The Daily News. TUESDAY, OCTOBER 17, 1916. FIXING THE PRICE OF BUTTER.

Taranaki Daily News, 17 October 1916, Page 4

The Daily News. TUESDAY, OCTOBER 17, 1916. FIXING THE PRICE OF BUTTER.

The action of the Government in fixing ■ the .price of butter in New Zealand at one shilling and seven pence per lb, and making up the loss to the butter facto] ies that supply the local market by j means of a levy on every dairy factory [exporting its produce, ha? fallen lik? a bombshell among factory suppliers. It , will be seen on reference to the report of j tlie Board of Trade .on the price of j butter that restrictions on export, while | vexatious to traders, had not kept the pi'icc, down on the local market, there being a disparity on October 1 of thicc halfpence to twopence per lb between export and local values, representing a loss to local suppliers of approximately fISCjfIOO for the season, wag regarded as inequitable. It was contended by the Board that, unless the Government Sook action of some sort, there would be an increase in the Dominion retail price of butter to Is 10d or Is lid per lb. The 'Board maintained that the present prices of butter and cheese had only been made possible by the exceedingly favorable conditions as to freight and space secured by the Imperial Board of Trade, and that the producers, in return, owed some consideration to the New Zealand consumer, on account of tlie fact that, without shinning facilities, there would have been no butter ex- | ported. Tlie argument is academically irrefutable, but we doubt if it will appeal to tlie producers as being other than hypothetical, whereas they naturally consider that the question should be viewed in the light of conditions that actually exist. However, that is not of much moment as affecting the direct interests of the producers. What really matters is the effect of the action taken by the Government. In tnis connection it will 'be generally conceded that in imposing any tax or regulating the price of any commodity the principles of equity and justice should be rigidly followed, To rob 'Peter in order to pay Paul may be convenient, but it is neither honest nor sound policy. The Board of Trade argues that as the price of butter in 1914 was Is 3d, and in 1015 was Is 3d, an extra twopence per lb would amply compensate for tlie increased cost of pi oduction, but the Board conveniently ignores the fact that the producers have to pay enormously increased prices for all materials required to carry on their farms, as well as iu their domestic departments, and that on top of this is extra taxation, with a special impost of 43 pel- cent, on war profits. Apparency the Government has suddenly awakened to the existence of the demand of the people for relief from the high cost of living, and as butter is declared u,v the medical fraternity to be an absolute essential to children and adults, that article has been made the subject of attack. It is of exceptional rarity that the fixing the limit of prices at which commodities may he sold works satisfactorily, The basis of British trade is the great law of supply and demand. Admitting tlia.t war conditions have for the time being upset this law, there still remains the need for a just and equitable solution of a very difficult problem. The altitude of the Government on this butter question is certainly arbitrary. They say to the producers, in effect: you must either sell butter locally at the price we fix or its export will be prohibited. The system adopted has certainly the doubtful merit of being ingenious, and may possibly be an honest attempt to gain the end in view. The levy which the Government proposes—-three-farthings per lb of Lutter-fnt produced—is nothing more or less than a tax on the exporters to benefit the consumer. The Minister repudiates this view, on the ground that the Government does not receive a fraction of the money. That contention will certainly not convince the producers who have to pay the three-farthings on every pound of their butter-fat. It is a scheme that penalises one section of the community for tlie benefit of the other, a form of injustice that stands condemned. The Government have bungle: l , the cost of living business badly, and such spasmodic efforts as that of creating a butter Dool only emnliasises their weakness.

There was only one way in which tiio prices of produce snoii'd lie regulated, and that was by the economic and effective means of of an export tax—not on one or two articles, but on the whole of our primary products. The Government could have bought sullicient for local needs and out of the proceeds of the tax have reduced the price of all these products required for local use or consumption, fixing the price at which each was to be sold from time to time. It would have been a large scheme, requiring very careful administration, but it would also h'ave been just and equitable on the whole community, instead of the reverse, as is the position at present. .