Evening Star Newspaper, September 6, 1931, Page 47

AR KNS S TR B RN B = Proposed by Matthew W oll As Told to Harry Goldberg TEN-YEAR plan to promote pros- perity, maintain high wages, elimi- nate unemployment and keep the money made in the United States in the pockets of the American people is advocated by Matthew Woll, noted American labor -leader, economist ard acting president of the Civic Federation. “The world is in the midst of an industrial and economic revolution which is transform- ing our philosophy of life and our method of governing business,” said Mr. Woll. “The channels of custom and trade, the ways of living and working are already shifting to mecet the new conditions created by mass production, new inventions and the intense competition of nations trying to keep their peoples content. “If we swim with the rising currents and use the new facts as safe anchorage for our social system, we can outride any storm. But if we heedlessly go on in the fog as before, then danger and disaster are ahead.” Mr. Woll's own views have shifted with the times. He believes it is important to know the facts before proceeding to describe the lessons of the depression and to take action which will abort or mitigate such a return of widespread distress. HE basis of our system, Mr. Woll pointed out, was every man for himself. In free competition for the consumer’s dollar the peo- ple would derive the most benefit and buy at the lowest price. The whole idea at the beginning of the ma- chine age was to benefit the consumer. Mr. Woll outlined the unexpected changes that happened. Small business men gave way to partnerships, partnerships were swallowed up in corporations and corporations were welded together into huge organisms that are actually industrial states. “Competition went on helter-skelter,” said Mr. Woll, “and suddenly a period of prosperity ended with more factories than we could use, more goods than could be sold, money idle, men idle and industry made stagnant by un- regulated, unplanned competition. Then we made a series of startling discoveries which must be the basis of a new approach to guiding the future of business and government.” Lesson No. 1, according to Mr. Woll, is the fact that the consumer must have money in order to consume. High wages mean good spenders. Low wages mean “tight” spending. And when you are producing goods in great quantities, they can't be sold unless millions of people have the money to buy them. Hence the new high-wage philosophy which has won many adherents among the biggest employers in the United States. As induséry produces more, the workers must get an increasing share of the gross industrial income. Lesson No. 2 is the new realization that when machines take the place of men hours must be shortened in order to give more men jobs. If we don't create opportunities for employment, says Mr. Woll, we will soon develop two classes of working people in the United States: A well paid class at fairly steady work and an unem- ployed class kept by odd jobs just above the starvation line. This growing reservoir of un- employed will be a menace to the American standard of living and to peace and order, ne says. Lesson No. 3 is the revelation that unre- strained competition, especially in a time of depression, only makes matters worse. In the struggle to keep factories working, goods are turned over at cost or below cost, reserves held for expansion or bonuses are used to subsidize the sale of goods below cost. Prices drop, and since nobody knows when the bottom is reached, consumers who have money try to outwait the producers. While the consumer appears to be benefited as a spender, he is seriously harmed as an earner because factories close down as the public does not buy what is already available. Therefore, unregulated and uncontrolled pro- duction and irresponsible price-cutting must cease. Lesson No. 4 is the awakening of people in all walks of life to social responsibility. For the first time in a major depression in the United States there was no concerted drive to cut wages on a national scale, according to Mr. Woll. The unemployed were not regarded as reckless idlers unwilling to work. People got the notion that depressions are social catas- trophies in which everybody suffers and all must work together to cure them. Many em- ployers tried hard to maintain the prosperity standard of wages. The point of view has been driven home that while a calamity like an earthquake is an “act of God” which man must helplessly suffer, a depression is an eco- nomic calamity due to the ignorance or heed- lessness of men and can be avoided or corrected. . 