The Gisborne Times. PUBLISHED EVERY MORNING. FRIDAY, AUGUST It, 1908. THE PROFITS OF CAPITAL.

Gisborne Times, Volume XXVI, Issue 2269, 14 August 1908, Page 2

The Gisborne Times. PUBLISHED EVERY MORNING. FRIDAY, AUGUST It, 1908. THE PROFITS OF CAPITAL.

One of the pleasant little illusions under which the oppressed “woikei is expected to labor is that of the the value of production of the lion’s share goes to the capitalist, who, like the lily, noither toils nor spins. It is wonderful how far a littlo cold analysis will go to shatter these dreams of the humanitarian socialist. Air. W. H. Irvine has been subjecting the manufacturing industries of Victoria to a little calm scrutiny, and although those, industries are fairly prosperous they leave no room for tho imaginary lordly profits on capital invested. Between them the industries produced a total of £30.000,000, which looks enough to make someono rich. But not far short of twenty per cent, of the value of production was paid in wages, over sixty per cent, went in materials, and when all tho incidental expenses have been allowed for it seems that a baro seven per cent, represents the average profit of the Victorian manufacturer. Seven per cent, on tho year’s output can hardly be called a rate of interest approaching usury, and any self-respecting lion would he astonished ,as his own moderation if ho accepted so reasonable a share of tho produce of tho indust”uil chase. As Mr. Irvine rightly pointed out, very little mirgin was, as a matter of fact, left lor possible in wages. A very slight all-roirui increase would wipe out most of tlio manufacturers’ profits.

The great weakness of much of labor advocacy (says the Sydney “Mornin £T Herald 51 in commenting upon the position) is that it fails to take account of simple fact, like tho foregoing. It is not difficult to generalise the lesson taught by Air. Irvine’s figures. If, for instance, wo look any day at tho yield to investors from shares in public companies, we find that perhaps a majority of them yield under five per cent, jniany yield less, and tho exceptions that yield up to nine or-ten per cent, are exceedingly restricted. Now, capital, like everything else, commands its price, and if it wero true that tho capitalist exploiter of labor could command Inigo profits out of underpayment for work done, he would bo willing to hire capital at much higher than these ruling rates. It is the same with all classes ol .investment House property, according to tho most attractive and alluring representations, is calculated to return some ten per cent, on capital invesl- - But when wo make reasonable reductions for taxes, insurance, depreciation, and so forth, as cvcryono knows, tlio investor of this class is lucky if he gets six per cent. Stories of capital lying idle for want of profitable outlet arc by no means apocryphal. These are trite enough comments, and everyone is familiar with tho facts on which they are based. Yet theso facts are sytematically ignored by the political exploiter of tlio (Labor vote. That, of course, is a sin of omission we might bo willing enough to forgive wero it not that it often threatens the most serious consequences. How often in our experience are struggling industries brought into jeopardy precisely by tho persistent harping on this so largely falacious idea that capital makes inordinate profits? It is well for Labor to understand what the truth really is; and it must occur to many of us that labor troubles would often be lulled to rest if tho harassed employer took his hands into his confidence and let them see how trilling his profits really were.