THE MEAT TRUST
REPORT OF THE COMMITTEE
INTERESTING FINDINGS j
AND IMPORTANT SUGGESTIONS
A LIVELY INTERLUDE
BRUSH BETWEEN MINISTER & MEMBER
The report of the Meat Export Trade Committee, commonly called the Meat Trust was presented to the House of Representatives yesterday by ffie chairman (Mr. E. P. Lee).
The Committee's Findings, Following wore the findings of the committee i— (1) That the conditions' prevailing during the war, under which the meat output of the has been purchased by the Imperial (government, have netes6arily held in suspense the system of trading wliich was in operation before The Imperial Government' took over the meat supply., ' It follows, therefore, that the operations of the meat trade are not carried on witli the freedom of contract which prevailed, and will prevail, in normal times. • (2) That Armour and Company (of Australasia), Ltd., is a company registered in New Zealand, and operates in New Zealand on American capital It jts financed and controlled by Jlr. 'J. Ogdeiv. Armour, of Chicago, president of tlie firm of Armour and Company, Chicaeo.
Armour and Company (of Australasia), Ltd., freeze iu. various works throughout Now Zealand.
That.in a pamphlet published in 1017 by Ai'mour and Company, of Chicago, Betting out their business organisation, it is stated that: .
"Armour packing plants are operated in Argentina, -Brazil, Canada, and New Zealand, and Armour eellinj organisations are located in London, Paris, llotterdam,( Hamburg, '. Bremen, Frankfort, Copenhagen, Stockholm, llilah. Cape Town, Havana, Buenos Aires, Panama, Canada, and elsewhere." The evidence befora the committee has not disclosed the works mentioned in the pamphlet, or that this company had any euch packing works in New Zealand. That -Veetey Brothors, of Great Britain and Chicago, U.S.A., control the following companies operating in New Zealand; viz.:
W. and B. Fletcher (N.Z.), Limited Vfestfield Freezing Company, Ltd.. The YY'hangarei I'reezing Co., Ltd. It lias been suggested that Sims, Cooper, and Company (N.Z.), Limited, ' are controlled by, or .assisted with, American, capital, but after taking eviuenee from various sources, no proof of tIRs has been forthcoming, but that financial support is received by the company, an so far as buying in New Zealand is concerned, from local banking institutions. (3) That some buyers have given prices for stock which could not be justified in view of the Government rates. ••■■•This has obtained more particularly in the North Island., The result of theso " undue prices "has been to cause soino freezing companies to suffer • heavy losses, and in ono case it brought about the closing of a company's works for part of iasf season. i (4) That it is unsatisfactory and unfair to the New Zealand producers that . enormous profits should have been made out of the sale of New Zealand released ' meat in Britain. (5) That freezing companies are giving ;"" large buyers special rebates and coiices- ' sions. This operates to the detriment of small buyers and tends to create uionn- .. polies. . ■ . '■ (6) That a system, has grown up in New .-. Zealand of establishing companies ■ financed and controlled i.y.' capital obtained from beyond the Dominion. These ■-.companies-register in New Zealand with - a capital entirely disproportionate to their scale of'operations. (7) Thai/ at present there appear to be sufficient freezing works in New Zealand for the stock offering under normal snipping conditions. There is, however, a .'•.. .complaint, which is justified, that spaco 1 is. allotted to laree buyer's to the preju-,.;dic-*e of 'small producers. . (8) The- system of payment f.o.b. by the 'Imperial Government is not ion- j -. dticiy.cto-the. interests of the small producers, as it tends to put the trade-in the hands of the largo operators. The '."" •iuiall producers are not financially \ . Ktrong enough to wait any length of time j '■•for payment, and are placed at a disadvantage with respect to storage and in- , toiost. <9) That in some countries the Anieri- ! can Meat Trust has already established — <:ontrol"of-the meat trade. By its opera- - .tion* it first inflates prices of stock to kill .competition, and then acts- detri- ■ . mentally— ■' " ■> j (1) To the producers by forcing ! prices down below the fair market j 1 value; and . | -• '2) Tc the consumer by imposing excessive prices. (10) That in this dominion the pro- | .. cucers, except us shareholders of freez- I -ing companies, have not, up to tlie'prn- : sent, fiuffered from the operations of i !nrge firms, but keen competition lias in- : duced hit'li prices. There is, however ! it distinct danger in the growth of any • combination which may endeavour to ' control values to the injury both of the producer and the consumer. The Recommendations, The recommendations of the committee i .were as follow:— j ' W .'^ t legislation )>e at once passed ! Giving the Government power to [ make it .illegal to grant concessions ' in consideration of exclusive dealing, and to control or prohibit special rebates. (2) That the Government promote legislation generally: (a) To contra) monopolies. !b) To prevent unfair trading by freezing companies or shipping com- ..- pauies. (c) To provide for issuing licences . to freezing works and the business of meat exporters. , (d) To deal with shipping companies as common carriers. (e) To make the charges of such carriers just and reasonable. . (f) To prevent carriers giving undue preference to persons or localities.. (g) To prohibit the pooling if freights and earnings, and (h) To provide, that common carriers shall print and exhibit schedules of all rates and charges. •< . (3) That the Government should forthwith consider a scheme for: (a) Controlling the export of frozen I meat after the war, and. (b) In conjunction with tilts Imperial Government the distribution of meat in Britain. . ' Note.—This is necessary- to prevent the exploitation of the producer or consumer by meat I trusts. ■ . (4) That effective measures should, in ' the interests of the British consumer, be, taken by the Imperial Government to control' the prices of released meat in Britain. (s)'That the Government, either in conjunction with the Home Government or the New Zealand producer, consumer, and importer, or with nil of these parties, should establish a controlling interest in the freights and shipping between New Zealand and Great Britain. (6> That the Government should, in
the interests of the email producer, and in view of the probable serious shortage of storage space, "take power to prevent large buyers monopolising space in freezing works during the war.
