"MUST RISE."

Auckland Star, Volume LXX, Issue 109, 11 May 1939, Page 12

"MUST RISE."

PRICES OF GOODS. IMPORTED "LUXURY LINES." SUPPLY AND DEMAND LAW. While retailers are disinclined to comment on the appointment by the Government of a tribunal to exercise control over prices, importers say that prices must rise in respect to poods that have been "cut" I>y the Government's import restriction regulations. Most business men say that except in isolated cases there has been no undue "ekying" of prices, hut they explain that where goods will he in short supply and in demand the inevitable law of supply and demand must operate. "The tribunal does not alter the state of a trail's -existing at the present time." *>aid the chairman of the Auckland Chamber of Commerce, Mr. A. Ely. "The. Government ha.*, already wide powers under present legislation to prevent profiteering, and the machinery now proposed will merely give effect to what the Government can already do. During the war period it was held in England that a 'fair value' for goods was their replacement value. However, the situation is slightly different here in view of the fact that certain lines arc being totally restricted under the present , import regulations. '"This, of course, is having the effect of reducing potential turnover of importing houses, and although it is possible to introduce certain economies, mostly by way of stall , reductions, there remain lixed overheads such as rent and rater" that have to be paid in any cafte. The importers as a whole are loath to 'cut' fttalfs when the present prospect of their , employment in other tradw is nebulous. The Government, in making these import restrictions, ha* allowed in most instances necessities to Ik? imported on as large a scale as possible, it- being , understood, of course, that an important : purpose of the restriction policy is the building up of London funds. Tf, therefore, there are any price increases it is unlikely that they will be made on items which aro etill being imported on the same scale as previously. Where 'cuts.' arc lx'ing made, however, it is probable that the various distributors, in order to maintain their turnovers and so pay the fixed charges already mentioned, will have to slightly increase prices on the*e luxury lines. Standard of Living. "The htisinetM community feel* that the tribunal when in action will take into consideration all these aspects when deciding whether an increase of price is fair or otherwise. It us concerned that the standard of living should he on the highest possible basis. If thi« is not maintained there will be a general shorta?e of money available for spending and business men will be the first to suffer in consequence. Supply and demand will have to, play a part in case** where articles are not a necessity. There are always people prepared to give high prices for anything they particularly fancy, and .especially in cases where those same goods will be banned in future." Political Gesture. "I consider that the Government in getting up the tribunal ie merely making la political gesture to hoodwink the public over the inevitable rifle of prices that must result from the restriction of imports." said Mr. Gainor .Tackson, an Auckland importer. "It is impossible for importing firms to continue to sell goods at the old prices, as in many caees the turnover is reduced to les« than 50 per cent. In these circumstances there must be a sufficient 'on cost' margin to cover overhead. The only other alternative to increased prices i« wholesale dismissals of etaff. which will involve the Government in additional expense from the resultant unemployment." "The tribunal will find that prices of goods manufactured in the Dominion are not excessive." said a business man connected with a number of local industries. "Firms that are minutely costed as a general rule a rev reasonable in their profits, but there are many manufacturers who will welcome the tribunal because they have not put up their prices but "find" that they will be compelled to do so when existing stocks of raw materials that were purchased before increases came into force are used up. Manufacturers have never been profiteers," he added. "They will be glad to go before any tribunal to have a fair price awarded for their goods."