listing, the creation of a disability or pension fund by joint contributions of employers and employees, schemes of industrial partnership for the purpose of regulating wages, and schemes of industrial courts; and other like matters. Said committee shall consider the matters involved in all petitions, bills and resolves now pending in the general court concerning any of the subjects above referred to.

His Excellency the Governor, on the ninth day of July, 1903, appointed the undersigned as members of the Committee on Relations between Employer and Employee. On the thirteenth of the same month the members qualified under their respective commissions by taking and subscribing the oath prescribed by the Constitution, and on the same day organized for the purpose of considering the questions referred to them. The committee has held repeated hearings, giving notice throughout the Commonwealth, by advertisement in the papers and through circulars, of its readiness to take testimony on the different subjects referred to it.

Under the provisions of the foregoing resolve, the committee was charged to examine and consider the laws of the Commonwealth concerning the legal relations of employer and employee, and especially concerning the liability of the employer for injuries received by the employee, the conduct of strikes and lockouts, the authority of the courts to issue injunctions in cases of strikes and to punish for contempt of court, the matter of blacklisting, the creation of a disability or pension fund, schemes of industrial partnership for the purpose of regulating wages, and schemes of industrial courts. These matters have received the larger share of the attention of the committee. The other like matters concerning the legal relations between employers and employees, which are covered by petitions, bills and resolves pending in the General Court at the time of the passage of the foregoing resolve, have received such consideration as their importance demanded.

There have been brought to the attention of the committee other matters neither specifically nor incidentally referred to in the resolve. Among the bills before the committee are quite a number which do not come within the scope of the

instructions under which it has acted.

Of these there may be mentioned "An Act to establish a Board of Examiners for Barbers and to regulate the Management of Barber Shops" (House, No. 905). This is a measure which more specifically belongs to the Board of Health, and has no relation to the subject-matter referred to the committee, although testimony was offered which would seem to indicate that it is a measure possibly requiring the attention of the Legislature.

The attention of the committee was also called at the hearings to a number of bills relating to the granting of police pensions in cities (Senate, No. 59), to pensioning employees of the city of Boston (House, No. 206), to authorizing the city of Boston to pension certain employees (House, No. 286), to pensioning firemen in cities (House, No. 393), to the further extension of the pension system in the police department of the city of Boston (House, No. 625), to leaves of absence of twenty-four consecutive hours in the fire department of the city of Boston (House, No. 628), to authorizing the city of Boston to pension members of its police signal service (House, No. 844), and other bills of like character. These bills were not construed by the committee as coming properly under its consideration.

Other bills of a different nature were urged upon our attention, among which may be mentioned the following: a bill relative to the use of safety appliances by railroad companies (House, No. 430), a matter which might more properly be passed upon by the Board of Railroad Commissioners; a bill relative to the number of brakemen which railroad companies shall employ on freight trains (House, No. 431), which might, in like manner, be passed upon by the Board of Railroad Commissioners; a bill relative to arrests in minor criminal prosecutions (House, No. 434); one providing that no person shall be imprisoned for debt (House, No. 918); and one relative to the protection of traders (House, No. 555). These three latter bills, as relating to criminal matters, do not in any way pertain to the subjects to be considered by the committee. They have all been passed over, however, without prejudice, the committee

having no recommendations or suggestions to make relative to them.

A bill incidentally before the committee, and which might be considered as affecting the relation of employers and employees, is one to exclude from certain occupations persons who do not declare an intention of becoming citizens of the United States (House, No. 350). Section 14 of chapter 106 of the Revised Laws provides as follows:

In the employment of mechanics and laborers in the construction of public works by the Commonwealth, or by a county, city or town, or by persons contracting with them, preference shall be given to citizens of the United States; and every contract for such works shall contain a provision to that effect. Any contractor who knowingly and wilfully violates the provisions of this section shall be punished by a fine of not more than one hundred dollars for each offence.

