First World War Centennial

CHAPTER IV

THE MOBILISATION OF INDUSTRY

IT is in money and munitions that we can most promptly help our com­rades already in arms. And the amount of aid we can give them is limited only by the strength of our national desire. If we are in earnest about it we can do a great deal.

One thing is certain. However long the war lasts, whether our Army is to be large or small, the Government will have to do a great deal of buying. And even if our only contribution to our friends in Europe should be food, we ought to have a Government Purchasing Bureau to protect them from speculators here. We have much to learn from Europe in mili­tary matters, but in meeting such prob­lems as this we are prepared. Goethals of Panama or Hoover of Belgium at the head of the Purchasing Bureau would at once remove all sus­picion of slackness, inefficiency or graft. Such men are a national asset of which we must make use. Names like theirs are symbols of the kind of decent, energetic, efficient action which would make the war popular. And we have more reason to fear graft than German spies. It will take only a very little "embalmed beef" to take all the snap out of us.

The methods by which we can most ef­fectively put our immense financial re­serves at work for the defeat of Ger­many must be planned by experts.

Our laws are notoriously backward in governmental control of finance. But the savings of the people are as much a part of our national resources as our man-power. We can no more permit a banker to use the money which we have intrusted to him in unpatriotic specula­tions, than we could allow a general to lend one of our regiments to the enemy. The vast sum of our savings in banks, in­surance and trust companies is a force which should be immediately available as a national weapon.

Once more, this is no time to argue out far-reaching, permanent reforms in our fiscal system. We need an emergency measure, which—for the duration of the emergency—will put our financial re­serves at the disposal of the Government. We do not want acrimonious discus­sions of the best way to raise the budget in normal times. We do not want be­fogging debates on the relative sound­ness of Bond Issues and Direct Taxation. We want quick results. Europe has been a laboratory of experiment in War Fi­nance, and our Treasury experts ought to know which method has proved the best. Most of us have small knowledge of finance, but loans—Bond Issues—seem to mean a larger profit to the mid­dleman banker, which is of course an ar­gument against that method. Still if the lessons of the European War have con­vinced our government experts that Bond Issues are the quickest and most effective means of mobilising finance, few of us will feel inclined to argue. The results, more than the methods, are of importance in an emergency.

The one thing for us, who are laymen, to insist upon is that our bankers shall no longer coin excessive profits out of the needs of our friends.

When we leave the icy heights of finance and come down to "the business proposition" of intensifying the output of munitions, we face a problem more comprehensible to most of us. It was however the gravest and most trouble­some problem with which the democracies of Europe had to deal.

In 1914 no one knew what was the best ratio between munition makers and sol­diers. No one could foresee what was going to be needed. Few knew where the raw material came from. Worst of all no one was sure how long the war would last. Every one under-estimated its duration. So neither France nor Brit­ain had a coherent plan of munition pro­duction to start with. Inevitably every­thing at first was chaotic, makeshift, inefficient.

Britain went through three stages in the effort to intensify output—first, an appeal to private initiative; second, re­luctant State Aid; and third, a thor­oughgoing Government control. In the last stage the increase in production has been phenomenal.

The munitions which we have furnished to the Entente so far have come solely from private initiative. We have barely scratched the surface of our resources. If the Government sets its shoulder to the wheel the increase of output will be immense. We have had more than two years to watch our sister democracies of Europe struggle with this problem—and solve it. We have had ample time—and it is to be hoped, also the intelligence—to profit by their experience.

There are in particular two dangers to be avoided.

I. In the first days of the war there was a natural and comprehensible tend­ency to put every energy into the Army and to let industry take care of itself. France blundered into this error more deeply and suffered more from it than Britain. At the call to arms she put too many men into uniform and let her fac­tories close down. The immediate inva­sion of her coal and iron districts in the North was a great blow, but her mu­nition industry was even more hampered by lack of men. In spite of the patriotic response of the women of France, who not only brought in the harvests to feed the nation but also in great numbers entered the factories, the Army was soon short of munitions. It was only slowly and with hesitancy that the Government recovered from the Short War Fallacy and began sending men back from the front to work the machines of industry.

