FOOD PRICES. QUESTION OF GOVERNMENT CONTROL.

Pukekohe & Waiuku Times, Volume 5, Issue 235, 15 December 1916, Page 2 (Supplement)

FOOD PRICES.

QUESTION OF GOVERNMENT CONTROL.

MR RUNCIMAN ON WHAT HAS BEEN DONE.

What the Government has done to control food prices during the war was explained by Mr Runciman, the President of the Board of Trade, in the following letter to Mr A. W. Yeo, M.P. for Poplar, published in the London papers of September 22: "You sent me the other day a letter from the Town Clerk at Poplar enclosing a resolution of protest against the present high and increasing food prices, calling upon the Government to assume control of the supplies and prices of the food of the nation. I have received a number of communications of a similar character, and I think it will be useful to review one or two of the governing conditions of the situation as regards prices of food and other necessaries.

"The terms of the resolution seem to suggest that the Government have been inactive in this matter, and imply that the Government are to blame for not having interfered. The Government have, in fact, interfered. By this I do not refer merely to the fact that the question of prices has continually engaged the anxious attention and thought of Ministers and Departments concerned since the outbreak of war; what I have in mind is the practical steps which have been taken to deal with what, as you know, is an entremely intricate and delicate set of conditions.

SUGAR AND MEAT. "I will give three instances, and these are the three foodstuffs in which there was expected to be, and has been, the heaviest rise in price: "(1*) At the very beginning of the war the Government, foreseeing the danger of a serious shortage of sugar, in view of the extent to which this country depended on German sources for supplies of that essential article, took immediate control of the entire sugar suplies of the United Kingdom, a control which, as you know, still continues. "(2) Another essential commodity and one of which, as a consequence of the war both this country and our Allies have required greatly increased supplies, is imported meat. Steps were taken to deal with the meat question also at the earliest stages of the war. I have requisitioned practically the whole of the refrigerated tonnage in the Australian, New Zealand, and South American trades, so that the utmost use may be made of the carrying capacity of these steamers for the maximum amount of meat that can be transported. The whole of the output of frozen meat from New Zealand, Queensland, Victoria, New South Wales, and South Australia available for export has been purchased.

MODEST COMMISSION. "In this transaction the Colonial Governments concerned have helped us in every possible way by special legislation and by other measures. Large purchases have also been made of South American meat. Arrangements which have been in force since the early months of the war were made for part of the meat so purchased in New Zealand and Australia to be available for the civil population. That meat has been marketed through the ordinary channels, all purchasers and localities getting the same proportion of the reduced supsion is paid to our selling agents, and they are instructed to keep prices steeady and moderate. All speculation is forbidden, and wholesale distributors are restricted in the addition which they can make to the prices at which they bought. "Further, the drought in Australia severely restricted supplies in the latter part of the year, but the Board, having control of all the available meat, was able to regulate issues to the market so as to tide over the period before the opening of the new season; but for this there might have been at times an actual absence of colonial meat, and prices of all meat would have soared to ffrpflt hpiphft; CLOSE ATTENTION TO WHEAT. U "The Cabinet Committee on Food Supplies have from the outbreak of the war given close attention to the question of maintaining the supplies of wheat in the country, more especially with a view to provide a reserve in case of an interruption of the regular imports. In November, 1914, arrangements were made to purchase a supply for delivery in the early months of the following year, and this supply was gradually put into consumption, as the danger of diminishing reserves disappeared owing to the approach of the next harvest.

"In March, 1915, in co-operation with the Indian Government, the Government arranged for the shipment of wheat from India, and its sale by Government agents in this country, and these supplies proved especially valuable in view of the delay in supplies from the new American crop in the latter part of the year. At the end of 1915 the Government again arranged for the accumulation of a reserve for the spring and summer of 1916, part of this reserve being held by millers and gradually sold by them in in August and September.

GOVERNMENT NOT INACTIVE. "I have quoted these instances to show (hat the Government can hardly be accused with justice of having been inactive. They would 110 doubt have done much more if they had acted on all the suggestions received from outside sources, but the fatal objection to the various simple and drastic remedies which readily present themselves in dealing with this problem is that they fail to reach the fundamental conditions. Nothing could be more disastrous than to embark on a line of action wliiclmight alleviate the immediate stringency while actually aggravating the causes which lie at tlie root of the t rouble.

"It is. I thin' important, in order to arrive at a <•!• r ju '"ivnt on this matter, to real!.- that the fact that the Government have not taken action on certain lines which obviously suggr-f | lie.-tselves upon a superficial exanrnatiou of the prob-

lem, does not in the least imply that they have been or are inactive. "The cardinal fact, botn as regards prices and freights, is that we are dealing with a world problem. No responsible person would be so foolish as to question tne importance from a national point of view of low food prices, but we must not be blind to the danger that ill-conceived action, artificially fixing prices 111 this country, may easily create an actual shortage of supplies, which would indeed be the gravest of dangers.

"Broadly speaking, we cannot control the world's prices, and in such prime necessaries as meat and wheat our supplies come largely from abroad, and are purchased in competition with other countries whose needs are as great as, or greater than, ours. It is interesting to note, in this connection, that the prices of three important foodstuffs the supplies of which have been li ought more completely under Government control than any others, have iievertheless risen to a very considerable extent since the outbreak of war.

"In conclusion, J can assure you that the Government are giving unremitting attention to the problem of food prices. They have, as you know, recently appointed a strong committee to inquire into the whole matter and to recommend any further action which appears to them practicable and expedient, having regard ing supplies. "But whatever further measui'"" may or may not be taken, we must not expect Government interference to bring miraculous relief. There is, I imagine, no other country in the world where Government interference with food supplies has gone so far as in this country, except Germany, and in Germany the prices of food have risen since the war to something over 117 per cent., while in this country they have risen 65 per cent. These figures represent the general level of retail food prices weighted according to household consumption. The United Kingdom figure of 65 per cent., high as it is, compares very favourably with those of our enemies (in Austria the percentage being 149), or even, when the difference of conditions is taken into account, with some neutral countries."