(7) That special care be taken to see that foreign firms and their agents, and companies registered in New Zealand with small capital, which carry on large businesses by means of outside financial support, shall not escape taxation on the ground that small, if any, profits art made on their trading in the Dominion. Provision shall be made that such firms shall be taxed to an amount not. loss than is paid by New Zealand firms not so financed , or controlled.
A LIVELY DISCUSSION THE OCEAN BEACH WORKS. Mr. G. V. Pearce (Patca) said that the committee had gone fully into the m?;uiry and , had established one important act—that the capital of the American Meat Trust iras being used in the meat trade in this country. The evidence had shown that one firm most often suspected
of being servant of the trust was actually financed in. New Zealand. But Annour \nd Co. had commenced operations less
than a year ago. The managing director of that company in New Zealand, Mr. W. I. Carney, had stated that tho oapital of this company, ,£20,000, was owned en-
tiiely by J. Ogden Armour, of Chicagc with the exception of three M ehare, held by servants of the company in Nei\ Zealand. The company was financed bj the guarantee of the same J. Ogden Armour. There was no evidence that Armours had used any of the methode of the trust here, but thero was ample evidence of what the trust had <lone in otlior countries. The trust had complete control in Argentina. The price of fat bullocks in that country to the producers was ,£8 155., half the price payable in New Zealand. And yet the trust could get a better price for beef from the War Office than was paid for tho New Zealand beef, and a proporfion of tho Argentine beef was 6old free on the market
gentine beef was 6ow iree uu mo i U «... iu England. Jf Armours or some othe combine set to work to do it they coul< shut down a lot of the weaker freezhif companies. One of the findings of the committee was that there was no evidence that any works in New Zealand were- owned by the trust. He thought there was very solid- evidence that one company is owned by some of the parties of the Meat Trust. He quoted from an advertisement by Birt and Company, of Australia, in the "Pastoralists' Review," in which this firm stated that they were the owners of the Ocean Beaoh works in Southland (for which the firm of J. G. Ward and Co. are managing agents), and from a, letter from Birt. and Company, in which it was stated that they wore agents in Australia for Armour and Co., of Chicago. Sir Joseph Ward: If you want to deal with people's private affairs iu the House I will deal with yours. Jfr. Pearce said that he had no wish to refer to Sir Joseph Ward's private affairs. ' Sir Joseph Ward: Don't you make any mis-statements about,me! Mr. Pearce: I only want to read this linn's oivn advertisement. Sir Joseph Ward again protested heatedly against Mr. Pearce's "attack," and threatened retaliation, saying: "You have got hold of the- wrong man this time." i Mr. Pearce said that he was surprised that the honourable gentleman should take up this attitude Ho (II r. Pearce) had never attempted to impute any blame to the firm of J. G. Ward and Company. He was dealing with Birt and Company. He understood quite well that the Ocean Beaoh works were managed by J. G. Ward and Uo. on salary. But Birt and Co. in their own advertisement stated that they had works at Ocean Beach, io New Zealand. The evidence was that the works belonged to the Federal Steamship Line. There was also a letter from' Birt and Co. to a Ne-w Zealand freezing company offering to buy the whole of the output for this season, mentioning that they were tho Australian agents for Armour and Company, Ltd. He did not wish to suggest that J. G. Ward and, Co. were anything more than the malinger.-; of these works, the owners being Birt and Co. Sir Joseph Ward: That is not correct, and every member of the committee knows it. 411 , . Pearce: "That is rather strange, seeing that they advertise it here." He went on to say. again that he did not agree with tho finding of the committee that there was no evidence of any works in New Zealand being owned by representatives of tiie trust. He disapproved of Hie practice of giving rebates, as being unfair to the small producer. Ho uvgcu also that it was 'unlair that wealthy concerns should be allowed to register here with small capital, and to conduct their business in such a way as to escape New Zealand income tax. He urged also the necessity for Government control of shipping, in order to combat trusts. He was opposed to all trusts, whether they were controlled by British or American capital. Sharp Retort by Sir Joseph Ward. Sir Joseph Ward said that the report of the committee was a very important one, and. the matters it dealt with wero of the greatest importance to this country. It was rather to be regretted that upon the introduction of the report