"Property Ownership and Human Relations"
EMPLOYER - EMPLOYEE COOPERATION
By ALBERT W. HAWKES, President, Congoleum-Nairn, Inc.
Delivered before the New Jersey Bankers Association at Atlantic City, New Jersey, May 15, 1942
Vital Speeches of the Day, Vol. VIII, pp. 566-568
REGARDLESS of the differences of opinion that existed between well-intentioned American citizens prior to Pearl Harbor—I am for a complete prosecution of war to that kind of a victory which will bring to the world some satisfactory compensation for the great losses of manpower and material that will be destroyed in the prosecution of the war.
Some of the important things that our American free men have gone to war for are as follows:
1. The preservation of our form of government and the American way of life.
2. The preservation of the fundamentals of free enterprise.
3. The preservation of private property in the hands of its lawful owners, when honestly and legally acquired.
4. The establishment and preservation of fair rights on a sound basis for all, on the simple and well known rule that "he who asks equity must do equity."
5. The preservation of the right to have and express a difference of opinion.
6. Victory to enable us of the representative democracies to establish a lasting, well protected peace, fair enough for friend and foe to give it the qualities and characteristics that will make peace enduring.
America should not let its bars down completely or unnecessarily expose its bosom to economic destruction in accomplishing these things. I have no sympathy with those who would destroy the strong while attempting to raise the weak. Let us not crush the hope, faith and initiative of those who have built and accomplished, while we are trying to establish hope, faith and initiative in others. Let us keep and protect the strong while helping them to improve themselves and our American way of life—into a better way for all. If we do this, the weak will then have encouragement to become strong enough to stand alone in the light of opportunity under sustained individual freedom.
The United States of America came along a straight road for about 130 years after the Constitution was adopted in 1789. That road had some rough spots in it here and there, but the main road was always discernible from various roads that led away from it and from our Constitution and the established American way of life. About 20 years ago many of our citizens became confused because for more than two decades we had had very easy sailing on a smooth road at a high rate of speed, without too much regard for traffic lights and warnings as to what it takes to make representative democracy work—what it takes to sustain the free enterprise system and maintain the security of private property rights. Then we came to rough spots in the road which we travelled with a fair degree of success, but always with a doubt in the minds of many as to whether we should leave the road and take detours to unknown places.
Now we come to a three-pronged fork in the road and our citizens are confused. One prong of this fork, as I see it, leads to victory over our external foes in the battle of free men against dictatorship—but without certainty of sustaining and preserving the fundamental rights and desires of free men.
The second prong leads to half-hearted cooperation or the enforced cooperation of free men in their fight against dictatorship.
The third and center prong takes us to victory through complete voluntary cooperation—the establishment of sound human relations—the preservation of our way of life with our free enterprise system and the security of property honestly and legally acquired. It is the most certain road to full victory because it promises to save the incentive system—to improve it as may be necessary in the fair interests of all so that that stimulus and mainspring will be here for the use of the living when peace is reestablished.
Our system has taught us that the world owes no one a living, but it owes every able-bodied person an opportunity to work and earn a living. It owes them the opportunity through sound saving and thrift to provide security against a rainy day and old age. It has taught us by degrees from generation to generation the proper answer to the words, "Am I my brother's keeper?" It has taught us that the sick, incapacitated and helpless from any cause, are a responsibility of the able and successful.
We are learning that man can only be custodian of funds and that he has a very great duty and responsibility which goes with the power and right to be the possessor of those funds. The use of funds for his own gratification is an insignificant part of the right and obligation that goes with the possession and security of funds.
In this world of ours, he who has the custodianship of property owes a great obligation to his fellow Americans to so use those funds as to promote ways and means for the production of things desired and required by mankind for their comfort and happiness and—secondly—to use those funds in such a way as to create the most opportunities for sound employment on a fair basis of compensation under fair working conditions. Only such custodianship of funds can lead to a satisfied people, and only a satisfied people can make representative democracy—the instrument of free men—endure from age to age.
Speaking to a group of able bankers may be slightly different from talking to a group of average American citizens, because bankers think principally about money and property in their daily work. That is your job. However, I wonder how many of you gentlemen have found yourselves the last few years in very much the same position as I found myself with reference to private property?
