allowed to pay piece rates based thereon. The Board must also fix the working hours, rates of overtime, and number of apprentices and improvers. Old or infirm persons unable to earn the minimum wage may be licensed by the Chief Inspector of Factories to work at a specified lower wage. A "determination" or award made by a Board continues in force until altered, and can only be challenged for "illegality" before the Supreme Court. The Governor may, however, suspend a "determination" for six months, within which time the Board must hear evidence and then decide finally.

Under these Boards sweating was abolished and wages were considerably raised. Thus the average weekly wage for all males in the baking trade rose from 32s. 5d. in 1896 to 42s. 6d. in 1901; in the clothing trade from 35s. 3d. to 40s. 5d.; and in bootmaking from 26s. 10d. to 34s. 5d. For all females the average weekly wage in the clothing trade rose from 15s. 5d. to 18s. 3d.; in the boot trade from 13s. 4d. to 15s. 3d.; and in the underclothing trade from 11s. 3d. (in 1898) to 12s. 7d. The wages for adults only are much higher, and the fixed minimum wage is never the actual wages paid. Thus, in 1901 the minimum wage fixed by the Clothing Board was 45s. for adult males and 20s. for adult females, but the average wages earned were 53s. 6d. and 22s. 3d. Under the Shirt Board the minimum wage for adult females was 16s. and the average wage 20s. 8d.

Nevertheless there have been serious difficulties in the working of the Acts. The Boards were too large, and had no power to call evidence, examine books, or decide the cases on anything but the written statements put forward by their members. The members thus regarded themselves not as judges but as the advocates of the side by which they were elected. To avoid giving either side an advantage the chairman was always chosen from outside the trade, and while he always worked for a compromise each side sought to weary or cajole him into the greatest possible preference for its views. Only the suspensory power of the Governor, by enabling evidence to be heard, made the law workable in many cases. Indeed the wonder is there has not been more friction than there actually was. The provisions for dealing with old and slow workers were clumsy, and further complications were added by the opposition to the regulation of apprenticeship in the sweated trades offered by employers greedy for cheap labor. In a noticeable number of cases, too, through complicity of the workpeople the minimum wage was not in practice observed. A Royal Commission was appointed in 1900 to investigate the working of the Factories and Shops Act, and in the spring of 1903 it reported against the continuance of the wage-board system, but, recognizing "that there cannot be any return to the old conditions of freedom of contract in factory labor," recommended the adoption of a scheme substantially based on the New Zealand Act which the commissioners described as "the fairest, the most complete. and the most useful labor law on the statute-books of the Australasian States." Meanwhile the Act of 1900 came to an end in 1902 and was renewed for a year; all determinations made after July, 1902, were suspended while the earlier ones were continued in force.

Arbitration in New South Wales.

The Industrial Arbitation Act of 1901 is closely modelled on the New Zealand law in its provisions for industrial unions and agreements. There are no Boards of Conciliation, but only one Court of Arbitration for the whole colony, consisting of a Judge of the Supreme Court and two members recommended by the industrial unions of workers and employers respectively. Other special points are that the Registrar of the Court may bring an industrial dispute before the Court; an employer who locks out his men while proceedings are pending may be fined £1,000 or imprisoned for two months; and most important of all-in any case before it the Court may "declare that any practice, regulation, rule, custom, term of agreement, condition of employment, or dealing whatsoever in relation to an industrial matter, shall be a common rule of the industry." It is still too soon to say how this Act will work. Finally it may be noted that West Australia adopted in 1900 the New Zealand law, and about the same time South Australia set up a system of wage boards.

Failure of Voluntary Intervention.

