The times-news. [volume] (Hendersonville, N.C.) 1927-current, 1938-01-31
NEUTRALITY-SUSPICIOUS.
WAGES, WORK AND BUYING POWER


There are few grounds for hoping that President
Roosevelt will be any more successful than Presi-
dent Hoover in appealing to industry to take up
the slack" by keeping up wages while prices are
falling. Mr.. Roosevelt adds the warning that I'M
less purchasing power be restored by this
means the government viii have to seek other ways
probably inflationary pump printing. But this
may antagonize rather than persuade.
1t is probably true that industries and
many firms could keep up wages for a time. Some
did in response to Mr.. Hoover's appeal. Some did
in answer to the Blue Eagles patriotic call in 1888
In some trades wages small part OF costs
Henry Ford has proved that in mass production
industries improved machines and better manage
ment can cut production costs and increase wages
at the same time.
General Wood, head of Sears Roebuck told the
senate unemployment committee that his firm
would seek to revive buying by sharp cut IN
prices Other retailers have done the same thing.
They should not be asked to absorb the whole cost
of a new start Mr. Roosevelt has good reason, as
did Mr.. Hoover, in asking that producers generally
bear part of the burden. And he has the strong
support of Mr.. Ford in believing that when labor
gets larger share of the joint product of labor
and capital the same promise of continued sale for
industrial production is strengthened.
Better distribution of purchasing power is def
nitey one key to consumed production and con-
tinued operation Yet conditions vary greatly as
between industries. In some higher costs are even
now bringing increased prices at the risk OF smaller
production. In some the undistributed profits tax
has removed reserves out of which the slack be-
tween steady wages and lower prices may be alb
sorbed.
And bascally it is the total wage fund which
governs recovery of purchasing power. The
wages in manufacturing pants-whlch Mr. RooSe-
welt seems to be thinking of-are only part OF
the total wage fund. Nor are high wage rates
which often mean less working time and lower an
nual wage income-a guarantee OF purchasing
power. In fact, they may have the same impov-
erishing effect the total national wealth that
monopolistic high prices and curtailed production
have.
Lower prices with steady wages would mean an
increase in purchasing power if working time were
not reduced But experience with Mr.. Hoover's ap-
peal and with the NRA effort, does not encourage
THE hope that employers a whole will keep up
production and employment when prices fall
ing.
Mr.. Roosevelt says wages should be as sacred
as bond interest That will appeal to the heart of
everyone But the hope of recovery is in flexbility
enough to permit cost and price reductions If costs
are frozen by fixed charges if no reduction can be
made in bond interest, taxes and wages, then for
trades which cannot quickly cut costs by better
production methods flexibility will come only from
changing the value of money. That is what nearly
every industrial country has done in the effort to
reverse defaton and depression. But the stimu-
liant of inflation-even of pump primng-is not
one to which sober nations will repeatedly resort
If there is slight hope of getting industries now
operating to keep up wages, would it not be we'll
to explore the opportunities for starting up other
industries and thus increasing employment and
purchasing power? More definite assurances to
investors by government might do that. They
should accompany the wage appeal.-Christian Sci
ence Monitor.