This question leads me to the two points I wish to discuss with you today.
1. What is private property? What makes it secure or insecure?
2. What are sound human relations? Can representative democracy, free enterprise and private property be secure without the building of the foundation of sound human relations upon which they must rest?
A few years ago I began to ask myself what makes property secure as we have proceeded as a people in a representative democracy? The past few years I came to the conclusion that private property in a representative democracy can only last and be secure so long as the people in that democracy wish to make it secure. It is established at the will of the people; its security is in the hands of the people; and its continuance rests upon the will of the people. Some one may differ with me on this simple conclusion, but if so, I would like him to explain how this right can be established and survive in any other way.
Now, if I am correct in my first conclusion, then my second conclusion must be right—namely, property ownership depends upon sound human relations. Sound human relations, in my opinion, depend upon equity, justice and fairness in the distribution of the proceeds that arise from our common cooperative efforts.
About twenty-six years ago I wrote a set of recommendations to a great company, the basic thought of which was the growing necessity of doing something to hold the interest of the human being in his work for corporations and large, privately owned companies. I recognized there was a necessity for the corporation to find a way to establish in the conduct of corporate business an equivalent for the old-fashioned human touch relationship that existed when only a few men worked for an employer—knew their employer and were known by their employer personally, and had a hope of being rewarded by a partnership or an interest in the profits of the business if their performance in service was well and efficiently done and directly contributed to the success of the employer or small partnership.
To find a way to satisfy this yearning for an interest in the results attained in corporate business, is one of our great problems in building the kind of human relations that will make private property secure. I sometimes wonder why able men directing the affairs of business, large and small, fail to see what has been accomplished by concerns who have recognized the necessity of satisfying this human desire for an interest in the results of cooperative effort. We have many cases on record in the United States of concerns that have made and paid substantial dividends to their stockholders and for years have maintained a wage dividend plan for employees who have remained with the company and have been at least partly responsible for its success. In such companies you seldom see any organization of employees that will take a stand which is injurious to the company and its objectives. The reason for this is perfectly clear— when they injure the company, they injure something in which they themselves have a definite interest. Enlightened self-interest alone dictates that they should not follow such a course. The record of such companies as to strikes, shutdowns, sabotage and incompetence, is worthy of the consideration of every business executive. If the free enterprise system and private property are insecure because of the confused ideas of humanity today throughout the world— I would ask every one charged with the responsibility of management and the direction of the affairs of business and industry to stop and analyze the records of some of these great institutions which have paid dividends through depression periods as well as periods of prosperity and whose stockholders have rated their investment highly—at the same time the worker has rated highly his continuing job with the same company.
This is the type of harmony in human relations which I believe will be the solution to the employer-employee problems that are so upsetting to every nation in the world at this time in our history. Many employers contend that the workman cannot have an interest in the profits of the company—that he should be paid a good wage, under fair working conditions, and his interest must cease there. I ask you ladies and gentlemen if that is sound reasoning when such a course has placed in jeopardy the whole free enterprise system and the opposite course has a record of success and offers a way to the solution of the economic human relations problem.
Many of our owners and leaders in industry and business have seen the importance of sound human relations and gone a long way toward the establishment of them. Some have failed to recognize the great importance and necessity for this foundation. Some in the ranks of labor and some labor leaders in their zeal to correct certain evils are creating other and greater evils. They must stop, look and listen—otherwise the very creative act they are engaged in will spell the downfall and destruction of their objective.
I urge the banking profession to interest itself in the employment program of its clients and prospective clients. The solvency of a business for many years has been read from the balance sheet and operating statement of a company. But the solvency of the future is going to be measured more and more by the soundness of the employment plan and the unity with which employer and employee operate.
Let me urge you to test the soundness of a loan on the measuring stick of employer-employee relations. The liquidation of any debt depends on both the willingness to pay and the capacity to pay. The honesty of the man who is seeking a loan—that is, his willingness to pay—is not often questioned in this enlightened day. But his capacity to pay is very decidedly measured by his ability to keep his plant running — and that in our post-war reconstruction era, will be largely determined by the human relations program between management and workmen.
