History of Cooperation in the U.S. 1888
The field for profit-sharing is as limited as it is new in the South, except
in that questionable form of farming-on- shares, to be later treated. The
principle attempts at the system have been in coal and iron mines, and in iron
foundries. Texas, Alabama
and Georgia can furnish several instances in their newly developed mining industries. In Maryland there exists one
notable case in the management of the Union Mining Company at Mt. Savage. Through the kindness of the president,
Mr. James S. Mackie, I have obtained a minute account of this newly started experiment. To anticipate and avoid a strike among their employees, strikes having occurred in neighboring mines, the company determined to inaugurate a profit-sharing system in their works. The proposition was made to the employees, and .accepted, and the scheme went into active operation January
1st, 1886. The provisions of the agreement were, in brief, that the directors pledge themselves to pay to their employees,
annually or semi-annually, an amount equal to ten per cent. on every dividend made to the shareholders; the said percentage
to be pro-rated according to the earnings of each man on the pay-rolls for the time covered by the dividend. Salaried employees were excluded, from the fact that no interruptions from weather or lack of work curtailed their regular incomes. The company protected itself from any attempt of management on the part of the employees or oversight of the books. The company, moreover, could terminate the system at the close of any year. The division of profits is among the workmen in all the departments, miners, brick makers, foundry men, carpenters and laborers, and is made on the basis of the aggregate earnings of the whole system. The first dividend was declared in July, 1886, payable on September 15th, and varied from sixty-seven cents to twenty-three dollars per capita, depending on the time of service. Universal gratification was expressed by the two hundred and fifteen participators, who had little faith in any considerable advantage to themselves from the scheme. Indeed, before the distribution occurred, offers were made to sell out their interests for seventy-five cents, but with no takers! The second dividend was made in March, 1887, when about $3,000 was divided among two hundred and fifty employ6s. Hardly had this been paid, when in April a large number of the employees struck, refusing the arbitration offered by the company. The profit-sharing system has for the present been discontinued and the good are suffering for the actions of the obstinate and foolish.
The Union Mining Company, through its care for the welfare of its employees, deservedly had for six years perfect exemption from the evil of strikes. Twenty years ago the company, on principle, discontinued its store and allowed it to be managed by private parties. It was later found that the store-keepers dealt almost exclusively in bills against the company, a system caused, perhaps, by monthly payments of wages. This was found so injurious in tendency that it was broken up in 1883 and the store introduced a cash basis, made easier by weekly payment of wages.
In May, 1884, the company donated a park for the use of, and under the control of its employees and their families. To further still their thrift and encourage cleanliness and taste in the management of their dwelling houses, Mr. Mackie has divided his tenements into five districts, and in each offers a prize of one month's rent, whatever it be, to the tenant who shows during the year the greatest improvement and taste. Though a careful examination of such a large field is well-nigh impossible, I have found the existence of profit-sharing limited to a few kinds of undertakings in the South, and by far the most prevalent form is farming-on-shares. Maryland Code of 1878, section 170, article 40. "No railroad or mining company shall own, conduct, or carry on any store or have any interest in any store, or receive any portion of the profits thereof, etc."