KEEPING UP PRICES

Taranaki Daily News, 23 July 1929, Page 2

KEEPING UP PRICES

HOW IT RE-ACTS

BUTTER, WOOL AND TIMBER

SUBSTITUTES PROVIDED.

(From Our Own Correspondent.) Wellington, July 22. Figuratively speaking, there is always in evidence a war between producers and consumers, and it seems that in the long run consumers must win. During the war consumers were cruelly exploited, but they are now beginning to have their revenge with the aid of substitutes. Owing to the high prices and difficulty in obtaining butter during the war, the consumption of margarine was Simulated, and now it is said that margarine is becoming a real menace to the butter trade, for it is difficult to tell the difference between margarine and utter, and authorities state that its nutritive value is just as great as that of butter. The margarine combine in Europe is. a very powerful one with practically unlimited resources and is able to push the sale of its product with vigour and success. If margarine is just as good as butter, as it is claimed to be, it is cheaper, and therefore lias a strong appeal to the consumer. The competition of margarine keeps the price of butter down, for the moment the price advances those wiio are unable to afford the higher price switch on to margarine, and as the consumption of butter declines stocks accumulate. and to stimulate consumption prices must be reduced. It is a sort or vicious circle. Empire Dairies, Ltd., which has been sponsored by Mr. W. Goodfellow, and has received the benediction of Mr. W. Grounds, has for its purpose co-ordin-ated and co-operative marketing. Price control on the lines which proved such a rank failure when attempted by the Dairy Control Board will no doubt be the principal policy of the new organisation, for those connected with it were closely associated with —e Dairy Board and it c policy of price-fixing. If price control is to be the policy, and that seems probable, it will result in a further stimulus to the consumption of

margarine. Wool is undoubtedly feeling the effects of wool substitutes, and the subst■L-tcs have been called into existence by the high price of wool. There was one year in the early post-war period when the average price of New Zealand crossbred wool was returned at £35 per bale. The development of rayon, or artificial silk, has been sensational, and that is not a matter of accident. The product was needed to supply the people with an article more within their means. Now the woolgrowers are waking up to the fact that rayon is directly responsible for the heavy fall that has taken place in the prices of all grades of wool, and to counter this an advertising campaign on a large scale is now under serious consideration. But rayon is not the only competitor that wool has to contend with, for there is another fibre known as “N.T.” that will have to be contended with in the near future. In May last the N.T. Artificial Wool Company was formed in London to acquire from the Textiles (New Process), Ltd., the chemical and mechanical processes invented by Monsieur Joseph Viallet, of Paris; for the manufacture of an artificial wool; or substitute for wool. It is stated that the processes have been developed from the experimental to the commercial stage, and that tests carried . out by various firms of wool spinners in Yorkshire are said to have been’ quite satisfactory. It was stated in a cable message the other day that a Tin Producers’ Association had been formed in London for the protection and betterment of the tin industry. Aluminium has been the competitor which has made tin somewhat unprofitable to the producers. Cooperation of producers will, it is believed, overcome the difficulty by regulating the output, but co-operation is a policy with certain inherent dangers, particularly the danger of over enhancement of prices. Now it is stated that a substitute for building timber will be coming on to the market. A new use for waste straw will be developed by a company incorporated in Regina, Canada, for the manufacture of strawboard to replace, ordinary lumber in the construction of buildings,, and one machine has. recently • been placed in operation on a farm. The patented . .production, is called . , “Solomite?’ T'he machine,' it is. stated, compresses the straw under a pressure of lOffib to the. square, inch, the product being laced with wire and turned, out in boards 14ft long by oft wide and ; two inches thick. The machine turns out 4000 square feet of strawboard a ; day. It is contended that the product is fireproof on account of the pressure to which it is subjected, _ and that it possesses insulating qualities to a high degree. The menace of substitutes ' should convince producers that to be . successful it is necessary ever, to be on the alert to reduce costs of production, and thus cheapen the product so as to . bring it before a wider circle of consumers. Trying to “keep up prices, or stabilising prices, is more or less 01 a Bedlam policy. • ■.