GRAVE CONCERN

Wanganui Chronicle, Volume 83, Issue 254, 27 October 1939, Page 8

GRAVE CONCERN

SEVERITY OF IMPORT RESTRICTIONS VIEWS OF RETAILERS IN AUCKLAND [ Per Press Association ] AUCKLAND, Oct. 26. Grave concern at the severity of the cuts imposed by the latest import restrictions was expressed at a meeting of Auckland drapers, mercers and shoe retailers. It was stated that many lines were excluded altogether, while the percentage allowed on others was so small that they were not worth considering. Instances cited showed that importers would receive about oneeighth of the requirements needed for a normal season's trading. When the present stocks are depleted it is expected the prospects for replenishment for next season are very poor. It was stated that retailers in the Auckland Association alone gave employment to some thousands of assistants, and if the present conditions prevailed much longer unemployment was bound to follow', solely through the inability of traders to obtain stocks. The late issue of the new schedule would mean much higher prices in the future, because all overseas prices had increased ' and the local importer was denied the opportunity of operating before rises in prices began. Matters were further complicated by the sterling exchange position, because the overseas supplier was not likely to look for deferred payment, when he could sell his goods for cash to other customers. The opinion of the meeting was that increased taxation, rising costs on all sides and loss merchandise to sell had created a serious problem. Unless a ! solution was quickly found much ! hardship to the community would be caused. SALES AT '‘REPLACEMENT VALUE” SUGGESTION NOT FAVOURED MEWS OE THE MINISTER. ( [ I’cr Tiesj Association. J j AUCKLAND, Oct. 26. j The principle that traders should be j allowed to sell at "replacement value" ( on a rising market is definitely reject- ( ea by the Minister of Industries and t Commerce, Hon. D. G. Sullivan, in re- c ply to a request by the Auckland Chamber of Commerce that the Price . Stabilisation Emergency Regulations be modified to meet recent increases } in the landed cost of imported goods and that "replacement, value be j adopted as a basis. t The chamber wrote to the Minister x on September 19 to this effect, and. c after considerable delay, it hits re- c ceived a reply. In this Mr. Sullivan points out that in a statement issued r on September 28. he let it be known c that the Price Investigation Tribunal j would consider applications to increase prices where it could be shown that c the landed costs had risen. Alter enumerating the chief Miuses of the v increases in cost of imported goods, f Mr. Sullivan continues; c "The Government has laid it dowui 0 as a general policy that such extra r costs may be auded to the September a 1 prices if it is considered that the in- •. dustry or trade is not in a position to a absorb some, or all, of tnese extra costs. It was realised by the Government that if approval nad not been given to some increases in prices, then merchants might have been laced with the necessity of selling goods at lower prices than those they themselves paid. The Government had no intention of forcing people out of business through unreasonably rigid control of prices. Un the other hand, it had no intention t, of permitting profiteering to take v place. ft "It is noted that it is suggested that the regulations should be moditied so r as to permit of replacement costs. You s will appreciate that application of this e principle would have meant that the p prices of all stocks in New' Zealand of a imported goods would have been raised quite considerably, and con- j. sumers would have had to pay considerably higher prices for goods which had not cost one penny more to merchants and retailers. Merchants and retailers would have reaped a handsome profit had this been allowed, and the Government did not consider the application of the ‘replacement cost' principle was justified under the » abnormal circumstances brought about by the war." The Auckland Chamber of Commerce, in reply, .states: “When the war is over and prices fall, traders will have to sell at reduced prices the commodities they have purchased at. the high prices of the war period. This offsets tir* ‘handsome profit’ referred to in your third paragraph, which alleged handsome profit is, in any case, mostly illusory, as high prices mean reduced quantities sold, so that fixed overhead costs of ousiness have to be spread c ' over fewer articles handled. Replace- d ment cost is, therefore, quite equitable 13 as a basis for charging, and on a long e view confers no ‘handsome profit’ at c all on the dealer. ’’ n . The reply adds that the Government’s present scheme is inherently n too unwieldy and cumbrous. It might 11 be replaced by laying down some 13 simple principle, such as that of replacement costs and having complaints 11 by the public investigated by a com- c l petent tribunal in association witll CJ people having some practical business st experience.