PRODUCTION COSTS AND PRICES.

Press, Volume LXVI, Issue 20093, 24 November 1930, Page 17

PRODUCTION COSTS AND PRICES.

TO THE EDITOB OF THE PRESS Sir, —I have read quite a lot in your valuable paper, suggesting that the cost of production is the cause of tho lowering of prices. Now any schoolboy knows far better then that, and it should be stopped at once. We all know that cost of production has absolutely nothing to do With the price of goods when offered for sale That is controlled altogether by the demand, which is controlled by the supply. Anyone who gluts the market and expects high prions :s a fool. The wholo trouble is over-production, and the lowering of purchasing power, both of which are the result of the ever-increasing introduction of more machinery, which has put millions on the road; and now Capital tries to blamo the working; man for. the folly of unwise competition. To show that the cost of production doe? not militate against prices, but should have the opposite effect, it goes without saying that if the cost of the production of anything was excessive there would naturally be a curtailment, and of course in sympathy with that and in obedience to the demand the price would go up. If _we want any proof of this wo have it staring us* in the face all over the world.: — Yours, etc., A. DENISON. November 22nd. 1930.