Imperial Valley press., 1924-09-26
Suspension of American WOODEN
Company Dividend Causedby Their
Refusal TO Lower 1923 Wage Scale

BABS0N PARK, Mass, Sept %.
When the American Woolen Com
pany recently announced that ii
must suspend its dividend, and the
stock dropped 20 points, Roger w.
BabsoH announced that it was
largely due TO the action Of the
company IN the spring Of last year
in increasing wages 1879 per cent
when other wooden companies felt
thcre shoald be wage reductions He
claimed that the American Woolen
Company then stood ort alone
against wage reductions when other
New England mills felt that such
reductions were in the interests Of
wage earners, stockholders, and the
public generally. "The American
Woolen Company is now suffering
for its action at that time states
Mr.. Babson. In commenting fur
ther on this wage situation, he says:
During tine war wages increased
very rapidly. IN early 1920 they
stood at what was then the highest
point in the history of industry in
the United States. Tho panic of
1920 resulted in some wage cutting
In 1922, however, wages again be-
gan to increase, until, at the present
moment, they stand at approximate
" TO per cent above the peak of
1920 and at the highest point, both
in dollars and in purchasing power,
ever reached.
Time is Needed
I'm the years since 1914 great
changes have come over the indus
trial situation. The producing pow
or OF the country has tremendously
increased. In every manufacturing
town great new factories stand as
monuments of the zeal of war time,
while the pre-war factories are idle
and are placarGed with For Sale
signs, 1t will take. years for the
consuming power of the country,
through domestic and foreign trade,
to catch up with this development
This feature Is against the wage am
birions of the employees. On the
other hand, during and since the
war we have entered upon a plan to
limit and regulate immigration. Not
oAly do we select who shall come,
but the total admissible is but n
fraction of what we admitted before
the war. This change plays iuto the
hands of employees. So the battle
goes on between those who want
wages kept up, on the one hand, and
those who would reduce them on the
other.
Wage rates are what an employ
er agrees to pay his employees, and
it is over wage rates that employers
ana employees fight. Earnings
what the employe gets id his pay
envelope,-are the result of multi
plying wage rates by hours worked
or by-product turned out. In years
time this product constitutes the
yearly income of the worker and de-
termines whether he can afford to
buy an automobile. Real wages are
what the employe can buy with his
earnings. Real wages are much
talked about by academic people,
uplifters and the like; but they do
not cut much figure in wage con
tests. No industry can pay real
wages unless it is making money
enough so that it does not have 20 /
cut corners. Wage raSes are what
employees are interested in first of
all, then they are interested in what /
is earned under the rates. It is OF ,
no great importance to have wage
rates high if earnings are low.
- Now what makes earnings go
up or down is work. What makes
work is orders. What produces or /
ders is ability to sell, and ability to
sell depends upon price. This last
was never truer than it is today. /
Low Wage Argument
Put in afother way, that ques
tion means: How much are the en-
ployees of those textile mills and
those shoe shops going to earn dur
ing the next y months compared
with the total earnings during the
same period of the people who work
ed in the mills and shops that have
cut wages, And what is going 10
be the result when the statesmen of
these high wage plants report to
their boss tina, they cannot get
oTutTS because TIC ~" wage siOPS
are selling for less money than they
can offer goods for2 Every low
wage shop in any industry is an ar
gument for lower wages in the other
shops in that industry, because
prices ara the determining argu-
ment in getting orders. Orders
determine TO whas extent the fac
tory is TO operate. Employees WHO