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.
UirfcOLOl- Ul !.J'i iJ LU! y
OtWtflTOIs:
LThis Document is the Property of His-Britannic Majesty's Government.]
Printed
for tlie War Cabinet.
January
1918.
SECRET.
1
WAR
Minutet
CABINET,
Q
310.
of a Meeting of the War Cabinet held at 1 0 , Downing
on Tuesday, January
1 , 1 9 1 8 , at 6 ' 3 0 P.M.
Street,
S.W.,
Present :
THE
PRIME MINISTER
T h e R i g h t Hon. G E O R G E IN". B A R N E S , M . P .
(in the
Chair).
The Right Hon. S I R E D W A R D
K.C., M.P.
CABSON,
T h e following were also p r e s e n t : —
The
R i g h t H o n . W . S. C H U R C H I L L , M.P.,
Minister of Munitions.
Right
H o n . G . H . ROBERTS, M.P.,
Minister of L a b o u r .
SIR
DAVID SHACKLETON, K . C . B . ,
STEPHENSON
KENT, K.C.B.,
ANDERSON,
Director
of t h e D e p a r t m e n t of L a b o u r Supply,
Ministry of Munitions.
The Right Hon. S I R AUCKLAND GEDDES,
K.C.B.,
M.P., Minister of National
Service.
Industrial
Labour.
K.C., K.C.B., Chief
Commissioner, Ministry of
Major J . W. H I L L S , M.P.
Mr. G . C A J I P B E L L , Ministry of Munitions.
Mr. C. S. H U R S T , Ministry of Munitions.
Mr. W . J . L A R K E , Ministry of Munitions.
C a p t a i n t h e Hon. W . O R M S B Y - G O R E , M . P . , Assistant
The 1 2 J P
dilemma.
e
r
3
c e u t
-
^
Con-
SIR GEORGE ASKWITH,
Lieutenant-Colonel Sir M . P . A. H A N K E Y , K.C.B.,
The Labour
Situation:
K.B.E.,
Mr. U . W O L E F , Ministry of Munitions.
Perma- j
n e n t Secretary, Ministry of Labour.
SIR
ALAN
troller, A d m i r a l t y .
The Right Hon. S I R ALBERT STANLEY,
M.P., President of t h e Board of T r a d e .
The
SIR
Secretary.
Secretary.
T H E W a r Cabinet continued t h e discussion begun a t W a r
Cabinet 3 0 9 , Minute 3 .
Mr. Barnes s t a t e d t h a t t h e Cabinet Labour Committee h a d m e t
a t 3 P.M. t h a t afternoon, a n d h a d endeavoured t o unravel t h e difficulty
occasioned b y t h e 12-J- p e r cent, increase t o certain time-workers.
T h e usual t e l e g r a m s h a d been received r e g a r d i n g t h r e a t e n e d stoppages
of work. Several strikes h a d actually commenced : bricklayers were
o u t in Glasgow, a n d steel-smelters were n o t l i g h t i n g u p t h e furnaces,
a n d so resumption of work after t h e holidays would be delayed. T h e
n u m b e r of applications received b y t h e Committee for consideration
was so great t h a t it w a s impossible for t h e m t o go on dealing w i t h
t h e questions a t issue in t h e same w a y as t h e y h a d been a t t e m p t i n g
t o do in t h e last few days. O n t h e other h a n d , h e w a s of opinion
t h a t it w a s q u i t e impossible t o deal w i t h t h e cases in b u l k ; each
trade would h a v e to be considered b y itself. H i t h e r t o t h e Committee
had k e p t clear of a n y piece-work applications.
T h e only case
affecting piece-workers t h a t had been approached was t h a t of t h e
Belfast shipyard workers, to whom an increase h a d been given by t h e
Committee on Production. This case was u p for re-hearing this week.
I t was a s o m e w h a t special case, owing to t h e fact t h a t m a n y of t h e
Belfast men were only working t h r e e days a w e e k becauseof t h e shortage
of material. The Labour Committee recommended t h a t t h e Cabinet
should issue a declaration, to be made on behalf of the Government.
The W a r C a b i n e t Labour Committee found t h a t t h e r e was no logical
stopping-place for t h e extension of t h e 12-J- per cent, bonus by t h e
inclusion of all munition workers, b u t this fact could not be p u t in a
declaration.
