incompleteness of its examination of Mr. Pullman and Mr. Wickes. The questioning of these gentlemen stopped at the very point where it should have begun. Mr. Pullman clearly stated before the Commission what he had asserted in his letter to the public on July 16, 1894, that he had taken contracts "at less than the actual cost to the company of delivering, without any reckoning for the use of capital and plant." He further said: "This work was taken to keep the large force of men employed, and to postpone and with the hope of avoiding the numberless embarrassments to all classes of people at Pullman and in its vicinity of a closing down of the works, to prevent which the company considered it wise policy to operate the shops temporarily at a loss." This is the constant assertion of both Mr. Pullman and Mr. Wickes. (See pp. 7, 14, 15, 26, 27, etc.) The "loss" estimated by Mr. Pullman upon certain contracts was $112,000, which he divided into nearly two parts,-asking his wage-earners to stand $62,000, by a reduction in wages, and throwing $50,000 upon his stockholders, to come out of their $36,000,000 surplus. It does not seem to have occurred to Mr. Pullman that the fairness of such a division might be questioned by minds of a doubting nature. But that is immaterial. Mr. Pullman's statements up to this point stand unchallenged and unquestioned, and just here the Committee dropped its investigation. It should have gone further and asked Mr. Pullman how he estimated "Cost." He did not, naturally, volunteer information upon this point; for this was the vital point which, in his differences with his employes, he had declined to arbitrate. In the manufacturing business, "cost" is usually estimated as follows: (1) the actual cash outlay for material; (2) the same for labor; (3) estimated waste on material; (4) estimated fixed charges. This last item is as much a part of the real cost of manufacture as the first three, being such items as rent, insurance, depreciation of plant, overseers, engineers, draughtsmen, timekeepers, watchmen, bookkeepers, taxes, etc., etc. But it differs from the other items in this, that such charges are fixed, and attach to a plant in a larger or smaller degree whether the works are running or idle. In such a plant as Pullman's a fair percentage to be added to actual cost for fixed charges would be, in our opinion: Add to material, 10 per cent. Add to bench labor, 333 per cent. As the fixed charges are nearly the same for a factory running on half time as for one running on full time, the percentage naturally increases when work is light. It naturally decreases as the works are busy; hence it is economy for a factory to run'at "white heat" even at a seeming loss; or, in other words, when cutting into estimated fixed charges. The same argument holds true when the question arises as to the wisdom of closing works or of taking work at prices estimated below "cost." The fixed charges remain nearly the same; hence, in such an alternative, no wise manufacturer estimates fixed charges as a part of cost. That the Pullman Company follows this plan of reasoning is evident from Mr. Pullman's statement, that he did not reduce the salaries of high-priced men because he was obliged to keep such men permanently in his employ. When Mr. Pullman, therefore, stated that he took contracts involving a "loss" of $112,000, and he proposed to divide it among his wageearners and stockholders in the proportion stated, the vital question to have asked him was as to what constituted "cost." Mr. Pullman would have been compelled to tell what the percentages were that he added as fixed charges. Assuming the contracts to amount to $1,500,000, upon which he sustained a loss of $112,000, it would have been drawn out that fixed charges amounted probably at least to $250,000. If, then, asked if these charges were not actual gain compared with the alternative of shutting down his works, Mr. Pullman would have admitted the truth, which, as matters stand, has not been brought out.1 If, then, questioned as to the necessity of running his works for "repairs," he would have admitted that these same fixed charges might be charged to repairs as well as to new work. It would then appear that his best interests demanded that he should take contracts below "cost," not to keep his men busy simply, but to save his fixed charges; permit men to earn enough to pay him rent on the 1,800 tenement houses, which he deducted from wages; prevent his salaried men, no less than his machinery, from rusting, and securing good advertising from taking such large contracts. In all human probability such reasons urged him to bid below ordinary prices. His statement, therefore, that he took such contracts to keep his men busy, has, in our opinion, not even the merit of a half-truth, but more nearly a thirty-second part of the truth. The purpose to use his men, instead of desiring to serve them, finds expression in many ways in the town of Pullman, and it is Mr. Pullman's one fatal blunder. To awaken a man's self-respect, his sense of ownership and independence is of incalculable benefit to a manufacturer; but such is not the evident plan and purpose of the man who conceived and laid out 1 Mr. Wickes said (see p. 6), "In giving these figures and the figures which I am going on to give, I desire to say distinctly and explicitly, that by 'shop cost' I mean the cost of any work spoken of, excluding any element of charge for depreciation of machinery or plant, or for interest on the value of machinery or plant, or for interest on the capital invested or employed in any way. The estimated shop cost, or the shop cost ascertained after the completion of any work, contains no such element in any case in this statement." Perhaps Mr. Wickes will now explain if these items are the only ones in fixed charges left out in "cost," and what actual items are estimated in "cost." the town of Pullman, as Judge Gibbons has so clearly shown in his able work "Tenure and Toil." Mr. Pullman's desire to use his men unjustly in order to serve his stockholders appears even more evident from his admission that his works are compelled to employ 800 men in order to keep his cars in repair for service. His enormous dividends depend on his cars running; cars get out of repair; works must run to keep them in order; fixed charges are necessary to running his works for such repairs; and he declared his usual dividend! Why was he not questioned then as to what part of his fixed charges were laid at the door of repairs and what part on those disastrous contracts? The American people may take their choice of these two views: Mr. Pullman took contracts below cost to keep his men busy; divided such loss generously between his workmen and stockholders; could not afford to reduce rents even if he