The Online Library of Liberty

A project of Liberty Fund, Inc.

• Preface.
• Methods of Social Reform.
• Amusements of the People.∗
• Appendix
• The Rationale of Free Public Libraries.∗
• The Use and Abuse of Museums.∗
• “cram.”∗
• Trades Societies Their Objects and Policy∗
• On Industrial Partnerships.∗
• Discussion.
• Married Women In Factories.∗
• Inaugural Address As President of the Manchester Statistical Society On the Work of the Society In Connection With the Questions of the Day.∗
• Opening Address As President of Section F (economic Science and Statistics) of the British Association For the Advancement of Science, At the Fortieth Meeting, At Liverpool, September, 1870.∗
• Appendix A.
• Appendix B.: On the Connection Between the Irish Population and the Rate of Mortality In Towns.
• Cruelty to Animals—a Study In Sociology.∗
• On the United Kingdom Alliance and Its Prospects of Success.∗
• Experimental Legislation and the Drink Traffic.∗
• On the Analogy Between the Post Office, Telegraphs, and Other Systems of Conveyance of the United Kingdom, As Regards Government Control.∗
• Postscript.
• The Post Office Telegraphs and Their Financial Results.∗
• Postal Notes, Money Orders, and Bank Cheques.∗
• Postscript.
• A State Parcel Post.∗
• The Railways and the State.∗

ON INDUSTRIAL PARTNERSHIPS.∗

• I. Present Evils.
• II. Boards of Arbitration and Conciliation.
• III. Trades Union Commissioners' Report.
• IV. Messrs. Briggs' Industrial Partnership.
• V. Messrs. Fox, Head & Co.'s Partnership.
• VI. Summary of their Scheme.
• VII. Mr. Babbage's Proposal of the Partnership Principle.
• VIII. Advantages and Difficulties of the System.
• IX. True Principles of Co-operation.
• X. Circumstances Limiting its Application.
• XI. Probable Effects upon the Working-classes.
• XII. Concluding Remarks.

I.

It was with great pleasure that I undertook to prepare the present lecture, because I have become more and more convinced of the extreme importance of the Industrial Partnership principle to the peace and well-being of the kingdom. The seeming novelty of the proposition, that workmen should become sharers in their master's profits, causes many persons to stigmatise the idea as impracticable, unsound, and opposed to experience. But I believe that the unsoundness is all in the present state of things, and that experience is not against the novelty but in its favour.

For can any one truly say that experience is in favour of the present relations of capital and labour? Does not every one feel that there is an evil at work which needs a remedy? Does not the constant occurrence of strikes, and the rise of vast and powerful organisations of workmen, show that there is some profound unfitness in the present customs of the country to the progress of affairs? Bacon tells us that it is not good to try experiments in states, and that “we should stand upon the ancient ways;” but he adds, “unless the necessity be urgent, or the utility evident,”—and with deep wisdom he points out that “Time is the greatest innovator; and if time alter all things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end?”∗ I believe that his words apply to the present state of things, and that time is altering the status of the workmen of this country. As a great middle-class of merchants and manufacturers has arisen and asserted their position in the state, so I conceive that all these combinations and arbitrations, and regulations, and other devices in the various trades, betoken an earnest though often a mistaken impulse in the working-classes towards something better and higher than they yet enjoy. It is true that the innovations of time are slow and scarce to be perceived. It is our misfortune that we cannot measure and estimate what is going on in the present moment, and only when an evil has been long endured can we see how obvious and how necessary was the remedy.

I confess that I cannot myself see the end to the troubles which arise out of the contest of capital and labour, without some decided change. To overcome or destroy unions, and achieve peace in this manner, is the desire of some masters. To me this seems neither desirable nor practicable. Association of some kind or other is alike the sign and means of civilisation. In proportion as we become more civilised, societies and unions will ever multiply. It is only by substituting one more useful and beneficial form of organisation that another can be dissolved, and I think it can be demonstrated that union between each master and his men is the real union which will be a blessing to all.

II.

Some men of great experience think that Boards of Arbitration and Conciliation will solve the difficulty; and there is no doubt that such boards have prevented strikes and dis-agreements. Anyone will admit that conciliation is better than open strife; but it does not follow that what brings peace affords a sound and thorough settlement. I have never been able to persuade myself that arbitration by an elected board or single individual is a theoretically sound measure. It appears to me to countenance the erroneous idea, so generally prevailing, that prices and wages can be and ought to be the subject of regulation. It tends to remove all free competition, to substitute one single arbitrary power for the two rival powers which now strive in every trade. The Act of Parliament under which such councils are established certainly provides that there shall be no power to fix a uniform rate of prices or wages, so that the Legislature has formally, at least, maintained the principles of free labour.

But unless the councils arbitrate in the matter of wages and prices, they do not touch the chief point in dispute; and if they do not fix rates which will practically be respected and enforced by public opinion upon the whole trade, where is the use of their arbitration? The tendency of all such arrangements would surely be to destroy the freedom of individual action; and any such tendency is directly contrary to the undoubted truths of economical science, which we must unflinchingly uphold at the peril of unmeasured evils. I am perfectly willing to allow that there are many details of trade relating to the hours and conditions of labour, the safety, comfort, and welfare of the men, which are rightly the subject of regulation; and in respect to such matters I wish to see the vigilance and energy of the unions and councils increased rather than diminished, provided that they will learn to discriminate between what they can, and what they cannot, properly regulate. But I fear that a long time must pass before the fallacies of protection will be thoroughly eradicated from the minds of men. Many a sad experiment must be made, and many a disastrous failure incurred, before the men of a trade will see that they cannot ultimately find their exclusive benefit in the injury of others, and that the supreme law of the general welfare forbids them to do it if they could. I feel that Sir G. C. Lewis was right when he said that mankind must suffer before they have discovered the true tendencies of the protective theory of labour now enjoying popular favour.

I believe, then, that we may say of the present time and subject, again in the words of Bacon, that, “a froward retention of custom is as turbulent a thing as an innovation.” Nay, more so: the turbulence is in the present state of things, and the innovation, I trust, will be its end. If the masters insist upon retaining their ancient customs; if they will shroud their profits in mystery, and treat their men as if they were another class of beings, whose interests were wholly separate and opposite; I see trouble in the future as in the past. But I trust they will accept the change which time is pressing on them. The sharing of profits is one of those apparently obvious inventions, at the simplicity of which men will wonder in an after-age. There was a time in England, not so long ago, when wages were the last new invention, the most turbulent innovation. It seems natural now that a man should be paid for what he does; but, to our Norman forefathers the matter did not present itself in this light. The Public Record Office could furnish many a proof, I dare say, of the presumption and turbulence of those Saxon serfs who asked for pay. Laborious historians can trace precisely how the Saxon slave became by degrees the free and wage-paid journeyman. We can almost put our finger on the year when the thin end of the wedge was first inserted, and can point to every step in its progress home. Not without bitter strife and suffering was so great a change effected. There is the thin end of some wedge, as I believe, in the present state of things, and it is our duty to endeavour to detect the direction in which it is tending. It is the part of wisdom not to think that things will always be as they have been, still less to think that the relations of society can be shaped according to our own narrow wishes and ideas. It is the work of economical and social science to endeavour to detect those arrangements which must ultimately prosper, because they are founded on the true principles of human nature. And if, as I believe, the artizan will ultimately become the sharer in the profits of the work he does, and the zealous friend of the capitalist, we cannot do a more important work than facilitating and hastening the change.

