Part 9

Perhaps the best field for a short consideration of this interesting subject, so far as railroads are concerned, is to be found on the Santa Fé Railroad system. The introduction of the individual-effort reward or bonus system of stimulating employees to extra or unusual effort, and of compensating them suitably therefor, is probably the most important of all the betterment work on this railroad. The inauguration of the system followed the strike of the machinists, boiler-makers, and blacksmiths, in May, 1904. The credit for its introduction on the Santa Fé is due to Mr. J. W. Kendrick, Second Vice-President. Mr. Charles H. Fry, associate editor of the “Railroad Gazette,” who has written a valuable and comprehensive report of this betterment work, gives the following as its principal features and objects:--

“To restore and promote cordial relations, based on mutual respect and confidence, between employer and employee;

“To restore the worker to himself by freeing him from the small and debasing tyrannies of petty and arbitrary officials on the one side, and from individuality-destroying union domination on the other;

“To give the company better, more reliable, and more trustworthy employees;

“To increase automatically, and without fixed limit, the pay of good men, this increase of pay depending on themselves and not on their immediate superiors;

“To increase the capacity of the shops without adding new equipment;

“To increase the reliability of work turned out and the efficiency of operation performed;

“To do all these things, not only without cost to the company, but with a marked reduction in its expenses.”

The programme was certainly ambitious and praiseworthy, and in Mr. Fry’s report the results, after a thorough trial extending over several years, are given in the following paragraph:--

“It can safely be said that the betterment work _has_ resulted as anticipated in restoring harmony between employer and employee, in restoring self-respect to the latter and increasing his efficiency and reliability. Also it has raised his wages ten to twenty per cent on the average. In addition, for every dollar of supervising and special expense incurred, the company has saved at least ten dollars in reduced costs.”

But just here two very important points require to be noticed and emphasized. In the operations of a railroad, efficiency must never be sacrificed for the sake of economy, and on the Santa Fé Railroad, when questions arise in which there is even the remote possibility of impairment of efficiency, all economical propositions or arrangements are at once postponed or vetoed altogether. Again, it is manifest that as a result of the improved methods and greater individual effort, certain reductions in working force will become possible. In regard to this matter the Santa Fé management claims that such reduction, when necessary, can easily be effected, simply by not replacing men who naturally drop out. This has been their uniform policy, and therefore, from their point of view, there is no possible ground for objection by employees on that score.

The individual-effort reward system on the Santa Fé thus far has been limited to the maintenance of equipment and to locomotive operation. The labor employed in the shops is, of course, distinctly non-union. The saving effected under these methods on tools and machinery alone, at Topeka, was $119,000, and the total economy on 1633 locomotives (repairs and renewals) for the year 1906 amounted to $1,737,626. These facts and figures are derived from a comparison of the cost of actual and identically similar work before and after the inauguration of the bonus system.

It is impossible at this time to enter into a minute explanation or description of the system which is to-day in actual operation on the Santa Fé Railroad, and under which satisfactory results, both to employer and employee, are being obtained. The work itself is notable not so much because of its economical results as on account of its moral and sociological aspects. Without taking any side in the questions at all, it is evident that the movement and work on the Santa Fé, from beginning to end, has been an appeal to individual effort and character, and a protest against the recognized ideals of the labor unions. But it will not be found necessary to go into details of the Santa Fé system in order to illustrate and emphasize the principles that are at stake and the nature of the problem that must, before long, be settled, one way or the other, by an educated and enlightened public opinion.

On the Santa Fé Railroad, prior to the installation of the bonus system, a vast number of time-studies had to be made and schedules prepared. Every operation or piece of work to be bonused had to be studied by competent men, to determine, from the machine and other conditions, a fair or standard time to apply to it. Thousands of such studies have been made at the Topeka shops, and properly recorded and preserved on regular blanks.

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?

Furthermore, if the encouragement of the best men and the best service can be shown to work against the interests of second-class men and poorer service, would you be willing, on a railroad, to sacrifice these second-class men and their interests, in so far as this action should become necessary, to secure the greatest possible efficiency for the safeguarding of the traveling public?

Finally, in the history of the development and civilization of the human race, is it possible to point to a single item of real progress, efficiency, or achievement, that has not been the direct result of the sacrifice of something below to the more important interests of something above?

Does it not therefore follow that any legislation or labor movement that has the effect of checking individual effort, or of interfering in any way with the free play of the best that is in any man, must necessarily reduce the standard and ideals of labor? for such movements are an inversion of the laws of progress, and at the same time a reflection on the best thought and tradition of the American people.

VII

DISCIPLINE

At the present day, public attention is being constantly aroused and focused upon all questions that immediately concern the general welfare of the people. In this way the efficiency of the service on American railroads has, of late, been freely discussed, not only by railroad men, but by thoughtful people in all the walks of life. The reason for this universal interest is to be found in the fact that an inquiry into an ordinary preventable railroad accident entails, at the same time, a study of the actual working conditions that exist in America between the rights and interests of the workingman, and the more important rights and interests of the general public. Of course, figures and tables in regard to efficiency of service cannot always be taken at their face value, and yet the conclusions that one is sometimes compelled to draw from them are altogether too significant to be lightly dismissed from the public mind.

For example, in the year 1906, a total of 1,200,000,000 passengers was carried on British railroads on 27,000 miles of track, against 800,000,000 passengers carried on American railroads on a mileage of 200,000. Generally speaking, collisions and derailments form quite a reliable standard from which to make comparisons in regard to efficiency of service. It must also be remembered that the chances for accidents are naturally increased with increase of traffic and consequent multiplication of train movements. One might reasonably expect, therefore, to find the density of conditions in Great Britain reflected in a startling list of fatalities, as compared with the United States. Yet if we take the year 1906 to illustrate our theories and anticipated conclusions, we find that there were 13,455 collisions and derailments in this country, and only 239 in Great Britain. In the same year 146 passengers were killed and 6000 injured in the United States, against 58 passengers killed and 631 injured in Great Britain. The number of employees killed and injured in train accidents was respectively 13 and 140 in Great Britain, against 879 and 7483 in this country.

