DEMONSTRATION LESSON IN ENGLISH 4 MATATAG CURRICULUM
Public Sector Bargaining Legislationand Strikes A Case St.docx
1. Public Sector Bargaining Legislation
and Strikes: A Case Study
By CHARLES R. GREER
Assistant Professor of Management, College of Business
Admin-
istration, Oklahoma State University.
TH E RAPID GROWTH OF PUBLIC SECTOR UNIONS
hascreated problems for state and local governments. States
have
reacted to this trend for unionization in a variety of ways. Some
states
have passed relatively comprehensive labor legislation while
others
have no such legislation.^ A question which has been the
subject of
recent research efforts concerns the relationship between public
sec-
tor labor relations legislation and the incidence of strikes. The
purpose
of this article is to contribute to the body of knowledge by
analyzing
the relationship between Oklahoma's public employee labor
relations
legislation and a serious failure in employer and employee
relations.
This failure was the Oklahoma City police strike in 1975.
Before analyzing
Oklahoma's public sector labor legislation and the strike
experience,
2. a review of the literature regarding legislation and public sector
strikes
is in order.
Some students of industrial relations have maintained that states
may prevent some strikes and work interruptions by the
adoption of
collective bargaining and impasse resolution procedures. Bakke
has
argued for giving public sector employees the right to bargain
collec-
tively while requiring both unions and employers to bargain in
good
faith. This procedure prevents employees from pursuing strikes
and
other such tactics as their only alternative for obtaining desired
results.^
A similar conclusion is reached by Seidman. "While there are
differences of opinion over the most desirable type of
legislation, and
while no legislation will solve all problems, in the.absence of
legisla-
tion the parties must depend on ad hoc procedures, with their
rights and
duties in doubt, the scope of bargaining uncertain, and no
agency to
determine bargaining units or conduct elections . . . Union-
manage-
ment relationships are likely to be most satisfactory where the
law
establishes exclusive bargaining rights for the majority union
rather than a
system of proportional representation and where the employing
agency has
4. a state's first public sector legislation
was found positively correlated to strike
frequency and strike duration for teach-
ers. No similar relationship was found,
bowever, for local employees (other
than teachers, police and firefighters)
and state employees. The comprehen-
siveness of public sector collective bar-
gaining legislation was also found
positively correlated to strike frequency
and duration and an index of man-days
idle for teachers. Similar correlations
were found only between the compre-
hensiveness of such legislation and
strike duration for other local em-
ployees. No such correlations were
found for state employees.*
In a comprehensive empirical study
of strikes in local government, during
the years from 1968 to 1971, Burton
and Krider found that, ". . . the statu-
tory prohibition on strikes has little
apparent impact on the incidence of
strikes, nor does the enactment of a
law either prohibiting or encouraging
collective bargaining by public em-
ployees appear to affect materially the
number of local government strikes . . .
Those states that encourage collective
bargaining because they believe this
is a meritorious way to determine work-
ing conditions for public employees
do not incur a rasb of strikes as a
result."6
5. In another empirical study, Kocban
found states' environmental character-
istics (economic, social, political and
industrial relations subenvironment)
to be related to their public policies
(such as public employee labor rela-
tions legislation). Therefore, studies
of the effects of such policies (such
as public sector strikes) should con-
trol for environmental characteristics.'̂
Kochan's findings seem to imply the
following: It would make little sense
to compare the incidence of public
sector strikes in two states having
different public sector labor relations
legislation without controlling for the
fact that those states may vary widely
in environmental characteristics.
It can be concluded from this review
of the literature that the relationship
between legislation and public sector
strikes is complex. It cannot be as-
sumed, as have some politicians, that
passage of such legislation must result
in more public sector strikes. In order
to obtain additional information con-
cerning the legislation and strike re-
lationship, a case study approach is
employed in this analysis. The case
' Seidman, Joel. "State Legislation on
Collective Bargaining by Public Employees,"
Labor Laiv Journal. Vol. 22 (January 1971),
p. 21.
6. * Burton, John F., Jr. and Krider, Charles
E. "The Incidence of Strikes in Public Em-
ployment," in Hamermesh, Daniel S., ed.
