FARMERS’ SHIPPING AND BANKING.

Taranaki Daily News, 16 September 1922, Page 12

FARMERS’ SHIPPING AND BANKING.

A WORD IN SEASON. (Contributed.) \ A contributor to a provincial pewspaper has drawn attention to what he conceives to be a dost resemblance between the proposals of the Fanners’ Union for a producers shipping line and an agricultural bank and the demand of the Socialists for the nationalisation of the means of production, distribution and exchange. The farmers, he says, already hold the main part of the means of production in the shape of land, and 'they now are seeking to secure the means of distribution and exchange through ships and banks controlled by themselves and largely financed by the State. The assumption of an analogy between the farmers’ proposals and the Socialists’ demand is somewhat far-fetched, since the building of additional ships and the establishment of additional banks would not mean the extinction of wholesome competition, as would the adoption of the Socialists’ creed; but it suggests that both the shipping scheme and the banking scheme snould be very carefully examined by the public before such ventures are allowed to involve the country in any further financial liability. A producers’ shipping line is, of course, no new idea. It has been discussed in this country at longer or shorter intervals, during the last thirty years, and has attracted more or less attention according to the needs of the farmers at the moment. It was not until two yeafs ago, nowever, that it was brought under the serious attention of Parliament by a report irom the Agriculture and Stock. Committee of the House, which had been directed by the Prime Minister, after receiving a deputation from the Farmers’ Union, to look into the question. As what happened then is really the basis of what is happening now, it will not be unprofitable to recall some of the facts. The committee, which by its constitution naturally would have a good deal of sympathy with the shipping propect, had. the following recommendations, framed at a representative meeting of producers placed before it: (1) “That a company of say £5,000,000 be floated for the purpose of entering the shipping trade and that the predominance of shares be held by the producers;” (2) “That in such company the Government should hold a certain portion of the capital (as in the Bank of New Zealand) and have representatives on the board of management, but that the predominating party should be asked to give power (as in the Orchard Tax Act) to the Government to make such a levy upon producers as would provide capital for the company, scrip to be given in exchange to the amount of the levy collected in each case.” These recommendations are quoted in full in order to make it plain that the fixed idea in the minds of the promoters of the scheme was that while the Government should subscribe a certain amount of the capital, the management of the company should remain beyond all question in the hands of the producing shareholders. The Committee took a considerable amount of evidence, including informative statements by Mr. James Findley, the representative of the shipping companies, Mr. E. W. Relph, the general manager of the New Zealand Farmers’ Co-Operative Society,- and Sir Walter Buchanan, a strong supporter of the scheme. The principal passage in its report was as follows: “Notwithstanding the fact that sufficient rerngerated tonnage for present day normal .requirements is owned by the companies now in the New Zealand trade, the committee if of opinion that consequent upon the possibilities latent in the combinations existing, it is desirable in the best interests of the Dominion that a shipping line be established, which will be entirely independent of any combination and that the Government shall assist in the establishment of such a line by guarantee, financial assistance or otherwise.’ Mr. Findlay was perfectly frank in his statements, withholding no information for which the committee asked and pressing no gratuitous opinions upon its attention. Incidently he mentioned that the running costs of steamers had increased by GO per cent between 1919 and 1920, and'that while butter was carried from New Zea-

land to London at a rate as nearly as possible equal to Ud a pound the charge for its conveyance from Copenhagen to New York, a voyage of only a fortnight’s duration, was Id per pound. Mr. Relph, who had been associated with farmers’ co-operative concerns for over fort}’ years, explained that he approached the inquiry solely from the producers’ point of view. His remarks, coming from a gentleman’so intimately acquainted with evjxry phase iof the farmers’ business, were so pertinent to the subject matter of the inquiry that some portion of them at least should be quoted here. “If we can bring pressure to bear upon the shipping companies,” he said, “it would be better to do that than to run the risk of forming a new company here practically owned by the producers, because there would be a serious element of risk in such a venture. The shipping at present is, as you know 7 , in the hands of very powerful concerns, and I should hesitate very seriously before I would urge our people to subscribe their capital towards such a venture, particularly when the trade is so peculiar as it is at present. Yon see, the farmers do not ship their meat. It goes Home, but it goes through other people’s hands. Then take the w’ool. No better system, as far as I am able to see, 'both from the Traders’ point of view 7 and from the farmer’s point of view 7, sould obtain than that which obtained under pre-war conditions. Now, with respect to the farmers themselves, there are very few 7 who are absolutely unencunibered. They are all more or less indebted to one firm or another, or to their various associations. Take my own concern, for instance. We have ramifications all over the country. We have branches and saleyards in all the centres, and we look to the farmers who are indebted to us to adjust their accounts from time ta time through the medium of their sales of surplus stock. We find them buyers for their produce, and we sell them what they require. Just imagine for a moment what the position would be if we nad a tarmers shipping concern, which would be owned and controlled by what we will call the farmers’ organisations. What is the good of having ships unless you have the cargo for them? You go to the farmer and say, T want so-and-so, but there may be other buyers who may temporarily offer better terms. I have had a long experience of the farming community and, unfortunately, their minds are easily disturbed. These other buyers who are going round are not going to be balked. They would temporarily make better proposals to the farmers and I an afraid that they would succeed in getting the produce and oiir ships would consequently be neglected.” This, it may be well to repeat, was the opinion of an exceptionally capable business man, wholly unassociated with shipping undertakings and keenly anxious to promate the best interests of the farmers.

This position has not materially altered, so far as the principles involved the concerned, since this inquiry was held; but a very grave change in the finances of the country and of. the farmers has been revealed during the last two years. Even the six insulated ships suggested by Sir Walter Buchanan as a beginning with the scheme, would cost something in the. neighbourhood of three millions, to say nothing of the other absolutely necessary expenditure, and no one will suggest that this sum could be obtained from the farmers just now. Nor would anyone intimately acquainted with the shipping business recommend such an expenditure in any circumstances. Canada and Australia, without conferring any benefit upon the people in whose interests their shipping lines were established, are now seeking to get out of their ventures with as little loss as possible, and a comparately modest venture in the same direction in New Zealand has resulted disastrously to a body of lamenting shareholders. These surely are lessons which will not be lost on the New Zealand farmers.

As to the share the Government is asked to take in such, ventures this ought to be altogether out of the question. State aud Municipal trading enterprises, as a score of instances bear witness, have proved far too costly in this country to justify the consideration of this one for a single moment. In this respect the same thing may be said of the Agricultural Bank. If Parliament really is out of a job just now it might amuse itself by providing the legislative machinery for the creation or such an institution; bxit the Government would be proclaiming itself a' reckless spendthrift if it pledged the credit of the country in any shape or form in an undertaking which in these days, at any rate, would be foredoomed to disastrous failure.