§ 6. Industrial Partnership.

The difficulties of productive co-operation arising from the need of skilled management, together with the existing unsatisfactory relation between employers and laborers when wholly separate from each other, have led to a most promising plan of industrial partnership by which the manager retains the control of the business operations, but shares his profits with the workmen. The gain through increased efficiency, greater economy, and superior workmanship, recoups the manager for the voluntary subtraction from his share, and yet the laborers receive an additional share; but more than this, it educates the laborer in industrial methods, discloses the difficulties of management, and stimulates him to saving habits and greater regularity of work. This system is particularly adapted to reaching those laborers who would not themselves rise to the demands of productive co-operation.

The principle was tried on one of the Belgian railways. “Ninety-five kilogrammes of coke were consumed for every league of distance run, but this was known to be more than necessary; but how to remedy the evil was the problem. A bonus of 3-½d. on every hectolitre of coke saved on this average of ninety-five to the league was offered to the men concerned, and this trifling bonus worked the miracle. The work was done equally well, or better, with forty-eight kilogrammes of coke instead of ninety-five; just one half, or nearly, saved by careful work, at an expense of probably less than one tenth of the saving.”329

The experiment which has attracted most attention in the past has been that of the Messrs. Briggs, at their collieries in Yorkshire, England.330The relations between the owners and the laborers were as bad as they could well be. “All coal-masters is devils, and Briggs is the prince of devils,” ran the talk of the miners, when they did not choose to send letters threatening to shoot the owners. In 1865 Messrs. Briggs tried the plan of an industrial partnership with their men, purely from business considerations. Seventy per cent of the cost of raising coal consisted of wages, and fully fifteen per cent of materials which were habitually wasted. The whole property [pg 530] was valued, and divided into shares of $50 each, of which the owners retained two thirds, together with the control of the business. The remaining one third of the shares was offered to the employés. If any subscriber was too poor to pay $50 for a share, the subsequent dividends and payments were to be applied to purchasing the share. After reserving a fair allowance for expenses, like the redemption of capital, whenever the remaining profits exceeded ten per cent on the capital, that excess was to be divided into two equal parts, one of which was to be distributed among all persons employed by the company in proportion to their wages, and the other was to be retained by the capital. In previous years but once had they made ten per cent profit on their capital, and twice only five per cent. In the first year after the new system came into operation, the total profits were fourteen per cent, and the four per cent of excess was divided, two to the laborers' bonus, and two to the capital, so that capital received twelve per cent. In the second year the profits were sixteen per cent, in the third year seventeen per cent; the first year the work-people received in addition to their wages $9,000, in the second $13,500, in the third $15,750. The moral effect was striking. Work was done regularly, forbearance was exercised, habits improved, and the faces of the men were set toward improvement in life. The scheme worked successfully for years, but was finally ended by the pressure of the outside trades-unions, who compelled the workmen to give up the arrangement.

A similar experiment was tried by the Messrs. Brewster, carriage-manufacturers, of New York. They offered to their workmen ten per cent of their profits, before any allowance was made for interest on the capital invested, or before any payment was made for the services of the firm as managers. In one year as much as $11,000 was divided among the laborers. Again, as in the case of the Briggs colliery, the experiment was brought to an end by an unreasoning submission to the pressure of outside workmen during a strike.331

But, all in all, industrial partnership332offers a great field for [pg 531] that kind of improvement which is worth more than a mere increase of wages, and seems to make it possible to reach the heavy weight of sluggishness among the lower and more hopeless strata of society. And it is possible that it will stir in them the powers which may afterward find employment in the harder problems of productive co-operation.333

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