Labor in the Public and Nonprofit Sectors,
Princeton, New Jersey: Princeton Univer-
sity Press, 1975, pp. 135-177.
242
^' Perry, James L. "Public Policy and Pub-
lic Employee Strikes," Industrial Relations,
Vol. 16 (October 1977), pp. 273-282.
° Burton and Krider, op. eit., p. 171.
' Kochan, Thomas A. "iCorrelates of State
Public Employee Bargaining Laws," In-
dustrial Relations, Vol. 12 (October 1973),
pp. 322-337.
April, 1978 o Labor Law Journal
study approach has the advantage of
allowing consideration of some of the
environmental characteristics which may
affect the relationship. Before examin-
ing the police strike experience in Ok-
lahoma City, it is necessary to review
Oklahoma's public employee labor re-
lations legislation.
The Legislative Environment
7. On March 11, 1971, the Oklahoma
Firefighters' and Policemen's Arbitra-
tion Act became effective.* In its ini-
tial version,® the law provided fire-
fighters and policemen the right to
bargain collectively. Municipal authori-
ties were required to meet and confer
in good faith. There was provision
for interest arbitration. If agreement
On a contract could not be reached
within 30 days after the commencement
of negotiations, unresolved issues were
to be submitted to arbitration if either
party requested. The arbitration pro-
vision specified that the arbitration
panel's ruling would be binding on the
union if the municipal authorities adopted
the decision but that the municipal
authorities would not be bound by the
ruling.
Unions were denied the right to strike.
Penalties were provided for municipal
authorities found in violation of the
good faith bargaining requirements.
In 1972, the law was amended^" to
include coverage of other municipal
employees. In addition, a Public Em-
ployees Relations Board was created to
administer the Act. The Board was
granted authority to "adopt, promul-
gate, amend or rescind such rules and
regulations as it deems necessary and
administratively feasible to carry out
8. the Provisions . . ."̂ ^ of the Act.
Unfair labor practices applicable to
the municipal authorities were: 8. a.
(1) interfering with, restraining, in-
timidating or coercing employees ex-
ercising their rights; (2) domination
of or interference with the union ; (3)
interference with the selection of em-
ployee bargaining agents; (4) dis-
criminatory treatment of employees
giving testimony under the Act or
electing to be represented by a bar-
gaining agent; (5) refusal to bargain
in good faith ; and (6) locking out em-
ployees.
Unfair labor practices applicable to
unions were: 8. b. (1) interfering with,
restraining, intimidating or coercing
employees exercising their rights; (2)
interfering with the selection of the
employer's collective bargaining rep-
resentatives ; and (3) refusal to bar-
gain in good faith.
Since passage and amendment of the
Act, it has been subjected to several
court decisions that have narrowed its
scope.i^ The bargaining agent for the
Midwest City police charged the city
with an unfair labor practice, failure
to bargain in good faith over salaries. ̂ ^
The Midwest City v. Cravens^* case,
which was eventually decided by the
Oklahoma Supreme Court, marked the
9. demise of the Act as a com.prehensive
law governing public sector labor re-
lations. The court ruled that the Ok-
lahoma Public Employees Relations
Board had no authority to adjudicate
the unfair labor practice charge be-
cause of an unconstitutional delegation
of legislative authority to the board.
Eurthermore, the court ruled that since
' SR 115. A summary of the act appears
in the Oklahoma Law R-eview, Vol. 27 (Sum-
mer 1974), pp. 528-533.
"11 O. S. 1971.
"• 11 O. S. Supp. 1972.
" O . S. Supp. 1972, §548.4-1 subpara-
graph ( D ) .
Case Study
^' Barnett, James iR., Assistant Attorney
General, State of Oklahoma, letter dated
June 27, 1977.
^' Ibid.
'^^ Midwest City v. Cravens, Okl., 532 P.
2d 829 (1975).
243
the 1972 amendment had not met re-
10. quirements of re-enactment and pub-
lication at length, the 1972 amendment
did not confer collective bargaining
rights to municipal employees other
than police and firefighters.