At present we see the working-men of a trade usually banded together, endeavouring to restrict the number who can share in the work, often resisting more or less openly any considerable improvement that will yield more results in proportion to labour; in short, studying in some degree, but perhaps unconsciously, “how not to do it,” instead of giving their whole thoughts and efforts “how to do most work with least time, trouble, and expense.” We find them again labouring under the impression that their employers are a grasping set of monopolists, who contribute but little to their work, but draw enormous profits from it. Every increase of wages they can secure is too often thought to be twice blessed; it is so much to their own advantage, it is so much from the profits of those who have no right to it. The ardent unionist looks to the raising of prices, the restriction of labour, the limitation of supply, for the improving of his own condition. He does not see that all these measures, though beneficial apparently to himself, are directly contrary to the good of the whole community, and that if others acted on the same principles it would simply amount to a general striving after scarcity and poverty.

The masters contribute to all these erroneous notions by surrounding their profits and their losses with profound secrecy, and, though the ultimate result is different, there is no doubt that their immediate profit does depend upon keeping wages down. Acting, as they usually do, in more or less concert with other employers, they countenance, if they do not originate, the idea that combination should be in a horizontal direction between employer and employer, between workman and workman.

And then, again, what motive is there under present circumstances for a workman to be zealous and skilful? If he be but moderately efficient and active, the union will support him if discharged, and will oppose him if he seeks for better wages than his companions. Unless, as I believe is very generally the case, real honesty and love of doing his work in a workmanlike manner stimulate him, he can really have no motive for doing more than the average amount of work. We know that unions often oppose piece-work, or any such arrangement as secures a reward proportional to energy. When I think of all these things, I am surprised that work is so well done as it is; there must be a strong power of energy and honesty behind.

The advocates of industrial partnerships wish to see honest labour meet with its due reward. They consider that combination should be in a perpendicular, and not in a horizontal, direction. The master is to combine with his men, to be their true leader, and after all the ordinary costs of wages, interest, and superintendence are provided for, the surplus is to be fairly divided among all who have contributed towards it. There is no reason whatever, except long-standing custom, why the capitalist should take all the risk and have all the excess of profits. Workmen generally cannot wait beyond the week's end for their wages, and thus they have been obliged to part with all interest in their products for an immediate payment; but theoretical soundness is in favour of a totally different arrangement. In every work there are a thousand opportunities where the workman can either benefit or injure the establishment; and could he really be made to feel his interests identical with those of his employers, there can be no doubt that the profits of the trade could be greatly increased in many cases.

III.

Here I would point out that the Report of the Trades Union Commissioners is not only erroneous as regards questions of theory relating to industrial partnerships, but is, in point of fact, positively opposed to their evidence. They say:∗

“It must be remembered that, as regards Messrs. Briggs' system, the principle is to limit the profits of the employer, and to give the workman, over and above his wages, a share in the profits of the concern, without subjecting him to any liability for loss. It is, then, not unreasonable to suppose that many capitalists will prefer the chances of disputes with their workmen, and even run the risk of strikes and temporary loss, rather than voluntarily limit their profits to 10 per cent., or any other fixed amount.”

These statements totally misrepresent the system which we are going to consider. The Messrs. Briggs, as we shall see, do not allow of any fixed limit to their profits. Instead of 10 per cent. being their maximum profit, it is rather a minimum, since the interests and energies of the workmen are enlisted in ensuring them this amount, which is a first charge upon all the profits of the establishment. It is true that any excess of profits above 10 per cent. is shared with the men; but considering that the men, by abstaining from all strikes, agitations, or loss of time, and by promoting in every way the success of the firm, have greatly diminished the risks, there is not the slightest reason to suppose that the average profits of the masters will be decreased. The men cannot earn any dividend without an equal amount going into the pockets of their masters. Again, I venture to assert that this arrangement is entirely sound in principle, and that the arbitration and conciliation so much recommended by the Commissioners, although a good makeshift, is entirely unsound in principle.

But fortunately the time is past when this question need be discussed as a matter of theory only; it is now a matter of experience. It has been put to the test in more than one instance, and under circumstances which will meet every objection. The results are of a most conclusive character.

IV.

Although the history of Messrs. Briggs' partnership may be known to many, I must briefly recount it, that all may know what experience proves. Until the middle of the year 1865, Messrs. Briggs, Son & Co., had worked the Whitwood and Methley Junction Collieries by an ordinary private partnership. During ten years previous to that date four long strikes had occurred, causing a loss of seventy-eight weeks of work, not to speak of many minor interruptions. It would be under the mark, I believe, to say that there was an average loss of one day's work in the week, both to masters and men. In addition to this was the cost incurred in the struggles with the men, in importing non-unionists, and guarding the men and works from outrage. The anxiety and painful feelings engendered must not be unthought of. There were the usual sad concomitants of such struggles—evictions of the unionists, attacks upon the non-unionists, police guards, threatening letters, and the like; the whole culminating in a serious riot, trials at the York assizes and heavy sentences—there was, in short, a small civil war, just such as has, I hope, been brought to a close at the Thorncliffe Collieries. And when I hear of armed bodies of men attacking quiet cottages, the inmates driven to the higher stories, while fire is applied below, and all the other incidents which we have read, I almost feel as if we were in the Middle Ages, and border raids were still going on. The signal-beacon alone is missing, and the buzzer has taken its place.

The pecuniary result of the civil war at Whitwood was that the proprietors barely secured 5 per cent. profit on the average of ten years, and they were so thoroughly disgusted and pained at their relations with their men that they were on the point of throwing up the business. Fortunately the Companies Act of 1862 allowed of their introducing a new arrangement, and in July, 1865, the decisive experiment was made. This system consisted mainly in an engagement to divide with their men all excess of nett profit over 10 per cent.; at the same time the men were allowed and encouraged to purchase small shares in the undertaking, without, however, acquiring any power to interfere in the management of the business. The result is easily told. The pecuniary result I will postpone to the moral and social results of the change. Peace has reigned where there was strife. Steady, zealons work has become the unbroken rule. Strikes are known only by tradition. Hardly a day's work has been lost; mutual feelings of confidence and esteem between employers and employed have been thoroughly established. These are facts beyond doubt or denial. I have heard them from the lips of one of the employers, and also from one of the men, and as they have been published for some time and have never been contradicted, we may receive them as certainly true. There is also little doubt that the moral condition of the neighbourhood is distinctly improved; there is less drunkenness, less fighting, swearing, and gambling.

