PATER'S CHATS WITH THE BOYS.

Otago Witness, Issue 2209, 2 July 1896, Page 51

PATER'S CHATS WITH THE BOYS.

The Raising of Wages and Shortening . of Hours. <■ { More than once I have thought of writing a series of Ohats on economic subjects, thinking that a few of my young readers might look through them and in the future, help in some small way to prevent the' industrial ware that so often cause each loss to both capital and labour. Well, to-day I'll write one on wages, j though I won't promise when I'll write another. And the strike at Newcastle has led me to take the question up now. At the "outset I want you to clearly understand that I do not know which side is to blame for the present oonfllot, I daw s*y both. isge

are at fault— the men'beoanse they have not folly considered before acting in the past ; and the proprietors beoause they are indifferent as to the welfare of the men, who have perhaps refused to listen to reason. Unfortunately the average working man doesn't read deeply or widely enough to get a broad grasp of a question, and so in action is at fault, not intentionally, "but through ignorance. In the case of the Newcastle miners we are told that they cannot return to work at even former wages, but must take a reduction— rather a humiliating thing, isn't it 1 And why mußt they take a lower wage 7 Labour troubles drove coal buyers to find other coal mines to get supplies from, and protection in other colonies and countries oaused the opening up of new mines, whioh will fight hard to keep the trade. Not only that, but new mines in the same colony, though in other parts, have been enlarged or opened. All this means inoreassd competition, .for extra capital has been sunk, and all efforts will be made to get interest on that capital. Besides, though coal miners migrate, yet many become colliers who would not have become so if it had not been for the labour troubles, and so a greater number of miners are competing for employment. It seems to me that if men would look more deeply into thinga they would have more influence with their masters, who would recognise the intelligence, of the men and w,ould confidently explain matters fully to them, knowing that their explanations would b,e well thought over. As a result of the strike some years ago mines were opened up in the south of New South Wales ; Victoria opened up mines, so did Queensland ; Japan and China entered into competition for the coal trade of the east and west coasts of the North Pacific; and the immense coal beds at Nanaimo, in Vancouver Island, were drawn upon to supply th 9 San Francisco and other markets, i This result of a strike, and much of this was the direct outcome of it, the owners partially i foresaw, but the men didn't ; each side treated the other as an enemy to be beaten, j and they are both beaten. Newcastle now must sell at a very low price to gain back a j portion— 3he will never regain the whole— of the markets she has lost. That perhaps is rather a long IntrodUCtioil ; bub I use this example o£ an industrial war to drive home a trutb t just aa a tale is told to point a moral or to illustrate a lesson. ■ , And now as briefly as I can I'll put the points I think must be considered by master arid man before indulging in the luxury or misery of a strike or lock-out;. A rise in wages or a shortening of hours must be made up in one or more of the following ways :— 1. Capital invested must receive less interest* 2. Salaries paid to managers must be reduced. 3. If the trade uses machinery, newer and more economic machinery must be used. 4. More efficient means of distribution must be j adoptej, such as co-operation or supplying the user direct. 6. Cheaper materials may be used which will ] at the same time answer the same purpose as the j more costly material previously in use. 6. Pricesjnajs be raised. 7. The men may become more efficient— (a) In the use of their material. j (b) By producing more in a given time. (c) By doing superior work. 8. Under pressure the capitalist may find means of working the business with a less amount of capital. These headings do not exhaust the means by which wages may be raised or hours shortened, bub I am sure they involve far more than most worker's think out before entering on a strike. Lst us for a' moment or two discuss these points, or some of them.

Take remuneration for capital. In the first case we must remember that capital, like labour, if left in free competition finds its level ; and if a higher rate is got in one industry or investment than in another, the difference is largely an insurance against ris& To give a simple illustration. An investment in British consols is looked upon as about the safest in the world ; so people are willing to lend money to the British Government at a very low rate, because there is comparatively no risk of the prlnoiplo being lost, and therefore the investor does not worry about his money. At the present time so many want to have British consols that investors cannot get £2 interest for £100 invested. Now turn to Egypt. Before Great Britain took possession an Egyptian bond, faoe value £100 (that is, the Government agrees to pay £100 in gold for it when the time agreed upon has passed), and yielding 8 per cent, interest on face valae, could have been purchased for about £10 cash. That is, £40 , spent got £8 interest yearly, and the promise of £100 in gold for the bond or debenture when its face stated time had expired. Why this difference? Because investors were not certain that they would geb the interest for long, let alone the £100 principle in place of the £10 principle lent. But the investors being men of enterprise, or having an idea that the British Government would protect bondholders, bought the bonds, and in five years got their £40 principle back. £40 in British consols at 2 per cent, would have only returned £4, or one-tenth the amount. It would take 50 years to get back £100 principle in British consols, instead of five years aB in Egypt ; there, in 50 years £10 would have returned £400. But there was the chance there of getting nothing at all, and even if interest were paid regularly, perhaps no chance of getting the prinoiple. Now, however, owing to British occupation, investments are safer and interest not nearly so high.

This is perhaps an extreme case, but it illustrates what I mean when I say that interest; in investments equalises Itself ; and that when one investment pays better than another- it is because there are attendant risks that only enterprising speculators or investors care to face,

But capitalists can combine, and then interest on capital does not represent what might be called "normal" interest. Combinations can get high rates. The kerosene oil companies by combination have made millions as interest whioh would not have been made if they had been openly com* peting against one another. We have now referred to capital In free competition and in combination. Other considerations will ooonr to anyone giving any thought to the aubjeot of. r«mun«r*tion that c&pltalis to rcosivS,

Do workers or their leaders fully coosidei these points before acting 2 I think not, Now what about . . REDUCTION OF SALARIED? I Workmen will not consider this question —in fact, most cannot ; for, being only capable of performing physical work, they cannot appreciate the value of oaptains of industry who are born organisers and brain workers. I have already told you that Lord Brassey's father paid thousands a year to bis industrial lieutenants, but simply beoause their capacities earned more than theil ; salaries for him, and if he hadn't paid them high rates other great railway contractors would have done so. Supposing it had been possible for the navvies to have • reduced! these men one-half, the industrial captains might have gone over to German or Belgian or other foreign capitalists, and have brought foreigners into direct competition with Eng« lishmen. * Not long since a teaoher wished to shotf how managers and Qverseers.earn.their wages! and also by their capacities higher wages foi the workmen nnder them. He allowed the pupils of a class to work for an hour at arithmetic at one class of sum pretty well aa they liked as long as they did not idle or. talk , or misbehave In any way, and at the end of the time counted the sums done. Next day similar work was taken, and the youngsters- pitted against one another and put on a time limit.- More than double the work was covered. Let the teacher represent in the first case an ordinary overseer controlling, say, 40 men, turning in a profit of £10 a. week. Then suppose- the 'teacher in the second case to be the overseer of a new rival firm, and that this overseer simply by improved organisation, but with no more capital invested, is able to get twice the work out of the men— this will mean a profit of £20 a week. The more efficient overseer could take £12 10a a week to the other one's £10, and also raise the men's wages 3s 9d a week ; and if other savings were taken into consideration— l have only referred to organisation—these amounts could be considerably increased. The effect, however, would be more far reaching, for the efficiency of the second overseer would make the first overseer's services quite valueless, and perhaps shut up the factory he controlled. So you see managers of businesses cannot be reduced off band to provide >n increase in wages fox the workmen— workmen who actually depend upon the overseers for their very existence. I have only briefly outlined the position from a capitalist's and an overseer's standpoint. Next week, all being well, I shall take up the other points. '