Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1920-05-08
LABOR PUTS BLAME
FOR HIGH PRICES ON
PROFITS, not WAGES
Relation Exists "Between
High Prices, Profiteering
and Addition to Quota of
MiIIionaires," Lauck Says

WASHINGTON, May "a study
Of profiteering in American industry,
made under the auspices of the rail-
way brotherhoods, was presented to
the railroad labor board today in
support of the railway workers de-
mands for higher pay and to refute
the charge that increased labor costs
are responsible for the high cost of
living.
Prepared by w. ]. Lauck, former
secretary Of the war labor board,
the study seeks to show that profit
eering in industry is the fundamen-
tai cause for high prices in practi-
cally all commodities. 1t gives many
statistics to support that contention,
Calling attention to the many
war-rnade millionaires, the study
contends that three-fold relation
ship exists "between high prices,
profteering and the addition to the
quota of millionaires," and that the
increase in the wealth of the wealthy
is an "unanswerabJe" refutation
to all attempts to charge labor with
profiteering. and to all attempts to
hold labor responsible for the, high
cost of living.
For, if invested wealth gets a
larger return" said the study, "a
come than formerly, the man who
gives personal service Of labor is
bound to get a smaller proportion.
The menace of the future lies in
the probability that the vast profits
which are still held in reserve will
be capitalized in order. that, under
the preteXt of fair return on cap
ital, those who own them may con-
tinue to take the larger proportion
of national income, even at the ex-
pense of very great suffering on the
part Of workers, when the oyer-stim-
ulation of war has passed away" =
Sugar, Meat, Shoe Figures
Of the extraordinary increase in
the price of sugar now amounting to
500 per cent, the study says the in
crease in labor cost paid by the con-
sumner was less than Is per cent.
The result Of advaced prices, ac-
cordtng to the quoted reports OF
twelve companies producing over
half of the sugar consumed in the
United States, was pictured in the
net profits of these concerns which,
it was said, rose from an average OF
$11,O6O,O00 during the years 1912
1914 to $94,000,00O for the years
1916-191S.
In the meat packing industry
where profits were said to have in
creased between 800 and 400 per
cent, the labor item was shown so
small that a wage Increase of one
hundred per cent would add less
than per cent to the total cost of
the meat. The increase in price be-
tween 1914 and 1918 was shown as
eight times the total labor cost and
the 1918 price represented Is times
the total labor item.
Profits absorb approximately one
half the retail price of certain kinds
of cloth, the report declared, while
the labor item amounts to from one
fourteenth to one twentieth of the
price. Similar relations were pic
tured in the manufacture of men s
garments.
Other Figures
Shoes, according to the study,
for the profiteer." The profit items
in 1914, it was charged, absorbed
nearly one-half the price paid by the
consumer, or nearly three times the
total labor cost while in 1917 the
profit items amounted to approx
-mately three-ffths of the total price
and over five times the total labor
cost.
Increases in the retail price OF
bituminous coal were shown at -four
times the increase in labor costs
of the industry received by the Goa
| operators was shown as increased
from rs to 400 per cent
Profiteering did not stop wit. the
armistice, the report declared pre-
senting figures to show that corpor.
cent over the pre-war aver Age
which means, the study added, tina
| 1919 profits were more than double
the average for the years 1912
1914.
An average Of $1,000 per famiI,
OF five during the years 1916-191t
was declared to be probably a high
| ly conservative estimate of the act
ual cost of corporate protiteering tt
/ the consumer.
Mr.. Lauck called the boards at
tention to public statements of 20
representative corporations whicI
| showed average net earnings of 8.
per cent on capital stock in 1912
II and 1873 per cent in 1916-1S
Germs dealing in the basic raw ma
terial steel, copper, and manufactur
ed metal products; 20 dealing il
food products including meat pack
u ing; 19 in clothing; "a in fuel ligh
and housing; and SO dealing in mer
cattle goods and agricultural sup
plies.
Corporation Figures
"The outstanding fact" said MI
Lauck, lis that during the year
1916-18 these corporations earne'
per cent of their capital stock. Thi
appears to be nearly three times tn
average for the pre-war year o
1924 and the. figures for produc
ton show conclusiVely that these in
creased profits were not due to In
in large measure to the fact tina
these corporations took a large pro
portion of every dollar spent by
purchaser
If all corporations did as wei
as the 2 2O5 oe cited ed, corporate profit
+ the three war years than in the pre-
war period, Mr.. Lauck said.
"A total of $4,80O,O00, 900 a year,
he said, means $240 per family o
five throughout the nation. Conside
that each family paid as a toll no
4 so-called legitimate profits, but t
excess war profits over pre-wa
profits, $240 a year. and one gain
an id, of the total burden which
profteering meant to the country