CAPITALISM DONS THE ROBES OF THE GOOD SAMARITAN
Capitalism Dons the Robes of the Good Samarital Newer Defence of the Profit System Under Micrope At League for Industrial Democracy Session Camp Tamlment, | Pernst Parte, Ps. f GAPITAUfnTS...
...Out of the thirteen companies examined having 5,000...
...at the same time his organisation, by choosing the manager Of B*e trust, could mobilise the voting power of tho shares held in such a way sa to secure a real voice in railroad directorship...
...Public Protection Held tnadaquab The public isi...
...Lsrge generating and distributing ^uniu such as Muscle Shoals, the' St Lawrence and Boulder Dam must be publicly owned and operated to furnish tfiSBpubllc a cheek on the power Industry...
...ac^aa farce sthnuhuing Wianagemcnt to oiBannato waste all along tho line so that tha conditions of labor and oervice to an public may bo improved...
...Shoulder* pressed to shouldsrs Onward Stsndsrd soldiers We're a merry throng...
...Nevertheless, the point is that we have here a strong motive not directly associated with private ownership,-which may be made useful...
...Thet all the world may marvel Remove the bushel basket At the gorgeous sight...
...There is also the possibility ef »«plying the standards and checks t» management through the agency at public control...
...to do wAl according to prevailing staadardsjto maintain their prestifce, to hare Jhofrun of directing" and devetoptagean undertaking of Importance...
...Believe in us...
...We want you to * In case of alack times Understand ' We will endesvor, of course, Thst the eubseriptions srs To taks cars of thoss who Entirely voluntary...
...Until this is done In ail States our system of regulation will remain Inadequate, we will have to pay higher rates than necessary or just In the meantime a few large public owned and operated unite are essential if we are to gpt the benefits from the large scale development of this industry...
...there sM employed'In these concerns at least a million and half persons—not all of whom, of course, own stock...
...huge organisation of the Standard Oil Company (Indiana) as a machine...
...Saturday night, we were I treated to "Jersey Justice," a delight-H fut bit of burlesque on the textile strike, the scenes of which were placed I n "Siberia, New Jersey...
...earnings of the holding companies warrant further reduction in rates...
...The several hundred men and women I who attended the* conference made the most of the splendid opportunity the Rand School's summer camp offered for recreation...
...It is indeed gratifying," -Say Joe, a little Said the director, Flurry on the street "This evidence of loyalty Might give ua a chance On the pert of our employees' To pick up Something Touches my heart...
...I doubt the wisdom of general ownership control under present conditions, even, if tit could be establisbad...
...It win work perhaps still better where tho private owner is entirely eliminated aa on tho Canadian National...
...It would bo an application of the worst features of democracy—without any of the checks of expert knowledge and functlonallsed administration which exist in the most advanced political systems- I believe we should rather face the fact that modern largescale industry has developed to a point such that ownership control baa lost its reality...
...Only.one-half of the companies employing from 1.000 to 6.000 report a participation of as much as 10 percent...
...Common sense everywhere has...
...This number of shares represents an accumulation in five years of approximately 626,000,000, or 4.2 per cent, of all the Standard OU Company (Indiana) shares outstanding...
...in some hv» stances^ absurd proliferation of bust, noss and economic statistics, of aeeountancy, of expert business advisers, of courses in business administration, ; of scientific research Into sarsoaaol ; problems and of new engineering tech* nique in management mesas ia its ' largest sense that management is de1 veloplng a pragmatic methodology .to take tho place of the vanishing profit motive of tho managing'owner...
...first holding'compsnles, particularly fa thl field of public' utilities, control largt numbers of subsidiaries has* a was that the' small atodk hauler at separates from power over iiisiissjsiiisiiI bj a thicker dfrnVahcorporation entanglemeats.' Secondt msucane*' cesnpanies, »tmsht companies,'And the likl and vote targ« Moots* of stock which they have acquired with the money saved and entrusted to thorn by small investors...
...then, to^|^ tha training and aclectlon of exeoassahi to penataMo their---.--lr„ ^j,J now idoaav each that oootai oSidoacoi anfehsv* a atrger place ia thowsekeasfi of -thlespj...
...Bowers states, that .of the companies •»satined, the percentage of employee owning stock varies according to' site...
...It Would seem to do so...
...Brower's term "general participation...
...Benjamin gtolberg and other...
...How ths stock will sosr, Near four hundred thoussnd With ths cross of Jesus 8hsres are in our pants...
