Strikes, lock-outs, the cries of children, the curses of men, angry mutterings of an anarchistic band, like the low thundering premonitions of a rising storm, signify some trouble with existing industrial conditions. The uppermost problem is the labor problem. What is that? In brief it is this: How shall there be a more equitable division of the results of productive industry between employer and employee? If anyone thinks this definition begs the question, he would better not spend his time in reading this article, or the works that serve it as a timely text.

First on the list is the volume of Johns

Hopkins University Studies, "A History of Coöperation in the United States." Did this university need to justify its existence, its case would be sufficiently pleaded by this single volume. By such a work it reflects honor upon itself and does a service of great worth

*HISTORY OF COÖPERATION IN THE UNITED STATES. Johns Hopkins University Studies, Vol. VI. Baltimore: N. Murray, Publication Agent.

SHARING THE PROFITS. By Mary Whiton Calkins, A.M. Boston: Ginn & Co.

PROFIT SHARING BETWEEN EMPLOYER AND EMPLOYEE. A Study in the Evolution of the Wages System. By Nicholas Paine Gilman. Boston: Houghton, Mifflin & Co.

to every student of social questions. Between the covers of the volume are contained facts gathered from all available sources, which may startle the merely theoretical economist who rarely puts his head beyond his door, and whose methods of reasoning and argument have been deductive as a geometrical demonstration. To obtain these facts five Johns Hopkins University men-Messrs. Bemis, Shaw, Warner, Shinn, and Randall-divided the United States into territories so small that each could make a careful and exhaustive study of coöperation within the limits apportioned him. Thus are treated, in separate chapters, the coöperative experiments in New England; in the Middle States, by which seem to be meant New York, Pennsylvania, and New Jersey; in the Northwest, including Minnesota, Wisconsin, and Iowa; in the West, i. e., in the states of Ohio, Indiana, Illinois, Michigan, Missouri, Kansas, and Nebraska, the Mormon settlements in Utah, California; and in Maryland and other Southern states. The scholarly men who have compiled these facts and figures have been wise enough not to obtrude a theory based upon their investigations. The work is a monument of labor, and will prove of invaluable service to future investigators. Had arguments been made and conclusions definitely stated, there would of necessity have been in the reader's mind a suspicion that all the facts obtainable were not presented. The work of formulating and defending a theory could not successfully be so largely coöperative as the labor of accumulating statistics: that task would be better delegated to a single writer. Two truths are clearly enough demonstrated. The first is that productive coöperation cannot at present succeed in this country to any general extent, because it is too radical a change from the existing industrial system, and because it leaves out of account that important and increasingly important productive factor, the made obvious by a perusal of these pages is entrepreneur, or manager. The second fact that social regeneration is not to be sought through revolution and anarchy, but through and along with a moral regeneration which shall make the grasping monopolist a moral impossibility as he is now a moral monstrosity, and shall make that individuality whose keynote is "each for all" not an accepted theory but an accomplished fact.

The little pamphlet of less than seventy pages, written by Miss Calkins, an instructor in Wellesley College, is an excellent hand-book for the general reader who wishes to inform himself concerning a few of the most prominent experiments in profit sharing, and to get some idea of the ethical and economic principles upon which the argument of profit sharing is based. Illustrations of practical operation are drawn, with a single exception, from foreign sources; particularly the Maison Leclaire, the Bon Marché, and the Familestère at Guise. The portions of the monograph which will be read with the most interest are the last part of Chapter I., in which the writer assumes that profit sharing directly increases, indirectly increases, and regulates production; and Chapter VI., where objections to profit sharing are discussed. The value of the pamphlet is enhanced by the addition of a bibliography of profit sharing.

The latest and most noteworthy book is that by Mr. Gilman. It differs materially from either of the works just mentioned. It does not treat, as does the Johns Hopkins volume, of coöperation; it is confined to profit sharing, and while giving all the examples of profit sharing mentioned in the "History of Coöperation," it adds many others. Mr. Gilman makes no assumptions, takes nothing for granted. He treats the subject from the economic standpoint; and while he clearly states his own views and conclusions, he is evidently singularly free from the curse of either preconceived and biassive notions or an arrogant belief that his conclusions are final. As may be inferred, therefore, Mr. Gilman's point is scientific, and by his treatment of the subject he compels one to believe that there is an earnest attempt to know and tell the truth. Beginning with a striking and not generally perceived analogy between product sharing, which was formerly customary to a large extent in New England in agriculture, which still obtains in the fisheries industry, and is "the natural method of rewarding labor in primitive times and fundamental industries," the author proceeds to a discussion of the wages system in all its various forms. He claims that it is a great advance over the system of former days, because of its general-nay, universalapplicability to the existing conditions of industrial life. The present system has some disadvantages, in that time wages afford insufficient remuneration to the good workman, too large pay to the inferior employee,

and only the average man is properly remunerated for his time. Piece-work can not generally take the place of time-work, because it involves the necessity of more extensive superintendence. Under the piece system the efficient laborer is rewarded for his efficiency; but the incompetent, aided by labor organizations, demands time wages, notwithstanding the unfairness, as the only means by which he may gain a sufficient livelihood. The sliding scale has been attempted and abandoned.

