The Blame for Lawrence
Textile workers seek only a living wage, but their walkout is met with violence at the hands of the police and a jingoistic citizenry.
It is futile to view Lawrence under a microscope. The strike of the textile workers has most of the familiar characteristics of other strikes, but its significance does not lie on the surface. The apparent facts of the case are more bewildering than illuminating. In the slack season of the industry, when large numbers were unemployed, several thousand workers struck for a reduction in hours without reduction in pay; they were receiving considerably less than the standard living wage set by the National War Labor Board; the leadership of the strike gravitated to three clergymen of advanced social views; the community condemned the strike as anti-American and uneconomic, and the picketers were persecuted by the police with relentless brutality. The manufacturers had conceded the reduction in hours but insisted on a corresponding lowering of wages, and staunchly maintained their refusal to arbitrate. Probably three-fourths of the employees are at work. Yet the remaining fourth, eight or nine thousand, have continued their fight for weeks at the price of impoverishment and great suffering.
The fact that the strikers are foreigners divided among thirty-one nationalities, that few of them speak English or are citizens, and that some are boasting that in a short time the workers will own the mills, has been used as an argument that this is an attempt on the part of Eastern Europeans to impose upon America the fallacious economics of a misguided Russia. And in the light of this argument the hostility of the community, the shocking conduct of the police, and the obstinacy of the manufacturers are being justified. But the motives of the strike are not to be so precisely named or so conveniently dismissed. Had these foreigners swarmed to America imbued with the revolutionary spirit, and intrenched themselves in an industrial city to launch an attack, this strike would be truly a breach of hospitality. But they are here because American business demanded cheap labor, and many of them were even solicited by textile agents.
For years the textile manufacturers have carried on a policy of gathering in the peasants of Eastern and Southeastern Europe to operate the looms of New England. These immigrants were distributed so that no more than fifteen per cent. of any one race were employed in a single mill, and the apportionment was dispassionately determined so that men and women racially hostile to one another worked side by side. This was to render organization impossible, and thus keep wages low.
This policy of importation was so valuable that one concern, engaged in textile manufacturing, when charged with violating the Contract Labor Law, was willing to compromise with the Government by paying $50,000, in view of which action the records were sealed and the public was kept in ignorance of the transgression. Though this company does not operate a mill in Lawrence the instance shows how eager one corporation was not to jeopardize a practice of vital importance to the trade. The American Woolen Company, which owns four of the eight Lawrence mills, posted lithographs throughout the Balkans depicting one of their factories as a magnificent edifice, a veritable palace of Midas, through one portal of which an army of ragged peasants marched, only to emerge from a neighboring doorway splendidly arrayed and bearing trophies—an unparalleled vision of instantaneous American alchemy. Unfortunately, actualities and visions are not allied. In red brick factories, one prodigious tier of glazed windows upon another, the European peasant has tended the looms and the spindles, and has received at the end of the week less than a living wage. The Lawrence manufacturer has not so much as justified the first unwritten premise of his posters; he has done nothing comprehensive to make Americans of these disillusioned immigrants.
But if this policy has not been civic in the best sense, it has brought prosperity to the industry. Since 1900 the American Woolen Company has not missed its annual seven per cent. dividend on preferred stock, and this year it has apportioned three million dollars to the owners of common stock. Though the latter stock is not much more than speculative paper, yet since 1916 a total of five and three-quarters millions has fallen to its holders. Two special dividends were voted this year, one of five per cent, just before the strike began, the other of ten per cent, after it had been called. The payments, be it noted, were made in Liberty Bonds, publicly purchased as a proof of the company's patriotism, and distributed to owners of watered stock. This action was taken at a moment when the manufacturers, in explanation of their refusal to increase wages, pleaded that a season of transformation and low production was in prospect.
