LETTERS TO THE EDITOR.

THE LABOUR QUESTION IN AMERICA. [TO TIIR EDITOR OF THE SPROTATOR:] SIR,—In the present state of the labour question at home, I think the accompanying letter from the bead of the great firm of Brewster and Co., carriage-builders, in New York, may interest your readers. They were (so far as I know) the first large firm of American employers of labour who adopted the principle of in- dustrial partnership. I think the letter will sufficiently explain itself. You will observe that the plan, as carried out successfully by Messrs. Brewster, is more liberal with regard to the workmen than that of Messrs. Briggs, or of any other English firm. The questions whether the right to a share of profits should not in- volve liability to contribute out of wages to the losses of bad years, and how this is to be effected, are left untouched ; but the experiment is still full of instruction, I think. Out of all the

plans for improving the relations between employers and employed we shall soon, I trust, get to some scientific result.—I am,

Sir, &c.,

St. Andrew's, September 21, 1871. Tnos. HUGHES.

" New York., August 30, 1871. "Dm Sm,—You will, perhaps, remember that under date of 29th November, 1869, you were good enough to write to a Committee of our shop, giving your views in regard to the plan of 'Industrial Partner- ships ;' the committee also had letters and kind words from Mr. Bright, Mr. Mill, and Mr. Ludlow ; and now that we have been working under the new plan for more than eighteen months, it occurs to us that you may be interested in learning how we got on and something of our organi- zation. In your letter to the Committee you called attention to certain features of the plan contained in the proposals we had made which you considered were weak, and as they were retained in the constitution (a copy of which we enclose) framed by the Committee to which your letter was addressed, it may be well for us to explain why these fea- tures wore retained, in view of the fact that nearly all from whom opinions and advice were asked agreed with you in condemning them. That you may have a clearer view of the situation, we bog to say that when our proposal for an individual partnership was made, we had a well-established and fairly-profitable business, which was steadily grow- ing in volume and quality. We had no serious wrongs at the hands of our men to complain of, no strike had over taken place in our estate. lish went, our organization was a fairly good ono, and therefore our proposal was wholly a voluntary ono, and the step taken with the view of avoiding difficulties in the future, when our business had grown (as it promises) so large as to make it impossible for us to have per- sonal intercourse with those in our employ—not a rare thing here—and the influence which such intercourse brings about, we felt that a busi- ness so valuable as ours ought not to be put in jeopardy by a disastrous strike, which might come upon us when the number of our employes had become too large to be controlled by such influence as we have mentioned. It seemed to us that in continuing to pay the highest wages known to the trade, and in addi- tion paying them a part of the profits of the business, they would under- stand that we wished to act fairly towards them, especially when it was done at a time of profound peace, when they had no demands to make. We hoped that this course would establish between the office and the workshop a thoroughly good understanding, do away with what seems to be inseparable from all large working establishments, the antagonism between capital and labour. These were our hopes and wishes, and now we bog to say a few words about our plans and your criticisms.

'Investigation on the part of the Committee and ourselves convinced

us that the weak parts in the English industrial organizations were those in which it was provided that before labour received its share capital must receive its interest, and the managers (generally the capitalists) their salaries ; then, if any part of the profits was left, labour takes its share. This would be very well, if the result of each. year's business was uniformly good ; but the uncertainties of business are too groat to count upon good results every year, and when a bad year comes it is found that although every man may have done his whole duty, the interest on capital and the salaries of the managers absorb the entire profits, and leave labour without the additional reward it had confidently looked for ; but a really disastrous year would make things even worse. Through losses of various kinds the capital has become impaired, and the men not only fail to receive the expected dividend, but are naked to work on for another year perhaps in order that the impaired capital may ho made whole and good. Now our experience with mechanics of average intelligence induces us to believe that no organization can pass safely through such an ordeal ; the men will be- come suspicious, talk of bad management, got up all sorts of theories to account for the losses, and finally resolve not to work any longer for a 'dead horse.'

