Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-07-29
Steel's Reimbursement.


not reduced the wages Of labor. In ex-
PLANTATION of its reduced dividend pay
ments and cuts in salaries, the corpo-
ration calls attention to its materially
reduced earnings. The action OF the
Steel Corporation. while interesting In
itself, is doubly Of moment as q pos
sible forerunner OF cuts in pay OF
employees in other big industries. In
some quarters there has for months
been q demand that there be read
justment of wages to meet the lower
prices of commodities and the inability
Of industrial concerns to earn as much as
they have in the past. Such demand
has been resisted not only by many
business men who have hoped for an
uptorn in industry, but also by the
President of the United States and his
administration.
Soon after the stock market crash in
1929 President Hoover called to the
White House leaders Of industries,
labor and agriculture and urged upon
them the need of upholding wage scales
and Of avoiding strikes and demands
for higher wages. The upshot OF the
conferences was a declaration that in
dustry and labor would stand by the
administration in its efforts to main
tain wages and industrial peace. In the
main the pledge has been carried out,
luckily for the country at large.
The action Of the United States Steel
Corporation yesterday still conserves in
large measure the pledge not to reduce
wages. Labor, 1t is understood, Is to
continue to work for the corporation
at its old scale of pay. On the other
hand, the corporation Is making capital
bear the burden Of reduced dividends
and is reducing the salaries of the
better paid employees. 1t Is difficult to
quarrel with the action Of the corpora
ton In these circumstances. Obviously.
II the corporation earnings are falling
off, it would not be possible to continue
to pay the same rate Of dividend, $500
q share, now cut to 81, without
drastic cut in operating costs. If then.
The directorate Of the corporation has
undertaken to make capital bear its
share Of the burden Of the depression.
II it had gone ahead and reduced SAL
aries and wages and at the same time
had sought to maintain the old divi-
dend scale for stockholders, there would
have been ground, indeed, for severe
criticism. ANY effort on the part OF
capital to make labor bear the whole
burden of the depression or even the
greater part of 1t would be blow to
the capitalistic system. In times of
great activity and prosperity. capital
reaps as rule the greater reward, al
though more and more the workers
have come to share In the earnings
which they make possible by their
labor. In hard times it is but just that
capital shall share the burden In an
even greater degree than labor.
For nearly two years this country
has wallowed in business slump, the
result of overexpansion and over
production, with the rest OF the world
steadily losing buying power. The oe-
preston which resulted in 1929 was
inevitable Economic laws are mex
orable. America and the world will
win a way out of the present slump.
That there will have to be readjust-
ments is beyond a doubt. Already
these establishments have, in many
cases. been made. Unfortunately they
have led to q halt in many industries,
with many employees cut of work or on
part time.
Confidence, lower prices and in
creased buying. the exhaustion OF
stocks Of goods of all kinds. making
necessary further production. will all
play their part in the revival when 1t
comes. The action of the Steel Cor
poration is regarded by the directorate
itself as a temporary measure. Other
concerns which seek to reduce salaries
and wages, too, giving the action OF the
Steel Corporation as an excuse for so
doing, when the same sound reasons
do not exist for readjustment, Will
be doing themselves and the country
a disservice. And those concerns which
seek to reduce wages while maintaining
the payment of dividends or earnings
In whatever form at the old rate should
be censured.