PRICE REGULATION whether possible in order to stimulate production of copper to increase domestic price of copper conditional on producer’s maintaining specified amount per ton in reserve
National Security (Prices) Regulations
I am in receipt of your memorandum dated 6th February, 1940, asking for my views as to whether it is possible, in order to stimulate the production of copper, to increase the domestic price of copper conditional on the producer maintaining a specified amount per ton in reserve–
- to be used for necessary capital expenditure;
- to be used for any increase in cost on account of working lower grade ore; or
- to be held against a possible post war fall in prices.
Under the National Security (Prices) Regulations, the Commissioner has power to fix maximum prices according to or upon any principle or condition specified by the Commissioner.
It would be legally possible to fix a maximum price for copper subject to any or all of the conditions specified in the first paragraph of this memorandum but such conditions would only be operative during the present state of war and six months thereafter and no longer (vide s 19 of the National Security Act).
I have some doubts as to whether the Commissioner is the proper authority to be charged with the duty of stimulating the production of copper. It may be that Cabinet might consider that a bounty should be paid or that the matter is one for the Department of Commerce or the Department of Supply and Development.
Owing to the far reaching effect of the action proposed to be taken in regulating the domestic affairs of producers and to the fact that such action would establish a precedent, I suggest that, before any further action is taken, a decision of the War Cabinet on the matter should be obtained.
[Vol 33, p. 59]