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tl.—PRIVATE FIRMS AND COMPANIES.

of the goods are important factors, and that when a large amount of raw
material is worked up, and when the stocks both of raw material and
of manufactured goods are necessarily heavy, and when there is a
constant fluctuation in prices, the apparent profits are much affected
by these fluctuations. These matters are, of course, outside the work-
people, and they feel that their exertions may he in part neutralised by
other causes not under their control, and this operates prejudicially on
the working of this scheme. Could they clearly see cause and effect, and
directly trace the results of their increased watchfulness in the increased
prosperity of the business, then their participation in the profits would
probably have more definite results.

“ Fifthly.—There is no doubt that the management of the business
by the partners is much more closely watched by the workpeople, and
especially by the foremen and others in places of trust.

“ Having thus endeavoured to describe some of the results of the plan
carried out in our works, I will attempt to point out some of the lessons
that these appear to me to teach, and also to state some of the difficulties
that seem to me to threaten all schemes the object of which is to make
the employed participators in the profits with their employers.

“ First.—Unless a sufficiently large share of the profits be given, the
desired effect will not be produced, that is to say, that increased attention
and intelligence will not be aroused which are necessary to ensure its
success.

“ Secondly.—The larger the interest given to the employed, and the
more their prosperity depends directly on the prosperity of the concern,
the greater will their influence become. As long as a business is prosperous
and well managed all will go on well; large profits will be divided,
and the employees will be satisfied. But when bad times come, either
from depression in the trade carried on, or from bad management, then
difficulties will arise, the workpeople may become dissatisfied, and in the
latter case especially may insist on the management being changed. In
any case, the difficulties of the principals will be greatly increased, and
they may come into awkwmrd collision with their workpeople.

“ Thirdly.—I fail to see that the introduction of industrial partnerships
will altogether solve the wages difficulty. Divide the profits as you will
between capital and labour, it will always be a question open to dispute
whether that division is a fair one. It is true that by introducing plans
whereby labour is to share directly in the profits made by the joint action
of capital and labour the total profits earned may be augmented, and the
earnings of the labourer be also increased, yet after all he may remain
dissatisfied with his share, and may demand either an increase of wages
or a larger share in the profits.

“ In conclusion, it seems to me that the experience gained by the work-
ing out of the scheme adopted by us shows that when the basis exists of
an excellent understanding, and thorough goodwill between the masters
and workmen, and whep the share of the profits given to the latter is not
too large, then, the system may be carried out successfully so long as the
management of the concern is good and the business prosperous, but
that the results on the profitable w'orking of the business are somew'hat
dubious. It has, however, the advantage of avoiding to a large extent the
difficulties which might arise were the share of profits divided among the
workpeople to be on a larger scale.”

A system of profit-sharing deposits on lines different in certain
respects from that just described, which is of much interest on