From Labour’s Viewpoint.

Sun (Auckland), Volume 1, Issue 38, 7 May 1927, Page 13

From Labour’s Viewpoint.

Control and Mr Coates

Written for THE SUN,

By

H. E. Holland, M.P.

This is the seventh article of a weekly series' contributed, by the Leader of the Opposition, political head of the N.ew Zealand Labour Party. It is as fair to Mr. Holland as it is to THE SUN to state that his pithy opinions are entirely his own and represent only the policy of the Labour Party; also that , in their publication , the right of criticism is not surrendered.

rpHE demand for dairy control came A in the first place from the farmers themselves, and when they voted on the compulsory clauses of the 1923 Bill, 71 per cent, of the voters declared for compulsion and 29 per cent, against it. When the Bill was before the House the Labour Party supported its general principles because we saw in it the possibility of transferring the marketing of the primary products of New Zealand from the control of the speculators in London to the primary producers themselves. It is true that we sought to secure the one-man-one vote principle in the election of the board: we felt that men and women should vote, rather than tons of butter and cheese. In this we were defeated, but that fact in no way affected the central idea of co-operative marketing and price-fixing. AS TO PRICE-FIXING

There is not and cannot be any question of price-fixing or no price-fixing. The only question is: Who shall do the price-fixing? In every commercial transaction, price-fixing comes more or less into the scheme of things, and we are faced with the hard fact that if the primary producers of the Dominion do not fix prices through their own board it will be done for them by Tooley Street and its companion concerns, as in the past. The price-fixing of the past was done largely on a speculative basis, and at the expense of both the producers of New Zealand and the consumers of Great Britain. It was a planless system and I agree with those spokesmen of the Farmers’ Union who say that the crisis which followed the introduction of control was not due to the operations of the board, but to the non-con-trol system which preceded it, and which led to the storing of New Zealand butter in large quantities for speculative and other purposes. The manner in which the speculators seized the occasion of the seamen’s strike in 1925 to work a gamble with New Zealand stocks will not be forgotten. The gamblers reckoned on the strike lasting and no further supplies reaching Britain; they believed and wished that this would be so. No one regretted the fact that the gamblers “fell in.” Their endeavour to manipulate the old season's supplies last year to the detriment of the New Zealand producers is also a matter of history. First they decried the old season’s butter because :it was stored, and defamed it as “stale” New Zealand butter; but as the new season’s supplies began to arrive they commenced to boost the good quality of the stored article. It was all part of the gamble. These gamblers are the people who have everything to lose if co-operative marketing proves successful; and consequently they are the people who will move Heaven and earth to prevent the co-operative effort from succeeding. THE PROPAGANDISTS

Before the coming of control and immediately after it, a vigorous anticontrol campaign was launched. In some cases the newspapers making the campaign had on their directorates men who were also on the directorates of Tooley Street and the companion concerns. One of the trading organisations concerned in the phopaganda was the Wholesale Grocers’ Association. Its famous circular went out on November 16, 1926, stating that its representatives had had several interviews with the New Zealand Prime Minister on the subject of the New Zealand Dairy Pool, and adding that “it would help the work we are doing if you could pass a resolution something on the lines of the following.” The draft resolution submitted condemned control and and price-fixing generally and the circular went on to state: “This should be sent forthwith to the Right Hon. J. G. Coates, Prime Minister of New Zaland, Hotel Cecil. London, also the manager, New Zealand Dairy Control Board, Adelaide House, London Bridge, stating the name and district of your association, in order that they may realise how widepread is the objection to this pool.” It was further stated: “You will note that this circular is marked ‘private,’ because it is desired that the resolution should be sent as from each separate association.” Another piece of propaganda was the long cable of March 9 which purported to give the views of “a prominent marketing authority”—hostile to control, of course. From this end a notable contribution to the propaganda was the

