Washing Out the Waste:

Canada Cannot Finance Waste—It Stands Between Us and Continued Prosperity

J. L. RUTLEDGE November 15 1920

Washing Out the Waste:

Canada Cannot Finance Waste—It Stands Between Us and Continued Prosperity

J. L. RUTLEDGE November 15 1920

Washing Out the Waste:

A Composite Interview

Canada Cannot Finance Waste—It Stands Between Us and Continued Prosperity

J. L. RUTLEDGE

IN THESE days when the tide of things is beginning to change a little, when prices are showing a tendency toward decline, most of us are

inclined to sit back with the satisfying sense that somebody is going to get their deserts.

Just who this somebody is, or why he deserves any retributive treatment is a point on which we are rather hazy. The word profiteer comes to mind, and we pin our attention thereon. It seems just to us that the profiteer should be duly caught and his hide deftly nailed to the fence. But even profiteering, it appears, has its times and its fashions. In 1914 to 1916 war’s demands sent food prices soaring because, whatever else a warring world might need, its great imperative need was for food. So we chivied the Food Barons around and blamed them for all the ills of the growing cost of living. But by degrees the joy of this chase petered out. We had grown used to high-priced foods, and the bitterness of our little strife with the Food Barons had died out.

Then, of a sudden, we found that our semi-annual suit of clothes had almost doubled in price which was mounting so rapidly that this semi-annual extravagance threatened to become merely annual. Once more we were off on a clamorous hunt for the profiteers; this time they were the Clothing Barons. And once again, after a terrifying waste of invective and vituperation, we ¿ave lost their trail, and are baying on the warmer scent of the Money Barons, the last discovered profiteers.

All of which goes to show, if it shows anything at all, not that we are superhumanly acute in discovering these matters, but rather that we save our injured feelings by barking up any tree that may reasonably be supposed to house a quarry without making any very definite enquiries as to whether there is a quarry anywhere in the neighborhood.

As a matter of fact, this feverish hunt for a victim has blinded us as a people to the fact that we are hunting in a circle, and that the warm trail that we are following is in reality our own footprints.

That is not by the way of saying that there has been no such thing as profiteering but is merely a statement that, in the way we have viewed it, the steely-eyed monster piteously grinding the faces of. the poor has existed in a few minor cases, no more. But if you go deep enough you will find .profiteering everywhere, if by profiteering you mean that item of cost that is added to the price of any article for which the purchaser actually receives no value.

The Crowning Cost of Waste

THERE have been millions made during the past years, Uñíjfitestionably. It does not take superhuman genius to make money on a rising market, but the money that this represents is nothing compared to the enormous item of cost added to ail Commodities by the one element of waste, “If,” »aid a prominent business man recently, “conditions had been permitted to return to normal, to the orderly working of that much-abused law of supply and demand immediately after the Armistice, if thêré had been no government control, aimed to let people out with a whole hide, matters would have readjusted themselves quickly. As it is, prices have advanced since the Armistice on an average of about33 per cent., while there hasn’t been a single thing in the situation to justify anything but declining prices.”

If this is true, then there is every reason to question just how and why prices have soared in this way. The answer is simple, according to the business executive just quoted. Here is an article. Its raw material costs are two dollars; -the labor eosts of its production are two dollars; and the manufacturer can reasonably expect to make another two dollars as profit, making a selling price at the time of the Armistice of six dollars. But to-day the same article is selling for eight dollars. There has been no appreciable advance in cost of raw materials, the manufacturer is bull getting only his two dollars, and the workman who produces it js being paid no more, yet the article now sells for eight dollars. What is the answer? Well the answer Is simple enough. It is this, that the workman who made this article is now making three of these articles in the time that heioijfneriy made four; and those three have to bear the same overhead costs that were formerly spread over four. And .not only that, but each article has to l>ear its share qf a long Une of waste that stretches back to the very beginning of things, to the original worker who put a little less (effort into the swing of his pick, or lifted a Tittle less;per shovel-’ifUll”; to the handler who loaded it •n the,car who idled a little longer over his pipe; to the ¡railroad worker^, who jaré ait least partially responsible for the fact that the railroads ace only half efficient, and so on to the'last act Sometimes this iis the result -of inexpertness. The man who left hisj ob togo to tí he ww «ame back, perhaps, with a

desire to do something else, and his place is filled with one less expert, while he himself went to a place where he was perhaps less expert than his predecessor. In the various manifestations of this fact there was a reason for a measure of lowered production, but it is only a part, a very small part. The vicious phase of the situation was indeed that there has been developed an attitude that a maximum effort is not necessary. Jobs were easy to get, therefore there was no particular reason to struggle to hold them. There was in a word no need to dig. And so there was a general let down. Labor costs remained high but labor’s efficiency declined. Nor can anyone sit complacently by and pass the blame on to the worker, the trade unionist or the day laborer. They are to blame, but not more so than the clerk or the office man, or than any other. Our whole system of business was and is honey-combed and rotten with waste. It is in every operation we undertake.

