On A New System Of Manufacturing

305. A most erroneous and unfortunate opinion prevails

amongst workmen in many manufacturing countries, that their own

interest and that of their employers are at variance. The

consequences are that valuable machinery is sometimes neglected,

and even privately injured--that new improvements, introduced by

the masters, do not receive a fair trial--and that the talents

and observations of the workmen are not directed to

improvement of the processes in which they are employed. This

error is, perhaps, most prevalent where the establishment of

manufactories has been of recent origin, and where the number of

persons employed in them is not very large: thus, in some of the

Prussian provinces on the Rhine it prevails to a much greater

extent than in Lancashire. Perhaps its diminished prevalence in

our own manufacturing districts, arises partly from the superior

information spread amongst the workmen; and partly from the

frequent example of persons, who by good conduct and an attention

to the interests of their employers for a series of years, have

become foremen, or who have ultimately been admitted into

advantageous partnerships. Convinced as I am, from my own

observation, that the prosperity and success of the master

manufacturer is essential to the welfare of the workman, I am yet

compelled to admit that this connection is, in many cases, too

remote to be always understood by the latter, and whilst it is

perfectly true that workmen, as a class, derive advantage from

the prosperity of their employers, I do not think that each

individual partakes of that advantage exactly in proportion to

the extent to which he contributes towards it; nor do I perceive

that the resulting advantage is as immediate as it might become

under a different system.

306. It would be of great importance, if, in every large

establishment the mode of payment could be so arranged, that

every person employed should derive advantage from the success of

the whole; and that the profits of each individual should

advance, as the factory itself produced profit, without the

necessity of making any change in the wages. This is by no means

easy to effect, particularly amongst that class whose daily

labour procures for them their daily food. The system which has

long been pursued in working the Cornish mines, although not

exactly fulfilling these conditions, yet possesses advantages

which make it worthy of attention, as having nearly approached

towards them, and as tending to render fully effective the

faculties of all who are engaged in it. I am the more strongly

induced to place before the reader a short sketch of this system,

because its similarity to that which I shall afterwards recommend

for trial, will perhaps remove some objections to the latter, and

may also furnish some valuable hints for conducting any

experiment which might be undertaken.

307. In the mines of Cornwall, almost the whole of the

operations, both above and below ground, are contracted for. The

manner of making the contract is nearly as follows. At the end of

every two months, the work which it is proposed to carry on

during the next period is marked out. It is of three kinds. 1.

Tutwork, which consists in sinking shafts, driving levels, and

making excavations: this is paid for by the fathom in depth, or

in length, or by the cubic fathom. 2. Tribute, which is payment

for raising and dressing the ore, by means of a certain part of

its v alue when rendered merchantable. It is this mode of payment

which produces such admirable effects. The miners, who are to be

paid in proportion to the richness of the vein, and the quantity

of metal extracted from it, naturally become quicksighted in the

discovery of ore, and in estimating its value; and it is their

interest to avail themselves of every improvement that can bring

it more cheaply to market. 3. Dressing. The 'Tributors', who dig

and dress the ore, can seldom afford to dress the coarser parts

of what they raise, at their contract price; this portion,

therefore, is again let out to other persons, who agree to dress

it at an advanced price.

The lots of ore to be dressed, and the works to be carried

on, having been marked out some days before, and having been

examined by the men, a kind of auction is held by the captains of

the mine, in which each lot is put up, and bid for by different

gangs of men. The work is then offered, at a price usually below

that bid at the auction, to the lowest bidder, who rarely

declines it at the rate proposed. The tribute is a certain sum

out of every twenty shillings' worth of ore raised, and may vary

from threepence to fourteen or fifteen shillings. The rate of

earnings in tribute is very uncertain: if a vein, which was poor

when taken, becomes rich, the men earn money rapidly; and

instances have occurred in which each miner of a gang has gained

a hundred pounds in the two months. These extraordinary cases,

are, perhaps, of more advantage to the owners of the mine than

even to the men; for whilst the skill and industry of the workmen

are greatly stimulated, the owner himself always derives still

greater advantage from the improvement of the vein.(1*) This

system has been introduced, by Mr Taylor, into the lead mines of

Flintshire, into those at Skipton in Yorkshire, and into some of

the copper mines of Cumberland; and it is desirable that it

should become general, because no other mode of payment affords

to the workmen a measure of success so directly proportioned to

the industry, the integrity, and the talent, which they exert.