They t h o u g h t t h a t discretion might be left to
negotiations within the limit of all munition workers as ordinarily
understood. O t h e r kinds of workers m u s t negotiate advances in
wages, including t h e extension of t h e 12-J per cent, bonus, in t h e
usual w a y — t h r o u g h t h e i r employers or t h r o u g h an agreement with
the Ministry of Labour. I t was quite impossible to e x t e n d wages
advances over the whole country without examination into each
separate case. Mr. Barnes felt t h a t t h e whole labour world was on
edge in r e g a r d to t h e question, and he read a l e t t e r from t h e President
of t h e Board of E d u c a t i o n regarding t h e position at Sheffield, which
showed t h a t t h e most fantastic notions were being circulated b y a
small k n o t of revolutionaries. For instance, it was being said t h a t
t h e situation had been engineered by t h e G o v e r n m e n t for t h e purpose
of creating a revolution in order t h a t t h e G o v e r n m e n t m i g h t shoot
down the revolutionaries. Mr. Barnes t h e n read to t h e Cabinet two
a l t e r n a t i v e drafts, which should form t h e basis of t h e G o v e r n m e n t s
declaration. One h a d been d r a w n up by himself (Appendix), and t h e
o t h e r b y Sir A u c k l a n d Geddes. T h e main difference between t h e
two consisted in t h e inclusion, in Sir A u c k l a n d Geddes's proposed
declaration, of a definite assurance to be given by t h e Government
t h a t t h e y would take t h e whole of t h e excess profits, instead oi ordy
80 per cent, as a t present.
T h e Prime Minister s t a t e d t h a t he h a d seen Mr. George
Terrell, M.P., who represented a certain Federation of Employers.
The suggestion p u t to him by t h e l a t t e r was t h a t , before deciding t h e
question, which affected all t h e employers of t h e country, it was
absolutely essential t h a t t h e employers should be heard a n d consulted.
T h e G o v e r n m e n t h a d to consider w h a t would be t h e effect of t h e
proposed declaration upon t h e working of t h e whole industrial
machine of t h e country. H e g a t h e r e d t h a t t h e case of t h e employers
could be summarised as follows :—
(a.) There were numerous cases w h e r e little or no profit was
being m a d e by employers before t h e W a r , a n d t h a t t h e
t a k i n g of t h e whole of t h e excess profits would
consequently act most unfairly between employers whose
business was flourishing before t h e W a r a n d those whose
business was n o t then flourishing ;
(b.) M a n y of t h e employees were e a r n i n g four or five times t h e
wages t h a t t h e y were m a k i n g before t h e W a r , these
increases in wages being far in advance of any increase
corresponding t o t h e rise in t h e cost of living.
I t would be quite impossible for t h e G o v e r n m e n t to include .a
s t a t e m e n t t h a t t h e y would t a k e t h e whole of t h e excess profits
w i t h o n t hearing t h e views of t h e Chancellor of t h e E x c h e q u e r , who
w a s absent in P a r i s . The Chancellor of t h e E x c h e q u e r h a d s t r o n g
views upon t h i s question, and he g a t h e r e d t h a t t h e l a t t e r ' s opinion
w a s t h a t , if all t h e excess profits were t a k e n , n o t h i n g wotdd be left
t o t h e employers of this c o u n t r y for t h e purpose of developing a n d
e x t e n d i n g t h e i r business. T h e P r i m e Minister a d d e d t h a t he h a d
promised to see some of Mr. Terrell's people on t h e following day.
3
WG 310
Siv Albert Stanley s t a t e d t h a t , in his opinion, it was both j u s t
and necessary t h a t t h e employers should be consulted before any
declaration, such as was proposed, was m a d e by t h e Government.
Mr. George Terrelfs organisation did not represent a d t h e employers
of the. country, and he suggested t h a t a selected list of representative
employers should be d r a w n u p b y t h e Board of Trade, a n d t h a t t h e y
should be interviewed by t h e Cabinet, if possible, t h i s week.
Sir Auckland Geddes s t a t e d t h a t t h e sentiment r e g a r d i n g excess
profits now prevailing among the wage-earners of t h e c o u n t r y was
profound, and vitally affected t h e reception t h a t would be given to
t h e Government proposals regarding man-power a n d recruiting.
Mr. Churchill s t a t e d t h a t , in his opinion, i t was j u s t a n d r i g h t t h a t
t h e whole of t h e excess profits should be t a k e n , b u t he q u i t e agreed
t h a t t h e employers should he seen first, and t h a t t h e question should
not be settled w i t h o u t a clear u n d e r s t a n d i n g with the employers.
