Herbert Hoover: The Man and His Work

by Vernon L. Kellogg

some parts of Australia, where certificates of inability to earn the minimum, and therefore permission to undertake employment at less than this wage had to be issued in order that employment might be found for the aged and disabled. The employers will naturally in face of a minimum wage retain in employment that quality of worker that can give the maximum effort. Another difficulty is the tendency for wages of all workers, regardless of their ability, to fall to the minimum, for the employer naturally reduces the good to average with the poor worker. I would not want to be understood to necessarily oppose the possibilities of a minimum wage for women over large areas, as distinguished from craft minimums for men, because certain social questions enter that problem to an important degree.

There is another feature of the Kansas Act that should be given a great deal of consideration, and that is its essential provision that in the determination of wage disputes it shall be based on a fair profit to the employer. This must ultimately lead to a determination as to what a fair profit consists of, just as minimum wage will need be found for every craft and every establishment. I do not assume that any employer will contend for an unfair profit, but the termination of what may be a fair or unfair

profit in respect to the hazards involved in the institution of a business, in its conduct over a long term of years, its necessary provisions for its replacement and future disasters, is a matter that has not yet been satisfactorily determined by either theoretic economics, legislation, or courts. In competitive industry the processes of business determine this matter every day, and owners will only claim such determination by the State when the competitive tide is against them. We have long since recognized the rights of the State to determine maximum profits in case of a monopoly, but the determination of minimum profits (for fair profit is a minimum as well as maximum) may deliver large burdens to the people. Moreover, I doubt whether labor will ultimately welcome such determination, for an unsuccessful plant, instead of abandoning its production to its competitors, will claim wage reductions from the courts, and the general level of wages can thus be driven down and the State, at least morally, becomes a guarantor of profits in overdeveloped industry. This plan in the long run substitutes government control of industry for competition.

As to whether such acts will not tend to crush out initiative, credit, and curtail the proper development of industry, can only be determined

with time. Generally, it should be clearly understood that compulsory settlement of employment at best only assures continuity of production through just wages, hours and profits. It does not approach the problem from the point of view of upbuilding a relation in industry that will, if successful, not only eliminate strikes and lockouts, but make constructively for greater production and cheaper costs.

The economic repercussions from such regulation do not all lie in favor of either capital or labor. To curtail the activities in one is not necessarily a favor to the other.

I am sure you would, upon consideration, view the entry of the Government on a nation-wide scale into the determination of fair wage and fair profit in industry, even if it could be accomplished without force, with great apprehension. There are some things worse in the development of democracy than strikes and lockouts, and whether by legislative repression we do not set up economic and social repercussions of worse character is by no means determined. They have also the deficiency in that they undermine the real development of self-government in industry and that, to me, is part of the growth of democracy itself. Courts and litigation are necessary to the preservation of life and property, but they are less stimulus

to improved relations among men than are discussion and disposal of their own differences.

The whole world is groping for solution to this problem. If we cannot solve it progressively, our civilization will go back to chaos. We cannot stand still with the economic and social forces that surround us. There has never been a complete panacea to all human relationships so far in this world. The best we can do is to take short steps forward, to align each step to the tried ideals that have carried us thus far. The Conference has endeavored to find a plan for systematic organization of the forces that are making for better relationships, to encourage the growing acceptance of collective bargaining by providing a method that should enable it to meet the objections of its critics and to aggregate around this the forces of conciliation and arbitration now in such wide use. It has sought to do this without legal repression but with the organized pressure of public opinion.

To me there is no question that we should try the experiment of the perhaps longer road proposed by the Industrial Conference for the development of mutuality of relationship between employer and employee, rather than to enter upon summary action of court decision that may both stifle the delicate adjustment of