Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1916-02-05
CAPITAL AND WAGES.


that "the rich are growing richer and
the poor are growing poorer" Like
all sweeping statements this may con-
tain germ of truth, but as used by
the ignorant and INSCRIPTIONS it car
ries meaning entirely unjustif1ed by
the facts. In times of stress, when
men are walking the streets in search
Of work and the factories are closed,
the capitalist may put aside something
| from his income if he is so inclined
and in that restricted sense grow
richer" while the wage Garner is grow
ing poorer if he has not already reach
ed the limit Of poverty.
But in prosperous times the saying
that the rich are growing richer and
the poor are growing poorer" is clear
ly fallacious. In the monthly letter
for February of the National City Bank
| of New York the demands of the rail-
way employees for an eight-hour day
and more pay for overtime, following
the increase in wages in the steel
trade and textile industries, are dis
cussed at length. Among other things
the letter says:
! This movement illustrates how cas-
lily wages advance when business con-
ditions are favorable and when the
supply of capital increases 1t illus
trates a fundamental law of progress
which inevitably regulates the division
OF product between capital and labor,
but which amid all the. wrangIing over
that division is seldom referred to.
Capital in all advanced countries in
creases faster than population and
this is especially true in the United
States, as shown by the census re-
turns. Since capital cannot be put
into use without employing labor, it
follows that a constantly increasing
amount of capital completes for a rel
atiyely smaller amount of labor I'm
der such conditions there is an inevita-
BILE tendency of wages to rise, the new
supplies of capital always coming on
the market would have to lie idle il
they did not enter the field and bid
for labor against the capital already
conducting industry. If the supply OF
labor increased at the same rate as
the supply Of capital the balance be-
tween them would remain the same
but with capital increasing faster than
labor the latter constantly comes into
q stronger position.
When this is understood it is seen
that for the rich to grow richer and
the poor grow poorer or fail to share
in the progress, in the very nature OF
things is impossible. Every attempt
Of the rich to use their capital sets In
motion equalizing Influences. If capt
tai accumulates rapidly the demand
for labor will increase with even great
er relative rapidity.
The direct effect upon wages Is
modified by the fact that as labor be-
comes scarce and wages rise there is
greater inducement to install labor
saving machinery, but improvements
OF this kind multiply and cheaper the
production of the necessaries and COM
forts Of life, and the wage earners
share in these gains as consumers
They are gamers either way the equa-
! ton works out"
The writer refers to the direct dis.
tribution of higher wages by Henry
! Ford and also points out that Mr.. Ford
. is devoting part of his accommodations
; to the development of farm tractor
i which, if successful, will decrease the
cost of farm operations and cheaper
the cost of food" This, he says, will
be more serviceable to the wage earn
| ing class as whole than any dis
t tribUtion OF cash among his own work
men. Here Is statement that will
: bear close scrutiny. 1t seems to be
too sweeping. That a successful trac
, tor will decrease the cost Of farm
products to the consumer is prop
osition that the consumer will TAKE
with reservations until the reduction
: is reality. 1t probably would reduce
, the cost Of production to the farmer
The present prices of grain are no
based on the cost Of production. These
prices could be reduced considerabl!
and still the farmer would realize {
reasonable profit
In closing, the writer sounds +;
d, warning:
There is going on now rapid &C
emulation of capital in this country
and a corresponding increase in the
demand for labor Under normal con
ditions such a condition is wholesome
and beneficial. but it would be a mis-
take not to recognize that present con
ditions are abnormal, If capital was
increasing all over the world as It 1:
in the United States wages would e
up abroad as we'll as here, but unles!
wages advance in other countries W,
will have either an inflow of labor o.
an outflow Of capital after the war 1!
3 over, until the equilibrium is restored
The best conditions in industry fol
both employers and employed arr
those that make for stability, afford
ing steady employment. increasing
g output and a constantly enlarging dis
tribution and consumption OF prod
= ucts."