of the United States suffering from a severe trade depression such as has been experienced in Great Britain during the last few years. There can be no question, however, as to the soundness of the principle underlying the joint schemes, which is to provide for closer contact between the management and the employees and for open and frank disclosure of facts and figures on both sides.

75. In addition to the schemes of employee representation based on the provision of joint machinery for the consideration of grievances, two notable cases in which the association between management and labour has developed beyond this are set out in Appendix No. 5 (Cases B and C).

76. Apart from organised schemes of employee representation many individual employers, where there is no internal organisation in the workshop, have sought and gained a closer relationship with their employees and have given much effective study and attention to the human element. As a matter of practice, grievances or requests may be carried by the workers individually or collectively through various stages to the head of the business. The old conditions of personal contact between owners or management and employees have been partially maintained or revived. The employer takes an active interest in his workpeople and provides, either alone or with the co-operation of the workpeople, many forms of welfare work.

General.

77. In the preceding paragraphs we have indicated the methods adopted in the United States for the regulation of working conditions, and we have referred earlier in the Report to other facts which must be taken into consideration in estimating the position to-day as regards industrial relations. The most important of these are:

(1) The individualist character of the employers and workers.

(2) The lack of homogeneity of the workers.

(3) The restriction of trade union organisation, except in the railway, mining and clothing industries, mainly to the skilled crafts.

In the result a large proportion of the working population has had neither the desire or opportunity to become organised, nor experience of collective arrangements. This position has existed side by side with a trade union organisation of the higher grades of workers which, under the earlier conditions of hostility, grew up as a protective rather than co-operative movement. The recognition of the importance of a contented labour force and the influence of this on production and efficiency, stimulated managements to make the needs and desires of their employees an important factor in the settlement of their policies and, with or without standing joint machinery, action has been taken over

a large area of industry to remove the chances of discontent and to provide means of early settlement of grievances. In many cases some form of collective arrangement within individual establishments has been created and such schemes, which were only possible on the initiative of the management, have usually been the first introduction of the workers to any form of collective action.

78. It is not necessary, in estimating the value of this movement, to place the motive of management higher than that of enlightened self-interest. It is inherent in industry in the United States that working conditions must be settled in the closest relationship with the circumstances of the individual establishment and that there should, as far as possible, be a direct contact between the management and their workpeople. The trade unions have always made many agreements with individual employers and, while it has to be recognised that there is on the part of other employers a definite hostility to the trade union form of organisation, there appears to be no conflict between the organisation of workers in trade unions and the settlement of the majority of questions arising in individual establishments within those establishments. The trade unions desire that the right to belong to a union shall not be denied to a worker and that, if the need arises, the union may come to his support. This has been recognised in the later developments towards association between trade unions and managements.

79. It is impossible to foretell what the future developments will be, but it would appear that there is growing up in the United States and Canada, by a process of experiment, a form of collective bargaining based on the workshop which, while allowing the circumstances of each establishment to be the primary consideration, will not preclude a wider association of either employers or workers. The course of development will without doubt depend upon the extent to which managements are able to create confidence in their good faith. In the meantime it is undoubted that in those cases in which such confidence has been created, the closer contact in the establishments concerned has proved of great benefit to both sides. Grievances which were formerly left to grow into sources of wide discontent are quickly dealt with, and causes of inefficiency have been removed, often on the initiative of the workers themselves. Where trade unions have been concerned, there has been a great reduction of the matters which have required the attention of the unions outside the workshop, and not the east important result has been the revelation to managements which had formerly not sought co-operation, of the number of unnecessary grievances which existed and the extent of the improvements in the workshops which the men concerned were able to suggest. There can be no doubt that the progress of the movement is being adversely affected by those managements who are not acting in good faith and who are fettering the liberty of the

workers to organise. It is such conduct which lays the movement open to criticism. On the observations we have made we cannot too greatly emphasise that success is being achieved only when the management as a whole, including the foremen, have established confidence in their motives and have been constantly active in maintaining that confidence.

PART III.-THE CONDITIONS OF WAGE EARNERS IN THE UNITED STATES.

Earnings and Real Wages.

80. A good deal of attention has been paid in Great Britain to the higher earnings of the industrial workers in the United States and the Delegation gave special attention to this subject. It was not possible for us to make an exhaustive inquiry into the rates of wages payable to every grade of worker in all industries, but we were able to obtain sufficient information from firms visited and from published data to make an estimate of the general position. We excluded agriculture from the scope of our investigations and it is important to bear in mind that about one-third of the population are engaged in agriculture.

81. During the war period increases in wages were made to meet the increased cost of living. We have referred in paragraph 13 to the efforts made after the War to reduce costs by wages reductions, and to the change in this policy which took place in 1921-2. Weekly earnings have been maintained or increased during the last four years but such has been the development of manufacture that piece work prices have been revised consequent upon the subdivision of operations, changes in method and the installation of new machinery, and they are not comparable over any long period of time. The new prices have been so arranged, however, that at least the same amount can be earned as before by the workers.

