Problems of Labor

I should like to record here some of the labor disputes I have had to deal with, as these may point a moral to both capital and labor.

The workers at the blast furnaces in our steel-rail works once sent in a "round-robin" stating that unless the firm gave them an advance of wages by Monday afternoon at four o'clock they would leave the furnaces. Now, the scale upon which these men had agreed to work did not lapse until the end of the year, several months off. I felt if men would break an agreement there was no use in making a second agreement with them, but nevertheless I took the night train from New York and was at the works early in the morning.

I asked the superintendent to call together the three committees which governed the works--not only the blast-furnace committee that was alone involved, but the mill and the converting works committees as well. They appeared and, of course, were received by me with great courtesy, not because it was good policy to be courteous, but because I have always enjoyed meeting our men. I am bound to say that the more I know of working-men the higher I rate their virtues. But it is with them as Barrie says with women: "Dootless the Lord made a' things weel, but he left some michty queer kinks in women." They have their prejudices and "red rags," which have to be respected, for the main root of trouble is ignorance, not hostility. The committee sat in a semicircle before me, all with their hats off, of course, as mine was also; and really there was the appearance of a model assembly.

Addressing the chairman of the mill committee, I said:

"Mr. Mackay" (he was an old gentleman and wore spectacles), "have we an agreement with you covering the remainder of the year?"

Taking the spectacles off slowly, and holding them in his hand, he said:

"Yes, sir, you have, Mr. Carnegie, and you haven't got enough money to make us break it either."

"There spoke the true American workman," I said. "I am proud of you."

"Mr. Johnson" (who was chairman of the rail converters' committee), "have we a similar agreement with you?"

Mr. Johnson was a small, spare man; he spoke very deliberately:

"Mr. Carnegie, when an agreement is presented to me to sign, I read it carefully, and if it don't suit me, I don't sign it, and if it does suit me, I do sign it, and when I sign it I keep it."

"There again speaks the self-respecting American workman," I said.

Turning now to the chairman of the blast-furnaces committee, an Irishman named Kelly, I addressed the same question to him:

"Mr. Kelly, have we an agreement with you covering the remainder of this year?"

Mr. Kelly answered that he couldn't say exactly. There was a paper sent round and he signed it, but didn't read it over carefully, and didn't understand just what was in it. At this moment our superintendent, Captain Jones, excellent manager, but impulsive, exclaimed abruptly:

"Now, Mr. Kelly, you know I read that over twice and discussed it with you!"

"Order, order, Captain! Mr. Kelly is entitled to give his explanation. I sign many a paper that I do not read--documents our lawyers and partners present to me to sign. Mr. Kelly states that he signed this document under such circumstances and his statement must be received. But, Mr. Kelly, I have always found that the best way is to carry out the provisions of the agreement one signs carelessly and resolve to be more careful next time. Would it not be better for you to continue four months longer under this agreement, and then, when you sign the next one, see that you understand it?"

There was no answer to this, and I arose and said:

"Gentlemen of the Blast-Furnace Committee, you have threatened our firm that you will break your agreement and that you will leave these blast furnaces (which means disaster) unless you get a favorable answer to your threat by four o'clock to-day. It is not yet three, but your answer is ready. You may leave the blast furnaces. The grass will grow around them before we yield to your threat. The worst day that labor has ever seen in this world is that day in which it dishonors itself by breaking its agreement. You have your answer."

The committee filed out slowly and there was silence among the partners. A stranger who was coming in on business met the committee in the passage and he reported:

"As I came in, a man wearing spectacles pushed up alongside of an Irishman he called Kelly, and he said: 'You fellows might just as well understand it now as later. There's to be no d----d monkeying round these works.'"

That meant business. Later we heard from one of our clerks what took place at the furnaces. Kelly and his committee marched down to them. Of course, the men were waiting and watching for the committee and a crowd had gathered. When the furnaces were reached, Kelly called out to them:

"Get to work, you spalpeens, what are you doing here? Begorra, the little boss just hit from the shoulder. He won't fight, but he says he has sat down, and begorra, we all know he'll be a skeleton afore he rises. Get to work, ye spalpeens."

The Irish and Scotch-Irish are queer, but the easiest and best fellows to get on with, if you only know how. That man Kelly was my stanch friend and admirer ever afterward, and he was before that one of our most violent men. My experience is that you can always rely upon the great body of working-men to do what is right, provided they have not taken up a position and promised their leaders to stand by them. But their loyalty to their leaders even when mistaken, is something to make us proud of them. Anything can be done with men who have this feeling of loyalty within them. They only need to be treated fairly.