Britain—from the same reason—made the same blunder. It was lightly assumed that the best way to serve your country was to die for it. No serious discrimination was made in the early re­cruiting. Thousands and thousands of men who were very much more valuable in the mines, the iron mills and in agricul­ture went into the training camps.

II. The opposite error, "Business as usual"—also a result of the Short War Fallacy—was an even more serious check to speedy and complete mobilisa­tion of industry. And into this mistake Britain stumbled more deeply than France.

The old Manchester School of Political Economy—the laissez-faire, trust-to-luck philosophy—still dominated the thinking of the English Liberals. The Government wanted to interfere with the processes of industry as little as possible. Production, they held, is based on the lure of profits. They were entirely un­prepared to realise that people will work harder out of patriotism than they will for an increase of income.

So at first Britain tried to meet an ex­traordinary emergency by ordinary means. "Private initiative" was tried and miserably fell down on the job. The Government then took hesitating steps in the direction of State Aid: grants of capital, subsidies, bonuses. But these measures—in the immoderate need—brought only moderate returns. And so, as they could not get results by appeal to the commercial instinct, they were forced at last to go the limit in direct government control and operation of the war industries.

In France the difficulty on this score arose principally over the lack of a clear definition of "munitions." Every one was ready to admit that shells are ammu­nition and that their manufacture should at once be directed and controlled by the Government. But is red wine, which les Pollux call "pintard" a munition? And how about the silk used for balloon en­velopes? "Munitions" are as hard to define as "contraband." Of course the only workable definition is: all things needed by the Government for the con­duct of the war. It is not the nature of the product which is important, but who needs it.

The French suffered considerably from lack of such a definition. It was in these subsidiary industries that the profiteurs piled up excessive fortunes and that the worst labor conflicts occurred.

The greatest element in mobilising in­dustry is Labor. Nothing much can be done without the hearty co-operation of the wage-workers and of their organisa­tions. Here again the struggles of the European democracies with this problem which now faces us is full of lessons—lessons both of encouragement and of warning.

Imperial Germany has not—presum­ably has not dared to—put as much strain on her laborers as France and Britain. At the first sign of food short­age, the Kaiser's government put the nation on rations which bore more heavily on the well-to-do than on the poor. The system of bread and meat tickets has not greatly reduced the diet of the wage-earners. The German statesmen have nursed the proletariat. Even Prussia has promised them some measure of dem­ocratic power after the war. An intelli­gent and largely successful effort has been made not to give the workers any specific grievances.

The democratic governments were not so foresighted. They were slow to es­tablish measures to safeguard the inter­ests of Labor. It was only under the pressure of circumstances that they gave attention to this problem.

Both in France and Britain the or­ganised workers responded immediately and wholeheartedly to the Call to Arms. Many were surprised at this. In France the extreme revolutionary syndicalism of the General Confederation of Labor had been intensely anti-militarist and to a large extent anarchistic and anti-patriot. But behind the fog of diplomatic corre­spondence and the veil of theory, the workers of France and Britain saw a clear-cut issue between democracy and military despotism. They believed that the principles of popular self-government were worth defending and they rallied to the Call with a patriotism not surpassed by any class of society.

The English Unions gave more than their proportion to the first wave of volunteers. On their own initiative they abandoned all their strike plans. This was a very real sacrifice for them. The cost of living had been going up in Eng­land in the last decade and there had been no compensating raise in wages, so practically all the large unions were pre­paring for simultaneous strikes in the fall of 1914. They had been at work for years mobilising for a bitter fight. The German Government, through their spies, knew of this. They were counting on Industrial War in England. But in the face of national danger the British workers gave up their own plans and threw themselves into the work of Na­tional Defence.

