CONTROL OF PRICES

Taihape Daily Times, 12 November 1918, Page 5

CONTROL OF PRICES

BOARD OP TRADE REPORT The Board of Trade, in its report presented to Parliament, states that advantage had been taken of the market to make money without any ligitimate manoeuvring, many dealers having made profits by sale of stock which were purchased cheaply and sold in a rising market. These goods however, could not he replaced for sale, even at the advanced selling prices obtained.

“The primary products of the country.’ ’said the report, “have also been charged with profiteering, and undoubtedly the largest share of - the record prices that have been received for our primary products has gone to the primary producer; but these prices have been determined by negotiations between the Imperial'- and Dominion Governments, and it is now a matter of common knowledge that the prices so arranged have been below the prices that could have been obtained on the London market had the shipping been available to transport these products across the seas. “The Government has already taken power to fix prices, but this is,a remedy that can be applied only with the greatest care. The danger of fixing prices for any commodity that the supply may greatly diminish, if not entirely cease. The general- rule should therefore be to avoid the fixation of prices unless the whole supply of the commodity is controlled; • - hut when this can be done the control should extend from the field of production to the point of consumption, as has been done in the case of wheat, flour, and bread. Intermediary chargesshould be limited to fair remuneration for services rendered. - ■ ■ ■ “The main difficulty in this connection rises in respect to the commodities produced'in New'Zealand that can be marketed both within New Zealand and abroad. In this category be long all our primary products—wool, meat, butter, cheese, hides, and skins. If a price is fixed for these commodities for consumption in New Zealand below the export value, those producers who supply the local markets are placed at a disadvantage as compared with those who are allowed to export. This disadvantage engenders a feeling of dissatisfaction, and results in supplies being diverted from the local market to the export trade. Price fixing alone is therefore not a remedy. “In regard to the commodities imported from abroad, it is impossible to control the landed cost, but by an extension of the system of permitting Import under license, on condition that the licensee sells at prices deemed reasonable by the Board of Trade, much can be done to control profits. Indeed, tbe control of business profits is tbe crux of the problem as far as controlling prices of articles imported from abroad or manufactured in New Zealand is concerned!! The board suggests in this connection that the basis of ‘fair profit' during the war might be the pre-war profit in any given business, but power should be given to the controlling authority to vary this basis should the pre-war rate prove largely- in excess of the general average or insufficient to encourage production.

“The board emphasises the fact that the time has arrived to take steps to control the manufacture and sale of goods that might be considered as luxuries. Valuable labour is expended in the production of such goods, and diverted from the production of essential commodities. One of the surest methods of reducing'prices of necessities is to increase their supply, aud it is possible that much valuable labour now expended upon the creation and distribution of luxuries might be employed in the creation of a greater number of articles in common demand.’ ’