PRICE CONTROL

Evening Post, Volume CX, Issue 50, 27 August 1930, Page 12

PRICE CONTROL

t WHY IT BEEAKS DOWN

EX-PRESIDENT COOLIDGE'S

VIEWS

■Evening Post," 27th August,

i A valuable review of the price situation in Xcw Zealand and-the world in, general •lias been furnished by the Department of Enonotnies to the Canterbury Chamber of Commerce. The review is written in irnt'echnical language as far as practicable, 'so that the retail trader and merchant cannot help grasping the points clearly and convincingly made. The theory of price 'is -gone into in simple terms, and the operation'of the law of supply and demand is outlined. The attempted control of the rubber and coffee by valorisation or similar schemes, /With Government backings, is reviewed, and brief reference is made to the private control of non-fer-rous metals. The opinion of the World Economic Conference at Geneva, .1927; is quoted to show the dangers.likely to arise out of: possible misuse of .monopolistic action.- ■ ' ■ , • v^fheu the review passes from the general ' to the particular, instancing what had been attempted in New Zealand, remarking: "With the exception of the short-lived '-attempt of the Dairy Produce Export Control Board to manipulate prices in 1926-27, the Export Control Boards in New Zealand TiAve -wisely limited their operations _to 'measures -which make for more economical production arid marketing. By reducing fcosts of transport, insurance, .storage, and commission charges, arranging for better regulation of shipments and more comprehensive and' accurate information as to mavketr- requirements, they have brought benefits to both producer and consnmers. UNEXHAUSTED POSSIBILITIES. • "The possibilities of co-operation in production and, marketing by. voluntary associations, with or without State assistance, iave not yet been esbausted." Co-operation in organising productive activities along '**»«'mort, efficient lines,, and thus efiec«ve!r meet low, prices with low-cost metnmfe of - production is advocated; _ also, elimination of waste in public and private enterprises, full utilisation of natural resources' by the most efficient application 6? labour, .organisation, and capital; improvement of facilities for marketing and finance;1 and the ruthless jettisoning of j>6licies incompatible with the highest degree b£: industrial efficiency. . < "The adoption of uneconomic methods ' that are designed to give an artificial protection . to. inefficient producers can end only in a reduction of standards of Jiving and' the loss o£ market^ to competitors more ifavourably situated." , AMERICAN EXPERIMENT. ■ By the San Francisco mail, just received, • private letter addressed to a Wellington merchant contains recent remarks by exPrtsident Coolidge on the subject of price control. He showed how the European cartel for maintaining an arbitrary price for steel had been abandoned. Ihe plan failed.' "Some years ago," he continues, "our Government was trying to nx a ■price'for'silver. More recently the British were trying to control rubber. In Brazil it was coffee, in Cuba sugar, and in Canada'the wheat market. Our producers i tried-to hold the price of copper andthe United States Farm Board went into Wheat and cotton. None of these efforts has'been a success. It is not possible to repeal -the law of supply and demand, ol cause' and • effect, or of action and reaction. Value is a matter of opinion, an act of -Congress .has small jurisdiction over what man think. . . ' THE CONSUMER KNOWS. "When'the consumer buys a product it "oes out. of the market and disappears. When private or public agents try to lix an arbitrary price the product is still in the'market, every consumer knows it and waits for the resale.. The price can be held only as a local or temporary expedient which' usually makes matters worse. But because all of us are bigger than some of us not even the United States Treasury is powerful enough to put an arbitrary price on the great jorld staples with an> permanent success." Incidentally the United States taxpayer is feeling uneasy over the advances made to growers of wheat and cotton considerably in excess of the present market values of those commodities. Production 5n many agricultural products m the States has outstripped demand, and the head of a Californian packing company, one of the largest in the United ' States, wrote by the same mail: "With the largest fruit crops as a whole that this State (California) has ever produced, growers are facing a serious problem m marketing same at anything like cost of production."