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June 13, 1908
RECORD AND GUIDE
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DD&IEO P Rem. EsTAJE^BuiLMffc AfpfrTECnn^ .Ko^SEUOLD DEOtlRfTtMl,
BirsoftSBjuto Themes of'GEjfeftal liftERfsi.;
PRICE PER YEAR IN ADVANCE EIGHT DOLLARS
CommuQlcatlons should be addressed to
C 'W. S'WEET
Fahtistied Everg Satardag
By THE RECORD AND GUTDE CO.
President, CLINTON W. SWEET Treasurer, F, W. DODGE
Tice-Pres. Sc Genl. Mgr., H. W. DESMOND Secretary. F. T. MILLER
Noa. 11 to 15 East 24(1» Street, New York City
(Telephoua, Madisou Square, 4430 to 4433,)
"Entered at the Post
Office at New
Porfc
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Copyrighted,
190B, by
Tbe
Record
Sc
Guide
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Vol.
LXXXl.
JUNE
13,
1908.
No.
2099.
CERTAINLY one of the most remarkable aspects oE the
existing Ijusiiiess depression is the extent to whicli the
old rates of wages have been maintained. Rarely before in
the history of the country has a more sudden contraction
taken place in business than that whicli occurred last fall
and winter. There is no precise way of estimating the
shrinkage in ;he volume of business transacted; hut it is
probable tha' the average diminution in all the industrial
branches uf economic production amounted to almost tliirty
^er cent., and it â– was only the relative prosperity of the farm¬
ers which prevented the situation from becoming much
worse- Even so, the proportion of the laborers employed
in the mechanical trades, manufacturing and iniuing, who
suddenly found themselves out of employment was probably
as much as forty per cent., and while this proportion has
diminished somewhat since last November, It remains very
large- The effect of such a sudden business contraction is
usually an equally sharp diminution of wages. Such a dim¬
inution took place after the panic of 1873, and to a smaller
extent, after the panic of 1893. But the panic of 1907 has
had no effect upon wages corresponding to its severity. Of
course, there are tliousands of individual cases in whicii
men are working for less money now tlian they did a year
ago, and there are certain instances in which entire trades
have accepted a reduction of remuneration. But these in¬
stances are much more rare tlian migiit have been antici¬
pated. It looks, on the whole, as if the country would pass
through one of the severest industrial crises in its history
and flnd at the eud thereof wages at substantially the same
level as in a period of abounding prosperity.
raise the issue. The only possible method of forcing a
substantial reduction in wages would have beeu to ttirn off
the employees who would not accept the reduction, and
that would have meant a prolonged and embittered period
of industrial warfare. With a presidential election at hand,
and with the agitation against corporations but little dimin¬
ished, the big employers coirld not risk the possible political
consequences of a series of strili.es and lockouts. They
have, consequently, done little or nothing to bring about
a general reduction of wages; and the country has so far
been spared the radical political agitation which followed
on the panic of 1S93. Just what the remoter consequence
will be of the maintenance of wages is not so easily ascer¬
tained, but to all appearances it should lielp to make the
recovery in business earlier than would otherwise have been
the case. A general reduction in wages means a more
permanent diminution of the consuming power of the coun¬
try than will take place irnder current conditions- As the
number of the employed increases they will almost imme¬
diately regain their former power of consumption; and this
fact will undoubtedly hasten the coming of the time when
at least a normal amount of business will be transacted.
On tlie other hand, the fact that wages remained high during
a period of depression will make employers unwilling to
submit to any further advances in wages during a period of
prosperity- As soon as they realize that every increase in
the level of wages is a permanent increase, they will have
a much stronger interest in fighting such increases as long as
they have any chance of success in so doing.