...Another recent device mentioned hp aha Is tao-pjaaaaps ef nun' rotaaj s^ray-"' "Tfiree other comparhx^ohr toeesd developments'bsve llmHod the swp£ l»£e*WeM»s^^ tsmuasas she***.-this ants f|k It) at oases ihsjr tnt«s»ary .ttBtooe...
...One great difficulty now is that no adequate distinction has yet been made in our general thought and education between the profit-motive and the' management-motive.' Though the managers act independently, the standards which they too often apply to their actioa are the standards hold over from tho old' order of small private enterprises...
...This weea) furnish a oafs investment for the av dividual...
...It may prevent strife We gotta be humt\" Among the damn lice...
...A machinery of this Had would not bo open to the objections of ordinary employe stockholdings tootared by...
...Newer, defeases, of CaTrtUlieor,"-waa begun actuary with the...
...Mr...
...One professed justification for this policy is that it extends industrial democracy %y giving representation to ' the two estates hitherto excluded from business control...
...The directors pocketed their gold The grim grey buildings pieces Loosed against the eky, And smilingly bid one another adieu.' And from Lake Michigan Their limousines sped up the oily There came a mournful eigh...
...In fact, W. Z. Ripley of Harvard only a few months ago objected to popular stock-ownership as one device for trot of business by its owners...
...Tate taak becomes sjah* staaUy esaier as tha oelence and teal* nhfne of uus&agement develop, as oak* erete standards, measaremeats of pgai forms nco, and testa of results are ksJsi up to' take the place of tho capaassk reHgioti and the Inherited propjdhsj no tho basis of the •executive's ilrrlilaas For this reason I regard the work ef tho engineering societies, particularly tho Taylor Society, as one of fieiawa dous Importance, and I even look wtth some hope on the future of ir tine hi of business administration...
...In the smaller concern—those having less than-1,0*0 employes—all bat on* report that 30 percent or more participate in the plan...
...Out gettin lit together...
...The discussion' of "The...
...And when they hit the line The Standard Oil Company (Indiana) has proved by the actual working out of Its principles that humanity in big business is practical...
...Major Premise: Capitalism should be abolished...
...Going on before...
...Through these contracts they will get enough profit to' pay interest on a lot of paper which, as Chairman A twin oT the Massachusetts Department of Public Utilities says, represents practically nothing at the present time except various goodwills and theories of people that the value of those various properties are such that they should be allowed to issue the paper against them...
...they may bo so jealous of their power and position that they ajtopf towards labor, for instance, an attitude more hard-boiled than financiers or bankers want.them to adopt...
...The operating ratio has Improved, 21 per cent In the last six years...
...Eternally, We like our bread We stsnd to ssrve...
...After five yeara TWO THOUSAND DOLLARS Each one of you will have Will allow one to have Nearly TWO THOUSAND DOLLARS...
...Or, vice versa, employee stock ownership and the like do not strengthen capitalism and may therefor be regarded with indifference...
...digeativs pill...
...Revolutions...
...He pointed to the recent cut in power rates of 26 per cent by the Tacoma municipal- plant as an Illustration of the need for a few publicly owned developments throughout the country to act as gauges* to a nation wide system at private ownership...
...No doubt, there are some people who think of tin...
...My God I Aggie, Qn Thirty-first street, Yuh just shoulda seen' WOW I Proxy and Joe the service station guy The old man nevsr missed a bet...
...Suppose, for instance, aa Investment trust were' established by tho railroad labor f. ganization and their banks to buy common stock of tho railroads...
...They wish also to make/good records as executives...
...In Mr...
...Efforts have been made to sell it, not merely to capitalists looking for stratum on their money, but u» the wags-earners" and customers of large corporations...
...Give the unions a stake in •Sclent performance, organise their powers so help management improve sendee, eat ' you have" an over-pi sesut...
...On the other hand r By their voluntary action, the employees, collectively, have made themseivee tl)e second largest Influence "among the 60.000 stockholders, not one of whom owns as much as 6% Per cent, of the total stock Issued...
...Harvey O'Connor, and many others...
...Two thirds of the power of the country is controlled by twelve holding companies and six of them control onethird of the nation's water power...
...Real cheap...
...The motive is there...
...The class of executives already has a morale and class-consciousness of its own which, because it is young and...
...An example of the practical application of this principle is found in the report of the Employees' Stock-Purchasing Plan just made public...
...Bcesassio research also takes its place ia thai movement...
...The statutes should specify the rate of return in advance and forbid the distribution to investors of excess earnings...
...I Thoae new tendenclea Id the Indue- I trial world were: placed under the I mlcroecope by George Boule, H11 mar 8. Raushenbush, Jacob 8. Potofsky, Rob- I Brt W. Dunn, Ordwey Tead, Stuart Chase, Harry...
