The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-01-05

The only explanation Of our extraordinary
increase in export trade is that We are pro-
ducing cheaper than our competitors. in
spite of our high wage rate. AS this cheap
production Is due TO our superiority in
machinery and efficiency Of abor why do not
our competitors adopt our appliances?
The very natural explanation of this is
that they cannot afford to- II must be re-
WONDERED that the object Of using labor
saving machine is not TO save labor but
wages As | said in my former communi-
cation, n machine may save any amount
of labor, but II the value Of the labor saved
is not greater than the incidental expenses
of operation the machine cannot be run at
a profit These incidental expenses are
power, taxes and interest on investment.
II is in the nature Of things that the same
policy which tends to lower wages tends
also TO raise the aggregate Of these incidental
expenses. Considering the heavy burdens
to which the people Of Europe are sub
jected. it is no wonder they are handicapped
on the industrial field High taxes fall
heavily on invested capital, on machinery,
and thus discourage its use. At the same
time the wages paid their workmen are low,
so that the incentive 10 save labor IS slight,
and only those machines are used profit
ably which save very great amount Of
labor Their industry is on so primitive
scale, comparatively, that we use in manu-
featuring industries Approximately seven
times as much horsepower per worker as
do England France and Germany.
These statistics show tho fallacy OF the
assumption that an increase in our wage
rate would deprive us Of our foreign mar
kets, unless our scientists and inventors have
reached the limit Of their powers, when in
fact they have only us; started
Every increase in che cost Of labor means
a corresponding increase in our national
efficiency, and only when labor becomes
the most expensive material in the market
will 1t be possible 10 reap the full fruits Of
inventive genius As we are now able TO
employ machinery which Europe is unable
10 use. so with higher wages we would
loo able to use machinery now econom-
ically impossible. On the contrary, to lower
wages in this country to the level Of Europe
would not only ruin our home market, but
would soon put us on an industrial level
with Europe. How many typesettng ma
chimes would be used in this country ten
years hence If the price Of composition was
so 1903 per hour. as now in France?
Again, logically, If TO raise wages would
weaken our competitive position II would
strengthen US comparatively to lower wages;
we have only follower our standard Of living.
to become sufficiently poor TO control the
trade of tho world and become richl
As 10 the effect Of high wages on our
home market. we are not confined 10 the
hypothesis that the increase in wages would
merely be added to prices, leaving no net
change in market conditions, unless there
was an impossible iiXity Of prices
Those branches OF industry whore mo-
nopoy has sway and prices are already
regulated on the principle OF -all the traffic
will bear may be left ont Of our calculations.
Their prices arc not affected by the price Of
labor In all business where competition
exists any raise in prices a result Of high
wages would quickly find its level again
because OF Improvement in manufacturing
methods, and a real net gain in the purchas-
ing power OF tho wage earners would re-
suit Moreover the mechanical develop
meut stimulated by high wages would lead
to an increase in production, 10 overtake
increased power of consumption. With a
wage increase continuing and accelerating
our country would enter on period Of uu-
examped prosperity and development.
Still more: You imply that the reason
for overproduction is that our people are
supplied with oil the boots and shoes, dry
goods and agricultural implements they
need This is far from being the case
There can be no legitimate overproduction
Of neoessaries in a country until there is
ample food. clothing and shelter for every
man, woman and child within its borders
We suffer from overproduction because our
people have not the financial power TO buy
the things they 80 sorely need The remedy
for a gut il indeed an outlet Let that
outlet be through the pockets OF tho wage
earners. WILLIAM 6. LIGHIBowN