anticipatory, indicate in some measure the physical problems which the Fleet Corporation faced.1

The task was made more difficult because many business men rushed into the shipbuilding business, lured on by the prospect of high profits, who knew no more about shipbuilding than Gilbert and Sullivan's immortal First Lord of the Admiralty knew about seamanship. While most of the old yards were under efficient management, the great majority of the new yards which were built during the war were owned and managed by men who were not familiar with the technical problems of shipbuilding and these yards were managed on the whole inefficiently.

However, not only were the majority of yards inefficiently managed, but each employer was intent only upon fulfilling his own contract and was not concerned with the success of the shipbuilding program as a whole. The truth of the "Invisible Hand," doctrine of Adam Smith, that every man who sought his own best interest thereby sought the interest of society as a whole, was tested in war time and this study of the shipbuilding industry may throw some light upon the validity of the theory.

The 285,000 men who were added to the shipbuilding rolls of 1917-18 were in a large part "green" and inexperienced. The depreciation in the building trades furnished, to be sure, many thousands of workers who could be adapted to shipbuilding without a great deal of preparation and other trades furnished men whose

I The following table shows the delivery record. This does not include fourteen vessels with an approximate total tonnage of 120,000 which were built for the Fleet Corporation in Japan.

trade experiences had been similar to that of shipbuilding. But on the whole the men were inexperienced and ill-acquainted with the work which they assumed.

To add to these difficulties the relation between workmen and employees at the beginning of the war was in many sections one of either open or ill-concealed hostility. There was no clearcut national labor policy and many shipyard owners did not recognize the principle of collective bargaining and refused to deal with any organization of their men. The general prejudice of workmen against the owners was heightened by the fact that the owners had reaped huge profits from the sale of requisitioned ships to the Shipping Board and expected liberal sums from the new contracts let by the Fleet Corporation. To these facts was joined the rapidly increasing cost of living which intensified the resentment normally existing between workmen and employers where the principle of collective bargaining is denied or abridged.

The Corporation therefore faced a labor situation which for difficulty has never been surpassed. It was compelled to build ships at high speed in every section of the country where shipbuilding had been previously moribund, in yards which were on the whole hastily and poorly constructed and managed by men not familiar with the industry. To do this it was compelled to increase its labor force almost tenfold within sixteen months which in the face of a labor turnover of approximately 230 per cent was equivalent to hiring two to three men for every man permanently retained. The Corporation, moveover, was compelled to do all this at the same time when all the other production departments of the government were expanding and clamoring for an increased labor force. The Fleet Corporation was therefore called upon to cope upon a national scale with a hastily mobilized, inexperienced, and unstable working force and with an individualistic group of contractors, both of whom were embittered with each other and distrustful of the Fleet Corporation itself. To produce from this welter a well-trained and suitable force of employees and to work out a labor policy as regards wages, hours, conditions of labor, and the principles of labor organization, which would build the maximum number of ships, was the task that the Fleet Corporation

faced. This was a heavy task to lay upon an organization just getting under way in August, 1917, in a country which was mentally unprepared for collective activity and organization.

II. ORGANIZATION CREATED TO DEAL WITH THE LABOR PROBLEMS

A. THE SHIPBUILDING LABOR ADJUSTMENT BOARD

The Shipbuilding Labor Adjustment Board, or, as it has been commonly termed, the "Macy Board," after the name of its chairman, has been perhaps the most important agency created to deal with the labor problems in the shipyards. Early in the summer of 1917 labor troubles were impending in many yards and it was felt that unless some agreement was reached the shipbuilding program would be balked by reason of strikes and labor disputes. After preliminary negotiations the memorandum creating the Shipbuilding Labor Adjustment Board was signed on August 20, by Franklin D. Roosevelt, Assistant Secretary of the Navy, and by E. N. Hurley and Admiral W. L. Capps, representing the United States Shipping Board and the Emergency Fleet Corporation, together with the presidents of all the important international unions having to do with shipbuilding with the exception of President W. L. Hutcheson of the Carpenters and Joiners.

