MEAT CONTROL

Otago Daily Times, Issue 22024, 5 August 1933, Page 8

MEAT CONTROL

THE WORK OF THE BOARD ADDRESS BY MR JAMES BEGG There was a large attendance, including ladies, in the Oddfellows’ Hall, Waikouaiti, last night, when Mr James Begg, of Dunedin, gave an address on meat control. Mr Lee occupied the chair. Mr Begg said he would deal chiefly with Meat Board matters, but he would also touch on exchange, quotas, and monetary problems. “ I have not come here to defend the Meat Producers’ Board,” said Mr Begg, “ but to tell you what the board is doing. I have noticed that the board is being severely criticised and even abused, but the criticism is in very general terms and it is seldom suggested definitely what the board has done, what it should not have done, or what it has left undone. Let it be understood at once that I am not suggesting that the work of the board is perfect, but merely that it would be more helpful if criticism were more constructive.” The board had very wide powers, he continued, some of which it had never exercised, because it had felt that the interests of farmers were better served by allowing these powers to remain latent. He was referring to the power to take over all meat for export and market it on behalf of the owners through selected channels or through an organisation of its own. Before any such drastic steps were taken, it was necessary to consider the effect of the goodwill that had been slowly built up among the many distributing agencies handling New Zealand meat, the certain disorganisation of the market and also the possibility that the result might easily be the getting of lower instead of higher prices for produce. The board was the trustee for the farmers of New Zealand. It had a full sense of its responsibility, and would have to be very sure of its ground before it interfered with the present very efficient marketing of meat. This description of the marketing might be challenged by some, but he would ask such to consider that their mutton and lamb sold at a higher price than that of their competitors in Australia and Argentina, despite the fact that the product of those countries had been greatly improved in recent years, while at times New Zealand got fairly close to the price of the Home-killed article. The low prices of late years had been very disappointing, but Scotch lamb, a luxury line, had been quoted as low as 6d a pound at Smithficld markets, and the low prices generally had credted a demand for the restriction of supplies not only from foreign countries, but from the dominions as well. The board exercised supervision over the meat from the time the aniifial arrived at the freezing works till it reached the market in London or elsewhere. It reached further back by studying the question of bruising between the farm and the works, and even further by organising competitions in fat lambs, judging the entries in each district of the various competitors, consigning to, Smithficld, and having the carcasses judged and prizes awarded by experts, so demonstrating the breed, weight, and shape of lamb most acceptable to the market. These competitions were a feature in the Smithficld Market, and a very useful advertisement for New Zealand lamb. It was regrettable that Otago had not yet joined in these competitions, because the judging of the entries on the field day arranged for the purpose provided useful information to the lamb breeder. Southland had got a great advertisement this year by beating the best that Canterbury could produce, and he hoped that next year Otago would be a strong competitor. The travelling supervising graders visited all works frequently to see that grading was even and grades kept up to the proper standard. So far this had proved fairly satisfactory, though sometimes a downward slip in the grading was detected. Great importance was attached to correct grading, and should it be necessary the board would not hesitate to put its own graders into the freezing works. The board was in constant touch with the Low Temperature Research Station at Cambridge, where men with the highest qualifications were constantly studying every phase of, the freezing and transport of perishable foods. At the request of the board two competent men from this station had visited New Zealand to study local problems on the spot. The board’s inspectors supervised the loading of meat into the ships at this end, and also supervised the unloading at the other end. One result had been greater care in handling and the reduction of insurance rates to substantially below the pre-war level. Its influence had been used to secure lower railway freight rates and to get charges in freezing works reduced. These charges were still high, and many lambs are conveyed by lorry. This would always be necessary in outlying districts, but where railways could compete for the traffic, rates, should be sufficiently low to secure the carrying of stock by the railways. In connection with freezing charges, it had to be remembered that there was at present little or no profit in by-products to the freezing works. In regard to shipping, the objects of the board were: To see that the cargoes were properly handled; to let contracts for carrying so as to ensure a regular service; to arrange with the shipping companies in advance the tonnage to be shipped each month; to arrange for the clearing of the year’s kill as early as possible so as not to clash with Homekilled lamb more than could be helped; to secure the lowest freight rates possible.

