COST OF LIVING.

Dominion, Volume 5, Issue 1485, 6 July 1912, Page 5

COST OF LIVING.

AND THE CAUSES.

THE BROAD ECONOMIC SIDE,

BY COLLEGE MAN.

HIS EVIDENCE & ANSWERS,

Tho Cost of Living Commission continued its Wellington sitting nil day yesterday. Mr. E. Tregear presided. l''raucis Prcndevillo Wilson, lecturer on Jiconomios at Victoria College, opened the day's ovideuee. Ho staled that ho looked upon ''cost of living" os a relative .lerm, and said that in order to investigate, its variations, it was necessary to investigate not merely the variations in the prices of commodities, but also tho variations m tho amount of money earned or obtained by consumers. A rising level of prices meant a diminution in the purchasing powor of money, and this was to tho disadvantage of creditors, and those in receipt of fixed incomes or annuities. It would bo to tho disadvantage of wagcearners generally unless their wages increase proportionately to the rise in prices. A falling level of prices must have the' opposite effect. Tho main source of his information on the subject of wholesalo prices was Dr. Jt'llwraith's pamphlet of figures. Dr. Ju'Uwraith's figures (adapted so as to make 1891 equal 100) showed that wholesalo prices of commodities in general had varied as follows:—1891, 100; 1890, 89; 1901, 90; 1900, 93; and 1910, 95. So that, in tho first live years of the period, prices fell considerably, but had 6inco been rising steadily. . Ho . .tK 11 took four cla S3 e s of figures in which bo thought that tho masses were most concerned, and stated that the course of prices was as follows.—A ueneral produce (wheat, flour, barley, oats)": 1891, 100; 1890, lOi; 1901, 82; 190fi,'103; 1910, 110. .there the nso in the last ten years had been very rapid. In pastoral' products (wool, beef; mutton, lamb, bacon, butter,'cheese) tho figures were: 1891, 100; 1890, 91; 1901, 108; 1900, 129; 1910, 132; which showed also a very rapid rise in tho past ten years. Taking beverages (tea, coffee, and cocoa), thev had: 1891, 100;' IS9O, 98; 1901, 98; 1900, 98; 1910, 107. Tho rise of 1900-1910 was duo to rises of I, 2d. per lb. each in tho prices of tea and (coffee, and Id. per lb in cocoa. Foodstuffs: IS9I, 100; 1890, 7i; 1901, 79; 1900, 75; 1910, 70.

Combining these tables, they had tlio index numbers of prices of agricultural products, pastoral products, beverages, and foodstuffs, taken as groups: IS'.ll, 100; 1890, 92; 1901, 92; 1006; 102; 1910, 105. It was, of course, obvious that tho figures as presented would bring out tho variations attributable to tho peculiar conditions of particular years, and that the

course of prices would be better Khoint, by, say, quinquennial averages,, but tho ; tendency of prices was sufficiently shown by tho figures given. Rents and Wages. The most important item, rent, had not been included in the figures, which ho had given. So far as ho could father, ! no official inquiry had been mado in previous years into tho rents actually paid, but in the census of 1911, such a census was made. By consulting tlio files of Wellington newspapers of 1891 and 1895, the' had arrived at whit might bo a fair approximation of tho rents of i, 5, and G-roomed house,". Ho'had found that in. 1891-5 tho rents were as follow:— i rooms, 13s. per week; S rooms, 15s. 6d. per week; G rooms, 18s. por week. Tho census of 1911 showed tho rents to be:—l rooms, lis. Gd. per week; 5 rooms, 18s. per week; 6 rooms, 21s. per week. Taking tho figures of 1694-5 as 100 tho ratio of . 1910 . was :—t, TooniSj. 112; 5 1 rooms, 116;' and 6 rooms, 116, Hut, in conjunction with those, figures, there had to bo considered the fact that tho majority of those smaller houses was prob- j ably now in tho suburbs, and that to tlio 1911 figures must bo added an allowance for tram faros, which would probably average at least 2s. per family, so that tho real riso would, probably "approximate 30 to 35 per cent. A G-roomed house in M'Donald Crescent was then let at 18s. Gd., and would now command probably 255. to 275. Gd. A new 6-rooiucd house in Brougham Street was let at 18s., and would now oommand probably 255. to 275. Gd. A 7-roomcd house at Karori, with stable, trap-shed, cow-shed, barn, good orchard, and 5 1-3 acres of land, near tho school, had been offered for .£52 per annum.

