DAIRY EXPORTS

New Zealand Times, Volume XXXVII, Issue 8458, 18 June 1913, Page 9

DAIRY EXPORTS

AN ALLEGED COMBINE NATIONAL ASSOCIATION’S CONTRACT. HOT CRITICISM AT ANNUAL MEETING. TALK OF A MONOPOLY. From Our Special Reporters. PALMERSTON NORTH, Juno 17. The most important question dealt with by the annual meeting of the National Dairy Association to-day was that relating to the shipping contract recently entered into with the Shaw, Savill and Albion Company and New Zealand Shipping Company. The outside exporters have raised a great deal of opposition to the association’s action in entering into a now contract, taking effect from October, 1914, with a duration of five years. The president (Mr A. Morton) explained the position during the course of his annual address. For a considerable time past, he said, it hhd been the custom of the association, in conjunction with the South Island Association, to run contracts with the Shaw, Savill and Albion Company and the New Zealand Shipping Company. In doing so, the executive had always endeavoured to look ahead for a number of years, and to get the best conditions. Tne association had a contract running which would expire in October, 1914. It had been the custom of the association to renew its contracts a fairly lengthy period of time before the old ones ran out. About January last, Mr McMillan, a representative of the New Zealand Shipping Company, who had come from Home, expressed a wish to confer with members of the association. A small informal conference between two cheese representatives, the president, and one or two others was held, and following this there was a conference at Christchurch on March 6th last between the two shipping companies, the South Island Association and the National Dairy Association (represented by Messrs Fisher, Hubbard and himself). After a very full discussion, the conference came to an agreement relating to the export of the produce, which was embodied in a contract with five years’ duration after October, 1914. REASONS FOR RENEWAL. The conditions of export had changed considerably during the last five years. The cost of labour, fuel, and everything else had increased, even doubled. “We were aware,” said the president, “that the shipping companies had doubled the freight on wool, and were also aware that we might have to pay an increase for the export of our dairy produce. It was shown to us that if a short contract wore signed, the shipping companies would want an increase in freights, but with the longer period of five years wo found that we could renew the 'terms we have had for the past five years. We deemed it advisable to do This, in order io save snob increase.” ' [Applause.) Oheese, be continued, bad to ho-car-ried in separate chambers on the vessel. and the chambers bad to be prepared .beforehand for the, reception of the cheese cargo. It was impossible for tile shipping companies, il they bad not had long notice, to have handled all the cheese that was offering this last year. “Your representatives at the conference,” continued the chairman, “impressed upon the shipping companies the fact that the cheese export was on the increase, and was going to continue to be so, so that they would have to make provision for this increase in the future.” It was also necessary for the shipping companies to inake provision for the increased production in the Auckland district, and it was the custom of the Union Steamship Company to put on a boat from Onehunga to New Plymouth, thence to Wellington. That arrangement was ;all right up till a year or two ago, but lately it became unsatisfactory for the New Plymouth exporters. The shipping companies had therefore arranged, on representations being made, to put on a direct fortnightly boat from Auckland to Wellington, taking what produce was offering. (Applause.) It was not until the previous evening that the terms arrived at by the conference in Christchurch on March 6th last had been confirmed by the whole of the executive of the association. That was why the terms had not been submitted before to the factories for approval. THE EXPORTERS’ CRITICISM.

The action of the executive had not vet been called into question, Mr Morton went on, but it had been criticised by several exporters, who had issued a circular to all the factories headed, “London Freight Kates." That circular contained a largo number of misleading and confusing statements —(applause)—and it was no doubt tho cause of the presence of many of the members there that day. The trouble really was that those exporters had approached the shipping companies to have a separate contract made, but he could safely declare that the terms arrived at by the recent conference with 'the shipping companies were in tho interests of every factory in tho industry. (Applause.) The circular told them that tho directors of the association ought to have consulted the members before the agreement was arrived at, but he had always thought that tho association had confidence in its directorate to thoroughly safeguard the interests of the members. (A voice: “We have!”) The circular said that the association was getting little in exchange for its contract. Wasn’t it something for the members of the association to have assured tho safe delivery of their produce on the London market on satisfactory terms for five years? The man who wrote the circular, that statement showed, did not know anything about the subject ho was dealing with. The statement that tho contract was made for a higher freight than was ruling In Australia was also incorrect, for 2s 2d was the rate .which ruled here from New Zealand coastal ports to London.

Mr Morton also criticised several technical points in the. circular, alleging irregularities in the shipments and tho system of coastal transport.

“IS DISCUSSION USELESS?” Mr Bracker (Pahiatua) said he wanted to be quite clear about the matter. Did the president sire the meeting to understand that the contract was signed, and that discussion on the matter was useless? The president: “The contract is signed.”

Mr Braoker: “Then if this meeting carried a resolution disapproving of, say, the length of time of the contract, it would have no effect on the contract?” ,

The President: “That would bo a matter for the new executive. if such a resolution wore carried, I would not a member of the executive.” (Applause. ) Mr Bracker: “There is one other question. Do I understand that the executive of the association did not meet from March 6th until last night, and then ratified the agreement arrived at by the conference?” If so, the executive, knowing full well that the annual meeting of the association was to bo held the very next day, Mr Bracker said he believed that the executive had stolen a march on the members. (Cries of “Nol Nol”) Tho President explained that the executive always met on the night previous to the annual meeting. He, as president, was always in close touch with all that was going on, and the two officers of the association in Auckland and Wellington were quite capable of looking after tho business as it transpired. A COMBINE ALLEGED.

