"A Method of Evading Management"--Contract Labor in Chinese Coal Mines before 1937

Society for Comparative Studies in Society and History

"A Method of Evading Management"--Contract Labor in Chinese Coal Mines before 1937Author(s): Tim WrightSource: Comparative Studies in Society and History, Vol. 23, No. 4 (Oct., 1981), pp. 656-678Published by: Cambridge University PressStable URL: http://www.jstor.org/stable/178397 .

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"A Method of Evading Management' -Contract Labor in Chinese Coal Mines before 1937 TIM WRIGHT The Australian National University

How far were China's prewar economic institutions the product of its particular history and traditions-that is, the product either of the nature of its

premodern society or of its later status as a semicolony-and how far can they rather be seen as answers to problems common to the stage of economic

development which the country had reached at that time?' This is a central

question in China's economic history, and this article seeks to examine it in the context of one important institution, namely, the contract labor system in Chinese coal mines.2

To speak of "the system" is perhaps to use a misnomer, because contract labor appeared in a wide variety of forms in many industries.3 Fundamental to them all, in the words of J. Chesneaux, was that the

labor force was recruited by the owner or manager of an enterprise through an intermediary, who was given full or partial authority over the workers he recruited throughout their term of employment, and upon whom they were completely dependent for payment of wages and arrangements about working conditions.4

The contract between the management and this intermediary specified payment either by unit of output (in the "pure" form of the system) or, later, in

proportion to the number of workers provided. In coal mining, the contractor's functions often extended also to the provision of some or even all of the means of production.

The author would like to thank Shannon R. Brown, Joe Moore, Beverley Hooper, and the CSSH reviewer for many carefully considered and helpful comments.

1 J. Chesneaux, "The Chinese Labour Force in the First Part of the Twentieth Century,'' in The Economic Development of China and Japan, C. D. Cowan, ed. (London, 1964), 124-25.

2 In Britain, this was called the subcontract system (see A. J. Taylor, 'The Sub-contract System in the British Coal Industry," in Studies in the Industrial Revolution, L. S. Pressnell, ed. (London, 1960), 215-35), but the normal terminology in the literature on China is used here. The system is referred to as the gang-boss system in W. Brugger, Democracy and Organization in the Chinese Industrial Enterprise (1948-1953) (Cambridge, 1976), 42.

3 For some discussion of this, see Okabe Toshiyoshi, "Shina b6sekigy6 ni okeru r6d6 ukeoi seido," Toa keizai ronso, 1:1 (February 1941), 220-21.

4 J. Chesneaux, The Chinese Labor Movement, H. M. Wright, trans. (Stanford, 1968), 57.

0010-4175/81/4692-1375 $2.00 ? 1981 Society for Comparative Study of Society and History

656



CONTRACT LABOR IN CHINESE COAL MINES 657

Two predominant interpretations have been common in the literature up to this time. One sees the system primarily as a remnant of traditional Chinese social institutions. Boris P. Torgashev describes it as "a deep rooted custom in Chinese mines, handed down from old times. "5 Leonard G. Ting goes even further in describing it as unique to China.6 We shall see that this form of organization was indeed common in premodern China, but this fact does not help explain why almost identical institutions existed in many other countries during early industrialization.

The other main line of interpretation stresses the impact of imperialism on Chinese society and the needs of foreign enterprise. A recent Chinese work states that "the contract labor system in modern Chinese industry was introduced by the imperialists and particularly by the British capitalists."7 Lowe Chuan-hwa traced the emergence of contract labor in the Shanghai textile industry to foreign mills, and a Japanese source put forward a similar theory for the docks, while Chesneaux also laid heavy emphasis on this aspect.8 The institution seems, however, to have been as common in Chinese as in foreign enterprises; nor indeed did it appear only in colonial or semicolonial countries.

The central theme of this essay will be that the contract labor system can more profitably be viewed as an economic institution fulfilling similar functions in the face of similar problems in many countries during the early stages of industrialization than as the particular product of China's traditional society and institutions or as the result of the specific needs of foreign enterprise in a colonial or semicolonial country. We shall examine what functions the system fulfilled in the Chinese coal industry, while also analyzing those factors which led to the system's disappearance in other countries and to its incipient decline in pre-1937 China.

I I

The "substitution of commerce for management," as one author describes the contract system,9 had a long history in relatively large-scale undertakings in China, and did not appear only with the beginnings of the modernization of the economy. The system already existed in a rudimentary form in the twelfth

5 B. P. Torgashev, "Mining Labor in China," Chinese Economic Journal, 6:5 (May 1930), 533.

6 Leonard G. Ting, "The Coal Industry in China," Nankai Social and Economic Quarterly, 10:2 (July 1937), 243.

7 Jiu Zhongguo de zibenzhuyi shengchan guanxi bianxiezu, Jiu Zhongguo de zibenzhuvi shengchan guanxi (Beijing, 1977), 180. This work also stresses the preexistence of a feudal Chinese institution which was readily available for use by foreign capital.

8 Lowe Chuan-hwa, Facing Labour Issues in China (London, 1934), 20; Tokyo sh6k6 kaigisho, Ch6sabu, ed. Shina keizai nempo (Tokyo, 1936), 544; Chesneaux, Chinese Labor Movement, 60.

9 M. Elvin, The Pattern of the Chinese Past (Stanford, 1973), 281.



658 TIM WRIGHT

century,10 but no attempt is made here to trace it to its origins. More pertinent, contract labor was used extensively in China from the seventeenth century. The docks at Tianjin and Shanghai were operated in this way, and land transport also tended to be under the control of contractors." In the Suzhou calendering industry, the wholesale merchant owner of the cloth did not process it himself or hire labor to do so, but rather contracted the processing to a baogongtou (contractor) who was paid a fixed fee, and in return undertook all the functions of production, providing both the labor and the means of production.12 This at once reduced the scale of management and freed the owner of the product from the necessity of providing fixed capital for its processing. In contrast, the contractor in the twentieth-century Shanghai textile mills provided no fixed capital at all, and was merely an intermediary in the recruitment of labor.

The system also had antecedents in the mining industry. At least from the seventeenth century, the Chinese government, partly in order to extend its control over the mining population, promoted the use of foremen who recruited groups of miners, of from ten to fifty, and were responsible for them to the authorities. E-tu Zen Sun speculates that the origins of the contract system in mining lay in the strengthening of the position of these foremen into one in which they could exploit the workers, something which had already happened in the Yunnan copper mines by the midnineteenth century.'3

Various forms of contract labor survived into the twentieth century in the unmodernized sector of the Chinese economy as well as in modern industry. Gangs of laborers under contractors did seasonal agricultural work on large farms, often migrating to mining work in the slack season.14 There is, however, little information on this aspect of the system, and the pattern of Chinese farming suggests that such forms were not very widespread.

In its parcelling out of responsibility to authorized individuals, the contract

10 Furubayashi Horihiro, "Sodai no kosho to sono soshiki," Tohogaku, 33 (January 1967), 35-36.

" Jiu Zhongguo, 189. 12 See Yokoyama Suguru, "Shindai ni okeru h6otsei no tenkai," Shigaku zasshi; 71:1,2 (1962),

and Terada Takanobu, 'Soshu tempugyo no keiei keitai," Bungakubu kenkyv nenmpo, 18 (1968), 121-72. The system originated in the rapid expansion of the industry in the late Ming, necessitating a scale of operation by the wholesale merchants which was beyond their capacity for direct management. Even in the Qing, the contractor, who had at first been a mere intermediary, did not directly hire his artisans; rather, they in turn worked on contract. This was similar to the sweating system in the nineteenth-century British and American tailoring industries. A major difference between the operation of the system in premodern Suzhou and in twentieth-century Shanghai was that in the former case the contractor's monopoly was enforced by law, but in Shanghai it was merely a matter of practice.

13 E-tu Zen Sun, "Mining Labor in the Ch'ing Period," in Approaches to Modern Chinese History, A. Feuerwerker, ed. (Berkeley, 1967), 59-61. Memorial by Lin Zexu in Xu Yunnan tongzhi gao, Wang Wenshao, ed. (Yuechixian, Sichuan, 1900) 43:7.

