who, seeing their interests neglected, believe themselves entitled to suppose that workmen are constantly conspiring to ruin those from whom they derive their livelihood. If the journeyman were sure of constant employment, his position would in some respects be more enviable than that of the master, because he is assured of a certain amount of day's wages, which he will get whether he works much or little. He runs no risk, and has no other motive to stimulate him to do his best than his own sense of duty. The master, on the other hand, depends greatly on chance for his returns: his position is one of continual irritation and anxiety. This would no longer be the case to the same extent, if the interests of the master and those of the workmen were bound up with each other, connected by some bond of mutual security, such as that which would be obtained by the plan of a yearly division of profits."

His

Even in the first year during which M. Leclaire's experiment was in complete operation, the success was remarkable. Not one of his journeymen who worked as many as three hundred days, earned in that year less than 1500 francs, and some considerably more. highest rate of daily wages being four francs, or 1200 francs for 300 days, the remaining 300 francs, or 127., must have been the smallest amount which any journeyman, who worked that number of days, obtained as his proportion of the surplus profit. M. Leclaire describes in strong terms the improvement which was already manifest in the habits and demeanour of his workmen, not merely when at work, and in their relations with their employer, but at other times and in other relations, showing increased respect both for others and for themselves. 1M. Chevalier, in a work published in 1848,* stated on M. Leclaire's authority, that the increased zeal of the workpeople continued to be a full compensation to him, even in a pecuniary sense, for the share of profit which he renounced in their favour. And M. Villiaumé, in 1857,† observes :-" Though he has always kept himself free from the frauds which are but too frequent in his profession, he has always been able to hold his ground against competition, and has acquired a handsome competency in spite of the relinquishment of so great a portion of his profits. Assuredly he has been only thus successful because the unusual activity of his workpeople, and the watch which they kept over one 1 [Added in 2nd ed. (1849).]

ઃઃ

* Lettres sur l'Organisation du Travail, by Michel Chevalier, lettre xiv. 2 [The concluding sentence of this paragraph, together with the next paragraph and the examples quoted in the note, were added in the 5th ed. (1862).] † Nouveau Traité d'Economie Politique.

another, have compensated him for the sacrifice made in contenting himself with only a share of the gain." *

The beneficent example set by M. Leclaire has been followed, with brilliant success, by other employers of labour on a large scale at Paris; and I annex, from the work last referred to (one of the ablest of the many able treatises on political economy produced by the present generation of the political economists of France), some signal examples of the economical and moral benefit arising from this admirable arrangement.†

* [1865] At the present time M. Leclaire's establishment is conducted on a somewhat altered system, though the principle of dividing the profits is maintained. There are now three partners in the concern: M. Leclaire himself, one other person (M. Defournaux), and a Provident Society (Société de Secours Mutuels), of which all persons in his employment are the members. (This Society owns an excellent library, and has scientific, technical, and other lectures regularly delivered to it.) Each of the three partners has 100,000 francs invested in the concern; M. Leclaire having advanced to the Provident Society as much as was necessary to supply the original insufficiency of their own funds. The partnership, on the part of the Society, is limited; on that of M. Leclaire and M. Defournaux, unlimited. These two receive 6000 francs (240l.) per annum each as wages of superintendence. Of the annual profits they receive half, though owning two-thirds of the capital. The remaining half belongs to the employés and workpeople; two-fifths of it being paid to the Provident Society, and the other three-fifths divided among the body. M. Leclaire, however, now reserves to himself the right of deciding who shall share in the distribution, and to what amount; only binding himself never to retain any part, but to bestow whatever has not been awarded to individuals, on the Provident Society. It is further provided that in case of the retirement of both the private partners, the goodwill and plant shall become, without payment, the property of the Society. + "In March 1847, M. Paul Dupont, the head of a Paris printing-office, had the idea of taking his workmen into partnership by assigning to them a tenth of the profits. He habitually employs three hundred; two hundred of them on piece work, and a hundred by the day. He also employs a hundred extra hands, who are not included in the association. The portion of profit which falls to the workmen does not bring them in, on the average, more than the amount of a fortnight's wages; but they receive their ordinary pay according to the rates established in all the great Paris printing offices; and have, besides, the advantage of medical attendance in illness at the expense of the association, and a franc and a half per day while incapacitated for work. The workmen cannot draw out their share of profit except on quitting the association. It is left at interest (sometimes invested in the public funds), and forms an accumulating reserve of savings for its owners.

