“COINING MONEY”

Hauraki Plains Gazette, Volume 52, Issue 3283, 2 July 1943, Page 3

“COINING MONEY”

HOW IT IS DONE

- - - CITY AUDIENCE AMUSED POSITION OF THE FARMER ADDRESS BY MR A. J. SINCLAIR In an address to the Economic Society of Australia and New Zealand in Auckland recently, Mr A. J. Sinclair, of Te Awamutu, spoke for an hour on the dairying industry’s proposals in connection with the Government’s plan of economic stabilisation. At the conclusion of his address, questions were invited by the chairman, and the speaker was kept busy for over an hour replying to the points raised. The questions came from professors of economics and business men, but the audience evinced the greatest interest in a battle of wits between Mr Sinclair and a prominent representative of the Federation of Labour whose name is a household word in New Zealand. This questioner was distinctly hostile and the audience enjoyed the humorous and effective manner in which Mr Sinclair replied to the points raised. The 1938 Price One questioner asked how the Government had justified its action in keeping the dairy farmer pinned down to a fixed price of 14.89 d for butter from August 1, 1938, to August 1, 1942, when there was a steep rise in farm costs during that period, as the Government had given a pledge that the guaranteed price included compensation for all costs.

Mr Sinclair replied that it was difficult for him to answer that question unless the audience knew something of the skilful manner in which the Hon. W. Nash had parried it for several years. He explained that Mr Nash’s favourite method was to select carefully a number of returns furnished by dairy farmers to the Commissioner o£ Taxes and show from the high taxable income that dairy farming was a very profitable occupation. Unfair Tactics “I have to concede,” said Mr Sinclair, “that some dairy farmers would still be comfortably well off if butterfat fell to Is a lb. These men may be on farms which have been in tne ' family for a generation; the mortgage js small and the farmer’s equity is

correspondingly large. In addition, some of these farmers are milking a herd of, say, 60 cows with the help of their wives, and with no outside labour This man is taxed on his equity, and is allowed nothing for his wife’s services, and his income tax is high. That position is not typical of ’he average dairy farmer to-day, and I would be equally justified in saying that the people in the cities were all well off to-day because 1426 waterside workers in Auckland earned an average of £746 for the past year on an average week of 59f hours —and they did not requ re to take their wives and families, to the wharves to help them to earn it.’’ As a typical instance of how the dairy farmer is “coining money.’’ Mr Sinclair created great amusement by relating the following incident which took place in his office recently: “Making £7OO A Year” Some weeks ago (he said) a sharemilker from Taranaki with a good herd of 100 cows called into see me, and said he had just signed up on a good 50/50 sharemilking agreement. He was confident that he would make £7OO next year. I asked him how he arrived at his estimate, and he replied : “The cream cheques will bring in £l2OO and I’ll make £2OO from pigs and calves. That makes £7OO for the onwer and £7OO for me.” I expressed the opinion that he must be a remarkably good man to milk 100 cows on ais own. “I don't,” he replied. “My wife and son, who is 17 and as good as a man, help me in the shed.” I suggested in that case it would be more accurate if he said that the three of them earn £7OO, but he replied: “What’s the difference? It all goes into the family purse, doesn’t, it?” I told him he was the type of man who gave me endless trouble when I explained to city people the difficulties the farmer was up against, and I asked him if he would let me examine his proposition on a business basis. He willingly agreed, and the following dialogue took place: “What value do you place on your herd of cows?” “Nothing less than £1000.” “How long did it take you to save that money when you were working on wages?” “Eight years.” “If you had invested that £lOOO in-

stead of buying cows, you would have got a return on your capital.” “I never gave that any thought. Cows are my line.” “I’ll give you a return of 5 per cent, on your investment —say. £5O. Now, you no doubt rear your own heifers and replacements, but don’t you find ‘hat you have also to buy a certain number of cows every year to keep your herd up to standard?” “Yes. about 8 to 10 cows every year, except once when I struck trouble, and it was 25 cows that year.” “Well, I’ll put you down for £lOO for that item —that’s what the business man calls 10 per cent, depreciation. It’s too little, but we’ll let it stand. Your wife and family are no doubt working without wages?” “Yes, it all goes into the family purse.” “If you had to employ outside labour, would it still require three in the shed?” “Yes, the cream lorry passes the gate at 7.30 every morning and I need three in the shed.” “Do you know any men in your district w’ho are working on dairy farms on wages?” “Yes, the farmer across the road, with a herd of 70 cows, employs a married man, but his wife doesn’t do anything on the farm, or help in any way. The farmer is paying £5 a week, with free house, milk, butter and coal.”

I asked hint to wait a moment while I worked out the cash equivalent of die perquisites, but he said: “You don’t need to do that, because the man is leaving. A neighbour down the road who is hard pressed for labour offered him £6 a week and the same concessions. He doesn’t know whether he will take that job, or apply for one he saw’ in the local paper yesterday: here it is”—and he handed me an advertisement which read: “Wanted, —Married man, all farm W’ork; no milking. To assist me to maintain production, I will pay £7 a w’eek, with free house and cow, to a willing worker.” “This is getting complicated,” I replied. “I had better assume that you could get two men to help you at an all-in wage of £5 a week each. In round figures, I will put down £5OO for wages. Now, you have t<s meet the power bill, rubber replacements, oils, and other sundries; and in addition you have to pay income and social security taxes, alw’ays bearing in mind that you cannot put down anything

for wages in respect of you wife’s services.’’ “I know all about that,” he said. *‘l tried it once. All these things would cost me round about £5O a year.” I then presented him a statement headed “Estimated Receipts and Expenditure: Interest on Capital, £5O; Depreciation, £100; Wages, £500; Sundries, £50 —Total, £7oo.’’ When he had examined this for a moment or two, he said: “Are you trying to tell me tnat I am working 70 hours a week for nothin O’?” “Certainly not,” I replied. “You ?re making £1 a week on your investment, and you have the privilege of free board with your family, and of helping them to spend the £lO a week *-hey are earning.” “That’s all rot,” he said. “I’m doing all right, and I know I’m doing all right, and these figures remind me of a statement I once heard that there are three kinds of lies—namely, lies, damned lies and statistics!” When that man goes on a trip to the city, he will still tell all his friends that he is making £7OO a year, and that he is on the point of buying a farm. He is a great nuisance to 'me.