NEW BONUS.

Taranaki Daily News, 2 December 1920, Page 5

NEW BONUS.

ERROR VI FIXING BASIS. EVIDENCE OF RISING PRICES. ' WARNING OF A CRISIS. By Telegraph.—Press Assa.—Copyright. Wellington, Last Night. The hearing of the employers' appeal against the latest cost of living bonus of 9s to workers was resumed by the Arbitration Court to-day. Mr. Reardon, representing the unions, stated that ho desired to hear the Government Statistician before replying to Mr. Pryor's statement. The Court accordingly called Mr. Fraser, who pointed out that Mr. Pryor had not questioned the method of compilation. Mr. Fraser answered in the affirmative the quest ion asked by Mr. Reardon, namely, "Is the system upon which the Government Statistician is working in accord with the principles approved by the statistical authorities?"

The second question was, "Are the figures supplied by the Government Statistician for the information of the Court correct?" Mr Fraser pointed out 'that no exception was taken by Mr. Pryor to the accuracy of the working out of the figures submitted. He could say, however, that the figures bad been checked and were correctly worked out on the basis submitted to the Court, which covered all groups for which information was available—food, housing, fuel, light and clothing. It was not the function of the Statistician to arbitrate as to the amount of bonus, but merely to advise as far as information wa ! s available indicating the extent of the movement of the cost of living.

'•COMPUTED ON WRONG BASIS." Mr. Eraser admitted that, although it was practically decided as the result of the discussion in C'hristchureh that the bonus calculation should be based on six monthly figures, the last two bonuses, the first of which was calculated during his absence, were calculated on a monthly average. The lirst calculation was made after the question had been discussed between tho Acting-Statistician and the president of the Court and the basis of the calculation had been specially pointed % out ,to the Court. At a request from the Court the last calculation of fls was computed on the lines of the estimate of the previous half-year.

The moving average eliminated violent fluctuations from month to mouth, but the question as to which system was correct depended on a variety of considerations. If it was the intention of the Court that the computation should have, been made on a six monthly average the Acting-Statistician must have misunderstood the instructions and the bonuses declared were computed on a wrong basis. If the moving average of the index numbers for food alone had been used, the bonus would have been substantially as shown by Mr. Pryor, namely: March—September, 1020, 1.8; March—September 20, 3.33. If, however, the moving average of tho numbers for food, rent, fuel, and light, with the increase as ascertained for clothing, were taken into account, the bonuses would have been approximately H, lid and ltd—total 3»d.

Mr. Reardon asked whether Mr. Eraser's statement disturbed the Court's pronouncement.

DUE TO A MISUNDERSTANDING. After Mr. Fraser liad explained the confusion that had arisen between the monthly average and the moving average, Mr. Beardon asked: "Does the Court feel its pronouncement has boon disturbed by the statement of the Statistician? 'if it does not, then we need go no further." Mr. .lustice Stringer: ''l may say at once that I think it wa.-s a most unfortunate thing that Mr. Fraser's duties should have tailed him away from tho Dominion just after the basis for computing the average had been agreed upon between the Court and myself and, I think, the then representatives of the employers. I remember the interview of which Mr. Fraser speaks with the aeting-Covortiment .Statistician, and I am bound to say he must have completely misunderstood any observation of mine if he assumed that he was requested or authorised to depart from the method which had already been agreed upon, and which I myself thought, and have always thought, is the more correct basis on which the bonus should be paid. Nor should .1, of course, have had any authority Jar taking upon myself to authorise any departure from the correct method. The communication which was made after that interview, and which gave us the basis upon which the first bonus was granted, came, of '•ourse. before myself and other members of the Court, and certainly, although it is possible the thing may have been capable of having the interpretation mentioned, neither X nor my colleagues understood in tho least degree Hint there had been in that calculation a departure from the original basis. T Ihink the position is unfortunate. Tho final calculations for a Us bonus, which were supplied by Mr. Fraser himself, were made on the assumption that tho two previous ones had been made in accordance with the desire of the Court. That is the position as far as the Court is concerned.''

WHAT DIFFERENCE MEANS. Mr. Eraser was questioned as to tho methods of compilation and finally Mr. Justice Stringer asked what would be the total bonus payable, if it were mado on the moving average basis—the system tinder which the Court thought it had been proceeding. Mr. Eraser: Threepence .three farthings. Mr. Justice Stringer; And as a matter of fact the !)s bonus makes the total 4-id? Mr. Eraser: "Yes." He went on to explain that, on the moving average basis the bonus would have -been id, l.ld. and l;(d per hour instead of The Id, lid and ->\(\ granted. Mr. Justice Stringer; Practically Mr. Pryor's contention. Mr. Eraser: Yes. Mr. ,[. McCombs. M.P., representing the Canterbury Trades Council, said that if Mr. Pryor preferred the food groups calculation rather than the all groups calculation he hoped he would advocate the payment of the back wages which would be due to the workers under the method of calculation stipulated by Mr. Pryor. When fully and logically applied the shortage in wages per week, comparing the fond isroup oak-illation

and the Court's bonus awards, was as follows:—March, 1911), 5s 2d; September, 1019, Is sd; March, 1920, 3s 2d; September, 1020, Is. In order to make up the existing shortage the Court required to lis. tiie present bonus at 2Jd per hour, or 10s per week, instead of at 2Jd and os. Also, if the workers were now to be compensated for losses sustained by the Court not having adopted the food groups method of calculation the bonus would have to be more than doubled.

INFLUENCE OP WAGES. Dealing with the effect of the increase of wages on the cost of living, Mr. McCombs said an increase of 10 per cent in wages only influenced the cost of finished articles in our secondary industries by 1J per cent, as the bulk of the articles that entered into the calculations of the index figures were either imported or wore primary products of New Zealand, the prices of which were governed by the world's markets. The influence of a ten per cent increase in New Zealand wages did not very appreciably affect the cost of living, and it was safe to estimate that taking all factors into consideration a ten per cent increase in wages would not affect,the cost of living by one per cent. The six shillings bonus given six months ago would affect it even less, yet during that period the cost of living ro3e over eleven per cent. He hoped the Court would not be stampeded by an entirely spurious agitation, as the Government was. It had been stated that prices were falling, but there was no evidence of that; in fact, the latest monthly abstract showed that food groups had gone up another 50 points, or taking the six-monthly average, by 27 points. He urged, as a matter of equity and fair dealing, that as wages had to follow prices on the up grade a fall in wages should not precede a fall in prices. GRAVE FINANCIAL CRISIS. During the afternoon Mr. Bloodworth addressed the Court on the state of various industries mentioned by .Mr. Pryor in his speech on Monday. Ue considered the employers were endeavoring to create a needless panic. Mr. Harold Beauchamp, chairman of the Bank of New Zealand, called by Mr. Pryor, as a witness for the employers, said he had prepared figures which he thought indicated that the country was passing through one of the gravest financial crises it had ever experienced. He would hazard the opinion, as far as this bonus was concerned, that it would be an extremeFy difficult matter for manufacturers, employers, and others to stand the additional strain it was proposed to place on tliem. If New Zealand continued to enlarge j the vicious circle it would in the end meet with a crisis of unparalleled magnitude. ,•' |

Other witnesses having been heard, the proceedings were adjourned till tomorrow.