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be worked as earnestly and intelligently as any other branch
of their business.

If employers could be enlightened on the subject, the
Joint Stock system, by which all great industries are now
worked, is just the thing. It is a partnership, and all that is
necessary is to include the wage -earners. This can be done
as recommended by the Labour Co-partnership Association,
by paying the profit-sharing bonus partly, or entirely, in
shares in the concern. This is done by the gas companies
above referred to, who pay half in the ordinary stock of the
company, bought at the market price of the day, while
the other half is payable in cash ; the greater part of the
men, however, as already stated, either leave it on deposit at
interest or invest it in stock.

Another difficulty to the introduction of the system is the
dislike of the Trade Unions. At this there need be no sur-
prise, for the ultimate success of co-partnership means that
employers and employed will be one, and therefore there
will be no need for the Trade Union as it now exists. It will,
in fact, be superseded by a superior system. There are
already some Trade Union leaders in the North of England
who have the courage to say that if a better system such as co-
partnership supersedes their organisations they will welcome
it. At present such men are few in number, and official
trade unionism generally is either quietly opposed or actually
hostile to all systems of profit-sharing that tend in the direc-
tion of partnership.

Partnership in businesses, such as railway and other com-
panies where employment is regular and constant, is, I believe,
quite possible and practicable ; but where employment is



INDUSTRIAL PARTNERSHIP AND PREVENTION OF DISTRESS 113

casual and uncertain the co-partnership system is at present
scarcely applicable, and unfortunately from these fluctuating
businesses mainly comes the distress caused by want of em-
ployment.

Of course, there are many and great difficulties, but there
is also great danger to the industrial community and to the
State. Something must be done, and it appears clear that it
must be in the direction of co- partnership, which I thoroughly
believe is the goal of British industry. Employers are doubt-
less in many cases fearful of the result of bringing their
workmen into partnership, which need cause no surprise ; but,
so far as my experience goes, working men respond most
satisfactorily to the trust their employer reposes in them.
Confidence begets confidence, and mutual confidence between
employer and employed is the foundation of any and all
good relations.

If and when the working classes become possessors of pro-
perty, one indirect effect in the prevention of distress will be
that employment will be more regular and constant, or they
will be not mere labourers, but, by virtue of their thrift and
savings, active promoters of productive industry.

Is my ideal right or wrong ? If right, then the co-part-
nership of capital and labour is worth any effort to make it
general as speedily as possible, for, amongst other great
advantages that it will bring, may be numbered the preven-
tion of distress. Or the ideal may be right, but the method
for its attainment not the best. All that can be said in its
favour is that so far it has succeeded beyond expectations. If,
however, a better can be found, by all means let it be tried.

If my ideal is wrong, the sooner it is exposed the better.
The great advantage of meetings such as this is that they
tend to discover truth and to expose error. For that reason
I thank the Charity Organisation Society for this opportunity
of discussing a very important question.

G. L.



114 METHODS OF SOCIAL ADVANCE

POSTSCEIPT

By request I add the following particulars of the system
of profit-sharing or industrial partnership adopted by the
Gas Companies referred to in the paper.

Nearly thirty years ago the sliding- scale principle was
applied to Gas Companies, whereby the interests of share-
holders and consumers are identified. For every reduction
of one penny per 1,000 feet in the price of gas below a
certain standard or initial figure the shareholders are allowed
a small increase of dividend. It is therefore to the interest
of the company to sell gas at the lowest possible price, and
by that means a partnership was established between share-
holders and consumers. This partnership was incomplete,
because it did not extend to the employees, but for that the
time was not ripe.

