THE NEW INDUSTRIAL REVOLUTION 229 
which industrial profits have been maintained during a period 
of falling prices for nonagricultural products and of fixed or 
advancing wage rates. Dr. David Friday, in discussing this 
situation, has pointed out that since 1923 industrial profits 
have increased from 5.6 billion dollars in 1923 to 6 billion in 
1925, 6.6 billion in 1926, and about 6 billion in 1927, while the 
index of prices of nonagricultural commodities in the Bureau 
of Labor Statistics index declined from a yearly average of 
[58 in 1925 and 154 in 1926, and to a low point for the post- 
war period of 144 in the summer of 1927. In the meantime 
average wages earned per worker have increased. It appears 
that during the past five years, corporations, by means of in- 
creased productivity and the exercise of other economies, 
have been able to increase output, reduce prices, mainlain 
wages, and expand drofits. 
The fundamental cause of the new order in industry was 
undoubtedly, as pointed out by Mr. Thomas, the experi- 
ence gained by industrial leaders during the war period. 
The acceleration of industry by combination, mass produc- 
tion and cooperative effort, together with the development 
of new methods, technological processes, and means of con- 
trol of conditions and output, had afforded a background of 
experience, which industrial management realized could be 
most effectually used under normal conditions. The abun- 
dance of capital seeking investment at reasonable rates in 
the post-war period also made it possible to put wartime 
experience into practise. The change in attitude toward 
rates of pay of industrial workers and prices to consumers, 
or the post-war phenomenon of falling prices, higher 
wages and increasing profits, also was born of the experi- 
ence that rates of wages and price levels were subordi- 
nate to the greater problem of reducing production costs 
through greater capital investment and higher managerial 
ability.