THE FLOUR SUPPLY

Dominion, Volume 8, Issue 2271, 3 October 1914, Page 8

THE FLOUR SUPPLY

MILLERS' GRIEVANCES

PRICES FIXED TOO LOW

THREATS TO CLOSE DOWN

DEPUTATION TO THE PREMIER

A statement of the unhappy plight in which flourmillors, grain merchants, and farmers holding wheat now find themselves., as a result of the proclamation fixing the prices of wheat and flour, was made by a deputation of flourmillers which waited upon the Prime Minister yesterday. The millers said that the prices fixed for these commodities were too low, and thoy announced that thoy did not propose to carry on business, for the reason that it was quite impossible for them to do so without loss. "They asked the Government either to cancel the proclamation, to increase the prices for wheat and flour, 0r,.t0 take over th'oir .mills and make flour. The deputation, which consisted of South Island millers, mostly in a small way, Rnd outside of the Flourmillers'' Association, was, introduced by the Hon. D. Buddo. It was supported also by Mr. W. Nosworthy, M.P., and Mr. E. P. Lee, M.P.

No Huge Profits. Mr. R. Gardner; of the Oust Mills, said that when tho proclamation was issued, North. Canterbury millers had got into communication with one anand boing of opinion that a great injustice had been done to millers, had decided to como to Wellington to interview the' Prime Minister. On behalf of the smaller millers of North Canterbury', ho could say that they had not been asked by the Food Commission to giv* evidence.. He t was a millowiier and a practical operator, so that he claimed to knoir something about the subjeot. The smaller millers in Canterbury 'usually worked on short period supplies of rrhcit, .and lately they had "purchased supplies of wheat at from ss. to ss. 3d. per bushel. These purchases had been forced upon them. At this time'of the' year'because farmers wore anxious to clear out their sheds in anticipation of shearing they came, to millers and offered for sale their stocks of wheat, and the millers, fearful lest they might bo caught short of supplies, were forced'to buy. His firm had purchased supplies at os. per bushel, aud by tho issue of the proclamation they stood to loso some £500. Extraordinary demands for flour in August had forced the millers to '■ deplete their stocks of grain, and consequently they were compelled to buy at the higher figures recently ruling. H6 supplied to the Minister an abstract of his profit and loss account for the past three years. This showed that in 1911 he had made a profit of £454, in 1912 a loss of £98,- and in 1913-a profit of £704. This left an average profit for the three, years of £372. If against this were charged salary for . himself as manager and operator of tho mill, it would teav» say 1.1-6 per cent, of profit. ■ This showed that there was nothing in .the nature of exploitation in tho trade.

Mr. P. W. Eihy, also a miller, quoted liguros to the Mimaterjin a voice which was almost inardibla. Tho effect of them was, however, that with wheat at 4b, 9d. a bushel'miliars could not sell flour at £11 15s. per ton without losing 12s. 10d. a_ton. He urged that the prices fixed should bo revised and fixed at such a level tlhat millers would not he compelled to work at a loss.

First -Doohlan Should have stood.. ■ _ Mr. W. Evans (Timarii) said that the Commission, after going through tho wheat and flour producing districts and hearing evidence tbero, had: como to'tho decision that the price of wheat should be ss. 3d. a bushel, and the prico of flour £13 a ton. Had this decision been acted upon, no complaint would- havebeen raised; for it would havo been fair and equitable, but the decision had been altered to suit places outsido of tho wheat-growing districts of tho South Island; Many sales of wheat had been made at _6s; 9d. a bushel' a, few days before prices were fixed by proclamation, and merchants and speculators were anxiously deserving to place hirge'orders of flour at £13 a ton.- On September 8 tho ruling price for wheat was ss. a, bushe), and on the 19th 6s. 9d. a bushel.' Many parcels were bought at these prices, and many contracts were -fixed in accordance with these figures. As soon as the prico of w'heat was fixed at 4s. 9d. and the price of flour at £11 15s. many purchasers of wheat tried to get out of their contracts, and bakers who had made contracts to buy flour were refusing to pay more than £11 15s. It was his opinion that there had not been any exploitation of the public for a long time, and it was his further opinion that owing to the prospect of a failure of the wheat crop in Australia owing to the drought, the price of wheat iii New; Zealand would have been at least ss. if there had been no war. The millers were ready to lease their mills to the Government at very low rentals, and tho Government could then mill flour and sell it to suit the agitators, of whom there seemed to be a good many about. The millers held that either the original suggestion of tho millers should be carried out, or the Government should take over the mills and run them in the' interests of the public. He stated that Australian millers were refusing to sell flour at the prices fixed, and as they were allowed to export wheat Home, they were sending it to England, where they could get far better prices for it.

