202 



SCIENCE, 



[Vol. IX., No. 213 



tures of the case : it has been highly spoken of for 

 ties on account of its practical indestructibility 

 when placed in the soil, and all the ties of this 

 wood here tried are still sound, except just under 

 the rails, where they are crushed nearly to pulp, so 

 as to be of no service whatever for roads of heavy 

 traffic. 



In a recent number of Science we noted some 

 instances in w^hich large employers had given 

 favorable testimony to the action of profit-sharing 

 in promoting good feeling and harmonious rela- 

 tions between employers and employees. The 

 reverse side is presented very forcibly and clearly 

 by Mr. Eichard Aldrich in the (Quarterly journal 

 of economics. Mr. Aldrich points out that any 

 system, such as profit-sharing or industrial part- 

 nership, which promises so momentous results, 

 must be subjected to a most careful examination 

 before receiving the stamp of approval. The in- 

 ductive evidence so far obtained, he contends, is 

 not sufficient, because the data included in it are 

 so few, the whole number of instances collected 

 not being more than one hundred, — a very 

 minute speck in the whole world of business. 

 Furthermore, the actual application of the system 

 of profit-sharing has been so limited that the cases, 

 from their very novelty, have often been sur- 

 rounded by a set of special circumstances, and to 

 eliminate the effect of these a large number of 

 cases must be averaged. Induction being, for the 

 present, inconclusive, it is necessary to turn to 

 theoretical and apriori considerations. In apply- 

 ing these, in turn, profit-sharing must be viewed 

 as a permanent and prevalent industrial system, 

 and not as exceptional and experimental. Then 

 the first consideration is that profit-sharing is un- 

 fair, in that it disturbs the natural working of 

 wages and pays the employee twice over — his 

 insured part of the product represented by wages, 

 and a premium besides. The latter is taken from 

 what should accrue to capital, and is over and 

 above the commuted and fixed advanced share of 

 the product, to which alone the employee is en- 

 titled. 



Furthermore, profit-sharing implies some profits 

 to share ; but what happens, Mr. Aldrich asks, 

 — and this is a point we have frequently empha- 

 sized in Science, — if instead of a profit there should 

 be a loss ? Logically, profit-sharing must and does 

 imply loss-sharing. But this is impossible, and 

 whUe capital is asked to share prosperity, it must 



shoulder adversity alone. It, of course, suggests 

 itself that a reserve fund might he established in 

 good J ears to be used in bad ones, but there are 

 practical objections to this. In the first place, 

 the stimulus to the employee which profit-shar- 

 ing is supposed to furnish by holding out a pros- 

 pect of immediate gain, is blunted by any claim on 

 the gross profits other than the necessary ones of 

 interest on capital, and profit on the same ; and, 

 secondly, the exact amount of the reserve fund 

 would be difficult to determine. Another and a 

 very forcible objection to profit-sharing is, that, in 

 order to protect the employees, a full publication 

 of the accounts of the business would be neces- 

 sary. This would render business impossible. 

 Secrecy in accounts is a most important element 

 in the security and stability of any business, how- 

 ever sound. Mr. Aldrich develops all these con- 

 siderations somewhat, and then mentions the very 

 interesting and suggestive point, hitherto gen- 

 erally overlooked, that, because of the importance 

 of the entrepreneur in the modern industrial sys- 

 tem, the result of the widely-spread adoption of 

 industrial partnerships would be to subordinate 

 the pay of the laborer to the success of the capital- 

 ist who employs him. Where capital plays a sub- 

 ordinate part, where the functions of the entre- 

 preneur are reduced to a minimum, there will in- 

 dustrial partnership be applied with greatest chance 

 of success. But suppose, says Mr. Aldrich, that 

 profit-sharing does all that is claimed for it by its 

 advocates, and is introduced generally, in what 

 respect will the situation of labor and capital be 

 changed ? The satisfactory results now attested 

 to are due to the present exceptional character of 

 the system. " The glamour and emotional inter- 

 est which surround the experiments in industrial 

 partnership have prevented any practical test 

 from ever yet being made that would give the 

 system an undoubted claim to be considered a 

 solution of the ' labor problem.'" 



The dentists of Massachusetts are again 

 endeavoring to secure a legislative act establishing 

 a board of registration in dentistry. Such an act 

 almost became a law several years ago, and seems 

 to have failed because it was regarded by some as 

 an infringement of the liberties and rights of the 

 people, or on that small share of them who wished 

 to practise dentistry without sufficient previous 

 study. A broader view of the question would 

 give chief consideration to the feelings of those 



