So far as regards voluntary profit-sharing the inquiry covered 168 businesses; but 93 of these failed to satisfy even a very wide definition of profit-sharing. The remaining 75 undertakings em ployed 102,00o manual and non-manual workers, of whom 62,00o work for the Paris-Orleans Railway company. In more than one third of the cases the adoption of profit-sharing was subsequent to the year 1919. The share in the profits varies from 5 to 70% and more; rates of 6 to 20% being commonest. Information re garding 62 establishments employing 99,55o workers indicates that, in 1921, nine of them, employing 63,050 workers, realised no profits, and there was consequently no distribution. Fifty-three establishments, employing 36,500 workers, distributed 25,743,000 francs among 20,415 workers, an average of 1,260 francs for each participant. The actual amounts varied between a minimum of 24 and a maximum of 4,169 francs. On the whole, profit-sharing appears to be on the decline.
Germany.—Profit-sharing had gained little ground in Ger many prior to the War. The number of businesses known to be practising profit-sharing at that time was 21, with probably a little more than 15,00o workers. The most interesting of these schemes was that existing in the famous Zeiss works, at Jena.
The position after the War has been studied by the social attache to the Swedish legation at Berlin; and the following ob servations are largely based on the report of his investigation (Socials Meddelanden, No. 1923).
There was a revival of interest in profit-sharing in Germany after the revolution; and some of the leading industrialists, in cluding Krupp and Stinnes, were among its advocates.
According to a report by Werner Feilchenfeld, secretary of the Berlin chamber of commerce, published in 1922, in which he carried his investigations as far back as 1824, a system of profit sharing had existed in 95 undertakings; but of these only 29 were in operation in I92r.
The great majority of profit-sharing schemes in Germany pro vide for the payment of a bonus in cash, or for payments into savings bank accounts or into provident or benefit funds. As a rule, the distribution is based on the annual earnings.
Only two instances are apparently on record in Germany of the "co-partnership" type of scheme, both of which have been discontinued. The first was almost contemporaneous with the Briggs scheme in England, and was apparently modelled upon it. The latter was introduced in the great Krupp business in 1922, and discontinued in 1925, on the ground, it is stated, that it would not be possible in future years to pay the dividend (6% pref erential) on the workers' shares. (J. H.) United States.—Profit-sharing is a method of additional re muneration of employees under which the employees receive a share, fixed in advance in relation to profits. In other words the
basis of distribution of the profits between the stockholders and the employees is predetermined. The actual amount distributed depends upon the profits earned and varies from year to year according to the company's ability to earn profits. The conception of profit-sharing in the Senate report of 1939, pp. 2-5 (which makes profit-sharing include "all payments to employees, regard less of the form in which they are allocated or distributed, which are in addition to the market rate") is incorrect.
Early Examples.—Experience with profit-sharing in the United States dates from at least 1867. The pioneer experiments were, however, short-lived. The first enduring plan appears to be that established by the Peace Dale Manufacturing Company of Peace Dale, R.I., in 1878. This company, which was engaged in the manufacture of shawls, worsted goods and woollen fabrics, employed about 450 workers. Its profit-sharing plan was typical of those most frequently adopted in subsequent years. It provided for the allotment of a percentage of the profits, after making cer tain deductions for depreciation, reserve and dividends, to be dis tributed among those employees who had been with the company for a specified time on the basis of their individual earnings. It was also provided that, if the profits were not sufficient to allow a distribution of at least 1% of the earnings, the profit-sharing bonus would not be paid. This situation arose in the first year of the plan's creation. Thereafter, for the succeeding II years, a share of the profits varying between 3 and 5% of earnings, was paid to all eligible employees.
Another conspicuous example of the early systems in the United States, and one similar to the Leclaire plan in France, was that adopted in 1886 by the N. 0. Nelson Manufacturing Company of St. Louis, Missouri, which continued 49. years. Under the terms of this plan capital received the usual commercial return and the remaining profits, after setting aside 21% for educational purposes and 5% for a provident fund, were proportionately divided between capital and labour on the basis of the relationship between the total pay roll and the total capital investment. Profit sharing dividends from 8 to ro% were paid for a number of years. Until 1890 the employees were permitted a choice between pay ment in cash or in the stock in the company. After that time all payments were made in the form of stock. In 1894 it was decided to allow profit-sharing dividends only to those employees who invested ro% of their wages in the company's stock. During the dull years which followed, no dividends were paid, but in 1906 a total of $108,778 was distributed in the form of company stock to employees, customers and the provident fund.