Evening star. [volume] (Washington, D.C.) 1854-1972, 1946-01-22
Letters to The Star
Readers Discuss Labor Troubles
From Different Angles
To the Editor of The Star:

FROM Inherent Angles
To the Editor Of The Star:
In the editorials I have so far read,
and the radio comments I have heard
concerning the industrial disputes that
have resulted in the present wave of
serious strikes, there seems to be one
point of view which has escaped notice.
1t is this: That the board of direc-
tors and officers of corporation, COM
monty called management" are trus-
tees Of the stockholders, and as such,
have clear duty to protect them from
loss and to take care of their interests.
The ownership of corporation, of
course, is vested In its stockholders and
the board of directors is elected by
them for the purpose of carrying on
its business for their benefit. Officers of
the corporation. chosen by the board,
OF course, are part of the manage
ment." The board and officers neces-
sarily study, and inform themselves as
to the many and various problems
that are involved in operating a great
industrial corporation, such as the cost
of operation, depreciation, reserves for
taxes, and research work, interest on
bonds and the amount to be paid in
dividends and many other necessities
incident to the kind of business to be
operated. In these respects they be-
come familiar with the factors re-
quired to conduct safely and success
fully that particular industry. All these
matters are of vital interest to the
stockholders who have invested their
money in the enterprise in the hope of
a return on their investment and in
reliance on the management" they
have selected to see to it that they do
not lose such return.
In my opinion, neither the President
Of the United States, nor any fact
finding board is, or can be as we'll
equipped to grasp the problems pre-
sented to management as are the board
Of directors and officers of a corpora
ton.
Nor can either of the former be con-
sldered, under any circumstances, trus-
tees for the stockholders. who-and I
believe I am correct-in many, If not
all Of the great industrial corporations
OF the country, outnumber the en-
ployes in the ratio Of about two to one.
II the amount of increase in wages
demanded of corporation by union
Is so high as, if granted, to necessitate
a cut in dividends, resulting in loss to
the stockholders, would 1t not be the
duty of management" as trustees for
the stockholders, to protect them from
such loss by refusing the unions de-
mands?
I believe that fact-fnding ESQ called
boards should not be created by law
or given any powers whatever. Such
boards necessarily would usurp the
functions of management, substituting
their Judgment for that of well-informed
expertS-namely, the board of directors
and officers Of the corporation. What
such fact-flnding board would think
would be a proper wage raise, or a
reasonable profit, in reality might be
ruinous to a corporation and its owners,
the stockholders
I am not a stakeholder In any of
the corporations involved in strikes or
threatened strikes
CHARLES L. FRAILEY.
To the Editor Of The Star:
Many of the striking labor union men
have two objects in view. They want
more pay, but they also, as economic
authorities, wish to combat unemploy-
ment by increasing purchasing power"
This familiar and facile phrase is a
vestige OF the ancient notion that wage
earners are practically the only pur-
chasers. But when A gets some Of
BIS income, what one gains is exactly
equal to what the other loses; there is
no net change in purchasing power.
The value of wage boosts in increasing
purchasing power, then, is normally Just
exactly zero.
A different consideration, however,
has hearing on the case. Many good
men claim that income for the rich,
when it is boarded. stiles employment.
Higher wages might tend to remedy
this, but the point is not what the
worker gets, but what the rich do not
get. There also is an opposite, equally
strong and equally one-sided reason
for giving money to the rich, in order
that they may make the investments
which are necessary for full employ
ment. 1t is only a theory, but rea-
sonable one, that continued prosperity
calls for giving the rich just the proper
amount, varying with economic condi-
lions, since even when they do not
hoard they may over-invest, giving the
boom which busts. This regulation of
the investing class, If done through
wages, would demand that wages some
times be lowered, as well as raised, but
might be aided by variable income
tax. In any case, 1t would call for the
highest intelligence and experience. To
attempt it through one single, slapdash,
discriminating method, such as always
raising wages, is like butcher doing
brain surgery. WALTER P. WHITE.
Burning Wearing Apparel, Etc.
To the Editor of The Star: