STATE CONTROL OF INDUSTRY

Southland Times, Issue 25537, 4 December 1944, Page 6

STATE CONTROL OF INDUSTRY

Commercial Trends In Dominion “RELENTLESS WAR ON PRIVATE TRADERS” Some aspects of the trend of commercial events in New Zealand over the past decade, and what he described as “the observable results of the relentless war which an avowedly socialistic Government has waged, and is still waging, against each one of us as private traders” were discussed by the president of the New Zealand Grain, Seed and Produce Merchants’ Federation, Mr J. R. Virtue, in his address.to the annual conference of the federation. “The inroads so far made are all the more serious because in the main they have been effected under the ingenious and all-embracing camouflage of that misused term, the war effort,” said Mr Virtue.

“We have now reached a stage where •we are encircled by the Internal Marketing Division, by advisory committees for almost every commodity under the sun, and by other departments of State, substantially all of which, instead of merely regulating the flow of goods as they did at first, now arbitrarily assume control as active traders in the commodities which have been for so long part and parcel of our respective commercial organizations. MASK THROWN ASIDE

“It matters not whether the State ventures are economically sound, or are conducted on normal commercial lines, because the Government has thrown aside the mask at long last, and has blatantly proclaimed that no matter what the initial cost may be, and no matter what the economics of the occasion may demand in practice, public, or in other words, State control is to be paramount. Our present-day problems involve consideration of taxation, of subsidies, of control's and of State enterprise, because all four factors have contributed to our immediate difficulties, and are also linked closely with our future.”

Private traders, said Mr Virtue, had now to support from their profits a vast and increasing army of officials of State, and every inroad by the State into commercial Circles immediately eliminated some of their taxpaying friends and resulted in additional burdens being placed on the shoulders of those remaining. The inevitable result of this policy was becoming all too apparent. They were urged to support, and should support, loans such as the recent Victory Loan, but it was disturbing when they saw the money they had subscribed used in part for alleged war subsidies to all sorts of interests, with the consequence that their very existence was endangered and steadily undermined. “The present subsidy system is the inevitable progeny of the wartime union of price control and stabilization,” said Mr Virtue, “but unfortunately we have it on ministerial authority that these particular controls will remain with us long after hostilities have actually ceased. “The specious reason given by those in authority is to prevent inflation and at the same time usher in the new world order of economic stability, but it is obvious that if economic stability can only be obtained by economic blood transfusions to concerns which have been bled white by crippling taxation, the simpler and surer remedy is to bleed the body economic less, and thus make the subsidy transfusion unnecessary. “SINISTER DESIGN” SEEN “I see a sinister design behind all the talk of high taxation coupled with subsidies to impoverished but still necessary (even in official eyes) private trading concerns. Make no mistake, the hand that provides the subsidy controls the situation, and under the seemingly benevolent guise of helping private enterprise, the State skilfully manoeuvres itself into a position where the industry either continues to limp on and lick its wounds, or at last collapses and is at once compulsorily acquired and nationalized. “When we are asked to play our part in postwar rehabilitation, we must of necessity contribute our full share, but what I fear is that when the time arrives we will find ourselves without either the resources or the will, or the ability to do the job, and in the result will be accused by bureaucracy of failing to do our part. ’ “In common with others, we should press for a complete revision and progressive easing of the present taxation system so that we may have both the incentive and the ability to do whatever may be asked of us. When the war ended he apprehended that the problem of distribution would still be awaiting a rational solution, and that it would be their inevitable fate as traders to succumb if they were not prepared to take the initiative and boldly proclaim their faith in private enterprise, and, what was more, translate that faith into immediate and positive action.

Today they as merchant traders were well organized as a body, but they could not shut their eyes to the fact that little by little, indeed imperceptibly, their trading privileges were steadily being whittled away—not by temporary wartime restrictions, but by new organizations and structures sponsored by the Government, which it would be extremely difficult to dislodge and demolish when peace came. The farming community had been encouraged to organize, and then inducement was given them to trade direct with the Government. They only had to look at the position concerning eggs, honey, apples, citrus fruits, to realize who in reality was in control of those various commodities today. If the producers really thought they retained control they were suffering from a form of selfdelusion from which they would probably never be permitted to recover. GROWTH OF BUREAUCRACY “Then growing apace is bureaucracy in the form of the 1.M.D., which by setting producers against us—while pretending to co-ordinate their activities with ours—sees the opportunity of ultimately eliminating us,” he said. “No matter what burden the public has to bear, whether by price increase or by direct or indirect taxation, there is an unfortunate outward solidarity, which conceals the guile beneath, and which still impels the spending public to chase a political will of the wisp in the name of planned economy in production and distribution. The real objective of the State while assuming the role of planning for industry, appears to be designed to divide traders against themselves, and then conquer them by individual controls.

“Private enterprise must advance with the time, and be prepared to be frank to the point of rudeness if necessary in advancing its postwar claims, otherwise our present trading structure will most surely topple to its doom, to be replaced by some form of totalitarian Govemmentalism. The remedy, if we are not too late, is to do the planning now, and to act promptly as soon as circumstances permit. SUGGESTED PLAN

“We should first of all make contact with the producers with whom we both buy and sell. It should not be impossible to make the various producer organizations see that their present relationship with the Government will ultimately lead to their loss of economic freedom. Surely, the producers can, as a united body, negotiate economic bargains with us, without the necessity for Government intervention—but if they surrender to. bureaucratic control they

will sooner or later find themselves in a position where they cannot say ‘No’ when they most want to. We, as middlemen, are not indispensable in many political eyes, and in the light of this we must, therefore, economically speaking, justify our existence and usefulness with those upon whom our trading life depends. “The issues are, fortunately, not narrow parochial issues confined to any one section of the trading community or its interests. Trading conditions and repressive controls affecting, say, manufacturers, for example, must and should be our concern, just as much as theirs, and I feel that the trading community should have some small but authoritative body, comprising all sections, to announce, after consultation with the industries concerned, a joint plan of campaign against every major assault that is made from time to time, on the general principle of private trading,”