FIXING PRICES

Greymouth Evening Star, 24 July 1936, Page 3

FIXING PRICES

CERTAINTY AND GUESS-WORK An indication of difficulty in the Government’s task in ascertaining a fair basis of prices, as lhe sequel to recent legislation, is given in a review of the British coal-mining industry by a contributor to the Accountant (London).

“The major point at issue,” the writes states, "concerns the very wide margin between pithead and consumers’ prices, especially those paid by the domestic user, who is now being asked to pay still more'in order that I he industry may 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 in spite of the exceptional publicity given to the affairs of the industry. The official pithead prices can be obtained without difficulty, but when the consumer desires an explanation of the margin between the 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 a ton represents only a small Z percentage of the price charged to the ~ consumer. And after the closest analy- ~ sis of the figures put forward by these Z three sets of interests concerned, there - is still a wide and unexplained gap. Z “Even if only for the reason that y the real profits made by the industry Z are used by both sides as decisive y arguments in wage discussions, it is [' essential that conjecture should give 2 place to knowledge, and that certain- y ty should take the place of estimates • and guess-work. Here is a matter in 7 which the accountancy profession y might render a valuable service to the Z community. In this connection, it is *■; to be emphasised that 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 •-* ralieble index, since, it is claimed, the real profits are largely made by sub- y sidiary 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 y has no obvious and vital connection . with the whole question of wages.”