Paying For Present Prosperity
Author of "lords of the North," " The Canadian Commonwealth." etc.
By Agnes C. Laut
THIS article deals with conditions in the United States; but much that is said, with regard to industrial matters, applies also to Canada. The Dominion is also enjoying an era of high wages and its inevitable accompaniment, higher cost of living. Canada a has to look carefully forward to the future with the knowledge that l»oth wages and food prices must come down.
But there the analogy ceases. Canada has not plunged riotously into the orgy of speculation that has vibrated the whole American nation. Canada has been laying something aside for the uncertain future. And Canada, having borne a noble part in the world war, is not perplexed with the political difficulties that darken the future of the United States.
However, future developments in the United States are of very grave interest to Canadians, so close are the business relations between the two countries. Consequently the facts that must be presented have a closer significance for Canadians than might at first appear.
THE United States is in the midst of the most riotous prosperity it has ever known in all its history. There is literally not an unemployed worker in the country from Atlantic to Pacific. Wages have doubled, trebled, quadrupled in three years. Cases are on record of hotel porters at $25 a month going to munition factories at $35 and $40 a week. In the case of expert piece workers in munition factories, men, who formerly earned only $2 a day, are now making from $11 to $30, not a week, but a day. Day workers are netting more in 8 hours than their foremen net in a week. They are netting more in a week than their bankers net in a month. The increases in wages in the United States total in one year more than $300,000,000—that is, the wage increases of factory hands equal half the value of a year’s wheat crop.
When one comes to consider dividends in industry, the picture is not so rosy. High wages and high cost of raw material lower dividends; but in the case of exports to warring nations, the selling price has taken care of high wages, high priced raw material and high dividends. There are certain steel products selling at an advance of 200"r over the price of 1914.
Consequences are evident in a wild and runaway stock market. The stock market has been on a something worse than a stampede. It has been on what the street calls a wild “bust.” Copper, cotton, steel, wheat, are 200% higher than in 1914. Industrials, munitions, utilities, railroads—all are soaring on a wild voltaplane joy-ride in the clouds, above the
clouds, among the kites and ther high explosives that go up to come down ; and
when the coming down time is due, there is a scatteration with ruin and fragments.
I hear people who are ordinarily sane predicting how cotton, nickel, copper, wheat, steel-—are bound to be—can’t possibly miss being—second Bethlehem steels.
And gold continues pouring into the country in volumes to swamp the avarice of Midas. In 1914, there was in the United States a reserve of $1.890,000,000 of the yellow metal. In 1910, the gold had increased to $2,700,000,000—an increase of $800,000,000. Gold is coming to the United States from abroad at the rate of $05,000,000 a month. Though the country has loaned abroad one and a half billions since the war began, the loans have been chiefly in the forms of credits for goods bought and to be bought; so that as the credits come to be paid, the loans have really increased the yellow floods of inflowing gold. In other words, this country is yearly importing as much gold as the entire world produces in a year.
Exports are to-day four times greater than in 1914.
IS ANY more proof needed of the fact that Uncle Sam is redundantly, riotously prosperous? Could he be any more prosperous and not blow up like the deep sea fish that brought suddenly to the upper rarer airs instantaneously fly to pieces? Is it surprising that the impoverished nations of Europe, taxed to the hilt and battling to the death for freedom, should have a glowing and growing resentment to this democracy larded in opulence, wallowing in wealth, at ease, at peace, safe, while the rest of the world fights for the principles of democracy?
General Wood has declared—and no one has disputed him—that the end of the war would see the United States the most envied, the most hated, the most despised nation of the world ; and Theodore Roosevelt has added that Americans will be just about as able to defend themselves as any other fat man with a protruding bay window, or as a huge cheese attacked by maggots.
In the face of all this, it seems almost preposterously incredible to say that* Uncle Sam is paying for the war through his pockets and through his nose. It seems one of Shaw’s absurd paradoxes to
add that the price Uncle Sam is paying now is a mere bagatelle compared to the price he is going to pay for the war in the almost immediate future.
Yet look at facts! Look at them hard and take in what they mean !
At the present date of wriitng — November 1st—the cos* of bread, the cost of milk, the cost of meat, the cost of clothing, rent, fuel— each and all are 100'* higher in the United States than in Germany or in Austria.
Surely I am mistaken ! No, not by as much as a cent! Five cents to-day will buy a loaf of white bread in Germany twice as large as the 5-cent loaf in New York. Food is cheaper to-day in a Berlin restaurant than in New York. How is that? Because when the price manipulators of Germany began to jack up prices, the Government put on screws and forced them down. This was done in the case of milk, meat, bread, and potatoes— the staple wholesome foods. If any one doubts this, he can get the exact lists of prices from the U.S. Department of Labor and Commerce. Don’t confuse points! This does not mean there is not scarcity of food in Germany and Austria. There is great, growing and dreadful scarcity; but for such food as does exict, the price is lower in Europe than in the United States. How is it possible that Europe can pay $2 plus for American wheat and sell bread cheaper than Americans do? Simply because in time of war the European Governments regulate the price of food. Americans are at peace; and the Trusts in Food Products—beef, pork, milk, wheat, corn—have worked their will unchecked—because, gentlemen, Americans are neutral and are “too proud to fight,” and they thank God they are at peace, though a prophet once declaimed about “a peace — peace that was no peace.”