Commodities and Wages.' Figures in the Tear Book showed that flour, beef, niuttou, butler, cheese, and potatoes had risen from 100 to 130 iu tho rotail prices, while their wholesale prices had increased from 100 to 121. From tho figures given in tho census report for 1890 ho found that in 29 industries tho average wages for males was .£B7 and of females .£32, whilst tho 1911 figures showed tho wages to average JDIIS and JBO7 10s. Tho ratio was: Moles, 100 to 132; females. 100 to 180. Tho information, however, did not allow ono to stato definitely that there had been tho rises iu wages for adult workers siiico these- rises in wages may havo teen brought about by an alteration in the ratio of boy and girl workers to adults; but that tlinro had been a substantial rise might bo safely asserted, and the riso appeared to liavo been greater than tho riso iu tho wholesale prices of commodities, ond about equal to the riso iu retail prices. In tho j United States and tho United Kingdom wages and prices had pursued parallel l courses,

Gold Aspect. As to tho causo of prices it was generally agreed by economists— thero was not an absolute, agreement, but 95 per cent of them wero at one—rlmt tho fundamental causes affecting prices .wero: (a) Tho amount of money in' circulation; (b) tho velocity of its circulation; and (c) tho quantity of commodities to bo exchanged, by means of this money. The basis of tho mcibii of oxehango in most oommercM countries being gold it would bo expected that variations in tho supplies of gold would produce corresponding variations in tho prices of commodities. To go back no further than tho beginning of tho ninoteenth century, tho main source of supply of tho precious metal was tho Spanish colonies of America, and when these entered on their strugglo for liberty, tho disturbed state of tho Continent resulted in tho paralysis of tho mining industry, tho effect of which, showed itself in a gradual decline of prices and comparative stagnation throughout the commercial world. I

The saving featuro of tho situation was the development of the Ural mines, which, after 1823, began to send out increasing quantities of gold and silver. In IS4B came tho discovery of the mines of California, followed by tho discovery of gold in Victoria in ISSI. Tho effect on prices had been at onco felt; they had begun at onco to rise steadily, and although tho rato of production of cold had not been maintained, the "pacer supplies of California having been practically exhausted in a few years, tho effect had been maintained till about 1573, when a dcclino in prices had begun again, mid had continued till checked by tho discovory of tho Rand fields, when in ISS7 a slight increase had begun, to bo shortly followed by a dcclino, tho production of gold not having been able to keep pace with the expanding industry.

In 1891 there had oomo the difcovorv of tho Coolgnrdie mines, and this, with tho rapidly-increasing output of the Rand had checked the fall, and a steady rise had begun. Two or threo years Inter •there had occurred tho discovery of (ho Yukon fields, and except for the Interruption caused by tho Boer Wot, the production had increased steadily ever since, and prices had, with occasional interruptions, risen steadily in sympathy. Since lSSl'tho production of gold had risen five-fold, and was now over 20,000,000 ounces per annum. Only a portion of tho increased yield was absorbed in currency, (ho remnnder in tho arts. Tho velocity of circulation depended on two main factors—the habits of (ho propin and tho distribution of population. A nation in which habits of banking wero developed would maintain a level of prices on a lower gold basis than ono in which these habits were undeveloped, and. the fact that such habits wero in commercial countries would explain further the rise in prices. An urban population spent more rapidly than o isxmtiz BOEuktioa, w.a£«B sfm^esml

within, a fow days of receipt, and (!■.•> loss the interval botweon tho receipt sm,<l sponding, tho greater tho velocity of circulation and tho higher tho level 'of prhr; maintained. Bonking deposits, though only a Mtiall portion of them is converted into enrroncy, still economised currency, uml the greater tho deposits, and tho mioro ranidI,y those deposit*; wore operated on, tlio higher the level of prices. Protection tended to raise the price levels of a country, tinec, for n wl.il.', it acted as a dam to prevent Roods /lowing in. Hut was was worth .noting Unit once the internal price-love! had ndju-i----ed itself as a result of protection, II::; flow of goods must begin, again. If wj export wo must import, and Hint in spite of protection. If tho protection on our industries was doubled .for a year or (wo imports of goods would decline, ihonov would flow in, prices of nil commodities would riso, tho cost of living would increase, creditors, annuitants, the™ in re-' . eeipt of fixed incomes, and (till wngei wore adjusted), wage-earners would suffer; and, after a period, when our price-levels had risen sufficiently, importation would increase till our exports had again, been balanced. Dialogue Between Witness and Commit, sioner, Mr. Robertson: Do you maintain tliat labour is a commodity like goods? Mr. Wilsons That is a somewhat) dimcult question. In what reject do you want me to answer? Mr - Kobcrtson: Is it subject to n risa and fall in prices with a greater or lesser , production of gold, same as other commodities? Mr. Wilson: I take it that it is. Mr. Robertson: If that is so, (ho cost ol living ennnot bo effected by tho increased prico of gold, i slr -,,» : , i ] i? °»: 1 thought that I had brought that out, Trices may go up. but wages riso. too. Mr. Robertson: So that wo will have to look for another cause? Mr. Wilson: Ye?. Mr. Robertson: The prico of gold may he neglected altogether. Mr. Wilson: I think so. ... If you tako.n lino of prices you would find it very erratic; but tho conrso of wages is very much smoother, subject neither to such extreme minima, nor maxima. In reply to another question, Mr. Wilson said that any riso in what was called tho cost ol living was probably duo to tho increased standard .of comfort, and that that probably showed itself in the decreasing birth-rate. Better quality articles were demanded, and this might lie compensated for by tho diminishing birth>r' V lo '- 1 red,ICC(I the family expenses. Mr. Fmrbnirn: Is gold subject to (he Ea K° r r° nn(l M 1 as olllcr commodities? . Mr. Wilson: I think that owing to tho way in which you have put tho question, I can only answer, "Yes." ... As commodities increase in quantity relatively to the supply of gold, prices will fall, and as (hoy diminish in quantity relative to tlio yold, prices will riso. Rises in tlio price of produce increased tho price of land'from which they wore raised, Mr. Wilson said. What has increased tho price of urban land? he was asked. Mr, Wilson: Mhink it is a great deal a case of supply and demand. As an urban population increase so will the land go. Mr. Veitch: No doubt, you have no-, ticed that tho banking institutions are showing very high profite this year. How do you regard that as affecting tho pooplo who have no capital? Mr. Wilson: 1 don't regard it as affecting them. I regard it rather as reward for services rendered to the community, and I think-that crery service is worthy of reward. Witness and Mr. Veitch.