Mr A. Gray (representing Wright, Stephenson and Co., Wellington), one of the exporters who had signed the circular, maintained that the entering into hard and fast contracts put obstacles in the way of competition in the carrying of the produce. Where was the shipping company that was going to come out to New Zealand with cargo, and return empty’? xne two shipping companies which had made the contract would naturally bo consulted if another * steamship line offered a lower rate than The two were a combine, pure and simple, and he was against monopoly of any kind. “Instead of being used by the shipping companies, we should use them.” declared Mr Gray. “For after all they are only common carriers, in a similar position to a man with a horse and cart on the street.” The contract for five years kept competition out, he continued, and if the dairy factories wanted the best terms possible, they would have to promote competition, and uot stifle it. He proposed that a sub-committee of the association, and a sub-committee from the exporters should be set up to work side by side to get the best terms from the shipping companies. “There are two other lines of steamers anxious to got a cut at the dairy produce trade,” said Mr Gray, “and I don not see why two companies should have a monopoly.” (Applause.) Mr Beattie (Woodville) contended that the executive of the association was hampered by the association being in receipt of subsidies from the shipping companies. The directors should he in a position to approach tho companies freely and openly when making contracts. KEEPING COMPETITION OUT. Mr Nathan said that the contract should have been drawn up by a conference of the association and the other exporters. The matter had been rushed too much by the executive of the association. The Shaw, Savill and the New Zealand companies had not sent out a smart man from England to fix up a contract like that just for the association’s benefit. There were other shipping companies trying to get in to share the trade from New Zealand. The P. and O. steamers already visited Auckland. What was to prevent- -the- Orient line running to Wellington, and they had already heard that the N.D.L. steamers intended to make calls at New Zealand ports. Such contracts as had been made were keeping competition out, and it was competition that was wanted. Mr Turner (representing Lonsdale and Co., London) said that investiga-’ tions he had had made led him to the conclusion that the reason of the contract being rushed into was because freights were shortly to be reduced. He quoted the “Financial Times” of April 16th, stating that there were prospects of a sluifip in shipping freights all. over the world taking place in the near future. That was quite a good reason why a man should be sent from London to rush into a contract. He contended that the association ought to stand- by the executive’s , action, but should go to the shipping companies and ask for certain modifications of the contract relating to the regularity of weekly shipments from the Dominion. The association was strong, and should be able to get what it asked for.

THE CONTRACT UPHELD. Mr Griffiths characterised the ac tion of tho executive ns a sound one; and strongly upheld the views of the president. Mr Dobson (representing Messrs Weddel and Company) read the views of his principals, which stated that the association’s executive had made a wise and sound move, and that the contract was in their opinion a good one. After the luncheon adjournment, Mr Bray (representing Messrs Bray Bros.) said that tho grounds of the exporters’ complaints wore that the latter’s interests were the same as those of the dairy factories. Even if it was impossible to recall the contract that had been njade, the exporters wished to bs consulted in the future. Ho supported Mr Nathan’s suggestion of a subcommittee being set up. Mr -R. W. D. Robertson said that in tho past there had been a certain amount of antagonism on the,part of some of the exporters to the National Dairy Association, and that had, been the cause of trouble all along. He thought that tho ideal set of conditions would bo the representation of the exporters on the directorate, ■bailing that, the exporters were entitled to some say when contracts were being arranged. Mr Hughiss said that while on a visit abroad last tear he noticed that conditions everywhere were tending to higher freights, and he therefore considered that the association’s action was a good one. There was a congestion of shipbuilding, a senes of labour troubles, and a shortage of carriers for the industry. _ ~ XT Mr Parsons (representing the New Zealand Dairy Union) supported the action of the association’s executive. The latter, he said, could be trusted to watch the interests of the producer. There was a great deal yet to be done in improving the conditions under which dairy produce was marketed, but the opponents of the association should look back and see what had already been done in the last few years. (Applause.) Mr J. G. Harkness. secretary of the association, said he had come to the meeting prepared to make a fighting speech, but after hearing the speeches of the exporters who had signed tho circular he was satisfied that there was nothing to fight. The speeches had been apologies, and those who had signed tho circular were now afraid to own it.

A voice: “No.” Mr Harkness; Did somebody say “No?” Let him come up to the platform and make a fight of it. Con-

tinuing, Mr Harkness referred to the benefits of the new contract regarding the freight rates on both butter and cheese. SUBSIDIES. , Later in the afternoon Mr Beattie moved:—“That it be a recommendation to the incoming executive not to accept any further subsidy or payment in the nature of a subsidy from shipping companies.” Mr Turner seconded the motion. Mr Asthury moved as an amendment that the matter be left in the hands of the executive. Mr Beattie then created some amusement by withdrawing his motion in favour of the amendment. Finally both resolution and the amendment were withdrawn, and the matter dropped.