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"My grandfather rode to his shop in a buggy. He wore a Prince Albert coat and a high hat. . . . During the noon-hour he went out into the yard with his men, sat on a pile of pig-iron, and ate his dinner out of a tin dinner-pail just like the rest. .. Capital and labor in that plant came together around a tin dinner-pail.'

T is a step in industrial evolution, and I am confident it will make for permanent satisfaction."

These are the words of Henry C. Osborn, president of the American Multigraph Company, Cleveland, Ohio. His company recently instituted a plan of self-government in the plant by which the employees have been given a voice and vote in deciding many details pertaining to the conditions under which they work and in making suggestions for the general improvement of factory operations. Mr. Osborn is a keen-looking man of the younger generation of industrial executives. He continued:

"Industry simply cannot endure if there is to be constant irritation and discontent among the workers. Without attempting to dictate to others, I shall tell you what we are trying to do to solve our own problems. Our force ranges from a thousand to twenty-three hundred. It it not a large factory, but it has gone beyond the small-shop stage in which the men can meet their employer face to face, and talk over and adjust issues as they arise. For a long time the men in one department in our factory did not know their relation to

other departments. They did not understand the interdependence of the various parts.

"Our first idea is to give everybody in the concern an all-around view of the business. We want the man at the bench to get our point of view and we want to get his point of view. With that idea in mind we decided to let them govern themselves. They like it, and so do we. Through the congress to which delegates are elected they take care of a great mass of details and differences that have heretofore burdened the foreman and heads of departments. The new responsibility has sobered the men. and made them think. Members of the congress know that their shopmates will hold them accountable for whatever they may do, and that there will be a quick reckoning if they are 'not on the level.' It is the best way in the world to transform a radical into a conservative.

"An incident occurred in this plant during the war which shows how important it is for the men to have an exact knowledge of an industry. It is not enough to give them the right to legislate. They must be given the facts about the entire business. In the instance I refer to one of the men out in

the shop had occasion to look over some papers in the front office in the course of his work, and among them he came across a cost-sheet. This sheet showed that we were charging the government twenty cents an hour more than we were paying the men for making fuses. Of course this chap thought he had made a great discovery, and he went about denouncing us as 'profiteers who were robbing labor.'

"Now, there were two ways to dispose of this trouble-maker. One was to discharge him, and the other was to educate him, and we decided to try the latter method first. Step by step we explained to him the mysteries of overhead expense. Finally we made him see that labor is only a part of the cost of making anything. We prepared a statement showing the factors of cost in turning out our product, such as raw material, supervision, spoiled work, light, heat, taxes, insurance, stenographers, bookkeepers, clerks, as well as labor. He had never seen it quite that way before. We won him over by giving him the whole truth, and now he is one of the most loyal men in the plant.

"Radical labor leaders and others who are causing trouble in industry are men with little education, but with more than average ability, who are dominated by wrong ideas derived from wrong or erroneous information. The only effective weapon to use in dealing with such men is to attack their wrong ideas with right ideas based on all the facts, just as we set the man right who thought we were robbing labor.

"It is alarming how many workingmen are being fed on half-truths about economics. Taking these half-truths as a premise, it is natural for them to reason to a wrong conclusion. Millions of pages of printed matter are circulated among wage-earners, and thousands of speeches are made each year based on the affirmation that labor produces all wealth; therefore labor should control all wealth. It is an alluring and a very dangerous doctrine, and should not be allowed to go unchallenged. Thousands of wage-earners, just like the man in our shop, are nursing resentment against employers because they

have been told that they are being 'robbed of the fruits of their toil,' and that they should rise and seize what rightly belongs to them. Bolshevism, sabotage, strikes, and other wild outbreaks among working-men can be traced right back to this false teaching.

"I believe in fighting these halftruths by giving the whole truth. It may sound like a joke to advocate the teaching of industrial economics to uneducated working-men, but that is part of our system, and I believe such teaching is just as necessary as to give them a voice and a vote in factory management.

"Ignorance and prejudice are the soil in which agitators sow the seed of discontent and revolution, and our chief weapon is to give the men complete information."

