COSTLY LEISURE

Evening Post, Volume CXXVI, Issue 134, 3 December 1938, Page 8

COSTLY LEISURE

A business that has long failed to pay interest on its borrowed capital takes a new downward plunge when it falls short of meeting its working expenses, apart from interest. As was pointed out in Thursday's issue, this was the position of the Government railways during the four weeks ended September 17, when there was a railways operating loss of £26,566 —that is to say, the railways revenue failed by that amount to equal the working expenditure for the period, without taking interest into account at all. Over the first 24 weeks of the current financial year the loss was £33,058. In a period of prosperity and greatly expanding revenue over the past two and a half years expenses have increased by over £2,000,000, absorbing all the revenue rise and now the previouslyexisting net earnings also. With Christmas approaching, the financial position might have been improved, but the Minister of Railways did not wait. By his decision, from and including Sunday, December 11, the drift will be checked by a 10 per cent, addition to fares and freights, and the new low level of financial failure (failure to meet working expenses) may thus be avoided. If the railways can contribute little or nothing to the ..interest bill, they should gather into their revenue pocket as much as they pay out in working costs.

It would be interesting to know to what extent the 40-hour week has contributed to railway losses. Labour speaks of increased wages in terms of purchasing power. Reduced hours do not represent purchasing power —though they may represent spending opportunity—and where they

cause losses to the employing concern (State or private) there is no offset except the workers' increased leisure. When the 40-hour week was adopted there was little or no light on its direct and indirect costs, but since then employers have been gathering painful experience. The view of a good many of them is expressed by the chairman of the Bruce Woollen Manufacturing Company, who this week gave it as his considered opinion that "nothing has hit those secondary industries that 'are competing with overseas importations as hard as the 40-hour week." This gentleman, Mr. McSkimming, spoke for woollen manufacturing. Other textile industries have had similar experience. The cure is not machinery, for the 40-hour week has hit machine-using industries very harshly in cases where the machine is short-lived and subject to heavy depreciation charges. The loss of machine hours means reduction of the machine's chance to pay for its limited existence.

Does the worker's increased leisure compensate either him or anyone else for the addition which the 40-hour week makes to costs but not to purchasing power? Must it not inevitably be paid for by higher prices in semi-monopolistic industries like the railways, and by further protection, against imports, of those competitive industries to which Mr. McSkimming

refers?