The Birmingham age-herald., 1920-12-15
Daily Financial Gossip
By HOLLAND

Dy III
 New York, December 14.-(Special) In the latter part of the present month and early in January reports will be received from various industrial or ganizations which will tend to show how far the modern method of shar- ing profits with employees has proved successful and whether or not the results are so encouraging as to justify the maintenance of this policy and possibly the broadening of it. Profit sharing, so-called in it's fundamental purpose is a division among employees or wage earners of snare in the net earnings of a company, this share be- ing in excess of the regular wages. Prior to the organization of the United States Steel corporation several at tempts were made to permit participa- ton in profits or net earnings by em- ployes.
 Almost all of them were failures. In one case a corporation was compelled to go into bankruptcy and it was in- timated that this was partly due to a diSproportionate division of profits or the payment of alleged profits when there had been none whereby the company at last found itself insolvent. In some other cases the payment of bonuses to employees was adopted. This, however, was always unsatisfac- tory. Many employees were disposed to resent what seemed like a gratuity, although it professed to be return to employees of some part of the earn ings of the company in addition to their regular wages.
 The late George w. Perkins with in year or two after the organization of the United States Steel corporation worked out a plan whereby the em- ployes were to share in profits. MT. Perkins, however, did not purpose paying dividends or surplus profits in the form of cash. His plan involved the opportunity for every employe to purchase stock of the United States Steel corporation, being able to do this, by the setting apart of some of the earnings of the corporation and the distribution of them to employees in such manner as would make it pos sible for them to invest the earnings fortified by substantial aid by the company in the stock of the steel cor poration. From one point of view the plan has proved satisfactory. It has enabled some 50,0OO employees to be- come stockholders in the corporation. It has also tended to increase the ef- ficiency of the workmen and to strengthen their loyalty to the cor poration.
 A plan somewhat similar was adopted by the International Harves- ter company and the results are said to be highly satisfactory. But it re- mained for John H. Patterson, founder of and president of the National Cash Register company to perfect and then adopt plan now in operation which many regard as the most satisfactory of all the plans. The Home Fire In- surance Company of New York does not term the payments now to be made to employees which are in excess of their salaries or wages as profit shar- ing, but instead speaks of these pay ments as dividends. The stockholders of this company receive 50 per cent of the net earnings as dividends upon their stocks and the employees receive 50 per cent of the net earnings dis tributed in reasonable proportion to the service given by the employees.
 MIR. PATTERSON'S PLAN
 Four years ago President Patter- son of the National Cash Register com pany began experimentally with a profit sharing system which at first was confined to comparatively few of the employees. He adopted this method because he was anxious to learn whether there was merit in the plan and if there were whether it could be successfully expanded until at last it included the entire force The first years test was satisfactory so for the next year the number of those en- titled to share in the profits was in- creased. A year later the number was again increased and last year it in- cluded the entire force, approximately 5000 wage earners.
 few days ago MT. J. H. Barringer,