New national era. [volume] (Washington, D.C.) 1870-1874, 1871-11-23
Industrial Partnerships.
Letter from the Hon. ID. y. Morreii, super
tntendenf of the Cambria Works.

| seen your editorial of the 9th instant, alludn
to the subject of Industrial partnerships, AM
asking me to furnish statement of result
obtained under this system at the Cambria
Works. | regret to say that our industry i
| not organized in q strictly co operative form
and you were probably led into error by par
agraph published in some Of the newspaper
last winter concerning scheme of industria
partnership submitted to the board of director
of this company, which would probably be il
operation at this time, were it not for obstacles
which the Legislature might have removed
had it seen Gt to pass bill presented by Hon.
Harry White in the Senate and advocated By
Hon. Miles s. Humphreys in the House O
Representatives, a copy Of which | herewith
send you.
am o firm believer in the practicability and
utility Of cooperation in the smaller industries
which require little capital, and industrial
partnerships in the greater industries, which
demand not only an amount Of capital beyond
the reach of associations of workingmep, but
also financial and business experience and
ability which few of them possess. Purely CO.
operative associations of workingmen have
been quite successful in shoemaking, printing
trunk making, &C., and it is reported that an
association upon the co operative principle has
made complete success in the foundry bust
ness at Troy, New York, but with the par.
ticulars am not familiar.
In your editorial you refer to an extensive
manufacturing firm in New York city as an
instance of successful industrial partnership.
There are at least two large establishments in
New York organized upon this principle and
producing satisfactory results. l allude to
Messrs. Brewster < Co., carriage builders, and
to Messrs Cameron IL Co., iron founders and
machinists, and you will find mention of other
instances in this and foreign countries in DR..
William Elders new book" Topics of the
Day"-in which the labor question in all its
phases is discussed with great intelligence and
ability, and with hopeful benevolence char
acteristic of the author.
While the Cambria Works are not organized
in cooperative form, as near an approach TO it
has been made as is possible under existing
circumstances. The principle of giving work
ingmen an equitable share in the profits of the
business is partially attained by the adoption
Of basis and sliding scale Of wages governed
by the price of iron aud rising and falling
with it.
The higher grades of skilled workmen about
the mill are upon this basis while other grades
not susceptible of being directly governed in
this way, are indirectly Influenced, the price of
iron deciding every increase or reduction that
is made. This system was substantially adopted
iu 1853, but the rapid fluctuations of values
during the war rendered it inapplicable. In
1865, after difficulty with tho puddlers, this
system was restored and their wages fixed at
one-twelfth of the value of rails, wages and
iron being taken at their gold value the aver
age OF the gold price of iron in New York city
during one month determining the wages for
the following month. That this basis is favor
able to the workingman is shown by the fact
that the cost Of pudding in Great Britain is
about shilling to the pound sterling of the
price OF manufactured iron, which gives TO the
puddler but one-twentieth of the value of the
finished product, that value, owing to duties
and freight, being much less than the price of
iron here. Finding this arrangement with the
puddlers to work well, it was afterwards ex
tended to other classes of skilled workmen in
the mill, and as before stated, controls all
changes in wages throughout the entire works,
and has. as far as l can learn, given satisfac-
ton to the workmen generally, who recognize
the correctness of the principle.
Industrial partnerships differ in their details,
but substantially concur in making division of
profits to employer and employed upon the
basis OF invested capital on the one side, and
wages earned during the year on the other
A portion OF the net profit is annually set
aside as interest upon capital, and the remain
der divided between owners and laborers in
accordance with the terms Of the agreement.
AT the present time money may be readily
loaned In such way that it needs no care and
is insured against loss at twelve per cent. per
annum, and it is therefore not unreasonable to
allow ten per cent. upon capital invested in
manufactures before proceeding to make divi.
dends OF profits to the laborer. This amount
OF interest is bat just equivalent for the
wages received by the workmen in this part
nership between capital and labor. Capital
takes all risks, for the workmen, in case of
IOSa inSfaad of prnff ihpt 9TH
This scheme of Industrial partnership in
wolves the payment of ordinary and usual
wages to workingmen, and in addition thereto
certain proportion of the PROFESSIONALLY
one-half-abOve interest on capital, which
labor, skill, good management and capital
combined may have earned. 1t looks like a
one sided bargain, in which all the gains would
go to the laborers, but believe the employer
will always be compensated by the increased
economy and productveness in his business,
and by absolute assurance against the dis
turbance and loss which so often result from
conflicts between capital and labor. Individual
owners may at any time initiate the Brewster
and Cameron firms, but chartered companies
having numerous shareholders cannot so readily
do so. Many of these companies, being com
peiled to keep up with the march of invention
and progress of improvements, have been OBJ
liged to invest all their earnings for years in
new machinery, extension of works, &C., re.
celvlng no dividends until their property may
have become double the value Of their stock
VI course stock must be the basis of dividends
to capital in industrial partnerships, and com
paAes whose earnings have been invested in
extensions and Improvement could not start
LARRY without increasing stock to an amount
which will represent the value Of the property
at the time, and to do this as the law now
stands, they become liable to the tax on divi
bends to the extent of any increase of capital
Stockholders may be willing to incur the risk
and make the sacrifices which the experiment
OF industrial partnership involves. but are not
willing to pay a-huge bonus to the State at the
outset. After entering into partnership, other
difficulties must be encountered. 1t would be
impossible to reinvest or accumulate all earn.
ings, for q distribution to the workingmen
would be compulsory, and the hardship Of
being taxed twice by the State in this process,
first upon the money when earned, and again
when distributed, appears like q wanton out.
rage. Manufacturing corporations pay the
same taxes on their lands, houses, mills, fac
tories, and other property that are imposed on
Individual proprietors engaged in similar bust
ness, and pay IN addition thereto bonus upon
capital stock, tax upon their net earnings.
and another tax when these same earnings are
divided among stockholders. This exceptional
taxation of corporations seems to have origin.
ated from the idea that they are monopolies,
bat this is in no sense true of MANUFACTURING
companies engaged in business in which any
individual having sufficient capital may enter
upon, and which are compelled TO send their
trebly-taxed product to market in competition
with wealthy individual operators who have no
such burdens to bear. This unjust and i'm
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