292 . INDUSTRIAL REVOLUTION AND WAGES

should not, require considerable time for general acceptance.
 The point of paramount importance, however, to
industrial peace and proficiency, is the underlying principle
of organization and collective bargaining. Its general application
 is an essential preliminary to real industrial stability
 and accomplishment.

UnN1oN-MANAGEMENT PLANS OF COOPERATION ON
THE RAILROADS

There have been several noteworthy plans of union-management
 cooperation which afford the basis, through practical
 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, applicable
 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 relation
 to total gross revenues, it was also true that enginemen
 would receive advantages from favorable factors
affecting gross revenues, or the other side of the operat-