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RUSSIA AND JAPAN AGREE TO FORGET PAST DIFFERENCES IN A PEACE PACT
The picture shows Marquis Okuma, Premier of Japan, shaking hands with M. Krupensky, Russian Ambassador to the Island Empire. This historic
scene was enacted at Tokyo recently, and was followed by a parade of forty thousand persons in a lantern procession at night to celebrate Japan's agreement

with a nation which only a feir years ago she defeated in war

[graphic]

ROBERT BACON Banker; L'. S. Secretary of State, 1909; Ambassador to France, 1909–1912. Now candidate for Republican THE RAILWAY CONTROVERSY: ITS PROGRESS

nomination for Senator from New York

29

basis to arbitration, but would compromise by Congress together in joint session on the leaving the question of pay for overtime to an afternoon of August 29, and addressed to investigating board. The managers asserted this joint session a special personal Message, that even this would involve them in such an announcing that his mediation had failed, that enormous expenditure that they could not he had no means of compelling the railways acquiesce. This phase of the controversy and railway managers to refrain from war, can be best illustrated by the table below. and that he desired power so to compel Ten hours now constitute a day's work, and them. He recommended to Congress six a man is paid pro rata for overtime. The proposals, all to be enacted by statute, as men demanded that eight hours should consti- follows : tute a day's work, and that a man should be 1. A reorganization and enlargement of the paid time and a half, or price' and a half, as Inter-State Commerce Commission, to give it it is called, for overtime. The men point more power and make it more efficient. out, with considerable reason, that the effect 2. The creation of eight hours as the legal of this demand for price and a half for over- day of labor for all railway wage-earners time would be to reduce their hours of labor. engaged in the operation of trains in interUnder the pro rata system of paying for State transportation. overtime there is no inducement to the rail- 3. The creation through appointment by way employers to reduce the working hours the President of a small body to observe the of the individual. If A is paid $4 for eight operation of this eight-hour law, and to report hours, he would be paid pro rata $8 for six- its actual financial and social effects to Conteen hours' work. But at price and a half gress for subsequent Congressional action. he would receive $10 for sixteen hours. It 4. An explicit statement by Congress that would therefore be the policy of the railways it will approve the consideration by the Interto hire two men at $4 each to do the sixteen State Commerce Commission of an increase hours' labor. Thus more men would have of freight rates, if such an increase is proved jobs at less cost to the railways in money, to be necessary to pay the additional cost of and less cost to the men in exhausting hours an eight-hour day. and conditions of labor. The President pro- 5. A law establishing compulsory arbitraposed that eight hours a day should con- tion in industrial disputes, and forbidding stitute a day's work, and that the men should strikes or lockouts until the dispute has been be paid pra rata for overtime, leaving the submitted to arbitration under such a law. question of time and a half, or price and a 6. A law empowering the President, in case half, to arbitration.

of military necessity, to take control of railway property and railway workmen, and operate

the railways by drafting the railway workIf A is paid $4 per day for 10 hours'

men into the military service of the United work,

States, For 12 hours he gets $4 plus 2 hours over- The latter proposal was doubtless sugtime pro rata, or 40c. per hour, which equals gested by the experience of France in its $4.80.

great railway strike in which Minister Briand THE MEN'S DEMANDS

ordered the trainmen to run the trains as A must be paid his $4 for 8 hours' work,

soldiers of the Republic under martial law. and “price and a half " for overtime.

The necessity for the suggestion at this time, For 12 hours he would get $4 plus 4

the President says, is found in the fact that hours overtime at 75c. per hour, which equals

" almost the entire military force of the $7.00.

Nation is stationed upon the Mexican border, THE PRESIDENT'S PROPOSAL

to guard our territory against hostile raids.

This military must, of course, be furnished A would be paid $+ for 8 hours and pro

with supplies and be promptly transported rata for overtime, leaving “ price and a half ”

to any other part of the country should need to arbitration.

arise.' For 12 hours he would get $t plus 4 hours

It is hardly necessary to add that as we go overtime at 50c. per hour, which equals

to press these suggestions apparently meet $6.00.

with the complete approval of neither ConOn his failure to persuade both parties to gress nor the railway unions nor the railway accept his proposal, the President called employers. Such suggestions almost never

PRESENT BASIS OF PAY

do satisfy all parties. The grounds for the there was no means of obtaining arbitration. President's course of action in this contro- The law supplied none; earnest efforts at mediaversy are clearly set forth in the following

tion had failed to influence the men in the least. extract from his special Message to Congress :

To stand firm for the principle of arbitration

and yet not get arbitration seemed to me futile, I unhesitatingly offered the friendly services of the Administration to the railway managers

and something more than futile, because it

involved incalculable distress to the country and 10 see to it that justice was done the railroads in the outcome. I felt warranted in assuring

consequences in some respects worse than

those of war, and that in the midst of peace. them that no obstacle of law would be suffered

I yield to no man in firm adherence, alike of 10 stand in the way of their increasing their

conviction and of purpose, to the principle of revenues to meet the expenses resulting from

arbitration in industrial disputes; but matters the change so far as the development of their

have come to a sudden crisis in this particular business and of their administrative efficiency

dispute and the country had been caught undid not prove adequate to meet them. The

provided with any practicable means of enforcpublic and the representatives of the public, I

ing that conviction in practice (by whose fault selt justified in assuring them, were disposed to

we will not now stop to inquire). A situation nothing but justice in such cases and were will

had to be met whose elements and fixed condiing to serve those who served them.