It is not surprising, therefore, that figures and returns like the above, repeated from year to year with the same marked and, indeed, ever-increasing disparity, should give rise to widespread discussion and criticism, consequently leading up to a better understanding of the nature of the problem that is now submitted, with all necessary facts and illustrations, practically for the first time, to the American people. For it must be understood, to begin with, that, from its very nature and from the circumstances connected with the safety problem, the intervention of public opinion and of some kind of public action is imperatively called for. Numerous difficulties, mistakes, and inconsistencies relating to the handling of trains, to the conduct of employees, and to the present status of the railroad manager, have been exposed and explained during the course of these confessions. But, after all, these are merely side issues and details of the service; the real heart of the situation, as insisted upon from first to last in these pages, is significantly outlined in a recent issue of the “Engineering Magazine,” as follows:

“Even more serious, as a predisposing cause of railroad accidents, is the lamentable lack of discipline, which is becoming increasingly manifest in these days of labor-union interference. This has been carried to such a point that the officials of our railroads have no longer that direct control of the employees which is absolutely essential to the maintenance of discipline. Until this condition has been changed it is hopeless to look for any material reduction in the number of killed and injured on our railroads.”

Such, then, being the truthful and logical diagnosis of the situation, the final and most important question of all remains to be considered. From individuals in no way connected with railroad life, as well as from employees and managers in different sections of the country, the general interest in the matter has been expressed in the following inquiries: “What are you now going to do about it? Granting this and granting that, what is your plan of construction or reconstruction? What can you propose as a practical method of reform?”

After a careful review and consideration of the conditions that obtain on American railroads at the present day, these significant and final questions, in the opinion of the writer, must all be answered in terms of _external authority_. It is really too bad to have to come to the conclusion that no reform can be expected, or indeed is possible, from within. The men, the organizations, and the managements must now be called upon to submit to publicity and to correction, to be administered by the stern arm of the law. A proper adjustment of the interests of the men and the management, with a view to the safety of travel, is, under present conditions, absolutely impossible.

Ample opportunity and time have been afforded these parties to solve the safety problem between themselves, without outside interference. The Canadian government has already come to the conclusion that it is useless to wait any longer, and accordingly it has taken measures to safeguard the rights of the traveling public. In like manner, just as soon as the government of the United States arrives at the same conclusion and sees fit to designate carelessness on a railroad as a crime, punishable in the same way as carelessness in driving horses or automobiles on a crowded thoroughfare, a revolution will take place in the service on American railroads. When the management and the men are called upon to face public examination and public criticism, there will be no more hair-splitting in the interpretation and administration of discipline. The men and the management will then very quickly recognize the necessity of adjusting their differences and combining their forces in the interests of the public. In a word, _authority_ will become supreme, and it will not take long for it to assert itself in terms of effectual discipline. Such, according to my view of it, is the only possible solution of the safety problem on American railroads.

All other topics and questions, although closely related to the problem, are in reality merely matters of detail. For example, the lack of adequate supervision means, of course, unchecked negligence, and points the way to no end of trouble; and yet the most comprehensive system of supervision imaginable would be of little use, unsupported by a reasonable and effective system of discipline. While, therefore, my opinion as to the immediate necessity for the intervention of the national government holds good, a general description of the American method of discipline, upon which the efficiency of the service is, in the mean time, absolutely dependent, should nevertheless prove interesting to all classes of readers.

To a great extent, a system of discipline represents a state of mind, the ideals of an individual or of a community, and sometimes, under certain special conditions, an economical habit or business necessity. In the old countries of Europe, where the public interests smother individual rights as well as the schedules of labor organizations, the railroads have taken for their motto, “He that sinneth shall die.” Cassio, faithful and true, with an honorable and spotless record in the public service, falls from grace in an unguarded moment, and is sorrowfully yet absolutely doomed to dismissal by the high-minded Othello. “Nevermore be officer of mine.” Such in spirit, and, to a great extent, in actual railroad life, is the European interpretation of discipline. The European officials work upon the plan, and with the unswerving determination to protect the traveling public at all costs. The record of accidents on their railroads leaves little doubt as to the correctness of their methods of railroading. On the other hand, in the United States, the railroad manager, backed to a certain extent by public opinion, says to an offending employee, “Your sin has enlightened and purified you, go back to your job.” This is the mental method of discipline. A man is called upon to think, without at the same time being called upon to feel.

On a railroad nowadays, when a “green” man makes a mistake, he is quietly informed by his superintendent that five or ten demerit marks have been placed against his name on the record book. The shock he receives on the commission of his first mistake is not very striking. He has perhaps been called upon to think, but in order to give his thoughts pungency and direction, he should also have been called upon to feel. Good habits are induced by feeling plus thought much more surely and expeditiously than by thought alone. Feeling plus thought is the scientific route. Some day, perhaps, thought alone will prove sufficient, but a railroad is no place to experiment with Utopian possibilities. What is necessary is the best and quickest way to originate good habits. The whole nervous system in man is first organized by habit. The feeling plus thought method of discipline is humane as well as scientific, and is the most potent instigator and prompter of habit.

According to Webster, discipline is “subjection to severe and systematic training.” In the American method of discipline on railroads, there is no systematic training of any kind; sensation or feeling plays no part in it, and thought is left to take care of itself.