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 postwar
 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 increased
 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 experience
 gained by industrial leaders during the war period.
The acceleration of industry by combination, mass production
 and cooperative effort, together with the development
of new methods, technological processes, and means of control
 of conditions and output, had afforded a background of
experience, which industrial management realized could be
most effectually used under normal conditions. The abundance
 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 experience
 that rates of wages and price levels were subordinate
 to the greater problem of reducing production costs
through greater capital investment and higher managerial
ability.