COMPENSATED PRICES

Press, Volume LXXIV, Issue 22430, 17 June 1938, Page 17

COMPENSATED PRICES

TO TUB BDITOB Of TUB PRBSa. Sir, —In your issue of to-day there is a letter signed “T.V.W.,” in which the writer criticises certain statements of • mine in a previous letter to you on the above issue. I repeat my statement that no government can Insulate the farmer against fluctuations of ■ prices in the export market. I do not believe in flxcd prices; as a free trader I believe that all restrictions on trade and exchange should be removed, but the National Party does not hold with this view; it is supported by . the “protected” manufacturers. For proof let “T.V.W.” read the party’s organ, “The N.Z. National Review.” The party will never antagonise these interests. Neither are the farmers united for freedom of trade. A large number of. them are protectionists. lie accuses the Government of having played a confidence trick on the farmers about the guaranteed price. I believe that the Government’s intentions were honest, but the policy is a mistaken one. The same applies to compensated prices if Mr Hamilton’s party is elected. I would ask “T.V.W.” how Mr Hamilton is going to regulate prices and costs by legislation. If there is a drop in export prices how could he maintain prices without reducing wages. It would mean lower prices for the farmers’ produce because it would check demand. Again, hpw could he enable the farmer to buy his supplies cheaper than the towndweller without a subsidy, which must increase prices and create a demand for higher wages. Again, we will have in operation the vicious circle of wages chasing prices. If the primary industries are subsidised, as you say, all other sections will demand them, too. “T.V.W.” says that they are already subsidised. Granted, but if compensated prices are adopted they will come back for more. I agree with you that the problem of costs should be the one for the farmer’s concern, not prices, which he cannot control. 'Fixed prices cannot reduce internal costs. The chief trouble with the farmers is the prices that they paid %or land—out of all propoprtion to its productive value in the boom period. Many farms are mortgaged beyend their actual value. The farmer has lost his equity and the mortgagee has a shrinking asset. Speculative values of land benefit no one; the productive : value of land cannot be destroyed exi cept by Nature, The farmers are bur- , dened with mortgages ‘ and crippled ! with oppressive taxation due to a land I and taxation system that is laid down | on a wrong level in taxing labour instead of land values. Regarding my support of the Labour Party, if there was an independent radical party in sight I would vote for I it. There is no such party in view and the Nationalists are out-to crush independents. The . Labour ; Party

is not all that I desire, but the National Party is a thousand times worse.—Yours, etc., F. - W. BOURKE June 14, 1938.