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JUNE, 1914
7 ; m 'ty
The Commoner
' ' ' ' ; ' ' ' '
ProfitSharing arid OtKer Things
(From the Philadelphia North
American.)
i Eighteen years ago the inhabitants
if Detroit were startled by the ap
pearance on the streets of a weird
Contraption a buggy propelled by
an engine and steered by the young
proprietor of a bicycle repair shop.
At first they were interested, and
then amused, but finally bored.
'Ford's folly" they called it.
' Some time ago Henry Ford an
nounced that this year he and his six
fellow-owners of the Ford Motor
Company will distribute among their
20,000 workers more than $10,000,
000, one-half of the annual profits.
And "Ford's folly" is a current
phrase once more. ,
Practical business men and econ
omic theorists of various schools are
skeptical about the wisdom of the
plan and gloomy about its effect.
Socialists flout it as a worthless sub
stitute for their system. Supporters
of special privilege are irritated and
resentful. Mr. Ford makes a rather
quaint explanation:
"It's just a matter -of selfishness.
I want to enjoy what money I have
in my lifetime. The only way I know
of enjoying a large sum is to see that
it does the greatest good to the
greatest number of persons. I believe
that every man who does his share
toward making a business profitable
should share in the profits.
"And we shall get increased effi
ciency. A man does more efficient
work when he is well paid-; it is a
good business principle to see that all
employes are making enough to live
on with comfort."
An obvious comment, t widely of
along the street it gives mo personal
pleasure. I say to mysslf, 'I made
it possible for that man to have a
car.' I want to make it possible for
nearly every one t0' ride in an auto
mobile. It will-mean that much more
tpleasure for1 me. It's just a matter
of .selfishness'
Profit-shafting -with his workers
and ,care for their interests arc not
new , things, with him. For years
each employe has' received 5 per cent
bonus at the end of h's first year,
7 1-2 per dent the second year and 10
per cent thereafter. The plant has
its own Hospital and six first-aid sta
tions, with twenty-eight doctors and
many trained nurses in charge.
Whenever a worker absents himself
an official is sent to his home and
prompt aid given in relieving any
trouble, whether the need is medical
attendance or a temporary loan. Yet
Mr. Ford insists that none of this is
charity. He says.:
"I don't believe in charity. If a
man works and is paid a decent wage,
he doesn't need or want any charity.
He deserves to be as independent as
anybody else, and he wants to be. I
don't believe in model working men's
homes. Give a man the wages he's
entitled to and he'll make his own
model home."
Efficiency is his passion, the secret
of his success and the inspiration of
his new plan. "I'm not a philan
thropist," he says; "I'm a business
man. We have long paid high wages,
because by doing bo we evolved effi
ciency. By adding shares in the
profits to those wages we believe we
.will increase that efficiency. And in
these days that spells success."
It is efficiency that has made the
fered, is that the plan is impossible Ford machine sbop the largest in the
of general application. The Ford en
terprise is unique in its scope, its
profits and its virtual monopoly of a
vast field. Yet there is a vital lesson
to be drawn from that fact, that the
profits which permit this huge dis
tribution are the result of business
methods which those who dominate
American commerce and finance con
demn and abhQr. Henry Ford bas
done more than set new marks for
success and liberal dealing; he has
ilemonstratea" the fallacy and dis
honesty of the system by which many
6'f the big industries of this country
have been debauched.
! It goes without saying that such a
man has an Interesting personality,
lie is 50 years old, slight in build
ana lmeiiweiy c. nw " "
come of, .more than, $1Q,000000 a
year, tie lives 'in a modest bungalow
on his 2,000-acre farm, keeps two
servants and drives one of 'his own
$550 cars. Every day he tours. his
factory, often in overalls. He is his
own .chief designer and, chief engi
neer; there is not a factory machine
Which he ca'nbt run nor an opera
tion which, hei cannot perform. Office
management and finance he leaves to
others. He keeps cash accounts ag
gregating $15,000,000 in Detroit
banks. Once his bookkeepers pro
otii to him about a $75,000 divi
dend check which had not been de
posited; he had forgotten about it,
but finally dragged it, crumpled and
soiled, from a pocket in his overalls.
