STILL UNSETTLED

Dominion, Volume 13, Issue 142, 11 March 1920, Page 5

STILL UNSETTLED

THE PRICE OF BREAD

MR. MASSEY AND THE

BAKERS

GOVERNMENT SCHEME NOT ACCEPTABLE

Tho question about the price of bread which has arisen between the master bakers and the Government was very fully discussed, by a deputation of master bakers waiting on the' Prime Minister yesterday morning. The members of the Board of Trado were also present at tho interview.

Mr. W. J. Logan, secretory for the. United Master Bakers of New Zealand, put tho ease first of all for the association. He said that the association had had a conference with the Board of Trade at Christchurch, and after this conference a definite arrangement was arrived at with the Board of Trade, lmt it was fully understood that the arrangement was subject to confirmation by Cabinet. There was a chance that Cabinet might not Ix 3 called together in time to permit of authority being given to the bakers to raise the prico of bread from March 1. tho dato on which the new flour prices wero to como into operation. The bakers wero then given provisional authority to charge the prices agreed upon ns from March 1. This explained the reasons for tho increase that had been made by the bakers all over the country in the price of bread as from March 1. Increases in Cost. Eegarding' the proposal of Cabinet that the proposed increases in the prices of flour and bread should be halved, he thought that Cabinet had'overlooked tho increase that had taknn place in the cost of manufacture. For the purposes of calculation it was proposed to allow 1300- 21b. loaves of hread from the ton of flour. The increase of one halfpenny per loaf represented £2 lis. 2d. per ton: Out of this had to be paid an additional .£1 10s. per ton for flour, leaving £1 is. 2d. per ton. But since the bread prices were gazetted in March, 1918, carters' wages had increased 12s. per week, and it was the general experience that a carter delivered one ton of bread per week. In the bakehouse operatives had had advances of 19s. per week, and an operative turned out just about a ton and a half of bread per week, making the increased charge per ton 12s. Bd. On these charges alono the increases were £1 is. Bd. per ton, and the Government proposed to allow only £1 is. 2d. He contended that other expenses in connection with the bread business had increased quite 30 per cent, in the past two years. Mr. Massey: Will yoa explain that SO ner cent? .. | Mr. Logan said that the Board of Trade had been supplied with figures which will justify tho statement. He mentioned among the increases repairs to .carts, saddlery, shoeing, and, horsefeed. Mr. Massey: What you mean is that certain items have increased 30 per cent. Mr. Logan: I think the increase is general. ■ Mr. Massey: You do not suggest that your general expenses have increased 30 per cent? Mr. Logan: Yes, we do. Take coal, for instance. «s one item Mr. Massey: Very well, we .want to lie supplied with those items. What of the Future? Mr. Logan said that he would be able to substantiate his statement, and what the bakers feared was that the increases might still go on. The Government was offering them a bare minimum, putting them in a worse position to meet possible increases than they had been given '• In March, 1918. None of them knew yet what the price of coal was going to bo during this year. Mr. Massey: Do you expect that coal will cost you more in the next twelve months than it has cost you in the past year? Mr. Logan: Wo nro not in a position to, ""say." ' Mr. Massey: Supposing there is decrease in. the price of coal, will you decrease the price of bread? . Mr. Logan protested that the comparison he was making was between tho present alid March, 1918, and in that time the price of coal had advanced a great' deal. In the next year they rniidit yet have to pay as much as M a ton for coal. There were numerous other items, tho cost of which were advancing day by day. Those bakers who used crushed malt in bread-making had found that the price had increased by nearly fifty per cent, in the oast month. Other lngredier.ts in bread had increased very much in the past two years, and so far hs 'the bakers could see, the: increases would continue. Tho Auckland bakers would havo to face a new award in Juno, and, of course, tlrs would mean a demand for more pay and shorter hour?. These factors, which ns»d to i% negligible, hail how to he taken info account along with the price of flour in determining the price of the loaf. iCost of Delivery, > The bakers thought tho margin allowed between the over-the-counter price and the delivered and booked price was not sufficient. For delivery he suggested that they should be allowed an additional id. per loaf, to cover the increased cost of delivery. Ho urged that if the Board of Trade fixed a cash price for bread bought over the counter, they were doing their duty- by tho public. If the people wanted cheap bread they could get it by coming to the shop for it and carrying it away. If the public wanted to have bread delivered they should he prepared to pay for it. Mr. Massey: What is tho total cost of delivery?. Mr. Logan: It varies from Id. to ljd. per two-pound loaf.. Mr. Massey: Surely that is an extraordinary price for delivery. Mr. Logan said that the price was not excessive in view of tho low value of the article to bo delivered, and the number of calls to be mado by the carter for tho delivery of small quantities. It cost not less than £1 per week to keep a man and a cart and horse on the roads. The public should pay a reasonable cha>se for this service. Mr. No one would expect you to deliver bread for nothing. The Real Cost of Flour. Mr. Logan said that 'in the. south an extra farthing per 21b. loaf was allowed • for delivery. Ho declared that the bread baking Jndusftry had practically been "ridden on tho curb" for two years. Bakers had not been allowed any latitude at all, and it was only by tho adoption of better methods • and more efficient management thnt they had been able to carry on at all. For tho past year thero had been a certain amount of cutting by millers, but the bakers did not expect thai there would bo any such cutting next year. There would be 60 little flour that the demand for it would be very keen indeed. Certainly bakers would not be able to get. flour at less than tho Board of Trade p'-iccs. JLast year some bakers. had received discounts of from 10s. to 15s. a ton on flour from some of the mills.

