THE FLOUR-MILLING TRUST.

Otago Witness, Issue 2556, 11 March 1903, Page 11

THE FLOUR-MILLING TRUST.

From time immemorial, as the pages of history . .eloquently bear witness, the public has been extremely sensitive to any influence which threatens to increase the price of bread, and for this reason the operations of the New

Zealand Flourmillers' Association, commonly known as the Flour-milling .Trust, engage more than the amount of attention which is usually bestowed upon such commercial enterprises. For some weeks past it had been actively rumoured that, owing to the unwillingness of a number of the former signatories to enter into a new agreement; — the. old agreement having expired at the end of last month — tEe Trust would cease to exist, or, at anyrate, Would only be able to operate in. such limited

fashion as to no longer cause it .to be regarded in any quarters as a menace to the public weal. But, according to the information we were enabled to publish yesterday, a new project is on foot which demands the notice of the community. The cause of .the formation of the Trust, in the first instance, as set out in the preamble to the agreement entered into

hy the associated naillowners, is stated in the following terms : — " "Whereas for many years the business of flourmilling in New Zealand has been carried on practically without profit and very frequently at a loss, largely owing to heavy expense of distribution in consequence of each millowner in the past having "separately disposed of the products of his mill to buyers residing in various parts of the colony, and having for that purpose to maintain 'a separate staff of travellers, agents, and others, and to incur other expenses, which considerably increase the price at which manufactured articles can be placed upon the market, which circumstances, together -with overproduction, have rendered the business not only practically profitless, but frequently a source of loss. And whereas ; unless the cost of distribution is lessened and the output made proportionate to the needs of the community for consumption in this colony, a large number of persons (now engaged in the business will incur further heavy loss, and have to retire from it, leaving it m the. hands oi

those who are longest able to bear the loss resulting from the unsatisfactory condition of the trade, and other consequences detrimental to manufacturers and consumers alike will follow." Now, we have reason to believe that the deplorable state of things pictured in this preamble formerly had some foundation in fact so far as the flour-milling industry in thip colony is concerned. But it cannot be too strongly insisted upon that such a condition no longer exists. On the contrary, thanks largely to the operations of the Trust, the flourmilling industry is now in a highly flourishing condition. A copy of the balance sheet just issued by one large milling firm shows that the net profit on the past year's working amounts to over £18,000, and we have reason to believe that other flourmillers have be^en proportionately successful. We should ungrudgingly congratulate the millers on their good fortune, for every man is clearly entitled to due reward for the energy and ability displayed in the conduct of his business, we're it not for the evident signs that the dividend they have earned has whetted their appetites and made thum hungei after larger profits, which must ultimately come out of the pockets of the consumers. Now, in discussing this subject some little time back, we expressed the opinion that the flourmillers were perfectly justified in combining to regulate the price of flour and thus check reckless competition and the pernicious practice of forward sales, which in the past has occasionally spelt ruin and bankruptcy. But when it is proposed by an influential combination to buy up two large mills at a cost of over £30,000, with the avowed purpose of closing one of them, and of thus restricting the- output, and by enhancing the price of flour to make the consumer pay the cost of the operation, a time hao come when it is necessary, in the interests of the public, to utter a word of stern protest. Another matter on which a note of warning may profitably be sounded is that of the bakers' boycott, which is said to have been instituted against the non-associated millers at the instance of ilie Trust.

When an association seeks t» use the baking tr^l© »n. instrument for .the

purpose of coercing millers who have withdrawn from its ranks into signing its agreement it is distinctly overstepping the mark and adopting methods that will not commend themselves to lovers of liberty and fair trade. The existence of an arrangement under which members of th Bakers' Association are pledged not to purchase flour from any millers who are not included in the Trust and undei which the Millers' Association, in turn, binds itself not to supply flour to bakers who do not belong to the Association which has been formed in their trade is obviously fraught with mischief. Any steps which, in pursuance of this arrangement, are taken either to force a miller to join the Trust or, if he is indisposed to do that, to crush him by depriving __him of a market will, the Association may rest assured, be carefully watched. Whatever may have been the past of flour-milling in the colony, the industry now rests on a sound basis, and is allegedly returning handsome profits. In their own interests the associated flourmillers should recognise that it will be a mistake on their part to attempt to cany out their projected programme. With every prospect of a bountiful harvest, the public will not be content with bread at famine prices ; but it is fairly certain that if the scheme that is now on foot is carried to a successful issue by the millers who ai'e concerned in it the consumer will have very little reason to look for any appreciable reduction in the cost of breadstuffs for the ensuing twelve ■ months. i