MEAT AND PRODUCE TRADE

Waikato Times, Volume 92, Issue 14261, 12 January 1920, Page 3

MEAT AND PRODUCE TRADE

BRITISH MEAT COMPANIES AND r-vasiGw oo:...'utition. The question of British income tax, as it presses unfavourably upon the British meat company in comparison with the favoured foreigner, was never brought out more strongly than in the evidence of Sir William Vestey before the British lioyal Commission on the income tax not long since, and the report of the evidence which has just been published makes such interesting reading that it is worth while to reproduce some passages for the benefit of readers. Sir William Vestey, in the course of his evidence, said:— "We are proprietors and managers of freezing works, cold stores, and cattle ranches in Great Britain, Russia, China, Australia, New Zealand, United States, Venezuela, Brazil, Paraguay, Argentine, South Africa, Madagascar, France, Spain, Portugal, and other countries. The capital employed in the business, and that of the affiliated concerns under the same management, is in excess of £20,000,000; the business therefore ranks among the largest .British industrial concerns, and is larger than that of all other British freezing and cold storage companies combined. It is quite as important as that of three out of the five members of the American Beef Trust. Up to the end of the year 1915 we conducted the business from London. In that year taxation was imposed, which made it impossible to continue working from England. We did all we could to be allowed to remain in England, but after several interviews with the highest officials, who were most sympathetic, we had no alternative but to remove the business abroad, and are ' now domiciled in the Argentine Republic. "Our competitors are the American Beef Trust; they arc fierce competitors with more than £100,000,000 of capital; enterprising and skilled in their business, and with the whole force of the American Government and of every employee of that Government everywhere working like beavers for them. .Under those circumstances, for any firm to try to compete with them, on anything but absolutely equal terms is useless, the slightest handicap means failure. "I think the best evidence I can give as to the .effect of the income tax, super-tax, and excess profits duty is to give the concrete example of its effect in the case of our firm, and to show the unfair and overwhelming advantages given to the American Beef Trust by the present method of taxation. "In respect of all businesses begun Bince August, 1914, if we were working from London, we should have to pay on the profits 6s income tax, 4s 6d supertax, plus 40 per cent, excess profits duty on all profits in excess of 9 per cent. In addition, we should also have to pay 40 per cent estate duty, which is merely deferred income lax, so the result would be as follows: — (In the following calculation no account is taken of the effect of the 9 per cent allowed on capital, as it is impossible to estimate what relation it would bear to the profits, but it could not materially affect the calculation): — £ s d

So that the Government would take £B2 18s in taxation, leaving us with £l7 2s for the use of our capital and to cover the risk and as payment for our time, energy, and enterprises; to do business on these terms is.of ?-•»?=«. impossible. The Trust, on the other band, pay the American taxes on —e business they do in America just as we should do our English business, but they have made their business outside America into foreign companies, and unless they take the profits to America, which they avoid doing as much as possible they are free from American taxation. Most of the goods they sell to England are sold f .o.b port of shipment, and are quite free of English taxation. If they ship goods to England wiiieut selling first, then they are siven special terms by the English Government. The net result is that on more than 90 per cent of their business with England from their work outside America they pay no taxation whatever, and only a mere trifle on the remaining 10 per cent., while we, if carrying on our business from England, should have to pay £B2 18s per cent on the profit if the goods were sold in England. «r even if they were sold abroad and neyo? saw England, a condition under wJ--s!i it is obviously impossible to **?'*• "We are told, and believe, that tut 'Government would like to get England out of the clutches of the American Beef Trust, but, in fact, the Trust themselves could never have conce-v-"d bo perfect and simple a device for CO" ■oiidating and extending their practical monopoly of the froze.i meat trade as that the British Government shmjl.l exempt them from taxation and impose a tax of £B2 18s per cent on the p-Ofits of any British firms who might have the temerity to oppose them. It ap•:>earß impossible, but that is the prese—. position. "We should like very much to brmg our organisation to this country, and work from London instead of Chicago or Buenos Aires, but we cannot do tins unless wc have equality of taxation with the American Beef Trust and the Argentine meat companies. It does seem a pitiable state of affairs that wo should have to ask our own Govenirment for equality of treatment witn foreigners in our own country, or thai v/c should have <o .'-move our business •abroad in order to be able to trade iu England on an equality with foreigners. "It is unnecessary to point out .how vital it is that the supply of foodstuffs, particularly Of meats, should be in the hands of 'English subjects, whereas, whatever their intentions may be, the Government have done, and are doing, everything they can to fasten the American Beef Trust still more firmly upon the backs of our people. "Until ten years ago, the American Beef Trust had not one single freezing works outside the United States. Smec then they have built very many n different parts of the world solely to suvmlv the English market, and are now i building freezing works at Sao Paulo : Santa Ana do Livramento, pother qu i near that place, and two at Bio Grande ! do Bui, all in Brazil, three m Paraguii>, i and one in Santa Crux., Patagonia, and i have boucht land and arc about **•»nImence the erection of anodWat ! Rosario do Sante Fe, in Urn ArgcnUno I Republic. They arc also commencing • building in Colomgia, I behey a j Baranquilla, also sending out material i to build in South Africa, and have their i men out acquiring sites in other counI tn>s Thcv have, to my knowledge, ; offered to buy important works in the ' colonics. Al"l llitiir works in the past i'have been built almost solely to supply 1 the English market. While all this I work is being done by the Trust, not j one English freezing works has been built abroad by any other firm than our i own. It does seem to me that the | preferences which are given in every ! possible way to the American Beef i Trust by " the English Government 1 should be stopped and English firms <riven cp"»litv of treatment. We do not ask for any preference in any way,

but merely equality of taxation. “One of the most shameful things is that the American Beef Trust are allowed to open freezing works in Australia (a British colony), sell the whole of the beef from those works to the British Government, and not pay one farthing of taxation in England either for income tax, super-tax, or excess profits duty, while, upon any profits which might be derived from our Australian works, were we domiciled in England, we should have to pay £B2 18s per cent in taxation. That this state of affairs should be allowed to exist for one minute after attention is called to it is beyond belief."

40 per cent excess profits 100 0 40. 0 0 0 Income tax, 6s; super-tax, 4s 6d —10s 6d 60 0 31 10 0 0 Death duties (merely deferred income tax, 40 28 10 11 8 0 0 17 2 0