way in which one car may be coupled to another, or the rule of liability for personal injuries to an employee. It also seems to me to be an oversight of the proportions of things to contend that, in order to encourage a policy of arbitration between carriers and their employees which may prevent a disastrous interruption of commerce, the derangement of business, and even greater evils to the public welfare, Congress cannot restrain the discharge of an employee, and yet can, to enforce a policy of unrestrained competition between railroads, prohibit reasonable agreements between them as to the rates at which merchandise shall be carried.

I would not be misunderstood. I grant that there are rights which can have no material measure. There are rights which, when exercised in a private business, may not be disturbed or limited. With them we are not concerned. We are dealing with rights exercised in a quasi public business, and therefore subject to control in the interest of the public.

I think the judgment should be affirmed.

[Justice Holmes also filed a brief dissenting opinion.]

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SETTLEMENTS UNDER THE LAW24

For eight and a half years after its passage the use of the Erdman Act was attempted only once. And this resulted in a complete failure. The first attempt to use the law came in a movement on the part of the trainmen and the conductors in and about Pittsburgh in 1899. Mr. P. H. Morrissey, grand master of the Brotherhood of Railroad Trainmen, requested mediation by the commission. The railroads refused to enter into mediation proceedings, and thus the first attempt to use the law ended in failure.

No further effort was made to use the act until December, 1906. In a controversy with the firemen on the Southern Pacific Railroad the company, after a strike had been ordered for the following day, requested mediation by Judge Knapp and Commissioner Neill. From that time until the passage of the Newlands law in 1913 61 cases were settled under the Erdman Act. Twenty-six of these cases were ad

24 Fisher, Clyde O., Use of Federal Power in Settlement of Railway Labor Disputes, Bulletin of the United States Bureau of Labor Statistics, No. 303, pp. 31-35.

justed through mediation, 10 by mediation and arbitration and six by arbitration alone.

Of the remaining 19 cases some were settled without the intervention of the mediators but after their aid had been invoked, and others were cases in which the second party refused to accept the mediation by this commission.

In some cases both parties to the controversy asked the aid of the mediators. Thus, in all, 61 requests for mediation were made to the board. The cases ranged in importance from those in which less than 100 employees were involved to those with more than 40,000 employees in one controversy. In the year 1910 there were nearly 80,000 employees and about 300,000 miles of road involved in 16 cases. The total of 61 cases affected more than 680,000 miles of trackage and over 250,000 employees. From 1906 to 1911 there were only 4 cases in which mediation was invoked directly and only 8 had to go to arbitration for a settlement. And even in those 8 cases only a part of the issues were settled by arbitration; through mediation and conciliation the contestants had already agreed upon most of the points of difference between them and had submitted to arbitration only those on which they could not reach an agreement.

There was never a repudiation of an award made by an arbitration board under the Erdman law. And in only one case was there an appeal to the courts from the decision of the arbitrators. In that case the employees appealed, filing exceptions to only a part of the award. They requested that the other parts of the decision be put into operation as rendered.

The court, however, took the position that no part of the award could be enforced pending the adjudication of the controverted points. After four months the court handed down its decision in which some of the points were favorable to the men and other points were in favor of the railroad. Thereupon the employer appealed and the case was not settled a year after the original award had been handed down by the board of arbitration. Both parties had become exasperated by this time and reopened the negotiations with each other.

In this way they finally reached an agreement, but 14 months had elapsed since the decision of the arbitration tribunal. This single instance, Commissioner Neill said, proved that the provision of the law granting an appeal to the courts was of no real value. And, in the majority of the cases arbitrated subsequently to this experience, the

parties agreed beforehand to waive the right of appeal to the courts.

In view of the relative importance of mediation under the law something should be said of the procedure adopted. The mediators refused to intervene in any case until they were satisfied that the contending parties had exhausted all their own resources to reach an agreement.

If the application were made before the respective interests had done all within their power to effect a settlement, as it appeared to the mediators, Judge Knapp and Commissioner Neill refused to consider the dispute. In such cases they suggested to the contesting parties that they continue their own efforts toward an agreement. Had the mediators followed any other course it is likely that they would have been overwhelmed with insignificant matters that could better have been adjusted without outside intervention. Then, too, the action of the mediators was all the more effective because of the relative infrequency with which it was put to use.