"Tell me what started you in this direction," I asked. "Was it the result of an expensive strike?"

"It is the outcome of long-continued thinking," was the reply. "My grandfather gave me the original idea, although he was not aware of it. He was the organizer of a rolling-mill, a Scotchman, and a close friend of Andrew Carnegie. Although he was very strict with his men, they liked him. That was something I could not understand until I talked with some of the men who had worked for him in their early days. That was when American industry was in its infancy. My grandfather rode to his shop in a buggy. He wore a Prince Albert coat and a high hat, as was the fashion in those days. It was said of him that whenever he was in bad humor he would set his hat on the back of his head, which was the signal that everybody must keep away from him. He was stern, but just, and if a man could not do a piece of work, my grandfather would pull off his coat and show him how. During the noon-hour he went out into the yard with his men, sat on a pile of pig-iron, and ate his dinner out of a tin dinner-pail just like the rest. While they ate together they exchanged views about the work in the shop. The men had a chance to express themselves, and they got information from headquarters on the spot. Capi

tal and labor in that plant came together around a dinner-pail.

"My purpose is to bring capital and labor together through our factory organization. We have established a method for quick action right up the line from the least employee to the president."

The method of giving instruction to the employees in this plant is one that could be adapted to any factory. It consists of moving-pictures visualizing manufacturing processes, lectures by experts on production problems, and lectures on the general aspects of industry and finance. The president of the concern gives the talks on industrial economics.

Standing before a blackboard with chalk in hand he analyzes an industry from its very inception. For instance:

"Every industry starts with an idea as the basis of an invention or a process. Henry Brown, the blacksmith, runs his shop all alone, and yet he embodies in himself all the elements of a big organization. A time comes when Brown hits upon a new process for making horseshoe-nails. In developing

a plant to make the nails he must do several new things not necessary so long as he confines himself to shoeing horses, which is really a form of personal service. To make the nails he must have special machinery, a factory, material, labor, and a way of selling his product, all of which requires capital. Brown has a little money, but not enough. So he must borrow. He can do this by giving notes, taking in a partner, or forming a company and issuing bonds or selling stock. The moment a company is formed, directors are chosen by the stockholders to manage the business."

The speaker then paused while he drew a diagram on the blackboard. He made a circle to represent the original idea and management. At the right he drew a circle to represent the financial department. A circle at the bottom symbolized the purchasing department, one at the left stood for labor or production, and another at the top for sales. Lines running from the financial department to the central circle showed the vital connection between management and the investors. There was no

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No. 1-First step in founding an industry, symbolizing the fundamental idea and management. No. 2 Department for buying raw material, indicated by circle marked "RM." No. 3-Sales department, indicated by the circle marked "C" for customer. No. 4-Financial department, symbolized by the circle marked "F." No. 5- Production department, shown by the circle marked "L." No. 6-This drawing shows a present-day corporation, in which labor has no voice in the management. Mr. Osborn proposes to

give labor a voice and a vote through a factory organization. The outer circle in No. 6 represents the board of directors, with connecting line to the source of capital on the right. No. 7-This is an enlargement of the circle on the right of No. 6, representing the source of capital. In this chart "C" stands for credits at the bank or with the dealer in raw material; "B" for bonds; "N" for notes; "PS" for preferred stock-holders, and "CS" for common stock-holders.

such vital relation between production and management, but the speaker drew lines connecting production with management, just as finance and management were connected. His idea was to show that labor was just as much entitled to a part in management as was capital, and that was obtained by the self-management plan. Continuing, the speaker said:

"This diagram shows at a glance that labor, which is the chief visible element of production, is not the only factor of cost. Financing, buying, selling, and managing all involve cost, and that cost must be met out of the sales. The investors who furnish the capital, as well as the people who do the work, are entitled to 'wages' out of the receipts of the business. Therefore management is not robbing labor when it pays dividends to capital. Ever since the beginning of industry capital has had a voice in management, but labor has not. Industrial democracy is the connectinglink by which capital and labor become united in the management of an industry in which both are vitally concerned."

