PRICES & PROFITS

Dominion, Volume 13, Issue 31, 31 October 1919, Page 8

PRICES & PROFITS

BOARD OF TRADE BILL

ABOUT EXPLOITATION

SOME INTERESTING EVIDENCE

Some interesting information regarding tho cost of living was secured by tho Statutes.Revision Committee of the Legislative Council while- the Board of Trade Bill was under consideration. The committee took tho.evidence of members of the Board of Trade and merchants. ;■' . A general explanation of the proposals contained in the Bill was given by Mr. W. G. M'Donald, acting-chairman of the i,. ., Board of Trade. "Under tho proposals contained in this Bill," said Mr. M'Donald, "tho Board of Trade will become a permanent Royal Commission, and we |: . Will.havo tho powers of a Royal Commission in,respect to the production of '■ documents, examination of books, calling of witnesses, and so on. During the war , period tho Board of Trade was met by ! . the _ commercial people generally in a ■ spirit of sweet reasonableness. .We had ';•.. no great cause to complain in respect to the withholding of information from the board, although the penalty for with- . holding" information was merely a fine of . .£2O. But after the armistice was. signed :■ there was a very noticeable difference of ■;■.;. attitude. We woro ,inot almost inline- ;.'.. diately with refusals. The Bill provides .a punishment for. recalcitrant persons or firms which is very much greater than a fine.of .£2O. In fact,, the provisions /..us now drawn nre so stringent that I • think no firm would stand up against the. legitimate desires of the board to secure '. information. :' "Tho Bill stresses the fact that reason- ' • able publicity on tho part of industry is ; and that before the Govern-' : /ment can legislate or regulate wisely it must lie in full possession of all' the foots; that feature is stressed in the Bill. : In regard to the legislation that was .passed last session known as the exploitation and profiteering clauses in the War Legislation and Statute Law Amend- ;. ment-scctions 21 and 22—there wag no ;' ■ ■. maohinory provided iu those sections to give effect to them. They were almost - entirely a dead-letter. The duty of tak- ■ action was really placed upon any individual member of the general pulilio who might he 'injured by overcharges, , ■by profiteering, or by exploitation-lie had to act upon his own initiative as a Under this Bill 1 the action will bo taken by the constituted authority. ; '- Ini °r?l°, f Tra(le - Then «sain. this r< Bill establishes what is not entirely a newDepartinent, in the Department of Inttistrfes and Commerce. There is a paper : . BrST 11 * of «»* ™»e -nt present, but r that Department has existed almost en- + v! r i(: has nover been effMi£(.' , I , hlsßl l ll Ptoses to establish an ~. and live Department, to be nS„ aS t h ° , I " d « sh ' ies and Commerce Wtaen . Of course, the Ministerial ST of i 1 Department might hold , . .Plated that the work of tho Department ; will be so important that it will prob- • ably occupy the Minister's whole atten--non. although on that point, of course ' ion" 1 expressin = an out-and-out opin*w7T?ni' Wa ?'-, th , e powcr is tilken lln "<* Jhis it has not existed in the ..... methods oi competition. If I might'so ,-Kill is this: that all competition which is properly regulated is itself the best - regulator of prices and of profits; that at a mice-fixing authority were set up to lis prices generally, that authority would ; either have to fix a price which would be the competitive price, or if would ■ S? Te ° H?. pnce h '3 fl er or lower than the competitive price: Clearly, if if fix- ' hI.VT , Umt W0 " ,(1 h ™» been brought about m any event by market conditions its work would be superfluousr"' LM i '• doi S* So '" lctlli »E which would havo been dono without its inter- : vmtim On; the other hand, if it fix- , .ed,a,price higher than tho competitive mice., its action would ho unfair to the ; consnmins public, and it would havo to deal with a possiblo surplus of commodities. It. on the other hand, it fixed a ~• Price lower than the market price it , (ironic; be unfair to the producer '■ fcr'rfi- P">i<!!Plo, tho Bill em- . , bodies the idea that m most ca=es tho : competitive price, if that S is : ■fer , .'n lt^ t >' fni * meaM ' » t"e hell for all t he interests of the community, - fvf lt . T>ro P°. s(! f to take steps to soe that - the price fixed is the competitive price : rTntt "l-V 0 clcment of monopoly iinat there is no element of wasteful .competition ir the price. The B TIfS to lav down the conditions that will govern competition, and then the funciion of the Board of Trade will be to Bee that-the "rules of the game" are Itally enforced That is the main W. : ftrenco m the law as proposed in this ■Bill as compared with the law as it . Stands, at,, uresent." : .taking, of averages. "IVom mj own ex■jerience," said Mr. W. A Mowbrnv "T , thint that the indWidiwlWng rf any' one ' i n t 9 hinktrt O 'H° nablo L° «>o wholesaler! , i tliink that the gross turnover should be : faken, and the net profits at the nd of Jhe-year, to give a fair lead as to whether a fair profit has been made general. 3y or not. ; Our business-the general Aweary business-has been a very bad one : HiiTing the past fifteen or sixteen rears Nino wholesale firms in ChristcJmrch have retired from business, and two in and one also became bant r?i *? J elll "Fton W. and GF. TurnMI and Co. Wright,, Stephenson, and 00., Ltd., and Aitken, Wilson, and Co. £ave retired because it did not pay them ; Of you ouestion tho Hon. Mr. Aitken he jSvill probably tell yon that it nny 3 him i jjetter to put his monoy out at'oi-dinarv interest than to risk It in the general -.grocery business.

'• T. may mention soveral lines to show #ou what-1 mean. Take haricot beans' '?55" wa T- t,l6y ,verp vnlue(l at & a ton. .'After two years the Indian Government prohibited the salo of them, and the resuit was that the New Zealand market soon becamo exhausted. Shaw-Savill Company came to nie and asked for supplies for the troopships, and wo got about SO tons, which cost us .-656 to land from Sydney. The armistioo occurred before wo expected it, and tho Indian Government removed the prohibition, and we tad to unload at J328 a toir. Take salt: I bought SOO tens of salt from Melbourne , for delivery in July, 1918. We had Rot about -150 tons here, but owing to the epidemic and the strike we heard nothing more of it until 'last February. Then we wore asked to take tho balance into stock. In tho meanwliilo the market had fallen £i. Naturally I thought that as they had broken their contract by not giving us delivery in July wo would not bo responsible. I took legal ? Si oml wns informed that if I had •!."., Cl - f - l ,voul( ' liaT « tW" all right, but having bought f.o.b. tho re- ; Bponsibility of securing freight rested with the buyer, and we were forced to - accept. "Then, again, ive have to imnort from thirty to forty thousand woobacks a • irear. This year, owing to the high price' of jute, and tho exchange, which has risen from Is. td. to ?*. 2d., they are costing ua 6s. each. It is impos- . Bible to correctly estimate tho amount required by our clients, and I am therefore compelled to import- a surplus, ■which I estimate will bo in the neigh-* bonrhood of five thousand this year. Should ihe exchange become normal during the next twelve months I should be left with fivo thousand packs nt a nominal value of 2s. 3d. to 2s. Id. There is tho difficulty. Then it eosts us from 7 to 0 per cent, to sell our goods. The commissions wo get on lending line? ,- aro: Flour, 25 per cent.; sugar, Si per cent.:. oatmeal, 5 per cent.: bacon and hams, 2', per cent.; candles. 2.} to V< per cent.; kerosene, 5 nor cent.; benzine, 1 per cent.; starch. 7{- per reiil. It would bo bettor ,to fake our gross turnover for the year ni'd tho net prcdil' and ■work it out that way, and then you would see whether wo were profiteering or not."