I want you to take a few figures on bread! The 5-cent loaf to-day is just half the size it was before the war. Or put it differently! The same sized loaf costs 10 to 12 cents. A housekeeper recently wrote to the New York press that the 6-cent loaf only weighed one-half pound, where it used to cost 5 cents and weigh a pound. She said that loaf just lasted her family of eight one meal. Put it in this way! One 6-cent loaf equals 8 people one meal. Put the population of the United States at one hundred millions! On the basis of 8 people equal one loaf, they require per meal 12,500,000 loaves at 6 cents—or cost per meal in bread $750,000. Before the war that loaf would have lasted 2 meals and cost only 5 cents. In other words, one-half loaf at 5 cents equals 8 people 1 meal. Total country requires 6,250,000 loaves at 5 cents—or cost per meal in bread $312,500. We’ll suppose at dinner, bread is eliminated by meat and vegetables and pastry —though flour goes into the cooking of these, too; but put the increased price of bread for two meals a day only, this increase totals $875,000 a day for the nation. Deduct fast days,though I don’t personally know any one in the United States who is fasting. Restaurants and banks and employers say this nation is not fasting—it is riotously feasting and wasting enough to feed another nation ; but deduct 65 days in the year; and on a basis ofs 300 days in the year, the increased cost of bread totals $262,500,000 for the year. Now America sold Europe in 1914-15 only 338,000,000 bushels of wheat at prices ranging from $1.25 to $1.75, and in 1915-16 only 250,000,000 bushels at a slightly lower figure. (Europe paid higher by 40 to 50 cents; but that was freight. I am quoting New York and Chicago prices.) In other words, the increased cost of bread to the American consumer for 1916 exceeds all the profit made on American wheat in 1915-16.
A ND THE war has caused similar increases in meat, metals, lumber, clothing. Cotton is at 20 cents where it was 10 and 11 cents. Copper is at 24 to 28, where it was 12 to 17 cents. Beef is at 28 to 32, where it was 17 to 22 cents. Oil for motors haa almost doubled. Paper prices have quadrupled. Take a look at this list of wholesale prices:—
Flour (bbl.) ...$4.95 . $9.45
Potatoes (bus.). 1.50 2.75
Sugar (bbl.) .. 4.90 6.47
Lard (lb.).....10* .15*
Pork (U>.).....17 .30
Wheat (bus.).. 1.06 1.89
Veal (lb.).....14 .25
Butter (lb.) .. .25 .36
Eggs (doe.) .. .30 .44
Salmon (can) . .10 .14
Steak (lb.) ... .18 .32
Lumber (M). .$15 to $25 $25 to $60 .Firewood(cord)$4 to $ 5 $ 8 to $10 Coal (ton) . .$5.75 to $6 $6 to $7.75
TT IS all very well, and very misleading A to say food has increased in England 55%, in Germany 100%, in Norway 63% —what percentages do you work out the increases for America? Of 210 brands of bread sold in the United States, only 14 in remote sections dose to the wheat belt sell at the same price as in 1915. It is also all very well to say the short, crops would have sent the price up without the war. They would ; but without war, there would not be a universal world shortage ; for fifty million men, dead dr fighting on the line, would have been at work in productive fields. Also it is no consolation to know that in food products, prices cannot come down much for at least 2 years, for the simple reason, labor is so short and seed so short, there is no possibility of making up the shortage within two seasons.
Statisticians have figured that the war has imposed a tax of 20% on every householder's pocket in the United States. And who gat the profits — just a group of _ highly paid artisans—say 280,000 on the railroads, possibly another 500,000 in steel and allied products. Then as to dividends and surplus gold, an inner group of an inner ring in control of—
(1) The bank»;
(*) The aranition factories such as steel, oil, motors;
(3) The food products such as beef, condensed milk, wheat, flour, etc.
The hundred million people pay the tax. The inner group of the inner ring gather the big profits.
DUT THE reaction of the war goes deepef under the skin of things than prices. If I were asked what price Uncle Sam is» paying for his joy ride of prosperity. I would answer: —
(1) In a higher and higher cost of living.
(2) In a higher and higher cost of labor.
(3) In a higher and higher cost of capital. (Interest rates used to be 2% to 4%. They are now 5 r to 8"f.)
(4) In a surplus abundance of gold that will end in panic.
(5) In a conspiracy of silence that has entered into the very vitals of the integrity of the nation.
