PROFIT-SHARING.

Evening Star, Issue 7641, 18 June 1888, Page 4

PROFIT-SHARING.

TO THE EDITOR.

Sir,— I find from Mr Leary's subsequent explanations that the meaning of the pro. posal set out in his first letter on this subject differs materially from what I understood it to bo. I BtiU thi-nk that tVie terms he used were open to the construction put on them by others and myself. Mr Leary supposed the product of the capital (expended on machinery, plant, etc.) and of the labor to consist of L 25.000 worth of " manufactured articles," and that material having cost L 7.000, there was a net product of LIB.COO left for distribution. One would naturally take this to mean that LIB,OOO was profit and wages in the ordinary sense of the terms. Otherwise where were the machinery, plant, etc. ? Surely they could not be included in the " manufactured articles." Yet it now appears that this last term was intended to include the whole partnership property. However, I recognise the difficulty of putting such a matter quite clearly in a short letter, especially when old terms are used to express new ideas. In the light of the explanations my objection—that werkers would be much worse off under Mr Leary's scheme—falls to the ground. As the instances I gave have thus no bearing on the question, I need not give the details Mr Leary asks, but the concerns were all remunerative, yielding returns rarjging from 7j to 17:1 P er cent - Mr Leary's scheme, as it now appears, is all in favor of the workers, and it involves radical change enough truly—viz., the repudiation of the sacred inalienable right of capital to fructify by the mere lapse of time, and an intelligent use of Laurie's interest tables. What would one of the shareholders of the local company, whose figures Mr Leary gives, say to the adoption of this scheme by the company ? This is how it would work. In any result, whether the company lost or gained, the L 2,150 would be payable to the workers. If the profit, however, instead of being 21£ per cent, as shown, had been only per cent., this small dividend must be made'still smaller by gfchs per cent, being first deducted, and handed as a bonus to the workers. Indeed, out of every LIOO made on their capital of L 4,000 a slice of L 34 19s 2d would be taken for the horny-handed, in addition to their wages. I do not by any means say that such an arrangement would be inequitable. On the contrary, it would be but a practical application of the principle that all profit derived from the labor of a fellowman should be fairly shared with him. Butare capitalists readyyet to forego theirtraditional right to interest as a first charge ? It has been proved by long experience that the exercise of this right promotes the growth of Dational wealth, although at the cost of the deterioration of the majority of the nation. A long course of legislation has protected this right. Men are valued in consequence at what they are worth to property. Can we readily reverse the standard, and value property only at what it is worth to the men who create or improve it ? Is not interest the social polar axis, and if it be perturbed, will not the convulsion be as severe as were the physical upturnings from a similar cause in the prehistoric times of Mr Beal? All the more honor to any capitalists generous enough to waive this right, and take such an entirely new departure in the paths of social rectitude as this scheme would involve. But for many a day such cases will be few and far between.

I think, however, something might bo done in the direction pointed out oy Mr Waddell by taking a yet more easy first step. I would suggest this : That the basis of profit-sharing should be—First charge, wages to workers ; second charge, moderate interest of 5 or 6 por cent, to capitalists, any surplus divisible, id the relative proportions of wages and interest between workers and capitalists, and as a first step in legislation make this basis compulsory in the case of all new joint stock companies.—l am, etc., Audit. Dunedin, June IG.