RIDDLE OF PRICES.

Auckland Star, Volume LXVII, Issue 173, 23 July 1936, Page 15

RIDDLE OF PRICES.

AN ENGLISH EXAMPLE.

CURE FOR GUESS-WORK,

An indication of the difficulty in the Government's task in ascertaining a rail basis of prices, as the sequel to I'cccnt legislation, is given in a review ot the British coal mining industry liy a contributor to the "Accountant (London). "The major point at issue," the writer states, "concerns the very wide margin between pithead" and consumers prices, especially those paid by the domesticuser, who is now being asked _ to pay still more in order that the industry mav pass on to the public the bulk of any wage increases that may be given to'the men. In theory it should be easy enough to trace the entire price structure process in the progress from pithead to consumer. In practice this has so far proved impossible, despite the exceptional publicity given to the affairs of the industry. The' official pithead prices can be ascertained without difficulty, but when the consumer desires an explanation of the margin between pithead price and the figure that he pays he comes up against a series of contradictory explanations. The owners point to their selling prices and their profit and loss accounts. The railway companies produce figures that enable the ratio of freight charges to purchaser's price to be established with accuracy. The selling, agents, through whom the general public draws its supplies, produce figures purporting to show that their net profit per ton represents, only a small percentage of the price charged to the consumer. And after the closest analysis of the figures put forward by these three sets of interests concerned there is still a wide and unexplained gap. "Even if only for the reason that the real profits made by the industry are used by botli sides.-as decisive arguments in wage discussions, it is essential that conjecture should give place to knowledge, and that certainty should take the place of estimates and guess-work. Here is a matter in which the accoun-

tancv profession might render a valuable service to the community. In this, connection it is to be emphasised that j the miners' case is largely based on the contention that the published profit figures, whether of individual colliery undertakings or for the industry as a whole, afford no reliable index, since, it is claimed, the real profits are largely made by subsidiary selling organisations to which the coal owners sell at a low figure. It should not be impossible for a° scientific and impartial inquiry to prove or disprove this assertion, which lias an obvious and vital connection \\ itli the whole question of wages."