"Even if a body of several hundred working-men should possess

more than ordinary intelligence, their laok of business experience will prevent the majority from taking the correct views of the results of a bad year's business of which they have had no management, and which to them may have appeared to have been going on prosperously during the year, not forgetting that they have done thew part to make it successful. To avoid these troubles, you will see that we have pro- vided that labour shall receive its share before capital or the managers (in our case, members of the firm) receive anything, and we have placed each year by itself, so that in the event of serious losses impairing our capital, our men would not be called upon to make good our losses. "Of course, if the capital was distributed through the workmen, than those who shared the profits should, and must, share the losses ; this has been the weakness of all co-operative establishments here not so fortunate as to be uniformly and continuously successful. On our plan you will not fail to see that we could not give to labour so large a share, nominally, of the profits, as on the English plan of paying interest on capital and salaries to managers, and making labour share the losses as well as profits. And when the question Caine up in the convention framing the constitution as to what share labour should receive, we confess that nearly all the members considered our proposal of 10 per cent. as too little, and our argument was this :—We have a well-established and fairly profitable business, the good-will of which is very valuable. You have made no demand upon us, and apparently have none to naalco; we propose to enter upon an untried experiment, in which you cannot possibly lose anything, and must receive the highest wages in the trade. If losses are naado, we must make them, and we, therefore, propose to inaugurate the plan by giving to labour a small ahare, promising to in- crease the per-centage if the plan shall prove to be successful after a fair trial. And in using this argument we took occasion to illustrate it in this way—using imaginary figures :—Suppose some friend of the working-man should, in order to toot your ability to conduct such a business as ours, offer you the use of $30,000 as capital to start the carriage business, and for the use of it should charge you but simple interest, taking no part of the profits of your labour, only stipulating that the capital should be repaid at some fixed limo, without any deduc- tions whatever for any losses it might have incurred whilst in your keep- ing, and that in the meantime the amount of your wages must wholly de- pend upon your skill in the management of the business, and your industry in the workshops, would you not look upon the offer as exceedingly kind and liberal, and accept it at once,—even with your inexperience in management, and the fact that your business had to be made ? Now the difference between such an offer and the one we make is this ;—We have an established and already profitable business ; its success proves that its managers are competent. Our capital is $300,000, and as we propose to give you the entire profits on one-tenth of our capital, $30,000, you will see that our offer is much the more liberal of the two. Taking as a criterion the results of our business for the several past years, we estimated that our first dividend would be about 4 per cent. on the amount of wages paid ; and assuming this to be correct, we then compared the results of our proposed plan with the Joint-Stock Manu- facturing Companies, many of which had adopted the system of selling shares to the workmen, like the plan mentioned in your letter as being adopted in England.

" Hero those Companies are considered successful if they pay a divi- dend on capital of 15 per cont., but by far the larger number pay less than that. Now, we will suppose that a workman takes shares in such a company to the amount of $500, paying cash for the same ; his dividend at 15 per cent, would be $75. If working under our plan, he would buy bonds or loan his cash, $500, and receive about $35 as interest upon it ; and if he earned as wages $1,000 per annum, he would receive from us at 4 per cent. $40. This, with the $35 interest on his $500, would make $75, the interest which he would receive on his capital if invested in one of these joint-stock or co-operative companies. Ho placed the earnings at $1,000, but the most of our best skilled mechanics earn more than that, some of them earning twice that sum. It must also be remembered that in placing the $500 at the risk of business, he subjects himself to the chances of lose, and puts it beyond his own control, "In our eonstitution you will observe that we have given the men great power,—our own voluntary act. Under this power the board of governors may at any time pass a resolution that wages shall be advanced ; the president, always some member of the firm, is given the power to veto this or any other resolution ; but if re-enacted by a two-thirds' vote of the board, it or any other resolve becomes a law, in spite of the objection of the president. Many of our friends, as Well as Some members of the convention, deemed this too great a power to place in the hands of our men ; but we had more faith in working-men of average intelligence than to -believe that, having the power volun- tarily placed in their hands, they would use it unjustly, or that they would be so unwise as to 'kill the goose that laid the egg.' Men of all

classes are always more desirous of exorcising a power they do not

possess than they are when they actually have it—that is, bodies of moo —and this opinion is justified by the conduct of our men during the past eighteen months. During all this time we cannot complain of one act of injustice towards Us j the wages question has not even been brought for- ward for debate or mentioned, rules and regulations have boon made for the discipline and government of the factory far more stringent and rigid than we ever dared to make under our former plan. Harmony has reigned throughout the establishment, and the utmost good-feeling

has been shown between the employers and workmen. Cleanliness and good order are now marked features of every department ; the men are more punctual in attendance than before, there is less waste of stock,

and decided improvement in all things, and we believe the work is

bettor done and the production more valuable under the new plan. The first dividend, a half-year, July, 1870, amounted to about $3,600, being

31 per cent. ; the last dividend, July, 1871, was $8,200, being I per cont., and we believe that now the plan is under good head-way we shall have still better results during the next twelvemonth.

"Of course we do not claim that our plan is perfect, nor that it is the best that can be made ; but we have faith that it will lead to good to all concerned, and do something towards solving the question as to the proper relations between labour and capital. We trust you will pardon us for troubling you with this long letter ; we could not make it more

brief and give you a proper idea of the whole matter; and we felt that the interest you have taken in these questions, your friendliness for this country, and the trouble you so kindly took in advising the Committee warranted us in taking this liberty.—We have the honour to be your