"M. Dupont and his partners find this association a source of great additional profit to them: the workmen, on their side, congratulate themselves daily on the happy idea of their employer. Several of them have by their exertions caused the establishment to gain a gold medal in 1849, and an honorary medal at the Universal Exhibition of 1855: some even have personally received the recompense of their inventions and of their labours. Under an ordinary employer, these excellent people would not have had leisure to prosecute their inventions, unless by leaving the whole honour to one who was not the author of them but, associated as they were, if the employer had been unjust, two hundred men would have obliged him to repair the wrong.

1 Until the passing of the Limited Liability Act, it was held that an arrangement similar to M. Leclaire's would have been impossible in England, as the workmen could not, in the previous state of the law, have been associated in the profits, without being liable for losses. One of the many benefits of that great legislative improvement has been to render partnerships of this description possible, and we may now expect to see them carried into practice. Messrs. Briggs, of the Whitwood and Methley collieries, near Normanton in Yorkshire, have taken the first step. They now work these mines by a company, two-thirds of the capital of which they themselves continue to hold, but undertake, in the allotment of the remaining third, to give the preference to the "officials and operatives employed

"I have visited this establishment, and have been able to see for myself the improvement which the partnership produces in the habits of the workpeople.

"M. Gisquet, formerly Prefect of Police, has long been the proprietor of an oil manufactory at St. Denis, the most important one in France next to that of M. Darblay, of Corbeil. When in 1848 he took the personal management of it, he found workmen who got drunk several days in the week, and during their work sung, smoked, and sometimes quarrelled with one another. Many unsuccessful attempts had been made to alter this state of things: he accomplished it by forbidding his workmen to get drunk on working days, on pain of dismissal, and at the same time promising to share with them, by way of annual gratuity, five per cent of his net profits, in shares proportioned to wages, which are fixed at the current rates. From that time the reformation has been complete, and he is surrounded by a hundred workmen full of zeal and devotion. Their comforts have been increased by what they have ceased to spend in drink, and what they gain by their punctuality at work. The annual gratuity has amounted, on the average, to the equivalent of six weeks' wages.

M. Beslay, a member of the Chamber of Deputies from 1830 to 1839, and afterwards of the Constituent Assembly, has founded an important manufactory of steam engines at Paris, in the Faubourg of the Temple. He has taken his workpeople into partnership ever since the beginning of 1847, and the contract of association is one of the most complete which have been made between employers and workpeople.

The practical sagacity of Chinese emigrants long ago suggested to them, according to the report of a recent visitor to Manilla, a similar constitution of the relation between an employer and labourers. "In these Chinese shops (at Manilla) "the owner usually engages all the activity of his countrymen employed by him in them, by giving each of them a share in the profits of the concern, or in fact by making them all small partners in the business, of which he of course takes care to retain the lion's share, so that while doing good for him by managing it well, they are also benefiting themselves. To such an extent is this principle carried that it is usual to give even their coolies a share in the profits of the business in lieu of fixed wages, and the plan appears to suit their temper well; for although they are in general most complete eye-servants when working for a fixed wage, they are found to be most industrious and useful ones when interested even for the smallest share. -McMicking's Recollections of Manilla and the Philippines during 1848, 1849, and 1850, p. 24. [This paragraph was added in the 6th ed. (1865); and it was said that Messrs. Briggs have issued a proposal to work "; changed to “They now work" &c., in the 7th ed. (1871).]

in the concern ;" and, what is of still greater importance, whenever the annual profit exceeds 10 per cent, one-half the excess is divided among the workpeople and employés, whether shareholders or not, in proportion to their earnings during the year. It is highly honourable to these important employers of labour to have initiated a system so full of benefit both to the operatives employed and to the general interest of social improvement: and they express no more than a just confidence in the principle when they say, that "the adoption. of the mode of appropriation thus recommended would, it is believed, add so great an element of success to the undertaking as to increase rather than diminish the dividend to the shareholders." 1

2 § 6. The form of association, however, which if mankind continue to improve, must be expected in the end to predominate,

1 [For the abandonment of the Briggs experiment in 1875 see Schloss, Methods of Industrial Remuneration (2nd ed.), p. 282.]