The aftermath of the Midwest City
V. Cravens decision is that "the au-
thority and duties of the Oklahoma
Public Employees Relations Board
have been reduced to overseeing the
selection and election of bargaining
agents for firemen and policemen."^-''
The date of the Midwest City decision
was February 14, 1975. Within nine
months, Oklahoma City experienced
a police strike.
The Oklahoma City Police Strike
Although public sector unionization
is not as prevalent in Oklahoma^" as
in some other states, the state has
not been immune from public sector
strikes. The Oklahoma City police-
men were involved in a strike which
began on October 23, 1975.'^ A re-
view of events leading up to the
strike and its eventual resolution
provides insight into the relationship
of these events to Oklahoma's legisla-
tion governing public sector labor
relations.
The strike represented the culmina-
tion of events related to arbitration
11. of police wage demands. The police-
men's bargaining' agent (the Frater-
nal Order of Police (FOP), Lodge
123) had bargained for a 10 percent
wage increase retroactive to August
1, 1975.1* Earlier in the year, the
police had engaged in a trafific ticket
slowdown in order to persuade the
city to request arbitration of the mat-
ter.^" The city eventually requested
arbitration, although it was not ob-
ligated to accept the arbitration panel's
ruling.^" The tripartite arbitration
panel recommended that the police
be given a 10 percent wage increase
retroactive to August 1, 1975; how-
ever, the city refused to accept the
panel's ruling. Accounts of the city
council's response to the panel's rul-
ing indicated a feeling that police
raises could not be instituted without
giving comparable raises to other mu-
nicipal employees and because of the
city's inability to pay.-^
Prior to the work stoppage, the
city had made an offer of a wage in-
crease of 7 to 7.3 percent.2^ The
policemen charged that the city was
morally obligated to accept the panel's
recommendation since the city had
requested arbitration.^^ A day before
the work stoppage the police had
initiated a work slowdown.^* The
work slowdown involved failures to
12. investigate traffic accidents or answer
non-emergency calls.̂ •''
" Barnett, cited at note 12, p. 8.
" Oklahoma is somewhat unique wiith re-
spect to unionization in fhe private sector
in that it is one of the few states in the
region that does not have a right-to-vi'ork
law.
" Dryden, Dave and Tevington, Andrew.
"City Police Go on Strike," The Daily Okla-
homan. October 24, 1975, pp. 1-2.
" Dryiden, Dave. "Raises Could Mean Cut
in City Jobs, Officials Say," The Daily Okla-
homan. October 11, 1975, pp. 1-2.
" Ibid.
^̂ Tevington, Andrew. "City Officers Air
Threats in Pay Rift," The Daily Oklahoman.
October 12, 1975, pp. 1-2.
"̂ Dryden, Dave, cited at note 18.
244"
"° McCarthy, Tom. "Police Pay Bid Faces
Rejection," The Daily Oklahoman. October
20. 1975, pp. 1-2 and Dryden, Dave "Dock-
ing Strikers' Pay Probably Won't Show."
The Daily Oklahoman. October 28, 1975, p.
12.
13. -' Dryden, Dave. "Council Pair Urge Fir-
ings in Walkout," The Daily Oklahoman. Oc-
tober 14, 1975, pp. 1-2.
-' Tevington, Andrew. "Police Start Slow-
down to Protest Wage Vote," The Daily
Oklahoman. October 22, 1975, pp. 1-2.
-° Donovan. Kevin and McCarthy, Tom.
"Police Chiefs Deny Men Ignore Nonemer-
gency Calls." The Daily Oklahoman. Octo-
ber 22, 1975, pp. 1-2.
April, 1978 • Labor Law Journal
When the work slowdown failed
to cause the city to accede to the
FOP's demands, the police began a
work stoppage. In a show of force,
the policemen filed in to turn in their
badges in the city manager's office.
The FOP lodge president said the
policemen were "suspending them-
selves" rather than striking, while
the FOP's attorney termed the action
"mass resignations.''^" In a dramatic
event, an officer recovering from a
gunshot wound was carried in on a
stretcher to turn in his badge.^' Ac-
cording to accounts of the work stop-
page, 582 of the police department's
598 officers participated in the walk-
Out.28
14. Police duties during the strike were
performed by Oklahoma state high-
way patrolmen and sheriff's depart-
ment deputies. The troopers and
sheriff's deputies had been on stand-
fjy status and assumed the duties of
the police immediately following the
walk out.̂ ® Oklahoma City faced no
apparent onslaught of criminal ac-
tivity as a result of the police strike.
