DAIRY CONTROL.

Hawera Star, Volume XLVI, 11 April 1927, Page 6

DAIRY CONTROL.

THE PREMIER’S ACTION

REPLY TO MR. GROUNDS

WHAT TRANSPIRED AT HOME

(BY TELEGRAPH— pbess association.; WELLINGTON, April 10.

*‘My attention has been drawn to a statement by Mr W. Grounds, chairman of the New Zealand Dairy Produce Export Board, in the last issue of the ‘Dairy Produce Exporter,’ the official organ of the board,” said the Hon. J. G. Coates to-day. “In the course of his remarks, Mr Grounds says, regarding the position as he found it on Ills arrival in England im September last: ‘For anything thus far recorded, we should have no cause for complaint against Mr Coates or his Government, but when subsequent experiences proved that Mr Paterson, who is the Government representative upon the agency, was engaged in, this propaganda against the board, and * penly .proclaimed his opposition to its policy, its manager, and general constitution, the position assumed a different complexion. These facts were represented to Mr Coates in London, but, holding the same views, and having accepted Mr Paterson’s guidance, without any proper investigation, it was readily foreseen that he could not jettison his guide.’ “The opinion expressed in the last sentence bv Mr Grounds,” said Mr Coates, ‘is wholly inaccurate. So far from ‘accepting Mr Paterson’s guidance without anv proper investigation,’ I arrived in London in October with a mind openly sympathetic with the board, and imbued with an earnest desire that the board’s operations should be in every way successful. “I was in no way guided by (Mr Paterson, nor by the interests opposed to the hoard’s policy. If I had been captured by these interests, my views might naturally be challenged, hut what impressed me as to the seriousness of tne position, was that, wherever I went, 'among consumers, retail salesmen, distributors, multiple shops or financial firms, the hostiity to price fixation was universal, and by no means confined to those, who might be! regarded as disgruntled speculators. ‘‘Thus. when. I became aware from many reliable sources, apart from Mr Paterson altogether, that the policy of price fixation was giving rise to much antagonism and opposition, not on.y among thin consuming public, and was also causing anxiety in financial circles. I had to consider whether I should take no action in the matter, and leave the board to pursue its expressed policy or whether I .should take action. “After careful deliberation, I deemed it to be mv. duty to transmit the information to New 'Zealand, especially having regard to the extent to which the Dominion’s prosperity is bound up with the dairy industry. I had opportunities also of conferring, not only with Mir Grounds and the members of the London agency (including Mr Paterson), but with representatives of those directly interested in the dairy produce trade in the British market. “In communicating the views that I had formed to New Zealand, I was actuated .solely by a desire to ensure that the representative of the producers in the Dominion should not, without full consideration, pursue a course which the evidence showed was fraught with danger to our dairy produce on the Home, market. I had no desire to dictate to the board, nor had I any power so to do. Parliament had already vested full responsibility in the board, and the Government could not and would not, attempt to exercse direction over the board. My views were offered merely in an advisory spirit. I made it perfectly plain in London that the co-oper-ative policy of the New Zealand producers in the marketing of their produce was definitely settled, and would continue. “This .statement was accepted. u:ik! the trade representatives, in their turn, expressed their desire to work in the interests of the dairy industry in the Dominion. I indicated, howev.-r, in my cable, that the opposition to minimum price-fixing was overwheming, not merely from traders, but also from consumers. I could foresee the imminent danger that existed of losing that friendly co-operation which is so essential for the successful marketing of our produce, and I emphasised this in my telegram. “There is no necessity to refer specially to the narration of events set out in Mr Grounds’ statement during the period of his visit to London.. I merely remark that I was very pleased to see him many times and have the opportunity of discussing the position with him. On these occasions I pointed out that it seemed to me unwi.se to ignore the widespread hostility to price-fixing, and stressed the Importance of moving cautiously and tactfully at the inception of the board’s policy, in order to retain the goodwill and friendship of our customers at Home. “That mv advice was sound at that time, I think subsequent events have demonstrated. It is a matter for regret that Mr Grounds ha.s published remarks in which he does me a great injustice. hr making an incorrect statement. However. I think that my record in the past proves prettv conclusively that my sympathies have always been with mv fellow-producers, and that I .am not likelv now. hi mv position, as Prime Minister, to deviate from that attitude in so important a matter. “T deprecate bringing personalities into the discussion, and it seems +hnt Mr Grounds’* differences with Mr Paterson have rather clouded his judgment and caused him to adopt a course whir'-oertainl-r will not feud to encourage unitv amongst our producers.”