With the increased'number of Downcross lambs, and the top-dressing of pastures, much larger numbers of lambs were ready early in the season each succeeding year. With the vagaries of the weather it was not easy to forecast the probably numbers to be sent away in any given month. Ships had to be ordered three months before required, so it was not always feasible to synchronise the amount of shipping with the lambs available. There had been a good deal of congestion in the freezing stores this year, and many complaints of lack of shipping space, but it would have been a disastrous policy to have overloaded the market during the first half of the season, and the action of the board had been justified by results. The use of the chain system of slaughtering had brought another complication by enabling works to increase their daily killing by 50 per cent, and so fill their cold stores very rapidly. Opinions might differ as to the value of the freight contract which expired this month. When made, the contract had seemed a good one, but there had been a great slump in freight rates, and the present contract must have been a very good one for the shipping companies, especially as the quantity of meat shipped had steadily increased during the last three years. The freight rates were much too high. A survey of all rates carried by British shipping last year showed that the average freight rates were below pre-war rates, while the rates on New Zealand meat were up to 50 per cent, above pre-war rates. The business could not stand these rates today, and he would prefer having no contract at all rather than agree to a continuation of present rates. The shipping companies had served them well, but the freight rates had to come a 0 "’ 11 * and any other companies that would assist to reduce them would be welcome. Negotiations for new contracts were proceeding, and he hoped would be concluded satisfactorily very soon. The advertising of New Zealand meat was one of the principal activities of the board. In Britain a travelling representative was always on the road, trying to interest retailers in the sale of New Zealand products, and for those wno agreed to sell the meat most attractive display material was provided. Special “New Zealand weeks” were held m various cities, with window-dressing competitions, sometimes as many as 40 butchers competing. Over £21,000 had been spent last year on the advertising campaign, and the board was satisfied that this had been returned many times over in the price of Dominion meats. There had been a strong agitation by the National Farmers’ Union to secure the marking of all imported meat. Feeling that this would be a disadvantage to New Zealand owing to it making the carcasses unsightly, the board had done everything possible to prevent the system being adopted. It was frequently suggested that new markets should bo opened up, but this was by no means a simple matter, : as restrictions and heavy duties were now | the rule in most countries. He had a list of European countries with conditions

under which meat can be imported, and these conditions practically closed these markets to New Zealand. The board had arranged to send a small trial shipment to Shanghai some months ago, but on the eve of shipment a cablegram had been received from the agent advising not to ship as plenty of Chinese lambs were available at about fid per lb. Australia had been trying for many years to develop trade in meat with the East, and despite advantages of proximity and regular shipping services, the trade so far was very small. The board had attempted to develop the.trade in lambs with New York, and in! one season had successfully marketed 3(},000 lambs there. The tariff had promptly been raised to a point that definitelyclosed that opening. Despite these difficulties, the board kept in constant touch with all possible markets, and would .take advantage of any opportunity that occurred. Owing' to the failure and elimination of a number of freezing works and to the increase in the numbers of stock to be treated, all the works in New Zealand are now required during the peak of the killing season. It would cause dangerous congestion if any more works were eliminated, and it was the policy of the board to see that the existing works were maintained. If ; any one concern secured too large a share of the available stock, it meant that some others would starve, and cease to function. This would be dangerous, as a scarcity of killing space in the height of the season would cause great loss to .'farmers w r ho could not get accommodation. It would also reduce competition and lower prices. The object was to secure the strongest competition, while seeing that sufficient freezing accommodation is available. The method of the election of the Meat Board was being freely discussed and criticised. It was true that the farmers elect members indirectly and this had both advantages and disadvantages. No member represented any particular constituency, and consequently had no direct touch With his constituents.. This was a disadvantage, but on the other hand no member had an " axe to grind ” for his particular district as he represented the whole of the farmers in the Dominion. The Electoral Committee had always been a very representative group of farmers. These men met at the annual meeting of the board and received the report of the year’s work. This was commented upon, criticised, and discussed. Members of the board could be questioned and all information was freely given. The candidates for election had to appear before the committee and state the policy they proposed to follow if elected. They were asked questions by the members of the Electoral Committee, who had to themselves that each candidate was suitable, as to character and ability, and was one who would act in the interest of farmers. A secret ballot was then taken._ ! The Electoral Committee was responsible for the personnel of the board. There had been no lack of candidates, so if the right men were not elected it was the fault of the Electoral Committee. QUOTAS.

