The Evening Star TUESDAY, OCTOBER 14, 1930. BULK PURCHASE SCHEME.

Evening Star, Issue 20614, 14 October 1930, Page 8

The Evening Star TUESDAY, OCTOBER 14, 1930. BULK PURCHASE SCHEME.

Indications are that the Imperial Conference is likely to approach the question of Empire Trade by way of the Labour Party’s proposal for bulk purphase of foodstuffs. Ip the conversations between the Prime Ministers, it appears, the question of bulk purchase of dominion products is probably to be the central point. This issue of bulk purchase of food Is linked with the Labour Party’s pledge to endeavour to faring about the stabilisation of prices. It is set out plainly in the sections of ‘Labour and the Nation,’ tho 1928 manifesto of the party. Here the stabilisation of prices is regarded as of fundamental importance, as under existing conditions the price of homegrown supplies is governed by the price of foreign foodstuffs. Great Britain, for instance, imports GO per cent, of her meat from abroad. “ Fluctuations in prices,” in the Labour view, “ benefit only the speculative middlemen, and tho Labour Party’s policy is designed to bring them under control in tho interests alike of. producers and consumers. It would turn the import of meat into a public service, and would vest the responsibility for it in the hands of an Import Board composed of expert directors appointed by the Ministry of Agriculture or tho Board of Trade, and charged with the duty of organising in the most efficient and economical manner the business of purchasing, distributing, and transporting tho whole import of meat. Since tho board would operate on a largo scale, it would eliminate many of the unnecessary charges with which both producers and consumers arc burdened to-day.”

The Labour view is that ns the board would have all imported supplies under its control it would be in a position to smooth out the fluctuations in prices which at pres2nt handicap agriculture, would secure the farmer a stable market for tho sale of his produce, and would bring many advantages to the consumer. According to the admission ot Mr E. F. Wise, C.R., who is Labour member for Leicester and one of the advocates of the scheme, having co-operated with Sir Oswald Mosley in expounding it, little has been heard of the policy because the Government, due to its minority position, has not been able to face the House of Commons in the endeavour to carry out this part of its policy. Mr Wise, who is credited with being the formulator of the scheme, considers that a system of bulk purchases will relievo British agriculture from

its present grave difficulties. He dismisses Lord Beaverbrook’s scheme for Empire Freetrade as “ inadequate in detail and vague in its concrete proposals,” but thinks that bulk purchase is “ a logical and natural development in these days of large-scale business,” contending also that a specially created organ such as the Import Board would be of much greater effect in the stimulation of trade than tariffs, which are clumsy, vague, and uncertain in their results—“ primitive.” Mr Wise calls them.

Last February the London ‘ Times ’ announced that conferences were being held with the various departmental heads in the endeavour to work out the details for a scheme of bulk purchase of dominion products. Also, 4 The Times ’ mentioned that Mr J. H. Thomas, Minister for the Dominions, was to confci with representatives of the Canadian wheat pool on the subject of better marketing of Canadian wheat in Britain, and that 4 ‘ one of the suggestions which had been made was that the British Government should purchase wheat in bulk and erect elevators for its storage in England.” These matters were to be laid before the Empire Economic Conference. The details of the working of the scheme, so far, have not been revealed, but on Mr Wise’s statement the Labour Government contemplates a system under which the import boards are expected to function so as to stabilise prices by entering into long term contracts over a period of years to control and systematise trade, establishing a bargaining strength for creating satisfactory trading agreements with other countries, and to rationalise distribution so that import costs will be reduced. It is expected that the boards will have a fairly constant income owing to the fact that the demand can be predicted, and that this will make for ease of finance. This question of demand, however, raises another important aspect of the bulk purchase scheme, which is that the commodity of which the demand in the United Kingdom is most easily predicted is wheat. The annual consumption of wheat is known; it is steady' from year to year; and wheat is thus considered the easiest commodity with which to make beginning. It is therefore to be expected (as is the position) that the Government's proposals have been worked out in their greatest detail in the case of this product. From the conversations which Mr Thomas had with the Canadian Wheat Pool members earlier in the year it may appear that even ; f other dominions are not attracted by the scheme an effort will he made to induce Canada to come to an arrangement on the subject. However, the matter does not rest hero, for there is a condition attached to the offer of the British Government. In exchange for long-term contracts for the supply ol wheat at fixed prices, it is expected that the dominions will bo willing to enter upon 4 ‘ satisfactory contracts for the purchase of British goods.’ Whether this is portion of the Laboui Government’s scheme or the personal opinion of Mr Wise it is impossible at the moment to say. The attraction of an agreement which might relieve British agriculture and create a stable market for British industries at one and the same time is obvious. But to this proposal there are equally obvious and serious objections. Contracts for sup plies of British manufactures entered into by dominion Governments appear to connote the entry by the dominion Governments into the distributing field, an event which is extremely remote from practical politics. And hero again, bearing on the scheme even for the purchase of wheat, there must be considered the fact that a higher-tariff party was recently victorious in the Canadian General Elections.

New Zealand opinion on the subject has not been crystallised by any member of the Government. But in tho course of a speech which he delivered to the committee on ‘ Trade, Communications, and Finance ’ appointed by the Empire Parliamentary Association, Mr D. Jones, M.P., chairman of the New Zealand Meat Producers’ Board, gave his opinion that tho dominion would not accept any Offer such as tho British Government proposed to make. “We have been for nearly fifty years building up our meat trade, and throughout Great Britain wo have a host of retailers who arc our supporters, and who are pushing our meat. An organisation of such a kind is essential in developing our trade,” said Mr Jones. Ho criticised the difficulty of administering a scheme for tho bulk purchase of meat, pointing out that if Now Zealand had entered upon a contract for tho sale of her meat to Britain this year the United Kingdom would have lost £500,000 over tho deal, due to tho slump in prices. In addition, the Import Board would probably have been left with 2,000,000 carcasses upon its hands. What would have been the position then? New Zealand's sailing organisation in Britain would have gone, and there would be 3,000,000 carcasses of her meat left over to spoil the market. Such a policy as selling the whole of New Zealand’s meat to Britain, he thought, was a policy impossible even to discuss In tho end New Zealand would have to take lower prices for the sake of tho Import Board making its promised savings.