The morning call., 1890-07-15
RAILROAD Co-OFEKATIoN.

- The latest move in cooperation is pro-
posal by the Illinois Central Railroad Com
pany to interest its hands in the enterprise
by selling each of them one or more shares
Of stock on credit. In France this form of
cooperation has been common for quar-
ter of a century or more, and it has occa-
sionally been quite successful. 1t has
never been tried on railroads. But mine
owners, foundTies and other manufacturing
establishments have agreed to divide profits
with their Men, after deducting moderate
interest ON capital invested and in some of
the northern departments the plan has been
found to work well. In this country, CO.
operative distribution, cooperative credit
and cooperative insurance are carried on
to a considerable extent; but cooperative
production and cooperative transportation
have not mads much Roadway. We have
thousands of building societies, which are
based on cooperative credit; large num-
Der CT cooperative insurance companies,
most Of which are connected with agricul-
tural oranges; and several cooperative
stores, where goods are sold in retail lots at
wholesale prices, in Pennsy ivania, Texas,
Ohio, New York and other States.
There is no abstract objection to the
profits of their labor. The arguments Of
French economists on this proposition are
simply unanswerable. But, in practice,
the plan comes into collision with the
axiom that lie who shares the profit shall
also share the loss. Ii wOrkmen are en-
titled to a dividend out of the profits of the
industry in which they are engaged-when
there are profts-it will probably be urged
that they should pay their share of the
losses, when there are losses. Ia 1865, the
proprietorS Of the wildwood IL Methley
Coliierie5 in England agreed to divide
profits with their miners, after a certain de-
uuctOn for interest OH capital. For sew
era years the plan worked satisfactorily.
But decline in the value of coal converted
tile profits of the cOlliery into loss, and
the miners, whose wages had been some
what lower than those prevailing in col
lieries which were not cooperative, threw
up the bargain, and the cooperation ended.
We are not informed whether the Illinois
Central proposes to couple with its sale OF
stock on credit stipulation that its hands
shall work for less than the current
value of such labor as theirs. There is
probably no such understanding. The COM
pany's object is most likely to enlist the
interest of their woTkmen in their work
and to indispose them against strikes.
They would attain that object if they sue
ceeded in inducing their hands to become
stockholders. So long as the company
does good business and pays regular divi-
dends the hands will benefit by sharing its
profits. If its business is diverted by com
petiug lines, or by any other accident. there
will be no dividends for the stock, and the
hands will merely enjoy the honor of being
stockholders. But even then, as railroad
stocks are not assessable, the possession of
more or less shares can involve no loss.
1t is eminently desirable, on general
grounds, that workmen should share in the
profits of their labor. The capitalist has
right to interest on his capital, as the work
man has right to the wages of his labor.
Whatever is over after these two demands
are fairly adjusted ought to be divided be-
t15'cees:y the two. That at least, is common
belief. But in practice a third interest is
left in the cold by this distribution of
profits. That is, the knowledge and expe-
rience which conducts the enterprise so as
to make it profitable. 1t is the want of that
knowledge and experience which has caused
the failure of so many cooperative product
i've undertakings. When the coal-miners of
ShlrIand, in England, complained that their
employers were taking an exorbitant share
of the profits the owners met them with an
offer TO sell out for $4,000. The money
was raised and the collieres passed into
the hands of the men. But the leaders
were not skilled in the business OF selling
coal. They made loss after lDss, and were
finally compelled to sell ont for sec, 900, hay
ing lost every penny Of their savings.
If the scheme Of the Illinois Central Di-
rectors should be produced Indefinitely,
tn control Of the road would probably ul-
timately pass into the hands of the con-
ductorS. engineers, brakesmen and labor
ers. Whether it would then earn money,
II whether it would be so administered that
.1e stock would be wiped out by decree