800 employees, of whom 325 are boys and girls. The business of soap-making requires very little skilled labor, and wages are low. They average $10 a week for men; $4.75 for women; and from $3.50 to $7 for boys and girls.

In 1887 the company adopted the plan of sharing profits. During the previous year there had been fourteen strikes in the factory, involving each time from ten to 100 men. Stability and education were needed. The plan as originally adopted gave a salary of $4,000 to each member of the firm actively engaged in the business, and divided the rest in a certain ratio between the employees and the company. The employees' share was divided according to wages received. All who had been in the company's employ for three months were included, except the boys and girls earning less than $4.50 a week.

In 1890 the company was incorporated, and a new plan was adopted of paying a bonus on wages proportional to that earned by the common stock. A stockholder owning five hundred dollar's worth of stock and an employee earning $500 a year receive the same dividend. The dividends since have averaged more than twelve per cent., and more than ninety, instead of fifty, per cent. of the employees draw their dividend.

There have been several reasons for it all. Since 1892 the employees have been encouraged to become shareholders in the company. Ten dollars assures to any employee one share of the common stock, bought at the market price by a trustee appointed by the company. Two years is allowed to complete the payment and interest on the unpaid balance which is charged at four per cent. Nearly a hundred of the adult male employees own shares in the stock, the total present value of which is almost half a million dollars.

In 1894 a pension plan was established. A portion of the profit dividend is set aside each year, and the company contributes an equal amount. A pension not exceeding threefourths of the average wages received during the last two years of service is paid to any employee who, on account of old age, sickness or accident is obliged to give up work. The only condition is ten years of service. In 1899 the pension fund amounted to about six thousand dollars, with only one pensioner, and he still earns something by tending the gate at the entrance to the factory grounds.

In the main, good spirit has been shown by the men. Of course there are always excep

tions. Men have left the Proctor & Gamble Company in dissatisfaction, but that would always happen even under the best conditions. In August, 1899, thirty-four boys in the packing department went out on a strike. They had all been in the company's employ several years, and had grown to manhood, though they were still on boy's wages. Their action, however, was not so much a protest against profit-sharing as an illustration of the fact that profit-sharing is, after all, only a means. It tends to bring employer and worker into closer relations. And that is all. It does not take the place either of good wages or of permanent employment.

One instance may be taken as typical of the general result. From time to time it is the custom to sum up the results at a meeting of the firm and the employees. Once it was pointed out that where the cost of raw material is the chief cost of production, the best way of saving is the prevention of waste. Formerly, the scraps that came from the machine where the soap was cut were scattered heedlessly over the floor. Once a week the floors had to be scraped, and from this material a lowgrade soap was manufactured, which was called "Banjo," and sold at $1.25 a box. By a little attention another grade of soap was obtained from reworking this same material. This grade sells for $3 a box, and as about 10,000 boxes are turned out every day, the saving in material alone is evident. But this is only one instance. The main result is that which the company set out in the beginning to attain

to bring about stability, to give permanent employment at good wages, and to educate their men in the business. At present there are only two men in important positions in the factory who have not been advanced or promoted from the ranks. And these two are employed on account of their technical knowledge and experience.

The main objection to any form of profitsharing is that it is illogical. It doesn't work both ways. To share a loss means a decrease in wages. And good wages are at the basis of it all. It is, then, only where wages are entirely independent of all hazards of business that profit-sharing-or, better still, prosperitysharing-can hope to succeed. Moreover, the method is everything. method is everything. It stands for merit. Charity must be barred.

