WELLINGTON NEWS

Hokitika Guardian, 28 November 1929, Page 6

WELLINGTON NEWS

CUT RATE TRADING

(Special Correspondent )

WELLINGTON, Nov. 27

Auckland retailers held a meeting last week and gave vent to some gloomy, views on current trading conditions in that city. Several of the shopkeepers related their experiences and one and all seemed to think it was the duty of the Government to interefere; none of them gave the true reason for the gloomy picture presented by the speakers. A tailor remarked that his trade was being murdered by the factory system. Apparently the trader who made the remark is one of the “made-to-meas- - ure” fraternity who seems to think that the factory system should be put into a straight jacket by the Government. It may be asked why is the factory system murdering the tailoring trade? Is it not because there is a wide margin, of difference between tho prices of a made-to-measure suit and a factory made suit? A suit made to measure costs nearly as much as it did during the war period and yet wool is lower in price. Jne factory made suit is dearer also compared with war time, hut it is cheaper than a tailor-made suit .and nine times out of ten cannot he distinguished from the tailor-made suit. It is the duty of the tailors of combining to meet the competition of the factory system and not expect the Government to act as nursemaid. A fruiterer stated that price-cutting and over keen competition was driving the buying public into scavongcring for goods. Price cutting is the result of over keen competition, and the tobacconist who spoke at the meeting stated that, those in the tobacco and cigarette trade were feeling the cut rate pinch more than anybody else. The same complaint can be made by practically every other retail trade and to some extent by the wholesale traders, and the cure is not Government interference which would be political. The fact of the matter is there are more retailers than the country can support. If there were 25 or 30 per cent less the remainder would do a reasonably good business. How to eliminate the percentage named is the problem, and that' is an economic one. The keener the competition the keener the price cutting, and sooner or later the weakest in each trade must go under. Price cutting cannot be stopped while those engaged in any branch of retail trade are, from the economic point of view, in excess of the country’s needs. There is every indication that price cutting will be much more severe than it has been and it would not be surprising if, next year there is more retail trade done on credit than in the past dew years. The cash customer will be penalised to make up the deficits that are bound to arise from excessive cash trading. Rationalisation may be the best solution of the difficulties that at present beset retailers, and that is a problem that has not received consideration, nevertheless it is worth considering.

empire trade. The idea of free trade within the Empire is at present a dream, but there is no reason why the component parts of the Empire should not do a great deal more trade with one another and less with foreign countries than is the case at present. The advocates of Empire trade have forced the. subject to the forefront and it can now be said to be a burning question. The Leader of the Conservative Party has given in his adhesion to the policy of Empire trade, which must henceforth receive very close and urgent attention from politicians throughout the Empire. The expansion of trade and employment are clearly associated for the greater and more widespread the trade the greater the scope for employment. Finding work for its nationals seems to he engaging the attention of most countries, even wealthy America. Unemployment has been the bugbear of Europe, except France, and it has been a serious menace in Britain. Unemployment gives every indication of becoming severer in Australia owing mainly to the fault}’ handling of the country’s finances. Increased taxation and increased protection for selected industries spells unemployment. Protection tends to reduce imports which on the face of it appears to be a good thing, but reduced imports involves reduced revenue from Customs, and that revenue must he made up by increasing' taxation in other directions. The Commonwealth Covernment is determined to tamper with the operations of the Commonwealth Bank. At present that institution acts as a central bank, but the recent Labour Government proposes to convert it into ail ordinary trading bank. The excuse is “ these periods of depression it is essential that advances should be made ou good security.” The difficulty is in finding “ good security ” in time of depression. What, is likely to happen is that the Commonwealth Bank will have foisted upon it ail the “lamo ducks” in industry ami trade, and the sound and profitable business will go to the private banks. This is one of the Federal plans for relieving unemployment. In the* United States big expenditure is contemplated to bolster up confidence in prosperity. It is obvious that the recent New ■York slump created more damage than is known to the outside world. Of course America has to maintain mass production and instalment selling or suffer :i serious set back in prosperity.