June last, stated to his audience: "You all know that between Manchester and India there has been an elimination of a great many middlemen. Now, in London that is the case to a still more extraordinary extent. Let me tell you how the cotton trade, for instance, used to be conducted between New Orleans and the interior of Germany. The New Orleans man consigned his cotton to New York or to a New York house, the New York house consigned it to Liverpool, Liverpool to London, London to Hamburg, and Hamburg to spinners in the interior of Germany. But now the German spinner goes direct to New Orleans, the agent visits him in his home, and a number of intermediate profits and commissions are swept away." Mr. Goschen also makes a very wise remark when speaking of the comparatively small profits which have been made in manufacturing: "It is true of a great portion of the country (Great Britain) that trade in which profits have been small has been sound, and comparatively less has been lost by bad debts."

A careful examination in all directions, so far as production is concerned, whether of agricultural or manufactured products, leads clearly to the conclusion that production increases faster than population, so that one of the great economic problems in this matter is, not how shall production be made to keep pace with population, but how shall production be more equably distributed. Faulty distribution, then, and not over-production, is the truer term, but to the community involved over production more clearly expresses the difficulty.

Coöperation, as applied to distribution, might remedy this difficulty by reducing the share secured by the party who handles the yard of cloth, but it would in no wise raise the amount received by the weaver for weaving the same goods; so that coöperation, in order to effect the best results to the two forces, the producer and the consumer, must join the two in the same transaction; that is, coöperation, in order to be complete, must, as a principle, surround production as well as consumption. As a partial remedial agency, coöperative distribution, when successful, is influential. Its completed relationship involvesProfit-sharing.-This is not only an attractive but a most instructive theme. It is the whole principle of coöperation applied to the production of goods. Simple, pure coöperation cannot succeed when applied to manufacturing, for two reasons: First, under it the worker must wait till the last for the profits which may come to him in the place of wages, and if no profit comes his labor has gone for naught; on the other hand, the management would receive its share in salary at the outset, as a rule. In the second place, a score of men, operating on the simple basis of each doing a full day's work on some kind of production, cannot make such coöperation a success, because some out of the score will find themselves doing more than others, while those who produce less receive the same amount of profits. Human nature, individual development, skill, ambition, are opposed to such coöperation. The advantage the present system has over simple coöperative pro

duction is that wages are paid from the outset and management waits for its compensation till the goods are sold and the books balanced. These fundamental difficulties prevent simple coöperation from being considered seriously as a remedy for industrial depressions or of labor troubles. This is the crude popular conception of coöperation in production as a plan to get rid of the employer and the wage system. The workers under it are supposed to employ a manager to be subject to their will, and, if necessary, hire capital at usual rates of interest. Then, pooling their services, they are to divide among themselves whatever profit there may be after fixed charges are paid. This scheme is purely visionary and utterly impracticable. Workers cannot wait till an indefinite future for their reward, neither can they run the risk of getting no reward at all. They must be guaranteed something, to be paid at frequent intervals, and the only party that can so guarantee is the capitalist employer, who alone can run risks and wait indefinitely for rewards. The capitalist employer may be an association of the workers themselves, but it is none the less an employer, a moral personality, possessing all the powers over individual workers that an individual employer would have. The more efficient and prosperous members become inevitably the controlling power in the association, and they will not consent to divide profits irrespectively of the value of services or to guarantee employment to inefficient members. The valid idea in this crude conception of coöperation is that in the degree that workmen develop the necessary qualifications and acquire the requisite capital they may become self-employers, and that, whether as self-employers or other wise, they should as workers participate in the profits of industry in proportion to their efficiency. This ideal is in process of realization through various forms of coöperative organization and profit-sharing. Industrial partnership instituted by capitalist employers, and coöperation instituted by capital-owning workmen, work toward the same result from different directions. Each has its own proper field, and each will probably acquire increasing prominence in social economy.a

