NLarch, 19X1 



THE I. A. A. RECORD 



Page Seven 



LEGISLATION CONSIDERED 



{Continued from page J ) ' ' 



fund and reasonably expected net receipts T 

 therein from the income tax. 



Senator Lantz expressed the opinion that the 

 income tax bill and the companion bills will 

 make it possible for the state to dispense 

 wholly with any levy of taxes on property for 

 the various purposes referred to above and 

 other general purposes, at a saving of approxi- 

 mately thirty million dollars per year to prop- 

 erty owners of the state. 



Motor Vehicle Bills 



Other measures in which the I. A. A. is in- 

 terested and is watching closely are those 

 amending the motor vehicle Act so as to ex- 

 empt farm tractors from paying a state motor 

 license fee; and to change the classification of 

 trucks in the levying of fees. 



Senator Henry M. Dunlap of Champaign 

 and Rep. Henry C. Allen of Lyndon have in- 

 troduced practically the same bill in their re- 

 spective Houses which fixes a fee of $8 for 

 trucks weighing less than 4,000 pounds, $12 

 for trucks of from 4,000 to 8,000 pounds, and 

 $22.50 for trucks of 8,000 to 12,000 pounds. 

 Trailers and semi-trailers weighing 2,000 to 

 4,000 pounds are assessed $12, and those of 

 from 4,000 to 10,000 pounds $25. 



Senator Mason introduced a bill to exempt 

 tractors, traction engines, etc., from the pay- 

 ment of motor license fees whether used by 

 owners or in behalf of others; provides that 

 vehicles of less than 7,500 pounds (now 5,000) 

 shall pay the minimum fee of $12. 



Senator Mills has a bill in the hopper pro- 

 viding for a license fee of $17.50 for vehicles 

 of 5,000 to 8,500 pounds (present fee $22.50 

 for 5,000 to 12,000 pounds). Another bill in- 

 troduced by Mills seeks a $200,000 appropria- 

 tion to build a 4-H Club building at the 

 State Fair Grounds. 



Representative Hunter has introduced House 

 Bill No. 228 which provides that threshing 

 machines, clover hullers, corn shredders, and 

 similar vehicles used primarily for agricultural 

 purposes shall not be subject to the payment 

 of vehicle license fees. ■'."/• 



Another Oleo Bill 



Representative J. R. Thompson of Bridge- 

 port has introduced a bill to license all handlers 

 of oleomargarine charging a fee of $250 per 

 quarter for a license to sell it wholesale, and 

 $75 per quarter for a license to sell it retail. 

 The State Director of Agriculture is authorized 

 and empowered to supervise the Act. 



Free Limestone Bill 



A bill to distribute agricultural limestone 

 produced at Chester Penitentiary free of charge 

 to southern Illinois farmers in the vicinity of 

 the prison failed to secure favorable action 

 of the House Committee on Efficiency and 

 Economy on March 4. 



The bill introduced by Rep. Davis of Mur- 

 physboro was criticized first on the ground 

 that it is illegal for the state to give away its 

 property; secondly, because only a few citizens 

 would be benefited; thirdly, because it would 

 furnish unfair competition to limestone com- 

 panies operating in that territory. 



President Earl Smith, who happened to be 

 in the committee room when the measure came 

 up, was called on to express his views. He 

 stated that the bill as a temporary relief meas- 

 ure to benefit drouth stricken southern Illinois 

 farmers had merit, but as a permanent program 

 thought it unwise. 



Observations 



f ■>■■■-> r 1 ,4 



Can a man earn $1,000,000 a year? 



This is the controversial issue stock- 

 holders of the Bethlehem Steel Com- 

 pany will decide at their coming annual 

 meeting on April 14 when the com- 

 pany's bonus system initiated years ago 

 by Charles M. Schwab, chairman of the 

 board, will come up for consideration. 



ing, and general expense of Bethlehem, 

 including all bonuses, in the six years 

 ending December 31, 1929, was less 

 than that of United State Steel Corp., 

 or the Youngstown Sheet and Tube 

 Company both in terms of cost per 

 ton of steel sold and in relation to the 

 percentage of gross sales." 



