use the plan for the presentation
of minor grievances or complaints at a time when the country
was suffering from widespread business depression. They no
doubt felt that at such a time they were fortunate to have a job
at all, and complaints which at another time they might bring
before the Works Council would not be brought to the attention
of the, employee representatives. The plan accordingly became
to them a scheme that would work all right when wages were
going up, but was of no benefit when wages were coming down.

Management did not utilize the committees to present to the
employees information regarding business conditions as they
affected the company. It has been clearly shown that this is
one of the great advantages of a Works Council during a period
of business depression, and that the employees appreciate the
action of employers who do inform them as to how business is
going.

No regular meetings for constructive work were held in the
plant just referred to. There was no opportunity for the inter-
change of ideas and experiences between employees and manage-
ment that such meetings afford. The management's idea seemed
to be that the introduction of the plan was sufficient. It could
then run itself. That it could not is proven by the doubt in
the minds of the management as to whether the plan was a
success, and by the attitude of the employee representatives, in
whose minds there was no, doubt as to its being a failure.

The viewpoints of employee representatives in an eastern
steel plant, regarding the value of their representation plan
during a period of business depression, is in striking contrast
to these just quoted. In this plant a representative of the
management devotes the whole oi^his time to the administration
of the representation plan.

168

Regular meetings of the committees are held monthly. The
management has taken a live interest in the plan, which was
initiated "to establish a closer relationship with the employees
in order that the greatest degree of cooperation might be ob-
tained." At the time of the visit of a field investigator, the
employees' wages had been considerably reduced and the
plant was working only part time.

Employee representatives questioned, were unanimous in
their approval of the plan. They said the management had
shown themselves willing to play the game according to the
rules laid down in the plan. Management was "on the square."
The recent wage reduction and curtailment of workhour sched-
ules were believed by the employee representatives to have been
necessary. They had come to realize this through the monthly
talks by the higher executives of the company, telling how the
company was standing the strain of business adversity. This
was one thing on which the representatives laid particular
stress — the opportunity of finding out what the prospects were.
Through the information they received from the president
of the firm and other high officials, they were able to answer
the questions of the employees. Interest in the Council, in-
stead of waning, had increased. A company official stated that
the attendance at the meetings was greater when wages were
coming down and the business of the company was falling off
than in times of business prosperity. An employee representa-
tive speaking of this said:

"Employee representation is all right if it is worked the way it is
here. We get in direct touch with the executives. We get to know
them and we can talk to them as man to man. We believe they are
honest and want to be fair to us. They have got to be that way or the
plan would be a failure.

"We go to the meetings and get inside dope on the business situa-
tion. We know how many orders are coming in. We know if there
is going to be another blast furnace opened up soon. We aren't in the
dark any more and we appreciate it."

The foregoing experiences are evidence of the importance of
a sincere and constant interest in and attention to an employee
representation plan on the part of the management. In general,
plans carefully fostered by employers, used to disseminate
information of interest to employees, and to assure the latter of
a direct channel whereby their grievances might reach the execu-
tives, have operated successfully. But where employers have
not first convinced the workers of their own sincerity in in-
augurating the plan, or have failed to take advantage of the
machinery provided by the Councils for keeping the employees
informed about business conditions, especially when those
conditions were adverse, employees have lost confidence in both
the management and the Council, and the organization has
either become dormant or has gone out of existence altogether.

169

CHAPTER XVI
IMPORTANCE OF WORKERS' INTEREST

In the chapter preceding, employers were quoted who em-
phasized the idea that unless the management gave the Works
Council constant and sincere attention it was more than likely
to fail. Other officials have gone further than this in their
discussions of the success of employee representation plans, and
have pointed out the necessity for a corresponding interest and
cooperation on the part of the workers. Given these two factors
to start with, many employers have found that the Works
Council is a highly satisfactory channel of communication be-
tween the management and the employees, and that it furnishes
a means for discussing and often for settling to the satisfaction
of both parties concerned, those questions which especially
interest and affect the worker.

It is the expressed opinion of still other officials that employee
representation should not stop here. It may be made to function
far more broadly than as a mere point of contact between
management and employees. It has not attained its maximum
of usefulness until the interest of the employees has been enlisted
to the extent that they have at least some realization of the
oneness of their interests with those of the company, and mani-
fest this interest and realization by attempting work of a
constructive nature for the furtherance of production. This
work may take the form of suggestions for improvements in
production processes brought to the attention of the workers
by their practical experience,^ or it may relate to safety and
sanitation, education, studies of wage rates, etc.

Some plants have merely stated that interest on the part of
the executives, and a response to this from the workers, had
evolved a Council that was a complete success as a means of
communication between the two. But a few employers have
given histories which began with earnest endeavor on the part
of the management to make the scheme a living thing, which
recorded a hearty cooperative spirit among the employees, and
which followed this with a record of truly valuable constructive
work.

A company official of an eastern steel plant, where a plan
of the "committee" type is in existence, gave detailed comment
on the necessity for creating a true appreciation of the other's
viewpoint in the case of both management and employees.
With this as a foundation, he was of the opinion that almost any

> A full discussion of this point will be found in Chapter V.

170

type of representation plan could meet with success. This con-
clusion was reached after the plan had stood the test of a care-
fully planned but unsuccessful attack by organized labor:^
"Each organization has problems peculiar to itself which must be
understood before any workable plan can be mapped out. Probably
the biggest task confronting a person contemplating introducing a
shop committee is first to convince the management that human
nature is pretty much the same in the shop as in the office, and that
there is little difference in the aspirations of the humblest worker and
those of the president of the company. Both want what they term
a good living, although their ideas of what constitutes a good living
may differ greatly. The next difficult problem is to convince the
working men that the manager is just as human as they, and that
instead of being a slave driver, whose main interest is profits, he is an in-
telligent man, of necessity vitally interested in the well-being of his
employees, and that the question of wages is of minor importance as
compared with the volume of production and the total cost of produc-
tion. A complete understanding of this can be followed by the intro-
duction of almost any form of committee representation and meet
with success, both in making for a contented working force and a
greater volume of production, so long as both parties are fair and open,
and the management realizes that the duty of the management is to
lead and direct."