308. I shall now present the outline of a system which

appears to me to be pregnant with the most important results,

both to the class of workmen and to the country at large; and

which, if acted upon, would, in my opinion, permanently raise the

working classes, and greatly extend the manufacturing system.

The general principles on which the proposed system is

founded, are

1. That a considerable part of the wages received by each

person employed should depend on the profits made by the

establishment; and,

2. That every person connected with it should derive more

advantage from applying any improvement he might discover, to the

factory in which he is employed, than he could by any other


309. It would be difficult to prevail on the large capitalist

to enter upon any system, which would change the division of the

profits arising from the employment of his capital in setting

skill and labour in action; any alteration, therefore, must be

expected rather from the small capitalist, or from the higher

class of workmen, who combine the two characters; and to these

latter classes, whose welfare will be first affected, the change

is most important. I shall therefore first point out the course

to be pursued in making the experiment; and then, taking a

particular branch of trade as an illustration, I shall examine

the merits and defects of the proposed system as applied to it.

310. Let us suppose, in some large manufacturing town, ten or

twelve of the most intelligent and skilful workmen to unite,

whose characters for sobriety and steadiness are good, and are

well known among their own class. Such persons will each possess

some small portion of capital; and let them join with one or two

others who have raised themselves into the class of small master

manufacturers, and, therefore possess rather a larger portion of

capital. Let these persons, after well considering the subject,

agree to establish a manufactory of fire-irons and fenders; and

let us suppose that each of the ten workmen can command forty

pounds, and each of the small capitalists possesses two hundred

pounds: thus they have a capital of L800 with which to commence

business; and, for the sake of simplifying, let us further

suppose the labour of each of these twelve persons to be worth

two pounds a week. One portion of their capital will be expended

in procuring the tools necessary for their trade, which we shall

take at L400, and this must be considered as their fixed capital.

The remaining L400 must be employed as circulating capital, in

purchasing the iron with which their articles are made, in paying

the rent of their workshops, and in supporting themselves and

their families until some portion of it is replaced by the sale

of the goods produced.

311. Now the first question to be settled is, what proportion

of the profit should be allowed for the use of capital, and what

for skill and labour? It does not seem possible to decide this

question by any abstract reasoning: if the capital supplied by

each partner is equal, all difficulty will be removed; if

otherwise, the proportion must be left to find its level, and

will be discovered by experience; and it is probable that it will

not fluctuate much. Let us suppose it to be agreed that the

capital of L800 shall receive the wages of one workman. At the

end of each week every workman is to receive one pound as wages,

and one pound is to be divided amongst the owners of the capital.

After a few weeks the returns will begin to come in; and they

will soon become nearly uniform. Accurate accounts should be kept

of every expense and of all the sales; and at the end of each

week the profit should be divided. A certain portion should be

laid aside as a reserved fund, another portion for repair of the

tools, and the remainder being divided into thirteen parts, one

of these parts would be divided amongst the capitalists and one

belong to each workman. Thus each man would, in ordinary

circumstances, make up his usual wages of two pounds weekly. If

the factory went on prosperously, the wages of the men would

increase; if the sales fell off they would be diminished. It is

important that every person employed in the establishment,

whatever might be the amount paid for his services, whether he

act as labourer or porter, as the clerk who keeps the accounts,

or as bookkeeper employed for a few hours once a week to

superintend them, should receive one half of what his service is

worth in fixed salary, the other part varying with the success of

the undertaking.

