SUPPLY AND DEMAND.

Waikato Times, Volume 107, Issue 17992, 10 April 1930, Page 9

SUPPLY AND DEMAND.

THE FOLLY OF TARIFFS.

SYSTEM STRONGLY CONDEMNED. an interesting address. Before the Te Awamutu Chamber of Commerce, Mr J. OUphant (president), in the chair, Mr Douglas Seymour g the following erudite address on the law \of supply and demand and the tariff system. Human Output Lessens. In opening Mr Seymour explained that he did not maintain that his suggestions, if adopted, would prove a panacea for economic ills m New Zea land nor did he wish to p-ose as an economist or to suggest that any more importance be attached to his views than to the grounds upon which they were based; he was more with the reasons for his conclusions than with the conclusions themselves. After referring to the general conditions in New Zealand at Present, which were very largely paralleled b> conditions in other countries, and remarking that in spite of the en ° rm increase in facilities for Production during the past 20 years the output per man in New Zealand measured > volume had reached its peak as far back as 1911 and had not been equalled since, the speaker went on to suggest that it was necessary to go back on the principles upon which society was constituted and to consider to what extent those principles were being observed and followed in our existing organisation. The first question to be asked was what was the force or motive that kept the generality of citizens up to the collar of their everyday tasks. While admitting certain exceptions, Mr Seymour contended that this force was to be found in economic pressure, that the need for every individual to provide for the future of both himself and his dependents was the motive force that kept the machinery of production going. The next primary consideration- was the means by which the annual production of goods and services was distributed among the population in .spite of the attempts made by various forms ■of Socialistic legislation to distribute the return to special classes of individuals on an arbitrary basis. The speaker quoted the Arbitration Act and the tariffs as illustrations. He contended that fundamentally the question of distribution had always been, and would always be, governed by the law of supply and demand. This law appeared to hold good not merely among human relationships, but was a determining factor even throughout the animal and vegetable world. Economic Pressure. The speaker proceeded to maintain that if the governing impulse for production of goods and services was ultimately economic pressure, it followed that production as a whole must he affected by relaxation of this pressure, and by all legislation having as its' effect the removal of responsibilities from the shoulders of Ihe individual to those of the community. H might he that it was desirable to alleviate this pressure in some directions, but every community had to realise that ultimately it could not have its cake and eat it too—in other words, ■ that it could not maximise its standard , 0 f living at the same time as it relaxed

the pressure that kept up the standard. Unfortunately humanitarian legislation had proceeded on a tacit assumption that there was always to be found some inexhaustible'central fund whicn could be tapped in the interests of those it was desired to benefit. This had now been systematically done over a long period in many countries, and the economic disturbances which ultimately followed were beginning to open the eyes of even the supporters of the system to its inevitable consequences. In England at present apparently all parties were willing to join in a campaign for squeezing the wealthy interests for the benefit of the so-called under dog who comprised the political majority.' But the process had reached a dead end, because the raising, for example, of the wages of the coal-miner to the desired point inevitably resulted in an increase of manufacturing cost to the stage where the manufacturing businesses themselves had to close down. It was thus no longer possible to use the capitalist as a chopping block, and the issue had now to be fought out in. this field between the employees of the manufacturers and the employees of the coal interests. An almost identical situation

had developed in Australia, whose present experiences were an abject lesson for New Zealand. In New Zealand we had been proceeding on identically similar political lines and at a rather slower rate of speed, but there was no doubt in the speaker's mind as to the consequences with w’hich we would be sooner or later faeed.

The Tariff System. Reverting to the question of the distribution of goods and services in the community and the payments therefor, Mr Seymour raised the question whether there really was any economic justification for the action of the State in compelling its members to pay more for any particular class of goods or services than the consumers were walling to pay, or could get the same goods and services for elsewhere. This was the object .and effect of the tariff, which in New Zealand applied to about DO per cent, of our imports. The justification suggested w-as the so-called protection principally of local manufactures. The effect had been that certain interests had been placed in a privileged position and had been enabled by legislative authority to levy a toll on the community for the purpose of carrying on uneconomic businesses. The Australian Tariff Commission recently reported that the Australian consumer was paying £36,000,000 per annum for protected Australian goods in excess of what lie could buy the same goods for in the world market. No similar figures were available for New Zealand, but the speaker suggested that the probable minimum for New r Zealand was £5,000,000, and this figure might be very much greater. The Australian Tariff Commission had also found that about 50 per cent, of the protected industries in Australia could carry on without protection. Mr Seymour suggested that an inquiry on similar line's in New Zealand might disclose some very' interesting information. The principal sufferers by the tariff in Now Zealand were the farming community, and their case against the tariff seemed to the speaker completely watertight. In Australia political pressure had forced the recognition of the unfairness to the farmer, und this had resulted in the famous Patterson scheme, by which the farmer " -»u«ued ta next column.)

was subsidised by the community for every pound of butter be produced. The Farmer Hardest Hit. The speaker said he would be very sorry indeed to see the same system introduced into New Zealand, and for his own part he hoped that the farming community would insist unswervingly on the abolition of the tariff system, and upon the free operation of the law of supply and demand.