Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-05-07
SAYSPR0F|TEER|NG
|N|NDUSTRy CAUSE
. OF THE HIGH PRICES
Study on Subject by Loan
Board Presented to Rail-
way Board.


A study of profiteering in American
Industry, made under the auspices of
the railway brotherhoods. was pre-
sented to the Railroad Labor Board
today in support of the railway
workrs' demands. 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 fundamental
cause for high prices in practically
statistics to support that contention.
War-Made MiIlionaires shown.
Calling attention to the many war
made millionaires. the study contends
that a three-fold relationship exists
between high prices. proflteering
and the addition to the quota Of mill
ionaires." and that the increase in the
wealth of the wealthy is an "un-
answerable" refutation to all at
tempts to charge labor with profit
eering, and to all attempts to hold
labor responsible for the high cost
For. if invested wealth gets a
larger return" said the study, "a
larger proportion of the national in
come than formerly. the man who
gives personal service or labor is
bound to get smaller proportion.
probability that the vast profits
which are still held in reserve will be
capitalized in order that. under the
pretext of a fair return on capital,
those who own them may continue to
take the larger proportion of national
great suffering on the part of work
ers. when the overstimulation OF war
has passed away"
Sugar Raise VI. Labor Cost.
OF the extraordinary increase in the.
price of sugar, now amounting to 800
per cent, the study says, the increase
in labor cost paid by the consumer
was less than Is per cent. The result
Of advanced prices, according to the
producing over half of the sugar con-
sumed in the United States. was pic
tured in the net profits of these con-
Germs which, 1t was said, rose from
an average Of .$11,000.000 during the
years 1912-1914 to $34,00O.000 for the
years 1916-1918.
In the meat-packing industry. where
profits were said to have increased be-
tween 800 and 400 per cent. the labor
item was shown SO small that a wage
increase Of 100 per cent would add
less than S per cent to the total cost
between 1914 and 1918 was shown as
eight times the total labor cost. and
the 1918 price repre- sented twenty-five
times the total labor item.
Retail Profits Absorption.
Profits absorb approximately one
half the retail price OF certain kinds
Of cloth, the report declared. while the
labor item amounts to from one-four-
teenth to one-twentieth of the price.
Similar relations were pictured in the
manufacture Of mems garments.
Shoes. according to the study. EUR
nished splendid opportunity for the
profiteer." The profit items in 1914. 1t
vas charged. absorbed nearly one half
the price paid by the consumer. or
cost. while in 1917 the profit items
amounted to approximately three e-fifths
OF the total price and over five times
the total labor cost.
Increases in the retail price of btu
minous coal were shown at four times
the increase In labor costs. while the
proportion of the proceeds Of the in
dustry received by the coal operators
was shown as increased from rs to
400 per cent.
Pronteer1ng did not stop with the
armistice, the report declared, present.
ing figures to show that corporation
profits in 1919 were 10 per cent over
the pre-war average, which means,
the study added. that 1919 profits
were more than double the average
for the years 1912-1914.
An average of $1,000 per family of
five during the years 1916-191S was
declared to be probably a highly con-
servative estimate Of the actual cost
Of corporate profiteering to the con-
sumer.
Submits General Demands.
Concluding his study. Mr.. Lauck
submitted the following general de-
mands in the name Of the railroad
workers:
IL Labor in general, and railroad
labor in particular, must have wage
increases proportionate to advances
In living costs.
"2. In the present crisis. and for
all time to come. producers and mid
dlemen must be restrained from ad-
vancing prices in excess of Increases
in labor and material costs.
"3. Producers and middlemen must
refrain from including income and
excess profit taxes in their costs and
passing them on to the consumer
with an added profit.
"a. The principle of a living wage
must be accepted and established in
order that normal production may be
restored and increased production
hoped for in all fields Of industry"