THE FLOUR DUTY.

Dominion, Volume 1, Issue 19, 17 October 1907, Page 6

THE FLOUR DUTY.

• Tiie decision of the Government to abolish the flour duty, and we presume also the duty on wheat, will have a steadying effect on the prices of those commodities. It will depend upon the nature of the proposals whether the action now taken will result in permanent good to the community. If 'the duties are to be reimposed as soon •as the price drops back to £11 10s.. for flour, the benefit to the consumer will be a passing one, but if the duties are abandoned for a twelvemonth we should have a very complete test of the good or bad effects of the proposal. There is no doubt that there is 'a scarcity of the cereal, and that prices have advanced everywhere, but it is quite another matter whether there is justification for the quotations ruling in New Zealand. Supplies are ample for domestic requirements, but there is not sufficient surplus to make exporting worth while. When values began to ascend the cautious amongst the flourmillers secured supplies for ..some weeks or months in advance, and such supplies are likely to last longer than was first supposed. We do not think'it-is the flour-millers who are forcing up the pricc of wheat, but speculators who fancy they see a good thing for profitmaking in the cereal. The present high prices cannot last for more than a few weeks, because the 'consumption will fall off and supplies will' consequently accumulate. It may be argued that consumption cannot decline, for people must have bread; but, although bread is a necessity, there can easily be a shrinkage in the consumption. The dustmen of the city could tell a tale of extravagance. How much bread is every day thrown into the dustbins? The waste.is enormous in a city of the dimensions of Wellington, but with dear bread the waste will be reduced to a minimum, and at a rough estimate we should say the economy of a week would be equal to a week's supply. Economy will be exercised in practically every household throughout Australasia, and in every country, where bread is a staple. Among the poorer classes of Europe various substitutes will be used, all of which will have the desired effect of bringing about an accumulation of wheat and flour. Scarcity of supplies causes advancing prices, and abundance of supplies causes falling prices. Wheat at over ss. a bushel is almost an impossible position, ,and a reaction is inevitable, i and that very soon.