IRE WOOL SPINNERS

New Zealand Times, Volume XLVI, Issue 10560, 10 April 1920, Page 4

IRE WOOL SPINNERS

HUGE PROFITS BRITISH BOARD OF TRADE'S REPORT. The long'-cxpcoted report on wool spinners’ nrofits was issued recently by tlio London. Board of Trade. It is the work of tire Central Committee on the Investigation of X’rices under the Profiteering Act. Tho methods addled by, the committee in order to arrive at a conclusion were the following The raw matetrial prices have been taken, and to them has been applied the War Office schedule of “Fair Prices for converting the raw material into yarn. The resultnt figures have been compared with the published market quotations for yarn recorded in the trade paper. The figures so obtained show a striking disparity between the “Fair Prices” on the War Office basis and market price quoted by the trade paper. Without exeption the market price, is considerably in excess of th fair price, and whereas tho estimated profit allowed by the War Office varied from Id to 3d, according to th.o typo of yard, the market quotations show by comparison an estimated profit ranging upwards from 13d per lb, even to 43d per lb m some cases. Of the 30 to 40 types of yarns covered by the investigation, one-half show » profit of not less than 25d per lb. REMARKABLE PROFITS. Col lowing are figures taken from the schedules attached to the report, from whicii it will bo seen, that Mr jNXaclcnider’s 3200 per cent, is more than justified. The technical description of the yarn, is omitted:— Profit per lb. Excess profit Excess allowed by on spinners* peieentageon War Office. prie allowed profit, d. d. 1 39 3,900 l' 33 3,800 3 40 2.00 3 ’. 34 1.133 3 40 ’. 1,333 As at least one-half of the 30 to 40 tvpes of yarn investigated' showed, the committee say. a profit of not less than 25d per lb, the excess percentage accruing to the spinners would he: On Id per lb yarns, 2.500 per cent. On 3d per lb yarns, 833 per cent. ON SPINNERS’ OWN FIGURES. Tho Spinners’ Federation objected that the’ figures on wbdoh these calculations were based wore misleading. They were.’ therefore, asked to furnish figures -which they themselves had prepared. These figures, treated in the same way. showed profits ranging from • Bid to 34Jd. The highest, profits based on tfie figures supplied -by the spinners themselves are as follow.— Id - aid 2400 p.c. . 2d 34d 1700, p;c. And the lowest: Id lid UOOi p.c. 2d 5d 250 p.c. The above figures give the extremes of 36 quotations. The intervening percentages of profit cover tho whole range. The spinners supplied no figures on which tho War Office allowed a profit of 3d per lb. THE FINDINGS. The reasoned findings of tho committee are as follow: 1. That during the war the -bulk of the spinning machinery was used for the production of worsted yarns for tho requirements of the Army. Navy, and other public services. ’ ‘ j! 2. That the spinners were,'remunerated for such yarns ‘by a prieo based on the cost of production plus a reasonable margin of profit, and that the latter was estimated on a pre-war basis. 3. That tho rates ’of profit allowed by the War Office were Id to 3d per lb, in accordance with the time over which the machinery was occupied in producing the finished, yam. 4. That no faefts have been brought to the notice of the committee which lend support ■to the view that the spinners were Inadequately remunerated by the war unite during the period of the war. 5. That the War Office scale of charges does not make provision for bad debts and selling expenses incidental to the civilian trade, but that in view of the present circumstances of tho industry this does not materially affect tho figures given in these findings. 6. That ifi tho War Office schedule of prices, revised so as to include all increases in costs, is applied to the market rates of tho raw material, published in a recognised trade paper, the resultant figures show Ithat a profit of from 13d to 43d per lb was received by SpinHoi's on yams quoted for November-De-combor, 1919. delivery. 7. That in the view of th© representatives of the Worsted Spinners’ Federal tion tho market rates for raw. material and .yarn quoted in th© trad© paper in question are misleading. 8. That on tho basis of revised figures prepared, by the worsted spinners, indicating'what they themselves consider to be the market prices for raw materials and tho resultant yams for delivery No-vember-Dycember, 1919, the application of tho War Office scale (brought up to date by the inclusion of all known charges) shows that tho rates of profit per lb rang© from to 341 d. 9. That the figures revealed in findings Nos. 6 and 8 are based on tho assumption, with which the spinners agreed, that when selling yarns a spinner has to cover himself forthwith for raw materials; and that when raw materials liavo been bought a-h.oa.cl a correspondingly increased- profit accrues to the spinner.

10. That the Profiteering Act has had no apparent effect on the prices of worsted jams or the profit arising therefrom. IN SPITE OP THEMSELVES,

In tho main body of their report the committee place on record the point raised by the spinners that Producers -whose output is sold ahead often quoted high pricesi to deter customers from placing orders, but so persistent has the demand been that the high, prices have boon willingly paid. Referring to tho objections put for. ward bw the spinners, tho committee say:

The observations are general in character, and it is clearly possible in tho absence of definite facts and figures to prolong such a discussion indefinitely. After reviewing tho whole question tho committee feel that even were the spinners' contentions acepted by them at their fullest value, tho figures submitted in this report would not be materially affected. MEANING OP "HATE OF PROFIT." "One point of general importance," tho committee say, “was raised by the spinners. They suggested that a profit which might be equitable on yarn at five shillings a pound was inadequate on yarn at fifteen shillings a pound, and that the reference in the Profiteering Act to ‘rate of profit’ should bo deemed to mean rate of profit per cent. "Whilst agreeing that the question whether the same profit in pence per pound could bo held to bo equitable now that market prices of raw materials had risen was worthy of consideration, tho committee is unable to accept the view that, eo long as the percentage of profit on cost remains the same to-day as in pre-war davs> it cannot bo doomed to be unreasonable. “The spinners themselves suggested no an illustration that a pre-war profit or 8d per lb would on a percentage basis become fiftecnpcnco per lb to-day. Tho committee cannot accept this ns a fair and reasonable profit. The matter boins one of general application, tho com-

mittoe porpose to prepare a special report on the subject." • PROFITS UNAVOIDABLE'. In signing the report Mr E. F. Wise says that individual spinners would not have assisted the wearer of clothing by accepting less for their yarn than the trace was not only prepared but anxious to pav- Tho only effect would have been to transfer ah additional profit either to the yarn merchant or to tho manufacturer or to somebody else. "It is only fair,’ he says, “to lay stress on the fact that the trade, through the Wool Council, urged tho adoption either of a compulsory or voluntary standard clothing scheme as a practical measure of protection of the Home consumer."