The greatest man in the country, he
thinks is John Burroughs, the nat
uralist; the second, Thomas A.
Edison. His 'greatest hobby is study
ing bird life,
But, of course the big aim of his
life is typified in the car that bears
his name. He determined to make
an automobile that would be abso
lutely serviceable, yet so cheap that
it would be within tha .reach of per
uons of moderate, means. This,. .too,
e calls a, form iof selfishness? -
"Every time I see a Ford car going
world, not excepting the Krupp's;
that produced 200,000 cars during
1913 and will turn out 1,100 a day
during 1914; that has just cut the
nine-hour day to eight hours the
shifts changing every four hours, so
as to avoid overcrowding the street
cars which carry the workers to their
homes.
Efficiency means r this; , Twelve
thousand dollars was paid for' a ma
chine to bore holes in -engine cast
ings, but that machine bores forty
five castings in one operation, with
more accuracy and dispatch than
forty-flye men could do the work. It
means 10,000 workmen, each a well
paid .specialist, trained to a few ex
nert motions with tool or machine. It
means the production of two finished
chassis a minute during working
hours. It mea'hs that a thousand and
one parts can be assembled and a car
run out of the shop under its own
power in six; and onehalf .minutes,
It means that every one ofi those
parts, can tbe made from raw material
arid a complete car assembled in two
hours and a half.
Immersed .in devising methods and
getting results like these, Mr. Ford
has actually neglected matters of
terrific concern to many eminent
business men. This is from a New
Vnrk Herald interview:
" 'Rut weren't you afraid,' it was
asked, 'to make this announcement
with the new tarnr dm jubi a mw
and the currency bill threatening un
settled conditions?' This was evi
dently one of the funniest things Mr.
Ford had heard all day.
" 'Do you know,' he said, 'I haven t
paid any attention to that tariff .bill
at all I'm in the automobile busi
ness, and, I haven't considered the
currency and tariff worth worrying
about.' "
Now, let us look at what his sys
tem has accomplished. He organized
S?Swy 1903,. with $100,000
canitaCwhicb. later was increased to
$2,000,000. The seven stockholders
Mr. Ford owns 55 per cent last
year divided $25,000,000. Tho plant
embraces four-story and six-Btory
buildings covering nearly sixty acres.
A new power plant costing $1,500,
000 is now being erected, And mark
this: ,
"'Let mo toll yOu,'lsaid Mr. Ford,
'one of our business principles, which
may explain va lot to some pr those
who are so distressed over the im
practicability of our distribution
scheme. We don't borrow money.
When wo first started business we
decided we would bo our own bank
ers. Wo started with about $50,000
cash, and, except for brief accommo
dation at the bank, have never
borrowed money. I always stood out
against heavy borrowing. 1 felt that
if we went into Wall street, Wall
DIIVUV HUUIU DUUU jut. I'D.
It will bo observed that the Ford
system defies one of tho cardinal
principles of "big business." In fact
it defies all of them.
It would havo been the easiest
thing in the world for a Wall street
management to increase the capital
stock faster than the profits, thus
concealing the enormous earnings.
A gain of $1,000,000 net, under such
auspices, would mean tho issuance of
$20,000,000 more stock; profits of
$10,000,000 a year, in the Wall street
view, would justify the issuance of
$200,000,000 of capitalization. Ford
on the contrary, reduced tho price of
his product; he gave the benefit of
his efficient method to the consumer
instead of to promoters Let us try
to imagine some news dispatches that
might have told the history of the
enterprise under other auspices:
"Detroit, September, 1903. The
Ford Motor company, capitalized at
$2,000,000, is to be reorganized by
powerful Wall street interests. Tho
capital will be increased to $20,000,
000. The general offices will be in
New York.
"New York, June, 1909. The net
earnings'of the Ford Motor company
for the last year were $10,000,000.
The capital is to be increased to
$200,000,000. The price of the cars
will remain tho same.