the j member for Patea—a member of the i committee . ! Mr. Witty: He was on a fishing expedition all the time! Sir Joseph AVard said it was to be re- i gretted that the member for Patea had j tried to show that, the firm of J. G. j Ward and Co. wns in some way connect- ' ed with' the trust. j Mr. Pearce: Nothing of the kind, Sir | Joseph. I never suggested such a tiling, j Sir Joseph; AVard said he had made it j a rule never' to attack any man private- : ly unless that man attacked him pri- i vately. "If," he aaid, "the lion, mem- j Tjer lor Patea runs away with the idea that I (tin going to stand by and allow him indirectly to attack me, and not defend myself, then he labours under a delusion that I feel it incumbent upon me I to remove. I want in the first place to | rend my own evidonce. I may say that I was called before the committee at my request, because I heard that tlie honourable member for Patea wns attempting to associate me and my firm with the American Meat Trust." Every mem. ber of the committee who had heard his evidence, lie continued, knew: that the statement was contrary to fact. The attack had been made by the member for Patea because lie was "blinded by political prejudice." He would take the opportunity of saying that ho was opposed to trusts and monopolies and combines in this country, and he had never tit any time belonged to one of thorn." Sir Joseph Ward rood the full text of his own evidence and of tbnt of hi? 111.111iiEring partner (Mr. I?. A. Anderson). The evidence was to the effect that the works were acquired by Jfossrs. Birt, Hiiglics and Potter for the Federal Line in order to set freight for thesp steamers, the reason being that tho other works hnd j contracted to give their meat to other | lines. The company's business \vns a freezing business; they did not trade or speculate in meat, f.nd they did not handle meat for any American operators.
In Southland this business was done by the company in opposition, to his. Sir Joseph Ward said that tho member for Patea had tried to create an impression that in eome way or other he wag associated with the trust.
Mr. Pearce: No, not at all. ilr. M'Calluin: That is the only reason he spoke.
Sir Joseph Ward said that it was with his knowledgo that Jlr. Pearce had been collecting information in order to try to associate tho Ocean Beach works with the meat trust, and had attacked him behind his back in the Committee. Ho accused Mr. Poarco of having forgotten what was fair play. He did not contemplate the necessity might ariso for having to put all thie evidence on record, because he did not think all the important matters of tho inquiry would be subordinated by rno member of the Committee to "a personal fishing espedition."
Ilr. Pearce: Nothing of the kind. All my questions were with regard only to tlie ownership of the works. The Controlling Factor—Beef. Sir Joseph Ward said that he had seen from the beginning that the effort of the American Meat Trust to get into New Zealand was a very dangerous matter for this country. Hβ had always recognised that it was tlie duty of the Government if possible to keep fair methods of trading in the face of endeavours by any trust or combine to get control of the business. He was under no obligation to anybody not to aupport any measure to bring this about, lie had never been anything' but a free agent in public life. But he realised that it won}..* he a very difficult matter to deal with the meat trade. He did not see how it would l>o possible to prevent American citizens from" coming to this country. His opinion was that the controlline factor was the beef market, which was wholly controlled by the Americans. The retailers could not sell mutton and lamh alone, and they had to deal with the Americans in order to get beef. The trouble was not in this country at all. And he believed that farmers, who benefited by keen ami active competition among buyers, would demand free and active competition n-jain after the war. He considered , that the only effective way of dealing with trusts would be by effective anti-trust legislation. A Proper Subject for Inquiry. Mr. Pearce, iA a. personal explanation, said that the last speaker had accused him of attacking him or his company in regard to the handling of meat and the works. Sir Joseph Ward: I say you tried to connect me with it. Mr. Pearce: "I refute that statement." He went on to siv. that the Committee was set up to discover whether there was any American money in tho running of works in New Zealand, and he considered it was his duty to make these inquiries. Birt and Company stated in. their advertisement that they were tinowners of the Ocean Beack works, and in a letter they said that they were the agents in Australia for Armours. About theso facts he considered lie was entitled to ask questions. Ho did not attack Sir Joseph Ward or his company in any way. His questions would showthat.