The policy of t h e W a r Cabinet L a b o u r C o m m i t t e e laid down t h a t
the Ministry of Munitions should have power to e x t e n d t h e 1-4 per
cent, bonus or its equivalent over t h e whole of the munitions industry
in cases where t h e Ministry of Munitions considered t h a t such an
extension should be made. A s r e g a r d s time-workers, t w o - t h i r d s of
the area concerned had already been covered, and an extension to the
remaining one-third would involve t h e S t a t e in a further expendi­
t u r e of about 8,000,0'JOZ. a year.
As regards piece-workers, he
understood t h a t t h e Trades Union leaders agreed t h a t no wide
extension of t h e 12A per cent, bonus or its equivalent was desirable
or necessary. The piece workers would have to be dealt with by
adjusted piece-rates in each t r a d e separately, where t h e rates were
so low as to be no longer an inducement.
The Trades Union
Advisory Committee were of opinion t h a t employers should settle the
terms with their piece-workers while the Ministry only dealt with
time-workers. There were forty strikes t h r e a t e n i n g , b u t in nearly
every one of these cases t h e classes affected would obtain t h e advance
under t h e proposed extension. H e felt t h a t t h e problem of the
p'ece-workers could be left to work automatically,
in many cases
t h e piece-work earnings were so high t h a t there \va* little or no risk
of a strike, as t h e piece-workers, by going out for t w o weeks, would
lose more money than t h e y could hope to gain by a n y advance for a
long period.
Sir Albert S t a n l e y pointed out t h a t there was considerable
d a n g e r t h a t t h e demand would spread fr. m t h e munition workers to
t h e mines and railways, particularly t h e l a t t e r . I t was impossible
t o prevent t h e railwaymen in t h e shops making a demand for the
1-1- per cent, increase, as t h e men engaged in munition work in
railway workshops could not be t r e a t e d differently from munition
workers, a n d once any man in t h e railway workshops was given the
1 2 - per cent, increase all the others would press for a similar
increase.
Mr. Barnes pointed out t h a t t h e only shops touched a t present
were t h e Great C e n t r a l Railway shops at Gorton.
Mr. Churchill urged t h a t a n y consideration of t h e wages of
railwaymen should be t r e a t e d as p a r t of a special railway agreement.
The only hope was t h e establishment of a ring of separate trade
agreements.
Sir Albert Stanley s t a t e d t h a t Mr. J . H . Thomas, M . P . , was
opposed to t h e extension of t h e 12^- per cent, to t h e railway
workshops.
I n this connection Sir D a v i d Shackleton pointed out t h a t t h e
railway shops were only partially controlled by Mr. J. H . Thomas's
union ; t h e craft unions had a considerable membership.
Sir Auckland Geddes s t a t e d t h a t the position as r e g a r d s railway­
men had already been t u r n e d on a n o t h e r flank, namely, by t h e
National Maritime B o a r d s , of which Sir Leo Chiozza Money is
Chairman, somewhat sudden g r a n t of an increase in t h e wages
1
ot seamen on railway boats. The difficulty appeared t o be t h a t ,
unless some s t a n d were t a k e n , t h e demands would extend by similar
methods from one industry to another, until every kind of extraneous
t r a d e was included.
T h e P r i m e Minister stated t h a t , as far as he could see, it waB
now impossible to stop. W e were not in a position to face a serious
strike, as t h e r e w a s no logical g r o u n d upon which to t a k e t h e strike.
Mr. Roberts agreed with t h i s view, a n d s t a t e d t h a t t h e question
had become psychological. The wage-earners of all kinds had got
this question into t h e i r heads, a n d there was no stopping it.
Sir E d w a r d Carson added t h a t it appeared like a flame in a
forest, which would e x t e n d until t h e whole forest was consumed, a n d
involve t h e S t a t e in an e x p e n d i t u r e of countless millions.
Sir David Shackleton pointed out t h a t , owing to t h e present
situation, a nest of trouble was being created in every industry. A
municipal employer h a d pointed out to him t h a t many different rates
of wages were being paid in t h e i r works at t h e present moment.
