NEW CUSTOMS DUTIES

Taranaki Daily News, 1 August 1931, Page 9

NEW CUSTOMS DUTIES

EFFECTS UPON BUSINESS

TRADERS EXPRESS OPINIONS.

EARLY REFLECTION ON PRICES.

The latest increases in Customs, excise and primage duties, especially as they relate to soft goods, are • not looked upon favourably by business men interviewed in New Plymouth yesterday. Trade, they said, has already been slowed up. People , are buying, as a rule, only absolute necessities and are inclined to hesitate before they make any purchase at all, carefully apprising values, and debating with themselves whether they must have an article now or can postpone its acquisition. The new tariffs will constitute a further brake on the buying public. Though recognising the magnitude of the difficulties facing the Government, several shopkeepers considered the new duties were too drastic. On the one side spending power had been and was being reduced by widespread unemployment, wage cuts, unemployment levies and taxes and income taxes. The community was forced to economise as never before and to reduce expenditure along every avenue. The retailers wore expected to respond by selling at lower prices and, with original costs down, had succeeded in doing so in most lines. Yet just when the consumers were readjusting themselves to the new conditions the burden of these duties was imposed. The most popular lines of silk hosiery come from Canada or America. Two yeans ago the duty on Canadian manufactures amounted to 284 per cent. Owing to the dispute with Canada over importations about Jwo months ago the gross duty on Canadian hosiery was raised from about 37 per cent, to 67 per cent. To-day, with the new tariff, the extra charge on these goods, both Canadian and American, is 74 per cent! It was pointed out that favoured lines of pure silk stockings were not made in New Zealand, though this Dominion did produce art silk goods at good competitive prices.

EFFECT ON SOFT GOODS.

Shipping freights have not come down, the reporter was told. British made apparel that two years ago bore duties totalling 281 per cent, to-day was loaded with tariffs approximating 43J per cent. British hosiery and general apparel that could once be landed into store for 37J- per cent, on cost was to-day imposted with charges aggregating 72 J per cent, owing to bigger duties and high rates of exchange. High exchange rates in themselves were stressed as very important factors with which the importer had to contend in his endeavour to keep prices low. Prices had fallen very considerably in the countries of manufacture, said a draper, yet with the new tariffs, freights and exchange it would npw be impossible to land foreign apparel and hosiery under 105 per cent, on the original cost!

Gloves were a line on which the retail price had been greatly increased in this way. Roughly the duties on many popular articles of drapery had risen by an average of from 9 to 10 per cent. British silks and floral rayons, formerly admitted free, now had to pass a barrier of 13J per cent, on their first cost. There was a primage duty of 3 per cent, on sheetings and other plain, cotton piece goods that were not dutiable before. “I am certain these additional charges are going to slow up further trading activities,” commented one man.

Unfortunately the bulk of spring and summer drapery was only just arriving and would be subject to the higher tariffs, said a retailer. The goods at present in the shops would, of course, not be raised in prices, but increases were inevitable as new orders came to hand.

Apparently it is the general policy at present to keep stocks down to a point not far above the margin of safety. With the fluctuating exchange rates and uncertain conditions in other directions it is found that wholesale buying has to be done with more care and judgment than ever before. Especially in the drapery business, it is essential not to carry over large quantities of goods from one season to another in which the fashions will have changed. An early loss im quitting such wares is preferable to a belated one. “I shall trade on my present stocks as long as possible,” said one trader when asked flow men’s wear would be affected. “Most of us are living from hand to mouth these days.” STRUGGLE FOR PATRONAGE. In the face of fierce competition and a falling national income business to-day was a continual struggle for the patronage of a poorer and less numerous buying public, the reporter was informed. Where formerly the bread would be eaten and the crust discarded to-day the crust was consumed and there was a diligent search for the smallest crumb. Rates and rents had not come down, taxes had increased, running and overhead expenses were practically the same, despite wage reductions that represented only a small percentage of the whole cost. In a word, the,turnover was down though the expenses were almost at their old level. It was pointed out, too, that even though some imported goods were cheaper, without the duty, by almost half of what they cost several years ago, there was not an increased sale to compensate. A woman would not buy twice as much cloth because it was cheaper. She purchased only what she required, and, in any case, she had not the money these days to pay for more. “Members of the public are apt to forget,” said a business man, “that we must make a profit or we can’t pay wages or keep up an establishment. Today most of us, if not relying on it, are living very close to our capital.” A dealer in wholesale groceries held a more optimistic view than most of those interviewed. Referring to the extra 3d a ■pound on tea, he said this could be saved in most cases by buying in bulk retail and by the consumer contenting himself with one of the cheaper grades, some of which were quite good. The tendency had been for consumers to use the higher-priced teas, but they could adjust themselves to the conditions. A taste for a particular brand of tea was largely a matter of habit, and he considered the purchaser could soon adapt herself to a less expensive kind. Several large shipments of tea were expected by the Monowai but failed to connect with *that ship at Sydney, with the result that when they did arrive they would have to pay the full duty. INCREASE ANTICIPATED. I Increased' duties on tea, sugar and tobacco had been generally anticipated by the trade, said the wholesaler. He pointed out that sugar had beeu falling in price for a number of years. During the war it was £45 a ton wholesale, but to-day it was down to £l6 10s. a ton at the New Plymouth wharves. This was very much cheaper than in Aus-, tralia, where it was £37 a ton. It so happened, however, that there was a distinct shortage at present in New Plymouth, because the last shipment from Auckland on Monday had been the first for a fortnight. Therefore the new duties would come into operation here much more quickly than if good stocks were held. The local manufacture of confectionery would be affected by the increased price, but this would be counterbalanced by the extra 5 per cent, ad valorem on imported sweets. The. new tariff on tobacco wae ex-

pccted, because the consiynption of “made” cigarettes had fallen very considerably owing to the duty on them being out erf proportion to that on tobacco suitable for “home-made” cigarettes. The tobacco required to make approximately 60 cigarettes was costing the same as 20 machine-made cigarettes. A tobacconist said the retailers would have to add 2d. to the price of each twoounce tin and Id. to each ounce of loose tobacco that they placed in stock. He did not think the price of pipes would be very seriously affected in proportion to their retail price. In any case, probably most of the retailers were carrying stocks that would last some time. “I think the public should form a league demanding that the whole basis of Government and taxation should be changed,” said a man whose stock included a wide range of taxable articles. “Why not let, say, five men administer the country. I don’t care how much you would have to pay them, they would be cheaper j than the current cost of Government. At present spending power is being .reduced heavily, and prices arc being raised by exchange and duties. You can’t have it both ways.”