INDUSTRIAL PEACE, Experiments in.
The desire to find a common ground of understanding between capital and labor with a view to reducing the enormous financial wastage resulting from needless labor strikes is the purpose back of every experiment in in dustrial peace that has been inaugurated dur ing the past 20 years. The first efforts in this direction assumed the form of some type of profit-sharing, the idea being that the prospect of sharing in the profits of the employer would appeal to the self-interests of the workers and so inspire more loyal and efficient service. Theoretically, the idea appealed to many practi cal men, and various developments of the profit sharing scheme have since been carried out. The failure of many of these projects has not had a permanently discouraging effect upon those who favor some such form of co-opera tive business effort, chiefly because of the fact that, in at least a majority of cases, the lack of success can be traced to local causes which proved stronger than the principles involved. Thus, the attempts of employers to use the profit-sharing ideal for advertising purposes or as a means of evading appeals for increases in wages, have invariably proved disastrous. At the same time, some of the largest concerns in the country have adopted this form of reward ing their employees, and with such satisfactory results that it is still in force. One reason why the number of failures charged against the profit-sharing idea is so great is that so many schemes that cannot properly be called profit sharing have been classified under this desig nation. Thus, numerous forms of co-operative effort, including plans for participation in stock ownership through instalment purchase, bonus systems, pension schemes, and various projects of a welfare character have erroneously been classed as "profit-sharing? The term "profit-sharing" was first defined by the International Co-operative Congress, which was held in Paris, in 1889, and was stated to be "an agreement freely entered into by which the employees receive a share, fixed in advance, of the profits," while the term "agree ment," as used in this connection, was de fined to cover "not only agreements binding in law but as including also cases where the agree ment is only a moral obligation? The term "profit" was defined as "the actual net balance or gain realized by the operations of the under Ca share as "a sum paid to the em ployees out of the profits," such share to be "dependent the amount of the profits" and "not indeterminate? or, in other words, 'zit must not be a share which an employer fixes, at the end of some period, at his absolute discretion.
as distinguished from a prearranged basis," while the proportion of the total working force of a concern that must share in the benefits be fore real profit-sharing conditions can be es tablished was declared to be "not less than 75 per cent" Making allowance for certain elas ticities in interpreting this definition, neces sitated by typically American conditions, the United States Bureau of Labor Statistics (Bulle tin 208) reports that it found 60 genuine profit— sharing plans in operation in the United States. Of these, seven were established prior to 1900 while 29 have come into existence since 1911 and 21, or about one-third of the number, in the three years between 1914 and 1916. More than three-fifths of the concerns operating on a strict profit-sharing basis were located in three States, New York, Massachusetts and Ohio. Since the publication of this report, the number of plants adopting some form of genuine profit sharing has been considerably augmented and advocates of this method of securing closer co operation between employer and employee be lieve that the next government report will show more favorable conditions, not only in an in creased rate of distribution but in other results more definitely indicative of the general prac ticability of the plan.