CO-PARTNERSHIP

Taranaki Daily News, Volume LVI, Issue 221, 18 March 1914, Page 7

CO-PARTNERSHIP

I>KACF. lIKTWLEX CAPITAL A:.'» LABOR. INTKUVIKW WITH EAIiL tiKKY. Fjtrl Grey, at present on a tour of th' Dominion, has snlnnitled to an interview on industrial co-partnership, a system upon which he is a vorld-wide authority, and of which he is a warm advocate. "There is," said the Karl, "a glowing ' lief in Kngland that the easiest and best, means of # nvonciling labor and capital lies in the application of the co-parti.orshin principle. It is quite obvious that unless tliLsc great interests ire reconciled v,'e e not hope to secure industrial efficiency" Do the experiments which ZiHand has already made in this direction encourage the belief that the prineiole could be advantageously adopted in New Zealand?" asked the interviewer. "Yes, certainly," was the reply.. "Take the gas industry as an illustration. The late Sir Georgfe Livesey, when chairman of the Metropolitan (las Company, toid me in 1!)04 that the result of the amdication of the principle to that concern had been to enable the company to give a higher wage to its workers than anv other gas company in England, f o pay at the same time higher divide! (Is to the shareholders, and linally to sell was at a lower rate than anv other company. This I attribute entirely to the saving of waste and to the greater efficiency of the men, once they i valise 1 that they were, co-partners, not mere hirelings. It was not until after Sir George Livesey's death in 1980 that other gai companies followed the lead to any extent, but now gas companies representing a capitalisation of £50,000,000 have adopted the scheme."

"Not only to gas-making has it been applied with marked success." continued the Karl. "In the woollen industries of Yorkshire Messrs Taylor and Thomson's experiments have attracted great - attention. In both cases it was known that the employers were bona-fide actuated by a feeling of sympathy, even o; attachment, for their men, and the result was that not only a feeling of brotherhood was engendered but a spirit of efficiency soon manifested itself." In answer to a question whether the woollen manufacturers' applied the same principle of co-partnership as was up by Sir George Livesey in the London gas works, the Karl said each concern applied it in a different manner. Jn the gas industry Sir George Livesey took the average cost of production and said to his employees, "If vou save the waste that is going on, increase your efficiency, and reduce the cost of the output, onethird of the profits shall go to v OU in proportion to your wages, one-third to the shareholders in proportion to their dividends, and the remaining one-third to the consumers in proportion to the'r purchases of the commodity." Jn this way Labor, Capital and the consumer were benefited. On the other hand, in the case of the Yorkshire woollen industries, as in all productive societies which are managed entirely by the men, of which societies there are over one hundred, trade union rates of wages arc 11:11 iirally a first charge oil tl. unfits of the particular industry. Then alter a sufficient sum has been'placed aside to the reserve and for depreciation, the capitalist is paid for the use of his capital (this varying with the risk of the industry), and then the surplus that remains goes for division between the capitalist and the emplovecs en the same principle of canity. The Earl proceeded to give instances of the work:--of one of these co-perative societies * Walsall in a particular industry. The rate of interest regarded as a fair remuneration for the capital invisted was T'/i per cent, and after that had been paid any surplus remaining <ws di.'ided between labor and capital, the division being made in proportion to the vain-* of their respective services. "But," continued the Karl, stopping the obvious question which this suggested, "vou will ask how is the value of their respective services to be measured. The answer is, simply, what does tile industry pay for the use of the capital invested? The fixed rate of interest obtained supplies the answer. The next question is what is the value of the service contributed by labor, The nmnunl paid by the particular industry for ilie labor it employs, in other words the wage bill, is the answer. Therefore the interest bill and Hie wage liill represriit the value of the respective services of capital and labor, llet'c is an example. ' Suppose that the Walsail industry I have referred to pavs Hie rate of interest (7V S per cent) for the use of its capital. Willi a canital of £7.!<>o t' at would be about £7">o tier annum for the use of this eanitnl. That is the measure of the service rendered by capital.. . Suppose then, that the wage bill is flallO a year. Well, then, if there is anv surplus after paying these fixed charges, two-thirds of that surplus must go (0 labor and one-third to the shareholders in proportion to the shares held. This formula was invented by a Frenchman. Cloidin. of Guise. TTis principle of management \va- founded on his desire t» help his workmen as well as himself, an I to create fcelinss of mutual s.vmnalhv lHwocn the employer and the man. A' present you have labor and capital pulling against each other, the capitalist giving as little wage as he must in return for the service rendered bv labor, and labor giving as little as possible for the wage received." "Now," concluded Karl Grey, "vou can never create a great nation on the basis of a man giving his worst instead of hbest. Industrial co-partnershi: is the principle that will release the Hoods of energy and usefulness that are ..ow locked up in the human breast, and its application will assuredly drive out suspicion and distrust."