THE VALUE OF THE SOVEREIGN

Otago Daily Times, Issue 17038, 23 June 1917, Page 7

THE VALUE OF THE SOVEREIGN

THE NEED FOR ECONOMY. Mr H. Beauchamp, in the course of his speech from the chair at the annual meeting of the Bank of New Zealand yesterday, said: — "The cost of living is steadily rising, and is pressing with unusual severity upon those with limited salaries. The purchasing power of the sovereign now, as compared with 1914, is greatly reduced. The New Zealand Government has taken steps to meet tho difficulty, and has succeeded to some extent. For instance, sugar is cheaper in Now Zealand than perhaps anywhere else in the world, and this is due to the reasonable spirit in which the Colonial Sugar Refining Company—practically our solo supplier— met tho Government on the question of supplies and prices. The increased cost of living is a subject upon which we have heard a good deal since the commencement of this worldwide war, but there appears to be considermisconception, especially in this dominion, with regard to the causes of it. Many people seem to think that prices of commodities have been raised by wholesale and retail merchants, through combination or otherwise 1 , for purposes of profit and without any justification. In this conn9ction one has to remember that in respect to many articles we use and consume we are dependent upon supplies from overseas. Now, the majority of these lines have enhanced enormously in price at port of shipment, and before reaching this country there havo to be added thereto freight (calculated at not less than three times the rate ruling before, the war),' war risk at from £l Is to £10 per cent., higher rates of exchange and duty, and other charges. In support of the statement as to enhancement in prime cost, a table published in the Economist of April 7, 1917, dealing with many essential commodities, shows -that, starting with a basis rate of 100 per cent, as an average in 1901-05, the percentage figure has risen during the war from 116.6 to 240.9. As regards New Zealand produce and goods manufactured in this country, it must be borne in mind that prices of tho former are largely, if not wholly, determined by the values ruling in London, or in the other markets to which our produce may be consigned, or by the prices paid by our Government on behalf of the Imperial Government, whilst the latter are affected by increase in cost-of raw materials, higher wages, etc. Faced with these facts, it must be apparent that it is quite useless for a section of the community to urge the Government, as was done recently, to take steps, to force traders and producers to sell at pre-war prices. In most cases it would be, for the reasons stated, an utter impossibility to do so. Whilst much prominence has been given to this question of increase in the cost of living, we rarely, if ever, see a suggestion that, to meet' the additional burdens that are being cast on us by the war, there should he any reduction in the standard of living. If the 'standard' were modified to meet the altered conditions people could face the increased cost of living with much greater equanimity and without undue hardship to themselves. "In spite of the increased cost of living and other seeming handicaps, the spending power of the community appears to be in no way. restricted. The' need for national economy is being constantly proclaimed, but unfortunately, to all appearances, is being as constantly largely ignore®. Extravagance is rife, and tho lavish expenditure which is being made on dress and pleasure at the present time is, to say the least of it, very regrettable. I attribute it to the fact that tho baneful effects of the war have hardly reached our shores; that so far the consequence upon us financially has been entirely beneficial—the prices of our primary products having been forced by war conditions up to levels never before dreamt of—and that, with this unexampled prosperity surrounding them, the majority, of our people are prone fo close their eyes to the- grim and portentous happenings on the other side of the world. "With all the requisites of scli-indulgence lying ready to our hands, it requires the exercise of some restraint to he other than self-indulgent. But the time has come for a halt, and for taking serious stock of the position. rhe demand for a more economical codp of living in all parts of tho British Empire is becoming clearer and more insistent, and I apprehend that, if the war continue, the call for (greater economy in tho national outlay will ere long be proclaimed in ways that will necessitate a more genuino response thnn has so far been given to tho appeal."