CUTTING THE BONUS.

Auckland Star, Volume LIII, Issue 98, 27 April 1922, Page 7

CUTTING THE BONUS.

THE COURT'S SUGGESTION. \ EMPLOYERS STATE THEIR CASE. A WORLD-WIDE NEED. ' (By Telegraph.—Press Association.) ] WELLINGTON, Wednesday. ; During the discussion before the ' Arbitration Court of the pronouncement of the Court in regard to the cost of living bonus, Mr. T. O. Bishop, employers' representative, in urging a reduction of 13/ a week, covering the whole bonus granted, summarised his arguments as follows:— 1. There is undoubtedly a most urgent need to-day for a readjustment of wages and prices. The need is not restricted to New Zealand but is world-wide, and ' we cannot blind ourselves to the experience of other countries. Apart from ' the effect we most feel from the world's situation the position of primary industries to-day is such as to call for an immediate remedy, and the reaction upon our secondary industries hae already become most serious. 2. It has been abundantly proved that we can no longer adjust "wages to the cost of living regardless of the economic situation, and Parliament has recognised this fact by making it mandatory that in any adjustment of wages the economic and financial conditions shall be given due consideration. 3. The worker is not being asked to bear an undue share of the sacrifice. The employers have been losing for the last year, are losing to-day, and are prepared to continue to lose by passing on to the public the benefit of"wage reductions, if by so doing they arc re-estab-lishing their business and increasing the volume of their trade. 4. The effect of an adequate wage reduction will be increased employment and an increase in the total wages bill and therefore the purchasing power. An Inadequate reduction will be a prolongation of the period of half-time employment, a continuation of stagnation regarding all development work, and the maintenance of high prices. 'FACING THE .SITUATION. 5. Ultimately the situation will bring its own cure. Competition from foreign countries will force down our prices for manufactured goods. The prices of our primary products must fall lower than they are today. The result will be unemployment to euch an extent that the average wages of the community will be reduced perforce and the Arbitration system will fail. Iβ it not better and wiser to face the situation boldly today, undergo the operation and suffer the initial pain, followed ( by a speedy recovery rather than wait for the sickness to develop still further and then suffer a very long drawn out convalescence? 6. New Zealand workers are the best off in the world to-day, and by making «. brief sacrifice they can maintain that position. Is the Court going to call Upon them to face the situation or is it going to permit them to drift into the Conditions prevailing in other countries? What is the position in Australia to* di».y? Copper mines idle in nearly all States, Brpken Hill miners practically sill idle, and iron and steel works at Lithgow and- Newcastle closed down. Hear what the senior British trade commissioner for Australia says on the subject: "The most serious feature in the economic situation is the refusal of the leaders of organised labour to permit any wage reductions to meet the situation caused by the lowering of the cost of production in other countries. The result ie creeping paralysis in the manufacturing industries, "which, although protected by a high tariff, are subject to overseas competition/ That is only one aspect of the case, and to adapt it to New Zealand we must go further and •ay that we cannot protect secondary industries by a high "tariff, because if we do we are only increasing the burden of taxation on our primary producers. REAL AXD NOMINAL WAGES. 7. I wish also to emphasise this point most strongly—if the- Court makes a substantial general order it affects everyone alike at the same moment, and the producers would reap the maximum benefit in return; but if the Court makes quite an inadequate general order the effect will be that the workers in some trades will be fully employed and will enjoy a continuance of high wages. ■while the workers in otlyer trades will receive high nominal wages, but small actual wages, because they will have Only part-time employment. The difficulties of the poorly-paid man will be Aggravated because he will have tp pay high prices for the products of his bet-ter-paid fellow-worker. To put a concrete caee, the workers in the iron trade ■will continue to work half-time, as they are doing to-day, and their cost of living •will be kept up because in the woollen tr-ade, owing to the absence of competition, prices and wages have not been reduced. 8. There are two ways in which the present situation may be faced, and only two. One is, ignoring all the necessities of the case and the lessons that others have learned by bitter experience, to endeavour to maintain a false standard of wages and prices, and ac a result to suffer creeping paralysis in all our industries. The otfier is to grntp our nettle, to join hands in the necessary initial sacrifice, and so get back to a sound economical basis in our businesses and hasten the. return to pros : perity. The question for this Court to decide is -which of the two courses we are to adopt. MS. HUNT'S EVIDENCE. PRODUCE PRICES. PRE-WAR AND PRESENT. (By Telegraph. —Own Correspondent.) WELLINGTON, this day. Very interesting evidence in support of the employers' ease was given by >lr. W D. Hunt, managing director ol tne Wright. Stephenson Company. He pointed out that the basis of New Zealand prosperity and credit is its export of agricultural and pastoral products. These products have to pay for all our imports and also the interest and Making fund upon all our foreign debt. Their value and relative value be continually borne in mind in considering the affairs of the country, and the whole community must in the end adjust themselves to these values. At some length he reviewed the prices received by the farmer this season and in 1914. showing clearly the difference in the net return on staple lines. The average price obtained per bale for wool in New Zealand this year has been £8 13/4, and the ne* return to the farmer this season has been about £6 18/6 per bale less than in 1914, not much more then half.

