PRICE OF BUTTER

Dominion, Volume 12, Issue 293, 6 September 1919, Page 9

PRICE OF BUTTER

• AND THE EQUALISATION FUND WHO ESTABLISHED IT? SCHEME WHICH WORKED BADLY MR. MASSEY PROMISES RELIEF The oft-repeated demand of the butter producers for relief from the burden of the equalisation fund was made to the Primo Minister by a deputation representative of the producers yesterday. Tile deputation was introduced by Mr. S. ft. Smith, M.P. There was a large attendance also of mein'bers of the House of Representatives—Messrs, Buddo, Pearce, J. M. Dickson, Hudson,' Bollard. Jennings, Mander, M'Callum. T. W. Rhodes, E. Newman, Young, Reid, Nash, W. 11. Field, and Ell. The Hon. W. D, S. MacDonald was present as an ox-Minister, who had had much to do with the arrangements. regarding butter for some time past. The Hon.'D. 11. Guthrie,who also lmd had Something to do with tlto negotiations with the producers, was prosent. The speakers for the deputation were Mr. A. Morton, chairman' of the Butter Committee, the body through which all .tho negotiations on behalf of the producers hare.been conducted, and tho Hon. .T. B. Gow, M.L.C. The arguments aro so familiar that the.v need not be. repeated. In effect, the demand made <m account of tho producer; was that instead of the butter producers being compelled to use profits from the pxport of butter to compensate, those selling at n lower fixed prico for the local market, this, money should be paid out of the Consolidated Fund. Whoso Arrangement? Mr. Morton said tliat it had been said repeatedly in reply to previous deputa- ■ tions that tho arrangement for the establishment of an equalisation fund had been mado at tho instance of the producers. He had on every occasion clearly and explicitly denied this. , T'lie butter companies had never, except under compulsion, agreed to anything of the sort. Mr. Massey: Have you a good memory? Mr. Morton said that he had a good memory, and lie repeated his previous Statement. It was true that the dairy companies had agreed to accept tho equalisation fund by resolutions at meetings, but the position was that these factories had been competed to do this in order to save from injustice those factories compelled to serve the local market. He produced a statement signed by Mr. Massey in March, 191b, before the agreement was made, in which three courses were proposed, as follow:- Prohibit export and so compel the factories to supply the local' market; (2; seize butter from the stores and put it on the local market, paying tho full export value for tho butter; and (3) estiblish (an equalisation fund. • Mr. Massey asked for the document, and when he. received it he said that it was a Departmental document, signed by him as head of the Department. ■Mr. Morton said that,'the bolter pro-'! ducers liad given an unwilling consent to the agreement. Mr. Massey had called the Dominion Committee together no less than threo times in connection with it. Mr. Massey: I did not. But go on, I will clear tho whole tiling up presently. Mr. Morton repeated that the producers had agreed to the equalisation lurid only under protest. He pointed to the fact that the Government was paying a subsidy in respect of flour, ami that if it was fair to follow this course in Tespect of one food product, it should be fair to do it in respect of butter. The Hon. J. B. Gow did not go into the merits of tho dispute between Mr. Massey and Mr. Morton, but he did discuss Hie underlying principle, and ho declared that it wns unfair that one seciton of the community should ho asked to bear tho burden of keeping down the cost of a commodity to .other sections of the community.. Ho further pointed to the fact that butter producers were the poorest settlers'on tho land of tho country. ; Cheeso. factories were located in localities where .the roads were good because it was necessary that the milk should be brought to the .central factory. But many of the men producing butter were "located in. tho backblocks, and somo of them had to pack their cream to the factorie3. "Grossly Unfair." Mr. Massey, in reply, thanked the speakers for welcomes oil'ered to him on liis return from Europe. "Coming to this matter," he 6aid, l "l*w'ant to gn back a bit. 1 should just like to say tliat my attention was called on my arrival here to some statements made in my absence with regard to myself which are grossly unfair and absolutely incorrect, Mr. Morton will, remember that when the butter-l'at tax wns imposed in the first instance 1 was in England, attending the first meeting of the .Imperial War Cabinet. I Was kept informed to a certain extent as to what was going oil j in New Zealand, and J cabled to the j Acting-Prime Minister mv opinion of what was proposed so far as 1. was able to understand it. It turned out just as I had expected. When I came back I was waited upon by a deputation asking me to remedy tho existing state of things, | 1 placed tiio position before my colleagues in Cabinet, and the butter-fat tax was taken oil'. Is tliat correct? Mr. Morton and others: Yes. Mr.. Massey:.Time went on, and it became necessary to see that tho local market was supplied. There was a good deal of discussion as to tlie method to bo followed. Mr. Morton has produced this document, and he has left the impression that it. came from me. It is true that tho paper bears my signature, but what_was quoted was not my opinion. It was the opinion of the SolicitorGeneral, who was asked to make recommendations as to methods. . Was Mr. Morton aware of that? Mr. Morton: It states that thero (pointing to tlie document). Mr. Massey: Yes, but you didn't say so. What Mr. Massey Did. The statement had been made, he continued, that the arrangement had been made by him, but in i'act it had been made wnen he wis in . England. While he was in England he received a cablegram from the secretary of tho Butter Committee informing him that the producers had arranged an equalisation rund. Mr. Morton: We admit that, but wo Bay that it was dono unwillingly. Mr. Massey: I aiu not done with it •yet. Mr. Agar, in this room, on January 31, l'JlB, said tins: "Does Mr. Massey want the committee to make a report on the equalisation business?" I said: "I want an expression of opinion, but it is scarcely necessary for me to Bay tliat I am not going to bo a party to the awful arrangement of last year" (the butter-fat levy). There was my distinct statement that I would have nothing to do with it. I said further, and I used an unparliamentary expression: "It seems to mo tlmt the exporter escaped scot free, and tie unfortunate devil in the backblocks paid." He went on to say that at tknt time the export prico of butter was Is. sd. per pound. It vm only when tho price of butter went up in England that the position altered. On July 23, 1918, Mr. Morton informed him that tlie Butter Committee, having authority from tho producers to do so, had resolved to recommend the establishment of an equalisation fund, and he asked Cabinet to take tiie matter in hand with tho assistance of an advisory committee to act in a similar manner as the Advisory Committee had acted with tho Board of Trade. The suggestion had come from Mr. Morton himself. He (Mr, Massey) had never suggested it, anil he did not know that any member of tlie Government had ever supported it. Mr. Morton said , that the Government had not proposed a remedy, and I he producers had had to propose this method of protecting those factories supplying the local market from injustice which they would otherwise have suffered. Mr. Massey: There was no injustice until butter wont up in England. As Boon as butter went up in England, then you had a case, but so far as I can see you never used that argument. say that you had a.good case then

