right to his million rests on exactly the same ground as the workman's right to his week's earnings.

By what method to restore a lasting harmony between the two, is a great question of the day. The first and simplest method is by arbitration. Where it is possible to obtain referees, in whose impartiality and intelligence both parties have confidence, and where both are ready to submit their case, disputes are easily settled and harmony restored. The ordinary courts of justice are not available for the purpose, because they cannct adjudicate the terms of contracts not yet made, and because the judges have no special acquaintance with the matters at issue. The establishment of tribunals of arbitration chosen from both masters and men, with the sanction of government, has been successfully tried in England, and these have put an end to several recent strikes and lock-outs. Something like these, though more official in their character, were the Conseils de Prudhommes of medieval France, which were revived by Napoleon I. in 1806; but the latter are rather government courts of selected experts to decide legal issues.

§ 138. A second solution is offered by the system of coöperation, whose advocates would abolish the conflict between capitalist and laborer, by uniting the two functions in the same persons. They would have workingmen unite their savings to establish a workshop of their own, to be managed by foremen of their own selection under rules adopted by the whole body.

Instances of this industrial method are to be found very early in our own country. The Greek merchant marine is based on the same principle, and it has secured, through the zeal and energy of its sailors, nearly the monopoly of the carrying trade in the Mediterranean. But the first proclamation of the method as a means to revolutionize industry and commerce was made by the socialist Robert Owen. His design was to set up coöperative stores rather than workshops; to abolish the profits of middlemen rather than to get rid of the wages system. About 1824-30 many societies were formed on this basis to make "every man his own shopkeeper." The most successful was the

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"Rochdale Equitable Pioneers," organized in 1844. The politi cal troubles of 1848-50 called attention to this method and to successful applications of it to industry in France. The Christian socialist party (F. D. Maurice, Chas. Kingsley, Thos. Hughes, J. M. Ludlow, &c.) urged its general adoption as a remedy for the deadly competition of the wages system. Every man was to be his own employer as well as his own shopkeeper. In spite of many failures, coöperation has an honorable record of successes to show in France, England, Germany, Spain and the United States.

If considered as intended to supersede the wages system entirely, coöperation is open to serious theoretical and practical objections. In the light of the true law of social progress (§ 30), it will be seen to be a decline in industrial organization, when duties and functions that have been distributed among several persons are united in the same person. It would be a loss on all sides, were the captain of industry to cease to exist, and were his functions to be vested in the whole body of workmen. The singleness of purpose, the clearness of outlook, and the energy that large industrial operations demand, could never be brought into play by an association of workmen, or by delegates chosen from their ranks and subject to their control. As a rule, the possession of capital is itself the gauge of business capacity, and of the power to organize and administer an establishment. To exclude those who possess these from their present position, would be to deprive industry of its natural and trusted leaders. Now if coöperation were to become universal they would become mere money-lenders, or else their capital would be entirely withdrawn from the sphere of produc-a loss of the results of past labor that would be eminently deporable.

tion,

In practice it has been found difficult to secure the right sort of men to take the place at the head of coöperative establishments. Men of the necessary qualifications are generally able to command their own price elsewhere, and are too well satisfied with their positions to give them up to begin a mere experiment here

And if they did, the estimate put upon their services by their new associates is commonly much below their deserts, so that they would soon be glad to go back to their old places. In the absence of first-class men, it is commonly not the second class that are chosen, but rather men of an inferior grade but more showy qualities.

§ 139. Less open to objection as a solution of the question is the plan of industrial partnerships. In this, the proprietor of an establishment agrees to pay his workmen the current rate of wages, and also to distribute among them at the end of the year all or part of the net profit above a certain percentage, say 15 or 20 per cent. This method identifies the interests of labor and capital without confounding their functions. The men are stimulated to do their utmost,-to avoid all waste as tending to diminish profits, and all careless work as injuring their market, -and to keep each other up to the mark by the force of public opinion.