What is known as industrial copartnership, involving profit-sharing and embodying all the vitality there is in the principle of coöperation, offers a practical way of producing goods on a basis at once just to capital and to labor, and one which brings out the best moral elements of the capitalist and the workman. This system has been tried in many instances, and nearly always with success. The leading experi ments in Europe are well known, among them being the system adopted by Leclaire, a Parisian house painter; the methods in vogue with the Paris and Orleans Railway Company; the industrial partnership established by M. Godin at Guise, France; the experiments of Messrs. Briggs Brothers in Yorkshire, England, and other places. In the United States but little has been done in this direction, but wherever a Cf. " 'Profit-sharing," Seventeenth Annual Report of the Massachusetts Bureau of Statistics of Labor,

the principle has been tried there have been three grand 'results: Labor has received a more liberal share for its skill, capital has been better remunerated, and the moral tone of the whole community involved raised. Employment has been steadier and more sure. The interest

of all has been given for the general welfare. Each man feels himself more a man. The employer looks upon his employés in the true light, as associates. Conflict ceases and harmony takes the place of disturb ances. Sometimes the experiments in profit-sharing have been abandoned for one cause or another, but so long as they have existed no strikes have occurred, and no labor troubles have been experienced. This feature, as a suggested remedy for industrial depressions, has so much in it of hope for the future that specimen articles of agreement, which have been adopted by manufacturing concerns, are printed for the benefit of all:

"First. On all orders executed during the year 1886, commencing January 1 ultimo, both capital and labor in proportion to the amounts or values contributed by each shall share in the net profits made on such orders during the year.

"Second. The net profits shall be determined in the following manner, viz: Out of the gross receipts, or from the capital employed shall be drawn, first, the wages of the men employed as journeymen, whether by day's work or piece-work, at the rates mutually agreed upon or otherwise established, which shall be paid monthly. Second, all other expenses of conducting the business, including superintendence, trav elling expenses, clerk hire, taxes, insurance, and legal interest on the capital employed, shall then be deducted and paid out of the gross profits, and the balance remaining shall be treated as the net profits from which a dividend shall be declared and paid in manner and form as hereinafter provided.

"Third. The net profits having been determined, the entire amount shall be divided into three parts, one part to be appropriated and paid as a dividend to labor, one part to be appropriated and paid as a dividend to capital, and one-third to be reserved as a guarantee fund, to which fund shall be charged all losses by bad debts, or credits given for materials and labor during the year.

"Fourth. The labor dividend shall be made and paid before any div idend is paid to capital, and such payment shall be made at the end of each fiscal year, or as soon thereafter as the books can be written up, an inventory taken, and the net profits determined.

"Fifth. When the net profits have been determined as aforesaid, the same may be verified by a competent accountant or auditor, to be selected and agreed upon by the parties in interest; and when such accountant shall certify that the net profits have been correctly and fairly determined, then the dividends may be paid; but such accountant or auditor shall not be at liberty to disclose or make public any other facts concerning the business audited than a simple verification of the accounts and the sum total of the net profits for the year, available for the purpose of a dividend.

"Sixth. As the labor dividend is intended for labor only, no officer, superintendent, overseer, clerk, agent, or other employé drawing a salary, or however otherwise paid, nor any contractor or subcontractor, who, for their own account and profit, contract or agree for a “lump

sum" to do and perform the whole or certain specific parts of the work upon a building, monument, or other structure, such work being outside of and not subject to an established or agreed bill of prices, either for day's work or piece-work, therefore no such officer, superintendent, clerk, apprentice, or contractor will participate in any dividend paid to labor as herein before stated.

"Seventh. No workman who during the year shall have been discharged for good and sufficient cause, such as drunkenness, insubordination, bad workmanship, etc., or who leaves the employment of the company without the consent of the superintendent in writing, shall be entitled to participate in any dividend of profits for the year during which such discharge has taken place..

"Eighth. No workman shall be deprived of his dividend who has been discharged arbitrarily or without good cause, or who has been discharged for the reason that the superintendent has not sufficient orders in hand to justify his further employment.

Ninth. The value of all labor contributed to the business for the year shall, for the purpose of a dividend, be treated as so much capital, which capital, having been returned to the laborer in the form of wages, is still entitled to a share of the profits in just proportion to the amount contributed during the year in which such profits are made.