For more than forty years, profit sharing has been employed in France with marked success. What does profit sharing propose to do? It proposes to increase the quantity and improve the quality of the product, to lessen the expense of superintendence, and to give to the laborer a larger share than he at present receives of the results of his labor. If profit sharing can be shown to do what it professes to be able to accomplish, it should everywhere supplant the present wages system. Human nature is both energetic and lazy, ambitious and self-satisfied, possessed of a desire to reform and of an unthinking helplessness engendered by laissez faire. On the whole, this complex thing we call human nature will put forth more effort to secure increased comforts or enlarged leisure. The workman, once assured that the results of augmented skill, or rapidity, or faithfulness, may be secured to himself and not given to an employer, is certain to increase his effort. So far forth he comes under the influence of the same motive that actuates the employer,—the most powerful of all motives, that of self-interest. Each does his best, each watches carefully himself and his neighbor. There is less waste, inore economy; less talk, more work; less indifference, more thoughtful consideration of quality as essential. There can be but one result: larger product united with improved quality. As a matter of fact, if testimony is needed, it is at hand in great abundance. It is of one sort, so far as this question goes. Even those firms that have abandoned profit sharing after a brief trial, assert that the material results of labor were enlarged and improved. Not only is this true, but the increased value of the product of a given force of workmen during a given time accrues partly to the employer, largely to the employee. Herein their interests are identical.

From this it follows that profit sharing tends to reduce to a minimum the difficulties between employer and laborer. The friction of the past has arisen from a sense of alienation of

interests. Could each see the real identity of interest which profit sharing illustrates or emphasizes, the day of strikes and lockouts would soon be past. In but two noteworthy instances has serious trouble arisen between a firm and its workmen, after the adoption of profit sharing. Messrs. Brewster of New York, carriage manufacturers, after two and a half years of profit sharing, abandoned the system on account of a strike of their men, who were urged to this action by the labor agitation of May, 1872. The men struck at a time when $11,000 was about to be paid as bonus, and thus forfeited by a two weeks' strike $19,000 in wages and homes. It was a strange "freak," to use the expression of one of the partners. It is at least so far an abnormal case that it can hardly be admitted as evidence against profit sharing. The other instance of abandonment occurred after so long a trial that it probably has had much influence in delaying a general adoption of the new system. The Messrs. Briggs, coal miners, after years of contention with the labor organizations, contending against suspicion and even hatred of their men, in 1865 adopted profit sharing. The workmen distrusted the managers and opposed their plans. During the six years that followed, however, the success of a plan which paid to the stockholders an annual dividend of twelve and a half per cent. and to the laborers a bonus of two and a half per cent. of the invested capital, or about six per cent. on the wages, made the firm enthusiastic believers and the men willing coöperators in the new plan. The change to the employers was largely financial, to the employees moral. Instead of enemies, they became the friends of the firm. Owing, however, to depression of business and other misfortunes, it became necessary in 1874, after two years of great prosperity and exceptionally high earnings, to reduce the wages. The reduction was accepted only after a four weeks' strike. Then followed a fight against the union, which was so bitter that the miners were compelled finally to choose between the union and the firm. The choice was what might be expected; and profit sharing in the Whitwood collieries was at an end. The mistakes of the firm were three in number: During the days of prosperity they paid wages higher than the prevailing rate; when wages and bonus to labor were diminished there was not a corresponding diminution in the rate of bonus to capital; the payment of bonus to labor was made dependent upon an annual rate

of the stockholders, many of whom were not informed of the true condition of affairs, and most of whom, outside of the managing firm, were utterly out of sympathy with a profit sharing system. In consideration of these mistakes, any of which might have proved fatal to the success of the plan, we are justified in saying that the failure was not caused by any defect in the plan of profit sharing.

One feature of profit sharing, which seems to Mr. Gilman essential to its success, is that of general stability of the wages paid. In an especially prosperous time, neither interest on capital nor wages should greatly rise; nor in season of commercial distress should interest or wages considerably fall, though the bonus paid to labor and capital may decrease or even be cut off entirely. Sharing the profits is not a universal panacea for industrial disorders. It is, however, rational to suppose that it will be very likely to bring about peace between master and workman, because it is really a partnership without the absurd condition of brainlessness that has characterized most attempts at industrial coöperation.

There are other reasons why general adoption of profit sharing would be a step in advance of the present wages system.

Wages

are paid from the product of labor" is no longer so heterodox as when Henry George was the only man who dared to say that "Wages are not drawn from capital, but produced by labor." Three services claim remuneration in every industry: capital, management, labor. Each is helpless without the other. Whether combined in a single individual, or divided among three parties, each is entitled to its full share of resulting profits. By custom, the manager and workmen are paid in stipulated amounts. This stipulation does not deprive the manager of an increased reward, in case of unusual success secured by unusual effort. Is there any reason in justice why the third industrial factor should be deprived of his share of the surplus which may remain after the proper remuneration of the capitalist and entrepreneur? If it be objected that the laborer is ruled out from a division of profits that remain after the stipulated interest, management, salaries, and wages have been paid, because he assumes no risk, it is answered, that if he makes especial effort to secure a larger or improved product he assumes risk to the extent of the extraordinary above the ordinary effort, and is in equity entitled to his proportionate share of any