It is obvious that the Lawrence situation presents fundamental discrepancies, and it is not unnatural to inquire how much of the responsibility rests, not on agitators, but on the shoulders of the men who guide the industry. These men, as one hears in Boston, are honest Christian gentlemen. There is Mr. William Whitman, who has seen his Arlington Mill rise, not magically, but by his enterprise and genius, from a modest factory to a monumental property worth millions; a man who is flatteringly remembered in Washington for his brilliant argumentation on behalf of a high protective tariff. There is Mr. Franklin W. Hobbs, his son-in-law and aide. There is Mr. Robert F. Herrick, a leading barrister and capitalist, a famous stroke at Harvard, as well as a person of impelling social and political ambitions. Then there are the many officers and directors of the corporations whose names stand on the rolls of New England respectability. And there is Mr. William M. Wood, president of the American Woolen Company. It is conceivable that he contributed to the inspiration of this company's Balkan posters; for, according to Boston, he himself is descended from a humble Portuguese emigre.
These men of authority in the Lawrence mills declare that there is an essential unfairness in a point of view which isolates the Lawrence situation. They pay the prevailing wages of the industry in New England, and they cannot raise the scale and still compete with mills that do not make a corresponding advance. Furthermore, these wages are not lower than those paid in many other industries employing "cheap immigrant labor."
It has been suggested to these men that a keener ethical sense would have dictated the utilization of the three-million-dollar dividend for the benefit of the employees during an inevitable slack season. They reply that the directors of a company are responsible to the stockholders and may not take the initiative in disbursing the legitimate profits of investors. Under the law of some States, it appears, it is obligatory to pay dividends.
In 1916, Henry Ford announced that the Ford Motor Company had decided to pay no special dividends, but to put back into the business all the earnings of the company other than the regular dividends. "My ambition," declared Mr. Ford, "is to employ still more men, to spread the benefits of this industrial system to the greatest possible number, to help them build up their lives and their homes." The minority stockholders brought suit, and the Supreme Court of Michigan rendered the following decision:
A business corporation is organized and carried on primarily for the benefit of the stockholders. The powers of the directors are to be employed for that end. The discretion of directors is to be exercised in choice of means to attain that end and does not extend to a change in the end itself, to the reduction of profits or to the non-distribution of profits among the stockholders in order to devote them to other purposes.
The court conceded that a corporation has the power to make an incidental humanitarian expenditure of corporate funds for the benefit of its employees, as in building a hospital or in employing an agency for the betterment of living conditions, but it drew the distinction between this and the diversion of the entire corporate enterprise to the purpose of employing a large number of men merely for their benefit, as opposed to the financial interest of the stockholders.
Even if the managers of the textile industry have pursued a censurable policy in importing "cheap" workers, they may not now be condemned for their failure at this moment to employ benevolently their great war profits. The decision of the Michigan Supreme Court is no more than an expression of the universal industrial code. Furthermore, when the Lawrence employers brought over European labor and paid less than a living wage, this was only in conformity with a general practice which has had an intrinsic part in the creation of American prosperity. For years it has been an accepted course, which has neither startled the country nor stirred its indignation. It is manifestly unsound to single out the Lawrence employers for especial condemnation. The duty of the officer of the corporation is to make profits for the shareholder, and his independence is limited. The responsibility for corporate practices lies ultimately with the stock owners and with no one else. If not their desire, then at least their inertia sanctions the sharp methods and unsocial policies.
One is accordingly tempted in the Lawrence case to seek out principal stockholders and to inquire of them the nature of the responsibility they feel; for Lawrence stock is held by university presidents, bishops, judges, philanthropists, and other members of leading families which are cornerstones in the cultural aristocracy of New England. But they are not alone. The American Woolen Company has seventeen thousand stockholders, and considering all the Lawrence mills, there are probably three stockholders for every striker.