State intervention in labor disputes when one of the parties cannot be compelled to arbitrate, and the award is not enforceable at law, can be summed up as a universal failure, and the contrast with the compulsory Act of New Zealand is striking. The causes are on the surface. Naturally the party in an industrial dispute which feels itself the stronger is unwilling to surrender the strategic advantage of position for the chance of winning less in arbitration, and when both are strongly organized the result may be disastrous. Secondly, intervention usually takes place too late, when angry passions have been roused and neither side is willing to believe in the other's good faith. Distrust of well-meaning but unskilled arbitrators counts for much, and the fact that arbitrators are usually drawn from the middle or upper classes has been a standing cause of objection by working men. This feeling is, however, changing. "Things are very different now," said Mr. Mawdsley to an interviewer (Sunday Chronicle, 7th November, 1897), "the Board of Trade takes the matter up, and appoints a thoroughly able investigator." Above all, the absence of a penalty for breach of the award nullifies the best intentions of the legislators. Actual breach of agreements formally entered into have fortunately been of comparatively rare occurrence in this country, but the statistics show that refusal to accept an unfavorable award is by no means uncommon everywhere. Or if the award is accepted the quarrel is renewed in a short time and arbitration refused.

The Right of the State.

The great difficulty in the way of arbitration is the refusal of the disputants to admit that anyone is concerned in their quarrel but themselves. When the Board of Trade at last intervened in the Engineering War its conduct was denounced by Sir Henry Howorth, F.R.S., M.P., as an "impertinence," and the Times, October 7, 1897, declared that: "The right of interference by a Government depart

ment can only be exercised to any good purpose when the conflict is practically over, and when one side or the other wishes to have an opportunity for honorable retreat." Against this belated theory of the right of private warfare we oppose the only theory under which social peace is possible-the right and duty of the State both to safeguard the national welfare and industry, and to secure the well-being of each of its members. This theory is particularly applicable to strikes and lock-outs where large numbers of people, not concerned in the dispute, are often seriously injured by the stoppage of work. For the sake of the public peace the State interferes in the purely private quarrels of a couple of litigants, for the sake of the public health it interferes at every turn with the rights of private property, for the sake of safety to life and limb it interferes with the internal arrangements of factories and mines and the right of an employer to do what he likes with his own, for the sake of common honesty it regulates the payment of wages by means of Truck Acts, " Particulars Clauses," and Checkweighmen. To extend this general principle of the regulation of industry by common rules to the determination of wages, hours, and the other conditions of labor is a natural sequence. It is not proposed, as is often objected, to compel employers to run their works at a loss, but it is proposed that if employers enter into an industry at all they shall conduct it on terms satisfactory to the public conscience. A man is not compelled to run a factory if he cannot afford it; but if he does open one it must have sufficient fireescapes and satisfactory appliances against accidents. When the small boot and shoe manufacturers complained that they were being driven out of the trade by the agreements which the large factoryowners were making with the trade union, the editor of the Shoe and Leather Record replied: "If small manufacturers cannot continue to exist except by paying less than a proper standard of wages for work done, that is the clearest possible proof that they have no right to exist as such."* In return for this State interference employers are offered the opportunity of conducting their business under the rules of peace instead of war, of freedom from cessation of industry, and of having the terms and conditions of labor fixed for periods of sufficient duration to enable them to enter advantageously into future contracts. The workmen are given the great boon of steady rate of wages, and instead of having to maintain their standard of life in an unequal struggle against the present-day huge amalgamations of capital, they are offered an impartial umpire and a judicial enquiry.

The Principles of Arbitration.

When it is admitted that all labor disputes ought to be submitted to Boards of Arbitration whose awards should be enforceable at law, we are still left face to face with the problem of the principles upon which arbitration ought to be based. For practical purposes this means the principle on which wage questions must be arranged, for more than half the strikes and lock-outs originate in wage disputes.

*Vol. X., p. 254, 10th April, 1891; quoted in Industrial Democracy, by S. and B. Webb, Vol., pp. 549-550.