The way a strike was once broken at our steel-rail mills is interesting. Here again, I am sorry to say, one hundred and thirty-four men in one department had bound themselves under secret oath to demand increased wages at the end of the year, several months away. The new year proved very unfavorable for business, and other iron and steel manufacturers throughout the country had effected reductions in wages. Nevertheless, these men, having secretly sworn months previously that they would not work unless they got increased wages, thought themselves bound to insist upon their demands. We could not advance wages when our competitors were reducing them, and the works were stopped in consequence. Every department of the works was brought to a stand by these strikers. The blast furnaces were abandoned a day or two before the time agreed upon, and we were greatly troubled in consequence.

I went to Pittsburgh and was surprised to find the furnaces had been banked, contrary to agreement. I was to meet the men in the morning upon arrival at Pittsburgh, but a message was sent to me from the works stating that the men had "left the furnaces and would meet me to-morrow." Here was a nice reception! My reply was:

"No they won't. Tell them I shall not be here to-morrow. Anybody can stop work; the trick is to start it again. Some fine day these men will want the works started and will be looking around for somebody who can start them, and I will tell them then just what I do now: that the works will never start except upon a sliding scale based upon the prices we get for our products. That scale will last three years and it will not be submitted by the men. They have submitted many scales to us. It is our turn now, and we are going to submit a scale to them.

"Now," I said to my partners, "I am going back to New York in the afternoon. Nothing more is to be done."

A short time after my message was received by the men they asked if they could come in and see me that afternoon before I left.

I answered: "Certainly!"

They came in and I said to them:

"Gentlemen, your chairman here, Mr. Bennett, assured you that I would make my appearance and settle with you in some way or other, as I always have settled. That is true. And he told you that I would not fight, which is also true. He is a true prophet. But he told you something else in which he was slightly mistaken. He said I _could_ not fight. Gentlemen," looking Mr. Bennett straight in the eye and closing and raising my fist, "he forgot that I was Scotch. But I will tell you something; I will never fight you. I know better than to fight labor. I will not fight, but I can beat any committee that was ever made at sitting down, and I have sat down. These works will never start until the men vote by a two-thirds majority to start them, and then, as I told you this morning, they will start on our sliding scale. I have nothing more to say."

They retired. It was about two weeks afterwards that one of the house servants came to my library in New York with a card, and I found upon it the names of two of our workmen, and also the name of a reverend gentleman. The men said they were from the works at Pittsburgh and would like to see me.

"Ask if either of these gentlemen belongs to the blast-furnace workers who banked the furnaces contrary to agreement."

The man returned and said "No." I replied: "In that case go down and tell them that I shall be pleased to have them come up."

Of course they were received with genuine warmth and cordiality and we sat and talked about New York, for some time, this being their first visit.

"Mr. Carnegie, we really came to talk about the trouble at the works," the minister said at last.

"Oh, indeed!" I answered. "Have the men voted?"

"No," he said.

My rejoinder was:

"You will have to excuse me from entering upon that subject; I said I never would discuss it until they voted by a two-thirds majority to start the mills. Gentlemen, you have never seen New York. Let me take you out and show you Fifth Avenue and the Park, and we shall come back here to lunch at half-past one."

This we did, talking about everything except the one thing that they wished to talk about. We had a good time, and I know they enjoyed their lunch. There is one great difference between the American working-man and the foreigner. The American is a man; he sits down at lunch with people as if he were (as he generally is) a gentleman born. It is splendid.

They returned to Pittsburgh, not another word having been said about the works. But the men soon voted (there were very few votes against starting) and I went again to Pittsburgh. I laid before the committee the scale under which they were to work. It was a sliding scale based on the price of the product. Such a scale really makes capital and labor partners, sharing prosperous and disastrous times together. Of course it has a minimum, so that the men are always sure of living wages. As the men had seen these scales, it was unnecessary to go over them. The chairman said:

"Mr. Carnegie, we will agree to everything. And now," he said hesitatingly, "we have one favor to ask of you, and we hope you will not refuse it."

"Well, gentlemen, if it be reasonable I shall surely grant it."

"Well, it is this: That you permit the officers of the union to sign these papers for the men."

"Why, certainly, gentlemen! With the greatest pleasure! And then I have a small favor to ask of you, which I hope you will not refuse, as I have granted yours. Just to please me, after the officers have signed, let every workman sign also for himself. You see, Mr. Bennett, this scale lasts for three years, and some man, or body of men, might dispute whether your president of the union had authority to bind them for so long, but if we have his signature also, there cannot be any misunderstanding."

There was a pause; then one man at his side whispered to Mr. Bennett (but I heard him perfectly):

"By golly, the jig's up!"

