We are pleased to present, in installments, a very rare yet significant book written by former Congressman Henry George Jr. in 1905.
Earlier installments are available at the Progress Report Archive.
more of CHAPTER 11, DANGERS OF UNIONISM
Embezzlement and "Arthurization"
Now the growth in numerical strength and the centralizing movement among the trade unions calls forth a power in no way provided for in our civil polity. It is not a power accountable to the masses of the people, unless it in some way infracts the general laws. Short of that it is responsible only to those who brought it into existence, who compose it and who direct it. Its policy is not the fundamental one of killing privilege, and so of ending the necessity of militant unionism among laborers. It assumes that privilege must not only continue to exist, but grow and that the only recourse for workingrnen is to extend their organization to meet it.
John Mitchell says this frankly: "Whatever the advantage or disadvantage, the merits or faults, of trusts as they exist today, it is inevitable that industrial combinations continue to exist. . . . The lesson which the labor union should learn from the trust, is the absolute necessity for complete organization upon a national scale." ("Organized Labor," by John Mitchell, pp. 196-201.)
Thus the course advised to meet augmenting privilege is greater and more centralized labor unionism. With the wisdom and integrity of a Gompers or a Mitchell at its head, there might be reasonable assurance of good use of the great power this must bring. But here is power that is to a large extent extra-constitutional, and to that extent not to be called to account by the body of the people, as is that of corporate bodies and public servants under the civil law.
Do men of wisdom and integrity come to the top where such irresponsibility exists; or coming to the top, do they stay? Experience shows that they do not as a rule. When men get power for which they do not have to account, they become corrupted by it and they abuse it; or else, resisting temptation and striving to use their power well, they are swept aside by the crafty and unscrupulous. Human nature remaining what it is, this must be the rule.
The chief aim of labor unionism is to raise wages and reduce hours. Is it not in the very nature of things that as time inures laboring men to trade union warfare to this end, they will become less and less sensitive to other things? Has not this a menace of a state within a state, or worse -- of an armed camp within a state? Indeed, do we not see manifestations of this in the policy of some of the large labor bodies now? Is there not a frequent display of arrogance and arbitrariness? "We've got the power and we're going to use it," has often and often been the precursor of injustice.
One form of this injustice we have seen grow up. It is blackmail. Dennis Kearney in the smaller way in California and Samuel Parks in the larger way in New York are examples of this. They both obtained sums for their own pockets as an item in the price of peace with unions they represented. Nor was this a secret. It was known and talked about. So far from losing them their standing in the unions, it rather strengthened it.
The tribute they extorted came, not out of the unions, but out of the employers -- not out of the chosen people, but out of the Egyptians. Parks was actually elected grand marshal of the Labor Day parade in New York when he was awaiting retrial on blackmail and conspiracy charges. Soon afterwards he was found guilty as charged and was sentenced to a term of imprisonment, from serving out which he was saved through death by consumption.
Sometimes a union's members not only know that blackmail is practiced by the leaders, but they sanction the practice with the expectation of sharing the spoil. An instance of this kind appeared in the case of one Lawrence Murphy, who was brought to trial in the Supreme Court of New York on the charge of embezzling from the treasury of the Journeymen Stonecutters' Association, of which he had been treasurer. His defense was not that he did not take the money. He admitted he took it, but he contended that in taking it he did not take what legitimately belonged to the union, since it had been obtained by blackmailing employers, and that therefore the union had no valid title to it.
That is to say, the theft on Murphy's part was admitted, but his plea was that the union could not sue for something to which it had no true title, the laws of New York not recognizing extortion as constituting a valid basis for property. I attended that trial and heard Murphy's counsel -- a brilliant ex-Assistant District Attorney -- argue in defense of the prisoner and against the union in this style: --
If a highwayman meets his victim in the night and takes his property, he cannot acquire title to such property, obtained as it was by duress, violence or threats. The man who steals from me by physical force, coercion or by fear he inspires in me acquires no title to the property he has taken from me. It has been held repeatedly by the higher courts, and I refer your Honor especially to the case of the People vs. Barondess, that to threaten to tie up a shop if money is not paid, and money on this threat is obtained, is extortion. Whoever does this is guilty of extortion, and he cannot have a clear title to money obtained by a crime.
The astonished judge exclaimed, "You do not seriously offer this as a defense of the prisoner at the bar?"
To which the counsel replied: "I certainly do. Stealing must be from the true owner. If these men [representatives of the union] went to the bosses and demanded money on the threat that they would declare a strike, they were guilty of extortion and have no title to the money thus obtained. The indictment in this case charged Lawrence Murphy with the theft of money from the true owner. I submit that he is not guilty of such a crime."
