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730 Released. for publication, morning papers, Septeruber 25, 1919. I I ~ •• I An address·by Ar c. Miller, Member. Federal Reserve Board, Delivered at Chicago, Wednesday, September 24, 1919, before the American Associution of the Baking Industry* -o- ~·: q:~~~·1;-:~':'.::"i"~'I.t''"~·:"l~':~"'"·~:';:-"·~;.,.r;""'i""'?'f~~"t(,P~~.~~·-- · ' .. 1 x-l67S 731 - 1- That there is a fee ling of ,n.rest abroad in the country is too obvious to admit of questioning# That this unrest is delaying the recovery and re~ adju.stLJ.ent of industry and in general the restoration of normal conditions seems a~ost • equally obvious. is becoming clearer every day. That this unrest is social as well as industrial That the unrest in the United states is a part of the general world unrest following the great war has latterly became evident. That the situation is a serious one can not be denied, but JUst because it is serious it is well not to make it more serious by taking it too seriously~ Plarm and apprehension do not create the best atmosphere in which to take wise counsel and make wise decisions. On the other hand the situation is not one to be taken light-heartedly as some are showing a disposition to do. It will not do to dismiss the existing unrest with the remark that it is "natural" after such a war as the world has gone through these past five years and that conditions are worse in other countries than our own. condition of unrest with which we are confronted.. It is no ordinary Industrial discontent forms a large part of it but it is wore than an industrial question that is presented .. Doubts, distrust and antagonism have taken hold of the mind and soul of large sections of the populations of all the leading countries of the world, our own included, with respect to e~isting institutions and other social classes. The prevalent unrest presents therefore, a condition of mi.nl to be dealt. with. To handle it successfully means that its causes must oe carefully understood. Sympathy', as well as .intelligence Llust, therefore, be applied. to their examina,..; tion, if a quick way out of the impending situation is to be found and. our country saved the pain. and t~oil, sacrifice, waste, ruin and class bitterness, which an unintelligent and uns~athetic handling of the situation would ~nvolve • http://fraser.stlouisfed.org/ Federal Reserve Bank of ....._ St. Louis t.....o.oo ................ _........_ __ _ _ _ _ _~-------~ ··~-----------~---··--····- 1. ~ I X-1678 - 2 CAUSES OF . INDUSTRI~ UNREST .Among the causes of .il'ldustrial unrest in the qnited States at the · present time there are two which seem especially worthy of public attention, particularly among the employing classes: h~.gh e.nCI. 1.. The dec lining value cf tb.e do1lar with· the of living; ard, 2. The absence of a nat:i.onal and constructive :policy with respect to labor. Indeed, these two are largely intertwined. ad.va'rlcing cost cost of living has devel~ed into much more than a cost of liv:ir.<g problem because until quite recently no definite and com,petent :program for dealing with it has been undertaken. The fact that the Government and the Natio~ have drifted without admitting that there was an industrial situation which ought to be studied and remedied as quickly as conditions would permit, not unnaturally established in the minds of the working .classes J many of whom were suffering real hardships because of high ..and advancing prices, a feeling that now that the war was won anCl. over, the:l:r · condition.and rieeds had ceased to be a matter of national concern. As a result the .war has left us not only with a cost of living problem, but also with the problem of restoring the faith of the average working man in the disposition of the country at large to concern itself with his welfare. r.t is tin..e, therefore, that earnest thought should be given to the present industrial unrest. something wust be done to help labor meet the cost of living problem, but beyond that something substantial wust be done to put labor in a better frame of mind on the larger q,uestion of its future ecomomic position. we need a constructive policy in labor matters. Labor should be given an obJective - an attractive obJective - toward which to work in order that hope and cQlltentment, as well a.s wages, way be its portion in .AJnerican industry. 732 X-16713 - 3- • ~ I HIGH COST OF LI~ING so far as the unrest in the united high and risin~ 733 sta~es is econar.J.Iic in character, the cost of living ll.le-y be said to be the chief source of irritation.. During the war the acute situation :produced by rising :prices was endured on the whole with fortitude and patience, because, it was said, 11 We are at war", and in the confident expectation that the war would be brief and that the close of hostilities would bring a lower level of prices ana a great and progressive improvement in the cost of living situation. As a mat1er of fact, barring the first wonths following the armistice, the price situation as it af1'ects the cost of living (that is to s~ the prices of articles of general consumption such as food, clothing, fuel, light and housing), has grown worse instead of better. Why is this 1 What is it that is keeping prices up1 These q_uestions must be answered before the real nature of the cost of living problem can be understood and a solution undertaken. In general the answer is that the continuance of many of the influences that raised prices during the war is responsible for the continuance of high prices after the war, with a new aggravation added in the shaJ?e of profiteering. PROFITEERING The extent to which profiteering, that is to s~ hoarding and speculative holding of goods for a rise of prices, is responsible for recent price advances in the United States is not, of course, a matter that can be statistically determined. It is, however, a matter of widespread belief, s~ported in part by official investigation of the practices pursued by certain industries since the ar.mistice, that prices of many articles of or~i~y cons~tion :preciably, higher than econOIIlic cordi tions warrant. are ap- The recent declines of X-1678 A. 4- retail prices in several lines cont'irm this impression. same mitigation of the cost of living situation may be expected from the eliwination of control of profiteering practices, but it seems not ~robabl~ that when all is. accomplished that can. be accomplished through investigation, publicity and prosecution, to effect a red.uct:i.on of pr.ices, the coun~ry wiJJ. still be left with a price situation which will be f~ from satis.fa.ctrn·y am which will indicate that the causes. of the high cost of living which have got to be reached in order to solve the cost of living problem lie ueeper. Indeed. the increase in profiteering itself is a thing which needs explana; / tion. .After all wb.y i.s there so much :rpore profiteering than ordinarily? profiteering is an o;Ld instinct of human nature~ Cupidity or the desire to make all the profit that can be made out of a situation by pushing prices to the limit of endurance is no " ne~i trait of man. changed in this particular by the war.. Human nature has not been The war has si.nq?ly afforded an oppor- tunity for a more active and aggressive assertion and play of certain human 1iraits .