Earl Dean Howard; Director of Labor for Hart, Schaffner & Marx; Chairman of the National Board of Labor Managers for the Clothing industry; Professor of Economics in the College of Liberal Arts, and Professor of Banking and Finance in the School of Commerce of North-western University, Chicago, recently prepared for the Crimson the following statement on the development of government in industry.

The firm of Hart, Schaffner & Marx, the largest concern in the clothing industry, has attracted wide attention by its progressive labor policy. Since 1910, when it adopted the preferential Union shop system, it has had no strikes, although the clothing industry elsewhere has been troubled by constant industrial warfare. This firm employs at times a force of 10,000 workers.

During the past decade in several branches of the garment-making industries of New York and Chicago, certain principles for the adjustment of conflicting interests with employes by legal methods have been experimented with. This experience has suggested certain ideas and possibilities interesting to those who appreciate the growing danger of leaving the settlement of employer-employee controversies to the arbitrament of industrial warfare and who understand how, in other human relations, the crude method of forces has been superseded by the legal method.

The protocol in the cloak and suit trade, together with half a dozen similar protocols in other branches of garment-making in New York, the Rockefeller system of industrial representation in the Colorado mines, and the labor agreement of Hart, Schaffner & Marx in Chicago, grew out of long and bitter strikes, severe enough on both sides to convince the parties thereto that the old system was intolerable. Complete predomination by either side was impossible and intermittent struggles over the division of power were costly and unsatisfactory. The protocols and the agreements provided a system of government to protect each side against the other.

Need Special Legal Devices

Any system of government for the adjustment of human relations and conflicting interests by law rather than by force requires some devices to perform legislative, executive and judicial functions. Rules must be laid down and interpreted, administrative duties must be discharged, effective limitations and requirements must be placed upon individuals to secure co-ordination, and all questions in dispute must be authoritatively decided.

There is a strong tendency to enlarge the scope of political government so as to include also industrial government. Whether this shall grow into state socialism or whether private enterprises will be able individually or collectively to establish a satisfactory form of government, supplementary to political government, is one of these large interesting questions which may be decided within a generation or two. The solution may depend upon the ability of the employees to develop a constructive power and effective government among themselves.

Reluctant to Lose Control

Employers and those responsible for the prosperity of large enterprises are reluctant to lose any part of their control. When they discover that the power has passed from them, or when their government has failed to maintain peace they are then ready for experiment. The protocols and other experiments have always grown out of strikes, usually long and exhausting.

The first step is an agreement on a constitution providing usually for a board of arbitration. Executive control is left in the hands of the employer but subject to the limitations of the agreement and the decrees of the board. The representatives of the employees usually labor union officials, strive through the board to extent these limitations to in hibit all acts of the employer which the employees or their officials conceive to be of any disadvantage to themselves. The system resembles a constitutional monarchy.

Legislative Function Inadequate

The legislative function is usually in adequately provided for. New conditions arise to which the rules of the agreement and the previous decisions are not applicable. The employer claims the right to legislate by administrative decree on the ground that he has all the authority not specifically relinquished in the agreement. The union officials urge the board to assume jurisdiction and by a decision create a precedent which has the effect of law. In practice, legislation originates in several ways: (1) The constitution or basic agreement entered into by the parties at stated intervals for definite terms and with which the decisions of the board of arbitration must harmonize; (2) administrative orders promulgated by the employer and subject to veto or alteration by the board of arbitration on the ground of unconstitutionality; (3) judicial decisions having the force of precedents by the board of arbitration in adjudicating complaints--"judge-made" law.

The judicial function is performed by the board of arbitration and inferior courts or committees, such as the Trade Board in the Hart, Schaffner & Marx system, and the Committee on Immediate Action in the Suit and Coat Protocol. Appeals may always be taken for final action to the board of arbitration. Decisions are based upon the fundamental agreement, administrative orders which have not been challenged, precedent decisions, customs and practices in the industry.

Neutral Arbitrator on Boards

The judicial boards and committees are composed of representatives in equal strength of employers and employees, presided over by a neutral arbitrator who casts the deciding vote. This neutral arbitrator has the opportunity to develop an extra-legal process of mediation by which the necessity of much litigation is avoided. It is usually stipulated that the agreements reached by mediation do not create precedents, but apply only to the particular cases in hand. The neutral arbitrator, if he has the ability and inclination, may in the course of his work by discussion and education establish standards of justice and fair dealing in the employer-employee relation acceptable to both sides. These may form a sort of underwritten constitution of great practical influence upon the harmonious operation of the enterprise. The possibility of disputes and conflicts is greatly reduced when the parties, acting in good faith, gradually approach agreements in their beliefs as to what is right and what is wrong action.