Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-05-03
WAGE LEVELS HOLD
LEADERS, INTEREST
Views on Whether to Reduce
Made Contingent Upon
Business Revival.
NJ MARX SULLIVAN.

Policy about wage levels is the one
matter that has most engaged the at
tention Of the meeting Of the United
States Chamber Of Commerce. The dis
eusston will be intensified at the meet
inr Of the International Chamber In
washington this week. The public ad-
dresses necessarily are not always as
freely spoken as the earnest private
discussions The question seethes
wherever leaders meet The writer mas
listened to many such discussions pc
tween leaders OF business ana OF
thought.
&radict each other Practically all agree
that on a longtime basis, as dlStln-
e1lished from present emergency, the
share Of labor In the fruits of business
Is certain to trend upward. In all
cases, views on whether to reduce OF
not are made contingent upon how soon
business will revive.
All admit that as a practical prob
lem the conditions differ Some IN
6ustries. such as most public utilities,
have not suffered to such a degree as
to make wage reduction an immediate
problem. Many other businesses, espe-
cially small ones, are hard up against
the necessity OF deciding Whetner 10
0IlQR dOOQU lOWCACO "oSNS az NAAS~
0 means Of avoiding destruction, or TO
hang on in the hope that greater
volume Of business may save them
without the necessity of wage reduc-
tons.
Problem Practical One.
The problem is partly a practical
one for each business and partly a
broad question of national policy. AS
to national policy, the question. is
whether prosperity will be most has
tened by keeping up wage levels every
where or by reducing wages so as TO
adjust costs Of production to the level
to which practically everything except
labor has already gone.
The outstanding exponent OF the for
n1er theory is Henry Ford. He has an
nounced that not only will he keep
wages up, but that the many concerns
from which he buys materials must 90
the same or he viii cease to patronize
them. incidentally, critics Of Ford say
this compulsion put by him on other
Arms is dictatorial and In the case Of
sor1" small firms cruel.
Opponents OF Ford's policy say he Is
In a special situation. Most Of those
W. purchase his cars are workers and
It to his interest to maintain their
~ to buy. Critics say the high
.--:o-y he has practiced since 1914
n merely matter OF good bust
- him. Ford fixed minimum
Ct IS a day in 1914, raised 1t to
1922 ana again to 81 in 1928. He
y having a study made to deter
just what wage In various cities
6. IA Is the equivalent Of 81 a day in
Detroit He proposes to put the wage
thus ascertained In effect In each of the
a countries In which he has recently
begun to manufacture In large way.
Business Men Oppose.
Opposed to Mr.. Ford is school Of
realistic business men and Of equally
hard-thinking economists. They say
with as much certainty as they talk
about the calendar, that wage levels
must 60 down in proportion as every
thing else has, that this reduction is
covery, and that the longer the read
justment Is delayed the more prolonged
and disastrous will the depression be.
The two contrasting theories may be
put as follows. The Ford theory, stated
roughly, IS higher wages, and there
fore, higher purchasing power and,
therefore, more production, followed by
still another raise Of wages" The
otter and older theory Is lower cost
OF production followed by lower prices
fo- goods, followed by greater consump-
ton OF goods, followed by increasing
prosperity, followed at that point by
IL "reased wages"
Critics Of the Ford theory claim that
n practice he has actually followed the
oloer theory. They claim that he did
net and that no noe else can follow
the new Ford theory until after he has
nrst acquired a high production by
paying the normal level Of wages.
Coincide" with Prosperity.
=, A view Of an important member Of
the administration, Secretary Of Com
nerce lamont, Is that high wages have
always "coincided" with prosperity. II
VII be observed he refrained from say
ing they have been cause" of pros
per1ty. Whether high wages are the
cause" or the consequence" Of pros
perity Is precisely the question about
which much Of the wrangling is. Ford
holds the cause theory. One handi-
cap Of that theory is that /: has been
q few years ago in bad company. It
was q feature In 1928 and 1929 of the
eo.ealled new economics" which main
tanned, among other things, that there
would never be another great depres-
sion and that common stocks of In.
0ustry would never range downward.
As the net Of many discussions. a
rev deductions stand out. One is that
some industries. such as public utilities,
may be able 70 60 on without facing
necessity Of reductions. Some manu-.
featuring industries like Ford's NAV at
tempt for long time to keep the "a te
OF wages up even though the quantity
paid Ii greatly diminished by part time
The mass Of Ford's own workers are
on part time. Even though they get
the same daily rate, the sum they get
At the end Of the week is smaller than
normal. ''4''
Another deduction is that there are
many businesses which have ceased
their dividends. which have practiced
every possible economy which are now
doing business at loss, ard which
must either reduce the wage rate or
give Up. AS to each business, the mat
ter Is, as it was put by Myron c. Tay-
Ior OF the United States Steel Corpo-
ration, "tn the lap Of the gods" de-
pending upon future volume OF business
generally.
One wise person Of the writer's ac-
quaintance says the final answer will be
the sliding scale, meaning wage scale
that rises and falls along with the price
at which the product can be sold and
along with the general state Of pros
perity.
COL. FRANCIS WHEATON
RITES SET TnMnPpnWJ