(6) And finally, there is the aftermath, which no living soul may predict. The aftermath may be a “Feed America First” clamor in the next Congress, deliberately designed to catch the popular ear and to involve the United States in friction with the Allies. Such a plan or plot is? row under way among the German propagandists; and the very-extortionate cost of living will give it tremendous impetus.
A S TO the increased cost of living, bread is typical. You can work the figures out for yourself in lumber, fuel, beef.
As to labor — consider a moment! Where America formerly had one million immigrants a year, she now has only 100,000—which barely fills the depletion in ranks by mortality and age. Dock laborers are to-day getting $6 where before the war they got $1.75 ; and this is typical of the entire scale. Ford’s much heralded $5 per day would rank only a9 a moderate wage in many factories. The consequents are apparent. As soon a9 abnormal profits slacken, capital will be so near the dead line of a topple over, that it will be safer to shut down than to go on. Though the war last another two years, the day of big munition orders „is past in America. Europe will need raw material to the end of the war; but
she can amply supply her own munitions from now on. This fe true of even Russia. The American stock mark-t still booms, but it booms because dividends are being paid on past orders; and “th » innergroup of the inner ring” will hold prices up till as usual they have unloaded at top notch prices on the gullible, eager public. Meanwhile, what is happening out in the factories? Let us acknc pledge that steel, oil, wheat, flour, coppnr and beef will “boom” to the end of th * war! In munition factories, as many a 5,000 men are being warned in single ccncerns they will be laid off by Christma?. The labor “slump” has not begun: because no big industry—as the railroads am »ly demonstrated—would risk a strike before the elections. Nor will the factories risk a strike after elections. They wfill simplv follow’ the lead of the powder cone ?rns— lay off in batches of 2,000 and 5,0i 0.
HOW does surplus gold in a c »untry bring about a panic? Gold-in itself is not worth as much as steel or iron. It is less useful, less durable. It s only valuable as a universal medium of exchange and international barter. 3efore the war, w’e’ll say, a man was earring $2 a day and flour was worth $5 a »arrel. The equation stood thus—2* days work equals a barrel of flour. But sudde dy the gross of gold in a country increase i twofold. Flour increased to $10 a »arrel. The equation stands thus: 4* day: work equals a barrel of flour. But just as the gold increased, the world’s supply of flour shrank by half. The equation becomes this: 4* days work equals one-half barrel of flour. Suddenly labor awakes and scratches its bewildered head. Wl y is it the purchasing power of the $5 goh l piece shrinks with increasing gold and d creasing flour? So labor demands louble wages; and the equation stands thus: 2* days work equals one-half barrel of flour. Even with double wages, labor gets only half as much flour as before the wa~; and if you are neither the laborer wi h the double wages, nor a member of the inner group with the double supply of y old, it isn’t hard to explain why you ft »1 the pinch. That i» why a “bulge” o' gold always means to the street “a bu: t,” or in dignified language, points the ^'ay to panic.
F THE cons »iracy of silence whichUncle Sam pars as the pri* of his prosperity, no bette r example co aid be given th in the 1916 eb-ction. It has 1 een a thing to make every true Amer can hang hit head in sham » and silence. For the first time m the history of the country, a foreign vob> was able to dictate whe her a president should opm his mouth and tell the truth, or shut down the lid. For the fint time in history, an alien vote was able :o dicContinued on page 72. täte whether a man who aspired to be president should speak the truth or maintain a silence that was a lie. I refer to the whole inside knowledge of the sinking of the Lusitania, of which President Wilson and Mr. Hughes both had every detail. Both men kept carefully silent as to the true facts. Both men spoke brave words that glittered in the sunlight with the substance of soap bubbles at the end of a boy’s clay pipe; but both men—and everybody knows it—carefully and with a cowardice that sickened the American heart—suppressed the facts as to the sinking of the Lusitania. Voters waited for the declaration that never came; and the man, who spoke the truth—Theodore Roosevelt—was rejected by the country.
Paying for Present Prosperity
Continued from page 24.
What true Americans really feel as to their international statu9 was well illustrated soon after it became apparent that Hughes as well as Wilson was going to side step all facts on the Lusitania. A Í group of the most substantial men in the East got together in a down town dub | in New York. There they had an Euro¡ pean army expert give them a secret lecture on how coast cities must be defended in modern war from air and submarine attacks. It was the week the submarine sank the freighters off Nantucket. I ! asked one of the big men present why ! they had done this. “Why,” he reiterated. “If the best our presidents can do is what they have done in this election, w’here do you think we would be in case of attack? And attack,” he added “may be ter-/
ribly near. If a president declares you \ may kick him into the middle of next week l and he’ll be ‘too proud to fight’ and keepl us out of war, how long do you think; we are safe from attack? Europe ha.s to pay the cost of this war some how; and we are the How; and that is the bitter aftermath we’ll pay for our supine cowardice demonstrated to the whole world in this election.”