Evening journal., 1915-07-07
CAPITAL NOT GETTING THE
LIONS SHARE OF THE PROFITS
Report to National Civic Federation Shows the Socialist COHen
tiOH is Based Assumption Mistaken Deductions From the
Census Returns Committee Finds That "GrOSS Product
Has Been Used as the Measure Of Weath--State
ment Of the Proportion for Capital and Labor
The Ford Method
CFrom the Wall Street Journal.)

interest nor profits. II this depreci-
alton allowance be estimated at per
cent. of the capital invested, it is
found to be $124 per employe. which
leaves S175 for interest and profits.
With no allowance for depreciation,
the share of capital appears to be
practically half that of labor With
allowance for depreciation. the share
of interest and profits appears as
practically three-tenths that Of labor.
Similar calculations applied to the
census figures for 1899 and 1904 show
that not only are payments for ser
vices higher at each successive cen
sus, but that they bear larger
proportion to the total which is di
visible between capital and labor.
They show that the aggregate return
of capital is a smaller proportion OF
this total, and that after proper al
lowance is made for depret iation,
profits and interest combined have
declined to an even greater extent.
If 1t is not true, as many have claim
ed that the worker gets only one-hfth
Of product, neither is it true, as the
Socialist leaders contend, that he gets
only one-half Such proportion is
figured out by the Socialist Congress
sional Handbook before quoted by dis
regarding all miscellaneous expenses.
But it cannot seriously be maintain
ed that miscellaneous expenses in
Cured by the manufacturer are in
the nature of a return to capital Nor
as the report shows, Is it possible as
other Socialist authorities attempt TO
do, to apportion such miscellaneous
expenses between capital and labor,
nor 10 eliminate any considerable
fraction from the payments for sal
aries on the ground that it repre-
sents disguised profits.
The report attempts to answer the
anticipated objection that some big
manufacturing industi les are nOtori-
ously profitable, and says:
How IL will be asked. does Hen
ry Ford pay such big wages out of
such returns as this?" But the Ford
factory does not and could not meet
its present payroll out of such re-
turns as this. The figures above do
not present the earnings and expenses
per worker of the Ford factory or
any ether conspicuous success. They
are general averages for between
100000 and 100000 plants. big and
little, efficient and non-efiicient. The
automobile factory that was in the
hands of the receiver in 1909 had The
same relative Inference on the census
figures as Henry Fords factory. Hen
ry Ford did not begin his present sys-
TEN Of paying labor. usually describ-
ed as a minimum wage of SIS a day,
until 1914, but in 1909 his business
was prospering magnidcently. The
fact that 1t was prosperous and that
| It is increasingly prosperous now no
more proves all other automobile fac.
tories and all other manufacturing
plants to be equally profitable than
the Calumet & Hecla proves one cop
per mine to be as good as another
: Workers Share Increasing.
While the average annual wage in
manufacturing industries has inoreas-
ed from S247 to S51S in sixty years
the normal rate of interest has de-
creased one-fourth.
Wages and salaries are both still
increasing. and the increase was es.
pecially large from 1899 to 1909.
while early statistics are unsatis.
AdNi'AF DN TIE HiAlits lUtIt Is on evil
dence that the workers share of tn,
product is lessening. In fact. during
ten years covered by the three manu-
featuring censuses that are exactly
comparable, the trend of the percent
age has been distinctly upward. 7
the average wage and the average
wage-salary are discouragingly small
it is because the average product an,
the average net earnings of industr,
per worker are discouragingly small
"All our capital. our wealth Of in
vention, our energy industry and or
! ganizatiOn have so far enabled us I,
produce little more than 1000 ne
worker in the most highly deVeloye,
industries which are most effectiv
! IN producing wealth. II is not i'm
probable that, could the entire field o
production, agriculture as well a
b manufactures. and all enterprises
great and small. be compressed int
the tables, this average would be con
: siderably diminished
"All that the people of the countr
need, and want and hope to do, mus
81 for the present be paid out of thes
+ relatively small returns. II in tn
z future an increased output per work
+ er should result from betterments /
. the application of capital or labor. o
$ both, to industry. experience seems {
O. show that the worker would secur
r the major part of such increase. Bu
4 whatever the sum 10 be divided Is q
3 may be, to see that this income
e fairly apportioned without being les
{ sened by high charges, negligence
{ idleness or waste by employer q
(! wage-earner, Or dissipated in labc
: wars. is the proper function of on
: leaders in business. in labor organ
r cations and in politics"