A few weeks ago the manager of a large department store in San Francisco was kind enough to show me his record of departmental profits for a number of months. The fluctuation in relative profits of different departments month by month was apparent, especially the fact that after a certain month several departments which had previously earned high profits became relatively much less profitable. I asked the manager to explain, and he did in this way: At the time when the change occurred a new policy had been inaugurated by which employment of help had been centralized and standardized for the whole concern. As a result, when certain departments which had been decidedly sub-standard with respect to wages were brought up to standard, they were unable to earn anything like the profits which they had previously shown. Without going into the question of the connection between high wages and profits, of which this incident in my opinion was an exception, it was clear to the manager as to me that the increase in wages in these particular departments had been accompanied by an immediate loss in profits. Furthermore, the manager was unable to determine, from figures available before and after the change, that this loss had been directly compensated by gains in other departments. In order to get his viewpoint concerning the change at issue, I asked him two questions: (1) Why was he willing to make a change of such a fundamental character without being able to ascertain in advance whether or not it would be profitable? (2) In the absence of facts that could be incorporated in the accounts, was it his belief that the change would in time be profitable, and if so, how did he reach his conclusion? His response to the first question revealed to me an intensely natural but nevertheless complex motive. He said, substantially, that he was confident that standardized employment was the only acceptable policy, from the standpoint of the general manager. Given the necessity of standardizing, it was necessary for the general reputation of the business to standardize upward rather than downward. He wanted his business to be regarded as one in which the best standards of employments obtained. Furthermore, he added, "California will soon have a minimum wage law, and I want this business to be well in advance of any wage standards which may be imposed by law."