gent and possessed of unusual skill, but it does not appeal to the unskilled laborer, and when there are no profits to divide the laborers object. However, profit-sharing has been remarkably successful in many American plants and its advocates are confident of greater success and wider application.

A new plan of profit-sharing was announced in August, 1920, by the International Harvester Company. This corporation intends to distribute $60,000,000 of its stock among its 40,000 employees by annual gifts during a period of eight or ten years. The gifts of stock each year will vary with the profits of the year, and in addition cash bonuses will be distributed. The corporation expects to profit by the plan. As President McCormick expressed it: "This distribution furnishes a distinct incentive to each and every employee to do his full share, for upon individual effort and team-play will depend in a large measure the amount of the annual extra compensation to each employee who is entitled to participate." In time the employees will own 20 per cent of the stock of the company and will have a voice in its management. The United States Steel Company has sold considerable stock to its employees, but this is not profit-sharing, as it has been sold, though on very favorable terms, and not given as a share in the profits.

Welfare Work. Many corporations do more for their employees than pay wages. This service is generally known as welfare work. It is necessarily limited, at least in its full application, to corporations which are doing a large and prosperous business. Welfare work includes part or all of the following:

I.

1. Medical Work. This includes medical examination, rest-rooms, washing and bathing facilities, home nursing, optical and dental care.

2. Savings and Insurance. This

covers insurance

against sickness, old age, and accidents.

3. Profit-Sharing.-Whereby the laborer shares in the profits. Usually 8 per cent goes to the owner before labor receives any share and then laborers share in proportion to wages and term of service.

4. Recreation. Clubs, entertainments, dances, and

concerts.

5. Education.-Training for jobs and training in jobs. Training in citizenship, etc.

6. Care Outside of Working Hours.-Housing of employees. Recreation and care of families.

Co-operation as a Method of Production.-Co-operation is a form of business organization whereby the working men supply the capital and manage the industry. It has met with considerable success in England, Belgium, and other European countries, especially in co-operative stores. In the United States co-operative stores have succeeded in some places and have failed elsewhere, depending for success or failure upon the skill with which they have been managed and upon local conditions. Co-operation in manufacturing enterprises has not been very successful in the United States. Skill in management is not possessed by many, and the man who has such skill can demand and receive a large remuneration. Men who start co-operative manufacturing plants are usually unwilling to pay for the best talent and they seldom possess it themselves.

Co-operative creameries and cheese factories have been

very successful, but they are not co-operative in the real meaning of the term. A group of farmers builds the creamery and hires a man to run it. The farmers share in the earnings, but do not work in the plant. The farmers are really capitalists, and that they take milk to the plant in no way changes their status.

Industrial Democracy. The plan of giving employees a voice in factory management was adopted in England as a reconstruction policy after the Great War, but its most extensive application has been in Belgium.

*

In the United States, recently, a number of industrial plants have adopted the plan and this includes some of the largest in the country, such as the Standard Oil Company of New Jersey and the Goodyear Tire & Rubber Company of Akron, Ohio.

The method is not uniform. In a number of plants, joint committees, composed of equal numbers of employees, have charge of all matters pertaining to employment, working conditions, hours of labor, safety and accidents, etc.; profit-sharing is also usually included. In other plants an organization somewhat similar to that of the United States Government is followed: There is a Cabinet consisting of the executive officers of the company; a Senate composed of heads of departments and foremen; and a House of Representatives elected by the employees.

It has been found that labor representation tends to give the laborer a greater interest in his work and in the plant as a whole; helps him to overcome the sense of isolation;

* See "Industrial Councils in Belgium,” by Henry de Man, The Survey, July 3, 1920.

makes it possible to adjust matters of difference without resorting to strikes and lockouts; increases production and lessens waste and the labor turn-over.

Mr. Paul W. Litchfield, factory manager of the Goodyear Tire & Rubber Company, bears testimony as to its success in that factory and to the spirit of co-operation that has resulted. "Nearly every decision has been unanimous, and where there have been differences of opinion, in each case parts of both groups were voting the same way.' Not only has labor representation worked well with highly skilled labor, but Mr. John Leitch, in his valuable work, Man to Man, shows how it has been as great a success in plants where it might reasonably be thought there would be little chance of success.

At the Industrial Conference of 1919, called by the President of the United States, it was found "That joint organization of management and employees, where undertaken with sincerity and good-will, has a record of success.' The report of the conference further states "Employee representation must not be considered solely as a device for settling grievances. It can find success only if it also embodies co-operation in the problem of production. Whatever subjects the representatives come to feel as having a relation to their work, and their effectiveness as members of the plant, may come within the field of committee consideration.

"It must be undertaken, if at all, in a thoroughgoing way. Representatives must be selected by the employees with absolute freedom. In order to prevent suspicion on

* Litchfield, The Industrial Republic, pp. 91, 92. See Appendix for the Goodyear plan.

any side, selection should be by secret ballot. There must be equal freedom of expression thereafter. All employees must feel absolutely convinced that the management will not discriminate against them in any way because of any activities in connection with shop committees. Meetings should be held frequently and regularly, not merely when specific disputes are threatened. Both sides must be prepared to study the problems presented and must give them patient, serious, and open-minded consideration."

No plan of this kind can succeed unless the representatives of capital are prepared to give a "square deal" to labor and unless labor is willing to give a fair day's work for a fair day's pay.

"The idea of employee representation has aroused opposition from two sources: On the one hand, in plants too large for direct personal contact, employers who still adhere to the theory that labor is a commodity, hold off from any co-operation with employees. This view is steadily disappearing and will, it is to be hoped, wholly disappear. On the other hand, a number of trade-union leaders regard shop representation as a subtle weapon directed against the union. This theory is apparently based on the fear that it may be used by some employers to undermine the unions. Conceived in that spirit no plan can be a lasting agency of industrial peace.'

In

The Relation of the State to Industry. In many countries the government directly engages in industry. most European countries the telephone-lines, the telegraph, the railroads, and many other forms of industry are owned and operated by the State. The United States * Report of the Industrial Conference, p. 10.