GOLD AND WAGES.

New Zealand Herald, Volume LXIX, Issue 21112, 20 February 1932, Page 12

GOLD AND WAGES.

CLAIM BY WAIHI MEN. RESTORATION OF CUT SOUGHT. NEW TAXES ON COMPANY. The higher prices for gold and silver formed the basis of an application in the Arbitration Court yesterday for the restoration of the 10 per cent, cut in the ■wages of members of the four unions who are employed by the Waihi Gold Mining Company. Mr. Justice Frazer presided. The unions which made the application .—the Ohinemuri Mines and Batteries "Union, the Waihi Carpenters' and Joiners' Union, the Ohinemuri Engineering Union and the Enginodrivers' Union—were represented by Sir. T. Bloodworth. Mr. C. Rhodes, a director of the Waihi Company, and Mr. R. G. Milligan, the secretary, appeared for the company, which opposed the application. Mr. Bloodworth said that in August last year the Court disallowed an application by the unions for exemption from the general order reducing wages. In , its decision the Court stated that costs were increased above pre-war level and that, gold was bringing only pre-war price, while silver was selling so. low as to offset any advantage to be gained by the exchange, premium on gold. Metal Prices Advance. V Almost before the ink was dry on the decision, tho grounds on which it was based ceased to operate," said Mr. Bloodworth. " Great Britain went off' the gold standard on September 21 and . the price of gold and silver increased, about 50 per cent, in tho case of gold and 53 per cent, with silver. As New Zealand has the added benefit of a depreciated exchange, gold producers in the Dominion, whoso costs are fixed in terms of New Zealand currency, -are snjoying a great increase in profits. ! "In the case of a commodity sold on the local market, it may be agreed that an increase in wages will increase the cost of the commodity to the consumer, but in this case the gold is sold at Loudon prices. The only point at issue is the equity of permitting the whole of the increased profits, resulting from conditions for which the employers can take no credit, being retained by them." An estimate submitted by Mr. Bloodworth of the benefits gained by the company owing to higher prices was as follows:—September to December, extra on gold sold at Ills an ounce, 27s above the standard price, £28,940; January to February, extra on gold sold at 120s an ounce, 36s above tho standard price, £25,725; extra on silver at 20d an ounce, £4366; total, £59,531. In addition, there >vas the benefit of the exchange premium. Burden of Taxation. Mr. Bloodworth said 350 employees were concerned, the total wages bill before the cut being about £I6OO a week. The unions asked for the restoration of £l6O a week, on £8320 for the year. If prices for precious metals were maintained, the company stood to gain £175,000 a year, plus exchange. The men asked for £8320, or about 5 per cent. / / Mr. Rhodes said that the practical result of the year's, operations of the company was that, in spite of the assistance of a gold premium amounting to £40.749, taxation had called for a provision of £47j287, of which £33,473 was entirely new, and the directors, instead of being able to pay the usual dividend of 2s a share, could provide only threequarters of that amount. It was absurd /to suggest that, because of the gold premium, which might be temporary, the industry could stand both the "blistering" taxation and a reinstatement of the cut. "In Australia the Government has removed all taxation from tho mining industry, but taxation has been doubled by the New Zealand Government, until the total now paid in New Zealand and the United Kingdom reaches about 35 per cent, of the profits," said Mr. Rhodes. "In one case the advantages to the nation of fostering the gold output, are lecog'nised, while in the other they are ignored or subordinated to the capacity of a single company to pay out of its reserves." Rise may be Temporary. The possible temporary nature of the , high prices was emphasised by Mr. Milligan, who said that in spite of them there had been no boom in quartz areas, although dredging and washing by small parties had increased. He said costs were still at a high level, and prospects ;were uncertain. Gold at, £6 an ounce .was a true index of the poor position of ■Britain's external trade. The price) would ! fall if the position improved. If war debts were cancelled, the urgency of Britain's need for sending gold to America would cease, and gold would tend to revert to its normal price. t Mr. Milligan said there had been a fnlling-off in the grade of ore going to the battery and working expenses had increased. "This is not the worst," he said. "The Government has forestalled the unions and has taken the whole of our / benefit, and more. Of the increased taxation, amounting to £33,473, tho sum of £29,010 was plain confiscation, an adf ditional tax levied on the Waihi Company alone. The levy was made to apply not only to future profits, but to divi- ' dends paid for the previous two years, a liability that was both unwarranted and wholly unexpected." Mr. Milligan said a premium of £26,007 gained on bullion was offset by additional taxation, £33,473, and extra working expenses, £3996. The net result was that the position of the company Was worse than at the close of 1930. Hie Court.reserved its decision.