MR, D, J, NATHAN'S SCHEME.

Otago Witness, Issue 2151, 16 May 1895, Page 3

MR, D, J, NATHAN'S SCHEME.

We recently reviewed a paper by Mr David J. Nathan, read before the Wellington Chamber of Commerce, which contained very far-reaching and radical proposals for the reform of our export trade in frozen meat. Mr Nathan's paper attracted much deserved attention and discussion, and he has noAV replied to his critics in a second paper of more value and interest than the first. It will be remembered that the salient points of this scheme are consolidation of the interests of the existing companies, and the acquisition of large, indeed practically unlimited, working capital at a low rate of interest, by a voluntary tax of threepence per head upon all the sheep of the colony, and a Government guarantee of the debentured stock of the consolidated company. The objections that have been urged, broadly speaking, are, first that the proposed tax is not practicable, that under no eiveum-

stances, and particularly in face of existing diminished values, would the farmers assent to (ho proposed levy, and that there is no warrant for State aid to an industry that came into existence by the natural operation of the law of supply and demand ; and has rapidly expanded to its present great proportions by the unaided efforts of those who have hitherto been profitably engaged in it. As to the first objection : Mr Nathan alleges that very flattering letters have reached him from many of those who would be called upon to pay the sheep tax, including expressions of approval from some of the largest flockowners of the colony, while, as he expected, opposition has come from several loading business men in commercial centres. In defending his proposed tax lie says : — "My answer is complete, and I think unassailable. The ratio of values as between freezers, stores, and culls remains the same irrespective of the current price for freezers; in other words, raise the price of freezers and you raise the price of all grades of sheep." This is a fair example of the cocksureness of Mr Nathan that will no doubt disappear when that gentleman shall have gratified his very laudable intention to make a progress through the country for the purpose of expounding his scheme to the man who grows the sheep. If he can satisfy him that by paying threepence per head voluntary tax upon the culls he is now sending to the boiling pot he will raise the market price of tallow and give added value to pelts, he will go a long way to prove his case. We should not care to hold a brief for Mr Nathan and to attempt the conversion of the farmer who at the present time is contributing to the many thousands of sheep that this season are being boiled down, for the simple reason that under no circumstances could they be turned to other account. For the State guarantee many precedents are naturally quoted in support. It is asked, Where is the country to-day which does not subsidise commerce in some form or other? What are cable and mail boat subsidies, butter and beet sugar bonuses, endowments to harbour boards, &c, but aids to commerce? Continuing, Mr Naotan says : "Ifit be wrong to endorse a bill for a groat industry on the security of the general sheepfarmer, surely it must be a greater wrong to guarantee the profits of a private cable company, or a mail boat company, in the interest of the city merchant. Of course it may be said that the merchant's convenience is the country's gain ; but is not the farmer's prosperity the cause of the merchant's existence, in common with everyone else?" This is very pertinent argument, but Mr Nathan puts himself out of court by asking too much. His two essentials are each difficult of attainment ; but he now expresses his willingness to forego the one theleast difficult of attainment — that is, a properly safe-guarded State guaranteein favour of his threepenny tax, which, from our point of view, it is impossible to achieve. Granted that the enterprise requires a substantial endorsement, it would be easier to procure legislation for State-guaranteed debentures secured upon the assets of the consolidated company, as is already done in the case of the sugar plantation industry in Queensland, than to induce the farmers to incur the heavy liability of a tax of threepence per sheep. And if Mr j Nathan is wedded to this last principle he may find a precedent for imposing it by statutory enactment in Australia, I where, in the case of one colony, it is in force for the purpose of subsidising the meat and butter industries, and it is seriously contemplated by a sister colony. But there is too much reason to suppose that the sheepgrowers of New Zealand are taxed to their furthest legitimate ability to pay. Mr Nathan goes into somewhat attractive figures to show the immense saving in interest there would be on the money invested in the meat trade could ib be aided by a State guarantee. He says money could be procured at 3J per cent. Probably it might be obtained even cheaper, for there would be a double security — that of the assets of the company and the State guarantee. This it was no doubt that largely helped the successful floating of the recent loan : it was for investment in a tangible asset. But we are chary of borrowing in any form, and impelled to approach any proposals for Stateaided industries with the utmost caution. There are two points touched upon by Mr Nathan in his latest paper that are especially deserving of attention, and these are the excessive freights for

