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