SUGAR SUPPLIES.

Press, Volume LIX, Issue 17812, 11 July 1923, Page 10

SUGAR SUPPLIES.

COLONIAL CO. VERSUS JAVA TRUST. PREFERENCE RECOMMENDED. (sracitL TO "TKB M»Sf.") WELLINGTON, July 10. In a recent telegram I mentioned that there was danger of the closing down o£ the Colonial Sugar Company's refining works at Chelsea, Auckland, unless some preference was given against Java importations. In the House of Representatives today the Hon. W. Do wide Stewart, Minister in Charge of the Department >f Industries and Commerce, made an niportant statement regarding the question. He said it was a very important juestion, and he -wished to bring it before the House at the earliost possible moment, so that members might consider the matter before it came to the House in tho shape of a Tariff Bill, or by way of a resolution. It was also important bo that merchants and manufacturers might, be able to make their arrangements. Members would recollect that it was announced some time ago that the control would end in August next. When he took over this portfolio a few weeks ago ho began to look into the position in regard to what tho supplies for the Dominion ■ would be. He, had at first suggested that when the control ceased, there would be a free market, and everyone would have to make his own arrangements for supplies, as beforo the war. However, he had interviewed some sugar merchants, and they raised some far-reaching considerations which he decided should be placed before the Industries and Commerce Committee, The point that arose was this: They would not be ablo in any respect to get back to pre-war conditions. During the long period of Government control which enabled -the Dominion to get regular supplies of sugar, a large number of industries had sprung up dependent upon a regular supply of high-grade sugar and a stable price, such as fruit preserving and jam factories.. The merchants represented to him that if a free market was established, there would at once be chaos in these industries. They made urgent representations that before any action was taken, very careful enquiries should be made. At the same time the Colonial Sugar Company urged the Goternmont to put them on a footing to compete with the importations from Java, The reasons they gave were that their supplies from Fiji this year were abort, and that they were to some extent dependent upon new sugar from Java. Unless they could get some dnly on refined sugar, they could not compete with the Java sugar because of tho highe/ charges in New Zealand for labour, coastal freights, coal, raw materia], etc. Accordingly the company asked for a protective duty of £3 a ton. He had enquired of the expert accountant who had controlled on behalf of the Government the books of the Sugar Company during the period of Government control, to check the statements now made by tho company, and it had been made evident that there was danger of the closing down of the works. Realising the seriousness of the position, the committee had token evidence as to whether it would be better to risk the closing of the. works and have a free market, or to afford some protection and have the works kept going. A large number of merchants and manufacturers gave evidence, and except for the representa- <■ tives of Java sugar, they were unani-' rnous that it was advisable that the Government should maintain whatever duty was necessary in order to keep tho works open. The evidence of merchants interested in the importation and sale of Java sugar was also taken, and while it was stated that Java sugar would be sufficient for many purposes, it was at' the same time necessary to have the Colonial Sugar Company's high-grade Al sugar for cßrtain purposes. Manufacturers also gave evidence to the-same effect, pointing out that Java sugars imported could not be relied upon for such work, there being often in one shipment five or six grades. Some of the merchants, interested in Java sugar argued in favour of a free market, but even in their case, .it was admitted by some that if the duty were taken off, there would be chaos for some time, though it was also recognised-that what the committee was recommending was giving a monopoly to the Sugar Company, yet if they did not agree to their proposal the Dominion might be out of the frying pan into the fire, because the Java sugar was alleged to be under the.control of a trust. It was claimed that if the Colonial Sugar Company had to close down, the Java trust would bo in a position to fix the price. As a result of their deliberations the committee came to certain decisions:— (1) That the Government should give up control of sugar in August. That view was, howover, controverted by quite a number of merchants who wanted to see the control continued. They admitted that while at times they thought thoy could have improved on Government control, the Government had saved the country a very large sum by the control. . (2) That it would be necessary to impose a duty on white sugar, allowing raw sugar in free, and that the arrangement should only hold good for a period, sayj up to the end of September next year, a little over a year. There were certain other subsidiary resolutions come to by the committee, requesting the Department during the next twelve months to ascertain what sources other than these were available, such as the possibility of growing beet in this country. He had informed the representative of the Colonial Sugar Refining Company of the decision arrived nt, and they had ogrced to continue their refinery on a duty of o-16d per lb on all refined sugars. That worked out at a little under £3 a ton. The whole position could be reviewed after twelve months. The arrangement made was subject to ratification by the House. Tho duty agreed on was lower than the limit the Committee had authorised him to negotiate for, and the .agreement made would mean a lessened margin to the. company of £SOOO a year. The Committee, he added, were impressed with the importance of keeping a continual supply of highgrade sugar available for the important industries which had sprung up in all directions in New Zealand. The position could bo reviewed again in twelve months. "In connexion with Fiji sugar," said the Minister, "thev are at present producing sugar, as to the cost of cane and labour, under conditions which were fixed at the request °',. t f British Government at a level which forbids thoir selling in any market but Britain and Canada, where ifrS, ls n P ref crential duty The net result of considerations of the Committee, after hearing evidence »«m «11 sides, is that for the twelve months the refinery should be .kept going. There era between 300

Jftonitijuea at foot of cost colons.)

and 400 persons employed there. Th© rata of 5-16(1 is not a subsidy, but to put them oil a level footing to compete with Java sugar." The Minister added that if hon. members would investigate the charges which were incurred during the past year or two, they would see that the company could not compote on a level basis with Java sugar without some sort of assistance. What he proposed was that if there was no opportunity of bringing down the Tariff Bill for a week or so, it might be possible, with the leave of the House, to introduce a resolution within the next day or two, giving effect to the Committee's recommendations. The evidence was flll taken down, but had not been printed. It might be possible to lay it on ths table. There were one or two subsidiary questions concerning which the Committee asked him to see the company, said the Minister in conclusion. They were such questions as freight on the coast, but sufficient information was not yet available