“.Britain seems to be committed to a policy of restricting imports in order to raise the_ price of home-produced products,” said Mr Begg. “ This policy as a temporary measure may not do much harm and it remains to be seen whether it is approved by the mass of the people. There has been no direct mandate showing that the policy has general approval. Less than 10 per cent, of the population is engaged in agriculture, and the 90 per cent, may object to a policy which means higher prices for food. In the meantime, by the Ottawa agreement, little restriction is placed on our exports, but the Government hag been asked voluntarily to restrict the export of dairy products, and also of meat to a lesser degree. “ The terms of the agreement in respect to dairy products may be revised in about two years’ time, and in respect to meat in about four years. Much may happen even in two years, but we must consider the wisdom or otherwise of resisting the wishes of our best, in some lines only, customer. Serious as the effects of restriction would be to New Zealand, we ! must recognise that Britain holds all the I cards and is in a position to dictate her own terms, when the present agreements expire. If at that time admission by ! quota is Britain’s settled policy, all we ! in New Zealand can do is to see that our j treatment of British goods imported into this country is so fair and generous that t we will secure quotas larger and more j liberal, not only than foreign countries, { but than other dominions. It is possible ' that if we firmly-and resolutely reduced our protective tariffs against British goods* till we were approximately on a Freetrade basis with Britain, quotas might not be applied to New Zealand at all, but only to foreign countries and .to dominions which retained higher duties against British goods. “ Different treatment of the various dominions is surely coming. It will raise \ serious questions regarding Empire unity, but Britain will most certainly use it to ■ secure better treatment for her exports. The serious consequences of restriction of ! exports do not seem to be appreciated by ! the city dwellers among us. Not only will ! the disposal of surplus products without j demoralising the local market be an ex--1 ceedingly difficult problem, but the whole policy of this country for the last 50 years will first be brought to a standstill i and then reversed. That policy has been i one of opening up and placing settlers on new land whose wants were supplied by an increasing population. . New outlets in this direction will be closed and some land already occupied may be abandoned. The slogan, ‘ Increased Production ’ will be replaced by ‘ Reduce Production,’ and the ! whole increase in population, together with I many at present settled on the land, will be thrown back into the towns. The basis on which the city industries are founded will be contracted and weakened, unemployment will increase, and standards of living will decline. “There will have to be a complete reorientation of the policy which has been pursued by Governments of every colour, backed by public opinion and the press of the Dominion. Whatever temporary advantages it may bring the whole system of quotas and restrictions seems to me to be fundamentally unsound. It is a long step towards Government control of industry, and also a long step towards State Socialism. EXCHANGE. The fixing of the exchange at 25 per cent, premium, said the speaker, had, m his opinion, been of benefit to the Vominion, but it was a matter that had been subjected to strong criticism by some sections of the community. It was described as an artificial rate, as if that were something new and peculiar to this country. They were told that it did not bring any more money into hew Zealand, but merely distributed what was brought in in an arbitrary manner. Mr Edwin Salmoncl, of the Importers Federation, had challenged the farmers to prove that the rate was a natural one, and seemed to think that this challenge settled the matter. No farmer, so far as he knew, claimed that the r,ate was a natural one, and the challenge might be met by asking Mr Salmond to name any country that allowed free exchange, or even any country, that had ever done so. “Free exchange” presupposed free exchange of goods and services, for in fact these were the things they did exchange with other countries. Any interruption of this freedom reacted on bankers’ exchange. If a duty were placed on imports, the flow was checked, and money tended to accumulate in London and to lower the rate of exchange., If they imported too much, money became scarce in New Zealand, and the exchange tended to rise. In the past over-importa-tion had been a very common condition, and exchange if free would often have risen. This had always been prevented by borrowing in London, a course apparently now closed to New Zealand. When all checks to trade were removed and no further overseas borrowing was indulged in they might begin to talk of freedom of exchange, but not before. Every country was arranging its currency to suit itself, and New Zealand had a perfect right to do likewise. It had been found impossible to adjust cost to the low level of prices, and a higher exchange rate tended partly to raise prices towards -the level of costs. This adjustment was very far from complete, and it was to be hoped that adjustment would come by way of higher prices, for if not it would come by the painful process of wage and salary reductions, rent and interest reductions, wholesale dismissals, defaults and bankruptcies. Had they remained on pre-war currency the prices received by farmers would be just half what they were to-day. Raising the rate of exchange in Britain and New Zealand had so far saved them from national bankruptcy. Moreover, the rate of exchange had been the means of actually bringing in more money. ,

Finally, Britain’s exchange market was not free. The Government had established a huge fund of some £350,000,000, which

was secretly used to keep sterling exchange just where the Government wanted it. It was generally believed that the fund had been freely used to keep sterling from rising towards parity with gold, or, in othr words, to maintain a high rate of exchange. The gold standard itself had always been operated to prevent freedom of exchange, as whenever gold began to flow out discount rates, bad always been arbitrarily raised to stop the outward flow. MONETARY STABILITY.

