Newspaper Page Text
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THE WASHINGTON TIMES, SATURDAY, JUNE 2S, 1919.
NO DECLINE IN BUILDING COSTS
Industrial Leaders See
No Early Price Decline;
Urge Construction Now
Leading bankers, merchants, and in
surance men throughout the country
are unqualified in their statement that
there will be no early decline in
building and construction costs. In
statements prepared at the instance
of Director General Roger W. Babson,
of the Department or Labor, these
men declare with certainty that there
will be no sudden decline of prices
following the signing of the treaty of
peace other than the elimination of
war prices, which were made neces
sary to stimulate production in high
J. Ogden Armour says that the
greatest danger to our economic struc
ture today arises from the failure of
many to recognize a new and higher
level of prices, based on permanently
increased cost of labor and high taxa
tion "Those who postpone building or
buying in the hope of materially lower
prices are speculating in the future
misfortune of the nation," he says,
"for falling prices, when reaching the
point where profit is eliminated, mean
panic, depression, unemployment, and
"Nothing in the labor situation
warrants any one in expecting mate
rially lower costs of commodities in
general, and building in particular.
XVages will not be less for several
fundamental reasons, viz:
"1. The practical stoppage of immi
gration since 1914. depriving America
bf the several million workers who
would normally have come to our
"2. The retention by the nation's
military and naval establishments of
nearly 2.000.000 workers, which may
continue for an indefinite period
"3. The creation of new industries,
such as shipbuilding, and manufac
ture of chemicals and dyes, requiring
hundreds of thousands of workers.
"4. The urgent demand for building
and construction of every class, due to
their having been forcibly held back
for several years.
"5. The shortage of the world's food
"6. The proportionately higher levels
of commodity prices existing prac
tically all over Europe.
Face Labor Shortage.
"On the one hand, then, we are fac
ing a serious shortage of labor as
soon as we approach normal Indus-t
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there is confronting us a tremendous
unsatisfied demand for many necessi
ties which it was difficult or impos-'
Bible to obtain during the war. A new
level of prices has been established
from which there can be no material
recession until inventive genius suc
ceeds in correspondingly increasing,
labor's productive capacity by me
James B. Forgan. president of the
First National Bank of Chicago, as
serts: "While It is my belief that the gen
eral trenn of prices during the next
decade may be downward. I do not an
ticipate any sudden violent tumble in
the near future beyond the elimina
tion of war prices made necessary to
stimulate production in high-cost
plants. We cannot eat our cake and
have it. We cannot immediately
have low-priced products with high
"At no time was honest labor more
Indispensable than during the war.
and during that period the average !
weexiy wage or all workers was
greatly advanced. Out of the war has
come a strong realignatlon of the
value of labor to civilization, and we
must accustom ourselves to the evi
dent fact that a permanently higher
scale of wages or compensation has
been established for the world's
wdHcer. both skilled and unskilled."
Maj. Gen. George W. Goethals ex
pressed the view that we can return !
to neither pre-war prices nor pre-war
"Every thoughtful employer of la
bor." he bays, "realizes that the
wage earner is entitled to DroDor -
tlonately more of the comforts and"
conveniences of life than fell to his '
share before the war. Every thought-
ful buyer should realize that the ,
price he pays for goods must be in '
proportion to the Increased cost of l
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labor. Also that labor, in the broad
est sense, constitutes over 75 per
cent of the cost of most products
of farm, forest, mine, factory, and
"The manufacturer, employer, or
individual who is selling his own la
bor, brains or product at a high
though reasonable price should not
expect to buy cheaply from others.
Let us be careful, in our cry for lower
prices, not to forget that permanent
improvement of living conditions is
effected only by increased efficiency
of the forces of production. And ex- i
Jperience shows such increase of ef
ficiency is at best a slow process, a
process of years and perhaps dec
ades." A. Barton Hepburn, president jf
the Chase National Bank, New York,
Should Fight Redaction.
"As long as the minimum price of
wheat is fixed by the Government at
?2.25 a bushel and other necessities of
the wage earner are approximately as
high in proportion, there is every rea
son why labor should contend against
reduction. With a recession In the
cost of living there should be a cor
responding reduction in the cost of
labor. The employers of labor can
not go on paying present wages, nor,
indeed, any wages, unless their busi
ness continues, and it has seemed to
me that the closing of certain indus
tries would throw labor out of em
ployment. In seeking new employ
ment they would accept the reduc
tion in accordance with what the
industry could afford to pay.
"I understand that this is why you
are contending against, and you seek
to induce manufacturers, wnolesal
'era, retailers, and consumers to ac-
cept the present prices for goods and
commodities and continue business,
thereby insuring the employment of
labor at the present level of wages.
You very likely will be successful as
to the large industries, but I think
there will be more or less readjust
ment of the wage scale on a lowel
level in the small Industries and in
Cause For Rejoicing.
