[Letter] Feb.7,1887,Smith College [to F.H. Giddings]

Feb. 7, 1887, Smith College.

Dear Mr. Giddings,
 I agree with
you that #14 contains
the best of the argument. The
fact of a permanent fall of
cost of production due to
social changes gives to whatever
of profit is thereby secured more
of the character of an 'unearned
increment' than the fact of
fluctuations in selling price can
well give to profit secured
through them. Will the
opponents allege that this
source of profit is discounted?
Will they claim that competition
between producers (in spite of
combinations) forces them to
make the actual cost of
each lot of goods and its
actual selling price at the
time when it is expected to
reach the market the basis
of their calculations? Is there
anything to prevent competition
from doing this? What influence
draws a line at present
selling price or at past cost
price, as the basis of the
employer's calculations? Will
not competition naturally go
on and do its work until
the employer's profit from
all sources is encroached
upon and his demand for
labor curtailed by the contracting
of his business?
 I make these suggestions,
which may have occurred to you
merely as what might be
alleged by an opponent. As to
bankruptcies, do they help the
employer? Manufacturers lose
by failure of commission houses
and merchants. When manufac-
turers fail the loss falls on
creditors, i.e. loaners of capital,
sellers of raw material, and
operatives. If some kindly
arrangement gives the last a
preference over other creditors
their share of the loss may be
avoided; but deferred payments
are, in case of firms on
the verge of bankruptcy, inflicting
untold harm on wage earners.
Perhaps this gives them a
claim to insurance against
such loss. It is one of the
forms of risk sharing by wage
earners. In so far, however,
as loss by a manufacturer's
failure falls on other employees,
does it count in our favor?
This, again is suggested for
consideration. Is not Aldrich
( ) in saying profit-sharing
needs to be considered, theoretically,
as a universal arrangement?
Are not the probable facts all
against that? Is it not competent
for us to analyze the effects of
putting 1000 or 5000 firms
on a profit-sharing basis? This
would react on wages where the
old system prevailed. If I get
my paper on 'Profits' into shape
to send to you it will help a little
to explain my notion of a legitimate
business profit above wages of superintendence.
 I confess I am myself just a little chary of the
term measured increment as applied to the
regular and
honest profit
of business.
I would rather
prove the work
claim than
the claim
society to
any gain
of this
kind ( ) ( ).

         Yours Very Truly,
                 J. B. Clark