The pecuniary result may be briefly summed up. During the four complete years which have passed since the partnership was constituted, the capitalists have received dividends of 12, 13, 13½, and 13½ per cent. The proprietors must have felt that a very pleasant limit had been placed to their profits. An average profit of 13 per cent. earned amid peace and goodwill, compared with 5 per cent. earned out of contention and riot, present advantages which even a Royal Commission might be supposed to recognise. But it passes me to conceive how seven gentlemen of great eminence, with a Lord Chief Justice at their head, could so far overlook the facts brought before them as to say that the Messrs. Briggs voluntarily limited their profits to 10 per cent. At the same time the workmen received dividends equivalent to the excess beyond 10 per cent., namely, 2, 3, 3½, and 3⅓ per cent., so that the total nett profits of the business were 14, 16, 17, and 16 3/3 per cent., or more than three times what they had been in previous years! Many workmen have thus received dividends of £5, the largest sums that they have probably ever received at one time. These dividends were of course increased by any accruing from shares held in the capital account of the business, and one man has thus received altogether £10 in a single payment.

It may perhaps be said that all these gratifying results are due to the exceptional energy, good tact, and business-like qualities of the proprietors. I have no doubt they do possess all these qualities; but if so, we are forced to the conclusion that the most able and conciliatory masters cannot, under the ordinary relations of capital and labour, prevent their works from becoming a constant exhibition of ill-will, conflict, and riot. The Whitwood Collieries seem to me to furnish all the requirements of a perfectly decisive experiment. The re-constitution of the partnership in 1865 is the only cause to which we can attribute the undoubted change which has followed.

But the Commissioners remarked that when they reported the plan had only been tested during a period of comparative prosperity in the coal trade. It might be answered that since they reported, the state of the trade has not been at all prosperous, and yet there is no apparent effect. But I can fortunately refer to a second independent experiment, which entirely negatives their remark.

V.

It happens that Messrs. Fox, Head & Co., of the Newport Iron Works, Middlesbrough, had up to the year 1866 suffered even more from strikes than the Messrs. Briggs. Their works had stood idle about one-fourth of the time since they had been opened, and at the close of the long strike of 1866, they determined to adopt a partnership scheme closely similar to that we have been considering. The differences are not of a material kind, but the importance of their case arises from the fact that the partnership was constituted just at the commencement of a period of intense depression in the trade. The collapse of 1866, and the cessation of railway works, have rendered it difficult-for any ironmaker to make a profit. In their first two annual reports, Messrs. Fox, Head & Co. were obliged to declare to their men that there was no bonus to divide, and it might have been expected that such disappointment and discouragement would have ended the scheme. But the accounts were audited, and the result certified by eminent accountants, and they were apparently received with confidence by the men. In the third year of the scheme, which has just ended, the proprietors were enabled to distribute a bonus of 2 ½ per cent. or 6d. in the pound, on all wages. They find too that there is at the present time much more confidence, and a much better state of feeling at the works than existed there a few years ago. The period fixed for the first scheme having elapsed, they have just reconstituted the partnership, with some slight changes, for a period of five years. In short, the experiment had succeeded at Middlesbrough, in the midst of the most untoward circumstances, just as it had succeeded at Whitwood in a prosperous state of trade. If it would fail at all, surely the first two bad years would have displayed the weakness. The members of both these firms will, I believe, deserve the gratitude of the country for the firmness with which they have cast aside the current prejudices, and have put to a decisive test a plan which had everything but experience in its favour.

VI.

I owe to the kindness of Messrs. Fox, Head & Co., a copy of the rules on which their work is conducted, and that we may understand precisely the nature of the scheme, I have prepared a summary of the rules.

(1.) The employers are to have the sole and undisputed control of the works and the business.

(2.) No employés are to belong to Trades Unions.

(3.) Employers similarly are not to belong to any association of employers.

(4.) All questions concerning wages and prices are to be decided at the discretion of the employers.

(5.) Wages will, however, be those generally accepted in the district, but during any trade dispute the old rate is to be retained.

(6.) Working partners are to receive salaries at customary rates, approved by accountants.

(7.) Rate of interest allowed to capitalists is to average 10 per cent. during the continuance of the scheme.

(8.) Amount charged annually for renewals and depreciations of the work and plant is not to exceed on an average 6 per cent. per annum upon the outlaid capital.

(9.) Cost of all necessary repairs are to be charged to the cost of manufacture.

(10.) Costs of manufacture are to include all law, banking, and other incidental charges.

(11.) To meet bad debts a fund is to be created by an annual charge of 1½ per cent. of the gross returns. Should this fund prove insufficient the excess shall be charged to cost of manufacture. Any balance of the fund at termination of partnership to be carried forward should the partnership be reconstituted; otherwise it shall revert to capitalists.

(12.) Surplus profits beyond all the charges and costs of manufacture are to be divided into two equal parts, one half to be distributed to all employés—that is, all who have received wages or salaries during the year—in proportion to the amount so received by them.

(13.) The employers to appoint public accountants to audit accounts and report the result.

(14.) The public accountants to decide all matters in dispute.

(15.) Employés' bonuses unclaimed during one month to be forfeited.

(16.) All employés to share proportionately to the time they have served, however short.

(17.) All dividends not claimed to be carried to the profit and loss account of the following year.

(18.) Any employé joining a Trades Union or legally convicted of injuring the works to forfeit dividend.

(19.) Persons performing work by contract to furnish lists of the wages paid to their assistants, who will receive the dividend direct from the employers; the latter, however, will not be responsible for the correctness of the returns, and will decide all disputes at their discretion.

(20.) Should the year's profits not meet all the charges, including 10 per cent. profit to capital, the deficiency is to be charged to the profit and loss account of the following year.

(21.) Exempts from the scheme a certain patent manufacture belonging to Messrs. Fox, Head & Co.

(22.) No employé to acquire any of the rights or liabilities of a partner, or to be in any way exempted from the laws relating to masters and workmen.

(23.) The scheme is to be considered a continuation of that of November, 1866.

(24.) Employés will be considered as assenting to the scheme by merely accepting or continuing in employment.

This scheme came into operation on the 5th of February last, and is to continue in operation for five years.

VII.