Some men had g o t 1 2 s . advance, o t h e r s l G s . , others 2 0 s . , some had
already g o t t h e 12-^ per cent, advance, while others had not. The
Belfast employers a n d employed were combining t o exploit the public
by agreeing, without any consultation with t h e Government, to large
increases in wages, b u t t h e Committee on P r o d u c t i o n had refused to
sanction t h e agreement.
Sir Alan Anderson stated t h a t t h e shipbuilding employers had
informed him t h a t , in t h e i r opinion, t h e 12\ per cent, increase would
have to go round all time-workers in the shipyards, and t h a t con­
cessions would t h e n have to be made to men paid by results. The
only way in which t h e Government could g e t a n y t h i n g back would
be to increase a n d e x t e n d t h e principle of p a y m e n t by results. H e
would like t o see an extension of t h e principle of p r e m i u m bonus.
I n t h i s connection Mr. R o b e r t s s t a t e d t h a t it would be
impossible to bribe t h e men to agree to an extension of t h e system
of premium bonus.
Sir David Shackleton added t h a t t h e 1 2 £ per cent, increase­
had done more to kill t h e premium bonus principle t h a n a n y t h i n g
else in t h e last t e n years. I t was quite impossible now to get t h e
men to w i t h d r a w their opposition to t h e s y s t e m of p a y m e n t by
result. They considered t h e refusal to e x t e n d t h e 121- per cent, to
piece-workers and premium-bonus workers a p e n a l t y on higher wages
due to increased effort.
The W^ar Cabinet decided—
(a.) T h a t , before t a k i n g any final decision, t h e views of repre­
s e n t a t i v e employers should be heard.
Sir Albert Stanley undertook t o assemble a suitable
d e p u t a t i o n to w a i t upon t h e P r i m e Minister on T h u r s d a y
or Friday afternoon next.
(o.) Meanwhile t h e Minister of Munitions to have a u t h o r i t y
t o negotiate within t h e general area of munitions trades,
with a view t o defining, both b y extension a n d inter­
pretation, She scope of t h e existing Orders, with power
to include a n y such trades, provided always t h a t t h e
extension was limited to time-workers.
2, Whitehall Gardens,
S.W.,
January 2, 1 9 1 8 .
APPENDIX.
Draft
Statement
by the Right
Hon.
G. N. Barnes,
M.P.
T H E Government find it necessaiy t o place certain facts before t h e nation.
The
collapse of Russia and t h e weakening of I t a l y has t h r o w n upon us a g r e a t strain and a
g r e a t duty. I t is therefore no t i m e for wage scrambling or profiteering. The Govern­
m e n t has come to t h e conclusion t h a t neither one nor t h e other can continue. T h e
idea t h a t a n y class has a r i g h t to m a k e money out of t h e nation's needs m u s t b e
combated wherever it appears. If it be found t h a t t h e G o v e r n m e n t have not sufficient
power to see to this w i t h o u t additional legislation, t h e n t h a t legislation will be sought.
The G o v e r n m e n t are doing all in their power to deal with t h e food situation. A
determined effort is being made to abolish t h e food queues. The Local Committees are
being armed with additional powers, a n d are being encouraged to use those powers to
t h e fullest e x t e n t so as to distribute food on t h e basis of share a n d share alike.
Advance of wages have recently been given by t h e G o v e r n m e n t to certain sections
of workmen in t h e engineering and shipbuilding trades. These advances arose out of
an honest intention to remedy an a d m i t t e d anomaly. I n practice it has been found
impossible to keep t h e m within the original limits, and t h i s has led to much agitation
a n d trouble. I t is imperative now, however, to come to a stop. Limits m u s t be set to
t h e area within which those wage advances can be paid. There are certain o u t s t a n d i n g
negotiations t a k i n g place as between t h e Minister of Munitions and t h e workpeople
concerned. The Minister has therefore been directed to convene trades' conferences in
certain cases in order to ascertain w h e t h e r a n d to w h a t e x t e n t any consequential change
is called for.
Beyond this, advances of wages can only be negotiated in t h e usual w a y on proof of
increased cost of living, or in the form of paj-ment by results, or for some v e r y
exceptional cause. The best w a y in which t h e mass of t h e British people can be helped
t h r o u g h the present grave period in our national fortunes is, not by raising wages all round,
b u t by keeping down t h e cost of living by every means in h u m a n power, a n d b y
p r e v e n t i n g any class or section making money out of the war. I t is to t h a t t h e efforts
of t h e Government in t h e new y e a r will be constantly directed.