CONTROL MATTERS.

Northland Age, Volume 26, Issue 50, 4 May 1927, Page 3

CONTROL MATTERS.

ADDRESS BY MR. W. GROUNDS. MASS MEETING OF FARMERS. CONFIDENCE IN BOARD CHAIRMAN. an enthusiastic GATHERING. MR. GROUNDS CHEERED. ODE TO MR GROUNDS. Give us a man who does not fear To stand alone, and when . no cheer Heartens his efforts, still his soul Strives onward, upward to its goal. What tho no laurels deck his brow. A brow that shows high purpose, true, And breadth of mind, and wide outlook Vouchsafed to leaders but a few. Strive on brave heart, With courage face The men who fatten on the toil Of men who hardly know they live, And wrestle vainly with the soil. I see your name revered among The daylight-saving slaving throng; The mother bent with ceaseless toil, Oh how she hopes that you can foil The parasite, who robs her mate And leaving him to such a fate, Roams God’s sweet earth and finds it sweet, While he must labour ■ for his meat. The holiday much B overdue ■ Is vouchsafed to the favoured B few B In God’s own country can it be B That there are slaves and B slavery 1 j “That this meeting expresses f complete confidence in Mr* I Grounds, Chairman of the Dairy ' Control Board and in the past policy of the Board as advocated by Mr. Giounds and his supporters on the Board.” The foregoing resolution moved bv Mr. C. S. Puckey, Chairman of directors of the Kaitaia Dairy Company, and seconded simultaneously by Mr. J. M. Dawson, a director of the Oruru Dairy Company, and by Mr. A. W. Masters, a director of the Kaitaia Dairy Company, was carried with only one dissentic voice in the person of Mr. Lyall of Whangape, at the conclasion of a most interesting address delivered by Mr. Grounds on Wednesday evening last in the Mangonui A. & P. Society’s Hall. Loud and hearty cheers for Mr. Grounds followed the passing of the resolution. A more representative meeting of farmers has not assembled in Kaitaia for a long time, and numerically it was a large gathering, and the audience faced by Mr. Grounds when he rose to speak, comprised some of the best think- \ ers among the farming coramunJ ity in the Bay of Islands. The Chair was occupied by Mr. H. Roberts, President of the Bay of Islands Sub-Provincial Conference of the Farmers’ Union, who fittingly introduced Mr. Grounds. There was a flattering outburst of applause when Mr. Grounds frose to speak. By way of an introduction to the important matters he had to place before his auditors, Mr. Grounds said; It gives me very great pleasure to be able once again to visit Kaitaia, and to be able to speak of some of the more recent experiences in connection with Control matters. I am not going to labour over matters concerning Control which are now history so far as the general movement has gone. It is my desire to lay before you a brief epitomey of the experience we have had mare recently in

connection with the Control movement, so that you all may be familiar with conditions in operation. You will not expect me to touch on matters relative to my four years experience, but if there is any matter that seems pertinent to the subjects I shall mention, I shall be pleased to answer questions at the conclusion of my address.

It is not necessary for me to mention the demand there was for control of our produce, and the leaders in touch with the industry for several years felt, that although we have made considerable progress in connection with manufacture ef butter, we have not been able to get the lull benefits of our efforts. Again it was felt that unless we had some co-ordinating scheme in connection with the marketing ot our produce we should not be able to secure that full measure of benefit we all so much desire. Hence I say we have been convinced of the need of co-ordinat-ing effort right throughout the country for the establishment of the Board, which you will remember after a great deal ot conflict with merchant interests in England, and Tooley Street especially, the Act was passed and the establishment of a Dairy Control Board was finally ratified by the dairy producers themselves, and this year the Board was set up. A COMPLETE INVESTIGATION