Scarcity Not Due to War. Mr. A. J. Pulton said ho could not understand how tho commission had arrived at their decision. It was his opinion that the commission had mad© a big blunder. Tho information they had been asked to supply to'the commission on the forms sent to them could not have been of any use to the commission' as.evidence. They had been asked to state the average prico at which they had purchased wheat since March 1. In that time they had purchased a good deal of low-priced wheat, but that lowpriced ,wheat had long ago been baked into bread. What tho commission should have asked for was the average prico at which they had recently bought wheat now held in store. H« would urge that beforo the decree fixing the prices was made absolute, the recommendation ho referred back to the commission, as ho was sure a" great wrong would otherwise be done to millers and farmers.

Mr. R. MMigan said that tho millors in the Oamaru district l ; ad purchased wheat they had in hand at from ss. to ss. 3d. per bushel at sidings,.which was equal to from ss. 2d. to ss. 6d. in tho mills. At these prices they must havo purchased 50,000 bushels of wheat, and they would make very heavy losses if they woro compelled t osell now at the/ prices fixed. Everybody iu the trade know that, war or no war> the prices Would have been high now, and they could not prudently, refuse to accept lines offered to them at the ruling rates. Were they to bo compelled to lose this very largo sum of money? In 1907 tho price of wheat was 6s. when there was no war or rumour of war, and this year the probablo shortago was much more pronounced than it was in that year. In viow of the removal of the embargo upon tho export of Australian wheat to fill contracts, there would bo a great deal of Australian wheat coming to Wellington and Auckland. This flour would be in competition with New Zealand flour, and be contended therefore that there would bo no famine prices, and . therefore no need for tho proclamation,

Mr. Massoy: With wheat at 4s. 9d., at what price can you 6ell flour at a profit? Mr. Eiby repeated that at the present figure, £11165., thoy must lose 12s. lOd. a ton. If the price wore £13, thoy would get a reasonable profit. Mr. Milligan urged that the Government should take over from the millers the flour they had purohased at ruling rates in good faith,' especially as they were compelled to purchase the wheat in order to avoid being faced with a shortage of wheat.

Mr. .Evans stated that thirty years ago, when there was no war, he had sold 30,000 bushels of wheat at 7s. 4d. a bushel.

Mr. R. Ireland said it might be true that some of them had cheap wheat in store, but against it thoy had made cheap contracts. For instance, he was still supplying flour to the Seaclifl: Asylum at £9 Bs. Cd. per ton. Mr. J. Moffatt said that he had recently sold flour to bakers at £13 per ton, made from wheat purchased' at about ss. Now the bakers refused to pay more for the flour already supplied to them than £11 15s. per ton. Could the millers now claim from the farmers or the merchants from whom they had bought the wheat? Mr. Evans said he had had exactly the same experience with bakers. Mr. Gardner said ho thought the deputation had made it clear that thoy could not earn' on with wheat at 4s. Dd. ami flour at £1115s. It would pay them much better to close their mills down and keep their stocks.

Prospects for Next Harvest. Mr. Ma6sey: Can anyone express an opinion as to the area in wheat as compared with the area in wheat last year? Mr. Gardner: Less, sir. Mr. Nosworthy said that ho believed a good deal of extra wheat was sown in responso to the appeal of the Frime Minister, but before that appeal was made the area, sown was considerably less than that for the previous-year, lie asked the deputation whether, if the original idea of the .commission had been carried out, the millers would have been satisfied.. There was a general response that the first decision would have given satisfaction. _ . Mr. Evans pointed out that the price of potatoes in the south was very low. "We can hardly get a pound a ton for our potatoes now,' ana while that_ ie the case there' can't be any starvation about," ho said. A Difficult Problem.

