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and in handling machinery and appliances. If the fusion of interests as between Capital and Labour is not so perfect under the profit-sharing as under the co-operative plan, the system seems capable of a wider expansion. While it does not abolish the capitalist or the wage-earner, profit sharing brings both together on terms more generally advantageous than under the wage system. It is adapted to the circumstances of those workers, necessarily the great majority, who have not sufficient capital to start on their own account. The principle of profit sharing has been strongly recommended by political economists. Mr. Fawcett, in his essay on Pauperism, wrote as follows: It is vain to expect any marked improvement in the general economic condition of the country so long as the production of wealth involves a keen conflict of pecuniary interests.' The more he thought of the plan of profit sharing the greater was the impor tance which he attributed to the extension of the principle.
The objections to profit sharing are similar to those which were urged before the Royal Commission on Labour in reference to piecework. On purely economic grounds piece-work is justifiable; it secures a fixed ratio between the wages and the work. In practice it is contended that it operates injuriously, and, like overtime, is unfavourable to the steady and regular employment so essential to the general well-being of the workers. This aspect of the question was discussed at length in the report of the Commission. Trades-Unionists, they say, are inclined to distrust a system which seems to enlist the interest of the workmen in maintaining the rate of profits rather than the rate of wage, and which tends, to quote the evidence of Mr. Tom Mann, 'to lift the man out of the ranks of the army of labour.' Looking to profit sharing from the employers' point of view, considerable weight attaches to the objection put forward by Sir Robert Giffen, of the Statistical Department of the Board of Trade. As he pointed out to the Royal Commission, employers whose profits were small could only work the system by raising their earners' wages up to the level of the earnings of men employed by firms which had large profits to share. Such profits are rarely earned, and hence it is that the number of profit-sharing firms in the United Kingdom at the date of Sir Robert Giffen's evidence did not exceed seventy-nine, with some 16,000 employees.
In concluding this rapid survey of co-operation and profit-sharing industries, the admission must be made, though not without regret, that thus far the lessons of experience do not encourage the belief that thought and labour would be profitably employed in the endeavour to establish methods of industrial production. It is indeed greatly to be desired that the workers in every industry should be able to judge for themselves as to the fairness with which the profits earned are apportioned, as between wages, remuneration for skilled management, and interest on capital. Co-operation, in so far as it
may be practicable, will supply this knowledge. The Royal Commission on Labour did not anticipate any large extension of the cooperative industries. In the existing commercial world industrial establishments cannot face keen competition without that skill in business, energy, and concentration of power which can only be looked for in individual employers, and the highly trained managers in the service of great companies. For these reasons it must be assumed that industrial operations will continue to be conducted mainly by the combined efforts of employers working for profits and workers rewarded by wages. Co-operative industries will be few, but their influence will, as the Commissioners observe, spread far beyond their own members. They will be the means of spreading widely among the industrial classes a sound knowledge of the principles and the conditions which govern the remuneration of work.
While profit sharing and co-operation will achieve something in the solution of labour difficulties, we may anticipate far greater results through the agency, wisely directed, of Trades Unions. The present generation has witnessed a notable change in the popular view of Trades Unions. They are no longer dreaded or denounced as a danger to society. The Royal Commission on Labour, in the concluding observations of their report, describe the creation of considerable bodies of workmen, more or less separate in their lives and pursuits from those under whom they work, as a necessary result of the growth or development of large industrial establishments during the present century. It was in industries where the separation of classes was most marked that they observed the fullest developments of that organisation of the respective parties which is the most. remarkable and important feature of the present industrial situation. Powerful Trades Unions and powerful associations of employers had been the means of bringing together in conference the representatives of both classes, thus enabling each to appreciate the position of the other, and to understand the conditions subject to which their joint undertakings must be conducted. The Commissioners saw reason to believe that in this way the course of events was tending towards a more settled period, and a clearer perception of the principles which must regulate the division of the proceeds of each industry, consistently with its permanency and prosperity, between those who labour and those who supply managing capital and ability.
Reviewing the publications of Mr. George Howell on Trades Unions, in his recent volumes on Democracy and Liberty, Mr. Lecky observes that it is clearly shown how entirely subordinate is the part which strikes have held in the policy of the most important Trades Unions, how admirable and conscientious their administration has usually been, what a vast sum of self-help and providence exists among the better class of the English labourers, and what incalculable benefits these Trades Unions have conferred upon their members.
The aggregate amount devoted by the fourteen largest societies to what might be called the constant and permanent requirements of workmen—namely, pecuniary assistance in cases of need over which they have little control-reached the grand sum of 7,331,952l., while the total ascertained amount expended solely on strikes was only 462,818/.
It is not possible in the present paper to deal exhaustively with the subject of Trades Unions. Let us limit our view, therefore, to the essential services they are capable of rendering both in the collection and diffusion of information on the state and prospects of trade, on wages, and the standard of living at home and in the countries with which we compete. As a necessary preliminary to successful negotiation, workers must know their case, and they can only know it by the aid of their Trades Unions. They cannot individually keep in touch with all the seats of industry. To spread an accurate knowledge of trade conditions is a work of national and international cooperation in the best sense.
