The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-01-10
WAGES AND Production.
Further Presentation OF the Views
OF MIR. LightboNn.

OF MIR. LightboNn.
To TIRE EDITOR or The SuN-Sir: Your
correspondent Importer has greatly
misconceived my position on the question
Of export trade Nowhere have | said
that we should not export manufactures,
and quite agree with him that the exporta-
/ ton Of products from ono country TO an
other is just as natural au economic process
as domestic trading between the States.
/ Left 20 itself there is a natural tendency
for goods TO be produced In the localities
best fitted for that branch of industry.
New England, with its abundant water
power. turned as naturally TO manufacturing
as did the fertile plains Of the West TO ag-
rlcuture. The same holds true Of old
England with its abundant coal and mineral
resources, as compared, for instance, with
Argentina, which is naturally grain
producing and cattle raising country.
Foreign trade between the two is az neces-
sary and inevitable az domestic trade be-
tween New England and the West
What | did say was that expectation Of
manufactures il not cure for overpro-
duction Importer says that exports OF
staple manufactures do not bring us foreign
made goods in return. When | said they
did, | did not mean that they brought us
identically the same kind of goods in return.
but some kind Of goods they must bring U.s.
or the foreign countries involved would
soon go bankrupt and not be able 20 buy
from us at all Has England or France
or Germany an inexhaustble fount of gold
with which TO pay for our products? Has
even China. toward which the commercial
nations are looking so greedily, with its
my ah htt xranaa2
II they have not. then they must sell us
something in return. This being so. how
IL the glut in our markets essened?
The existence of constant balance Of
trade in our favor-indicatng that we are
sending away more than we buy in return
may seem like a refutation of my state
rnents, but it is. in fact only an indication
Of the heavy tribute We pay TO foreign
holders Of our interest bearing securities.
The old and rich countries OF Europe, which
have enormous foreign investments, are
able 10 support a constant balance Of trade
against them
My main contention is by no means the
academic question you deem it. The
relation Of wages to the use OF machinery
is not new discovery 1t was first adj
vanced by DR. Theodore Hertzka, n famous
Niennese political economist and has re-
ceiyed the Endorsement of many economists
both here and abroad. For instance. Alfred
Russell Wallace, the great English scientist
who, simultaneously With Darwin. put
forth the "Darwinian' theory, took an active
part in agitating movement based on this
principle. The scientific formula express
ing this natural law is
The condition determining the use OF |
labor saving machine Is that the difference
between its cost and its product he greater
than the difference between the wages and |
the product Of labor
AS ! explained, the incidental cost Of |
operating a machine consists Of power.
interest, profit and taxes The machine !
must save enough in wages more than |
to Offset these expenses. or 1t cannot
be Used probably The amount Of labor |
which a machine must save In ORDER
10 he profitable is therefore less in
a country where wages are high than
in low wage country The consequence
Is that the variety of machines which
will be profitable is much greater in the
high wage than in the low wage country.
Furthermore: The Incidental cost OF opera
ton is high in proportion as wages are low.
When taxes are high for instance there il
less left for labor out of the total
product In the low wage country, there
fore, the incentive to save labor is lessened
at the same time that the cost Of operating
the machine j. increased
The results Of these tendencies on the
efficiency Of a nation are tremendous The
following statistics relating TO manufacture
ing Industries are taken from an article
comparing American and European com
mercial conditions in the Engineering Maya
rino by Mr.. j Clark, an expert on this sub
lpCt.