OO-PARTNERSHIP AND PEACE.

Poverty Bay Herald, Volume XLI, Issue 13321, 5 March 1914, Page 3

00-PARTNERSHIP AND PEACE.

(Special to Herald.) juUNhiiiiN, tins day. On his ,train journey north y ester ua-y, Earl Grey submitted u> an interview on the industrial co-partnership system, upon which his Loiulup is a woriU'-wicle authority, and ol winch lie is a warm advocate. "There is," said the Earl, "the growing belief m England that the easiest and best means ol reconcilnig labor and capital lies m the application ol the copartnership principle. It is quite obvious that unless these great interests are reconciled we cannot hope to secure industrial efficiency." "Do the experiments which England has already made m this direction encourage the belief that tjhe principle could be advantageously adopted an New Zealand?" asiced tne interviewer. "Yes, certainly," was the reply. "Taice, the gas industry as an ' illustration. ' The late Sir George Liversey, when chairman of the Metropolitan Gas Company,, told me m lbo4 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 other gas company m England, to pay at the same time higher dividends to the shareholders, and finally to sell gas at a lower rate than m any other company. This he attributed entirely to the greater efficiency of the men, once they realised that they were co-partners, not mere hirelings. It was not until after Sir George Liversey's death m 1908 that other gas companies followed the lead to any extent, but now gas companies representing a capitalisation of £50,000,000 have, adopted the scheme, and not only to gas making has it been ( applied with marked success. In the woollen industry of Yorkshire Messrs Taylor and Thomson's (of Huddersfield) experiments have attracted attention. In both cases it was now known that the employers were bona fide actuated by a feeling of sympathy even of attachment for their men, and the result was that not only a feeling of brotherhood -was engendered, but a spirit of efficiency soon manifested itself." In answer to a question whether the woollen manufacturers applied the same principle of co-partnership as was set up by Sir George Liversey m the South London Gas Works, the Earl said each concern applied it m a different manner. In the gas industry Sir George Livesey took the average cost of production, and said to his employes, "If you save the waste that is going on, increase your efficiency, and reduce the cost of the output, one-third of the profits shall go to you m the proportion of your wages, one-third to the shareholders m proportion to their dividends, and the remaining one-third to the consumers m proportion to their purchases of the commodity." In this way labor, capi•tal, and the consumer were benefited. On the other -hand, m the case of the Yorkshire woollen industries, as m all productive societies which are managed entirely by the men, of which societies there are rarer nng hnnrjpprj,. trftrlp union r «\ iPl *^Gi-^vr*&S~~sXe naturally ~~ar~ 1 -n* t >i - fcjftai-ge oh the profits of the particular" industry. Then, after a sufficient, sum , has been placed aside to the reserve and for depreciation, the capitalist" is paid for the use of his capital (this varying with the risk of ; the industry), and then the surplus that remains goes for division between the capitalist and the employes on the same, principle of equity." , His. Lordship proceeded to give instances of the working of one of these co-operative societies at Walsall m a particular industry. The rate of interest regarded as a fair remuneration for •^ the capital invested was 7£ per cent., and after that had been paid any surplus retnaining was divided between labor and capital, and the customers, division being made m proportion to the value of ther respective services. "ißutj" continued the Earl," anticipating the obvious question which had been suggested, "you will ask how is the A'alue of their respective services to be measured? The answer i.s simply what does the industry pay for the use of the capital invested, and the fixed rate of interest obtained supplies the answer." "And what -is the value of the service contributed by labor!" "The amount paid by the particular industry for the labor it employs-: m other words, the wage bill. Therefore, the interest bill and the wage bill represent the value of the respective services of cr.nl'-l and labor. Here is an example : touppose that -the Walsall industry I have rtderred to pays the- rate of interest. 7-J per cent., for the use of its capital. With a capital of £7000. that tvould be about £750 per annum for the rise of this capital. That is the mea-. sure of the service rendered by capital. (Suppose, then, that the wage bill is £1500 a year. Well, then, if there is any surplus after paying these fired charges, two-thirds of that surplus must go to labor and one-third to the shareholders m proportion to the shares held. Tins formula was invented by a Frenchman, Goidin, of Guise. Iris principle of management was founded on his desire to help his workmen as well af? himself, and to create feelings of mutual sympathy and brotherhood between the ■employer and the men. At present you have labor and capital pulling against each other, the capitalist giving ns little •wage as he must m return for the service rendered by labor, and labor giving as little as possible m return for the wage received. Now," concluded the Earl, "you can never create a great nation on the basis of a man giving his -worst instead of his best. Industrial co"-partnership is the principle that will release 1 the floods of energy and usefulness that' are now locked up m the human breast, and its application will assuredly drive out suspicion and distrust." - , "' ■'