Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1922-12-24
KEEP PRODUCTION COSTS
DOWN, WARNS BA4SON
Says Employers Will Be Con-
frontcd With Big Prob
lens Soon.
AGAINST WAGE INCREASE
Fixing Scale mt Top OF Wave !. Poor
POiicy-UrRcs Hunus ia Maintain
Pence Rnthcr Than Salary Adj
Nnncc.
Especial to The Timcs-Dispa,ch.I

Especial 10 The Times Dispatch
WELLESLEY HILLS. MASS. Dec.
23.--commcnting on the present
scarcity OF skilled labor In certain
lines Roger w. Babson today. issued
distinct warming to both executives
hnd Investors who would base future
plans on present conditions.
The Last six months Of 1872 have
been marked by "a scarcity Ui labor
In many lines" says MIR iabsun.
particularly common labor aud the
skilled building trades Employment
conditions the country over have i'm
proved in thcS. months There has.
therefore. hc"n general tendency
on Tia" part Of tabor to seek in
creased wages. and on the part Of ON
nloycrs. even when they did not see
the way clear 10 raise wages. To- con
sent TO their stabilizatiom at the
present or the preceding levels. This
situation Is likely To continue for
tho first six months OF 1928. going FAR
enough TO cover the usual wag. set
Elements which come up In the
spring.
Employers. therefore. are going
TO be confronted with demands which.
n granted. VIII Of necessity mean In
creased production costs. In 1917 and
1918 we were IN a similar position.
Labor was getting scarce. business
was running along brigkl-. ana the
demand for increased wages was in
sis,cnt. AZ that time. my advice
10 business men NAB that they
should make terms with labor as
quickly rs possible. so an To keep
their factories running and turn out
tho stun. The costs were 10 be
charged NJ TO tho consumer This AL
yicc. tho business men OF the coUn-
try cheeriully took. even to the cx-
tent OF Improving upon II.
Against Wage Increase.
"At the present time. my advice
IS directly opposite. Under no CON
di,!cns should wage rates b" IN
creased. II it IS at all possible to
avoid it. \ wage rate. once cstab-
lishcd. IL "a milestone about an ON
ploycrs neck. The Fundamental long
swing tendency of wages and Of com
modities is downward. This prcacn,
i'inonIng Of conditions Is hut an
"ddy Ia the main stream \ year
from now. perhaps. the lover pric"
tendency VIII again b" r"eGm"d. TIL"
Employer Who has allowed hims-l;
to he weighted dowu with Increased
wag" rates Viii nnd himself at 81
disadvantage when tn" downward
tendency - again resumed.
II, therefore. you must pay NOR"
for your help. In order 10 s"cur. la
Dor and keep the peace" continued
the siatIstician. do it by come Kind
~ n bonus which will DO eliminated
automatically when the turn comes
In 1917 and l9lS you could pass tn.
cost on TO the public. but that Time
has gone. The public is not looking
tor goods at any price; IL is looking
for goods at a lower price. and II
y"pr goods are put INTO tn" market
on the basis Of Increased production
costs, they viii not find a ready sale.
Inventors VIII lie Cnutious.
"FurthermOre, investors ar" so,nS
10 bc extremely cautious. about put
Ting their funds Into industrial enter
pr.scs. They axe going to ask great
many pcrplcNIng and embarrassing
qucstious First among these is go
ug TO hc tn" question a. 10 rpw TAT
the particular plant has got ia pro
duciiou costs down TO PERMANENT
Lowell
These questions arc yojug to h.,
asked strictly from the diy.dcnd-
playing basis. ON all sides tn" profit
making possibilities Of rroduc,t.c en-
tC:pr!srs are going 70 be ,Ur,aii-I.
Your normal margin OF profit IN ,h"
Years Just ahead o: M is going to
BE very much less than /, has been
:pr To" last nv" years Any "icm-n,
therefore. which tends TO increase
production costs is going To ada to
IN" embarrassment O: your company.
tDr this reason Investors arr. ..nirr