In 1889 when the New Socialistic Unionism was rising
into power after the great London Dock Strike, the Gas
Workers' Union obtained control over gas stokers. The
South Metropolitan Company then felt it to be imperative
that some effective step should be taken to attach the work-
men to the Company, and the profit-sharing system was
introduced, which is simply an extension of the sliding scale
to the employees. It was at once accepted by all the non-
unionists, and the Union then ordered the strike, to compel
the withdrawal of profit-sharing, and failed. The standard
or initial price of gas, which in the case of the South Metro-
politan Gas Company has been fixed by Parliament at 8s. Id.
per 1,000 feet, is the starting point for both the dividend and
the profit-sharing bonus. For every penny at which gas is
sold below the standard price the dividend may be increased
2s. Sd. per cent., and the directors give an annual bonus of
three-quarters, or 15s., per cent, on the salaries and wages of
all the officers and workmen who enter into agreements to
serve the Company for various periods not exceeding twelve
months, with a proviso that any individual can leave by



INDUSTRIAL PARTNERSHIP AND PREVENTION OF DISTRESS 115

consent (which is always given) at any time. The present
selling price of this Company's gas is 2s. 3d. per 1,000 feet,
or Wd. below the standard, therefore the annual bonus is at
the rate of 7 per cent, on salaries and wages. By the rules
one-half only of the bonus is payable in cash and the other
half is invested in the Company's ordinary stock at the
market price of the day. If the Company should not be
raising new or additional capital the amount required for
these annual allotments is bought in the market.

To induce the employees to save the withdrawable half of
the bonus they have the option of leaving it at interest
4 per cent, up to 20, and 3 per cent, over 20 in the
Company's hands, but withdrawable at any time on a week's
notice, or they can invest it in stock. As stated in the paper,
a very large proportion of this part of the bonus is saved.

The agreements are an important part of the system, for
by their means discrimination is exercised. This is essential
to success. If a profit-sharing bonus is given indis-
criminately to all workmen, good, bad and indifferent, it
may very soon lose its effect as a stimulus to good work.
Workmen who are careless and indifferent about their work
are therefore told when their agreement expires that it will
not be renewed until they show more interest in their work,
and that they can apply again in three months. If they
have improved, an agreement for perhaps three months is
given, to be renewed if they continue to work satisfactorily.
This system of agreements giving security for twelve months'
work is greatly valued by the regular workmen, while those
employed in the winter only have agreements for shorter
terms, thus bringing them also into the partnership. The
granting or refusing agreements is not left to any subordinate
official or foreman, but all must come before the chief.

The question was asked at the meeting, Where does the
money come from to pay the bonus ? which last year
amounted to 25,660 in the case of the South Metropolitan
Company.

i 2



116 METHODS OF SOCIAL ADVANCE

It is undoubtedly produced by the better working of the
employees generally. This is proved by a comparison with
the wages accounts of companies where the system is not in
force, the rates of wages being the same, but the cost per
ton of coal handled is considerably less.

The system is, therefore, beneficial to both employer and
employed. It was introduced with the double object of attach-
ing the men to the Company and of enabling them to improve
their position in life. If the bonus were distributed annually
in cash nearly all would be spent and little permanent good
would result to the workmen ; their interest in the partner-
ship would gradually weaken and in time disappear. The
partnership was made complete in 1898, when the two work-
men directors were elected by the shareholding workmen.
They share equally with the other directors in the control of
the Company, with credit to themselves and to the general
advantage. The workmen have responded in the right spirit,
and have shown themselves to be quite ready and willing to
accept losses. Twice since 1889 has the price of gas been
considerably increased, necessitated by the great rise in the
price of coal. Consequently in 1892 the bonus fell from 5 to
3 per cent., and in 1900 it dropped from 9 per cent, to
nothing, and started again at 3J per cent, in 1901, rising
to 7i in 1902. The men accepted the position cheerfully ;
they knew the cause, and maintained their confidence in
their employers, and relaxed none of their interest in the
Company, hoping for a return of prosperity.

The Crystal Palace District Gas Company adopted a
profit-sharing system in 1894 on the same principle as that
of the South Metropolitan Company, and with equal success.
Rather more than 500 employees are participators, and now
possess in the ordinary stock of the Company and on deposit
at interest over 16,000, or an average of more than 30 per
man, the accumulations of nine years. They, like the South
Metropolitan men, have had good and bad times, and have
taken the latter quite as well as their neighbours, but the



INDUSTRIAL PARTNERSHIP AND PREVENTION OF DISTRESS 117

consummation of workmen directors will not be reached until
next year. At the Commercial Gas Company of London a
start was only made in 1901, on identical lines, when an
immediate and striking change took place in the bearing and
conduct of the workmen towards the management, and every
thing promises as well as at the other two Companies.