82. While it does not follow, and, indeed, is not the case in many instances, that greater effort is required of the worker, it is important to note that in practically every case earnings have been maintained or increased by an increase of productivity. The National Industrial Conference Board estimate for example that in the year 1925 alone there was an increase in productivity of about ten per cent. without a perceptible general increase in the number employed, and in some establishments the number of wage earners has been reduced although production has increased. This increase has been made possible largely by the close application of management to the improvement of methods and to the introduction of mechanical equipment. Machines also are practically always run to the limit of their capacity, and it is not unusual to find that the rate of working has been speeded up. As a rule no difficulty appears to have been experienced in changing methods or in the introduction

of new machinery. This has been largely due to the desire of workers to maintain their individual earnings and to the opportunities of alternative employment which have been offered by the expansion of United States industry.

83. As regards the level of earnings, we set out in Appendix No. 15 a table of average weekly earnings published by the National Industrial Conference Board and some sample earnings in establishments which we studied. In general we found in the industrial centres of the North that the weekly earnings of a labourer range from $20 to $25 a week, of a semiskilled worker from $25 to $30 a week, and of skilled workers from $30 to $60 a week and upwards. The best paid industrial workers are engaged on the railroads, in building, printing and anthracite coal mining. Highly skilled men are much in demand, and there is a growing shortage of this class of worker, which tends to keep up the level of earnings.

In

84. In estimating the relative positions of workers in the United States and Great Britain there are several important considerations to be borne in mind. In the first place there is nothing in the United States to compare with the State provision in this country for unemployment, sickness and old age. general an unemployed worker has to depend upon his savings when not able to work. This absence of outside assistance for the worker who is unable to obtain employment makes poverty in the United States a matter of extreme hardship. At the same time attention is being given by individual managements to welfare work and to the regularisation of employment. There is no doubt, however, that in the United States the worker is in a less favourable position in regard to the risks of industry than in Great Britain. In Appendix No. 9 we deal with this subject more fully.

85. In comparing wages allowance must also be made for differences in the cost of living. It is impossible without an exhaustive technical study to make a comparison between the relative cost of living in the two countries with any degree of exactness. The cost of living in the United States, particularly in the matter of house rents and clothing, is higher than in Great Britain. According to the reports of the Federal Department of Labour the average percentage increase in the cost of living for 1926 was 75.5 per cent. over 1914. Average earnings have in nearly all cases increased by at least 100 per cent. in the same period, so that generally speaking a worker in the United States is better off to-day than in 1914.

86. The payment of higher real wages during a period of prosperity has resulted in a considerable accumulation of savings out of wages, notwithstanding that the scale of expenditure has risen in the purchase of greater material comforts. This accumulation of savings is shown by the increase in savings deposits in the banks, by the amount of stock held by employees,

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by the purchase of homes and by the increase in life insurance. In Appendix No. 13 we give the figures showing the increase in savings deposits, building and loan associations, home ownership, life assurance, industrial assurance, group life insurance, and stock ownership. With this increase in real wages there has been a steady improvement in the standard of living, particularly of the skilled workers, whose standard of living is higher than the standard in Great Britain. Such a workman expects to have his house fitted with central heating, and a household is in many cases not considered complete without an automobile, a wireless set, an electric washer and other electric domestic equipment. Many of these accessories are purchased on the instalment plan, to which reference has been made in paragraph 15.

Method of Wages Payment.

87. Wages in establishments not covered by collective agreements are, as a rule, settled by the management, not for classes of workers but individually, according to the capacity of the workman or according to the majority rate paid in the district. Where there is a union rate in a district, that rate is generally the standard which enters largely into their determination. Payment by results is in operation wherever possible. We found in general four methods of payment-a piece work price, bonus on output, a time rate based on task and a straight time rate. Once the piece price is determined, it is rare for it to be changed unless the process is changed, or, by mutual consent, there has been an obvious mistake in the calculation. The amount that the piece price should yield in weekly wages is usually related to and in excess of the current time rate.

Grading of workers.

88. The grading and promotion of workers is a special feature of American industry, the only test being the capacity to do the job without regard to previous training or history. It is the practice in certain establishments to classify processes according to the skill or effort required and within those classes to grade individual workers on the same work according to their efficiency. In one very large establishment processes are divided into five classes; each class is divided into grades having a range of seven or eight rates. In another establishment there are three classes with corresponding ranges of rates. The individual rate depends upon the worker's capacity and his earnings upon output so that men working side by side on the same class of work may have wide variations of earnings. The individual rates are reviewed periodically and men are promoted to a higher rate in the same class or to a higher class when they are considered competent. In some cases, if short time working is necessary, men in the lower grades of each class are suspended from work