WAGE CUTS.

Press, Volume LXVIII, Issue 20551, 20 May 1932, Page 10

WAGE CUTS.

LITTLE GAIN TO FARMERS. PROBLEMS OF LOW PRICE LEVEL.

That no material reduction in the cost of production on farms had resulted from the reduction of workers' \vages generally was stressed by remits before the annual conference of the North Canterbury district branch of the New Zealand Farmers' Union, held j-esterday in Clrristdmrch, and it was decided, after ditaussion, and an address from Dr. I. W. Weston, farm economist from Lincoln College, that investigation be urged in an endeavour to ascertain where the economies had been held up. Dr. Weston emphasised the point that it was fixed debt and "not wages which was the principal charge in the costing system, and said that the raising of price levels was the way advocated by economists as tho best way out of tho present crisis. Tho remits before- the meeting dealing with farm costs read: That as no material reduction in the cost of production on our farms lias resulted from the reduction in award wages and Civil Service salaries, a careful investigation should bo instituted to ascertain where it is that the economics are being held up. The co.it of transport, classing and selling all reduce the prices received bv the farmers to such an extent that it lias become necessary to investigate the whole method of marketing, and the Dominion Confercuce should be asked to nuthoriso a report being prepared* explaining tho position and suggesting remedies. Prices and Banking Policy. Dr. 1. W. Weston, farm economist of Canterbury Agricultural College, Lincoln, delivered an address dealing with the question of farm costs. He quoted the world's leading authorities on the subject and explained that it had been proved that money price levels were controlled unconsciously by banking policy. It was also true that with expansion of business prices tended to rise automatically and vice versa. The advocacy of tho leading authority as a cure for depressions at regular intervals was that the rate of interest should bo raised when times are good, compelling a saving of the surplus, and conversely tho lowering of the rate of interest in times of crisis such as at present ruling. It should be reduced to zero if necessary to force new production. The way out of tho present maze of arguments concerning costs and prices for produce was to raise the price levels of produce. Economists agreed that in that lav a solution. It was equally clear that the greatest cost was not that of wages but of fixed debt. That applied to all classes of industry. In reply to a question, Dr. Weston explained that it was possible to have 11 stable international price level or a stable internal price level, but it was not possible to have both. Personally he favoured the fixing of an internal price level.

Wages and Costs. Mr J. D. Hall: Could it not be expected that production should be benefited by the 10 per cent, or more cut made in the wages of workers in tho Civil Service and under awards? Would that not bo so even if slow in action ? Dr. Weston: Perhaps, but as I pointed out, wages are but a small proportion of the costing system. Fixed debt is tho largest and a reduction of costs affecting that particular section might take 10, 20 or even 30 years to effect. Mr Hall: Then does it not appear that reductions were useless harrassments to tho workers? Dr. "Weston: That is deflation. It was then decided to bracket tho two remits set out above and send them to the Dominion conference for further discussion. A hearty vote of thanks was extended to Dr. Weston for his address.

ARBITRATION AND THE FARMER. | THE SYSTEM CONDEMNED. Tho Arbitration Court was condemned at the annual meeting of tho Waimate Agricultural and Pastoral Association by the retiring president, Mr E. C. Studholme, in the course of comment on economic matters affecting tho farmer. "Arbitration as administered by tho Court is_ one of the chief causes of our financial and industrial troubles, for many awards have been made without due consideration being given as to how they will affect the industries concerned," said. Mr Studholme. "The threshing award and freezing workers award are two glaring cases of the blunders made by tho Court, for the farmers' interests have not been considered in either case; tho result being that the costs of production are out of all proportion to tho sale price of wheat, moat, and wool. Tho Arbitration Court has dug its own grave, so let us hope it may be buried as quickly ris possible, in order that we can make a fresh start along the road toward prosperity. "No reasonable farmers have any desire to cut down wages below a fair level. As they have no income at tho present time it is quite impossible for them to continue paying out the large amounts they have of late years. •We must get down to strict economy in every walk of life, and provided everyone does his bit, there is no reason why we should not return to a sound financial position at an early date."