14 Imahori Seiji, "Hat6sei," in Ajia rekishijiten, Kaizuka Shigeki et al., eds., 10 vols. (Tokyo, 1962), VII, 393.




labor system paralleled the system of mutual responsibility (baojia), to which it formed an adjunct both in traditional mining and in the calendering industry.s1 One can therefore both point to the appearance of contracting itself in premodern China and say that it fitted in well with more general traditional Chinese patterns of social organization.

III

How widespread was the use of contract labor in Chinese coal mines in the early twentieth century? In partial answer to this question, Table 1 presents data covering the thirty-three largest coal mines in China, listed in approxi- mate order of their size in the mid-1930s. At that time, these mines produced more than 70 percent of China's coal output, and over 90 percent of the output from modern mines. Thus they may fairly be taken as representing the moder sector of the Chinese coal industry.16

These mines all used contract labor, at least up to the late 1920s. Skilled labor was usually hired directly by the management, as were unskilled surface workers at some mines. But the largest part of the unskilled labor was provided by the contractors, whose workers, for whom the management had no direct responsibility, worked the face in nearly all mines, as well as undertak- ing most of the jobs of underground haulage and tunnelling.17 Generally about 60 to 80 percent of the total workforce was provided by the contractors, a fact which reflects the labor-intensive nature of coal mining, especially at the technological level at which it operated in China in the early twentieth century.'8

Originally the contractor was paid by unit of output, and he recruited and paid his workers himself. This remained the situation in most mines throughout the prewar period; even in the British-controlled Kailuan mines in Hebei during the 1930s, very detailed schedules fixed the prices paid to contractors for extracting given amounts of coal at different seams.'9 Table 1 indicates, however, that changes began to be made in the system at several

1s For the baojia system, see Hsiao Kung-chuan, Rural China: Imperial Control in the Nineteenth Century (Seattle, 1960), ch. 3.

16 Modern coal mines were concentrated almost exclusively in north China, as indicated by the fact that only two of these thirty-three mines were situated south of the Yangzi.

17 The same situation was found in India (see D. H. Buchanan, The Development of Capitalist Enterprise in India (New York, 1934), 270) and in Staffordshire (see "Report on the Charter Master System," British Parliamentary Papers, Reports, 1907, XIV, 404).

'8 This paragraph does not mean that the lower the proportion of contract labor at any mine the higher was the proportion of skilled workers. The differences are much more likely to result from whether or not surface workers were included in the contract labor system. In the two cases where Table 1 gives a proportion of contract workers of under half, the figures are open to doubt.

19 South Manchurian Railway Company (hereafter SMR), Shomubu chosaka, Kairan tanko chosa shirry (Dairen, 1929), 107; Kuangye zhoubao (hereafter KYZB), 180 (28 February 1932), 177-78. This was the case not only at Kailuan; for Jingxing, see KYZB, 152 (28 July 1931), 891- 94; for Liujiang, see KYZB, 143 (21 May 1931), 747-49.



TABLE 1

Labor Systems in Major Chinese Coal Mines, 1910-1937

Percentage of Workers under

Mine Province Type of system Contract System

Fushun*

Kailuan* Zhongxing Jiaozuo*

Jingxing*

Luda* (Zichuan)

Liuhegou Baojin

Benxihu*

Xi'an Beipiao Mentougou Yuesheng Hegang Zhengfeng

Pingxiang

Jinbei

Liaoning

Hebei Shandong Henan

Hebei

Shandong

Henan Shanxi

Liaoning

Jilin Rehe Hebei Shandong Heilongjiang Hebei

Jiangxi

Shanxi

Contract (pre-1929) Commission system (post-1929) Contract (more company control from 1933) Contract Contract (pre-1927) Direct hiring (1927-29) Contract (post-1929) Contract (pre-1929) Small butty (post-1929) Contract (pre-1934) Small butty (post-1934) Contract Contract

Contract (pre-1929) Commission system (post-1929) Contractj Contractk Contract Contract Contract" Contract

Contract

74 (1929)"

c. 66 (late 1920s)" 60-83 (1930s)'

82 (1935)( 70+ (1920s)

80 (1934)f

58 (1930s)" 68-76 (1921-23) c. 75 (1930s)h

75 (1931)i

c. 64 (1939)' 81 (1930s)"'

45 (1929) 76 (1937)" c. 88 (1904) 67 (1933)"

Contract (pre-1933) Direct hiring" (post-1933)

CJ~



Jiawang

Yantai* Huainan Muleng* Changxing Datong Yili Liujiang

Fuzhouwan Lincheng Fuyuan

Luda* (Fangzi) Bodong* Lieshan Fuhua

Zhalainuoer*

Jiangsu

Liaoning Anhui Jilin Zhejiang Anhui Hebei Hebei

Liaoning Hebei Hubei

Shandong Shandong Anhui Hubei

Heilongjiang

Contract

Contract' (pre-1929) Contract Contract Contract Contract Contract Contract (pre-1928) Direct hiring (1928-30) Contract (post-1930) Contractz Contract Contract (pre-1927) Small butty?' (post-1927) Contract"" Contract Contract"' Contract (pre-1927) Small butty'"s (post-1927) Contract (early 1920s) Small butty (later)

Note: An asterisk denotes a foreign or Sino-foreign mine. SOURC-ES: " South Manchurian Railway Company (hereafter SMR), Romuka, Minatmi Manshiu kodzan roddo jijd (Dairen, 1931), 16-17, 33-36; Yu Heyin, Fushun mnei- kuang haogao (Beijing, 1926), 156. The 74 percent figure includes all workers not explicitly directly hired. The actual proportion of contract workers may have been lower than this. t' SMR, Shomubu chosaka, Kairmn tank5 chOsti shiryO (Dairen, 1929), 101; Hou Defeng, Disici Zhongguo kuangvejivao (Beijing, 1932), 308-309; Kuangve zhoubao (hereafter KYZB), 142 (14 May 1931), 721-24; Jiu Zhongguo de zibenzhuyi shengchan guanxi bianxiezu, Jiu Zhongguo de zibenzhusi shengchan guaiovi (Beijing, 1977), 203; Tezuka Masao, Shinai jkgfik?gy hattatsushi (Kyoto. 1944), 355. ' Liu Xinquan and Shi Yushou, "Shandong Zhongxing meikuang gongren diaocha," Shehui kexue Z.azhi, 3:1 (March 1932), 40; SMR, Tenshinjimusho chdsaka, Kita Shina kogyo kivd (Tianjin, 1936), 74. Estimates for the proportion of workers under contractors vary widely.

o\ Xu Gengsheng, Zhong-.wai heban imeitie kuangye shihua (Shanghai, 1947), 78-79; KYZB, 84 (28 February 1930), 562; KYZB, 369 (7 February 1936), 91 1-12; Hou '

Defeng, Disanci Zhongguo kuangye jiy o (Beijing, 1929), 78. ' Chen Zhen, Zhongguo jindoi gongyeshi Zilitc, 4 collections (Beijing, 1957-62), 4th collection, 928; SMR, Chosabu, Seikei ttintdenti kaihatsu hdslak narahbii (ch1s

shiriv& (Dairen, 1937), 67; Hou, Disanci Zhongguo kuangye jiltao, 13-16.

