the first place New Zealand was then under the dominance of the late Mr. Richard Seddon, who virtually ruled her as an absolute monarch. Wise and able statesman as Mr. Seddon undoubtedly was, he was also a man to whose forceful character the idea of compulsion presented itself readily enough-if a thing, was good, well then people must be made to do it. No doubt also Mr. Seddon looked upon the absence from the English system of provision for preventing strikes and lock-outs as a weakness, and thought that he could remedy it in his Act. No doubt he honestly believed that arbitration awards. given with the authority of a legal tribunal would be implicitly obeyed. Add to this that every State in Australasia is virtually a republic; that republics are notorious for a somewhat mischievous activity in the manufacture of laws; and that in their legislation they have little scruple about interfering largely with individual liberty-and we may arrive at some explanation to account for the form taken by the Industrial Conciliation and Arbitration Act in New Zealand. In 1901 an Act to deal with labor troubles was passed in New South Wales, and it followed closely the lines laid down in the New Zealand Act. When that measure was introduced, its author, the then Attorney-General, Mr. B. R. Wise, and its advocates lauded compulsory arbitration as the best way of dealing with industrial disputes, and in proof of their statement pointed to its success in New Zealand. Whether they were justified in so doing is a question to which we shall advert by and by. Finally, in 1902, a compulsory arbitration Act on very similar lines was passed in West Australia. The object of this paper is to show that these Acts have utterly failed to effect their purposes; that they have intensified rather than diminished the evils they were designed to cure; that their inherent defects can be remedied by no amount of tinkering; and that the only wise policy is to rescind them altogether and frame new Acts upon better and more logical principles.

In all the various phases of life novelty possesses a peculiar charm and new ideas meet with a ready welcome. Thus there is no denying the fact that advanced social and industrial legislation, which is a marked characteristic of the present day, and of which these compulsory arbitration Acts form a conspicuous part, has much in it that is at the first impression very attractive. Nor can it be denied that here in Australia the majority of people have hailed such legislation with enthusiasm, and still continue to believe in its efficacy to promote the general good. In theory an Act which makes it incumbent upon employers and employees alike to submit their differences to a special and impartial tribunal ought to work out. well, the object of these Acts is most praiseworthy; they aim at the realisation of a really noble ideal; their advocates promised that they would bring about harmonious co-operation between employers and employed, put an end to industrial friction and warfare, and substitute for the barbarous methods of strike and lock-out the peaceful, satisfying decrees of a court of law. Moreover, these Acts were based upon the general principle-sound in itself but liable to be pushed beyond the limits of legitimacy and expediency -that the State, for the good of its members as a whole, is justified in intervening between man and man, and between class and class, to the curtailment of individual liberty. Is it any wonder that Acts which presented such fascinating credentials and promised so much benefit should have captivated the imagination of the majority and been quickly passed into law.? Some there were of course with the ability to look below the surface and to foresee consequences, who condemned these Acts from the outset, but their warnings were unheeded. Others, again, were willing to give the new experiment a trial, though they gravely doubted its ability to fulfil its promises.

The trial has been given. Compulsory arbitration has passed beyond the experimental stage and can be tested by the touchstone of practical experience. What is the result? People are slowly coming to realise that it exemplifies the old truism that theory and practice do not always agree, and the equally trite dictum that mankind cannot be made moral by Act of Parliament. It has become manifest that those who first advocated and those who accepted this new legislation took far too many promises for granted, and rather jumped to conclusions than reached them by a sound process of logical reasoning. Moreover, it has now been seen that many present day social and industrial enactments, compulsory arbitration Acts among them, are founded to a large extent upon fallacies, and that their successful operation presupposes the possibility of doing away with certain immutable principles inherent in human nature and in the nature of things. After four years' experience of the working of the New South Wales Act the Chief Justice of that State, the late Sir Frederick Darley, roundly condemned it in the following terms:

