favor the greater possibilities to labor offered by the arbitration courts.

Without having traced the development of compulsory arbitration in Australia and considered the methods and results of this system of industrial regulation, it would be unwise to attempt here any appraisement of the work of the arbitration courts or to make any lengthy comparison of the two systems of wage regulation. A brief statement of the main arguments made for and against the plan to substitute compulsory arbitration for wages boards may, however, not be out of place.

Compulsory arbitration was originally intended to put an end to strikes and lockouts, and judges of the arbitration courts still insist that the maintenance of industrial peace is the principal if not the sole end to be kept in view. Now, as has already been pointed out, the wages board states have shown an even better record in the way of freedom from strikes than have the states which have adopted compulsory arbitration. This is due, the friends of the wages boards claim, to the fact that the representatives of capital and labor have themselves settled by the conference method the important questions of wages and hours, the only matters in dispute which are of sufficient importance to precipitate a strike if not settled by peaceful means. If these and other matters are to be settled by a judge of an arbitration court, a man not directly engaged in industry, his judgment, it is urged, will be less willingly accepted than will the decision of those who are themselves participants in the dispute and consequently bound by their own decision. The opponents of the arbitration system say that a judge is not fitted by training and experience to deal with industrial matters and that he lacks the intimate knowledge of business matters which is possessed by members of a wages

board. Furthermore, the advocates of wages boards point to the greater simplicity and economy of the wages board method of regulation and above all else to the greater facility for transacting business possessed by the boards. A number of boards can be sitting at the same time, handling disputes in several trades. A single arbitration court in any one state would soon be congested with business, and to multiply the courts would only create confusion owing to overlapping of awards and contradictory decisions.

On the other hand, the friends of compulsory arbitration point to the danger, which they believe to be a real one, that employees sitting on a board of which their employers are also members will be afraid to take a decisive stand in favor of a considerable increase of wages or an important reduction in the hours of work for fear of dismissal, or at least for fear that their chances of advancement in the trade will be lessened. Employees who have the courage to take a strong stand for improvement of working conditions will be " marked men" among employers in that trade, it is claimed. A judge need not fear intimidation.

The supporters of compulsory arbitration claim in the second place that employers and employees on a wages board on which the public is practically without representation may easily connive to raise wages with the understanding that the increased cost of production is to be passed on to the public in the shape of higher prices for the articles or service furnished by the trade for which the board makes a determination. A judge of an arbitration court would be far more likely to consider the public welfare and the effect on prices of an increase of wages.

Finally the advocates of arbitration point to the fact that the sphere of influence of a state wages board

is limited to the boundaries of the particular state. It may be unable to raise the wages of even poorly paid labor if the industry is one in which there is keen competition with establishments located outside the state, while on the other hand a state wages board may neglect altogether the interests of people of other states and by its manipulation of the wage scale seek to attract trade to its own state. This claim is of course not advanced in favor of a state arbitration court; but it is a strong argument in favor of extending the powers and activities of the Commonwealth Arbitration Court, and is therefore strongly urged in Victoria. Indeed one may say that the most ominous influence now threatening the Victorian wages boards is the steadily growing power of the Commonwealth Arbitration Court. The political friends of the wages boards, men like Deakin, Mauger, Watt and Murray, see the shadow, but as yet have been unable to devise any satisfactory plan for averting this danger to the boards. When one considers the fact that as industries grow, their markets are not limited by state boundary lines and consequently they can be satisfactorily regulated only by a power which is interstate in character, he can easily see why the power of the Commonwealth Arbitration Court is likely to grow at the expense of the state wages boards and state arbitration courts. But the Commonwealth Arbitration Court is not limited to the regulation of industries which are interstate in character. It has jurisdiction over industrial disputes "extending beyond the limits of any one state."

To get a case heard by the Commonwealth Arbitration Court it is only necessary for employees in establishments situated in different states to make the same demand at approximately the same time upon their employers, which, when refused, constitutes a dispute

extending beyond the limits of any one state." Laborers dissatisfied with what they have been able to secure through wages boards may easily foment a dispute which will bring their case before the Commonwealth Arbitration Court. The popularity with the laboring classes of Mr. Justice Higgins, who for several years has presided over the Commonwealth Arbitration Court, has increased the desire to get cases into court; and the rapid growth within the past two years of the number of cases presented to the Court for hearing has necessitated the appointment of two additional judges; a development which clearly shows that there is a disposition to make full use of the Court.

Nevertheless, it is not probable that the wages boards will soon, if ever, disappear. Their success and popularity in Australia has been too great to warrant such an assumption. The fact that even the arbitration states have adopted or retained the wages boards and incorporated them into their arbitration systems shows that there is a real need for these preliminary conferences between employers and employees to endeavor to reach an agreement in matters in controversy before the dispute goes if it does go-to the arbitration court. The fact that in the great majority of cases an agreement is reached in these conferences augurs well for the continuation of the conciliation plan.

M. B. HAMMOND.

OHIO STATE UNIVERSITY.

REVIEWS

MOORE'S ECONOMIC CYCLES

In this volume 1 Professor Moore again makes use of his characteristic method, developed in his earlier volume on Laws of Wages. The method, in brief, is to derive economic laws inductively from statistics by means of the modern refined methods of the calculus of probabilities. The specific problem in the present instance is to derive the law of business cycles of expansion and depression from data as to rainfall, crops, and prices.

First, by an application of Fourier's formula to data as to rainfall in the Ohio valley and in Illinois, he finds that the annual rainfall obeys a compound cyclical law based on cycles of eight and thirty-three years. He then correlates the rainfall at the critical period of growth for each crop with the total yield and with the yield per acre of the principal staple crops. These in turn are correlated with prices of pig iron and with general prices. The laws which he derives from this analysis may be briefly stated as follows. The annual rainfall, as just stated, obeys a law of compound cycles of eight and thirty-three years' duration. The yield of the great staple crops, both the gross yield and the yield per acre, obeys a similar law, presumably in the relation of cause and effect. The upward phase of a period of agricultural productivity brings with it, allowing a lag of a few years, a period of general business expansion, characterized by an increased demand for producers' goods (of which pig iron may be taken

1 Economic Cycles: their Law and Cause. By Henry Ludwell Moore. New York, The Macmillan Company.

The reviewer wishes to acknowledge his indebtedness to Sewall G. Wright for valuable suggestions, and assistance in making the computations involved in preparing this review.