becnuso the producers are entitled to the equivalent to the world's market value of what they produce. But I did object to, ami 1 took measures to put down, the attempts made by the middlemen to put up the price to the local consumer. . Mr. Morton: Wo don't represent tho middlemen. Bad Bargain Vetoed. Mr. Massey: I Had my eyes opened when-wo eauie bacK from liugiantt •and 1 saw that the butter producer, who is apparently not able to lake care of limisen in business, vats being exploited all along tiie liiie. i tlon't know wlietner Mr. •Morton understands the trouble that 1 had to get the butter producers to accept the bargain made i'or them. 1 saved them on tnat occasion lrom (jetting into a mess. When I was in London I saw what they had proposed, and i said tlirt 1 would not agree to it. ii was thtii proposed that'the butter should be sold to the Imperial Board of Trade.! in this way: the Board of Trade was to take what it couiil find shipping space tor, and the rc-st would be left in the hands of the producers. 1 could not agreo with that arrangement, and it was in that portion" of the business that I took an active part. I made it my business to see the Shipping Controller and those working with him. At that' time the American troops were coming across, and 'shipping was in a bad way, but I had confidence enough in the ljritish mercantile marine to knowthat it would come right later, as the season went on. But here is the potsition you were getting into—and I believe lily veto stopped it—. . . the meat commandeered, on which the Imperial Government was paying heavy storage, would have been taken and the butter would have been left. You may be sure that the Imperial Government would not have gono on paying enormous sums on the storage of meat and left tho meat here in order to take away your butter. I could sea tliat there would be a mess. I took the responsibility of vetoing the arrangement then proposed, and my action has turned out right. Mr. Morton will remember the long timo it took to get the first negotiations through. At that time the-factor-ies were already open, and there was no cash on. pay days. I saved the position again for the butter producers. I borrowed the sum of ,£600,000 from mv colleague the Defence Minister, and used it to pay the suppliers. It is just as well to 'remember these things, and I mention them to bliow the interest I have always taken in tho producers of this country, and especialy in the butter producers, a section of hard working settlers with whom I have the utmost sympathy. Mr. Morton hastened to, assure the Prime Minister that he did not wish to depreciate the efforts of the Prime Minister ill tho past. The request was now being made that ho should do something more. The Local Price. Mr. Massey said that the decision mado by the butter producers to adopt tho expedient of an equalisation fund had been made by the producers without any request or suggestion from him. He had never asked tor it. It was true that tho Government was taking steps to keep tho price of butter dowii in this country; and gcnemt'.y to control tho cost of living. Mr. Morton: You said you would not allow an increase in prico for the ioeal market. Mr. Massey: At the time I felt that we were paying tha full export value for butter, and at that timo I could not allow an increase. Mr. Morton: Do you suggest that if wo had made representations to you at tho time tho export price rose you would have allowed the price for local consumption to rise? Mr. Massey: I would have reconsidered th& whole position. When I am met wij.li a difficulty I find a. way out of it, and I think that, probably I could have got out of this: one. But the bargain was made and now you are faced with this difficulty. I have not been idle in this matter. I have already had tho subject beforo Cabinet, and I have discussed the position with the head of the! Department. I think I can seo a way out. I am not in a position to furnish yon with details at the present moment. It would not be fnir for me j to do so. I don't quite know how to put it to you at the present date, but I may. say that I believe in the principle that you as producers .should get tho export value of your butter. Mr. Morton: That is all we ask. Mr. Massey: And I think I can proini?