THE MOST

EXTRAORDINARY

AND

CONTRADICTORY GOVERN

E

UROPE holds no more pathetic figure than Francis Joseph, Emperor of Austria and King of Hungary. Merely to set down the story of his life is to unfold a tragedy worthy of the Attic stage. All his life he has been tried as with fire, buffeted by every exquisite experience of sorrow that a man can know and almost every ignominy that a king can endure. He came as a boy to a throne shaken by revolution and an empire seemingly crumbling to ruin. That empire still has a prospect of the same fate. By the fortunes of two bloody wars precious parts of it have been lost to his crown forever. His only son died a violent death under circumstances that are still somewhat of a mystery. His brother Maximilian went to Mexico to establish an empire, but, as it turned out, only to find a grave; for he fell under the weapons of his own subjects-if he could ever have been entitled to regard in that light men whose loyalty was never anything but a matter of interest or compulsion. Maximilian's wife, the Empress Charlotte, lost her reason under the blow. The Queen of Naples, the sister of the late Empress of Austria, was driven from her throne during the struggle for Italian independence. She came to Francis Joseph a fugitive from the ramparts of Gaeta, where she had played a man's part, for want of a man capable of playing it, by encouraging the garrison, at the hazard of her own life, to a splendid but vain resistance. A little over two years ago came the last blow. The nation was just preparing to celebrate the jubilee of its patient, beloved, and sorely stricken monarch. when the Empress was murdered by an Italian anarchist. With wife, son, and

brother all lost, small wonder the Emperor cried out in his agony, "Is nothing to be spared me in this world?" There must arise the sombre simplicity of another Sophocles before the tragedy of such a life can be felt in its full measure.

And if the past has been bitter, the present and the future, at least in many eyes, seem almost as hopeless. If the cup of all possible personal suffering is full, the portents are dark with presage of political trouble. Europe watches the Dual Monarchy with a sense of impending dissolution.

For more than fifty years Francis Joseph has striven "to solder close impossibilities and make them kiss," and now at last the prophets declare that the forces of disunion are growing too strong even for his quiet and restraining influence. This, as will afterwards appear, is an opinion I venture to dispute; but I have to admit it is a foreboding entertained by many cautious and capable observers. If the Dual Monarchy holds together during the remainder of the Emperor's lifetime, the world will look upon it as a memorable tribute to the place he has won in the hearts of his peoples. it survives his death for long, it will falsify many an expectation. In either case the closing years of the hapless monarch's life are doomed to be preyed upon by a fearful anxiety for the realm that the Habsburgs have ruled for six hundred years and more.

A GREAT GOVERNMENTAL CRISIS

If

tutions in southeastern Europe; they are likely to be a turning-point in the history of the Dual Monarchy itself. The Emperor announced after the dissolution that this was the last chance his peoples would be allowed to settle their difficulties by constitutional means. The warning can hardly be thought over-hasty. It has indeed been delayed long past the first moment of justification. Within the last three years the Emperor has seen no less than five Premiers adding to and baffled by the confusion of the country. He has seen the Reichsrath turned into a bear-garden, Bohemia convulsed with something more than a pretence of civil war, the German-Czech feud carried to a point where neither side will be satisfied with anything short of a shattering triumph, the partnership with Hungary imperilled by a crisis which has been partly tided over but by no means settled, and the Parliamentary system degraded and nullified in a vicious chaos of polyglot intrigue. He has seen one half of his realm lying exhausted and impotent at the feet of the obstructionists, and the other half taking advantage of its weakness. He has run through all the permutations and combinations of Austrian parties and appealed to each nationality in turn in his search for a durable and decisive Ministry. He has even tried his hand at such constitutional autocracy as Article XIV permits of, an autocracy, of course, very different in kind and effect from the absolutism of his earlier years.

