left vertical, which will indicate the corrective ratio required. Next, multiply the previously computed difference by this corrective ratio, and add the result to or subtract it from "Sum C." The result, "Sum E," will be the finally corrected limit, from which must be subtracted the total actual cost so as to determine the amount of profit to be divided. The first step in such division is to set aside the employees' share on the basis of percentage agreed on; and the next is to divide the remaining profit between the contractor and the owner, as per the profit diagram (Fig. 33a).

The size of the percentage of the declared profit to allow the employees will depend on the character of the work covered in the contract in respect to the proportionate division of the cost between materials and labor. Under ordinary conditions, the division is about half and half, in which case the employees' percentage should be from 20 to 25; but where the labor cost preponderates these figures should be increased, and where the materials cost is the greater they should be diminished.

In respect to the division of this bonus among the employees, the following method is suggested:

Only those workmen or assistants of any class who have stayed on the job, either until its completion or until their services were no longer needed, should participate in the profits; and the amount of the share of each such workman and assistant should be in the proportion which his total earning on the work bears to the grand total of the earnings of all those employees who so participate. As, in any good business organization, a record is always kept of the amount of salary or wages paid to each employee on any contract, it would require only a few hours of extra work for the book-keeper, after the job is finished, to compute each man's proportionate share of the bonus.

There is an additional protection against possible loss which might be given to the contractor under certain conditions, especially on work to be done in a foreign country. If it be anticipated that during construction any large general rise in the price of labor is likely to occur, thus greatly augmenting the total cost of the work, the limiting total expenditure of the owner, as hereinbefore finally adjusted, should be increased by an amount figured thus:

Determine the average current wages for common labor at the time of letting the contract, and the average paid therefor during the entire time occupied by the construction, and call the ratio of these two averages r'; then figure the total amount of salaries and wages paid to employees from start to finish and call it W. Then,

W (r'- 1) X 1.2

will be the amount required, the factor, 1.2, covering a fair allowance for overhead and profits.

It has been suggested of late in the technical press that the contractor himself should be paid a salary by the owner, in addition to whatever