BUTTER QUOTAS.

Waikato Times, Volume 113, Issue 18903, 24 March 1933, Page 5

BUTTER QUOTAS.

RESTRICTIONS OPPOSED. MR W. GOODFELLOW’S VIEWS. "FIGHT THE MATTER OUT!” AUCKLAND, Friday. Mr W. Goodfellow, advisory director of the New Zealand Co-operative Dairy Company, Ltd., addressing the Auckland Chamber of Commerce yesterdav said: "I 'have done my best to Induce the New Zealand Dairy Board not to agree to any restriction on the imports of our butter into the United Kingdom, because I believe it will be better to fight the matter out, even if prices do go a little lower. Mr Goodfellow said the United Kingdom had given the Dominion a free market for three years, and had penalised the foreigner to the extent of imposing a duty of 15s a cwt. on butter and 15 per cent on cheese. Larger quantities of foreign dairy produce were coming into the United Kingdom meanwhile, because the Continental countries could not absorb all they were producing. However, he believed that the situation would right itself with an improvement in the international position. New Zealand’s Agreement. New Zealand had agreed not to de- > velop uneconomic secondary industries, and to reduce the duties on certain British goods to enable the British manufacturers to compete reasonably with local manufacturers. Further, when it could afford to do so, the Dominion had promised to abolish the 3 per cent primage. Disoussing the terms on which Britain had agreed to give a free market to Empire dairy produce for three years, Mr Goodfellow referred to the following significant reservation: ‘‘As regards eggs, poultry, butter, cheese and other milk products, free entry for New Zealand produco will be continued for three years certain. The United Kingdom Government, however, reserves to itself the right after the expiration of three years, if it considers it necessary in the interests of the United Kingdom producer to do so. to review the basis of preference so far as it relates to the articles enumerated, and, after notifying the New ihaland Government, either to impose a preferential duty on New Zealand produce, while maintaining existing preference margins, or in consultation with the New Zealand Government. to bring such produce within any system which may be put in operation for the quantitative regulation of supplies from all sources in the United Kingdom market.”

What Reservation Means.

"That reservation means that at the end of the period Britain reserves the right to tax our food and limit the amount going into the United Kingdom,” he said. New Zealand had been slow in carrying out Its part of the agreement. The duties had been reduced on several items, but the tariff commission still had to sit to revise the general tariff. By increasing the exchange rate without making a corresponding reduction in duties New Zealand had broken the agreement and placed a further disability of 15 per cent on British goods. Although Britain had made no direct reference to that action, it had countered it by suggesting a restriction on New Zealand dairy produce exports. That, had been done in spite of the fact that the Ottawa agreement still had about two and a-haif years to run, and was caused, he was forced fp conclude, by New Zealand’s action in raising the exchange.

A Pernicious System

Mr Goodfellow referred to the restrictions proposal as “a pernicious syste I;,” and one likely to play into the hands of the foreigners. It had been suggested that foreign butter should bo restricted to two tons for every one ton restriction placed on Empire .butter. Denmark, Holland and the Baltic States were all 'highly developed as far as their dairying industry was concerned, and it was questionable whether thpy could produce much mort. In the face of (he duty of 15s per cwt., or about ljd a pound, they were consuming more of their own butter, and would have substantially less to sell to Britain. By agreeing to the restrictions, therefore, the Northern European countries were probably only accepting a position which would come about automatically in a few years.

Mr Goodfellow said Denmark 'had alternative markets. if the British market were restricted, the Danes would get a higher price for the produce they sold in the United Kingdom, because of the restriction on Empire countries, and would still have the rest of Europe In which to dispose of Its surplus, even If lower prices had to be accepted in those countries. Therefore, the restrictions would probr/Ty hurt, the Dominions more than the foreigners, who might not suffer at all.

