292 . INDUSTRIAL REVOLUTION AND WAGES 
should not, require considerable time for general accept- 
ance. The point of paramount importance, however, to 
industrial peace and proficiency, is the underlying principle 
of organization and collective bargaining. Its general ap- 
plication is an essential preliminary to real industrial sta- 
bility and accomplishment. 
UnN1oN-MANAGEMENT PLANS OF COOPERATION ON 
THE RAILROADS 
There have been several noteworthy plans of union-man- 
agement cooperation which afford the basis, through prac- 
tical experience, for a general constructive policy along the 
lines that have been suggested. 
So far as the productive efficiency principle is concerned, 
or a method for employees to participate in the results of 
their own cooperative efficiency, the Southern Railroad in 
1924 entered into an agreement for three years with its 
unionized engine and train service crews, providing that 
these classes of employees should receive, in addition to 
their regular rates of pay, a bonus each year of 174 to 3 per 
cent., if the ratio of certain selected items of operating 
expenses to total operating revenues did not increase. The 
“test ratio” was based on the operating expenses for the 
year 1923. When this agreement terminated in 1927 a 
new arrangement was negotiated with the engineers and 
firemen alone, based on the same principle, namely, that if 
these classes of employees would cooperate in reducing 
operating costs, such as fuel, oil, and other items, appli- 
cable to their specific work, they would be given a share of 
the gains realized. Moreover, as this was worked out on 
the ratio of the aggregate outlay for specific items in rela- 
tion to total gross revenues, it was also true that engine- 
men would receive advantages from favorable factors 
affecting gross revenues, or the other side of the operat-