R ECONSTRUCTION PROPOSALS

REPIIESKNTATJOX OK FACTORIES

(To the Editor)

Sir, —Kindly grant me .space in your valuable pap-r to thank -Mr H. A. Lennon for Jii.s tiiuly ’otter of advice. I also ask space fop a lew personal remarks n>nen t the meeting and the final solution to the present difficulty. liike Mr Lennon, 1 was also disappointed at the outcome of the meeting, but more so with the three members of the board. To anyone with goods to dispose of they certainly did not inspire confidence, in fact they were only apologetic, and I for one do ;not feel like entrusting them with any work of mine to do. particularly re-establishing the goodwill and confidence of the London merchants. As far as reconstruction. is concerned. Mr Lennon appears to have missed this point. The board do not appear to consider this course necessary Tin fact, I fee 1 safe in saying that they are hoping now that with a free hand given to the merchants, their goodwill will be 'restored and our produce quitted at some price. When this has happe : ned they will feel that, they Lave justified themselves, and will cer-

taiply resent interference of any kind from either producer or anyone else. As the board has not asked the producers for a. constructive plan, all the producers can now do is to give the board their opinion as to wnat they consider best for the industry.

Again, at the meeting, Mr Lennon must remember, the producers had met for a purpose, and with the atmosphere caused by the object of the gathering, certain feeling naturally had to be dissipated, before a working basis could be arrived at. It is wrong to imply that out of those assembled then? were not men of sound common sense; in fact I would be prepared to take isix men out of anv ten there present and would be heartily ashamed if with the in aid I could not show as good results as the present hoard. There is much more natural intelligence in the average farmer than outsiders are often led to think. This is caused by the farmer allowing himself to be gulled or led by some moie persuasive person, oft times against bis own reasoning. Again, I further think the present unfortunate position is largely due to the wilful or stupidly misleading statements of many who should know better how our produce is marketed. Farmers who have had no opportunity to get in touch with merchants or the business system by which they successfully handle large quantities of produce, think the whole is bought upon a speculative basis. As I have said before, those who should have known better have encouraged this belief and further insinuated that the farmers were being mercilessly “exploited.” (Pardon the term). This has brought about a feeling of resentment and mistrust, whereas had the true facts Igcn told the farmer’s vision would be clearer and he would not so readily listen to these slanders against keen merchants who are at the base: — men who expect- to give and receive value for services rendered.