Of almost equal importance to this sac­rifice of their wage demands, was the ac­tion of the British Unions in regard to fraudulent Army Furnishers. They served notice that they would strike in any shop which tried to cheat on govern­ment contracts. And the fact that the British Army has suffered less than ever before in its history from paper-soled shoes, shoddy clothing, and wooden bul­lets is very largely due to the patriotism of Organised Labor.

But this first spontaneous outburst of patriotism—this immensely valuable asset—was soon dampened. To a less extent in France, to a much greater ex­tent in England, the enthusiasm of the working class was cooled by official stu­pidity sometimes stupidity of act, but more often of inaction.

The development of the situation in the coal fields of South Wales is broadly typ­ical. There had been a good deal of anti-militarist agitation among the men. In the week before hostilities broke out, they had voted to strike in case of war. They expected a like action from the coal min­ers of Germany. Modern war they argued would be impossible without coal, so if all the miners of the world acted together the great tragedy could be pre­vented. But Organised Labor in Ger­many did not respond. (There also the workers were more loyal to their govern­ment than to their class.) And the first news of the invasion of Belgium put an end to all anti-military propaganda in Wales. The miners proved themselves more patriotic than the rest of England—furnishing considerably more volun­teers than their due proportion.

Once war began there was no thought of a strike in the coal fields. The men who had not volunteered were working overtime to make up for those who had gone and to increase the gross output. But all this the Government accepted from them as a matter of course. It took no care to protect them from less patriotic people who were taking advan­tage of their sacrifices.

Very soon discontent—inevitable, justifiable discontent—arose. For the coal-owners were not exhibiting any self-denying patriotism. They were charg­ing top prices—all the traffic would bear—to the Navy, the Merchant Fleet and the Munition Factories. They were also holding up the Allies. The profits of the coal owners and their close allies, the shipping interests, soared. And the Government, committed to the Business-as-usual theory, did nothing to stop this abuse till the complaints from France and Italy, where people were freezing and where the manufacture of munitions was being throttled, became too strident to be ignored.

The miners knew that their extra ef­forts were benefitting the Cause of De­mocracy very little, but were swelling the fortunes of their bosses extravagantly. And the Government did nothing to pro­tect them from the piracy of the food speculators. While their wages, inade­quate before the war, had not been in­creased, the price of their food had gone up forty per cent.

But the worst of it was that when the public outcry for cheaper coal and a greater output became insistent, the Coal Barons replied that they could do noth­ing unless the Unions were smashed. They proposed some laws, compulsory arbitration, forced labor, etc., which seemed to the workers cold-blooded as­saults on their liberties.

And then the first strike broke out.

The Government, in the person of Mr. Lloyd George, came down to Wales to mediate. His intervention gives us a very human picture of a perplexed states­man, immensely preoccupied with other and to him more important problems, ob­sessed by the Short War Fallacy—a fal­lacy shared by his colleagues in office, shared by almost every one. His domi­nant idea was to postpone all lesser is­sues in the face of the great national crisis. As he has dealt with the Irish Question, so he dealt with the Welsh miners.

We do not know what he said to the bosses—that was a private conference. But he spoke to the men in a public meet­ing. He had no coherent remedy for their complaints. He had not had time to think the problem out. He did not be­lieve there was time to solve it. The midst of a Great War was not an ideal occasion for an attempt to settle the age-old dispute between the "haves" and the "have-nots." His one object was to get the men back to work and postpone the settlement.

Lloyd George is a past master of pop­ular oratory. And all his repertoire is in that speech—half-sobbing emotional pathos, cajolery and good jokes, prom­ises and threats. But the keynote of it all was an appeal to their loyalty. "Don't go back on the boys at the front."

The men, unconvinced by his promises but moved by his appeal, went back to their underground jobs. And we may imagine Mr. Lloyd George heaving a great sigh of relief, taking the midnight train back to the Parliament at West­minster, brushing aside those who wanted to waste time congratulating him over his success in Wales, and throwing his tireless energy into the soul-consuming work of infusing activity into the nation.

