COST OF LIVING.

Dominion, Volume 5, Issue 1533, 31 August 1912, Page 14

COST OF LIVING.

THE COMMISSION'S REPORT. CAUSES AND REMEDIESINFLUENCE OF TRUSTS AND LABOUR LAWS. The report of the Cost of.Living Commission was presented in the House of Representatives last evening. In its printed form tho report is a bulky volume of nearly seven hundred foolscap pages. There arc 510 pages of evidence. In addition to the main report, there are six minority reports. The commission consisted of: Messrs. E. Trejyear (chairman), A. Fairbairn, E. Hall, J. .flight, 6. W. Ixsadley, W. G. M'Donald, J. Robertson, nml W. A. Yeitoh. Set up by tho Mackenzie Government on May 24, 1912, the period granted to tho commission for its inquiry was twice extended. The report now presented is dated August 80. In conducting its inquiry, the commission held 31 open sittings, in addition numerous committeo meetings, and .examined 270 witnesses. The report draws attention to the fact that there was a reluctance on the part of i some witnesses to givo evidence. "We would particularly draw attention to the fact," runs ono paragraph, "that the commission was met by a point-blank refusal oil tho part of tho Merchants' Association of Now Zealand to give any evidence whatever." Tho report proper is an elaborate document of 88 pages, which goes nt great length into tho subjects raised by the inquiry, and bristles with slalistie.il tables. Appended to this voluminous production is n summary of findings, of which some of tho more important are given below. The earlier findings in the list ileal with the difficulties of defining and computing tho term "cost of livins," and with the increased cost of living iu recent years. Comparisons With Other Lands. The whole of one section is devoted to comparisons with other countries. It is stated that .lie rise in the cost of living due to increase of the prices of the articles in the uniform schedule of living has been considerably less in New Siealand "than iii the United States, Canadn, and Germany, and Appears, to have been approximately , tho same ..as in the United Kingdom, but higher than in Franco. After elaborately reviewing tlie influence of gold-supply. the Commission concludes that cost of Jiving in New Zealand has risen much irioro than the increase in the supplies of gold and of money generally would explain: Respecting tho influence of standard of living, the Commission states that the standard of living, has risen vov considerably, but it has risen because of the growing surplus of income left after paying the cost of living as defined at the beginning of the report. As to the influence of the rise in the price of land the report states that the rise in the price of rural lands has not increased the prices of the necessaries of life produced by the farmer. "The produce of land is high not because land is dear, but land is dear because produce is high." The same principle, it is said, applies to urban lands. Site-rents paid in the cities are dependent on the selling prices of the goods sold. These rents do. not determine the selling price. The increase in the value of agricultural land may have made it more difficult to procure suitable sites in the citifs for some industries and'so may have tended to restrict production and raise prices. The Export Trade, As to the influence of the foreign demand for New Zealand products the report states that the development of the export trade has increased local priccs but has brought about greater general prosperity. As a general- rule . New "Zealand produce is not sold in the London markets at a lower price 'than in leeal market?. If there was no outside market for New Zealand produce the supply would greatly exceed the demand, prices would fall to an unprofitable level, and the reduction would have a disastrous effect on both town and country population alike. , . Tho report deals at length with movements of population. It is stated that similar inquiries abroad have supported the opinion that the drift of population into the towns has had a marked effect on tho cost of living. Enhanced food prioss abroad, said to be duo partly to rural depopulation have indirectly tended to increase cost, of living in New Zealand, but: have mado New Zealand prosperous ,and raised tho standard of comfort of her population. It is concluded that migration into tho towns must shrink if foodstuffs continue to" rise in price. The Influence of Trusts. The Commission states that it has not been able to measure exactly the influence of trusts on prices, but'that it has been appreciable iii regard to some commodities. Tho influence, it is stated, has been growing in recent years, and \ T eiv Zealand is said to be iu danger of being' exploited Ijy combinations fixing sellin" prices, imposing penalties on traders,, anil boycotting independent traders. The Merchants' Association refused to give evidence, but it was proved to the satislVtion of commissioners that it had' secured control and fixed higher prices for abo'it thirty articles in common li.-e. In no cose has price been reduced'as a result of (he combination./ The method adopted !o obtain control is illustrated by the correspondence that took place between fa) Mr. Harold Beauchamp. president,of the New Zealand Merchants' Association, end rhe manufacturers of Jcves fluid, and the New Zealand a?ent: (b) by the letters of Van Houten and Zoon and Jas. Iveiller nnd Son to Messrs. Loughland, Mack-ay nnd Co., London; (c) that a boycott existed is shown by the refusal of the British Empire Trading Company to supply at least two New Zealand firms, although orders were accompanied with cash, end by the treatment accorded to Cuthbert Bowycr. H. B. Low, J. J, M'estgarth, and J.'W. Hall. The evidence of. a number of witnesses of repute proves the association raised prices on certain lines. Manufacturers have combined with the association to raise jirices. as illustrated V the evidence of G. L. Cnll, and tho buying conditions imposed by the Suzar Company, which refuses maximum discounts to all but members of the New Zealand. Merchants' Association. The capital of the Colonial Sugar defining Company is shown for several vears. It increased from X 1,700,130 in 1805 to .£3,000,000 iu 1911. The profits in a year's trading (basis 1911-1912) equal 15.01 per cent, on present capital. Larger discounts are given to favoured retailers and '.Merchants' Association than to independent traders who buy in largo quantities end who will not join the association. In regard to meat and fish- no monopoly exists, though unsuccessful attempts have been made to fix prices. Coastal Trade. Our coastal trade is controlled by a combine, tho predominant partner being tho Union Steam Ship Company. The keystone of the monopoly is the coal carrying trade. Correspondence that passed between the Union Company and ft coal company proves that the former insisted on getting preference, and stipulated t.lwit f.o.b.' sales were to be discouraged before contracting to carry the output, the reason given being that ibe compnny would not carr ythe main bulk oi' the coal if tho effect was to introduce fresh shipping interests which would compete with it : in its general trade. Discrimination shown V,y shipping monopoly in freight rates between Australia Mil New Zealand and 'between ports in New Zealand itself: Another shipping niquooolv has secured control of tho Dominion's import trade, and by _ a system of secret rebates uniustly discriminates goods in favour of Continental gTio.'v.'TTud thus directly defeats the policy of the Legislature as expressed by the preferential tariff. Butter, Flour, and Timber. Although if has been alleged at various times t Hiat bultor has been cornered, the Commission found no evidence in sup. port of a systematic exploitation, but a danger exists that 'under Iho >helter of the 20 per cent. Customs Inriff speculators may be able to control supplies and inflate prices. Neither flour nor timber has ever beep successfully, coatrollsd Joi; .any. length of