Mr. Massey: Don't you tliink the millers will be in as good a position to mako the same profit, and/ to offer the same advantages as last year? Mr. Logan said that he was not in a position to say how the millers would he likely to act. He thought that the important factor this year would be the law of supply and demand, and when demand was in excess of supply, as seemed possiblo, there would be no drop in prices. The master bakers felt rather Aggrieved that ?o much had been made of the fact that the recent increases in the price of bread had not been authorised. They knew that the authority given to them by the Board of Trade was provisional, but after this arrangement had been made they thought that before any drastic alteration was made the master bakers should have been consulted on the subject. Mr. Massey: The master bakers should have consulted mo before putting the price up. Mr. Logan said that the bakers could not go to Mr. Massey because be was not at hand, but they had gone to the Board of Trade, which they understood was a properly constituted body to deal with such matters. No slight on the Prime Minister had been intended.

Mr. Massey said that ho was not concerned with that aspect of the matter at nil. He was concerned as representative of the public. Removal of All Restrictions. Mr. Logan 6aid that he thought tho time had come when all restrictions on the malting of bread should bo removed. There were always traders prepared to cut prices, and these would prevent the, raising of prices. Mr. Massey: I hope that that time will como soon.

Mr. Logan referred also to what ho termed "insane cutting" by small bakers. Many bakers who had been in tho trade for many years had thought that they might be able to take life a little easier, but they had. in fact, to work harder than ever before.

