ENGINEERING TRADE

Dominion, Volume 13, Issue 247, 13 July 1920, Page 6

ENGINEERING TRADE

CAUSE OF INCREASED PRICES AN INTERESTING LETTER An interesting letter explaining why increases in the prices of certain engineering requisites nave becomo necessary has been received by Messrs. A. B. Hislop, .Ltd., of Wellington, from Mr. B. Balfour, chairman of directors of tlio Eagle and Globe Steel Company, England. Mr. Balfour was a member of the Board of Munitions during the war. In tho course of his letter ho says— "It is with very great reluctance that wo have had to cable you abon*. the further increase of prices. These jaro brought about by: (1) The Government increasing the inineis' wages by .£35,000,000 per annum. (2) The Government increasing the railway workers' wages by '.£20,000,000. (3) The increased cost of materials and everything we use is the result of the effect of (1) ,and (2) on everything that is produced in this country. (4) The compulsory shortening of hours by the Government, (5) The Government war subsidies on food and coal being withdrawn, and causing an increase in wages all round. (G) In addition to these vital facts, it is undoubtedly the effect of the strain that has been put on the workers by the war, which has had a very bad influence on both their capacity and willingness to produce. Thoie. are signs, however, of seme improvement taking place. (7) Tho 6s. per week granted to the engineers and allied trades by the Government's recent award. . "We are to-day faced with various other demands which are not included I i.i the prices which we are cabling, and it seems inevitable that we shall have to cable you further increases in the courso of a month or two. "We regret more than you do, probably, the necessity for these constant increases, and also the terrible uncertainly which the pre.-ent position creates. We at the present time have a largo number of orders on hand on which we shall certainly lose a great deal of money owing to the fact that we took them at a fixed price. We are now fnced with tho situation that everybody from, whom we purchase our raw materials and supplies will only accept our orders on condition that goods have to bo invoiced at the price current at the time of shipment. In most cases we shall have to do 'this with you; in fact, the only materials which we can take at fixed prices are high speed drills and cutters, steel above tlie warranted cast steel grade, and our higher qualities of high speed drills, and higher qualities of carbon. "Wo would add for your information that the now taxation which <the Government intends to impose upon us means between 63 and G8 per cent, of any profits.made. In addition to this we attach liereto a copy of a newspaper cutting showing you the burden which this country has to carry compared with other countries. All the increases we have made are absolutely inevitable, and we must leavo it to you to make the necessary explanations to our customers on the baste of •this letter. _ "Wo feel that this situation cannot go on for ever, and that though it may last for another year or so, it must result finally in grave restriction of trade." The clipping referred to in the above letter was taken from "The Times." It stated that tlie Chancellor of the Exchequer, hud given a written reply to Mr. L.' Lyle, M.P.,- who asked what was the per capita percentage of direct taxation in April. 1914, and April. 1920, respectively, in Great Britain, France, Italy, and the United States. Mr, ten Chamberlain stated that as tlie financial proposals of the other countries for the current year' were not yet available, a precise comparison could not be made,' but the following approximate figures were based on actual receipts of revenue in the last pre-war financial year .and in the last closed financial year, Currency had been converted at jiar. Average * amount of-direct . taxation per head. £ e. a. United Kingdom-Year ended March 31, 1914 1 U 0 United Kingdom—Year ended March 31, 1920 15 3 0 France—Year ended December 31, 1913 0 13 S France—Year ended December 31, 1919 2 7 0 Italy—Year ended Jiine 30. 1914 0 12 6 Italy—Year ended June 30. 1919 1 2 3 3 U.S.A.—Year ended June 30, 1914 0 3 0 U.S.A.—Year ended June 30. 1919 5 8 0