COLLECTIVE TRADING.

Timaru Herald, Volume XIIC, Issue 13683, 27 August 1908, Page 2

COLLECTIVE TRADING.

(To.the Editor.of the "Timam Herald.") ,Sjr,—You complain ' that. 1,. and others in .favour of, collective trading, "cannot see'.the difference between a, dividend on capital ; subscribed by ihe shareholders of a private company, and interest on capital borrowed : by ' a. corporation to start trading of any sort.'' .Very well. 1 have always understood that profit meant, that portion of money left over after all regularly recurring charges had been met, and that such profit -would be called so much par cent, on the capital invested in the business. The difference between us seems to be that yon call the interest, and. sinking fund, -of a corporation the same sorb: of regularly recurring charges as wages, repairs, etc. ; but rhey are not of the same sorb for the former mil cease, in time, but the latter never, so long as the business is carried on. The interest and sinking fund are only apparently not profits of the corporation arcept in so far as they enable the capital to be repaid, but the holders of the corporation scrip will- get the money as profit on their capital invested in the public services. Take the South Canterbury Dairy Company's case. If the shareholders have subscribed £2OOO, and borrowed £2OOO at 5 per cent., and if £2OQ is left over after all regular recurring charges have been met at the end of a year then the business, it Seems to me, will have paid S per cent, on the capital invested, and the sbareholdeis will receive £ICO, or 5 per cent, on their own capital and be enabled to pay £IOO for interest-! on the capital borrowed. But if you reckon the interest on the borrowed _ £2OOO in the same category', as wages, etc., then the business will only have paid cent, on the capital invested although both lenders and borrowers will have got the same money as before. .Suppose they had bonowed all the capital, to put an extreme case, is the biu-iness to be sufficiently remunerative to pay the shareholders 5, or any other per cent., in addition . to' the interest paid to the lenders? If so how are they (the shareholders) to compete with firms whose shareholders find all the capital? That seems to be what Lord Avebury wants the corporation to do; but " they are not having any." Another difference between lis arises from comparing a corporate business to a private one; 1 hut there is no comparison. The pri-vately-owned are carried on entirely for profit by supplying other- people than themselves with commodities, the only means' by which they can make a profit. The municipally-owned are canied on by the owners (all the citizens) for supplying the owners (all the citizens) and not for supplying- anyone with commodities outside the municipality, except to a small degree and for which they charge as a private trader does. ' Hence fhey are not in business for profit at all, in fact cannot make a profit in the ordinary i senes of the term, for how can a, community make a profit- oufc of itself any more than a'man could make a profit by supplying himself only and not. other people: Whatever profits a corpora - lion makes out of its reproductive businesses, gas, water, trains, etc.. mui : t go lessening - the , rates . which must be levied for carrying on' the non-pro-ductive departments, as scavenging, road repairs.' lighting, public parks;, etc., so that.whatever is taken out of one pocket of each citizen, to make profit in one department prevents it being taken out of the other, to ■ pay for unproductive works ; and here we have in actual operation production for use and not for profit.—l am etc., ; SOCIALIST.