Mr. A. .T. Clestg (Wellington) said that the Board of Trade had recommended an increase of a halfpenny per lonf in Wellington in March last, but Cabinet would not agree to it. There had been some talk among tho bakers then about heing compelled to close (lowir* but it had been decided to carry on until the new season when prices would again he fixed. When they were announced the bakers felt that the case was desperate. They had only one of two courses open to them-to maintain the price thev had fixed with the M'.nrr of Trade or to close down. They had decided to take the wisest course and tn keep tho people supplied with bread until they were in a nositinn to placo the matt»c before the Prime Minister. When they had approached the Board of Trade in Christchurch they had made a claim for an increase of one penny, assuming that tho increase in the price of flour would not exceed 30s. per ton. It was three vears since there had. been an increase'in the price of bread in Wellington, and the increase now given would barely cover the increased cost of labour, without taking any account of the increase in the price of flour. Increases in the cost of running tho business had been borne by the trado for the past three years, and they could not be borne any longer." He went on to itemise some of "the costs of the business. He mentioned that bakers' had now to pay- £U per ton for chaff. ~•,_. , , Mr Ma«ey. I see that chaff is quoted in Ohn<tchiirch at £7 per ton. Mr. Cle?g replied that thnt was the prico without sacks, and sacks to-day made a difference of .£2 per ton in cost. Th»y had to pav .£2 15s. per ton for coal, and'they had paid as much f.f [£i per ton for it. These increases had been graduall "oing on. and it could be exnected that they would still go on. If "the price of flour were brought back to .£ls per ton, they might be able to so nn with the increase of a halfpenny in the prico of the loaf, but not otherwise. Bread and Other Commodities. Mr. Tonks said that the increase in the price of 'bread had not been nearly so hi"h as had been the cost of other commodities in the past three years. In Australia, where the prico of hV.ir was tho same' as in New Zealand, the prices for which they were asking were in operation. Thev were allowed there an extra farthing a loaf for "extreme", deliveries, and this would be applicable in Wellington to such suburbs as Ivelburn. He complained that the bakin* trade was being treated very much worse than any other. The farmer demanded his price and he got it. Farmers'' Prices. Mr Massey said that the price of flour was only nominally -610 10s. -ei; ton. This was subject to a reduction of H per cent, for cash, making the price ,£l6 Is. wl. As a matter of fact, the figures supplied to him by an accountant showed that tlie actual cost of flour to the bakers would be £Vo 18s. per ton. It was not correct that the farmer demanded his price and got it. Farmers never did get the prices they demanded. The farmers prices were fixed by the' Imperial Supplies Department. The wholesale once of meat had never been raised in tho whole period of the war. Bcgarding wheat production, he. did not know quite what the future held in New Zealand. Farmers found that there were other branches of farming which paid very much better, and they were going out of wheat production.' Unless something had been done in a few years there would' have been very little' wheat in the country. The Government had had to increase the nrice V wh'cat, but the increase hnd been iieaiiy so much as the farmers had asked for. Personally he would be very glad' when the time came when they would he able to depend again on the law of demand and sunply, but so isiv as he could see these high prices would continue for some months yet. Then be hoped that they would fall. In the case of some commodities not oroduced here the prices wo-jld rise still higher. Detail Questions. A °cneral discussion followed bearing generally on the amount of profit that a taker could expect to make out of a ton of flour by converting it into bread It was generally conceded that tho mast that could be made from a ton of flour by machine was 1300 two-pound loaves, and Hint by hand baking the amount might 'be increased by as.much ns Ml loaves per ton. Complaint was made by the bakers against the new terms of purchase imposed by the millers, particularly in respect of.the discount being payable only if payment was made within seven days. It was pointed out that the invoices received by country bakers would be dated moro than seven days before receipt, and it would never be possible for these men to get the discount at all. ~..,,• Mr Massey promised to look into tn s matter He thought that the us*»l trade practice should, be followed-tq give discount for payment within thirty days. Mr Massey's argument on the question of tho profits of the bakers was based on the calculation that out of a ton of flour costing JUG 10s. per ton the baker could get a return of somo £iS. It was pointed out to him by the 'bakers that this took no account of the cost oi manufacture of loss of bread in the process nf baking through faulty loaves, and ot bad debts and other business losses. Generally they urged that the bakers could not continue unless they were given higher prices for their bread. It was further pointed out (hat they had been nble to get from the mi ler certain cuts in price last year, and but for the fact that some of them had been nble to buy dour to advantage they would not have been able to carry on for the year. They did not expect to get these cuts this year. Some of them had tried to do it, but in order to cover themselves for the year's operations had had to buy at the prices hxed by, the Board of Trado without ony reduction. Mr. Massey said that the year was only beginning, and there might he changes up or down in later months, according to the amount of wheat available for milling. He could not spcak positiveiy on the point, but he did know that a larger acreage was being put into wheat in the wheat-growing countries of the world than had been the case in vecent years, and this would affect, in all probability, the price in Now Zealand. It would be impossible to make inv predictions as to this until somi> information was available as to the returns from the Eurouean and North American harvests. Mr. Massey's Proposal, He would make a suggestion to the bakers. Itc had beside him a number of forms which he would ask the takers to fill in monthly, to let Hie Govern, ment know how they were faring, what their oxpensps were, and the rate of profit belnjf vtait. All information supplied would be confidential. Furnished with these monthly statements, he, with' the Hoard of Trade, would bo guided by the position ns it might change from time to time. He did not wish to do anything unfair, but they had got into a most unfortunate position in this country. They were involved in a vicious circic. Prices went up in ono Hirness. and immediately this was followed by increases in other businesses, until tho circle was complete, anil the general rise brgan again. Nothing would slop this except increased production, and this did not depend on this country, where production had been well maintained. He hoped that soon this would end, and that we might get back to a healthier state of business. Especially since the armistice had conditions boon unsatisfactory. There had not been much room for fault-finding before the armistice, but there was much to complain about now, and it was not matter for surprise that people did complain. Increased profits wero not the only cause of the increased prices. What the Government had to do was to satisfy tho people that profiteering was not going any further than could be avoided, and