Sir Joseph Ward said it would have been tlio easiest thing in the world for the Committee to have obtained a sworn affidavit as to who were the owners of the works. The firm of J. G. Wnrd and Co. liad no interest in the works.
Mr. G. Witty (Eiccarton) said that the inquiry had proved that Sims, Cooper, and Company were not an Amorican firm. It was admitted openly that Armours were an American company. The Prime Minister. The Bight Hon. \Y. I'. llaseey said thut the committee had been set up as liie outcome ol a. discussion that look place at the Imperial Conference, and lie ilioujjiit the reiwrt and the evidence would justify the setting up of the committee. "1 need uai'diy empnasise the importance ol thia trade to JNew Zealand. Since the New Zealand Government had Inkeu over the meat export on behalf of tliß Imperial Government, the amount of money expended on meat had been £18,515,!l8o. The prices to the producers iiiid been satisfactory, but they must look U> the future, and to take note of what; had happened elsewhere In America. Jsorth and South, the American Trust had .complete control, and were in it position to exploit both producer and consumer, and it was the duty of the Uovernment to prevent such :i urate of things occurriug again. He had reabou to Deiieve that .Argentine meat cost the British Government less than Australian and A'ew Zealand meat." Mr. Pearce: The freight is less. Jlr. Hassey said that the Argentine people Uad made very satisfactory arrangements with. Ihe Imperial Government iroiu their point of view. If they were able to supply more meat than the Ajmy authorities required, they were allowed to sell the surplus on the lingiish market at the ruling market price. They had u great advantage over Australia and iSew Zealand, because the price of Australian and jN T ew Zealand meat was controlled, and the price of Argentine meat was not controlled. Mr. Payne: Why do we submit to tjiat? Jlr. Jlassey: "Because we have no option." it had been explained to him, he lidded, that if this meat were not allowed free on iSe English market, in 'all probability it would have gone to enemy countries.
The report made reference to 6peoial rebates, and he agreed with the recommendation ol the committee in that iiiiiiivr. He did not know whether legislation would be necessary, but if legislation were necessary to prevent the giving -of rebates, he thought it would bo a jjood thing to-have such legislation passed. Profits on "Free" Meat, ft was a popular belief that die agents of some firms at this end could buy lUUjUUO carcasses of lamb aud sell it to tiieir irioiids ut the. other eud. This nas not the case. Tho regulations made it perieccly clear lli.it meat must be distribute*! directly to retailers in '.England.
Mr. Sbiiug: How is it these people can jjTv'o higner prices tiiaa the Government can pay? Mr. ulusbuy: They can't, as a matter of fact, buuauso they havo to re-sell to the Uoverniuent.
Mr. i'ouuy: JJon't they mako a profit on the released meat? . Mr. Massey. "Tho profit they can mako is set iurih in tlm regulations and the arrangement made by tue Eood Controller There is very little profit to be made iu that way." lie explained that Kiere "iad Iweu considerable gambliiiu' in oelts, which had increased iu price very much in the last twelve montns.
Provision for the Future, Mr. Massey said that tho Questions discussed by the committee had rumvud the attention or the Imperial Conference, .lie. read.extraoU iruiu tho oliicial vtyort oi tue proceedings, lie agreed viioroujjlily, iie said, vritn the suggestion lhal control of shipping was necessary, in orde. that communication on reasonable (.erms might be maintained bewten Uie producers and Uieir markets. 'iUo producers had' not suffered seriously up to tho present time lioin tho opinions ui any shipping monopoly. The bnortage \>t steamers was due to the war, and ne did not know that the shipowners wero making very large profits. Air. l'eaiue: Tlie British Government is taking SO per cent, of the profits. Mr. Massey said that in London a. prominent shipowner had offered to sell out to him at present prices, but lie had no intention of dealing on those tenns. The GoviM-niaents of the Empire oiiglit to prepare for post-war conditions by adopting such measures as would mako it impossible for uiiy combination c;, companies to exploit tho producers. Uβ had his own ideas on this subject. Tho Imperial Government had agreed that some arrangement should bo made by which Britain and (he, Dominions should control freights and rates. Hn believed tlint Hie Imperial statesmen would do tho right thin;; for the whole Empire. A committee of tlio House of Commons had been set up to deal with the subject. If the Imperial Government did not act, then tho Dominions must do something for thcmpelve-i. "We must tontrol sufficient shipping .to prevent any exploitation taking place," said Mr. Msissey. %)\b debate was adjourned, Mr. Mnssey liridprtnkiug to allow an afternoon fo> it later in tho week.
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Dominion, Volume 11, Issue 26, 25 October 1917, Page 6
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3,699THE MEAT TRUST Dominion, Volume 11, Issue 26, 25 October 1917, Page 6
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