HIGH PRICES AND PROFITEERING

Evening Post, Volume XCIX, Issue 70, 23 March 1920, Page 7

HIGH PRICES AND PROFITEERING

10 THE EDITOR. Sir, —We know there has been considerable talk by economists of the schools, of Parliament, and of various social organisations. No clear definition of profiteering has, however, been given. Mr. Walter P. Ford, in the Fortnightly Review, gives this definition: "Profiteering is-nothing more .than taking the fullest "advantage of an abnormal demand." That definition does not cover.the whole pound'oj. profiteeringl. Take ah article like locallymade flannel. There was no question of an abnormal demand \yhon there were allegations of profiteering made. T-ake cotton: Messrs. J. and P. Coats have just disf^ufcod between three and four millions sterling of accumulated profits. The '2j-d_ reel before the war is now 7Ad, and may go higher The deraa-nd is not abnormal in this case, but the manufacturers hold a- monopoly, and it is wrong 1 to allege—as is frequently done—that -the ro- , ta-iler is profiteering in this particular. It is difficult to determine vi'ho is profiteering and who is not. The working man who is earning his 12s, 15s, and £1 per day roay be profiteering, inasmuch as he may be going slow; therefore he is taking full money for lees than full service. That is profiteering, and -as a- result of that profiteering the cost of production has been increased, and. the manufacturers—and in some cases the producers— have indulged in profiteering, otherwise such a corporation as that named would not have four millions of accumulated -profits for distribution.

The producers in New Zealand have been curbed and prevented from taking the very fullest out of an abnormal demand, and it certainly would have been better if the Government of .New Zealand had followed the example' of the Imperial Government in the matter of commandeering instead of adopting the "hire" systymi i in connection with shipping and transport services. Doubtless tho inflation of the currency •has had a good deal to do with higher prices, but when academic gentlemen, like Professor Murphy and. others, blamo tho j inflation of the currency and say "tho ! currency must bo t deflated," the actual business man, tho banker, and the statesman hesitate to accept and to-pursue Bueh a policy. Why ? Because the deflation of a, currency which has been, brought about under abnormal conditions, if suddenly determined, would bring about financial disaster and bankruptcy. Tho same- notion v.-as suggested to the Government of Great Britain, and it is said the Government there acted upoii it for one week, but fearing the results of such a policy they reverted to the diametrically opposite course, and made a fresh issxu> of" paper currency. Thus it was that the deflation of the currency was held for a week to be right, but on reconsideration it was found to be wrong, or, at all events, not suited, to tho conditions of the people and the trade- of Groat. Britain. It has taken five or six years to gradually raise prices, so it must take five or six years of the gradual withdrawal of paper money, five or six years of increased production and industrial activity, and five or six years of strict economy to brincr back normal conditions and a re-establishment of a gold basis for a paper currenoy. It is all very well to talk about high price«, profiteer\iug, inflated currency, but it does not do to dogmatise, and I am persuaded that, after the experience of the' British Government, any attempt to abnormally contract t.fio panel- currency would" lead to untold financial disaster, both public and private, and mvioh individual suffering and misery. The war created the disease, it took five or six years to develop, and it will take ■ probably the same time—if not. longer—to bring about the normal conditions and a reasonable measure of financial health. Every man and woman may help towards this end, but anything like pushing and forcing the situation is likely. to do more harm than good.

As wo set our teeth in the war, and grinned and boro trials, losses, and dis- '. asters,. so while doing the best, we can to bring about normaj conditions we must continue to bear with high prices, which are duo, not so much to profiteering, in my judgment, at all events as far as tho wholesale and retail trade of this country is concerned, as to the scarcity of supplies and the high prices which producers of primary products and monopolies and combines in manufacturing are a.blo to command in the world's markate so inadequately supplied.—l am, etc., J. D. SIEVWRIGHT.