In a southern shoe factory where the Council is of the "com-
mittee" type, the management, by a wise handling of the scheme,
has been able gradually to develop in the workers an interest
and confidence in the plan. Executives have planned for regular
meeting times and topics to be discussed. They have themselves
encouraged the workers to discuss the subjects which affected
them. With regard to the necessity for retrenchment in the
plant, one of the company officials said:

"This phase has been taken up in our meetings incessantly for the
last few months, and our employee representatives in the main have
grasped the spirit of the retrenchment and the economy program and
have helped pass it along in their respective rooms."

The meetings were held under circumstances which en-
couraged employees to frank discussion:

"The meetings take place once a month in a sort of informal round-
table discussion; the atmosphere is easy and the general manager of the
works usually acts as chairman and leads the discussion. It has been
nearly two years since this plan was adopted and at first the employee
representatives were rather inclined to be silent and diffident about
expressing themselves. At this time, though, they have thawed out
to a great extent and enter freely into discussions."

The management expressed distinct approval of the effect
which the plan had had on the spirit of the employees, and was
optimistic over the outlook for the future:

"The judgment of the management with respect to shop committees
is that it has distinctly shown good results in breaking the vague sus-
picion and distrust which exists in all wage earning groups. It has
brought about a much more cordial feelirig, the employees feeling that
they know the company much more intelligently and understand their
problems better, and vice versa.

"We approve of the shop committee plan and expect it to improve.
We feel that while we have gone slowly we have certainly gone some-
• See p. 142.

171

where and that if we keep up the present pace, in five more years or
so, the standard of intelligence and efficiency in our plants . . . will
be vastly improved."

An eastern oil company employing eleven thousand men and
operating a Works Council of the "committee" type has had
three years of successful experience with its plan. It has been
described as a "great method for educating the workers." The
men have proven that "if you take them into your confidence
they will repay you by deserving it." Fairness and sincerity
on the part or the management have created a similar feeling
among the employees. And this feeling has formed the basis
for the successful working out of the employee representation
plan:

"Industrial representation ... is based on the fundmental prin-
ciple that the purpose of the joint conference is 'to discuss and settle,
subject to final review by the Board of Directors, all matters of general
interest, such as hours, wages and working conditions, adjusting of
grievances.' In the three years since the inauguration of our first
joint conference all such matters have come before the joint confer-
ferences and as yet there has not been a single instance in which a fair
and amicable conclusion has not been reached. As a satisfactory
means of direct contact for the elimination of unsatisfactory condi-
tions and for the development of better relations, the plan has the
confidence of both employees and management."

In a western rubber company, where the Works Council
operating is of the "Industrial Democracy" type, one of the
company officials laid down a definite set of rules covering the
part which the management must play in developing a successful
representation plan. It had been the executive's experience
that a sense of fair play on the part of the employees followed
the perfect frankness and sincerity evinced by the management
in the plan; that while final decisions had not been placed in
the hands of the workers, it had been possible in every case to
let their rulings stand. The following he stipulated as essential:
"1. There must be no secrets, no forbidden ground in the organi-
zation adopting the plan. All the cards must be on the table. This
company issues regular quarterly financial statements to its employees
just as to its stockholders.

"2. There must be complete freedom in the expression of opinion.
"3. The form of the plan is not important except that the machin-
ery must make it impossible for the free action of the workers to be
stifled by plant officialdom. It is the spirit which is important. The
presence or absence of sincerity and the desire for fair play will deter-
mine success or failure."

The same official made the statement that if, with the ex-
perience with his own Works Council plan, he had to decide
whether or not he would introduce a representation plan in an
establishment controlled by him, he

". . . would immediately develop such a plan with complete power
of the representative body to initiate and adopt legislation which must
always be subject to the management's veto, though experience proves
that with wise leadership the workers themselves are ultra conservative
and the veto power is never used."

172

In an eastern plant where a council of the "committee" type
is in operation, both executives and employee representatives
were highly in favor of employee representation as a point of
contact. The management felt that it "created a better under-
standing; was a means of getting closer to the operatives,"
while the workers

". . . appreciated the insight they were obtaining into the business

through talks of the company officers."

This feeling of a common interest was the natural outgrowth
of the manner in which the organization had been handled.
After securing the approval of the employee body to the intro-
duction of the plan, the management proceeded to keep their
interest in it alive by suggesting, at the earlier meetings, sub-
jects for discussion such as "savings plans, safety work, English
classes, etc." Later, when business conditions became uncertain
and employees were anxious about future prospects, the com-
pany used the committees to keep them fully informed regarding
plant conditions:

"This information was passed on to the employees who, at the
present time of uncertainty, were very eager to learn all they could
about the company's position and the outlook for the future."

In this connection, a point not heretofore mentioned was
brought up by the Board's correspondent. This was the diffi-
culty of getting information transmitted from management to
employees and from employees to management, correctly re-
ported by employee representatives. Any representative unable
to explain clearly to his constituents the import of a message
from the executives tended to forfeit the latter's confidence.
The workers, in their turn, distrusted his ability to make a
clear statement of their views. The remedy recommended by
this official was education for representatives by frank discus-
sion in frequent meetings.

This writer's opinion on the value of employee representation
in general, with special reference to his own experience with it,
was as follows:

"We feel that some form of employee representation is necessary,
that there must be some well regulated means of communication be-
tween employee and management and between management and
employee.

"The great problem, as we see it in the representation plan, is the
establishment of confidence of the employees in their representatives
on the committees. It is a matter of education which can only be
brought out by holding frequent regular meetings at which matters
are frankly discussed. The employees will have faith in their repre-
sentative and in the committee plan only after they have continually
seen and have experienced the results of discussions and matters which
have been taken up at committee meetings. The employee represen-
tation plan will fail, with those concerns who consider such a plan and
such committees simply in the light of grievance committees."

Both executives and workers have appreciated the value of
the educational opportunities afforded those who were fortunate

173

enough to be elected to the committees. It was remarked by
another official in the plant that "the committee was a great
place for a man to receive training to become an assistant fore-
man."

In a large eastern rubber concern operating fourteen Councils
of the "committee" type, the report of one of the company
officials indicated a high degree of satisfaction with the progress
of the plans. The management has kept in touch with them;
the employees have supported them. The committees have
discussed and satisfactorily settled problems in which a wide
range of subjects was involved. As a means of keeping the
viewpoint of each party before the other, and of eliminating
small disputes before they assumed importance, employee
representation has proven of great value,

"It provides a means of contact which cannot otherwise be obtained
and gives opportunity for the management of a plant to inform their
employees of their viewpoint, and likewise gives opportunity for the
employees to present their viewpoint.

