670 



PROFIT-SHARING. 



his absence. Other papers were read on " The 

 Doctrinal Agreement of the Reformed and Pres- 

 byterian Churches," by the Rev. T. W. Cham- 

 bers, D. D., LL. D. ; " The Biblical Idea of the 

 Ministry," by Principal Me Vicar; and "The 

 Minister as a Teacher," by the Rev. Alexander 

 Oliver, D. D., of Glasgow, Scotland. Reports 

 were made of the work of the American churches 

 among the negro race, the Indian aborigines, 

 the European immigrants, and the Asiatics ; of 

 work in the British colonies in Canada and the 

 Northwest, and in Australia ; of work on the 

 European Continent, including the Reformed 

 Church in Germany, missionary work in Bel- 

 gium, the Waldensian Church in India, and Eng- 

 lish services on the Continent ; and conferences 

 were held on Spiritual Life and the Relation 

 and Duty of the Church to Outside Societies 

 doing Christian work. A Woman's Missionary 

 Conference of the Churches represented in the 

 Alliance was held during the week of the meeting. 



PROFIT-SHARING, a term applied to any 

 arrangement whereby labor is rewarded in ad- 

 dition to its ordinary wages, or, in place of 

 wages, by a participation in the profits of the 

 business. The term is somewhat synonymous with 

 the word co-operation. The latter is divided into 

 distributive and productive. Distributive co- 

 operation (known more properly as co-operation) 

 aims to save money to consumers by dispensing 

 with middlemen. A notable instance of success 

 is shown by the Beverly Co-operative Associa- 

 tion, organized in Massachusetts in 1875. It 

 began with a capital of $102, which has grown 

 to $7,000. It sells goods nearly at cost, and 

 only a single share can be owned by one person. 

 It pays no dividends and it sells everything. 

 College co-operative societies are represented at 

 Harvard and Yale and the University of Michi- 

 gan. Some of them sell books, crockery, and 

 tennis goods, and they have direct connections 

 with town tradesmen. 



Profit-sharing is the productive or participa- 

 tive branch of co-operation. It should always be 

 known by that term, and not be confounded 

 with distributive co-operation. Of foreign works 

 on the subject, those of Dr. Bohmert, of Dres- 

 den, and M. Pougerousse, of Paris, are the most 

 valuable. The latter declares that the simplest 

 system is that which distributes this share in 

 ready money at the close of each year's account 

 without making any conditions as to the dis- 

 posal of the sums so paid over. This mode is 

 adopted by but a limited group of firms, the 

 most important among which is the piano-forte- 

 making establishment of M. Bord, in Paris. 

 Participation was introduced in 1865, in conse- 

 quence of a strike, on the following basis : After 

 deduction from the net profits of interest at 10 

 per cent, on M. Bord's capital embarked in the 

 business, the remainder is divided into two 

 parts. One of these parts is proportional to the 

 amount of interest on capital drawn by M. 

 Bord ; the other is proportional to the whole 

 sum paid during the year in wages to the work- 

 men. The former of these two parts goes to M. 

 Bord; the latter is divided among all his em- 

 ployes who can show six months' continuous 

 presence in the house up to the day of the an- 

 nual distribution. The share obtained by each 

 workman is proportional to the sum that he has 



earned in wages, paid at the full market rate 

 during the year in which the division of profits 

 is made. The number of M. Bord's employes is 

 a little over 400, and the sums he has paid in 

 labor dividends average about 14 per cent, on 

 the men's earnings in wages. Profit-sharing 

 was introduced nearly forty years ago, under the 

 auspices of M. Alfred do Courcy, into one of the 

 most important insurance companies of Paris. 

 Five per cent, on the yearly profits is allotted to 

 its staff, which numbers about 250 employes of 

 all grades, whose fixed salaries are at least equal 

 to those paid in non - participating insurance 

 offices at Paris. No part of this share in profits 

 is handed over in annual dividends. Each suc- 

 cessive payment is capitalized, and accumulates 

 at 4 per cent, compound interest until the bene- 

 ficiary has completed twenty-five years of work 

 in the house or is sixty-five years of age. At 

 the expiration of this period he is at liberty 

 either to sink the value of his account in the 

 purchase of a life annuity in the office, or to in- 

 vest it in French Government or railway securi- 

 ties. Should he decide on the investment, he is 

 allowed to draw only the annual dividends aris- 

 ing from it, as the company retain the stock 

 certificates, and not till after his death abandon 

 their hold on the principal in favor of such per- 

 sons as he may designate by will to receive it. 

 Leclaire, a house-painter, tried the system among 

 his employes. He finally had his establishment 

 incorporated as a co-operative house, and as 

 such it still exists. The two heads of the firm 

 each receive $1,200 as the compensation for his 

 work as manager ; the capital is allowed an in- 

 terest of 5 per cent ; then, one fourth of the 

 profits goes to the two managers, one fourth to 

 a mutual benefit society and insurance fund, 

 and one half to the laborers, who receive shares 

 proportionate to their wages. Not only is the 

 system a financial success, but the painters of 

 the establishment are among the best workmen 

 and most thrifty men in Paris. It is said that 

 more than 100 continental firms are now work- 

 ing on a participatory basis. The principle has 

 been introduced with good results into agricult- 

 ure ; into the administration of railways, banks, 

 and insurance offices ; into iron-smelting, type- 

 founding, and cotton-spinning ; into the manu- 

 facture of tools, paper, chemicals, lucifer matches, 

 soap, cardboard, and cigarette papers ; into 

 printing, engraving, cabinet-making, house- 

 painting, and plumbing; into stock - broking, 

 book-selling, the wine trade, and haberdashery. 

 The establishments differ in size and importance 

 as much as in the character of the industry they 

 pursue, from the paper mills of M. Laroche- 

 Joubert, at Angouleme, with their 1,500 work- 

 men, to the establishment of M. Lenoir, in Paris, 

 with its 40 house-painters. 



In the United States, profit-sharing dates from 

 the time when the whaling-ships of New Eng- 

 land first went out " on shares " to all in any way 

 concerned in the capture. But the form of profit- 

 sharing whereby the worker has somewhat to do 

 with the capital is of more recent years. Per- 

 haps the oldest example of productive co-opera- 

 tion is the Somerset Co-operative Foundry Com- 

 pany of 1867, which has been fairly successful. 

 The origin of all our co-operative concerns shows 

 that they are born from a strike, when men are 



