Such "social work" creates a strained relation--the recipient of bounty feels that he has been belittled in the taking, and it is a question whether the giver should not also feel that he has been belittled in the giving. Charity never led to a settled state of affairs. The charitable system that does not aim to make itself unnecessary is not performing service. It is simply making a job for itself and is an added item to the record of non-production.
Charity becomes unnecessary as those who seem to be unable to earn livings are taken out of the non-productive class and put into the productive. In a previous chapter I have set out how experiments in our shops have demonstrated that in sufficiently subdivided industry there are places which can be filled by the maimed, the halt, and the blind.
Scientific industry need not be a monster devouring all who come near it. When it is, then it is not fulfilling its place in life. In and out of industry there must be jobs that take the full strength of a powerful man; there are other jobs, and plenty of them, that require more skill than the artisans of the Middle Ages ever had. The minute subdivision of industry permits a strong man or a skilled man always to use his strength or skill. In the old hand industry, a skilled man spent a good part of his time at unskilled work. That was a waste. But since in those days every task required both skilled and unskilled labour to be performed by the one man, there was little room for either the man who was too stupid ever to be skilled or the man who did not have the opportunity to learn a trade.
No mechanic working with only his hands can earn more than a bare sustenance. He cannot have a surplus. It has been taken for granted that, coming into old age, a mechanic must be supported by his children or, if he has no children, that he will be a public charge. All of that is quite unnecessary. The subdivision of industry opens places that can be filled by practically any one. There are more places in subdivision industry that can be filled by blind men than there are blind men. There are more places that can be filled by cripples than there are cripples.
And in each of these places the man who short-sightedly might be considered as an object of charity can earn just as adequate a living as the keenest and most able-bodied. It is waste to put an able-bodied man in a job that might be just as well cared for by a cripple. It is a frightful waste to put the blind at weaving baskets. It is waste to have convicts breaking stone or picking hemp or doing any sort of petty, useless task.
A well-conducted jail should not only be self-supporting, but a man in jail ought to be able to support his family or, if he has no family, he should be able to accumulate a sum of money sufficient to put him on his feet when he gets out of jail. I am not advocating convict labour or the farming out of men practically as slaves. Such a plan is too detestable for words. We have greatly overdone the prison business, anyway; we begin at the wrong end. But as long as we have prisons they can be fitted into, the general scheme of production so neatly that a prison may become a productive unit working for the relief of the public and the benefit of the prisoners. I know that there are laws--foolish laws passed by unthinking men--that restrict the industrial activities of prisons. Those laws were passed mostly at the behest of what is called Labour. They are not for the benefit of the workingman. Increasing the charges upon a community does not benefit any one in the community. If the idea of service be kept in mind, then there is always in every community more work to do than there are men who can do it.
Industry organized for service removes the need for philanthropy.
Philanthropy, no matter how noble its motive, does not make for self-reliance. We must have self-reliance. A community is the better for being discontented, for being dissatisfied with what it has. I do not mean the petty, daily, nagging, gnawing sort of discontent, but a broad, courageous sort of discontent which believes that everything which is done can and ought to be eventually done better. Industry organized for service--and the workingman as well as the leader must serve--can pay wages sufficiently large to permit every family to be both self-reliant and self-supporting. A philanthropy that spends its time and money in helping the world to do more for itself is far better than the sort which merely gives and thus encourages idleness. Philanthropy, like everything else, ought to be productive, and I believe that it can be. I have personally been experimenting with a trade school and a hospital to discover if such institutions, which are commonly regarded as benevolent, cannot be made to stand on their own feet. I have found that they can be.
I am not in sympathy with the trade school as it is commonly organized--the boys get only a smattering of knowledge and they do not learn how to use that knowledge. The trade school should not be a cross between a technical college and a school; it should be a means of teaching boys to be productive. If they are put at useless tasks--at making articles and then throwing them away--they cannot have the interest or acquire the knowledge which is their right. And during the period of schooling the boy is not productive; the schools--unless by charity--make no provision for the support of the boy. Many boys need support; they must work at the first thing which comes to hand. They have no chance to pick and choose.