"Misunderstandings in regard to small things quite frequently grow
to large difficulties if permitted to go on. Employee representation
provides means whereby the smaller difficulties are settled as they
arise, and if we can settle all our small difficulties as they come up, we
may never have to. face the big ones so far as our dealings with em-
ployees go."

A mid-western steel company has operated Works Councils
of the "committee" type in four plants for upwards of two years.
The organizations have been unusually successful as a means of
communication between management and employees. This
success has been attained, according to statements made by one
of the company officials, by the constantly demonstrated inter-
est in the Council by the executives, attended by the active
cooperation of the workers.

In the beginning the plan was not even suggested by the
management; it was requested entirely by the employee body.

A favorable answer to this request was returned by the
management and plans laid for an election. Aside from advising
the workers to exercise judgment in their choice of the men
they elected to represent them on the committee, the manage-
ment took no part in installing the system. For two years the
Council operated without even a constitution, and when that
was finally drawn up and adopted, it too was at the suggestion
of the workers.

But, though the officials of the company showed no tendency
to interfere in the installation or work of the Council, they were
at great pains to keep the employees ever conscious of their
interest in the plan and their support of it. In this way they
developed more and more the workers' confidence in them and
in the Councils.

174

The scope of the committees' activities has been wide. They
have "discussed every conceivable question . . . wages, hours,
working conditions, sanitation, safety and comforts," and
always with results satisfactory to both management and men:

"While at times the progress would be quite stormy, there never
has been an occasion where our men did not show good judgment and
exceeding fairness with the company in their final conclusions."

An additional factor to be considered in these results is the
education of employee representatives afforded by the manage-
ment:

"The representatives themselves must be taught as you go along
some fundamental thinking in regard to business economics, but after
they have obtained ideas about production and costs, we have found
no instance where they have been unfair."

While the management does not consider its plan a perfect
one, it finds it increasingly satisfactory in its functioning.

Another example of keen interest in and right use of the
Works Council on the part of the management, a response in
kind from the employee body, and the subsequent functioning
of the organization as a highly satisfactory channel of communi-
cation between the two parties concerned, was furnished by an
eastern concern whose representation plan, of the "committee"
type, has operated since 1919.

The president of this concern has used the Council constantly
since its installation to keep his workers informed on every
phase of business conditions. Especially has he made use of it
during the time of business depression. In every case of a change
made necessary by economic pressure, the reason has been
explained to the men. And it has not been the employee repre-
sentatives alone who have had opportunities to learn how things
were going. In addition to meeting the employee representa-
tives at Council meetings, the president has made it a policy
to hold mass meetings of all the men in several departments,
at which he placed before them subjects of common interest.

The response of the workers to the efforts of the management
has been satisfactory. While there has been no enthusiasm
manifested over necessary reductions in wages and hours, at
least they have been understood and accepted in good spirit.
A keen appreciation of the frankness of the executives, as well
as a recognition of the Council as a means of getting their
grievances to the management, has been expressed by the
majority of the men.

Employee representatives interviewed by a field investigator
of the National Industrial Conference Board, spoke well of the
Council:

"We like it because when anything goes wrong we can get it right
to the 'boss.' "

175

Some of the men had been inclined to get all they could out
of the plan and give nothing in return. But, under the influence
of the fair-minded attitude of the management, that feeling was
gradually disappearing. Employees in general were realizing
that the Council was intended for the benefit of both parties.
A statement made by one of the executives indicated that the
period of business depression had in no way interfered with the
successful functioning of the plan.

A company official of a large eastern firm, whose Works Coun-
cil, of the "committee" type, has been operating successfully for
nearly three years, stated his belief, as drawn from his own
experience, that the success of any plan of employee representa-
tion was entirely dependent on the attitude toward it of the
two parties concerned. Each must be convinced of the sincerity
and fair intentions of the other. Special reference was made to
the satisfactory functioning of the Council during the period of
business depression:

"The Works Council has weathered the stress of the last few mpnths
of industrial depression, which has entailed an increase in the hours of
labor and thereby a decrease in hourly earnings, although weekly
pay remains the same. During this period the number of hours
worked were cut from one-half to one-third for a considerable number
of employees, although part continued to work full time."

This company has a firm belief in employee representation,
not as a cure for all industrial ills, not as a weapon to be used
against unionism, but as a means, to be universally employed
in industry in the future, of inducing a clear understanding
between employer and employed:

"The attitude of this firm toward the establishment of a Works
Council and the spread of any plan of representation would be highly
favorable. This attitude is determined by the firm belief that some
plan of representation will ultimately be adopted throughout industry
as a matter of fairness and value, both to employer and employee. If
any plan of representation is installed with the idea of combating the
unions, per se, or of dominating the employees, the plan is bound to
fail ultimately.

"It will take a long time for each firm to work out the plan to its
logical and best conclusion, to be of value to both employer and
employee. It will never be a panacea for all the ills of any company."

Various employers quoted in the preceding pages have dis-
covered, by experience with the organization, that a sincere
interest and an honest intent for fair play on the part of the
management make for a like interest and cooperation from the
employees, resulting in a Council which forms an ideal channel
of communication between management and workers.

A few of the manufacturers interviewed by the National
Industrial Conference Board have found that the spirit of co-
operation between executives and workers created by the
Council may develop to the point where employees will feel
that the company's interests are theirs. The natural result — a

176

desire to do something constructive — follows. A striking illus-
tration of the extent to which this may be carried was afforded
by a mid-western printing concern. The representation plan
there is of the "Industrial Democracy" type, and has been in
operation for more than two years.

A statement made by the company shows an intent to
"practice as well as preach the 'Square Deal' " toward their
men. The work that the Council has accomplished is ample
proof of the interest and cooperation with which the employee
body has responded to the management's policy towards them.
The committees have not been content to function merely as a
channel through which information regarding economic con-
ditions might flow from executives to workers, and workers
might get their grievances to the management direct. It has
gone farther than that. Constructive work has been done
without a money incentive, for the "Collective Economy
Dividend," usually a feature of the "Industrial Democracy"
type of Council, has been left out of this organization.