60 (c. 1930) 77 (1935)'

85 (1935)' 80 (1920s)U 66 (1935)" 78 (1933)"' 44 (1920s)'

71 (1932)y

78 (1935)""

53 (c. 1936)"'

64 (1928)""



f KYZB, 297 (7 August 1934), 906; Zhang, Huiruo, Diwuci Shandong kuangye baogao (Jinan, 1936), 194-97. " Chen, Gongyeshi, 4th collection, 928; Nichi-Man shoji kabushiki kaisha, Hoku-Shi sekitankai no genkyo (Xinjing, 1937), 329. Excluding mechanics, the second source gives a 64 percent proportion for contract workers. hYu Heyin, Shanxi Pingdingxian Yangquanfujin Baojin gongsi meikuang tiechang baogao (Beijing, 1926), 58-59; KYZB, 34 (14 February 1929), 548. Minami Manshfi kozan rodo jijo, 19, 36-45. Yu Heyin, "Xi'an meikuang ji," Nongkuang gongbao, 18 (November 1929), 179.

k Hou, Disici Zhongguo kuangye jiyao, 272. / Beijing shifan daxue, lishixi sannianji, yanjiuban, Mentougou meikuang shigao (Beijing, 1958), 16-17; KYZB, 105 (7 August 1930), 142; Leonard G. Ting, "The Coal Industry in China," Nankai Social and Economic Quarterly, 10:2 (July 1937), 249, says that in 1928 the mine sacked all its contractors and appointed its foremen in their places, which allowed closer control and supervision. "'Chen, Gongyeshi, 4th collection, 928. "Hou, Disici Zhongguo kuangye jivao, 202. " Hou, Disanci Zhongguo kuangye jiyao, 24; Kuboyama Yfiz6, Shina sekitan jijo (Tokyo, 1944), 212. p Shiyebu, laodong nianjian bianzuan weiyuanhui, Ershiernian Zhongguo laodong nianjian (Nanjing, 1934), sec. 1, p. 264; Xu Run, Xu Yuzhai zishu nianpu, quoted in Zhongguo shixue hui, comp., Yangwu yundong, 8 vols. (Shanghai, 1961), VIII, 199. 'KYZB, 171 (21 December 1931), 40; KYZB, 358 (14 November 1935), 734; Hou, Disanci Zhongguo kuangye jivao, 68; Kita Shina kogyo kiy6, 137; Zhonggong Datong meikuang weiyuanhui kuangshi bianxiezu, "1918-1936 nian de Datong meikuang," Lishijiaoxue, 1962:2 (February 1962), 34-35. This last source says that the contract system was abolished in 1931. rHou, Disanci Zhongguo kuangye jiyao, 126; Kuboyama, Shina sekitan jijo, 102; KYZB, 39 (21 March 1929), 630; KYZB, 324 (28 February 1935), 178. s Yu Heyin, "Rishang nan Manzhou tielu gongsi jingying liaoyang Yantai meikuang, ' Nongkuang gongbao, 22 (March 1930), 209. Yantai, which like Fushun was run by the SMR, probably also changed over to the commission system in 1929. ' KYZB, 386 (14 June 1936), 23.

Hou, Disanci Zhongguo kuangye jivao, 187. ' KYZB, 349 (7 September 1935), 590. " Hou, Disanci Zhongguo kuangye jiyao, 117; KYZB, 234 (14 April 1933), 1078. * Hou, Disanci Zhongguo kuangye jiyao, 27; KYZB, 14 (7 September 1928), 237-38. I Hou, Disanci Zhongguo kuangye jiyao, 33; idem, Disici Zhongguo kuangyejiyao, 314; see also Ershiernian Zhongguo laodong nianjian, sec. 2, p. 33; KYZB, 22 (14 November 1928), 355-56. Hou, Disici Zhongguo kuangye jivao, 254.

"'Ershiernian Zhongguo laodong nianjian, sec. 2, p. 34; KYZB, 323 (21 February 1935), 162. t Hou, Disanci Zhongguo kuangye jiyao, 147; KYZB, 63 (21 September 1929), 227. "' Ershiernian Zhongguo laodong nianjian, sec. 2, p. 37. "'tKYZB, 35 (21 February 1929), 565; SMR, Ch6sabu, Shisen Hakusan Shkyvu tanden ch6sa shiry6 (Dairen, 1937), 134. ( Hu Rongquan, Zhongguo meikuang (Shanghai, 1935), 292. "f KYZB, 129 (7 February 1931), 526. (/ Horiuchi Takejiro, "Satsuraidakuji tankQ higyo temmatsu," in Mantetsu, Ito Takeo etal., eds., 3 vols. (Tokyo, 1967), III, 740; Hu, Zhongguo meikuang, 158-59.




mines in the late 1920s. The reasons for the change were both political and economic and will be examined in a later section. The Japanese-owned Fushun colliery in Liaoning, the largest in China, adopted in April 1929 a system of payment according to the number of men supplied-a commission on labor.20 Other mines went over to a type of collective piecework known in Britain as the "small butty," under which small groups of workers joined together to undertake a contract.

IV

The main duties of the contractor were the recruitment and supervision of labor. At most mines the contracts also specified he should provide at least some of the tools and materials required for day-to-day work. Similar institutions performed some or all of these functions in other countries-the butty subcontracting system in Britain, the Japanese naya and hamba systems, the cai in Vietnam, and the ticcadari system in India.21

In some countries and industries, the recruitment of unskilled labor was the contractor's primary task. During early industrialization, even when there was no theoretical shortage of labor, actual recruitment in sufficient numbers for large-scale enterprise was often a problem. The labor market tended to be nonexistent, or at best highly fragmented, and the use of intermediaries in recruiting was regularly found in underdeveloped countries undergoing the process of industrialization. The exact nature of these intermediaries depended on the social structure of the society in question: thus Russian landowners supplied the labor of their serfs for railway construction, and local chiefs were often used as intermediaries in Africa.22 In Japan, the existence of the naya and hamba systems in the coal mines was a function of the labor shortage, or at least of the lack of, or imperfection in, the labor market. Similarly in India, the sardars, who were one kind of contractor, recruited labor from their own villages, in which they were influential figures. In the Chinese cotton industry, contractors recruited young female workers, especially for the Shanghai factories, and provided accommodations for them, but without taking a major part in their supervision at work. The regional and

20 SMR, Romuka, Minamni Manshu kozan rodo jij( (Dairen, 1931), 33-34; Torgashev, "Mining Labor," 539; "Labour Management at the Fushun Coal Mines," Contemporary Manchuria, 2:5 (September 1938), 41-44.

21 Taylor, "Sub-contract System," passim; S. Pollard, The Genesis of Modern Management (London, 1965), 38-43, from which book the phrase "a method of evading management" used in the title of this paper was taken. Imahori, "Hatosei," 393; Nihon keizaishi kenkyujo Nihon keizaishijiten, 2 vols. and index (Tokyo, 1940), II, 1357; Report of the Roval Commission on Labour in India (H.M.S.O., 1931) (hereafter Report), 119; V. Thompson, Labor Problems in Southeast Asia (New York, 1947), 201-202. For Russian mines, see J. P. McKay, Pioneers for Profit. Foreign Entrepreneurship and Russian Industrialization, 1885-1913 (Chicago, 1970), 254, 260.

22 W. L. Blackwell, The Beginnings of Russian Industrialization, 1800-1860 (Princeton, 1968), 299; R. M. A. van Zwanenberg, Colonial Capitalism and Labour in Kenya, 1919-1939 (Kampala, 1975), ch. 6.



664 TIM WRIGHT

temporal incidence of this system in Chinese cotton mills was clearly related to problems with the supply of labor and imperfections in the labor market.23

In the Chinese coal mines, the management did not have to concern itself with finding unskilled labor since this task was done by contractors.24 Very little is known about the actual ways in which willing laborers were found. The contractors had closer ties to the rural power structure than did the management, and this made it easier for them to recruit labor, particularly from their home villages.25 They had, however, less control over their work forces than did local chiefs or feudal landowners, and they did not always recruit from their own villages. Two specific studies, of the Zhongxing mine in Shandong and of the Zhengfeng mine in Hebei, indicate that the batou (bosses, contractors) did not in fact have very deep roots in the village economy: at Zhengfeng, only around 20 percent of the workers attached to eleven batou came from the batou's home villages.26 This indicates that a labor market had at least begun to emerge in some areas, which in turn suggests that there may have been less necessity for some sort of intermediary with the villages in China than elsewhere.