And we cannot be very much surprised that, in the rush of other work, he forgot his promises to the Welsh Miners—till they reminded him of their intolerable conditions by new strikes.

With slight differences of detail this is the story of every industrial dispute which has arisen in France or England to impede the conduct of the War. Every­where Organised Labor was patriotic—wanted to be patriotic—and came more than half-way to meet the Government in the defence of democratic institutions. It cheerfully assumed more than its due share of the common burden. But where Labor was rebuffed, it grew sullen. If the workers were not protected from less patriotic exploiters, they tried to pro­tect themselves by the only weapon they knew.

The Organised Working-men are pecu­liarly sensitive to Public Opinion. They have not the type of mind of those fili­bustering Senators who stood out alone against the manifest will of their asso­ciates. If the Unions are convinced that their interests are being protected, that the war is not being conducted against them, they will at once discountenance any unjustified strike in a time of crisis.

This was illustrated when a group of mechanics on the Panama Canal job tried to hold up the Commission for wages far in excess of those gained by their mates at home. They had no reason for striking, except that they thought they had the Government in a hole. But their own National Organisation at home at once denounced them and offered to re­place them if they quit work.

The coal strikes in Wales would not have been possible if an overwhelming proportion of the Trade Unionists in other industries had not considered them justified. If the Government had had a strong case against the Welsh miners, the other working-men would not have countenanced the strike. But by failing to protect labor from unpatriotic ex­ploitation the Government had weakened its case hopelessly.

The wage earning class is the largest and most devotedly liberal element in any modern nation. No democratic war is possible without their wholehearted support. And the question of assuring their cordial co-operation—obviously a matter of vital importance—will not solve itself. It demands immediate at­tention. It cannot be evaded. It must be faced.

The problem will be the same in America. The men will be patriotic, for they hate the autocratic principle. They will support our government against autocrats abroad, in so far as they are convinced that it is not con­trolled by our home-grown autocrats.

But every one who reads our newspa­pers knows that many big employers of labor openly advocate universal mili­tary service as a good means of smash­ing the Unions. Some have written in the public press favoring a war with Germany—a war with any one—on the theory of Napoleon, the Less, that: "Foreign adventures distract attention from discontent at home." And just as the French Republicans knew that the Royalists and Clericalists would grasp at war as a pretext to regain power, so our working-men know that anti-labor forces will try to use this crisis to at­tack them.

This is not a question of whether one approves or disapproves of the Organ­isation of Labor. It is a lesson of cold fact. A democracy cannot carry on an effective war without the sincere co-operation of the working class. And the Unions will not support a war which is directed against themselves. They cannot be expected to consider that pa­tient submission to overwork and under­pay for the greater glory and profit of the bosses is a patriotic duty.

Imperial Germany was astute enough to foresee the danger of any justified dis­content among its workers. France saw it quickly. Britain, less quickly. But in the end, after many bitter and anxious moments, Britain had to face and solve the problem. Are we adroit enough to profit by these lessons or must we learn them for ourselves by months of muddle, painful paralysing strikes and industrial war?

One point to which I have frequently referred and which deserves emphasis in this connection is the advisability of mak­ing it clear that War Measures are temporary.

Throughout the first two years of war, when Britain was evolving a solution to the munition problem, the issue was con­tinually befogged by the ingrained Brit­ish reverence for precedents—respect for those already established and fear of establishing unsound rules for the future.

It was only slowly that the nation came to realise that the crisis was un­precedented, that methods were demanded which had no relation to the needs of normal times. The process of intensify­ing munition production would have been immensely speeded up, if British states­manship had produced a formula of emergency. A clear statement that war measures were temporary, and not to be used as precedents for the future, would have greatly eased the situation.

