Part 5

But an indictment is not a remedy. The evidence behind it is not even valid always in the search for a remedy. What we need to know now is why have public and private relief failed. Professor Foerster mentions several statements of mine which do not seem to him successful arguments against widows’ pensions. I am not arguing against widows’ pensions. I merely recognize many considerations growing out of ten years’ experience in social work which make me both dissatisfied with what we are doing and suggest the need for the most careful study before we can be sure of a remedy.

I realize that many people grow impatient when the question of widows’ pensions is related to the problem of relief. Perhaps the movement, as some people hope, will be the entering wedge of a system of state endowment of motherhood. We cannot wisely, however, begin experiments for the sake of their expected future value with a total disregard of their certain present effect. Widows’ pensions as projected by the commission would be in fact a relief problem. The responsibility of the public outdoor relief machinery for their administration as proposed by the commission’s bill would indicate this even if there were no other indications, which there are.

I have found the Massachusetts report of the greatest interest, but in my judgment it does not justify widows’ pensions. The figures and the expressions of opinion secured from various agencies are significant. They are significant of the need for a deeper probe, however, not for an extension of an unsatisfactory system of relief. A recommendation that this deeper probe be undertaken is the one recommendation to which it logically leads.

It is because states which regard Massachusetts precedents with respect are likely to consider this report as the long-needed scientific and comprehensive study of the status of outdoor relief that I have tried to estimate it from this point of view.

The commonwealth of Massachusetts gave Professor Foerster and his associates on the commission a tremendously difficult task and gave them hopelessly inadequate facilities with which to perform it. Under the circumstances, perhaps none of us could have done any better. But Massachusetts should have done better.

PORTER R. LEE.

[Contributing Editor Family Rehabilitation.]

New York.

CASUALTY COMPANIES AND COMPENSATION

(_From a personal letter to the editors of The Survey published with permission of the author._)

TO THE EDITOR:

Allow me to say that I absolutely endorse the article in a recent issue by Paul Kennaday entitled Big Business and Workmen’s Compensation.[5] I have been acting for the Canadian Manufacturers’ Association, a body corresponding to your National Association of Manufacturers, but more highly organized and representing a much larger proportion of its constituency than the American body. In fact, we represent about 85 per cent of all the manufacturers of Canada. I say this to indicate the probability that the Canadian body would not adopt any policy without the most careful consideration and investigation. This body has adopted the same view as that expressed in the article and is devoting a large amount of energy and considerable money promoting a workmen’s compensation system of the type of the Washington system.

There is not the slightest doubt in my mind that such a system is the only satisfactory solution ultimate or even temporary to the problem. This view is of course opposed by the liability insurance interests who are conducting a carefully planned and well financed campaign against “state insurance.”

Time and again we have had to deal with the representatives of these insurance interests in connection with the investigation in Ontario preliminary to the drafting of a Workmen’s Compensation Act for that province, and I am glad to state that, generally speaking, the motives and arguments (perfectly legitimate perhaps) of the insurance interests are understood and rated at their proper value. I think I have a pretty broad view of the situation in the United States and I am sorry to say that the true position of affairs does not appear to be generally appreciated by either the politicians or the leaders of labor and industry. I should think it might well be one of the functions of THE SURVEY to open up this matter.

F. W. WEGENAST.

[Counsel Canadian Manufacturers’ Association.]

Toronto.

WAGES FIXED BY LAW

TO THE EDITOR:

In his letter to THE SURVEY on the subject of fixing wages by law, James Deegan says: “The report of the United States Bureau of Commerce and Labor for 1910 states how labor received only 20 per cent of the value of the product which it served to create.”

Considering carefully this rather surprising statement, I came to the conclusion that the writer referred to the report of the Census Bureau in the Department of Commerce and Labor, presenting the results of the manufacturers census of 1910. To be sure, this report does not make any such statement as that which Mr. Deegan attributes to it nor could the statement be properly based upon the statistics which it publishes. On the contrary, the census figures conclusively disprove this statement, showing it to be a gross perversion of the facts.

It is true that the total value of products reported by the census of manufacturing industries was a little over $20,000,000,000, while the amount paid out for wages and salaries was a trifle over $4,000,000,000, so that the latter amount was about 20 per cent of the former.

If Mr. Deegan had stated that the amount paid to labor employed in manufacturing industries represented 20 per cent of the total value of the products turned out by these industries, the statement would have been formally accurate, although it probably would be misleading even then. The statement is, however, that labor received only 20 per cent of the value of the product which it served to create.

Even with a superficial knowledge of economics and industrial processes one ought to perceive that the laborers employed in manufacturing industries by no means create the full value of the products which these industries place upon the market. The laborer in the factory does not create the raw material which the factory uses; labor on the farm, in the mine or in the forest entered into that.