"It is beyond question that the Arbitration Act, as in force in this State, is an Act which is in derogation of the common law; it does encroach upon the liberty of the subject as regards persons and property; it creates new crimes unknown to the common law or contained in any previous statute. It interferes with the liberty of action of both employer and employee. It precludes the one from giving and the other from obtaining employment except upon terms imposed by the Act. It deprives the employer of the conduct of his own business and invests it in the tribunal formed under the Act, and it can prescribe terms of management which, however injurious they may be to the employer, he must comply with, under penalties for any breach of the order of the Court. . . . Further, I think this Act is productive of the most alarming and deplorable amount of litigation, with its concomitant ill-feeling and ill-will between employers and employees, who are by this Act forced into hostile camps. I believe the object of the Legislature in passing this Act was to promote peace and goodwill between employers and employees, but I fear it has not done so.

About the same time as Mr. Justice Darley made this pronouncement, the then Attorney-General of New South Wales declared that the effect of the Act was "to make a laughing-stock of justice"; and two years later the then President of the Arbitration Court publicly complained that all its decisions were nullified, either by the contumacy of the workers, whom it had no power to punish, or by decrees of the full Court.

The two New South Wales judges, in their remarks above, specify the two essential particulars in which the performance of the Act has limped behind its promise. It was designed to promote industrial peace; Mr. Justice Darley declared that it has been productive. of industrial friction, ill-will, and conflict. Its authors assumed that the decisions of the Court would be loyally obeyed; the President of the Court expressly states that they are nullified by the refusal of the workers to obey them-and his non-inclusion of the employers in that category of continuacy is highly significant. The Court, he further says, has no power to punish the workers, and in so saying he implies that it has the power to punish recalcitrant employers. In other words, the Act exercises compulsion on the employers, while it has no power to bring any compulsion to bear upon the employees. Here then are two grave indictments against compulsory arbitration. The fact is that it fosters industrial friction and drives Capital and Labor further apart instead of conducing to their harmonious co-working. The second is that its incidence is wholly one-sided; that the employer must conform to its rulings while the employee may

flout them with impunity; that the former must accept an award however unpalatable or detrimental to his business, while the latter, if an award does not satisfy him, may refuse to work under it, and may even go out on strike to force an employer to grant him better terms. The truth of these contentions can easily be shown by reference to a few among the many incidents that have occurred since compulsory arbitration Acts were passed. In New Zealand, for example, one has only to recall the slaughtermen's strike in open defiance of the Act some three years ago, or to look at the present strike of the Government coal employees. In New South Wales there was the coal strike in the Teralba district in January, 1904, against an award of the Court-a strike, moreover, after the men had previously signed an agreement to abide by the award. There were subsequent coal mining strikes and other episodes in that State which made its Arbitration Act a public jest and reduced its Arbitration Court proceedings to the level of a comic opera. The great strike at Broken Hill last year, and the still unsettled general coal strike, are instances to the point. In West Australia, again, there was the timber strike in September, 1903, happily soon settled; and the more serious timber-workers' strike in 1907, which brought misery and distress upon thousands of persons in the south-western districts. The Commonwealth "Official Year-Vook" summarises the operation of Arbitration Acts in New South Wales and Western Australia up to the end of 1907 thus:"There have been a certain number of labor troubles in New South Wales since the passing of the Act, and between thirty and forty instances of cessations of work have been reported. In the majority of instances," it rather emphatically adds, "the strikes were by small bodies of men and were quickly settled." What the Year-Book" does not state is that they were settled, not by any compulsion on the part of the Court against the strikers, but as a rule by some compromise between the men and their employers.

In the same context, as bearing out Mr. Justice Darley's statement that "this Act is productive of the most alarming and deplorable amount of litigation, with its concomitant ill-feeling and ill-will between employers and employees," the "Year-Book" gives some interesting figures, prefacing them with the remark that "the Courts have been kept extremely busy." In New South Wales, from 1901 to 1908, 252 industrial disputes were brought before the Court; 130 awards were given; and there were 648 summonses for breaches of award. In West Australia, from 1902 to 1908, there occurred 252 industrial disputes; 71 awards were made; and there were 45 summonses for breach of award. "The Courts have also heard several hundred other minot cases arising out of the Act or industrial questions." All this hardly tends to encourage the belief that these Arbitration Acts have made for the promotion of industrial peace; the figures quoted would rather imply they that had directly generated a lamentable amount of industrial friction.

