DISPARITY OF PRICES

Taranaki Daily News, 22 December 1930, Page 7

DISPARITY OF PRICES

?• EXPORT AND INTERNAL. handToap'oE HIGH COSTS. “The most significant factor in the trend of business conditions is undoubtedly the present low level of prices received for exports,” says a bulletin prepared by the department of, economics of. Canterbury College and issued by the Canterbury Chamber of Commerce. “According to the official indexes for September, wool was then 15 per cent, below pre-war level, hides, skins and tallow 4 per cent, below, dairy, produce 10 per ebrtt. abbve, meat, 26 per cenf. above and all export prices 6 per* cent, above that level. “The contraction of income resulting from reduced export prices must result in a considerable contraction of exporters’ purchasing power, and hence must reduce the dmand for the goods and services" produced by industries selling in the loc.il market. It might' reasonably !be expected that, if internal prices were also to decline, the volume of sales of goods and services in the local market might be higher, and. that the contraction of production and employment might be less. But while prices all over the world have been falling heavily, internal prices in New Zealand have proved particularly insensitive and have remained at high levels. While export prices average* only 6 per cent, above the 1914 level, retail prices (all groups) are 57 per cent., average wages 66 per cent., and the average of three sheltered groups of wholesale prices 79 per cent, above that level. Prices of . exports, particularly wool and dairy produce, have- declined further since September, and present prospects suggest that’ theprices received for exports in the 193031 season will be definitely lower, than in 1929-30. - ’ . “Since export prices cannot be controlled, ahd since there is apparently no : ■prospect of export prices rising within any reasonable period to the' level of internal prices, the only way to remove these disparities, and .so to, remove the. troubles dependent upon them, is to reduce the interna! prices which constitute the costs of production for all our industry.” . The three “sheltered groups” to which ■special reference is made on account of the disproportionately . high level of their wholesale prices are, according to a previous bulletin, textiles, wool products and coal. ..