Employers' opinions quoted in another chapter have em-
phasized the importance of the method in which a representa-
tion plan is introduced. The necessity for educating the em-
ployees to it, for thoroughly "selling" it to them, has been
demonstrated. This was the method adopted in the installation
of this particular Council. And the efficiency developed by the
committee in one year's time has more than compensated the
company for the time and pains spent in preparing the employees
for the introduction of the plan. It was accomplished as follows:
"Ip our case our campaign of education was running for more than
a year before we said anything about any system of employee repre-
sentation. Our plan came as a factor in a whole campaign to have
men understand what they were doing and why. Never has it dom-
inated the situation — and we hope it never will."

An outline of what was achieved by this works committee
during the first year of its existence is of interest here, as a
concrete illustration of what the organization is capable of
accomplishing, given the sincere cooperation of both the parties
concerned. A sub-committee has, after a careful survey of the
subject, established an elaborate educational course which
includes a wide range of subjects; regular academic subjects
for those who have not had the opportunity for them; technical
courses for those who wished to train for better positions and
cultural courses for those interested in them. Through this
committee also, the plant has obtained a branch of the public
library. Another branch of the Council, after careful investiga-
tion of the methods used by other firms in job analysis and
specification, has classified and rated every individual in the
plant, basing this on quality and quantity of the work produced.
By this system it is possible to progress from one class to an-
other. "As soon as a man shows himself worth more, he gets it."

177

Great strides have been made toward health sanitation and
safety. A committee on economies, suggestions and improve-
ments has collected and passed judgment on hundreds of sug-
gestions by employees, after having established a new sugges-
tion system. Another committee has been of great assistance
in the attempt to increase efficiency and thereby earnings to
both employees and management. Spoiled work has been
investigated and improvements in machinery and tools sug-
gested. Attendance has been carefully followed up and greatly
improved and tardiness reduced.

At the end of its first year, a vote was taken to learn the
sentiment of the employees on the representation plan. Five
hundred and ninety-five men voted to continue it and nine
went on record against it. The management, wishing to find
out the objections of the latter group, requested that they send
in unsigned letters stating reasons for their attitude. Not one
such letter was received. This would seem a fairly conclusive
proof of employee sentiment on the subject.

The attitude of the company toward employee representation
is as follows:

"We are for shop representation, as we believe that men are fair.
We need them. They need us. Their actions in 'Congress' and the
things they have accomplished prove to us that the solution of indus-
trial misunderstandings is possible through giving the employees an
opportunity to express their personal opinions regarding their work-
ing hours, working wages, and working conditions."

A report of constructive work accomplished by its committees
was received by the Board from an eastern steel company,
where a Works Council of the "committee" type is in operation.
The interest and satisfaction of both management and employees
in the plan, and their extensive use of it, have been discussed
in another chapter.' In the eyes of the management, the Council
has been a distinct success as a means for giving each of the
parties concerned an increased appreciation of the problems of
the other:

"We feel that the employees, through their representatives, are
becoming more familiar with the problems of the management, and
management, by personal contact with the representatives of the
. employees, are getting a better understanding of the workers' point
of view. We feel that many misunderstandings can be avoided when
the employer and the employee really understand the reasons for the
attitude of the other. By establishing this point of contact we feel
an esprit de corps has been created among the employees which is
bound to produce better team work."

The cooperative spirit induced by the Council has been
instrumental in producing a highly satisfactory record of con-
structive work. In confirmation of this conclusion is a statement
from the management:

"The following are some of the general accomplishments which can ,
be credited to the plan:
1 See pp. 168-169.

178

"(1) Originated and recommended set of rules governing suspension
and discharge of employees which was adopted by the management.

"(2) Studied and recommended a Savings Plan through wage de-
ductions which resulted in the adoption of a plan for the purchase of
Victory Notes.

"(3) Recommended institution of Plant Schools during working
hours for non-English speaking employees.

"(4) Suggested and secured many improvements resulting in greater
safety to employees.

"(5) Recommended that provision be made for classroom as well
as shop training for apprentices.

"(6) Suggested better methods of paying off.

"(7) Production of bolt and nut department increased by following
suggestion of representative regarding quality and distribution of stock.

"(8) Representatives of very material assistance in adjusting wage
reductions equitably."

The foregoing discussion emphasizes the idea that a Works
Council cannot function successfully without the sincere inter-
est and painstaking attention of the management and the
cooperation of the workers. Nearly every employer from whom
an opinion on this subject was received laid stress on the neces-
sity for these two prerequisites to the operation of a representa-
tion plan as a means for smoothing out the misunderstandings
which so often exist between employers and their workers, and
for establishing a satisfactory channel of communication be-
tween the two, a means by which each may comprehend the
other's point of view. A fair number of employers, with this
background of experience, have cited results which go far beyond
the establishment of a clearer understanding between executives
and workers. With an appreciation of the business from the
company's point of view the workers have been found ambitious
to undertake constructive work and, in several instances, have
accomplished highly desirable results.

179

CHAPTER XVII
IMPORTANCE IN LARGE ORGANIZATIONS

A few employers, when asked for a statement of their opinions
on the subject of employee representation, have made a special
point of their value in large organizations — plants where the
number of workers employed precluded any degree of personal
contact between management and employees.

A western lumber concern, employing upwards of eight hun-
dred men and operating three Councils of the "committee"
type, reported that employee representation is a necessity in
any plant where the number of employees made it impossible
for an employer to know all of his men. The Board's cor-
respondent was "convinced that employee representation is
necessary in plants of this size and larger."

The management made a special point of the manner in which
these Councils, organized in 1919, have stood up under the
business depression and have facilitated the changes made
necessary by business conditions during that period:

"Our shop committee^ was organized during times of business pros-
perity, and during that period met with no test as critical as the one
to which it has been subjected during the recent period of wage re-
ductions. We had anticipated serious objection on the part of the
men to the wage cut that we have been forced to make, since the ex-
tremely rapid decline in the lumber market necessitated a reduction
in wages seemingly out of proportion to the reduction in the cost of liv-
ing. However, the objections were not so strong as we had feared
and the men are now working on a wage schedule that represents an
approximate decline of 30% from the high wages of 1919 and 1920,
and at the shop committee elections held last week the vote for com-
mitteemen compared favorably with that of previous elections."

With regard to the establishment of a Council in another
concern, after experience with this one, a company official said:
"I would not hesitate to establish a shop committee plan like ours
if the decision were left to me."

This executive's further recommendations as to rules to be
observed in installing a works committee were in line with one
of the essentials laid down in a previous report of the Conference
Board,^ discussing the scope of the Works Council. It was his
opinion that the company should be honest and definite with
the employees concerning the amount of power to be really
theirs; that workers should not be permitted to hope for author-
ity which the employer had no intention of giving them.

