INCREASED PRODUCTION.

Hawera Star, Volume XLVI, 18 September 1926, Page 4

INCREASED PRODUCTION.

As Mr W. A. Shcat is- reported to have left the district since writing the letter iwhich wc publish to-day, and as we have no desire to' take advantage of his absence, it. will bo sufficient to point out that the sense' of flattery arising from our notice of his first contribution, and the exuberance of .liis own verbosity, have .so overwhelmed him on this occasion that lie has lost sight completely of the point at issue. All the while we have been dealing with dairy produce, emphasising that a fall in prieei does not. necessarily indicate) over-production. There can be no over-production until the market, is saturated, and it is nonsense to say that Great Britain could- absorb no lpore butter and cheese than at present. All that a fall in price indicates is the satisfaction of the market.'available at the former; price. Mr 'Sheaf is confounded out of his own mouth when he claims that “the only sound policy of production is to ‘restrict- production’ to the amount that the market can absorb.” We do not advocate production beyond what the marketcan absorb, until butter, and cheese rot in the stores. What we do contend: is that a fall in retail prices—an undoubted blessing to tlve British working people for whom Mr Sheaf pr'ofessos such solicitude—need not pro. judieo the position of the- producer- if he can increase his output at little or n<7 extra cost. It is conceivable that there might- come a time when the whole range of the 1 market would be ; fully supplied; certainly there would

come a point -beyond which increased production at the ruling price ‘would not be a. payable proposition. Then economic forces would operate as a brake on the further expansion of the industry. But neither of these limits has been reached yet, and 1 to-wander off into learned dissertations on timber, coal, rubber and pig-iron is to draw so many red herrings across the scent. Suppose fifty of every hundred people in 'Britain can afford to buy •butter when the grocers are charging 2/- per lb, whereas eighty in every hundred could afford it at 1/6 per lb; in other words, that for every £5 worth of butter sold When- the price is 2/p £6 Worth will be sold at 1/6. Then an extended market is available, so long as production costs can be reduced to meet it. Our point was, and is, that dairy production in New Zealand is capable of such increased volume and cheapened cost as to enable it to take advantage of at least a part of this vast, potential market. At no stage has Mr Slieat challenged that contention.