BONUSES AND TARIFFS.

New Zealand Herald, Volume LXVII, Issue 20537, 11 April 1930, Page 14

BONUSES AND TARIFFS.

Sir, —Captain Colbccly real'y does not face my argument, nor does lie appear to see tha 4 tfie variation of the "gross profit rate per cent" is the crux of the question. Instead, he tries to draw a distinction—nnt implicit in his first letter—between the costing methods of the wholesaler and that of the retailer. No such distinction can he rightly drawn; in fact, a large portion of our imports are brought ill by firms which retail the goods. I ask my friend to consider the followingA largo retail firm uses £IOOO of its capital for financing its customs payment,s. This sum passes' through the customs house three times a. year and covers a total of £3OOO of duties. The. "overhead" cost to tho firm is £7O, yet the theory is that it can, and does, load its sales wjlh 53 per cent, on the duties, or £IOOO of "profit," ii» return for an expenditure of £7O. Competition will prevent this, and although tho importer will still keep to his costing formula, he will be forced to reduce his gross profit rate per cent, until his net return is no more than it would be if all goods were free of duty. C.11.N.