Indeed, in the region where inadequacies in the labor supply posed the most serious problems, the mine management played a greater part than elsewhere in recruitment. In Manchuria during the 1910s and most of the 1920s, there was a severe shortage of labor, leading at times to the curtailment of output.27 The management of the Fushun mines met these problems by themselves send- ing agents to Hebei and Shandong. Shandong was an area notorious for surplus

23 Chesneaux, Chinese Labor Movement, 57. Murakushi Nisabur6 Nihon tanko chin rodo shi- ron (Tokyo, 1976), 87-88, 222; In Report, 116, the Royal Commission noted: "Most collieries recruit through a contractor. Some make a special contract for the supply of labour, which is then employed and paid by the mine management; but the more usual method is to employ a raising contractor to whom are assigned other important functions." For the sardars, see International Labour Office, Industrial Labour in India (Geneva, 1938), 156. For the Chinese cotton industry, see Okabe Toshiyoshi, "Shina boseki rod6 ukeoi seido no hattatsu," Toa keizai ronso 1:3 (Sep- tember 1941), 227-28.

24 For Jingxing, see Gu Lang, Zhongguo shi da kuangchang diaochaji (Shanghai, 1916), sec. 6, p. 20.

25 Imahori, "Hatosei," 393; Shina keizai nempo, 543. A detailed study of the Longyan iron mine in the late 1930s and early 1940s also provides evidence of close personal links between the contractor and his workers, and cities recruitment as one of the central tasks of the contractor. See Nakamura Takatoshi, Hato seido no kenkyu (Tokyo, 1944), 22. See also Okabe, "Shina b6seki rodo ukeoi seido no hattatsu," 233-34.

26 Sakamori Bumpei, "Hoku-Shi tankogyo ni okeru rodo soshiki, " Mantetsu chosa geppo 22:7 (July 1942), 60-61; SMR, Hoku-Shi keizai ch6sajo, Chuko- tanko rodo gaivo chosa hokoku (Beijing, 1941), 31-32. Both these references are to 1941, but there seems no reason to expect this to invalidate the findings. The Japanese found that after 1937 the contractors were unable to secure sufficient labor for the needs of Zhongxing.

27 SMR, Minami Manshui tetsudo kabushiki kaisha dainiji junenshi (Dairen, 1928), 702. In 1917 1918, although output rose, the shortage of labor meant that production still fell short of demand and that therefore export sales dropped sharply.




labor, and for the whole of this period formed the main reservoir of labor for the Manchurian coal mines.28 So, although Torgashev reports one instance of the labor supply drying up when a mining company attempted to abolish the system,29 recruitment was probably not the most important function of the contractor in coal mining, as it was in the cotton industry.

The central function of the contractor in Chinese coal mines was rather to take over the job of line management from the mine owners. Before the emergence of modern management, the control of large units such as coal mines posed serious difficulties. The contracting out of sections of the work reduced the problem to workshop size for the contractors and allowed the owners of the mine to avoid direct contact with their work force. Although this could theoretically be a rational step at any stage of industrial development, depending on the particular context involved,30 the role of contracting is the greatest in early industrialization, when the rapid growth and proliferation of relatively large-scale enterprises come up against the lack of trained managerial personnel. The contracting of sections is particularly suited to coal mining, where supervision is difficult because large numbers of men are set to work in scattered locations; so in Japan, the system was abandoned as the more centralized longwall method of mining was introduced in place of the stall-and-pillar.3'

Contract labor was not generally used in mines small enough to be easily supervised by the owner or by his direct representative.32 The whole unit was, however, often operated by a contractor, who sold his output at a fixed price to the owner of the mining rights.33 In some cases where the unit was large

28 Minami Manshft kozan rodo jij6, 6, 63ff. The direct involvement of the management in recruitment, however, caused problems when the workers were put to work under contractors, and it was found to be more difficult to keep discipline in such cases. Therefore the management later reverted to recruitment through the baito though management still covered the expenses for the recruiters and for the workers to come to the mine. Local labor was recruited by contractors throughout. See Minami Manshu tetsudo kabushiki kaisha dainiji junenshi, 565, and "Labour Management at Fushun," 43-44.

29 Torgashev, "Mining Labor," 539. 30 This point is strongly made in Pollard, Genesis of Modern Management, 39. -3 Murakushi, Nihon tanko(, 236, 317-19. Ashton and Sykes suggest, however, that in

eighteenth-century England longwall was more conducive to the use of the butty than was stall-and-pillar (see Taylor, "Sub-contract System," 220, and T. S. Ashton and J. Sykes, The Coal Industry of the Eighteenth Century, 2d ed. (Manchester, 1964), 111-12), though Griffin disputes this (see A. R. Griffin, The British Coalmining Industry, Retrospect and Prospect (Buxton, England, 1977), 1 11). Even if Ashton and Sykes are correct, the two interpretations are not necessarily contradictory, for at that time the general scale of production was smaller, favoring an individual contract in the stall-and-pillar and the butty in longwall.

32 Tezuka Masao, "Shina tank6 no doho keitai," T6a kenk'u shoho 20 (February 1943), 165; idem, Shina juikogyo hattatsushi (Kyoto, 1944), 274-75.

33 For example, in Jiaozuo in Henan in the 1920s, the Zhongyuan Company leased out small mines in its area to contractors who hired their own labor and provided their own equipment. Where they could, the contractors sold to outside buyers at a price higher than that paid by the



666 TIM WRIGHT

enough-as for instance in the Kailuan brickworks34-the contractor would himself put out the work to several subcontractors. Within a mine, the incidence of the use of contractors was clearly related to scale.

The historical development of the contract labor system also shows the importance of the size of unit involved. In the foreign-owned docks in Shang- hai during the nineteenth century, the increasing scale and complication of the work led to the adoption of the contract system.35 Similarly, in Japan contract labor was not used in the very small mines operated in the Tokugawa period, but came into its own with the expansion and limited modernization of coal mining after 1868.36 In the Jingxing area of Hebei during the early 1910s, the managers and foremen from the traditional mines moved over to become contractors in the large mines which were then being established.37 The managers of the latter were unable to hire enough trained personnel, and so were forced to employ these men, who were at least experienced in traditional mining. Such men were unlikely to fit easily into a large structured hierarchy, and therefore the solution was to fall back on the contract system, reducing the size of the management unit to one to which they were accustomed.

The lack of trained supervisory staff formed the basis of the pressures to avoid direct management: this was a pervasive feature of Chinese industry, as indeed of industry in underdeveloped countries in general.38 In coal mining in both China and Japan, it was recognized by those who wished to get rid of the system that a prerequisite for achieving this was the provision of adequate supervisory staff.39 The deputy manager of the Kailuan mines stressed that the company would have to ensure the supply of enough "good men" to replace the contractors, though he was unable to see beyond the provision of additional foreign staff. His opinion here was no doubt partly a matter of prejudice, but it also reflected the shortcomings of the Chinese staff, which deficiencies in turn were largely a result of the social milieu in which these men worked.40

company but lower than that charged by Zhongyuan to its customers. This led to a serious conflict of interest between the two parties. See KYZB, 60 (28 August 1929), 179-80; KYZB, 67 (21 October 1929), 289, 299-300. In these mines the recruitment of labor was sometimes entrusted to subcontractors by the main contractors. See KYZB, 177 (7 February 1932), 129. For similar arrangements in other areas, see SMR, Ch6sabu, Shisen Hakusan Shokyu tanden chosa shiryo (Dairen, 1937), 476 for Shandong and KYZB, 83 (21 February 1930), 549 for Anhui.

34 KYZB, 142 (14 May 1931), 724. 35 Shina keizai nempo, 544. 36 Marakushi, Nihon tanko 27-31, 205-10. 37 Sakamori, "Hoku-Shi tank6gy6," 40-41, 45-46. 38 Quan Hansheng, Hanyeping gongsi shilue (Hongkong, 1972), 239-41; A. Feuerwerker, Eco-

nomic Trends in the Republic of China, 1912-1949 (Ann Arbor, Michigan, 1977), 38; R. B. Sutcliffe, Industry and Underdevelopment (London, 1971), 129-30.

