The Guardian And Evening Star, with which is incorporated the West Coast Times. TUESDAY, AUGUST 7, 1928. THE EIGHT SPIRIT.

Hokitika Guardian, 7 August 1928, Page 2

The Guardian And Evening Star, with which is incorporated the West Coast Times. TUESDAY, AUGUST 7, 1928. THE EIGHT SPIRIT.

The harmonious agreement reached between the British railway companies and tho three. unions connected with them for an all-round reduction of wages lias been received by the Press and public as an encouraging sign of a new atmosphere in industry. Tho reductions, in which all concerned, from the directors downwards through the various branches of the service, are to participate, mean a saving of from two to three millions sterling on a total wages bill of a hundred millions, and,is a measure of economy necessary In order to enable the railways to balance their budgets. If this decision had been in fact a victory for a policy of wages reduction, achieved against the inclination of unions unable to offer resistance, there would have been little merit in it. The importance of the incident- lies in the recognition of the men that their industry, under the severe stress of road competition, was no longer able to pay the old rate of wages without seriously crippling its resources for meeting the competition and recovering its former stability. To obtain this recognition it is obvious that the managements concerned must have taken the men into their confidence. Here, says a contemporary, we have an example of co-operation in industry surviving what is probably the severest test to which it could have been submitted. It has been argued in the Arbitration Court proceedings in this country than an .industrial enterprise must be prepared to accept as part of its business liabilities the obligation to pay the standard rate of wages. The inference is that if it cannot do this it should not carry on. This argument takes no account of the ebb and flow of economic conditions. The opposite argument is that the maximum capacity of an industry to pay a fixed rate of.-wages cannot be passed without endangering that industry, and, incidentally, raising the spectre of unemployment, either through shortening of hands or closing down altogether. In the ease of a railway enterprise, there is a limit to the shortening of l hands, because the public safety is at stake, There niTist fdtobe-a Emit t-q

the curtailment of services, because of the risk of losing public .patronage to rival transport enterprises. The very fact that tho railways no longer have a monopoly'of goods and passenger transport renders it increasingly necessary that they should l>e conducted oil strict business .principle. In that -respect it makes no difference whether tho railways are State-owned or run hv private capital. In the face of the present severe road competition, strict economy is necessary in respect to all departments of overhead expenditure. i.v is essential, of course, that a wise discrimination should be observed, between legitimate cutting down of unnecessary expenditure, and that shortsighted cheese-paring economy which hesitates to spend liberally in developing and popularising services with the, object of winning an ultimate return in increased patronage and revenue. Economy in the right direction provides tho margin for clear-sighted expenditure in the other.