During the first night of the strike a
lower than normal number of calls
for police assistance were received.^"
Nevertheless, the transition of po-
lice replacements into the regular
officers' duties was not without prob-
lems. According to one source, the
main problem of the emergency re-
placements was their lack of fa-
miliarity with Oklahoma City streets.*^
Although a serious situation, accounts
of some of the problems faced by
replacements provide insight as well
as some humor. One reporter's ac-
count of some incidents follows:
" 'Now, on what authority do I
make this arrest ?' a trooper asked.
"The sergeant gave his name and
the trooper wrote it on the palm of
his hand for quick reference . . .32
"While troopers were receiving in-
15. structions in the field from Oklahoma
City police supervisors, they were
also being guided by drunks at the
city jail.
" 'Now be sure and put me on five
(cell floor),' an inebriate cautioned an
arresting trooper.
" 'I usually get beat up if they put
me on three,' he explained."*•''
These quotations, although humor-
ous, indicate that the replacements
constituted a police force which was
probably not prepared to deal with
any real crisis. Oklahoma City was
spared the misfortunes of other cities
where police strikes have occurred,
such as Boston in 1919 and Montreal
in 1969. As Burton and Krider con-
clude from the experiences of such
strikes, "In the case of strikes by
essential employees, such as police-
men, the deterioration of public order
occurs almost immediately."^''
Three days after the strike began.
it ended when the FOP accepted the
city's offer of a 9 percent across the
board wage increase. The increase
aoplied to all positions except entry
"'Dryden, Dave and Tevington, Andrew;
cited at note 17, and Dryden, Dave. "Talks
Bring No Changes in Situation" The Daily
16. Oklahoman. October 2S, 1975, pp. 1-2.
•'Dryden, Dave and Tevington, Andrew;
cited at note 17.
"' McCarthy, Tom and Donovan, Kevin.
"Emergency 'Forces Find Task Routine,"
The Dailv Oklahoman. October 24, 1975, pp
1-2.
"" Dryden, Dave and Tevington, Andrew;
cited at note 17.
Case Study
""McCarthy. Tom and Donovan, Kevin;
cited at note 28.
" Ibid.
"' Donovan, Kevin. "Duties Trying for
Busy Troopers," The Daily Oklahoman. Oc-
tober 26, 1975. p. 1.
"^ Ibid., p. 2.
"* Burton, John F., Jr. and Krider. Charles
E. "The Role and Consequences of Strikes by
Public Employees," The Yale Laze Journal,
Vol. 79 '(January 1970), p. 434.
245
levels, and was retroactive to August
17. 1, 1975. Educational incentive pay
was reduced; the officers involved in
the strike would not be paid for the
three days during the walk-out, and
would be penalized another two days'
pay for "improper action."^"
Upon conclusion of the strike, sev-
eral statements were made regarding
the experience. The city manager con-
cluded that the city should not have
gone to arbitration.*" The Daily Okla-
homan concluded that, "Arbitration
has no valid place in public employee
bargaining . . ."̂ ^ One councilman pre-
dicted tyranny through the following
causal chain: "To succumb to these
illegal acts (the strike) is to con-
tribute to the eventual destruction of
our society. Disrespect for the law
leads to anarchy, and anarchy always
leads to tyranny. . ."̂ ^ Another coun-
cilman predicted the death of his
conscience before he would vote for
giving the union benefits gained by
a work stoppage.^" It almost goes
without saying that these are extreme
statements, but ones that may convey
a notion of the emotion of those deal-
ing with the union and a major news-
paper in the state.
Emotion and inexperience on the
part of negotiators probably con-
tributed to occurrence of the strike,
but the failure of the law is apparent.