There is, in fact, no reason but want of will why this
system of co-partnership of shareholders, employees, and
consumers should not be extended to every Gas Company in
the kingdom. If there were the will why should not the
principle, modified to meet varying conditions and circum-
stances, be adapted to a multitude of industries sadly in
need of such a bond of union and strength ?

G. L.



H8 METHODS OF SOCIAL ADVANCE



XI

APPKENTICESHIP IN EELATION TO THE
UNEMPLOYED

DUBING the past winter general attention was once more
attracted to the 'problem of the unemployed.' Reflection
and inquiry have recently shown, as they always do show, that
the causes of the evil are complex and far-reaching; that
there is no one remedy easy of application. Former experience
warns us that with this disappointing conviction public
interest is likely to flag, and the subject to be neglected, till
the next hard winter or industrial depression brings it again
to the fore. Yet no one can say that the state of things
exhibited by the ' unemployed ' of last winter is inevitable.
On the contrary, the evil is in its nature curable. Because
its cure is complex, slow, and difficult, it is none the less
incumbent upon all patriotic men and women to set it on
foot and further it.

It is the purpose of this paper to isolate and consider one
of the well-recognised causes which produce * lack of employ-
ment ' namely, Lack of Technical Skill, and to advocate as
a remedy for this the revival in a modified form of the old
system of apprenticeship.

The remedy is no new idea ; it has many and more
weighty advocates ; and yet it remains untried. We do not
think this is because its opponents hold the field, even though
they include some well-known economists. We think, rather,
it is because the subject, important as it is, has not yet
received sufficient attention. The economists alluded to fail



APPKENTICESHIP IN KELATION TO THE UNEMPLOYED 119

to consider it in all its bearings, but condemn it on too slight
a hearing. The general public overlook it.

Apprenticeship was given a bad name and hanged by
Adam Smith, who saw it under special circumstances, and
his followers have inveighed against it ever since. Laymen
look upon it as obsolete on their authority. The system
these writers condemn is one involving restriction of liberty,
injustice, oppression, and lack of adaptability to changing
conditions of industry.

But these objectionable features are not inherent in the
contract of apprenticeship. They are the results of unwise
trade regulations, or undesirable trade customs associated
with, but incidental to, that contract.

It is worthy of note that not even the opponents of
apprenticeship have been able to suggest a satisfactory sub-
stitute for it as a means of craft training. It might be
revived in a form which is free from the disadvantages
referred to, and by its revival a great improvement might be
effected in the technical skill of workmen of all sorts, and
that in an easy and natural way involving no expenditure
and little new machinery.

If we look closely at the Unemployed of London on any
one day, we discern several grades. First we will set aside
those who are physically or morally unfitted for continuous
work of a more arduous kind than marching in street
processions. These form a serious problem, but its solution
is not to be sought in better technical training. We will also
set aside the varying number of skilled workmen who are
temporarily out of work from one reason or another. These
men, for the most part, have solved the problem in their
own case by thrift. There remain two distinct classes of the
unemployed.

(1) First, men who pursue the less skilled industries.
General labourers and labourers auxiliary to some definite
trade ; carmen and porters of all sorts.

To these must be added clerks and warehousemen.



120 METHODS OF SOCIAL ADVANCE

For the first of these groups, the special skill needed is
quickly or easily acquired ; for the second, it is acquired in
the higher standards of the elementary schools at no cost to
the parents.

(2) Secondly, so called ' wasters.' Men who practise a skilled
trade which they have only imperfectly mastered. They
cannot join their trades' unions, for they are not competent
to earn the minimum rates of wages fixed by those bodies.

