effect, appeals may be taken through regular and recognized channels to the International Council.

(f) Investigation of the question of apprenticeship conditions; adoption of suitable methods of selection for apprenticeship, and the technical training of apprentices, learners and journeymen throughout the industry; the improvement of process, designs and standards of workmanship; to seek adequate representation on the control and management of all technical institutes; to consider and report upon all improvements of processes, machinery and organization, and appropriate questions relating to management and the examination of industrial experiments, with special reference to coöperation in carrying new ideas into effect, and full consideration of the employees' point of view in relation thereto. The better utilization of the practical knowledge and experience of employees, with provision for facilities for the full consideration and utilization of acceptable inventions and improvements designed by employers or employees, and for the adequate safeguarding of the right of the designer of such improvements.

(g) Determination of practicability of establishing wage adjustment boards throughout the industry.

(h) Consideration of any matters of general interest to the Trade, whether industrial, educational, economic, legislative or hygienic, may be taken up."

While the organization has been in existence but a few years, F. A. Silcox, Director of the Department of Industrial Relations of the United Typothetæ, in the article above referred to outlines the following as its achievements:

"1. The establishment of machinery for informal and frank discussion of problems in which both groups are vitally interested and the maintenance of an industrial good will and respect for one another's opinions which will lay the foundation for materially better industrial relations throughout the industry.

2. Adoption of cardinal principles to guide wage negotiations on the basis of joint investigation and recognition of the facts as to economic conditions in the industry.

3. Provisions looking toward the constructive handling of the apprenticeship problem-such as a standard percentage ratio which apprentices' wages should bear to those of journeymen for each year of apprenticeship; the establishment locally of joint apprenticeship committees authorized to enforce apprenticeship contract regulations; methods of making surveys to determine number of apprentices needed and the like.

4. A standard International Arbitration Agreement form recommended for all contractual negotiations.

5. The agreement through mutual legislative negotiations for the introduction on May 1, 1921, of the 44-hour week, in the union-employing sections of the industry.

6. Standard Cost of Living Readjustment Clause, recommended for local contracts.

7. Establishing joint committees to consider shop practices and the possibilities of greater standardization."

By far the most important effort to correlate the efforts of all factors in industry, including labor, to secure higher standards of integrity and efficiency is the program for the organization of the American Construction Council. Over two hundred trade associations producing materials for, or engaged in the construction industries have been invited to participate. Architects, engineers, contractors, material and equipment manufacturers and dealers, bond, insurance, and real estate interests, the construction departments of federal, state, and municipal governments, and public utilities are all expected to unite in this movement. The building trades department of the American Federation of Labor has been asked to become a member. A number of large associations are actively participating in the preliminary work of organization. The former Assistant Secretary of the Navy, Franklin D. Roosevelt, has been asked to accept the Presidency of the Council. The Council promises to be a great "town meeting" of the construction industries. The purposes of the Council has been stated by its organizers in the following language:

"The formation of a code of ethics acceptable to the industry and to the public:

"The gathering of adequate statistics so that the industry may operate intelligently. While there are partial statistics collected by many sources, they have not been brought together and interpreted in the light of all the facts:

"A reduction of the national shortage of building mechanics and the establishment of the necessary apprenticeship system:

"A national study of building codes and the working out of a program for carrying the recommendations into effect:

"A revision of the existing freight rates on construction materials: "A stabilization of the Construction Industry to mitigate the evils of seasonal employment and the trade migration of labor:

"The encouragement of local building shows and the adoption of a publicity program capable of giving the public an adequate conception of the magnitude and work of the Construction Industry."

The formation of this Council represents a great organized effort to apply the conference method, the method of common counsel in the betterment of conditions in the industry with due regard to the protection of the interests of the public. One of the most significant features of the Council, adopted after mature consideration by the leading business men of a number of industries, is the participation of the labor organizations in the Council for the consideration of the great common problems of the industry.

