e
combined into an index number of profits. Possibly, in making up the
index number, the figures for each industry should be weighted according
to the number of wage earners employed in the industry. The resulting
weighted average would be a reliable record of the profits return
throughout industry at the particular time. The statistical method just
described, however, is meant rather in the nature of a suggestion than
as a declaration that it is the best method.

Suppose the index number of profits so calculated for a given period of
time proves to be, for example, 18 per cent.--6 per cent. higher than
the approved level of profits. On the basis of this profit showing, the
wages of all classes of wage earners could be increased for the
subsequent period, with some hope of effecting a transfer to the wage
earners of at least part of the product of industry represented by the 6
per cent. extra profit. That is to say, that whenever the index of
profits showed a profits return in excess of this conceived just return,
wages throughout industry should be increased to such an extent as is
calculated to bring the profits return down to the approved level.

Whenever the index of profits showed a profits return approximately
equal to or less than the approved level, no wage change should be
undertaken. For if the profits return was approximately equal to the
approved level, it can be concluded that the distributive result is
approximately that which is desired. And if the profits return is under
the approved level, it would probably be both impracticable and
inadvisable to reduce wages throughout the industry. For since no direct
control is exercised over profits, the falling of the profits return to
a point below the appointed mark of just and sound distribution, would
be but the outcome of industrial competition. While it is conceivable,
in particular cases, that the community would be better off if the
profits return was greater than the return thereby produced, the
contrary presumption is more likely to be correct under present
conditions. For it is both desirable and likely that the figure that
would be set as the mark of just and sound distribution will err on the
side of being higher than the profits return required to assure adequate
accumulation and investment.

6.--So much for the basis of the proposed measure. It is desirable to
examine briefly its chief advantages and disadvantages. But first note
must be taken