CAPITALISTS AND LABOURERS.
NTV are all conscious of the difficulty of discerning the right remedies for any troubles until the causes are remote enough to be seen in perspective, and then it is usually too late, for the politician at :all events. The industrial "unrest" to which the kingdom has been a prey is attributed to genuine grievances, to the inflammatory rhetoric of Celtic politicians, to the cold calculation of Syndicalists or Socialists, or to a desire to get some fun for the money saved by individuals or unions, and so on. Amid these the larger causes of slow growth do not get due consideration unless people are pointedly reminded of what they really know well enough.
No one will contradict the statement that one contributory cause is the decline of personal relations between capitalists and labourers. If we admit the fact that the limited liability company has been steadily ousting the old paternal system under which the absolute owner and master worked at the head of his employees, there will be no need to discuss the debatable proportions of gain and loss. Un- doubtedly there has been some loss, and the most useful effort we can make is to see how to minimize by our experience of the old system the disadvantages that come with the limited company and its undeniable advantages. The most prominent stand of recent years for the paternal system was made by the late Lord Penrhyn. Though much of the abuse he received was utterly unjust, it was plainly a fight against an overwhelming tendency of the time. The system had great moral and social power for good, which indirectly producedeconomic advantages. Take, forinstance, that ease of access where collective bargaining had little or no authority. The value of the lesson to be learnt from the old system received one confirmation in the railway strike last year, for it is generally supposed that the men employed by the London and South-Western Railway Company were encouraged in their loyalty to the company by the greater care taken on this line than on others that every grade of employees should have as full access as possible to all the officials above them.
Among the advantages of the limited liability company are the infinitely greater ease of investment and the inducement to thrift and profitable saving which have deprived the stocking and the teapot, as the napkin of old, of their unprofitable function as receptacles for savings ; the reciprocal encouragement of enterprise by the greater ease of finding capital ; and the capitalist's greater ease in " spreading " his risks. The particular disadvan- tage of the system, to which we have referred as a con- tributory cause of "unrest," is the divorce between the shareholding master and the workman. It would be a hopelessly Quixotic optimism that could expect every individual among a multitude of small shareholders in a large company to realize the responsibility of ownership, as in theory he ought. All the personal dealing- with employees, single or combined, is left to officials and managers, whose first duty may reasonably be said to be towards their masters, i.e., the directors, wbo in turn represent the shareholders. Sometimes managing directors are paid by commission on turn-over, on the amount of work done regardless of net profits. If this leads them astray it is in the direction of committing the company to unprofitable work for which they are paid, while dividends suffer. This does not directly hurt the workman, but even- tually labour suffers from bad management with its partner, capital. But the point is that the official goes in fear of the shareholders only, and a short-sighted man will not see that the best economic results are in the long run closely dependent upon the good treatment of the workmen. He has, further, the constant temptation to plead that not he but Jorkins, the intangible shareholder, is the master responsible for any hardship. Where is the room for friendly feeling ? One cannot expect the ordinary work- man to think gratefully towards the capitalist who provides the money to give him his job. 'He does not care a rap whether the shareholder gets a good dividend or not. He is not so unnaturally broadminded ; his circumstances do not make it easy for him to be altruistic ; he is not profoundly versed in ethics or economics ' • nor is he, thank Heaven! a prig. He sees very clearly his own share in the work ; he realizes the deserts of his labour's partner very dimly. The first remedy for this evil is surely to make the labourer and the capitalist identical, at least in part ; to make their interests converge more clearly. The limited company and the trade unions have indirectly done a little to this end where unions, as of railway men, have invested portions of their accumulated funds in the companies which their members serve. The aggregate of such holdings must be large, but still the visible effect of a higher or lower dividend is remote from the individual. It is an increased volume of really close co-partnership or profit- sharing which is needed. Co-operation in distribution is thriving and increasing. Co-partnership in production is plainly a more difficult matter ; the risks are greater, the brain-work needs more freedom, and may be grudged due remuneration. But this, too, is now fairly on its feet, and even well-meant failures, such as Lord Furness's shipbuilding, have been valuable for the lessons they teach. Profit-sharing is the easier form in produc- tive enterprise. Messrs. Lever have introduced a system in the production of soap ; there is no reason why some form of the principle should not be extended to coal. What has been done at Sir W. G-. Armstrong and Co.'s Elswick Works, where workmen's debentures are issued, can be done by other great manufacturing firms, though the obstacles may be greater than in the case of the gas companies, which are the classic examples of successful co-partnership. The immensity of the effort needed to introduce such a change on a large scale ought not to discourage masters or directors of large concerns. Let us go straight to the case of the railway companies, the biggest field open, wherein the difficulties have been discussed and considered insur- mountable. Directors will say wearily that " they have given it their best consideration," that "they would need Parliamentary powers, which they would never get, to deal with their stock," that " the men themselves won't have it," and so on. The companies deserve credit for the trouble they have taken in making arrangements for holding deferred pay, managing pension funds, and otherwise considering the welfare of their men in these matters, but they have stopped short of any co-partnership. Let them go on. The progress would be slow at first, because it is perfectly true that the men have been set against the principle. Socialistic leaders have fought against this form of spreading capitalism. They have told the men that it is only a form of bribery against strikes. This is a curious travesty. Unless a strike is a good thing in itself, why stigmatize as bribery any means taken to make the men content and even anxious to avoid strikes ? We cannot teach the companies the details of their business, but a rough outline of the best course would probably be to issue .R1 shares either at par or at some fixed relation to the market price, giving a slight advantage to the holder. These shares could either be classed as debentures or preference shares, or should bear the same interest as the ordinary stock ; or if, again, a. special advantage is deemed advisable, then bearing interest at -; or 1 per cent. more than the ordinary dividend. They should be readily obtainable from the company for cash, and also offered at the choice of the employee as bonus or for deferred pay. They should be easily redeem- able by the company, but otherwise not transferable except to other employees and to widows of the holders.
The acceptance would probably be small at first, and this would be no disadvantage in the experimental stage, but would prevent serious disarrangement of the com- pany's finance. Trade-union leaders would make diffi- culties before the men themselves could get much direct knowledge of the benefits. A great deal of office arrange- ment would be necessary and little result shown for some time. But gradually the knowledge of the advantages would permeate the staffs, and eventually there would be a, large holding of such stock. Then there would be a great social and economic gain for all concerned, and the movement would be acquiring force throughout the industrial world, for many a small concern would be adopting some suitable form of the same principle.
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