When the boy thus enters life untrained, he but adds to the already great scarcity of competent labour. Modern industry requires a degree of ability and skill which neither early quitting of school nor long continuance at school provides. It is true that, in order to retain the interest of the boy and train him in handicraft, manual training departments have been introduced in the more progressive school systems, but even these are confessedly makeshifts because they only cater to, without satisfying, the normal boy's creative instincts.
To meet this condition--to fulfill the boy's educational possibilities and at the same time begin his industrial training along constructive lines--the Henry Ford Trade School was incorporated in 1916. We do not use the word philanthropy in connection with this effort. It grew out of a desire to aid the boy whose circumstances compelled him to leave school early. This desire to aid fitted in conveniently with the necessity of providing trained tool-makers in the shops. From the beginning we have held to three cardinal principles: first, that the boy was to be kept a boy and not changed into a premature working-man; second, that the academic training was to go hand in hand with the industrial instruction; third, that the boy was to be given a sense of pride and responsibility in his work by being trained on articles which were to be used. He works on objects of recognized industrial worth. The school is incorporated as a private school and is open to boys between the ages of twelve and eighteen. It is organized on the basis of scholarships and each boy is awarded an annual cash scholarship of four hundred dollars at his entrance. This is gradually increased to a maximum of six hundred dollars if his record is satisfactory.
A record of the class and shop work is kept and also of the industry the boy displays in each. It is the marks in industry which are used in making subsequent adjustments of his scholarship. In addition to his scholarship each boy is given a small amount each month which must be deposited in his savings account. This thrift fund must be left in the bank as long as the boy remains in the school unless he is given permission by the authorities to use it for an emergency.
One by one the problems of managing the school are being solved and better ways of accomplishing its objects are being discovered. At the beginning it was the custom to give the boy one third of the day in class work and two thirds in shop work. This daily adjustment was found to be a hindrance to progress, and now the boy takes his training in blocks of weeks--one week in the class and two weeks in the shop.
Classes are continuous, the various groups taking their weeks in turn.
The best instructors obtainable are on the staff, and the text-book is the Ford plant. It offers more resources for practical education than most universities. The arithmetic lessons come in concrete shop problems. No longer is the boy's mind tortured with the mysterious A who can row four miles while B is rowing two. The actual processes and actual conditions are exhibited to him--he is taught to observe. Cities are no longer black specks on maps and continents are not just pages of a book. The shop shipments to Singapore, the shop receipts of material from Africa and South America are shown to him, and the world becomes an inhabited planet instead of a coloured globe on the teacher's desk. In physics and chemistry the industrial plant provides a laboratory in which theory becomes practice and the lesson becomes actual experience.
Suppose the action of a pump is being taught. The teacher explains the parts and their functions, answers questions, and then they all troop away to the engine rooms to see a great pump. The school has a regular factory workshop with the finest equipment. The boys work up from one machine to the next. They work solely on parts or articles needed by the company, but our needs are so vast that this list comprehends nearly everything. The inspected work is purchased by the Ford Motor Company, and, of course, the work that does not pass inspection is a loss to the school.
The boys who have progressed furthest do fine micrometer work, and they do every operation with a clear understanding of the purposes and principles involved. They repair their own machines; they learn how to take care of themselves around machinery; they study pattern-making and in clean, well-lighted rooms with their instructors they lay the foundation for successful careers.
When they graduate, places are always open for them in the shops at good wages. The social and moral well-being of the boys is given an unobtrusive care. The supervision is not of authority but of friendly interest. The home conditions of every boy are pretty well known, and his tendencies are observed. And no attempt is made to coddle him. No attempt is made to render him namby-pamby. One day when two boys came to the point of a fight, they were not lectured on the wickedness of fighting. They were counseled to make up their differences in a better way, but when, boy-like, they preferred the more primitive mode of settlement, they were given gloves and made to fight it out in a corner of the shop. The only prohibition laid upon them was that they were to finish it there, and not to be caught fighting outside the shop. The result was a short encounter and--friendship.
They are handled as boys; their better boyish instincts are encouraged; and when one sees them in the shops and classes one cannot easily miss the light of dawning mastery in their eyes. They have a sense of "belonging." They feel they are doing something worth while. They learn readily and eagerly because they are learning the things which every active boy wants to learn and about which he is constantly asking questions that none of his home-folks can answer.