Position of British Producer. The speaker said SO per cent, of the cows in tlie United Kingdom were milked for town supply, which would not ho affected by butter and cheese prices, because the British Government was adopting a scheme for rationalising or nationalising the milk supply, fixing the cost of distribution to give Ihe Home producer a fair price. As far as Hie remaining 20 per cent was concerned, that figure was largely represented by by-pro-ducts of the town supply business. As far as lie could see, then, the restriction system would not help the Home producer, hut it would help the Continental farmer. “ New Zealand will get info a very difficult- position if it agrees to restrict its output." said .Mr. Goodfellow. "Increased production is the only way out of our difficulties. 1 hope and nolieve that the Dairy Board will not agree to tile proposal, and Dial city opinion will support I hat view." It was pointed out by the speaker ihat in Hie lasi Iwo years. New Zealand had hough! more from Australia and Canada than il had sold !o those countries. lie made the point ili.it. even In entering into agreements with other Empire countries. New Zealand should do nothing to stultify its position with the United Kingdom. Emphasis was also laid on me nee.l for reducing farming costa. The whole trouble arose from the disparity (Continued In next column.)

between costs and prices. A permanent reduction in costs —wages, for instance, were a third higher than in some other countries —-would help the farmers more than bounties and subsidies, which would be removed when the outlook improved, "We should substantially reduce our duties -on British goods,” declared Mr Goodfellow. “ 1 admit that discretion ‘has* to be shown, hut it should bo a definite part of tho Government’s policy to do so, with the ultimate -object of having free trade between New Zealand -and tho United Kingdom. It Is obvious that the United Kingdom is not -going to -be content to continue the slack methods of tho past, but will trade goods for goods. She Cannot afford to do otherwise.”

Turn for the Better Expected. Mr Goodfellow considered there would be a turn for the better within the next few months, and that -one might expect:— (1) An all-round reduction of war debts; (2) a scaling down of tariffs; (3) a return to gold on a new -basis, involving a devaluation of say 25 per cent. One result would be that Germany would be able to buy large quantities of wool and butter, because her national obligations would be reduced to about £150,000,000, or less than the national debt of New Zealand.

"But if there is a lift in prices," said Mr. Goodfellow, "we will still have to face the problem of permanently holding the British market.”

NOT A FORM OF REPRISAL. LETTER FROM MR COATES. ALLEGED INCORRECT STATEMENTS AUCKLAND, Friday. The Right Hon. J. G. Coates, In a letter to the Auckland Chamber of Commerce, contradicts the suggestion ihat the endeavour of the British Government to restrict the quantity of New Zealand butter imported into Britain is a form of reprisal for the Dominion Government’s action in forcing up the exchange rate on London. “ I must take exception to your statement that this alleged resentment in England against the New Zealand Exchange adjustment is apparently evidenced also by the overtures from the British Government in connection with butter imports into Britain,” said Mr Coates. “ 'There is no evidence to support this suggestion and, if I may say so, it is unworthy of a responsible chamber of commerce. The Government cabled to the High Commissioner an inquiry as to whether, in his opinion or in the opinion expressed in any quarter, there were grounds for Ihe suggestion that tlie proposed restriction of butter imports Into the United Kingdom had been influenced by the recent adjustment in the London-New Zealand exchange rate. The High Commissioner’s reply was as follows: ‘I am confident the increase in the rate of exchange has nothing to do with the' suggested restriction.’

“ I am in complete agreement with your chamber in recognising the desirability of removing obstacles to trade and of reducing uncertainty to a minimum. The Government is losing no time in putting in hand a review of the protective tariff in accordance with our undertaking at Ottawa. It Is because I recognise the need for removing uncertainty that I have felt obliged to take exception to the continued reiteration of misleading statements in regard to tlie exchange rate."

Reply to Mr Coates.

At a meeting of ihe council of the ■chamber yesterday It was decided that the following reply be sent, to Mr Coates:—

“ It is noted with regret that Hie tone of your reply shows a marked departure from dial courtesy and sympathy that, has always hitherto characterised (lie correspondence passing between you ami Ibis chamber. Although we appreciate your action in communicating with the High Commissioner and Hie lenor of his rep>, we cimnol accept, as apparently you do wilhout reservation, his message as set Ming Ihe whole quetiUui. " Information in llio possession of Ihe commercial community definitely indicates Ihat Ihe exchange manipulation lias resulted in oxlremo pressure from trade circles in Great Britain for some measure of retaliation ami there seems some reason In believe Iha I this pressure lias not hern wilhout its ellierl, on (he authorities in Great Brirarn. " This chamber lias always avoided putting forward wind you characterise as ‘ partisan ’ and • baseless ’ slalemriiis. It does not lake up millers idly and withoul careful consideraliou. It ronsidrrs mm us rcpreseiualions should lie 'received and deal! with without undue resenlmeni If they should happen lo differ from the views of the recipient.”