where the system is in operation, the total profit or gain resulting from the operation of this system was $8,062, one-half of which was retained by the principal and the other half distributed among the operatives. The rates of dividends to the employees were approximately the same as those indicated in Appendix A of the paper, which range from a minimum of about one per cent. to a maximum of twelve per cent.; the mean is about four or five per cent.

If there are any members present who have in any way experimented with profit-sharing, or participation, or any kindred method of interesting employees in industrial, works in the outcome of their work, it would be interesting to the membership to have the result of their experience.

Prof. Denton.-I hardly feel competent to speak about a subject of this kind, in the presence of the knowledge that a good deal of actual experience is necessary to be considered regarding it. But I feel that this paper is so admirable that one or two thoughts may be permitted. We all probably remember that this subject. came out at the Washington meeting, and that our President then discussed the paper that was there presented, and made the matter interesting by detailing the extent to which this idea had already become prevalent in other countries with success; and considerable interest was evidenced on the part of other mem. bers. He promised us at that time to give us such a paper as this, and now keeps his promise in a very valuable way. The importance of the subject, I believe, can hardly be over-estimated; for I am informed that the idea is looked upon with favor by the labor organizations, in which case it may be likely to come before any manufacturer at any time. The idea in my mind regarding it is that the gain together with profit-sharing contains a distinct element of favor as compared with piece work. all know, if a man is earning by the day, on a certain work which is uniform, certain wages at so many pieces in a day, and is apparently doing all that he knows how, and all that we know how to ask him to do, we know that if we put his work on piece price so adjusted that it is supposed that he will just about make wages, he will at once proceed to make double wages. In some way he will turn out so many pieces that his wages will double, and the tendency on the part of the employer is, the next time the piece work adjustment comes around, to readjust the piece price so that the man will more nearly approximate his former

day wages. That has been going on for many years in many establishments; and I believe that constant reduction in piece prices, and all the time getting from the workman more than he originally did, has resulted in a sour state of mind on the part of the latter; he thinks that the piece work system has been used to his disadvantage, and I can easily see that the question must arise in an establishment that is carrying on piece work like that of Mr. Towne's: How can we at once get the workman to squeeze a little more out of himself and at the same time be goodnatured in doing it? A method of doing that is represented certainly in this idea of gain or profit sharing. I believe that the fact that the workman sees in it something to encourage him to go beyond piece work is likely to bring out a much better state of feeling between employer and employee than existed on the piece work system. I have seen the idea carried out on a small scale. I have in mind a manufactory which organized itself in a small way, and drew to it, through the acquaintance of the proprietor, certain excellent men, so skilful that they were able to earn the very highest wages. They went with him and expected that he would prosper, but he was barely able to drag along; business did not succeed, work was not available, and there was every motive to those men to leave him. They could go to more prosperous concerns where they would be likely to do better. I have seen this idea of gain-sharing carried out there on a very small scale, holding those men year after year. It was not the money they made, so much as the idea that they were interested with the proprietor in the profits of the concern. I have tried the same thing on a small scale in this way: We have instructors in our shops at Hoboken, in pipe fitting, blacksmithing and machinists' work. We are all the time extending our courses and asking those men to do a little more. We also often have certain experimental tests to perform for the general public, and we organized a department of tests which is presided over by the President, and any work coming in is given to the men best fitted to do it. Ninetenths of the work naturally falls upon those mechanics in some way. We want them to do this work and not sacrifice the least point in the efficiency of the instruction. We ask them to carry out what they were hired to do and at the same time enable the college to earn a little money. There is no idea that so nicely fits the case as dividing a portion of the profits, and we have found that such a plan is working very nicely. Our men may be

called upon to take hold of any outside job, and work late hours or squeeze it in between times, and yet the system of instruction does not suffer, and the amount of profit, though small, is sufficient to make them feel it is worth while to put forth this exertion. This is very easy when you have a few men; but when you have hundreds of men, I can see that difficulties multiply enormously, because there will be some black sheep who thinks that he does not get enough, and he will communicate his irritation to his fellows, and it may lead to strikes. When it is done on such a scale as Mr. Towne has done it, and as well as he has done it, certainly great advantage must result, and great pains have been taken in his establishment; and I wish to testify to my appreciation of this fact.

