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concerned to rebut. It""seems to me that if people have their attention diverted to attacking the Arbitration Court it means that they will not have time to go in for constructive problems. That would be disastrous ; but if the Conference as a whole would come to the decision that the Arbitration Court after all was a minor thing, and was doing a minor but useful piece of work moderately well, we could then turn aside to the really important constructive needs, and then I think the work of the Conference would not be entirely wasted. Professor Tocher's Reply. Professor Tocker : In view of the fa.ct that I have more than fifteen specific answers to deal with, may I ask the indulgence of the Conference for an extension of time ; I shall be as brief as possible. (An extension of time was granted.) Professor Tocher : Mr. Nash has called attention to the faulty distribution of the national income, and referred to my rough guess that about one-half the income of the country went to wage-earners. The census shows about 400,000 wage-earners ; and I would stress the point that it is almost certain that wage-earners getting less than £5 a week receive at least one-half the national income. But my objection lies very much deeper, from the point of view disclosed by Mr. Nash's statement. That is the point of view that the Arbitration Court might be used, and is used, for improving the distribution of wealth. In that connection I wish to quote one of the greatest statistical authorities living, a man who was a leading member of the recent Industrial Conference in England, and who was mainly responsible for introducing the much improved system of wage bargaining on the English railways. I refer to Sir Josiah Stamp, who said : " Attention is almost exclusively focussed upon the struggle for a larger proportion of the total product, whereas statistics show that a material gain in this respect is insignificant compared with what can be got from even the present proportion of a much improved aggregate. This obsession itself kills the prospect of a higher standard of life." Mr. Nash also mentioned the sheltering effect of the B.A.W.R.A. instituted in Australia, with regard to the protection it affords to New Zealand wool. But the B.A.W.R.A. dealt almost entirely with Australian merino wool. The greater part of New Zealand wool is crossbred, and there is very little relationship between the price of Australian and New Zealand wool. I understand that for the last eighteen months B.A.W.R.A. has been devoted to liquidation, and not to marketing, and that for some years before liquidation B.A.W.R.A. has not had any considerable influence over wool prices. Mr. Parlane asked whether lower costs would raise land-values and neutralize the benefits to labour. I think, with Mr. Brechin, that lower costs would increase land-values; but I emphasize that if landvalues are to fall in New Zealand, then all land-values will fall together. Some land is worth £100 per acre, and some is worth nothing ; and if land-values fall, then land which is worth at present very little would not be worth anything per acre, and would not be used, and our farming production would tend to decline. By increasing land-values and by increasing the number of farms, the number of people demanding the products of sheltered industries would be increased, and therefore it would be possible for these industries to employ more labour at higher rates. Mr. Bloodworth mentioned the fact that in two or three other countries where there is no Arbitration Court there has also been unemployment; are we to conclude, therefore, that the Court has not been the cause of unemployment ? Mr. Bloodworth asked why there had been a 39-per-cent. and a 61-per-cent. increase in imports and cost of living prices respectively. The answer is that, while many prices are 40 per cent, above pre-war rates retail prices are 60 per cent, above pre-war. The margin between these price levels is one of the big questions to come before this Conference, and we professors have all devoted a good deal of attention to analysing the causes which have led to that state of affairs. Some state that labour costs are a very important factor in the high internal prices ; others disagree. Mr. Semple wanted proof that the workers are not producing a fair thing, but he failed to define what is a fair thing. I hold that a fair thing is that the worker should produce by his labour sufficient value, under ruling market conditions, to pay his wages. If that is so and. he is producing no more or no less than this, then his wages are fair. But if he wants his wages to rise it will be necessary for him to produce more value—something that can be sold in the market for more ; because, after all, the employer of labour is very largely a middleman ; he is buying labour and producing from it something to sell; so that the value of labour is settled very largely by the market value of the goods produced. If the value produced is insufficient to pay the cost of production, the employer cannot carry on his business. If the market will not pay the prices asked at the present time, and unemployment results, one must look to the question of the labour costs. Mr. Tucker asked a question about wage index numbers and asked me to explain that matter. I said that workers, excluding the agricultural and pastoral workers, have had their wages increased by at least 63 per cent, since 1914, according to the Government Statistician's figures. There is a table in the Year-book showing the rise of wage rates year by year. That table is weighted, and the total weight is given as 853 for all the groups. The agricultural and pastoral group, whose index has risen 47 per cent., has a weight of 188. If you take the 188 weight of the agricultural groups from the total it leaves a weight of 665 for the remaining groups. The average index for all groups, based on 1914 equals 100, is 158. Multiply this 158 by the total weight, 853, subtract the product of the farm wage index and its weight, 147 X 188, and divide the remainder by the remaining weight, 665. The result is 163, the index of all wage groups, excluding agricultural and pastoral. The Government Statistician will vouch for the validity of this method. The wages of the workers covered, excluding agricultural and pastoral workers, have risen 63 per cent, since 1914. Mr. Mcßrine said that I stated that labour costs must be reduced and that I made no referenct to anything else being reduced. It is not true that I made no reference to anything else. I did refer to capital costs, taxation, and other things ; but I took it we were concerned here mainly with

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