39 Hou Defeng, Disanci Zhongguo kuangyejiyao (Beijing, 1929), 260; Murakushi, Nihon tanko, 235-39. In Fushun, Japanese staff played this role, and when their number and quality declined after 1937, the strength of the contract system revived. See Nakamura, Hat6 seido, 11-12.

40 Nathan to Young, 15 July 1929; Nathan to Turner, 18 April 1932, Nathan Papers, Bodleian Library, Oxford University. In the second of these letters, Nathan expresses his dissatisfaction




The use of foreigners, however, offered no solution to the problems, which indeed, some have argued, were most pronounced for foreign firms.41 The inability of many foreign businessmen in China to speak Chinese and a general unfamiliarity with local society and ways meant that the foreigners often sought Chinese intermediaries to handle their contacts with the indigenous population-compradors to deal with Chinese merchants, contractors with workers or peasants.42 Similarly, in India the Royal Commission on Labour wrote in 1930: "In some cases we fear that the manager is imperfectly ac- quainted with the languages native to the workers. This may be one of the reasons for the survival of the raising contractor."43

Inability to speak Chinese was widespread among foreign staff at mines in China. This was true even in the 1930s among the Japanese, a group generally more willing to learn the language than most.44 At Kailuan, foreign staff, of whom the ability to speak Chinese was not always required by the management, often found it very difficult to get on with the native population. Indeed, strikes were sometimes caused by fights between foreign staff and Chinese workers.45 While for technical reasons foreign mining companies did not feel able to entrust the whole direction of production to intermediaries, any system which reduced the amount of contact between foreign staff and Chinese workers had its advantages. The problem might of course have been solved merely by the hiring of Chinese foremen, but here the foreign companies faced the same lack of trained supervisory personnel able to work easily in a large organization that plagued all mining companies in China, irrespective of ownership. Thus they also resorted to the contract system, which fitted in more easily with traditional management patterns.

with his Chinese staff: 'The conclusions I came to were that a desperate and progressively losing fight was being waged by our foreign senior staff to retain that technical efficiency which has in the past been such a conspicuous feature of our operations, and which the very fine equipment we possess makes possible. In this struggle the Chinese senior staff are playing an almost negligible part." The management at Kailuan did, however, start a foreman training school, graduates of which played an important role in changing the contract system. See Nakamura, Hato( seido, I 1.

41 For a general interpretation along these lines, citing evidence from China, Egypt, India, and Vietnam, see W. E. Moore, Industrialization and Labor (New York, 1951), 129-31.

42 In some cases the same man filled both posts (see Chesneaux, Chinese Labor Movement, 60, 453).

43 Report, 120. 44 Zheng Wanyan, Minguo shijiunian Shandong kuangye baogao (Jinan, 1931), 151-52. The

need for native intermediaries was stressed in the case of Fushun: "Since the Japanese find little in common with the racial habits, customs and language of the coolies, patou [batou I are placed over the labourers, who act as liaison agents between the management and working force by relaying orders and instructions and keep strict vigilance over morals and discipline.'" "Labour Management at Fushun," 40.

45 Nathan to Young, 19 February 1925, 6 December 1925, [sic, but from the order in which the letter is filed, it should probably be 6 December 1924] and 15 July 1929; Nathan to Turner, 10 November 1931, Nathan Papers. Nathan wrote of one unfortunate man: "Callaghan, I am sorry to say, proved a failure, as he was quite unable to handle Chinese properly... so I paid him six months' salary and got rid of him on the spot."



668 TIM WRIGHT

Nevertheless, one should not overstress the importance of these pressures towards the use of the contract system in foreign mines. The incidence of contract labor in foreign-owned mines was no greater than in Chinese mines, and the system was used in Kaiping-which was Chinese owned though it employed foreign staff-before there was any foreign investment at all in coal mining.46 Moreover, the traditional aversion of the Chinese upper classes toward manual labor was probably as strong a barrier to direct supervision by the management as was the language problem for the foreigners. Bottlenecks in the overall supply of labor and skills, inherent in the stage of economic development then reached by China, were much more important influences than the specific needs of foreign interests.

Some contractors lacked the skills necessary to perform the supervisory role, but most of those at the more modern mines had formerly been experienced miners or members of staff. At Zhongxing, most batou had previously been lower-level staff either at that or at other Chinese mines, where they had accumulated considerable experience and skill. At Zhengfeng, several had earlier run their own small mines in the area, while many eventually emerged from among the ranks of the contract laborers.47

The habituation of workers from rural areas to industrial life was also helped by the survival of certain traditional social patterns within the contract group. The Japanese evidence points most strongly to this, with simulated kinship ties linking contractors and workers, but studies of other cultures have also emphasized the importance of taking account of traditional social patterns when trying to introduce new work organization. In addition, the system served management in a more direct way because the contractors kept labor under control. In India, a representative of the Indian Mining Association described the duties of the contractor as "to recruit labour, to attend to their wants and grievances and to keep them happy"; and in Japan, the contractor was responsible for his workers and was required to control and discipline them.48 In China, Kailuan's general manager spoke of that company's labor being rigidly controlled by the contractors up to the early 1920s,49 and in some mines force was used to keep the workers in line, so that they sometimes became little better than slaves.50 Contracting also promoted competition

46 C. W. Kinder, "Railways and Collieries of North China," Minutes of the Proceedings of the Institution of Civil Engineers, 103 (1890-1), 285; Sun Yutang, Zhongguo jindai gongyeshi ziliao, diviji, 1840-1895 nian (Beijing, 1957), 1245. Contract labor was also used in the Mohe Gold Mine before 1895 (see He Hanwei, "Qingji de Mohe jinkuang," Xianggang Zhongwen da.xue Zhongguo wenhua yanjiusuo xuebao, 8:1 (December 1976), 240-41). See also Okabe's criticism of Lowe's attribution of the origins of contract labor to the needs of foreign textile factories in "Shina boseki rodo ukeoi seido no hattatsu," 224.

47 Chuko tanko rod6 gaiyo 31; Sakamori, "Hoku-Shi tankogyo," 45-46. 48 Report, Evidence, vol. 4, pt. 2, p. 242; Nihon keizaishi kenkyfjo, Nihon keizaishi jiten,

II, 1357. See also Sumiya Mikio, Nihon chin rodo no shiteki kenkua (Tokyo, 1976), 92-93. 49 Nathan to Turner, 27 April 1934, Nathan Papers. 50 Jiu Zhongguo, 200-202. Although receiving considerable publicity, this aspect does not

seem to have been central to the operation of the system, especially in the larger, more modern




among the workers and made it difficult for them to put forward concerted demands. At the same time it made the target of any such demands rather diffuse, enabling contractors and management to blame each other for the worker's poor conditions. On the other hand, exploitation by the batou consti- tuted an extra cause of grievance for the workers, one over which the mine company had little control.

Apart from supplying labor, many contractors had in addition to provide most of the materials for the day-to-day working of the mine. The contracts at the Liujiang mine in northeast Hebei stipulated that they should supply materials such as the oil for the lamps, the tools used by the workers, and the baskets for hauling the coal-indeed everything except the timber.51 In this way, as well as through the payment of wages before getting the full price for the coal, the batou supplied working capital. Most companies had to rely on expensive bank loans to supply working, and even to some extent fixed, capital,52 and company cash flow could be greatly improved if, by paying in arrears for coal extracted, the burden of the wage fund could at least partly be shifted onto other shoulders.53 So a prospective contractor needed a considerable amount of capital for wages and materials: 600 to 900 yuan (approxi- mately a month's wages for 100 workers) was required to set up as a batou at Zhengfeng in 1931.54 This circumstance forced the contractor into depen- dence on creditors or on a partnership, with investment often coming from local notables and gentry. While this added yet another level of exploitation on to the workers, from the company's point of view it delayed the necessity to advance working capital and improved company liquidity.

The contract system had other, more general, advantages for the mine management. It allowed them to share the risks of the business. Because the company had few obligations to contract workers (known as waigong, or

mines. For some examples of extraeconomic means of control, see Liu Dunkui and Mei Zhen "Zhongguo zaoqi meikuang zibenjia dui gongren de canku boxue," Xin jianshe, 1965:6 (June 1965), 66-69.

