36 



Profit-Sharing. 



great inequality in the earnings of workmen in the same factory, and 

 still greater inequality in the earnings of men in different factories. 

 In some shops men would receive large dividends ; in others, equally 

 good, and perhaps better, workmen would get nothing. In other 

 shops good workmen as well as poor might be debited on their weekly 

 wages with the losses of an unprofitable year. While it must be con- 

 ceded that an unprofitable year is the test of profit-sharing, it should 

 also be conceded that the existence of losses is abnormal and contrary 

 to the ideas on which all industry is founded. The laborer may be 

 regarded as paying his share of losses through the depression in the 

 market-price of labor, which always accompanies hard times, while 

 capital does not always suffer from the same influence. An instance 

 is known of a concern in which a large number of the workmen were 

 small holders of stock. A bad season made it necessary to make an 

 outlay of some $25,000 for improved machinery in order to meet com- 

 petitors. There was only one way to provide for it, and this was by 

 assessment of the stockholders. The small holders could not see that 

 the investment of further money was for their benefit. Some of them 

 raised the cry of robbery, and the result was that in order to save the 

 business many of them were bought out. They would have made 

 money if they had remained in, but there was no reasoning with them. 

 The moment there was a bad showing for business the proprietors 

 lost the sympathy of the men. They would not permit a reduction of 

 wages, and even declared that they preferred to go back to the old 

 method of employment, in which they had no share of the profits. 



This brings us to what might be called the fatal defect in any 

 systems of profit-sharing, so far as they have been tried down to the 

 present time. It is very well for the employer to speak of consider- 

 able profits and his willingness to divide them among his men iu 

 some equitable way. Such a division is not only generous, but it is 

 profitable to the employer in the end, because every man in his employ 

 will have some incentive to work. The employer thus guarantees 

 extra pay to the employed. But can any one guarantee to the 

 employer that every year will be a profitable one ? And if there are 

 losses, who shall make them up? Shall the employers make them up 

 by themselves ; or shall the men, having once been taken into a part- 

 nership upon the profits, still continue that partnership by making up 

 their share of the losses ? There are many employed men who are the 

 owners, or the partial owners, of their own homes. They would 

 gladly enter into an arrangement for the division of the profits ; but 

 they would hesitate to mortgage their homes as security to their 