The Board embarked upon a complete investigation of the position, and two delegates were appointed to investigate conditions affecting our produce before the Board took any action whatever in the direction of framing its policy. Having settled that policy it was felt that there were points calling for reform. This was recognised b y practically everyone i n the industry. There was the organisation of shipping and the readjustment of shipping rates, and that was one of the first accomplishments of the Board. The industry at the present time has no idea of the fight we had to put up to get the shipping contract we at present enjoy. I was over three months in London and 1 say deliberately again, the industry does not know the strength of the opposition we had to overcome in connection with this shipping. But it was accomplished, and there is no need to talk about the happenings or the disabilities we had to contend against. INSURANCE. Mr Grounds next turned to the question of insurance. He said the board had to face more opposition here. There were quite a number of people interested in insurance in the old days. So many commissions were received by factory secretaries, and they were opposed to the board’s policy to consolidate the board’s business. However, all opposition was overcome with the result that the arrangement made by the board for insurance provided a saving of £45,000 over the whole of the industry. “I remember,” said Mr Grounds “being accosted bv a factory secretary, who said the board’s insurance scheme was costing him £65 a year, and I said, if it is costing you that much, your suppliers are getting that and a good deal into the bargain.” (Applause) EXTENDING MARKETS. Coming to the question of extending markets which had been raised, Mr Grounds said they all recognised the need tor extending markets but unfortunately the fun damental difficulties in connection with the extension of markets was not generally understood. He quoted by way of argument attempts to try out Manchester and Glasgow. Each of these cities had excellent shipping facilities and large consuming populations, On the one hand the deductions were quite sound, but seeing that no definite organisation for controlling supplies for disrribution existed, it was found in practice that quantities sent to these ports reacted against the larger volume sent to the port of London. For instance if either of these ports were overloaded a slump was caused and this reacted agninst London, ant} caused

a fall in prices. Consequently it was found, by experience that these new markets had not been developed, and this pointed conclusively to the Central Co-ordi-nating Body getting control of these new markets if they were to be established successfully. “I know of two factories in New Zealand which sent butter to Manchester and they had to pay freight on account of the fact that the market was overloaded, and they had to entrain it to London. That is one of the reasons which serves to make it plain to you if you are to market the whole ot your produce satisfactorily' What was the experience in connection with the marketing in London? It was very much in line with the experience in Manchester. Whereas they were disposing of their produce, we have at the present time some thirty agents engaged in the distribution of th# dairy produce of New Zealand. Let no-one think that these thirty are the only ones who can handle our produce and who would do it, tor their name is legion. There is an unlimited field in Great Britain notwithstanding the recent talk ot boycottiug New Zealand produce, made available to them. But to get back to the thirty agents handling New Zealand produce. Unless you have your produce based upon quality : unless you have that Central guidance from the board : it is easy to see that each of these agents will conje into competition with the other, with your produce, and this will determine the general level of prices at which your produce is to be sold. There is as much difference between the quality, capacity and financial standingof the various agents as between chalk and cheese. When it is that an agent is financed up to the limit of his power or financial ability he has to make good with his bank, and if any pressure is extended upon him, the produce he is handling must suffer if he is forced to sell. Consequently the experience of factories throughout the country has shown the need for organising in order that supplies may be regulated and every phase of marketing of dairy produce met as circumstances arise. We must see that the market is not flooded at anytime. We fully realise that in the marketing of produce, especially, the volume of produce we have in hand, that we must be prepared to meet competition on that market, based upon the quality of our produce also. It has been said in connection with our price fixing policy, that we have been selling or holding the produce a b ov e the economic price. That is quite contrary to the actual facts as I shall hope to prove to you. It must be recognised in view of the variation of the produce supplied to Great Britain an absolute level of prices can never be obtained. There will be varying seasons in the countries of origin of such produce, and the varying volume on Britain will cause a variation it the price. The aim of the Board has been to regulate prices and to elevate them as much as possible ; to prevent undue variations in prices. These are the variations which in the past have pinched us and they are due to the speculative handling of our produce. To secure regularity of supply it has been necessary for the board to make reservations from the produce during the seasons of maximum production. Sometimes it is alleged by firms —tt is a mercantile red herring—that New Zealand should be manufacturing all the year round like Denmark. It is a fine red herring that the mercantile people are trailing across the sand. In order to get over the necessity of storage entailed by reason of our distance from the market, and to supply a sufficiency of Britain’s requirements all the year round it was necessary to make these reservations, and at the same time to overcome the trades suggestions for .‘manufacturing all the year round. This is not at all necessary and it is certainly not economic, because we can produce more cheaply than it can be done under the byre system in Denmark, which has been forced upon Denmark by virtue of her system of operat.

