The Daily News. MONDAY, JANUARY 5, 1914. PROFIT-SHARING..

Taranaki Daily News, Volume LVI, Issue 159, 5 January 1914, Page 4

The Daily News. MONDAY, JANUARY 5, 1914. PROFIT-SHARING..

The visit of Sir W,m. Lever, head of the great soap manufacturing linn of that name, to New Zealand has drawn attention to the system of >cput-s|iaring which has largely contributed to the success of the company's operations. From time to time various means have been , devised and tried to solve the industrial question, eliminating the risk of striking, and giving workers incentive to render the most efficient service. Most of the attempts have ended in failure. Lever I Bros.' efforts in this respect, however,

have, been attended with the greatest success. Sir William Lever has given to the Wellington papers an outline of the scheme, which possesses features that could hardly fail to ensure success., Sir William states that at the beginning, of any year in any industry, be it manufacturing, shipping, or agriculture, it is impossible to say whether the year will he a good one or a bad one, what ] the profits will be, whether there will bo any profits, or whether there will be a loss. Therefore, in consequence of this uncertainty, it is obvious that a wage system must be the. basis of the relationship between employer and employed, or between management and labor. The worker cannot live without liis wage, and there must be a rate for labor, just as there must be a fixed interest for capital. The great Home manufacturer went on to'say: —

"At the end of the year there may •have been a profit above, those, rates. Labor may have produced more than it received, and capital may iiavc produced more. This cannot be ascertained until the end of the year, when the accounts are lieing made up. The basis of my idea is that if at the end of the year there, is a loss shown, the bearing of that loss must fall, and rightly fall, upon Ihose who had the nfanageitient of the undertaking. The price that is to be paid for management or control, carries with it the responsibility for hearing losses. Of course from that many .argue'that it must also carry with it the right to take all the profits. And I think you will agree that what Labor, in effect," says to Capital when it engages itself is: 'Guarantee me my weekly wage, or monthly, or quarterly salarly. I can't live without it. If there are any profits in this business they are yours, if there are any losses, you must hear them.' Before, therefore, proper sharing can become, an expansion or development to assist the worker from the position of wage-drawer to that of-—profit-sharer there must bo a closer community of interest between Labor and the man-

ageinent that directs Labor. It is npt reasonable to expect men to give more than a mechanical performance of duties unless they have an interest in the results. It is impossible to ask Labor to be interested in the losses of a .business, unless you say to La-bor, Ton shall share with the management in the. direction of the industry.' But it does seem to inc. to be fair, ami wise, and prudent, and logical that a community of interest should be created by which the munagermen can say to Labor: Tt is true that I. pay you a salary for the performance of certain duties, but if you take a keener interest in the business, and in its development, and a keener interest in the performance of the duties you have undertaken, then let us share the profits that may result, notwithstanding the fact that if there are losses you cannot share with us.' On these lines 1 feel that profit-sharing 'brings about the close relationship that used to exist centuries ago in all industries, when they were, small, .between master and man as they were then called- They worked together in one room, knew each other and each had a full understanding of every job undertaken—just the same conditions as apply in a village smithy nowadays. In big industries that spirit ought to be encouraged, and it ran be ■encouraged only under a system in which the employer says to those who are employed, 'lf this business by your efforts and my efforts results in a prolit, you share on a perfectly fair footing with me. in those profits.' That is the independent and manly relationship that must exist between employer and | employed. 1 1. make the employee manly 'and independent, lie is not accepting a gratuity or a present, but merely sharing in a perfectly houorabl-. straightforward way with his employer in the. profits their joint lahor, industry, in.tclligenee. and skill have created. The 'effect of profit-sharing ought to he increased ellieicncy, and the profits shared 'would be in a great, .measure the result 'of great efficiency. They are not something added to the, coei. of the article which the consumer has to pay. They are not something taken from tl mployur, but they are something jointly created by the intelligence of both part■ies in tin' industrial system in which ,they can share in the real spirit of true Woi'kincn. If it were otherwise, then any .employer sharing profits with his workpeople, in addition to paying wages, •would merely be adding to'the cost'of production in his industry, and would .. liud himself so handicapped in competing with others who did not share profits that ultimately, sooner rather than •later, lie would find himself driven out of the field. On the, other hand, under a successful system of profit sharing, the greater intelligence and J;eener interest of the workers gives stability and permanence to an industry, and gives it power and strength to meet any competition. I haTo tha.strongest faith in profit-sJiarJng on these linos, but n« a

gift or present from employer to workman it would be a delusion and a snare, degrading to tiie workman and ruinous •to the employer."