The average price this year over all { delivered at the freezing works for 1 woolly lambs has been about 6Jd per H>, j although present average price is about < 'id. The average price up to this date . "I 1914 was about s|d. The i average price over all at freezing < works for wethers this season . i has been about 3|d per lb, although j present average price is about 4id. The j average price up to this date in 1914 ' was about 3Jd per lb. For ewes the !' average price over all at works this season has been about 2Ad per lb, but present average price is about 3Jd. The average price up to this date in 19H was 3|d. Prices of beef on an average this year in New Zealand are about 10/ per 1001b below 1914 values. , In considering these values for lamb, , mutton and beef. Mr. Hunt pointed out j that it now costs about 40 per cent. , more to rail stock to freezing works j, than it did in 1914, and this comes off |, the price to the farmer. j] The analysis of , the position of the |, dairy produce was as follows:—Cheese - is now worth about 7d per lb f.o.b It ] costs no ; w 2d to 2Jd per lb to manufac- j ' ture cheese and put it f.0.b., leaving j the farmer rather less than od. On a ■; butterfat basis this works out at about ; 12* d per lb. In 1914 cheese .was worth , about 6Jd per lb f.o.b. It cost ttien id I to Id per lb to manufacture and put ; f.n.'b.. leaving the farmer 5Jd, which is the equivalent of 1/l-f per lb for butter- i fat. Butter this season has averaged i about 1/2 per lb f.0.b., although to- , day's value is about 1/4. It now costs 2*d to 2|d per lb to manufacture butter i and put it f.0.b., which leaves the farmer, say, Hid for his butter. This is ' the equivalent of about 13Jd per lb for ' butterfat. In 1914 butter was worth about lid per lb f.o.b. and it cost Id per •: lb to manufacture it and put it f.o.b. This left the farmer 10d per lb, -which, was equal to 1/ per lb for butterfat. i> The skim milk left over, however, could j be turned to greater profit in 1914 than to-day. In comparing the grain market. Mr. Hunt stated that an average sample of wheat at a railway station with, say. a. 50 mile railage, is worth to-day S/4 per bushel, and in 1914 about 4/. Oats are worth to-day 2/6 per bushel, md in 1914 1/7. but this was muck below the average pre-war price. Barley to-day w worth 3/6 per bushel and in 1914 3/6. Linseed to-day £12 per ton, and the samp price in 1914. Tt costs 5d to 6d per bushel more to harvest and thresh grain to-day than it did in 1914. | Briefly the conclusions drawn by Mr. I Hunt are that the average price farmers' are receiving for their products arej below pre-war prices. In addition to| this, farmers are faced with increased taxation, higher rate? of interest, and higher costs for almost every service rendered to them end for % almost everything they buy. The purchasing power' of farm products in goods and services j i.5 probably as low now as ever it has been in thie history of the Dominion. Thej result of reduced income and increased r costs ie that many farmers arc failing | to pay their way and a large number will be quite.unable to carry on. Farmers as a hody were never working i harder, thinking harder or were more economical in their expenditure than they are to-day, but in spite of this they are seeing their capital and savmjs melting away in the reduced value of everything they posaese. The values of the bulk of New Zealand farm products aro fixed by export values which are based on world values. Little cart be done in this country to control-these, but while we cannot control them we must adjnet ourselves to them. The crux of 'the trade situation to-day is the disproportionate relations between what farmera have to sell and the goods and servicee they have to buy. The value of our farm products ie the standard by which the conditions of this country compel us to measure all other values. Big borrowings from abroad may temporarily relieve the position m the citie-s, but the standard must react to the world's price for produce. If the fact that borrowed money is being epent is used to keep wages at a level lhat pastoral and agricultural products cannot support, it will mean that the development and improvement of country lands cannot in the meantime continue; the maintenance of these lands in their present condition may in fact be jeopardised. This will mean that pastoral and agricultural production will not increase and may even diminish. If this takes place, then, when the borrowed money is epent, we will not be prepared to meet interest on it. If a wage higher than economic value is insisted on by any eection of workers it can only be paid at the expense of some other section of workers, and in the end will re-act on all workers. TO-DAY'S PROCEEDINGS. THE WAXGANUI PRONOUNCEMENT. PURELY STATISTICAL. (By Telegraph.—Press Association.) WELLINGTON, this d»y. When the Arbitration Court opened to-day Mr. Frazer said he wished to clear up a misunderstanding in regard to the Court's Wanganui pronouncement. That pronouncement was not a tentative proposal that wages should be reduced by 5/ .per week. The Court's statement ■was purely a statistical one, and not in any sense a statement of whether or to what extent wages ehould be reduced. The employers' evidence was continued. Arthur Seed (secretary of the Dominion Federated Saw-millers' Association). read a statement ehowing that there had been a closing down of mills and shortening of hands and a general reduction of 2/ per hundred feet in prices at the mill. Labour costs represented TO to 75 per cent, of the total production ceete. Mr. Beaumont Mapplebeck (representing boot manufacturers), gave evidence as to" the unparallelled prosperity of the boot trade between 1915 and 1918. Witness spoke of the effect of heavy smoortations in 1920. causing Xew Zealand factories, when the slump came, to work half-time. England (where wages were £2 18/, compared with £4 11/8 here, and where, workers- put in four extra hours) wee Xew Zealand's greatest competitor. Manufacturers had had to sell below cost as much as 50 per cent. in some cases. The latest figures showed that in March last, tliere were emoloyed 178 le=s workers than in March, 1920. •Mr. McCombs . congratulated Mr. Biehop on his choice of the engineering trade as the principal basis from which to fight his ease, and for avoidance of woollen and other industries which are paying handsomely. Dealing wtth the result of stabilisation, he said reductions in the cost of living had not been as I gTeat as the court anticipated. A fall '• of 10/. which should have taken place at the end of the first six months, did ■ not occur until the end of the year. 5 Workers, therefore, urged that the sta- '■ bilUation period should be extended for > one year. And. in making this request, i they relied on the promise of that if the fall in the cost of living

should prove to be less than anticipated there would be a readjustment. 'Having protested against non-publi-cation of all groups index numbers since August, 1920, he said the court could not, if it was to maintain a fair standard of living, possibly reduce the present minimum rates of wages.