"Lap of the Gods"

Boreham House has stood in Essex County, England, since 1728. It has had many masters. Yet last week Essex County was more excited than ever before when it heard that Boreham House will soon have yet another master walking through its handsome halls, inspecting its heronry (one of four in the County), tramping its grounds. For Boreham House's new owner, it was revealed last week, is Henry Ford. His English factory is also in Essex.

Home in Detroit since he left Florida last March, Henry Ford last week had much to occupy his mind. His home life is happy. He has a son, four grandchildren: Henry Ford II, 13; Edsel Ford Jr., 11; Josephine Ford, 8; William Clay Ford, 6. He has used his money to surround himself with those things he likes. Yet Depression has not spared him. Ford sales are running about 50% lower than last year. In addition, there is every indication that the great Chevrolet v. Ford battle is more intense than ever with Chevrolet in the lead. There have been rumors that the Ford plants may shut down for three months.

But principally at stake is Henry Ford's place in economic history. Two years ago he saw the whole world, including bankers, capitulating to the Ford theory that high wages create prosperity. A year ago he was pleased to see that the U. S. business world still fought to maintain the theory of which he had become the Symbol. But last week he knew that the greatest subject in business today is whether or not wages must come down, that many financiers (historically his opponents) are paving the way for such a move. Henry Ford has given no real opinion on the subject lately. Last week, however, two smart Detroit writers for the Wall Street Journal, Philip Hanna and Harold Gronseth, put together what they knew of his policy, wrote it as if coming from a spokesman. They said that Mr. Ford stands firm against any reduction in wages and insists that the wagescale be maintained by firms manufacturing accessories and parts for his use. The New York Times gave the gist of these remarks as direct quotations from a "Ford spokesman."

Not so sure of their attitude have been other U. S. industrialists. Wage-cuts are increasing in momentum; men who previously said wages should be maintained now admit a reduction must eventually be made as a concession to Depression's demands. Most potent recent pronouncements are:

For High Wages:

James Augustine Farrell, U. S. Steel: "It is my deliberate judgment that a general reduction of wages in this country would set back the impending recovery by at least two years."

Walter Sherman Gifford, A. T. & T., approvingly: "In.no other cycle of this kind have wages ever been maintained as they have in this."

Alfred Pritchard Sloan Jr., General Motors, reluctantly: "If the present low level of commodity prices becomes permanent . . . then labor prices will have to be adjusted."

For Lower Wages:

Albert Henry Wiggin, Chase ("Biggest") Bank: "It is not true that high wages make prosperity. Instead, prosperity makes high wages. When wages are kept higher than the market situation justifies, employment and the buying power of labor fall off."

Melvin Alvah Traylor, First National of Chicago: "Employers must be as quick to recognize the real wage (based on purchasing power of the dollar) in a rising market as labor must be to recognize the real wage in a falling market."

George Evan Roberts, National City Bank: "Nobody likes to say anything about reduction of wages, but equilibrium in industry must be restored."

Despite the fact that most bankers deny they agitate for lower wages and insist that the cause of a reduction would be economic principle, not personal endeavor, the wage argument is roughly divided between bankers on one side and industrialists on the other. The argument of deflationists is that capital is taking its reduction in the form of impaired dividend payments, that the dollar buys more and Labor must take its loss. They also say a lowered wage-scale will cheapen manufactured goods, unearth new markets.

High-wagers believe a great purchasing power of Labor will speed recovery. Furthermore, many feel that for rich board-directors and high paid executives to cut Labor's wages is poor sportsmanship, especially where corporations have large surpluses. Others feel that an assault on wages is socially dangerous.

The situation at present is that there is a growing feeling that wage-cuts are inevitable, although the nonunionized steel industry and the highly unionized railroad industry will probably be the two which decide the course of events. Myron Charles Taylor of United States Steel Corp. has said that the entire matter now is "in the lap of the Gods." When he returns from Europe in June the fate of the U.S. wage scale will probably be known. If it is pressed downward, pessimists say that the nation will revert to the long gloom of 1893-96.

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