The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1922-12-23
KEEP THE COSTS DOWN, WARNS
'BABS0N, THE 5TAT|ST|C|AN

Commenting en- the present scarcity
Of skilled labor In certain lines. Roger
W. Dabson today issued distinct
warning to both executives and III
vestors who would base future plans
on present conditions.
THE last six months of 1922 have
been marked by scarcity of labor IN
many lines, says Mr. Babson, 'parti-
cularly common labor and the skilled
building trades. Employment condi.
tons the country over have improved
in these months. There has, there
fore, been general tendency on the
part of labor TO seek increased wages.
and on the part Of employers. even
when they did not gee the way clear
to- raise wages, TO consent TO their
sterilization at the present or the pre-
ceding levels This situation Is ike
~ 10 continue for the first six months
Of 1923. going far enough to cover the
usual wage settlements which come
up in the spring.
"Emplovers. therefore. are gong 10
be confronted with demands which. II
granted. will Of necessity mean IN
creased production costs. In 1871 ana
1918 we were in a similar position. La
Dor was getting scarce; busineas was
running along hriskly. and the de-
mand for increased wages was IN
sistent. Al that time my ADVICE 10
| business men was that they should
make terms with labor as quickly as
possihlc. so a. tn keep their factories
running and turn out the stuff. the
costs we're 10 be charged up TO the
consumer, This advice the business
men of the country cheerfully LOOK
even TO the extent Of improving upon
IT,
! AT the present time my ADVICE -
directly opposite. Under no cohu,'
lions should wage rates be lncreaseu'
II II is at all possible to avoid 1t. A
w.ce scale once established, is mill
stone about an employers neck. me
fundamental long swing tendency or
waees and of commodities is down
ward. This present stiffening or con-
ditions is hut an eddy in the main
stream. A year from now. perhaps
the lower price tendency VIII again DC
resumed The employer who mas al
lowed himself to be weighted GOWN
with increased wage rates Will nnd
himself at disadvantage when 'the
downward tendency is again resumed
"If therefore. you must pay more
for your help in order to secure iaoor
and keep the peace" continued the
statisiician. do 1T by some kind OF
Gonus which will be eliminated auto
matically when the turn comes. III
1917 and 1918 you could pass the cost
ON TO the public. but that time mas
gone. The public Is not looking LOT
goods at any price: 1t is looking lot
goods at n lower price. and II your
goods are put into the market on the
basis OF increased production costs'
they will not find ready sale.
Furthermore. investors are going
to be extremely cautious about put
ting their funds into industrial enter
nrises. They are going to ask greaf
many perplexing and embarrassing
ouestions. First among these is gong
To be the question as to how far the
particular plant has got Its production
costs down to permanent level
These questions are going 10 De
asked strictly from the dividend pay.
inp basis. On all sides the profit max
ing possibilities OF productive enter
prises are going to be curtailed. Your
normal margin Of profit in the years
ms, ahead Of us Is going to be very
much less than it has been for the last
FIVE years. Any element, therefore,
which tends to increase production
costs is going to add to the emoarrass'
ment of your company. For this rea
SON. investors are going to look BE-
vond the advertisements as to the as
sets and income, and things OF ike
kind. They are going to- ask to see
your wage sheets and to demand in
formation as TO how the wage levels
under which you are operating CORE
spond with those OF six months and
wear ago. This is a perfectly legitl'
mate question, and upon the answer
10 It will depend not only the pronts
which YOU will make in 1923. but also
the difficulties which you will meet IN
obtaining money to finance your oper-
atoms"