LXXVII

ft—lB;

CHAPTER X.— TARIFF. Question 6 : What has been the effect on prices of the tariff reduction ? 1. The peculiar difficulty incidental to the study of dynamic economics—namely, the impossibility of isolating phenomena that it is desired to study in detail—is exemplified, especially in dealing with the effect on prices of tariff reductions. A priori a reduction in Customs duty should result in a reduction of the price paid by the consumer, provided all other factors in fixing price remain constant. The period under consideration, however, more especially the last fifteen years, has been a period of rising prices the world over, due to causes which have been discussed in other portions of the report, but which cannot be neglected here. Chief among these causes may be mentioned (a) the relative change in the circulatingmedium as compared with commodities generally ; (o) increased demand for foodstrffs ; (c) shortage of supplies ; (d) the operation of trade combinations that secure the control of certain commodities and regulate the price in their own. interests ; (c) increased cost of production, due to increased cost of raw materials, higher wages, and transportation. 2. The Customs tariff of New Zealand was in the first instance adopted for the purpose of raising revenue. Later it was used as a means of affording protection to local industries from outside competition. The important changes which have taken place since 1896 are indicated in the following table :—

General principles.

Period one of rising prices.

Tariff remissiong

Table No. 54.

The Customs Duties Amendment Act, 1909, imposed a surtax of 1 per cent, on the amount of duty payable under the existing tariff on tobacco, cigars, and cigarettes, and 2 \ per cent, on the amount of all duty payable on all other dutiable goods. This surtax took effect on the 24th November, 1909, and terminated on the 31st March, 1911.

.Effect on prices.

Rates of Duty. 1896. 1900. 1907. Currants and raisins Other dried fruits Mustard 2d. lb. 2d. „ 2d. „ 2d. „ Id. „ Id. lb. 2d. „ 2d. „ 2d. „ Id. „ Free. ii ii Unground spices .. ... Acid, tartaric .. ,, citric Sugar, molasses, and treacle Blue Candles Infants' foods Matches, plaids, 100's . . ,, flat pocket, 100's ,, oblong, No. 4's, tin Patent and proprietary medicines Sarsaparilla Rice 15 per cent. Id. lb. 2d. „ 2d. „ 20 per cent. Is. 2d. gross Is. 9d. „ 5s. 40 per cent. 25 6s. cwt. 6d. gallon 4d. lb. 15 per cent. Id. lb. . Id. „ 2d. „ 15 per cent. Is. gross Is. 4d. „ 4s. 6d. „ 15 per cent. 15 Free j? ii ,, Id." lb. Ild. „ Free. Is. gross. Is. 4d. „ 4s. 6d. „ 20 per cent. 20 „ Free. Kerosene .. 2d." lb. 221 P er cent. 221 'J Tea Infants' boots (Nos. 0 to 6) Boots, shoes, and slippers 221 P er cent. 221 )) 55 Motor-cars Soda, bicarbonate and carbonate 20 Is. cwt. 20 Is. cwt. 23 per cent, to 100 per cent. Free. ))