The Daily Telegraph. TUESDAY, JUNE 4, 1895. THE FROZEN MEAT TRADE.

Daily Telegraph (Napier), Issue 7382, 4 June 1895, Page 2

The Daily Telegraph. TUESDAY, JUNE 4, 1895. THE FROZEN MEAT TRADE.

Mr R. P. Nathan's scheme for altering the conditions of the meat trade possesses all the vicious attributes of the two most important transactions of the Government last session. Those were the decision to advance two millions to the Bank of New Zealand, and to borrow money on the national credit in order to lend it again to landowners at less than the market rate for small loans. Mr Nathan proposes among other things that the sheep farmers of the colony should join together in a sort of corporation, in order to push the sale of frozen meat in England, and that the Government should guarantee this corporation a big loan to float the new affair. It would be obviously inconsistent for any journal which has opposed the Government pledging the national credit for tho benefit of shareholders in a private financial institution, and of landowners who wish to borrow, to take up the position that the Government ought to guarantee to sheepfarmers a big loan to assist them in building up » corner in meat. All that oan be said is that if it :"g right for the Government to lend the Bank of New Zealand two millions, and if it is right for the Government to pledge the credit of the whole country for the benefit of one section of it—the owners of land—then it would not be wrong for the taxpayers to be further called upon in order to find a big loan for the sheepfarmers to buy up existing freezing establishments and sales and freight agencies, or to crush out their competition without purchase, in order to start a new organisation to take the place of the agencies thrust to the wall. But as we happen to very firmly bebelieve that the loan to the Bank of New Zealand and tho competition of the Government with private lending establishments are wrong in theory, and will yet prove disastrous in practice to the best interests of the colony, we are precluded from giving support to the suggestion that the Government should drag the general taxpayer into a deeper slough with a view to crushing out private enterprise at present engaged in freezing and selling mutton.

But there are more practical objections. One is that Mr Nathan, although meaning well, does not appear to quite know what he is talking about. Speaking recently at Woodville, Mr Nathan talked of a " Smithfield Ring " which he conceived was fighting against fair prices for New Zealand mutton, and of the independence of this ring achieved by an agency for selling American chiiled beef. He pointed out that this agency had six hundred shops in England selling beef, and that if the sheepfarmers of New Zealand had six hundred shops selling their frozen meat equal success would be attained. We will take the points one at a time. As to the first, the alleged " Smithfield Ring," it is to all intents and purposes a creature of the imagination. This might be proved in many ways, but probably the simplest form of conviction will be that based upon the consideration that tbe Smithfield men sell our mutton on commission, and that they are therefore interested in obtaining a3 high prices as possible. On this point wo will quote an entirely disinterested witness in the person of the special London correspondent of the Pastoralists' Review. In his communication to that journal for May, in writing on the subject of the low prices now ruling for mutton in the Homo markets, he says :—

Tho consideration whioh arises now is : — Will tho area cf consumption of frozen muttou here bo extended iv consequence of tho oheap rato at which it is sold ? Can we hope that as a set-ofl against tho poor trado fresh channels of consumption may be opened up ? I havo boon trying of lato to glean some tidings of joy on this head, with no satisfactory result. Frozen mutton is, thoy toll mo, a specialised trado, cheapcutting men take tho bulk of it, and it goes amongst tho poorer clas-os, restaurants, and eating houses, and tho butchers who openly do a frozen meat trade iv the better localities aro in tho minority. statement that a" dead set " is made against thomout is not supported by ono tittle of evidenco; the block exists with tho aatipathetic feeling which the largo proportion of middleclass pooplo entertain against fr< zen meat. This, of course, acts upon tho butchers, who aro but the servants of the public. That butchers as a class extensively retail frozen mutton for homo-grown is a theory disproved by tho very position of which we are now complaining, for were thoy able to do this on a large scale, tho profits would bo tromeudou?, and thero would be such a rush upon the imported meat that prices instead of going down would lise. Of course, wo know the practice does exist (I instanced a glaring cstso some months ago), but tho dulnosß which characterises tho trado indicates tho absonoe of tee brisk demand which would immediately ensue if butchers oould buy frozen mutton at 2gd to 3d per lb., and retail at tho fashionable pricoa for English aud Scotch. As to tho Binithfield salesmen, it is obviously to tluic advantage to mako sales as high as possiblo, for the lower the prioe is tho lets thoy get in commission; thoy earn 2 por oeut, aud arc naturally interested to keep the prioe of frozen mutton at 4d rather than at 2d per lb.

We now turn to the American agency with its six hundred shops. It is a fact that these six hundred shops oxisfc. But they exist to sell New Zealand frozen mutton as well as chilled beef from America. It is found in practice that butchers' shops in England, to be successful, must sell beef and mutton, and that any shop which attempts to keep going by selling either beef or mutton alone fails to succeed. Now there is a large amount of capital behind the chilled beef agency, and its directors determined to open shops that would compete with the butchers dealing only in the Home grown product. So the American agency, finding that to sell chilled beef alone will not do, buy frozen mutton of Australasian origin and sell it in their shops. Now suppose Mr Nathan's big scheme in operation, and that six hundred shops for selling frozen mutton are opened in England by a sheepfarming syndicate possessing capital derived from a loan guaranteed by the Government. In that case those shops will have to sell beef. They will then have to buy the Home grown beef, or to get frozen or chilled beef from Australasia, or purchase chilled beef from the American agency. In the latter case the agency can close its six hundred shops, because it will profitably sell its beef to our supposed New Zealand State-aided concern. But if those shops are closed the mutton the American agency now sells, after purchasing it from dealers in Australasian mutton, will no longer be sold by them. The other six hundred shops we suppose opened by New Zealand agencies will doubtless sell the same quantity of mutton, and also sell the beef now retailed by the American agency's shops, but there is no gain in that. All that is achieved is the shutting-up of one lot of shops to open another lot. Some persons on the look-out for billets might gain by that, but it is difficult to see how the New Zealand sheepfarmer would be advantaged. In the other cases the conclusion comes very easily. In either case we should only sell the mutton the American agency's shops now sell for us, and in the one case we should undertake the task of trying to control the whole British beef supply, while in the other we should have to contend with those causes which up till now have prevented the export of frozen beef from Australasia being a success. It will be easily understood that we do not condemn Mr Nathan's scheme for the pleasure of doing so. The energy he has displayed in placing it before the public, and the pains he has taken to think it out beforehand, entitle him to praise although we conclude that some of his thinking has been erroneous and much of his energy consequently wasted. His primary error is in supposing that the resources of the Government should be placed at the back of the trade. It" is the old system of bonuses and subsidies again in another shape, which fails whenever and wherever tried, and is bound to fail because founded upon injustice. If the frozen meat trade will not stand unless the Government take it in hand, and to do so pledge the credit of the colony to find capital with which to compete against established agencies that have been built up as the result of sagacity, probity, and enterprise, it would be better for the trade to fall, so that our energies rfiay be diverted into some more profitable channel.