Looking more closely at these two classes, we see that
for the workers in the first there is a demand. As with the
demand for skilled mechanics, this varies with the conditions
of each particular trade and of trade in general. The chief
cause of lack of employment in this class is the excessive
supply of labour. The fact hardly needs demonstration.
Experience shows us that a man on the wrong side of forty,
who loses his berth through sheer ill fortune, may remain
out of work, even though he be intelligent, trustworthy, and
have had a good general education.

No employer advertises for a qualified clerk, for he would
have half London besieging his office for the post.

A gentleman who advertised for a coachman it was
before the reservists had come back told me that he had
two hundred applications in two days.

At the Fulham Labour Bureau, during the week ending
February 13 last, 280 men applied for work. Of these 171,
or about 74 per cent., belonged to this class.

We submit, then, the urgency of diminishing the supply
of unskilled and clerical labour by diverting young boys to
the more skilled industries.

For the workers in the second class as such there is no
demand. No one who had a choice would employ a man who
did his work badly. The existence of this class is generally
admitted to be an evil, and in London a grave and increasing
evil.

It was felt to be so serious in the building trades, that
the Technical Education Board of the London County Council,



APPEENTICESHIP IN EELATION TO THE UNEMPLOYED 121

in 1897, appointed a sub-committee to inquire into the
' educational requirements ' of members of these trades. The
committee reported in 1899, and the burden of their report
is applicable to other trades. They inquired to what was
due the lack of skill amongst workmen, so generally com-
plained of by architects. They found it was due to the
absence of any method of learning the trades thoroughly.
Such a method they agreed cannot be supplied by technical
classes alone, however efficiently conducted. Technical
education authorities are the first to admit this fact.

Most of the twenty-nine witnesses examined by the sub-
committee advocated the re-introduction of the apprentice-
ship system, which still obtains throughout the trades in
Scotland and to a considerable extent in the provinces.

The system has not so completely died out even in
London as is sometimes assumed, and we may here notice
cases of its survival or revival.

Amongst London compositors it is the rule, though
there are probably numerous exceptions. Indentured
apprenticeship is the professed qualification for admission
into the union, which includes at least 75 per cent, of those
in the trade.

It is also common in the other skilled branches of the
printing trade, in the book-binding and kindred trades, and
in the smaller industries of basket- making, brush-making,
coopering and silk-hat making.

It is frequently met with in various other trades, such
as the tobacco industries, coach-building, and gold and silver
smithing. Moreover, it is important to observe that in the
very industries in which it has fallen into general disuse
individual employers are to be met with who practise it, and
that admittedly not from any philanthropic motive, but
because, looking further ahead than their fellow-employers,
they consider it pays them in the long run. The firm
of Messrs. Holloway Bros, is an instance in the building
trades ; the Government dockyards, Messrs. Yarrow, and



122 METHODS OF SOCIAL ADVANCE

Messrs. Humphrey & Tennant are instances in the ship-
building and engineering trades.

Amongst small employers it is frequent in these trades
the trades, that is, where it is reported non-existent. The
Jewish Board of Guardians has at present twenty boys
apprenticed to electrical and fifteen to mechanical en-
gineering.

There would seem to be, then, enough primd facie evidence
of the practicability of apprenticeship to justify further
inquiry on the subject. We will accordingly glance at the
history of the system, for possibly much prevalent misunder-
standing of it is due to the historical associations of the word.

Apprenticeship in the Middle Ages was an essential part
of the guild system, under which industry was effectively
organised and regulated, roughly speaking, from the thirteenth
to the sixteenth centuries. The aim of the guilds was to
maintain the standard of quality of the goods produced, and
the standard of life of the craftsman. This was attained by
the enforcement of, apprenticeship as a means of entrance to
the trade, as well as by inspection of goods and regulation
of prices. The only exception to apprenticeship was in the
case of a father teaching his son his own trade, when a
binding form of indenture was not as a rule used, the
interest of the father to train his son properly being held
sufficient security. Antagonism between capital and labour
was in the Middle Ages practically non-existent. The
apprentice lived under his master's roof. His master stood
in loco parentis to him during his term of servitude, and was
responsible alike for his moral as for his craft training.
Division of labour was very little known, and a craftsman
had to carry through all the processes of manufacture
himself. To qualify himself for this in each trade he was
bound for not less than seven years.