The reason for Mr. Hutcheson's refusal to sign the memorandum was never fully stated but was undoubtedly in part his belief that the memorandum should recognize the "closed" or union shop as the basis. His position was that unless this was uniformly provided the union officials would have no power of compelling the workmen to obey the rulings of the Board since they would have no control over the nonunion men. Union leaders would consequently be bound before the public to keep labor in line and yet would not be furnished with the authority to do this effectively. From the standpoint of sheer logic this attitude of Mr. Hutcheson's was not ill-taken, but, although the Carpenters and Joiners Union has never been a party to the creation or continuance of the Adjustment It should not be inferred that the other labor officials who signed the memorandum did not appreciate this situation. They did, but they chose to waive this point, which the American people as a whole were probably not prepared to support, in the national interest.

Board, the Board has uniformly fixed wages and working conditions for these trades as for others, and their decisions have been obeyed by the Carpenters and Joiners nearly as faithfully as by any other trade.

1. Analysis of memoranda and organization of the Board.This memorandum of August 20 was loosely drawn and is ambiguous in many respects. The most salient features of the agreement were as follows:

All disputes "concerning wages, hours, or conditions of labor" in the construction or repair of shipbuilding plants or the construction of ships, either carried on directly by the United States Shipping Board or the Emergency Fleet Corporation or under direct contract with them, were to be referred to a Board of Arbitration. It was implied, but not directly stated, that no strikes or lockouts were to be held pending an award of the Board.

This Board of Arbitration was to consist of three members. One was to be appointed by the Emergency Fleet Corporation, one to represent the public and to be nominated by the President, and one to represent labor and to be nominated by Mr. Gompers, the president of the American Federation of Labor. There were, however, other features in the personnel of the Board which made it cumbersome. The Navy was entitled to a separate representative when matters affecting it were raised. There were really to be two representatives of labor, one to sit when steel-ship yards were under discussion and the other when wood-ship yards were considered. In addition local employers and employees were each to be entitled to a seat on the Board.

In settling disputes in any plant, the Board was to consider as basic standards the wages, hours, and working conditions which were in force at such plant on July 15, 1917. Increases in the cost of living were to be the basis for altering wages, and the decisions of the Board could be made retroactive. Upon complaint by the majority of crafts at any plant the awards could be readjusted at the end of six months. To aid the Board in adjusting local difficulties, local examiners were to be appointed after nomination by both sides to the dispute.

Mr. V. Everit Macy was appointed by the President to represent the public, Mr. L. A. Coolidge, the Fleet Corporation, and Mr. A. J. Berres, Labor. Owing to the opposition of Mr. Hutcheson to the agreement no member was appointed to represent the wood trades.

This memorandum proved faulty in several respects; the organization of the Board was over-elaborate and objections were advanced to taking the prevailing rate of wages in June, 1917, as the base. The Board's Pacific Coast decisions, which were issued in November, aroused so much opposition on the Pacific Coast that the life of the Board appeared doubtful. In order to save the Board a second memorandum was drawn up on December 8, which materially altered the organization and status of the Board. The most important changes which were made were:

a) Simplification of the Board's personnel. Separate representation by local employers, employees, and by the navy was dropped

'Henry R. Seager, of Columbia University, was appointed as secretary of the Board and served to December 15, 1918, when he was succeeded by Willard E. Hotchkiss, of the University of Minnesota. L. C. Marshall replaced L. A. Coolidge as a member of the Board in August, 1918.

2 The text of this memorandum was as follows: "When disputes arise concerning wages, hours, and conditions of labor in the construction or repair of shipbuilding plants, or of ships in shipyards, under the United States Shipping Board Emergency Fleet Corporation, or under said Shipping Board, or under contract with said Corporation, or with said Board, or if questions coming under the jurisdiction of the Board arise with reference to such construction in a private plant in which construction is also being carried on for the Navy Department, and attempts at mediation or conciliation between employers and employees have failed, the adjustment of such disputes shall be referred to an adjustment board of three persons, hereinafter called the "Board," one to be appointed jointly by the said Corporation and the Navy Department, one to represent the public and to be appointed by the President of the United States, and one to represent labor, to be appointed by Samuel Gompers, President of the American Federation of Labor. It is understood, however, that this memorandum shall in no wise serve as a precedent for procedure in government plants under the War or Navy Departments, except as may be authorized by such departments.

"The plants where such construction is being carried on shall be geographically districted by the Board. In each district, the contractors in whose plants such construction is being carried on, and the representatives of such international labor organizations as have members engaged in such production or construction in such plants, and as are selected for the purpose, by the labor member of the Board, shall be called upon, under conditions to be laid down by it, to agree upon a person or persons who shall act under the direction of the Board as Examiner or Examiners in