CHAPTER II 
PRE-WAR PRINCIPLES AND METHODS 
Prior to the World War, thought and practise relative 
to the determination of wages in the United States were 
entirely different from the situation at the present time. 
Small progress had been made beyond the century-old 
“Iron Law of Wages” as originally worked out by the 
English classical economists. With the exception of the 
general theory of “Supply and Demand,” there were in 
practise no definite principles or accepted standards for 
the determination of wage rates. Labor, in relation to its 
compensation, in other words, was generally—altho per- 
haps unconsciously—viewed as a commodity whose value 
was determined by the interplay of the forces of supply 
and demand. Altho such a conception as to fixing the 
price of labor would not always be acknowledged or openly 
avowed, nevertheless, as a matter of practise, it was a rule 
subconsciously present and usually followed. Labor’s 
value was generally looked upon and determined in the 
same way as that of purely physical commodities, such as 
wheat, coal, iron, textiles and steel products. Very little 
attention, in a practical way, had been given prior to 1914 
to the human and ethical elements in the wage problem. 
TrHE So-CaLLED “LAW” oF SupPLY AND DEMAND 
From this view-point, the rate of pay to industrial 
workers at any time was to be determined by placing the 
supply of labor over against the demand for labor. The 
going price for labor was the result. In the event of any 
dislocation to or collapse in industry, the wage-earners 
were the residual sufferers. The evils arising from unre-