The next prerequisite to success for a representation plan,
in the opinion of the same official, was:

• This is a special use of the term Shop Committee and should not be confused with the
"shop committees" established by the National War Labor Board.

2 "A Works Council Manual." Research Report No. 26, February, 1920, p. 2.

180

"The foremen should be thoroughly sold to the idea and trained in
modern industrial methods before the plan is entered upon."

The necessity for this has been borne in upon him by his own
experience. Another chapter of this report contains a detailed
discussion of the necessity for a favorable attitude towards
employee representation on the part of foremen, if the plan
is to function with any degree of success. Through opinions
quoted from employers, it suggests methods of educating fore-
men to see that a Works Council, by producing greater con-
tentment and good will among the workers, may be made to
influence them to increase production either by more conscien-
tious labor or by making constructive suggestions out of their
practical experience, for greater efficiency in the plant. The
need for such education for the foremen has been keenly felt
in this plant, as it was found that

". . . suggestionsfor improving the efficiency of various departments
have not, on the whole, been kindly received by the foremen and
superintendents, and their attitude has served to discourage the men
in making these suggestions."

The Board's correspondent stated that it seemed "almost
impossible" to convince foremen that

". • . the acceptance of such suggestions is not a reflection upon their
skill in the management of their various departments."

Emphasis was placed, in conclusion, on a point already dis-
cussed in several cases: that of the importance of sincere interest,
intelligent guidance, and the assurance of a square deal on the
part of the management:

"It is my conviction that there is very little danger that the shop
committee would become a body difficult to handle if it were intelli-
gently guided, since it has been our experience that the men are much
more interested in securing the assurance of being fairly dealt with
and treated humanly, than in using their organization to force greater
monetary returns for their labor."

An eastern dye concern where, in normal times, 4,400 men were
employed, organized a Works Council, a "committee" type,
because the greatly increased size of the plant made it impos-
sible for the executives to come in contact with more than a
small fraction of the rank and file workers. A desire to pre-
serve the cooperation between management and employees
and to keep alive among the workers the interest heretofore
manifested in the company's welfare led to the presentation of
a plan of employee representation; this plan to be a point of
contact for executives and workers; for avoiding misunder-
standings or for eliminating them in their initial stages.

The plan, as outlined, was offered to the employee body, their
vote on its installation to be final.

The Council as proposed by the management was accepted
by the employees and has been in operation for two years.

181

From the report received by the Board it is evident that the
plan has justified, to some extent at least, its installation:

"In curtailing the weekly working period, retrenching in industrial
betterment plans, etc., we have received excellent cooperation from
the committees."

The organization has also —

"... improved the relationship between the management and the
workers by causing men to feel that the management is easily approach-
able on all matters of mutual interest."

To some extent the management has felt itself handicapped
by the necessity for using in every case the machinery provided
by the Works Council. Executives have found much valuable
time lost because even minor changes desired by them had to
be submitted to the Council before they were made. This was
best explained by a company official:

"Frequently a desirable change is contemplated, investigated and
determined upon, but in order to prevent the slightest suspicion from
arising in the minds of the workmen that we are not playing fair with
them, such items are submitted to the conference.

"Some of the kind of items referred to are, changes in train
schedules, changes in working rules, changes in personnel, elimination
of certain classes of work, assignment of houses, etc., etc.

"In practically all cases, the conference agrees as to the desirability
of such changes, and therefore the time lost in submitting such items
to the conference is a handicap, frequently not justified by the results
obtained."

The same official was asked whether his experience with this
Council would influence him to organize another, should the
occasion arise. His opinion was as follows:

"This depends on the size of the establishment. Where small, we
feel that proper direct contact with employees, and especially with
the foremen, is preferable and will secure the desired results fully as
effectively, and even where the establishment is large, we feel that no
decision should be made on introducing a conference plan until a care-
ful analysis has been made and the necessity for providing a plan is
made evident. Local conditions and nature of industry are probably
of even more importance in arriving at a decision than size of works."

In contrast to the opinion expressed above regarding the loss
of valuable time through having to obtain the consent of the
employees' committees to any proposed changes that manage-
ment may determine upon, is the statement of the vice-president
of a textile plant in which there is a plan of the "Industrial
Democracy" type. This executive was of the opinion that,
although such a method took more time than would be otherwise
necessary, it was productive of better results:

"Real accomplishment comes slowly. Although things were done
quicker under the old line management than under the Works Council
method, we received only a half-hearted compliance then. It is better
to take three weeks and secure the backing of your employees, gained
through their thoroughly understanding the situation, than to take
one week and be without it."

182

Executives quoted in this chapter have brought out various
points already discussed in favor of the Works Council, such as
its value as a means for keeping the worker informed and sat-
isfied when depressed business conditions made changes neces-
sary, its use as a means for improving the relations between
management and men, etc. But the fact which most recom-
mends the organization to these officials is its value in large
organizations where the personal touch between management
and men is sure to be lost unless it is retained by some such
method as the one under discussion. As plants increased in
size it became impossible for executives to come in contact with
more than a small fraction of the rank and file workers, but, in
the instances cited, the machinery furnished by the Works
Council has preserved the friendly contact which existed between
officials and employees.

183

APPENDIX

Industrial Concerns Having a Form of Employee
Representa tion

Note. — This list contains the names of companies that are known to have a
form of employee representation in operation at the present time. Firms in
which the representation plans have been abandoned are omitted from the list
though considered in the report; those whose experience forms the basis of the
body of this report are printed in italics.

Key. — ^The types of plans are designated as follows:

N. W. L. Bd. — "National War Labor Board Committee."

Br. P. — "Bridgeport Plan."

S. L. A. Bd. — "Shipbuilding Labor Adjustment Board Committee."

Ltd. — "Limited" Plan.

C. U. — ^Plan based on "Company Union."

L D. — "Industrial Democracy" Plan.

E. P. — Other plans introduced voluntarily by employers.

Date of

Name of Company

Location

Intro-

Type of

duction

Plan

of Plan

Abbeville Cotton Mills Abbeville, S. C 1919. . . .E. P.

*Aberdeen Coal Company. . . . Elkins, W. Va 1920

*Abrams Creek Coal &

Coke Company Fairmont, W. Va 1920

Acme Wire Company New Haven, Conn 1918 .... Ltd.

