THE OTAGO DAILY TIMES FRIDAY, JANUARY 11, 1924. THE WHEAT BARGAIN.

Otago Daily Times, Issue 19066, 11 January 1924, Page 6

THE OTAGO DAILY TIMES FRIDAY, JANUARY 11, 1924. THE WHEAT BARGAIN.

In spite of an embargo against the importation of wheat and a guaranteed price considerably in advance of the world’s parity value, farmers are not growing a supply of wheat sufficient to meet the requirements of the dominion. The decision of the Government to continue the embargo and increase the guaranteed price will therefore raise not a little doubt as to its soundness. The effect of the policy of artificial bolstering has invariably been to produce difficulties, which, in the case of the local wheat supply, seem to be increasing rather than disappearing. It lias been made clear by the farmers that they are not satisfied with the complete measure of protection enjoyed by them. Their demand is for a still higher price. It is hardly extravagant to say that there are wheat growers who desire a price that will give them a return equal to that which would be obtainable from the most profitable use of their land. Their claim is, for instance, that if the world’s butter market advances, they should receive a price for wheat which will give them a return equal to that secured by dairy farmers. The claim is not only unfair from the point of view of the consumers, but is also economically unsound. If butter prices are regulated by world parity, why should not wheat prices be P Butter may at certain periods be scarce with the result that prices are high. Wool and other farm products may be in the same position, but concurrently the world’s wheat supply may be above the world’s demand. Yet, with the policy of fixed prices and an embargo against importation the people of the dominion must pay a .price for bread which is far above the world’s parity. At present such a price is being paid, and yet sufficient wheat is not being produced in New Zealand. The policy of protection has therefore failed in a double sense—it has not produced a wheat supply sufficient for local requirements, and it has resulted in the exaction of high prices. Mr Downie Stewart, addressing the Bakers’ Conference in Christchurch this week, expressed concern at any increase in the price of bread, but it is abundantly clear that the policy of regulation maintains a higher price level than would obtain under free trade. It has been stated that the price of bread in England is 8d per 41b loaf, while the local price is Is—a price which, we are asked to believe, will not be increased as a result of the increase of a penny per bushel in the payment to wheat farmers. The Minister defended the Government’s policy at Christchurch on the ground that it ensured independence of outside sources, and he suggested that if outside markets were utilised there was a possibility that the consumers in the dominion would be exploited. This argument does not carry conviction at a time when the supply of wheat grown in New Zealand is not sufficient to meet local requirements and when the consumers are paying for bread a price that is above world’s parity. The simple economic fact is that local consumers, in the absence of the embargo, would sometimes have cheap bread, and at other times would have bread that was not so cheap. Under existing conditions they cannot have cheap bread, because wheat growers must use highly-priced land, while the great grain-growing countries of the world have ample areas of cheap land. The question therefore becomes one of economic principle. If the guaranteed price for wheat is, as is contended, inadequate to secure the grower a reasonable profit, is it in his eventual interest that the expedient should be continued? If it is sound policy to give him whatever price is supposed to be necessary to ensure the satisfaction of local supplies—though, as wo have seen, the guaranteed price for wheat has not, that effect—it is equally sound that growers of other produce and manufacturers of other articles should be guaranteed a price that will ensure them a profit. Such an application of the principle would, of course, quickly reveal its unsoundness, and the wheat grower would be forced to consider whether the guaranteed price, which increases the cost of living and correspondingly increases the cost of the commodities which he must himself purchase, is not more shadowy than substantial. HOME POLITICS. Though the new Parliament at Home has undoubtedly assembled amid circumstances of critical import, it would be quite alien to the genius of British statecraft to take a pessimistic view of a situation which, whatever the difficulties may be, is surely devoid of tragic significance. In ancient Rome it was counted the gravest of public crimes “to despair of the State” ; and it is invariably disastrous to give way to feelings of panic or craven apprehensiveuess. The fabric of British polity will not fall in ruins on account of the accession to office, if this should take place, of a Socialist party which, however extreme some of its doctrines may be, will be rigorously restrained by the parliamentary conditions that prevent it from commanding anything like an independent majority. Sooner or later a day will probably come when that party will really be in power, as distinct from mere office; and the lessons of a term of tentative experience should then prove very helpful. “Responsibility had a wonderfully sobering influence,” remarked Lord Leverhulmo at Sydney on Wednesday; and we think that there can be little doubt regarding the wisdom of the opinion expressed by The Times that the formation of a Labour Government, faced by a formidable Opposition, would be “less- dangerous than a hasty and artificial Con-servative-Liberal pact, with the object of excluding Labour .from office.” Such a pact would provide Labour with a grievance which might bo more than plausible ; and its consonance with the best traditions of public conduct would bo very dubious. It is far better, as the loading journal shrewdly observes, that those who now entertain extravagant hopes “should learn the relation between what is desired and what is possible from the experience of their own leaders in office.” The cabled reports of Mr Ramsay MacDonald’s speech at the Albert Hall have not been as copious as

might have been expected, but it is evident that the Labour leader disclaimed any intention of presenting the full Socialistic programme to the new Parliament. The Morning Post remarks that he “devoted his oratory to a protestation that the Socialists would do none of those things which for many years they had been saying they would do.” Even so, there does not appear to be any substantial warrant in the special circumstances for the tart judgment that Mr Ramsay MacDonald and his friends are seeking office under false pretences. There is a certain cogency and even impressiveness in the Labour leader’s statement — “We shall take office because we shrink from rio responsibility that comes in the course of the evolution of our movement. We have built our final habitation away on the horizon. We are a party of idealists, but we are going to get there, not by a jump, but step by step.” It remains to be seen for how long a time Mr MacDonald, as Prime Minister, will find it possible or politic to maintain this cautious attitude. It is difficult to avoid a surmise that at no distant date some legislative proposal will be advanced, or some line of foreign policy initiated, which will tax the forbearance of Conservatives and Liberals alike to breaking point.