The Logan Republican. [volume] (Logan, Utah) 1902-1924, 1921-05-07
THE Law or THE
OVERHEAD

a prominent New York business
man is quoted as saying that he does
not agree completely with those who
assert that our prosperity is depend
ent upon our export trade, and also
that in most things he only method
OF competing with Germany and Eng
land will be through lowering wage
scales and standards of living. Some
people take this as a suggestion that
the United States should lower wage
scales in orer TO compete with Ger
many and England in the markets
of the world. We do not so under
stand IL. Nevertheless, we do agree
with the assertion that our prosper
ity is largely dependent upon our ex-
port trade-that is our productiol
of a surplus which we can export ar
ter supplying the needs OF our own
people. The amount of export need
not be large in order that the ma
ton may have a net income, Il
should have a surplus for sale to
other countries
Whether the New York business
man advocated reduction of wig
cs in order to compete with Germany
and England or not he is incorrect
in his statement that that is the only
method by which we could success
fully compete. The American policy
has never been to compete by redur-
ing wages but rather to increase
production to such large extent as
to reduce the unit cost through or
and quantity production.
In days gone by one of the strong
arguments OF the free traders was
that under the protective tariu sya-
tenn manufacturers made sewing ma
chimes for example. which they sold
in foreign countries for less than
they charged the American buyer.
AZ first glance this was an Injustice
to the American, but when the facts
are fully analysed a lower export
price can be justified. The most eff
fective way OF reducing costs is by
quantity production. by means of
whinh the overhead sharges may be
purchase OF raw mater
ials may be made TO the best advan-
tage and a selling organization built
up which will dispose OF the output
ut the lowest distributing cost.
sewing machine manufacturer who
could produce, for example. 100000
machines per year al price Of 80
each, might be able TO sell his ma
chimes for s25 each IL he could in
crease the output to 100000 per
year. But II his domestic market
called for only 100000 machines per
year and he must market abroad the
$4,000, II he manufactured
them. II would be to the interest or
the United States To have him man
ufacure the 100000 machines and
continue the domestic price at $40
each even II he disposed OF the addl-
tiohal $4,000 abroad at less than se5
each. The ineease production would
give employment to Ametean labor
and supply a market for American
and the buyer Of the do
nestle machine would be no worse
IN. The surplus marketed abroad
would represent gain 10 American
iDdustry, II would bring money TO-
he Channels Of AnnerieEn trade toI
hat extent. EVen though fhe pro
iue were marketed abroad at less
ihsn the machine brought In the
home market II would help kmerl-
IAN posperity.
One well known automobile con-
,ern not only produced machines
which were sold 10 the public Al the
owest relative price but also took
he lead in paying the highest min
mum wage. Ability 10 do this was
clearly dependent upon quantity pro-
iuetiou. Any other industry or en-