*Adams Coal Company Westernport, Md 1920

Admiral Line Seattle, Wash 1920. . . .E. P.

*Allegheny Coal Company. . . . Westernport, Md 1920

American Brass Company Waterbury, Conn 1919. . . .E. P.

American LaFrance Fire
Engine Company Elmira, N. Y E. P.

American Multigraph Co Cleveland, Ohio 1919. . . .1. D.

American Pulley Co Philadelphia, Pa 1919. . . . E. P.

American Rolling Mill Co.... Middletown, Ohio 1918 E. P.

American Woolen Co Lawrence, Mass 1921 . . . .Ltd.

*Annan & JeiFries Frostburg, Md 1920

Arco Company Cleveland, Ohio 1919. . . .1. D.

Armour (S Company Chicago, 111 1921 E. P.

Art in Buttons Rochester, N. Y

Ascher, Simon, & Com-
pany, Inc New York, N. Y 1918. . . .1. D.

Bath Iron Works, Ltd Bath, Maine 1918. . . .S. L. A. Bd.

Beacon Falls Rubber Shoe

Company Beacon Falls, Conn 1919. . . .1. D.

Berkey &? Gay Furniture

Company Grand Rapids, Mich 1919 I. D.

Bethlehem Steel Company Bethlehem, Pa 1918 . . . .E. P.

♦Blackwater Coal Co Davis, W. Va 1920

Bloedel Donovan Lumber

Mills Bellingham, Wash 1919. . . .E. P.

185

Date of
Name of Company Location Intro- Type of

duction Plan
of Plan

Blumenthaly Sidney &

Company, Inc Shelton, Conn 1917. . . .1. D.

Boone Fork Lumber Co ShuU's Mills, N. C I. D.

Borden's Farm Products
Company, Inc New York, N. Y 1922. . . .E. P.

Bowser, S. F., & Com-
pany, Inc Fort Wayne, Ind 1919 E. P.

*Brailer Mining Company. . . . Mt. Savage, Md 1920

Bridgeport Brass Co Bridgeport, Conn 1918 .... E. P.

Bridgeport Malleable Iron

Works Bridgeport, Conn 1918. . . .E. P.

Brooklyn Rapid Transit

Company Brooklyn, N. Y 1920. . . .E. P.

*Brophy Hitchins Coal Co. . . . Frostburg, Md 1920

Brown, Thos. E.&Sons Philadelphia, Pa E. P.

Browning Company Cleveland, Ohio 1917 . . . . E. P.

♦Carroll Cross Coal Co Piedmont, W. Va 1920

Champlain Silk Mills. New York, N. Y 1919. . . . I. D.

*Chapman Coal Mining

Company Baltimore, Md 1920

Chicago Bridge & Iron
Works.. Chicago, 111.... 1919.... E. P.

Cincinnati Coffin Co Cincinnati, Ohio I. D.

♦Clise Brothers Coal Co Emeryville, W. Va 1920

Collins, A. M. Company ..... Philadelphia, Pa 1919. . . .E. P.

Colorado Fuel & Iron

Company Denver, Colo 1915. . . .E. P.

Columbia Conserve Co Indianapolis, Ind 1917. . . .E. P.

Columbia Graphophone

Company Bridgeport, Conn 1919. . . .E. P.

Commonwealth Edison

Company Chicago, 111 1921 . . . .E. P.

Commonwealth Steel Co ... Granite City, 111 1921 .... E. P.

♦Consolidation Coal Co Baltimore, Md 1920

Continental Mills Philadelphia, Pa 1919. . . .E. P.

Courierjournaljob Print-
ing Company Louisville, Ky I. D.

Craddock Terry Co Lynchburg, Va .- 1919 .... E. P.

Crocker McElwain Co Holyoke, Mass 1919 Ltd.

Cudahy Brothers Co..... Cudahy, Wis 1920. . . .E. P.

♦Cumberland Big Vein

Coal Company Cumberland, Md 1920.

♦Cumberland Coal Co Baltimore, Md 1920.

Curtis Companies Clinton, Iowa 1919.

Darlington Manufactur-
ing Company Darlington, S. C 1919.

David B.Edmund, Inc Paterson, N. J 1919.

Davis Coal & Coke Co Cumberland, Md 1920.

Day & Zimmerman, Inc Philadelphia, Pa 1921 ,

♦Dean Coal Company Elk Garden, W. Va 1920.

Demuth, William, & Co New York, N. Y 1917 .... I. D.

Dennison Manufacturing
Company Framingham, Mass 1919. . . .E. P.

Derby, P., & Company Gardner, Mass E. P.

Dexter Folder Company New York, N. Y 1920. . . ". I. D.

Dodge, Nathan D., Shoe
Company Newburyport, Mass 1919 .... I. D.

186

....I.

....E.

....I.

.P.

Date of

Name of Company Location Intro- Type of

duction Plan
of Plan

Dold,Jacol>, PackingCo Buffalo, N. Y C. U.

Dorris Motor Car Co St. Louis, Mo 1919. . . . E. P.

DuPont de Nemours &

Company Wilmington, Del 1919 E, P.

Durham Hosiery Mills Durham, N. C 1919 L D.

Dutchess Bleachery, Inc Wappingers Falls, N. Y 1919. . . . E. P.

Dutchess Manufacturing

Company Poughkeepsie, N. Y 1918 E. P.

Eastern Manufacturing

Company Bangor, Me 191 8 .... E. P.

Eastman Kodak Co Rochester, N. Y 1921 . . . .E. P.

Easton Furniture Co Easton, Md 1920 E. P.

Elgin National Watch Co Elgin, 111 1918 .... E. P.

Emerson Electric Manu-
facturing Company St. Louis, Mo 1919. . . .E. P.

*Emmons Coal Mming Co. . . . Philadelphia, Pa 1920

Erie City Iron Works Erie, Pa 1919. . . .E. P.

Farquhar,A. B. Co., Ltd York, Pa 1919. . . . E. P.

Forbes Lithograph Mfg.

Company Boston, Mass I. D.

Fownes Brothers & Co Gloversville, N. Y 1919. . . .E. P.

Frick Company, Inc Waynesboro, Pa 1920 N.W.L. Bd.

& E. P.
*Frostburg Big Vein Coal

Company Frostburg, Md 1920

*Garrett Coal & Mining

Company Bethlehem, Pa 1920

Gates Rubber Company Denver, Colo 1919. . . . I, D.