It is therefore only after a quite wonderful forbearance and a long and resolute stifling of his Habsburg instincts that the Emperor has launched his ultimatum. Its intention is clear only up to a certain point, but it has within it at least a definite promise of deliverance and as such has been gratefully welcomed. If the extremists are again in control and the new Reichsrath proves as unworkable as its predecessor, and there is not the smallest hope or the smallest indication of any other issue, the Constitution is to be suspended that much seems assured. Whether after that a new Constitution will be drafted by royal decree and an effort made to secure for it the sanction of a plebiscite; whether the new Constitution, if promulgated, will sweep away the present clumsy and dis

honest electoral system and duplicate Count Taafe's rather desperate attempt to flatten out racial enmities under the steam-roller of universal suffrage; whether the standing orders of the Reichsrath are to be revised and strengthened to head off obstruction; or whether the Emperor will take up once more his old rôle of benevolent despotthe benevolence of it may be assumed to-day, though it did not temper the first ten years of his reign and govern without the hindrance of a Parliament, are questions to which only speculative answers can yet be given. Whatever happens one may perhaps be certain of three things:

Nevertheless, there is a crisis in AustriaHungary and a dangerous one, in spite of Dr. Emil Reich's convenient dismissal of the racial ferment as a sign of just that healthy activity in the body politic, for the lack of which Poland perished. The truth of the matter seems to be that Austria is slowly, and under conditions of peculiar complexity, coming in for her full share of the French Revolution and the bouleversements of '48. It is the last rumblings of the world-earthquake in the southeastern corner of Europe-not the last altogether, for Spain's turn is still to come-that we have been listening to, the final bout in the struggle for individual and rational assertion.

In such a situation the simpler the conditions and the clearer the objective, the more likely is the revolutionary movement to succeed at a stroke. The infinite crosscurrents of Austrian politics, the intermin

gling of so many opposing interests of race, religion, and economics, saved the realm in 1848, and will always be a barrier to the cohesion and common impulse and determination, without which an agitation must sooner or later crumble away. The complexity of Austria, if it gives too obvious and easy an opening to the small incendiary, is also a safeguard against anything like subversion on a large scale. There is always the chance of playing off one faction against another as the Czechs were used to police Hungary after the rebellion -and neutralizing a threatening combination by stirring up divisions in its ranks. The Dual Monarchy, in fact, as we know it to-day, is a congeries of nationalities balancing one another, not by an artificial system of checks, but by the natural play of racial enmities and ambitions. The final strength of its position lies in the weakness and antagonisms of its component parts, so that while it is never without a crisis of some sort, it always manages to evade the logical disruption. It is easier to see that it seems forever on the brink of a precipice than to recognize and gauge the forces that keep it from sliding over.

It is

geneous nation. Indeed, as the late Professor Freeman used to insist with lofty impatience and somewhat rasping iteration, the word "nation" has no applicability to Austria and very little to Hungary. To talk of either state so as to give the impression that it can act or think as a unit, is, to use his own shattering conclusion, to talk nonsense. this variegated contradictoriness of AustriaHungary that makes up its fascination for the political student. There is hardly a problem of those that are common to all modern countries with which it is not faced, and in addition it is an inexhaustible problem itself, a paradox, a mosaic without obvious cement, a Tower of Babel "erected into a system of government," everything, in short, that is abnormal, unreasonable, and impossible. The nationalities that inhabit it have owned a common sceptre and jostled side by side for centuries in an area smaller than Texas, and yet never mingled. Each race has lived its own life, made its own history, produced its own literature, preserved, and, of course, tried to extend, its own individuality.

Austria to-day is what Metternich with less truth called Italy, little more than a geographical expression. Three bonds, to be touched on later, do indeed unite its discordant nationalities; but for the too hasty observer the country might well seem in the last stages of decomposition. There is nothing really Austrian in Austria-no Austrian interests, no Austrian language, or literature, or patriotism, no Austrian nationality, no Austrian standard of civilization; nothing except the Emperor, and the army, and the cockpit of Reichsrath that the races share in common. The Germans form a compact entity by themselves in Upper and Lower Austria and the Duchy of Salzburg. In Bohemia there is a respectable colony of them along the borders of Saxony and Bavaria, over two million strong, but even so outnumbered by the Czechs in the ratio of three to five. All together the German-speaking subjects are about a third of the total population of Austria - some eight and a half out of twenty-four millions. The Czechs in Bohemia, Moravia, and Silesia number roughly five millions. In Galicia some four million Poles hold down a trifle over three millon Ruthenians. A couple of million Slovenes, Servians, and Croats are

