LABOUR PROBLEMS.

Press, Volume L, Issue 14908, 5 March 1914, Page 7

LABOUR PROBLEMS.

THE CO-PARTNERSHIP CURE

(special to "Trn* rn__ss.".

DUNEDIN, March 4

'There is a growing belief in England," said Earl Grey in an interview thi.; morning, 'that the easiest and best means of reconciling labour aud capital lies in the application of tho co-partnership principle. It is quite obvious that unless these great interests are reconciled we cannot hope to secure industrial supremacy and peace effectually. The principle could b> advantageously adopted in New Zealand. The gas industry is a good illustration of the principle. The lato Sir George, Livesey. wh<-:i chairman of the South Metropolitan Gas Company, told mc in I!XM that the result of the application of the principle to that concern had been to enable the company to give a higher wage to their workers than any otiior gas company'in England, to pay at tiie same time higher dividends to the shareholders, and, finally, to sell gas at a lower rate tnan any other ■This he attributed entirely to' tho saving of waste and to the greater efiieienc\- of the men once they realised that "they were co-partners* and not mere "hirelings. It was not until after Sii George Livc-ey s death in lIK'B that other gas companies followed the lead to any great extent, but now gas companies representin.-; a capitalisation of £50,000.000 have adopted the scheme. SUCCESSFUL LEASES. "Not only to gas-making has it been applied with marked success," continued the Earl. 'In the woollen in-

dustrios of Yorkshire, Messrs Taylor's anc" Thomson's (of Huddcrsfield. experiments have attracted groat attention. In both case* it was known that the- employer.- were actuated by a feeling of sympathy —even of attachrunt . —f or tiit'ir men, and the result w<i-s that not only a. feeling of brotherhood was engender .«tl, but a spirit of efficiency soon manifested itself." In answer to a qui?stion a.s to whether th.- woollen manufacturers, applied the same principle of co-part norsnip as was se tin by Sir George Livesey in tho iS.uth London i» a* works, the Earl saicl that each concern applied it in a riiiferent manner. In the gas industry, CM- Georgo Livosey t-ook tho average cost of production, nnd said to his i-uiplov.-e... "If you save the waste that is going on, increase your efficiency, and mF-co tho cost of the output, one-, t'liiu ot tho profits sludl go to you in proportion to your wages, one third to the. .shareholders in proportion to their dividends and the remaining one-third to tlio consumers in proportion to their purchases of tho commodity." In this wav labour and capitul and the customer were On the other hand, in tho case of tlio Yorkshire woollen industries, a.s in all productive societies which aro managed entirely by tlio men (of which societies thero are over lUU) trade union rate- ot •vagos are nil. v rally a first charge on \h- profits of tho particular indust/y. Then, a tier a sufficient mm has been placed aside to tho reserve and for depreciation, tho capitalist is paid for tlie u.-o ot his capital (thus varying with tho risk of the industry), and then the .surplus that remains goes for division between the capitalist) and the employee on some principle oi equity. FIXING THE SHARE. Hus Lordship proceeded- to give instances of the Working of one of those co-operative societies. At "Walsall in a particular industry tho rate of interest regarded as a fair remuneration for the capital invested was 7} per cent., and after that had been paid any .surplus remaining was divided between labour and capital, ijivioion being made in proportion to tho valuo ot their r«.poecive .services-.. "How is the value of the respective services to be measured *■ Tho answer is simply, what does tho industry pay for tho use of the capital invested -in it '? The fixed rate of interest obtained I supplies the answer. And what is the | value eif tlio services contributed by labour?- Tho amount paid by the particular industry for tho labour it employs—in other wortls, the wage bill —therefore the interest bill and the wae»o bill ropie-out tho value of the respective services of capital ami labour. Here is an example: Suppose that the Walsall industry pays the rate of interest "J por cent, for the use of its capital. With a capital of £7000 that would bo about £750 per annum. That is tho measure of the service rendered by capital. Suppose then that tho wage bill is £1500 a year—well, then, if there is any surplus after paying these fixed charges, two-thirds of that surplus must go to labour and ono-third to the shareholders in proportion to the shares held. THE IDEAL OF IT. "This formula." said Lord Grey, "was invented by a Frenchman—Goidin of Guise. His principle of management was founded on his desiro to help his workmen as well as himself and to create feelings of mutual sympathy and brotherhood between the employer and the man.' At present you have labour and capital pulling against each other, the capitalist giving a*_ littlo wan-e as he must in return for tho service rendered by labour and labour giving as little as possible in return for the wage received. "Now," continued tho Earl, "you can never create a great nation on the basis of a man giving his worst instead of his best. Industrial co-part-nership is the principle that will release the floods of energy and usefulness that are now locked up in the human breast and its application will assuredly drive out suspicion and distrust."