CORRESPONDENCE

Evening Post, Volume xciv, Issue 73, 24 September 1917, Page 2

CORRESPONDENCE

REGULATION OF FOOD PRICES

-ALLEGED PROFITEERING AND EXPLOITATION

10 THE EDITOR. Sir,—The constant reference through your columns to high prices of commodities, alleged profiteering and .exploitation of the public are sufficient evidence of the extent to which these questions are, in. these abnormal times, exercising the public mind. A Parliamentary Committee is at present engaged on the gargantuan question of tile whole cost of living, and it is understood that the report of the Board of Trade, New Zealand, on the subject of profiteering ,ia now in the hands of the j Prime Minister. These facts and the great importance to the whole community of the questions involved must be my excuse for asking you to bear with the length of. this attempt to touch impartially on salient aspects of the subject. Turgot, nearly 150 years ago, sounded a warning note to France against calumnies, so easily bandied about, that the dearness of food was the effect of artificial manoeuvres. In answer to pressure to restrict prices and confiscate supplies, he said: "We stand firm," even before the people, when we say to them, "What; you ask is an. injustice. Those who do not accept this reason will accept none, and will always calumniate the Government whatever efforts are made to please them." Had our own Government stood firm upon this high ground, it goes without saying that a more equitable way of dealing with the .question would, have been found than that adopted by them in respect of the recent butter levy. First, then, in dealing with food price control Governments should endeavour to do no injustice. That is surely a doctrine to which all sections of the community will subscribe. Of course, it must be justice to the consumer as well as to the producer, not justice to the one at the expense.of injustice to the other. Now, let us look at the economic aspect of State price-fixing, in particular.. It is an interference with the laws of supply and demand, we know,- but what is its tendency and effect? It has been found in England and Germany that the fixing of low maximum prices for foodstuffs at once discourages production, while tending to increase consumption. High prices limit consumption and stimulate production. It is*manifest that if, say, butter is going, by reason of fixing maximum prices, to be less profitable than production of, say, cheese or.other commodity, the production of butter will inevitably decline. But we should, especially under present conditions, aim at the increase of production and the reduction of consumption as much as possible. Therefore, on that ground, the fixing of prices is economically unsound. The British' Government has admitted that the great reduction in output of commodities in the United Kingdom is largely due to the policy of fixing low prices and confiscation, which the Government has adopted. In Germany, early in the war, the Government fixed prices relatively low, and the production fell off as consumption per capita relatively increased. It is frankly admitted that the fixing of low maximum prices in Germany has proved wholly ineffective; and as a consequence German agricultural production has shrunk at an incredible, rate. Both England and Germany have overlooked the fact that as other prices rise, in war-time the producers' requirements of raw material, etc., also cost more, and they are—by not being allowed to participate in the lise—penalised at the expense of the rest of the community. But there is a much more cogent reason why the New Zealand Government should hesitate before fixing low minimum prices for this country's staple products. The jpce we set upon our stuffs here is a *'■ ' :|nter' for their price elsewhere, and .iL^kely to affect them. The British Govetyineot is probably at present far and "away our biggest customer, and I maintain that it is unjust to this country and its producers, besides being wrong in. policy and principle, that we should sell even to that Government at lower prices than other producing countries are receiving. Let us give our last man and our last shilling by all means to win the war, but let us know and let the British Government know what %ye are giving. We will ultimately have to pay our fair share of the cost of the war in some shape or another anyway, and so/it is not taßing money out of the British taxpayer in any sense. To take less for our products than they are worth in the open market is an extension of the already .overdone'system of voluntary contribution. It is more important that we should encourage the volume of production by a high price rather than that we should sell less at a low price. In other words, | encourage production by high prices and pay our fair share of the cost of war at the same time. I shall, with your permission, deal with the subject of the distributor and his profits on another occasion. Meanwhile, it is reassuring to learn that the report of the Board of Trade, now in the hands of the Prime Minister, altogether discredits the hysterical statements which are constantly being made regarding profiteering and exploitation of the public. —I am-etc.,