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vital, because the workmen were little disposed to give either their lives or their privileges in the cause of increased private profits. The committee on production were fully alive to the need not only for a dramatic gesture in this matter, but for dramatic results following upon the gesture. They recommended accordingly in their fourth report (March 5) that the Govern- ment should assume direct control of shipbuilding and armament firms, and should use this direct control radically to restrict profits. These proposals were explored, and throughout March the Board of Trade were conferring with the principal of Proa's." armament firms with the object, not so much of con- trolling their methods of manufacture, as of controlling their profits. These negotiations did not do more than place the Government in the position of announcing to the A.S.E. in the course of the negotiations for the second Treasury agreement (and embodying the announcement in the agreement) that profits would be limited. But the announcement was, in fact, the decisive factor in securing adhesion to the agreement.

In the middle of March the Government, as represented by the Chancellor of the Exchequer, the President of the Board of Trade, Mr. Montagu and Dr. Macnamara, together with Mr. Balfour as representing the Opposition, met representatives of the trade unions in full conference. The trade unions were represented by a committee under the chairmanship of Mr. Arthur Henderson, which was constituted as the result of the conference as the National Labour Advisory Committee. The negotiations started on March 17 and were concluded on March 19, and resulted in a document of such vital importance to the whole future of labour regulation that it is given in full:

The workmen's representatives at the conference will recom- mend to their members the following proposals with a view to accelerating the output of munitions and equipments of war.

(1) During the war period there shall in no case be any stoppage of work upon munitions and equipments of war or other work required for a satisfactory completion of the war.

All differences on wages or conditions of employment arising out of the war shall be dealt with without stoppage in accordance with paragraph (2).

Questions not arising out of the war should not be made the cause of stoppage during the war period.

(2) Subject to any existing agreements or methods now prevailing for the settlement of disputes, differences of a purely individual or local character shall, unless mutually arranged, be the subject of a deputation to the firm representing the workmen concerned, and differences of a general character affecting wages and conditions of employment arising out of the war shall be the subject of con- ferences between the parties.

In all cases of failure to reach a settlement of disputes by the parties directly concerned, or their representatives, or under the existing agreements, the matter in dispute shall be dealt with under any one of the three following alternatives as may be mutually agreed, or in default of agreement, settled by the Board of Trade:

(a) The committee on production.

(6) A single arbitrator agreed upon by the parties or appointed by the Board of Trade.

(c) A court of arbitration upon which labour is represented equally with the employers.

(3) An advisory committee representative of the organized workers engaged in production for Government requirements shall be appointed by the Government for the purpose 01 facilitating the carrying out of these recommendations and for consultation by the Government or by the workmen concerned.

(4) Provided that the conditions set out in paragraph (5) are accepted by the Government as applicable to all contracts for the execution of war munitions and equipments, the workmen's repre- sentatives at the conference are of opinion that during the war period the relaxation of the present trade practices is imperative, and that each union be recommended to take into favourable consideration such changes in working conditions or trade customs as may be necessary with a view to accelerating the output of war munitions or equipments.

(5) The recommendations contained in paragraph (4) are condi- tional on Government requiring all contractors and sub-contractors engaged on munitions and equipments of war or other work required for the satisfactory completion of the war to give an undertaking to the following effect :

Any departure during the war from the practice ruling in our work- shops, shipyards, and other industries prior to the war, shall only be for the period of the war.

No change in practice made during the war shall be allowed to prejudice the position of the workpeople in our employment, or of their trade unions, in regard to the resumption and maintenance after the war of any rules or customs existing prior to the war.

In any readjustment of staff which may have to be effected after the war priority of employment will be given to workmen in the employment at the beginning of the war who are serving with our colours or who are now in our employment. 1

Where the custom of a shop is changed during the war by the introduction of semi-skilled men to perform work hitherto performed by a class of workmen of higher skill, the rates paid shall be the usual rates of the district for that class of work. 2

The relaxation of existing demarcation restrictions or admission of semi-skilled or female labour shall not affect adversely the rates customarily paid for the job. In cases where men who ordinarily do the work are adversely affected thereby, the necessary readjust- ments shall be made so that they can maintain their earnings.

A record of the nature of the departure from the conditions pre- vailing before the date of this undertaking shall be kept and shall be open for inspection by the authorized representative of the Government.

Due notice shall be given to the workmen concerned wherever practicable of any changes of working conditions which it is desired to introduce as the result of this arrangement, and opportunity of local consultation with the men or their representatives shall be given if desired.

All differences with our workmen engaged on Government work arising out of changes so introduced or with regard to wages or conditions of employment arising out of the war shall be settled without stoppage of work in accordance with the procedure laid down in paragraph (2).

It is clearly understood that except as expressly provided in the fourth paragraph of clause (5) nothing in this undertaking is to prejudice the position of employers or employee * after the war.

(Signed)

D. Lloyd George. Walter Runciman.

Arthur Henderson. (Chairman of Workmen's Representatives.)

Wm. Mosses.

(Secretary of Workmen's Representatives.) March igth, 1915.

The Amalgamated Society of Engineers were not parties to this agreement, and on March 25 a further agreement was con- cluded with that Society which contained two additional points of first-rate importance an undertaking by the Government to limit the profits of contractors on war work, and the limitation of the agreements to war work purely.

This was a great achievement, and equal credit is due to the members of the Government who secured it and the unions who accepted it. But the plain truth is that its acceptance by the rank and file in actual practice was not a matter of weeks but of weary months, as the account of the progress of dilution indicates. Indeed it is fair to say that the agreement had not a real chance to produce results until not merely the first Munitions Act had made the safeguards statutory and the removal of restrictions com- pulsory, and had limited profits, but the second Munitions Act of 1916 had provided effective powers to regulate the wages of women entrants. From that date, as has been shown elsewhere, progress began, but the Treasury agreement may well take its place among historical records of the World War as a crystalliza- tion of the deep and unswerving purpose of the ordinary British citizen to serve the nation even at the cost of his livelihood.

It should be added that throughout the war considerable uneasi- ness was manifested by the trade unions lest the safeguards provided by the Munitions Acts would not be adequate to secure effective restitution. Conscious of the great changes produced by the wide- spread introduction of the automatic machine, they feared that the changes might tend to become permanent. One step taken during the war to reassure them was the appointment of a number of officers by the Labour Department of the Ministry of Munitions to keep effective records of all departures from previous practice. The work of these officers was extremely effective, and there is no doubt that the records provided by them covered a great deal of the ground.

The existence of the records made restitution practicable. The trade unions did not rest content till what was practicable was made inevitable. Two committees were appointed in turn to consider what added safeguards were necessary the first under the chair- manship of Sir John Simon, K.C., M.P., in 1916; the second under

'These three clauses are taken from the form of undertaking proposed in the Second Report of the Committee on Production.

whether the semi-skilled worker should also receive the guarantee (given according to the practice of some shops to the skilled worker) of his minimum time rate when he was employed on piece-work. The reason of the omission was probably that the practice was not general before the war.
 * A point not provided for in this paragraph was the question