"Tenth. The true value of all labor contributed as aforesaid shall be determined by the amounts earned, and credited to each workman as wages for labor performed during the year; and the dividend to each will be declared upon the exact amount thus earned and credited to his individual account. For example, suppose the entire amount of capital employed to be $100,000, and the entire amount paid for labor during the year to be $150,000. Such an amount of capital employed and wages paid ought, with the added cost of transportation and delivery, to insure an output of $400,000 and a net profit of $25,000. Of this amount one-third, or $8,333.33, would be credited to guarantee amount to provide for an assumed loss of about 2 per cent. on the entire output; the balance would remain for a dividend to capital and labor in proportion to their respective contributions, in this example: Two-thirds to capital, $6,666.67, and three-fifths to labor, $10,000, or 6.66 per cent. on cach; thus the workman whose wages for the year amounts to $1,000 would have a dividend of $66.66, and he whose wages amounts to $600 would have $39.96. This dividend to labor would also be materially increased, owing to the fact that all those who take work by contract, superintendents, clerks, apprentices, etc., do not participate; so that if each man's labor be treated as so much capital contributed to the business, that capital is not only returned to its owner as wages at the end of each month, but at the end of the year it is again reckoned and rewarded with a high rate of interest.

"Eleventh. At the end of the year all outstanding accounts and bills receivable will be treated as good under the guarantee account, and therefore available in determining the net profits. If the guarantee account does not prove to be sufficient to cover the losses the amount must be made up by the stockholders, but when it is more than sufficient the surplus will belong to the stockholders.

"Twelfth. The control of the business must necessarily be in the hands of the stockholders. Men employed every day in mechanical labor cannot watch the markets, or possess the aptitude for business management on a large scale which is requisite to success; but they can do much in stopping the leaks caused by inefficient and bad workman

"Thirteenth. All work done or money earned by the employment of machinery will be counted to the credit of labor and capital alike, and the profits made thereby will be subject to the same rule for distribution as for profits otherwise made.

"Fourteenth. No officer, director, or stockholder shall receive any salary or compensation, except for services actually rendered, and time actually spent in the service of the company, all of which shall be as fully stated as the amount of service contributed by any other person in the employment of the company.

"Fifteenth. The rate of wages per diem, the bill of prices for piece-、 work, and the number of hours to constitute a day's work shall be determined by mutual agreement on or before the 1st day of January in each year, and any disagreement which may arise during the year be tween the superintendent and workmen in regard to the same shall be settled by arbitration.

"Sixteenth. The rate of wages per diem and the bill of prices for piece-work shall not be reduced by the superintendent to affect any contract on hand, or taken upon the rate of wages or bill of prices prevailing at the time such contract was made, neither shall the rate of wages or bill of prices be advanced by the workmen to affect such contracts, and if so advanced the difference in cost by reason thereof may be adjusted in making up the dividends."

That inquirers may have the advantage of the experience of one of the oldest coöperative stock associations in the country, the by-laws of the Somerset (Mass.) Foundery are given:

"ARTICLE 1. This company shall be known by the name and title of the Somerset Coöperative Foundery Company. The business of this company shall be the manufacturing of iron castings.

"ART. 2. The capital stock of this company shall consist of $15,000, divided into one hundred and fifty shares, of $100 each, and no person shall be permitted to hold an amount to exceed ten shares.

"ART. 3. All stock shall be paid for within thirty days from the time of subscribing, and no one shall be a member of this association or entitled to vote in its meetings until he shall have paid an amount equal to one share.

"ART. 4. The salary of the officers shall be fixed at the yearly meetings.

"ART. 5. The officers of this company shall consist of a president, treasurer, and of not more than thirteen directors, who shall be styled a board of managers; they shall also have a corporation clerk and foreman.

"ART. 6. The board of managers shall have power to make such prudential by-laws as they may deem proper for the management and disposition of the capital stock and business affairs of the company, not inconsistent with the laws of this state, as they may elect, and of the prescribing the duties of officers.

"ART. 7. It shall be the duty of the president to preside at all meetings of the directors and stockholders; he shall make and execute all contracts as directed by the board of managers; he shall be the authorized agent of the company, and his signature, when attested by the clerk, shall be the bond of the company.

"ART. 8. The clerk shall keep a correct record of the meetings of the stockholders and the board of managers; he shall be chairman of the finance committee, and perform such other duties as the board of managers may prescribe.