POOL CONDEMNED.

Auckland Star, Volume LII, Issue 304, 22 December 1921, Page 9

POOL CONDEMNED.

CRITICISM BY CHAS. ELGAR. CHAIRMAN OX W.M.F. CO. PREMIER STARTS OUT WRONG. ATTACKING AN AGE-OLD LAW. "As far as I understand Mr. Massey's proposals they arc basically wrong, and cannot possibly succeed." said Mr. Charles Elgar this morning, when he tras asked what he thought of the Pre- ■ ihier's pooling scheme as a means of puffing the country out of the troubles Brought about 'by the meat slump. Mr. Elgar is a well-known sheep farmer, is chairman of the Wellington Meat Export Company, and has just come from London, where he devoted a good deal of what was at first intended to be purely a pleasure trip, to a study of the very ■business with which 'Mr. Massey proposes to deal in such a revolutionary manner. Mr. Elgar is therefore peculiarly fitted to give an opinion on the Question of a pool, and he condemns it absolutely. To put it briefly, he says Mr. Massey is trying to get oxer a law ■ which has been operating for thousands of years—the law of supply and demand. "in the first place," said Mr. Elgar, "it is quite a mistake to attempt to formulate any scheme at the present time. The meat market has never recovered from the enormous stocks -which wete field by the English Government. Things are far from normal anywhere, and it would he most unsafe to start a hew and untried scheme of the nature Mr. ■Massey proposes. If you are going to launch out into something vast, you want to start when conditions are normal, otherwise the position may change quite suddenly and render your fiuge scheme not only very costly, but quite unworka/ble. It is quite useless taking the experience of the past seven years as a guide in dealing with our meat. We must wait until things get 'hack to normal before we can come to any reasonable conclusion as to the meat [market, or in fact any other market for put primary prdduee. "Then the basic ideas of the proposal for a meat pool are wrong. The kernel of the matter is Dominion grading and control, and there have been comjiati: sons between meat and butter. The two things cannot, hbwever, be Compared. Butter is a manufactured article, and if a factory turns out a bad brand it.js a sure sign that something is at fault in that factory. Meat, on the other hand, is a matter of pastures and districts. You can't make meat as you - can make 'butter. There is a big difference 'between the quality of the meat exported from one district as cdmpared with the meat of another district; In A word, there ds such a variety of meat in the Dominion that it would be impossible to grade it in the manner pro--s*osed. It would ni§in that eventually the good meat would come down to the indifferent meat—at least that would %c the tendency. VALUE OF A BRAND. "There has been so_e criticism of the inu'ltifflicity of brands, and the number .# ports from which frozen meat has to • J* shipped, but I don't see the use of letting up a meat pool to get over that .disadvantage. You must remember j .iftoiv the trade has been 'built up that '■Mr. Massey proposes to revolutionise in . such a summary manner. It has taken the meat companies, years and years to -ouild up a particular brand, a brand on Which the meat is actually sold, and . do you think they are going to lightly give up such a brand, and such a valu- - .ftblc asset? Jusi hy way of Cxplana- .' 'tl&n, let mc go through the processes of disposing of meat. The purchasing freezing company goes to the farmer and gives him what is called "payment on the gate" price, which means cash at the —vrmers' yards; the company then puts that meat into the freezing works, and at the very earliest opportunity disposes it it, without waiting for it to get to London. And the company sells entirely on its brand. That brand is known to the London buyers, and it is 6a the reputation of that brand that We are enalbled to do business as I have 'described—a most convenient and excellent method for the companies. So that you can't expect a company to throw up its brand at a moment's ilotice, as it were. It has taken us years to build up our reputation." When asked what he thought of the . iuggestion of the Premier for setting Hip a committee of experts in New Zealafld and another committee of experts . in London, to respectively forward and receive the meat, Mr. Elgar detailed the routine at present observed in selling ftleat in London. This routine has been mult up after years of experience, and the men engaged in the business are ■6_e of the cleverest .'brains in England. At present New Zealand meat is sold through brokers in London, and any BCheine such as Mr. Massey proposed Would naturally antagonise them if the committee superseded them. 'You IwoiiM simply drive them into dealing •with the meat of other countries," said Mr. Elgar, "and I may say that the competition is quite keen enough as it is— "in all except our it is no ■use. making enemies of these brokers, who have beert in the business for years. Even if Mr. Massey should say: "On, w;eli, we intend to still employ these brokers; we will do the business through them, but under the control of the eomanjtttee,' I still maintain that the pool is a mistake. My reason for .saying so is that if you are going to employ these London brokers there is no reason whatever for a committee and a costly army of officials, because these London brokers are at the top of the tree in their business and know exactly when to sell better than any committee can tell them." THE CURE. "Then how would you get over the fclump?" was asked. "You must remember that the slump and the present low prices would' have come anyway s " replied Mr. Elgar. "The cause is one of those fundamental causes . Which no amount of legislation can alter, and as a matter of fact, any attempt to interfere with that cause is bound, sooner or later, to react On 'ttneself. The Whole thing is the outcome of the operation of the laws of supply and demand. If you have an oversupply *i meat or any other product the prices nutst come down, and that is precisely what has happened with our frozen •neat. It is simply that and nothing Shore. To give you an example of the extent to which the market is overstocked in the Old Country, I saw an instance where it took two months to Unload a steamer because the stores Were so full they could not hold any mare. "Why hae the meat accumulated?' you ask. The cause lay in the . Very fact of the English Government and others holding oh to the meat when the market began to fall from the very high prices that prevailed during the War, and these high prices have only