...Minor Premise: Employee stock ownership and the like strengthen capitalism...
...the company...
...light Five years ago the management offered all employees an opportunity to purchase shares of the company's stock on the deferred payment plan...
...I believe there is even greater danger to society at this roomer/t from misdirected seal of hired executives than there is fromMndolence or graft arising from the fact that the* do not own the properties they manage...
...This is the procedure In the Federal Water Power Act of 1620 and Is the only .way to protect-the consumers from the principles laid down tat the New Jersey Telephone case in April where It was decided that the customers must pay a return even on all property bought out of excess earnings...
...Mare than that, in the absence ot.cempleto personal ownership which would give him a certain amount of discretion, la the absence of tho automatic -»vtThf to action which appear quiekly in a small business but are not so apparent in a giant organisation, the executive has been forced to build himself a e£use ia aJfc view unions •n^M)Lam| wroafspd act to be toteratsCMea}* •?#t a small Viislami w^mM^eshflf teiapa with tha aahma beesaat>:figif3 coawrnteot to compromise...
...Norman Thomas, Harry Xaldler...
...The conference got under way witha discussion on the problem of carrying the ideas of industrial democracy to the attention of the nation's college" students...
...Indeed, if the traditional theory of ownership held good...
...And there wss not sn srgument Sliding down the boulevard in shiny On who would psy ths bill...
...Tsve test of any specific ohange ts-whether It K*a tt the direction of the outcome "*j*jf nrThat outcome is briefly swmiisiMM In the title sad aim eC the jULJ>.-*mm» form of workers* .control ejrar ta» ht> dusrries in which they at...
...Samuel Friedman...
...employed, and production for use sathjtr tbajp fee profit...
...V It waa a scream...
...Tou may not agree with the assumption on which I am about to proceed, but I believe it Is worth considering...
...In this discus- I •ion joined Abraham Becksrman, Louis Waldman, James H. Msurer, Solon De Leon, Abraham Bpeteln...
...McAUster...
...satftvS ajaa mota profitable, '. >. "One great task is...
...And from this course God's in His hesven...
...Instances have been recorded in which such an executive has defied even the closely held minority ownership which la supposed, to control the property iij question...
...It is this...
...million kilowatt hours a year, put- j ting It among the thirty biggest plants j in the country...
...Conclusion: Employee stock ownership and the like are undesirable...
...The spectscle of political campaigns among thousands of widely distributed absentee owners, who have no special knowledge of Industrial problems and care chiefly for the sise of their dividend checks is one that might wen appall us...
...We can no longer depend en the simple operation of private enterprise and the profit motive to furnish the drive tor good" industrial -management, as we seemed to do In the old days of small and personal business...
...It wouldn't treat us right...
...Whoopa my dsar, thsre's a ring around Whatever you do just keep in tune the moon, . With the big bass drum and the big Some are born with a solid silver bassoon...
...Changes In engineerings are making all Isolated small plants, 'both private and municipal, out of date.and the public can no longer expect them to keep the rates of the private companies down...
...The report ef the L. I. R «e«farenee will be eon11 uses «•* week...
...an unusually high standard of I llecussion on the part of the audience I followed each address...
...This is the test I want to apply to some of the changes that are baking place In property ownership and eon-, trot...
...The shiny stsel musclss Will prevent friction...
...Wsll as I wus sayin* Bifl, Remove a thin slice, Yuh can't have-yuh cake on eat it too...
...1 Such an encouraging response' justifies the faith of the managemenf^in the loyalty of the 28,066 men and women making up this splendid organization...
...y> "Mr...
...The only way in which many of the holding companies can pay dividends and Interest on all the paper they are pyramiding on top of the operating companies Is to secure valuable long time contracts with the local companies which now seem reasonable but with' the growth of the Industry, will become*excessive...
...Coleman, Solon De Leon...
...The Standard Oil Company (Indiana) believes that the eternal foundation of an greatness Is human sympathy, based on understanding and high Integrity...
...Subscriptions were voluntary...
...I hnow of no important company which is actually controlled by employe stockholders...
...Large scale production and" the Improvements in engineering and the...
...THE management of the Standard Oil Company (Indiana) believes In, humanity for man to man* and practices It...
...Ten little directors each The eun came up in the morning With five per cent, of ahareo ' The eun went down at night, i Make o aafe majority '' And if it didn't rise agaip Thafa likely to get theirs...
...The private companies ' should have no honest objection to the ! competition of three or four large publicly owned developments throughout the country...
...The sddrossss ef Harry Elmer Ssmeo end Stuart Chess will ho printed in full la esriy issues of The New Loader...
