PROFITS ON WOOL.

Taranaki Daily News, 18 August 1921, Page 5

PROFITS ON WOOL.

MR. MASSEY’S NEGOTIATIONS. NEW’ ZEALAND VIEW OPPOSED. LOSS ON BUTTER CONTRACT. London, June lu. Mr. Massey has been discussing with the authorities the question of profits on the Government contracts for New Zealand wool. He is Hot without hope that he will convince them of their further indebtedness to the New Zealand woolgrowers. In July last, he said, the New Zealand Government was informed that £11,600,000 profits would be paid on the understanding that the final dividend would be based on the whole of the transactions. The effect of this was simply to wipe out the previous arrangement.

The question at issue is whether the profits claimable by New Zealand should be based on each individual clip or on the total transactions. Mr. Massey takes up the attitude that the New Zealand producers have not had the market' price of their wool; that the British Government should stand by the original agreement, though it may be said that that agreement seems to be somewhat indefinite, and that they should stand by their own losses. Coming on the top of the great loss which the British Government has made over the butter contract with New Zealand, this desire for more on the part of New Zealand farmers—however much it may be justified from a purely commercial point of view—is unpopular, as may be gathered from conversations with business men having relations with the Dominion. To the ordinary taxpayer it is still more unpopular. Regarding the high price paid for the butter, Mr. Massey maintains that it was the competition of the Co-operative Wholesale Society which caused the British Government to offer the price that was accepted. It must be remembered, however, the Government had the right at that time to prevent any butter from coming into the country which had not been bought by the Ministry of Food. Probably the Ministry had optimistic views with regard to the market prices being maintained, but the threat to sell New Zealand butter to America, or to produce cheese instead of butter, had something to do with the fixing of the contract price.

With regard to the wool problem the question is asked: Tf the New Zealand woolgrowers adopt the view that they should be paid a percentage of profits on individual clips, why did they accept the £1,600,000 last year and the conditions pertaining, to that payment? Of course the arrangement still holds good, and should there be a profit on the unsold wool—which is very unlikely—New Zealand will receive the percentage of profit over the whole of the transactions. But the wool is not sold, and it will be a long time before a complete balancesheet covering all the transactions is available, and the authorities are not likely to act in any direction until then.

On the question of freights, Mr. Massey admitted that he was up against solid facts. The running charges of ships were high, and freights were high in consequence. But he maintains they will have to come down, and he leaves it to the shipping companies to reduce those running charges somehow. He instanced the case of beef costing 4d per lb to be landed in London, portions of which are sold at Smithfield at 4d per lb. Such a state of affairs naturally could not continue.

It must not be forgotten, however, that the cost of handling and freezing in New Zealand has risen in an equal proportion to the rise in the freights. Half of the 4d represents the handling and freezing. Tf the running charges of shipping as represented very largely in wages and the demands of labor can be brought down here, then it should be equally possible to bring down the charges on the handling and freezing in New Zealand. Added to this is the fact that strikes in New Zealand have to a certain extent been responsible for the increased running charges of the shipping companies trading between this country and New Zealand.