18. The power of the Public Employee
Relations Board to administer the
law had been eliminated. The law had
no provision for final resolution of
impasses. The arbitration provision
served only to intensify the dispute
by allowing the city to refuse to
abide by the panel's ruling. Unfavor-
able views of the present arbitration
procedure seem warranted, but not
for arbitration in which the award is
binding on both parties. In this case,
legislation contributed to a strike but
more comprehensive legislation with
a compulsory arbitration provision could
have eliminated the cause for the
strike.
Conclusion
Arbitration is not the cure for all
labor problems. The Oklahoma City
experience is perhaps better explained
by an alternative view of the value
of arbitration. This view would be
that arbitration serves a valuable pur-
pose in public sector bargaining, par-
ticularly compulsory arbitration as an
alternative to public sector strikes
in essential services. According to
this explanation, the Oklahoma City
police work slowdown could have
been prevented if arbitration of the
dispute had been eflfectively man-
dated. Furthermore, the strike could
19. probably have been prevented if the
arbitration panel's ruling had been
binding on all parties. Instead, the
city's refusal to accept the panel's
ruling caused the police to feel they
had been treated unfairly.
Whether collective bargaining leg-
islation leads to more strikes is a yet
unresolved question. One study in-
dicates some tendency among certain
employee groups to strike more fre-
quently after passage of such legisla-
tion. A comprehensive study indicates
that such legislation is not associated
with a higher incidence of strikes.
A third study indicates that environ-
mental characteristics are important
determinates of how such legislation
is related to strike incidence.
"McCarthy, Tom. "Strike Ends; Police
on Job," The Daily Oklahoman. October 27,
1975, pp. 1-2.
"• Ibid,
"' Editorial. The Daily Oklahoman October
30, 1975, p. 8.
246
""Dryden, Dave. 'ICily Officials Hint at
Vote on Sales Tax," The Daily Oklahoman
October 29, 1975, p. 15.
20. "° Ibid.
April, 1978 • Labor Law Journal
The present analysis provides evi- eliminated the cause of the
strike,
dence that inadequate legislation and Without such legislation,
given the
administration of such legislation may somewhat mild penalties
assessed of
have contributed to a serious strike police officers participating
in the
in an essential service. Conversely, strike, a recurrence of a
similar work
legislation providing for final resolu- stoppage may be more
than a remote
tion of impasses would probably have possibility. [The End]
SUPREME COURT DETERMINES DEGREE
REQUIREMENT LAWFUL
Employers who require that job applicants have college degrees
to be hired for certain, positions are not in violation of fair
employment
rules. The U. S. Supreme Court has left standing a
determination that
the use of a college degree job requirement is lawful although
such
standards could exclude 94 per cent of the black adult
population
{Townsend v. Nassau County Medical School, CA-2, 14 EPD jj
7673).
AGE BIAS IN FEDERAL PROGRAMS
21. Eederally assisted programs, including vocational rehabilitation,
often discriminate against older citizens, a study by the U. S.
Civil
Rights Commission concluded. The Commission reported to
Congress
that federal and state agencies apparently give preference to
younger
people in training programs, believing that will result in a better
return on the government's investment.
Among other recommendations, the Commission supports enact-
ment of H. ,R. 5383. That bill, which has already been passed
by the
House, would end compulsory retirement and extend protection
under
the Age Discrimination Act to workers up to 70 years old. The
current
law only protects workers aged 40 to 65.
Case Study 247
Problem 1 (10 marks)
You have been provided with the following information zero
coupon bonds with $1000 face value.
Maturity - semi -annual periods
semi-annual spot rates
1
4.25
2
22. 4.15
3
3.95
4
3.70
5
3.50
6
3.25
7
3.05
8
2.90
1. Compute the forward interest rates.
2. Graph the yield curve.
3. Explain the factors that account for the shape of the curve.
Problem 2 (10 marks)
Company HTA had a free cash flow for the firm (FCFF) of
$1,500,000 last year. It is expected the FCFF will keep a
sustainable growth rate of 5%. The company has 2 million
common shares outstanding. In addition, the following
information has been gathered:
Capital structure: D/E=0.2:0.8；
Market value of Debt: VD =$5,000,000;
Required return on equity: kE =15%
Cost of debt before tax =6%
23. Tax rate: tc =25%;
Determine the fair value of HTA stock.
