PROFIT SHARING IN THE UNITED STATES 693
mostly unskilled, in the factory, and about lOO in the offices. The plan of division, as adopted in 1890, is to pay to employes the same dividend on wages as is paid on stock. This has averaged a 12 per cent, dividend since the plan was adopted. These dividends are paid semi-annually. All employes, after being in the employ of the company for three months, share in the dividends upon the same basis. Fully 98 per cent, of the employes now participate. The company reserves the right to deny the dividend to employes for cause, but the amount of this unpaid dividend must be divided among the other laborers, and does not go to the stockholders of the company. Any waste or loss of material, due to carelessness or neglect upon the part of an employe, is deducted from the negligent employe's dividend in favor of the company. The company encourages stock holding by the employes, and at present between seventy and eighty shares are so held. An insurance fund, a library and reading room, a company physician, etc. are provided by the company. The company also pays wages to injured employes. For the first few years the plan was not a success from a purely business point of view. But it is now held that the saving under profit sharing is largely in excess of the sums paid to wage earners as profits. This saving is one of time, of diminished waste of material, in making a better quality of product, in keep- ing men of experience and in oversight. Owing to the grade of labor employed, the success of profit sharing has here been a matter of education.
John Wanamaker, a mercantile firm, of Philadelphia, Pa., adopted in 1887, a method of profit sharing combined with a system of percentage on sales, long service pensions, and inde- terminate bonus. On account of this complication of system, this experience is of little value as a test of profit sharing. Several thousand employes are benefited by the plan.
The Scott & Holston Lumber Company, of Duluth, Minn., adopted a division of profits based on wages in 1888. The results of their experience are thus stated :
For the last two years there have been no profits in our business