The operation and results of compulsory arbitration may perhaps be best seen by a sketch somewhat more in detail of how it has worked in the case of some special industry, and the mining industry of this State naturally suggests itself for selection as typical of all. The West Australian Arbitration Act was passed in 1902. As soon as it became law thousands of men in various mining districts of the State, who had for years been at work amicably with their employers and in the receipt of high wages-exceptionally high wages when compared with the rates of pay for similar work all over the rest of Australia-seized upon the chance of getting their wages increased. Through unions they put in claims for general all round increments of pay, and the newly constituted Court soon became exceedingly busy. After hearing an immense volume of evidence, the Court gave awards affecting the

rates of pay and the conditions and hours of labour in some six or seven mining districts. Space forbids the examination of these figures in detail, but, speaking generally, the awards represented substantial advances upon the rates that has hitherto prevailed. In some few cases there were decreases, but as a rule the increases varied from 4 or 5 per cent. up to something like 14 or 16 per cent. In several instances the wages fixed by the Court even exceeded those asked for by the men. These awards, especially in the Murchison and Leonora districts, were received with no little surprise and consternation by the employers, who saw clearly that if such a policy were to continue, it must inevitably work disaster, not only to the mining industry and to the State at large, but also to the workers themselves, by closing many avenues of employment and by driving capital out of the country to other and more profitable fields for investment.

These early awards in the gold mining industry suggest one or two pertinent criticisms on the Act that was responsible for them. In the first place, no real industrial dispute whatever existed in the districts affected by them; there was no quarrel between the employers and the employed. Each so-called dispute, was a purely technical one, manufactured on paper for the occasion. It simply consisted of a claim for certain specified rates of wages, drawn up by the union officials at their pleasure, and presented to the Court for adjudication. This exemplifies what is a very black blot on the principle of Compulsory Arbitration, as it works out in practice. It needs no more than action by one party to constitute a bogus dispute, set the machinery of the law in motion and bring a case before the Court. No matter how trivial and how unwarranted the claim advanced may be, the other party must appear and answer it, possibly at considerable expense and loss of time, or else let judgment go by default. Compulsory Arbitration does not merely deal with actual disputes that may arise; it lends itself to the concoction of imaginary disputes, in which one side formulates a claim upon the principle that, if the Court concedes them anything, they are so much better off, and if it gives them nothing, they are at any rate no worse off. The practice of thus "trying it on" is a characteristic feature of compulsory Arbitration, and has engendered an incalculable amount of industrial friction and ill-feeling. The principle of compromise, of fair give and take, which is really an essential part of Arbitration proper, is virtually eliminated altogether. The attitude of the two parties before a Court of Compulsory Arbitration is aggression on the one side, and resentment on the other, whatever the award may be, it is certain not to satisfy both parties. The one which considers itself aggrieved will either repudiate the award altogether, or resort to various devices to counteract the effects of it.

In the second place these early awards fully justified the grave doubts which many people expressed at the outset regarding the constitution of the Court. By the Act the power of adjudicating on industrial disputes is vested in a Court composed of a Supreme Court judge as President, and two assessors nominated one each by the industrial unions of employers and employees respectively. No provision is made, as it is under the English system, to secure technical knowledge and experience in the assessors. It is impossible that any member of the Court should be conversant with the surrounding circumstances of every class of work or of the conditions of every industry in respect of which he is called upon to fix the rates of wages; and especially is this true in the case of an industry so extremely technical as mining. The Court can do no more than endeavor to strike a balance between the varying testimony of interested witnesses, whose credibility it has no, means of checking; and its ignorance is likely to lead it into serious mistakes. For example, in the awards above, the Court adopted

HANNAN STREET, KALGOORLIE, showing intersection with Maritana Street; Palace Hotel on right hand corner.