To-day the commodity used, the thing worked with, the whole fabric and structure of our commercial and daily life is feeling the blight of lessened effort and its entailed waste.

A Los» In Character

FROM time tô time we sit back and bay at a metaphorical moon of exaggerated prices, and howl for justice on the profiteers. “The profiteers are robbing Us!” has grown a familiar cry. It is time for us to wake up from this dream. We are robbing ourselves, everyone who In the slightest degree has slackened bis effort has added to the burden of himself and others.

We have suffered in money loss, but we have suffered in a more essential lactori We have lost much of the character we had. We s'aÿ that we are not as efficient as we used to be, because efficiency is the by-word of the moment, but it is not efficiency that we have lost—it is character.

A large woolen manufacturing concern found that its production was getting beyond its orders. The management frankly admitted that this was largely so because the goods were costing more than they were worth. Still, raw materials and production being what they were, they could see no chance of reductions. As the only means of keeping their production within the bounds of the demand for their product, they decided to let out 500 hands, believing this would limit their production to a point of safety. Checking up a month later they discovered that production, despite the lowered staff, had increased rather than diminished. It was a surprise to the management, but it provided the answer. The men retained, shaken by the dismissal of their fellows, had speeded up to their normal output; the product with its lowered overhead cost could be sold at a lower price.

Recently, the foreman of a large tailoring plant went to the manager, with the information that the men were demanding higher pay.

“Well," said the manager, “you get production, and you can pay them anything they ask.”

“I don’t care what you pay them,’’ he continued, pound-

ing his desk with vehemence. “If they will only

turn out the vjork. If they will turn out as much

work as they used to do four years ago.”

What is the meaning of such an assertion? It means that production has gone down as wages have increased. Take a definite instance.

A woolen manufacturer is authority for the statement that wages have increased two and a half times what they were before the war and that production has declined 40 per cent. This is the condition that demands a remedy.

There is no danger to the working man, no danger to anyone, in this demand for a more honest giving of work for wages. It simply means the honest return for payment that will react in favor of everyone in the community, because it means the elimination of waste that helps no one.

A Delirium of Spending

BUT there are other forms of waste that are behind the talk that is sometimes heard of possible hard times.

A woman dropped into a large departmental store recently and asked for a certain kind of cloth. It was ^¡own to her and to all apearances she found it entirely satisfactory. She asked the price and on hearing it, with an expression of disapproval, she dropped the cloth from her hand.

“Haven’t you got anything more expensive than that?” she asked.

In these times of extravagance people are still buying what they never thought of buying before. It is that peculiar mental slant that we have come to speak of as better living. It is not better living, but rather ‘ ‘damnable extravagance,” as one business man said recently. It is the lack of a sort of spiritual enjoyment, like the glutted tastes that come from an overfed stomach.

A prominent English representative at the Imperial Press Conference happened to drop in at the restaurant of a large departmental store where he was recognized by one of the officials.

“I have been dining here fairly regularly,” he said, “since I came to your city.” The official murmured something about that being complimentary to the restaurant. “No,” replied the visitor, “it isn’t that. I’ll tell you what it is. I am staying at—,” mentioning the name of a prominent hotel. “When I sit down to lunch there, I get a soup that is a meal in itself, and it is followed by a great many other dishes—more food than I could possibly eat. For several days I watched the waiter taking away about as much food as he brought in. Then I began to remember that over in England, where conditions are far better than in most parts of Europe, we hardly know the taste of butter or of sugar, and I said to myself that it was criminal for me to connive ip such a waste.”

“If,” he continued, “you could add to every hundredweight of food that you ship us one-eighth of what you waste, without charging us more—because every time we pay for food it depreciates our money as you can’t take all the things we would sell you in return—if you would do this, it would make that exchange easier, and would help to bring back healthy conditions to the world, and it would only cost you what you now throw away.”

WHât df the Future?

DURING thé past few Months there has come a breath of uncertainty over the commercial activities of the country. It is not hard times, nor anything like it, it is a slowing up, so slight as to be almost unnoticed t>y anyone outside the businesses affected, but It is there, and everyone knows it by a sort of intuition. What is happening? people ask. What is happening is merely this, we are beginning to wash out the waste. That is what is happening, and there is nothing else happening. It is going to be painful to some, and we will call it a lack of prosperity, perhaps, for a while; for it will not be more than that, hut in the end it will give us far more than it has cost. It will bring us back to a saner method of thinking, a saner appreciation of our needs, and an ability to enjoy because of the merit and the comfort, rather than because of the

There are some dark-browed Jeremiahs who are going to and fro in the land preaching the coming of hard times, and pointing to the unsettled conditions across the line at the present time.