To say that the leading citizens of Boston are oblivious to the Lawrence situation is to do them an injustice. There is at least one prominent woman who, on the receipt of her extra dividend, demanded to know why the directors had decreed such a distribution while babies were starving in the mill-workers' homes. Another prominent woman share-owner is picketing for the strikers at Lawrence. The Harvard Liberal Club gave a dinner to bring together influential stockholders with representative strikers, and has been active in the campaign for an investigation by the State. But even so the great majority of stockholders knows practically nothing of the conditions at Lawrence, since only the Boston American has told the real story of the strike. Unquestionably, only an exceptional few are familiar with the policies which have built up the industry. It is true that the wealthy families of New England own the controlling interest in the Lawrence mills, and have the power to increase the wages and end the misery. But, as a leading Boston capitalist said:
Should I exert my influence to the detriment of smaller stockholders than myself? To me it would make no great difference if I received a hundred thousand dollars less this year or next. But there are many stockholders who depend for a living on their dividends. If you know New England, you must know the Boston spinster who has less of an income than the War Labor Board declares necessary. She can't move to the tenements, she must live in the Back Bay and be able to attend Trinity Church in her impeccable black taffeta dress. I do not imply that she is typical, but there are large numbers whose dividends are the margin between comfort and penury.
Just as it is unfair to single out the Lawrence manufacturers for opprobrium, it is illogical to expect the uninformed shareholders to answer for the strike. A Boston man, prominent in his profession, said: "I consider myself the prototype of the investor. When I have saved a little money I buy some stocks. I put them aside, collect my dividends, and that is the end of the matter. Oh yes, I vote. But so far as I know I haven't voted my stock intelligently a half dozen times in my life"— a confession which could be made by practically ninety per cent. of the investors in any American industry.
Business should be so conducted that if there are irregularities, the public can learn who is to blame and insist on a change of conditions. The structure of the textile industry has the semblance of a responsible authority. After all, in law, the stockholders are answerable. And yet the individual bishop, or capitalist, or the Boston spinster in her taffeta dress, cannot be particularly challenged. The evils that are found at Lawrence exist in some guise in most industrial centres, and other bishops and capitalists and maiden ladies are profiting by them without being questioned. Stockholders are not competent to manage corporations; they do not inform themselves as to far-reaching economic policies and intricate business details in which they have no professional interest. It appears that the responsibility cannot be intelligently fixed upon individuals, but only upon a system.
Is it therefore reasonable to assume that the Lawrence strikers are hostile to America, or dangerous, because some of their leaders preach industrial reconstruction? In the last analysis, their strike at this inopportune time is not over a question of wages, but over problems of economic philosophy. If it is revolution to demand a change of the status quo, the Lawrence immigrants are treasonable, and the Lawrence police are doing a meritorious service, even if they are overzealous. For what has occurred in Lawrence is that the Eastern European peasants have contrived to outwit the prudent plans of the textile managers. It is a blind, helpless, and probably pre-doomed effort, certainly a predominantly unconscious one. For the striker has not made an astute evaluation of the industrial system, any more than the stockholder. He has no higher ideal of the social service of industry. He is an uneducated, somewhat primitive man, who knows that his pay is inadequate and his life wretched—and that his employer has cut a melon. There are indeed passions at Lawrence, and these are not of inferior significance to the minor question of wages and hours.
The hostile races were not irretrievably divided by the circumstances under which they worked side by side in the mills. They are now striking side by side. The general strike committee meets every morning in a dingy hall—the home, evidently, of a Syrian religious society. Approximately forty delegates come to this hall from the various language groups. Within its four walls, incontinently displaying faded pictures illustrating the Book of Revelation, Lawrence has formed her league of nations. That Syrian religious stronghold is vibrating with a new eloquence. New emotions, some of them powerful and portentous, are coming to unheralded expression. The hostile races are now allies.
It is a union without form and without a name, but it was welded with something of the same fervor which brought together, under strangely different conditions, the labor organizations of Seattle for a general strike. It would be folly to declare that this power in Lawrence is generated by merely local difficulties. This is not a New England problem; it must be solved one day for every community where workers and profit-makers compose the industrial family.