ion. We have our fresh pastures and sunshine and if we were to adopt the suggestion of manufacturing all the year round, we would then hare to sacrifice what we claim to be our biggest asset—the high quality which we are claiming. To provide for these interests it was necessary for the Board to make satisfactory arrangements in the interests of all the producers so that it could ensure to them all the advantages and so that they would not suffer any disabilities attached to these reservations to provide for marketing all the year round To ensure production of the best quality article the Board has definitely approved of premium payment. This has resulted as the record at our grading stores shows in the production of higher quality goods this season than ever before. The graders are uniformally declaring that as a result ot premium payments higher grades have been expsrienced, and that over 82% of the butter produced in New Zealand was graded finest. Something in the nature of a record in highgrade production, and we can legitimately claim that much of this improved production is a result of the Board's policy of premium payments. (Applause! FIXING OF PRICES.

This point of fixing prices has been surrounded by a good deal of confusion, and many ideas have been circulated round about, f don’t know why there should be but during the last few weeks it has been suggested that price fixing is the rock upon which the board’s policy broke. But is there anyone who does not experience that fixing of prices every day in the week. What commodity is there that the farmer does not experience the fixation of prices in connection with his own particular commodity. I mark that it would be definitely grasped that there is no fact more definitely established in commercial file at the present time than that of the fixing of prices, (applause). But how long any particular commodity will remain fixed at any particular level will depend upon the forces interested in the marketing of this particular commodity. If anyoae cemes along and offers te sell you manures for five or ten shillings a ton would not that be fixing prices. Because someone has broken down the old ring which previously held these commodities and sells them at a definite price is there anything the matter with thatThe same rule might I observe applies to the dairy commodity, but the board’s chief business was the output and sale of the product and its second business was to secure as high a price as possible consistent with the maintenance of its gain with the consuming public, so that the producers couio get the benefits accruing from that supervision of the market. The fixing of prices although suggested as such, was never intended arbitarily fixing the level which was above the buying capacity of those in the market fer the produce; and as a consequence the board’s idea in connection with the fixing of prices w as ‘‘naming prices” so that all the agents would have all the produce to sell on the board’s account at the same price. There would then be no possibility of breaking down the level of prices by one agent operating against another and bringing down the level of prices for the whole of the board's produce. It will be seen that the board’s policy of suggesting to all its agents what the ruling prices on any particular day, was exactly the Hues upon which our mercantile houses are working in naming the prices of any commodity when you go to buy it. These are facts in connection with the so-called "ugly” developments of the board’s policy. 1 hose who have followed the policy from time to time will have verified this for themselves. There is another notably surprising fact and that is in connection with the tarmers right to handle his own produce. This has given rise to considerable discussion, and it is a notable fact that we have had in the process the whole of the mercantile firms on the one side and dairy interests on the other. Even though one approaches the position deductively it must be sufficiently obvious that mercantile interests have been attempting to trip up the Board, even in the matter of selecting tne Board. When this was before the House last year, there was still the old urge of suspension until some future date, until some further inquiry regarding the satisfactory working ot the Board had been made. (Laughter). Let us examine what was definitely done by the Board and how it has worked so far as New Zealand is concerned. I can say without any fear or question from anyone connected with the business that the necessary organisation for handling of the farmers business has been done without a hitch. 1 have not heard one complaint regarding this work that hau to be done to handle the various aspects of the business. It will be very obvious to 'H of you especially in view of the recent publicity that we were conscious of existing difficulties in London which led to my visit during last year. The intrigue that had been going on lor sometime had so prejudiced the position from the New Zealand dairy farmers point of view,'that it was evident that strong action was necessary to suc-

