291] COLLECTIVE BARGAINING 159 



that one great defect in sliding scales has been in the pro- 

 vision for fixing future wages by past prices. His argu- 

 ment is that future prices are not reasonably certain. Pro- 

 fessor Pigou's argument seems more valid. He shows that, 

 since the oscillations of the labor demand lag behind those 

 of the public demand for the commodity in time, wage 

 changes ought to take place after, and not contempora- 

 neously with, the price changes in which they correspond. 

 Only after prices have remained up for some time do em- 

 ployers generally expand their business, and, on the other 

 hand, they hesitate about reducing production when a de- 

 pression sets in. 



These general considerations may be illustrated by the 

 history of sliding scales as employed by the Iron and Steel 

 Workers. It is the only trade in which the system has con- 

 tinuously existed. Here it has worked fairly well, althougli 

 it has not been successfully applied to all kinds of work. 

 The success or failure of the system must be considered in 

 the light of such supplementary influences as the character 

 of the union and its leadership, the nature of the industry, 

 and the policies of leading employers in the industr>'. 



The first question is whether the failure of the union to 

 increase in influence proportionately with the growth of the 

 industry is in any degree attributable to the system of slid- 

 ing scales. The Association grew steadily during the first 

 fifteen years of its existence, and the success of the union 

 in the iron industry was continuous and progressive. Mr. 

 Week? pointed out in 1881 that not since the origin of the 

 scale in 1865 had there been a single instance of disloyalty 

 to it. In 1890 nearly all mills signed the scale. 



In thq steel industry the union never gained the foothold 

 it enjoyed in the iron industry. In its strongest years it 

 probably did not control more than half of the steel work- 

 ers, and hence a majority of the steel mills were never 

 unionized. The production of steel was growing rapidly. 

 Frequent changes were made in the technique of the indus- 

 try and with each improvement the union demanded the 



