COSTS OF PRODUCTION

Press, Volume LXXIV, Issue 22465, 28 July 1938, Page 9

COSTS OF PRODUCTION

TO THE EDITOR OP THE PRESS. Sir, —I observe that owing to the vastly increased cost of shipbuilding, in which labour costs play a prominent part, the provision of two new vessels for the Pacific run has been rendered uneconomic and has been shelved. This should be taken to heart by the Federation of Labour here in New Zealand, as there is not the slightest doubt but that the ever-growing costs of production will soon reach a point where economic production will cease and automatic unemployment ensue. If employers are forced to pay wages in excess of the amount which a business can stand the result must surely be patent to the meanest intellect. Labour seems not to realise that every shilling increase in wages is passed on to the consuming public until in the end a point is reached where this cannot be _ continued, owing, to consumer inability to pay. Result, a debacle. Employers have not the bottomless pockets which Labour seems to think they possess. If such a state of things as I indicate should come to pass, what about the effect on State finance. The resulting reduction in income tax would be Should private industry collapse and the State take control the position would not be improved—in fact, it would be worse—for the simple reason that publiclv run enterprises are notoriously inefficiently managed. A.s an instance, look at the local tramways, they are run by a body ouite incapable of bringing business efficiency into the picture. A similar position would arise in any class of business run by the State—Yours, etc.. COMMON SENSE. July 26. 1938.