Beginning with six boys the school now has two hundred and is possessed of so practical a system that it may expand to seven hundred. It began with a deficit, but as it is one of my basic ideas that anything worth while in itself can be made self-sustaining, it has so developed its processes that it is now paying its way.
We have been able to let the boy have his boyhood. These boys learn to be workmen but they do not forget how to be boys. That is of the first importance. They earn from 19 to 35 cents an hour--which is more than they could earn as boys in the sort of job open to a youngster. They can better help support their families by staying in school than by going out to work. When they are through, they have a good general education, the beginning of a technical education, and they are so skilled as workmen that they can earn wages which will give them the liberty to continue their education if they like. If they do not want more education, they have at least the skill to command high wages anywhere.
They do not have to go into our factories; most of them do because they do not know where better jobs are to be had--we want all our jobs to be good for the men who take them. But there is no string tied to the boys.
They have earned their own way and are under obligations to no one.
There is no charity. The place pays for itself.
The Ford Hospital is being worked out on somewhat similar lines, but because of the interruption of the war--when it was given to the Government and became General Hospital No. 36, housing some fifteen hundred patients--the work has not yet advanced to the point of absolutely definite results. I did not deliberately set out to build this hospital. It began in 1914 as the Detroit General Hospital and was designed to be erected by popular subscription. With others, I made a subscription, and the building began. Long before the first buildings were done, the funds became exhausted and I was asked to make another subscription. I refused because I thought that the managers should have known how much the building was going to cost before they started. And that sort of a beginning did not give great confidence as to how the place would be managed after it was finished. However, I did offer to take the whole hospital, paying back all the subscriptions that had been made. This was accomplished, and we were going forward with the work when, on August 1, 1918, the whole institution was turned over to the Government. It was returned to us in October, 1919, and on the tenth day of November of the same year the first private patient was admitted.
The hospital is on West Grand Boulevard in Detroit and the plot embraces twenty acres, so that there will be ample room for expansion. It is our thought to extend the facilities as they justify themselves. The original design of the hospital has been quite abandoned and we have endeavoured to work out a new kind of hospital, both in design and management. There are plenty of hospitals for the rich. There are plenty of hospitals for the poor. There are no hospitals for those who can afford to pay only a moderate amount and yet desire to pay without a feeling that they are recipients of charity. It has been taken for granted that a hospital cannot both serve and be self-supporting--that it has to be either an institution kept going by private contributions or pass into the class of private sanitariums managed for profit. This hospital is designed to be self-supporting--to give a maximum of service at a minimum of cost and without the slightest colouring of charity.
In the new buildings that we have erected there are no wards. All of the rooms are private and each one is provided with a bath. The rooms--which are in groups of twenty-four--are all identical in size, in fittings, and in furnishings. There is no choice of rooms. It is planned that there shall be no choice of anything within the hospital. Every patient is on an equal footing with every other patient.
It is not at all certain whether hospitals as they are now managed exist for patients or for doctors. I am not unmindful of the large amount of time which a capable physician or surgeon gives to charity, but also I am not convinced that the fees of surgeons should be regulated according to the wealth of the patient, and I am entirely convinced that what is known as "professional etiquette" is a curse to mankind and to the development of medicine. Diagnosis is not very much developed. I should not care to be among the proprietors of a hospital in which every step had not been taken to insure that the patients were being treated for what actually was the matter with them, instead of for something that one doctor had decided they had. Professional etiquette makes it very difficult for a wrong diagnosis to be corrected. The consulting physician, unless he be a man of great tact, will not change a diagnosis or a treatment unless the physician who has called him in is in thorough agreement, and then if a change be made, it is usually without the knowledge of the patient. There seems to be a notion that a patient, and especially when in a hospital, becomes the property of the doctor. A conscientious practitioner does not exploit the patient. A less conscientious one does. Many physicians seem to regard the sustaining of their own diagnoses as of as great moment as the recovery of the patient.
