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Real estate record and builders' guide: v. 81, no. 2099 [i.e. 2100]: June 13, 1908

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June 13, 1908 RECORD AND GUIDE hi: ^i tail. GH2m^l868. 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 . 3V. 7.. as s I'CO 11 fl -clo SS m utter." Copyrighted, 190B, by Tbe Record Sc Guide Co 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 ■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 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. ■ 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 ■^ 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