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Philip Dru Administrator : a Story of Tomorrow 1920 - 1935 online

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accident fund, and of a 24s. per week pension fund. In these mills cloth
is made from wool and wool only, not an ounce of shoddy. Here again the
surplus profits, after the fixed reward of capital - viz., interest at
the rate of 5 per cent. per annum - has been paid, are divided between
labor and custom; and here again the capital sunk in the mills has been
written down from £8,655 to £1,680. Unprofitable machinery is
scrap-heaped. The mill has only the best, most up-to-date machinery, and
all connected with the works, shareholders and workers, live together like
a happy family.

As an illustration of a co-partnership industry which divides its
surplus profits between wages, interest, and custom, I might point to
the gas companies which are being administered on the Livesey
principle, which is now so well known. Since co-partnership principles
were applied to the South Metropolitan Gas Works in 1899 over £500,000
has been paid, as their share of the profits, to the credit of the
workers, who also own over £400,000 of the company's stock. The fact
that over £50,000,000 of capital is invested in gas companies
administered on co-partnership principles, which divide surplus profits
between consumers, shareholders, and wage-earners, encourages us to
hope that we may look forward with confidence to the adoption of
co-partnership principles by other industries.

As an illustration of a co-partnership industry which divides its
surplus profits between labor and capital alone, let me refer to the
Walsall Padlock Society, one of the 114 workmen productive societies
which may be regarded as so many different schools of co-partnership
under exclusive trade unionist management. In this society the rate of
interest on share capital has been fixed at 7-1/2 per cent., and should
there be any surplus profit after trade union rate of wages and the
fixed reward of capital, 7-1/2 per cent., have been paid, it is divided
between labor and capital in proportion to the value of their respective
services, and the measure of the value is the price the Walsall Padlock
Society pays for the use of capital and labor respectively. £1 of
interest counts for as much in the division of the profits as £1 of
wage, and vice versa. This principle of division, invented by the
Frenchman Godin, of Guise, has always seemed to me to be absolutely fair
and to be capable of being easily applied to many industries.

Now in these cases I have quoted, and I could refer to many others, a
unity of interest is established between labor and capital, with the
result that there is a general atmosphere of peace and of mutual
brotherhood and goodwill.

Capital receives the advantage of greater security. Labor is secured the
highest rate of wage the industry can afford.


Now, what does the substitution of such conditions for the conditions
generally prevailing to-day in England mean for our country? Who shall
estimate the difference between the value of willing and unwilling
service? The Board of Trade will tell you that a man paid by piecework
is generally from 30 to 50 per cent. more effective than a man paid by

If the co-partnership principle, which is better than piecework, because
it tends to produce identity of interest between capital and labor were
to increase the efficiency of time-paid workers from 30 to 50 per cent.,
just think of the result; and yet the fact that co-partnership might add
from 30 to 50 per cent. to the efficiency of the worker is urged by many
trade unionists as a reason against co-partnership. They seem to fear
that the result of making men co-partners will be to cause them to give
25 per cent. better labor and to receive only 50 per cent. more wage. No
system can be right which is based on the assumption that self-interest
calls for a man to give his worst instead of his best. When I compare
Canada with England I am struck by the fact, that, whereas Canada's
greatest undeveloped asset is her natural resources, England's greatest
undeveloped asset is man himself. How to get each man to do his best is
the problem before England to-day. It is because co-partnership
harnesses to industry not only the muscle but the heart and the
intelligence of the worker that we are justified in regarding it with
reverence and enthusiasm as the principle of the future.

[Transcriber's Note:

The following have been identified as possible typographical errors in
the original:

hands over the to-morrow
infringe upon the rights as nations
but with that her prescience
plead for Gloria]

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Online LibraryEdward Mandell HousePhilip Dru Administrator : a Story of Tomorrow 1920 - 1935 → online text (page 14 of 14)