tions were indisputable. The practical and The representatives of the brotherhoods

patriotic course to pursue, as it seemed to me, accepted the plan, but the representatives of

was to secure immediate peace by conceding the railroads declined to accept it. In the face

the one thing in the demands of the men which of what I cannot but regard as the practical

society itself and any arbitrators who reprecertainty that they will be ultimately obliged to

sented public sentiment were most likely to accept the eight-hour day by the concerted

approve, and immediately lay the foundations action of organized labor, backed by the favor

for securing arbitration with regard to everyable judgment of society, the representatives of

thing else involved. The event has confirmed the railway management have felt justified in

that judgment. declining a peaceful settlement which would

I was seeking to compose the present in order engage all the forces of justice, public and pri

to safeguard the future; for I wished an atmosvate, on their side to take care of the event.

phere of peace and friendly co-operation in They fear the hostile influence of shippers, who

which to take counsel with the representatives would be opposed to an increase of freight of the Nation with regard to the best means for rates (for which, however, of course, the public providing, so far as it might prove possible to itself would pay); they apparently feel no con

provide, against the recurrence of such unhappy fidence that the Inter-State Commerce Commis

situations in the future-the best and most sion could withstand the objections that would

practicable means of securing calm and fair be made. They do not care to rely upon the

arbitration of all industrial disputes in the days friendly assurances of the Congress or the Presi

to come. This is assuredly the best way of dent. “They have thought it best that they vindicating a principle, namely, having failed to should be forced to yield, if they must yield, make certain of its observance in the present, not by counsel, but by the suffering of the

to make certain of its observance in the future. country. While my conferences with them were in progress, and when to all outward ap- We are not among those who ascribe to pearance those conferences had come to a the President political motives in the position standstill, the representatives of the brother- and action which he has taken in this grave hoods suddenly acted and set the strike for

crisis.

His special Message to Congress is September 4.

dignified, strong, and discloses an earnest The railway managers based their decision to

desire on his part to avoid the arbitrament reject my counsel in this matter upon their con

of industrial war. viction that they must at any cost to themselves

Whatever may be said of or to the country stand firm for the principle of the practical wisdom of certain features of his arbitration which the men had rejected. I based plan, its spirit and general purpose should my counsel upon the indisputable fact that receive the support of the country.

COMMISSION GOVERNMENT

II-PUBLIC UTILITY REGULATION IN CALIFORNIA

BY PAUL A. SINSHEIMER

FINANCIAL EXPERT CALIFORNIA RAILROAD COMMISSION, AND SPECIAL
LECTURER ON PUBLIC UTILITY FINANCE, UNIVERSITY OF CALIFORNIA

F

VOR three decades the largest trans- It required a statesmanlike discernment to

portation interest of California, the distinguish the lines of political and economic

Southern Pacific, controlled as a chat- cleavage. But this is one of the attributes tel the Railroad Commission which had been which has given the present régime in Calicreated solely for its own regulation. An fornia its peculiar appeal both to radical and aroused public sentiment had established this conservative. Commission in the Constitution of 1879 to The Governor revitalized the regulative write the epitaph of railway rule. But all it law ; gave it, in the parlance of the moment, wrote was the feeble record of its own sub- “ a set of full-grown teeth," and extended its serviency.

scope to all forms of public utilities-railway, It is told that one of its early members, gas, water, telegraph, telephone, electric rebuked for his frequent calls at the office of light and power, steamships, warehouses, the Southern Pacific, replied, indignantly, wharfs, and pipe lines—a variety to which “ And where else, please, should one go to the abundance of companionship brought a regulate the railway?"

sufficient solace. To be sure, where else?

The measure of the Commission's author“The State had invoked an inalienable ity was fixed indelibly beyond the power of right," said Andrew Furuseth, the sailor- the courts to impair. Its membership was statesman --" the right to abdicate.”

enlarged from three to five and its personnel Then came the spectacular campaign of rejuvenated with the impress of youth and Hiram W. Johnson and his election as Gov- vision, scholarship and ceaseless energy. ernor in 1910 upon his emphatic and epi- At the head of the new board was John grammatic promise to “ kick William F. Her- M. Eshleman,' a young and intensely enerrin and the Southern Pacific out of the gov- getic attorney of brilliant mentality, who had ernment of the State." And after election a few years before attracted attention for he proceeded so to do with full vigor of foot his attainments in philosophy and classical and fist.

literature at the State University. AssoA railway that could rule could also serve, ciated with him were Max Thelen, also a and the Governor set about to do some long youthful and scholarly attorney, from the neglected regulating.

staff of the Western Pacific Railway, who had Naturally it was assumed by those most been a class medalist at the University of intimately concerned that this would take the California ; Edwin 0. Edgerton, a lawyer in form of bitter retaliation. To their surprise, his middle thirties, distinguished for incihowever, the Governor conceived and put siveness of mind and breadth of vision, an into execution a policy of benevolent super- authority on municipal affairs ; Alexander vision which rested upon the premise that Gordon, a veteran farmer and banker, a postregulation could be made beneficial alike to graduate in the school of experience; and the corporations and the people.

Colonel H. D. Loveland, a well known busiStrangely enough, he had been in office ness man and dissenting member of a prebut two years when his administration, in vious commission. consonance with this belief, used the same Mr. Eshleman subsequently was elevated energies that had thrown the Southern Pacific to the Lieutenant-Governorship and his place out of the politics of the State, to preserve, filled by the appointment of Frank R. Devlin, in the public interest, that same Southern a former Superior Judge, a progressive Pacific from dismemberment and consequent leader of the Legislature, and a widely known commercial ruin.

attorney.

It required but one incident to persuade 1 This article should be read in connection with that on railway regulation by Mr. Blewett Lee, of the Illinois I Mr. Eshleman, who had been the guiding spirit of the Central Railroad, which appeared in The Outlook of Commission's work, died at Indio, California, on Feb. last week.

ruary 28, 1916.

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