ich are determined by
world competition. This case is complex and not to be analyzed by a
general rule. A few observations may be made. It is conceivable that a
situation should arise in which a policy of wage reduction is expedient
because the export industries are very gravely threatened by foreign
competition. In such a situation it may be argued that any genuine
necessity for a reduction of wages would be manifested by the pressure
of the banking system, because of the outflow of gold that would occur
consequent to a great falling off of exports. But, as we have seen
during the war, such a banking situation may be avoided for a number of
years by such devices as foreign loans, and the industries in question
would decline in the meantime. On the other hand, any policy of general
wage reduction could only be undertaken with caution. Situations of the
sort described tend to call out the reserve energies of a country. They
are always present to a greater or less extent.

So much then in answer to the first question--as to whether there was
any reason for wage reduction during periods of declining prices. The
second question then presents itself--on what basis should such
reductions as are advocated be arranged? On which subject the
conclusions reached in the course of discussion of wage adjustment to
upward price movement are applicable. These conclusions will be recalled
at various points further on in the book.

FOOTNOTES:

[58] Nor has it for that matter been applied with
consistency in Great Britain. See the Minority Report of the
War Cabinet Committee on "Women's Wages," 1918, page 262.

[59] Webb, "Industrial Democracy," Doctrine of the Vested
Interests, pages 562-572, 595.

[60] The data published in the monthly _U. S. Labor
Bulletin_ covers most of the articles which are at all
important in the wage earners' budget. The collection of
such data, however, has remained spasmodic up to the
present. See the article by H. S. Hanna in the October,
1919, issue of the Monthly Review of the U. S. Department of
Labor. The Sumner Committee Report on the "Cost of Living in
Great Britain" 1917 (CD 8980), covered food, rent, clothing,
fares, fuel and light, insurance, and sundries. Data was
collected for skilled, semi-skilled, and unskilled labor.

[61] See pages 89-91, Chapter V.

[62] See Chapter XII.

[63] "While these two series (i.e., of wholesale and retail
food prices) agree closely in the general trend of