The judge answered that if the men representing the union obtained the money improperly the remedy against them lay in another proceeding. Murphy was found guilty of embezzling from the union -- something he did not deny. He was sentenced to a term of imprisonment.
This case also furnished an instance of the way in which unions may, and the Journeymen Stonecutters' Association of New York did, use the club of extortion. The union fined 240 of its members $40 each for a cause not explained, not even in court. Of course the men could not pay this money themselves, and of course if they did not they would be suspended from the union. Suspended from the union, they would be outside of its jurisdiction, and therefore would rank as "scabs." An employer who gave employment to a suspended member would himself fall under the displeasure of the union. Non-union stone-cutters not being numerous enough to warrant stone-cutting employers to act independently of the union, the only course for such employers to pursue in order to continue work on their contracts with union men was to pay the fines the union inflicted on its 240 members!
What is this but brigandage, even if practiced by a trade union? Yet if the existence of monopoly privileges primarily compel laborers in self-defense to band themselves into unions and then those unions use that power of combination to extort pelf, should we not go back to its source in condemning it? Trade union blackmail is but the spawn of monopoly privilege.
Thus there are cases where the unions mulct employers. But there are also cases where they engage in a very different kind of and more far-reaching mulcting -- cases where the unions contract with the employers to mulct the public.
Such agreements occur between highly organized unions and closely associated employers. Who are the employers who can thus associate? Not competitive employers; that is, not those in ordinary competitive lines, for competition would prevent such employers from making any but the loosest association. But those who possess government-made or sanctioned privileges, such as railroad franchises, coal and ore beds, can come closely together and thereby command a monopoly in their channel of business. They can and do openly combine or covertly form "gentlemen's agreements." By virtue of such fusing they are enabled to put up prices and thereby rob the public. These are not competitive, but monopoly, employers. Entering upon a treaty with the organized laborers in their employ, they agree to give certain pay for certain conditions of service. They thus obtain assurance, generally for a fixed term, against a strike or other interference, while they ply a purse-filching trade against the public.
The unions do not make distinctions between competitive and monopoly employers. They engage in collective bargaining relatively on the same terms with all who wish to buy their labor. They consider that their first duty is to themselves, that the public can take care of the trusts as it pleases. They say substantially, "Trusts may or may not be natural, yet while we must live under them, we only follow the primary law of human nature -- that of self-preservation -- in making the best bargain we can with them."
Now, this collective bargaining may with the growth of unionism lead to what has been called the "arthurization" of the labor movement. The word "arthurization" is drawn from the name of the late P. M. Arthur, who for more than twenty-five years was Grand Chief of the Brotherhood of Locomotive Engineers and who brought that organization to the point of highest perfection. Mr. Arthur had earlier in life been a locomotive engineer. He had gone through the Pittsburg strike and riot of 1877, which cost the Pennsylvania Railroad so dear. Out of it he emerged with a scheme to have the engineers, as a union, make the best terms possible with the railroad companies and "go it alone," regardless of other bodies of labor and also regardless of public rights the railroads were overriding.
He rose to the head of the organization and remained there until he died, largely, no doubt, by successfully appealing through this policy to the self-interest of the men; but somewhat, I have been credibly assured, by a watchfulness against all opposition, even going to the length, it is thought, of secretly requesting railroad managements to send certain men off on special runs to prevent their participating in Brotherhood elections that might prove inimical to Arthur's policy and power.
Once in a while the engineers had to fight the railroads, but this was rare. Generally there was peace. They went on serving the railroads, regardless of how the railroads were treating the public. And it is certain that the shackles of hard conditions have been kept on all other railroad employees and that many an opportunity for betterment of general railroad employment has been lost because the railroad engineers turned a deaf ear to appeals for a united labor demand. The engineers refused to listen because Chief Arthur, speaking for them, made substantially an offensive and defensive alliance with the railroad companies and severed all ties of kinship with other labor bodies. For this alliance with the monopolies, that were not only enemies of his fellow-workingmen, but the robbers of the general public, Chief Arthur obtained special concessions; and he could, by making his demands moderate, at most times get concessions for the engineers from the transportation corporations.
The Arthur policy of aloofness from other labor bodies will, with the growth and centralization of trade unionism, probably soon yield to coordination. That is to say, trade unions will not fight each other; they will act together. But will this not put them in a better position to carry on the other feature of Arthur's policy -- to make treaties with monopoly employers?
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