PROFIT SHARING.

Taranaki Daily News, Volume LVII, Issue 1, 13 July 1914, Page 4

PROFIT SHARING.

Profit-sharing, as practised in England, is the existence between an employer and his work-people of an agreement to the eflect that the latter shall receiv* l , ill Addition to their ordinary wages, & share fixed beforehand, in the profirs of the business. Where the worker accumulates his share of pTofits in the capital of tlie business employing hitn and becomes a shareholder, then the relationship becomes one of co-partnev-ship. A report recently issued by the Statistical Department of the British Board of Trade shows that in August, 1912, there were in the 'United Kingdom 133 profit-sharing schemes out of 239 started since 1529, and in connection | with those 133 schemes just over 10C,0() l men were employed, and the average bonus for the preceding ten years had been 5.5 per cent. Many of the older schemes still provide for the payment of the bonus in cash, but the more recent

ones encourage the workmen to buy shares. In France, on the other hand, cash payment had been discouraged; th* pureliase of shares is not genoral, the typical system being that of capitalising the bonus to form a patrimonie, or pension, for the employee on retirement, or for shis widow and children after his death. The number of schemes actually in operation at the present time appears to ibe between seventy and eighty, roost of which, however, have enjoyed a longer life than any of the English schemes, with the exception of the South Metropolitan lias Works. Some of the biggest French examples of profit-shar-ing are almost co-operative associations, J as the Maison Leclaire (house painting and decorating, which dates from 1842), I

which added 20 per cent, to the vr&gea of Hhe workpeople and staff by way of bonus in 1911; the liaison Godin (hardware), where the bonus ranged from 2 to 10 per cent, of wago3 in 1910; and the Bon Marche (drapery store). A group in which profit-sharing has extended very widely in Prance, while no instances of it are found in England, is insurance and banking. The question of State encouragement to profit-sharing schemes is constantly under discussion in France, though no measures have yet got to the Statute Book. In Germany profit-sharing has made little progress, many of the schemes having been shortlived. At the present time the total number known to be in existence is under thirty, employing some 15,000 to 16,000 persons. One of the most interesting schemes is that in operation at I the Zeiss Optical Works; one of the largest, a Berlin brewery, with over 3000 work-people. In Holland and Switzerland the schemes in existence are all small. Then the twenty-five or thirty schemes in operation in the United States are all of comparatively recent date, .but since many of them are in connection with vast corporations, the number of workpeople under profit-shw-ing conditions is relatively very large. For example, the United States Stiel Corporation, in 1<912 allotted over 60,000 shares to nearly 37,000 of its workpeople, while the United States Rubber Company has over 25,000 workpeople. The type of profit-sharing adopted by the United States Steel Corporation, and generally in America, is the issue of shares "to employees on specially advantageous terms, which has not yet, however, resulted in any instance or t:ic holding, by work people, o£ sufficient shares to give them any considerable voting power; still less to entitle them to appoint directors in the large capital aggregations concerned. The report states that profit-sharing is not regarded with very great favor in the United States cither by manufacturers and business men or by economists. Trade unionism there, as elsewhere, is unfavorable to its growth, for reasons which ara comprehensive, but, in many cases, shortsighted and regrettable. The advocates of profit-sharing in various countries arc adverse to tihe cash bonus system as tending to make the workers both diasatisfied and spendthrift. The cases in which the system most successfully operate are those in which the inducement to efficiency and industry takes the form of shareholding and substantial provision for old age.