• · The seller has always sought to get for his goods all the money that he could. The bqyer has he could. alw~s sought to get for his money all the goods that As a rule, buyer and seller are·matched in intelligence, acumen and intensity of desire. From their action there have usually resulteu prices that C01tld properly be regarded as the outcome Of :warket COII!Petition... Some- times, however, conditions are such that a buyer is in the position of vantage; for exar.uple, when the outlook indicated that prices would fall. There are other tixoos when the conditions are such that.the seller is in a position of vantage; for example, when the outloOk was for a rise of prices. which induce hoarding, specuiation and profiteering. It is rising prices Ordinarily buying for a rise in such circumstances undoubtedly tends to accelerate or aggravate the rise of prices. But is is always a question whether speculation and profiteer- 734. .... ' X-1678 ... 5ing are more tbe cause of high prices than they are the effect of high prices. When all is said and the g:-eatAr economic truth is stated, the fact is that prices make themselves :t'a:r- r..ore than tb.ey a.r.-e made. profiteering has ' flourished in the United states and elsewhere in recent years because the price situation has been favo:::·a~Je to it. conditions. The profiteer is a creature of He does not make conditions, though he frequently doee much to make them worse. Like the poor, the profiteer is always with us ever ready to go when the going is good. To say that prices are high because of }.lrofiteer- ing explains little, and does not get us far on the way toward a solution of the cost of living .. OUr high prices are far more an economic fact than a criminal fact. Their correction will therefore be found more through the processes of industry than through the processes of the courts. Prosecution of profiteers will do some- thing; it is to be hoped will do 111uch to improve the situation, but prosecution of industry will do more. ·• will not produce goods. Prosecution of profiteers may lower prices but it What is LlOst wanted at the present Juncture is not alone lower prices but more goods at lower prices. So far as the price pro- blem has given rise to a cost of living problem it is mainly a problem in production. The causes of the existing situation are mainly econauic and the remedies must therefore be mainly economic. WAGES AND PRICES Much the same may be said of wages as a cnuae of the high cost of living • .. There is a good aeal of misapprehension particularly anong · of the relation between wages and prices. em~loyers of labor Looked at from the point of view of the individual ef4Ployer of labor wages is an element of expenses of production which regulate the price which enterprise is. to succeed. mus~ be received for the product if the business It is not surprising therefore, that the eniiJloyer 735 736 - 6who ordinarily reason from wages to prices, should conclude, when both prices and wages are risi.ng, that :v6;;es are rising because wages a::e rising. There is) however, little foundatio:>. for this view of the conn~ction between high wages and hig.b. prices, looking at the matter as an economic t::ond.iti.on rather than a business condib.rm. When are wages hi&'1? for the fun of it. to do so~ '!he emplorer does not eng-_;loy wor.kruen and pay v;agee He employs wen and raises their wages on~ as it pays him It pays bim to do so when prices are rising and profits are follow- ing in the wake. High wages are rather, therefore, the resultant of rising prices than the cause, and there is far less of a vicio~s tion of wages and prices than is currently alleged. circle in the rel~ As a general pr~ositiop the economic sequence which results in high wages way be stated briefly as follows: Brisk trade, intensive demand for goods, rising prices, increasing w- .. profits resulting in increased demand for labor and rise of wages, This sequence, I think, represents the approXimate relat:i.onship between the move- ment of prices and the movement of v;ages in the United Ste.tes during the years 1914 to 1919~ Both prices and wages (which are the price of labor), have risen frmn the same general causes~ either OIB They do not explain one another. They are not themselves, or the other, a priw.ary cause but the effects and the exp~ession of fundamental forces governing 1. The money and credj t dew.and for g.oods, and 2. The supply of goods~ WHAT HIGH PRICES ARE DUE TO The more the matter is studied the clearer .it is that the high prices which deve.loped with the European war in 1914, and which are still with us as a heritage of the war) are si~Xq)ly to be regarded as an e.x.tre:we case of . ?;·Z - 7the working of the til:r.e-old. economic law of demand and supply. In the United states, as the world over, through the past five years, intensified demand (credit as well as economic demand), for goods and an inadequate supply of goods have put up md kept up prices and given us the acute cost of living situation so widely complained of. Turning then to the major influences in the price changes which have taken place in the five years, there are three that staP~ out conspicuouslY. They are; t. The excessive demar.d by belligerent governments for war sapplies both before and after our entry into the war~ 2~ The excessive expansion of banking credit. 3- Shortage of supplies in mapy lines, due to ful . (a) wastejconsumption and loss of goods (b) Heavy loans of capital and exportations of goods, and (c) Slackening of production. I ~ I Taking the five year peri~, 1914 to 1919, as a whole, the most persistent single influence affecting prices has been tbe expanding state of credit. Taking the period before our entry into the war the enormous demand of Europe for American war supplies, aided by easy credit United States, was the most ~ortant condit~ons in the influence affecting prices. Taking the period since our entry into the wa.r, a fact. or of equal ~ortance with those already enumerated was the inability of our industry i:amediatel;y to reorganize itself to meet the vast requirements of the GOvernment for war supplies of one kind or another for the use of its armed forces. Coupled with this and ag8ravating the situation was the heavy d.ra.in of goods· from the United states for the use of the Armies and the civilian populations of the nations with whi-Ch we were as&OC~ted for which no goOds,, at an:~ rate in q'tb.,i.na like an equivalalt alilomlt, were receiveQ. in return .. 737 - 8- Taking the most recent period, the fiscal year 1919, which includ.es eight months followi.ng the arru.i.stice, the active and ituuea.iate causes of rising prices are the greatly inc!'ea3i:!d shipment and sale of ruer..::.handise on credit to Europe, particularly focdstvffs and war11ll'actu::-es res1y fo:!" c.ntH'l'..lll~ption, slackening of production, 'Hll.linished eronoray of cor.,sw:r:>:>t:i.on 9J.ld., n.;, :profiteering and. the f>Per.ulati.1T3 hol.d.ing of goods for alJ.