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Industrial Conciliation is the discussion and adjustment of mutual differences by employers and employees or their representatives. Arbitration implies the submission of such differences to a body in which the authoritative decision is rendered by a disinterested person. In mediation a disinterested person strives either to bring the parties together for conciliation or to induce them to make such mutual concessions as will lead to an agreement. The term, "boards of conciliation", describes not merely committees of employers and employees, but also those appointed by the civil authority, and by private associations. The two latter are primarily concerned with the work of mediation.
In France conciliation has been practised since 1806 by the conseils de prudhommes , or committees of experts. These are composed of equal numbers of employers and employees, and are legally authorized to interpret existing labour contracts and adjust minor grievances. Within this limited field they have been quite successful. Five-sixths of the strikes that were settled by the French Conciliation and Arbitration Act of 1892, during the first ten years of its existence, were disposed of by the method of conciliation. For the last thirty-five years conciliation has practically eliminated strikes from the manufactured iron and steel trade in the north of England. Recourse was had to conciliation in 506 of the 788 disputes that were adjusted by boards of conciliation and arbitration throughout England in the year 1903. In the United States about half the States have boards of conciliation and arbitration, while the chairman of the Interstate Commerce Commission and the Commissioner of Labour are directed by the federal law of 1898 to endeavour to bring about conciliation or arbitration whenever they are appealed to by one of the parties to any dispute which threatens seriously to interfere with interstate commerce. Only five of the State boards have accomplished anything worthy of notice, and these five have settled relatively few disputes — mostly by conciliation. The national board has recently given promise of a considerable measure of usefulness. Boards of conciliation composed jointly of employers and employees have adjusted a large number of important differences in many industries — for example, in the shoe industry, the building trades, and the coal mines of the East and the Middle West. Conciliation has also had considerable success through the mediation of prominent citizens, and of bodies like the Civic Federation.
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The importance of conciliation finds recognition in the recommendation of Pope Leo XIII (Encyclical on the Condition of Labour, "Rerum Novarum", 15 May, 1891) that masters and workmen should unite in joint associations, and select capable committees for the decision of disputes. This method is highly consonant with Christian peace and Christian charity. Its chief advantages over arbitration are that it brings the two parties together in friendly and informal discussion, teaches each to appreciate the position and rights of the other, and results in a decision that is more willingly accepted and more faithfully observed. There are, however, two important situations in which conciliation can have but slight success: first, where compulsory arbitration is in vogue; second, where the employees have not sufficient economic strength to inflict considerable damage upon their employer through the alternative of a strike. The experience of Western Australia and New Zealand seems to prove the first contention (cf. Clark, The Labour Movement in Australasia, p. 161), while the second seems established by the fact that conciliation was practically unknown before the era of labour unions , and that it has still very little application in unorganized trades. On the other hand, the first step towards conciliation, namely, discussion of differences on an equal plane, becomes quite feasible as soon as each side realizes the strength of the other. When they treat each other as equals and as reasonable men, they easily reach an agreement. Conciliation then becomes much more frequent than voluntary arbitration indeed, it renders the latter method almost superfluous. The labour unions are committed to it, and seem to prefer it to arbitration. John Mitchell sees in the trade agreement, which is essentially the method of conciliation, the greatest hope for industrial peace in America (Organized Labour, p. 354), and Professor T. S. Adams thinks that America will follow the same line of development as England, where conciliation has already produced conditions of industrial peace which are almost entirely satisfactory (Labour Problems, pp. 312, 314, 319). Not the least of the influences making for the extension of conciliation in the United States is public sentiment, which threatens to establish the alternative of compulsory arbitration.