must be reorganized, for which $7,500,000 are needed. Their shares, which have sold above $85, are now at $38. The vicissitudes of the leading iron and steel concerns of Tennessee and Colorado are still in evidence. Our friends in Canada have similar experiences. Shares of their large Dominion Iron and Steel company, which sold at $60 in 1901, are quoted at $25.

Our experience in America has not been peculiar. In 1901 the iron and steel works of Germany were generally in a depressed condition, and their shares suffered heavily. I read a list of these losses at the time which impressed me deeply. If I remember rightly, many declined one half or more. Several important works were reported in financial trouble. Experience in Great Britain is similar. Not a few concerns, after vibrating between seasons of loss and gain, have from time to time had to be reorganized, entailing heavy losses upon shareholders. Uncertainty of results pertains not only to iron and steel, but to all forms of business operations, and is inherent in them.

You know too well how the path of iron and steel is strewn with financial loss in all countries, and that all forms of business must encounter grave risks. Scarcely a week passes without news of embarrassment or failure in the industrial world. Thus it has ever been, and ever must be, while human nature remains unchanged.

Bearing all this in mind, the thought of asking the workingman to risk his precious savings in the manufacturing or any form of business was always discarded by us as too dangerous for him. He was advised to buy a home instead and save his rent. To facilitate this, money to build a home was lent to any of the employees who had the ground clear of debt. Their savings up to $2,000 each were taken by the company and placed in a special trust fund, entirely separate from the business. Interest at 6 per cent was allowed, to encourage the workman to save part of his earnings for old age. The funds received were lent upon mortgage on real property, generally to such workmen as wished to build homes. It was believed that this was the safest, and therefore the wisest, use of their savings which workmen could make.

The most convincing proof of the steady march of labor to recompense more and more based upon profits, and in forms drawing capital and labor into the peaceful bonds of mutuality, is to be credited to the United States Steel corporation, the largest of all industrial corporations, and for which they deserve unstinted praise, as proving a genuine interest in the workmen and sagacious thought for their own.

It is in this form: 25,000 of the $100 shares of preferred 7 per cent stock were offered to their 168,000 employees at $82.50 per $100 share, in different amounts according to their earnings, which were subscribed for twice over; nearly one sixth of the men subscribed-one half being salaried men. Twenty thousand more shares of stock were afterward provided, making 45,000 in all, worth about $4,500,000. Monthly payments are received. Another distribution of shares is intended.

It will be noted that the investment is at the risk of the men. This seems a feature which we may, however, expect the corporation to change as experience is gained, as the plan is most wisely stated to be subject to future changes. In most of the states of the Union labor's precious earnings, surely the most precious of all capital, are a first charge upon property, and this I believe the only safe policy to follow. "Every workman a shareholder" would end most of the conflicts which sadden us between capital and labor. To effect this every corporation could well afford to offer to distribute part of their shares among the saving workmen, and in case of disaster, give preference to repayment of principal as a first charge. Any desired legislation with proper safeguards could be readily obtained authorizing corporations to make savings of employees up to a certain sum for each a preferred claim, ranking before mortgage or ordinary debts or the claims of shareholders, akin to the mechanics' lien and the homestead exemption laws. This seems due to the workingman, who, necessarily unacquainted with business, takes his shares upon trust and becomes the beneficiary or the victim of his employers. He should be considered as an inexperienced youth in the affair; besides, he is asked to invest not solely for his own, but at least equally for the advantage of his employer.

Thus we see that the world moves on step by step toward better conditions. Just as the mechanical world has changed and improved, so has advanced the world of labor from the slavery of the laborer to the day of his absolute independence, and now to this day when he begins to take his proper place as the capitalist partner of his employer. We may look forward with hope to the day when it shall be the rule that the workman is partner with capital, the man of affairs giving his business experience, the workingman in the mill giving his mechanical skill to the company, both owners in the shares and so far equally interested in the success of their joint efforts, each indispensable, without whose co-operation success were impossible. It is a splendid vista along which we are permitted to gaze.

Perhaps I may be considered much too sanguine in this forecast, which no doubt will take time to realize, but as the result of my experience I am convinced that the huge combination, and even the moderate corporations, have no chance in competition with the partnership which embraces the principal officials and has adopted the system of payment by bonus or reward throughout its works. The latter may be relied upon as a rule to earn handsome dividends in times of depression, during which the former, conducted upon the old plan, will incur actual loss and perhaps land in financial embarrassment. In speaking of corporations we must not forget, however, that there are many who are corporations in name only, their management being the life work of their few owners. These rank with partnerships, having all the advantages of this form. The true corporation is that whose shares are upon the stock exchange and whose real owners change constantly and are often unknown even to the president and directors, while to the workmen they are mere abstractions. It is impossible to infuse through their ranks the sentiment of personal regard and loyalty in all its wonderful power.

The idea of making every workman a capitalist and of sharing large percentages of the profits among those rendering exceptional service will probably encounter the opposition of the extremists on both sides, the violent revolutionist of

capitalistic conditions, and the narrow grasping employer whose creed is to purchase his labor as he does his materials, paying the price agreed upon and there an end. But this opposition will, we believe, amount to little. It will even speak well for the new idea if it be scouted by the extremists and commended by the mass of men who are on neither dangerous edge, but in the middle, where usually lies wisdom.

Meanwhile, here is the germ of a promising plan offered as a solvent for one of the pressing problems of our age, which may prove capable of development. Human society bears a charmed life. It is immortal and was born with the inherent power or instinct, as a law of its being, to solve all problems finally in the best form, and among these none more surely than that vexed question of our day, the relations between these Siamese twins, which must mutually prosper or mutually decay-capital and labor.

CAUSES OF THE SUCCESS OF AMERICAN

MANUFACTURERS.

BY JOHN FOSTER FRASER.

[John Foster Fraser, economist, is one of the most popular of British writers on industrial and economic topics. He has made first hand investigations of the industrial situation in the United States and in European countries and the results of such investigations have been embodied in newspaper and magazine articles and in lectures. Their popularity and value have been heightened by his bringing to his investigations not only the sound judgment of the scholar, but the experience of the business man.]

Some time ago I held conversation with a Spanish gentleman who had been making a tour of England. "Yes," he said, in reply to an inviting question of mine, "I have seen many things that have filled me with wonder: the rush of business in London, the magnificence of your buildings, the keenness in trade. I have seen your great steelworks in Sheffield, your busy black country about Birmingham, your shipbuilding yards on the Clyde side, and your great cotton factories in Lancashire. It is all marvellous. But I wouldn't like to be an Englishman. I am glad to be going back to my own sunny Spain. We're a poor people, but we get some brightness out of life. We've got no great commerce to be proud of; but then we've got no country bleached of all beauty, as I've seen in your black country; we've got no crowds of young men and women in consumption from working in mills, as in Yorkshire and Lancashire. You're a great people, a mighty industrial nation. But what a price you are paying for it! I'm going back to my orange trees and sunshine and happiness."

At the time I thought little of my friend's outburst. Recently I have been recalling it every day. For I have returned from a mission of inquiry into industrial conditions prevailing in the United States. I have been coming in contact with many British manufacturers, and the reply they have invariably given, when I have pictured to them the dash, the sweeping success of industrial America, has been, "Oh, yes, the Americans are a great people. But we in