~ead.y noted, R- :r:i.;;e .. _Qtm:DIT EY,PAN§.l9!i _ The form that credit deme.:-I.Cl (and expaTlsion) has taken in the United states has beon banking credit in the shape of bank deposits.. rency· has played a very subordinate role. Expansion of the cur- It is no exaggeration to say that expansion of the currency has been a consequence rather trum a cause of our Wholesale prices began to rise shar,ply i.ri the united States with high prices. heavy demands for our goods from Europe shortly after the in 1914. beginnin~ of the war Credit was e.x,pan.ded. to Iileet the requirements of e.J~.lJOt·t industries .. Prices at wholesale rose and kept on rising. Retail prices had to follow suit, and thus there was called into existence an increased amount of pocket money to accommodate the needs of the conmunity. So far as ~xpansion of the purchasing medium uf the co1.mt.cy is res11onsible for our great rise of prices it has been and is purchasing weuium in the form of 'bank deposit credit and not in the form of the Federal Reserve Note. commercial bank deposit credits in the United states have increased from $16,264,000,000 to $30,099,000,000 an increase of about 85 per cent, between the dates of June 30, 1914, and June 30, 1919.. ments of the s~ LOans, discounts and invest- institutions have increased in the sawe period from $15,819,000,..000 to $29 1 765,000,000 or about 6811er cent. A large part of the increase in the loan and investQent aCcount is tuade ·u.p of war securities and . war loan paper.. This is estiDJated to amount to as much as frcm si.x to seven . l X-1678 :. 739 ··;· - 9Treasury needs have been the chief factor in our credit expansion. The situation of the United States obliged the gove~ent to borrow money faster than the· rate of saving of the caww~ity could sustain. The result was reliance on banking credit to r..1ake u:p the defiCiency; .ar:d. thus the resul.ting rise of prices r.aay be descr:i.'Qed in its econom'.c effect.:; as a method of forcing econOmf and saving on the cawmunity, or large sections of the c~ munit~, because most people buy less and consume less as prices rise. As the present volume of undigested Liberty Eonds is absorbed out of savings, the investment account of the banks which is now swollen because of the large amount of war securities they are earrying will diminish and wi~ the diruinution vnll go a decline in the volume of bank deposits, following which will come a decline in the volume of currency in circulation. Prices will then fall and the cost of living decline. Working to the same effect in bringing about a lowering of :prices will the be/expected diminution in the rate at which the United States have been ex,porting goods to Europe on credit. The large volume of exports we have been sending out of the country in excess of what we have received as im.Ports has been on~ of the great determining factors in our rising cost of living through the last five years 8nd especially in the last year. X l67S -10... 740 A compari..son o: our ox:port tra.d.e for the five years since the beginning of the Eurorean war, and particularly the period foJlowing our entrance into the w~r, with conditions in the five years preceding the breaking out of the Eu.ropean war yields some very instructive results. Our exports of domestic merchandise for the years 1910 to 1914, inclusive, arrounted to $10,652,143,234, Qr an annual average of $2,130,428,647 For the five years, 1915 to 1919,inclusive, our dorrestic exports arr.ounted to $26,.128, 183,680, (an annu.a.l average of $5,225,636,736), o£ which ~$19,139,827,636 represents export ~f domestic merchandise for the years 1917, 1918 and 1919, ~nd $7,074,011,529 domestic exports for the last fiscal year 1919. Our average annual exports for the five years from the beginning of the war exceeded our average in the earlier period, l45.3 per cent. /1ro ~ to I 9/~ 1~, by $3,095,208,089, or For the three year period since we entered the war, the amount by which exports exceed those which were normal before the war, is $4,249,513,898, or 199.5 per cent. the excess is For the last fiscal year 1919, $4,943,582,882, or zze.2 per cent. These comparisons are rrade on basis of our custons house reports an..i do not include exports made by the government itself, which consti- tuted a very important addition to our exports in the period since we entered the war. Government e.x.:ports have been estimated as high as from 30 to 35 per cent of the exports regularly reporte~ by the customs house. Some indication of their volume is given by the returns of the aggregate weight of a.rey shiprrents for the period June 1917, .to 0 ctober 1918, of 4,897,600 short tons, and of navy shipments for the period May 1917, to December 1918, inclusi'9e, of 1, 090,724 net tons .• X 1678 -11- 74:1 Of eq_11al signHicance v•i t.l1 the trade in the last si tion. fl~ts incr~ase of the totals of our export ye.;,..rs A-re figunfj indicating charges in its Gron"?ing our e2:po.-:-t:s in'..;o <liX great; gro~.i.ps, 'N() COJ1lPO- have: rrarru.:fa~t·ur:i.ng. 1. Cr-u.de ma.teri3.ls fo:r:- use in 8. Foo~-13klf:fs 3. Foodstuffs pa.rtly or wholly prepared. 4. M.amuactures fo:r:- further use in mOi.nufacturing. 5. l\1anufact.ures red.d.Y for cons'UII!Ption. 6. Miscellaneous. in crude condition .:1nd food a.ninals. We find tlat whi.le the first na.rr~d group, cru.de l!'.ateria.ls for use in manufacturing, constituted an average of 33.1 per cent of our annual exports in the five year period, 1910 to 1914, it fell to 14.89 per cent ~ in the five year period, 1915 to 1919. The second group, foodstuffs in crude condition and food animals, rose for the same period from 5.94 per cent to 9.68 per cent. The third group, foodstuffs partly or wholly pre- . pared, rose from 13.84 per cent to 18.11 per cent•. The fourth group, nanufactures for further use in nanufacturing,. held its own, being 16.04 per cent in the ea.rl:l er period, and 16. 69 per cent in the la.tter period. The fifth gro,~p, rra.nufactu.res ready for consunption, · rose from 30.71 per cent in the earlier perioi, to ~n average of 39.49 per cent in the latter. The sixth group, miscellaneous, rose from .37 :per cent L"l the earlier period, to 1.20per cent for the latter. It must be a.dmi tted tha.t the comparisons just. :rmde for the :yurpose of showing the increase in the e7.port trade of the country give an exag~r- a.ted and distorted "'fiew of the export trade a.s it bears upon the cost of living situation because the V:Q.ll~ of our exports is stated in value, not Digitizedin for FRASER quantities. The great rise of prices has reflecte¢ itself, of course, in 1 i' 742 -12- X 1678 a rise in the money value of our exports far in excess of the growth in_ Phe physical volume of exports. It nevertheless appears that when the price factor is elindnated in estimating the growth in the voJ.ume of our exportations, the ~ti ties of goods we have sent overseas in the past five years are so la:t.