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CAUSE AND CURE OF PREVAILING
CONDITIONS
Why the High Cost of Living Is Worrying Us, and How It May Be Possible to So
Regulate Things as to Reduce the Ruinous Altitude.
By WILLIAM TONK
(President, William Tonk & Bro., Inc., New York)
The following article was inspired and prompted
by the discourse on the "High Cost of Living" at
an executive meeting of the National Association of
Manufacturers, which the writer had the honor and
pleasure of attending.
In my remarks at this moeting I held that the
remedy for the "High Cost of Living" should be
looked for at the source of production, and it is
my opinion still that, if this were done and an in-
quiry carried to the final consumer, it would be
found that the question will, for the main part, de-
volve itself into a matter of supply and demand, and
that the chief culprit is not the manufacturer.
The housewife complains of the high cost of food.
Potatoes are now 10 to 12 cents per pound; this
means one large or two or three small ones. For-
merly, the same sum would buy one-half peck, hold-
ing four or five times as many. The same is true of
all vegetables, also poultry, meat, etc. Going to the
farmer for. an explanation, he will tell you he pays
from five to ten times as much for seed as he did
formerly and that labor has advanced 200 to 300
per cent, say from $30 per month, as formerly, to
$90 and $100 per month now.
The Source of Food Supplies.
Why does the farmer pay such high wages? it is
asked. Simply because if he did not meet the pre-
vailing wage his neighbor would, and this condition
exists generally because of the supply and demand;
there are not sufficient farm hands to go around.
The situation of the farmer has become so acute
that many of them, in this state (New York) threat-
en to give up farming and join their city cousins,
where they can rest beyond sunrise and otherwise
enjoy the pleasure and gaieties of city life. (This
from a daily paper.)
But this is not all that makes foodstuffs so abnor-
mally dear. It is the manipulator and the speculator
who have much to do with it.
For instance, as you may know, the farmer can-
not sell cattle, sheep or hogs to the home butcher,
not because the butcher is not prepared nor willing
to buy, but because the packers' "combine" will boy-
cott the butcher if he does. As I understand it, the
packers' trust is well broken by act of Congress.
Whether this will help the situation remains to be
seen.
Enter the Speculator.
The next evil-doer is the speculator, who will
buy and store large quantities of all sorts, not for
immediate sale, but to hold them for the highest
possible price before placing them on the market.
This, however, is not the worst he does to pro-
mote the high cos.t of living. In order to accomplish
his purpose—that is, to force prices on to the high-
est possible level—he will cause to be destroyed
thousands of tons of good foodstuffs, should there
happen to be an overabundant production which,
if placed on the market, would depress prices. These
are the men who are, to a great extent, responsible
for the high cost of living, and whose nefarious
trading should be regulated more strictly by law.
The storing of foodstuffs should be more strictly
controlled, and restricted, and entirely prohibited for
speculation purposes. Despoilation of foodstuffs for
the purpose of upholding and advancing prices
should be made a crime and adequately punished.
Interference with Farmer.
Farmers adjacent to large cities, who desire to
market their stuff directly to the consumer, should
not be prohibited doing so in cases where there are
no good reasons for not granting such privileges. I
have just been informed that farmers who came to
Jersey City laden with all kinds of garden truck
and other foodstuffs were not permitted to sell their
goods, but were driven back, not by legal process,
but by persons whose interest the sale of these food-
stuffs would have affected. Of course, there might
be some objection to allowing farmers to do this
WILLIAM TOXK.
at all times and in all cases; but it seems to the
writer that to do so during these trying times would
be another way of reducing the cost of living.
The next greatest need of man is clothing. We
will not start our inquiry at the source, but rather
with the manufacturing tailor, although the result
would be the same if we began at the beginning.
The Clothing We Wear.
