ingly low. Manufacturing was in its infancy. The young nation was for the most part agricultural and, though severed from the mother-country politically, was still economically dependent upon her for manufactured goods. Then came the protective tariff of 1816, and the "American system" of Henry Clay, aiming to turn a larger proportion of the population away from agriculture to manufacturing in an effort to bring about a more favorable balance between agriculture and industry. From 1820 to 1860 the factory system became firmly established in the textile industry and was gradually becoming intrenched in other fields. Moreover, domestic manufacture in the field of the hand trades was rapidly increasing. While manufacturing was growing apace, the settlement of the West was progressing slowly. The revolution in agriculture had not yet come, and the obstacles imposed on rapid settlement by transportation difficulties and the purchase of land were considerable. Such transportation improvements as the period witnessed, notably the Erie Canal, served to cheapen greatly the cost of transportation from land already settled, though to a considerable extent these developments served to hasten the tide of immigration to new lands.

Thus from 1820 to 1920 (excepting the sharp break in 185962), the purchasing power of farm products climbed upward with greater or less rapidity, and this remarkable fact was witnessed in a century which saw a phenomenal development of agriculture both extensive and intensive. This rise in the purchasing power of farm products bears testimony to the still greater development of manufacturing in Europe and America. The agricultural development probably outran the industrial in the United States. But when we consider the world-market, it is clear that manufacturing outran agricultural production.

Table II shows the price movements of farm products, cloth and clothing, and all commodities by decades. It indicates that agriculture has run far behind manufacturing in the advance in the arts of economical production. Technical progress in the textile and clothing industry has been particularly marked.

Nor were the terrific price upheavals of the century able to modify materially this upward trend in the purchasing power of

quarter of 1911. Notice of the action was sent to every printer in Chicago. The Club could not enforce the use of this rate upon its members or the industry in general, but as part of the process of education in proper pricing the action was useful.23

In addition to its work on costs, the Club attacked other problems, through committees on trade relations, insurance, legislation, estimating, and credits. Special groups with common interests organized separately under the auspices of the Club to study their cost problems, and in some cases adopted price lists and trade customs. In several outlying districts job printers organized groups to consider their local problems. The work of the Club was more far-reaching and effective than had been true of any of the earlier organizations.

Nevertheless, division of the industry prevented the most effective educational work. In addition to certain specialized trade groups, there were three main organizations of employers: the non-union Chicago Typothetae; a group of union plants organized in 1909 for collective bargaining; and the Ben Franklin Club with its large membership among small- and medium-sized plants. Discussion was under way for five years before it was possible to agree upon a basis of organization to protect the interests of each group and provide for co-operation in a single organization with a reasonable dues rate. In 1915, however, the old organizations were replaced by the Franklin-Typothetae of Chicago. The open shop and closed shop printers had separate autonomous divisions for full control over their special problems. While controversial labor matters were thus relegated to the groups interested, to be kept out of the main organization, on matters of general interest all could co-operate.

In the prosperous years from 1916 to 1920 the hopes of those who established the Franklin-Typothetae were largely realized. While co-operation was promoted by increasing costs, prices, and profits, membership rose to 500 by 1920. A broad educational program was carried on. Cost work was the basis of activities, following the methods of the Ben Franklin Club. Cost systems were installed, composite statements of hour costs issued, and

"Inland Printer, May, 1911, p. 268; July, 1911, p. 594.

cost and estimating classes organized. Nevertheless, even at the time of greatest organization, not more than 250 standard cost systems were in operation. As before, a broader educational campaign to reach printers without cost systems was needed as well as cost-finding education. Frequent discussions of competition and price-cutting occurred, in which every effort was made to discourage price competition. After each wage increase notices were sent out suggesting the price increase needed to cover the greater costs. Special groups, organized to consider their problems, in some cases adopted minimum scales of prices. From 1919 to 1921, the Franklin-Typothetae itself issued lists of recommended selling prices for standard operations, based on average hour costs. No penalties were exacted for violations, but with the aid of prosperity and the active organization the lists were helpful in standardizing prices. In 1921, however, because of the complaint of the Federal Trade Commission against the United Typothetae of America, it was decided to publish only average hour costs.24

Other types of activities gave service to members during these years. Work on credits and collections, a bookkeeping service, an appraisal service, and the adjustment of problems in the relations of printers to the supply-houses, all were useful. In the meantime the two labor divisions carried on their activities with a minimum of friction. It appeared after five years' experience that a satisfactory way had been found to secure general support for educational work on management problems in an industry divided by labor policy into two opposing camps.

