ental change).

It is conceivable that a policy of direct profits control for all
industry can be worked out, which would not penalize and discourage
productive capacity. But it would be an extraordinarily hard job and
would necessitate a detailed study of the facts of each particular
industry. No doubt a policy of direct profits control is to be strongly
advised in particular cases. As, for example, on the American railways
at present, where the rate-making power is in the hands of a public
body; or in the case of the English coal mines, where the question of
control is comparatively simple, and the occasion for control plain. But
as a policy for all industries it would involve, in my opinion, an
entirely impracticable amount of regulation, and it would be likely to
lessen the effectiveness of production and to lead to the wasteful
conduct of industry. Therefore, it must be concluded that some such
attempt to control profits indirectly as has been proposed--depending
upon the forces of competition, trade union activity, public opinion and
government regulation--is to be preferred.

There is another possible criticism of a theoretical sort. It may be
pointed out that it is proposed to increase wages on the basis of data
derived from the whole field of industry. And it may be argued,
therefore, that the increases undertaken by the reason of the showing of
that data may be considerably greater than particular industries could
stand, without an increase in the price of their products. On the other
hand, they may be considerably less than the increase required in other
industries to reduce the profits return to approximately the approved
level.

As to the first possibility, it is entirely conceivable. A wage movement
based upon the profits return from all industries and applied equally to
all groups of wage earners might cause price increases in particular
industries and possibly temporary dislocation and even some
unemployment. Such price changes and dislocations, however, are
constantly occurring in industry in the absence of any policy of wage
settlement, due to the effect of wage increases in one industry on wage
movements in other industries. There is little reason to believe that
the measure advocated will add considerably to the frequency of their
occurrence. It might in one respect serve to lessen the extent of such
disturbances. It might make less frequent the recurrence of wage
demands, originating in particula