The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-09-01
FINANCIAL NEWS
AND THE SITUATION
Labor Unrest and Firmness Of
Security Prices Are Chief
Marked Influences.
NEED FEDERAL ECONOMY
Real Problem Of American
Employers and Workers
Is Wages.
NEED FEDERAL ECONOMY
BY WILLIAM JUsTUs Bo1Es.


By WILLIAM JUsTUs BOIEs.
The Presidents message to railroad
labor and efforts OF steel workers to
obtain union recognition and reopen
wage discussions have brought the in
vesting public face to face again with
the labor problem as probably the over
shadowing issue in the coming Presi-
Dental campaign. Much to clarity the
situation is likely to happen before, as
labor has been In an intolerant mood
ever since the Adamson law was en-
acted, and If the shopmen reject the
Presidents proposal they will find rail-
road officials pretty well prepared to
meet the issue. The whole country is
interested in the problem as never be-
fore. as the nationwide concern regard
ing high cost of living has brought home
to the average householder the influence
of the increased freight rate as an eff
fective factor in putting up living ex-
penses When the premier railroad sys-
TEN OF the country shows less than
per cent actually earned under Gov
eminent management in 1918 the fact
Inat In6 TOdu TeCelNeS 600 per cent. OT
its stock under Federal guarantee is not
likely to deceive the 112,261 holders OF
Pennsylvania Railroad shares as to the
ability OF that great corporation to pay
the vastly increased wages which the
men ask.
Wages and Living Costs.
It stands to reason that II the cost of
living be reduced the labor item in rail-
road accounting cannot be advanced
greatly, as the consequent rise in freight
rates which higher wages would bring
would enhance materially the living ex-
penses Of. the average family. The
roads may be forced ultimately to in
crease their revenues to make good the
large deficit developed under Govern
ment management, but it would be a
crying evil for the Government to put
that increased burden on the public at
the behest of the unions unless the most
painstaking investigation developed that
S1,505 year for the average railroad
worker was less than a living wage.
Fully 100000 workers in various indus
tries in different States are refusing to
work until their pay shall have been
increased or, what amounts to the same
thing, their hours of labor shortened.
For various unions to plead for forty
of living as a life and death problem Is
one of the incongruities of our over
wrought labor situation. difficult to dis
cuss with patience The whole world Is
suffering from deficient production as a
consequence of reduced output during
the war period and unless labor quits
asking for shorter hours and Is willing
to do an honest days work for an hon.
est days pay the situation will .
worse.
Government Retrenchment.
The British Government has entered
on a drastic retrenchment campaign. cut
ting out waste, reducing payrolls and op-
Grating some branches with half the
forces formerly employed. A single de-
partment has been ordered to reduce Its
payroll $500, 900 a week and the work of
discharging thousands of extra men and
women taken on during the war is being
pushed vigorously. That readjustment
of working forces In some instances has
been attended with hardships incident to
serious dislocation of labor, but ultimate
results will be highly beneficial, even to
men who have been displaced. There is
urgent need for similar scaling down of
expenses by our Government, which has
been charged with gross extravaganza
in war work. The high cost of govern
ment has become an important factor in
the high cost OF living in this country as
we'll as in Great Britain. and until 1t
shall have been materially lowered
through cutting unnecessary salaries and
adopting a vigorous retrenchment policy
It will not be possible to reduce taxes or
lessen other burdens expressing the peo-
pie. The Government should set itself
to that task without delay as expendi-
lures have been prodigious and cost of
maintaining our huge military organiza-
ton was probably greater than the cost
of support OF armies OF other nations
during the war.
If Federal authorities are DESTROYS of
making II easier for the masses to live
| they will follow the example of the Brit
| ish Premier in forcing a thoroughgoing
reduction in the expense of maintaining
Government service. Those considera-
lions have direct bearing on the invest
| ment outlook at this time, as in Septem-
| Der the bond market often becomes ac-
| tive In response to broader absorption by
| investors. There is an immense poten-
tial demand for high grade securities
which will make itself felt as soon as
the public shall have recovered from its
concern over social unrest and the effect
of successive demands for higher wages
Nearly 1925, 1000. 900 will be paid out dur
! ing next month for interest and dividend
| disbursements and the probability is that
n considerable portion of that sum will
be reinvested, provided that the sixty OF
more strikes In progress in the country
| are In a fair way of being settled. The
| one thing which the average American
| investor, like the average English in
weston. dislikes is to have his money lie
idle. He may think that he will wait
three or four months to employ it, but in
many cases he gives out a buying order
and has reinvested his funds almost be-
| fore he knows it. The incentive fol
keeping funds well employed was never
greater than 1t Is in these days of high
living expenses.
| Seasoned Preference Shares.
This is one reason why investors are
turning to preference shares of high
grade industrial companies and tC
seasoned common stocks of other cor.
porations having satisfactory dividend
records. The income return from such
1 stocks ranges from 6 to ~ per cent.
which seems almost irresistible wher
the tax exempt features are taken into
account. Much money which would
have been placed in foreign Government
bonds has been put into the shares OF
approved industrials by people who had
to provide for largely increased llvinl
expenses. The indications are that thes,
investments will be further extended anC
that much of the new financing to bs
done later by great industrial companie,
will take the form OF stock and not,
issues. The long term bond has not re
| tnad tic unnularit htt tyra dtaIlxy AZ 4,