THE WOOL PROFITS.

Timaru Herald, Volume XCVIII, Issue 170576, 5 August 1921, Page 2

THE WOOL PROFITS.

■ ' AN INSPIRED STATEMENT. (Official Con espomlent). LONDON, Juno JO. Tliero appeared in tin: Daily ’lelegraph. Loudon, on June 7 the lolloping article dealing with the pool profits negotiations bet wo-it .Mr Massey and the Imperial authorities annul white nothing up to this dag- had been published. The article also appeared in a similar form in utln r papers.

GOVERNMENT M’OOL DKAU. FIFTEEN All Li JON A IX DISPCLL. (From a Corn .-pendent». “The Government of New Zealand claims for the Tiva-ury millions of pounds as part in tla, 1 profits resulting ii'om the sale of the iv-.i tvool elips, IOIb-18. The Dome authorities oppo.-e. to this (leuinnd i b.e lu- es ia-sirred trout the realisation of the wool itt tlte years If) IS-‘Jib •■When Ihe war began mil' (lovrniincnii entered into • out ra-.-; wit In New Zealand in taki off i! - baud-- the entire (piantily ol cool avoidsic lot v.\-

porta lion. Tho sheepfarmors were to receive a guaranteed price 55 per cent: over pre-war standards, and the New Zealand- Government 50 per cent, of tho net profits of the sale in Europe. This arangement was renewed yearly in 1918, 1919, and 1920. The sales in 1917 and 1918 resulted in a profit of £5,000,000, but iu the following two years a loss of £10,000,000 was incurred, This leaves us with, a neb loss of £5,009,000 on the whole operation. According to a special claws© in the contracts, the New Zealand Government is not responsible for any loss that may occur as the result of the sales, but, not satisfied with tins, it claims in addition £5,000,000 as its part of tlie profits of the first two years. Tho argument jmt forward is that the contacts were renewed yearly, and are to bo considered independently. This point, of view is strenuously opposed by the Treasury. In consequence serious friction has occurred between .Mr Massey, tho New! Zealand Premier, and the Home authorities, with whom he has been disoussing the question To this the Prime Minister sent the following reply:—

MR: MASSEY’S STATEMENT.

The position of affairs in regard to the purchase of New Zealand wool by the British Government was explained | yesterday by the Right Hon \V. F. Mstssoy, Prime Minister of New ZeaI land, in an interview with a represen- } dative of the “Daily Telegraph.” Mr ' Massey said at the outset that the paragraph contributed by a correspondent which appeared in the “Daily Telegraph” on Tuesday under the heading “Government "Wool Deal —£15,000,000 in dispute” was very far from correct. “Tito purchase,'’ Mr Massey continued, “in the first instances was made at the same time and in the same way that the Australian wool purchase was made. The Imperial Government wanted the wool and both the Commonwealth and Dominion Governments sold at what- was considered a fair i price, though a price not equal to the | value which free wool was fetching m the open market. Consideration, however, was given to the fact that most of the wool was wanted for army purposes. and that the necessary shipping toil carry it was being provided by the purchasers. The arrangement was that wool used for army purposes should i stand at the price tor tfiieb it was purchased, but if wool was used for civilian purposes and realised a profit when sold, then half the profit went to the country whore the wool was produced —that is, to the producers. That the wool iwns sold well within its value was proved by the fact that until recently every time New Zealand wool was placed on the open market it icuj lised considerably more than was paid ' for it by the authorities m the Lmted Kingdom. The arrangement worked . very' well until July of last year, when a telegram was received by the New . Zealand Government indicating that - then 1 was approximately a million and a half sterling of profits belonging to the New Zealand sheep farmers (nviucU the Department here was prepared to hand over), and stating explieitlj that further dividends would be forthcoming. It a telegram from the Secretary 0 t St-iito for tho Colonies it wns stated that the dividend thus distributed was to be ‘regarded as an interim dividend, and final dividends shall be based on ascertained profits over the whole of tho clips purchased.’ The wool growers in tho Dominion were asking lor their money, and t-lio New Zealand Government"agreed to the suggestion from here. On January 4, 19J1, a telegram wa.s received ironi the of .State for tho Colonies, of which the folio wing is an extract: “Undistributed profits on New Zoa- , laud wool estimated at a little under ! £8.000,000 before writing down stocks, i but loss on present stocks estimated to eost approximately £'JJ,OOO,OOO will it is feared substantially exceed undos-t-rilmlod profits on sales since March 31, I I PIP.” j 'Jins meant- that the whole of tho | CPdHkUOiM was being held lor the put- j pose of mooting any possible loss that , might, be made on the wool now in j stock The wool on which, as the tele- I gram' says, tlu-re has boon £5,000,000 nudistributed profits, was all sold foi . civilian purposes, and therefore, according to the last arrangement math —viz., that, fho share of profits actually ma]Nod should be paid to Noiw Zealand, ca loniaietl as same rate. per pound of j wool delivered as was paid to tile Comnmnwoahh Government —a very large . proportion, it not the whole ol the j LS.'MO.nOi), may bo claimed to belong i ■to the New Zealand _ producers. They are not. however, asking for that; they 1 arc oulv asking for what is reasonable, j They claim that what the represent;!- ; lives of the Imperial Government propose is not carrying out the spirit- of the airreeincni. and 1 must- say I agree, with them.

iSo far as the “serious friction” referred in in (he paragraph is concerned, I know nothing of it. Fight through the war period tho business relations between the. two Governments have I>. on of the pleasantest character, and I regret exceedingly that any attempt