The Grey River Argus WEDNESDAY, October 12, 1949. SUBSIDIES AND PRICE CONTROLS

Grey River Argus, 12 October 1949, Page 4

The Grey River Argus WEDNESDAY, October 12, 1949. SUBSIDIES AND PRICE CONTROLS

couple of cables this week have east a significant light on the policy of economic controls in vogue in this country. For instance, the removal of lands sales control is reported from Sydney to have left the market lifeless. The reason is easy to guess. It is the speculative advance in values. God knows what prices would have been demanded for land in New Zealand during the comparative prosperity of the past fourteen years had not there been an effective factor to moderate the speculative advance in values. As it is, no end of owners are insisting that, since the values of a few

years ago were taken as a guide by the Committees, there has been the equivalent of a large speculative advance, and they ask why they should not got the whole lot of it. They expect the memory has faded of the fate of returned servicemen who went bankrupt in large numbers after the first great war when the price exacted for the holdings they took up was determined by the speculative advance in values. A reminder of what is inherent in the capitalistic system was the disclosure in Parliament last night that people arc ready to ask fantastic prices from the State for the coal measures which the Crown has resumed. Nobody is yet aware of the ultimate total payable, but it is a case of relying on speculative value when land holders-calculate now to get the price coal may bring when it is scarcer in future, oven though the deposits arc the gift of nature, ami not the product of land holders. There is every reason to believe that one reason why New Zealand is so comparatively well oil' at present is that soaring land and site values have been subjected to sane regulation, and that the unearned increment due to increasing population and production is distributed among the whole community. This measure. is one of several whereby the Government is in a position to prevent a slump. AH of the Opposition forecasts of depression have proven false, and the best they now can do is to claim that prosperity is quite too costly, and that subsidies are the proof of it. Oui' coal miners are as good as told that they are too well off, although they are at the same time solemnly warned that they are paying in taxation too much for their welfare! Now the second item from abroad which throws light upon this question is the news of the French politicoeconomic crisis. The workers find prices entirely too high, wncrcas the producers declare their inability to continue with any reduction. The man commissioned to form a new administration in order to cope with a grim situation has formulated as his basic policy that of the subsidy. The most essential commodities it is proposed to subsidise, the alternative being evidently an industrial upheaval. Even with -subsidy the mines of this Dominion are by no means over-manned, so that without the present remuneration they would soon be under-manned —unless, of course, shortage of essential fuel created unemployment elsewhere, and induced workers to undercut each other in a quest for work. In France the immediate need is to avert great strikes, and with the economy of the country affected by currency variations, and with the need to augment production, the solution proposed for a. new administration to effect is that of subsidising the more essential foods and other' ’household needs. The same policy is being proposed in the United States, and is being used in Britain, Australia and elsewhere. No doubt it is dubbed socialistic, but, even so, experience is proving it an alternative far preferable to the expedients which are- essentially capitalistic, the chief of which is the exploitation of labour. The suppliers of labour in general have little other resource than wages, and when

wages are inadequate, and essential industries unable to make them adequate, the only means j)f doing it is that of the subsidy.