The Flour Miller's Association.

Wanganui Chronicle, Volume XXXXVII, Issue 1278, 27 November 1903, Page 4

The Flour Miller's Association.

The report of the Parliamentary Committee on the Flour Millers' Association, which was presented to Hie House last week, may be regarded as having completely exonerated the combination irom the swe*<ping charges preferred against it by certain politicians early «n the session. The evidence given before the Committee shows that the/ Association was formed on March 1, 1901, and the object of the movement was purely to effect, by combination, a saving in the expenses of management and the cost of distribution of Hour. It was stated that the business had been carried on for some years practically with-, out profit and frequently at a loss, and that unless some method of curtailing expenses was devised, t/hose able to bear the loss longest would eventually get the. whole of the trade. It was intended to regulate the price of flour and offal by the price of wheat, so as to give the millers a fair margin of profit, while rateably apportioning the trade. The Association was simply to sot aa agents for the millers, distributing the orders and selling the produce at a 2£ per cent, commission. The,:-agreement to sell through the Association is only binding so far as New Zealand is concerned, the

millers being at liberty to sell as they like outside thd colony. For the first six monfehi of the Association's existence Mr Thomas Meek acted as managing director, Mr George Jameson being then appointed general manager. As to the method employed to induce millers to join, some witnesses stated that the Association's agents had distinctly threatened to "cut' the prices to force nriJlers into the Association, and one of the agents of tihe Association admitted that he had said he would ' most likely travel in a certain district" if the local miller did not come in. In the Aucki land district the Association candidly admitted that it had been cutting the prices, but this was done in the ordinary way' of business in order to retain its clients. The evidence showed that there are sufficient flourmills in the colony to produce three times as much flour as is required. The immense surplus has in the past been exported to Australia, but oi iate years the . high price of wheat and the duty imposed upon flour by the Commonwealth nave combined to do away with this market altogether. The consequence is that* if the mills are ; worked full time now there would be immense stocks of flour on hand for which no market could be found. This accounts largely for the tact, stated in evidence, that when the Association had distributed the orders tor the month one mill which before joining had turned out 63u tons a month was only required to contribute ibO tons. Working night and day the associated mills couid turn out from ten to twelve thousand tons a month, while the Association only handled an average of less than four thousand tons in the different months cited in evidence. As to the charge that the price of flour was fixed to coyer the iuterest on the cost of piant and buildings lying idl«(, the evidence was to the effect that there had been a grent depreciation in the value of flourmill property, which * has been written down accordingly, and, moreover, no mills have been lying idle during ordinary working hours. So far from repudiating the charge of ..attempting to establish a monopoly, the Association admits that it desires to secure the sole agency for home, distribution, but holds that such a monopoly Avould be for tilie good of all concerned. That no monopoly^exists is evident from the' fact that at present there* are as many millers outside the Association as there are in it, alhough a number of the "free" millers are working in conjunction with the Association., Moreover, in Auckland all the members of .the Association are frea to operate as they like. The Association denied, absolutely that it has restrained trade or forced the public to pay an excessive price for bread. The coininitt*» finds that the formation of the Association was justified by the fact that prior to the millers deciding to work together "the business of nourmilling m New Zealand was on a most unsatisfactory fobtihg." So far as the bakers are concerned, the committee is equally alive to the wisdom of legitimate combination/While admitting it to be very difficult "to estimate to what extent at times the price of bread has been regulated," the committee expresses the opinion that "unless unrestricted competition between bakers is again to be resorted to, witih the consequential insolvencies which have been a character } oi this trade, some form of organisation is essential.' 'llie committee is not blind to the dangers of trusts, but it ' states very clearly that this is not the only evn to be teareu. "The evidence given .before the committee,' says the ■; report, ■ discloses tlie evil possible on tne one hand under unrestricted competition, and on the other under the iron rule of combination; but your committee is unable to recommend a remedy for so difficult a problem." In short, the committee find thai/ altliougn the JL'io-jr millers' dissociation was formed for th» protection 01 millers, it has not restricred the output ol flour at -«i« public expense, nor nas it JoweraJ me price of wheat to the farm-. ■*, ,„„• .. alaetl liie price or flour to the pubic