INCREASED COST OF LIVING. 505 



4.— NOTES ON THE INCREASED COST OF LIVING. 

 By A. DUCKWORTH. 



The increase in the cost of living is a world-wide feature, perhaps 

 most noticeable at present in the United States. In Australia the 

 increase in recent years has been estimated variously at from 10 to 

 25 per cent. In New Zealand the rise has been equally pro- 

 nounced. 



The increase in prices of food, clothing, buildings and rents 

 probably arises, at least partly, perhaps mainly, from the largely 

 increased production of gold in the world. After the discovery of 

 gold in California and Australia the total output of gold was trebled, 

 and the world's prices were disturbed thereby. At that time, 

 however, the effect of the increased production was to neutralise 

 largely what would otherwise have been a sudden and pronounced 

 fall of prices owing to the great expansion of British industry upon 

 the recent adoption of Freetrade. As regards the present con- 

 dition of things, the obvious universal facts cannot be gainsaid : 

 (1) that there is an advance in prices generally, and (2) an 

 increase in the yearly output of gold. Now, Australian main 

 exports of raw materials are, of course, sold on the basis of world- 

 market values ; and, as gold is at once the measure for accounts, 

 contracts and commerce, the importance of variations in the amount 

 annually produced becomes evident, allowing, of course, for the 

 increased consumption of the metal in arts and manufactures. 

 Although " credit " as a commercial factor is of supreme import- 

 ance, yet at its root lies the gold base on which the system rests^ 

 and Australian producers benefit by increased prices on a 

 gold basis. 



It has to be recognised at the outset that certain world factors 

 are constantly in operation which should have the effect of reducing 

 prices, e.g., cheaper production of commodities by machinery and 

 appliances, greater output — and quicker turnover of stocks — 

 without increased labour cost, coupled with reduced costs of transit 

 by land and sea, are factors which should have a permanent ten- 

 dency to bring prices down. On the other hand, there are factors 

 making for increased prices ; the greater power of the producers 

 (with increased banking facilities, and by trade unions) to so 

 regulate the time at which the supply both of produce and labour 

 is placed on the market as to secure favourable prices ; the heavy 

 cost of advertising and canvassing for orders for goods sold on a 

 competitive basis ; and the growth of city populations, as compared 

 with primary producers, affecting the demand for farm products 

 etc. 



In Australia there are certain other special features. The 

 " wages fund " at the disposal of the working classes has been 

 largely augmented by the adoption of wages boards and levelling 

 up of industrial conditions. Tariff adjustments have to some extent 



