HOLDING ON TO PRODUCE

Hokitika Guardian, 21 December 1920, Page 4

HOLDING ON TO PRODUCE

(N.Z. Mercantile Gaeette). ' The general downward trend in values of commodities of practically all kinds has developed quite a number of schemes or devices for combatting tho fall, and the one that appears to be gen- . j erally favoured in New Zealand is to ; bold the goods and await events. Wool, for instance, is to be held, and the Government of the day is to help the woolurowers in this matter, but just why there should he this special class favour- , itism has never been explained. Woolgrowers are trying to make a virtue of necessity, for it is quite obvious that they must hold their wool, for there is really no market for it. Manufacturers would not buy tho wool, because they could not use it arid would have to store it They prefer that the growers should store the wool, and that will have to he done. Hides, skills, pelts, tallow, and other products, must to a certain ex- | tent, be held. Indeed, the stores m New Zealand arc now fairly full of hides and skills and they cannot he forced into consumption; but there is ,10 talk of the Government guaranteein,) advances 011 hides and skins There can be no, advances in prices so long as these heavy stocks are lie . vc cheese and butter have dropped in value the former because of increasing supplies. In July and August the directors of cheese factories were being rushed with offers of 14*3 per lb and the buyers were willing to make ad vances'up to the limit, and to pay lor the cheese as soon as it was in store. The wise directors thought by holding »“ 11 ft! per il,. W, they thought foolishly; their thoughts weie based on no sound'principles and on no reliable information.' They smipl thought because they were being pestered to sell on favourable terms, that there must be more money in- cheese, and they gambled 111 getting that little “t„ & of nllowins the tors to earn that for whatever risks they-may have been accepting. Aon, , the directors find that cheese w not the ■ fancy article they believe it to be, that the price, instead or going up, ' s g° in S down, and, instead of getting ail ex- , treme advance 011 cheese going into store, there is some difficulty in getting 10d per lb, and the probability is that , the advance will be reduced to 8d Stores in New Zealand, and for that

matter the stores in Australia, are bulging with goods that come under the categories of exports and imports. If tlie position is examined with some care, it must hear in upon the unbiassed individual that prices must fall further, until a level is reached when a great majority of the people of tlio civilised world will be the consumers. The war cost the world the lives of many millions of young men, it left the whole of Europe poor, many of the countries being poverty-stricken, with famine and disease making further inroads in a reduced population. Raw materials are not being consumed as rapidly now as they were during the war, because the prices demanded have been beyond the purse power of the impoverished peoples. It is, therefore, reasonable to suppose, if it is not really obvious, that prices must go lower, so that consumption may he stimulated. Goods must ■| )e brought within the reach of a greater number of people, and, Compared with 1914, there are a greater number of poorer people now. Holding hack in order to force up' prices will be effort and time wasted because there is no elasticity in the situation. There is a dead weight of poverty in Europe, and until that is removed it will prove a menace to the advance in the prices of commodities. The .Government, should be compelled to keep clear of business ventures. It should he forced to; look after the Government of the country. It should be compelled to exercise economy in administration and to eliminate all waste. Wheat growers in the South are desirous for Government control, and it may be safely assumed that they desire this, not in the interests of the people, hut because it will be profitable to wheat growers. When the Government cease to fix prices, and control and red-tape business affairs, the country wiji get along quite well. There is no need of any control of wheat or the fixing of prices. If this business is not stopped now, it will become chronic with the politicians, anil we will have other things “controlled,” and tlie people will be obliged to pay dearly for it. Sugar is controlled, and avc .are paying a fancy price for it; tea is not controlled, and the price is no higher now than it was in 1914. farmers,whether they are producing wheat, wool, or cheese, or meat,,must realise that prices are falling, and must continue to fall until a bedrock basis is reached.