It has been an aim of our hospital to cut away from all of these practices and to put the interest of the patient first. Therefore, it is what is known as a "closed" hospital. All of the physicians and all of the nurses are employed by the year and they can have no practice outside of the hospital. Including the interns, twenty-one physicians and surgeons are on the staff. These men have been selected with great care and they are paid salaries that amount to at least as much as they would ordinarily earn in successful private practice. They have, none of them, any financial interest whatsoever in any patient, and a patient may not be treated by a doctor from the outside. We gladly acknowledge the place and the use of the family physician. We do not seek to supplant him. We take the case where he leaves off, and return the patient as quickly as possible. Our system makes it undesirable for us to keep patients longer than necessary--we do not need that kind of business. And we will share with the family physician our knowledge of the case, but while the patient is in the hospital we assume full responsibility. It is "closed" to outside physicians' practice, though it is not closed to our cooperation with any family physician who desires it.
The admission of a patient is interesting. The incoming patient is first examined by the senior physician and then is routed for examination through three, four, or whatever number of doctors seems necessary. This routing takes place regardless of what the patient came to the hospital for, because, as we are gradually learning, it is the complete health rather than a single ailment which is important. Each of the doctors makes a complete examination, and each sends in his written findings to the head physician without any opportunity whatsoever to consult with any of the other examining physicians. At least three, and sometimes six or seven, absolutely complete and absolutely independent diagnoses are thus in the hands of the head of the hospital. They constitute a complete record of the case. These precautions are taken in order to insure, within the limits of present-day knowledge, a correct diagnosis.
At the present time, there are about six hundred beds available. Every patient pays according to a fixed schedule that includes the hospital room, board, medical and surgical attendance, and nursing. There are no extras. There are no private nurses. If a case requires more attention than the nurses assigned to the wing can give, then another nurse is put on, but without any additional expense to the patient. This, however, is rarely necessary because the patients are grouped according to the amount of nursing that they will need. There may be one nurse for two patients, or one nurse for five patients, as the type of cases may require. No one nurse ever has more than seven patients to care for, and because of the arrangements it is easily possible for a nurse to care for seven patients who are not desperately ill. In the ordinary hospital the nurses must make many useless steps. More of their time is spent in walking than in caring for the patient. This hospital is designed to save steps. Each floor is complete in itself, and just as in the factories we have tried to eliminate the necessity for waste motion, so have we also tried to eliminate waste motion in the hospital. The charge to patients for a room, nursing, and medical attendance is $4.50 a day.
This will be lowered as the size of the hospital increases. The charge for a major operation is $125. The charge for minor operations is according to a fixed scale. All of the charges are tentative. The hospital has a cost system just like a factory. The charges will be regulated to make ends just meet.
There seems to be no good reason why the experiment should not be successful. Its success is purely a matter of management and mathematics. The same kind of management which permits a factory to give the fullest service will permit a hospital to give the fullest service, and at a price so low as to be within the reach of everyone. The only difference between hospital and factory accounting is that I do not expect the hospital to return a profit; we do expect it to cover depreciation. The investment in this hospital to date is about $9,000,000.
If we can get away from charity, the funds that now go into charitable enterprises can be turned to furthering production--to making goods cheaply and in great plenty. And then we shall not only be removing the burden of taxes from the community and freeing men but also we can be adding to the general wealth. We leave for private interest too many things we ought to do for ourselves as a collective interest. We need more constructive thinking in public service. We need a kind of "universal training" in economic facts. The over-reaching ambitions of speculative capital, as well as the unreasonable demands of irresponsible labour, are due to ignorance of the economic basis of life. Nobody can get more out of life than life can produce--yet nearly everybody thinks he can. Speculative capital wants more; labour wants more; the source of raw material wants more; and the purchasing public wants more. A family knows that it cannot live beyond its income; even the children know that. But the public never seems to learn that it cannot live beyond its income--have more than it produces.
In clearing out the need for charity we must keep in mind not only the economic facts of existence, but also that lack of knowledge of these facts encourages fear. Banish fear and we can have self-reliance.
Charity is not present where self-reliance dwells.
Fear is the offspring of a reliance placed on something outside--on a foreman's good-will, perhaps, on a shop's prosperity, on a market's steadiness. That is just another way of saying that fear is the portion of the man who acknowledges his career to be in the keeping of earthly circumstances. Fear is the result of the body assuming ascendancy over the soul.
