MEAT TRUSTS.

Poverty Bay Herald, Volume XLIV, Issue 14437, 25 October 1917, Page 5

MEAT TRUSTS.

A DISTINCT DANGER

, SELECT COMMITTEE'S CONCLUSIONS. ; ■' OPERATIONS IN NEW ZEALAND IMPORTANT. PROPOSALS FOR CONTROL. (From Our Parliamentary Reporter.) WELLINGTON, this day. A select committee of the House appointed to investigate the alleged operations of American Meat Trusts m New Zealand presented its report yesterday. In the discussion there was a lively interlude as the result of a member of the committee endeavoring to show that the freezing works managed by J. G. Ward. Ltd., lnvercargill, was owned by Armour's great American' .meat combine. The select committee reported that Armour and Co (Australasia), Ltd, is registered m New Zealand, operates on American capital, and is financed and controlled by J. Ogden Armour, president of Armour and Co, Chicago; that, thig company freezes iro various New Zealand works, and mentions m n pamplilet jt has packing works m New Zealand, but the evidence has not disclosed its existence. That Vestey Bros, of Great Britain and Chicago, control the following companies operating m New Zealand : W. and & Fletcher, Ltd, Westfield Freezing Co, and Whangarei Freezing Co. It had "been suggested that Sims, Cooper and Co was controlled or assisted by American capital, but no proof was forthcoming, but that financial support m New Zealand came from local banking institutions. That some buyers have given prices for stofek which were not justified m view of the Government, rates, particularly ira tho North Island, the result being to cause some freezing companies tr; suffer heavy losses, while one company closed' its works for part of the season. •

That it is unsatisfactory and unfair %> Ne<w Zealand producers that enormous profits were made out of the sale of New Zealand meat m Britain. The freezing companies, give .large buyers rebates and concessions which operate against small buyers, tending to create monopolies.

That a system has grown up of establishing companies financed and controlled from outside New Zealand, the companies registering with capital entirely disproportionate 'to their scale of operations. That _ freezing works accommodation is sufficient, though justifiable complaints are made of space being allotted to larga biryer3 to the prejudice of small buyers. That the system o£ payment f.o.b^ by the Imperial Government is not conducive to the interests of small producers, as it puts the trade/ in the hands of _ large operators, small producers not being financially strong enough to wait for any length of time for payment, and beintr placed at a disadvantage.with respect to storage and interest. That m some countries the American Meat Trust has already established control of the meat trade iby its operations. It first inflates prices of stock to kill competition, and then acts detrimentailly to producers by forcing prices down below fair market value, and secondly to consumers, by imposing excessive prices. The committee finds thait except as shareholders of freezing companies New Zealand producers have not suffered. There is, however, distinct danger m the growth of any combination which may endeavor to- -control values to the injury of both .the producer and consumer, j THE' piEfOOM^IENDATIONS. The committe makes the following recommendations : — (1) That legislation be at once passed pivinjr the Government power to make it illegal to grant concessions m consideration of exclusive dealing, and to control or prohibit special rebates. (2) That the Government promote legislation generally: fa) To control mono- \ poliias ; (b) to prevent unfair trading by. freezing companies or shipping companies; (c) to provide for the issuing , of licenses to freezing works and the business of meat exporters ; (d)to deal : 'with -'shipping 1 companies as common car- | riers; (c) to make the charges of such : j carriers just and reasonable ; (f) to prevent common carriers giving undue preference to persons or localities ; (g) to prohibit, the pooling of. freights and earnings; and (h) to- provide that common •carriers shall print and exhibit schedules of all rates and charges. (3) That tihe Government should forthwith consider a scheme for: (a) Controlling the export of frozen meat after the waT; and (b) m conjunction with the Imperial^ Government: arrange for the distribution ,of meat m Britain. — Note : This is necessary to prevent the exploitation of producers or consumers by. meat trusts. (4) That effective measures should, m the interests or. the British consumer, be taken by the Imperial Government to control prices of released meat m Great Britain. ' . ■ ' • SHIPPING CONTROL. (5) That the Government, either mi conjunction with the Home ment or the New Zealand producer, consumer, and importer, or with all of these' parties, should establish a controlling interest m , freights and shipping between New Zealand and Britain. (6) That the Government should, m the interests of small producers, and m view of the probable ssrious shortage of storage space, take power to prevent large buyers monopolising space m freezing works during the war. TAXATION OF FOREIGN FIRMS.

(7) That special care be taken to see that foreign firms, their agents, and companies registered m New Zealand with ; small capital which carry on a large business by means, of outside financial support, shall not escape taxation, on the ground thai? small, if any, profits are made on their trading m the Dominion. Provision should be made that such .firms shall be taxed ari amount not leas than is paid by New Zealand firms not so financed or controlled.

