The practice is fair but not right, since it often results in getting both supplies and work for less than cost.

One of the fundamental propositions of the new competition is that, in so far as human sagacity can prevent, no man shall be permitted to sell labor or material below

cost.

One of the first steps of the new economy will be to devise ways and means for ascertaining costs of both labor and goods, and men who buy to sell either will be taught to know their costs and make their prices accordingly.

If it is a fundamentally sound proposition that no man should be permitted to sell below cost, then it follows that the Government-the community-of all parties should be the last to adopt a system of buying and contracting that is a direct inducement to men in need of work to bid below cost.

The Government cannot afford to appropriate either labor or property by paying less than it costs.

The Government method is fair in comparison with the vicious practices of most private buyers, but it is not right because it encourages a man to make a losing contract and then holds him to it.

Between the young millionaire who boasted that the tiled roof of his house cost the contractor three thousand dollars more than was paid for it and the Government who compels a poor devil of a contractor to finish a job that costs him three thousand dollars more than he gets for it, there is not the slightest difference both get and enjoy something that belongs to some one else.

Under existing conditions it is not uncommon to hear and see in print, boasts by Government, State and city officials how they closed contracts so low the contractors lost money, and the public is so blind to what is right in buying that it unwittingly applauds such bargains.

In fact, the attitude of the public is that if any man

makes money on a Government contract "there must be something wrong somewhere."

VI

All this must change. It should be the duty of the Government-federal, State, municipal-of every public body-to make sure of two things in all its purchases: I. Good work and good material, at

2. Fair prices.

Inspection of prices is just as important as inspection of work and material. As it is, the Government inspects to make sure work and material are up to standard; it makes no inspection to see that prices are up to standard; on the contrary, the only effort is to depress prices, which is as rational as a like effort to depress quality of work and material.

It is to the credit of many private buyers that they refuse to buy below cost, that they will not permit contractors to do work at less than cost-this is true of far more men than the public knows. No right-minded man cares to accept a present from a man he does not know and who cannot afford to give it; to accept work or material at less than cost amounts to the same thing-only

worse.

That contractors try to and do get even on public work by poor work, "extras" and other fraudulent devices, is so notorious it is expected; every public contract has its shadow of evasion and dishonesty. This is so true that many men and companies who make a business of Government contracts have a doubtful reputation; there is always the tacit assumption that their contracts are due to a "pull" and their profits, despite low bids, depend upon practices that will not bear the light.

It goes without saying no public commission can reform

this system by arbitrarily rejecting bids it thinks below cost and letting work to the bidder whose bid it thinks is fair; that would lead to conditions still worse. It may even be true that all the Government can do is accept the lowest bid, but it should not accept any offer that appears to be below cost without calling the attention of the bidder to the figures and securing from him the assurance-with, if necessary, some demonstration—that he can furnish the goods or do the work at the price and make money.

If he cannot give the assurance, or make the demonstration, his offer should be rejected.

And it should be open to every higher bidder to challenge the lowest bidder's ability to do the work required at the price and get out even.

The practical difficulties in the way of the Government's taking the initiative are obvious, but the work can be done, and done effectually, by open price associations, if the law would permit. Such associations would have no trouble whatsoever in checking up bids and disclosing those that did not cover cost plus a fair profit.

228

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True, of late years towns and smaller cities are making systematic efforts to diversify their industries so that they will not be wholly dependent upon the prosperity of some one large enterprise. Still there are cities and towns everywhere which depend more or less upon one or more large companies engaged in the same line; if they shut down the entire community feels the loss, if there is a strike all the people suffer.

The cotton and the woolen, and the boot and shoe makng towns of New England are illustrations; as are also the "agon making, implement making, automobile making wns farther west, and the mining towns of the far west. It is bad enough when these industries that are growg shut down temporarily, but the outlook is worse when is apparent to all interested that an industry is slowly dispearing.

II

It is needless to say that a given industry may be a growone, and yet factories in particular localities be in a ition, either with relation to the supply of raw material sale of outputs, where they cannot go on; this happens stantly; the condition is akin to that of a store that has lose or move on account of change in neighborhood, effective competition of establishments more centrally ed. This condition may be helped by the expert; by cooperation life may be prolonged or death rendered

'ess.

But where the entire industry is a vanishing one the sitn is difficult indeed.

iven a group of men-say ten-representing all the anies engaged in a particular industry, careful inquiry isclose one of the following conditions: