countries of Europe the co-operative system has played a notable part both in advancing the welfare and in consolidating the organization of wage-earners. In England, Ireland, Belgium, France, Italy, and Denmark, distributive stores, agricultural production, banking, farming, building-all these types of co-operative industry present examples of mutual advantage, popular education, and social hope. The single instance of the British organization with its membership, in 1911, of 2,640,091, in 1,407 distributive societies, and its wholesale business of £35,744,069 of sales, and £1,000,518 of profits is enough to demonstrate the capacity of plain people to conduct great business affairs.

In the presence of such facts it is impossible to dismiss cooperation as unimportant or ineffective. The history of abortive undertakings in the United States seems to point to unpropitious circumstances or unfaithful administration rather than to inherent defects in the plan; and the student of industrial conditions seems called to inquire, not whether co-operation can succeed, but what the special causes in the United States are which have made it so often fail.

What, then, are the most elemental conditions in industrial co-operation? The first condition is that of independence. The co-operative plan must not be tied up with other and more dubious undertakings, whose failure may involve the wreck of co-operation. In America communism, vegetarianism, pietism, feminism, have all annexed co-operation to their programs, and their abortive colonies have involved in their fall much disrepute for co-operative industry. Co-operation is too admirable a scheme to be made a bait for converts to Utopia.

The second condition is a considerable degree of fixity in residence. One joins a co-operative society, paying an entrance fee in the expectation of later profits. He has to wait for his dividend. The habit of buying at the co-operative store becomes gradually fixed in his family, and devotion to the cause is gradually strengthened by an increasing appreciation of advantage. All this gathering tradition of loyalty is hard to develop among the ordinary conditions of American life. We are for the present a nation of nomads. This fluidity in population, however, is not likely to last. Whenever, therefore, a reasonable fixity of residence has been reached, an opportunity of free organization for mutual help will have arrived.

A third condition to success is desire to save. The plan proposes a bonus on thrift. Distributive stores under co-operation, instead of underselling other traders, often accept market rates and

reserve the earnings for distribution to purchasers. The wholesale societies are themselves the property of the distributive stores, so that the profits filter down through the stores to the individual members. Thus the expectation of dividend becomes the economic basis of loyalty. The co-operator cherishes the faith that a penny saved is a penny earned. The American people are beyond all comparison, and from richest to humblest, the most unthrifty and extravagant in the world. Sooner or later, however, even so lighthearted and unprecedentedly prosperous a people as we will have to learn the ancient lesson of economy. Thrift will eventually turn out to be more lucrative than luck. The chances of gain will diminish, and the rewards of saving will increase. Whenever that time arrives the co-operative scheme will attract fresh attention.

A final condition of success is a supply of what the advocates of the movement call "co-operative men." The scheme depends on fidelity, integrity, and disinterestedness. A completely self-seeking man cannot be a good co-operator. Co-operation presupposes common sense, forbearance, and co-operative spirit, and can be successful only where such qualities exist. Co-operation is, in fact, a form of moral education, an expression of social ethics, a way of trade. that might write over its stores: "Bear ye one another's burdens"; "Ye are members one of another."

This condition of co-operation prescribes its own limitations. It is applicable only to the more thoughtful and intelligent of wageearners. The ignorant, the thriftless, and the short-sighted it excludes. Moral responsibility, a sense of loyalty, a willingness to sacrifice for the cause, are essential to business success. Yet this moral demand is precisely what gives to co-operation its peculiar place in the industrial world.

359. "U. S. Steel" and Labor16

BY RAYNAL C. BOLLING

The officers of the United States Steel Corporation and its subsidiary companies are not indifferent or self-satisfied as to conditions among their workmen. They are trying to improve those conditions as fast as it is practicable to do so. They do not maintain that the lot of the steel-worker is easy or ideal; but they do maintain that their workmen are treated as well on the whole as the workmen in any other industry and treated far better than ever before in the steel industry.

1Adapted from an article in the Annals of the American Academy of Political and Social Science, XLII, 38-46. Copyright (1912).

The United States Steel Corporation has made it possible for every employee, even down to the ordinary laborer, to become an owner of its stock. In its iron mines, a thousand feet underground, I have seen men working with pick and shovel who proved, when questioned, to be stockholders in the company. Over 30,000 of the workmen are thus interested in the business. These employee stockholders derive the following special benefits from the plant: (1) They are induced to save money, often for the first time in their lives. (2) For five years they receive a very high return upon their investments, and thereafter a large return for such small investments. (3) They are induced to feel a direct interest in the business and to remember that their own interests are tied up with those of the company. (4) They are encouraged to remain with the company and to profit by permanent employment.

Before there was any law in this country which required anything of the kind, the United States Steel Corporation established a system of voluntary accident relief absolutely regardless of legal liability. Every man injured and the family of every man killed is taken care of without need of lawsuits or even of any claims . against the companies. Last year we were sued in only two-tenths of one per cent of the cases-showing how satisfactory this plan has proved to our workmen.

