work; and for the same reason, let it be known,—with a kindly, sympathetic interest, looking forward to the advancement of the young men through the department and as far beyond in the work world as the boys can go.

It may be said that some labor will not respond to such kindly interest and surveillance I have yet to meet that kind of man. Naturally if industries try to handle such matters through cold outsiders, not a part of the workers' working fraternity, they will succeed about as well as the proverbial over-busy business man who trys to love his family by machinery (automobiles, yachts and lap dogs)-it can't be done.

The immediate ranking superior of any worker should be his mentor and guide as far as may be, and should in such capacity represent the executives who in turn are the stewards of the owners, the stockholders. This spirit if properly and honestly developed will produce wonderful results; it is simple and as old as the hills.

Training older men in the shop is very difficult, due, often, to their false pride and insistence on their own personal ideas and methods. Patience, intelligence and time must be the tools of the foreman in this job, and he will go far if he follows the Telephone Company's advice and keeps a smile in his voice.

The out of shop training of the older workers is also not so easy as with younger men. The older men have their family affairs after hours and are also more likely to be fatigued by the day's work. It would be profitable, I am sure, for most industries to try to develop these workers a little past the point to which their ordinary day's work carries them-and here again I would urge doing it in the name of the foreman or superintendent.

For example, a moving picture exhibition on the foundry floor after hours, to which all the foundry men and their wives are invited, will show them "how other plants do it." Funny films make a holiday performance of it. Have the best talker of the sales force on the "platform" and let him sell the plant output back to the men who made it. Let the metallurgist explain some of his micrographs and be prepared to answer embarrassing questions. Have some sort of a "community meet" for each group once or twice a month, and as far as possible mix fun with the instruction, and include the wives of the men once in a while.

At all contacts between workers keep the simple, fundamental facts of economics in the forefront. There are myriads of people who believe purses may be and are made of sows' ears-and that the secret of that highly lucrative performance is being hidden from them. Intelligent, trained workers will greatly help the less fortunate ones to see the real ins and outs of such purse making.

Ambitious workers usually "place" themselves. The good ones among the less ambitious must be helped and encouraged to go up. Some men are too modest to suggest that they be promoted to better jobs, and others are afraid of the jealous opinions of their fellows. They must be tactfully sorted out, and no man should be allowed to work much below his maximum mental capacity.

This sorting generally calls for the action of the foreman at least two grades above the worker. The immediate foreman naturally wants to keep his best men, both because of the workers' efficiency and because of his friendship and familiarity with the men. A tactful superintendent who knows how to appreciate and praise his foreman for developing such good workers has only to say the word in most cases of this kind.

It seems to be impracticable to go far with record systems in placing workers, especially in shifting men in the organization. Certain simple control records of workers should be kept principally for their protection against jealousy and the like, but in the actual size up of each proposal for change or promotion a few words between the foremen concerned, in the presence of a head foreman or assistant superintendent costs less and is better and fairer for all.

People are instinctively selfish of their own interests, and will fight to work in the light so that they may see things clearly and be sure they and their families who depend on them are not going backward in prosperity. My contacts with some of the leading men in this country, captains of industry in heart as well as mind, let me know they are working for exactly the same thing the worker wants-prosperity, self-respect and contentment. These men would have no trouble with any of the workers if they could work with them personally. But that is impossible and so they must trust to the personal touch of their lieutenants—not the

maudlin sentimental "welfare" touch of the opportunist-but an honest, sympathetic, brotherly relationship which every upstanding man appreciates and values highly.

The ablest workers in our industries are toiling day and night in the development of future plans to advance properly the status of their fellow-workers, and to divide fully and fairly the profitable results of their efforts between the three inseparable partners of all industry: money, brains and brawn.

Wages, Hours and Individual Output

By N. I. STONE

Labor Manager, Hickey-Freeman Company, Rochester, N. Y.

THE

THE ECONOMIC LAW OF WAGES

HE question of compensation is inseparable from the general wage problem. Limitations of space preclude a discussion of the theory of wages and those interested in the problem are referred to standard theoretical works on the subject. Nor would the theory of wages as developed by economists be of much practical aid for the purposes for which this volume is published. The Marxian theory, which is held by the Socialists and is the ultimate logical elaboration of the classical theories of Smith and Ricardo, holds that wages are determined by the cost of maintaining a worker and his family at the standard of living prevailing in society at a given time. As the standard of life is, however, a very elastic quantity varying greatly among different groups of workers living in the same country and in the same period, the Marxian theory, whatever its theoretical merits, is of little practical value for our purposes.

At the other extreme of economic thought is the “marginal utility" theory which is today the accepted theory in our schools and universities. According to this theory, the rate of wages is determined by the "marginal" or ultimate utility or productivity of labor, that is to say, by the specific contribution which the last available laborer makes to the necessary product of society.

The two theories really supplement one another, and mark the limits within which wages fluctuate in actual practice under the varying and interacting influences of supply and demand. Under the most unfavorable combination of these two factors wages cannot permanently remain below the prevailing cost of living of a workman's family without disaster to the workers as well as to the entire economic structure of society. On the other hand, wages cannot permanently rise above the value of the product contributed by labor, since no industrial enterprise, be it large or small, could survive in the struggle of competition, if it con

tinued for any length of time to pay out more in wages than its labor force has contributed to the value of its products.

Between these two extremes there is an endless gradation of rates of compensation determined by a variety of circumstances, among which the supply of and demand for labor, the prevailing cost of living, the productivity of labor and, last but not least, the strength of labor organizations exercised in collective bargaining, play the chief part.

The process of "bargaining," in a broad sense is the most conspicuous factor in wage determination. The bargaining may take the outspoken form of a bargain driven between a single employer or an association of employers on the one hand and an individual workman or a workmen's union on the other; or it may be disguised under the form of a workman hunting a job and accepting what he is offered when the supply of labor exceeds the demand or, vice versa, of employers scouring the market for labor and paying what the workman demands when the demand for labor outruns the supply, as was recently the case at the height of war activities. In either case the bargaining process goes on, with labor handled as any other commodity, the buyer (the employer) trying to get his commodity as cheaply as he can, and the seller (the workman) striving to obtain the highest possible price. Were the analogy between labor and any other commodity complete, there would be nothing further to be said on the subject. The similarity between labor and other commodities, however, ends at this point. For, while the seller of an ordinary commodity parts with it as soon as he has delivered it to the buyer, the seller of the commodity known as "labor" is inseparable from it. It is from this circumstance that all the perplexities of the modern labor problem spring. And it is to the failure on the part of employers to take this fact into account that most of the "labor troubles" can be traced.

WAGES AND LABOR COST

Even in buying ordinary commodities we have learned that the lowest priced article is not necessarily the cheapest. An experienced buyer will consider not only the price he is asked to pay, but also the quality of the article he is getting in the bargain. Unless the article is a staple commodity absolutely standardized