The upward swing in business since 1898, combined with the growth of trade unionism and with the successful negotiation of the Interstate agreement in the soft coal mining industry, created an atmosphere favorable to trade agreements. For a time "recognition" and its implications seemed to all concerned, the employer, the unions, and the public, a sort of cure-all for industrial disputes. Accordingly, in March 1899, the National Founders' Association (organized in the previous year and comprising foundrymen engaged principally in machinery manufacturing and jobbing) and the International Molders' Union of North America met and drew up the following tersely worded agreement which became known as the New York Agreement:
"That in event of a dispute arising between members of the respective organizations, a reasonable effort shall be made by the parties directly at interest to effect a satisfactory adjustment of the difficulty; failing to do which, either party shall have the right to ask its reference to a Committee of Arbitration which shall consist of the President of the National Founders' Association and the President of the Iron Molders' Union or their representatives, and two other representatives from each organization appointed by the respective Presidents.
"The finding of this Committee of Arbitration by majority vote shall be considered final in so far as the future action of the respective organizations is concerned.
"Pending settlement by the Committee, there shall be no cessation of work at the instance of either party to the dispute. The Committee of Arbitration shall meet within two weeks after reference of dispute to them."
The agreement was a triumph for the principle of pure conciliation as distinct from arbitration by a third party. Both sides preferred to run the risk of a possible deadlock in the conciliation machinery to throwing decisions into the hands of an umpire, who would be an uncertain quantity both as regards special bias and understanding of the industry.
The initial meeting of the arbitration committee was held in Cleveland, in May 1899, to consider the demand by the unions at Worcester, Massachusetts, and Providence, Rhode Island, for a minimum wage which the employers had refused. In each city one member of the National Founders' Association was involved and the men in these firms went to work pending the arbitration decision, while the others stayed out on strike.
The meeting ended inauspiciously. The founders and molders seemed not to be able to settle their difficulties. Each side stood fast on its own principles and the arbitration committees regularly became deadlocked. The question of a minimum wage was the most important issue. From 1899 to 1902 several joint conventions were held to discuss the wage question. In 1899 a settlement was made, which, however, proved of short duration. In November 1902, the two organizations met, differed, and arranged for a sub-committee to meet in March 1903. The sub-committee met but could reach no agreement.
The two organizations clashed also on the question of apprentices. The founders contended that, because there were not enough molders to fill the present demand, the union restrictions as to the employment of apprentices should be removed. The union argued that a removal of the restriction would cause unlimited competition among molders and eventually the founders could employ them at their own price. They likewise failed to agree on the matter of classifying molders.
Owing to the stalling of the conciliation machinery many strikes occurred in violation at least of the spirit of the agreement. July 1, 1901, the molders struck in Cleveland for an increase in wages; arbitration committees were appointed but failed to make a settlement. In Chicago and San Francisco strikes occurred for the same reason.
It was at last becoming evident that the New York agreement was not working well. In the autumn of 1903 business prosperity reached its high watermark and then came a sharp depression which lessened the demand for molders. Early in 1904 the National Founders' Association took advantage of this situation to reduce wages and finally practically abrogated the New York agreement. In April, 1904, the founders and molders tried to reach a decision as to how the agreement could be made effective, but gave it up after four days and nights of constant consideration. The founders claimed that the molders violated the agreement in 54 out of the 96 cases that came up during the five years of its life; and further justified their action on the ground that the union persistently refused to submit to arbitration by an impartial outsider the issues upon which the agreement was finally wrecked.
An agreement similar to the New York one was concluded in 1900 between the National Metal Trades' Association and the International Association of Machinists. The National Metal Trades' Association had been organized in 1899 by members of the National Founders' Association, whose foundries formed only a part of their manufacturing plants. The spur to action was given by a strike called by the machinists in Chicago and other cities for the nine-hour day. After eight weeks of intense struggle the Association made a settlement granting a promise of the shorter day. Although hailed as one of the big agreements in labor history, it lasted only one year, and broke up on the issue of making the nine-hour day general in the Association shops. The machinists continued to make numerous agreements with individual firms, especially the smaller ones, but the general agreement was never renewed. Thereafter the National Metal Trades' Association became an uncompromising enemy of organized labor.
In the following ten years both molders and machinists went on fighting for control and engaged in strikes with more or less success. But the industry as a whole never again came so near to embracing the idea of a joint co-partnership between organized capital and labor as in 1900.