It does not seem to be so generally known as it ought to be that, as far as can be ascertained, the real author of the system I am advocating is Mr. Charles Babbage. Nearly forty years ago his admirable work on “The Economy of Manufactures” was published, and it is truly difficult to overrate the genius which it displays. I never look into that work without discovering that it contains the germ of some truth that has since been recognised, or of some truth that is likely to be recognised. No one can read Chapter XXVI. without seeing how entirely he anticipated the advantages which have accrued from this proposal. The chapter is entitled, “On a New System of Manufacturing,” and I shall ask your permission to read considerable extracts from it.

“A most erroneous and unfortunate opinion,” he commences, “prevails among workmen in many manufacturing countries, that their own interests and that of their employers are at variance. The consequences are, that valuable machinery is sometimes neglected and even privately injured—that new improvements, introduced by the masters, do not receive a fair trial—and that the talents and observations of the workmen are not directed to the improvement of the processes in which they are employed. . . .

“Convinced as I am, from my own observation, that the prosperity and success of the master-manufacturer is essential to the welfare of the workman, I am yet compelled to admit that this connection is, in many cases, too remote to be always understood by the latter; and whilst it is perfectly true that workmen, as a class, derive advantage from the prosperity of their employers, I do not think that each individual partakes of that advantage exactly in proportion to the extent to which he contributes towards it; nor do I perceive that the resulting advantage is as immediate as it might become under a different system.

“It would be of great importance if, in every large establishment, the mode of payment could be so arranged, that every person employed should derive advantage from the success of the whole; and that the profits of each individual should advance, as the factory itself produced profit, without the necessity of making any change in the wages.”

Mr. Babbage then points out that the mode of paying for work in the Cornish mines, by which the miners receive a certain part of the value of the ore raised, fulfils to some extent the conditions of a better system. Admirable results have followed wherever this mode of payment was adopted.

“I shall now,” he continues, “present the outline of a system which appears to me to be pregnant with the most important results, both to the class of workmen and to the country at large; and which, if acted upon, would, in my opinion, permanently raise the working-classes and greatly extend the manufacturing system.

“The general principles on which the proposed system is founded, are:

“(1.) That a considerable part of the wages receiced by each person employed should depend on the profits made by the establishment; and,

“(2.) That every person connected with it should derive more advantage from applying any improvement he might discover to the factory in which he is employed, than he could by any other course.”

Thinking that it would be difficult to prevail upon capitalists to try the new system, involving an apparent change in the division of profits, Mr. Babbage suggests that it should be tried by small companies of working-men. He describes a plan not greatly differing from that on which not a few cooperative companies have since been started, the general principle being that every one should be paid proportionately to the services he has rendered towards the success of the company.

He enumerates the following as among the principal results of such an arrangement:

“(1.) That every person engaged in it would have a direct interest in its prosperity; since the effect of any success, or falling off, would almost immediately produce a corresponding change in his own weekly receipts.

“(2.) Every person concerned in the factory would have an immediate interest in preventing any waste or mismanagement in all the departments.

“(3.) The talents of all connected with it would be strongly directed to its improvement in every department.

“(4.) None but workmen of high character and qualifications could obtain admission into such establishments; because, when any additional hands were required, it would be the common interest of all to admit only the most respectable and skilful; and it would be far less easy to impose upon a dozen workmen than upon a single proprietor of a factory.”

The sixth advantage is perhaps the most important, namely, the total removal of all real or imaginary causes for combination.

“The workmen and capitalists,” says Mr. Babbage, “would so shade into each other—would so evidently have a common interest, and their difficulties and distresses would be mutually so well understood, that, instead of combining to oppress one another, the only combination which could exist would be a most powerful union between both parties to overcome their common difficulties.”

To the following remarks I would especially draw the attention of capitalists, since they clearly point out the mistakes into which the Trades Union Commissioners have fallen upon this point.

“One of the difficulties attending such a system is, that capitalists would at first fear to embark in it, imagining that the workmen would receive too large a share of the profits; and it is quite true that the workmen would have a larger share than at present: but, at the same time, it is presumed the effect of the whole system would be, that the total profits of the establishment being much increased, the smaller proportion allowed to capital under this system would yet be greater in actual amount than that which results to it from the larger share in the system now existing.”

It would be impossible more clearly to anticipate the doubts which have been felt, and the solution of those doubts which has been given by actual experience. Mr. Babbage's remarks about the interference of the law of partnership are rendered inapplicable by the alteration of the law, and the difficulty he notices concerning the discharge of incompetent or ill-behaved workmen does not affect the scheme I am advocating, in which the absolute power of management resides in the hands of the proprietors.

VIII.

It only remains for us now to consider more minutely the source and nature of the advantages which have been found in practice to follow from the adoption of this principle; we must also distinguish as accurately as possible the conditions of its success, and the character of the trades to which it is most suited. The chief obstructions which will stand in the way of its adoption must not be unnoticed so far as time will allow.

It is alike the great advantage and the great difficulty of this scheme that it requires the disclosure of the amount of profit made by the capitalists. So long as the employer surrounds his business with mystery, and carefully conceals the profit he obtains, it is natural that the workman should feel distrust, and probably over-estimate the amount of the share which is taken from the produce of his work. Every demand for wages and every strike is made in the dark, and the point to which the master carries resistance is the only real test of the sincerity of his professions. The master says, “I am making no sufficient profits,” and the “state of trade will not allow me to advance your wages.” The workmen reply: “We are not allowed to know what your profits are, but so far as we can judge we think the state of trade would allow of an advance; and therefore we cannot depend upon your vague assurances; the only way in which we can arrive at the truth is to try how long you will suffer your business to stand still.” There is no doubt that this is at least a plausible argument for combinations and strikes; arbitration may overcome the difficulty in some degree, because the real state of trade and profit can be made known to a single arbitrator, or even a limited board, more freely than to the public in general. But, as I have said, arbitration presupposes that there is combination and concert on both sides, and that all the trade are willing to make the conditions of wages and prices the subject of regulation. All this is directly contrary to the principles of free labour and free trade.

The only other alternative which I can see is for the masters to dissolve the mystery surrounding their profits in some degree. There is not the slightest necessity to make known positive losses, and all that need be published is the amount of excess, if any, beyond a certain fixed minimum, the truth of the report and the accuracy of the accounts to be certified by auditors or accountants of high position. I confess I should have little hope of masters overcoming their strong prejudices against such a proceeding were it not for one circumstance. The extension of limited liability companies will tend to render trade much less secret; for where there are a score or more of shareholders, any mystery about the rate of profit is out of the question. No doubt limited companies are a little out of favour just at present, owing to reaction after their recent rash creation. But there is a great future for joint-stock enterprise in one form or another, and when there are many shareholders among the capitalists, I see no reason whatever why the partnership principle should not at once be adopted as regards the men. The first to bring this principle into operation should be large companies owning coal mines, iron works, or any other large factories employing many labourers. And as a joint-stock company can less depend upon vigilant superintendence of their business when the managers are not the actual capitalists, it is all the more necessary that they should give each man an interest in the result. I perfectly feel how slowly this principle must make its way among private employers, but there are, nevertheless, many large companies existing which might embrace the principle at once without the slightest difficulty. Not to do so will argue, I should think, the greatest blindness to their own interests, and to those of the country generally. It is but a few years since the Legislature upheld the prejudice that it was impossible to allow anyone to share profits without obliging him to share the risks. But in the Act of 1862 this prejudice was given up, and I do trust that any other prejudices which stand in the way of this great reform may shortly be dissolved, now that the law gives a full opportunity for the trial.

