How such a policy reacts on the wage question, and hence on the efficiency of employees, is shown by an instance which lately fell under <p 155> my notice. By a long and persistent campaign of education and demonstration, a small ``quality'' house forced a rival ten times as large to adopt the careful processes on which this quality depended. Adopting the small man's methods, the competitor, instead of training its own operatives to the new standards, sought to hire the other man's skilled workers. The premium offered was a thirty per cent advance. It was refused, however. The tempted mechanics, analyzing the rival's proposal, hit on the disloyalty contemplated towards its own employees. They were to be discharged or transferred to other departments to make room for the new men. Measuring this cold-blooded policy against the consideration, the unfailing effort of their old employer to ``take care of them'' in bad seasons, the workers decided to stick to the smaller company and refuse the advance. _Next to continuous employment, among methods of increasing the value of wages, is the policy of making promotions from the ranks_. This practice seems to be commonly ac- <p 156> cepted as fruitful, although many firms believe it impossible of application in filling some of the higher as well as some of the more technical positions. Where the system is applicable, it acts as a powerful stimulus to the men by adding to their present wages the promise or possibility of better positions and higher pay in the future. It gives assurance of promotion for faithful service much greater than in houses which fill the upper positions from outside sources on the assumption that they thus get ``new blood'' into the business. The men secured from outside may be more skilled or more productive of immediate results than any available in the house organization. By their importation, however, the wages of all the men aspiring to the position have been cheapened. Nor does the evil stop there. _The assumption is naturally drawn that the same practice is likely to be followed in filling other vacancies. The stimulus to initiative and activity is thus weakened for men in every grade and their wages are shrunk below par_. <p 157> The importance which some successful employers attach to this principle of promotion from the ranks is well illustrated by an incident which recently occurred in a large manufacturing establishment organized on a one-man basis. During the president's absence it was decided to open up a new zone of trade for a new product. No one in the organization knew the product and the field, so a new man was put in charge. The work progressed surprisingly well; the enterprise was in every way successful.