So it was, but it was not by direct attack, but by a flank movement. Had I not allowed the union officers to sign, they would have had a grievance and an excuse for war. As it was, having allowed them to do so, how could they refuse so simple a request as mine, that each free and independent American citizen should also sign for himself. My recollection is that as a matter of fact the officers of the union never signed, but they may have done so. Why should they, if every man's signature was required? Besides this, the workmen, knowing that the union could do nothing for them when the scale was adopted, neglected to pay dues and the union was deserted. We never heard of it again. [That was in 1889, now twenty-seven years ago. The scale has never been changed. The men would not change it if they could; it works for their benefit, as I told them it would.]

Of all my services rendered to labor the introduction of the sliding scale is chief. It is the solution of the capital and labor problem, because it really makes them partners--alike in prosperity and adversity. There was a yearly scale in operation in the Pittsburgh district in the early years, but it is not a good plan because men and employers at once begin preparing for a struggle which is almost certain to come. It is far better for both employers and employed to set no date for an agreed-upon scale to end. It should be subject to six months' or a year's notice on either side, and in that way might and probably would run on for years.

To show upon what trifles a contest between capital and labor may turn, let me tell of two instances which were amicably settled by mere incidents of seemingly little consequence. Once when I went out to meet a men's committee, which had in our opinion made unfair demands, I was informed that they were influenced by a man who secretly owned a drinking saloon, although working in the mills. He was a great bully. The sober, quiet workmen were afraid of him, and the drinking men were his debtors. He was the real instigator of the movement.

We met in the usual friendly fashion. I was glad to see the men, many of whom I had long known and could call by name. When we sat down at the table the leader's seat was at one end and mine at the other. We therefore faced each other. After I had laid our proposition before the meeting, I saw the leader pick up his hat from the floor and slowly put it on his head, intimating that he was about to depart. Here was my chance.

"Sir, you are in the presence of gentlemen! Please be so good as to take your hat off or leave the room!"

My eyes were kept full upon him. There was a silence that could be felt. The great bully hesitated, but I knew whatever he did, he was beaten. If he left it was because he had treated the meeting discourteously by keeping his hat on, he was no gentleman; if he remained and took off his hat, he had been crushed by the rebuke. I didn't care which course he took. He had only two and either of them was fatal. He had delivered himself into my hands. He very slowly took off the hat and put it on the floor. Not a word did he speak thereafter in that conference. I was told afterward that he had to leave the place. The men rejoiced in the episode and a settlement was harmoniously effected.

When the three years' scale was proposed to the men, a committee of sixteen was chosen by them to confer with us. Little progress was made at first, and I announced my engagements compelled me to return the next day to New York. Inquiry was made as to whether we would meet a committee of thirty-two, as the men wished others added to the committee--a sure sign of division in their ranks. Of course we agreed. The committee came from the works to meet me at the office in Pittsburgh. The proceedings were opened by one of our best men, Billy Edwards (I remember him well; he rose to high position afterwards), who thought that the total offered was fair, but that the scale was not equable. Some departments were all right, others were not fairly dealt with. Most of the men were naturally of this opinion, but when they came to indicate the underpaid, there was a difference, as was to be expected. No two men in the different departments could agree. Billy began:

"Mr. Carnegie, we agree that the total sum per ton to be paid is fair, but we think it is not properly distributed among us. Now, Mr. Carnegie, you take my job--"

"Order, order!" I cried. "None of that, Billy. Mr. Carnegie 'takes no man's job.' Taking another's job is an unpardonable offense among high-classed workmen."

There was loud laughter, followed by applause, and then more laughter. I laughed with them. We had scored on Billy. Of course the dispute was soon settled. It is not solely, often it is not chiefly, a matter of dollars with workmen. Appreciation, kind treatment, a fair deal--these are often the potent forces with the American workmen.

Employers can do so many desirable things for their men at little cost. At one meeting when I asked what we could do for them, I remember this same Billy Edwards rose and said that most of the men had to run in debt to the storekeepers because they were paid monthly. Well I remember his words:

"I have a good woman for wife who manages well. We go into Pittsburgh every fourth Saturday afternoon and buy our supplies wholesale for the next month and save one third. Not many of your men can do this. Shopkeepers here charge so much. And another thing, they charge very high for coal. If you paid your men every two weeks, instead of monthly, it would be as good for the careful men as a raise in wages of ten per cent or more."

"Mr. Edwards, that shall be done," I replied.

It involved increased labor and a few more clerks, but that was a small matter. The remark about high prices charged set me to thinking why the men could not open a cooeperative store. This was also arranged--the firm agreeing to pay the rent of the building, but insisting that the men themselves take the stock and manage it. Out of that came the Braddock's Cooeperative Society, a valuable institution for many reasons, not the least of them that it taught the men that business had its difficulties.

