THE WHEAT DEAL

Otago Witness, Issue 3335, 13 February 1918, Page 11

THE WHEAT DEAL

MEETING OF BROKERS.

SYSTEM EXPLAINED. MrW. G. Macdonald and Mr W. S. Pratt, the Wheat Controller and Assistant Wheat Controller respectively, convened a meeting of licensed wheat brokers and their country representatives in tht» Chamber of Commerce, Christchurch, on Thursday morning, to explain in detail obsotire points in connection with- th<? Government pur-cuaao-of-vvheat schemo. The scheme has been in practical operatibn for a few weeks now,- but possibly because of a too superficial reading of tho regulations a few slight difficulties havo cropped up, and the meeting was designed to clear up points that were in doubt. Mr Macdonald made a thorough explanation o< the scheme in so far as it affected brokers, and at the conclusion of the meeting he Was accorded a hearty vote of thanka foj the lucid manner in which he had handle*

i the subject. { Speaking to a Press representative sub> ■ sequently, Mr Macdonald and Mr Pratt out' lined, for tho particular benefit of farmers, exactly how tho scheme worked bo far ai ; they [the farmers) were concerned, and id* ! cidentally explained a few interesting poinli | in connection with tho scheme in general. j In dealing with the subject, Mr Macdonald j traced an imaginary parcel of wheat from j the grower's hands to tho hands of tha I miller, and his remarks seemed to show j that the scheme is inherently simple, and should work well in so far as th< i actual machinery of it is concerned. ) The farmer with a parcel of wheat foi I sale, it was explained, was at liberty t< ! go to any licensed broker under the schem* j thab ho chose to handle his crop. Ha 1 would know the price he was I to receive, namely 5s lOd, f.0.b., and hi» I first operation would bo to submit thai I grade, of this special line, or a sample, to : the broker ho chose to deal with; Tha j broker, in turn, would subsnit the wheat J to tho miller, and, presuming tho latter i made a purchase of the parcel, would then I direct the farmer- to deliver tho wheat to the purchaser as from the Government. ■ The broker obtains from the miller the I pai-ticulars and invoice of the wheat reI ceived,_ and then sends out to the farmer a credit note, together with a cheque for payment. Provision is made for prompt | payment—i.e., within 14 days of the trans- [ action being concluded, the days on which ! payment is to be made being tho Ist ancj i 14th of each month, so the fanner will I not bo kept out of his cash for any length of time. The actual total commission I charged by the Government for handling \ the wheat amounts to l£d per bushel, this i being paid by the miller. One penny of i the amount goes to the broker for the ' commission on the purchase and delivery j of the wheat, and tho other gd is charged j to cover the general costs of administration. It will be seen, therefore, that wheat bought from the farmer at 5s lOd, f.0.b., willcost tho miller 5s per bushel. In cases where an immediate sale cannot bt made to the miller, and the farmer haf to hold his wheat, he gets id per bushel per month for so doing, from April 1, The matter of the payment made by the miller to the broker for his purchases i 3 largely a question of arrangement between the buyer and the broker, being either cash on delivery, cash against shipping documents, or rash within seven diays after delivery, and all purchase money in arrear ?i"! untied wi'l H«nr int<»r»>«"t at the rata of 8 per cent, per annum. The broker for his part is under an obligation to pay in tho. money received for wheat sales to tho pirVii'o account immediately. Wheat once bought and paid for become* " free wheat," and may bo dealt with at tho owner's option without it being necessary to obtain warrants for sale or purchase, as is tho caso with all other wheat, except wheat.

that has been offered to and rejected by the 'Government, which is also "free wheat." . It has been suggested that a wealthy milling i'firm-, buying a luie of extra good stuff, '' might deal with it later at a higher price, but Mr Macdonald said that this point had been thought of, and the regulations would settle any such attempt. Ail millers would be only allowed to purchase their quota of the different varieties, this quota being based upon the business done by the mill during the last three years. In this way all mills, large or small, would be able to get their fair share of what grain was available, and a wealthy firm would not be able to buy in at the expense of a smaller firm, which did not have such large fir.an-' cial resources. If a firm, under these conditions, sold part of its quota because of a Droiit appearing on the deal it would mean ihat it would have ,to go short of raw : material. < "This office." said Mr Macdonald. "will 'lave all the necessary information soon as >egards stocks and requirements and moveh -lents of wheat, and by June we will know what wheat is in the farmers' hands also, so there is little chance of buyers getting an share of the wheat. There are also .■penalties for breaches of the regulations, :-And the farmer who holds wheat unduly ■■. -lias also not been lost sight of. " The interests of all parties have been Jooked after, and the following Advisory Committee has been appointed to work with this office :—Brokers : Messrs J. B. Waters (Dunedin), R. A. M'Dov.ell (Oamaru), A. 'ghirtoliffe (Timaru), and T. F. Gibson (Ohristchurch). Millers: Messrs R. Milli- -. jran (Oamaru), Murray Bell (Auckland), F. Corson (Ohristchurch), H. Gardiner (Oust). , Fanners: Messrs D. Jones (Dunsandel), F. G. Howell (Horrelville), J. Talbot (Timaru), f. A. Kacpherson (North Otago). A committee of .thrashing-mill owners will also confer with us. if necessary, and of this committee Mr G. Sheat is chairman.''