INCREASED COSTS

New Zealand Herald, Volume LXXIII, Issue 22421, 18 May 1936, Page 12

INCREASED COSTS

Sir, —After reading the undertaking given by two Ministers that the Government would take good care to prevent any undue rise in the cost of living owing to its legislation increasing labour, overhead and all other costs, I decided to look into the matter a little. If a rise in prices to cover enhanced costs is to be prohibited, the only source from which these increases are to be met is profits. If, as is generally accepted, th-j new legislation will result in a 20 per cent increase in costs, the only business that could be carried on would be one earning more than 20 per cent profit, and they are as scarce as snow balls in Hades. I went through the stock market quotations in to-dav's (Friday) Herald, and worked out the average return to investors in the various financial and industrial groups quoted, with the following results: Banking, 6 members, average return, £3 os 8d per cent; insurance, 3, £3 14s 5d per cent; loan and agency, 3, £3 18s 9(1 per cent; coal, 4, £4Ss4d per cent (industry with diminishing assets); gas, 2, £4 5s 9d; shipping, 3, £5 9s 7d; timber, 3, £5 7s 8d; Avoollen, 1, £3 7s 3d; breweries, 1, £2 16s 6d. A perusal of the column containing the dividends shows that 10 5-7 per cent is the biggest dividend on the list. Xow where do the Ministers expect the money to pay increased costs to come from? It is plain that it cannot come from profits, for it is not there. It would be a good thing for some members of the House to ask the Government if it intends to comix 1 ! industry and commerce to be carried on at a loss. Idealism is all very well in its place, buc human life is carried on under the rule of actual fact. A. Warburton. Ngaruawahia.