The coal trouble was cured effectively by our agreeing that the company sell all its men coal at the net cost price to us (about half of what had been charged by coal dealers, so I was told) and arranging to deliver it at the men's houses--the buyer paying only actual cost of cartage.

There was another matter. We found that the men's savings caused them anxiety, for little faith have the prudent, saving men in banks and, unfortunately, our Government at that time did not follow the British in having post-office deposit banks. We offered to take the actual savings of each workman, up to two thousand dollars, and pay six per cent interest upon them, to encourage thrift. Their money was kept separate from the business, in a trust fund, and lent to such as wished to build homes for themselves. I consider this one of the best things that can be done for the saving workman.

It was such concessions as these that proved the most profitable investments ever made by the company, even from an economical standpoint. It pays to go beyond the letter of the bond with your men. Two of my partners, as Mr. Phipps has put it, "knew my extreme disposition to always grant the demands of labor, however unreasonable," but looking back upon my failing in this respect, I wish it had been greater--much greater. No expenditure returned such dividends as the friendship of our workmen.

We soon had a body of workmen, I truly believe, wholly unequaled--the best workmen and the best men ever drawn together. Quarrels and strikes became things of the past. Had the Homestead men been our own old men, instead of men we had to pick up, it is scarcely possible that the trouble there in 1892 could have arisen. The scale at the steel-rail mills, introduced in 1889, has been running up to the present time (1914), and I think there never has been a labor grievance at the works since. The men, as I have already stated, dissolved their old union because there was no use paying dues to a union when the men themselves had a three years' contract. Although their labor union is dissolved another and a better one has taken its place--a cordial union between the employers and their men, the best union of all for both parties.

It is for the interest of the employer that his men shall make good earnings and have steady work. The sliding scale enables the company to meet the market; and sometimes to take orders and keep the works running, which is the main thing for the working-men. High wages are well enough, but they are not to be compared with steady employment. The Edgar Thomson Mills are, in my opinion, the ideal works in respect to the relations of capital and labor. I am told the men in our day, and even to this day (1914) prefer two to three turns, but three turns are sure to come. Labor's hours are to be shortened as we progress. Eight hours will be the rule--eight for work, eight for sleep, and eight for rest and recreation.

There have been many incidents in my business life proving that labor troubles are not solely founded upon wages. I believe the best preventive of quarrels to be recognition of, and sincere interest in, the men, satisfying them that you really care for them and that you rejoice in their success. This I can sincerely say--that I always enjoyed my conferences with our workmen, which were not always in regard to wages, and that the better I knew the men the more I liked them. They have usually two virtues to the employer's one, and they are certainly more generous to each other.

Labor is usually helpless against capital. The employer, perhaps, decides to shut up the shops; he ceases to make profits for a short time. There is no change in his habits, food, clothing, pleasures--no agonizing fear of want. Contrast this with his workman whose lessening means of subsistence torment him. He has few comforts, scarcely the necessities for his wife and children in health, and for the sick little ones no proper treatment. It is not capital we need to guard, but helpless labor. If I returned to business to-morrow, fear of labor troubles would not enter my mind, but tenderness for poor and sometimes misguided though well-meaning laborers would fill my heart and soften it; and thereby soften theirs.

Upon my return to Pittsburgh in 1892, after the Homestead trouble, I went to the works and met many of the old men who had not been concerned in the riot. They expressed the opinion that if I had been at home the strike would never have happened. I told them that the company had offered generous terms and beyond its offer I should not have gone; that before their cable reached me in Scotland, the Governor of the State had appeared on the scene with troops and wished the law vindicated; that the question had then passed out of my partners' hands. I added:

"You were badly advised. My partners' offer should have been accepted. It was very generous. I don't know that I would have offered so much."

To this one of the rollers said to me:

"Oh, Mr. Carnegie, it wasn't a question of dollars. The boys would have let you kick 'em, but they wouldn't let that other man stroke their hair."

So much does sentiment count for in the practical affairs of life, even with the laboring classes. This is not generally believed by those who do not know them, but I am certain that disputes about wages do not account for one half the disagreements between capital and labor. There is lack of due appreciation and of kind treatment of employees upon the part of the employers.

Suits had been entered against many of the strikers, but upon my return these were promptly dismissed. All the old men who remained, and had not been guilty of violence, were taken back. I had cabled from Scotland urging that Mr. Schwab be sent back to Homestead. He had been only recently promoted to the Edgar Thomson Works. He went back, and "Charlie," as he was affectionately called, soon restored order, peace, and harmony. Had he remained at the Homestead Works, in all probability no serious trouble would have arisen. "Charlie" liked his workmen and they liked him; but there still remained at Homestead an unsatisfactory element in the men who had previously been discarded from our various works for good reasons and had found employment at the new works before we purchased them.