gain for its wages and it cannot be expected to forego entirely the advantages which market conditions now afford." It is interesting to note here that in the brief submitted by the manufacturers in the arbitration proceedings of March, 1921, they said on page 44 that "by and large, progress of wage earners is made by taking advantage of normal adjustment to cost of living during an upward swing and by holding some part of the increase when the tide turns."

In the wage arbitration of July and August, 1920, the serious condition with which the clothing industry was then confronted was the outstanding fact. The effects of the depression were already evident in the clothing industry. Though the cost of living had risen and earnings had fallen because of decreased volume of employment, no relief could be forthcoming from a business situation then so acute. The Board made no attempt to anticipate a possible change in the bargaining strength of the parties to the agreement. It made no change in the existing wage level.

The last wage arbitration took place after the first stage of the depression which had first affected the industry in the spring of 1920 had passed. Inventories of raw materials and stocks of clothing had, generally speaking, been liquidated with some loss to the manufacturers. The earnings of the workers on the other hand had suffered because of wide-spread unemployment. The question presented to the Board of Arbitration was whether it was within the province of the Board to reduce the standards of the workers fixed by the agreement on the ground (1) that labor should share with the manufacturers the losses of liquidation and (2) that a reduction of wages would permit lower prices to consumers and thus stimulate business. To this question the chairman answered that he was not justified in reducing wage standards below what the workers had gained by agreement with the manufacturers. Employers had not shared profits with the workers. There was no agreement that workers should share losses with the manufacturers.

But, the Board maintained, it did have the power and was justified in reducing wages to the extent that the cost of

living had decreased, but only to that extent. In other words, while the Board could reduce money wages, it could not cut real wages-wages measured by the amount of food, clothing, shelter, etc., which the wages could purchasewhen standards had been fixed by agrement between the manufacturers and the union.

Under the "emergency clause" of the agreement which provides for wage changes by the Board of Arbitration, the Board, it will be recalled, has wide powers. It is given authority to make such changes in wages as in its judgment seems proper. The Board of Arbitration has, however, severely limited its own authority. It has not arbitrarily attempted to fix a "fair wage. In the December, 1919, arbitration the chairman, when faced directly with the issue, decided that the Board should not interpose its authority to prevent the union from bettering the standards of the workers when the industry could afford it on the ground, which the employers had urged, of "protecting the consuming public." He granted a wage increase equal in amount to what had been given in other clothing markets. Again in April, 1921, the Board of Arbitration, though granting a wage reduction, refused to lower the standards of living of the workers attained by the union through direct negotiation. The chairman did not accept the theory of "wage liquidation " used so prevalently in these days of wage reductions to justify, if possible, drastic wage cuts. He confined himself to a wage adjustment in conformity with changes in living cost.

PART III

GOVERNMENT IN INDUSTRY

CHAPTER IX

INTRODUCTION

THE story of the rise of the clothing workers in Chicago would be seriously incomplete without accounting for their achievement of citizenship rights in the industry. The growth of the workers' rights as free partners in the enterprise of producing clothing dates from the settlement of the 1910 strike. By that settlement the firm of Hart, Schaffner and Marx agreed to the creation of a Board of Arbitration with power to "fix a method for settlement of grievances, if any, in the future." It was an act of industrial statesmanship on the part of one firm. But it can scarcely be supposed that those responsible for the step taken foresaw how farreaching would be its consequences within a few years. They were, in fact, laying the foundation for a system of industrial government that was destined within a decade to revolutionize industrial relations in all the important clothing markets of the country. Its influence upon the development of workers' control in related industries cannot yet be adequately estimated.

Up to the time of the strike, absolutism had held virtually unbroken sway in the tailor shops of Chicago. Since then, it has been forced out from one stronghold after another through the organized power of the workers, until in 1919 it was completely superseded by constitutional rule. Ownership of a clothing factory at one time conferred upon the employer almost unlimited personal authority over the lives and happiness of the workers in his employ. To-day, its claims are being increasingly subordinated to the needs of the industry as a joint enterprise and a public utility. The rights of the owners to all possible profits have yielded ground to the demands of expert management for efficiency on one side, and to the human rights and interests of the workers on the other. Government in the industry to-day