·gely in exc~ss of what was our customa..cy pre-war normal as to constitute a serious deduction from the goods left in the United States available for donestic consumption. For the fiscal year 1915, our exports by quantities show an increase over the average exportations by quantities for the years 1910 to 1914 of about 25 per cent; for the two-year period embracj:gg the fiscal years 1916 and 1917, an increase of over 20 per cent; for the fiscal year 1918, an increase of 9 per cent, and for the fiscal year 1919, an increase of 35 per cent. It is notable that the year which shows the heaviest increase of exports was the last fiscal year of which eight rr~nths followed the armistice, and that 35 per cent of our exports in this year consisted of foodstuffs. i ,j 743 X-1678 -·------.. ----- ---- RE!VIEDYING TH.I£ COST OF· I.TVING SITUATION -~·,-- . unaer this view of the· cause's of our present difficulties, it is clear that there c::.n oe no short cut remedies, "'nd therefore no eurly prospect of u return to the price sit\~~tion we had bei?re the war in 1914. Prices -:••ay be expected to decline, but the wore then one hundred p0r cent advance wi:ich they have scored in the past fiv..:; yGars will not be retraced short of at least a similar period, if not, more likely, a period of ten years or more. The most consider'lble relief in sight may be expected to come with diminishing exportation of foodstuffs and other articles of general consumption to Europe with the termination or, ~t ~~ rate, re- duction in the volume of the credits wnich Eu:tope has had at its disposal in the American market during the p9.st two years. ~ Food should certainly become cheaper, and so f&r as food is the most irr~ortant item making up the budget of the working classes, there should be an appr.eciable diminution in their cost of. living and the cost of living problem therefore find some considerable sol.ution in this way. The ultimate a.."'ld co~lete solution, however, will come only as the volume of purchasing media created in the last five years is reduced and the volume of ~ods vroduced is increased. This solution, ho,v.:;ver, will take time, and in the interim we sh<,tll continue to have a more or less .I I· acute and troublesome cost of living problem. some r;.ethod of dGa.ling with it in a practical manner is therefore one of the first and necessary steps to be taken toward the revival of industry il"i the United States and the improvement of the industrial situation gener~lly. Until some satisfactory method of dealing with the wage problem aso it bas been affected by the rising cost of living is worked out there will be unrest, industrial strife . . •. :.~ 744 -14- X-1678• and retardation of the processes of industrial recovery that will be costly in their effects to the nation, and costly to the world. that the United States c~ not afford at this time is The one thing su~ension of industry through failure to establish a good working relationShip between employers and employed. Some acceptable method of adjusting wages to chan~s in the cost of living is an obvious first requisite in dealing with the cost of living problem. While wage earners as a class have not been the only sufferers . from the rising cost of living, their ranks undoubtedly embrace a larger IIaDlber of sufferers than any 4)ther class of income receivers, In its most acute form, therefore, the cost of living problem is a labor problem and a wage problem. The problem is partly one as t.o facts, and partly a question of remedies. Have the great mass of those who are dependent . on wage income been compensated for the rising cost of living by commensurate increase of wages? This is the a~ect of the cost of living problem that is exciting discussion and unrest "in the United States at the present time. This is the real cost of living problem.. Besides this, there is an imaginary cost of living problem and a pretended cost of living problem which must be Sharply distinguished from the real cost of living problem. There are a good many people who imagine they are suffering unwarrantably from the advance of prices. For the most part they are those whose incomes in the forms of wages and salaries have risen sufficiently, and in many cases more than sufficiently• to offset the rise of the prices of the things that constituted their customary consumption in prewar days. '' X-1678 745 - 15Increase of money income usua.l~.y it is a fictictious prosperity. en~elo;pe :produces a feeling of prosperity even when Many wage earners getting a bigger pay think themselves better off irres.IJective of the fact that the pur- chasing power of the dollar has declined in substantially the same ratio as th~ir wages have increased. People in this position are frequently teilipted to extravagance. The man who five years ago received a salary of four or five dollars r.~ay now be making eight or ten dollars. He is apt to imagine himself . rich in consequence and probably is spending a considerable part of his increased money earnings for things that foi'lilerly constituted no part of his normal consumption. cheap Jewelry, fall:~y The retail trade everywhere reports heavy pUrchases of clothing and the like. It is a rnatter of comwon observe.- tion and remark that no line of business has experienced a brisker demand for its output than the automobile trade and the trade in automobile accessories. aPending heavily on purchases of this kind, the ~gin that is left over for the purchase of necessaries and real conveniences of life is inadequate at present prices to r.uaintain custor.Jary standards. Those who are victinls of their extravagance and foolishness then COII!Plain that they are suf:fering from the high cost of living, when tP,e cause of their difficulties is the change in their standard of living. It ruay be right that the standard of living should be raised, but it does not induce clear thinking.but ruerely confuses the issue not to note the distinction between the real and the fictictious problem problem. It is the real cost of living · . that concerns the nation at this time. Unfortunately our sources of statistical info~tion are not yet such that coiqJarisons can be made on an extensive scale between the .incomes of different groups (by income) of the wages-receiving class and the prices of the articles that go to make ~ the customary cans~tion or no~al -16- • • st8Zidat'cl ot 746 living of the several sro'l?s• What is needed for this purpose ir. 1. A coat of living im.ex, which shall carefully exhibit aDd measure changes in the eottt of living to lallor classified by inccme sr0'4>s, and 2.. A wage index,¥Fbich she.l:t. exhibit ~ meast-re cbanps in the wage ~ODie of th~tt~ different ,l~o,.;:s scrh es will enable a e~arism-. ~o ·ne ronde f~r tbe -purpo"'e o'C de~e1.1.05nlug whether v1~os a."'e Jr'!C9ing pace 1'1' th p:ic<"'e. The united States l!U..