HOW has it come about that wages have been main¬
tained at something like their former level? And
what effects may be expected to follow from such an unusual
condition? These are qu'estions which deserve answering
with much elaboration and care, and within the limits of a
paragraph only a few intimations of the proper answers can
be given. In general, however, wages have been main¬
tained partly because of the exodus to Europe of hundreds
of thousands of recent immigrants—an exodus which has
reached unprecedented proportions, and which has done
much to relieve the strain, A still more important cause is,
however, the superior ability of the American workingman to
pull through a period of adversity. He has enjoyed many years
of abundant work and comparatively good wages. He has
saved money and has become himself a capitalist in a stnall
way. He can afford to refuse work rather than accept it
at a sacrifice and that is what has actually taken place in a
great many cases. Every considerable employer of labor must
have been impressed by the stubborn insistence -with which
men out of work have refused to accept work at the price
of a concession of wages. Of course,- many thousands have
done so, but the concessions have been small and the un¬
derstanding has been that the earlier rate would soon be
restored. Still more important, however, than the ability
of the workingman to refuse to make concessions has been
the indisposition of capitalists to insist on concessions. The
railroad companies and other large employing agencies have
made no concerted and vigorous attempt to force on their
employees a lower scale of wages. They have threatened
to do ao; and they have grumbled because they were unable
to do so; but they have, none the less, refrained- And they
Have undoubtedly refrained because they were afraid to.
IT IS APPARENT that the advocates of the Fourth Avenue
subway in Brooklyn will eventually carry their point.
They have the necessary votes in the Board of Estimate,
and they will use them for the purpose of fastening like a
leech upou the municipal treasury an unprofitable subway.
The city cannot afford to build it. In building it, the city
will sacrifice more necessary and more generally useful tran¬
sit improvements. And after it is built it will not pay its
operating expenses for many years. Mayor McClellan and
Comptroller Metz deserve the utmost credit for the stiff
fight which they have put up on behalf of the general public
interest in this matter. They have exhibited an independ¬
ence and a steadiness of judgment in the face of newspaper
attacks and the clamors of local public opinion that indi¬
cate how much unpopularity they are willing to incur in the
defence of a sound municipal policy. The extraordinary
aspect of it is that the Public Service Commission has yielded
to this clamor while two elected officials have stood out
against it. One would have expected the commission to be
independent and capable of resisting an unreasoning outcry
because it is appointed by the Governor, and is directly re¬
sponsible to him. But instead, it has exhibited an utter
lack of backbone. It has shifted the responsibility for the
Fourth Avenue subway to the back of the old Rapid Transit
Commission, and its members have claimed that in laying
out subways they, can ignore the financial condition of the
city. If the route is wrong, that is the mistake of the
former Rapid Transit Coinmission. If the city cannot afford
the money, the responsibility rests with the Board of Esti¬
mate. The Public Service Commission apparently intends
to lay out subways and urge their construction, irrespective
of their effect upon a comprehensive plan of transit develop¬
ment and irrespective of the financial condition of the city.
The ill effects of a divided administrative responsibility are
plainly to be seen in this instance. â– The majority of th*
Board of Estimate shelters itself behind the Public Service
Commission. The Commission shifts its responsibility upon
the old Rapid Transit Board and upon the Board of Estimate.
And- the result will be the spending of $16,000,000 and
more upon a subway benefitting 150,000 people, while 3,000,-
000 people in other parts of city are totally iieglected.
T^HE BRIDGE DEPARTMENT has recently annouoiced
â– ^ that the Blackwells Island bridge would be opened
for traffic some time during the coming year; and this an¬
nouncement calls attention once more to the absurd manner
in whieh these bridges have been planned. The city will
have spent about $12,000,000 in constructing a bridge, which,
when it is flnished, cannot be put to any useful service for
an indeflnite number of years. It is'planned to accommo¬
date an enormous trafflc, but no hieans have been takeu to
develop that trafflc. The construction of a bridge termin¬
ating where the new Blackwells Island bridge terminates is
precisely comparable to building an eight-track subway from
Forty-second Street to Canal Street, and then leaving it