The Prime Minister said that .the Gcvernmont had been faced with a very difficult problem. Ho could assure the deputation that the. Government, had no intention of interfering with fair trade. .Their object was simply,to prevent exploitation. With that object a commission of impartial men were appointed to make recommendations. to the' Government, As the deputation knew, their first recommendation was ss.'3d. a bushel for. wheat, and £13 a ton for flour. This decision was withdrawn, but not-at the request'of the Government. ■ ■

Mr. Evans: Some interested party must have altered their opinion. Mi - '. Massey: We have had no communication with, them about'it.' The Government have never attempted .to ■influenco the commission. ..

Mr. Evans: No, but of course there are side winds which might-have'in-fluence what the commission would say. ACr. Massoy, after reading the report of the commiss>on, said that, the commission was being kept alive, because they did not expect a to fix prices for any length of time. Prices must be adjusted from time to time either higher or lower, as circumstances arose. He was quite wilting that the matter should bo referred .back to the commission' for further consideration. If the mombers of the deputation.wished to give evidence before the commisssion he was quite willing that the.commission should have an opportunity of hearing their evidence. He wanted them to understand that the Government could hot', and would not as a matter of fact,' bring any pressure to bear on the commission. Mr. Nosworthy suggested that the. Commission should be guided by the evidence of the southern millers, because the northern millers were supplied very largely from Australia.

Government Purchases of Wheat. In reply to a question Mr. Massey said that ho could not sell the wheat he had purchased in Australia at less thfin ss. a bushel. Mr. Milligan: And that is without' adding.the duty. If we bring in Australian wheat it'will cost us about ss.

4d. ■''~'.• Mr. Gardner (to Mr. Massey): You are in exactly the same position as we aro. You hold wheat that yoii can't sell at Commission prices.. I will givo you my mill and you' can mill it there, and sell flour at £13 10s., and you can't make ,a profit. Mr. Massey: Of course that, wheat was bought in anticipation of a shortago. There is not a large quantity of it—about 45,000 bushels—and we shall sell it not to one miller but to those millers who are short. :

Mr. Evans t You must remember, sir, that a time like this is the only time ,'that farmers can make a profit. If they make a loss next year how will you deal with it? Mr. Massey: I don't think there are many farmers holding wheat now. Mr. Evans:,Oil, yesj there are, and they are going to hold it until next year. I know a fanner who has got 3000 or 4000 sacks of wheat. 1 Mr, Milligan pointed out that_ there was a shortage of flour in Wellington now, and that the shortage would be accentuated.' The millers could not sell at £11 15s. Lots of orders were coming in but they wore not being executed; -' Mr. Evans: Are we bound to supply orders for flour? ' Mr. Massey: I should be very sorry io be forced into the position the Australian Government has taken up. Mr. Evans: They are very sorry for it now themselves. Mr. Massey: We have lots of responsibilities 'without that. Ho inquired whether the deputation wished tho Commission to take further evidence. . Mr. Eiby said that if things remained as they were now, his mill would have «> close down, because ho could not afford to sell flour at less than £13 a ton. _ ' Mr. Nosworthy: Closing down will bring them to their senses. Mr. Evans: They can commandeer them—como and take our mills. Mr. Massey said it was a matter for the Commission, and he would arrange, if the .deputation wished, that they should bo heard by tho Commission. .Question In tho House. In tho House of Representatives yesterday, Mr. Ell asked if it was true, as stated in The Dominion, that no miller would supply bakors with flour at tho prico fixed by tho Royal Commission. Mr. Massoy said ho was consulting the Commission on the point. Ho was telegraphing to tho chairman that' afternoon. A TIMARU PROTEST, • (By Telegraph—Press Association.) Tlmaru, October 2. A meeting of grain merchants this afternoon resolved to protest against tho prices fixed for milling wheat and flour, as they will involve many holders in serious' financial loss. In viow of the present short stocks on hand and thprospect of short supplies noxt season, the meeting considered ss. 3d. f.o.b. for wheat and~. £13 f.o.b. for flour as originally recommended by the commission would bo fair and reasonable. A copy of tho resolution is to be forwarded to tho Prime Minister.