time, but attempts have been mado in both instances to monopolise. Statistics coiicprmng the match industry arc quoted. This industry is held by the Commissioners to l>e a monopolv, ii combine, and a trust. An amendment of the Commercial Trusts Act is suggested. Effect of Tariff Reductions. The period during which tariff reductions have taken, place Ims been one of vising prices. The prices of articles placed im the free list fell considerably during this period of rising prices. When combinations secure control, prices nro prevented from falling. Our great primal industries are the real sources of our prosperity, and all people employed outsido protected industries bear ihe burden of this protection. Labour Legislation, What cffect, if any, has tho Labour legislation had on tho increase in. tho prices) of the commodities of life? The general effect has been, improvement ill environment of workers. What increased efiicicncy has resulted, the evidenco does not show, but labour cost of production has increased, Has this extra cost 1:01110 out of profits, or been passed on to the public? In some instances the former—e.g.,-coal; in other instances it has stimulated tho introduction of better machinery—e.g., boot track- am! iron trade. Hut neither prices nor wages can go on rising indefinitely, and a halt would have to be called before this, had our medium of' exchange not been elastic. Tho awards ofi the Court of Arbitration aft'ect; the whole community, although approximately DO-per cent, of the people are not represented before the Court. Causes. What causes generally have brought about the increased cost of living ? The chief factors appear to be:— (I) Tho increased supply of money, including gold and credit, and the increased velocity of circulation, all of which appear, to have outstripped the increase 111 tho volume of goods and services oxchanged against theni. (-} The increased cost of production of farm products, and the increased demand, both locally and abroad, for foodstuffs produced in the country. (3) Kural depopulation abroad and tlio slackened rate of production of foodstutfs in countries such as the United .States, which have hitherto exported a large proportion of the amount produced therein. (4) Local combinations, monopolies, and trusts, commercial and industrial, which both raise prices directly to the consumer, and tend to discourage initiative and .self-reliance.. (!>) Thb diminishing of the natural feitility of tho soil, and of'the natural resources abroad. (G) Tho relatively higher increase in tho cost-of distribution owing to increased transportation charges, tho excessive numbers of those engaged in' the work of distribution, the duplication of distributing agencies. (7) The national waste involved in extravagant living as evidenced by excessive devotion to luxury, sport, and nowise recreation; lack of economy in local and Governmental service; wasteful domestic methods employed by the great mass of the peoplo; rapid changes of fashion in clothing and boots; the devotion of an increasing proportion of wealth to nonproductive uses. (5) Increased taxation, both local and national. (9) Tile operation of protective tariffs and trust.-i abroad in raising the first cost of imported articles. (10) Tho New Zealand protective tariff, especially as regards taxation on the necessaries of life. (II) The failure to attain,that national efiicicncy which can bo secured only by the operation of a well-considered and properly-co-ordinated scheme of education —general, industrial, commercial, agricultural, and domestic. (12) Tho higher standard of life. .Recently there are signs that it is becoming increasingly difficult to maintain this new standard.. Remedies. i What steps should be taken with a 1 view to reducing the cost of the necessaries of life? Tho recommendations are:— Improvement of Xew Zealand statistics. That tho Government Statistician should have full control of statistics. That his office should form a separate Department. That he. should bo allowed to travel abroad. That an advisory board of statistics should be created. That the more responsible offices should be filled by me.i who have gone through a. recognised course of training in statistical methods and economics. That the Government should offer a scholarship for post-graduate research in social economics.. It is also recommended that New Zealand should be represented at the proposed International Commission 011 the cast of living. Under the heading "Education" it is reconunendfd as follows.— The inclusion in tho primary school syllabus of a definito course of simple descriptive economics, and the development of a more systematic course in the secondary schools. The extension of education in domestic economy. The formulation of a complete scheme of agricultural education and the endowment of researeli scholarships in agriculture. The extension of the present svstem of technical education that those who have passed through a definite course of technical education should receive special consideration in wages, rates, etc. That a closer connection should bo established between the administrative sido of. Government and tho political science rnd economic departments of the university. That 110 efTort should bo spared to improve the education of tin people. 1 hat steps should be taken to secure cxpci ach ico for ruiientii >n clioosifl" avocations for children. 0 Additional proviso is tre suggested for the Commercial Trusts Act. Another recommendation is that a permanent Board of Industrial and Soml j Invostigation-bc srt up. • ' Tariff and Protection. In re Customs tariff and protection; the following suggestions are made.— (a) Abolition of duty on all foodstuffs and on the necessaries of life used bv tho primary producers. (b) Failing this, the reduction of certain duties and thenbolition of others are recommended. (c) That nil imported' and locally-made boots containing composition or cardboard should bo branded accordingly (d) That duties on boots, shoes and slippers, if retained, should be amended a uniform ad valorem tariff to be substituted for the present one. Land and Rent. (a) That such a land policy is required as will break down land monopoly in town and country; a system of taxation of land values is suggested (see reservations of your Commissioners). (b) Tho provision of small holdings and tho extension of village settlements. ' (c), That tho workers' home echemo should be extended. (d) That the Government should pass n compulsory Utilisation of Lands Act (e) That the Government should provide country settlers with better facilities for obtaining communication and maternity nurses. • ' Immiflration. ; A systematic policy is advocated, and the continuance of the Sedgwick scheme also an assisted-scheme for adult labour. Transport.' (u) That differential rates l>c abolished, (b) That 1110 permanent Hoard of Industrial and Social Investigation should inquire into the whole marine transport service. _ v (v) The trial of motor trains. Municipalisation of Markets and Services. (a) The Commission is of opinion that municipal fish, fruit, and dairy produce markets should be established. (b) That the permanent Hoard of Investigation should take steps to get an authoritative report 011 the miinicipalisi4ion of the supply of bread and milk. Money Lending and Bailments. (.•1) That in all money-lending transactions the rain of interest computed at. the annual rale .-hoiild be embodied' in the, document comprising Ihe loan. (b) That all bailments and documents of salq or. wortgHigo jnuat chow, tho