"Detroit, November, 1910. As a
result of the strike at the Ford plant,
the state militia has been called out.
A government commission is investi
gating. "WnRhlncrtnn. TPfihriinrv. 1911.
The commission investigating condi
tions at the Ford plant reports that
62 per cent of tho employes are
aliens. Many of them work twelve
hours a day. Drastic recommenda
tions are made for better conditions
of labor and housing of the workers.
"New York, February, 1911. Offi
cers of the Ford Motor company
bitterly denounce the report of the
government commission. They de
clare that it will be absolutely neces
sary to reduce wages or Increase the
price of their cars if they are to earn
a fair dividend upon the capital
stock."
The explanation of "Ford's folly"
seems to be that he is an engineer
instead of a financier, a manufac
turer of automobiles instead of a
manufacturer of securities.
"We believe," he says, "in making
20,000 men and women prosperous
and contented rather than in making
a few multi-millionaires."
To put an automobile within the
reach of half a million families; to
provide means of cheap, rapid trans
portation for hundreds of thousands
of merchants, farmers, professional
men and pleasure-seekers; to employ
20,000 -workers at high wages, and
to distribute $10,000,000 in co-operative
profits in a single year these
'are fine achievements. But it is
something, too, to have demonstrated
that industrial success does, not de
pend upon special privilege, but upon
efficiency, and that the industry ex
ploited according to tho Wall street
system is a burden Instead of a bene
fit to tho people.
I
LKT THE IjAW MAY "THOU AIIT
THE MAN" '
Tho conscience of the whole nation
in behind President Wilson's demand
that guilt bo made personal. Every'
one knows, as he said (n his addrcsiF
to congress, that every act of busi '.
ness is done at the command of
somo person or group of persons;
just ns every net of government is
the act of an individual or group of,
individuals. j
When a citizen suffers wrong at.
the hands of a public official he seeks'
redress from the guilty man and not
from the political corporation that;
the man represents. But corporation
ofllciaU who have heon guilty of oti'
fonses against common morality havo
escaped punishment on tho plea that
the corporation committed them.
The corporation haa been punished'
by a fine. But the fine has merely
fixed tho price to bo paid for such
acts. It has been a license fee to bo'
reckoned with in tho conduct of busi
ness. Public sentiment ha., fortunately
reached the point whore it will no
longer toleiate such a licensing sys
tem. Guilt is personal. Tho man who
adopts a criminal policy of business
oppression for tho purpose of crush
ing his rivals is as guilty as any evil
doer, and he must be held individual-
ly responsible for his acts. Unfair
competition Is a crime, whatever
form it takes. If the law that tho
president suggests shall stiffen tho
bcickbone of tho attorney general
until he begins to demand the pun
ishment of the guilty under the old
law the abuses will stop. Phila-
delphia Public Ledger. '
BOOKS RECEIVED
"Tuberculosis Its Cause, Cure
and Prevention," by Edward O. Otis,
M. D., professor of pulmonary dis
eases and climatology Tufts College
Medical school, etc., etc. Published'
by Thomas Y. Crowell Company, New
York. Price, 1.25 net. , ;
"For You and Mo," (poems), by
Nixon Waterman. Davis & Bond pub
lishers, 530 Atlantic Ave., Boston,
Mass. Price, 50 cents, postage 5
cents.
"Public Papers of William' Sulzer;
Governor," January 1 to October 17,'
1913. J. B Lyon Company, printers)
Albany, N. Y. :,
"Tho Mexican People: Their
Strugglo for Freedom," by L. Gut-'
iorrez Do Lara, author, of "Story of'
a Political Refugee," and "Les Bri
bonen" and Edgcumb Pinchon. Illus
trated from photographs. Doubleday,
Pago & Co.; Garden City, New York.'
Cloth, net $1.50.
"The Picket Line of Democracy In
America," an address by J. F. Cronin j '
Seattle, Wash., March 17, 1914. Pub
lished for tho amusement of real
democrats, tho guidance of would-be
democrats and the excitement of
Tories.
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