The Dominion TUESDAY, JUNE 10, 1919. A CASE FOR INVESTIGATION

Dominion, Volume 12, Issue 219, 10 June 1919, Page 4

The Dominion TUESDAY, JUNE 10, 1919. A CASE FOR INVESTIGATION

Facts which domand investigation were touched upon by the New Zealand High Commissioner when he took occasion the other day to condemn what he described as "the exploitation of woollen mods in Great Britain." _ The brief cablegram in which his remarks were reported shows that Sir Thomas Mackenzie repeated charges which have been made insistently by some Dominion producers—charges which declare in cffcct that wool bought in this country under an Imperial commandcer is ultimately allowed to become a medium for profiteering. He stated that the price of woollen goods in Britain was fourfold the pre-war price, whereas New Zealand was only charging 55 per cent, over the pre-war price for wool. Such a comparison, of course, calls for material reservations. Apart from the cost of raw material, the wages of labour and practically all other manufacturing charges in Great _ Britain have greatly increased since 1914. Making all necessary allowances, however, the discrepancy between the price paid for New Zealand wool and tho price charged for the cloth into which it is manufactured seems to be unreasonably great, and British manufacturers certainly ought to be asked to explain why it is that their American competitors, according to Sir Thomas Mackenzie, arc selling tweeds. at 3s. per yard under the English price, though the American manufacturer pays much more than the English for his wool. The questions raised are of great moment, not only to wool-growers, but also to the consuming public, hero_ as well as in Great Britain. Obviously, Government control leading up to uncontrolled exploitation by private traders for their own benefit and at the expense of both producers and consumers would be a particularly farcical failure,_ and there is at least suggestive evidence that this is true of the Imperial commandeer of New Zealand wool.

The position in regard to fcEe disposal of the local wool clip is much complicated by the fact that it is only an item, though an item of great importance, in the total body of supplies sent to the London market. • While the- war was in progress the sale of wool and other, produce to the British Government was defended not only on grounds of Imperial policy, but as relieving producers from what promised other: wise to be insuperable difficulties in getting their produce conveyed to market. It was subsequent to the termination of hostilities, however, that tho requisition period for Now Zealand produce, including wool, was extended to June 30, 1920. In a statement which he made in February last, tTie Hon. D. H. Guthrie contended that tho requisition arrangement had proved so far to be in the best interests of the Dominion. On that occasion the Minister quoted a cablegram from the Secretary of State for the Colonies which reported that, as a result of the general cancellation of contracts by belligerent Governments, the market for wool was then depressed. The same cablegram mentioned, however, that His Majesty's Government had decided not to buy the British clip of 1919, "because the farmers in general are dissatisfied with the prices, and because the Government do not now require wool for military purposes." It was added that under .the new conditions I

Bntish South African, East Indies, and bouth American wool will bo sold freelv in the British markets without restrictions. Australian and New Zealand wool held by tho Government under the purchase schcmo will be auctioned in ?' i,\. a V d , will °1 )011 to all British and Allied buyors. '

In the conditions of a falling market for wool, those arrangements no aoubti wciilrl have given Australian and J\cw_ Zealand growers a favoured position. It docs not appear, however, that there was any reason to antieipato a continued fall in the price of wool; all the evidenco seemß to have pointed in the opposite direction. There are some very big factors bearing upon the matter apart from the positive indication now afforded in the inflated price of woollen goods in Great iSritain. borne arresting facts were An ' instance, by Dr. W. A. Giiapple, when he informed an Auckland interviewer the other day that in his opinion prices in Great .Britain would come down, but the prices that the primary producers were getting here would rise, because thp.v had not been commensurate with the prices in the world's markets. Iwinß1 w inß W cr in Lond °n (lie stated) hnd informed lnm on the evo of his departure for New Zealand that ho had just rotnrned from South America after an exhaustive inquiry into South American securities and prospects, and lio had found that the 'number of sheep had been reduced in the Argentine fmm M.OOOMO (o 84.000.000. Thodemand by the Central Powers for wool would bo unprecedented, and must bo supplied, lliey hnd been usin/j naper instead of wool for somo timo pnst. It would be possible, no doubt, to materially _ extend the citation of facts tending to justify Dn. Chappie's opinion that the demand for wool will be sustained, and that prices, if they do not rise, can hardly fall for several years to come. From the, standpoint of tho New Zealand producers, committed as tney are by tho arrangement under

which the wool clip of this season and next season has been sold to tho Imperial Government, the state of affairs in Great Britain of which Sir Thomas Mackenzie has complained seems moro likely to be aggravated than to bo remedied in tho immediate future. The problem of dealing with any profiteer-, ing by manufacturers who purchase New Zealand wool is much complicated by the fact that a great part of tho wool henceforth placcd on the British market (from other sources of supply than Australia and New Zealand) will be sold free of all restrictions. It is another point to be noted that there is an arrangement for the distribution of "surplus profits" to Australian and New Zealand growers. Some timo ago it was stated that: "About twenty per cent, of the New Zealand clip is issued for civilian purposes, and half the profits made on such sales will be returned to New Zealand growers." It was added that the amount for distribution in this connection was unlikely to be individual 1 1 aree. Presumably a falling-off injnilitary demands "and a corresponding increase in the amount of New Zealand wool made available for civilian consumption may to some extent increase the amount of surplus crofits, but thero is no late information on the point. The facts which are brought out and call for investigation are that an Imperial requisition which aims generally at keeping_ down prices, and does definitely limit the price obtainable by New Zealand producers, is so imperfect in its ultimate development that the consumer of goods manufactured out of tho "controlled" raw material is exposed to unhindered exriloitation. As a means of keeping down prices tho Imperial requisition is obviously weakened by the fact that much of' tho wool marketed in Britain, including that produced this year within its own borders, is to be sold henceforth without restriction. Even so, howover, most New Zealand producers would probably have been content to .abstain from criticism of _tho_ requisition arrangement (which in any case is a binding agreement) had the British Government prevented profiteering in the goods manufactured out of the requisitioned wool. In the circumstances disclosed New Zealand growers are certainly entitled to ask the British Government to searchingly investigate the charge of profiteering, and obviously it is wholly in the interest of tho consuming public here and in Great Britain, to support such a request. Failing measures to check this apparent injustice, representations should be made to the Imperial authorities with a view to ending the commandeering of Nop Zealand wool.