Address to the American Federation of Labor in Boston, Massachusetts

Members of the American Federation of Labor:

In his invitation that I should address you on this occasion President Green spoke in terms of high praise of the benefits to labor from the nationwide cooperation initiated at the White House last November for mitigation of the effects of the present depression.

At those White House conferences the leaders of business and industry undertook to do their utmost to maintain the rate of wages. They also undertook in case of shortened employment to distribute work as evenly as possible over their regular body of employees. The leaders of labor undertook to urge effort in production and to prevent conflict and dispute. The public officials and the managers of industry and utilities undertook to expand construction work to mitigate unemployment.

We have now had nearly a year in which to observe the working of these arrangements. These, the first undertakings of this character in our history, have been carried out in astonishing degree. There are, of course, exceptions, but in the large sense our great manufacturing companies, the railways, utilities, and business houses have been able to maintain the established wages. Employers have spread their employment systematically. For the first time in more than a century of these recurring depressions we have been practically free of bitter industrial conflict.

The fine cooperation in the providing of organized emergency employment through Federal, State, and municipal public works and utility construction has been an important contribution in taking up the slack of unemployment. The measure of success is easily demonstrated. The Department of Commerce reports to me that public works and the construction work by the railways and utilities in the last 8 months amount to about $4,500 million as compared with about $4 billion in the same period of the boom year of 1929, or an increase of about $500 million. In all previous depressions these works decreased, so that the gain is more than even the apparent figures.

We have thus had nationwide cooperation and team-play which have greatly ameliorated the hardship of this depression. These measures have served as a practical system of unemployment insurance. There are some unexpected byproducts. Through distribution of employment, large numbers of workers have been saved from being forced into competition for new jobs; the sense of security that the job is theirs by part-time employment has contributed to relieve much of the fear, despondency, and discouragement that come to men and women in search for new jobs in hard times.

I would indeed be remiss if I did not express an appreciation, in which I know you share, to the thousands of men in leadership of business and labor who have served in bringing about these results. In the face of decreasing prices it has required great courage, resolution, and devotion to the interest of their employees and the public on the part of our great manufacturers, our railways, utilities, business houses, and public officials.

The leaders of labor have likewise contributed their part. Our freedom from strike and lockout is well evidenced by the statement of the Department of Labor that in the last depression there were more than 2,000 labor disputes, many of them of major character and accompanied by great public disorder, as compared with less than 300 disputes in this period, and these mostly of minor character. And the great body of labor itself deserves much praise, for never was its individual efficiency higher than today.

The undertakings made at that time represent a growing sense of mutual responsibility and a willingness to bend private interests to the general good.

We still have a burden of unemployment. Although it is far less than one-half in proportion to our workers than in either England or Germany, no one can contemplate its effect in hardship and discouragement without new resolves to continued exertion and to further effort in solution of our greatest economic problem--stability in employment.

Your chairman has spoken of my interest in the development of an American basis of wage. Both the directors of industry and your leaders have made great progress toward a new and common ground in economic conceptions, which, I am confident, has had a profound effect upon our economic progress during the last few years. That is the conception that industry must be constantly renovated by scientific research and invention; that labor welcomes these laborsaving devices; that labor gives its full and unrestricted effort to reduce costs by the use of these machines and methods; that the savings from these reduced costs shall be shared between labor, employer, and the consumer. It is a philosophy of mutual interest. It is a practice of cooperation for an advantage that is not only mutual but universal. Labor gains either through increase of wage or reduction of cost of living or shortened hours. Employers gain through enlarged consumption, and a wider spread distribution of their products, and more stable business. Consumers gain through lower cost of what they buy. Indeed, mass production must be accompanied by mass consumption through increased standards of living.

A conception of this sort does not at once find universal application. We ought not forget that it is something new in the world's economic life. And there are, of course, those who do not yet believe. It is as far apart as the two poles from the teachings of the economists of 100 years ago, who took it for granted that the well-being of the worker could be purchased only at the expense of the well-being of the employer or some other group in the community, and further, that wages could never rise above subsistence or the number of workers would so increase as to pull the weaker back into the cesspool of poverty.

If we survey the Nation broadly we shall find that the diffusion of cost economies between wages, profits, and prices has worked out fairly well. In fact, due to competition and the necessity to average profits over the losses of lean years, industry in the national sense is probably today getting the least of the three.

From the acceptance of this basis of industrial relations I believe America is making more progress toward security, better living, and more hours of leisure than those countries which are seeking to continue old conceptions of the wage and to patch up the old system with doles of various kinds which limit the independence of men. Any comparison of the situation of our labor with the labor of those other countries, whether in times of high prosperity or today in times of temporary depression, should carry conviction that we are on the right track.

No system is or can be free of difficulties or problems. The rapidity of our inventions and discoveries has intensified many problems in adjusting what we nowadays call technological unemployment. I am cooperating with President Green and representatives of employers' associations in an exhaustive inquiry into its various phases. If we stretch our vision over the last 10 years, we shall find much to convince us that the problem is not at all insurmountable in the long run. It is estimated by some of our statisticians that in this period over 2 million workers have been displaced from older industry due to laborsaving devices. Some way, somehow, most of these were reestablished in new industry and new services. Nor is there any reason to believe that we cannot resolve our economic system in such fashion that further new discoveries and inventions will further increase our standard of living and thereby continue to absorb men who are displaced in the older industries. Nevertheless, there is a period of readjustment in each case of new discovery, and industry has need of a larger understanding of the facts.

It is this process of readjustment that partly causes our present difficulties in the bituminous coal industry. In that industry the encroachments of electrical power, of natural gas, of improvements in consumption, have operated to slow down the annual demand from its high peak, leaving a most excessive production capacity. At the same time, the introduction of laborsaving devices has decreased the demand for mine labor. In addition to its other difficulties must be counted the effect of the multitude of 6,000 independent mineowners among 7,000 mines, which has resulted in destructive competition and final breakdown of wages.

All these conditions have culminated in a demoralization of the industry and a depth of human misery in some sections which is wholly out of place in our American system. The situation has been under investigation of our Government departments, by Congress, together with commissions and committees of one sort or another, for the past 10 years. The facts are known. One key to solution seems to me to lie in reduction of this destructive competition. It certainly is not the purpose of our competitive system that it should produce a competition which destroys stability in an industry and reduces to poverty all those within it. Its purpose is rather to maintain that degree of competition which induces progress and protects the consumer. If our regulatory laws be at fault they should be revised.

But most of these problems are problems of stability. With the job secure, other questions can be solved with much more assurance. You, as workers, know best of all how much a man gains from security in his job. It is the insurance of his manliness, it upholds the personal valuation of himself and of his family. To establish a system that assures this security is the supreme challenge to our responsibility as representatives of millions of our fellow workers and fellow citizens. The discharge of that responsibility does not allow present difficulties to rob us of our clear vision or the wholesome faith and courageous aggressive character for which our country has been long the leader of the world.

The demonstration of nationwide cooperation and team play and the absence of conflict during this depression have increased the stability and wholesomeness of our industrial and social structure. We are justified in feeling that something like a new and improved tool has been added to the working kit for the solution of our future problems.

No one would invite either war or business depression, but from them may come some new inspirations. We find in these times courage and sympathy, generous helpfulness from our workpeople to those unfortunates suffering not alone from the present but from fear for their future. We find inspiration in the courage of our employers, the resolution of the Nation that we shall build steadily to prevent and mitigate the destructiveness of these great business storms. It is this inspiration which gives confidence for the future, and confirms our belief in fundamental human righteousness and the value of our American conception of mutuality of interest in our daily work.