LOWER COSTS AND HIGHER WAGES 201

general increases in consumption and general purchasing
power. This expansion in the demand for commodities, it
was assumed, would in turn also make possible further
wage advances and prosperity, for the reason that the widening
 demand for and consumption of manufactured products
 would enable greater economies to be realized through
mass production.
Since the year 1923, therefore, American industry has
proceeded more and more upon these assumptions. Wagecuts
 as a means of heading off depressions have been discarded
 as a worn-out fallacy. Increases in wages have
been urged as a substitute.

PurcHASING PowER or CoNsuMPTION URGED AS THE
DoMINANT FACTOR IN PROGRESS

So far as wage rates are concerned, the result of the
adoption of this new view of progress has been indeed surprizing.
 The consuming power of the people has increased
by leaps and bounds. Production has not only been guided
at a comparatively even pace with advances in consumption,
 but has also been made to yield an increasing quantity
of commodities at a lower level of prices. Standards of
living of industrial employees throughout the country have
risen to heights never before attained.
What had been accomplished in this direction prior to
1923, and never realized, has been cited as an earnest of the
still greater achievements possible. It has repeatedly been
pointed out on all sides that there has been a great growth
in our power to consume, due to greater productivity; that
the increased use of what were formerly regarded as luxuries
 has not been an extravagance or any retrenchment
upon savings, but “the product of better organized effort”
and a condition of continued prosperity. By way of illustration
 the Secretary of Labor, Mr. James J]. Davis. has