MUNITIONS PRICES

Dominion, Volume 11, Issue 210, 24 May 1918, Page 6

MUNITIONS PRICES

PROMTS THREE TIMES THE CAPITAL. i At the Ministry of Munitions financial control has been subordinated to large and rapid output, says a report by the Select Committee on National Expenditure. The recommendations include:— Finance Branch to be strengthened. Accountants to be released by the War Office. Collectivo bargaining to bo abolished. Kate of profit to be fixed. Ono of many instances of want lof cooperation by branches of the Ministry is given. An aeroplane engine company got permission to erect a forging shop costing ,£35,000. Tho building work had to bo abandoned for want of plant; labour and material were so scarce that similar plant was lying idle. Savings on contract prices effected by accountants and technical investigations have been:—

,£3,000,000 reduction of cordite prices. ,£35,000,000 in prices of gun ammunition in tiro years. ,81,000,000 oil aircraft contracts for .£7,000.000. In oue year 2G munition firms earned nearly five times their standard pre-war profits. Cases quoted are:— Engineering Product, price M 9s. 6d.— Ir. 1917 an investigation of the books of one firm showed a profit of 27 per cent, on tho turnover before allowing for depreciation, or 310 per cent, on the capital as it stood in the books of the company. Engineering Products, price about dClooo.—On the Ministry's rough estimate of cost the total profit on the first order of August, 191G, for 1000, at a price agreed by the Supply Branch, amounted to _£1,3-10,000. The firm offered a considerable rebate if they received a further order. On the same costing estimate this new order of August, 1917, which was half as large again, still gave a profit of nearly .£500,000. Of the capital expenditure incurred during the war one-half is allowed to be written off from excess profits. The firm would not accept any arrangement depending upon investigation of their books. Chemical Product.-In 1916, while the price of the commodity was 2-s. 3d., per lb., tho amount of profit retained,by the company after payment of all excess, taxation, was ,£51,000. Their paid-up capital was ,£11,250, and on the highest estimate tho actual capital employed in tho business was .£75,000. In 1917, when the flat rate for the product was fixed at In lid., the estimated profit (including third party explosion risks) on the Ministry's costs' was ,£GO,OOO, of which .£20,000 would be retained after all deductions.