wealth was made by its railway systems under the workings of the natural laws of supply and demand, and without the intervention of statute law, may we not well hesitate and take time to consider whether the intrusion of statute law upon this satisfactory business condition is after all as necessary as we are being asked to believe?

There is in some sections a persistent and almost hysterical demand for railway rate regulation, but what is really meant is not "rate regulation," but "rate reduction," and if this demand is enforced to an extent that will be of any appreciable value to the people at large, will not the railways, that in 1903 earned a surplus of only $120,000,000 and paid their shareholders an average dividend of less than 3 per cent., find it necessary to reduce their operating expenses to meet proportionately this loss of surplus income, and when such reductions become necessary do I need to point out to you where the greater part of this shrinkage must be borne?

But as he who criticises and objects to proposed methods is in reason bound to suggest something in substitution, I assume the necessary responsibility, and, with becoming modesty, offer the following:

The present laws seem adequate and sufficient, if thoroughly applied, to enable the interstate commerce commission to bring to light, punish and prevent every form of rebating and secret rate giving or taking, as rapidly as the cases are brought to its attention, and therefore further legislation upon this branch of the subject seems at present to be unnecessary. The other principal abuses and evils. alleged, and to which congressional attention has recently been called, are said to arise out of the improper use of privately owner freight cars and of private side tracks and railways of the so-called industrial combinations, I suggest that, if these privately controlled special facilities and their owners are, to the extent that they deal in transportation, brought within the scope of and made amenable to all laws that are now, or may hereafter be, ap

plicable to transportation companies engaged in interstate commerce, the alleged abuses and evils will at once become controllable and can be wholly eradicated. If the rate-making power is then found to need further supervision and relation, the interstate commerce commission should have added to its present full power of investigation that of recommending to the railways the substitution of rates that it thinks reasonable for those that, upon investigation, it has condemned, and if within reasonable time-say 30 daysthe railways interested fail to adopt these recommended rates, the commission should make to Congress a report of its findings and recommendations and of the failures or refusals to comply therewith, leaving to Congress the duty of applying such remedies as it may then think needful.

This plan has worked well for so many years in our own commonwealth that its trial by the general government would seem to be at least worthy of consideration. It would have the wholesome, and I think necessary, effect of preventing an accumulation of frivolous complaints, with which the commission is quite certain to be overwhelmed if the proposed plan of giving it the final adjudication of all rate cases submitted to it is adopted: and judging from the working of our Massachusetts laws covering this matter, the restraint against arbitrary and unjust acts by any of the railways would be so sufficient and wholesome as to bring substantial and even-handed justice to all parties in interest.

In conclusion I will only add, that in this necessarily condensed and somewhat fragmentary presentation of what I believe to be a subject of profound and far-reaching personal interest to every person engaged in railroad work I am not trying to build up a propoganda, or intimate a general agitation with the purpose of coercing the opinions of those charged with the duties of suggesting and framing changes in. or addition to, our national laws. I

those who would do the least if working alone, the net result is always expressed in an average that is much nearer the capacity of the least capable than that of the most efficient. All this will happen in any establishment without the aid of a labor union. What, then is the consequence, in this connection, of organization? Usually its first effect is that the restriction which was formerly tacit and somewhat irregularly enforced is reduced to a set of definite regulations that are systematically enforced. It may not become greater in amount, although it is not unlikely that it will. There is some evidence however, that the improved economic perception on the part of labor leaders is causing the older organizations to abandon their efforts in this direction. Yet the recent growth of the unions in numbers and power, and the reluctance of employers to resist their aggression in this particular, during a period of such tremendous general prosperty, that nearly every productive establishment was taxed to its utmost capacity, have undoubtedly led to an extension of the practice of restriction which must be checked. The unit of production per employe per hour has suffered a very considerable decrease in almost all American industries during the last six or seven years, and this diminuation of effectiveness has placed a more severe burden upon industry than the enhanced wages by which it has been accompanied. The record of the United Mine Workers in the anthracite region is probably an extreme one, but it can be more advantageously studied than any other on account of the elaborate investigation prosecuted last year. The testimony taken by the Strike Commission contained instances of probably every conceivable method by which the output of a body of workmen can be kept down to the level fixed by the least able and industrious. Those who dare to rebel against rules restricting their earnings were subjected to the ill-will and the systematic oppression of their less intelligent and energetic comrades until they either become less efficient or were driven from the mines. It is

necessary to be patient with folly that springs from ignorance, but there is little excuse for leaders who, knowing the truth, do not use all their tremendous influence to spread an intelligent understanding of the simple economic principles which would at once destroy this most vicious of self limiting practice.