312. In such a factory, of course, division of labour would

be introduced: some of the workmen would be constantly employed

in forging the fire-irons, others in polishing them, others in

piercing and forming the fenders. It would be essential that the

time occupied in each process, and also its expense, should be

well ascertained; information which would soon be obtained very

precisely. Now, if a workman should find a mode of shortening any

of the processes, he would confer a benefit on the whole party,

even if they received but a small part of the resulting profit.

For the promotion of such discoveries, it would be desirable that

those who make them should either receive some reward, to be

determined after a sufficient trial by a committee assembling

periodically; or if they be of high importance, that the

discoverer should receive one-half, or twothirds, of the profit

resulting from them during the next year, or some other

determinate period, as might be found expedient. As the

advantages of such improvements would be clear gain to the

factory, it is obvious that such a share might be allowed to the

inventor, that it would be for his interest rather to give the

benefit of them to his partners, than to dispose of them in any

other way.

313. The result of such arrangements in a factory would be,

1. That every person engaged in it would have a direct

interest in its prosperity; since the effect of any success, or

falling off, would almost immediately produce a corresponding

change in his own weekly receipts.

2. Every person concerned in the factory would have an

immediate interest in preventing any waste or mismanagement in

all the departments.

3. The talents of all connected with it would be strongly

directed to its improvement in every department.

4. None but workmen of high character and qualifications

could obtain admission into such establishments; because when any

additional hands were required, it would be the common interest

of all to admit only the most respectable and skilful; and it

would be far less easy to impose upon a dozen workmen than upon

the single proprietor of a factory.

5. When any circumstance produced a glut in the market, more

skill would be directed to diminishing the cost of production;

and a portion of the time of the men might then be occupied in

repairing and improving their tools, for which a reserved fund

would pay, thus checking present, and at the same time

facilitating future production.

6. Another advantage, of no small importance, would be the

total removal of all real or imaginary causes for combinations.

The workmen and the capitalist would so shade into each other--

would so evidently have a common interest, and their difficulties

and distresses would be mutually so well understood that, instead

of combining to oppress one another, the only combination which

could exist would be a most powerful union between both parties

to overcome their common difficulties.

314. One of the difficulties attending such a system is, that

capitalists would at first fear to embark in it, imagining that

the workmen would receive too large a share of the profits: and

it is quite true that the workmen would have a larger share than

at present: but, at the same time, it is presumed the effect of

the whole system would be, that the total profits of the

establishment being much increased, the smaller proportion

allowed to capital under this system would yet be greater in

actual amount, than that which results to it from the larger

share in the system now existing.

315. It is possible that the present laws relating to

partnerships might interfere with factories so conducted. If this

interference could not be obviated by confining their purchases

under the proposed system to ready money, it would be desirable

to consider what changes in the law would be necessary to its

existence: and this furnishes another reason for entering into

the question of limited partnerships.

316. A difficulty would occur also in discharging workmen who

behaved ill, or who were not competent to their work; this would

arise from their having a certain interest in the reserved fund,

and, perhaps, from their possessing a certain portion of the

capital employed; but without entering into detail, it may be

observed, that such cases might be determined on by meetings of

the whole establishment; and that if the policy of the laws

favoured such establishments, it would scarcely be more difficult

to enforce just regulations, than it now is to enforce some which

are unjust, by means of combinations either amongst the masters

or the men.

317. Some approach to this system is already practised in

several trades: the mode of conducting the Cornish mines has

already been alluded to; the payment to the crew of whaling ships

is governed by this principle; the profits arising from fishing

with nets on the south coast of England are thus divided:

one-half the produce belongs to the owner of the boat and net;

the other half is divided in equal portions between the persons

using it, who are also bound to assist in repairing the net when



1. For a detailed account of the method of working the Cornish

mines, see a paper of Mr John Taylor's Transactions of the

Geological Society, vol. ii, p. 309.