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regulating the hours of labor for women industrial workers. Such legislation was sustained by the courts on the ground that it was a proper exercise of the police power of the state, and for the general welfare. We used to hear the same claim as to the right of contract in connection with the loan sharks. The legislation enacted to remedy that evil has also stood the test of the courts. In the making of contracts the courts have said that contracts which are entered into under duress, which perpetrate a fraud upon one of the parties thereto, which take an unfair advantage of the necessities of one of the parties, which are contrary to the public welfare, or in which one of the parties entering into the contract is not competent to do so, will not be declared valid as instruments entered into with freedom or in accord with public policy. Labor is not attempting to destroy the right of contract, but rather endeavoring to prevent the law of contract from growing into disrepute because some employers make use of it for the purpose of destroying our essential right to organization. In addition to the attempt to force the individual worker to surrender his inherent, constitutional, and essential rights, once the surrender is made by him, such surrender is made the basis for the curtailment of the liberties and rights of others who are not a party to the so called contract.

The question is not a new one. There have been men who have sought to take advantage of their knowledge of American law to deny other men, American citizens, their essential rights. Immediately after the Civil War and the declaration that emancipated the Negro from a condition of slavery, some very clever constitutional lawyers said to many plantation owners, "Oh, that is all right. There is a way by which you can get around that Declaration of Emancipation. There is a sacred right of contract in the United States. Loan a Negro a few dollars, enter into a contract with him that he must work for you until he has paid his obligation, and you have got that Negro as firmly attached to the plantation as he was before the Civil War." In 1867, to prevent that misapplication and destructive construction of the law of contract, Congress enacted a peonage law, an antipeonage law, and in that law said that no contract entered into voluntarily or involuntarily to work for another to pay off a debt was valid. The United States Supreme Court, every time a question arising under the peonage law has been brought before it, by unanimous decision has held that law to be constitutional. Had the Supreme Court not done that, a condition of involuntary servitude would have been established, and not only the colored man but the white wage-earner brought under a condition where, bolstered up by the common law of contract, he would have been tied down for life to the man who had loaned him $50.00. Instead of having loan shark Shylocks charging us 25 and 50 per cent, as they had done under their so called "legal right" to contract until the state said, "You cannot charge all the interest you want," we would have had these same gentlemen engaged in bartering us and our labor because we had at some period, owing to necessities, borrowed a few dollars to save our families from dire want.


Percy S. Brown, Works Manager, Corona Typewriter Company,
Groton, New York; President, Taylor Society, New York

In presenting this subject I am going to stress the social aspects of the problem more than the economic ones, because the economic returns are self-evident, positive, and sustained. More regular employment means less work for the social worker. This is of direct interest to you. Your experience of course would make this point obvious, but it is deserving of emphasis because it shows why all groups engaged in social work should get behind constructive attempts at regularization.

On all sides we hear talk of the budget-the government budget, the state budget, and the business or industrial budget. In many plants they are carrying the budget down into departments, and the hourly worker is becoming familiar with budgeting as it affects industry and government. How long will it be before he is going to present the point that if the budget is good for business and government, it is good for the worker? How long before he will find that he is surrounded by great difficulties in setting up a budget for his family? A government can establish a budget of needs and tax accordingly, or both it and industry can determine with accuracy the amount of income that will be realized during a period of from six months to two years or more from the present. The worker, on the contrary, in most instances can have no conception of probable income, and his budget must necessarily be based on an estimate consisting of averages of previous years' income. By no power of his own can he insure the accuracy of his figures or the realization of predicted income. He may be laid off tomorrow for six weeks or six months.

In the past, in controversial matters with regard to payment of workers, emphasis has always been placed upon rate per hour. As a matter of fact is it not true that the worker, like anyone else, is primarily interested in income per annum and has emphasized rate per hour merely because he has used it as a basis for computing probable income in the light of past experience with regard to the number of days worked in a year. Does it not seem logical, therefore, that the emphasis can be removed from rate per hour and placed upon income per annum as a more tangible and understandable figure, and that regularization is the thing which will make the change in emphasis possible?

Where regularization has been attained by scientific study, contented workmen are found and labor turnover is reduced to a minimum compatible with a healthy condition of the industrial enterprise. Although surprisingly few from a percentage standpoint, there are, however, many examples of industrial organizations which have made a sustained attack upon this problem. A number have made marked advances toward a solution of the problem. Some of the more outstanding cases will be touched on.

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Colonel William C. Procter, president of the Procter and Gamble Company, sees no reason why, if the soap business can be regularized, other industries cannot be also. During the past three years they have maintained regular production, which means regular employment, and now have guaranteed regular employment to the fifty-five hundred odd employees throughout the country providing they meet certain qualifications which, in substance, are that all employees participating in the company profit sharing plan-which, by the way, inculcates thrift—are guaranteed full pay for 48 weeks in every calendar year. The plan provides against losses of time not controllable by the company, such as fire, flood, and other emergencies. The guaranty is not effective until employees have been on the pay-roll six months. This, like other plans, is being, and will probably continue to be, modified from time to time as experience defines the proper procedure.

The apparently simple expedient of finding out that a perishable commodity can be carried through a number of months by refrigeration has regularized employment for the workers of the Hills Brothers Company of New York, packers of Dromedary dates. Formerly the seasonal fluctuation was terrific, and the marketing problem acute. A simple determination of a scientific nature solved the problem for a company which had had to expand its force from 200 or 300 to 1,000 or more at certain seasons, then shrink the force back again to normal, with all of the certainty of inefficiency, poor workmanship, and attendant higher costs of doing business. With this company there has been an increase of earnings, an improvement in product, and a marked increase in satisfaction, as well as income, to the workers, who are now regularly employed. This is an excellent example because there was an additional direct gain to the worker in that there was an arbitrary increase in wages, so that the worker is now said to be financially bettered about 30 per cent per annum.