rato, of interest computed annually. Minority Reports. There arc six minority reports. llr. Trcgear dissents from a finding that M per cent, of the population are subject to awards of the Arbitration Court without representation. lie contends thai the Judgo and members of the Court, who deliver the award, represent tho whole people of the Dominion. llr. I'airbaini, in an elaborate and lengthy statement, explains his reasons for dissenting from the majority view of the Commission in regard to the influence of the value of gold 011 the cost of living. 111'. Trcgear dissents from I lie recn-n----mendatinn regarding the abolition of protective duties 011 the taritY on the grouiul that tho Commission has not had timi~r opportunity to properly investigate tho subject. Other minority reports are by Dr. Ilijlit and another by Messrs. Fafrbairn, Hall, and I.eadlev notify, dissent from the majority view regarding questions of land and land taxation. TIIO last minority report is by Messrs. Eoliertson and Veitch, who record their opinion that it «;ou!d ho unwise, under existing conditions, to increase Hie present volume of immigration. They add that a land policy is urgently required which will enable our population to ; have easy access to land for occupation and use. The report we.s presented to T.' iriiamenf by the Hon. W. i'. M-assey (I'ri ne Wilister) last night, and in answer 10 a iequest from Sir Joseph Ward he promised j to give the Houso an opportunity t;i di-:-cuss the report on some suitable occasion.