Sir William Lever's views will be read with interest throughout the country. Conditions, of course, are different in Xew Zealand from those obtaining in ' j England,where the workmen have for centuries been ground down and are only now emerging—and very slowly emerging at that—from a condition practically of serfdom. Here workmen are perhaps better treated in regard to wages, hours, and conditions than workmen in any other country in tbe world. It has .been termed ''The Workers' Paradise," and the .definition is not without justification. Actually many of the so-called "bosses" are worse off than the workers, with their large wages, short 'hours and easy conditions. They would tomorrow, if it were possible, withdraw their capital and utilise it in directions that do not entail the anxiety and harrassing that are features inseparable from the. conduct of their businesses, and probably be prepared to take subordinate positions elsewhere, themselves. Industrial progress and enterprise under the circumstan- ■ ees are impossible. If a system, of profit-sharing like that in force in Lever Bros.' can alter this unhappy and undesirable conditions of affairs, there are many employers in this country who would gladly give it a trial. It Ims been the experience of Lever liros- that pro-fit-sharing makes for greater efficiency. This in turn ensures greater profits. As things are in Xew Zealand, the 'betterment of industrial conditions has not, unfortunately, been accompanied by the display of greater efficiency. Rather the reverse. This makes it difficulty for many industrial undertakings to keep their heads'above water. ' Sir William Lever intends' to establish a -branch of his works in Pet one and. to introduce the profit-sharing system among the 'workers. eThe experiment in Xew Zealand will be followed with keen interest by both employers and employees, and if it succeeds as well as it has done at Home *it will, we are certain be adopted by many other concerns.

BRITISH LAND KEI'OUM. "Better late than never" will he the first reflection of colonists after they luive recovered from their surprise at learning that Great Britain is for the first tune in its history to have a Minister of Lands, and that the State will begin to take a lively interest in questions of land settlement, successful fanning' and a living wage for agricultural laborers. It seems almost incredible that, for centuries, good old "private enterprise" dms had it all his own way 'in these unatters at Home, and that it is left 'for Mr. David Lloyd George to propound «i Liberal land policy. At present *he reiorm is simply h'i the embryo stage. It was outlined in a recent speech, at Swindon by the Chancellor of the Exchequer. A Ministry of Lands is proposed to be set up, which will control mud supervise all questions connected .with the use of land in town or country, laud transfer and registraI tions of title, iand it will have the work of valuation transferred to it. There will lie Land Commissioners appointed, who will exercise very wide powers, intituling the following:

To Veto unreasonable evictions of fanners and small holders; to give exemplary compensation for disturbance; to fix fair rents; reduce excessive rents on appeal; lower rents when higher wages are paid to laborers, or when "l>ad times" cause a slump in prices; besides securing fixity in tenure and fair rents, land cultivators will have. full protection from da-ma-go by game; laborers' are to have a living wage minimum, with reasonable hours.

State aid is to he given to farm laborers and workers generally' to build their houses; in most cases the Government, will build the houses and rent them at a low rate. It is proposed to make a start by building 120,000 cottages, at a cost of about £24,1100,000, the moncj to be. taken out of the reserve funds under the Insurance Act. The State will he empowered to buy waste or inferior land, to reclaim and cultivate it. and to carry out large schemes of afforestation, so as to absorb surplus lafior to prevent the congestion in towns. While the farm laborers are to have "the first cutl off the joint," town artisans and traders are to be benefited. The shopkeeping class in towns and t-ities, who are mercilessly lleeced by landlords, will get the benefit of the ''fair rent" proviso. These proposals have been received with far greater favor than was anticipated, and it is generally agreed that Ministers are making a truly patriotic effort to enhance the prosperity of the country, to cause a movement "back to the land" and to encourage the perpetuation and increase of the yoeinan class, the (rue backbone of any country. The provisions of the Hill embodying the Liberal proposals will be. awaited with interest, and when published will be kecnlv discussed.