51 KYZB, 143 (21 May 1931), 747. At Kailuan, the contractors were responsible for all timber- ing, haulage, and ventilation within the specified area (see Kairan tanko chosa shirv6 106). The situation was similar at Zhengfeng (see Sakamori, "Hoku-Shi tankogy6," 48-49). The butties performed the same function in Britain (see Griffin, British Coalmining Industry, 57).

52 See T. Wright, "Shandong Mines in the Modern Chinese Coal Industry up to 1937" (Ph.D. thesis, Cambridge University, 1976), 55, 85-87, 415-17.

S3 The degree to which this burden was really shifted depended of course on the length of time between the date the workers were paid and the date the company paid the contractor. There is not much information on this. At Liujiang, workers had to be paid every ten days in arrears, but the company advanced to the contractors 70 percent of the contract price for the coal extracted in those ten days in order to enable them to pay the wages. The rest they presumably paid over at the end of the month.

S4 Sakamori, "Hoku-Shi tank6gy6o, 53-55. 55 The manager of the Jingxing mine explicitly mentioned this factor as one of the chief reasons

for the continued use of the contract system in his mine in the 1930s (see Gongshang banvuekan, 3:14 (15 July 1931), 145-46). The need to adjust to the changing demand for labor was also one of the factors behind the emergence of the contract system in the docks in the nineteenth century (see Jiu Zhongguo, 189).



670 TIM WRIGHT

outside workers), their numbers varied much more in response to fluctuations in output than did those of directly hired workers (ligong, or inside workers).55 This phenomenon can be seen most clearly in the disastrous period of the late 1920s and early 1930s when the output of many mines first fell precipitously and then recovered. At Zhongxing when the mine had just reopened in 1930, there were around 2,000 ligong and 1,600 waigong; by 1935, the number of ligong had declined somewhat, but there were nearly 6,000 waigong. Over the same period, output rose from 350,000 to 1,130,000 tons a year.56 Of course the greater stability of ligong employment was due not solely to the companies' feeling of greater obligation to them, but also to the fact that the more skilled maintenance jobs less directly tied to the extraction of coal-the types of jobs done by ligong-needed to be done even when production was in decline.

Even in normal times, the contract system simplified cost calculations and

may have kept down costs. This point is central to A. J. Taylor's interpretation in the British case, as well as to studies of contracting in China and India.s7 Unfortunately, there is insufficient detailed information to document such a statement. One way in which costs might have been reduced by the

system lies in the fact that fewer well-paid staff were needed-the South Manchurian Railway Company interpreted the costs at Kailuan, which were lower than costs at the mines at Fushun, in this light.58 However, since the contractors themselves needed incomes large enough to pay for several supervisors, more data would be needed to quantify the final effect of any savings.

The influence of the system on productivity was mixed: it provided a

"self-acting stimulus," in D. J. Schloss's words,59 to the contractors to increase output but, as the workers were often paid time rates, there was much less incentive for them.60 Kailuan's managers felt that the use of contract labor was a barrier to raising the level of productivity, and implicit in many calls for abolition of the system was the idea that increasing the very low wages would

help to augment output per man. During an experimental period in the operation of a ligong system, the Zhongyuan Company in Henan claimed that

56 Zheng, Minguo shijiunian Shandong kuangye baogao, 247; Zhang Huiruo, Diwuci Shan- dong kuangve baogao (Jinan, 1936), 118-20. Not all sources agree on the exact figures for ligong and waigong, but the general picture remains the same. Other similar examples can be quoted, for instance from Jingxing (KYZB, 377 (7 April 1936), 1141) and Jiawang (KYZB, 99 (21 June 1930), 43).

57 Jiu Zhongguo, 207; Taylor, "Sub-contract System," 228-30; Pollard, Genesis of Modern Management, 38. The Royal Commission was told: "In most cases it [contracting] results in economy of working." Report, Evidence, vol. 5, pt. 1, 179.

58 Kairan tanko chosa shirvo, 99. 59 Quoted in Taylor, "Sub-contract System," 218. 60 Shiyebu, laodong nianjian bianzuan weiyuanhui, Ershiernian Zhongguo laodong nianjian

(Nanjing, 1934), sec. 1, 265-66. The lack of incentive to the workers was also seen as a major problem in the textile industry (see Okabe, "Shina b6sekigyo ni okeru r6od ukeoi seido," 226).




output per man increased to match a 50 percent rise in wages, but the company later switched back to the contract system.61

The evidence presented here shows that the contract labor system was by no means solely a hangover from traditional society, but rather that it performed useful economic functions for the capitalist enterprise, whether foreign or Chinese owned.

v

In addition to delineating the functions of the batou in a mainly static sense, it is necessary to analyse the dysfunctional aspects and inherent contradictions of the contract labor system itself. Many features which were originally seen as advantages of contract labor eventually became obstacles to the coal industry's further development and began to be discarded. So in the late 1920s, many mines started to modify or even to abandon contracting, though not solely as the result of internal or economic factors. The contract labor system was a social as well as an economic institution, and many of the changes it underwent resulted from the changed social and political climate which fol- lowed the rise to power of the Nationalists in 1927-28.

The very evasion of management that had been the system's basic advan- tage began to become a burden as the size of mine and degree of mechanization increased. In Britain, contract labor was used mainly when coal mines were run as manufactories, and management later came to feel that it was incompatible with the needs of a large mechanized coal mine.62 In Japan, where we have a clearer picture of the system's rise and decline than we have for China, it tended to disappear earlier in the larger mines.63 The larger the mine, and the more mechanized-and the two generally, though not invar- iably, went together-the greater the pressure to bring the process of extraction under direct management control. For when a very heavy investment had been made in a moder pit-one at Fushun cost 10 million yen in the 1930s64-it was not in the interests of the owners to allow the disorganized working of the face that characterized the contract system, and they therefore wished to impose their own methods on the work force. This change was impossible so long as the contractors were working on a piece basis. Their tendency to work the deposits in their own short-term interests rather than in the long-term interest of the mine owners was one of the reasons given by

61 Hou, Disanci Zhongguo kuangyejivao, 260; KYZB, 36 (28 February 1929), 586-87; KYZB, 84 (28 February 1930), 562.

62 For England, see Taylor, "Sub-contract System," 231, and Pollard, Genesis of Modern Management, 42. For India, see Buchanan, Development of Capitalist Enterprise, 271. A man- ufactory is a site where many workers are gathered together in one unit, but where no mechanical power is used.

63 Murakushi, Nihon tanko, 108; Sumiya, Nihon chin rodo 106. 64 "The Ryuho Coal Mine," Contemporary Manchuria, 1:4 (November 1937), 64.



672 TIM WRIGHT

Liujiang's engineer for the abolition of the system in that mine in 1929.65 In India, where the conservation of coal resources was even more important than in China, this factor was one of the main reasons for official opposition to the ticcadari system.66 In Britain, an 1851 report put it succinctly: "His contract being terminable at short notice [the contractor] has no abiding interest in the mine."67 Most Chinese mines tried to limit this problem by insisting on a clause stipulating that the contractor had to follow the instructions of the full-time staff,68 but here also contradictions appeared: if the management had to provide sufficient staff to ensure that company directions were being fol- lowed, they might as well dispense with the contractors altogether, as the ability to do without such staff was one of the main advantages of the system.