Mt. Charlotte Reservoir of Coolgardie Goldfields Water Scheme at top of street. Hannan's Reward Mine (poppet heads) in background.

the peculiar method of taking as its starting point the wages paid in what is perhaps the richest mining filed in the whole world, and then fixing the wages in other fields at rates higher than those awarded in Kalgoorlie in rough proportion to the distance of each field from the starting point. The gold deposits of West Australia do not gradate in richness according to their distance from Kalgoorlie or the coast, or any other arbitrary centre, otherwise there might be some sense in the geographical adjustment of wages adopted by the Court; as things are it is absolutely senseless. Many other startling anomalies are to be found in these awards; let two suffice for example. The Court solemnly awarded extra pay for overtime to engine drivers, who are expressly forbidden by statute to work overtime; and refused to make any such provision in the case of workers under no such statutory disability. The Court also, by creating a short shift on Saturday and Monday, forced mine owners to work overtime, and then prescribed penalties for their doing so. Such anomalies and others, due solely to the ignorance of the Court-for its impartiality and desire to do right cannot be impugned-are surely fair warrant for demanding at least some betterment of its constitution.

The year 1903 was marked by the reference of several disputes to the Court, none of any very great practical importance. These cases, however, all conclusively showed that the 1ates of wages which for over seven years the workers had received with contentment were made the cause of comlpaints in artificial disputes; they were in fact further illustrations of the system of trying it on." Again, in some

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cases the Court awards were in excess of the workers' demands. In the year 1903, though the gold output of the State reached its zenith, there began a marked stagnation of mining in the outlying fields, mainly to be accounted for by the unsettled conditions rising out of the working of the Arbitration Act and by the unfortunate and steadily increasing demands of the workers. One incident of the year deserves a passing notice. The managers on the Kalgoorlie field voluntarily differentiated between the pay of engine-drivers in charge of winding engines on large mines, where the work was heavy and responsible, and of other engine-drivers by increasing the wages of the former from 13s. 4d. to 15s. a shift. They were at once met with the demand that the pay of all engine-drivers working on main shafts should be similarly increased. The request was refused, and the unreason of it was so manifest that the men took no further steps. Since then, however, voluntary concessions on the part of employers have led to demands for similar concessions to other workers, and the matter has been made an excuse for citing a case before the Court. The result has been that employers simply dare not pay higher wages for extra efficiency or responsibility, lest their doing so may be used as an argument for increases in wages all round for that particular class of work.

The year 1904 was memorable in more than one respect. In the first place, as the result of friendly conferences between employers and employed, the two awards in force at Kalgoorlie and the Cue-Nannine district were voluntarily extended, with some slight modifications, for a further period of eighteen months, and were registered as industrial agreements. Apart from these satisfactory incidents, the year was one of continuous and marked unsettlement. Between twenty and thirty so-called disputes in the mining industry came under the purview of the Court. The cases first heard affected an area of some 73,000 square miles, extending from Kalgoorlie to Laverton, and from Davyhurst to Yundamindera. Later on awards were given in the Peak Hill and Abbotts districts. All these cases showed very clearly that the workers look upon the compulsory Arbitration Act, not as an instrument for conciliation and arbitration, but solely as a lever

for raising their wages, and that the Court does all it possibly can to help them to that end. In all cases considerable advances in wages were asked for, and in most the Court granted substantial increases. Another point worthy of notice, and easily discernible from an examination of the various awards made during the year, was that the rough and ready method adopted at the outset of determining wages upwards according to distance from Kalgoorlie, had become hardened into a principle. Whether the Court hit upon this extraordinary method by pure accident or by unhappy design, it is utterly wrong in principle to take the wages paid on a very rich field as a minimum and to grade upwards therefrom those payable on far poorer fields. The absurdity of this method becomes all the more striking when it is considered that wages on the Kalgoorlie field have always been abnormally high. They became so in the early days, when the demand for good mineis far exceeded the supply, and they would probably have declined automatically long ago with increased supply and decreased cost of living had not the first Court award fixed them at an artificial level. The year 1904 was notable again for a small strike at Yundamindera, the first in the mining industry since the passing of the Abritration Act.