The guarantee of property rights under our Constitution is as fundamental as the guarantee of any of our human rights. In fact, they are so interdependent that unless property rights are continuously respected as they have been in our past development, then it is hopeless to expect that the human rights for which we are fighting and which we all treasure, can long last. Property ownership means the way of economic independence. It also means the way of political independence. Without the right to own property, the citizenry of any country would soon lose its political rights—and the protection of the law is as essential for one as it is for the other.
Abraham Lincoln recognized this fundamental and had it in mind when he stated:
"Property is the fruit of labor; property is desirable; it is a positive good in the world. That some should be rich shows that others may become rich, and hence is just encouragement to industry and enterprise. Let not him who is houseless pull down the house of another, but let him work diligently and build one for himself, thus by example assuring that his own shall be safe from violence when built."
Let none of us condemn our fellow citizen who had a different war viewpoint from ours prior to Pearl Harbor. We need the full cooperation of our people bound together with hoops of steel in order to win this victory. I assure you that the way to get that cooperation and to win the victory is not to condemn and continue to condemn each man who differed in opinion with us before we entered the war. But, by this cooperation I still do not feel that the great underlying principle of representative democracy should be waived, even in wartime. Every man and woman should remember every day that one of the pillars supporting representative
democracy is the right to have and to express a difference of opinion. Citizens under a dictatorship have neither the right to hold nor to express an opinion differing from that of the dictator. The best they can hope for is the great sorrow in having a difference of opinion with the right to express it denied to them under penalty of death.
None of us is going to have his own way during the prosecution of this war to victory. We will all be called upon to submerge self-interest and temporarily surrender many of our rights. The Constitution of the United States, which brought our people together under a great document that breathed equity and justice for all who lived under it and complied with its terms—was negotiated on the best obtainable terms in the interest of all. And just so, we can intelligently negotiate a set of rules and regulations governing human relationships on a basis that will hold the interest of all well-intentioned American citizens.
We must find a formula that will hold this interest, if we would preserve our way of life and free enterprise system and make property rights secure, which is the very foundation of it all. And we must insist on a peace that will perpetuate these human liberties which we so develop. That peace must be based upon equity and justice for all, and those who make it must be endowed with a spirit of the Divine Master to such an extent that they will put into effect the words of the Lord's Prayer, "Forgive us our trespasses as we forgive those who trespass against us." No other kind of a peace can withstand the ingenious machinations of groups who are made to feel that the peace has inflicted injustice upon some people and favored others.
There is a wonderful opportunity for this nation to weld itself together strongly as a unit, not only for the purpose of making this war victorious, but for the purpose of making the peace victorious and the building of a united nation that pursues a policy which carries out the pronouncement of our forefathers, embossed on our coins, "In God we trust."
Ladies and gentlemen, this is the most critical hour in the history of our nation and certainly the most critical hour in the lives of those sitting in this room, and I urge all of you to silently appraise yourselves—silently appraise what we have produced as a nation—and make your full contribution toward the preservation of it and the improvement of it in a way that exercises your greatest intelligence, all your strength and ability and supported by your full quota of courage.
Management and labor should sit down patiently and tolerantly together and try to work out plans that lie clearly within the Constitution and the established laws of the land. They should each be deeply interested in creating in the mind and heart of every American citizen a solemn, sacred respect for law and order in the true meaning of the words in the Constitution of the United States. Loss of respect for law and order, if carried far enough throughout the nation, can lead to nothing but destruction of all the things we as a free people profess to believe in.
After all, I would leave this admonition with this group and every American group—our national character can be no greater than the composite of the individual character of our citizens. This leads to the conclusion that our biggest job is to get hold of ourselves and see that we each are doing our duty; that we each are making our contribution in such a way as not only to save all the fundamentals in the American system and way of life, but to improve those things which need improvement, at a rate of speed which will not destroy the house while we are making the repairs.
This is the need of the nation—this is your need—this is the need of your family—and this, if carried into effect, will write a page on history which you will be proud to have posterity read.
In closing, let us ask God to give us the patience to accept those things which we cannot change; the courage to change, when we can, those things requiring change; and the wisdom to know the difference.