CONTROL OF FOOD PRICES

Dominion, Volume 8, Issue 2503, 2 July 1915, Page 6

CONTROL OF FOOD PRICES

SINCE THE WAR | NO EVIDENCE OF EXPLOITATION [COMMISSION'S REPORT' The report of the R-oyal Commission appointed : under the Regulation of Trade and Commerce Act, 1914, to inquire into the state of prices in New Zealand of wheat, flour, bread, oatmeal, beef, mutton, and any other articles of rood, and the advisability of determining prices, was presented to Parliament yesterday. I'he report stated that the commissioners made their first report on September 29, 1914, and since then various interim reports had been made to the Prime Minister, bearing dates of October 8, 1914 (relating to sugar); December 21 (relating to Hour); February 22 (relating to bread, meat, and imported foodstuffs). In dealing gonerally with the subject, the' commissioners pointed out that in the early weeks of the war a feeling of great uncertainty about the future was prevalent, and one result wa6 an unprecedented demand for provisions, principally from grocers, such as llo'ur, sugar, oatmeal, eto. ' The immediate result of this was the embarrassment' of merchants and manufacturers who supplied the retailers, and the millers, and the Colonial Sugar Company refused to supply abnormal orders, as their 6tocks were beiug depleted.- The merchants and retailers in turn raised prices in order to check the run on the stocks they were unable to- replace. Several months passed ■ before business settled down to normal conditions, the situation in the time becoming further complicated by the severe drought in Australia. • In normal times wheat or flour could be readily imported from Australia, but in view of the drought a strong demand for foddor of all kinds for Australia was experienced, and this had the effect of raising prices here. So there were two causes tending to raise prices—one world-wide, the other local. ' Shortage of Wheat. Supplies of. wheat in the Dominion and a threatened shortage of sugar 1 received' the Commission's attention first. Those millers who held large stocks of wheat at low prices undoubtedly made large profits. The margin at any given time between the price of wheat and the price of flour, and between the price of flour and the price of bread, had not, as far as the evidence had shown, been disproportionate. As prices of wheat were rapidly rising the' Commissioners made recommendations as stated in the report of September, 1914. They found that the area sown in wheat in. the Dominion was decreasing year by year. The low price of wheat for some years, the fact chat the raising and fattening of live stock and the production of butter and cheese had been made profitable during the same period, ana the difficulty in soouring sufficient and labour at harvesting time, were the chief reasons given for this decrease in wheat-grow-ing. The remedy usually suggested was tlio placing of an increased duty on wheat and flour. The Commissioners 1 could not .recommend this, for the reasons that it would involve an uneconomic use of land. Until sufficient wheat for own requirements was grown in the Dominion the consumer would have to pay an increased price. When an exportable surplus was grown protection for the grower could cease, and the crop would be marketed at the world's price. ' This season's 'harvest turned out better than was anticipated, ■ and the wheat threshed would nearly supply our normal requirements. There were indications that any possible deficiency would be made good by importations of flour from Vancouver- and elsewhere. The price was high during and immediately after harvest, but had since eased a little. Inevitable Rise in Meat Prices. The rise in the retail price of butchers' meat was inevitable; as the price of meat, especially beef for export, rose on the outbreak of war, while the price of by-products declined. The Commission found no indication that butchers were making undue profit. During the continuation of war-prices ■would be xegulated bv the price at whidh the Imperial Government had taken over our exportable surplus of meat, and might be further modified by shortage of snipping space. No Abnormal Profits, Evidence showed that retailers generally, -while receiving higher prices for a number of articles, were seldom making more profits than, in'normal times, and in many instances had to content themselves with reduced promts. It was repeatedly emphasised that if buying were generally done for cash over the counter prices could be materially reduced. Nearly'all retailers complained of the increased cost of booking and delivery. Traders Took No Advantages. The report concludes: "We had no evidence, nor was it suggested, that there was any combination amongst merchants to maintain a high level of prices. On-the contrary we were satisfied that merchants and traders, with few exceptions, throughout the Dominion had acted fairly and reasonably, and had not sought to take advantage of the war to-'augment their profits at the expense of the public. Your Commissioners have therefore not made any recommendation on the subject."