In 1905 the Arbitration Court saw fit to put some little check upon the excessive generosity with which it had dealt out wage increments in the past. It heard several of the usual technical disputes, or claims for higher pay, affecting most of the mine employees in many of the northern localities and certain classes of workers throughout the fields generally. The awards were generally in favor of the employers. The demands. of the men on the northern fields were for the most part refused, and fitters' wages in Kalgoorlie and elsewhere were actually somewhat reduced. What followed was exactly what might have been expected from previous experience of similar awards on the New South Wales coal mines, in the timber district of this State, and at Collie only a short while before. Virtually, all the men on the northern mines stopped work and went out on strike, and for some days many of the mines were closed down. Finally, on the personal entreaty of a member of the then Labor Government they consented to return to work, but not until the mine owners, to protect their property and prevent the closing down of all the mines, had undertaken to pay a scale of wages considerably above the rates prescribed by the Court.

The next year, 1906, was comparatively free from labor troubles of a serious kind. Three awards were given, involving in two cases slight reductions on rates previously paid. They were followed by the customary refusal to work under them. At Peak Hill the award was eventually enforced, but at Wilun the men remained out until they had exacted a substantial advance on the rates fixed by the Court. The year 1907 was still freer from industrial disputes. The only one that affected the mining industry was in the Black Range district, and in its award the Court reverted to the old practice of granting material increases of pay over the rates previously prevailing.

The next year, 1908, more than made up for the quiescence of the two preceding it. Apart from the disastrous strike of the workers on the wood lines round Kalgoorlie, which closed the big mines on that field for about a fortnight, and caused large losses to the mining companies, the business community, and the workers-apart from this and a similar strike at Day Dawn, the year was prolific in labor troubles. In spite of the general stagnation that prevailed in the mining industry, the employees in numerous districts advanced and persisted in claims for higher wages. In most of these cases the Court awarded generous increases, which the mine owners were perforce compelled to pay. In some cases, where the Court felt itself justified in ordering reductions, the mine owners

reaped no benefit. The men bluntly threatened to strike if any attempt were made to enforce the awards.

Of the year just passed there is not much to record. An award, again very favorable to the men, was given in a Mt. Magnet wages case. The workers in a set of mines at Southren Cross demanded higher wages from their employers, and, when they were met with a refusal, ignored the Act altogether and went out on strike to enforce their demand. After having thus asserted for some days their independence of the law, they resumed work and submitted a case to the Arbitration Court on condition that any award given should be made retrospective.

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This brief review of the practical working of the Act with regard to the mining industry in this State is a fair exemple of its operations generally, both here and elsewhere. If the labor troubles to which it has directly given rise have not been as serious as in other industries, it must be remembered that wages in the mining industry are, at their very lowest, exceptionally high, and therefore there has been little inducement to men not immediately concerned to join their fellow workers in a strike. Still the record conclusively proves that the Act, far from promoting industrial peace and harmony, has been an present and fertile source of industrial strife, driving employers and employees further and further apart into hostile camps. It has also shown that under compulsory arbitration the employers have few of the benefits and all the disabilities. An employer is under compulsion to pay his men any increase of wages that the Court may direct, and penalties are promptly recoverable from him for any lock-out or breach of an award. On the other hand, there is no power to compel the acceptance by the men of a reduced wage, nor can penalties be enforced against strikers. They are prescribed in the Act, but, so far as the workers are concerned, such penal clauses are a dead letter. It is the fashion with those who even yet hold by compulsory arbitration to say that it is still upon its trial. many minds it would seem as if the trial were concluded and the verdict of condemnation pronounced. Upon nearly every occasion here and elsewhere, when the Arbitration Court has declined to satisfy to the full the demands of labor, the workers have treated its decisions with contempt; they have openly defied the law, and experience has shown that they do so with complete impunity. The principle of compulsory arbitration was introduced and passed into law by the desire of the workers, with the active assistance of labor members inside Parliament and trade unions outside. They no doubt honestly desired to put an end to the period of great strikes such as in the past, which, whatever their result, had always done far more injury to Labor than to Capital. Possibly the more astute among them favored compulsory rather than voluntary arbitration because they foresaw what has proved the case, that the compulsion would be all on one side. The Act was consistently opposed by the employers and was passed against their wishes and efforts. Yet, since its passage, the employers have scrupulously obeyed it and have submitted to its awards even when these were detrimental to their interests; while the workers, who insisted upon the Act, who might be expected as in honor bound to abide loyally by the findings of the Court it established, have never scrupled, when it suited their purposes, to reject the awards of the Court, and treat with contempt and defiance what is virtually their own tribunal. It is true that they have sometimes repented and grudgingly obeyed the law. But in most of these cases, as a matter of fact, they have not really obeyed the law: they have simply obeyed the orders or yielded to the persuasions of their leaders. If only because of its one-sided operation, compulsory arbitration is doomed. No State can afford to have its judicial institutions defied and the decisions of its tribunals openly disobeyed. A law