This blackboard diagram contains the whole system of economics on which modern industry is based, and this corporation president is preparing a little manual embodying his ideas, so that every man in his employ may obtain the fundamental truth about the develop ment and management of an industry.

Following the blackboard talks, he asks the men to write essays giving their conception of industrial economics. Some of the essays are really very interesting, showing that the writers

have grasped his teachings in all their bearings. One writer in particular built up a story about a man who had invented a lead-pencil and how he had built up a big business.

"Now you will see why it pays to teach economics," said the president. "No man can study the foundation principles of an industry and still hold the doctrine that labor produces all, and therefore labor should take all.' Labor, capital, and management are partners, and I am glad we have found a way for them to get along together.

"One of our men got tangled up about stock transactions. I mention this to show how they are thinking about such matters. He wanted to know why it was that after all the capital stock of a company had been sold, stock sales were still reported in the papers. We then showed him that the sales were not between the company and the public, but between private owners of the stock and、 the public, which was quite a different matter. Another wanted information about stock-brokers. He denounced them as a set of robbers because of the big profits they made. His idea of their profits was the rise in the price on the market. He felt better after we had showed him that the seller of the stock got the benefit of the increase in price, and that all the broker received was a commission.

"I am a firm believer in giving our men the whole truth about finance and industry. I have staked everything for the future of our concern on democratic shop organization, plus the all-around economic education of our workers."



A Servant of Reality


(Mrs. Forbes Dennis) Illustrations by Norman Price


NTHONY had known moments in the year of his captivity when he had let himself go in a sudden compulsion of happiness. He had shut out by an effort of the will all sense of his imprisonment, and enjoyed as separate things the sight and smell of summer fields. He realized that he and Kitty were doing the same thing now; they had their single sunny hour, and behind and in front of it were monstrous experiences. It was a green space, with idelweiss growing between precipices. They had had to climb up, and they still had the dangers of the descent before them; but for a little while they stood safe and triumphant among the flowers.

Kitty managed their precarious footing better than Anthony; her pleasure was not invaded by thought or by the conscious effort of her own will. She had the strange humility of those who have not set themselves free by moral struggles. She could be happy because she expected nothing of herself and very little of others. She knew no more than that it was a fine day and she had Anthony.

Kitty loved her lunch in the oldfashioned dark dining-room at Richmond, and when she reached Kew she loved the gardens more. She caught sight of a squirrel making a brief excursion between the trees in an open avenue, and she held out her bare hands and laughed at the feeling of the warm sunshine touching them. Without a sign of fatigue, she drew Anthony on and on, across the lawn, where in the spring the azaleas bloom, and on into the leafless, empty bluebell wood.

"It 's like a sea," Kitty told him, "when they're out; not the big, clumsy sea, full of water, but a string of clear blue pools left behind by a tide. You look and look till the blueness closes over your head. I think the light today is a ghost light, for I can almost see the bluebells. We must come here together one day next spring." She broke off suddenly, and said she wanted to see the palace where Henry VIII's wives spent the gayer intervals of their precarious existences.

"It must have been rather nice," Kitty observed speculatively, "to have been one of those short queens; only I don't believe Henry would have cut my head off. I 'd have been short more naturally. The thing with Henry would have been to get tired first. I could easily have managed that."

"Are n't you tired now," Anthony asked anxiously, "without managing it?"

"Ah, you are n't Henry VIII,” said Kitty; "I don't have to take the precaution of being tired of you."

She strolled with him round the wide pond that lay as flat as an upturned looking glass within a whispering thicket of yellow water reeds.

"Fancy it's being a fine day," Kitty exclaimed, slipping her arm into Anthony's, "and then seeing a squirrel and having nobody about! I like winter best, don't you? There's nothing to take your attention off what there is. The trees are so jolly and black and bare; the grass is like a special treat; the sky is nearer; and when it 's fine, you don't expect it. It's so nice to be sold by a surprise."

Anthony was puzzled by this revelation of Kitty. He had not supposed she would like anything undecorative or

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