Supply and Demand

Hawke's Bay Tribune, Volume XXIII, Issue 276, 4 November 1933, Page 8

Supply and Demand

(To the Editor). Sir,—We recently stated what w« thought to be a truism, namely, that “every problem or theory in economics must take into account the laws of sup* ply and demand.” We pointed out that attempts have been made from time to time to evade or control these and that such attempts have always produced unexpected repercussions. Certain correspondents have taken exccption to this general assertion, but facts support it. (sir Arthur Samuel, M.P., In the “Times” (London,) has broadly defined this “law” as follows: — 1. When at the ruling price demand exceeds supply, the tendency of pries is towards a higher level. On tho other hand, if supply is greater than demand the tendency is towards a lower level. 2. Higher price will? in due course, reduce demand and increase supply; on the other hand, lower price will, in due course, increhso demand and reduce supply. 3. Price moves to the level at which demand is in equilibrium with supply. Artificial interference by legislation with this fundamental “law” nearly always results in defeating the objective aimed at, whereas if it were allowed to function it would automatically cure the trouble. In New Zealand we are suffering in many ways from attempts to impose control on this “law.” —Yours, etc., N.Z. WELFARE LEAGUE. Wellington, 3/11/33.