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II.—PRIVATE FIRMS AND COMPANIES.

panies the salaries include those of managing' and other directors,
and an analogous practice obtains with a few(a) private firms,
though, as a rule, in such firms the remuneration of management
is included in the proportion of the profits not allotted to em-
ployees, but retained by the firm. As to the minimum remunera-
tion of capital, interest at fixed rates is included in a large
number of instances, whether in the case of joint stock companies
or of private firms, among the deductions to be made before “ net
profits ” are arrived at; the fixed rate of interest being generally
5,(b) sometimes 6,(c) per cent., and only exceptionally a lower(a)
or a higher(e) percentage. In the case of No. 60 the remunera-
tion of capital is secured by a certain standard of profit' being
fixed for each job; this scheme is confined to working foremen
(leading hands), who are paid a percentage on the total account
for each job, and a special provision is made that any deficit on
the estimated profits is deducted from the amount due to the
employee. In some cases special mention is made of sums to be
set aside for depreciation^) and for reserve funds.(») Under
scheme No. 7 a sum is set aside before profits are divided to be
devoted to a Provident Uund for widows and orphans of em-
ployees.

The “ reserved limit ”—i.e., the point at which the participa-
tion of the employees begins—is in a few cases(h) known to be
based not on the actual profits earned in the years immediately
preceding the introduction of the profit-sharing scheme, but on
an amount below those profits.

The principle upon which the reserved limit is calculated is
generally communicated to the employees.0 In a few cases(J)
the results of the calculation determining the total amount avail-
able for participation are certified by professional auditors, whose
figures can be seen by the employees. In two(k) cases the
employees are allowed to inspect the books of the firm.

Share in Profits allotted to Employees.

The proportion of the profits allotted for division between the
employees varies considerably in different schemes. Of the cases
in which no mention is made of any part of the total net profits
being retained for the employers as a reserved limit, there are a
few(’) in which .10 per cent, of the profits is allotted as the share

(0 Nos. 19, 27, 35, 78, 115.

(b)	Nos. 5, 6, 9, 16, 28, 41, 43, 49, 62, 65, 78, 87, 103, 115, 117, and one anony-
mous case ; in the case of No. 49 the rate is cumulative.

0 Nos. 14, 25, 26, 51, 75, 76, 92, 120, 122 ; in the case of No. 76 the
rate is cumulative.	(d) No. 88, 4 per cent.

(c)	No. 131, about 9T per cent. ; Nos. 61 and 125, 10 per cent. ; No. 81, 50

per cent.	(f) Nos. 5, 25, 26, 37, 43, 78, 125.

(») Nos. 5, 6, 7, 9, 25, 49, 76, 125.	(”) Nos. 19, 25, 27, 66.

Q In the case, however, of Nos. 23 and 64 the reserved limit is disclosed
only to a professional auditor, who in the former case issues a certificate if no
bonus can be paid, and who in the latter case certifies the amount due toemployees.

(i) Nos. 14, 20, 30, 39, 47, 57 ; see also reference to Nos. 23 and 64 in
preceding note.

(k) Nos. 54 and 78 (through Finance Committee—see pp. 46-49),

0 Nos. 17, 126, and one anonymous case.