Belington progressive. [volume] (Belington, W. Va.) 1912-1927, 1919-06-12
Is the Cost Of
Construction High?
BY Michael A. Mikelsen-

! Guiding man power, was diverted TO
war production. To bring about this
great diversion of industry two means
were employed-stimulation and cur
| tailnient. Stimulation was practiced
throughout the war and affected the
prices of materials and the wages of
| labor because Government contracts
were awarded on basis which per-
mitted contractors to compete sue
cessfully with nonwar manufacturers
for materials and labor.
Curtailment was not important I'M
til early in 1918, except for the orders
of the Fuel Administration and the
Railroad Administration for the pur-
pose of conserving fuel and trans
portation, and certain priority orders.
But in statement of February 5,
1918, Secretary McAdoo requested
that homes should not be built except
i in case of urgent necessity. The
statement contained by implication
the premises on which the radical
|
was later carried out, j. e., % that
conservation of materials, labor, and
credit was necessary in order to win
the war, and (2) that the conser
walton must take place in those in
dustries that were not essential, or
only in part essential, to the winning
of the war. Some time after the
/ publication of Secretary McAdoo's
statement, the policy of seriously
curtailing nonwar production was put
into effect. Eventually the produc-
ton of sixteen building materials was
cut down Is to 60 per cent. Nonwar
construction was greatly restricted
until it was almost completely stop
ped from September 3, 1918, until
the armistice was signed. 1t was es
timated by the chief of the Building
Materials Section of the War Indus
tries Board that the nonwar construc-
ton in 1919 would be not more than
+, 10 per cent of normal. This estimate
indicates how great the diversion of
labor and capital from the construc-
ton industry had been.
The stimulation of war industry
and the curtailment of nonwar in
dustry was mainly carried out, dl-
rectly or Indirectly, by the Capital
4 Issues Committee, the War Indus
tries Board, and the War Labor Ad-
ministration. Not only were the
prices of building materials affected
by the stimulation of war industries
but in many cases also by direct
price fixing. The same was true of
the wages of labor The power of
the Government was exercised toward
keeping down the prices of materials
and the wages of labor in nonwar in
dustries in order to prevent labor and
material from being drawn away
from the war industries.
This brief sketch Of the Govern
ment's policy in stimulating war pro-
'duction and curtailing nonwar pro-
! duction explains the difference be-
4 tween the cost of labor and of
materials in the building industry
and the cost of labor and of mater
ials in general which was found to
exist at the close of the war.
At the close of the war the index
number for building materials, not
including steel and other metal prod
ucts, had risen only 81 per cent over
the prewar prices of 1918, while the
index number for commodities, ex-
elusive of building materials, had
risen 113 per cent. The increase of
wages in the construction industry
in forty-one leading cities from 1914
to 1918 was only 28.5 per cent as "a
gainst rise of "a per cent in COM
modities. When the armistice was
signed there was, of course, a great
volume of deferred construction pro-
jects, partly in the form of public
works, partly in the form of semi
public utilities, partly in the form of
housing and of commercial and in
dustrial buildings. This volume of
deferred construction represented in
large part the curtailment of nonwar
production which had resulted from
the diversion of one-third of the Ma
tons industrial capacity to war pro-
duction.
Fortunately, the return of peace did
i
not mean the complete, abrupt end of
war production, yet it threatened
serious unemployment. In order to
n7inimize unemployment during the
rod of economic REIMBURSEMENT, the
Government promptly removed the
restrictions which it had imposed up
On the construction industry. There
is one indirect restriction, however
which it has not removed and could
not remove; that is the moral obli-
cation of the financial community to