ever, did not restore the order to the confidence of the
public, and its strength now rapidly declined. A loss of 300,000
members for the year 1888 was reported. Early in the nineties, financial
troubles compelled the sale of the Philadelphia headquarters of the
Knights of Labor and the removal to more modest quarters in Washington.
A remnant of members still retain an organization, but it is barely a
shadow of the vast army of Knights who at one time so hopefully carried
on a crusade in every center of industry. It was not merely the excesses
of the lawless but the multiplicity of strikes which alienated
public sympathy. Powderly's repeated warnings that strikes, in and of
themselves, were destructive of the stable position of labor were shown
to be prophetic.

These excesses, however, were forcing upon the public the idea that it
too had not only an interest but a right and a duty in labor disputes.
Methods of arbitration and conciliation were now discussed in every
legislature. In 1883 the House of Representatives established a standing
committee on labor. In 1884 a national Bureau of Labor was created to
gather statistical information. In 1886 President Cleveland sent to
Congress a message which has become historic as the first presidential
message devoted to labor. In this he proposed the creation of a board
of labor commissioners who should act as official arbiters in labor
disputes, but Congress was unwilling at that time to take so advanced a
step. In 1888, however, it enacted a law providing for the settlement of
railway labor disputes by arbitration, upon agreement of both parties.

Arbitration signifies a judicial attitude of mind, a judgment based on
facts. These facts are derived from specific conditions and do not grow
out of broad generalizations. Arbitral tribunals are created to decide
points in dispute, not philosophies of human action. The businesslike
organization of the new trade union could as readily adapt itself to
arbitration as it had already adapted itself, in isolated instances,
to collective bargaining. A new stage had therefore been reached in the
labor movement.

CHAPTER V. FEDERATION

Experience and events had now paved the way for that vast centralization
of industry which characterizes the business world of the present era.
The terms sugar, coffee, steel, tobacco, oil, acquire on the stock
exchange a new and precise meaning. Seventy-five per cent of steel,
eighty-three per cent