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 oversimplify
 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 constructively.
 The difficulties involved in the present situation
as in all depressions are not at all simple but on the contrary
 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 tightness
 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 superficially
 that wage inflation is the main source of the chaotic
conditions that prevail there. But a talk with any one well