The manufacturing tailor will tell you that all
materials which enter into garments have advanced
in cost from 100 to 400 per cent. Domestic woolens
formerly costing from $1 to $1.50 per yard, now
command from $3.50 to $5 per yard. Imported wool-
ens have advanced about 300 per cent. Cotton and
mixed fabrics have advanced to even a greater extent,
mainly because the unprecedented high cost of raw
cotton, which, under normal conditions, was mar-
keted at from $10 to $18 per bale (10 cents to 18
cents per pound) and now brings from $30 to $40 per
bale (30 cents to 40 cents per oound).
My informant, who is an importer of tailors'
trimmings and woolens, also a jobber of domestic
goods, tells me that before the war cotton linings
that could be sold to the manufacturer for 30 cents
to 35 cents per yard, now command from $1.20 to
$1.35 per yard.
To my query whether he made larger profits than
before the war, he answered: "We do not; we make
a larger gross profit because of a greater turnover
in dollars and cents. This, however, is offset by
greater expenses and greater capital investment. We
did make larger real profits on goods we bought low
before the war and sold on the rise of prices. This
profit we are entitled to, because the time will come
when we will have to sell goods bought at war
prices, on a declining market and most likely at a
loss of all we made, and possibly more, too."
The Manufacturers' Profit.
The cost of manufacturing has advanced in the
same proportion. Tailors and cutters, who former-
ly earned from $18 to $24 per week, now command
from $36 to $75. "But why do we pay such high
wages?" you ask. "Why don't we pay less?" In
answer to this I can only tell you that we are not
paying high wages from choice, but because we are
compelled to do so. We must have labor to keep
our business going, and to secure it we must pay pre-
vailing wages. We must pay the same, or about the
same, wages that are paid by competing shops." In
answer to question: "Are you including in your
prices more than a reasonable profit?" he will tell
you that competition will not allow him to do so,
even is he was so inclined, for, if he did so, he
would soon lose his trade.
This bears out my contention that, as a rule,
manufacturers are not profited ing and that the ex-
ceptions are firms who manufacture specialties or
who have little or no competition.
There may be profiteers among the retail clothiers,
especially in fashionable localities, where a high
class of goods is offered.
Those Who Shoe Us.
The daily papers have commented on the high
cost of footwear, and when you hear of $12, $15
and $18 being paid for a pair of men's shoes, it does
appear as though there was some truth in it.
Apropos the latter, I heard the following story:
"A shoe manufacturer, on a business tour through
Pennsylvania, noticed in one of the shop windows,
while canvassing the town, a pair of shoes which
looked to be of his make and which were marked at
$15. Desiring to convince himself of the make, he
asked to be allowed to examine the shoes. After
convincing himself that he was right, he told the
dealer that to sell these shoes at the price marked
was next to robbery because, at his cost, he might
sell them at one-half less and still make a very good
profit.
In connection with this, I might mention an inci-
dent which was given to me as an actual occurrence
and which, if carried on to any considerable extent,
would have a decided tendency to enhance the cost
of footwear. Not very long ago, when the cost of
hides was much above normal, a tanning firm of
importance applied to the government authorities in
charge of such matters for permission to import
a ship load of hides from South America. Permis-
sion was not granted, notwithstanding the fact that
the ship came back cargoless.
The Genesis of It.
In conclusion, I would say that the high cost of
living is not attributable to any one cause. First of
all, we know it was brought about by the war.
The war brought about extraordinary demand for
all kinds of foodstuffs and manufactured articles for
shipment abroad.
During the period of our government's preparation
for war, and during its participation in the Euro-
pan conflict, it needed all sorts of materials; it need-
ed them in huge quantities and needed them quick.
In order to secure all these things in such enor-
mous quantities, quickly, the government had to pay
higher prices than normal; thereby establishing a
higher market price.
Furthermore, the government required hundreds
of thousands of men and women to manufacture mu-
nitions, to build ships, housing, etc.
It could only obtain these men and women by
taking them from their regular pursuits and paying
higher wages than they were receiving.
Government Set the Pace.
Here began the higher cost of living. The higher
wage established by the government had to be met
by the manufacturers. This and the high cost of
materials paid by the government plants at once
raised the price of production, and of course the
cost of living.
This condition was from time to time aggravated
by the government's call for men for the army and
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