The New Zealand Railways Magazine, Volume 2, Issue 5 (September 1, 1927)
Profits for Employees
Profits for Employees.
These facts show beyond all question that during the last twenty years the employees of the railroads have received far greater benefits from the improvements in the properties and in their operation than those who, by the investment of capital in them, have made these improvements possible. Twenty years ago the employees as a whole received an income from the industry 24 per cent. greater than the income received by capital, while last year the employees received 140 per cent. more than capital. Probably in most other industries the increase in the income of employees has not been so much greater in proportion than the increase in the income of capital as it has been in the railway industry, because the railroads have been subject to a special form of regulation directed mainly at limiting the return received by the capital invested in them. But in practically all other industries wages have increased much more in proportion than the income from invested capital.
In other words, the facts demonstrate, as I indicated earlier in this address, that under our present industrial system it is the employee, not the employer, who gets the lion's share of the increase in income and purchasing power resulting from large and wise investment of capital, good management and sane co-operation between employers and employees to intensify industrial efficiency. During most of the period reviewed the difficulty of raising capital for the railway industry constantly increased because of excessively restrictive regulation of the return upon it. Undoubtedly if the percentage of return allowed to be earned had been larger the amount of capital invested would have been larger, resulting in improvements in facilities that would have effected still greater savings of labour, fuel and materials, thereby making possible even higher wages for employees or lower rates for the public.