XN000022-1974-03-27 — Page 5

Wednesday, March 27, 1974

However, he ruled out any general price controls and bulk

"We have seen

buying arrangements for the efficiency of such measures.

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the effect of such measures elsewhere the end result is always confusion

and distortion in the market and, furthermore, at a huge cost to public fund."

Profiteering

Mr. Haddon-Cave spoke at length on inflation and profiteering

but

and concluded that profiteering was not as widespread as some would

imagine. Neither did he believe that its total elimination would make

"any very great difference to the rate at which prices are rising,"

the fact that 'profiteering' does exist at all "is a cause for considerable

anger and frustration."

Or

People tended to be more aware of 'profiteering' in a situation

of rapidly rising prices, he said, but profiteering was difficult to define.

His own interpretation was that 'profiteering' could unambiguously

occur in situations where either there is a degree of monopoly power,

consumers are unable to effectively exercise their combined influence on

prices as a result of some failure in the market information process.

"In the first situation, the government has a clear obligation

to redress the balance as it were, in favour of the consumer if the

!]

government itself has been instrumental in providing any body of persons

with the potential power to manipulate prices or supplies to their own

advantage."

Where there