Los Angeles herald., 1906-07-12
NELSON EXPLAINS
PROFIT SHARING
ST. LOUIS MANUFACTURER
TELLS OF LECLAlR
Los Angeles Has Only Distributing
Station on Pacific Coast of Sys-
tem-No Police In Model
Town

THE story Of Leclair" was the sub
ject Of an address of thirty minutes by
N. O. Nelson of st. Louis last evening
before the Los Angeles Fellowship at
Blanchard's art gallery
Mr.. Nelson is the founder of the N. o.
Nelson Manufacturing company, which
was organized thirty-four years ago
and widely known as an exponent of
the profit sharing system. In the course
of his address Mr. Nelson said:
I'm 1890 founded the town of Le-
clair in Illinois. eighteen miles from
st. Louis. 1t consisted Of 125 acres of
good land. The purpose was to pro-
vide work to make homes for the en-
ployes who should work in the fac
tories and all to enjoy social utilities
and attractions. 1t was not for any
land speculation, but a common sense
effort to make better living conditions.
Likes kindergartens
For years we have had a kinder
garten where the children have at
tended And believe that the kinder
garten principles are the best in the
world for all classes and ages of peo-
pie.
For recreation we have bowling, oil
liards, baseball, tennis, dancing and a
large lake for rowing in summer and
skating in winter. The streets are
winding as in parks. Large flower beds
are around the factories, halls and lake.
"Leclair has got along for sixteen
years without any rules or policemen or
boss. without an arrest for any cause
whatever.
"The company by its regular en-
ployes has kept the roads and public
grounds in good order and attended to
the other public services.
"There are no idlers, either rich or
poor. Every man has his job, living
income his home to suit him and plenty
to interest him and the family.
Not One Arrst
"By the average of arrests in other
cities in this country, Leclaire should
have had 1S0, but has had none what
ever.
"The idea is that when men have
steady work, homes of their own and
are interested i'm the times, they do not
want to interfere with their neigh
bors The residents are of all nation
alities and average working people,
and while only a few of them are total
abstainers a from intoxicating liquors
the town is not in favor of removing
the restrictions in the deed, prohibiting
saloons.
"The original financial basis of the
factory was $25O0, which has now
grown into the millions. From a very
small beginning the inhabitants of Le-
clair now number over 900. There are
no churches in the town, the inhab-
itants being of a cosmopolitan nature,
belonging to many churches, and
go to their respective denominational
churches at the town of Edwardsville,
a short distance.
June / completes our fortyfirst half
year of proftsharing with employees
and the third half year with customers
Dividends to All
'Dividenda on wages for the whole
period have ranged from per cent
to Is per cent Dividends to customers
have been % per cent on gross profit
difference between first cost and SELL
ing price, of their purchases, averaging
about per cent on the selling price.
"The dividends in the twenty years
have amounted to several hundred
thousand dollars. They are now at the
rate of about 100000 year.
"This is the dollar dividend; the
larger and better dividends are the mu-
tual interest, the good will, the bridge
across the chasm between capital and
labor, between buyer and seller. Not
one man in the deal is injured; every
man is benefited.
"The property is made more produC-
tive by the process of distributing the
ownership and the benefits.
The Scheme
"In round figures the capital gets
about four -tenths. employees one-tenth,
the customers, three-tenths, the pub
lie two-tenths. The capital which gets
one-tenth is mainly held by the en-
ployes, who have received it as divi-
dends in past years. 1, as chief capital
ist take none.
Profit sharing are two meaningful
words. Profit is a gain above cost, an
addition to the working capital There
must first be profit before there can be
sharing.
"The fret co-operators disdained
profit, they sold at cost. No new cap
ital grew on the tree, there was no
dividend to attract common mortals
and the angels of pure equity were too
few.
owens idea was high. too high for
his times and ours. Then came the
famous twenty-eight with their pound
apiece, l40 paper dollars. They charged
themselves all the market would bear
and kept it. The profit made their
capital, the system spread, last year
the profit was $45,O0O,000 in Great
Britain and as much more in the rest
of the world.
Start With Little
"Our profit sharing profit, like CO.
operators profit isn't given to the cap
ital but to the customers and the en-
ployes. Co-operators start with little
capitll and build up, we start with
capital ready made, the customers and
employees use it and get the profit For
most of it (mine) they pay no interest.
"That is a sort Of restitution for not
letting the customers in thirty-four
years ago. when l started the business,
or twenty years ago, when l let the
employees in.
"Within the past year and a half all
the profits have been shared with the
employees customers and the public.
"Of this manufacturing association.
Los Angeles has the only distributing
station on the Pacific coast"