Problem 3 (10 marks)
Company JUK has a ROE of 25% and the company will not pay
any dividend for the next 3 years. It is estimated that the
company will pay $2 dividend per share after three years and
then to level off to 5% per year forever.
The company has a beta of 2. Assume the risk-free interest rate
is 4%, and the market risk premium is 8%.
1. What is your estimate of the fair price of a share of the
stock?
2. If the market price of a share is equal to this intrinsic value,
what is the P/E ratio?
3. What do you expect its price to be 1 year from now? Is the
implied capital gain consistent with your estimate of the
dividend yield and the market capitalization rate?
Problem 4 (10 marks)
MicroSense, Inc., paid $2 dividends per share last year. It is
estimated that the company’s ROEs will be 12% and 10%,
respectively, next two years. The plowback rate in next two
years will be 0.6. It is expected that the dividends will grow at a
sustainable rate of 3% per year after two years. Assume that the
expected return on the market is 8%, the risk-free rate is 4%,
and the beta of the stock is 1.4. What is the fair price of the
stock?
Problem 5 (10marks):
An analyst uses the constant growth model to evaluate a
company with the following data for a company:
24. Leverage ratio (asset/equity): 1.8
Total asset turnover: 1.5
Current ratio: 1.8
Net profit margin: 8%
Dividend payout ratio: 40%
Earnings per share in the past year: $0.85
The required rate on equity: 15%
Based on an analysis, the growth rate of the company will drop
by 25 percent per year in the next two years and then keep it
afterward. Assume that the company will keep its dividend
policy unchanged.
1. Determine the growth rate of the company for each of next
three years.
2. Use the multi-period DDM to estimate the intrinsic value of
the company’s stock.
3. Suppose after one year, everything else will be unchanged
but the required rate on equity will decrease to 14%. What
would be your holding period return for the year?
Problem 6 (50 marks)
Using the Yahoo! Finance website, search the Bank of Nova
Scotia (BNS.TO) by finding its stock symbol. If you are unable
to locate the prices for BNS.TO, use prices for BNS (the Bank
of Nova Scotia observed in US dollars at the New York Stock
Exchange). For the purpose of this question, assume that the
Canadian dollar and the US dollar had been exchanged one for
one. Find historical prices for the stock (on the left-hand menu)
and complete the following:
1. Download historical data for the stock prices (adj. close)
from January 1, 2004 through January 1, 2012, on a monthly
basis. You will also need to download corresponding monthly
prices for the S&P/TSX Comp index (also available on the
Yahoo! Finance site) as well as 3-month T-Bill rates (download
this attachment: T-Bill Rates.xlsx).
25. 2. Calculate returns for both series of prices downloaded from
Yahoo site (BNS and S&P /TSX Comp Index). Prior to that,
make sure the data is sorted in ascending order (i.e., first row
has the oldest data). The final spreadsheet should have the two
series of returns you downloaded and calculated from Yahoo!
Finance. Make sure all data is expressed in same units.
3. Using the Tools menu in EXCEL, (Tool Pack has to be
installed if EXCEL does not show it) perform regression
analyses using the Market Model for BNS.
4. Clearly provide the regression results in a table with an
explanation for the coefficients obtained, and clear
interpretation. Specifically, for each regression provide:
· Dependent Variable
· Independent Variable
· Intercept
· Beta Value
· Firm Specific Risk
i. How well does the S&P/TSX Comp Index movement explain
the variability of the return on BNS stock?
ii. What is the alpha of the BNS stock?
iii. Calculate the standard deviation of the stock return (using
the equation for R2 =β2σM2/σ2, and the individual regression
results).
iv. Calculate systematic risk and firm specific risk for the stock.
26. Page 1 of 4
PHILADELPHIA CORDWAINERS' CASE
[COMMONWEALTH v. PULLIS]
Philadelphia Mayor's Court (1806)
3 Doc. Hist. of Am. Ind. Soc. 59 (2d ed. Commons 1910)
Indictment for common law conspiracy, tried before a jury
consisting of two inn-keepers,
a tavern-keeper, three grocers, a merchant, a hatter, a
tobacconist, a watchmaker, a tailor,
a bottler .