General Chemical Company. . . . New York, N. Y 1914 . . . . C. U.

General Electric Company Lynn, Mass 1918. . . .N.W.L.Bd.

General Electric Company Taunton, Mass 1918 . . . . E. P.

General Necessities Cor-
poration Detroit, Mich 1919 E. P.

♦Georges Creek Coal Co Cumberland, Md 1920

Gilbert & Barker Manu-
facturing Company Springfield, Mass 1918 .... E. P.

♦Gleason Coal & Coke Co Frostburg, Md 1920

Globe-Wernicke Co Cincinnati, Ohio 1921 .... Ltd.

Goodyear Tire i£ Rubber

Company Akron, Ohio 1919 I. D.

Gorton-Pew Fisheries Co Gloucester, Mass 1921 ... .E. P.

Graton & Knight Mfg. Co Worcester, Mass 1 91 9 .... E. P.

Greenfield Tap & Die Cor-
poration Greenfield, Mass 1919. . . .1. D.

♦Hamill Coal & Coke Co Blaine, W. Va 1920

Hard Manufacturing Co Buffalo, N. Y 1920 .... I. D.

Hardwick & Magee Co Philadelphia, Pa 1921 .... E. P.

Hartsville Cotton Mills Hartsville, S. C 1919 E. P.

Hamilton Watch Co Lancaster, Pa E. P.

Hill Pump & Valve Co Chicago, 111 1919. . . .E. P.

Holt Manufacturing Co Peoria, 111 1919 E. P.

Holtzer-Cabot Electric Co Boston, Mass E. P.

Hood, H. P., ^ Sons Boston, Mass E. P.

Hooker Electro Chemical

Company Niagara Falls, N. Y 1919. . . .E. P.

♦Hubbard Coal Mining Co. . . . Hubbard, W. Va 1920

187

Date of
Name of Company Location Intro- Type of

duction Plan
of Plan

Hydraulic Pressed Steel

Company Cleveland, Ohio 1919 .... E. P.

flnland Steel Company Indiana Harbor, Ind 1919. . . .E. P.

Interborough Rapid Tran-
sit Company New York, N. Y 1919. . . . C. U.

International Harvester

Company.. Chicago, 111 1919. . . .E. P.

International Silver Com-
pany Meriden, Conn 1919 E. P.

Intertype Corporation Brooklyn, N. Y 1919 E. P.

Irving-Pitt Mfg. Co Kansas City, Mo 1917 . . . . C. U.

Joseph ^ Feiss Company Cleveland, Ohio 1915 C. U.

*Kalbaugh Coal Company. . . . Cumberland, Md 1920

Kansas City Railways Kansas City, Mo 1920. .. .E. P.

Kimberly Clark Co Neenah, Wis 1920. . . .E. P.

Knox Hat Company T . Brooklyn, N. Y 1919. . . .E. P.

LaCrosse Plow Company LaCrosse, Wis 1919 E. P.

Lake Torpedo Boat Co Bridgeport, Conn 1918 S. L. A. Bd.

Landis Tool & Machine

Company Waynesboro, Pa 1918 . . . .N.W.L.Bd.

&E. P.

Leeds &? Northrup Co Philadelphia, Pa 1918 .... C. U.

Lewis I. Cigar Mfg. Co. Newark, N. J I. D.

jLouisiana Shipbuilding

Corporation Slidell, La 1918. . . .S. L. A. Bd.

Louisville Railway Co Louisville, Ky 1920.

Loyal Legion of Loggers

i^ Lumbermen Portland, Oregon 1917.

Lukens Steel Company Coatesville, Pa 1918 . ,

Lupton's David Sons Co Philadelphia, Pa 1919.

Lynchburg Foundry Co Lynchburg, Va 1920 I. D.

MacuUar Parker Co Boston, Mass 1921 E. P.

McCallum Hosiery Co Northampton, Mass 1919. . . .1. D.

McElwain, W.H.Co Manchester, N. H 1921 . . . .E. P.

*Manor Coal Company Johnstown, Pa 1920

*Mapleville Coal Co Elk Garden, W. Va 1920

Maryland Coal Company. . . . New York, N. Y 1920

*Mastellar Coal Company. . . . Keyser, W. Va 1920

MaXy Ams Machine Co Bridgeport, Conn 1919. .. . Br. P.

Mergenthaler Linotype

Company Brooklyn, N. Y 1919. . . .E. P.

Miami Copper Company .... Miami, Axiz 1919 E. P.

Midvale Steel & Ordnance

Company Midvale, Pa 1918 . . . .E. P.

Midwest Reining Co Denver, Colo 1919. . . .E. P.

Miller Lock Company Philadelphia, Pa 1918 ... .E. P.

*Miller& Green Coal Co Westernport, Md 1920

Milwaukee Coke & Gas
Company Milwaukee, Wis E. P.

Milwaukee Electric Rail-
way & Light Company Milwaukee, Wis 1918. . . .C. U.

Monarch Mfg. Company Milwaukee, Wis E. P.

Moore Shipbuilding Co Oakland, Calif. 1920. ... E. P.

Morse Chain Company Ithaca, N. Y 1917 E. P.

Morse Dry Dock & Repair
Company New York, N. Y 1917. . . .C. U.

188

.S.

L.A,

.c.

.E.

.E.P.

Date of
Name of Company Location Intro- Type of

duction Plan
of Plan

*Moscoe Georges Creek

Coal Company. Frostburg, Md 1920

Mueller Metals Company Port Huron, Mich. . . .' 1919 E. P.

National Cash Register

Company Dayton, Ohio 1920. . . .E. P.

Neptune Meter Company New York, N, Y 1919 I. D.

fNewburgh Shipyards, Inc . . . . Newburgh, N. Y 1918 . . . . S. L. A. Bd.

New York Railways Co New York, N. Y 1919. . . .E. P.

New York Shipbuilding

Corporation Camden, N. J 1918 . . . .S. L. A. Bd.

New York Telephone Co New York, N. Y 1919. . . .E. P.

*North Maryland Coal

Mining Company Johnstown, Pa 1920

Nunn Bush £s? Weldon Shoe

Company Milwaukee, Wis 1915 C. U.

Oliver Iron Mining Co Duluth, Minn 1918 .... E. P.

Oliver Mfg. Company Oakland, Calif. 1920. . . .E. P.

