Four plans provide for workers' co-partnership committees, though there are several strictly stock-purchasing plans which allow shareholding employees to acquire a voice in management through the exercise of the ordinary voting rights of shareholders. The extent of the co-partnership in these forms is negligible.
All these varying details (and the variations are by no means exhausted in this recapitulation) reveal in large measure the spirit and purpose of profit-sharing. As a rule the employer announces his plan without previously consulting his employees. There is virtually unanimous agreement among successful profit-sharing employers that the coöperation, loyalty and stability of working forces—the chief avowed purposes of profit-sharing—are obtained by all the plans which have been in operation for any considerable period. There are, however, varying opinions as to how far these plans attain the more specific objects of (1) economy of time and material, (2) improvements in quality and quantity of output, (3) inducement to thrift, (4) avoidance of industrial disputes, (5) attainment of social justice. On the whole there is a considerable body of employers' opinion supporting the value and practicability of profit-sharing in improving industrial relations.
On the other hand union leaders universally condemn profit-sharing for three general reasons: (1) Where profit-sharing exists, wages less than the market rates are paid; (2) workers prefer a fair, fixed wage scale rather than a part of their wages undetermined and subject wholly to the employer's decision; (3) labour organization is undermined, as obligations to the firm are made a first lien on the workers' loyalty. That these criticisms have some foundation in fact is proved by the high percentage of abandoned plans and the reasons for their failure. Most of the failures were due to apathy or open hostility on the part of the workers, expressed in strikes, to diminished profits, or to changes in ownership of the business.
The success or failure of profit-sharing plans depends on circumstances not touched by the profit-sharing principle. Where favourable results have been obtained, they were due, not to profit-sharing as a mechanical device, but to the confidence which the employees had in the management.
Bibliography.—A comprehensive bibliography will be found in Boris Emmet's report “Profit-Sharing in the United States”—United States Bureau of Labor Statistics, Bulletin No. 208, 1917. Other references are: C. D. Wright, Profit-Sharing (1886); N. P. Gilman, Profit-Sharing between Employer and Employee (London and New York, 1892); idem, A Dividend to Labour (London and Boston, 1900); A. F. Burritt, Profit-Sharing: its Principles and Practice (New York and London, 1918); National Industrial Conference Board, Research Report No. 29, “Practical Experience with Profit-Sharing in Industrial Establishments” (Boston, 1920); National Civic Federation, Profit-Sharing Department, Profit-Sharing by American Employers (New York, 1920).
PROHIBITION.—In the earlier article (see 26.578) under Temperance, reference has already been made to the various methods devised for securing total abstinence from the consumption of intoxicating liquor, and in particular to the progress of the movement for legislative Prohibition in the United States up to the year 1910. This latter movement eventually culminated in the establishment of nation-wide Prohibition by the Eighteenth Amendment to the Constitution of the United States, as proposed by Congress, Dec. 3 1917, ratified by the necessary three-fourths of all the states, and officially proclaimed, Jan. 29 1919, as part of the Constitution, becoming effective, in accordance with its terms, one year from the date of ratification by 36 states, namely Jan. 16 1920.
In the separate article under Liquor Laws the measures adopted in Great Britain for further regulating the liquor traffic during 1910 to 1921 are dealt with; and here it is only necessary to deal with the advent of complete national Prohibition in the United States, where its adoption forms one of the most interesting chapters in the social history of modern times. The movement for Prohibition was affected by new scientific knowledge, new views of industrial economics, and educational forces of great variety, considerably intensified, but not substantially changed in character, by the experience of the World War. The conviction had grown steadily in the United States that social and industrial efficiency, and national unity of purpose, could not be had at any cheaper price than the cost or sacrifices involved (whatever they might be) in national prohibition; and this belief had almost reached the point where it could be translated into effective governmental action even before the war necessitated a supreme effort for such efficiency. Surprising evidence of this was seen in the passage, by a majority vote (193 to 189) in the House of Representatives, of the Hobson amendment for national prohibition, Dec. 22 1914, two years and four months before the United States entered the war. Save for the war, the country would probably not have had constitutional (which means virtually permanent) national prohibition as early as 1920. Forces were, however, at work which would have probably brought it within another decade, and with it the “bone dry” enforcement contemplated in the National Prohibition Act (popularly called the Volstead Act), the significant title of which is “an Act to prohibit intoxicating beverages, and to regulate the manufacture, production, use, and sale of high-proof spirits for other than beverage purposes, and to ensure an ample supply of alcohol and promote its use in scientific research and in the development of fuel, dye, and other lawful industries.”
Up to the wartime legislation of 1917 and 1918 and the Volstead Act of Oct. 28 1919 for the enforcement of the Eighteenth Amendment, there had been but little change since 1910 in Federal policy. Federal taxation of liquor was greatly increased for revenue purposes in 1917 and 1918. The increasing sentiment in favour of prohibition throughout the country was reflected, however, in other Federal measures. In 1913 the Webb-Kenyon Act was passed, over President Taft's veto. It was based on the constitutional grounds that the Act delegated power over interstate commerce, exclusively vested in Congress, to a state, by making illegal the shipment of liquor from a “wet” state to a “dry” state contrary to the laws of the latter. Some such measure seemed necessary in order that local prohibition might be enforced in “dry” territory. Another indication of national sentiment in favour of restriction is found in the same year in the passage of the Jones-Works Excise Bill for the District of Columbia, which reduced the number of licensed saloons by Nov. 1 1914 to not more than 300, about half as many as before. The Isthmian Canal Commission on July 1 1913, by an administrative order previously adopted, abolished 35 saloons in the Canal Zone by declining to issue any further licences for the sale of liquor. In 1915 absolute prohibition for the District of Columbia was proposed in a rider to an appropriation bill, and defeated in the Senate by a small majority, and in the same year a bill for that purpose was favourably reported in the Senate by the Committee on the District of Columbia. In 1916 the Judiciary Committee of the Senate reported, 13 to 3, a resolution proposing the National Prohibition Amendment to the Constitution. A similar resolution received a majority vote in the House of Representatives in Dec. 1914, though it failed to secure the two-thirds necessary for passage. During the years 1915 and 1916 many of the states had enacted statewide prohibition laws, and there was a considerable extension of dry territory under local option in wet states.
Early in 1917 Congress enacted the Federal Anti-Liquor Advertising Bill with the so-called Reed Bone-Dry Amendment, as an amendment to the Post-Office appropriation bill. This was a drastic prohibition of the use of the mails for advertising, or soliciting orders for, liquor in “dry” territory, and was an extension of the principle of the Webb-Kenyon Act. Congress also adopted prohibition for the District of Columbia, over which it has exclusive legislative power. It provided for prohibition in Alaska to be effective Jan. 1 1918, and in the Porto Rican Citizenship and Civil Government Act it made provision for a referendum in Porto Rico on prohibition. This was held in July 1917, and resulted in a vote of 99,775 for prohibition to 62,195 against. All this action by Congress took place before the declaration of war in April, 1917. Following that declaration came the enactment of wartime prohibition in the Food Control Act of Aug. 10 1917, the liquor restrictions of the draft law of
