AFFAIRS IN AMERICA.

Taranaki Daily News, 14 May 1921, Page 6

AFFAIRS IN AMERICA.

DEFLATION OF WAGES.

In a trade circular forwarded by Brown and Dureau, Ltd., Australasian agents for John Dunn, Son and Co., of New York, the position of affairs on March 7 is reported upon as follows: “The financial atmosphere has been fairly calm of late, with little change of note, except that the absence of further disturbing events is helping the return of confidence. The basic industries, such as iron and steel, lumber and coal, are extremely quiet, but. woollen goods and silks are in better demand than a month ago, and automobile manufacturers report decided improvement.” Referring uo the railways, the report states that a point has been reached where earnings are scarcely sufficient to cover paid charges, let alone a fair return on the investment. The only solution seems to be a reduction of expenses through lower wages, which it is stated still average 130 per cent, above those of pre-war days. The report adds: “It may be expected that the railroad brotherhoods will resist any material reductions of rates of pay, and it is quite likely that the process of deflating railroad wages will be accompanied by another period of labor disturbance, more or less similar to that of last spring, when wages were so inordinately advanced under threats by the men of paralysing the commerce of the country. This is confirmed by chairman Edgar E. Clark, of the InterState Commerce Commission, who lately stated that for every dollar the railroads earn they pay out in operating expenses more than 90 cents. He adds that owing to the narrow margin between revenue and operating expenses and fixed charges a good many are not even earning operating expenses just now.”