The use of contract labor tended to obstruct the formation of a permanent and more skilled labor force.69 Seasonal variations in the availability of labor, while by no means caused by or occurring only within the contract system, tended to be greater among waigong than among ligong. The ligong were more likely to be full-time miners, while the flexible nature of contracting, which in some ways benefitted the company, also encouraged seasonal employment of part-time farmers.70 In a similar way, contracting stood in the way of efficiency-oriented reforms proposed by the companies: the ending of the practice of working double shifts of sixteen hours or more at a stretch was one of the main targets in a campaign at Kailuan to raise productivity and to get rid of the contract system.71

The fact that decisions by the subordinate staff in a large mine-for instance, the setting of the contract price and the allocation of the most profit- able seams-could greatly affect a contractor's income created an ever- present danger of corruption in the internal working of the firm. This problem was common in India, and in China a major scandal rocked Kailuan in 1935

65 KYZB, 22 (14 November 1928), 357. 66 S. Panandikar, Industrial Labour in India (Bombay, 1933), 96. It is also interesting that

Sumiya attributes the fact that contracting out the extraction of coal disappeared more rapidly in Japan than in England to the circumstance that, whereas in England the mine operators generally leased the mineral lands, in Japan they owned them and thus had a greater interest in their long-term conservation. See Nihon chin r6d6, 101.

67 "Report on Charter Master System,'' 404. Another report said that the system was conducive to the "working of the pits in an unskilful way, and to the neglect of discipline and measures of safety." See also Pollard, Genesis of Modern Management, 38.

68 For the Changcheng mine (in northeast Hebei), see KYZB, 22 (14 November 1928), 358; for Liujiang, see KYZB, 143 (21 May 1931), 748.

69 Lowe, Facing Labour Issues, 22. See also Gongshang banyuekan, 3:14 (15 July 1931), 145-46.

70 The exigencies of seasonality were such that if the contractors wished to keep up output they sometimes had to raise wages in order to attract labor from the alternative agricultural employment in the busy season; this happened in 1931 at Jiawang where, however, the contractors found it rather more difficult to enforce a cut once the temporary shortage had passed. See KYZB, 163 (21 October 1931), 1057.

71 Nathan to Turner, 8 May 1932, Nathan Papers.




when it was discovered that many of the senior mine staff, both Chinese and Belgian, were in receipt of money from contractors. The nephew of one of the Belgian members of the board was accused of receiving money while head of the company's Zhaogezhuang colliery, and in all thirteen Belgian and twenty Chinese staff at four of the company's five collieries were implicated. Kai- luan's general manager concluded from this that there was urgent need to abolish the contract system.72

These economic drawbacks of the system are not, however, of themselves sufficient to explain why contracting began to decline from the late 1920s. Some of the disadvantages were present from the start and, even where the problems were intensified by increasing mechanization, it would be difficult to argue that Chinese mines were significantly more mechanized in the 1930s than in the 1920s, although the trend was in that direction. The changes of the late 1920s were due rather to another disadvantage of the contract system, one which was common to all countries, but tied to social and political rather than to economic or technical factors-that is, the opposition of the workers. Similar complaints were made everywhere of the exploitive nature of contracting. In 1858 the Staffordshire miners struck against the system, while in the Takashima mine in Japan outbreaks of violence among the workers led to its reform and later abolition in the late nineteenth century.73

In China before World War I, there were some indications of management opposition to the contract labor system, but it still had a strong hold over the consciousness of the workers, linked as it often was with the traditional secret societies.74 From the 1920s, however, the workers increasingly came to op- pose the system. This was partly the result of the emergence of a more permanent labor force, which felt less in need of contractors to find jobs. It was also a question of political education and consciousness. In 1922 Liu Shaoqi used his workers' education classes at Pingxiang to teach the miners as to how the contractors and companies were exploiting them;75 the communists were also active at that time at Kailuan and later at Mentougou and no doubt at most other mines.76

The partial reunification of the country effected by the Nationalists' North-

72 Panandikar, Industrial Labour, 96; KYZB, 331 (21 April 1935), 291; Nathan to Turner, 6 March 1935, Nathan Papers.

73 "Report... on the State of the Population in the Mining Districts," British Parliamentarv Papers, 1859, sess. 2, XII, 6; Murakushi, Nihon tanko 46-50, 113-14.

74 Lynda Shaffer Womack, "Anyuan: The Cradle of the Chinese Workers' Revolutionary Movement, 1921-1922," in Columbia Essays in International Affairs (New York, 1970), V, 176, 178; Hoover to Detring, 4 August 1899, Nathan Papers. For the Secret Societies, see J. Chesneaux, Secret Societies in China in the Nineteenth and Twentieth Centuries, G. Nettle, trans. (Hong Kong, 1971).

75 Womack, "Anyuan," 188-89, citing Hongqi piaopiao, 12 (May 1959), 158-59. 76 Deng Zhongxia, Zhongguo zhigong yundong jianshi, 1919-1926 (Beijing, 1953), 78-84;

Beijing shifan daxue, lishixi, sannianji, yanjiuban, Mentougou meikuang shigao (Beijing, 1958), 33-37.



674 TIM WRIGHT

ern Expedition created for a short time a social and political atmosphere conducive to change. During the mid and late 1920s, many mining workers were politicized and unions were set up by local Nationalist party branches in many coal mining areas. Most of these were "yellow unions," explicitly dedicated to cooperation between capital and labor, and in some cases they came to be dominated by the contractors themselves. This happened at Liujiang in 1929 and the fact that, after the collapse of the Kailuan union in the mid 1930s, many of its leaders got jobs under the contractors suggests that the situation was similar there. Certainly the batou were very eager to tame the union, and several times used bribery to this end.77 Nevertheless, the workers, who had an increased, if still limited, freedom of action, expressed their dissatisfaction with the system, with or without the support of the formal union structure.

Many of the labor disputes which took place in Chinese mines during the 1920s and 1930s were rooted either in the workers' determination to get rid of the system altogether or in their struggle to reduce the gap between the conditions of the waigong and those of the ligong. The workers came to see the system as parasitic, with the contractor's share a deduction from their already low wages.78 Among the important strikes in which calls for abolition were made were those at Kailuan in 1922 and 1931; at Liuhegou in 1932, and at Jiaozuo in 1933. The Zhongxing strike in 1932 raised a demand for equal bonuses for waigong and ligong.79

The abolition issue was raised several times at Kailuan, where 80 percent of the labor disputes in the early 1930s were caused by contractors. During a strike in 1929, the company had accepted the government's unfavorable view of contracting and said that, while total elimination of the system would still be extremely difficult, the management would make a start by instituting more direct registration of workers, by reducing the number of contracting companies, and by themselves investing in these companies. Such investment would enable the mine companies to exercise greater control over the operations of the contractors; the lack of such control had always posed intractable problems for the mine management. The problem at Kailuan was exacer- bated by the fact that, because each contract group was very large, there was more than one level of contractors. Several strikes and disputes there in the

77 KYZB, 137 (7 April 1931), 647; KYZB, 140 (28 April 1931), 693; KYZB, 143 (21 May 1931), 747; KYZB, 273 (7 February 1934), 514.

78 The contractors paid out in wages from around 60 percent up to 90 percent of what they received from the company. Their share included, however, the expenses they incurred in providing materials as well as some of the costs of supervision, both of which would still have to be met even if the system were abolished.

79 Ma Chaojun, chief ed., Zhongguo laogong yundong shi, 5 vols. (Taibei, 1959), I, 232; III, 1104, 1127. Ershiernian Zhongguo laodong nianjian, sec. 2, p. 134. Yishibao, 19 May 1931, reprinted in Gendai Shina no kiroku (Beijing, 1924-1932), Hatano Ken'ichi, ed. (May 1931), 279-84.