THE DISCUSSION 1

MEMBER AND

MINISTER. CLASH. Mr Pearce (Patea) said that the committee had established the fact that the capital of American meat trusts was being used m New Zealand. Armour and Co. m New Zealand had' a capital of only £21,000. The president of Armour and Co.,- of America, held 3997 shares of £5 each. Only three New Zealanders had any interest m the company, this being to the extent of £5 each. They had 20 buyers operating here, but controlled no freezing works. There "was no evidence of monopolistic action m New Zealand, but it would be a simple matter to kill competition by inflating prices and then reduce prices to the producer. This had ibeen, done m Argentine. Though the prices of fat 'bullocks m Argentine were double the New Zealand prices while the monopoly was gaining a hold, the position to-day, was that the same stock was worth £8 15s to £10 10s per head m Argentine, not much more than half the New Zealand prico. Through the heavy inflation of prices, especially m the -North Island, some freezing, companies had made losses of between £20,000 and £30,000. It would be only a question of time when these "would shut down. Farmers ought to

recognise the danger, and not be content -with, a high price m view of the future danger. He did not agree with the committee's finding regarding freez-1 ing works not being run m Xew Zealand by a monopoly. lie had an advertisement of the Ocean Beach freezing works m association with an American firm, Burt and Co. The managers of this works wer© J- G. Ward and Co., who were paid a salary for .this si>j\ice..

Sir Joseph Ward : If you wish to deal with my private affairs m the House, I'll deal with yc-urs. i r ou are noo going to use your political position m jny private affairs without my retaliating.

Mr Pearce : lam nut doing so. Sir Joseph Ward : i know exactly what you ai'e doing. The evidence is all against everything you are saying. If you attempt to drag my private affairs m you have got hold of the wrong man.

Mr Pearce : I'm surprised at the hon. gejitlemaai taking np this position. I have explained that lm firm are managers on salary.

Sir Joseph Ward : I know exactly Avhat you have ' been toying to do all along.

Mr Pearcft : I'm not t rying to do anything of the kind. I'm dealing with ownership, not management. The member went on to quote .an advertisement of the Federal Steamship Company, which mentioned the Ocean Breach works, Bluff, as belonging to them, and that Burt and Co. w«re their agents/ In the committee's evidence there was a letter to a Wairarapa freezing company from Burt and Co., offering to take their whole output for the season m their capacity as Australasian agents- 'of Armour and Co. ITe did nut for a moment suggest that J. (J. "Ward and Co. were more tha n agents of the Ocean Beach works, but the evidence pointed to the works being those which were mentioned m. the pamphlet by Armour and Co. as being a. packing works they owned m Neiw Zealand. v "

Sir Joseph Ward declared that it was to be .regretted that the member for Patea, a member of the committee, should have thought more- of trying m some way to establish some connection between J. G. Ward and Co. and the American Meat Trust rather than deal v;ith the matter on a broad basis.

Mr Pearce : Nothing of the kind. Mr Witty: He has been on a fishing excursion all along. v Sir Joseph Ward, continuing, said that he madls it a rule never to attack a man. privately unless he himself was attacked privately. He was called before the oomanifrtee at his own request, because he had 'bieard that the member for Patea was attempting m some way to associate him. with the Meat Trust. There .was no member of the committee who did not know statements were (politically speaking) contrary to fact. Tha. member for Patea appeared to be so blinded by political prejudice that he could not even bury it during the period of National Government. 'Sit - Joseph Ward proceeded to read" his evidence before the Meat Trust Committee, prefacing it with the remarks : "I am opposed to monopolies and combines, and:' always have been, and I have never done anything of the kind m my life." . The , evidence read by Sir Joseph Ward snowed that- he stated that the owners of ihe Ocean Beach Freezing Company, Bluff, were the Federal Steamship Company, of England. 'The}' took no part m the management of the works, which under the sole control of J. G. Ward asnd Co., of which Mr Robevt Anderson , was managing director. The Ward Company had no shares m the Federal- Co., Ocean Beach Co., or Burt and Co., who were attorneys for the Federal Co. m Australasia. t When he (Sir Joseph Ward) was m Hngland, h« heard a rumor that American meat trusts were purchasing an interest m the Oeeanj j Beach works. He went to the Federal I Co.'s headquarters, and asked if there was any truth m the rumor, and was. informed that it was untrue ; that no American Co. had any interest. He asked if, m the event of sale of tha > works, the J. G. Ward Co. could have first refusal, and was informed that a i sale was not contemplated, but if it was ; his firm would have first refusal. No American firm or representative had ever j done a single line of business with the Ocean Beach Co. or the J. G. Ward Co. As a matter of fact, they did their business Avith the opposing freezing company tin Southland. . ; If ' they had offered to ; flo 'business with the Ocean Beach Co., ; the latter would' have, been glad to take the; business on commercial lines. It was entirely a f reezing works, not exporting or owning stook. He had ascertained, that the total killings this season were ■ much- -below what the works should have secured, the neason being thgt the Armour Company had been giving higher prices. t It was obvious if their operators had put their business .through tho Ocean Beach works, its returns/would have been largely'increasedi As for the suggestion, that Armour's had interest m the packing /works, ne wished to point out that absolutely no packing was done at Ocean Beaoh. He tknew; nothing of the meat buying by Burt and Co. The member for Patea was not present when he gave evidence, but simply worked m the points to endeavor to associate him witlh the American; Trust. Mi* McOalhim ■: That's the only reason why he. spoke. - Sir Joseph Ward: He made no suggestion of any practical nature to help us out. of the difficulty m regard to monopoly. . ' f Mr Pearce : You were asked to attend the committee. , Mr Witty : It is to the Premier's credit lie asked that ' Six Joseph Ward be invited to attend. OCEAN BEACH MANAGEMENT. • Sir Joseph Ward proceeded to put on record the evidence given by the managing director of the J. G. Ward Co., bearing out m detail the statements he liad made regarding the firm's association' with the Ocean 'Beach freezing works. The Ward Co. managed the works as if they were their own, said Mr Anderson, and Burt and Co., as attorneys for tlie Federal Co., received returns annually. No interference with the J. O. Ward Co. management of, the works had come from the Federal Steam- ' ship Co. or Burt and Co. ' ■