the Government would seize every opportunity of doing this. Me was not making any suggestion of profiteering on tho part of tho baker*,. Ho thought that tho offer he was making to them was a fair offer. He would suggest that the prices ns fixed by the Government should be adopted, and that tho scheme should bo tried for a month. If it should then he found that a loss or an insufficient profit was being made, it could be rectified. He would not ask for an immediate answer to his proposal. Who Will Pay? Mr. Eellow: In tho event of the bakers making a loss, can we expect to he recompensed? Mr. Massey: 1 think that would be asking too much. W* would have every producer in New Zealand asking for a like guarantee. We arc already subsidising flour to prevent the undue rise in the price of bread to the people. Mr. Kellow said that the bakers knew tlioy were likely to mako a loss, and they wished to know whether tkoy would be recompensed for this loss. Mr. Massey: 1 don't think you will make a loss,

Mr. Clegg made a further proposal to Mr. Massey, that tho bakers should be allowed' to iharge the same for their bread over the counter as grocers distributing bread were Allowed to charge for their bread. He pointed out that the leading bakers in AVellington had no shops, relying on the grocers to distribute their bread, but in the case of those who did sell over their own counters, it was only fair that they should be allowed to charge the same as the grocers selling tho same bread under the same . oondilions. Tho proposed schedule raade a difference of a halfpenny in favour of the grocer. Mr. Massey tubsequently agreed to this.

In support of the statement that baking was not a profitable business, Mr. Tonks informed the Prime Minister that nine takers had "gone through" in Wellington last year, and about fifteen in Christchurch and suburbs. He pressed tho Prime Minister to allow the bakers to maintain the prices they had agreed upon with the Board of Trade. Mr. Massey Inflexible. ' Mr. Massey said that he could .not do that. He was willing to consider tho details in suggestions made to him, hut thfc basis of the beginning of the scheme he had proposed would have to be tha prices fixed by the Government. Mr. Logan said thnt the bakers should not be called upon to take the risk of loss on this scheme, if only for a month. Other members of the deputation supported this plea, saying that it was not fair to ask the bakers to make a loss, and that tho trade wns being subjected to restrictions such ns had never been impused on any trade in the country. At this stage the bakers withdrew to consider the proposal made with Mr. M.tssey, and they conferred with the Board of Trade concerning it for most of the afternoon. Later they came to Mr. Massey again. Modified Proposals. Mr. Logan said that the bakers recognised that they wero faced with a very important question, affecting tho future of the trade, and they recognised the difficulty of the Government's position. The bakers were willing and anxious to do the fair thing, just as they hoped that the Government was willing to do tho fair thing by the trade. In view of this they were prepared to modify somewhat the proposals they had made to the Government earlier in the day, in the hope that a wav out of the'difficulty might be found. Ho honed that the new system of returns woula he given a fair trial, in order to prove that the position of tho bakers was as they had stated it to be. Mr. Massey: Tho returns will be in your interest really. Mr. Logan said that he thought this would prove to be the case. They hoped that the making up of these returns would have the effect of showing to some of the smaller men in the trade, who were apt to go in for cutting, thnt they wero losing by the practice, and they would hesitate before going on with it. But he Dointed out that many bakers weie working very hard, and some of them had neither time nor energy after the day's work- was done for making out big returns. The returns must be simple, and the making of them must be mado compulsory. The resolution of the bakers was as follows:—