The habit of failure is purely mental and is the mother of fear. This habit gets itself fixed on men because they lack vision. They start out to do something that reaches from A to Z. At A they fail, at B they stumble, and at C they meet with what seems to be an insuperable difficulty. They then cry "Beaten" and throw the whole task down. They have not even given themselves a chance really to fail; they have not given their vision a chance to be proved or disproved. They have simply let themselves be beaten by the natural difficulties that attend every kind of effort.
More men are beaten than fail. It is not wisdom they need or money, or brilliance, or "pull," but just plain gristle and bone. This rude, simple, primitive power which we call "stick-to-it-iveness" is the uncrowned king of the world of endeavour. People are utterly wrong in their slant upon things. They see the successes that men have made and somehow they appear to be easy. But that is a world away from the facts.
It is failure that is easy. Success is always hard. A man can fail in ease; he can succeed only by paying out all that he has and is. It is this which makes success so pitiable a thing if it be in lines that are not useful and uplifting.
If a man is in constant fear of the industrial situation he ought to change his life so as not to be dependent upon it. There is always the land, and fewer people are on the land now than ever before. If a man lives in fear of an employer's favor changing toward him, he ought to extricate himself from dependence on any employer. He can become his own boss. It may be that he will be a poorer boss than the one he leaves, and that his returns will be much less, but at least he will have rid himself of the shadow of his pet fear, and that is worth a great deal in money and position. Better still is for the man to come through himself and exceed himself by getting rid of his fears in the midst of the circumstances where his daily lot is cast. Become a freeman in the place where you first surrendered your freedom. Win your battle where you lost it. And you will come to see that, although there was much outside of you that was not right, there was more inside of you that was not right.
Thus you will learn that the wrong inside of you spoils even the right that is outside of you.
A man is still the superior being of the earth. Whatever happens, he is still a man. Business may slacken tomorrow--he is still a man. He goes through the changes of circumstances, as he goes through the variations of temperature--still a man. If he can only get this thought reborn in him, it opens new wells and mines in his own being. There is no security outside of himself. There is no wealth outside of himself. The elimination of fear is the bringing in of security and supply.
Let every American become steeled against coddling. Americans ought to resent coddling. It is a drug. Stand up and stand out; let weaklings take charity.
CHAPTER XVI
THE RAILROADS
Nothing in this country furnishes a better example of how a business may be turned from its function of service than do the railroads. We have a railroad problem, and much learned thought and discussion have been devoted to the solution of that problem. Everyone is dissatisfied with the railways. The public is dissatisfied because both the passenger and freight rates are too high. The railroad employees are dissatisfied because they say their wages are too low and their hours too long. The owners of the railways are dissatisfied because it is claimed that no adequate return is realized upon the money invested. All of the contacts of a properly managed undertaking ought to be satisfactory. If the public, the employees, and the owners do not find themselves better off because of the undertaking, then there must be something very wrong indeed with the manner in which the undertaking is carried through.
I am entirely without any disposition to pose as a railroad authority.
There may be railroad authorities, but if the service as rendered by the American railroad to-day is the result of accumulated railway knowledge, then I cannot say that my respect for the usefulness of that knowledge is at all profound. I have not the slightest doubt in the world that the active managers of the railways, the men who really do the work, are entirely capable of conducting the railways of the country to the satisfaction of every one, and I have equally no doubt that these active managers have, by force of a chain of circumstances, all but ceased to manage. And right there is the source of most of the trouble. The men who know railroading have not been allowed to manage railroads.
In a previous chapter on finance were set forth the dangers attendant upon the indiscriminate borrowing of money. It is inevitable that any one who can borrow freely to cover errors of management will borrow rather than correct the errors. Our railway managers have been practically forced to borrow, for since the very inception of the railways they have not been free agents. The guiding hand of the railway has been, not the railroad man, but the banker. When railroad credit was high, more money was to be made out of floating bond issues and speculating in the securities than out of service to the public. A very small fraction of the money earned by the railways has gone back into the rehabilitation of the properties. When by skilled management the net revenue became large enough to pay a considerable dividend upon the stock, then that dividend was used first by the speculators on the inside and controlling the railroad fiscal policy to boom the stock and unload their holdings, and then to float a bond issue on the strength of the credit gained through the earnings. When the earnings dropped or were artificially depressed, then the speculators bought back the stock and in the course of time staged another advance and unloading. There is scarcely a railroad in the United States that has not been through one or more receiverships, due to the fact that the financial interests piled on load after load of securities until the structures grew topheavy and fell over. Then they got in on the receiverships, made money at the expense of gullible security holders, and started the same old pyramiding game all over again.