Commissioner Neill and Judge Knapp adopted early in their administration of the law a method of procedure which, as the results show, was a happy one. The contending representatives were never brought together until they had made such concessions to the mediators that the difference could be adjusted. . . . . In the event of a failure to reach an agreement neither side knew what concessions the other side had been willing to make. Then, when the case went to arbitration, it would not be prejudiced for or against either side because of the points already yielded in mediation. Neither side could. use as a lever the concessions already made by the other. . . .

A valid objection to this kind of settlement is that it is based on what seems to be the easier plan rather than on the merits of the controversy; expediency rather than justice in the ultimate standard or basis for settlement. Judge Knapp was conscious of this weakness in the administration of the law. But he was so deeply concerned to protect the public interest in jeopardy that he considered it defensible to inflict a little of hardship in some instances if this became necessary. In other words, the individual should be willing to suffer for the common good in a measurable degree.

But whatever may have been the objections to the action of Messrs. Knapp and Neill, they succeeded in preventing many strikes that otherwise would have come. In no case did a strike ever follow a dispute in which they had intervened. And there was no instance in

which the disappointed party to an arbitration award failed to comply with the decision of the board for the period agreed upon.

In the arbitrations under the act the most difficult part was the selection of the neutral arbitrators. Although the law provided that the two representatives of the contestants should select the third member of the board within a period of five days from their own appointment, Commissioner Neill said there had been no case in which the mediators had not been called upon to select this third arbitrator. The two parties could not agree upon the neutral arbitrator within the five-day period prescribed by law. It was very difficult for the mediators to select this third arbitrator. Dr. Neill said he had traveled over the country and had spent weeks in the effort to find a satisfactory

man.

Perhaps the greatest improvement made in the Erdman law as compared with the statute of 1888 was the provision made for the permanent commission of mediation and conciliation. In the law of 1888 the only commission provided for was that of the special investigating board which was temporary and ceased to exist upon the filing of its report in the particular controversy investigated by it.

In the Erdman Act, however, Commissioner Neill and Judge Knapp were able to make use of their experience in one controversy in the settlement of subsequent ones. In this way they acquired a high degree of skill and technique in the handling of labor disputes. They were easily able to separate the wheat from the chaff in the demands made by each of the parties to a controversy, to know just how much each side would concede and what was demanded for the purpose of bargaining and higgling with a view to getting something by compromise.

...

So far all the discussion in this paper would indicate that the Erdman law was an unqualified success. That, though, would be putting the case too strongly. From time to time many suggestions were made for the improvement of the law. The number of arbitrators under the law, it was said, was too small. Questions of such moment should not be intrusted to the decision of one neutral arbitrator. It was held that the public should have a representation on the board that was larger than that of either party to the dispute. Objections were made to the provision for a court review of the award of the arbitration boards. It was suggested that the mediation and conciliation commission should be composed of men who could devote their entire time and energy to the problem. The mediators, it was said, should be

authorized to take the initiative in the work of mediation, and not have to wait supinely until called into the controversy, etc.

QUESTIONS

1. On exactly what grounds did the Adair case hold a portion of the Erdman Act unconstitutional?

2. What effect did the court's decision have on the remaining sections of the act?

3. Of what importance is the decision in its connection with the whole problem of federal control of relations between employer and employee?

4. Does the decision indicate that there is no relation between labor unions and interstate commerce and that therefore Congress cannot legislate on the subject?

5. What limits can be placed on the power of Congress to interfere with freedom of contract?

6. Apart from section 10, what seem to be the greatest defects in the Erdman Act?

7. To what may the success attained by the act be attributed?

8. Explain why the method adopted by Judge Knapp and Commissioner Neill involves "expediency rather than justice" as a standard.

9. Suggest a method by which absolute justice might have been attained under the Erdman Act.

10. Is it desirable to have labor disputes settled by mediation and conciliation or by arbitration?

11. Which party to a dispute did the Erdman Act favor?

(c) Newlands Act

A 25

[Section 1 of the present act repeats Section 1 of the Erdman Act with the addition of the following paragraph:]

A common carrier subject to the provisions of this Act is hereinafter referred to as an "employer," and the employees of one or more of such carriers are hereinafter referred to as "employees."

Sec. 2. That whenever a controversy concerning wages, hours of labor, or conditions of employment shall arise between an employer or employers and employees subject to this Act interrupting or threatening to interrupt the business of said employer or employers to the serious detriment of the public interest, either party to such controversy may apply to the Board of Mediation and Conciliation created by this Act and invoke its services for the purpose of bringing about an amicable adjustment of the controversy; and upon the request of 25 Act of July 15, 1913, 38 Stat. L. 103.