III-DR. STEINMETZ, OF THE GENERAL ELECTRIC COMPANY T HE most interesting man in America is President of the National Association of Corporation Schools. He is a Socialist who earns one hundred thousand dollars a year as a consulting engineer. He has a bent little-boy body with enormous bristling brown head lodged between up-shot shoulders. His body makes one suspect he has been sprawled over a planning board ever since he was born, whereby one accounts for the forward curvature in his spinettes One finds him in the arcade adjoining a convention halla brown, bushy; dynamic little man, standing hardly more than table high against the white wall. He is puffing a cigar and chatting. wisely, eying his listeners through gold-rimmed glasses cocked on his thick nose: "No," he said; "there is no sentiment in business."İNT His forehead wrinkled. He reconsidered: "I might just as well say yes. Business has no sentiment, but often men in business are sentimental. There is Williams, the first President of the Association; and there is Edwards, of the General Electric; and Insul; in Chicago these men are sentimental. They are very enthusiastic. I am sentimental-" "Because of public opinion?” consulting engineer of the General Electric Company, inventor or perfecter of the induction motor, the polyphase motor, other motors, now President of the National Association of Corporation Schools. One can feel the reach and play of his intellect. He has a tremendous mind, a tremendous heart; his heart and his mind are all of him. He is a Socialist; he is also ཐ a social worker. As a Socialist he sees what industry can be, as a social worker he sets out to help alter it, as Socialist and social worker he is president of a big business organization that is undertaking to do a little more than make the United States the first industrial nation of the world. In his hotel room, coatless, sipping tea, the little man explains that the Association is a young organization of private and quasi-private. corporations, of railways, manufactories, mercantile and other business concerns, that represents perhaps half the industrial capital of the United States. "We want to correlate the educational facilities of the corporations with each other and with the educational facilities of the whole country," he explained, "we want to increase the production of every worker so he can earn more, increase his consumption, and thereby raise his standard.h One hears that this: Nation is. first in point He wagged his head. "Public opinion-of resources, third in point of production. it is overestimated; it forgets." He went, for illustration, back to his turgid journalistic days in Germany when he ran a weekly Socialistic paper till the Government confiscated it, then ran another no weekly, then a bi-weekly. "The public forgets; it forgot the Colorado massacre in three days. But the unions do not forget; the unions have a memory." He chatted, glanced about. Men passing through the tiled arcade stopped, looked, listened, inquired; were told that the wise little sage was Charles Proteus Steinmetz, chief It is third in point of production because its workers are third in point of efficiency. Most are mistrained, many are illiterate. Illiteracy is costing the Nation_five hundred million dollars a year, the United States Commissioner. of Education says. Inefficiency is costing the Nation much more. Greater : efficiency presupposes greater contentment in work through a longer period of time, and those considerations mean that more than four per cent of our grade school graduates must have industrial training, and that-to illustrate-ninety thousand New York City boys must not be turned into blind alley-lives each year; must, instead, reach the summit of their hopes and their maximum average income of forty dollars or so a week at the late age of thirty-three, as the college man does, rather than their present maximum average of ten dollars a week at the early age of twenty-two. In other words, the organization of which Dr. Steinmetz is President is setting about deliberately to supply, for want of any similar provision by the States, a substitute for the old apprentice system. It is seeking to prolong the life and the hopes of grade school graduates, of every untrained American worker, and to conserve and to develop them the most neglected and the most vital of American resources. A corporation school, Dr. Steinmetz explains, is an elementary school conducted by a corporation to Americanize alien railway labor, for instance; or a commercial school with university class-rooms, and sometimes. university lectures and credit; or a technical school with a course extending, as in one corporation, through four years of work of company work-time, demanding two hours each day, and a total of 10,960 hours in all, for bonus and diploma. He went on; he summarized what he had said: "It is a question of efficiency-this new education . . There is a new education, he believes, coming in America. The determination of it has in part come from the fact that but four per cent of American boys and girls are sufficiently educated, and from the perception that it takes a good man to stand an American college