CONFLICT AND RECONSTRUCTION "2 
tunately, there are other factors in producing efficiency—one 
of the most important is that of good-will—and we cannot 
expect to maintain and develop this good-will in the long run 
if this process of wage readjustment is not tactfully handled. 
Now, I would suggest that there is a tendency to over- 
simplify all problems similar to the industrial cul-de-sac that 
we are facing in this country. An attempt is made to find a 
panacea and not infrequently the prescribing of a panacea 
involves making one particular group the scapegoat for all 
the ills with which we are troubled. It is so much easier to 
utter recriminations than to work out one’s problems con- 
structively. The difficulties involved in the present situation 
as in all depressions are not at all simple but on the con- 
trary exceedingly complex, and this time more than usual. 
There is much difference of opinion among the experts as to 
diagnosis and cure. The necessity for wage readjustment 
tho an important element is (it should be kept in mind) only 
one factor. An increase in the volume of trade will not be 
obtained by wage cuts alone. (Tho almost unnecessary to 
an audience such as this let me remind you of the many 
factors involved.) The European chaos, the continued tight- 
ness of money, high interest rates, the psychology of the 
consumer and of business men generally, each one plays the 
appropriate role. It is a rash individual indeed who would 
care to be dogmatic at such a time. There are many vicious 
circles that are troublesome in the situation. In many cases, 
as has been shown, the decline in wages has lagged behind 
the decline in the cost of living. In other cases it is difficult 
to demonstrate to labor the reasonableness of wage cuts until 
retail prices come down more in line with wholesale prices. 
To illustrate the complexity of the problems involved in 
different industries, let us take as an example the trade in 
which we have seemingly the most flagrant illustration of 
wage inflation. In the building trade it would appear super- 
ficially that wage inflation is the main source of the chaotic 
conditions that prevail there. But a talk with any one well