SIR,—With regard to Sir F. C. Gates' suggestion of what
Sit John Simon " said (or meant to say)," I can only reply that my quotation was from The Times report of the ex-Chancellor's speech. It is somewhat remarkable that such a striking state- ment, as it was actually made, should have gone unchallenged either in the debate which followed it or in the Press.
It would have made my previous letter too long to have men- tioned how greatly the " costing system " has been responsible for the unwarrantable rise in wages of all engaged in factories employed on Government work. The manufacturer receiving a percentage on costs for the remuneration of himself or his firm has obviously had a direct incentive to make these costs as high as possible. The more, for instance, he paid in wages the bigger his own profit.
If, under the new Emergency Powers Defence Bill, the manu- facturer has to disgorge too per cent. of his excess profits, it will be a crying scandal if those who are running hardly any of the risks of the men in the fighting-line are to be allowed to profiteer without any deduction of tax. Incidentally, this abuse, if un- checked, must inevitably increase the cost of living and cause inflation; for, as the experience of the last war clearly demon- strated, these big wages were mostly spent on superfluities and very little indeed of them saved for the rainy day which
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