education. It has been stimulated by the cry for efficiency; but that cry is significant primarily because it indicates that it is coming to be realized that the cardinal function of a good citizen is meritorious production, or, what eventually will be considered synonymous with production-service. . to co-operate with the State," the first Presi-dent of the Association replied. The welfare of industry is the welfare of America, for the furtherance of industry is the furtherance of production, and production itself, theoretically at least, is provision for, and presupposes the welfare of, the undistinguished many in the working world. Everywhere there is new alliance between education and industry and between the corporation and the community. Even capital and labor are, in the big new tendency in education that has in it almost the only promise of industrial peace, reaching across from diverging paths to co-operate with one another in gaining the greatest happiness for all. Corporation executives are not undertaking a function of the State for charity, and the workers want no charity; each is doing his part, as Dr. Steinmetz pointed out, to increase his production, to better the standards of his own life... Dr. Steinmetz likes to feel his mind running to broad theory. He reverted again and again to the industrial and social significance of the Corporation School Association, then he took a breath and leaped away once more to broad theory : In any business," he said, "three phases of organization have always been considered -the financial, administrative, and technical phases, I call them. But there is a fourth phase. It has been coming to attention for a long time, but we are just beginning to notice it. It is the human phase.. It is just as important, just as essential, as the others-the labor unions and many other forces have made it so. . . . The unions? What is fair for one side is fair for the other. You must let the unions organize. You see, when the small employer hired one laborer the two men bargained on an equal basis, but when many employers got together the employee did not have a fair chance. You must remember that a corporation is just many small employers banded together into a unit; instead of having them as individuals you have them as a corporation. Therefore as soon as you get an organization of employers logically you should get an organization of employees. That is good-the unions have helped to force the corporations to notice the fourth phase. "The fourth phase-it has been considered last. It is going to be considered first." He grew suddenly enthusiastic. His blue eyes beamed so kindly that one was reminded of his life, so lonely that once he spent a 1914 THE "BIG BUSINESS" MAN AS A SOCIAL WORKER "I liken these four phases of industry to the parts of a machine. You know, a machine will not run unless all its parts are oiled; but some of the parts can be oiled last and cleaned last. Now the least important cog in a machine is just as necessary as any cog, but perhaps you do not have to give it the same attention at first; indeed, some render service a long time without any attention at all." He puffed his cigar vigorously, was envel oped in a sudden cloud of blue, fragrant smoke. He has been smoking all his life and drinking tea. In his student days at Breslau he smoked a pipe and he drank beer, in keeping with the profundity of the little group of student friends with whom he sat in frequent determination of the economic and social destiny of the world. He had a lot of excitement in those days, and he tells of them so infectiously that one sees the early part of his life in outline, and remembers that his mother died when he was very young and his father was a lithographer and railway employee who sacrificed nearly everything to get his son a technical education. Comrade Steinmetz belonged to a club. The members of this club were suddenly arrested because a photograph of them appeared in a photographer's window the selfsame day as, and within less than twelve and a half feet of, a photograph of Lassalle, the eminent Socialist. The little group of students were haled before a justice, and the good German Court, viewing with disfavor the conclusive fact that there was no evidence obtainable for or against the club, straightway imprisoned some of its members, but freed the forgetful little-boy body of a man. Straightway the boy inventor tested the resourcefulness that has built up one invention after another since. He went home and invented an ink with which, quite indistinguishably, he wrote up and down the blank pages of books he was privileged to send the prisoners. This writing one of the prisoners, a young man engaged to be married, was told how, from chemical elements obtainable from tooth-wash and blotting-paper, to develop and read. The little man sent even love letters, and he built up an impregnable defense for his student friends, got them acquitted, and enjoyed his good college 499 joke till the authorities suddenly took after him in such terrorizing mien that he accepted a supply of cigars, took to his heels, and fled over the line to Switzerland and America. He has been smoking cigars ever