One thing which seems a strange para­dox is that the same Coal Barons who fought doggedly against any concessions to their men, submitted without a quiver to direct war taxes—taxes on profits, taxes on income—of unprecedented rigor. Some of them are paying a quar­ter in the dollar in income tax and the other taxes besides. They submitted to these drastic taxes for the very reason that being so drastic, they could not be permanent.

But in facing the industrial problem, Lloyd George never found the happy formula to free his proposed concessions from the suspicion of permanency.

There had been so much talk of Gov­ernment Ownership of the coal mines in the pre-war days that the owners were on their guard. They preferred to have the tax-gatherer take a quarter of their cash to having any suspicion cast on the validity of their title to the source of their wealth. Even if Government operation be the wiser permanent policy, it is ob­viously tactless to raise the question un­necessarily at a moment when you want the wholehearted co-operation of the ac­tual owner.

The same psychological snag was re­peatedly run against when dealing with Labor. Men who had been earning eight shillings a day gladly volunteered at a shilling a day—for the duration of the war. The same men at home fought stubbornly against reduction to seven shillings and six. They were ready to accept any temporary sacrifice demanded by the emergency, but they resisted bit­terly any lowering of their Union stand­ards, any concession at all, which seemed a permanent surrender.

So, whenever our Government appeals to either Capital or Labor for sacri­fices in behalf of the war, it is of pri­mary importance to make it clear that the concession asked for is a temporary emergency measure.

The experience of France and Britain indicate a solution of this nature:

The War Government should clearly state that it is not trying to solve the Industrial Problem, that the measures it proposes are temporary and will not out­live the emergency, that its one object in interfering with industry is the in­tensification of production.

The Munitions Commission should ap­portion its orders to existing plants (or arrange for their erection if necessary). Any company accepting government con­tracts should open its books. The Com­mission should fix a price based on ac­tual costs of production and a moderate profit—eight per cent, or whatever proves necessary to attract private cap­ital. And a schedule of increasing pro­duction up to utmost capacity should be agreed upon. The contracts should read that the Government will not intervene so long as the output is maintained in quality and quantity as per specifications—but that it will at once assume control of the fac­tory, for the duration of the war, if pro­duction falls below the schedule agreed upon.

It would then be up to the Employer and the Employes to arrange their own difficulties as they saw fit, so long as their dispute did not slacken the out­put.

If the boss felt that his men were mak­ing excessive demands and that his profits were too low, he could quit the job and turn his factory over to the Government.

If the men felt that the boss was mak­ing excessive profits, overworking or un­derpaying them, they could strike and automatically become Government em­ployes.

There should be a clear understanding on all sides of exactly what would hap­pen if a cessation of work forced the Government to assume control. It should mean to the owners a rental of six per cent, on the physical value of their property, to the men employment under the Union conditions in vogue in the Government Arsenals.

The Munition Commission should call together representatives of Capital and Labor and say to them:

"Citizens, we are at war. And in these modern days it is the volume of munitions that wins. Our ability at or­ganising industrial ventures is one of our great national prides. For the moment it is by industrial co-operation that we can most help our Comrades who are al­ready in arms.

"We do not intend to use this emer­gency of war as a pretext to put through any collectivist legislation and we are not going to use this crisis as an excuse for smashing organised labor. We are not attempting to solve the permanent problems which face you. In your dis­putes, we will be—for the duration of the war—strictly neutral.

"The National Emergency is too ur­gent to permit of consideration of the Industrial Problem in the abstract. We are faced by a concrete task—the in­crease of output. We are not inter­ested in anything else.

"To you, whose capital is at stake, we promise not to adopt any confisca­tory policy. We want you to operate and direct your factories. We intend to pay you for the use of your property and for your administrative work. We will give you a price estimated on a decent profit. As long as you continue to oper­ate your plant and intensify your pro­duction we will not limit your earnings. If you can improve your methods and increase your dividends, we will not ob­ject. If you can increase your profits by finding labor below the market price—well, that does not sound wise to us—but we will not intervene on that score. If you can afford to pay your employés more than Union rates, so much the bet­ter. But we are not directly interested in profits or wages. Our concern is only with output. To fall below the standard is industrial treason.