The natural ally of the banker is the lawyer. Such games as have been played on the railroads have needed expert legal advice. Lawyers, like bankers, know absolutely nothing about business. They imagine that a business is properly conducted if it keeps within the law or if the law can be altered or interpreted to suit the purpose in hand. They live on rules. The bankers took finance out of the hands of the managers. They put in lawyers to see that the railroads violated the law only in legal fashion, and thus grew up immense legal departments. Instead of operating under the rules of common sense and according to circumstances, every railroad had to operate on the advice of counsel.
Rules spread through every part of the organization. Then came the avalanche of state and federal regulations, until to-day we find the railways hog-tied in a mass of rules and regulations. With the lawyers and the financiers on the inside and various state commissions on the outside, the railway manager has little chance. That is the trouble with the railways. Business cannot be conducted by law.
We have had the opportunity of demonstrating to ourselves what a freedom from the banker-legal mortmain means, in our experience with the Detroit, Toledo & Ironton Railway. We bought the railway because its right of way interfered with some of our improvements on the River Rouge. We did not buy it as an investment, or as an adjunct to our industries, or because of its strategic position. The extraordinarily good situation of the railway seems to have become universally apparent only since we bought it. That, however, is beside the point. We bought the railway because it interfered with our plans. Then we had to do something with it. The only thing to do was to run it as a productive enterprise, applying to it exactly the same principles as are applied in every department of our industries. We have as yet made no special efforts of any kind and the railway has not been set up as a demonstration of how every railway should be run. It is true that applying the rule of maximum service at minimum cost has caused the income of the road to exceed the outgo--which, for that road, represents a most unusual condition. It has been represented that the changes we have made--and remember they have been made simply as part of the day's work--are peculiarly revolutionary and quite without application to railway management in general. Personally, it would seem to me that our little line does not differ much from the big lines. In our own work we have always found that, if our principles were right, the area over which they were applied did not matter. The principles that we use in the big Highland Park plant seem to work equally well in every plant that we establish. It has never made any difference with us whether we multiplied what we were doing by five or five hundred. Size is only a matter of the multiplication table, anyway.
The Detroit, Toledo & Ironton Railway was organized some twenty-odd years ago and has been reorganized every few years since then. The last reorganization was in 1914. The war and the federal control of the railways interrupted the cycle of reorganization. The road owns 343 miles of track, has 52 miles of branches, and 45 miles of trackage rights over other roads. It goes from Detroit almost due south to Ironton on the Ohio River, thus tapping the West Virginia coal deposits.
It crosses most of the large trunk lines and it is a road which, from a general business standpoint, ought to pay. It has paid. It seems to have paid the bankers. In 1913 the net capitalization per mile of road was $105,000. In the next receivership this was cut down to $47,000 per mile. I do not know how much money in all has been raised on the strength of the road. I do know that in the reorganization of 1914 the bondholders were assessed and forced to turn into the treasury nearly five million dollars--which is the amount that we paid for the entire road. We paid sixty cents on the dollar for the outstanding mortgage bonds, although the ruling price just before the time of purchase was between thirty and forty cents on the dollar. We paid a dollar a share for the common stock and five dollars a share for the preferred stock--which seemed to be a fair price considering that no interest had ever been paid upon the bonds and a dividend on the stock was a most remote possibility. The rolling stock of the road consisted of about seventy locomotives, twenty-seven passenger cars, and around twenty-eight hundred freight cars. All of the rolling stock was in extremely bad condition and a good part of it would not run at all. All of the buildings were dirty, unpainted, and generally run down. The roadbed was something more than a streak of rust and something less than a railway. The repair shops were over-manned and under-machined.
Practically everything connected with operation was conducted with a maximum of waste. There was, however, an exceedingly ample executive and administration department, and of course a legal department. The legal department alone cost in one month nearly $18,000.