Mr. Veitch: No doubt; but-how does it afreet the welfaro of tho people without capital? Mr. Wilson: I think it increases their welfare. Mr. Veitch.: Docs it not involve an additional accumulation of capital in tho country ? .. Mr. Wilsdrii Yes, I presume it does. Mr. Veitch: And is it not reasonable to supposo tnat it simply applies in tlio same way as increased rent? 'It represents an increased opportunity of extorting additional profits from the peo. plo? Mr. Wilson: No, I don't regard it ir that light at. all. t _ Mr. Veitch: How would you explain the increaso in tlio price of land? Mr. Wilson: By tho concentration of population, tho demand for land, and the limited supply of that land. Mr. Wilson added that he had alwav« held vie»s opposed to land monopoly. * LABOUR SECRETARY. , Jo'hn Tximas, Secretary for Labour, was called, and asked if 'thero were mr? industrial unions whoso rules permitted them to fix prices. He replied that there we're. Thero were four employers' unions in Canterbury—Canterbury Bakers, South': Canterbury Bakers, Timaru Grocers, and Timaru Painters and Plumbers. In Auckland thero wero the Bakors and the Suburban Coal Merchants. In Hawke's Bay thero wew the Bakers, in Wairarapit th« Bakers; in Wellington tlio Bakers and tho Timber Merchants; in Du.ncdin tho Bakers, the Suburban Coal Merchants; nnd in Invereargill tho Coal Merchants. In reply to Mr. Tregear, tho witness said that, on tho wholo, the first introduction of Sedgwick boys had been a success.. lie would favour going on with tlio scheme, except for tlio trouble it would cause the Department. Out of the 50 boys brought out, .17 had'been suocesses. The mode of collecting tlio Department's statistics on file cost of liviii<r was by sending out books to workers fop them to enter for the year the .money it cost theiu to live. The workers' dwellings were all being occupied, and there was ,\ demand for more. They were to build ,1(1 more at Auckland, !l at Timaru. an

Temnka S. Wanganui 10, and at kelson 12; and (hey were negotiating for iSmt at Wcstport, had recently purchased 23 acres at Iluntly, and wero 311 st completing tho purchase of 10 acres between Franklin and Hamilton. They would be, shortly, building some houses at Dunodin, had just completed 23 in Wellington, 13 in_ Cliristcliurch, nnd bad move applications under consideration in Cirri's!church. The cheapest house was in Auckland (four rooms for 10s. Gd.), ami the highest price at Wellington (G-roomcil houso IGs. no!) CHIEF RAILWAY CLERK. Ricli.iTd Win. M'Villy, chief clerk in tho New Zealand Railways, stated that' Hie Railway Department was doing all) it could in tho way of dealing with all perishable food-stuffs. They gave such goods the quickest despatch they could, but passenger traffic had to tiike precedence. Railway charges were much lower than they were fen years ago and (wenty years ago. Tho idea that railway freight < appreciably affected (lie prices of commodities in New Zealand was mythical. JTo quoted figures to support tin's observation, and Hint if tliey affect dm over-the-counter prices at all they should lw tho means of reducing them, as compared with 15 or Hi years ago. It, na a genuine answer to say Hint all Hi* coal used in tho railways would bo New Zealand coal if they -could get it. It was when tho Now Zealand companiei could not complete contracts that Newcastle coal was resorted to. MARTON FARMER. George I.eheup Marshall, sheerj n'.d agricultural farmer, Jlarton, and chairman of the Marlon branch of (he NewZealand Farmers'' Union. t\ii<L that it was surprising how produce increased in price in tho courso of its journey from the producer to the consumer, mi increase of pretty well 100 per cent. Last winter at Marlon, tradesmen's accounts h:u\ been very hard to get in. Thero was interest which had to be |>aid. and no one would trado on a small profit if ho had to wait from six to nine months for his mimev. It would be one of the best things Iho commission could do to recommend that debts must be sued for within two months of their contraction. Country workmen were not such good workers' now. nnd thought moro of pleasure. If (here was moro labour avnilnblo there would bo more production.

Tho remainder of yestordny's ovideni-o if held over owing to prcssuro on nut space,