THE AMERICAN MEAT TRUST.

Otago Daily Times, Issue 17658, 23 June 1919, Page 8

THE AMERICAN MEAT TRUST.

TO THE EDITOK. Sib,—Your leading article on the American Meat Trust throws a good deal of light on the commercial tactics by expert financiers. To tho great majority of even well educated people the realm oi hnance is a mysterious labyrinth which easily entangles the uninitiated, and it will be found that no hranch of economics is more difficult to understand than that of commercial finance. In the case of the American Meat Trust, we nave beiore us a reversal of the usual tactics employed in exploitation. Instead of reducing prices to the seller of stock, tiio trust oiters a higher pnee, and sells at a lower price. This in its effect would appear to be the very reverse of exploita tion— first, because prices do not appear to be raised to tho consumer, and secondly, because by this act a limitation is placed upon the profit of tho trust, while '"the fanners gladly receive the higher prices." These reniarkable tactics are, however, only preliminary evolutions in modern finance, employed with the object of gaining an ultimate advantage in the control of the market, when all preliminary sacrifices will ; be recovered much on tho same lines as those pursued by the Dβ Beer Diamond Trust in regulating the supply and prices of diamonds in the world's market. There is, however, an insurmountable difficulty confronting the operation of the American Meat Trust. In offering a higher price for stock the trust comes in immediate conflict with the interest 0/ the local buyer who finds hia formidable competitor a serious hindrance to his own interest in securing a wider profit, and from -this fact arises the strong protest against the competitive influence of the trust. Tho freezing companies in New Zealand are handicapped by the presence of the trust, whose operations are plainly seen to bo a move which tends to keep up the prices of stock and thus, while limiting the profit to the British shareholder, also prevents prices from falling in favour of the consumer, the only immediate gainer being the stock-raiser, who receives the inflated price. The conflicting interests are, therefore, seen to be an insuperable barrier to the American Meat Trust's ambitious dream of controlling the world's meat prices, because the interests of both the freezing companies and the public are in this case identically the same—both will suffer if the trust is ncst banished from our shore, and this can not be done except by regulating tho price of etock to the freezing companies and the public on a scale which prevents inflated prices bein"paid to tho stock-raisers. . ° With a fixture of wrices to the freezing companies and the public in New Zealand the combined interest of both producers and consumers would be secured, and a free hand would still be left to the American Meat Trust to give us a higher price for our surplus if it chose, but it would be excluded from regulating or inflating prices ruling in New Zealand, and this is all that is necessary to kill the trust's baneful influence. , Our greatest difficulty is, however, not with the American Trust, but with the extraordinary conceptions held by our legislators. Tims, to quote your leader: "The Prime Minister said plainly 'tha,t New Zealand was faced wuth the danger that the meat producers might bo exploited by tie trust.' " _ Now, tho probability of this occurring is quite contrary to tho conditions involved in production. If th e Prime Minister had said that the trust's activities caused an exploitation of the consumers in Now Zealand, then ho would have stated a fact, and would also have vindicated his abilities as a statesman by correctly locating the seat of the evil, and promptly pointing out the remedy. Something tangible would then bo available for consideration, instead .of the phantasmal deliverances 'whioh now permeate the political atmospn«re.—l am,, etc., W. SIVEnTSES.