« that you will get it. That is all I can toll you-to-day. As soon as details are arranged the Department will have to discus? it with me, and I have a littlo more to do with it in Cabinet, lint you car. depend upon it that this will be tho basis of the arrangement—that you will get tho export price for your "butter. Last Season's Fund. Mr, Mander: What about the present equalisation fund? Mr..Massey: I am speaking about the present season only. Air. Morton asked that the arrangement should .be made retrospective. Mr. Massey said that his promise applied to this season only. "You sec," lie said, 'vast season's arrangement was your ' own." _ ' Mr. Morton at once denied, this. Mr. Massey: I know what was in Mr. Morton's mind. lie was very anxious to get the'bonus that was being offered in. England. He knew that a similar arrangement had been made in Australia. He had been to Austfalia to mako inquiries on the subject, he saw their system, and thought it was working all right, and he came back thinking that it would lie a good thing to bring into operation here. 1 know there have been complaints about it, and I know that it j has worked badly. I take responsibility for putting it right this season, but I can't make the, promise asked by Mr. Morton. . . . And just a word about the bonus. If it had not been the bargain upon which I insisted, who would have got the bonus? Quite a large share of it would have gone to tho middlemen and not to the producers at all. There irould have "been no shipping for the' butt?!. :'iid litaiv of (he pr-'ducfTs would have had to self here to the exporters, and tho exporters would have got the bonus. I leave it at that. I will keep the promise I have made, but I can't make the other promise I am being asked to make. Tho Agreement, Th<j noil. W. D. S. Mac Donald said that when Mr. Morton had first made liis proposal for an equalisation fund he had said that this was an extremely generous arrangement—that the ivhole cost of the scheme should be thrown on one commodity nlone, - , Mr. Massey agreed that this point of Mi\ Mac Donald's was a good one. He himself had said that other commodities should be required to bear their share as well as butter. Mr. Mac Donald eaid that the ideas that the Government had had in 1916 about the cost of butter production would liavo to be revised. There was no doubt that the cost of production was much higher to-day. The'price of land had increased, and there was no doubt that the new man going on tho land was having a hard time. The Hon. D. H. Guthrie said that in the negotiations he had had with tho Butter Committee the prico of Is. sd. had been absolutely accented by the committee as the local price, if they got the price for which they were asking for export. Mr. Morton: They did not get that price. Mr. Guthrie said tliat he would not have been surprised at tho time to receive o demand for an increase of the export price, but no such demand had been made. Question of Increased Local Price, Mr. Morton (to Mr. Massey): You say you would have consented to an increase m tho local prico? Mr. Massey: J do not say that. I think I might lave got my way out of tho difficulty. But I would not have consented to the present arrangement. Mr. Morton: You were asked to . increase the local price and you refused. Mr. Massey: Because I could not see my way to increase the local price at that time. I don't say that I will increase the price to the consumer now. Mr. Morton: Aro you prepared to let the price go up for the local market? ' Mr. Massey: 1 am not. , Mr. Morton. You have always objected to that. Mr. Massey: But that is no business of yours if you get the export price for'your butter. At the timo we fixed the price for the local market wo lixed the export value of butter. Then when the mcroaso

came in England you had a good claim to ask for an increase in tho local price. Mr. Morton: You would not give it to us. Mr. Massey: I was not here. It is no use quibbling, Mr. Morton. Mr. Morton insisted that Mr. Massey had refused to allow tho local price to rise. Mr. Massey: Mr. Morton, the fact is that you made a very serious mistake, and 1 think' it would be better for you to own up to it. Mr. -Morton denied this. Mr. S. G. Smith; M.P., asked just as the deputation was dispersing whether it couJd be taken that the request of the deputation was absolutely refused. Mr. Massey: I have not snid so. Consideration of that is a matter for Cabinet.