Every evening, Wilmington daily commercial., 1922-09-19

Prominent capitalist frankly dis |
cusses relation between capital and
labor, at Babson Institute.
painful and damaging struggles which |
are now the rule, and which are not
| productive of permanent good tol
either employer or employe.
Pannceas Disregard Laws.
"Panaceas for employer wage work
er Ills have always been on the mar
Set but In practically all cases they
have been designed to produce some
effect other than that which would
come from the normal wol<ing out of
| the law of supply and demand. They
have sought to keep wages up while
\ cutting prices. or to force wages down
while maintaining price levels, or have
otherwise disregarded the normal and
natural relations between wages and
prices. Therefore. these panaceas
have not worked and never will work.
| The sooner II is recognized that
natural laws will prevail. the sooner
will we find the solution for our
troubles. The proper solution must
bring the same result that the mar
NAL working of the law would bring.
but must avoid the evils and Ills and
damages incident thereto.
Dividing the Profits.
THE fight between employer and
wage Garner has been described as
having to do with a division of the
profits. If that We're true, the prob
lem would be much simpler than 1t
really Is. Division of the profits is
merely a phase of the matter; the big
problem is TO make the profits In the
first place. 1t is astounding how
much Ignorance there is relative to the
profits OF business. The lay mind as
sumes that the margin between the
original cost and the ultimate selling
price is profit. The part that operating
costs and overhead expenses play i'm
wiping out this margin gets scant con-
| siderat ton.
When a business pays a dollar for
raw material and sells the finished
product for 81. the layman says there
is dollar profit, but as often as not
such a margin between cost and price
means loss. 1t may cost considerable
TO turn the raw product into the
finished article since the labor involved
and the equipment used may be a very
tig expense. On top of that there vii.
be storage charges and freight bills
and sales costs. There are a dozen
charges that enter in and conspire to
wipe out the margin, and not the
least of these is represented by the tax
that the business pays.
THE sum total of all Its operating
and overhead charges may easily
wipe out what appears TO be wide
margin between raw product costs and
finished article prices. Men work for
a livelihood and Capital works for
interest. and there always will be
room for difference of opinion as TO
what constitutes a good livelihood and
a good interest, but there need be no
question about this fact-neither men
nor money will work without a re-
turn. The problem of wage Garner
and employer then. is not to divide
profiSs but TO assure profits, for GER
tainly they must be made before they
can be divided. Dividing them is a
mighty easy Job alongside of making
them.
Reasonable Men Agree.
Everybody has a right TO opinions
, as TO the cure for industrial Ills, and
: the business with which l am con-
} nected is now engaged in trying out
I a plan which holds forth great prom
{ Use. 1t is not designed to bring about
the millennium; neither does it prom
E ise to give workers high wages and
= employers high profits. 1t is founded
e on knowledge that the business must
: prosper if either employe or employer
4 is to prosper. With the two factors
working together with mutual under
s standing and recognition Of the prob
d lens confronting the industry, the re-
e suits of the law of supply and de-
e mand can be attained without injury
: to either factor and with consequent
benefit TO both.
This is being accomplished with u:
by the workers organizing into wha
resembles political constituencies, they
electing their representatives to minor
and major conference boards. Th'
minor boards consider matters of pure
ly local and departmental interest
while the major boards broaden tn,
scope of their interests up to tn,
point where the General Conferenc,
Board sits in judgment on problems
affecting the entire organization. Th'
Conference Boards are made up o
equal numbers Of representatives o
employees and of the management, ant
all their decisions call for agreement
between the two factions. The plal
assumes that reasonable men who ar,
acquainted with all the facts about
matter will reach an agreement whel
they place their feet under the sam
table and give honest consideration
10 the problem before them. On tn
outside chance that some situation
may arise in which the two faction
cannot agree after such honest an
careful consideration. provision
made for arbitration. but it is not ex
pected that this will be necessary.
Unions Ideals All Right
ut takes a very narrow -ninde,
person TO believe that the announce
f'rht and Just, but there is also tn
certainty that in practice the relation
lerween unions and employers will b
ests Of strength. A strike or a lock
, out merely shows which factor /
: for the moment dominant, and in n
sense determines what is right O
what is best for the BUSINESSMAN
: when / say best for the business
mean best for those who are investin