INSURANCE AGAINST INDUSTRIAL DE

PRESSIONS.

Recent reductions in the selling price of bar and structural iron are producing the results predicted by Mr. George H. Hull in an editorial in the Cleveland Plain Dealer, under the title of "Pig Iron and Prosperity." It is unquestionably sound business to keep a manufacturing plant in full operation at a normal profit. Mr. Hull's theory is that producers of pig iron ought never to charge more than a normal profit for their product; that when the demand is not equal to productive capacity there should be no decrease, but the surplus should be stored until required by an increased demand. If producing capacity is not in excess of demand, taking the average for a decade, it is clear that the operation of the plants, at normal capacity, continuously for ten years, regardless of the fluctuations in demand, would not burden producers with an unsold surplus. It is also clear that a selling price fixed at a normal profit for an imperishable commodity that can be held without deterioration until sold, would make the business continuously profitable.

There are conditions affecting cost which producers of pig iron cannot control. While they may be able to establish and maintain a stable selling price, they cannot establish and maintain stability in costs of production. If costs fall the buying public will know it and will seek to benefit by it. If costs are raised,

from general causes, pig iron will not be the only commodity affected. The experience of all buyers of iron will teach them the fact that raising costs requires raising selling prices. So long as the relation between costs and selling price is maintained at a normal margin for profit there will be no resistance to its operation.

When the business of the country was beginning to recover from the panic of 1893 manufacturers commenced to question the methods they had pursued in dealing with the panic. As stated so clearly in the article under consideration, they found they had reduced demand by discharging workingmen. Recovery did not occur until they had begun to re-employ the men who had been discharged. The endless chain of employment, earnings, expenditures, demand and production, if turned backward, commencing with discharging men, will produce a panic at any time; if turned forward, commencing with employing more men, or increasing the wages of those already employed, will produce prosperity at any time. This fact shows the far-reaching and vital importance of a stability in economic public policies that will give conf.dence to all employers and cause them to keep turning the chain forward. It emphasizes the wisdom of a policy on the part of great employing corporations that pays out in dividends only a normal profit and holds all surplus as an insurance fund to provide for the payment of wages and dividends in years when

the normal rates may not be fully earned. This reference to the workings of natural economic laws shows how decidedly it is to the interests of every person, workingmen and employers, producers and distributers and consumers, to maintain the stability of the public policy of municipalities, states and the nation, founded on correct economic principles.

IT PAYS TO EDUCATE EMPLOYES.

We are acquainted with the manager of a large corporation who maintains that its employes are entitled to know why their wages must be fixed at the rates paid, with as good a right as an investor is entitled to know why the dividend on his investment is fixed at the rate paid. Wherever such a manager is found there will never be any difficulty between the corporation and its employes over the wage question, provided the employes are sufficiently intelligent to understand the meaning of the representations made to them. This they cannot be if they do not read the same class of economic and financial literature as the manager and stockholders of the corporation supply themselves with.

Fallacies are continually being taught to wageearners that are as harmful to their minds as poisons are to their bodies. Here is a sample taken from "The Labor Advocate" of Jacksonville, Fla.:

"It is a sad but truthful commentary upon our civilization to say that the people who produce all of our

wealth, get the least of it; that people who do no work at all get by far the largest share.

"Land, labor and capital are the elements of production, and as a consequence landlords, laborers and capitalists are the only classes who, primarily, share in distribution; therefore, if the laboring class gets less than its fair share of the wealth produced, it must be because it is robbed by either the landlord class or the capitalist class, or by both of these classes."

It is impossible for any man to work contentedly and efficiently for an employer he believes to be robbing him. A tremendous gain will be made in industrial relations when the conditions and results of a business are known and understood by the employed, as they are known and understood by the employer. The people are honest but not always intelligent. It is impossible for men to have correct views about the conditions of a business if they are always treated on the principle that it is none of their business to know anything about its incomes and disbursements, its resources and liabilities, its gains or losses. Knowing the innate desire of every person to secure all he can for himself, and to this end to represent only those features of the business that will tend to promote his own advantage, workingmen are excusable for believing that the truth is not told to them when they demand a change for their own advantage. If some system could be devised of statements of affairs for the information of employes, issued to them

regularly and without solicitation, the same as statements are furnished to shareholders; if, in addition to this, committees of employes were invited to meet committees of shareholders at every annual meeting to discuss the condition and prospects of the business, employes so treated and educated would be proof against insinuations that they are not getting their fair share, or that their employers are robbing them. If human nature is as good as we believe it to be, employes, when so treated, will be loyal, efficient and generous. They will give good value for every advantage enjoyed by them, and will be willing to carry their fair share of any curtailment necessary to carry the industry through a period of depression. They will be the workmen and friends of the corporation.

WORKINGMEN'S BRAINS.

Workingmen's brains are the most prolific, undeveloped raw material at the command of a manufacturer. This truth is illustrated by the experience of R. Dorndorf, the largest shoe manufacturer in Germany. He employs 450 persons and has his factory entirely equipped with American-made machinery. Notwithstanding this, his results were nothing like those obtained by American manufacturers. He finally hit upon the expediency of engaging an American workman and his wife to take positions in his factory to teach his employes how to work the machines