MEAT EXPORT LICENSE

Evening Post, Volume CXI, Issue 35, 10 February 1926, Page 10

MEAT EXPORT LICENSE

SOME COMMERCIAL OPINIONS

"A SERIOUS STEP TO TAKE"

GOVERNMENT AND BORTH-

WICK'S.

When the 1 Government, through the Minister of Agriculture (Mr. O. Hawken) refused to permit, the transfer of the license of the Wellington Meat Export Company, to Thomas Borthwick and Sons (Australasia), Ltd., the announcement was received wi?.h mixed feelings by the comercial community in various parts of the Dominion. "The Post" sought tint bankng opinion at the time. That opinion was unanimous: that the Government had practically destroyed a valuable asset against which banks made advances, for without a license under the Slaughtering and Inspection: Act a freezing undertaking cannot carry on business.

Time has elapsed since the Government's refusal to permit the traster sufficient for business men to take a close view of the position that ' has arisen. Some of their, views on the issue are hereunder summarised. Names are not given for various reasons, but the opinions are of men of wide experience and good standing. They are divergent. One group generally holds that the Government was justified in taking in this case what action it thought proper, being empowered to do so by statute; the. other contends that the license in the special circumstances should have been permitted to be transferred. . . PERFECTLY LEGAL ACTION. "In the first place," it was pointed out, "both the Meat Export Company and Borth wick's knew very well of the existence of the power vested in the Minister of Agriculture under the Act; but the one party proceeded with its arrangements,to transfer and th 6 other to' take over the license. Both knew of the published, decision of the Meat Control Board to prevent overseas in- y terests acquiring freezing works in the Dominion, and that in the event of such action being taken without its approval it would take such .steps as it thought proper tofr'ustrate anything of the kind. Borthwick's are "an oversea interest." The board, according to its lights, regarded it as such and advised, the Minister to refuse ,the transfer. " The matter,' then, rested with the board. It has only done what it has authority to do; it has acted in the interests of" the" industry primarily affected," •

Another opinion • was to the effect that although the only reason given by the Minister for refusal of the transfer was in the "public interest," that was sufficient. It was not incumbent on him \to give any further explanation. '' Wais he satisfied . that the Meat Export Company' could do no more to help itself in its difficulties than sell its undertaking to a British firm already operating in New Zealand, it is true, but not in the Wellington area?"

It was thought in this instance that the company might not have exhausted every means of improving its position and that of -( its. shareholders other than parting with its property. Until and unless'it did so the Minister was justified in refusing transfer. The Vestey transfer was held to be no parallel, for the circumstances were different in that case. Vestey's were already in Poverty Bay; Borthwick's are not in the Wellington district.

Besides, it has never been shown that Borthwick'g were ready to give up their license under which they operate in any other part of the Dominion for one permitting them to do so in the district covered by the Meat Export Company. Indubitably,. Borthwicks' are a British concern, but the policy of the Government is to keep its freezing industry out of the hands of overseas concerns.

It was acknowledged, that the Government offered no proof of anything being done by Borthwicks prejudicial to the freezing industry. Such proof it was not bound to furnish. Public interest was a sufficient reason to give and that is what the Government did give in refusing the transfer of the license to that firm. "A SEVERE BLOW." Other views were to the effect that the Government had struck a severe blow at the future .investment of British capital in New Zealand industries by its attitude towards a reputable British firm long established and operating in New Zealand by refusing to sanction the transfer. The Value of the Meat Export Company's undertaking was contingent, it was contended, on its license under the Slaughtering and Inspection Act; but it was prevented by the Government from realising its assets. This was "Government in business in excelsis." Borthwick's had not been charged with doing anything improper The Minister for Agriculture himself had testified to their probity. For the latter statement some acceptable evidence was asked. "But Mr. Hawken said so himself." "When.and where!" "In Parliament," was the answer. "Hansard" was looked up and the following extracts were made:— Mr. Hawken, 16th October, 1924:— "I, know that Borthwick and Sons haye 1 been a very fine help to the New Zealand farmers. They have been in the trade for a very long period, almost since its inception, and I have never yet heard in any district that Borthwick's have ;in any way tried to stifle competition. They have acted fairly in buying their stock and selling it, and I do not know anybody in ■ New Zealand i who thinks that Borthwieks have acted in a way that would demand - that legislatioTT should be passed to put them out of the trade. In fact, I believe that if such action were proposed you would find that throughout New' Zealand this firm of Borthwick and, Sons have many champions, because of their actions in the past." . ' An Hon. Member: "Have you read the British Commission's report of . 1919 on the trusts?" Mr. Hawken: "No, I have not; but, still I kntiw from experience that Borthwicks have acted well by the New Zealand farmer, and I confess that with all my objection to trusts I would be very'sorry to see such a firm as that go out of the trade in New Zealand. "

On a later date the late Mr. Ma3sey, it was found, said:: "I cai speak of Borthwicks, and I have no' fault to find with them, because I hear them well spoken of, and, 'as a firm, perfectly fair to the producers and to the people with whom they do business." ALL ABOVE BOARD. "So far as Borthwicks were concerned (it was pointed out), they were free to buy stock in the Wellington district. Moreover, they could have bought the shares of the Meat Export Company or- made advances to enable it to carry on.. But they came out in the open with a plain business proposition that the Meat Export Company was prepared to accept. Thero was no hole-and-corner business about the transaction. The position taken up'by the Government was embarrassing to the Meat Export Company and 'a slap I in the face' to a British ,conipany_."

Such action was held to be un-British, and calculated to impair the reputation of New Zealand in the minds of British capitalists.

It was suggested that the parties to the transaction would have been aware of the attitude of the Meat Board to overseas meat interests, and the power possessed by tho Government to prevent such increasing their standard in New Zealand.

This was admitted, but it was explained that when "meat trusts" were mentioned in the days before the Meat Board' was set up the common idea in the minds of Ministers, politicians, and producers was that powerful American meat controlling t interests were meant —certainly not Borthwicks, who had been working in New Zealand for so many years. Mr. MJLeod, present Minister for Lands, made that quite clear when the Meat Bill was under discussion.

The shareholders of the Meat Export Company are to be soon called together. No doubt they will have something to say from the investors' point of view of the action taken by the Government, at the instance of the Meat Board, in the matter of the proposed sale of their undertaking and recovery of a portion of their capital.