WAGES AND PROFITS.

Hauraki Plains Gazette, Volume XXXV, Issue 4682, 2 April 1924, Page 1

WAGES AND PROFITS.

DIVISION OF TURNOVER. PRESENT METHOD UPHELD. There is in some quarters an. idea that when it conies to dividing the sip'dlus obtained by tlie production ot goods that the part which goes to labour, namely, wages, is far too small in comparison with the part which goes to capital', namely, profits. Economists vainly point out that profits appear so large, and produce such social inequalities, because they fall into a few hands, whereas wage; are widely distributed. If four mea put £lOO,OOO into a business and secure a return of 8 per cent, each man draws £2OOO a year. If 1000 men put in £lOO each, and ran the concern, they would increase their annual wages by £B. As a set off against that they would have to run the business risk of the concern’s falling to pay, and of. the loss of their original capital. These are risks that every capitalist runs. The following state inent, prepared for publication by a large American firm, gives the whole thing in a nutshell.

The labour of one employee for on? year produces a giant transformer, 13 feet high, having a capacity of 1600 horsepower, containing 5300 steel parts, and selling for 3320 dollars. Boxed for shipment, this intricate machine sells for 15% cents a poun 1. A Ford sells for 32 cents a pound, and the cl eapest cigarettes for 3 dollars 20 cents.

The 3320 dollars in cash which tli3 company receives for tlie annual production of each employee is spent as follows: Salaries and wages, 1530 dollars ; material, 1339 dollars ; taxes, 136 dollars ; transportation, 108 dolars ; interest on borrowed money. 48 dollars ; profits, 159 dollars.

The pay roll almost equals the total capital, and is more than ten tlmas the annual dividend of this 140,000,000 dollar company.

This huge company pays a profit on turnover of less than five per cent. The deletion of the bloodsucking capitalist- would increase wages by te:i per cent. It would also leave the firm without finance. The Labour theory that profits take an inordinate slia e of production cannot be substantiate'! by ah appeal to facts. In certain special industries, or in a concern with some special facility, such as a cheaply worked coal mine, profits may be very large. But over the whole field of industry profits resolve themselves into a fair return on capital invested.. The a: gument that the abolition of profits would vastly increase the reward of the wage earner is pure moonshine. If profits were taken from the Canita’ist and given to the worker the latter would find that he was not Hi the ec'-nomic elysium so glibly promised him by liis leaders, but only .i few per cent, better off than he is new. nid with the task of financing his in lustry thrown upon him.