since. One learns to associate his cigar with him. At the General Electric shops an order to stop smoking appeared one day. The next day Dr. Steinmetz was missing. He had quit. The president of the company had to send an automobile for him. He went on smoking now, his elbows propped on the table, his cigar flaming between his first and second fingers. "If any of the four phases of a business are neglected," he said, "if either the financial, administrative, technical, or human phase is neglected, there is bound to be disaster. It may escape notice, like a rusty cog, for a few years, but you will hear from it. Thus if you neglect the financial phasewell, you have trouble. And if you neglect the human phase, you will get inefficiency every time, and the Industrial Workers of the World will catch you if you don't watch out." He laughed. "Yes, yes; that's what the Industrial Workers of the World are forthey are to frighten employers when they get rusty on the human side.” He thinks that it is not the big corporation but rather the little competitors that first get rusty" on the human side-that it is big business, and not little business, that throws fewer employees to the industrial scrap-heap. He believes in the large corporation, he believes in the carefully regulated trust. His mind looks far beyond any stage of nationalism, and yet he is doing his utmost to bridge his old-time Socialism to the newtime industrialism, confident that they are synonymously American, and that, with corporations and all that goes with them, in this Nation lies the hope of the world. He believes in the large corporation because it is an inevitable step in the progress forward, and he notes pleasurably that it is removing the lines between nationalities, developing the same great common interests for all, and working indomitably along in the groove of an inevitable tendency. pointed out some of the good the corporations are doing-welfare work, safety work, educative work, compensation for injuries, sick benefits, old age pensions, service annuities, profit-sharing He He caught on the words "profit-sharing,' rose from his chair, in eight words explained "Yes, yes, it is the half-way mark. It is a very ingenious way for labor to get half instead of all. . . .” He stood his feet squarely by the end of the bed, a smiling little mental giant only five feet high. ... Yes, as soon as all our big industrial and transportation corporations have combined, under stricter and stricter regulation, into one big corporation so powerful that it must be called the United States, we will have reached the goal. The rates of interest will be so low-" He galloped on with an enthusiasm that knew no bounds. He laughed infectiously now and then; he was having a good time. It was suggested that the big business men of any era are the broad, humanitarian men of that era, and that some of the big business men of the present era, therefore, are Socialists. "Yes," he laughed. "I can show you—" He returned from broad theory once more. G "Both labor and capital are grateful for the corporation," he said. "No one is ungrateful but the Government. The United States Government-it has its army and its navy planning to help to train young men for work in the big corporations. Yes, and President Wilson-he is trying to get Government ownership of railways and trying to break up the corporations at the same time. He is not consistent. He does not understand. And Mr. Taft-he did not understand. They have the old ideas about small production. They try to break up the large unit into the small." His keen blue eyes narrowed; he grew a little more serious. up. "The Sherman Law-it was intended to regulate the big corporations, not to break them It was used to break up Standard Oil, the biggest and most powerful corporation we had, and now there are thirty-four parts and the Government can't control them because they have no central responsible body. And it is very noticeable that the interests are more powerful than they were. . . . It cannot be done. You can't turn back economic fact; when you try to turn back a fly-wheel, something's got to break." B COMMERCE AND FINANCE A MONTHLY ARTICLE BY THEODORE H. PRICE THREE MONTHS OF WAR: LOOKING BACKWARD Y the time this is published the war will have been in progress nearly three months. In taking account of its effect upon business it must be admitted that up to this time, in so far as America is concerned, the anticipated has been worse than the reality. Thus again has it proved true that " we have many troubles, but most of them never happen." The loss of life and economic waste which the struggle has entailed are, of course, distressing and deplorable, but in England and America, at least, the consequences have been far less cataclysmic than had been expected. No banking or commercial concern of firstrate magnitude has failed in either Great Britain or the United States. No great corporation has confessed embarrassment, and no one entitled to credit has been denied such financial facilities as were absolutely essential to the conservative continuance of business. In England the Government stepped into the breach with extraordinary boldness, and by