Selling versus Consigning.

Stratford Evening Post, Volume XXIX, Issue 109, 29 June 1911, Page 2

Selling versus Consigning.

(First Article.)

The butter producers of Now Zealand who have shipped their butter Home on open consignment for the season just closing can easily set their loss down at £50,000. The average loss on the stiiff thus‘snipped, as compared with the "prices on f ree offer last A ugust may be taken, at £9 per ton . Tile butter for \\diich 11-jd was freely offered in New' Zealand liaydly realised tliat price after the freight and clmiges to London, had boon paid, hoi th’s a variety of causes are responsible The Chief, of course, was the wonderful increase of Australia. Lor -G*. cry hi x of New Zealand sent ..forward over three were sent from the C'cmii. oil wealth . A great deal of this mvs soul on open consignment, and no doubt it was a material factor in bbating down the market. When the National Daily Association entered into the “trust,”. * .“combine,” or “corner.” by which the whole of the butter they could command ■was to go to one . firm, the hand of every man in the trade was immediately- turned against them. Though there were nominally four firms included in. the “trust,” it was a case of one firm Hi st and the rest nowhere; for ho sooner had the compact been entered, into than the whole influence of the active members of the ' association, w<is Vised to induce factories to ship "to one only of the four firms. The representatives of the other firms, ! for the first time in their experience, had not only to battle with their competitors, but had .to put up ap' extra fight against the association itself 1 / How bitterly these three firms resented having to “Walk the plank” can he easily understood. Tire stale old dodge that had won the ear cif fjie. association,, had already been engineered in New Zealand fifteen years , before. When it was carried on the first time, Cah-, ; met Ministers were rung in to add, weight, to the proposal. The then, recently imported.’ dairy expogt, Mr C. R. Valentine, baited the trap with the names of the present Premier and the •■late .Sir John MacKenzie, Consignors were to .get half mission hack as a rebate when the' company had had a dividend 1 of 6 per cent. The selling commission was therefore only to* be a trifle like Is, or at mogt 2 per cant, and the bait was bitten at like a hungry dog snapping at a meaty bone. Needless to say, not a brass farthing of cohN ' mission was over refunded, and tliel wliole of the consignments met a very, sorry fate. The scheme fathered by the National Dairy Association, unlike its predecessor, /had no Cabinet. Minister's for its, foster fathers. Looking back at flip proposal now, it ’seems difficult to determine what to admire most—the ’ colossal _ impudence of tlie scheme or its applziug stupidity. Controlling little. more than onefortieth part of _ the supply of England, wc think ’ the' palm must be given to the stupidity of it. Let us picture the position in London last season. Merchants who had supplied their customers with Now .Zealand easily satisfied them with the best Australian; and, as supplies of this were large, sales were steadily and persistently pushed. As week' after week of this continued, the pressure on the holders of New Zealand became terrific. The total number of merchants handling New Zealand and Australian butter in England 1 and Scotland easily exceeds one hundred. Each of these had men on the road and brokers in the street offering butter to arrive, in quantities never sent before by the Coinmomvealth. Being about Id per lb cheaper, it thus left the retailer an extra profit, whereas the more' expensive Now Zealand, if it did not show a loss to the retailor, left a very narrow margin. , Jiarge, quantities 'of Australian, too, were on open consignment, for two or three similar “trusts” in Australia had'bitten at ■ the .same bait ; and .then arrivals of Australian were. three timps as great as those from tliiq',ypuntry'. The drafts that had to. bo met, were three times as nump'rquo ami, .three times as large, a nil money to meet them had to bo provided. As the seasbi'i advanced the intensity of the situation became daily more acute. Hundreds of the forty thousand grocers who had hitherto sold New Zealand wore, glad to take the,' cheaper Australian, and in many cases no. difference in quality was noticed. All lyliis time the shipments from Now Zealand grew bigger and bigger. A steamer leaving hero in October would only have four thousand boxes, but a sister ship leaving in December would be carrying fifty thousand; for which it was necessary to provide well ever £IOO,OOO. With the supply from Australia increased by 200 par cent., it iq easily seen tliat sales of New Zealand must' suffer. A' premise had been made to the factories that if .a certain.,quantity .of butter was bandied by the trust they would thus have the pojyor to' “lever up the price to its true value.” But the author of this neat phrase certafinly. reckoned without his. host. All the strong financial firms were outside the trust. The position' war. therefore very simple. They had the riinney: the other follow hail the butter. The sequel is sad enough, for the less has been nearly, if not mti£b. a penny a pound. fn the words of that one in an who knows more - than all the rest of the people in New Zealand abort the English market, the factories who entered into the “combine” had “played right into the har.dri of the buyers.” Great pain’s' are taken to keep the. trade up to date as to shipments coming forward I'-hm the Commonwealth and Now , Zealand, the amount chrried by each i ship being cabled as. soon as tlie bills of lading arc made out. With this reformation to hand the buyers' knew what to do. and they did it! As long

