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This policy continues in existence to-day. Casual offers so made may in some instances have been wrongfully quoted as selling-prices demanded by merchants. Corrugated Iron. In July, 1914, corrugated iron was selling wholesale, ex store, at £18 10s. to £20. Shortly after the outbreak of the war prices began to mount steadily, and continued rising; indeed, the maximum has not yet been reached, the landed cost from America being £77 per ton, with little prospect of obtaining supplies even at this price. Plain Fencing-wire. In July, 1914, this was selling wholesale at from £9 15s. to £10 10s. per ton, and had risen to £40 by July, 1917. Barbed Wire. This has risen in the same period from £12 15s. to £45 per ton. These prices are all ex store, Wellington. The reasons for these increases in price may be summarized as follows : 1. Shortness of supply in countries of manufacture. Manufacturing houses report that there, is meat scarcity both of materials and men. Spelter, which is used in the. manufacture of these commodities, rose in England from £23 per ton before the war to £135 per ton in June, 1915, and was unprocurable even at this phenomenally high price. Since then the price has fluctuated, but has never been lower than £60 per ton. As you are aware, most of the manufacturing plants in England have been taken over by the Imperial Government for the manufacture of war material. In one instance a firm lias sent to the. front two thousand of its men, and a great number of its remaining staff has been " starred " for Government work, and many others are waiting to be called up under their respective groups. The output in consequence has considerably decreased, and you will quite appreciate the fact that a smaller output materially increases the, cost of production. 2. The freight from England to New Zealand has increased from £1 ss. per ton pre-war to £4 I2s. 6d. per ton last shipment. In August, 1917, the freight from America, where alone supplies are obtainable, was £10 per ton. 3. Insurance has also increased from 6s. 3d. per cent, to 10s. per cent. 4. War risk has increased from one guinea to five guineas per cent. 5. The duty is still £2 per ton, but with primage added under the Finance Act of 1915 the total duty payable to-day is £2 14s. Bd., and preferential an additional Bs. per ton. 6. Expenses of marketing, which include wharfage, cartage, storage, railage, discount, advertising, salaries and wages, stationery, postages and telegrams, rates and taxes, lire insurance, &c, but not interest on capital, have increased from £1 15s. pre-war to £6 at present date, mainly because the overhead charges have to be,distributed over a much smaller turnover. The Board made careful inquiries and were satisfied that, although the prices of corrugated iron and fencing-wire, both plain and barbed, were unprecedently high, nothing in the nature of exploitation had taken place. The firms examined convinced the Board that they were not making unreasonable profits, or even profits commensurate, with those ruling in pre-war times. Possibly a good deal of the dissatisfaction that was found had resulted from the policy mentioned above, of firms supplying their own merchant customers pro rata, and restricting trade to persons who were not their customers in pre-war times. The Board saw nothing reprehensible, in this policy. You will so I .' from what has been stated above that stocks were totally insufficient to supply the existing demands, and owing to the difficulties experienced in the shipping world there is little chance of this position being relieved in the near future. GROCERIES i CONTROL 0E PRICES. The, recommendation made to you that power should be given to the Board to prevent any increase being made in the prices of commodities except with the consent of the Board was given effect, to by section 21 of the Statute Law Amendment Act, 1917. This section is an amendment of the provisions of the Regulation of Trade and Commerce Act, 1914, and enables the GovernorGeneral by Order in Council to fix maximum prices of any goods by reference to the " standard price "of such goods as on any date, that: may bo specified in the Order in Council. The, " standard price " of any goods is their " current price " as on the date fixed in the locality to which the Order in Council relates, when sold in the same quantity and on the same terms as to payment, delivery, &c. The " maximum price " may be the standard price itself, or may be the standard price plus or less any percentage thereof. While any such Order in Council remains in force no increase beyond the maximum price so fixed can be made without incurring the penalties provided for in the Act of 1914. After any such Order in Council is made it is open to the Board of Trade (or other authority) to consider representations that may be made by persons affected, and to make recommendations to the Government either for the withdrawal of the restriction or for an alteration (either by way of increase or reduction) of the maximum price. The Board decided under the provisions of this amendment to devise a scheme for restricting increases in prices of groceries, and after lull consideration it was considered inadvisable to adopt generally a policy of fixation of prices by Gazette notice, owing to the frequent and extraordinary fluctuations in prices that occurred, due to war conditions, and quite beyond the control cf the merchants concerned. In order to furnish the Board with information as to the cost of wholesale grocery prices committees of merchants were formed in each of the four centres to act as an advisory

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