It may be said that no firm would long stand if they could be obliged at intervals to reveal the state of their business; any temporary embarrassment would thus become known, and their credit would be gone. But no such revelation is at all necessary. The only fact which need be published is whether the profits exceed the fixed minimum. It would be absurd to suppose that any inference as to the credit and solvency of the firm could be drawn from such a fact. As regards all the particular transactions, debts, contracts, and other affairs of a firm, exactly the same secrecy can be maintained as at present. It is clearly to be understood, too, that the sharing of profits does not entail the right to control, in any degree, the affairs of the firm, or to demand an investigation of their accounts. The employés of an industrial partnership will partially resemble the immense number of persons who now hold small shares of insufficient value to give them any appreciable voice in the management of the companies, or to make it worth their while to spend time, trouble, or money in the matter. No small part of the capital of the country is thus owned by purely passive recipients of the profits procured for them by larger capitalists, or directors and managers of companies intrusted with the money. Workmen sharing profits will be in the same position, except that in their own work or in keeping an eye upon the work of others, they will possess, every hour and every minute, the means of contributing something to the profits they share.

IX.

When we come to think about the matter, it is plain that industrial partnerships are founded upon the surest principle of human nature—self-interest. There can, I think, be but four motives which can operate upon a workman.

(1.) Fear of dismissal.

(2.) Hope of getting higher wages or a better employment.

(3.) Goodwill to his employer, and desire to fulfil his bargain honestly.

(4.) Direct self-interest in the work.

The first of these, no doubt, is sufficient to prevent the workman being much below the average of efficiency, but it cannot do more. The second is a powerful incentive where an employment allows of many grades, and promotion is free and depends on merit. In many of the ordinary handicraft employments, however, both these motives are to a great extent relaxed by the regulations of the unions which favour the equal payment of all moderately efficient workmen, and yield a strong support to those who are in their opinion wrongfully dismissed. The third motive is really operative to a greater extent than we should suppose, but is not one that we can expect to trust to. The fourth motive—direct interest in the work done—is entirely excluded by the present mode of payment, which leaves all profit to the master. It is upon this motive that the partnership principle depends. So far, indeed, is the principle from being a new one, that it lies at the basis of all ordinary relations of trade and private enterprise. The very opponent of industrial partnerships argues upon the ground that the employer must have all the profit because it is requisite to compensate him for all the trouble and skill expended in management; in short, that he must have powerful self-interest in the matter. But it may be safely answered that the men have so many opportunities of benefiting the work of a large factory, and they have so many means of injuring it by strikes and contentions, that it is entirely to the interest of the employer to buy their exertions and goodwill with a share of profits.

Though I have spoken of this scheme as an innovation, it is only so as regards the larger branches of trade. All that is proposed is to extend to other trades what has long been found absolutely indispensable in special trades. In the whaling trade, in fishing, and in the Cornish mining system, as Mr. Babbage pointed out;∗ in American trading-ships, and some other instances noticed by Mr. Mill in his remarks upon the subject;† in the form of co-operation adopted in the Welsh slate quarries; in all cases where work is paid for by commission or by piece-work, the principle is really adopted at the present day. It is quite a common custom I believe, and is growing more common, for banks or firms of merchants to give bonuses to their clerks after a prosperous year; and managers, schoolmasters, and others holding responsible positions, usually have a considerable part of their remuneration dependent on the profits of the business they manage. The principle is nothing but that of payment by results, and, more or less directly, it is that which must govern all trade in a sound state of things. It is, no doubt, the total absence of any direct or apparent participation in results on the part of ordinary artizans which gives rise to much of the trouble we encounter at present.

The partnership scheme is, I believe, by far the truest form of co-operation. We have heard a great deal of co-operation lately, until we may well be tired of the name; but I agree with Mr. Briggs∗ in thinking that many of the institutions said to be co-operative really lack the fundamental principle, that those who work shall share. If a co-operative retail store employ shopmen, buyers, and managers, receiving fixed and usually low salaries, superintended by unpaid directors, I can only say that it embodies all the principles of dissolution; it has all the evils of a joint-stock company without many advantages. Such would also be the case with any manufacturing co-operative company which pays fixed wages and salaries. Such a company might probably be described as a loose aggregation of a number of persons of small means, none of whom have an adequate motive for care or energy. I do hope very much from co-operation in many forms, but the name of the thing will not be sufficient; the real interests of all employed must be enlisted, if co-operative societies are to prosper and grow. But industrial partnerships, such as those of the Messrs. Briggs, and Fox, Head & Co., have all the advantages and none of the evils of joint-stock co-operation. They are managed by two or three working partners, whose whole energies and interests are bound up in the success of their management, and who are at the same time unrestricted by any power of interference on the part of those employed or of shareholders. They can thus act with all the freedom, secrecy, and despatch of private enterprise; and yet they carry with them the interest and sympathy of all they govern. They have all the advantages of true leaders of their men. It is well understood that a successful military leader must be perfectly unfettered in judgment and supreme in executive power; and yet he must manage to earn the confidence and devotion of his men. It is to a position resembling this that the Messrs. Briggs seem to me to have raised themselves by the courageous adoption of a true principle, and I do believe that when their example is followed, our works and factories will become so many united and well-organised regiments of labourers. Good leaders will seek good men, and good men in return will seek and attach themselves to good leaders. We shall have an honourable rivalry between one firm and another, as to which shall get the best men and pay the best dividends.

X.

But it is evident that the partnership principle is not equally applicable to all trades. Those kinds of manufacture where the expenditure is to a large extent paid in wages and by time, and where a large number of men are employed in a manner not allowing of any rigid test or superintendence of their work, will derive most advantage from it. Where a large amount of fixed capital is required, so that the expenditure on wages is less considerable, the advantage will not be so marked, unless indeed the fixed capital be in the form of machines or other property which can be readily injured by careless use.