The target of attack by a group of 

 minority stockholders is the cash paid 

 President Eugene G. Grace, No. 1 em- 

 ployee, who for the past 13 years has 

 received a bonus averaging $814,993 

 per year. During 1929 his bonus 

 amounted to $1,623,75 3, during 1930 

 $1,01 J, 591. He draws the nominal 

 salary of $12,000 per year. The bonuses 

 of a number of other employees have 

 averaged between $100,000 and $230,- 

 000 annually during the 13 year period. 



Stoutly defending the company's 

 bonus plan in a recent letter to the 

 stockholders. Chairman Schwab pre- 

 sents all the facts and asks for favor- 

 able action at the coming meeting to 

 continue the profit-sharing system. 



"I personally have fixed the percent- 

 ages of the payments made under this 

 system to the principal executives of 

 the corporation since it was inaugu- 

 rated," he writes. "I assume full re- 

 sponsibility for these payments and I 

 am quite prepared to support them in 

 principle in detail. The directors of 

 the corporation share with me the be- 

 lief that our bonus system has been ona 

 of the principal factors in the success 

 of the corporation . . . . -•:: /"I- >---^. 



R. W. Hebard, New York engineer 

 and a stockholder in Bethlehem Steel, 

 expresses his disagreement with Chair- 

 Schwab thus: "I consider that the 

 stockholders who propose to put a stop 

 to the present bonus system, or at 

 least modify it to one within reason, 

 arc on very solid ground and deserve 

 the support of the other stockholders. 



"It is preposterous to claim that any 

 such reward as the company paid Mr. 

 Grace and others is indispensable to 

 obtaining 'unusual effort and ability on 

 the part of our officers and employees.' 



"If this were true, it would be a 

 forcible indictment against the policy 

 in this respect of hundreds of Amer- 

 ican corporations wherein only salaries 

 are paid or salaries plus a small bonus. 

 There is no convincing evidence at 

 hand that Bethlehem is any more effi- 

 cently managed than innumerable other 

 companies." Hebard contends that the 

 fairest method of rewarding effort is to 

 permit employees to acquire stock in 

 the company (such as in American 

 Telephone & Telegraph) and then em- 

 ploy all their ability to make the stock 

 valuable, or that the bonus be paid 

 after depreciation and dividends on 

 common stock, rather than before, as 

 is now the case. 



"I believe now as I have always be- 

 lieved that a liberal reward for unusual 

 effort and abiUty on the part of an offi- 

 cer or employee is returned many fold 

 to the stockholders of a corporation. 

 It is as true of men of great ability as 

 of those of lesser capacity. 



"But the value of a liberal bonus sys- 

 tem is not confined to the direct in- 

 centive offered to the particular recipi- 

 ents. Thfere are collateral advantages. 

 Chief among them is the fact that such 

 a system attracts to the corporation 

 men of exceptional ability. 



Sixteen inquiries in one mail were 

 received by Country Life Insurance 

 Co. in response to the "Family In- 

 come Rider" advertisement in the 

 February I. A. A. RECORD. 



"The hope of attaining an important 

 position in the corporation is the best 

 possible incentive to the younger men 

 to work hard and thus win recognition 

 and promotion. The results accom- 

 plished under the Bethlehem plan are 

 the best evidence of the stimulating 

 effect upon the entire organization of 

 compensating effort on an incentive 

 basis. The average administrative, sell- 



Farmers who are members of co- 

 operative associatons managed and op- 

 erated largely by employees will be in- 

 terested in the question raised in the 

 Bethlehem Company which has been 

 and is being widely discussed. The 

 same principles which govern the suc- 

 cess or failure of large corporations 

 apply to the operation of farm co- 

 operatives and agricultural associations 

 with perhaps one exception. In the 

 latter there are men whose zeal and 

 untiring effort is not prompted so much 

 by the compensation they receive, 

 which invariably is small, as by their 

 belief in and devotion to the principle 

 that agriculture as an industry has not 

 had a square deal and is entitled to a 

 better income for the service it renders. 

 ;.. -.:- •■. — G. T. 



February, 1931, was the largest 

 February in three years for the Indian- 

 apolis Producers. A total of 8 53 car- 

 loads of live stock was handled, repre- 

 senting 3 5 per cent of the market re- 

 ceipts. This was an increasa of 77 c»r» 

 over February last yeir. 