The United States Steel Corporation has spent six years in the development of a system of preventing accidents, which I confidently believe is not surpassed anywhere in the United States or abroad. The system which has been worked out comprehends all manner of safety devices and other material safeguards, but, above all, it is based upon the development of an earnest, constant and determined effort to prevent work accidents-all the way from the president down to the lowest workman.

In six years the number of serious and fatal accidents among workmen of the United States Steel Corporation has been reduced forty-three per cent, and more than 2,000 men each year are saved from injury or death in work accidents which would have happened to them under old conditions.

At all our mills, mines and plants provision is made for the best surgical and hospital treatment obtainable for employees injured in our work. In the mining regions the arrangements include medical attention for the men and for their families.

By an arrangement under which $8,000,000 is being added to the $4,000,000 originally given by Mr. Andrew Carnegie, there has been provided a permanent fund of $12,000,000, from the income of which all superannuated employees of the United States Steel

Corporation who have remained twenty years in its service are assured support for the rest of their lives. The smallest pension given is $12 a month and the largest $100-thus the lowest paid workman will receive enough to provide for his necessities and the high-salaried employees do not become a drain on the fund.

The most recently organized work for improving conditions among employees of the Steel Corporation is in sanitation and welfare. This work is being organized in the same manner in which the system of accident prevention has been worked out and with the same theory of bringing these matters home to the heads of departments, superintendents and foremen, and above all, to the men themselves.

This work includes sanitary disposal of sewage and fecal matter, provision for pure water in all plants and houses, the protection of food supplies, especially milk and meat, and the installation of wash-rooms, shower-baths and lockers for a change of clothing.

All our companies are donors to hospitals, churches, clubs, libraries and other organizations established by the communities and the workmen. It is the aim of our managers to make their plants a benefit to the communities in many ways additional to the wages paid the workmen.

Few people know how much our plant managers spend in carrying employees through hard times when there is not work enough, in furnishing groceries and coal, in paying rent and insurance to assist sick employees, in giving a little Christmas cheer to those who are in misfortune.

Please do not understand me to say that all of these things are done in all the subsidiary companies or in any of them. Many of these things are done in all of the companies, and all these and other means of making better the conditions of its workmen are on trial and under consideration somewhere in the Steel Corporation, with the hope and the purpose of eventually bringing all the companies and all the plants to the best standards.

The hours of labor in the steel mills of this country grew up with the industry. They were not established by the United States. Steel Corporation, and they can only be changed slowly where changes are shown to be practicable and desirable.

The twelve-hour day exists among only twenty-five per cent of the workmen employed by the United States Steel Corporation, although in the blast furnaces and rolling mills, to which the twelvehour day is largely confined, probably half the workmen have a twelve-hour day, more or less modified by periods of rest. The steel industry adopted the two-turn svstem long before the United

States Steel Corporation was organized. The same system prevails in Germany, where labor conditions have probably been made the subject of more state supervision than anywhere else in the world. Personally, I am satisfied that the lightening of labor by machinery and the rest periods prevent the twelve-hour day from doing any physical injury to the workmen. Since the Steel Corporation was organized the price of its products has been reduced on the average about ten dollars a ton. Meanwhile, wages have been increased twenty-five per cent. Yet the efficiency of labor has not increased. It would be easy to substitute an eight-hour day for twelve hours if the workman could accept two-thirds his present wages, but the workman, like everyone else, prefers longer hours to lower wages; and there are more applicants for twelve-hour positions than for those where the work is only ten hours, because the former pay better. This is an economic problem which confronts the industry and time is required for its solution.

The question of organization among the workmen in the steel industry is too large, too serious and too difficult a subject to discuss in a small portion of a short address. It is a subject where discussion too often engenders ill feeling and most unfortunate bitterness, where differences of opinion are seldom accepted with patience or tolerance on either side. For myself, I believe we must get rid of lawlessness and of violence and oppression on both sides and wherever they appear. I believe no agreement can be reached until the two parties are both prepared to seek an agreement on the basis of mutual advantages offered and of equal responsibilities assumed.

360. Labor and "U. S. Steel"1

BY JOHN A. FITCH

A discussion of the subject "Industrial Combinations and the Wage Earner" with reference to the Steel industry, may well take the form of an answer to the inquiry, "Has the formation of the United States Steel Corporation proven a good thing for labor or the reverse?"

The reasons for choosing the United States Steel Corporation are both logical and obvious, I believe. It is the greatest combination in the industry; it has more money to spend on improvements than any other, and so furnishes the most favorable basis for judg

17Adapted from an article in the Annals of the American Academy of Political and Social Science, XLII, 10-19, Copyright (1912).