The Taranaki Herald. [PIBLISHED DAILY.] SATURDAY, OCTOBER 3, 1908. CO-OPERATION IN THE EXPORT TRADE.

Wanganui Herald, Volume XXXXIII, Issue 12584, 3 October 1908, Page 4

The Taranaki Herald. [PIBLISHED DAILY.] SATURDAY, OCTOBER 3, 1908. CO-OPERATION IN THE EXPORT TRADE.

Thouoh the co-operative system is only in its infancy in New Zealand, it has nevertheless been in operation long enough to prove that when carried out on a fairly large scale and under the controlling influence of men who have some idea of business it is eminently successful. The dairy industry affords a striking example of what may be done by co-operation, for it is manifest that the farmers have been placed in a position they never could have occupied had they relied on individual efforts. The position of the flourmillers, too, has been greatly improved since they formed the combine, though the public may not look with favour upon the organisation, the fact remains that it has accomplished- that for which it was formed. The same may be said of the sawmilling industry in New Zealand. Samillers, by co-operating, have Jbeen able to dictate their own prices, and place themselves on a much sounder financial position than would have been the case had there been

no such organisation!, but each miller endeavouring to work out his own salvation. Numerous other successful co-opera-tive concerns might be mentioned, such, for instance, as the New Zealand Farmers' Co-operative Association, to which we referred the other day, and similar societies in various parts of the Dominion. Now we read of co-operation on a much more extensive scale being suggested in connection with the operations pf meat freezing and dairy companies, wool and flax exporters, and other concerns. Mr H. G. Stringer, secretary to the Auckland Farmers' Freezing Company, has been interesting himself for some time in this matter, and ho urges the establishment of one national agency at Home for New Zealand wool, beef, mutton, lamb, butter, flax, pelts, etc. Under such a combine Mr Stringer believes the Dominion would command better prices all round. Referring particularly to the wool export last year, he calculates that it realised between £2,000,000 and £3,000,000 less than it should have done, and he believes if the wool had been held back tho Dominion would have saved a big sum of money. He says the auctioneers held 88,000 bales of New Zealand wool back from the May sales, with the result that prices rose. He is convinced that the low priceß are not due to money 'being tight, but to the "bearing" of the market. He holds a letter from London which says: "Originally, no doubt, the money difficulties in America and Europe presented an opportunity for 'bearing' the market too favourable to be missed. The movement, however, was carried too far. The artificial depression of values when trade prospects are good may result in satisfactory profits to the 'bear' manipulators, but when the reverse is the case and the business horizon is clouded with uncertainty such action only generates nervousness, and is attended, as in the case mentioned, with disastrous results. The trade of England is in no sense in an unhealthy condition, but with a little encouragement to buy more than is needed for immediate use, and with the prospect of ample supplies ahead, manufacturers are disposed to hold back orders with a view to buying at the least .possible cost." According' to reports, Mr Stringer added, the manufacturers had more orders on hand than they ever had b&fore. If they could nofe have got the wool under a certain price, they would have had to go to that price. He says it is all nonsense to say they don't require New Zealand wool. The "bear" movement ran pricos down so low as to cause a. panic, but if that wool had been under individual control a very great part' of the loss, to New Zealand would have been avoided, if not the whole of it.

Asked if he suggested that co-operation of the freezing companies would have the same effect in regard to meat, Mr Stringer said he thought all New Zealand produce

should go through ono London agency. Meat, of course, could not be held like wool, but still there were a lot of foolish things done in the meat trade that could be obviated by co-operation through one central agency, which would mean that the bigger the prices at Home the bigger return to the producer here. It was a large undertaking, but men could be found to work it. The loss on wool alone last year, if it had been saved and invested, would return £120,000 per annum, a sum more tfian enough to establish a big agency. Supposing there were three different buyers of New Zealand meat here, and they had three different agents at Home, and the freezing company shipped 15,000 carcases of mutton, 5000 to each agent, what result was to be looked for? Those three agents would be competing on the Home market with the one brand of mutton. It was an absurd position. "If that meat were going through one source alone we would then do away with the present idiotic competition," said Mr Stringer. We would, in a large measure, be able to demand our own prices. They have, at Home, a number of absurdities they call old English customs that must not be disturbed. They cannot be disturbed because of the want of unanimity on the colonies. One "old English custom" is, if New Zealand goods are sold less 2£ per cent., to charge commission on the gross amount, which is not even honest. All the business done in New Zealand meat, ■sold on the c.i.f- basis, is subject to the London "arbitration clause," which practically means that the seller has no say in the disposal of the meat. Should anything go wrong with the market and the prices decline between the time of purchase in the Dominion and the arrival of the produce on the London market, the buyer usually resorts to the arbitration clause. He declares that the meat is not up to the standard and claims arbitration. An arbitrator is appointed by the buyer and another by the commission agent representing the seller, and as the latter arbitrator may to-morrow reresent the buyer, he is not going to oppose the ouyer, and the result is always a win for the buyer. An example was afforded in 1906, when very large shipments of beef were sent to London on account of c.i.f. buyers and at high prices, but . before the meat got Home the bottom dropped out of the market, and claims aggregating over £1000 were put in for so-called "tucked up" shins, irrespective of the fact that all the beef from Auckland for years previously had been dressed in this particular manner and no exception was taken before. The award was in the buyer's favour, and if the shins had not been "tucked up" the buyer would have scored because they were not "tucked up."

Upon the question of co-operation generally Mr Stringer said the freezing companies could do a great deal by joining in to get the meat through one house at Home. What was really wanted was one big distributing firm in London to handle New Zealand produce, wool, meat, butter, etc. The present agents had no interest outside their commission. The mere fact that the agents wanted to earn commission spurred them to further efforts, but it did not alter the fact that they were competing against each other with one brand of produce, and that was reducing the price. He thought that one of the best English houses, with its present connection, should handle all trade, and should be only too glad to represent all New Zealand and handle all its produce, provided, of course, that that house was willing to drop all outside lines and handle the New Zealand trade exclusively. "Cooperation along these lines," said Mr Stringer in conclusion, "should have, for immediate result, a saving of a very large sum of money to this country. Had it been established before last year this Dominion would have been between £3,000,000 and £4,000,000 better off today."