That we accept ns a trial afrrtli

ng advance for the 2lb. loaf, over rbe halfpenny ndvnnce oftered by the Government, providing that the pt'icf, of flour remains at <EIG lfls. per ton, and ask that the filling in of the returns lie made compulsory. Ie pointed out that the returns could mt go in before May. The month of larch was already half through, the renrns had to bo prepared and circulated o the bakers, and at tho present time rom 75 to 90' per cent, of the ,bakers i-nuld bo unable to fill in the returns. The work would be very easy,to a man iccustomed to figures, but not to a man ina'ble to keep any but the simplest sysem of books. The Board of Trade had made the suggestion that he pro through :he forms with the idea of making them more 6implo and Teadily understandable bv the least intelligent man "Mr. Massey said that if the bakers were goin» to accept the return it wasn t worth while to split straws about farthMr. Logan said that a farthing a loaf meant a great deal to the baker, who was at present being asked to carry on at a loss, and for three months. Mr. Massey: I don't admit that. _ Mr. Logan: But to the baker it is a painful reality. He can see it quite plainly. We have men here who havo been 4 n the business for half a century, and tliey know what this means to their trade. , „,..,, Mr. Massey. The ylain fact is that on the figures submitted the maker is in a better position than ho was last year, and I liavo some figures here to show that some bakers last year made a very good profit. Mr. Logan said that these might be the men who had been able to buy from the lpillers on advantageous terms. The millers would not be cutting prices this vear. . There would be a shortage of flour, and the millers would not be HtixiotK to throw it nway.

Mr. Massey said that, there wqs always a. shortage "at this time, of the yeaT. It was quite truo that there would be a shortage if the. Government could not import. Mr. Logan said that the Australian Government did not seem to be anxious to allow any moro flour to go cut of the country. Mr. Massey: They must allow our.? to go out. because it has been bought and paid - for. No Agreement,

Mr. Logan said that ho had nothing further to offer. The matter was a most serious ono for the trade, and it bad been given most serious consideration.

Mr. Massey: At present I am not disposed to go back on the suggestion 1 made, which was that you accept our prices for the coming month, and that uoy give us the returns of which I have spoken. Mr. Logan said that the returns could not be given to the Government before the beginning of May. From previous experience it would take, some time for rhe Government to deal with them, end to make a decision on them, audit would bo the end of May before any relief could be given. This meant from ttfo to three months'' trading.'

Mr. Massey: Well, there- you are, gentlemen. I don't think I can say any nioro at present. Air. Clegg explained what the new proposal meant. It meant that the bakein were prepared to serve tho stores at a farthing less than the Government price, if they were allowed to charge a farthing more for bread over their own counter, and to' collect a farthing more for delivery. This was an endeavour to balance things. Mr. Massey said that he would accept the farthing extra for delivery. There was then only tho other farthing at issue, and he felt that the bakers should be prepared to give his scheme a trial. It wis only a question of .his wi'":": for a month, and he did not think thi6 would affect the bakers seriously during tho month of trial. This was the wosiHon when Die interview ended. Mr. Mnssev had not accepted the baker;.' proposal, and they had not intimated what they wero going to do about the offer of the Government. Tho bakers conferred for a fow minutes, but decided to postpono further consideration of tho matter until to-day, when they are to meet tho Board of Trad').