The adoption of the principle, again, is of less importance where the work is paid for by the piece or by contract, as, for instance, in the Welsh slate quarries. In this case, however, a special form of co-operation has already been employed for a length of time, and attention has been called to the good results by Professor Cairnes, in “Macmillan's Magazine,” January, 1865. But even where payment is by quantity, the men might usually save a great deal were their interests enlisted in economy. Thus, in collieries, the hewing of the coal is paid by the weight got, nevertheless the value of the coal greatly depends upon the proportion of the large coal to the broken coal and slack, and also upon the careful picking of the coal from duff or rubbish. Again, the cost of the wooden props, by which the roof is supported in a colliery, is a considerable item in the expenditure, and a careful coal-hewer can extract and save more than a careless one.

The Messrs. Briggs show that the saving by care in their own works might easily be as follows:∗

This is independent of savings derived from superior care of the workings and property of the colliery generally.

It would be obviously undesirable to adopt the partnership arrangement where the risks of the business are very great, and arise chiefly from speculative causes, so that the amount of profit depends almost entirely upon the judgment and energy of the principals. In such cases, doubtless, the men could not compensate their masters by superior care for the dividends they would receive; and as the risks would remain undiminished, the dividends would really be subtracted from the legitimate profits of the capitalist. No one supposes for a moment that the scheme could succeed under such circumstances. But it would be entirely wrong to suppose that the scheme cannot adapt itself to trades with varying risk. As the Messrs. Briggs point out, there is no particular reason for adopting ten more than twelve or fifteen per cent., or any other rate of minimum profit that may seem fitting to the circumstances of the trade. That rate will ultimately be chosen in each trade which yields current interest in addition to compensation for risk, trouble, and all other unfavourable circumstances which are not allowed for in the depreciation fund, the bad debt fund, or the salaries of the working partners. The working classes perfectly acquiesce in the great differences of wages existing between different trades, and it is not to be supposed that any difficulty would be encountered in choosing for each trade that rate of profit which experience shows to be proper. The sharing of the excess of profit with the men will certainly prevent the masters from receiving in highly prosperous years so much as they otherwise might have done, but this will be compensated by the less chance of loss in other years, and by the fact that any deficiency below the minimum profit is to be made good out of the proceeds of subsequent years before any excess is to be distributed. The zeal of the employés to gain a dividend will thus insure the masters receiving their fair and necessary profits in addition to any excess which fortune or good management may bring. To sum up briefly the effect of the principle upon profits, I may say that I believe when the partnership principle is fully tested in various suitable trades, the effects will be as follows:

(1.) To diminish the risk of the business as arising from trade disputes and other circumstances in the control of the men.

(2.) To render the profits more steady from year to year.

(3.) To increase the average profit in some degree.

(4.) To increase the earnings of the men in a similar degree.

XI.

But there is an incidental advantage which would flow from such a scheme of which we cannot overestimate the value. As the Messrs. Briggs say, when their dividends were distributed, numbers of men left the pay office “richer men than they had ever been before. Many had a five-pound note in their possession for the first time, and some few had two.” “It is also a very satisfactory feature of the case,” they say, “that the amount so distributed has been almost universally well spent: by some in the purchase of shares in the company; by others in paying an instalment towards the purchase of a plot of freehold land, whereon to build a cottage; while the purchases of articles of furniture for domestic comforts were very numerous.” I believe it would be impossible to meet with facts more promising for the future welfare of the country than these. Here is the first insensible action of the lever by which millions may be ultimately raised above the chance of pauperism.

The one great defect of character which seems often to neutralise all the excellences of the British artizan is want of thrift and providence. His financial calculations are too often restricted to the week, and he esteems himself solvent if the wages of one pay-day will last until the next. No matter how brisk trade be, no matter what remission of taxes be made, or how vast become our exports and our imports, there will be no real improvement in the prospects of our population till this habit be overcome. Workmen too commonly look upon their wages as a life annuity; to save, they often think is mean and selfish; capitalists may do that; there is something freehanded and generous in spending when there is a chance; and it is a singular fact that Trades Unions seldom (and, so far as my knowledge goes, never) encourage saving by the institution of savings banks. So far as such societies provide for the sick and disabled, replace the lost tools, and promise superannuation allowances, there is everything to be said in their favour. But even then they do it on a footing of enforced equality; the levies, subscriptions, and benefits are the same for all, and there is not the least opportunity for any man to make himself better off than the majority. Not the least encouragement is given to accumulation, and it must be added that even the best-conducted societies do not accumulate what will enable them to meet their ultimate liabilities. By a constant accession of young members, and possibly by recourse to extra levies, the large societies now existing can no doubt last for many years to come, but no one who examines their accounts, or considers the evidence given before the Commission, can avoid seeing that they must either break in the end or throw a most unjust charge upon a future generation. They trust too much to the constant incomings of each week. And this is the great error of all the working-classes. Hence arises the distress at every temporary oscillation of trade; the early marriages; the crowds who need employment; the young who cannot go to school because they must add their pence to their parents' shillings; the necessity of medical charities; and, most sad of all, the crowding of the old into the wards of the workhouse. It is no doubt true to say that out of 20s. a week it is not easy to save. I admit it, but say that it must be done if things are to be better than they have been. In improvidence and in ignorance, the majority of the population are involved in a vicious circle. They are ignorant because their fathers were ignorant, and so will their children be ignorant to the end of time, unless the State interferes with a strong hand. They cannot be provident because their fathers were not so for many generations back, and, were there not a prospect of some change, I should look upon improvidence and pauperism as the lasting curse of the English people.

But though the cause may seem a slight one, I should anticipate the best results from workmen receiving part of their earnings in yearly dividends. It would insensibly teach them to look beyond the week; it would give an opportunity for making a fair beginning; and from the evidence we have, such does appear to be the result. There is no doubt that the very poorest classes of labourers are really unable to save any appreciable sum of money, but I believe that this is by no means the case with artizans. Receiving often £75 or £100 a year, they are really much better able to save than many clerks, shopmen, and others who would nevertheless be more provident. We ought by this time to give up the notion that one who wears a black coat is better off than one whose coat is rough and soiled with work. The poorer section of the working-classes, I have allowed, must still for some time be dependent and incapable of placing themselves beyond the reach of distress. But I am confident that the richer section of the working-classes may soon despise all notions of assistance and dependence. By the Post Office Life Assurance system they can provide for their widows and children in case of accident or early death; by deferred annuities they can insure comfort for old age and remove every risk of the workhouse; sick societies will insure them from the pressure of prolonged illness; and he who can further accumulate a sum in the Post Office or other savings banks can meet a period of bad trade, or can emigrate at will. It is only by accumulation and providence in some of these modes that he who depends upon his labour can be raised above the chances and almost inevitable vicissitudes of life. Weekly wages cannot be depended on; and it is only in becoming small capitalists that the working-classes will acquire the real independence from misfortune, which is their true and legitimate object.

