The Dominion FRIDAY, SEPTEMBER 26, 1919. A MUCH UNDERRATED BOARD

Dominion, Volume 13, Issue 1, 26 September 1919, Page 6

The Dominion FRIDAY, SEPTEMBER 26, 1919. A MUCH UNDERRATED BOARD

The Board of Trade has been sub> jeeteel in recent times to a great deal of criticism and some abuse. Not a few people profess to regard it as simply a dumping ground for pertinent questions about the cost of living and other things to which politicians are unab'le to make a satisfactory reply. This estimate of. the board will hardly be endorsed by those who attentively scan its annual and other reports. It is, of course, admitted that the concrete results thus far attained by the board are limited, though not perhaps as narrowly as some people' think. Those- who are inclined to assume that because them has been a continued upward movement in tho cost of living the Board of Trade must be set down as.,a failure ought as a matter of fair play to_ look into the facts. Doing so, they will find in the first place that the work done by the board in fixing and controlling prices, is by no means of negligible value. In its annual report, which was presented to Parliament the other day, the board cites a fairly lengthy list of commodities in common demand the prices of which it has fixed or controlled. It gives a detailed account of the rather complex operations, involving importations from Australia as well as the regulation of local supplies, in which it has controlled the prices of wheat, flour, and bread. At present the Government, under the advice of the board, is subsidising flourmillers to the extant 'of £213,000 in order to keep down the price of flour and that of bread. The board is again the authority under which the price of sugar is limited in this country, and a comparison with prices elsewhere demonstrates that where nugar is concerned its efforts have been particularly successful. At the period to which the report relates the wholesale price of sugar per ton in the Dominion was £23 15s. Simultaneously the corresponding price in the Australian States was from £29 Bs-. to £31, and in Great Britain it was £57 10s. New Zealand, tho board points out, is being supplied with sugar at a price cheaper than in any other country in the world. The useful detail activities undertaken by the board, of which these arc-conspicuous examples, obviously entitle it to a measure of public gratitude. Its chief title to consideration no doubts rests, however, upon tho extensive inquiries it has made and its suggestions, based upon these inquiries, for a much more comprehensive and effective regulation of trado and industry than has yet been attempted. As most people who take an interest in such matters are aware, the Bill now before Parliament to constitute a separate Department of Industries and Commerce, with wide powers of inquiry and regulation, is directly and closely based upon the recommendations of the Board_ of Trade. The Bill stands meantime as evidence that none are more definitely of opinion than its own members that the Board of Trade as it is at present constituted is incapable of really effective action except within unduly narrow limits. The admission plainly implied will hardly bo regarded as. damaging to the board by those wh(. take the trouble to consider seriously the problems by which it is faced. In the report it lately submitted to Parliament the board makes it particularly plain that lack "f adequate powers is not by any means the only hindrance it has found to effective action in limiting profits and protecting the consumer. Its extended survey of existing economic conditions in the Dominion and of the lines on which change is possible with benefit to the public is at all points full of interest. Nearly all the questions touched upon are highly contentious and afford ample room for honest difference of opinion. The board roaches definite conclusionl! in regard to the control of monopolies and the veeulation of other forms of trade. There can bo no question of cither unreservedly endorsing these conclusions or rejecting them wholesale, but some of them are certainly striking. The particular merit of the report is in the full prominence it gives to factors and issues which cannot be ignored in any practical handling of economic problems, though thev are often ignored or passed over lightly in political controversy. A sharp distinction is drawn, for instance, between monopolistic trading, in connection with which the board recommends hard-and-fast

regulation, and competitive trading.

Competition in all forms [tho report observes] is sometimes 'eoauemncd on account of tho waste that results from excessive or unfair competition, but the waste can ba diminished by co-operation in production nnd distribution, sucn cooperation resulting in more effective competition. Moreover, . . . competition is tho best regulator of prices and profits. .In general it results m increased production, us it evokes effort, initiative, nnd efficiency; but this is not free competition as preaohed by the oi school of individualists. Tiio State, we take it, is entitled to regulate conditions under which competition should I carried* on, and then, having prescribed tho conditions, should act cu referee and see fair play, so that the winning of the game should result from increased efliciency, and not by the use of the club. Even '■ hose who are disinclined to accept the view that competition, unhampered, but regulated, is in many cases the best regulator of prices, will find it hard to dispose of the considerations on which tho board bases its contention. It points out, for instance, that where the price of goods is fixed arbitrarily at a lower rate than would be reached under the operation of supply and demand one result is to create an excessive and unsatisfied demand. Whether the goods in question were raw or other materials of industry, or commodities for retail sale, the consequences of such a state of affairs would be serious. More people would want the goods than could get them, and unless an elaborate, and expensive, system cf rationing were instituted, confusion and bardship would result. Indeed, general price-fixing unaccompanied _by a careful regulation of the distribution of industrial materials and ofcher commodities would undoubtedly be disastrous. Then again, as the board points out, there are some industries in which profits of necessity fluctuate considerably from year to year. Under fixed prices such industries would lose part of their profits in good years, and would receive no help in less favourable years. All industries in this category would be heavily ill scon raged, if not extinguished, although, as the board justly remarks, "there is no reason to suppose th?,fc industries in which profits are fluctuating are socially less desirable than others." Amongst the conditions on which it relies to ensure effective competition the. board attaches not a little importance to publicity, which, amongst other things, "would enable the public to check prices of the commodities dealt in.' 1 At the same time "disclosure of high profits would stimulate competition and direct capital and enterprise to that industry." Tho legislative regulation and control of competition is also recommended, however, on such Hues as are provided for in the Board of Trade Bill, and the board, in its report, contemplates a limited application of State competition and the nationalisation of some industries to which special considerations applv. Only a few salient features of the report have _ been touched upon, but as a whole it is a document calculated to the nopular notion that the Board of Trade is little more than a screen for political incompetency.