~t'!t of work in this connection :t..:.bor stat!sti.cs ha.3 uM81"i.a!t£n SO'IIe iuportant w!lith~ · results which will be of as it i.s ca.r:-ied to conpletion, will yield t.igbest usefulness. .Among other th1Jlga, the investigation bas been planned, for the purpose, (a) of determining the cost of all iq>ortaut items of fam\.q cona\lll)tion in ail the more ~or ;;:,ut centers of !~t17 in the t.rd ted States i (b) of enabling the !!•re~m of Labor statistics to c0Jl4)ute a coat of Uving index naer that will show variations in total family ex.penses Sn the same wtq as its retail food price index now shows variations in the cost of the family food bud.get. anc1. (e) ot formulating·event,l&lq tentative attmdvd budgets to be uaecl by wags Ead,JUGtment boards in detc...'1D!ninf< minimum imd f&;ir wase awards. The statistical services of sClDie our states are lalOVing in the same direction. until the d.a.ta develO}Ied throup these aoWGes are available, it will be premature for SDTODe to venture an authoritative pronoUD08Dl811t t.J.PO.D the relative trend of wases and the cost of living in recent montba or 18&J"S for .American industry as a whole • • SUCh statistical data as a:re available show that food. constitutes fran 35 to 115 per cent of the total e~eDditure of t7_Pical wage-earnina famiUes eansiatin& of parents aDd tbree children un\er fifteen pars of age. The perCCAtage s.pent for food is wser in the lower iueane grO\I)S but the amount spe:At for food is larpr in the .bigber imCJUe P'ou.P•· J'Ood prices aliow an iDct-ease of 91 }181' cent for tbe six year period frCD _,. 15, 1913 to *1 15, 1919., the increase for the single par 1918 to 1919 being • • • 27 per cant. and fo~ tn<- 111nm·'' Jl'f'.t:l. l~ ~-- )·~ \-;: l919, 2 per cOl'\~.. malr8a up freD 15 to 20 l'~" uc:.•~'· faD il7, the illCrease i."'\ eo~1. of Cloth!ns •J! tre e~c,-\JJ.t;;:.A--e of f;ba avereff) wa!\8 eannns ~!~t'hing c~uted ire the imex m'mber of wholesale prices as COfrl' U.nci by the Pureau o! Lab@ Statistics beiDg about 150 per cent, to June 19:9. elq>erxlitllre of the average l\At aalres u.P W&tf' fr"A 9 to 15 per cent of the Mm1Ds far.oi.lJ, but no satisfact017 data at'e available as to the ave:-e.p increase 1n rents. Bu~, it is a D~&tter of cCI:aiDOil observation and c0119)laint that rents have advaDCed ccmaiderab]¥, eapecia.l.q aiDce the aipi.DS of tbe armistice. J'Qel md li~iD& make up from 7 per cent of worldDg f.S.]¥ a;peD~U.turea 3i to ancl these items have a4vamecl 1n price over the 1913 level a0118 to per cent. Bouse fumishiD&a DaalcB up frca 4 to 7 per cent of e~emditure, aDd baVe advuced1n price aiDce 1913, 1~ per cent. It is clear, tberefore, that there baa been a ve1"7 ~ked advaJ)CG in tbe· prices of aU groups of cCIIROd..\tiea that li1ake up tbe ccma11'qpt1on of the average working class famiq. lbetber W&tPtS have kept pace can not be cSeter- miDecl em a aatiafactotT scale until the 1Dlv.atrial 8\1l"ft7 UDCJ.ertaken b7 the BWeau ot I.abor, aid now •uin& CODilletion, 11 cOIIl»leted 8D4 the resu).ta published.. De 'pre)imiDarJ' report now 1n progress will present the basic facta concemecl, the hours worDd 8Dd. tbe e8Z"D1Dp received., for a larp r-ae of OCCURationa. It will aupp]¥ a basis on which in tiae D¥ be erecte4 a wa&e indeX for all the iq.ortant industries of tbe CCRilti'J' 41stribute4 tbroupout ita lAm&th aDl breadth. In the meantime tbe results of the investiption of tbe 8nf york state !Dlustrial C«a.culaaion abowiDS coq;arative iD:lex ll1Jd)ers of averaae weekl7 , eat'DiDp in New tor:k state factories aDd of retail tood prices 1n the Qdted • States since June 1914, are wonh DOtiD& aa of ccmaiQ.erable value: 7-18 - 1S- For the year 1914, the index number for wages if' . 9~ as coq>at>ed with 105, for food; for the year 1915, 101. as COD.l>ared with 102; for the year 1916, 114 as cOIJI)ared with 115; for the year 1917, 129 as compared with 147; for the year 1918, 1.60 as coupe.red with 170; for th9 first quarter of the year 1919, 117 as caJ!pared \vith 179• Tnese tiguras iX'di<-n.ta' a rit'3 Qf l6 per cent in wages for tbB yc~~ 1'17, a..'\'l 6.25 ~er c~.at !·>t· t.ilr.. ~M 191&, with the gap alaost closed tn •..:te '3aa.-: 1919. This sho'Rs the situation in the state of New York. How fa..... it is repr JSentati.ve is a 'Dlestion. Data derived frCID other s0\4--ees snowing 1;1-..e LaOVewent ot union wage rates in 19 trades in about 12 cities in 1914, to and in-;luding sane interesting results especia1q in the bui~ *" 15, 1916, yield trades: Bricklqers 1 wages lagged 21 per cent, Car',&)enters 1 18 per cent, cement finishers 1 20 })er cen+,, granite cutters t lS per cent, hod carriers t 9 per cent, painters t 14 per cent and plasterers • 5 per cent, iron-molders boiler-makers 25 per cent.. 5 per cent, and The wages of blackso.d.tba L~aehine-makers gained 10 per cent, while lost 5 per cent., Pluui:>ers t and gas-fitters • wages lagged 20 per cent, structural iron-workers t 14 per cent, stone Cl.ltters t lS per cent, coupositors • 25 per cent 8l3d electrotJ.Pers' 27 per cent. 'Iald.ng tbese fi&UNS as a. whole, tbey show a considerable lag of wages cau,pared ~th the advance in the cost ot living. In certain 1D&>-.rtant industries which were stimulat84 by war ccmditiona a different situation is presented.: Real wages in the boot and. shoe ind.ustq gained 23-5 per cent, in the cotton finishing indusAr,. 6 pe11 cent, in the I cotton manufacturing industry 13 per cent, in the manufacture of hosiery am. underwear 11 per cent, in tbe silk ind.ustey 5 per cent, in woolen manutacturin& 9 per cent, 8Jld in the iron and s tee 1 industry 45 per cent, CCJIII)&Ting the closing weeks of DecefA'i)er 1914, with the e1ld ot Septellber 1918. • • so fa:r as these d£:-<~a =~9 749 •• tilselose tf\e situation, it must be sai.a. that there has been on the v:bo1.t........ lack of elote -;orrespond.'3nce of cwnges of ~n wages with changes the c;cs~ In '!LH:'~ cases wages have l~d, o£ living. in other cases they r...ave ove::te.kfn nr.d outrun the rise in the cost of living. There has been no sener~l pc.lle,y, either public or private. governing the action of industry in the matter of wage 80.Jllfltment to changed. living conditions. All sorts of in!'1.uenees have been at work in deterndning the outcome; the tuaintenance of the standard ot' living has not been the controllillg consideration. Tho state of the labor market in ciifferent industries has, at tiu.es, resulted in increase of wages more than the increase in the cost of living, and at other tiiWs wages have lagged. The extent to which dif-ferent trades were unionized &.lso had much to do with the L.~atter .. These facts and indications, fragmentary as they a:re, reveal a situation which from every reasonable point of view must be regarded. as unsatisfactory. MUch as was achieved in certain industries duri~ the wa:r through the action of public or private agency. the maintenance of the standard of living does not occupy the decisive place it should in the c1etermina.tion of wages. Chance and circumstance plaw too large a role. anc1 principle too littie. 