Been maintained by allowing stocks to accumulate. The result has been this phenomenal glut. And you will find that as soon as you begin to interfere with the laws of supply and demand ybil always land yourself in some difficulty of the kind." ''And is the price we are getting for our meat in London a fair price!" " Yes," replied Mr. Elgar unhesitatingly. "Under the present conditions the prices we are getting are in in* opinion the best obtainable. It should hot be lost sight of that the present low prices have the effect of increasing the consumption and so the reduction of stocks will lie brought about automatically, but it will of course take time. PROHIBITIVE FREIGHTS. " What the meat trade is really suffering from," said Mr. Elgar, " is the high cost of getting owr meat to London. It is not always realised that the charges now ruling are 250 per cent higher than before the war. Another factor that is lost sight of by many people in connection with our frozen meat is that New Zealand is exactly as far away from the English market as it is possible for a country to be, and still another factor is that we are dealing with a low-priced product. If we were shipping an article like raw silk, a rise of £10 a 'ton in the freight would be neither here nor there, but with a lowpriSed product like meat there is always the danger that the cost of getting your wares to market may reach such a point a* to make the business unprofitable. " No," said Mr. Elgar, " we don't want the Government to interfere with the meat business. All we can do is to keep Oh pegging away at getting the freight, Port 6f London and other charges reduced, and let the age-old law of supply and demand take its course to eventually right fiie market. " You mttit not. think by what I have said I am not in sympathy all the time with the farmer. I am one myself and would do all I can to forward their interests, and I miist emphasise in conclusion that if I could see that the proposals now under consideration by Parliament would obtain for the farmer the very smallest of increased prices, I would endeavour to help it forward, but I cannot see it and do not believe anything but increased consumption and reduced accumulations will bring it about." f_JU__RS GETTING ANXIOUS. STATEMENT BY PRfiMIHB. (By Telegrapb —Parliamentary Beporter.) WELLINGTON, Wednesday. further information regarding the setting up of the meat pool was secured as the result of a question from Mr. Forbes (Huriinui) to-day. He {tainted out that the announcement of the pool has had an unsettling effect on farmers and the meat industry generally. Mr. Massey replied that it was intended to start the pool this season, though it would not be practicable to apply it to arrangements already made or to be made within the next fortnight or three weeks. It was intended to consult a representative gathering of producers after the Christmas and New Year holidays. Mr. Forbes: Call it as early as possible. Mr. Massey: My information is that it will bo held on the day the House resumes, or the day before. Those who are working With flic in the matter wish to get it in Operation for this season, but it is a very Important proposal, and a big scheme which we cannot hurry. We want men in charge who thoroughly understand the business and have the necessary ability to do the work. They are not to De picked Up every day. (Hear, neaf.) — ' '