guaranteeing to the Bank of England the repayment of debts at present uncollectable made them an acceptable basis of credit. Recently it has gone even further, and has arranged to guarantee the lenders against loss by loans made to members of the London Stock Exchange on collateral which may have been depreciated by the war. It is generally believed that this far-sighted action was taken upon the initiative of Sir Oct, 1914 its Preside erome COMMERCE AND FINANCE ate George Paish, chief financial adviser to the English Treasury, who is now in this country. In the columns of his paper, "The Statist," the course that the Government has pursued for is defended upon the ground that since it is to the interest of all the nation that business and industry should as far as possible be undisturbed by the war, it is equitable that all the people through the Government should share the risk and loss involved in maintainTing the machinery of credit upon which busiduca ness and industry depend. Break He erstan In America the limitations which the Constitution and Congress have imposed upon the executive officers of the Government have made the direct interposition of our National credit impossible, but under the able leadership of Mr. William G. McAdoo, Secretary of the Treasury, the banks and bankers of the country have organized a co-operative life-saving service, and have mobilized their resources with great efficiency for the protection of the Nation's business. The only great problem that is still unsolved at this writing is that of the cotton crop, and a plan has already been approved which, if it is made effective, will put at the disposal of the cotton producers a fund of $150,000,000 with which to carry over the surplus of this year's crop until it shall command better prices. The spirit of co-operation between the Government and the people which the great emergency has aroused is the most satisfactory consequence of the war. When the struggle is over, many old habits will doubtless have been abandoned and many new usages established, but in no respect will society be more benefited than by the sympathetic solidarity which necessity and distress have developed between the people and the government. Another consequence of the European war madness is the charity and unselfishness that it evokes, and the economy that it compels, which qualities, because they imply selfrestraint and the thought of others, are as essential to credit as they are to character. Ever since our petty war with Spain habits of luxury and extravagance have been enervating and weakening the moral fiber and dissipating the resources of a constantly increasing proportion of our population. The present war and the diminution or interruption of income that has followed it have already worked a palpable change in this respect, and are destined to work a still greater reformation. 501 Lavish expenditure has already become unfashionable; display provokes criticism rather than approval or distinction; and a moderate competency, in the opinion of most people, is now more to be desired than great wealth. Those who will compare the ideals of youth to-day with the aspirations of young men at the commencement of the present century will realize the degree in which our National standard of what is most worth while has been changed for the better. Fourteen or fifteen years ago the glamour of the great fortunes created by the formation of the United States Steel Corporation and kindred consolidations deluded many men just commencing life into the belief that great wealth was a guarantee of happiness as well as of social and political power. The illusion had commenced to disappear before the war began, but its destruction has been greatly hastened and almost completed by the prominence into which the vaster issues of life have been brought by the titanic struggle now in progress. More and more are we coming to realize that happiness is not a matter of money, luxury, and self-indulgence, but rather of selfrespect, self-restraint, and selflessness. Upon these aspects of the changes which the war has thus far wrought we can congratulate ourselves without any abatement of the sympathy that we should feel for the people of Europe whose lot is so much more unfortunate than our own. As to the future, there is no precedent to guide us or any mind sufficiently clairvoyant to predict the conditions that will prevail when peace is re-established. Gradually most people are coming to believe that the struggle will be ended only through the economic exhaustion of the combatants. No matter which of them shall yield first to the compulsion of want and hunger, it is evident that the resources of the others will be sadly taxed also. To Edmund Burke, who died in 1797, is attributed the statement that " a national debt is a national blessing," but he also said that " you can never plan the future by the past;" and if from some vantage-point beyond the grave Burke can see the struggle in which the world is now engaged he will probably be inclined to revise his opinion as to the beneficial effect of a national debt. The ability to pledge the credit of a nation has undoubtedly made the present war pos |