That recourse to the strike should ever be necessary is wholly deplorable, but the condition of men whom the laws deprived of the use of this industrial weapon of last resort would be indeed pitiable. Freemen must have the right to work and the right not to work, and they may not be impelled to choose the former by any command more imperative than that springing from their own desire to enjoy the fruits of exertion. The whole fabric of industry and commerce rests on bargains toward which there is no compulsion stronger than this. Between the buyer and seller of commodities there are successive offers and counter-offers until a point acceptable to both, but less satisfactory to either than his original demand, has become the point of contract. The corporation and the "trust' do away with a great deal of dickering between individuals, and in a precisely similar way the labor organization attempts to substitute a single collective bargain for a multitude of individual bargains. If, however, the corporation and the trust are unreasonable in their demands, everyone now knows that the potential competition of smaller concerns, which always exists, is speedily actualized and the productive organizations, that have shown their commercial incompetence to bargain reasonably with buyers, are destroyed. So it should be with labor organizations. Those organizations which are reasonable in their demands will usually establish their right to survive by remaining at peace with the employers; those whose frequent strikes and repeated complaints of the alleged tyranny of employers prove their inability to bargain are usually inefficient in their efforts to promote the interests of their members and ought to pass out of ex

istence. Yet the decision as to the terms which they will accept must always be left with the workmen, organized or unorganized. The right to strike ought to be used rarely and reluctantly; its use should always throw the burden of justifying its course at the bar of public sentiment jointly upon the employed and the employer; it can never be necessary except by reason of the grievous fault of one party or the other, yet it may be necessary and the greatest protection against it becoming so, save that which lies in the development and spread of a broad and intelligent spirit of humanity, lies in its exceedingly careful preservation. Generally speaking, however, the union which strikes on small provocation and frequently is to be classed among those which are undesirable, and the credit of any labor organization ought to be in inverse proportion to the frequency of its resort to this extreme method of enforcing its demands.

HOW CERTAIN STRIKES ORIGINATE.

As somewhat justifying the assumption that every strike is evidence of lack of capacity somewhere, and perhaps indicating where the blame more frequently resides, I would call your attention to the very large number of strikes which always attend the transition from a period of great industrial prosperity to one of relative depression. The interpretation of this phenomenon is very simple. From almost the beginning of a period of prosperity the leaders of organized workmen perceive that their position is one of growing strength. The demand for products is a demand for labor, and as the one is expressed in rising prices the other is naturally translated into rising wages. Organizations formulate their demands, make them and they organize. New demands and new concessions follow in an alternation which becomes more rapid as prosperity appears more intense, the willingness of employers to grant even seemingly extravagant demands as to wages or conditions being based on a confidence in the continuance of heavy demand and high prices which often amounts almost to intoxication. While this process has been going on the

effect of high wages and reduced efficiency is being transferred to the consumers, always with some addition to make up for the exactions of those in charge of production. Naturally, this cannot continue forever. Sooner ог later there is a consumers' "strike." That is, high prices ultimately reduce the effective demands, orders come less freely, the bubble is about to burst. Employers rather promptly perceive the situation more or less clearly; labor too frequently does not. More wages or less work, or both, are again demanded, and, as this time the employers see that the cost of acquiescence cannot be shifted or realize that a curtailment of

production must soon occur, the demands are refused. The strike which, if the workmen are ill-advised, follows, marks the turning point from prosperity to depression.

The other typical strike is a protest against a reduction in wages when the decline in commercial activity is in progress, or before the change to perceptibly better conditions has arrived. Such strikes are less frequent but much more likely to be creditable to the judgment of the strikers. Employers rarely refuse reasonable demands while industry is prosperous and the labor market empty or nearly so; some of them do attempt oppressive reductions in wages or unjust modifications in conditions when the times are dull and the labor market glutted with the unemployed. This is not to say that radical reductions in wages may not be necessary, they are very apt to be after such a period of unprecedented activity in every line of industry, but it should be recognized that when due allowance for the changed conditions has been made everywhere there may be some employers who will endeavor to take advantage of the situation and to deal unjustly with their workmen.

The character of any labor organization is further to be tested by its principles and practices in reference to laborsaving machinery, profit sharing, pensions, insurance funds, home Ownership by its members, admission of applicants for membership, apprentices,