The Washington herald., 1921-03-21
NlDUSTRY'S RETURN
TO NORMAL HINGES
ON WAGE REVISION
Prevailing High Scales
Reflected IN Weakened
Market Conditions.
COURAGE is NEEDED
Employees and Workers Must
Face Situation Frankly,
Says N. Y. Bank.
COURAGE is NEEDED


for the benefit of any group or unit
of production either in the United
States or elsewhere, says a state
ment by the National Bank Of Com
merce in New York.
Employers and workers who are
unwilling to face present conditions
frankly and courageously are re-
tarding resumption of normal busi-
ness and working against their own
interests! Prevailing wage scales
which under present conditions are
of little real advantage to the
workers, are an absolute deterrent
to the lowered costs which must be
established before the prices of coal
and steel can be lowered and
freight rates altered. High wage
rates are purely illusory as long as
widespread unemployment or part
time work reduces real income and
impairs purchasing power.
Earnings.
The primary and wholesale mar
kets, which for a time showed a
spotty improvement, have in many
lines again become dormant. Steel
output has fallen to less than one
half of mill capacity. Railway traf-
fic and earnings are decreasing
week by week. production of coal
has fallen to the lowest point in
four years and building operations
lag far behind the total OF new con-
struction known to be in immediate
demand.
Slow and moderate liquidation OF
borrowing from the reserve banks
is reflected in the slight but steady
Improvement in the reserve ratio
of the Federal reserve system, al
though the fact should not be over
looked that a substantial part of
this Improvement is the result OF
gold importations, which have con-
tinued uninterruptedly for many
months. There have been further
marked declines in wholesale
prices, but coal and steel, while
lower, are still out Of line with the
general price level. Buyers remain
unwilling to contract for other than
immediate necessities, which are at
a minimum.
Production.
There is a growing recognition
of the necessity for lowered freight
rates on heavy tonnage items which
can only be effected when there
have been corresponding reductions
in the wage scale both Of railroad
employees and of labor in the basic
Industries. The steel industry as
a whole Is reported to be operating
at about 40 per cent of capacity
Price reductions on the part of the
independent steel makers have not
resulted in large orders.
A further decline in the price OF
cotton has somewhat affected de-
mand for many classes OF cotton
textiles, but orders for immediate
requirements continue to be placed
In certain staple lines there has
been Improvement. Ginghams have
moved we'll following drastic price
cuts made several months ago by
the large producers, Cotton con-
sumption for February was ss5, ,5sa
running bales, as compared with
366,270 running bales during Janu-
ary. Silk and wool manufactures
which were first to feel the effect
of liquidation, have shown q
measurable degree of Improvement.
There Is a distinctly better move
ment in tires. and automobile in
quiries and sales have increased en-
couragingly.
Building.
Although therS have been reduc-
tions in the price of many building
high wage rates and
working rules which make economii
cal employment of labor impossible.
together with high freight rates,
bave prevented material lowering OF
costs. As a result
has been restricted almost
entirely to absolutely necessary
work
A considerable volume of inquiries
indicates that there Is a potential
which will make itself felt
as soon as and not until costs of
labor and material are lowered to
what the public regards as reason
able. Meanwhile, the disinclination
of labor not only to accept lower
wage rates, but to give adequate
return for wages paid will continue
to restrict new housing. thus direct
ly preventing a reduction in rent
which, next to food, is the largest
single item of the workingman's
living expenses.
Railroads.
oficial statements indicate that
both gross receipts and net earn
ings Of tn railroads fell Off sharply
during tie month of January, in
spite Of the slight improvement
which took place in many lines of
business following the first of the
year. Estimates of railroad earn
ings for February and the first two
weeks of March indicate a furthar
decline in traffic. Reduction in op-
Grating expenses commensurate with
reduced receipts is impossible With
the wages and working conditions
established during government oper-
alton and still in effect.
The working conditions in force
on the railroads. like those, in the
building trades, are a burden on the
entire community. Arbitrary regu-
lations which make 1t necessary to
employ several skilled men for work
that one man could do are in con-
fiict with common sense.