The case of the Dennison Manufacturing Company is also well known, and is mentioned primarily because that company has set up a fund which may be defined as an insurance fund against unemployment, a careful study of which would prove of considerable interest. No attempt will be made to elaborate Dennison experience or practice, because so much has been written about it and the technique is so generally understood.

The Leeds and Northrup Company at Philadelphia are attacking the problem of taking care of peak demand by the use of overtime. Then, during slack periods, they build up inventories and utilize surplus labor on plant maintenance work. They also have an unemployment fund built up from weekly deductions of 2 per cent of the production pay-roll. They pay 75 per cent of earnings per week of the individual worker to employees with dependents, and nothing to anyone earning over $2,600 per annum.

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The Walworth Manufacturing Company is another of our notable examples of what can be done toward regularization through a carefully engineered study of distribution. Through accurate sales analysis and forecasting they have been

able markedly to regularize employment in the various plants which they operate.

The Hood Rubber Company furnishes a splendid example of a regularization program made possible by scientific forecasting, and their accomplishments in matching production to predetermined sales have been nothing short of remarkable.

The David Lupton's Sons Company of Philadelphia loom up as one of the more recent examples of the application of sales engineering utilized to broaden their effectiveness. Diversification of line has here been introduced in order to flatten the demand curve and aid in the regularization program.

The railroads, too, are giving serious consideration to this problem, as evidenced by the work which Mr. Loree, the president of the Delaware & Hudson Company, has done with regard to various insurance funds. A sincere effort is being made to guarantee 48 weeks a year to the railroad employees and to safeguard their interests by recognized methods of group insurance, a number of which have been made available to employees.

The Sperry Gyroscope Company of Brooklyn use a system of training special groups of men to act as fill-ins on the highly skilled jobs of their organization. They furnish a splendid example of the flying squadron or utility operator plan for filling in weak points in an organization.

The American Radiator Company is attempting regularization by price differentials based on careful analysis of seasonal demand. It is changing buying habit by spreading demand. The base price exists for the months of February, March, and April, the time when the greatest demand for the product exists. During May, June, and July they offer a discount of 2 per cent. During August, September, and October the discount is increased to 5 per cent. Then it drops again to 2 per cent in November, December, and January. This naturally has had a direct effect in balancing production schedules.

Many other examples of marked progress in regularization can be cited, such as the Columbian Conserve Company at Indianapolis, Henry A. Dix & Sons Company in New Jersey, the Hickey-Freeman Company at Rochester, and others.

Careful investigation would disclose the fact that many industries not so well known nationally have been quietly and effectively solving their own problems. Such a case has just been reported by Dr. Feldman in the March issue of Industrial Management, where he cites the five-year full-time earning guaranty of the Crocker-McElwain Company and the Chemical Paper Manufacturing Company, both at Holyoke. These are associated industries which, for the first time, give a comprehensive report of a scientifically worked out program of regularization which has given five years of steady employment, at what has proved to be increased wages, to all members of the organization except office employees, executives, or other salaried people.

These examples which I have cited lead to the conclusion that there has de

veloped among industrial executives a new kind of moral consciousness which has permeated a great part of the industrial fabric of the country, but which has failed as yet to lead to any group form of organized effort. On the whole we should feel greatly encouraged by the progress that has been made, despite the fact that we cannot as yet point to any of the examples cited as conclusive examples of the success of regularization programs. The test will come only after a period of time has elapsed during which we will have an accurate cross-section of all of the economic factors which unfavorably affect the industrial and commercial situations of the country. We hope, and many believe, that we will never again have to undergo such a drastic readjustment as that of 1920-23, but we probably will go through less serious cycles from time to time. Then will come the test of the soundness of the methods which we today call attention to as examples of regularization made effective. Until such a test is forced on industry we cannot positively affirm that the cases presented are demonstrated successes, no matter how profoundly we may hope that they are and no matter how much faith we may have in their soundness. But let us remember that even though in some instances breakdowns may occur, a major contribution has been made toward solving this great problem through even partial success. Even a few years of regular work in some industries would be a real step forward. The men who have been far-sighted enough to devise the programs for their firms have peered far into the future, and men of such vision, guided by both economic and altruistic motives, are not likely to be very wrong even under most adverse conditions.

Now let us consider another phase. What are the benefits to be gained from regularization? Some are obvious. Regularization reduces turnover, low turnover means fewer new workers to be taught, and this reduces training cost. New workers increase accidents, which means an economic loss of man-power and dollars. Then, too, the element of health enters in. Physicians recognize that there is such a thing as toleration to dust or certain irritating chemicals, some even semi-poisonous. Workers tend to become immunized against these things if constantly subjected to their action or influence. Put in new workers or take off old ones for a few weeks and then put them back, and the sickness factor enters in. The toleration to the irritant is partly lost, even by the formerly immunized worker when not regularly at the work.

Then consider the question of skill. Irregular employment affects skill in many ways. The piece worker is off for a few weeks and his rhythmic habits are adversely affected. It takes him hours or days to regain his swing. Then he tires more easily for a while, and he tries to speed up to his old speed and spoils work. If the job is one that is known to be irregular the workers may quite naturally, especially on day work, try to make it last as long as possible. Here they may get a superlative quality but a very low production. There is no denying that under such conditions output will be restricted. Then, too, many skilled workers are driven from a particular trade or industry into another trade or industry

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