Sir Joseph Ward added that he didnot contemplate that the great factors involved would be subordinated to a personal fishing expedition by a member of the cpifamittee." , . Mr Pearce denied that he had any such intention.

Mr Witty: Then what did yon intend? (Hear, liear.) Mr. Pearce: I consider I was entitled to ask questions, but I did not attack Ward and Co. m any way. A GRIP OF MONOPOLY. ,

Sir Joseph Ward: It would have been the easiest thing m the world for the committee to have obtained sworn affidavits._ The Minister, after again emphasising the effect that, competition would have on producers and the practical impossibility of keeping out Americans m the ordinary way if they wished to enter into trading enterprise here, he expressed the conviction that thero was only one way to grip the problem effectively, and that wag by the vigorous enforcement of the anti-monopoly and anti-combine law m connection with meat or any other thiaf . * Mr. Payne: That is merely marking time.

Sir Joseph Ward: Well, I think that is the only way out. Dealing with the difficulty, he said he believed it would be only a matter of time when, if the American Trusts got into this country, they would rule the New Zealand meatj [market, and after a time they would be controlling the prices, the ultimate result of which would be detrimental to the producers. MEAT TRUST IN ENGLAND. j The Premier informed the House that the Meat Purchase Board had bought for the Imperial Government between March 3. 1915, and Sep^mber 30, 1917, meat worth £18,575,683. There wa s no

doubt that the Heads of the Meat Trust were practically collaring the whole of the trade m England^ and were now m a. position for exploiting both producer and consumer. The Government wished to see a similar position m New Zealand averted. He did not know whether it would be necessary to introduce legislation, on the subject, but if it were li« believed it would be a good thing to do so. Their duty, however, was to sco that the man who handled large quantities of meat did not put the smaller man at a serious disadvantage under the system of rebates. Speaking of the increase of shipping freight, Mr. Massey uttered the belief that the principal reason for the enormous increase m freight was the Imperial. Government's desire to prevent the export of commodities which they wanted at Home. The Pre-' mier pointed out that m the War Legislation Bill passed by the House on the previous day there was a clause which would enable the Government to deal with the question of trusts if the necessity arose. HeJ heartily agreed with the committee's recommendation to grant licenses to freezing companies and exporters of medt. CONTROL OF SHIPPING. Mr. Massey also cordially agreed that shipping should bo controlled m New Zealand. There wa3 no doubt, he said, that the overseas Dominions were suffering very set^ously through the shortage of shipping, and high freights, although he did,' not know that shipping owners, after tfexes were taken into .account, were milking very large profits. When m Lonjlon one shipping owner offered him to; sell to the New Zealand Government thii whole of his company's line at presenjt prices. ,He declined There was stilly a possibility of the war coming to an.-; end before very long, though it was $nly *V possibility, but he did not think, it would be wise for tho Government tq invest large sums of money at the present time. He thought, at the same ti|ne, they should get into a position to vmake it impossible for any shipping company or combination of companies to exploit producers. He considered somi, arrangement should be made by whic t the Imperial and Dominion Governi lents would control the whole of the j hipping so far as rates and freights ve»e concerned between the outlying portion of the Empire and Britain. Mr. Payne : Tou cannot expect a man like Bonar Law! who is a big shareholder m shipping comjpanies, to agree to that. Mr. Massey :f Well; I do not know about Mr. Bonjir Law & p'iva*? interests, but I beliejve him to He a patnolii man. ' ' "»■ Thie Premier added that he had asked the Secretary of State for the Colonies to keep him informed of anything being done. He believed sometliing of -the sort would have; to be done. If hot we would have to do it on our own. We must control sufficient shipping to prevent anything m the shape of exploiting taking place, declared the Premier Mr. Payne moved the adjournment of the debate, wh^ch the Prime Minister promised should^ be continued . another afternoon. . . V 1 • '