CHEAP BUTTER.

New Zealand Herald, Volume LXIII, Issue 19416, 26 August 1926, Page 6

CHEAP BUTTER.

Sir, —Mr. Thornes now states that lie clid not mean to artificially raise the local price of butter, but if riot, it is hard to see what he did mean. The local price naturally approximates the export value and if it -is intended to fix it at ii higher level, then some artificial means: nni|t I>B resorted to. I am asked if ray remedy means free trade. It certainly does. We are told that the law of supply and demand is, obsolete, that nearly every one except the farmer has his returns fixed quite independent of that law. and that it only remains for the fanner to do the same. . This line of reason entirely ignores the fact that the fixing referred to is done because the farmer is behind the whole structure und the extra costs are passed on to him in the shape of higher charges for all his requirements. It ii j impossible Iqf him to pass it on further as,he, works under competition with tim world and must continue to do so. As long as there was a satisfactory margin for the farmer and his industry was expanding the increasing load was not fed, but now he has about reached the limit, in fact, for many farmers, the limit has been exceeded, and they have gone under, while as for bringing in further unoccupied land, that is an economic impossibility. The only effective solution is to put all industries on the same competitive basis as tho primary industries, and that can only he done under free trade. Many contend that if the price of land was brought down to its proper level the trouble would be over, but it is obvious that while costs continue to increase any value which might be fair now would bo found too high later on. Also, it -is a well-known fact that many forms are held to-day at less than the bare cost of the improvements. Someone asks how the revenue is to be raised in the absence of protective duties, and it is mentioned that the single taxers have their solution of the problem. The reply is that we have only to look to free trade England, where for over two generations they raised the greater part of their revenue from customs taxation. As to the single, taxers, so far as the farmer is concerned they are as harmless doves compared with the protectionist. Single tax would. confiscate our unimproved value, but under protection not only is our unimproved value confiscated but a good part of cur improvements as well. A. A. Ross.