SUPPLY AND DEMAND

Poverty Bay Herald, Volume LX, Issue 18236, 3 November 1933, Page 4

SUPPLY AND DEMAND

(To tho Editor of the Herald.) .Sir,—We recently stated what ws thought to bo a truism, namely, that “Every problem or theory in economics must take into account the laws of supply and demand.” Wo pointed out that attempts have been made from time to time to evade or control theso and that such attempts have always produced unexpected repercussions. Certain correspondents have taken exception to this general assertion, but facts support it. Sir Arthur Samuel, M.P., in tho Times (London) has broadly defined this “law” as follows: 1. When at the ruling price, demand exceeds supply, the. tendency of price is towards a higher level. On the other hand if supply is greater than demand, the tendency is toward a lower level. 2. Higher price will, in due course, reduce demand and increase supply J on the other hand, lower price will in due course increase 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 iii defeating the objective aimed at, whereas if it is allowed to function it would automatically cure the Iroublo. In Now Zealand we are. suffering in many ways from attempts to impose control on this “law.”—Yours, etc., N.Z. WELFARE. LEAGUE.