scattered over Carinthia and Carniola, while close on a million Italians inhabit the Tyrol. None of these races can alone be said to represent Austria, though all of them claim to; and their mutual wranglings, struggles to realize themselves, struggles to elbow out their neighbors and seize an incontestable ascendency, are the background, and at times something more, of modern Austrian politics.

THE DOMINANT MAGYARS

But for the dashing tenacity of the Magyars, who in politics are the English of the Continent, Hungary might be as heterogeneous as her partner in the Dual Monarchy. The Magyars are only seven and a half out of nearly eighteen millions, but they are a race with the fierce hardihood and determination of the Teutonic stock and a grace and fascination that are neither Latin nor Celtic, but distinctively their own.

Since the two nations entered into a partnership agreement as coequal and sovereign states, the Magyars have devoted all their brilliant energies and the immense force of a concentrated one-idealness to making themselves paramount throughout the southern half of the realm. They revolted against being Germanized, but they see no inconsistency in insisting that the Servians, Croats, Roumanians, and Slovenes shall be Magyarized; and they have set about the task with unsparing persistency just saved from relentlessness by their genius for wise compromise.

A re

stricted suffrage, excluding nineteen-twentieths of the people from the polls, keeps public affairs in their grasp. The schools have been a much more effective instrument in the development of a national feeling, and the Magyars have thoroughly worked them to that end.

Like the Russians and Americans, but unlike the English, the Magyars recognize that where there is difference of speech there will be difference of sentiment, of heart, of interests, and at a pinch perhaps of loyalty, and have accordingly refused to make the preservation of dialects an object of government. Fifty years ago the Hungarian nobles spoke German and a bastard monkish Latin in their homes and Diets. To-day the native tongue obtains, among all classes, and the absorption of all manner of outlanders-Germans, Slo

vacks, Jews, Roumanians, and Croats-by the irresistible and peaceful process of denationalization in the schoolroom, has gone on at such a pace that the Magyars increase nearly three times as quickly as any of the neighboring races. The struggle of the nationalities in Hungary has ended in a more or less resigned acquiescence in Magyar rule.

THE MAGYAR TENACITY

In Austria, as in Spain, the factory is placed some distance behind the barracks as an element of national welfare, and a contemptuous bureaucracy shackles trade with a hundred entangling regulations. The Magyars, on the other hand, have been as attentive to commerce as to their racial position. Perhaps there is no country in which the state, as such, has done more for industrial development. The really vital domestic problems of Hungary are, indeed, no longer racial, and as freedom of worship is the law, they have never been acutely religious. But in the rise of what is called Agrarian Socialism, a movement which has a future before it not only in Hungary, but in Germany, Spain, and Italy, there is something that before long may test Magyar statesmanship severely.

Meanwhile the Magyars are the backbone of the Dual Monarchy. Against the rising tides of Pan-Slavism they present a compact and unbending front. Together with the German Empire they may be considered the outposts of Europe against Slav aggression; and even in the domestic affairs of the monarchy their unbreakable unity as a political force has made their influence well-nigh decisive. The Ausgleich of 1867 — the partnership agreement between the two halves of the realm-prescribed that matters of common concern, such as foreign affairs, diplomatic representation, and naval and military matters, should be arranged by sixty delegates from each country, meeting twice a year. The Austrian delegation is made up of Germans, Czechs, Poles, Ruthenians, Italians, whose feuds make steady coöperation all but impossible. The Hungarian delegation, on the other hand, is composed of fifty-five Magyars and five Croatians, working with the directness and harmony of a single man. The consequence is that in the long run the Hungarian view is pretty sure to carry the