'Pages n.ust be regarded as the first charge of ina.ustry, and the waintenauce of at least those living standards which were custQr.1817 before the wa:r must be made secure. The first duty of the nation is to preserve the health and strength of its workers. public anc1 The standard of living is, therefore, a matter of national concern as well as of indivi<iual concern. The Nation can not afford, industry can not afford., to run the risJ:t of ilfllairing its worxtng forces through lack of some effective the cost of living. of adJusting wages to This 1.s in an iw&led.iate sense, the £AOst pressing as.Pect of the cost of living problem with ~th~ which we are confronted. .. 75( - 20:Close stud¥ Sbou.ld., therefore, be given by different 1Dd.uatries 1n eve7:T sect4an of t}k) countq to methods of bazrili...,g the probl'!tJa 1n an effective ..and equit~le we:,... EegS.1:minsa have been mado 1.."'\ . , _ buslneas 8Dl iDd.ustrial ente:rpr1aes, but tt.e problw. eho'.l!d. be national scale in ord.er public ~timent b~ tlle tA~t ~- . U1:l~e0. ta~s:en neAC.M bold of on a re~tllts cball l'e Stat-ea .a.s r3i'idl7 acb!~. fQCUJ~Vj prl:aciple, ea1 the 811J>l078r who attaqpts to eecepe it. likely to fiD\ himself 1n eonta.qpt of public ststew:.~io OJ!1..~co. as:4 sew- t.tselt '-"Por.. this cr resist it, is . Slmh ectiao is particularq urgent in view of tbe extreme:Q- ur.certain am disturbed com:se wh1.ch prir.ea and the coat of .living seem 1\kell to follow for a good DiaD¥ ~s· to cCJ:De, or until tbe ati'airs of tbe ':\=!world we Cllee more in a state of settled. &\Uilibria. x,t will not do to leave chaups 1n the coat of liviD&, either to the slow . . tbe a}.Justment ot waaes to aaA ~ertai.n aotiCID Df tbe f~s of coa:petition, or to the coat)¥ ana. cU.arugtive ection of 1Dduatrial warfare. so fw as the strika is a method. of s&etd'it:g I'All acl.l•18ben~ 0! waaea to riting prices it ahoul4 beccme an obsolet,e toature of the .JralBL"i9BD iDd.ustrial syst.. X 167S a 751 FEDERAL @SERVE l3QARD. STA,TEMENT FOR THE PRESS Release for morning papers Thursday, Sept 25, 1919. Addressing the American Association of the Chicago yesterda¥, Dr. A C. Miller, B~ing Industry at of the Federal Reserve Board, dis- cussed "The Cost of Living Problem. 11 After defining some of the: causes of the· present industrial unrest, he said. "While wage earners as a class have not been the only sufferers from the rising cost of living, their ranks undoubtedly enbrac~ a larger nux!Der of sufferers than any other class of income receivers, In its most acute form, therefore, the cost of living problen, is a labor problem and a. wage probilem • The problem is partly one as to facts, and partly a ~estion of remedies. Have the great mass of those who are dependent on wage incorr.e been co~ pensated for the rising cost of living by comrrensurate increase of wages? This is the aspect of the cost of living problem that is exciting discussion and unrest in the United States at the present tirr~. This is the real cost of living problem. Besides this, there is an imaginary cost of living problem and a pretended cost of living problem which must be sharply distinguished from the real cost of living problem. WWages must be regarded as the first charge of industry, and the maintenance of at least those living standards which were custorrary before· the war must be rrade secure. The first duty of the nation is to preserve the health and strength of its workers. The standard of living is, therefore, a matter of public an4 national concern as well as of individual concern. The Nation can not afford, industry can not afford, to run the risk of impairing its working forces through lack of some effective method of adjusting wages to the cost of living. This is in an immadiate sense, the most pressing aspect of the cost of living problem with Which we a.re confronted. nrt must be said that there has been on the Whole a lack of close correspondence of changes of wages with Changes in the cost of living. In maey cases wages have lagged, in other cases they have overtaken and outrun the rise in the cost of living. There has been no general policy, either public or private, governing the acti-on of industry in the matter of wa.ge adjustment to changed living conditions. All sorts of influences have been at work in determining the outcome; the maintenance of the standard of living has not been the controlling consideration. The state of the labor market in different industries has, at times, resulted in increase of wages more than in the increase in the cost ~f living, and at other times wages have lagged. The extent to which different trades were unionized also had nuch to do with the matter. / 752 X 1678 a "These facts and indica.tions 1 fragmentary as they are, reveal a situation which from every reasor~ble point of view must be regarded as unsa.tis:factor.r. Mnch as w~s a~hiEnred l'1 certain industries during the war through "the action. of pu.blic or pri va.te agency, the na.intena.nce of the standard of Hv.tng does no~ o~~·~:PY ·the decisive place it shoul4 in the determination of wages. Cha.nce and circumstance play too large a. role 1 and principle too little. Close. study, should, therefore, be given by different iMJ.latries in every sect:i.on of the country to methods o:f ha.nd.l.ing the problem in a.n effective and. equitable wa.y · 'Beginnings have been :::JB.d.l3 in ~orr.e business a.r..d. ir.td\!strial enterprises, but the prcblem should be ta.ken bold of on a. systenatic and national scale in order that the needed re~:o'Ul ts shall be achieved. Some mecha.ni sm by which wages rray promptly be adjusted to cha.nges in the cost of livir.g rm1st be accepted a.s an essential part of the American wage system. Public sentiment in the United States is rap1dly focusing itself upon this principle, and the err~loyer who attempts to escape it, or resist it, is likely to find himself in contempt of public opinion. Such action is pa.rt:i.cularly urgent in view of the extreme}¥ uncertain and di stu.rbed course which prices a.nd the cost of living seem likely to follow for a. good many years to come, or until the affairs of the world a.re once ffiOre in a. state of settled e~ilibrium. It will not do to leave the adjustment of wages to changes in the cost of living. either to the slow and uncertain action of the forces of competition, or to the costly and dis.ruptive action of industrial warfare. So far a.s the st~ike is a method of securing a.n adjustment of wages to rising prices it should become an obsolete feature of the American industrial system. • 753 il]Jnfortunately, 11 he said, "our co·.~rces of ste\tistical information are n•.)t yet such that comparisor.s can be made on an extensive scale between the incomes of rl_ifferent gl•oups (by income) of the wagesreceiving class and the prices of th<J articles that go to make up the customary consumption or nor:nal standara. of living of the se·.reral groups. What is needed for this pu...