The test of the difficult years beginning in 1921, however, proved too great for this structure. The services of the association to its members were not so vital but that in depression the need for financial retrenchments brought many resignations. In addition, a situation strained by depression, overequipment, and

Minutes, Franklin-Typothetae of Chicago (1915-1921). The Federal Trade Commission complaint in 1919 was directed chiefly against the publication of the U. T. A. Standard Guide, or price list, and in the fall of 1923 a cease and desist order was issued. The United Typothetae of America, however, had discontinued its publication of prices in 1922. The publication of average hour costs was not affected by the order of the Commission, and was continued (Typothetae Bulletin, August 11, 1024, p. 195).

intense competition was complicated by serious labor difficulties in 1921 and 1922, which accentuated the divergent interests of various groups of proprietors. Friction among employers over labor questions, growth of the open shop, competitive advertising on the labor issue, ill-will and retaliation by the use of the cutprice weapon, all led to resignations, financial difficulties, and the final disbanding of the Typothetae early in 1924. The inability of divergent groups to reconcile their opposing interests and co-operate on a common program disrupted the work of years of building an educational program in the Chicago industry. In a setting of overequipment, distrust, and antagonism, and lack of the restraining influence of a trade association, competition then descended to cutthroat levels. A period of disorganization with an intolerable competitive situation followed.

The price of disorganization was so great that in only a few months efforts were begun to rebuild a Chicago organization. In December, 1924, the Master Printers' Federation was started with a nucleus of forty-one members. By 1929 the resentments of five years earlier had considerably faded. The Federation had progressed in the difficult task of re-establishing an educational program, and included more than 150 members, a good representation of the larger plants, and some of the smaller shops.

The greater interest of the employer in the problems of his immediate competitive group than in those of the industry as a whole was recognized in making autonomous groups the basis of organization of the Federation. Three separate groups provide for the large, the medium, and the small printers, while specialized groups such as trade compositors and paper rulers have their affiliated organizations. The groups promote cost-finding in the plants of members and issue statements of average hour costs, adopt trade customs, and act upon any other special problems. The basic costwork is carried on by the Federation staff with the interests of each group in mind.

The Master Printers' Federation, like other associations in Chicago, found it an impossible ideal that every printer should know his own costs. Other education was needed if prices were to be stabilized. Accordingly, a Cost and Production Record

help an unemployed man to buy commodities. It is the widespread unemployment that causes low purchasing power despite high real wage rates in the depression period. Now labor is no doubt justified from a long-run point of view in resisting wage reductions at all costs, but it cannot be claimed, as we see it, that these high wage rates are favorable to farmers. Labor and the raw materials of farms constitute the chief prime costs of industry. They share in the value of the product according to the relative supply of each. If labor curtails its supply (chooses to remain unemployed rather than accept lower wages) while farmers throw the full supply of their commodity on the market, the share that goes to the farmer will be inordinately low. Thus we find that in each period of heavily falling prices, the purchasing power of wages rises, while the purchasing power of farm products falls.

Let us examine the various periods of falling general prices in detail. The first period of rapidly falling prices (beginning with 1814) does not run quite true to form. The purchasing power of farm products at first rose rapidly, and did not begin to fall until 1817. But it will be remembered that immediately upon the close of the War of 1812 and the Napoleonic Wars in Europe, England unloaded huge quantities of manufactured goods in the United States, causing a precipitate decline in the prices of these commodities. Hence for the time being the purchasing-power ratio was favorable to farm products. After 1817, when general prices again fell precipitately, this factor had ceased to operate, and then the decline in the purchasing power of farm products, which normally would be expected in a period when general prices were heavily falling, came into evidence.

In the next period (1839) the purchasing power of farm products behaved normally. The curve started downward after 1838, one year before the fall in general prices. This is the normal relationship. Prices of producers' goods antedate in their movements the prices of consumers' goods, and raw materials antedate finished products. Farm products fall in the class of raw materials on the one hand and producers' goods on the other. The price movements of these commodities therefore precede the general price movement. The prices of producers' goods and of raw materials