If our industrial councils give due consideration to the public interests, if they are organized and conducted in good faith, if they do not attempt to arbitrate or participate directly in controversies but are maintained as an agency for common counsel where representatives of capital, labor, and the public can meet for the development of constructive programs upon which there is a possibility of agreement, they ought to become great forces for progress in industry. Any plan worked out in conference is bound to get much farther than a plan forced by some factor of an industry upon another simply because that faction thinks it is strong enough to dominate the situation. The mere opportunity for joint conferences and joint considerations of pressing problems by producers of raw material, manufacturers, distributors, laborers and professional men can not fail to result in far greater progress than the present method of letting such problems take care of themselves. There ought to develop from such organizations practical plans for the stabilization of employment, for the trade education of the worker, for the joint accurate determination of facts as to living costs and the like, disputes concerning which often prevent a reasonable settlement of disputes. If such councils are conducted in a fair democratic manner they ought to reduce industrial disputes, lessen waste, stabilize industrial conditions and further the best interests of the public. The creation of such councils in American industry, to quote the language of the sponsors of the American Construction Council, would seem to be the "logical step in the evolution of our industrial system."

The legality of constructive efforts in labor matters will not be challenged.33

33 See letter, H. M. Daugherty, Attorney General, to Herbert Hoover, Secretary of Commerce, Feb. 8, 1922. Appendix J.

CHAPTER IX

COÖPERATIVE ADVERTISING

HUGE sums are spent annually for advertising in the United States. This science of organized mass salesmanship so rapidly growing in dignity and importance has become one of the great forces in American industry. The development of the factory, with its resulting division of labor and increasing use of machinery has tremendously enlarged the productive capacity of our industries and the volume of commodities produced has decreased prices as well as standardized values during the past half century.1 Standards of living have immeasurably improved as a result. The great improvements in methods of communication and transportation and the relinquishment of many of the tasks of the home to the factory have also greatly enlarged markets and increased competition. But while production has made such great strides in increased efficiency and in steadily lowering costs and prices, distribution has become more chaotic, and more expensive. With the demands of the public for added expensive services of many kinds, the commercial warfare resulting from the attempts of manufacturers to change or control the methods of distribution and the crowding of the field with unnecessary and inefficient distributors, the distributive branches of our industries instead of handling this greatly increased volume at lower costs, confront us with a steadily increasing comparative cost. Basically, of course, the problems of the two branches of industry are different. In manufacturing, the machine is dominant. In distribution the man and the human element is the controlling factor which does not permit either of standardization or decreasing costs when the cost of living is steadily rising.3

1 TIPPER, "The New Business," p. 114, 116.

2 CHERINGTON, "Advertising as a Business Force," pp. 30, 44; TIPPER, "The New Business," pp. 27, 92.

3 TIPPER, "The New Business," p. 133.

The greatest single agency making for improved distribution is advertising. Without it effective distribution of the products of commerce would be greatly hampered. The growing intelligence of our people combined with our great system of communication through magazines, newspapers and other media has furnished the means whereby the seller of goods can sell to the multitude through the printed word where the salesman can only reach the individual.

But there is a tendency for competitive advertising to become more and more wasteful when the advertising policy of "dominating the market" is followed. If adopted by all competitors in an industry, such a policy may result in forcing an added expense on the already excessive cost of distribution to the consequent detriment of society. There is, of course, no doubt that an individual manufacturer advertising his particular product may create and enlarge demand for it and that the greater volume of production secured may reduce his overhead and selling costs and even his manufacturing costs.*

The lowered cost per unit may more than recoup him for his advertising expenses permitting him to lower his prices to the benefit of the public. It is beyond doubt also that the cumulative effects of many individual advertising campaigns may create demand. Many industries are constantly coming into being whose first problem is the creation of new buying habits and wants. It is unquestionable too that advertising by half selling the product reduces selling costs by lessening the time and efforts of distributors and salesmen in making sales. But there is a law of diminishing returns on advertising. It is doubtful whether the use of competitive advertising by all concerns in an industry will be an economic saving to the industry unless all unnecessary wastes and duplications are avoided. It must be conceded that to the extent it supplants or increases the efficiency of more cumbersome and expensive methods of salesmanship, advertising justifies itself economically but when it fails to do this it becomes merely a new and costly competitive weapon of benefit to the individual seller, but of doubtful benefit to society. In reality wastes of advertising are chiefly the

4 CHERINGTON, "Advertising as a Business Force," p. 430.