that cannot be enforced is worthless; a Court whose awards can be flouted with impunity is nothing but a legalised sham. It is worse, for the fact that the will of the State as embodied in it can be defied with impunity tends to bring the whole body of law into ridicule. If a law cannot be enforced, it must be repealed; so far as the State is concerned there can be no middle course.

It was not long before this general truth began to be realised, and even those who had most ardently supported the original Acts became aware that they were breaking down badly. Even the working classes came to regard them with disfavor. Their attitude was a very simple one. So long as the Act gave them exactly what they wanted, well and good; when the Act failed to do so, they had no further use for it. On the other side, it was seen that the State was powerless to punish disobedience to the Act on the part of the workers. From these premises politicians soon began to draw wrong conclusions. The Court, they considered, should be really vested with power it already theoretically possessed of punishing men for the non-acceptance of any award, just as a magistrate could send a man to prison for stealing a watch. The Act, they further held, was not compulsory enough; more compulsion was what was wanted. These ideas found expression in the New Zealand Amending Act of 1908; the New South Wales Industrial Disputes Act of 1908; and the Amending Act passed by the Legislative Council of West Australia in 1907, and then dropped. But amendment on these lines is a vain thing, though in the present coal strike in New South Wales several salutary convictions have been secured under the new Act. What the politicians have not yet realised is that the element of compulsion in these Acts is really fatal to their success.

You may

force men into an Arbitration Court but you cannot make them necessarily abide by its verdict. No power could make an employer carry on business under conditions that would mean his financial ruin. Nor can any power make a man work for a specified wage against his will.

Popular beliefs die hard, and there are many who, while admitting a certain amount of failure in the practical working of the compulsory arbitration principle, yet justify its retention on the ground that its operation has been on the whole beneficial; that it has enhanced the wages and improved the conditions of the working classes; and that, as these largely preponderate in numbers over all other classes, what benefits them must of necessity benefit all. This reasoning is wholly fallacious. It is on all fours with the argument of those who advocated the adoption of compulsory arbitration in New Suoth Wales and West Australia by pointing to its conspicuous success in New Zealand; and thus it brings us back to the question whether those arguments were justified. Early in 1906 they were reiterated with emphasis by a Victorian minister who visited New Zealand, and returned in ecstacies over the admirable working of the Arbitration Act there. He ascribed the prosperity of New Zealand then, as did Australian legislators five years before, almost solely to the working of this marvellous Act. In doing so they overlooked the very obvious fact that before the introduction of this Act New Zealand enjoyed so great a prosperity that it was held nothing could destroy it. They also forgot that many factors besides legislation make for material prosperity. A country like New Zealand, upon which Nature has lavished almost every blessing she could bestow, and which teems with a wealth of natural resources perhaps equalled nowhere else, could hardly fail to be materially prosperous, even under vicious laws and a corrupt administration. It is open to the opponent of compulsory arbitration to point to the undeniable fact that of late years the prosperity of New Zealand has been on the wane, and to affirm the Arbitration