Again, sir. I do not know whether there is much to reconstruct. True, the usual channels by which we dispose of our goods have become congested. but take away the cause, of the present congestion, and, just as the removal of any obstruction in a stream, again allows a normal flow; so would the removal of the present obstruction, viz., the Control ‘Board, cause the natural stream of trade to become operative. Sir. in the five minutes allowed in which to speak at the meeting little could be, said to cover much .ground, and owing to only a passing reference being given to an issue not only misunderstanding arose, but even a failure on the part of the speaker to convey to his hearers his true meaning. Firstly, sir, one point I think should definitely for all time be decided. That is, “has the board or anyone, else any power to seize produce and dispose of it!-”’ I personally think that they have not, in fact I regard the whole compulsory clause as a piece of downright presumption on the part of a blundering Government, who have acted by blind instinct and not by clear, sound reasoning, backed up by a knowledge of the fundamental' principles which the British Constitution stands for. You may remember, sir that judges in out courts declined to give a verdict. When this occurred the issue should have gone to the Privy Council for a decision. A splendid opportunity to do this was missed during the Imperial Conference. If this arbitrary seizure of produce is illegal (which I believe), then the Act regarding this clause is ultra vires, and automatically we have a right to a free market. If, on the other hand, the seizure of individual property by a vote of a majority is legal, then we, as producers, must look for a remedy if we are not satisfied. Assuming for the moment that this is so, and looking at the situation as it now is. what is the best to be done? We will analyse the position and arrive at a basis where normal trade relations can again become operative. The first must necessarily lie the taking from the board the right to interfere with the marketing of the produce. Without elaborating to any great extent. I feel that this is the safest course. I would not be satisfied with any assurance whatsoever from the Board or any of ts members. Ido not trust them. The easiest wav to. make a tiger harmless is either to kill it outright- or draw its claws. Bullying may .succeed while the fripjlrt Insts. but sodrot or late»r it would again thirst for blood and become ramoant. so likewise would the board. These powers must he removed. Factories could once more get in, touch with those houses through which they had so long and successfully and amicably dealt. In a few months the goodwill and confidence would be restored.

Now we will touch upon the board’s other functions' and see if jt should live. I venture to say, sir, that had those who first promulgated a “control board” been, as clear sighted as Mr E. Maxwell, or as wise as they now are, they would never have given the wretched thing birth. There is no doubt, whatever about it, the only channels bv which the board can-remain of any use to the producers could as effectually have been used by the> National Dairy Association. This latter body forsook its splendid opportunities, in searching for markets, etc., but got enveigled into trading, which I told them at Palmerston North could well be done bv other farmers’ organisations operating in the country. However. the N.D.A. sold its birthright, or was bereft of it. The control and a; 1 - 'otment of shipping space is virtually gone, insurances and freight arrangements have been handed over and only this trading -side l is left. Now, the N.D.A. desires to resurrect itself into i full-fledged trading concern. Personally, I would rather it wound up, paid back all assets (if any) to contributing companies, and rested upon its laurels with honour, for, apart from trading '•oss's. it ha.s faithfully and honourably served the industry.

I do not think dairy companies should have attached to them dozens of subsilarv companies, for while it appears ■easonable to think that only benefits should accrue, yet such expert specialised knowledge (as your correspondent states in his suggestion for a banker ipon the board) is essential for the mccessful carrying out of commercial ■oitei prise that I personally think this >ranch could ho left to commercial rouses to deal in. Assuming this, as ho S.D.A. lias lost its birthright, in my opinion it should now die.

As someone must make contracts, etc., for the col'ective factories which previously constituted the N.D.A., tins irerogativc could be left with the Control Hoard, hut under a changed name, vliicli I would suggest .should Ik* the Daily Produce Export Hoard. Certain powers of tlu* lxinrd should be curtailed. one lieing the amount to be 'cried off ;oM manufactured produce, because all ultimately b ncfit or suffer

equally. Then, again, only such sums should lie collected each rear to meet a programme of contemplated work and xnenfliture approved of at an Minimi meeting when all factories could send a representative. Salaries, unless, tor specified services, should b abo is hod and allowances he paid for each meetng or service. This would place upon the hoard men of high standing and ntegritv. Sir. in making these suggestions, I do so as one who has studied human •nature in many forms, by actual cxicrieiicp. b ■ observation, by persona! contact with British merchants, and by the most intimate knowledge of the farmer, bis requirements, his strength, his weaknesses, his gullibility, and his splendid industry, eon pled with his integrity. Realising all these factors, and

understanding flow from their complex combination can he obtained unexpected effects, it is only after mature deliberation that I have the temerity to exnress that which to me becomes the clear course for the- removal of the present unpleasantness, and place' the industry onre more upon a sound footing. Than,king von very much for your for'•ea ranee and courtesy in publishing this so lengthy n letter. I am. etc., J. A. TOSLAND. T’ihama, April 9, 197.