Now the report of the census shows that while the value of the product produced by the manufacturing industries of the United States was $20,700,000,000, the cost of the materials consumed in the manufacture of these products was $12,200,000,000 and that the value of the products, less cost of materials, was therefore about $8,500,000,000. The value created by the laborers employed in these industries could not possibly exceed this sum and would be considerably less than this if any allowance were made for wear and tear or depreciation of plant and machinery or fuel consumed or for other expenses which enter into the value of the final product.

If, however, we credit laborers with having produced the full value represented by the difference between the cost of materials and the final value of products it follows that the $4,000,000,000 which they received represented not 20 per cent but about 50 per cent of the value which they created.

If we deduct from the final value not only the materials purchased but also the miscellaneous expenses reported by the census, none of which represent values created in these industries, the proportion received by the laborers advances to about 65 per cent. And still no allowance is made for replacement of capital.

Mr. Deegan’s proposition for regulating wages proposes to award the laborers a minimum of 33⅓ per cent. It is evident that they are much better off than this under the present regime and without any state regulation of wages.

Mr. Deegan further states that the report referred to “also shows that after all expenses and charges are levied, there still remains over $2,000,000,000 surplus to be divided as profits among the employers.” It is true that after deducting from the value of the products reported by the census, the aggregate of all reported expenses, the remainder is a little over $2,000,000,000; but the census report is careful to point out that this difference can not be regarded as representing profits for the simple reason that the expenses reported by the census did not include all the expenses incidental to the process of manufacture. Among the expenses left out of account is the important item of depreciation.

If Mr. Deegan had consulted the census report itself, such statements as he made would be reprehensible as well as inexcusable; but I presume that he got his information at second hand from some newspaper paragraph or article originating no one knows how or where.

But THE SURVEY, however, ought not to be made the agency for the further promulgation of such misinformation. It might be said, perhaps, that such gross misstatements do not deceive thinking and well-informed people; but even well-informed people do not always know the facts which refute such statements; and thinking people do not have time to think about everything.

More than that it seems to me that some consideration should be shown for the unthinking people that they may not be deceived or misled.

Some of them have a vote.

JOSEPH A. HILL.

[Bureau of the Census.]

Washington.

FOOTNOTES:

[4] The report is for free distribution and may be had by writing to the Commission to Study the Question of the Support of Dependent Minor Children of Widowed Mothers, State House, Boston, Mass.

[5] See THE SURVEY for March 8, page 809.

JOTTINGS

HALVING THE TAX RATE

The Salant-Schaap lower rents bill, which provides for submitting to a referendum vote the gradual lowering of the tax rate on all buildings in New York city to one-half the rate on land, was killed in committee in the New York Legislature. This is the bill which was advocated at the Lower Rents Exhibit described in THE SURVEY of March 15 last.

RELIEF FOR BEDFORD REFORMATORY

In the final hours of the New York Legislature the sum voted to Bedford Reformatory to relieve overcrowding was $414,000 and not $500,000 as was stated in THE SURVEY of last week.

THE ROCKEFELLER FOUNDATION

By unanimous vote both the Senate and the Assembly in New York passed the bill to incorporate the Rockefeller Foundation for the dissemination of knowledge, the prevention of suffering, and the promotion of the well-being and civilization of the peoples of the United States. The bill which is very similar to the one urged before Congress in 1910 has not yet been signed by Governor Sulzer.

HUNGARY PROTECTS ABANDONED CHILDREN

Hungary maintains seventeen institutions for indigent, abandoned, delinquent and abused children. It is the custom to receive every child applicant, to give him a bath and clean clothes, and then to investigate his condition. If the investigation warrants the state’s interference the child is admitted. Seventeen thousand children were thus received in 1908. Most of them are placed out in the country or smaller cities with farmers or artisans of good character and in moderate circumstances. Five reformatories have been established for delinquent or absolutely unruly children. They have room for a thousand inmates, who live together in family groups of twenty-five, learning a trade under the supervision of the head of the household. Corporal punishment is still administered. Up to 1908, 2,331 inmates had been released on parole, 86.6 per cent had worked steadily and had kept straight, 5.4 per cent had committed crimes and 8 per cent had disappeared.

Country Property

Owners having Property For Sale or To Rent for the coming season are invited to write for our advertising rates.

THE SURVEY 105 East 22d Street, New York

Transcriber’s Notes

pg 247 Changed: be reckoned as the most throughly to: be reckoned as the most thoroughly

pg 255 Footnote removed due to no anchor: See The Survey, February 8, 1913, p. 653.

pg 256 Changed: institutions for indigent, abandoned, deliquent to: institutions for indigent, abandoned, delinquent