Nothing in industry is surrounded by so much confusion and ignorance, both among employers and employed, as the question of payment by results. The value of this method of payment in promoting production is indisputable. I have many actual cases in mind where the introduction of piece-work in place of time-work resulted in an increase of output up to 110 per cent., thereby materially reducing the cost of production. Yet while in some trades, for example the cotton trade, the operatives refuse to work on any basis other than piece-work, in other trades, for example carpentering and many sections of engineering, piece-work is considered a “pestilential system” [_sic_] tending to unemployment, degradation of the worker, and untold evils. It is in regard to payment by results on the premium bonus system that the greatest misconception prevails amongst both masters and men. That is a system under which a time is fixed for each job. If the job is done in less than the fixed time, the time saved is divided in a definite proportion between employer and worker—generally half and half in England—and the latter paid for his portion at his ordinary time-rate. The system has provoked in this country, unlike the United States of America, the greatest animosity on the part of the Trade Unions. Their point is that on a piece-work basis, where the man is paid a definite price for each article or operation, the more he does the more he is paid. For all time he saves in finishing an article, he receives the full benefit, the employer’s benefit being the lower cost of production resulting from increased output. What right then, it is argued, has the employer, like a parasite, to make anything out of the time which the worker saves on the premium-bonus system. The argument is plausible, but misleading. It entirely overlooks the fact that under a piece-work system, where the workman is paid for all the time saved, prices are necessarily fixed on a much less liberal basis than time allowances on a premium-bonus basis. In the latter case, just because the employer gets a share of the time saved, he can adjust the rate generously, or as rate-fixers put it, “fix the price loosely.” If production is to be furthered in this country, the whole system of payment proportioned to output must be lopped free of its perversion by certain employers, and emancipated from the prejudice of Trade Unions. When displayed intelligibly in its true economic characteristics, the system will speak for itself. The actual rates to be fixed under any particular system are, of course, a fair matter for collective bargaining. Subdivision and Simplification of Process