1930s were triggered not so much by the demand for the abolition of the system as a whole, as for the removal of the "small contractors," who were perceived by the workers as merely adding to their burdens. A strike in 1934 was attributed to exploitation by second or even third level contractors, while further trouble occurred there in the next year over the same issue.80

Under this pressure many companies modified or discarded the contract system. With the northern advance of the Nationalist armies, the workers at Fuyuan and Fuhua in Hubei rose up and overthrew the contractors in 1927, establishing in their place the small butty system. The Jingxing mine in Hebei also changed to this system in 1930, while Zhongyuan had adopted direct hiring in 1927.81 This last change, however, was not a success, nor was a similar one a year later at Liujiang, where 5,000 yuan was lost in the first month, partly because the new gangs were too large-eighty to a hundred men. After these were reduced in size the situation improved but was still unsatisfactory. Later a collective piecework system was introduced, based on small groups, and good results were claimed for this arrangement. Yet in 1929 the contract system was readopted. One of the main reasons for this step seems to have been that the shortage of trained supervisory staff had obliged the company to employ as supervisors the previous underlings of the contractors. These employees, vulnerable to pressure from their old bosses who strongly opposed the change, held productivity down, which brought losses to the company and a return to the old system.82

In Manchuria, the main Japanese mines changed in 1929 to a system whereby the contractors merely received a commission based on the amount of wages paid to their workers; the contractors did not handle the wages themselves. Since the popular pressures for reform were weaker in that area, more purely management considerations were dominant.83 In Japan, this change in method of payment was the first step toward the abolition of the contract system,84 and it was seen at Fushun as an attempt to weaken the power of the contractors. It meant that the contractors' income was no longer directly affected by the method of working the seam, and thus allowed the mine owners to exercise greater control over the process of production. But even then the batou had to be made foremen so as to facilitate the control of labor.

80 For a 1929 government report, see Nongkuang gongbao, 14 (July 1929), 6-9; also KYZB, 181 (7 March 1932), 196; KYZB, 273 (7 February 1934), 514; KYZB, 275 (21 February 1934), 545-47; KYZB, 309 (7 November 1934), 1090; KYZB, 315 (21 December 1934), 33-34. The 1934 and 1935 strikes took place at the company's Majiagou colliery.

81 KYZB, 63 (21 September 1929), 227; KYZB, 84 (28 February 1930), 562; KYZB, 129 (7 February 1931), 526; Hou, Disanci Zhongguo kuangye jiyao, 17.

82 KYZB, 143 (21 May 1931), 746-47. 83 Minami Manshu k6zan rodo jijo, 33-34. "Labour Management at Fushun," 40, attributes

the change to abuses inherent in the old system. 84 Murakushi, Nihon tanko, 60-63.



676 TIM WRIGHT

In general, the social and political atmosphere in China was less receptive to change in the 1930s than in the late 1920s, and this mood was reflected in a slowing of the pace of reform in the mines, something which was no doubt also influenced by the varied results of the experiments in new labor systems. Change did continue, however. In the 1930s, some of Zhongxing's miners worked in small butty groups, although most were still controlled by contractors. In Shanxi, the Jinbei Company went over to direct hiring in 1933, while the Luda Company in Shandong adopted the small butty method in 1934.85

Not surprisingly, there was considerable opposition to these changes on the part of the contractors. The problems of Liujiang were by no means unique, and both Fushun and Benxihu in Liaoning also faced stubborn resistance when they tried to bring the contractors under control. When, after two years of pressure from the workers, the small butty system was introduced as an experiment at Kailuan's Zhaogezhuang pit-head, the contractors organized groups of local rowdies to prevent the workers going on shift, and also tried to sow discontent by suggesting that the payment of wages was late.86

Ting postulates that it was easier to abolish contracting in the smaller mines.87 This theory, however, not only goes against the main thrust of our earlier analysis of the growing disadvantages which the system posed to larger mines, but it also seems to be contradicted by the evidence. The two largest collieries in the country were, in fact, among the first at which changes were introduced: The South Manchurian Railway Company instituted major reforms at Fushun in 1929, while in the 1930s Kailuan's management began a

system of registering all waigong, preparatory to making a complete record of shifts worked by each man and thence to establishing direct company control over the labor force. Zhongxing, the third largest mining company, similarly had instituted before 1937 a system of registration of waigong.88 At most mines, however, no such modifications were made. Some smaller mines did, it is true, abandon the contract system, but there is little reason to suppose that the opposition faced by Kailuan's management when they brought in reforms would have not arisen also in the case of a smaller mine, or that opposition in the latter would have been easier to overcome.

In fact the trend towards the decline of the contract system in China in the late 1920s and 1930s was only partial and incipient. It was caused mainly by political changes which gave greater latitude to the workers in their resistance

85 KYZB, 171 (21 December 1931), 40; KYZB, 297 (7 August 1934), 906; KYZB, 358 (14 November 1935), 734; Zhang, Diwuci Shandong kuangye baogao, 194.

86 Minami Manshu kozan rodo jijo, 41; Torgashev, "Mining Labor," 539-40; KYZB, 329 (7 April 1935), 257; Pryor to Turner, 4 April 1935, Nathan Papers.

87 Ting, "Coal Industry," 249. Ting cites the Sino-British mine at Mentougou as an example, but Mentougou meikuang shigao does not mention the abolition of the system there.

88 Nathan to Turner, 4 February 1932, 14 January 1933, Nathan Papers. Chuko tanko rodo gaiyo, 41-42.




to contracting, though the economic rationality of the system was also becom-

ing less compelling as Chinese mines slowly modernized. Variations between individual mines in the actual timing of changes undertaken can probably best be explained by contingent political circumstances rather than by any systema- tic economic differences. The system proved resilient in China, however, as it did elsewhere, and even after 1949 the communists found its extirpation a far from simple task.89

vI

To interpret the contract labor system as representing a form of organization which served a purpose in many countries during early industrialization is not of course to say that it was a universal, still less a necessary, stage in the evolution of capitalist industry. Its existence and incidence, and, most of all, its form were dependent on the nature of the preexisting labor institutions, on the characteristics of the labor market, and on the exigencies imposed by the needs of the particular economic development of the country or area con- cerned.

There is, nevertheless, sufficient evidence of the system's existence in different countries and industries to demand an interpretation not solely bound to any particular culture.90 The fairly large-scale form of contracting charac- teristic of the Chinese coal industry was mainly suitable for industries requiring large amounts of unskilled labor. It was thus prevalent in railway construction, mining, and some modern factory industries, and in some respects differs from the smaller-scale contracting of, for example, the engineering industries, where a skilled worker led a small group of helpers.

The contract labor system was used in order to deal with certain problems in the recruitment and management of labor arising in the early stages of a

country's industrialization. The imperfections existing in the labor markets of

premoder economies were partly overcome by the use of contracting, which also provided a more familiar environment for new workers to live and work in. The inadequate supply of skilled supervisory and managerial staff, accustomed and trained to work within a large organization, has been one of the

major bottlenecks impeding expansion of industry in underdeveloped coun-

89 Brugger, Democracy and Organization, 90-95. 90 Apart from its use in the coal industries mentioned above, contracting was described as

practically ubiquitous in British industries in the nineteenth century (D. J. Schloss, Methods of Industrial Remuneration, 3d ed. (London, 1907), 202). It was found in many American industries in the early part of that century (J. R. Commons et al., eds., History of Labour in the United States, 2 vols. (New York, 1926), I, 103, 309-10, 339ff.), and the Moscow-Saint Petersburg Railway was built using it (Blackwell, Beginnings of Russian Industrialization, 297-302). In this century it was found in many underdeveloped areas in Africa as well as in East Asia (see Moore, Industrialization atd Labor, 126-30, 142-44). For Japan, see J. Hirschmeier and Tsunehiko Yui, The Development of Japanese Business, 1600-1973 (London, 1975), 119-20, 192.



678 TIM WRIGHT

tries, yet there is no shortage of smaller-scale commercial and financial en- trepreneurs. The contract system was utilized in part in an attempt to use the latter type of talent to make up for the lack of the former. It allowed management units to be broken down to a scale not requiring any sophisticated organizational techniques, and the problem of providing an inducement to work was met by the commercial relationship existing between management and contractor, which was a self-acting incentive.

Just as the existence of these problems was the background to the emergence of the contract labor system in so many societies, so their amelio- ration in the course of economic development was the precondition for its disappearance. The formation of national or at least regional labor markets, and the increase in the supply of skilled labor with the growth of modem education, lessened the need for the system, but the actual timing of its disappearance often reflected short-term political and social changes rather than economic ones. This interpretation is thus close to Taylor's view of subcontracting as "a stage in the development of a managerial society. "91

9'Taylor, "Sub-contract System," 235.



Documents

"A Method of Evading Management"--Contract Labor in Chinese Coal Mines before 1937