“ The world is looking for a stable monetary unit,” Mr Begg went on, “ for money which will retain a fairly constant purchasing power, but so far has not found it. The gold standard, which many regard as having the sanction of centuries behind it, was really only a recent experiment. Though Britain has been on and off this standard for about 100 years it was only generally adopted between the years .1870 and 1900. It had, roughly speaking, about 30 to 40 years’ trial before it was smashed in 1914. Whatever happens, the gold standard, as we older people knew it, will never be restored, and it is very doubtful if sovereigns will ever again bo minted. Raw gold was last coined at the royal mint in 1917. Some kind of gold standard may again be generally adopted, but it will be a very different standard from the one we knew,” The war was not the cause of the monetary confusion in the world to-day, he said. Apart from the loss of life, the material damage done had long since been restored. The real cause had been the insane method used to finance the war and the vast inflation of credit and currency demanded by Governments and connived at by bankers and financers. It was fo the credit of London bankers that they had protested against the methods adopted, but the Government had Insisted and the bankers had given way. He had not heard of any protests by local bankers; they simply followed like sheep. the had example set in London. The bubble had become dangerously inflated in 1930. Desperate efforts to restore confidence had been made since then, sometimes with partial success, but . the final, burst had come in 1929 owing to a variety of causes. Confidence and the sanctity of contracts were the foundations of the economic life of the world, and these were badly shaken to-day. They were told that when confidence returned things would soon right themselves. Sanctity of contract had been destroyed by governments who, with the assistance of bankers and financiers, had altered the value of the monetary units on which contracts were based. The crop of legislation to protect centers from the action of creditors .was merely a belated attempt to modify the effects of the monetary crimes of thosb who occupied the seats of the mighty, ihe inflation and subsequent deflation of credit and currency had had precisely the same effect on the mortgaged farmer, as it those responsible for these phenomena had broken into the strong rooms, stolen the deeds, and replaced them with forged documents in which the rate of interest had been changed from 5 per cent, to .- per cent, or 20 per cent. It would so®® that before confidence could be restored some assurance had to be forthcoming that. Governments and financiers would not again play tricks with the currency or surrepticiously alter the terms ot existing, monetary contracts. "The attitude of self-satisfaction at a recent annual bank meeting was not very encouraging,” said Mr Begg. There is a story of a Pharisee who thanked God that he was not like other men , and modesty of this kind was very- much in evidence at the meeting referred to. One speaker contrasted our stable banks with American banks which had suspended payment, omitting of course-.to-mention that our banks are allowed to discharge their debts in promissory notes, while American banks had to pay out m-gold or close. Bankers, who do not admit that grave defects have become apparent in the handling of finance and currency in the last 19 years, and who are_ not prepared to study ,in a contrite spirit how these things can be improved are not fit to occupy responsible position*. “Checks and safeguards are needed to prevent a recurrence of the appalling mistakes of the past,” he concluded. We need a stable currency, stable in terms ot gold if possible, but first of all reasonably stable in terms of what the ordinary man and woman has to buy and sell. Till some such international measure or value is devised, New Zealand would do well to retain her freedom in this matter. There is no need to risk , our economic future by tying our currency to any other which may be-: fixed to suit conditions totally different from ours. I do not think that any revolutionary changes -are necessary, and the many schemes of. the ‘ all get' rich quickly ’ variety should be received with grave suspicion, but I do think that safeguards are necessary to prevent the pyramiding and abuse of credit and that the aims in view should include reasonable stability in internal purchasing power and reasonable equity between debtors and creditors.” ■ At the conclusion of his : address Mr Begg answered a number of questions, and on the motion of Mr Preston was accorded a hearty vote of thanks. Before returning to the city Mr Begg was entertained at supper provided by the ladies.