4 
INDUSTRIAL REVOLUTION AND WAGES 
sities and comforts of life. Prosperity, as a consequence, 
was contingent upon further improving these living stand- 
ards, as labor would consume more if it could produce 
more and receive higher compensation. The Secretary of 
Commerce and those of kindred views, therefore, advo- 
cated the elimination of waste from industry, the stand- 
ardization of output, the increased use of machines to 
extend mass production methods and to reduce labor and 
other costs of production. Under these conditions wage 
rates might be indeterminately increased, labor and other 
costs, as well as prices to consumers, reduced, and at the 
same time generous margins of profit maintained. 
As a result of the influence of these revolutionary sug- 
gestions, the present era of unprecedented prosperity was 
begun and developed. Industrial leaders and financiers, 
as well as heads of labor organizations, accepted the new 
enlightened and far-seeing attitude as to industrial policy. 
The new proposals were enthusiastically applied. It was 
also clearly evident, because of the impoverished condition 
of European countries at the time, that the United States 
could not hope to sell its surplus products abroad in suf- 
ficient quantities to absorb the actual or potential output 
of its mills and factories. It was, therefore, realized that 
reliance must be placed on the domestic market, and that 
to expand domestic demand, wages or purchasing power 
must be increased. 
Old wages, theories, and standards were, therefore, 
scrapped along with obsolete machinery and methods. The 
productivity principle of wage determination became dom- 
inant. Money rates of pay and real wages within a few 
years advanced to the highest point in the country’s history. 
In the pressure, however, of the extraordinary industrial 
development which occurred, no general, practical method 
was worked out for guaranteeing to labor a definite share