cessfully establish the policy that the Board had been so assiduously working towards for some eigh'een months to overcome for the time being these tn.rigues. Apart from these difficulties we were faced with a huge accumulation of stored butter in Great Britain resulting from the policy that had been pursued by the different factories throughout the country to hold back for a better market quite independent from the fact that a huge industrial dislocation had taken place in Great Britain and also quite apart from the fact that the Board had been making reservations to provide for the necessities of these lean months. Notwithstanding that we had been urging factories to maintain supplies, when the new season arrived at the beginning of last November, the Board although not responsible tor the accumulation of these stocks, and although not responsible tor the selling ot them, they realised that they should not be handling new seasons butter when any ot the stored butter was on the market.

They were bound to be used against the new season’s stocks until they were definitely exhausted. Asa consequence, in fixing the first price of the new season’s produce we had to take seriously into consideration all these stored stocks. It may interest you to know that prior to the arrival of the new stocks the trade held aloof from the stored stocks, but as soon as the new butter arrived and we fixed the price at 148/- to 150/-, within a week they were finding out how good that stored butter was. They were then buying stored butter at a discount of from six to eight shillings below the new season’s butter. It may be asked how we came to fix the price of new season’s but. ter at 148/- to 150. We held that a a premiiura of 2/- to 4/. on the new season’s was not excessive and was not one which would hinder the satisfactory distribution of this new season’s butter; but as I have already indicated to you the trade owing to the difference of a few shillings at which they could bay stored butter had immediately bought up all the stored stocks. We recognised that until this was definitely out ,of the way we could not hope to get full value for the new season’s produce and acted accordingly. At the end of a week there was not much new season’s butter in consumption Jand strong representations were made to us to sell at 140/-. At the end of the week finally in reply I said, ‘well if we do, wont stored butter go down to 132/-?, and if we follow down to 130/-, wont it go down to a comparative reduction?’ It would have meant had not the Board fixed their price at a reasonable level that the mar-, ket would have become demoralised last November without increasing consumption. THE FAMOUS CABLE. Mr Grounds next turned his attention to the famous cablegram iroin London and to the propaganda which had ensued on the question, ot Control. He said he hoped they had read the “Exporter” which set out the position fully. Misrepresentation of the position was palpably plain in most of the daily papers. The percentages of sales which they recorded .were hopelessly inaccurate as anyone who went to the trouble to ascertain from the official report of March 14th would do. It would be seen that 45% of the butter which arrived in Great Britain had actually been sold and that was taking into account three boats not sufficiently long in arrival to allow for the distribution of the butter. Notwithstanding all these reports the forward position as far as it could be humanly judged from stocks in hand, there was Bix or seven thousand tons of butter less in Britain than previously. There was no' reason whatever for tha scare which generally developed. Another curious matter in connection with the City Press was their clamour following on a statement he had made on March 14th for more information which he intimated it might be necessary to publish. One leading daily said “Why Not Now.” "They said I was not justified in making such an observation and then passing on,” 6aid Mr Grounds, “This week I made a further statement, but was there a Metropolitan paper which published it. I have not seen it in one. I wrote a letter to the Herald drawing their attention to my “Exporter” review and to my statement of the week before. Interest in the business then quickly sub sided so that you may now know that ‘‘il is not a matter of public interest.” However public interest has since been revived as you will have noticed by the more tecent publications, since the Board changed its policy, which I think was a lamentable thing for it to do. (Applause). As vour representative on the Board as well as chairman of the Board, I think it is due to you whom 1 represent on the Board that you should know exactly what I said on this matter: where I stand today and what I think of the course which was taken. You will remember that the Board decided that a certain quantity of butter should be sold weekly. Immediately our critics became alarmed and said

that this would affect the market and prices.