This plan also is no novelty in our own country. Thus in Albert Gallatin's Glass Factory (established in 1794 at New Geneva, Pa., being the first west of the Alleghenies), every workman had a direct interest in the profits, besides regular wages. The whale fishery and the China trade were managed on the same principle. It was first urged upon the attention of Europe by Charles Babbage in his Economy of Manufactures (1829). A Parisian house-painter, after making trial of the wages system in 1842, took his workmen into this limited sort of partnership, with moral and financial results that attracted very great attention, and led to its imitation by a considerable number of establishments in France and not a few in England. It has been found that the plan restores thorough good feeling between masters and men, where the worst irritation has existed for years; that it makes the workmen eager to adopt improved methods, which they would previously have resisted to the utmost; that it diminishes the amount of drunkenness and thriftlessness, and reduces to a minimum the number of holidays spent in dissipation; that it creates a vigorous public opinion against eye

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service and waste, and leads men to pride themselves upon giving good work for their wages. In some cases the amount of profits reserved to themselves by the firm, was fixed at a higher percentage than they had ever earned; and yet at the end of the year they had a surplus to divide with their workmen.

The plan has been adopted in a good number of American establishments, but it may fairly be hoped that it will be extended to many more, as it seems to be the least objectionable and the most effective of all the new solutions of the labor question. Of course circumstances will demand manifold modifications of the principle. The number of laborers employed in proportion to the capital invested, must determine what is the proportion of the surplus that will fall to capital and labor respectively. In case the business has suffered losses, it might perhaps be both wise and just to recoup those losses out of the profits of following years. All these details are open to equitable adjustment at the start, or to arbitration as cases of disagreement arise; but the great thing is to get the workman to feel that he is working for himself and has something to hope for as the result of his skill and diligence.

$140. Another modification of the principle of coöperation is that introduced in Germany by Schultze-Delitzch. In that country industry is not so generally organized on the grand scale as is common in England, France and America; a great part of their workshops are very small establishments, often managed by a single family. If these were to have their materials at the lowest price they must buy them at wholesale to save commissions; to this end there were organized raw material associations, that they might combine their capital for such purchases. Then came the establishment of public bazaars by these or similar associations, for the sale of their wares. But it was found that these workmen had but little capital and no credit; they could offer no sufficient security to induce the banks to lend them even the small sums that they needed; for a workingman's capital is his health and strength, and his death or serious illness destroys it. But if the single workingman has no credit,

a large body of them organized on the principle of mutual security would have credit enough; if one or a few died or were ill the rest would be the bank's security. Associations were therefore formed to establish loan banks or people's banks, as they are variously called; and these banks make advances to their shareholders on such terms as put them on an equality with the rich.

The movement began in 1850. In 1872, after twenty-two years of slow and steady growth, there were 442 associations for purchase of raw materials and sale of wares; 2220 banks to make advances to workmen. Of these banks, 807 reported 372,742 members; loans, 359,519,200 thalers; capital, 21,373,529 thalers; deposits and borrowed capital, 77,188,731 thalers. (A thaler is seventy-two and a half cents.) This group of banks is connected with a central bank, which negotiates loans for them in the money market.

§ 141. The question of the rate at which woman's labor should be paid, and of the employments that should be open to her, is one of the living issues of our time, and must not be passed over.

The rate at which she is paid is often alleged as an instance of the power of custom, and unjust custom besides. For doing exactly the same sort of work, it is said, and doing it quite as well, she receives far less pay than a man does. Custom, no doubt, has its influence here; the more rapid advance of woman's rate of pay seems to indicate as much. But there is reason as well as custom for the difference.

The

(1) Men are more steady workmen than women are. latter, rightly or wrongly, all but a small minority, look forward to marriage and the care of a household as their true career. For this reason they do not concentrate their attention upon their calling with the same singleness of eye as men show. Nor have they, as a rule, the same power of continuous application, although they have far more natural quickness. The superintendent of the Elgin Watch Factory told me that the women employed there learnt far more during their first fortnight than men did; but there they stopped, while the men went on learning all their lives.