The sixteenth century saw the decay of the guild system
as an effective institution, but the ideals for which the guilds
had striven were still recognised, and the means by which



APPRENTICESHIP IN RELATION TO THE UNEMPLOYED 123

they had sought to attain them adopted, viz. the maintenance
of the quality of output by apprenticeship and inspection.

In spite of their restrictive regulations the guilds had
proved themselves incapable of entirely excluding ' unlawful
men ' from the exercise of their trades, and they had followed
the mistaken policy of making their regulations against
outsiders more narrow and restrictive, instead of attempting
to modify them in accordance with the needs of the times.
Not only was there a considerable influx of foreign artizans
during the sixteenth century, but the hired servants or
labourers began to creep into the trade as it were by the
back door. The opposition shown to this class was un-
doubtedly a hardship, and involved a certain economic loss
to the community, but it is doubtful whether the class
existed to any considerable extent, except in those trades
where capital and the division of labour first appeared, as
for instance in the West of England clothing trade. In
these as soon as division of labour was introduced it became
manifest not only that a seven years' apprenticeship was not
in all cases necessary, but that it would be impossible to
enforce it. Towards the close of the eighteenth century the
introduction of machinery, growth of the capitalist class,
and increased division of labour, revolutionised industrial
methods. Not all trades were equally affected, but the
greatest change was wrought in the chief industry of the
country, namely, the textile. The old kind of apprenticeship
was no longer suited to this trade, but the famous Act of
Elizabeth enforcing it was unrepealed till 1814, and con-
victions under the Act became very numerous. This attempt
to enforce the system where it was no longer suitable
brought it into disrepute, and the legal interpretation of the
statute rendered possible manifold hardships and incon-
sistencies. Not infrequently the new capitalist employer
took unjust advantage of the Act. The mill-owner, for
instance, no longer wanted skilled workmen capable of
carrying out all the processes of manufacture ; he needed a



124 METHODS OF SOCIAL ADVANCE

vast number of ' hands ' as auxiliaries to his new machines,
each performing one small monotonous process. To obtain
these hands as cheap as possible he resorted to child-labour
on a large scale. The workers were frequently forced, by
threat of dismissal and the loss of their now reduced wages,
to put their children to the mills, bound by a one-sided
agreement to the benefit of the master. The child-labour of
the mills was also largely recruited by the parish apprentices,
sent in scores at the age of six and upwards, chiefly from
London but also from other large towns, bound by the
Guardians under the Statute 43 Elizabeth * for the relief of
the poor.' Thousands of hapless London children were thus
sent into virtual slavery among strangers, to supply the
needs of the northern mill-owners, and not a soul concerned
himself in their welfare. Small wonder that when this
abomination was put an end to, the system of apprentice-
ship proper never revived in these trades, and that ill odour
clung to the word. Except in these trades, however, and in
those new industries, such as engineering, which were
springing out of the new order, apprenticeship was still very
largely the custom at the close of the eighteenth century,
and it has survived more or less continuously to the present
day. To turn to our own times, as has been seen it is to be
found existing to some extent in most industries, even in
those where division of labour is carried furthest. But it
has ceased to be the rule.

Modern apprenticeship is, however, very different from
that we have been reviewing. The boy is nearly always an
<w-apprentice, living at home and going daily to work. This
fact alone fundamentally alters the relation between appren-
tice and master. The out-apprentice is, in fact, a new
production, adapted to new conditions of industry. What
gives the impression that he is an anachronism is that his
deed of binding is, more often than not, a replica of that used
in Elizabeth's time or even earlier. Many of its provisions
are now inapplicable, while its wording is unintelligible to



APPRENTICESHIP IN RELATION TO THE UNEMPLOYED 125

the boy bound by it. The reason it survives (besides the
reluctance of laymen to tamper with the law) is that the


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