We had decided to sail 91,000 boxes weekly, and our critics thought the Hade would be holding off because of the quantity we had decided to sell. But we sold 50,000 boxes within one day and the quo .a was sold in less than three days thereby showing that the Board's interpretation of the position was accurate, if given an opportunity the trade would have bought much larger quantities. We had not gone very far when we had reprssentations from the traders in London asking us to remove the quantity restriction as well as price restrictions. That was backed up by ihe press agency in the same way as several recent requests have been backed up. The Board decided that he quantity restriction must staid at ihe figure fixed. It will be seen that if the Board had not stood firm in this as well as in many another matter thi merchant interests would have dominated the situation. 1 say deliberately here had it not been for the stability and strength ot character of our London Manager throughout this trying experience he has had for many months, then we should not have enjoyed the measure of stability we have already enjoyed. The London manager is a man who has been most grossly wronged, and I wish it to be understood as my fixed opinion, had it not been for his strength of character, he would have told us where lo go witn our control business long ago. (Laughter and Applause.) Mr Grounds said that if the representslives of the Board had followed the instructions laid down by tbe Board, instead of generally uudeimining the whole position, theie would have been 110 difficulty in the way of the Boaid carrying out its policy. There was nothing outlined by experience that would not have worked out satisfactorily provided it had been given a fair chance to prove itself. Reverting again to the question of price-fix-ing Mr Grounds said it had been suggested that the Board’s prices were too high. If Ibis was so how was it that the largest agents handling New Zealand produce were on February 22nd absolutely cleaned out of their allocation. The speaker outlined the aim of the Board in so far as it related to the efficient handling of the farmers produce and working to conserve the interests of the consuming public. In the past it was a fact that the farmers had been carrying far too many on their backs and the burden had baen increasing for some years in connection with farming development.

With reference to the request for tbe resignation of Mr Paterson (Mr Paterson had then resigned) Mr Grounds said that in the controversy which it engendered he had not been concerned with personalities He recognised the high office of the Prime Minister and his recent statements had no political significance. “I have desired to do the best I can in defence of the interests of the whole country. But admiring qnd respecting the Prime Minister and his high office I cannot surrender the question of truth even to that high office,” he concluded. (Prolonged applause) QUESTIONS. Mr Grounds handled the questions asked him in a most able manner. In reply to Mr H B Matthews Mr Grounds pointed out that there had been no official resignation of three members of the trade attached to the London committee. These men had been elected by the Importers’ Association for a period of a month, but this had been altered, and the three original members still retained their positions when he left London. Another questioner asked, why Austra. lian butter was quoted two shillings higher than the N.Z article under the Control Board, Mr Grounds said the differ ence previously was four shillings. Mr F Lisle: \\ ould you fix the prices again if you had the opportunity? Mr Grounds said his personal opinion was that prices should be fixed as tha' was the only sound and stable way of market, ing our produce, but there was no hope of that under the new policy adopted by the Board. Mr Marsh: Is it not a fact that the boycott by the trade had inflicted hr dship on the umer. Why did not the New Zeaiam . 'ernmr communicate with the Brink id ot rade with a view of breakinr' the pycotl Mr Grounds said it was merely a trade boycott. The con. sumers generally were not at all aware of the position and had not suffered to any extent. Replying to Mr V, Parker Mr Grounds said tuat the recent meeting at Palmerston North was solely composed of those opposed to Control according to the list published. What are the prospects for nexr season? was another question asked amid laughter Captain Rushwortb: And the winner of the Melbourne Cup? Mr Grounds laugh, ingly replied he was not going to adopt the role of prophet.

ADDRESS BY MR. W GROUNDS.

QUESTIONS.

Mr D Archibald wanted to know whether the Board would consider direct ship, ping to the various ports as he understood it cost from I/- to 2/S per box railage, Mr Grounds pointed out that the Board found it best to use the usual lines of communication although as far as Glasgow was con eerned it cost as much as 3/6 per box. Mr W Parker wanted to know what had been the cost of the Board to the producers. Mr Grounds replied that even if the Board costs £50,000 it has already saved £120,000 in freights and £45,000 in insurances. He was satisfied that the Board was good business, but was of the opinion however, that too much had been spent on cables (laughter).