THE New Zealand Herald. AND DAILY SOUTHERN CROSS. MONDAY, MAY 15, 1911. THE COST OF LIVING.

New Zealand Herald, Volume XLVIII, Issue 14680, 15 May 1911, Page 6

THE New Zealand Herald. AND DAILY SOUTHERN CROSS. MONDAY, MAY 15, 1911. THE COST OF LIVING.

The New South Wales Labour Government has promised an immediate enquiry by Royal Commission into the increased cost of living. Such an enquiry has long been inevitable, not' because there is any likelihood of prices falling in consequence, but in order that some evidence may be

given of Governmental interest in a problem which has long puzzled Unionist leaders, more than publicists and economists. Whenever there is any appearance of what we commonly term "progress" • it is accompanied by ' a steady tendency on the park of selling prices to rise. Primarily this is due to the increase of commercial knowledge and the development of trading methods, making it easy for traders to seek the most remunerative market, and for producers to know what is being done by traders; secondarily, it is caused by the " cornering" of commodities in the hands of those who havestudied some special .application of the'law of supply and demand —and the most common effect of these corners" is that set up by the unions in the matter of Labour itself. " If wages -and profits could be made to increase indefinitely, without producing thereby any disturbing effect upon trade and industry, and without being reflected in increased prices or reduced outputs, this would, be a very happy and selfsatisfied world. Unfortunately, all increases in cost 'to the final seller of an article must be passed on to the consumer, and in the case of articles in universal use, that consumer is the general public. Wherever those who make and handle an article are chiefly concerned in obtaining as much as they possibly can for themselves and pay not 'the slightest rega rd to any claims which may be advanced on behalf of the general public, prices are only limited in the aggregate by the public's average ability to pay. This has always .been obvious, although it has been contemptuously ignored by those who hoped to find that increased wages invariably meant increased purchasing power. To some extent increased wages have given increased returns in many cases, wages based upon the needs of a family have given marked advantage to bachelors and others with limited responsibility, but broadly speaking increase in wages has been accompanied by such increase in prices that the general gain is very doubtful. No Royal Commission can alter this, for it is arithmetical and inevitable. The instability of modern commercial conditions accounts for much of the excessive variations in prices, and the consequent spasmodic impulses towards higher wages—with i the accompanying reflection to which we have referred. In more primitive times, and possibly in all normal times, the character of harvests governs the markets and the cost of living. Bread and meat, wool, milk and butter were cheap after good seasons and dear after bad.- But now the market is hardly affected by ordinarily good or bad seasons, for the world's averages are much more equable than any country's averages, and prices are fixed by the world's market. Butter is no cheaper in New Zealand after a good season than after a bad season ; and wool responds in price to antipodean influences, not to the conditions of a local market. Meat prices rise in Australia because North America is becoming densely populated, and because European millions are being similarly forced to buy foreign meat. These things we can see with our own eyes, and can understand how the gradual equalisation of prices throughout civilisation is eliminating the advantage once possessed by

new countries in the shape of cheap food. Naturally, no consumer appreciates higher prices. But it is evident that the effect of these readjustments of ' trade will gradually cease, and that changes in the cost of. living will again depend chiefly upon increase or decrease in wages, and upon increase or decrease in profits. Touching, profits, there is every . reason to think that undue advantage has been taken Of the necessities of the consumer, and of the ignorance of the producer by various " trusts," " combines," or other forms assumed by monopoly. But it would appear that, in practically every case, the offenders have done little more than pocket profits which ought to have gone to others. Prices do not appear to have been generally raised in this manner, and it is .exceedingly doubtful whether they . could thus be . permanently raised. To realise this in its fullness we have to turn to that stupendous tragedy which is going on in Asia, where European gold is' buying food for which millions starve and die. We eat rice in Auckland, which was grown in China by naked coolies, whose wage is counted in half-pence, where our New Zealanders count in shillings. Our purchasing power is so great that Asia cannot refuse us, and it is obvious that if Europeans become rice-eaters they might easily precipitate an Asiatic crisis by making the Asiatic cost of living far exceed any possible increase in the Asiatic wage. In any case, the cost of living does not increase without cause.' ' We cannot prevent such increases as are due to the readjustments of market conditions, but we may prevent such increases as are due to uncalledfor and inexpedient increase 'in the charges of production and we should do so, if only out of consideration for the everincreasing number who depend upon fixed incomes, ' who cannot recoup themselves at the expense of anybody else, and who suffer none the less grievously because they suffer silently and stoically.