WELLINGTON NEWS

Hokitika Guardian, 3 November 1927, Page 4

WELLINGTON NEWS

PROD BCE CfIEQUES

(Special to “ Guardian ”.)

WELLINGTON, Oct. 01. In the course of a few weeks the producers throughout the Dominion will he handling produce cheques, and in the first three months of the new vein* tin* aggregate of these cheques will he very large. The dairy farmers have nlreadv received' milk cheques for htilter lat supplied to factories hut these mav he said to he comparatively small. :.t any rate compared with the distribution when the season is at its height. The first wool sale of the season is to lie held in Wellington on Monday. Nov. Nth, when it is anticipated that at least 10,000 hales will change hands and as prices are expected to he its good or hotter than was obtained in the last season the* Side ol this 10,000 hales should realise over LITO.OOO. Ihe wooi s ihl on November I Ith must he paid for on or before Nov. 2Sth. so that on chat date or on the following day the idling brokers will distribute the

i deques to those entitled to receive them. Four days later the cheques on account of the wool sale at Napier will lie distributed and lour days alter that there will he the cheques lor tin* Wanganui wool sale and so it will go on. the South Island following the North island, and the wool cheques will expand with each succeeding sale.

Towards the end of November some if not. most 'of the freezing works in tin North Island should he in operation and (deques for fat sheep and fat lambs will he distributed far and wide. In the meanwhile the dairy farmers wiil he drawing their monthly milk cheques. 'I he next live months will see the Hood tide of produce cheques and tile aggregate should not he less than twenty millions sterling. This will enable the producers to discharge their debts aim do a variety of other things that they have been unable to do lor lack ot ready money. Most of the money will he spent in one way or another, and tin elfoct must he to stimulate the trade oi the country. it is this prospect added to the fad that in lines of produce quantit.*. increases will he shown, that is lorcing people into taking an optimistic view, ami the facts u arrant optimism. lfut how much ol th..* milk, wool and meat cheques will represent gain lo the producers:-' I low much will remain with interest. How muc h will remain wit ii them to meet development cxpendiLs.lv.' Their costs of production are high, and far too much of what should he* their profit is going into overhead charges as represented by taxes, rates, interest and labour costs. Will there he at the end of April a surplus to enable us lo get through the winter without seeing a repetition of excess unemployment. FREEZING I XDUSTRY. In the course ol a low weeks the freezing industry will he in operation and there is hound lo he a iciival ol tin* question of dealing with the linansdally unsound concerns. It has been admitted that the industry is over capi talised, that there are too many works, which are a burden on the (arming community. It must he remembered that then* is no free market lor I ret*:', ing works, so a moribund < oncern it i doses down means absolute less. I his notices the position very awkward an : is forcing the hanks to he very cant. oils in their dealings with some of the freezing companies.

It. is interesting to scan the bistort of the* Waingawa works in the Wairanipa. These works were originally owned by a joint stock company which liecam .* heavily indebted to the Dank ol Nett Zealand, and was obliged to go int > liquidation, the works lolling into lb* hands of the llank. It must he obvious to eveiyone that the Bank has no use for the works and would he glad to sell them at a loss. The Bank advanced money in good faith believing that it had a reasonably good security and si the works are and would continue to he so hut for Government interference. The* Bank’s right of sale was taken awav when the Meat Board was set up. for the Bank can only sell now to New Zealand capitalists, and no New Zealand capital can he found for such a venture.

The Bank it is understood could have sold to British capital, hut the Meat Board refused its sanction. I lie Bank l as no option in the matter hut to run the works as its own concern, or else dismantle and sell the machinery for scrap iron and make the best sale possible with regard to the land and buildings, If this were done it is bardic possible that the Bank would got more than 920.000, whereas the offer from the British capital is said to he about 91,10.000. Here is a striking example of the Reform Government’s interference with private enterprise. This experience must make all hanks very cautions in their dealings with meat companics and indeed with other enterprises, for we do not know what the precedent may lead to.