frozen meat from this colony as compared with Australia, and the pressing necessity of a uniform system of grading our sheep for export. As to the freights, it is pointed out that meat ia carried from Australia at from $d to 3-lGths of a penny a pound lower than from New Zealand, and that did the proposed consolidated company succeed in obtaining the lower rates it would result in a gain of £125,000 per annum, taking our export at 2,000,000 sheep of an average weight of 601b. As to "grading," it is fairly pointed out that much harm has been done to the trade through inferior carcases exported. The jn'oposed company would bo in a position to insist upon the breeding and shipping of suitable sheep only, for the grower would not, as now, have the alternative of turning to another company to have then! killed, frozen, and sold for whatever they might bring, with the chance o£ palming them oil as of superior quality. " The importance of grading," says Mir Nathan, " lias been recognised, and the difficulty met in connection with ilax and butter. Why should it be longer delayed in relation to meat ? The South Australian Government are moving in the matter in regard to wines, and the Victorian Government are doing the same with regard to brandy and butter, and purpose doing likewise with fruits and honey." Finally, as showing the magnitude of the issues involved in this project,' it is stated that "should tho iniluenco of the company be sufficient to reduce freight, insurance, storage, and brokerage charges combined by per lb, the net gain to the colony, independent altogether of possible trade extension, would be no less a sum than .£250,000. Mr Nathan's ia an ambitious scheme, but, as wo said in the first instance, it is, while large, unwieldy, and while his personal efforts to publish it throughout the length and breadth of the country cannot but result in public service for which the author will have deserved much credit, he will most certainly find his object unattainable. Yet the movement should help forward tho cause of progress, and something must be done to stimulate the trade so that a larger margin of profit may fall to the grower. We have already recognised the advantages that would spring from a combination of interests on the part of tbe existing companies, and suggested that their representatives should meet and confer with that object. It would no doubt be a great step forward could the farmers be induced to financially strengthen the company, and we learn that a scheme has lately had their attention that, while not nearly so large as that under review, is very much more practicable. It is suggested that for purposes of the necessary charges for regulating the English market and expanding the trade there should be included by the companies in tho consolidated charge for freezing, &c. a levy of 3d per sheep. This would give £25,000 a year for the purposes which Mr Nathan desires to achieve. Such a sum capitalised would mean immense power. It could be employed, for instance, if the principle of a State guarantee came to be recognised, to directly influence the freight rates, by the erection of adequate cool stores at our ports of shipment, so that a meat ship would not be delayed a single hour in loading, instead of steaming from port to port in quest of cargo as at present. •To such a fund could be charged the services of the best man obtainable to represent the interest of the tradein London, and these provided for, there would remain a considerable margin for the exploitation of new markets and the correction of tho abuses of the London trade. We commend this idea to Mr Nathan, for though small by comparison with his huge project, it goes in the same direction, and even from his point of viewmay serve to pave the way for his more ambitious enterprise. We intended to deal with some points in the scheme formulated by Mr M. C. OaBELL, president of the Geraldine Farmers' Club, but space will not permit of us doing so in this article. We are informed that Mr Oubell is taking steps to convene a conference of those who are interested in the trade in order that the whole question may be intelligently and exhaustively discussed. We trust his efforts in this direction, added as they are to those o£ the meeting of flockowners held at Feilding last week, will result in a conference being convened by the Minister for Agriculture, and that some beneficial results will be attained.