The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1919-09-22
NEW EMPLOYEES, PLAN.


Employees ownership as well as
employees management Of the rail-
roads as a possible substitute for the
Plumb plan is suggested by the Rail-
way Age in an editorial in its current
issue.
1T may be thought" says the Rail-
way Age. that employees ownership
would be difficult to bring about. But
it would be very easy to bring about.
When it can be shown that the rail-
road employees could easily and in a
short time become the managers of
the railroads by the simple process of
becoming their owners, the question
naturally arises as TO why they should
be carrying on an enormous propa-
country to buy the railroads for
them"
The employees. It is pointed out.
could quickly become the owners of
the railroads by saving a comparative
ly small part of their annual wages
and investing it in railroad securities.
"Of course. if the employees owned
even a HldJOIlly VI lllt SlOCh lAGJ
could elect all the directors and thru
them manage the railroads" A plan
for employees purchase and ownership
of the railroad is outlined as follows:
The employees are now being paid
approximately $4,000. 100000 a year in
wages. The cost of living in the
United States. according to the most
about rs per cent within the last five
years, while the average railway wage
has increased about 90 per cent.
Therefore. the employees could, on the
average. now save approximately one
fifth of their annual wages and at the
same time live about as we'll as they
could have lived about five years ago
II they should save one-fifth of their
wages their total annual saving would
be $500. 100000.
THE amount OF railroad stock out
standing in the hands of the public
on June so. 1915, was $6,315, OOO, 900,
and It is not much more now. The
average dividend paid was 51z per
cent. Presumably. IL the railways are
returned to private operation they will
be so regulated as to enable them to
continue to pay an average dividend
of 5h per cent. II the employees
should save $500, 900. 900 a year from
their wages. invest it each year in
railroad stocks. and also invest in rail-
road stocks the dividends they re-
ceived from their stocks, they would
in five years own $3.50. 900, 900 of
stock, or a majority of all the stock
outstanding. This would give them
control of the ownership. and there
fore of the management. OF the rail-
roads OF the United States. II they
should continue to save in the same
way, at the end of nine years they
would have saved in wages and dlvi-
bends $6.611, 100000. With this they
could purchase all the stock now out
standing and also q few hundreds of
millions worth OF bonds.
This plan would have great ad-
vantages over the Plumb plan from
the standpoint OF both the public and
the employees. Its adoption would ne
cessitate the practice by the employees
Of the same thrift which the farmer
or the small storekeeper practices in
order to acquire his property. Under
this plan OF employees ownership the
employees would be much more COM
petent to select the best men for rail-
road managers than they would under
the Plumb plan. The practice of
enough thrift to enable them to buy
the railroads and their ownership Of
large amounts of property would give
them the experience and the broad
view of business men and would en-
able them to judge much better than
they can now of the qualities which
a good railroad manager should pos
sess. OF the things he ought to do and
OF how he ought to do them. Under
the Plumb plan the employees would
get half OF any surplus that was
earned. while the public would have
to pay all of any deficit incurred. III
the employees knew. as they would
know II they owned the railroads. that
every increase in the efficiency of the
management was going to rebound
greatly to their benefit while every re-
duction OF efficiency was going to re-
suit in loss to them, the incentive they
would have to exert themselves for eff
ficient operation of the railroads
would be much more powerful than it
would be under the Plumb plan"
"
An instructor of the University of