PRICE CONTROL

New Zealand Herald, Volume LXXVI, Issue 23479, 17 October 1939, Page 9

PRICE CONTROL

"SYSTEM UNSOUND" COLLAPSE PREDICTED NORMAL BUSINESS IMPOSSIBLE Objection to the price regulations in their present form lias been expressed by the executive of the Auckland Manufacturers' Association after discussions with representative business men. It is considered that in their present form the regulations are unworkable if business activities are to he continued normally. If the tribunal continues to operate under its present procedure the view is taken that the system will inevitably break down. The prescribed basis of price-fixing is unsound. The following circular 011 the subject has been sent to members by the secretary, .Mr. N. E. Crimp:—"Under the price regulations applications are required for each particular item sold by each individual house. No provision is made for applying basic principles. A Colossal Task "The task of handling the enormous number of applications will be colossal, and in the opinion of men well qualified to judge the administration of the regulations will break down under their weight. Preliminary announcements by the tribunal indicate it is not prepared to recognise ordinary business principles which have been built up as the result of long experience. "A violation of these established principles may result in insolvency of many firms and widespread unemployment. In these circumstances business men must consider what steps . they must take when Government regulations make the carrying on of normal business impossible. Members' Considered Opinion "The considered opinion of representative members is that if businesses are to carry 011, they must continue in their normal course, increasing prices where necessary, but not taking advantage of conditions created by war."' The statement continues that in fixing new prices the well-established procedure is to take replacement costs into consideration. The practice of some firms.is to average costs. However, in the present special circumstances, there are some firms which intend to clear old stocks at pre-war prices.