Pacific Coast Coal Co Seattle, Wash 1922. . . .E. P.

tPackard Piano Company Fort Wayne, Ind 1913 .... I. D.

tPassaic Metal Ware Co Passaic, N. J 1919 I. D.

Penberthy Injector Co Detroit, Mich 1919 Ltd.

Pennsylvania Railroad Philadelphia, Pa 1921 E. P.

People's Gas Light &

Coke Company Chicago, 111 1921 .... E. P.

Phelps Dodge Corpora-
tion Bisbee, Ariz 1921 . . . .1. D.

Philadelphia Rapid Tran-
sit Company Philadelphia, Pa 1918

*Piedmont& Georges Coal

Company Frostburg, Md 1920

Phoenix Silk Mfg. Co Allentown, Pa 1920. . . .1. D.

Plankington Packing Co Milwaukee, Wis 1921 E. P.

Plant, Thomas G. & Co Boston, Mass E. P.

Plimpton Press Norwood, Mass 1915 .... Ltd.

Plumb, Fayette R., Inc Philadelphia, Pa 1918 .... E. P.

*Potomac ^ Cumberland

Coal Company Philadelphia, Pa 1920

*Potomac Valley Coal Co Philadelphia, Pa 1920

Power Specialty Co Dansville, N. Y 1919. . . . E. P.

Printz-Biederman Co Cleveland, Ohio 1914 1. D.

Procter ^Gamble Co Cincinnati, Ohio 1918. . . .E. P.

Public Service Company

of Northern III Chicago, 111 1920. . . . E. P.

Pullman Company Pullman, 111 1920. . . .E. P.

Quaker City Rubber Co Philadelphia, Pa 1919. ,. .1. D.

Reed & Prince Mfg. Co Worcester, Mass Ltd.

Remington U. M. C.

Works Bridgeport, Conn 1919. . . .Br. P.

Renfrew Mfg. Company Adams, Mass 1920. . . . I. D.

Riverside & Dan River

Cotton Mills Danville, Va 1919. . . .1. D.

tRock Island Arsenal Rock Island, 111 1919

Rockland Finishing Co Garnerville, N. Y 1918. . . .E. P.

Rome Brass i£ Copper Co Rome, N. Y 1920 .... E. P.

Roots, P. H. &F. M.Co Connersville, Ind 1918 .... N.W.L.Bd.

*Rowe, C. J. & Brother Meyersdale, Pa 1920.

189

&E.P.

Date of
Name of Company Location Intro- Type of

duction Plan
of Plan

Seng Company Chicago, 111 1919. . . .1. D.

*Silver Coal Company Luke, Md 1920

Singer Manufacturing Co Bridgeport, Conn 1919. . . . Br. P.

Smith & Kaufman, Inc Paterson, N. J 1921 . . . .E. P.

Sperry Gyroscope Co Brooklyn, N. Y 1920. . . .E. P.

Sprague Electric Works oj

General Electric Co Bloomfield, N. J 1918 .... E. P.

*St. Cloud Coal Mining Co. . . . Cumberland, Md 1920

Standard Gas Engine Co Oakland, Calif. 1920. .. .1. D.

Standard Oil Company of
New Jersey New York, N. Y 1918. . . .E. P.

Standard Oil Company of
Indiana Chicago, 111 1919. . . . E. P.

Stetson, John B. Co Philadelphia, Pa 1919. . . . E. P.

.*Sullivan Brothers Coal

Company Frostburg, Md 1920

Susquehanna Silk Mills Sunbury, Pa 1919 I. D.

Swift &f Company Chicago, 111 1921 E. P.

Taunton-NewBedfordCop-

per Company Taunton, Mass E. P.

Taylor-Wharton Iron &

Steel Company High Bridge, N. J 1919 E. P.

TemtorCorn & Fruit Prod-
ucts Company St. Louis, Mo 1918 N.W.L.Bd.

& E. P.

Tennessee Copper Co Copper Hill, Tenn 1920. . . . E. P.

fTroutwine Sons Company. . . Gloversville, N. Y 1919. . . .E. P.

Tweedy Silk Mills Co Danbury, Conn 1920 .... I. D.

Union Buffalo Mills Com-
pany, Inc Union. S. C 1919. . . .1. D.

Union Construction Co Oakland. Calif 1919. . . . E. P.

United Brethren.- Dayton, Ohio 1920. . . . I. D.

fUnited Railways & Elec-
tric Co. of Baltimore Baltimore, Md 1918 C. U.

United States Rubber
Company New York, N. Y 1919. . . .E. P.

UniversalFilm Mfg. Co New York, N. Y 1920 .... I. D.

Fan Tassel Tanning Co Stoneham, Mass 1919. . . . I. D.

Virginia Bridge & Iron

Company Roanoke, Va 1918 . . .N.W. L.Bd.

&E.P.

Vulcan Iron Works, Inc Jersey City, N. J 1920 .... E. P.

Walworth Mfg. Co Boston, Mass 1919. . . .N.W.L.Bd.

& E. P.

Warner Bros Bridgeport, Conn Ltd.

Waterfront Employers'

Union of Seattle Seattle, Wash 1921 . . . .E. P.

Western Union Telegraph

Company New York, N. Y 1918. . . . C. U.

*Westernport Coal Co Westernport, Md 1920

Westinghouse Air Brake

Company Pittsburgh, Pa 1919. . . .E. P.

Westinghouse Electric &

Manufacturing Co Pittsburgh, Pa 1919 E. P.

White Motor Company Cleveland, Ohio 1914 E. P.

190

Date of

Name of Company Location Intro- Type of

duction Plan
of Plan

White Sewing Machine

Company Cleveland, Ohio 1919. . . .E. P.

Williams, A. C, & Co Ravenna, Ohio E. P.

JVillys-Overland Co Toledo, Ohio 1919. . . .E. P.

Wilson & Company Chicago, 111 1921 .... E. P.

Windsor Print Works North Adams, Mass 1919 .... I. D.

Wright's Underwear Com-
pany Troy, N. Y 1922. . . , I. D.

Yale & Towne Mfg. Co Stamford, Conn 1919. . . .E. P.

Youngstown Sheet ^ Tube
Company Youngstown, Ohio 1918. . . .E. P.

♦Party to the Maryland Agreement.

tRepresentation plan in operation at date of last correspondence with company, 1918-19.

Jlnstituted by the U. S. War Department.

191

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