XII.

Before concluding I may say that it is an unpleasant circumstance concerning discussions upon capital and labour, that the sympathies and antipathies of large numbers of men are involved in the question, and that it is hardly possible to discuss the subject without prejudice, or at least the imputation of prejudice. I am much inclined to fear that some who are the professed teachers of the science, and should view it as a matter of science in the most unbiassed manner, allow their sympathies to lead their judgment. It speaks much indeed for the character of English statesmen that the three greatest popular leaders of our time—Cobden, Bright, and Gladstone—have been the foremost to uphold the doctrines of free trade and free labour, whether they were popular or unpopular. The emphatic condemnation which Mr. Gladstone pronounced at Oldham, upon some of the more common objects and rules of Trades Unions stamped him, it seemed to me, as one of the most upright and fearless of ministers. It is the statesmen of England, rather than the political economists, who have upheld the inestimable principle of freedom in labour.

For my own part I do think that the principle of unionism, so far as relates to the regulation of wages, is fundamentally and entirely wrong, but I see no reason why I should therefore be supposed to have less sympathy with working-men. I believe that they are striving earnestly and honourably to raise their own condition, but that they take the wrong way to do it. From wrong they must ultimately come to right, and I have no doubt that they will achieve more than they look for. But this right road will not be in struggling vainly against capital, but in making capital their ally. If the masters do not take the initiative and adopt the partnership principle, the present evil state of affairs must be much prolonged; but I do not doubt that the hard, sharp line which now exists between capital and labour will ultimately vanish. Partnerships of industry are, no doubt, an innovation, having hitherto existed only in exceptional trades and rare experiments; but I assert confidently that they are an innovation of which the utility is evident and the necessity urgent. They are required, not by the restless desire of change, but as the natural sequel of great revolutions in our social condition. Our great factories and our great army of artizans have sprung up within one hundred years, and it is quite to be expected that so vast an innovation should lead to other innovations. The lives of ourselves and our fathers and our grandfathers have been passed in the midst of peaceful revolutions, such as society has not known before; and it is most legitimate and proper that the artizan should seek to work yet another revolution—in his own moral and material condition. Already the artizan is less below his wealthy employer than he is above the poor dependent labourer of former days; and I do believe that we only need to throw aside some old but groundless prejudices, in order to heal the discords of capital and labour, and to efface in some degree the line which now divides employer and employed.

DISCUSSION.

Thomas Hughes, Esq., Q.C., M.P., in the Chair.

The Chairman said he felt with the lecturer, that the time was come when the question no longer depended upon theory, but upon experience. This experience had been detailed to them. He had himself been connected with the experiments that had been tried, and had been an original shareholder in Briggs's Colliery. He had gone down to their first meeting. In the late summer of 1865 the company had been formed, and in the early autumn of 1866 the first annual meeting had been held, at which he was present, and saw the results of the first year's working. It was extremely interesting to see the effect produced by the working of the principle in so short a time. The state of things previously had been extremely serious; there had been constant disputes and social war between masters and men for many months, and the collieries had been kept at work under the supervision of the police. He could not say that all doubt had at once disappeared; there was some feeling of doubt among the men whether the scheme was not one for putting more money into the pockets of the employers. Every man who chose to take out a penny book, and to have his wages entered in it, was entitled to a share in the annual division; and though the number of men was about 1000, only about 100 of them had sufficient confidence in the scheme to take out these books. He believed the great effect was produced by the first annual meeting, when the 100 men all came out each with a considerable bonus: this was what had made the new plan popular with the men. Since then matters had gone on from better to best, and now every man and boy on the works took good care to take out his book and to have his wages regularly entered. The coal trade during the past two years had been, in general, very dull and bad; almost as depressed as the iron trade; nevertheless, in spite of that depression, the prosperity of these collieries had continued, and there had only been a difference between the two years of one-half per cent. in the terms. The lecturer had also anticipated some of the advantages of the industrial partnership system. He had referred to the prophecies of Mr. Babbage, one of which was, that the best workmen would be glad to work on a principle of the kind. This had been justified within the last few weeks. He had gone down a few weeks since to the Cleveland iron district as arbitrator between the masters and the men, on a question of the advance of wages. There he had found that the Messrs. Briggs had determined on starting a new experiment in the iron trade in that district. The senior partner had had great jute works in Dundee, and, being an enthusiast in the matter of industrial partnerships, had been very anxious to convert the works at Dundee into one, but had not been able to persuade his partners to do so, probably because Scotchmen were very hard to convince. He had therefore determined to give up his partnership and to come to the Cleveland district to start these ironworks. The chief secretary of the Trades Unions there had told him (Mr. Hughes) that since it was known that the experiment was to be tried, all the best workmen had said that they would come and work for him, while many (and some of these had saved as much as £200) had expressed a wish to invest capital in the undertaking. He had been offered a complete staff of workmen all teetotalers. Thus it was clear that the northern workmen appreciated this movement. He could also confirm the remarks of the lecturer on another point. When he was down there, some fourteen or fifteen men sat at one side opposite to fourteen or fifteen masters at the other, and the only factory in the district not represented was that of the Messrs. Fox, Head & Co., and from them they had a communication, stating that they had just divided a bonus for the past year and were perfectly contented. He might also mention as an instance of faith that was felt in the system of the Messrs. Briggs, that Mr. Briggs had had offers from many of the co-operative societies of capital for his new undertaking. The Halifax Society had applied for shares to the amount of £10,000. The lecturer had alluded to the Report of the Trades Union Commissioners. He (Mr. Hughes) was not responsible for that report, inasmuch as he, with another member, had been obliged to dissent from it, and had presented another Report to Her Majesty. He agreed with the lecturer in thinking that the principle of this scheme had not been understood or appreciated by the Commission, and thought the Report must have done harm in many places. He did not think the system had been appreciated either by masters or men, and he hoped this lecture would be extensively circulated, and would lead to a better understanding of the subject. He thought he need not say much on the subject of Trades Unions, as he saw that they were exceedingly well represented in the room, but he must say a few words in reference to one point, namely, as to the exclusive system of industrial partnerships. The Messrs. Briggs had, it was true, absolute power, but they were now by no means fearful of the admission to some share of power of the people who were working with them, and they had established a committee of men, who met to advise them, and who had suggested many valuable improvements. They had also given the workingmen the power of sending one director to the board, so that one of the five directors was now a working shareholder in the mine. He quite agreed with the lecturer that this system offered the best solution which had yet been arrived at of the great labour question. He quite felt that the system of arbitration was only a sort of stopgap, and could only bring about a truce, but never a satisfactory peace. To have arbitration it was necessary to have two hostile organisations. While the men were kept in ignorance of the details of the business, and could only form a guess at the amount of the master's profits, a permanent peace could not be hoped for, such as he thought would come about by the development of the industrial partnership system. Those that had tried it deserved well of their country. They had done more for the prosperity of England, and for its establishment on a firm basis, than many who had made more noise.