-pose is 1. A cost of Living index, whi.cn shall carefully exhibit and measure ch.:m.ges in t.he cost of li,ring to labor classified oy incorue grou_l:)n, and 2. A wage index, vvhich shall e.1hibit and me.3.sure changes in the wage income of these different groups such as will enable a comparison to ·oe made for the puryose of determining whether wages c.TG keejJing pace with prices. "The United States Bureau of Labor Statistics has undertaken some important work in this-cmmection '"lhich, as it is carried to completion, will yield results which will oe of highast usefulness. "Such statistic2~ data as are available show that food constitutes from 35 to 45 per cent of the total expenditure of typical wage-earning fa:nllies ;COnsistbg of };larents end thre~ children under fifteen years of ago. The percentage spent for food is larger in the lower income groups but the amount S'J?ent for food is larger in the; higher income groups. Food prices Show an increase of 91 per cant for the six year period from Mey 15, 1913 to May 15, 1919, the increase for the single year 1918 to 1919 being 27 per cent, and :or the month April 15 to May 15, 1919, 2 per cent. Clothing mal;:es up from 15 to 20 per cent of the expenditure of the average wage earning family, the increase in cost of clothing computed from the indax number of wholesale prices as compiled by the B~aau of Labor statistics ':Jeing about . 150 per cent, to June 1919. Rent makes ~ frow 9 to 15 per cent of the expenditure of the average wage earning family, but no satisfactory data are available as to the average increase in rents. But, it is a ~atter of corr~on observation and com_l:)laint that rents have advanced considerably, especially sinc0 the signing of tha armistice. Fuel and 1 igh ting mako up fran. 3~ to 7 par cent of working family expenditures and these i terns have adva:ncGd in yrice over the 1913 level some 80 per cent. House furnishings make up from 4 to 7 per cent of expenditure, and have advanced in j?rice since 1913, 131 per cent. I I l rti t is clear, thereforG, that there has oeen a very marked advance . in the i:Jricesof all groups oi commodities that make u:-2 tl';le crms~tion of tha average worl:lng class family. Whether wages have kept }:lace ccn not be determined. on a satisfcctory scal-a ULtil the industrial survey undertaken by the Bureau of Labor, and now neuring completion, is completed and the results publishea.. The preliminary rGport now in progress will present the basic facts concerned, the hours worked and the e.J.rnings rGceived, for u le.rge range of occU'J?3.tions. It will supply a basis on which in time may be .erected a wage index for all the important industries of the country distributed throughuut its length and breadth. "'---------------------------··:~··~....d I l "There are a good many people, however, who imagine they are sufferring unwarrantably f:-om the advance of prices. For the most part th~y are those whose incomes in the forms of wages snd salaries have risen sufficiently, and in many cases more than sufficiently, to offset the rise of the pr i0e s of the things that cons ti tu ted their customary consumption in prewl:ir dl.~ys. Incfease of money income usually produces a feeling of prosperity even when it is a fictiti~WJ. prosperity. Many wage earners getting a bigger pay envelope think themselves better off irrespective of the f~ct thet the purchasing power of the dollar has declined in subst~tially the same ratio as their wages have incre~sed. peoplG in this p~sition are frequently tempted to extravagance. The m~n who five ye~rs ago received a salar.y of. four or five dollars may now be making aight or ten dollars. He is apt to imagine himself rich in cons~quence arid probably is spending a considerable part of his increased money earnings for things that formerly constituted rio part of his norrnl:ll. consumption. The retail trade averywhere reports heavy purchases of cheap jewelry, fane~ clothing and the like. Spending heavily 011 purchases of this kind, the margin that is left over for the purchase of necessaries and real conveniences of life is inadequate at present prices to maintain customary standards. Those who are victims of their extravagance and foolishness· then complain that they are suffering from the high cost of living, when the cause of their difficulties is the chang~ in their standard of living. It may be right that the stand9.I'd of living should be raised~ but it does not induce cled.l' thi:lking but marely confuses the issue not to note the ciistincti•.m oetween the real and the fictitious problem. It is the real cost of living prob~em that concerns the nation at this time .. Analyzing the causes of present high prices, Dr. Miller said: "Both prices and wages (which are the pric'e of labor):· . have risen from the sarw general causes. They do not explain one another. They are not theroselves, ·either one or the other, a primary cause but the effacts and the eX)?ression of fundamental forces governing l. 2. The money and credit demand for goods, and The sup).Jly of goods •. "The more the matter is studied the clearer it is tha~ the high prices which developed with the European war in 1914, and which are still with us as a heritage of the war • are simply to be regarded as an extreme case of the working of the time-old economiv law of demand and supply. In the United States. as the world over, through the past five years, intensified demand (credit as well as economic· demand), for goods and an inadequate supply of goods have put up and kept up prices and given us the acute cost of living sitQation so widely complained of. I. x-l678(a) - 5"Turning then to the maJOr influences in the price changes which have taken place in the five years 1 there are three that stand out conspicuously. They are: 1.. The excessive domand by beJ.ligereut bo'l;erncuE;lnts for war supplies both befote and after 01.1r entry into the war. 2. The excessive expansion of bank.i.ng crodit. 3. Shortage of su,ppl:l.es in LJanY lines, due to (a) (b) (c) Wasteful consuwptirJn and loss of goods Heavy loans of ca;l:JHal and exportations of goods, and Slackening of production. Taking the five year period, 1914 to 1919, as a whole, the most persistent single influence affecting prices has been the expanding state of credit. "Taking the period before our entry into the war the enormous deLl&ld of Europe for American ·war s~~lies, aided by easy credit conditions in the United Statea, was the ruost in:portant influehce affecting p'tiees. "Taking the period si.nce our entry into the war, a factor of equal i~ortance with those already enumerated was the inability of our industry iiil'.llediately to reorganize itse'-f to meet the va$t requirements of the Govemmcnt for war SilJlplies of lime kind or another for the use of its armed forces. Cot..'Pled with this and. aggravating the situation was the heavy drain of goods from the United States for the· use of the Armies and the civilian popub.tion,s ofthe nat:i.ons .vith which we we:re associated for which no goods, at any rate in anything like an equivalent amount, were received in return. "Takl.ng the most recent period, the fiscal year 1919, which inc.ludes eight months following the armi.stice, .