"To you, who contribute to industry your strength and manual skill, we prom­ise adequate protection. We can not possibly win this war without your en­thusiastic patriotism. We know you are in hearty accord with ideals for which we are fighting. But, while we expect your support, we are also resolved to de­serve it. We may have to ask you to waive some of your Union rules. But such sacrifices as are demanded of you we stamp with our guaranty, Temporary.' They are emergency—house-afire—measures. We pledge ourselves to allow no one to take selfish advantage of such sacrifices.

"We cannot at this time plan an ideal wage, nor ideal shop conditions. We must take the best we can find ready at hand. We will maintain the labor conditions as worked out in Government Shops, of which your Unions have ap­proved, as a minimum standard. If we are unable to prevent an increase in the cost of living, the Government wage will be raised in compensation. You are fa­miliar with the standards in our govern­ment factories. You are to consider that you have a right to similar condi­tions.

"However, it is not our intention to limit you to this minimum. Many em­ployers in private factories are able to give better terms. We have no objec­tion to your drawing a hundred dollars a minute if you can find any one to pay it. Whether your wage is raised or low­ered is not our concern. Do anything you want to better your condition which does not check production. The books are open on Government jobs, you can see for yourself how far you can go. But all you can gain by striking is Gov­ernment operation and Government wages—and no more!

"Citizens, we have tried to be fair to both sides. We undertake to protect each of you from unpatriotic or unjust demands of the other. We are subor­dinating everything to the needs of this emergency. We would much prefer not to assume the burden of operating the munition industry and we hope you can do it for us. If you fail us, we will be forced to take over your factories for the duration of the war. That will mean six per cent, for Capital and fair wages for Labor.

"Now we appeal to you as patriots. The time has not come when you are needed at the front to defend those ideals which are our common heritage and treasure. Your country needs, not your blood, but your skill.

"We have done the best we can for you. Now—go to it! Deliver the goods!"

Capital, although in Europe it has been very reluctant to forego excessive profits, could hardly object to such a patriotic appeal.

And no one who knows Organised La­bor here, or has watched it in this war emergency in Europe, can doubt that it would respond wholeheartedly.

It would not be necessary to conscript Labor. The Government has been a "good employer." In times of peace the men have learned that. Very few of them would want to strike on a govern­ment job in a time of crisis. Any who did would be overwhelmed by the denun­ciations of their mates.

Give them this for a slogan—"A fair wage and a fair profit"—and they will boost our industrial production to the sky.

It is not their patriotism which is in question, but their faith in our good faith. Reassure them, convince them that their sacrifices are appreciated, and the trouble with the labor market will not be strikes, but the tendency of the men to sneak away from the factories to enlist.

I chanced to visit one munition plant in England. It had been organised on capital, most of which had been raised by a free loan from the Government. The contract with the Munition Depart­ment had been arranged on an estimated weekly output of 3,000 shells and the price had been based on this figure.

The shops were placarded with post­ers urging the workers to "do their bit," "to help the boys at the front." And by such ardent appeals to the pa­triotism of the employes the output had been nearly doubled. But no increase in pay had been granted the workers and no reduction had been made in the price of sale to the Government.

The employes in this shop, many of whom were women, worked at tremendous speed for exceedingly long hours. They did it "to help the boys at the front" but they soon realised—and were sore and bitter with the knowledge—that most of their patriotic effort was being absorbed by the shockingly big profits of the shareholders.

I presume that this case was excep­tionally flagrant. I visited these shops before the Government became rigorous in its effort to stop such scandals. But there were enough similar cases to seriously dampen the first patriotic ar­dor of the British wage-earners. No government deserves the support of Labor under such circumstances.

The country which can say to its workers, "This is a war of fair wages and fair profits" is the kind of a country the workers will fight for.