The indictment charged in substance:
( 1) That defendants conspired and agreed that none of them
would work at the
shoemaking craft except at certain specified prices higher than
prices which had
theretofore customarily been paid;
(2) that defendants conspired and agreed that they would
endeavor to prevent "by
threats, menaces, and other unlawful means" other craftsmen
from working except
at said specified rates; and (3) that defendants, having formed
themselves into an
association, conspired and agreed that none of them would work
for any master
27. who should employ a cordwainera who had broken any rule or
bylaw of the
association, and that defendants, in accordance with such
agreement refused to
work at the usual rates and prices.
Counsel for the prosecution were Jared Ingersol and Joseph
Hopkinson. Counsel for the
defendants were Caesar A. Rodney and Walter Franklin. During
his address to the jury,
Joseph Hopkinson, for the prosecution, stated, among other
things, the following:
[Summary of the Prosecution’s Case]
If the court and jury shall decide, that journeymen may
associate together, and determine
that none shall work under certain prices; then, when orders
arrive for considerable
quantities of any article, the association may determine to raise
the wages, and reduce the
contracts to diminish their profit; to sustain a loss, or to
abandon the execution of the
orders, as was done in Bedford's case, who told you he could
have afforded to execute the
orders he obtained at the southward, had wages remained the
same as when he left
Philadelphia. When they found he had a contract, they took
advantage of his necessity.
What was done by the journeymen shoemakers, may be done by
those of every other
a A cordwainer is a shoemaker.
28. Page 2 of 4
trade, or manufacturer in the city A few more things of this sort,
and you will break up
the manufactories; the masters will be afraid to make a contract,
therefore he must
relinquish the export trade, and depend altogether upon the
profits of the work of
Philadelphia, and confine his supplies altogether to the city.
The last turn-out had liked to
have produced that effect: Mr .Ryan told you he had intended to
confine himself to
bespokeb work.
It must be plain to you, that the master employers have no
particular interest in the thing
...if they pay higher wages, you must pay higher for the articles.
They, in truth, ate
protecting the community. Nor is it merely the advance of
wages that increases the price
to the consumer, the master must have some compensation for
the advance of his cash,
and the credit he frequently gives. They have no interest to
serve in the prosecution; they
have no vindictive passions to gratify ...they merely stand as the
guardians of the
community from imposition and rapacity.
If this conspiracy was to be confined to the person themselves,
it would not be an offense
against the law, but they go further. There are two counts in the
indictment; you are to
29. consider each, and give your verdict on each. The first is for
contriving, and intending,
unjustly and oppressively, to encrease and augment the wages
usually allowed them. The
other for endeavouring to prevent, by threats, menaces, and
other unlawful means, other
journeymen from working at the usual prices, and that they
compelled others to join
them.
If these persons claim the right to put the price on their own
work, if they say their labour
is their own, and they are the judges of its value, why not admit
the same right to others?
If it is the right of Dubois, and the other defendants, is it not
equally the right of Hattison
and Cummings? We stand up for the right of the journeymen, as
well as of the masters.
The last turn-out was called by a small majority ...60 against
50, or thereabout: shall 60
unreasonable men, perhaps single men, having no one to
provide for but themselves,
distress and bring to destruction 50 married men with their
families?
Let the 60 put what price they please on their own work; but the
others are free agents
also: leave them free, or talk no more of equal rights, of
independence, or of liberty.
It may be answered, that when men enter into a society they are
bound to conform to its
rules; they may say, the majority ought to govern the minority
...granted ...but they ought
to leave a man free to join, or not to join the society. If I go
into a country I am bound to
30. submit to its laws, but surely I may judge, "whether or not I will
go there. The society has
b “Bespoken work” is custom work.
Page 3 of 4
no right to force you into its body, and then say you shall obey
its rules under severe
penalties. By their constitution you find, and from their own
lips I must take the words,
that though a man wants no more wages than he gets, he must
join in a turn-out. The man
who seeks an asylum in this country, from the arbitrary
laws of other nations, is coerced into this society, though he
does not work In the article
intended to be raised; he must leave his seat and join the
turnoutc.
