e
the state perceives and follows no clear principle in this connection.
It has neither defined the nature and extent of laborers' rights nor
provided for any orderly process for securing them.

9. The only escape from this situation is by arbitration. It is
necessary to adjudicate the laborer's demand for wages and to legalize
his tenure of place on condition that he shall accept a just rate of
pay. The state is bound to ascertain and declare what rate is just, to
confirm the workers in their positions when they accept it, and to
cause them to forfeit their right of tenure if they refuse it. If the
workers thus forfeit their claim, their positions are clearly open to
whoever will take them, and the state is bound to protect the men who
do this. Such appears to be the present situation, and an essential
feature of it is the need of ascertaining on what principle a court of
arbitration should proceed in determining what rate of pay is just.

CHAPTER XXVI

THE BASIS OF WAGES AS FIXED BY ARBITRATION

The state needs an authoritative mode of determining what rate of pay
is "reasonable." This duty is often imposed on boards of arbitration,
for whose guidance no definite principle of justice has as yet been
prescribed. Such a board has to depend on its own intuitions. It
approaches its difficult work, having no legal rule for reaching a
decision, and yet compelled, if possible, to reach one which will
actually settle the dispute referred to it and enable production to go
on. It must try, in the verdict it pronounces, to satisfy its own
sense of equity. What such a tribunal has, in most cases, actually
done has been to make compromises, and this has measurably
accomplished both of these ends. A verdict that "splits the
difference" between the men's demand and their employers' is most
likely to cause work to be resumed; and on the ground that each party
is probably claiming too much, and that justice lies between the
claims, it insures a rude approach to fairness. This action has caused
unfavorable criticism of the whole system of arbitration, on the
ground that it abandons the effort to reach absolute justice and tries
chiefly to end the quarrel on any terms, and also that by giving
strikers a part of what they demand, it encourages them to strike
again and secure more. We have to see whether a court can do better
than this and whether such a crude procedure has tended at all toward
putting wages on a normal basis