The New York herald. [volume] (New York, N.Y.) 1920-1924, 1921-05-05
THURSDAY, MAY 8. 1921.
The Steel Corporation Now in
the Procession.

AA( SsS&A W. ROA ASO" 50
the Procession.
Nothing of greater moment has
happened In the economic readjust-
mcnt demanded In America than the
United States Steel Corporations
wage reduction of 20 per cent. And
this would have come sooner, as THE
New York HERALD understands, ex-
cept for certain technical reasons.
How important it Is to this country
that the Steel Corporation has Joined
the Industrial procession back to eco
nomic sanity can be no better pic
tured than with Judge GARy's illumi-
mating explanation: 1.-THE wage costs
make up nearly 90 per cent. of the
cost of manufacturing steel"
For that very reason the nine wage
scale increases from the beginning Of
the war to February, 1920, and the
labor cost of ton OF finished steel
went up together like clockwork. In
1912, with an average yearly wage Of
1857 the labor cost a ton was $15.13.
In 1914 the average wage was 5000
and the labor ton cost S1S.01. BY
1916 the average annual wage was
up TO $1,o42 and the labor ton cost
up to $1704. BY 1917 the average
annual wage was UP to 81, $50 and the
labor ton cost up to 1924. Then
came these further increases: 1918,
average annual wage 81 ,6S5, labor ton
cost $500; 1919, average annual wage
s1.905, labor ton cost $685.; 1920,
average annual wage S2,173, labor ton
cost $4,000
The average annual wage going up
from 1857 In 1912 to $2,173 in 1920
was up two and a half times. The
ton labor cost going up In the same
period from S1513 to $4,000 was up
two and a third times.
Just as labor cost, accounting for
nine-tenths Of the whole cost Of max
Ing the steel, could not fail az It went
mp to carry up correspondingiy the
cost Of steel, so there could be no pos
sIble way to bring the cost of steel
down without working down the pre-
ponderating labor cost The Steel
Corporation does not, OF course, at
tempt TO get Its costs down to earth
again In one great jump. 1t did not
get them up In one great jump. ID
would be altogether 100 drastic and
disturbing to come down the whole
way all at once, for with the nine
wage increases from 1915 10 Febru-
airy. 1920. the company carried
wages up 153 per cent. The 20 per
cent. reduction, however. with which
the company does make the start back
takes fifty points of the 153 point
increase. The average wage, In other
words, which was 81 day in 1915,
and rose to 81 In early 1918, and on
up to So In 1920, goes back to S4,
where 1t was three years ago, before
the last three Increases.
The break having come with the
certainty that other readjustments
must follow, the huge value OF the
change 10 the country Is obvious
For what is true OF the steel busl-
ness MS to labor costs is true OF the
construction business, is true of
transportation, Is true OF manufac-
turing the necessaries OF life.
The cost to the American people OF
housing themselves Of feeding them
selves, Of clothing themselves ncrr
had q chance, as THE New YORK HLR
AID iterated and reiterated when cap
ital and labor alike were hesltatlng
10 begin TO return to reason-the cost
OF American living never had 4 chance
10 get back permanently 10 Anything
like normal unless and until AL their
labor costs, In the great majority Of
cases 90 per cent. of production costs
should get back TO something like
normal
When the United States Steel Cor
porntion meets the vital Issue squarely
as II now does II adds enormously e.
the momentum ~ the national swlne
back TO normal. When the United
States merchant marine meets the IS
sue squarely, as II is now doing, Il
further helps. When the United
states Railroad Labor Bonrd meets
the Issue squarely. as Il must IN a
few days ~ II Is lt 70 hold ~ onic,