did wages; hence he is a philanthropist who has suffered the slings and arrows of outrageous fortune because he is successful. The other view is: Mr. Pullman saved a quarter of a million dollars in fixed charges by losing $112,000 on some contracts; kept his works running for repairs necessary to the running of cars which were necessary to the earning of dividends; charged the $112,000 off against his men by reducing wages $62,000 and saving $50,000 in rent and other items which he otherwise would lose; did not reduce rents when rents were "off" elsewhere at least 20 per cent; declared his dividends as usual and then would use the President's Strike Commission to post him on the boards as an Abou Ben Adhem, or one who loves his fellow-men. But the worst is not yet. Pullman's annual report admits that it was not the reduction in wages which led the men to rebel, but it was the want of steady employment. In other words men were permitted to work long enough in the month to pay their rent, and instances were cited in which less than twenty cents was left for food and clothes for the family, after rent was deducted. It is difficult to define economics in terms of the intellect, and not of the emotions, when the naked facts in such cases are known. Here is a corporation, fattened at the public expense; protected by Patents granted by the government, whose courts thereby become the servants of a monopoly exercising those patents; defended by state and national troops at enormous expense; paying insignificant taxes in return for such privileges; monopolizing the privilege of furnishing a place to sleep on public carriers run on public highways under charters granted by the people; with dividends and a surplus out of all proportion to the services rendered; starving its colored porters, and then 1 Before the Grand Jury. turning them loose upon the public sympathy for proper remuneration; and finally, to cap all, using the Strike Commission to foist its president upon the innocent public as a much abused millionaire and a white-robed philanthropist. No wonder that workmen rebel when asked to make bricks without straw, and the American people rebel when used to prop up such a company. How can such a state of affairs continue to exist in a Christian civilization? SOME INTERESTING QUESTIONS NOT ASKED BY THE STRIKE COMMISSION, 1. "Working people are the most important element which enters into the successful operation of any manufacturing enterprise." (Pullman, p. 1.) Question: Was it not your mistake in supposing that people instea i of their labor is the element? 2. "It was not the intention to sell workmen homes in Pullman. . . If any lots had been sold in Pullman it would have permitted the introduction of (the) very baneful elements." (Pullman's testimony, p. 2.) Question: Can any element be more baneful than to rob a man of his sense of ownership, of responsibility, of self-respect, leaving him without ambition and without hope? 3. The investment (on homes) returned a net income during the last two years of 3.82-100 per cent' (p. 3). The average rental is $3 per room per month' (p. 28). Question: Do you mean to say that the cost of the houses in Pul!man was $900 per room? 4. "As to whether a fact which I know to be true, is true or not, I could not agree to submit it to arbitration." (Pullman, p. 3.) Question: If workmen doubt an employer's word on so vital a point, is it not his duty to convince them of the truth? Did you do it? If not, why? 5. "The facts are that Pullman car repair work requires a force of about 800 at the Pullman shops." (Wickes, p. 6.) Question: In estimating costs on contract work what part of fixed charges is put upon repair work? Did you reduce the wages of these 800 men as well as that of contract men? 6. "Rather than discharge absolutely a large number of men, we tried to give all of them some work." (Wickes, p. 9.) Question: Did not this plan result practically in securing your rent on your houses which you did not reduce? Did not some men work just long enough to earn their rent? 9.) 6. Coombs earned for the year ending April 30, 1894, $345.68. (p. His rent and water tax was $15.71 per month. (p. 19.) He had to support his wife and two children." (p. 19.) Question: Do you think $157.16 for a year's wages enough to sup port four persons, exclusive of rent? Do you think a company with $36,000,000 surplus can afford to treat an employe in that manner? How many others received similar treatment? 7. "In establishing the rate of wages for piece work over so large a force of workmen, the principle adopted is that the day's wage is to be a reasonable wage for ten hours at that particular work for a competent workman, not an expert." (Wickes, p. 16.) Question: Miss Curtis, who was not proved incompetent, earned in a year $346.82. (p. 19.) Is that a reasonable wage to support a family on? 8. "A charge [for the library] of 25 cents a month for adults and one-third that amount for young persons is made for membership, not for profit, but to give subscribers a sense of ownership." (Wickes, p. 23.) Question: If it is so desirable to create a sense of ownership in a library why is it not equally so in a home! Why did you not, then, sell the houses in Pullman to the workmen? 9. "It was the hope and belief of the management that . . . such surroundings [fine streets, houses, etc., in Pullman] would improve the character of the working people." (Wickes, p. 24.) Question: Is character improved by living in borrowed houses that are elegant so much as in humble homes that are owned by the workman? Is character improved by show or by simple reality? ATTORNEY-GENERAL OLNEY AND LABOR ORGANIZATIONS, was THE Reading Railroad is in the hands of Receivers, and certain of its employes were discharged because they were members of the Brotherhood of Railway Trainmen. This action brought on a controversy which brought before Judge Dallas, of the United States Court, and the case is still pending. In a letter written by Attorney-General Olney to Judge Dallas, labor's right to organize is stoutly upheld and the action of the Receivers, in discharging the men, is condemned. This letter from the Attorney-General is reported to have been printed by the labor organizations in the form of a circular, and is being widely distributed. The ground for the discharge of the men was clearly stated by the President and Receiver, Joseph H. Harris, as follows: "The policy of this Company is well known to be that it will not consent that persons in its service shall owe allegiance to other organizations which may make claims upon them that are incompatible with their duties to their em ployers. This position was taken advisedly and we have no intention of departing from it." The Attorney-General has made a lengthy report giving the reasons |