...Blaek sheen of Miehigsn Boulevard...
...He pointed out that in the !asr> six years, the lighting rates throughout the country had only dropped one half cent while the production has increased by 60 per cent and the gross revenues by 66 per cent...
...But, The significant result is that 15,000 employees purchased stock in the company by this method, and their holdings under this plan aggregate 190,000 shares...
...To make workers and customers partners In the Industry, sharers in its profits and management, is apparently to admit the commonalty to the electorate of business formerly occupied solely by the capitalist—largo or small...
...Ths meeting will come to order...
...A tennis tournament, rowing, swimming, dancing;, hiking were sandwiched in between the conference discussions...
...Experience haa shown on the Baltimore and Ohio and other roads that this force Is nt* deed a real one which haa improved not only shop practise, hut general management materially...
...In cases where social welfare or engineering efficiency clash with the traditional assumptions of capitalism, the executive has, by training, education, and habit,' usually been conditioned to respond as if he were a profit-seeking owner...
...vigorous, is sometimes an unduly sensitive and aggressive one...
...f GAPITAUfnTS "new dritaeN"iMBrf, with cocssioaal timer**- I menu, however, M company I BBloalom, "trade union cepllalUm," in- I lustrial combination a, employee own-1 krshtp of stock, propaganda and eco- I lomic imperialism—-ran tho gamut of I i trenchant criticism at the annual I lummer conference of the L«ague for I Industrial Democracy, held at Camp I Tamlmcnt from June 15th to 17th...
...The vast and...
...Elmer Barnes, Leland H. Tenka, M. K. Knight,' ttcAHster Cotenan...
...Under the chairmanship of Korman I rhoanaa, one of the directors of the I >ague...
...We will be human...
...A gorgeous funeral This eum in a bank With a motor hearse and tall black Would bring but a paltry plumes, , Eighty dollars interest...
...One authority en raproad regulation has already suggssaal that an pretense of the profit ¦Mho-, be eliminated from the lndusuar, thtt all railroad capital bo roriinsM am issued entirely In the form of SeseriUes having a fixed and giauaatasi return, that ths railroad exscuttras be stimulated, not by the etockhoMeey control and profit, but by standard* ef performance built up from the already elaborate array of railroad atatfctan built on standard accounting...
...the problem is, as I eee' It, to surround It with the proper personnel, training, standards of performance, and checks, in the public Interest...
...Waved s cheery hand And so saying ' . In snswsr to the passing smile...
...Charles W. Ervln...
...The efficiencies of the industry are not due to the holding companies but to engineering improvements...
...It is tangible evidence of the unusual apirit of harmony and friendliness which prevails throughout this great group of men and women, who are bound together by an ambition bigger than themselves—the ambition to serve mankind—and who work with a united effort...
...When the speeches and discussion appear in connected form in a book which the I lu L b. wlU publish, It will ore seen that the subject was treated in a compre- I tensive and authbritative manner which win make the Whole conference of enduring value," Harry W. Laldler, the other director of the League, declared...
...But the red and -preen traffic lights Here ond there Merrily flicked off and on...
...Lawrence and Boulder Dam are far more important than they seem to be to the electric light consumers of the nation...
...spoon...
...Raushenbush * also discussed State, and federal control of the power industry and the conflicting claims of the advocates of giant and superpower...
...Capitalism in America—doubtless will suggest to some a certain attitude to the whole series of questions...
...Gertrude W. Klein, David Sinclair and others kept the audience in one long howl of glee j at their songs and patter in which I they portrayed mill owners, strikers I end "private defectives...
...Muscle Shoals Is now operated end owned by the Government and Is , already selling power" at the rate of 170...
...George Soule, edrtot ot the ••New Republic" and Director of the Leber Bureau, lite, on Friday evening discussed the "Changing Relationships Between Property Ownership and Control...
...Muscle Shoals, the St...
...Capitalism Dons the Robes of the Good Samarital Newer Defence of the Profit System Under Micrope At League for Industrial Democracy Session Camp Tamlment, | Pernst Parte, Ps...
...Whst's thst to you...
...For every dollar subscribed the company agreed to add 60c...
...To summarise: The question m first, whether tho function of the owner, as in traditional theory, haa not loot meat of the reality which it may have had in tha pasts and second, whether it ie possible and desirable to* restore thst function or develop now motivse end Institutions more suitable to the problems of modern industry...
...Their chlel motive is not actually to amass profits for themselves...
...compasses hi the United States which has* employe stock ^parchase piano*, and...
...They are organised on a national basis while the public is still trying to control them through the competition of small municipal plants and through the State commissions...