11| AM not sure but that the widespread de- velopment of social responsibility is the most important of all the facts brought out by the depression,” said Mr. Woll. “If we give up she old idea of ‘every man for himself and the devil take the hindmost’ because we discover that it will no longer work as a principle & business and our thought runs in a new chan- nel, then we will carry into effect all the other important lessons learned from the economic crisis. “Higher wages, shorter hours, steady jobs— this trinity is inevitable if we concentrate on keeping the factories running and the people using up the things they make. “But then we must plan not to produce more than the people can buy. And if we agree that planning is imperative and essential, then we uuumumwmmnflnm =iy : THE SUNDAY STAR, WASHINGTON, D. C, SEPTEMBER 6, 1931 pasn IO 13 /- g Ry L = N bfll{mflflm m [ R T T Wmmmmrflly-m 1 DOy T~ R T | l oo, w must permit industry to unite to regulate pro- duction. “The first important move in that connection would be the modification of the Sherman anti- trust law. The Sherman law now is a threat against any kind of combination. Business oc- casionally attempts to evade it or challenge it in the hope that the United States Supreme Court will be ‘responsible’ in its interpretation. but for the most part industrial leaders are afraid to do anything which will get them in bad grace with the legal department of the Government. “If industry is to develop self-government and solve its problems without Government in- terference, then it should be permitted to com- bine or unite in any way that does not injure the public weal. Other nations permit cartels, trusts and amalgamations under such condi- tions and there is no reason why the United States should not permit it. “Having modified the Sherman act, the next step is to call a congress of American industry and proceed to plan for as far ahead as is possible—say, 10 years. There is today in the persons of the officers of trade associations and institutes and of trade unions and in the known facts sufficient experience and knowl- edge- available to launch such an industrial plan without much delay. “It may be argued that if we start busi- ness on a tangent which leads to closer and closer co-operation in each industry until it functions like one big unit, then large-scale business will develop into the nature of public utilities. “Probably so. But I do not fear such a change. It only emphasizes the increasing social nature of business. We have become so interdependent—business dependent upon the consumer and the consumer dependent upon industry for jobs—that such a shift in our views is a logical outcome of the new era. “And it is the puoplic ucilities which have been among the first tc assume social re- sponsibilities. They have introduced insurance schemes, made provision for sickness and ac- cident and now are beginning to make provi- sion for unemployment among their workers. “They can easily provide for such items in their budgets. They are non-competitive and the rate-making bodies regulate their earn- ings. What public service commission would dare challenge items for job insurance in the budget of any public utility?” N discussing the various angles of the forth- coming change, Mr. Woll pointed out a shift of opinion in regard to export trade was arising. “Bxport trade accounts for less than 10 per cent of our business,” he declared. “If we gave our workers a larger share in the product of labor and shortened the hours to give more men jobs, we could well permit our export trade to be reduced to a negligible percentage because our own people would consume most of what they manufacture or raise. ; “Outside of a few raw materials which we import, the United States is fortunate enough to be quite self-sufficient. g “European nations are using our money and TN g AR {" el Labor Day Message From the American L.abor Leader and Economist Is the Proposal of a Ten- Year Plan to Pro- vide Permanent Tenure for the Per- fect Trinity of Higher Wages, Shorter Hours and Steady Employ- ment. our technique to give us a taste of feroclous competition. Products made abroad with our money, profits created by American labor, are being shipped to the United States. Low-wage European products are competing with high- wage American products. Our standard of live ing must suffer in such competition. “This is not a partisan tariff matter. What I mean is that we will find nations organized to fight nations in competition to get business to keep their peiple at work. “Why should we permit our surplus to do us harm when by giving labor a greater share at home we can keep our people happy and our factories busy? “We have a home market of 120,000,000 per- sons. If we give our people steady jobs at proper ‘'wages, we don't have to worry about selling a surplus abroad. 1] OOK at the new situation created in recent years by world-wide economic changes. Long ago we lost our export wool market. The emergence of Russia once more as an exporter of agricultural products means that we may soon lose altogether our export wheat market and our export cotton market. “It is not sufficlent to denounce Russia, What we have to do is face the facts and ar- range to grow only what we can ourselves consume. “The Russians are, in a way, as fortunate as we are, because they control a huge land area with a population of 160,000,000 persons to work their land into agricultural and mineral wealth, Their factory system is, of course, woefully in< adequate, but give them time and the nations of the world will be forced to protect theme selves against a flood of Russian products.” The mention of Russia brought up the ques- tion of unrest in the United States as the re- Continued on Thirteenth Page L]