We may apply these observations to a case which for many weary weeks engaged the attention of the whole civilised world. I refer to the prolonged struggle in the engineering trade. The struggle was indeed most arduous for the workers. It imposed very heavy sacrifices on their employers, while the serious falling off in the exports of machinery from the United Kingdom showed clearly how serious was the loss to the community at large. Let us ask ourselves whether either of the contending parties would have engaged in a struggle so disastrous if all the facts had been fully ascertained in advance. Did employers and employed carefully compare the net wages earned, the efficiency of labour in the United Kingdom and in the commercial countries with which we compete, the cost of living, the prices obtainable for salaries and interest, and profits at home and abroad? If such an inquiry had been made, in the light of ample information, both sides might have been more ready for the compromises and concessions which, it is most earnestly to be hoped, will result from the conference now (14th of December, 1897) being held.
It was repeatedly stated that the employers in the recent regrettable struggle were contending even more against the growing tendency to interfere with the details of business than the reduction of hours. While concentration of command is necessary for successful management, the claim that wages and conditions of labour should be settled with the men individually and not through the Unions is not supported by the report of the Labour Commission. In the paragraph giving their general view of the methods of adjustment of wages, they say in the vast majority of cases workmen are paid by way of fixed wage-rates, varied from time to time in well-organised trades, the result of negotiations between the bodies of employers and workmen. The strong trade organisations, composed chiefly of males, skilled
workers, accustomed to act together in masses, have made the old method of settling individual wages by the higgling of the market impossible, and have for the most part already caused the substitution of wages boards, or other more or less formal institutions, by which they secure a consultative voice in the division of receipts between Capital and Labour. A standard wage is thus established.' Again, in the paragraph of the report in which their leading characteristics are described, it is said that a strong trade society having a central executive council, thoroughly representative of the members, and implicitly trusted by them, possesses a machinery which will enable it to negotiate with employers with the least possible friction, either from time to time as occasion may require or by way of a permanent joint board, for the purpose of settling hour and wage rate questions and other points of dispute, and to give undertakings, and to enter into agreements upon which employers can rely.'
The passages quoted can scarcely be regarded as approving the conditions on which the employers in the negotiations now pending insist. And who were the Commissioners who signed the majority report which we have been quoting? They were not agitators. They were men with a great stake in the industry of the United Kingdom. Their Chairman was the Duke of Devonshire. His colleagues included, among public men, Sir Michael Hicks-Beach, Mr. Gerald Balfour, Mr. Mundella, Mr. Leonard Courtney, Sir Frederick Pollock, and Mr. Marshall, Professor of Political Economy at Cambridge. Trade and industry were ably and influentially represented by Mr. David Dale, the late Sir Edward Harland, Mr. Ismay, of the famous White Star Line of Liverpool, Mr. Hewlett and Mr. Livesey. The Trades-unionists were represented by Thomas Burt.
To the views of the Royal Commission I may briefly add a recent personal experience. Up to the date of my departure from England for Victoria I was a director of the great ship-building company at Barrow. Our pay sheet amounted not rarely to the large sum of 1,000l. a day. The tonnage we had on hand for the Government alone was sometimes in excess of the total at any single dockyard. In conducting operations on so vast a scale it was found a convenient practice in all serious cases of dispute to call in the representatives of the Unions involved. It was a distinct advantage that they came from a distance and were thus free from local prejudices. Our managing director never failed to come to terms, and I may say that during all the years in which I was connected with Barrow, we had no serious difficulty in our relations with the large bodies of workmen, nor was there in any single case any important difference between the estimated and the actual cost of labour in the building of ships of the largest dimensions and most complicated design. Our greatest difficulty was caused not by the cost of labour, but the severe competition of rival shipbuilders. Thus estimates were cut
down and no reasonable margin remained for contingencies or profits. It is certain that the margin would have remained just as narrow if the cost of labour had been reduced all round by 50 per cent. Though the struggle was protracted, no opening presented itself for intervention in the Engineers' dispute. The public, however, were grave sufferers by the cessation of one of the most important industries in the United Kingdom.
In an article published in the Economist of the 9th of October last it is pointed out that the strike of the Engineers was not to be regarded as a proof that Socialism in the German sense had any appreciable hold on the mass of English skilled workmen. It might have been the object of the men to squeeze the capitalist on what was held to be a rising market. They might have overestimated the profits of their employers. They might have been working for a joint control with the capitalist. They had given no indication that they were working for socialist or collectivist objects.
In an earlier part of the present paper the claims of good employers on those whom they employ and on the community at large have been strongly insisted on. In closing it may not be unfitting to return once more to that special aspect of the question before us which has been under discussion. Employers are in full possession of all the facts. Their books are always open to their careful study. The workers in great industries are in a position of serious disadvantage from imperfect knowledge of costs, prices and profits, and yet it is upon a comparison of these essential elements that a just decision can alone be formed as to when it is prudent to accept existing conditions, and when a claim can be fairly pressed for shortened hours, higher wages, or improved conditions. The worker is compelled to accept statements without the means of verification. He sees his employer in better conditions of life than his own. He knows nothing of the painful and arduous struggle by which commerce and industry are built up. He knows nothing of the many who fail where one is successful. He does not see that every accumulation of capital means more and better-paid employment for his own class. He does not fully realise that if there were no profits there would be no wages. In the absence of any independent tribunal to which they can appeal, and with no information to guide them, coming from an impartial and trusted authority, neither the workers nor the public are in a position to decide as to the justice and the fairness of the demands which are from time to time put forward on behalf of labour. To use the forcible language of Mr. Mallock: 'Some demands are really made by misery, and can only be ignored by cruelty. There are other demands which could only be made by madmen and listened to by fools.' When the conditions would admit of an advance in the reward of labour, and when they require that the cost should be reduced, neither the workers nor the general