This provision would seem to be all that is required at the present time. To debar absolutely the Commonwealth and the counties and municipalities therein from employing other than citizens of the United States would, under certain conditions, it is believed, cripple the power of such governments to carry on public works. The provisions of the act cited, compelling the Commonwealth and counties, cities and towns to give preference to those who have become citizens, reach as far as public polity now demands.

The committee had before it another group of bills, relative to the unemployed. On this grave question there was submitted to the General Court, in March, 1895, an exhaustive report. That report took up the question of relief measures, wayfarers and tramps, public works and causes of non-employment, treating all the phases of the subject, and this committee does not feel that it can add anything to the statements and suggestions made therein.

One bill in this group provides for the establishment of free employment offices in certain cities (House, No. 133). The Bureau of Statistics of Labor reported quite fully upon this subject in its annual report for 1893, and again in its Bulletin for May, 1900; but, as the experience under free

employment offices had not been extensive at the latter date, and as since then cities and States have organized such offices, the Legislature at its recent session passed a resolve directing the Bureau of Statistics of Labor to consider the expediency of establishing free employment offices in the Commonwealth.. This resolve was approved May 4, 1903, and calls on the Bureau of Statistics of Labor to make a report not later than the fifteenth day of January, 1904.

To the measures affecting the relation of employers and employees, whether referred to either specifically or incidentally in the resolve under which the committee has acted, or brought forward at its hearings, the committee has given much consideration, and has formulated its recommendations and the reasons therefor, grouping the bills together under general topics.

Among the measures submitted for our consideration is House, No. 543, a bill which brings up the subject of profit sharing or industrial partnership. It provides, in brief, that any corporation doing business for profit within the Commonwealth, whether foreign or domestic, shall in the first instance be entitled to pay as annual dividends to its stockholders, from its earnings, an amount not exceeding five per cent. upon the market value of its property used in its business within the Commonwealth. From its earnings above the five per cent. so computed, reserve funds, not together exceeding ten per cent. on the market value of such property, may by authority of the Commissioner of Corporations be set aside for repairs, renewals or depreciation of property, and for arrears of dividends. The extra earnings above both the reserve funds and the five per cent. already mentioned shall be divided between the employees and the corporation in the ratio which the total ordinary wages earned during the period in question bear to the total ordinary dividends during the same period. The Commissioner of Corporations is given a general authority under the act, though an appeal lies to an industrial court to be appointed,

and on questions of law a second appeal lies to the Supreme Court.

It will be seen that in essence the proposed act provides for profit sharing under compulsion by the State, and it should be stated that the author of the bill has asked to substitute for it in our consideration a bill whose details we shall later discuss, but the proposed substitution of which hardly relieves us of the obligation laid on us by the Legislature to consider the original measure.

Profit sharing, in general, may be defined as a system under which the employee obtains some share in the prosperity of his employer in addition to his ordinary wages. It is advocated on the grounds both of abstract equity and of expediency, as tending to bring home to the employee the fact of the mutual interest existing between the employer and himself. In our opinion, no plan which increases the employee's sense of his personal stake in the success of the business in which he is employed should be lightly put aside. We believe that systems of profit sharing entered into voluntarily on private initiative may, and often do, prove of great value, notwithstanding that in practice the attempts which have been made to carry on business under such a system have met with varying success. It should be emphasized, however, that in order to conduct a business in the spirit of profit sharing, the technical form is by no means necessary; and that in every industry where the wages paid are higher in proportion to the cost of living in good than in bad times, profits are in some degree shared with the employee, whether the advanced wage comes from the sense of fairness of the employer, the demand of the employee, or the operation of the law of supply and demand.

It is difficult to understand how a general plan of profit sharing under compulsion, as proposed by House, No. 543, can advance the interests of all connected with it. It is possible that in actual operation the burden on industry would be so serious that the provisions of the bill would prove ineffective. Whether the outcome would be a depression of the rate of wages in proportion to the extra profits added to such wage under the bill proposed, so that within a short: