HIGH COST OF LIVING.

Taranaki Daily News, 23 September 1920, Page 5

HIGH COST OF LIVING.

THE LAWS OF SUPPLY & DEMAND. We quite sympathise with Mr,.Massey's attempt to keep the rate of interest down in the Dominion by refusing to permit applications for money to be made to the public, if the offer is to pay more than 5£ per cent., but we question very much whether this object can be attained, and, if bo, we are inclined to think that the Dominion will be the sufferer. Money cannot be kept from flowing to those places where it is most in demand. If any English newspaper of standing is opened, one will And pages of advertisements offering debentures and preferred shares at rates from BJ per cent, upwards. Last month Lever Bros, were appealing for money at 8 per cent,, and many firstclass business concerns are offering 7 per cent. The Bank of England rate today is 7 per cent., in America it is no less, and t]ie French Government is paying 8 per cent, for the loan they are just putting through, with a premium of 10 per cent, on repayment of the loan, while Treasury bills carrying 04 per cent, are selling in London at £9B 4s Od. In the face of these rates Mr, Massey, we think, is endeavoring to square the circle in his attempt to keep interest here to the figures laid down by him. We will, however, assume that he can prevent people remitting capital to other fields, where the rate is not artificially restricted, the result would bo* that the present inflated price of land would continue to expand, to the detriment of the Government, who are and will be the principal buyers, and to the ruin of every man that starts farming. Mr. Massey's attempt to curtail the rate of interest will drive money out of the country, and increase the present high cost of living. . Officials in other parts of the world have tried to set aside the laws of supply and demand, and for a time have been successful in temporarily deflecting their course, but no one yet. has succeeded in preventing their operation. Mr. Massey may try to keep the cost of living down by bread subsidies, and by compelling producers of butter to sell their goods below the world's prices, but any such attempt to ameliorate the condition of the population comes to nought, because the money from which the subsidy is paid must first be taken from them. The sooner all restrictions upon the free interchange of articles are removed the better; the world's markets must fix the price of commodities, and those wlio produce them hero cannot accept less than they would receive if they sold on the other side of the world. ' We must be content in this Dominion for much heavier costs of living, even than we have had in the past. There are only 350,000 males in the whole Dominion, counting boys of 16, and these must find the money required for administration, and the more taxation imposed upon then) the greater must be the cost of living. From this there is no escape, and the only chance of making things better is to reduce, not to increase the burden. A great many people rejoice at the rich being heavily taxed, but the incidence must and will find its way back, and the great bulk of the people will, in the long run, have to pay.—rManchester Guardian.