Jacob H. Schiff, the New York
banker, says, in part:
"For four years the orderly produc
tion and maintenance of peace-time
activity has been most violently in
terrupted throughout the civilized
world, causing on the one hand a
heavy depreciation of property and on
the other hand an appalling destruc-
aion of all those things which are
vital to human happiness, life, and ac
tivity. The reconstruction is going
to tax our efforts perhaps even harder
than did the war, the latent demand
for labor and commodities being tre-
There Is cause for rejoicing In
these conditions, for intense activity,
even though accompanied by high
prices, is far to be preferred to the
blight of inactivity, stagnation, idle
ness, and suffering attendant upon
unsound, unbalanced production, and
rapidly falling prices.
"After all, it Is not a question so
much of what price each of us has to
pay for what we want, but as to what
relation this price bears to our own
Income. Those millions of men and
women whose incomes have grown
apace with or ahead of the general
price advance have abundant cause
for satisfaction. let now onen ao
we not hear these same people unwit-
I tingly complain of high prices, their
attitude being that high prices is a
privilege that belongs to themselves
only, in the selling of their own labor
or wares, but has no place In their
scheme of buying."
Law of Supply and Demand.
Thomas Coleman du Pont writes:
"The thing that is going to make
labor and material go down, with a
few exceptions or little local varia-
i tions, is the law or supply ana ae-
mand. So long as there is a demand
for an article, its price will be high.
The greater the demand the higher
the price, and if the cost of this artl
ir - i l. mnstlv lahnr the nrice of labor
will continue high on that article, and
so on down the list. We are going
through a transition period, which
has followed and will follow every
"WiJl wages be higher when things
settle douTi than before? Yes. I think
they will, because wages have con
tinued to advance in this country
year after year, but the cost of liv
ing and the desire for luxuries, too,
have advanced so that relatively the
condition is the same."
Theodore X. Vail, president of the
American Telegraph and Telephone
"The principal cause of the gradual
return to pre-war price levels has
been ascribed to the rapid transfor
mation of manufacturing, agriculture,
mining, transportation, and business
In general, from hand methods to ma
chine methods, from small scale to
large scale production. Opportunities
do not exist at the present day in any
measure comparable with those of the
period following the civil war. Price
declines so far, since the cessation of
hostilities, bear this out, having been
trifling only 5 or G per cent up to
April 1, 1919. as compared with over
-5 per cent for the corresponding
period of the civil war.
Cont of Food Will Remain High.
Darwin P. Kingsley. President of
the New York Life Insurance Com
pany of New York, observes:
"For some years food will be
higher. Europe has been so stripppJ
of every sort of food that it will take
more than the harvests of 1919 to re
store an equilibrium. Food will re
main high because wages will not go
back to the pre-war level. Wages
will fall at some points, where the
production was over-forced during the
war; but unless our whole industrial
and financial fabric falls into chaos
and nothing like that seems possible
how the post-bellum readjustments
mean continued high wages, and of
course a higher cost for everything
into which wages enters.
"How far discoveries in science. In
ventions, improved methods, etc., may
go toward overcoming this increased
cost through Increasing efficiency and
increased production Is a question
These will be a factor, possibly a sur
prising factor, because the rewards
will be large, and few things so
quicken Invention and efficiency as
the incentive of large returns.
"Carry the message to the Bolshe
vik!." John D. Ryan, president of the Ana
conda Copper Company says:
"I am rather a firm believer in the
natural economic laws, and I do not
find myself in accord with the Impres
sion that many people seem to hae
that the level of prices is not likely to
be radically changed over the decade.
I believe that prices must be made
that will equalize consumption and
Some Prices Lower.
"We have seen some sharp adjust
ments already from war prices, and in
every product in which the companies
with which I am conected are
interested prices have gone back to
pre-war averages, and in some cases
lower. These products are conner.
zinc, lead, and manganese.
"I do not believe that the level of
prices will fall permanently as low as
before the war, but I am convinced
that we can now look for gradual ad
justments In most staple products. I
think prices will have to be put
where building and development of
all kinds must be encouraged before
we will see consumption approach
production in staples. I think In the
adjustments which are necessary
labor will have to contribute its
share, or unemployment on a very
berlous scale is bound to result."
Julius Rosenwald, president of
Sears, Roebuck & Co., of Chicago,
"It is my beylief that the range of
prices for the necessities of life will
average little, if any, lower than at
the present time."
John Hays Hammond, the mining
"As regards the future wage scale,
I am of the opinion that we should
not expect any significant reduction,
nor should we desire such a reduc
tion. We should not expect a lower
wage scale, because there can be but
little doubt that America faces a new
era In her national development; that
the future holds immeasurable po
tentialities; that at no time in the
life of the nation has the outlook
"From a social and political point
of view, high wages is of Inesti
mable advantage, in that it makes
possible a higher standard of living
which assures social contentment, in
dustrial peace, and higher standards
Don't let enreleas expenditure
make a kIctc of your pnre. Bay
wisely and Increase yonr money hold
Ings by Inventing In W. S. S.
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2I20-Z2 GEORGIA AVEN.W.
728 Fifteenth Street