The Butler County press. [volume] (Hamilton, Ohio) 1900-1946, 1915-05-07
DENNISON PLANS
To AID WORKERS
Control Of Company TO Be
Turned Over to Employees.
T%IIE move of the Dennison Man
ufacturing company of Boston
- in turning over to its employ

NJ StuliltS NOIIpdLS VI IOSlOu
- in turning over to its employ
ees the control and large
share of the firms profits is taken to
provide a better means of distributing
the profits where they are deserved and
to place the voting power in the hands
of those who are Intimately acquainted
with the company's affairs.
In accordance with the new scheme,
the company has been reincorporated
under an industrial partnership plan
unique in the history of the country.
Employees of the company who earn
$1,000 year or more and have served
a sufficient time are allowed eventually
the voting power and management of
the business and dividends on $1,0J0,-
600 worth of industrial partnership"
stock. There are now 250 holders of
this class of stock and all are actual
sharers iii the profits after dividends
at the rate of s per cent, cumulative,
have been paid upon the first prefer
red stock, which IS valued at 81 100000
Employees are paid pro rata dividends
in the industrial partnership stock In
accordance with their lengths OF serv-
ice and amounts of salary.
Explaining the new plan, Henry S.
Dennison said:
The chief motives which led us to
reincorporate in the form of an indus
trial partnership We're to provide bet.
ter means of distribution Of whatever
profits there might be in excess of a
fair return on capital and to make cer-
tain that the voting power should al
ways remain in the hands of those In
timately acquainted with the compa-
ny's affairs.
AT the time of the change our com
pany had only one kind Of stock, which
was each year tending more and more
60 pass out of the hands Of those con-
nected with the business A part of
the profits had each year been with
held from dividends in order to pro
vide for the growth of the company,
and therefore from time to time there
had been a distribution of the surplus
in the form of stock dividends. The
company had passed the stage where
the capital invested III it was at great
er risk than the normal business risk,
and its financing required no more
than a normal return to capital What
ever more than this was earned by
the organization, neither the needs of
the concern nor the demands Of justice
required TO be distributed to the stock
holders as such. on the other hand,
two considerations pointed to increas-
ing danger in the future
First. the constant spectacle Of all
fruits of extraordinary efforts on the
part of the managers, foremen or sales
men being turned over TO people who
were almost strangers to the company
could only result in a progressive weak
ening Of enthusiasm and loyalty.
Second, the steady increase in the
proportion of stock held by people un-
acquainted with the business pointed
to the time when the voting power
must inevitably be used for some 9th
er purposes than the permanent good
of the company itself. AS a measure
Of safety for the future the form Of
Incorporation was changed
THE interests Of the industrial part
ners are the interests OF permanent
residents in the business. They cannot
sell their jobs as readily as a man can
sell stock certificates, and they want
permanent and prosperous employment
more than they want immediate re-
turns. Under our conditions they must
pay everything due to the first prefer
red holders before they themselves get
cent and will lose their voting
strength if they materially neglect the
preferred dividends, and they are long
residents in our concern, Intimately ac-
quainted with its affairs and with the
men who have charge of them. Fur
thermore, new men are entering this
voting body each year, and the super
animated are dropping out, so that it
will be at all times live and active
force In every respect this body of
men is the best qualified electorate.
Our principal employees are not
only the working but the governing
body and get the fruits and pay the
penalties of their management. The
plan makes impossible many of the
most insidious dangers of the incorpo-
rate form, such as absentee ownership
and the unearned increment"
The industrial partnership stock has
been accumulating and nearing the ST.,
100000 mark since the articles of
agreement were entered into IN 1911,
and before another year the plant viii
have passed entirely into the hands of
industrial partnership employees, and
the business viii be managed and di-
rected by them
If at any time their management
shall result in The failure of the pay
ment of an per cent dividend to the
first preferred stockholders the latter
are authorized to reassume charge of
affairs until the deficit is made up.