The President, Mr. H. R. Towne.-In connection with this subject I wish to mention a book, which has just been published, which has more information, better stated, on the subject of profitsharing than any other book in the English language. The best one we had heretofore was one by Sedley Taylor, an English book, which is not as complete as one or two publications in German and French. But the Rev. Dr. Gilman of Boston has, during the past year, prepared and published a book which is just out now under the title of "Profit Sharing between Employer and Employee," in which he has brought together all of the facts which are of interest in this whole subject of profit-sharing, commencing with a rapid review of previous conditions existing between employers and employees which departed at all from the simple wages basis; then follows a discussion of the reasons why the simple wages system is no longer satisfactory now and that something else has so to supersede it, and then a very thorough presentation of all the known cases of profit-sharing all over the world. France is the country where the system first took root to any extent, in the Maison Leclaire in Paris, and where it has been most largely practised, and French experience is the fullest and most interesting. The Germans have done a good deal with it. The English took it up some twenty-five years ago, and in two very striking cases put it into extensive and very successful use; each of them was finally abandoned within six or eight years, from causes having no direct connection with the question whether profit-sharing is a good or bad thing in itself; but the result of its abandonment was unfortunately to put the whole thing back very much in England, so that nothing more has been done there in that line

until lately, when it has again been taken hold of. In this country, within the last three years, profit-sharing has been started in twenty or thirty different establishments scattered all over the country; and Mr. Gilman, in his book, has brought together the facts, so far as proprietors were willing to give them, in all of the cases in each of the countries named, and also in Switzerland and Italy. His last two chapters constitute a résumé or summary of the results everywhere, stating plainly the failures where they have occurred, and so far as possible accounting for them. To anyone who contemplates giving thought to the subject of profitsharing, or any modification of it, Mr. Gilman's book will be an invaluable aid.

In my own opinion the time is coming very rapidly when some readjustment of the relations of labor and capital has got to be made, not necessarily by reason of the demands of labor organizations, but simply, if we disregard all questions of philanthropy or sympathy, from motives of self-interest on the part of the employer. Some better method of bringing out of men the best that is in them in doing their work must be adopted. It is a fact which we all realize, of course, although we sometimes forget it, that the supreme factor in human endeavor is self-interest, and that any plan whereby we bring in self-interest as an agent to influence the workman, will induce him to take hold in a degree and manner that nothing else will approach, and that any system, such as the simple wages method, which entirely ignores self-interest and gives a daily stipend to a man whether he does much or little, is certainly a very incomplete and very unsatisfactory adjustment of the problem. I believe that all large employers of labor will find this subject one of profit and of interest to take up in the near future, and that the outcome should be the development of a large fund of experience which will aid others who desire to go into it. The meetings of this Society since they have been opened to the discussion of economic problems will make a very proper place for the presentation of data relating to such matters, and I know that it is the desire of many members that experiences of this kind, when obtained by the members, may and should appear in our Transactions.

Prof. Wood.-I wish to ask, Mr. President, if your experience makes you feel that this can be carried into a great variety of business transactions-where a manufacturer is making a variety of things?

The President.-In answer to Prof. Wood's question I may say that the system is in operation now under twenty-one different contracts, and is to be extended to others, and that no two of those twenty-one contracts relate to the same product; a number of them somewhat allied products involving a different group of men, different kinds of machines and different work, but quite a number of them are totally distinct products, including two foundries, one on iron work and another on brass and bronze, several woodworking operations, one which largely involves chemical operations, and another which includes the work of a large wheelfinishing room. The others are chiefly machine shop work. I think this is a thorough answer to the question, and it is my conviction about it, that the system is applicable to almost any industrial product that I know of.

Prof. Wood.-I wish also, in order to cover the ground, to ask whether the success of it will not depend largely upon the managers. You speak of securing the self-interest of the laborer. Now, if the business is not so managed as to secure a dividend, I would ask whether the interest would not depart from the workman in such cases and so be a failure. Even if there are only exceptional cases of failure, it does not invalidate the system by any means; but does not very much depend upon the managers in making it successful?

Mr. Chas. H. Parker.-I am glad to see such papers as the one presented by Mr. Towne on the question of gain-sharing. I think in the present condition of mind of the laboring people, as well as of the manufacturers, it is one of the problems that needs attention fully as much as any of the problems connected with the manufacturing industries. It has been my fortune for over something like fifteen years to be in a position where this problem has been brought to me very forcibly. I have found that nearly all the difficulties and troubles that arise regarding a fair and just arrangement, you may say, have a starting point in the selfishness of human nature. But I can say from experience that I never yet have seen any reason to lose faith; that where a spirit of justice and fairness is used on the part of the manufacturer, sooner or later, although not always at first, the same spirit has been shown by the workmen; and as a whole the results have not weakened my confidence in the final adoption on both sides of just and fair ideas. There are questions constantly arising that cannot at first be foreseen. Self-interest will often cause the workmen to take a