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164 to offer their opinion owing to the responsibility to do things which rests upon them. Confronted by the steady impoverishment of natural resources and the operation of the economic law of diminishing returns it devolves upon management, functioning through the engineering profession aided by scientists, to make such improvements leading to increased production and such elimination of wastes as to offset the increasing adversities of nature merely to hold our own; and to do more than offset them in order to improve the scale of living of the people. The engineers accept this responsibility, but in so doing they demand attention to their advice respecting fundamental economic matters, lest they be unduly hampered in the performance of the professional duties, which they acknowledge.

The welfare of any people depends upon production and saving, it being self-evident that people can live only by having goods and that there should be a surplus saved out of current production in order to provide for the needs of increasing population, especially in means for housing, for transportation and for fuel and clothing. Anything that tends to curtail production and saving is bound to react to the disadvantage of a people as a whole. Wages come out of production and from no other source.

Profits in business are not uneconomic or unsocial, being simply savings out of production. All of the capital in the world has been saved out of production. Wages can be paid only from the use of capital goods. Destruction of capital goods means also destruction of labor.

Previous to the war the American people found it necessary to save about 15 per cent of the national income in order to provide the railways, houses,