Before we can hope to abolish the appeal to force we must determine what is to be the controlling factor in fixing wages. There can be little expectation that either side in a dispute will be satisfied with an award of which they do not know the basis. The public view is that the decision must leave the national interests unimpaired. In New Zealand the settlement of disputes on the basis of the demands of "equity and good conscience" has led to progressively rising wages and progressively decreasing hours of labor. Such expressions are, however, too vague to suit the requirements of a highly organized industry. As a matter of fact, wage questions are debated upon one of two assumptions: that wages are dependent on profits or independent of them. The former assumption is naturally prevalent among employers, the latter among workmen, though not universally. The belief that capital should be assured of a certain minimum profit is one that arbitrators have often been credited with holding, and accounts for much of the dislike of the working classes to private arbitration. As Mr. Mawdsley told the Labor Commission (Group C., Q. 774): "Arbitrators generally go in for a certain standard of profit for capital-generally speaking, it has been 10 per cent. Mr. Chamberlain has always said that capital ought to have 10 per cent. If the arbitrator went in for 10 per cent. in the cotton trade we should have a very big reduction of wages; and we are not going to have it." Under the form that wages must follow prices, this same assumption was once very widely held among working men and still subsists among the miners of Northumberland and Durham and the ironworkers of the North of England. It was the governing idea of great arbitrators like Mr. (now Sir) David Dale and Dr. Spence Watson, and is strongly supported by Dr. Schultze-Gaevernitz, who says that the function of the arbitrator is "simply to find out what the price (of labor) would naturally have tended to become if he had not been called in . . . and discover the state of the balance of power between the two parties by scientific methods."* In the course of the last ten years, however, this assumption has been gradually replaced among the working classes by another, that wages must conform to a certain standard of life for each industrial grade. The Dock Strike of 1889 won over the general public to the belief that wages should not depend merely on the balancing of the supply of and demand for labor; and the Coal War of 1893 went far towards establishing the further principle that labor should be guaranteed a certain minimum wage not dependent on the price of the product. In the Boot Trade Dispute of 1895 it was agreed that the employers should not take advantage of the numbers thrown out of employment by machinery in order to reduce wages. The growth of this assumption has also been aided by the proved efficiency of high wages, and in fact it is rapidly replacing the other both among economists and in the general mind.

Legal Standards.

To give the support of the law-courts to the decisions of courts of arbitration means, frankly, the regulation of wages by law. Under *Social Peace, p. 192.

such a system the remuneration of labor would no longer depend on the higgling of the market, whether between individuals or between associations of employers and employed, but would have to conform to some principle which the State had elected to support. The determination of this principle-or, rather, the choice between the two principles already set forth-is therefore all the more important. So far as has been tried in this country, the most successful method of determining wages is where a strong trade union negotiates directly with the employers. Such success, however, has been largely due to the fact that the organization of the workmen has been superior to that of the employers, and that consequently their strategic position has been stronger. Not agreement upon economic principle, but defective combination among factory-owners, has enabled the cotton operatives to maintain their wages against falling profits. The growing process of trustification in the cotton industry is removing this obstacle, and where the masters are solidly combined even organized labor is powerless, as the Engineering Dispute of 1897 has shown. The slow growth of trade unionism and its abject weakness in a large, and that the lowest and worst-off, section of the labor world are additional arguments for not leaving the Standard of Life to the sole protection of the unions. The general public of consumers have also this special responsibility in the matter, that to them is due the economic pressure under which the workmen is crushed; for it is their insistence upon cheapness which, traced from the retail dealer through the middleman to the manufacturer, leads to the continual attacks on wages. The limitation of competition, by preventing the underselling of good employers by men who find their profit in low wages, is another object desirable both to the general public and to the best section of the capitalist class. And, failing other modes of settling wages, there is the danger, which realized itself for a time in the Birmingham staple trades and in the textile dyeing trade, that employers and employed should unite into "alliances" to put down competition and keep up prices and wages to the detriment of the general consumer. Finally, there is the transcendent interest of everyone in the freeing of industry from the serious losses caused by strikes and lock-outs.

We therefore conclude that the State should in its legislative capacity adopt the same principle which the Government departments and municipalities follow, and declare that wages fixed under its sanction must be an effective Living Wage.

If a Standard Living Wage were once established for a trade and fixed for a period of time, the fluctuations required by the exigencies of the market would be easier of determination. The standard ought to be not simply a minimum healthy subsistence wage, but a higher sum calculated to secure the average standard of comfort which the custom of the trade demands, to leave room for progressive improvement, and to fit the recipient for the life of an efficient citizen. It should also take into account the cost of training and the raising of a fresh generation of workers. Such a wage should be fixed for a somewhat long period, say five years, after which it should be revised to meet the new demands of progressive society.