Confessions of a Railroad Signalman

by James O. Fagan

The following illustrations are only partially descriptive of the Santa Fé method, but they are sufficiently accurate to cover the principles involved, the benefits that are derived from them, and some of the objections which have been advanced by the union men on the railroads, who are opposed to the bonus system in any form.

You take a certain piece of machinery, say a part of a locomotive. You make a “study” of this part. After making one hundred tests, under all sorts of conditions, you make a schedule in your machine-shop for this particular operation or piece of work. You then fix upon a standard time for doing this work. Standard time is simply the time which it ought reasonably to take to do the work without killing effort, but by eliminating every unnecessary waste. The elimination of waste is the fair and square proposition you present to your workman. You say to him, “Make a standard time on this piece of machinery, and I will pay you twenty per cent above your hourly rate, that is, above your regular pay. If you take more than standard time, your bonus will diminish until at fifty per cent above standard time it will simply merge into your day rate. On the other hand, if less than standard time is taken, your bonus will increase above twenty per cent. But, under any conditions or circumstances, you will always receive your full day’s wage.”

The situation becomes still plainer, if you explain it to your workman in this way. You say to him, “During the past year I have watched your work closely, and made hundreds of ‘studies’ in regard to the ‘part’ you turn out with that machine. I find that you have averaged about six to the hour. Now I am convinced that you can just as well turn out seven. Your pay is now $2.50 per day; if in the future you can make seven instead of six of these ‘parts’ in an hour, I will pay you $3.00 per day. In fact, your pay will increase in exact proportion to your cleverness and industry. Furthermore, if by any manner or means you can invent a way, such, for instance, as an improvement in the mechanism or in the operation of your machine whereby you are enabled to turn out a dozen of these ‘parts’ in an hour, I will see to it that your pay is increased accordingly, without any limit whatever.”

Continuing our general illustration, we will now take it for granted that you are able to start this bonus system in your factory or shop, in which, under ordinary circumstances, you give employment to one hundred union men. At the end of a certain period you find, on account of the extra effort put forth by the most ambitious and cleverest men, that the number of these “parts” which you require in your business, or on your railroad, can easily be turned out by seventy-five men. So without delay you reduce the working force in your shop accordingly. It matters not how you do this, whether by simple discharge or by omitting to fill vacancies as they occur in a natural way, the fact remains that at the end of the year you have decreased your force twenty-five per cent, and besides, without adding to your equipment, you have made a substantial reduction in your operating expenses.

Meanwhile the men who have lost their jobs have lodged a complaint with their union, and you are soon confronted with a grievance committee. These gentlemen inform you that the bonus system is all wrong, from beginning to end. From the union standpoint they will explain to you that the idea is, not to offer a reward for quickest and best work, nor to encourage the best men to get rich quick, or to vaunt their superiority over their duller and less fortunate comrades, but to make the job, whatever it may be, last as long as possible, and thus to afford employment to the greatest number of workers, at a fair and fixed rate of wages to every individual, regardless of ability or ambition, or of the profits and interests of the establishment. You are further informed that the grievance committee cannot enter into the discussion of ethical and sociological questions. The race is doing pretty well as a whole, and posterity will accord to labor its due share of credit. Meanwhile the men will be called out of your shop, and the issue between the bonus system of reward for individual effort and the leveling process in shop-work will be fought to a finish.

Take another illustration: You make a great many “studies” in relation to the use of oil and other supplies on a locomotive on your railroad. You arrive at a fair standard of expense. You conclude there must be considerable waste going on somewhere, so you say to the engine crews, “So much per month is a fair average of expense for such and such tools and supplies on your engine. If you can lower this average, we will share the amount saved in this way.” So you put the system in force on one thousand locomotives and save thereby four thousand dollars per month, which you divide with the men. But in doing this you have increased the pay of the careful men, and done nothing for those who are not interested in the general welfare of your railroad. The grievance committee takes the matter up with you; it protests against the whole business, and puts forth the argument that it is a dangerous proceeding, for you are guilty of encouraging a certain class of men to let engines “run hot” in order that they may secure your bonus for economy. In a word, you are requested to put a stop to this phase of your bonus system on the railroad.

Regardless of my somewhat crude and incomplete method of explaining the working of a bonus system on a railroad, my illustrations afford a very good idea of the Santa Fé system, which is in successful operation at the present day, as well as the proposed plans of the New York, New Haven & Hartford management, which quite recently the labor unions compelled the railroad to abandon.

But apart from successful operation in one quarter and defeat in another, the principles at stake in this bonus system are of world-wide interest and importance. Bearing this in mind, a few direct and pertinent questions have occurred to me, which I submit for the thoughtful consideration of my fellow workers on the railroads, as well as of liberty-loving people everywhere.

In the interest of human progress, and in particular with a view to efficiency of railroad service, do you think a railroad man should be permitted and encouraged to do his level best under all circumstances? Would you recognize and promote individual effort and good work in your sawmill, if you owned one, for the good of the business and in the interest of your pocketbook? Would you recognize and promote individual effort, attention to duty, and efficiency of service on a railroad, understanding, as you do, that upon these personal characteristics the welfare of the railroad and the safety of the traveling public are almost wholly dependent? Again, would you hesitate to encourage and reward the economical administration of the affairs of your own town or your sawmill, for fear lest the departments or the machinery might be deliberately ruined by employees, or by your fellow townsmen, in their efforts to secure said reward and encouragement?

If, after painstaking experiment, you become convinced that the plan would result in benefit to the interests of both management and men, would you hesitate to offer a bonus, or reward on coöperative principles, as an incentive to the economical use of supplies on a locomotive, for fear lest unprincipled engine crews should play tricks with the engine in order to secure the bonus?