LOWER COSTS AND HIGHER WAGES 203 
as cheaply as he can. The higher he gets in earning power 
above the line of mere existence, the more he can afford to 
put into purchases returning a fair margin of profit to the 
seller. 
In other words, the employer who keeps wages low hurts 
his own industry and all others. . . . 
In view of these facts it seems to me rather futile to be 
talking of overproduction in the United States. It seems also 
that we are only going half way when employers devote all 
‘heir attention to the problems of reducing costs, as a means 
of increasing distribution. If an equal amount of brains and 
energy were assigned to the task of bringing up the wage 
levels in certain industries where they are now below the sav- 
Ing line, I believe those lines of industry now having the most 
trouble would be hard put to it to supply the demand; instead 
of proposing, in effect, that we abandon or destroy shoe and 
textile factories, their problem would be to meet the demand 
with existing equipment. . . . 
In my view, what we call the problem of overproduction is 
no such “problem” at all. What appears to be the economic 
problem of overproduction is really the psychological prob- 
lem of underconsumption, which is far less to be feared. In 
the long run, I believe, consumption will always catch up 
with production. 
And our demands only increase as the standards of living 
rise. We have more prosperity here than any other country 
secause our people need and demand more. But millions of 
them have yet to get beyond the existence line, and when we 
get them beyond that stage we shall not have to worry for the 
present over the problem of overproduction. Eventually that 
may be a grave problem, but it is not yet. When that time 
comes I expect to see employers within an industry banded 
together to maintain wages as the first step toward the insur- 
ance of continued prosperity, provided always that as we de- 
velop and improve this home market, we also protect it and 
keep it to ourselves with wise and proper tariff laws.