Recorder Levy, in his charge to the jury, made the following
statements, among
others:
It is proper to consider, is such a combination consistent with
the principles of our law,
and injurious to the public welfare? The usual means by which
the prices of work are
regulated, are the demand for the article and the excellence of
its fabric. Where the work
is well done, and the demand is considerable, the prices will
necessarily be high. Where
31. the work is ill done, and the demand is inconsiderable, they will
unquestionably be low.
If there are many to consume, and few to work, the price of the
article will be high; but if
there are few to consume, and many to work, the article must be
low.
Much will depend, too, upon these circumstances, whether the
materials are plenty or
scarce; the price of the commodity, will in consequence be
higher or lower. These are the
means by which prices are regulated in the natural course of
things. To make an artificial
regulation, is not to regard the excellence of the work or quality
of the material, but to fix
a positive and arbitrary price, governed by no standard,
controlled by no impartial person,
but dependent on the will of the few who are interested; this is
the unnatural way of
raising the price of goods or work. This is independent of the
number who are to do the
work. It is an unnatural, artificial means of raising the price of
work beyond its standard,
and taking an undue advantage of the public. Is the rule of law
bottomed upon such
principles, as to permit or protect such conduct?
Consider it on the footing of the general commerce of the city.
Is there any man who can
calculate (if this is tolerated) at what price he may safely
contract to deliver articles, for
which he may receive orders, if he is to be regulated by the
journeymen in an arbitrary
jump from one price to another? It renders it impossible for a
man, making a contract for
a large quantity of such goods, to know whether he shall lose or
32. gain by it. If he makes a
large contract for goods today, for delivery at three, six or nine
months hence, can he
calculate what the prices will be then, if the journeymen in the
intermediate time, are
permitted to meet and raise their prices, according to their
caprice or pleasure? Can he fix
the price of his commodity for a future day? It is impossible
that any man can carry on
c A ‘turnout’ is a strike.
Page 4 of 4
commerce in this way. There cannot be a large contract entered
into, but what the
contractor will make at his peril. He may be ruined by the
difference of prices made by
the journeymen in the intermediate time. What then is the
operation of this kind of
conduct upon the commerce of the city? It exposes it to
inconveniences, if not to ruin;
therefore, it is against the public welfare.
What is the case now before us? ...A combination of workmen
to raise their wages may
be considered in a two fold point of view; one is to benefit
themselves ...the other is to
injure those who do not join their society. The rule of law
condemns both. If the rule be
clear, we are bound to conform to it even though we do not
33. comprehend the principle
upon which it is founded. We are not to reject it because we do
not see the reason of it. It
is enough, that is the will of the majority. It is law because it is
their will-if it is law, there
may be good reasons for it though we cannot find them out. But
the rule in this case is
pregnant with sound sense and all the authorities are clear upon
the subject. Hawkins, the
greatest authority on the criminal law, has laid it down, that a
combination to maintaining
one another, carrying a particular object, whether true or false,
is criminal... the authority
cited does not rest merely upon the reputation of that book. He
gives you other authorities
to which he refers.
It is adopted by Blackstoned, and laid down as the law by Lord
Mansfield 1793, that an
act innocent in an individual, is rendered criminal by a
confederacy to effect it. One man
determines not to work under a certain price and it may be
individually the opinion of all;
in such a case it would" be lawful in each to refuse to do so, for
if each stands, alone,
either may extract from his determination when he pleases. In
the turn-out of last fall, if
each member of the body had stood alone, fettered by no
promises to the rest, many of
them might have changed their opinion as to the price of wages
and gone to work; but it
has been give n to you in evidence, that they were bound down
by their agreement, and
pledged by mutual engagements, to persist in it, however
contrary to their own judgment.
The continuance in improper conduct may therefore well be
34. attributed to the
combination. The good sense of those individuals was prevented
by this agreement, from
having its free exercise.
The defendants were found guilty and were fined eight dollars
each plus costs.
d Lord Blackstone was British and the preeminent Anglo-
American legal scholar of this era.