Mr. Hughes having to leave, Mr. Frederic Hill was called to the chair.

Mr. Pare said that he doubted whether the division of the profits had been made in the most equitable manner. If the capitalist had, in the first instance, secured his 10 per cent. the workman ought to divide, not half, but the whole of the profits above that amount. It was not the workman's business to regulate production. Exchanges and monetary arrangements were at present in a perfect state of chaos, and we had panics regularly every ten years for want of a scientific system of the exchange of productions. The workmen could not be expected to bear any losses which accrued from production or exchange.

Mr. Dudley Baxter said the colliery trade was one very favourable for the trial of this experiment, because labour was so large an element in the work; and it was a great thing for men to be able to work in that way. But suppose they took the silk or cloth manufacture, or any that depended upon competition with others abroad, or upon other circumstances, and came to the time when for months together sales could not be made; how were they to do? Or suppose a coal-pit took fire, and the business was thus stopped, were the profits on capital to go on? Most likely this would put an end to the partnership, and the men would go elsewhere. The principle was applicable to some portions of industry, but could not be applied to all labour. One principle would be applicable to one branch, and another must be worked in another place, where the conditions of labour were different.

Mr. Lamport thought the great difficulty of applying the principle to a great variety of trades was, that it had never been tried. He had been largely engaged in the cotton trade, as well as in ship-building, and he ventured to say that at the present moment it would be impossible to apply this principle to these trades. It might, however, ultimately be so applied. In the cotton manufacture it would not be very difficult, perhaps, to calculate every week the amount of profit or loss by taking the market prices of raw cotton, and often yarn or cloth manufactured; but there was not one manufacturer in a hundred who chose to rest his chance of profit upon the difference between raw and manufactured material. They always speculated, and how was this point to be regulated? He apprehended there must be a division between the profits of the merchant and those of the manufacturer. There must, in fact, be a difference of profit in every business. In the cotton business you could not take a fair average on a term of less than ten years.

Mr. Applegarth believed that many of the good things detailed by the lecturer were not entirely attributable to the principle of industrial partnerships. All that could be said in its favour, could also be said of the Nottingham stocking weavers, both as regarded the establishment of peace and the material advantage of increased wages. The lecturer had spoken of the attempts of the unions to enforce a uniform rate of wages throughout the trade, but they never had attempted to do so. They fixed a minimum rate, and merely said a skilled workman should receive this, but they did not in any way prevent his obtaining more. The lecturer had prophesied the bankruptcy of the unions, but he (Mr. Applegarth) said they would not break. He admitted the ten years' existence of the Amalgamated Carpenters was not enough to justify this assertion; perhaps the twenty years of the Amalgamated Engineers was scarcely sufficient, but there was the society of the Ironfounders, which had existed for fifty-seven years upon the same principles, and he thought this experience was worth more than all the calculations of actuaries. He would ask the lecturer to point out where working-men were earning £100 a year. In the carpenters' trade, which was one of the most skilled in the country, the wages were 28s. per week, and he thought that not one man in five had fifty-two weeks' work in the year. This brought the amount under £72 a year. He admitted that their own vices and failings were accountable for many of the grievances from which they suffered. It had been said that a great difficulty arose from their want of knowledge; but where did the practical knowledge come from for conducting the industries of the country? All the skill in the building trade had come from the bench side, and the masters in this business had been working-men. Some years ago he had been much in favour of industrial partnerships, because he thought everything would be of value that would give the workman an insight into the difficulties of employers; but he was strongly of opinion that the plan would cut two ways, and he feared that it would content the working-men with their position, and in this way be mischievous. He believed it would apply to many branches but not to others; but he had a faith, moreover, that the time would come when large capitalists would conduct business in the country with a more true and proper regard to the interests of their workmen than had been the case.

Dr. Hodgson said they had had an honest as well as an intelligent man speaking to them, and telling them what he had seen, for the good of all classes in society. He agreed with the lecturer with respect to arbitration; it showed that there was something unsatisfactory in the state of things. Suppose that they were told that arbitration was an excellent mode of reconciling differences between husband and wife, would they consider that an evidence of the satisfactory nature of the marriage relations? There ought to be no more occasion for arbitration between employer and workman than between husband and wife. He had no idea that this principle of partnerships would supersede the principles of free trade and competition. As to the amount of the sum fixed as the first charge on the business, that was not a matter of equity or inequity; it was simply a matter of pure arrangement between the employers and the employed. There was no principle in the matter, just as there was no principle concerned in a working-man's having 30s. a day, or 30s. a week; it was a pure matter of arrangement dependent on the labour market.

Professor Jevons did not think there was much difference between himself and Mr. Applegarth as to the rate of wages; some workmen, such as the iron-puddlers, made much more than £100. As to the breaking of Trades Unions, he had said that they either do so, or place a burden upon posterity. If a colliery took fire, and the works came to an end, the loss could not be charged upon future profits. Certain allowances had to be made for risks of an extraordinary character, and this was one of them. In the company which Briggs was now organising he proposed to make 15 per cent. the minimum profit, a rate with which the men were perfectly satisfied, so that he in fact promised a return of 15 per cent. on the capital. No doubt this question was a more difficult one, and it would be only in the course of time that it would be worked out so that it might be extended to various trades. In the cotton trade there were great profits and great losses, and it was not fair to throw either entirely upon the workman. However, he saw no difficulty in spreading these over a series of years.

Mr. Frederic Hill, in asking the meeting to record a vote of thanks to the lecturer, took occasion to say that a friend of his some time since, who resided at Singapore, wanted a house built, and applied as advised to a Chinese, who made an agreement to do the work for a certain sum. He found out shortly that all the men employed had a share in the profits of the undertaking, and every man took care not only to do as much work as possible, but to see that his next neighbour did his work well also. On inquiry he found that this system is universal in China, and that every shopman there has a share in his master's profits, so that the Chinese had been before us in this matter of industrial partnerships, as well as in so many other matters.

[∗]Essay on Innovation.

[∗]“Eleventh and Final Report of the Trades Union Commissioners,” p. xxviii.

[∗]“Economy of Manufactures,” p. 259.

[†]“Principles of Political Economy.” Book IV., chap. vii., sec. 5, 3rd ed., vol. II., p. 335.

[∗]“Lecture upon Strikes and Lockouts,” Sheffield Daily Telegraph, 10th March, 1870.

[∗]“Report on the Formation, Principle, and Operations of the System of Industrial Partnership, adopted by Henry Briggs, Son & Co., Wakefield.”

[∗]“Contemporary Review,” January, 1882.