CAPITAL AND LABOUR

Otago Daily Times, Issue 21537, 8 January 1932, Page 4

CAPITAL AND LABOUR

THE HAMILTON EXPERIMENT Mr H. Valder, chairman of the Employee Partnership Institute (New Zealand), Ltd., has forwarded to us a copy of a letter despatched by him to Mr Wickham Steed concerning the comments by The Times on a letter written to it by Mr Steed, who supported the principle of the experiment in co-partner-ship that is being applied in Hamilton. The main feature of a letter by Mr Wickham Steed in The Times and of its leading article on the subject were recently published by us. Mr Yalder says in his letter to Mr Wickham Steed:—

"Your very interesting letter to The Times in November last and also that journal’s leading article on the subject matter of your letter have been copied into a number of New Zealand newspapers as you will see by the extract I now send to you.

"Unfortunately The Times article quite misses the real point of your letter and uses the stereotyped arguments against co-partnership and profit sharing which, whilst quite forceful as far as these two methods are concerned, do not apply in the slightest degree to the New Zealand plan of employee partnership—a third way which is entirely overlooked in'the leading article and which is the main feature of your letter. I think this is due to the use by you of the term ‘co-partnership.’ It cannot be too strongly emphasised that there is a very definite though subtle distinction between ‘ co-partnership ’ and ‘ employee partnership,’ the former being based on the ownership of capital shares, whereas the latter primarily is not concerned with capital at all, but uses ‘ personal service ’ as a basis for shareholding in place of capital. The issue, therefore, is rather confused if one term is used to cover the two different plans. This is where the writer of the leading article in The Times goes astray, owing no doubt to his lack of knowledge of the New Zealand plan and the principle on which it is based. The Spectator, in one of its September numbers, quoted a letter from Mr Montague Norman, the governor of the Bank of England, to the governor of the Bank of France: ‘Unless dramatic measures are taken to save it,’ wrote Mr Norman, ‘ the capitalist system throughout the civilised world will be wrecked within a year. I should like this prediction to be filed for future reference.’ You will, I am sure, agree that included in the ‘ dramatic measures ’ mentioned, there must be the giving of an economic franchise in industry to the worker, in virtue of his contribution of personal service. So far no plan other than ‘ employee partnership’ has been produced which will fulfil the condition mentioned in your letter to The Times, viz., ‘ concerted national endeavour, resulting in effective economic citizenship for the millions of our politically enfranchised and economically dependent wage-earners.’ ."In Great Britain the Companies Act does not permit the issue of shares in a company for any consideration other than capital. Consequently in your country companies are unable to confer on wageearners the privilege which you deem so essential to the reform of the present capitalist system. In this Dominion the Companies Act has been widened to allow the issue of Labour shares for which personal service, not capital, is the sole qualification, thus providing the machinery to give effect to the plan you advocate. “May I express the hope that it will not be long before the lead given by the New Zealand Legislature in respect to Labour shares will, through your advocacy, be followed by the Legislature of Great Britain.”