+-he active and immediate causes of rising prices 'U'e the greatly increased. s~1:•:pment and sE:J.;a of merchandise on credit to E!,lrope, paxticu.larly foodstuffs and rnar..ufactures ready for consumption, slackening of production, dim~.nished economy of consULiption and. ' :pro~iteerl.ng ~d the speculative holding of goods for a rise. "The form that credit demand(and e:x:pansion) has taken in the united states has been banking credit in the shape of ba1 k depos!.ts. Expansion of the currenny has pleyed a ve~y subordinate role. It is no exaggeration to say that expans:i.on of the c'Girre11cy has been a CC'lnsey_uence rathe:t· than a cause of 0,1r· hie.,h prices. Wholesale pr:i.ces began to r!.se sh~rp~.y in the United States with heavy demands for cur good.s from Eu.ro:pe shortly ai'ter ·the beginn:i.ng of the w~ in ·1914. credit was e:..:;vanded to meet the requirements of expor·t irrlus+,:r·ies. Prices at wb.olesal.e rose and kept on rlsing. Reta:\.1 _pric.es hac1. to follow suit, and. thtls there was c&.l'i.ed into existence an increa.sed amou."lt of pocke·~ money to accOlllliOd.ata t.n~ needs of the coruwvnity. 755 X..,l678(a) .756 ,·:v. -tne· "so far as expansion of l:Jurchasing medium of tbe cou.."'ltry is responsible for our great rise of prices it has been and is purchasing medium in the form of bank deposit credit and not in the form of tbe Federal Reserve Note. "Commercial bank deposit credits in tbe uniteO. states have increased from $16,264,000,000 to $30>099,000,000 an increase of about 85 per cent, between the dates of June 30, 1914, and June 30, 1919. Loans, discounts and investments of the same institutions have increased in the sazue }Jeriod from $15,819~000,000 to $29,675JOOO,OOO or about 88 per cac_t. A large part of tbe increase in the loan and investr>lent ac.cotmt is made up of war securities and war looo paper. This is estir,;alied to amu1mt to as much as from six to seven billio:ns of dollars. "Treasury needs he.ve been the chief factor in our credit expansion. The situation of the United 5tates obliged the GOvernment to borrow money faster than the rate of saving of the coruwunity could sustain. The result was reliance on bmking creciit to make up the deficiency; and thus the resulting rise of prices may be described in its economic effects as a lll.ethod of forcing economy and saving on tbe colll.!lunity, or large sections of tbe comnunity, because most people buy less. and consume less as prices rise •. "As the present voluue of undigested Liberty Bonds is absorbed out of savings, the investment account of the banks which is now swollen because of the large amount of war securities they are carrying will diminish and with the diminution will go a decline in the volume of bank deposits, following which will come a. decline in the voluue of currency in circulation. Prices will then fall and the cost of living decline. "Working to the same effect in bringing about a lowering of prices will be the expected dUninution in the rate at which t4e United States have been exporting goods to Europe on credit The large volume of exports we have been sending out of the country inex:cess of what we have received as imports has been one of the great determining factors in our rising cost of living through tbe last five years and especially in the last year. ' I I " I G :...7- x 1678 a "Under this new of the r.auses of our present difficultiest it is clear th.;,t there c::-.n "be no s!:..0rt cut remedies, and therefore no early prospect cf a ret;-u:'Il to the price si t'W).tion we bad before the war in 1914. Prices rrfi.y be expe0ted. to decline, but the more than one hundred :;?f:':i:' e8n i:; a.dva.nce which they have scored in the past five yea.rs will no~t be retraced short of at least a similar period, if not, more likely) a period of ten years or more. The most cons5.dcra.b:}.e reli.ef in sight rray be expected to come with diminishing E'.xporta.tion 0£ foodst,lffs and other articles of general consu<1Y:1t.ion ·~o Eu.rope with the termination or, at any rate, reduction in the volw:e of tha credits \'ihich Europe has had at its disposal in the P.Esrican rrarket during the past two years. Food should certainly becorr.e cheapex·, and so far as food is the rr.ost important item making up the budget of the working classes, ther~ should be an appreciable di~nution in their cost of living and the cost of living problem therefore find some considerable solution in this way. nThe ul t'in:ate and complete solution, however, will come only as the volurre of purchasing media created in the last five years is reduced ~ld the volurr.e of goods produced is increased. This solution, however, will take time, and in the interim we shall continue to have a more or less acute and troublesome cost of living problem. Some method of dealing with it in a practical rranner is therefore one of the first and necessary steps to be taken toward the revival of industry in the United States and the improvem:mt of the industrlal situation generally. Until some satisfactory method of dealing with the wage problem a.s it ha.s been affected by the rising ~ cost of living is ~~rked out there will be unrest, industrial strife and retardation of the processes of industrial recovery that will be costly in their effects to the nation, and costly to the world. The one thing that the United States can not afford at this tiiTe is suspension of industry through failure to establish a good working rela-tionship between employers and employed. "Cost of l i vi.ng has developed into mu.ch rrDre than a cost o:f living problem because until quite recently no definite and competent program for dealing with it bas been undertaken. The fact tl~t the Government and the Nation have drifted without admitting that there was an industrial si tua.tion which ought to be studied. and remedied as quickly as cozlditions would permit, not unna.turany established in the minds of the working classes, rra.ey of whom v<re ...·a suffering real hardships be cause of high and advancing pri.cE: s, a. feeling that now that the war. was won and 07er, their cond.l U.on ~nd needs ha.d ceased to be a matter of national conce::-n. As a. res-..;clt the war has left us not or~ly with a cost of l i vj ng prc\·tfJ.<:,m, bat a.l;30 with the problem of reotor·ing the faith of the avera. 1~e work:i ne;; rr:~.n in the disposition of the c-::>untry at large to ccncern it:;;elf w:.':.th his welfare. 757 X-l67S(a) - s11 It is t ir.le , the ref ore, that ea:rne st thought should be given to the present industl·ial unrest. S0r,1ethi.r.g runst be cione to help labor meet the cost of living probJem, b~t beyond t:.hat so:w~thing substantial :wust be done to put la1.Jor in a better frarueof mind on the larger q,uestion of its future economic posi ~ion. we need a constructive policy in labor matters. Labor ·should be given a:."l objec~,;ive ·- an attre..ctive obJective - toward which to work in orde!" that hope end contentmentt as well as wages, LJay be its portion in p~erican i~~stry." \ \ ' '< 758
@FedFRASER