But the' conditions that operate across the line do not apply in the same measure here. We are not the same temperamental folk as our cousins to the South. We neither climb the mountain of Hope so swiftly nor do we slide down so fast. Moreover, Canada has one great asset. Weproduce each year our hundreds of millions of dollars of new wealth. While there is a market for our grain ata flair figure, there'will be no spectre of hard times knocking at our door. There are folks who take their pleasure« sadly,.who derive a certain melancholy satiafac-

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Washing Out the Waste

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tion in being there at the obsequies. With such a taste it is not surprising that they should consider the obsequies somewhat too infrequent, and therefore that they should be inclined to view a trifling illness with the eye of the mourner. It is so that many such people are considering the present business situation. They look across the line and see unsettled conditions, and conclude that worse things still are in store for us in Canada. But they fail to realize that the business situation across the line is mixed up with politics and temperament—how much of each no one knows.

Canada’s Strong Position

AS A MATTER of fact Canada is in a better condition than almost any other country. When the Armistice came, there was a certain depression felt, and business for a few months was duller than it has been before or since. Then, the Canadian buyer seeking commodities that could be bought in other centres discovered that English and French industries that had been given over almost entirely to war industries had practically ceased to function. This, in conjunction with the congested shipping situation, made it evident that Canada had to depend largely on herself and the United States for supplies.

Following its usual temperamental history, the Armistice brought to the United States a feeling of near-panic. The Canadian buyer could buy cheaper there than in Canada, so our imports increased enormously. The large orders for clothing placed by Roumania stiffened the lip of most Canadian manufacturers, so that there was no possibility of obtaining goods here at the prices they could be obtained at across the line. This condition prevailed from the Armistice to about nine months thereafter. Then there happened what everyone said could not happen. Prices advanced.

The United States awoke to the fact that the world was still intact, and was eating food, wearing clothes, and using other necessities just as had been the custom since trading began. With this cheery thought once grasped, they went wild with delight. With confidence that these golden days would never pass they piled up prices. They advanced 25 per cent, at least and still kept rising.

Then there began to operate another condition that has had a most material effect on business. The merchant viewing his shelves found that the goods were not moving off as rapidly as usual.

“An off-week,” he said, but when the next week and the next came and there was still the same story he began to be alarmed. It is that alarm that is responsible for present conditions across the line Goods have been forced so high that demand has stopped, and eventually they must come down. That much everyone knows, and knowing it they are waiting for a slump and the producer is anything but happy.

But to argue that because these conditions prevail across the line they must necessarily prevail here is to reason without an understanding of the facts. It is largely a matter of misinformation gleaned from some little bits of news appearing in the newspapers, correct enough in themselves, that may yet be interpreted by the reader in anything but the correct light.

For instance, there comes the news that cotton sheeting has declined 20 per cent, in the United States. At once there is a hubbub about the coming decline in cotton. But the fact of the case is that cotton sheeting, despite everything that has been said of the Canadian textile mills, is still from 20 to 30 per cent, cheaper in Canada than in the United States, so that the American decline really has no bearing on any situation but that of the strictly American market.

THE fact of the matter is that Canada is and has been for some time one of the cheapest markets in the world, comparatively speaking. And, consequently, in the matter of prices there has been less distance to fall in Canada than across the

Where Canada is faced with a serious situation is in the widespread waste and the consequent extravagance of the Canadian people.

There is not enough money in Canada to finance this waste, nor yet the locked up funds that are represented in highclass, slow-moving commodities. In that much Canada is due for a change. But, fortunately, Canadians have been quick to see this. The unloading of these surplus stocks lias been progressing for months past and we are nearing the point of safety. We have passed the place where a man will buy two pair of shoes to save a possible advance in price, and, by so much, have passed through our era of wild-cat prosperity. But, if people are looking for

material decreases in prices in goods that exist to-day they are doomed to disappointment. The cheaper prices will come when the waste has been washed out of business.

Some time ago the buyer of a large store purchased some cloth from a manufacturer at $2.00 a yard; about three months ago he went hack for more and was quoted $2.75. The man protested that with wool prices down there was no ground for the advance.

“My dear man,” said the manufacturer, “if you could give me the wool for nothing I couldn’t make that cloth any cheaper.”

The answer is, of course, that the production costs are the largest factor in price, and that only an improvement in production can materially affect prices. Only the common effort to give full value in every act of life canbring about moderating prices without at the same time bringing on our heads all the disturbing effects of real hard times.