ns their Cellars hold one box of any butter that would (ill their requirements, they were only conspicuous on the market by their absence. Multiple shopkeepers who had bought in previous years ten thousand boxes to arrive in November and December took care to buy nothing forward. No sales were made except at the urgent solicitation of the seller. These, 'too. wore only made from hand to mouth. Practically every man in the trada had taken care to secure a ‘copy of the famous circular, which exposed the whole hand of the “trust.”' The exact strength of the position in Tooley Street was known to every one. Seventy-live per cent, of the lust: alian output coming Homs on, open consignment! Even'the veriest novice in commerce knew w imt to do. There was only one poiany to Wait. Each week of the waiting meant some more, money saved.’ The difference in price lor the four preceding rears between Now Zealand' japd ‘Danish butter had averaged 7s per bundledweight. The promoters of the ‘combine’ ’said tin’s difference was iniquitous,, and solely duo to want of combination. When the combine stalled there was piactically no New Zealand butter on the market. The nominal difference was only .'ls per hundredwo-ght, and even tins was to be reduced. Before, however, 1 lie “liust” had been going many necks, the difference was up to 7s. This gap was soon doubled! ami the difference was Ms—nearly half ns r. ncli again as it had over ‘been before. Bat oven this was not all. As supplies from Now Zealand went on increasing so, did the w idth of the gay, until it reached JSs, or just’ bn Td jyr lb. The guarantee that' ‘t^’-J 1 differences in pneo between Danish , New Zealand during the ' season '( ‘etoo h- to March, IflJO-11, should bo less tliaii in the same period of 1900-'*D, had l.eeome a laughing-stock long diH’oro the gap widened to' its greatest limits, and when the difference reached .its limit of 18s, any hopes of the guarantee being made good Vanished into thin air. ft was th'b eld f tory of too dog and the bone. in ptaaping at the shadow these tinfoi lunate factories had missed the substance. Instead of saving one-half per 'cent cn the commission rates. their losses have exactly eighteen times the 1 alf par cent. Certainly no greater has- — ? Dairy 'lndustry TWO co in commercial ' circles was evei accomplished. The position in reference to cheese consigned was Romrrtvhat different. There was no Canadian cheese on open consignment with which to beat down the price. All the Canadian output#is sold in Canada. What Canadian was held by. English holders, therefore, could not be sacrificed even to break the market for New Zealand. .Therefore the price ' remained normal until the now Cahadian ertmmoncccj to make its appearance, whoiCa sharp fail began. No one supposes for a moment; that this was'due to the fact that these supplies IV’bni ' the great Dominion were ready to go into consumption, but the fact that'they had passed into the hands' of the'merchants of England ehalilbd forward sales to be made, with' 'the result that the [market' broke 'at once, and prices i for our cheese' fell rapidly. The moral 6f the year’s experience is that sending goods to t'he other end of the To|rld on open Consignment is to deliberately play intO the hands ol the bilker, and as, thjO applies to open consignments in" every article of commerce it 'is surely absurd to contend that what is right for every other co ll l iff6'dis wrong"tor dairy,' prpducb. Our producers, however, have had one pretty costly lesson. If they elect to have such another they have ' only! jfljomselves to blame.