Evening star., 1938-12-15
Senate Group Begins
Writing Plan for
Profit-5haring
Formula to Be Offered
As Voluntary Step to
Industrial Peace
BY the Associated Press,

BY the Associated Press.
A special Senate committee today
began writing profit-sharing
formula calculated to stabilize en-
ployment and guarantee old-age
retirement funds for employees Of
10 of the Nations largest industries.
A formal report will be made
within a month The committee,
composed of Senators Herring, Dem
ocrat, of Iowa and Vandenberg, Re-
publican, of Michigan, ended hear
ings yesterday.
No attempt will be made to en-
force the proposal by legislation. 1t
will be offered to industry merely
as a possible method of creating
long time amicable labor relations.
Donald Despair, committee secre-
tary, said the tentative plan would
call for joint contribution by en-
ployes and employers to an ir-
revocable trust fund which would
be set up primarily to provide re-
tirement pay for workers. Interest
on the fund, however, could be used
by agreement between employers and
employees to bolster pay rolls and
keep men at work during unemploy-
ment periods.
To Demonstrate Plan.
Mr.. Despair said the committee
staff would superimpose this plan
on the capital structure of Sc OF
the country's largest corporations
in 10 industries to demonstrate with
actual figures of net earnings tina,
it could work successfully. Indus
trial fields to be covered, he said
include steel, automobile. chemicals
textile, food, machinery, durable
goods and three general manufac.
turing industries.
This plan is the outgrowth o.
the staff's analysis of 500 operating
proflt-sharing systems" Mr.. Des.
pain said. combining what thu
staff believes to be the best feature!
of the successful efforts"
He said industries which partici
pated would be asked to set aside
portion of their profits matching
contributions made to the trus
fund employees. In case of emer.
gency. interest on the previous year!
combined payments to the fune
could be used to keep up the employ.
ment level.
"Seed Of Industrial Peace"
He estimated that this interes
would reach substantial sum
after the fund had been held IL
trust for five years. Retiremen
benefits would be geared to Fedora
social security benefits and woult
be in addition to them.
In statement closing the hear
ings, Chairman Herring said HI
believed profit-sharing offers 9Th,
seed of industrial peace"
IT." he added, ''it is liberall,
adopted in those industries to which
| profit sharing would be adaptable
the American people would sool
be freed from the burden of strife
strikes and lockouts which hav,
beset our industrial life over the pc
riod of the past several years"
At the final hearing yesterday :
railroad president said lower freigh
rates might bring the railroads ou
of their present financial difficultie
if accompanied by reduced ex
penses and an increased volume o
traffic.
Didn't Ask Higher Rates.
This opinion was offered by G. P
McNear. jr., president of the Toledo
Peoria & Western Railroad, a divi
dend and bonus paying carrier tha
Mr.. McNear said had never Dor
rowed money from the Government
and preferred to run its own bust
ness without Government interfer
ence.
Mr.. McNear said his railroad die
not join in the request of most car
riers earlier this year for an in
crease in freight rates, believing any
advance in charges would driv,
traffic away and increase truck com.
petition.
The railroad president listed sew.
eral things that the Government
might do to help. He said he be-
lieved more liberal tax allowanc,
for depreciation of roadway nigh
stimulate railroad expenditures fol
replacements and suggested tina
present railroad reorganization pro
cedure be speeded up so the holder
of securities now in default woult
be able to step in and clean up tn,
financial situation promptly