The Washington herald., 1917-09-26
HOLLAND LETTER
The Biggest Daily
Financial News Feature Of
the Country's Best Newspapers.

to increase the pay of the employees
Of the subsidiary companies by 10
per cent. But the prevailing and
best opinion appears to be that this
action is well in line with the policy
OF THE corporation since IT was or
ganized and began operation. In the
fall Of 1914 when the corporation was
facing one OF its most trying expe-
riences and when its reports demon
strated the great Generalization of
industry and business throughout the
United States. there were many sur
misses respecting the necessity or ex-
pediency of reducing wages of the
employees.
The late Norman r. Ream, who was
one of the great forces of the cor
poration, in speaking OF the action
which the corporations management
took at that time, said: cit was a
question whether we should suspend
payment of dividends upon the COM
mon stock or whether We should re-
duce wages. We felt that IL would
be contrary to the general policy
adopted by the corporation IL there
were to be a reduction OF wages and
at the same time continued payment
of dividends. We therefore decided
that IL was the wIceI policy from
all points of view, TO suspend divi-
bends. We believed that the owners
Of the common stock of the corpora
ton were in better position to forego
such income as the dividends upon
their stock represented than the en-
pioyes OF the corporation were 20
@Ccept a reduction OF wages"
From the beginning the United
states Steel Corporation has recog-
nized that the true relation between
the corporation and its employees
would be maintained IL. not only jus
tice. but also perfect fairness, not
tempered by any sense of charity,
were to be secured.
Therefore, the corporation undertook
to work out a very difficult problem
1t involved the discovery Of the sound
economic method OF enabling the en-
p.oyes 20 share in the profits earned
by the corpratin. There had been
many proht-sharing undertakings,
some of the min the form of bonuses.
some Of them yearly distributions of
casa, but all were failures because
they were established upon an I'M
sound principle.
1t was afterwards said that there
probably was never a more difficult
problem, the factors of which were
financial. than was the one which the
steel corpol atoms MANAGEMENT un-
derto 10 solve, SO that employees
might obtain reasonable share OF
the profits. The solution was the
work Of George W. Perkins and after
ten or twelve years Of experience 1t
has been demonstrated that at last
the sound and permanent economic
pc! cy. whereby employees in addition
10 tier wages can receive their fair
share OF the profits, has been estab-
lished.
At about the time of the organiza-
ton of the United States Steel Cor
poration Abram s. Hewitt, one time
mayor Of New York, and for many
years member OF Congress. recognized
also as one of the great authorities
on business and industrial life, said
that he believed that the solution of
tho so-called labor problem, or the
means by which the friction between
labor and capital could at least be
eliminated, would be the participa-
ton by employees in the ownership
of industrial corporations.
A few years later the steel corpora
ton perfected 4 plan by which the
tilili'E NbAAu btNOillts w ldIA. ONU-
crs Of the great corporation. The ex-
pertinent, for 1t was an experiment at
the beginning. was shown after a
year or two to be no longer an ex-
pertinent hut well demonstrated
fact. Employees of the corporation
subscribed, aided and guided by the
managers of the corporation, to as
many shares Of the stock as their
savings and the aid given by the
corporation made possible. Today the
individual omploye ownership in the
United States Steel Corporation
reaches a figure which would of itself
he regarded as a very large aggregate
stock ownership. one of the largest
in the United States.
The corporation also decided that
when II gained prosperity il should
in another way share that prosperity
with its employees. That would be
done by increasing wages and with
this latest increase the aggregate in
crease since the policy was adopted
amounts 10 about 90 per cent as COM
pared with the wages that were at
first Paid.
At the beginning Of the organi-
! zation's life the modern policy Of
publicity was adopted and the first
report sent by the corporation to
the authorities at Washington was
read by leaders OF other industries
with Amusement. They were as
tonished to find that the corpora
ton had substantially opened its
books and taken the government
and the public into full confidence
respecting its management and its
condition.
This policy was radically different
from that which leaders in the BUSH
ness and Industrial world had been
Accustomed to follow. but il was
found that it served to establish
public confidence in the corporation
and it created the belief that the
management regarded the business
as in one sense a semipublic trust,
since there We're many thousand
owners of the stock and the bust
ness and stock ownership covered
the entire United States and reach
ed to other parts of the world.
In addition to highly skillful man.
agement of the business of the cor
poration, whereby while maintaining
high wages there could he secured
reduced cost of production, the treat
ment by the corporation of its en-
ployes has oeen followed by remark
able results with respect to efficiency,
rapid production and yet a high quail
ity and lessening Of cost in the pro-
ducts of the corporation, as well as
content, ambition and a proper pride
/ manifested by the employees when
they contemplate their relation as
part of the ownership of the corpora
ton.
The latest increase in wages will
, involve the payment out of earnings
of the corporation and its subsidiaries
of about thirty million dollars a year.
If prosperity continues there may
come a time by and by when the
corporation will feel justified in MAX
ing another increase.
The action of the corporation in in