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nance of the public highways. If the public cars hold on an average. 30 people, it means less interference with traffic than would 30 individual conveyances.

We believe that the theory of franchise taxation is in error, is against the interests of public policy, imposes burdens where they do not belong, and in the street-railway business imposes burdens on the poorer classes of people, whom as a rule the public wishes to protect and favor in all other methods of taxation.

GENERAL TAXES

In spite of belief to the contrary, it is generally a fact that less corporation wealth escapes taxation than any other, and, on the whole, corporations pay relatively more than their share of taxes. This is due to the fact that private individual wealth can be more easily concealed.

Again, subdividing corporations, it will be found that the public-service corporations pay relatively more taxes than the general corporations, for the same reason as that cited abovenamely, the inability of the public-service corporation to conceal its wealth from view.

We think it safe to say that if any general tax reform were inaugurated which would compel everybody to pay taxes on all wealth, it would receive the hearty and universal support of all public-service corporations.

If taxation be measured on the percentage of gross receipts, on tangible assets, on earning power, or on real estate, a careful investigation will show that the public-service corporations are already paying much more than their fair share.

Respectfully submitted,
Sub-committee

(Henry L. DOHERTY, Chairman,
Alex Dow.

REPORT OF SUB-COMMITTEE ON INDUSTRIAL INSURANCE, REWARDS AND PENSIONS

MAY, 1907

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INDEX

SUBJECT
General Statement
South Metropolitan Gas Light Company of London, Profit-sharing

Plan
Boston Consolidated Gas Company, Profit-sharing Plan..
Pennsylvania Railroad Company, Beneficial Society...
Pennsylvania Railroad Company, Superannuation Fund.
Pennsylvania Railroad Company, Pension
Philadelphia Electric Company, Beneficial Association.....
United Traction Employees' Mutual Aid Association, Providence,

R. I.
Results of the Operation of an Employees Association of a Large

Public-Utility Corporation, Including Results of Mortuary and

Sick-Benefit Funds
Boston Elevated Railway Company
New Haven (Conn.) Gas Light Company, Profit-sharing Plan..
Milwaukee (Wis.) Gas Light Company, Profit-sharing Plan..
The Italian Fund
Exhibit A. General Agr ent Between South Me

Olitan Gas
Company, of London, and Employees.....
Exhibit B. Statement Showing the Contributions Made by Members

of the Pennsylvania Railroad Voluntary Relief Department and
the Companies Associated in Administration Thereof, Also the
Disbursements in Benefits and Assistance Rendered to the

Members
Exhibit C. Regulations Governing the Philadelphia Electric Bene-

ficial Association
Exhibit D. Contract Between United Traction and Electric Com-

pany, Providence, R. I., with United Traction Employees' Mutual Aid Association

57 64 65

65

66

68

69

77

90

To the Committee on Public Policy, National Electric Light Asso

ciation:
Gentlemen-Your Committee

on Industrial Insurance, Rewards and Pensions begs leave to submit the following report of the investigations which it has made during the past year of the methods adopted in this country in connection with beneficial associations, pensions and profit-sharing. It has also in its investigations considered the plan that has been in operation for a number of years in the South Metropolitan Gas Company of London.

Except in a few instances there have been no profit-sharing plans adopted by the utility corporations of this country, and in those instances the profit-sharing has been calculated as a dividend upon the wages of the employees. We find, however, that it is becoming quite prevalent to inaugurate beneficial associations in connection with the operation of utility companies upon plans generally laid down on lines similar to those adopted by the large railway companies of the country.

Your committee gives to some extent in detail the plan of the Pennsylvania Railroad Company, which is representative of the plans used by the other large railway companies throughout the country.

References are also made to the plan that has been in force in Philadelphia for many years, which has been broadened out in the manner given in detail in the report; also the plan in operation in Providence, R. I., the figures of which to date are attached, as well as the figures in detail of the operations for a series of years of a beneficiary association organized under the auspices of the employees of a public-utility company in one of the large cities of the country; also to the pension order issued by the Boston Elevated Railway Company in 1903; and the profit-sharing plan adopted by the New Haven (Conn.) Gas Light Company and the Milwaukee (Wis.) Gas Light Company.

The purpose of your committee has been to gather together as much information as possible regarding such associations and such systems of insurance, rewards and pensions as have been adopted throughout the country. While your committee is aware of the fact that many of the companies connected with the association are operating under conditions that make it impossible for them to have any special organized system to accomplish this purpose, at the same time it feels that wherever it is possible to adopt such plans, or similar plans to those which have been described in this report, it is well to do so; and would further suggest to those companies that can not at this time, for different reasons, adopt such systems, that they operate as far as possible upon the general principle of doing whatever is possible to promote the health, happiness and comfort of the employees of their respective organizations.

It might be possible, in the case of the smaller companies, that operatives who have been with these companies for a great many years, who have been faithful and have always worked for the best interests of the company, could be rewarded by a small percentage of increase in pay, commensurate with such services and proportionate to their term of service. As many such operatives have nothing to look forward to for the future in the way of advancement of position, a plan of this kind would give them some inducement to remain with the company and an increasingly bright outlook from year to year. If it is possible, where men have been for a long term of years in service, to place them in positions where their labors can be lightened, such men should be recognized; and if, from old age, they are finally forced to resign, if it is possible and consistent with the demands upon the various companies to pension them at half pay, or at any rate which would give them some consideration, it should be done. The tendency with all such plans is to lighten the burden of the employee, increase his efficiency by reason of the peace of mind that comes from such a condition, and safeguard the interests of the company by encouraging closer, deeper and more harmonious relations between the employee and the company that employs him.

Respectfully submitted,
Sub-committee

S Joseph B. McCall, Chairman,
J. W. LIEB, Jr.

APPENDIX TO REPORT OF SUB-COMMITTEE ON INDUSTRIAL INSURANCE, REWARDS

AND PENSIONS

PROFIT-SHARING The profit-sharing plan of the South Metropolitan Gas Company of London-copy of which, with various details, we received through the courtesy of our secretary, Mr. Gardiner can be briefly stated as follows:

The officers and employees of the company who sign the agreement of employment (copy of which is hereto attached) participate in the profits in the form of a percentage upon their salaries, rising and falling with the price of gas and the stockholders' dividends. The initial rate, when the plan became operative in 1889, was one per cent upon their salaries, based upon gas at practically 50 cents per thousand cubic feet. Inasmuch as the London sliding scale, authorized by act of Parliament, entitled the stockholders to an increase in dividends as the price of gas to the consumers was reduced, the pan provided for a proportionate increase in the employees' participation; and inversely, as the price of gas increased, the dividends and the participation decreased. In fact, the principle of the London sliding scale is the basis of calculation of the profit-sharing plan.

At first the percentage of profits to which every employee was entitled on this basis was paid to him as a cash bonus, with the privilege of permitting the employee to leave his fund on deposit with the company, at an annual rate of interest.

Sir George Livesey, who was the author of the London sliding scale and also of the profit-sharing scheme that was adopted, states in his paper upon the subject that a great proportion of the employees from the beginning availed themselves of the opportunity of leaving the fund on deposit; while others invested in building stock, and others used it to purchase the company's stock; but about one-half of the number, it was discovered, withdrew their bonus as soon as it was paid and therefore derived no permanent benefit from the system. These conditions led to a consideration by the company of some method by

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