WOOLLEN TRADE PROFITS

New Zealand Times, Volume XLVI, Issue 10717, 11 October 1920, Page 2

WOOLLEN TRADE PROFITS

“NOT EXCESSIVE,” SAYS BOARD. INCREASED COST OF PRODUCTION. In connection with the report of tho Board of Trade on the woollen trade and the profits made (briefly mentioned in the last issue of the “Times ’), the Board of Trade says that, prior to the war, some of the companies were rapidly reaching a position of financial instability, and the higher profits seemed in recent years to have to some extent been obtained by the installation of new and up-to-date macnincH and tho adoption of improved inethods of organisation. Though the number of employees has increased, there is still a great shortage, and many machines are idle. Costs of production have greatly increased- —approximately 70 per cent. Cost of materials has increased from 100 per cent, for coal to several hundred per cent, for small commodities. Wool has increased about 55 per cent., operatives wages 2b pc, cent. The new profit} earned, with poreentaces on gross capital, neie respectively; 10.3 per cent., 9.9, 12.3, 13.1, 30.3, 17-8, 14.2, 17.3, and 1i.5; the total net profits were £266.185, and the per cent, on gross capital 11.9 per cent. In his summary, the Minister (the (Ton. E. P. Lee) expresses tho opinion that, upon the evidence disclosed, it cannot bo said that the woollen milling companies of Now Zealand have taken excessive profits during recent years. The profits have certainly been increased during the war period, and on the gross capital outlay the average net profit in 1919 amounted approximately to 12 per cent. A reduction of prices of Ices than 8 per cent, would place the companies in such a pos-

ition that no profit whatever would be j made by some, while at least two of the largest companies would be conducting business at a loss. “It must be allowed," runs a passage of the report, “that, in sympathy with general inflation of values; the decline in ths exchange value of money and the general increase in interest rates, in? vestors in woollen manufacturing com. panies are entitled to some increase it, tho net profits earned by the capital sc invested.”