12

II.—PRIVATE  FIRMS  AND  COMPANIES.

in  bonuses  a  total  of  more  than  £172,000)  remarks  as  follows  :■—
“  1  wonder  how  Sir  George  (Sir  George  Livesey,  Chairman  of  the
“  South  Metropolitan  Gas  Company)  would  deal  with  such  a
“business  as  ours,  where,  during  the  16  years  our  profit-sharing
“  scheme  has  been  in  force,  we  have  paid  in  bonuses  more  than
“  twice  the  amount  of  our  ordinary  capital,  and  we  couldn’t,  if
“  we  wanted  to,  find  employment  for  such  an  accumulation  of
“  capital  as  these  bonuses  represent.  With  a  Gas  Company,
“  which  is  always  increasing  its  mains  and  adding  to  capital
“  account,  it  is  different.  We  want  to  keep  our  capital  account
“  as  low  as  possible.”
In  an  article  on  Co-partnership  the  Engineer,  of  May  31,  .1912,
describes  a  profit-sharing  scheme  under  which  a  Company  at
the  end  of  each  year  pays  5  per  cent,  dividend  on  its  shares
“  and  the  remaining  profits  are  apportioned  between  capital  and
“  labour  in  the  ratio  that  the  capital  bears  to  the  wages  bill.
“  The  labour  portion  is  distributed  amongst  all  the  workers  gro
“rata  with  their  wages,  but  not  in  the  form  of  money.  The
“  distribution  is  made  in  ordinary  shares  of  the  Company,  which,
“  of  course,  take  their  dividends  in  the  ordinary  way  in  succeedtT
  ing  years.”  This  journal  observes  that  under  this  scheme
“  in  the  course  of  time  the  business  must  become  seriously  over-“
  capitalised.  Already  the  majority  of  the  shares  are  owned  by
“  the  workpeople,  and  these  all,  with  the  exception  of  such
“  transfers  as  are  made  when,  for  example,  a  co-partner  dies
“  or  leaves  the  firm,  represent  new  created  stock.  Clearly  there
“  must  be  a  limit  to  that  kind  of  thing.  A  natural  limit  would
“  no  doubt  be  reached  when  the  capital  became  so  great  that
“  the  dividends  dwindled  to  the  5  per  cent,  due  to  shareholders.
“  There  would  then  be  no  new  issue  of  stock,  and  although  every
“  shareholder  would  be  concerned  in  maintaining  the  5  per  cent.
“  dividend,  there  would  clearly  not  be  the  stimulus  that  there  is
“  at  present.”
Complete  lists  of  the  profit-sharing  schemes  notified  to  the
Department  up  to  August  1,  1912,  are  contained  in  Appendices ­
  A  and  B  (pp.  95-114),  particulars  relating,  to  schemes  which
have  been  abandoned  being  given  separately  from  those  relating
to  schemes  in  which  Profit-sharing  is  at  present  in  force.  In  every
case  the  year  of  starting  Profit-sharing  is  given,  together  with  the
nature  of  the  business  carried  on  by  the  employer,  the  number
of  the  employees,  and  the  form  in  which  the  bonus  is  paid.  In
the  case  of  abandoned  schemes,  the  year  and  the  cause  of  abandonment ­
  are  also  stated;  while  for  schemes  at  present  in  force
particulars  are  added  as  to  the  number  of  employees  entitled  to
participate  at  the  end  of  1911  (or  in  1912,  in  the  case  of  schemes
started  since  1911).  In  Appendices  C  and  D  1pp.  115-125)  Tables
are  given  for  existing  and  for  abandoned  schemes  relating  to  the
investments  of  employees  in  their  employers’  businesses.
The  Summary  Table  on  the  next  page  has  been  compiled  from
the  information  given  in  the  Appendices  referred  to  above  :  •—