2 [The opening paragraphs of this section and the account of French cooperative societies which follows were added in the 3rd ed. (1852). At the same time the following paragraph and section of the original (1848) text were removed :

"Under this system," of M. Leclaire, "as well as under that recommended by Mr. Babbage, the labourers are, in reality, taken into partnership with their employer. Bringing nothing into the common concern but their labour, while he brings not only his labour of direction and superintendence but his capital also, they have justly a smaller share of the profits; this, however, is a matter of private arrangement in all partnerships; one partner has a large, another a small share, according to their agreement, grounded on the equivalent which is given by each. The essence, however, of a partnership is obtained, since each benefits by all things that are beneficial to the concern, and loses by all which are injurious. It is, in the fullest sense, the common concern of all.

"§ 6. To this principle, in whatever form embodied, it seems to me that futurity has to look for obtaining the benefits of co-operation, without constituting the numerical majority of the co-operators an inferior caste. The objections that apply to a co-operative society,' in the Communist or Owenite sense, in which, by force of giving to every member of the body a share in the common interest, no one has a greater share in it than another, are not applicable to what is now suggested. It is expedient that those, whose performance of the part assigned to them is the most essential to the common end, should have a greater amount of personal interest in the issue of the enterprise. If those who supply the funds, and incur the whole risk of the undertaking, obtained no greater reward or more influential voice than the rest, few would practise the abstinence through which those funds are acquired and kept in existence. Up to a certain point, however, the principle of giving to every person concerned an interest in the profits is an actual benefit to the capitalist, not only (as M. Leclaire has testified) in point of ease and comfort, but even in pecuniary advantage. And after the point of greatest benefit to the employers has been attained, the participation of the labourers may be carried somewhat further without any material abatement from that maximum of benefit. At what point, in each employment of capital, this ultimatum is to be found, will one day be known and understood from experience; and up to that point it is not

is not that which can exist between a capitalist as chief, and workpeople without a voice in the management, but the association of the labourers themselves on terms of equality, collectively owning the capital with which they carry on their operations, and working under managers elected and removable by themselves. So long as this idea remained in a state of theory, in the writings of Owen or of Louis Blanc, it may have appeared, to the common modes of judgment, incapable of being realized, and not likely to be tried unless by seizing on the existing capital, and confiscating it for the benefit of the labourers; which is even now imagined by many persons, and pretended by more, both in England and on the Continent, to be the meaning and purpose of Socialism. But there is a capacity of exertion and self-denial in the masses of mankind, which is never known but on the rare occasions on which it is appealed to in the name of some great idea or elevated sentiment. Such an appeal was made by the French Revolution of 1848. For the first time it then seemed to the intelligent and generous of the working classes of a great nation that they had obtained a government who sincerely desired the freedom and dignity of the many, and who did not look upon it as their natural and legitimate state to be instruments of production, worked for the benefit of the possessors of capital. Under this encouragement, the ideas sown by Socialist writers, of an emancipation of labour to be effected by means of association, throve and fructified; and many working people came to the resolution, not only that they would work for one another, instead of working for a master tradesman or manufacturer, but that they would also free themselves, at whatever cost of labour or privation, from the necessity of paying, out of the produce of their industry,

unreasonable to expect that the partnership principle will be, at no very distant time, extended.

"The value of this organization of industry,' for healing the widening and embittering feud between the class of labourers and the class of capitalists, must, I think, impress itself by degrees on all who habitually reflect on the condition and tendencies of modern society. I cannot conceive how any such person can persuade himself that the majority of the community will for ever, or even for much longer, consent to hew wood and draw water all their lives in the service and for the benefit of others; or can doubt, that they will be less and less willing to co-operate as subordinate agents in any work, when they have no interest in the result, and that it will be more and more difficult to obtain the best work-people, or the best services of any work-people, except on conditions similar in principle to those of M. Leclaire. Although, therefore, arrangements of this sort are now in their infancy, their multiplication and growth, when once they enter into the general domain of popular discussion, are among the things which may most confidently be expected."]