New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1909-03-15
PROFIT SHARING
Il Series of Promising Experiments
Business Principles.
London. March a

! been satisfactorily tested in the business os
| the South Metropolitan Gas Company Strikes
have ceased: staff of permanent workers has
been recruited: WOrkmen are cOntented, thrifty
and efficient; and dividends have not declined
! although profits are shared with wage earn
ers. This policy initiated by the late Sir
! George Livesey who distributed bonuses
among the stokers and other workmen on tia
| payroll until more than five thousand OF them
| were converted into shareholders. with S1.75O-
| 600 invested in the business and with repre-
| sentatives Of their own on the board Of man.
| aSement Mr. T. c. Taylor proved that thu
same principles could be applied 10 woolen
| manufacturing. He began by giving paid up
I pound shares to his workmen at Bailey. two for
/ earnings above a pound week and one for
] earnings below that level and he ended by al
| lotting bonuses in proportion to wages received
These industrial undertakings were thrown
J open to the workers. who became profit sharers.
| with an influential voice in the direction and
! with a direct interest in the maintenance Of
] friendly relations with their employers. The
| trade unions lost their grip upon the work
! men; the standards Of efficiency were raised,
( and the effect of property rights was the de-
veIopment of conservatism among the wage
| earners. AS soon as they we're small capital
| lists with an interest in the business they were
! better workmen and increased the profits
The movement has recently received fresh
irnpuIse from the conversion Of several success
| full manufacturers to profit sharing Sir Chris
! topher Furness after a series Of battles with
/ trade unionists at Hartlepool. has made peacs
/ with them bv admitting his woTkmen to a
| share in the profits. They are paying for their
/ DroDertv rights themselves by agreeing to 4
| reduction of . per cent in their wages When
/ the face value Of their shares is covered ~
| these successive reductions they VIII have
| stock on which per cent interest is guaran-
! taed and which can be sold TO fellow worknnen
/ when they leave the employ Of the shipbuild-
| inc, company. The shares are not bonuses be-
| slowed for efficiency and faithful service DuS
! arc earned on easy terms. When the fixed rate
/ of interest is paid a dividend is declared after
/ the requirements OF the depreciation and re-
! serve funds have been met and a special al
| 1ovrance has been made for the service Of cap
! ita1 As the dividends will be wiped out bY
| strikes suspension OF orders and inefnclent
/ labor there Is a strong inducement for keep
\ inc faith with employers and in making ths
/ business as profitable possible Tho expert
I rnent is not essentially different from tnas
/ tried a+ the FIswick works and other large
| manufacturing concerns; but the arrangements
| for APPLYING the principle TO a large WORKING
! force and establishing a federation OF enlgnt-
/ a,ad seIf-interest and good will between mas
TaTS
| caIIy.
NJ 1e,ar at Port Sunlight is following Sir
| caorga 1ivesev's lines more closely than Sir
| crristonber Furness He does not ask his 200
/ -o-l,rnen to nav for their shares He offers TO
bas,ovv partnership certificates at his own DIS
cration among workers of either sex VINO naF9
been in his employ for at least I'VE years Ineso
will represent a holding Of s2.500,000. which VIII
rank with the ordinary shares A proHt OF
ner cent is reserved for the owner or the original
capftaI but a similar amount Will be PAID 70
the certificate holders II there be an aoequaIs
margin for a dividend of 10 per cent Mr.. Lever
does not wish to be accounted phllantnroplsr
for giving away these certificates, out ratheF
as a sound business man He is confident thar
b5s men when admitted to the privilege OF
nroft sharing. will cooperate in earning per
cent for him and much for themselves ms
great mercantile syndicate IN London known as
TIarrod's is undertaking an analogous scnens
for the benefit Of its working force SO thas
every faithful member Of the stan can nave
nersonal interest in the success or the business
and the certainty OF a pension when invahdated
for continued service
These experiments in profit sharing represent
various interests: the manufacture OF gas. tbs
,vooIlen industry. shipbuiIding, the production
Of soan and the sale OF merchandise on a large
scale. These industries not equally affected
nv trade unionisrn, but their prosperity depends
i'm large measure upon the maintenance OF
we'll ORGANIZED. efficient and COntented WORKING
force The prOprietOrs and chief stockholders
have been convinced that profit sharing Is
sound principle in business. since IL releases tns
manlgenent from apprehension OF strikes ana
Ia bor controversies within the works and raises
the standard of efficiency in every department
They consider IT q safe commercial undertaking
since It diminishes business risks and increases
the value of every working unit Ten per cent
on the capital invested formerly regarded
as a remunerative return for years operations
Five per cent is what shareholders are now
receiving when there are no labor disturbances
and business is good The advocates OF pront
sharing are now asserting that the sUrest way
Of getting ) per cent for the shareholders IS 70
admit the workmen 10 partnership in the ousi-
ness and TO divide 10 per cent with them, aftef
making adequate provision for the Impairment
Of plant and fixtures. Certainly. II is the Uoss
effective method of preventing labor revOlr ana
the stoppage of work and of imparting security
to the business; and there is prima facie eTt-
denCe that when cOntentment pervades the -
adjustment and every one is working at his best
there is less waste OF time and material and
wider margin of profit for the enterprise
Profit sharing is indeed more practical po'-
icy than either cooperation or copartnershlp
which were carried into practice when MauriC'
advocated Christian Socialism and kingsley
wrote Alton Locke" Modern industrial under
takings require unity Of direction and masses OF
capital. and absolute copartnershp oetWee"
masters and men cannot be worked out Gu
equitable principles. Profit sharing can De a.
ranged more easily. since the deterioration Q,