...Book Will Contain Speeches I "I think this -conference produced the most substantial contribution to a realisation of present day "capitalism's sctual technique as applied to the problem of industrial relations...
...The first of these to which we may direct -our attention ie the profeestonalIxation of management as distinct from ownership...
...If kept In public ownership and operation they are bound to exercise a powerful pressure to keep light and power rates down...
...I wish to suggest that this attitude) be laid aside for the moment by any who hold it and another one ad6pted...
...Many industries are represented...
...The corpulent directors survey the The grim gray building* lean agaihat passing scsnes...
...Wi will be human...
...Ia is possible, too, that employe or consumer stockholders, if properly organised, ' and equipped to function, might use tho old form of ownership to express their own interest...
...Onward Standard soldiers, In our hey-day, there's no May-day, Fifteen theussnd strong, Come end join our dance...
...or more workers only four have...
...reading .-At, a. reaper on the large scale development of superpower by Raushenbush, secretary of (he Committee on Coal and SuperPower, Public has not been getting the benefit of the large scale development of the power industry, Raushenbush, asserted...
...ths skiss) Their bellies surge Jn great content And oh the left Lake Michigsn rolls O'eft Jtdnder breastt'of qbait kntt # and eight...
...It is gratifying indeed to the management to have more than one half of the employees realise that only by helping and serving one another can man attain happiness . and success...
...It is thus clear that while the movement Is widespread, and significant of something, it Is hardly significant of general employe control, for one reason because the majority of employes do not participate...
...Of the dynamo, .Friction might cause heat Whirr . . . Whirr . . . Whirr « . . And the eventual stoppage And a little oil ori the bearings, a) Of its glittering From time to time...
...Soule said, in part: "The general heading for the series of papers of which this is the first— Newer' Defenses of...
...It is truer to think of |t as a group of human beings acting together in splendid co-operation...
...With a very eharp knife The individual employee was privileged to subscribe for stock up to 20 per cent, of his annual wage...
...It may be added that there is no really important concern in which employes own, or are likely to acquire, a majority of the stock...
...C. AJ Bowers estimates that there are at least See, ami probably from MO to loo...
...It will work under tho forms of private ownership...
...James Philips...
...We must develop other motives and other institutions, which have' perhsps existed in embryo and Uttle suspected within the old order...
...taught people Bat a man is Ukery to take better cars of something which ii his own than of another's property* Separate profit and ownership from risk and responsibility and you remove the whole justification of profit—in fact, if the traditional economist was right, you condemn the whole industrial system to dry-rot.' • "Queer things have lately boon done in 'regard to the ownership of common stock...
...This attitude may be stated in the form' of a syllogism...
...Sxecutivee of this type may be extremely ^reactionary in their social viewpoints...
...The thousands -of shareholders, the management, the employees—all are people like yourself, with a joy in their work and an eager love of lite...
...The Standard Oil Company' (Indiana) practices ths humsnity tt preaches, believing that In such principles lies better service to the thirty million people of the Middle West, whom it earnestly tries to serve in such a manner as to gain their confidence, respect and esteem...
...And butter too...
...The present economic order, which we crudely label "capitalism,'' is a varied and rapidly changing thing, it Is eapahle at bein* chango* in detail and by degress ssVveji as-fes a sudden overturn...
...adequately, protected through the limited regulation permitted by the courts and will not bo protected under prlajste ownership unless statutes are passed fixing all present values at soma definite figure and providing that all new companies or all new developments will be valued at cost only...
...We will be human...
...Any brief examination of the actual cases in which stock ownership has thAt, with a very few exceptions, the company doss not actually aim to grant * control lev employees thranfih ownership...
...limousines, "Now Jos, I'll take ears of it You know I get sll my expanses paid...
...From the csndle...
...A traffic tw,l tMmin...
...Already most of our great utilities and industrial enterprises are directed by men who, while they may bo part owners,^sm'in the main salaried executives managing other people's property...
...If ths tetter is the ease, my opinion is ¦ thst the way to s praetiesWe is* - duetHal democracy and production for use rather then for profit becomes considerably olesrw...
...The largest participants are, of course, the officers ' and administrative forces rather than the wage-earners...
...Will never swerve...
...And third, the investment trust—perhaps the most "recent and significant development of an— separated the owner from control of his property...
...And s most dignified undsrtsksr...
...j ;. "Another movement of great tmpartaneo that may be substituted for tso owner as an incentive to efficiency sad a cheek on slack administration Is union-management co-operation, sack as has developed in railroad sheas...
Vol. 3 • July 1926 • No. 25
