Production and Profits

T HE influence of production on profits has always been obvious and methods of reducing costs by increasing production have received very general attention since Mr. F. W. Taylor's careful analysis of the factor of overhead expense; but the influence of profits on production, though always a very real factor in industrial engineering, becomes obvious only under special conditions. In England during the war, in those cases where the earnings of the wage worker were increased to a point sufficient to fulfill all his ordinary desires, the final disposition of the profits arising in connection with his efforts became a very real force in spurring him on or holding him back. In spite of possibilities of increasing his own earnings, a normal human being will find his efforts lessened by the knowledge that he is also increasing an already liberal return to some absent stockholder; or will be moved to demand a larger share for himself and to stop work in support of that demand, and even to relax his efforts after the demand has been granted. On the other hand, there are millions of instances the world over of almost superhuman energy given forth week in and week out for four long years where the sole advantage beyond the pay envelope accrued. to the worker's country and its allies. American business men have taught their fellows that each business venture is an undertaking for profits and that they cannot be surprised if the profits of a business and the people to whom they go are subjects of real interest to every employee. Wherever, to the minds of employees, the distribution of profits has the flavor of justice, of a reasonable connection of ause and effect, of reward and dessert, the great majority of them feel a mild sense of satisfaction. None but that almost negligible percentage of true radicals, which is always with us, begrudges the reward of an Edison, a Vail or a Henry Ford, nor the reasonable reward of those who have risked their money in useful ventures. However, unr st begins and restless propositions arise where increased profits are known to be going to those who are inactive and w ose public service is invisible. Today, when production to support life is as seriously needed by the world s was production to destroy life during the war, this influence of the distribution of profits upon the primary agent of production is a challenge to all men interested in the profession of management. When we have to face any of the mechanical problems which the industrial process presents to us by the hundred thousand, we know that a careful analysis of causes and effects of the elemental forces and their interrelations is essential and we waste no time in cursing the crotchet of the machine or the crankiness of the material, but set to work finding the sources of trouble. Not so many managers have yet learned the value of maintaining the same clear-sighted, common-sense attitude when the problem lies within the field of labor. Yet it is obvious that the forces at work, brewing and stewing among a thousand employees, are as vital or as fatal as those in any electric furnace. I know many

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