cable of the “New Zealand Times” (now gone the way of all erring journals) to the London “Daily Mail.” Attack on the one hand and suppression on the other was the method employed. MR. PATERSON’S ATV'TUDE Mr. Stronach Paterson w.ts on a fairly good wicket in the matter of his appointment to the London agency as the New Zealand Government’s representative. The engagement was * a part-time one, terminable at three months’ notice on either side, with £I,OOO a year for salary. As a paid member of the agency Mr. Paterson might have been expected to see that his duty was to carry out the board’s decisions and to uphold its policy. But on his arrival in London, Mr. Grounds says he found that Mr. Paterson was openly declaring hostility to control, price-fixing, and to the manager and the constitution of the London agency. He requested Mr. Grounds to dismiss the London manager, Mr. Wright, and urged that a gentleman whom he had been interviewing should be appointed in Mr. Wright’s place, but Mr. Paterson would not give the gentleman’s name. All that he would say was that the new man would want a higher salary than Mr. Wright was receiving. The unnamed gentleman didn’t get the appointment. When Mr. Grounds came back to New Zealand the board unanimously decided to demand Mr. Paterson’s retirement. The letter conveying this resolution was despatched on January 19, but no reply was vouchsafed until March 12, nearly two months later, when the Hon. O. J. Hawken, Minister of Agriculture, wrote upholding Mr. Paterson’s attitude and refusing the board’s request. This means that the Government’s policy was being carried out by Mr. Paterson. It is interesting to recall that when Mr. Paterson, at a later stage, tendered his resignation, Mr. Coates refused to permit it to be accepted. MR. COATES AND TOOLEY ST.

In or about the middle of October Mr. Coates arrived in London. Tooley Street was already busy proclaiming that the Board’s policy would be jettisoned with the Prime Minister’s coming. On October 21 Mr. Grounds discovered that Mr. Paterson had arranged for a deputation of six Tooley Street men to meet Mr. Coates on October 23, on the subject of Dairy Control. This is said to have been done behind the backs of Mr. Grounds and the London agency. At first Mr. Paterson wanted a deputation of sixty, but it seems Mr. Coates’s room was not large enough. On October 1 then, Mr. Grounds wrote to Mr. Coates urging that the Prime Minister should see him before the deputation took place, in order that he (Mr. Grounds) might know the nature of the requests to be made, and I suppose, also, that he might fortify the Prime Minister in his replies. Mr. Coates never replied to Mr. Grounds’ letter, and the deputation took place without the chairman of the board having an opportunity to be present. Then on October 25, Mr. Coates sent for Mr. Grounds and informed him of what had taken place at the interview. Mr. Coates stated that when the deputation appeared he asked them if they wished Mr. Grounds to be present—and they said they did not. Yet if any one had a right to be present at such an interview it was surely the chairman of the Dairy Produce Export Control Board. CONCERNING TWO CABLEGRAMS In October two cablegrams of great signflcance were sent to the Board in New Zealand. One of these was from Mr. Coates. It was dated October 26, and set forth the fact that he had been interviewed by “an influential deputation” who objected to control, to pricefixing, and to the manager of the London agency. Mr. Coates stressed the objection of Tooley Street to Mr. Wright, and stated that “Paterson’s telegram to the Board in my opinion correctly represents the feeling of the majority of the trade here.” Up to this time Mr. Coates had not even met Mr. Wright. Mr. Grounds says the contents of Mr. Coates's cable was known to Tooley Street the day after it was sent, but neither he (Mr. Grounds) nor the London Agency was informed of it until nine days later. Another peculiar circumstance connected with these cables is that, although Mr. Coates's cablegram reached New Zealand the day after it was dated, that of Mr. Paterson (referred to by Mr. Coates), which was dated October 23, and which had been shown to Mr. Coates, did not arrive until five days after it was dated—and therefore came to hand the day after the board meeting in New Zealand. It is quite clear that Mr. Coates owes it to the primary producers as well as to the people of the Dominion, to explain why he took the line of action outlined above.

The Labour Party’s proposals with respect to the marketing of the Dominion’s primary products have already been published, and need not be repeated here.