H.—3ob.

and disposed of gradually. Again, the clips from the southern Dominions constituted a very large proportion of the world's supplies. Neither of these considerations applied to New Zealand foodstuffs. He hoped it would not be necessary to delay the agreements for a settlement of this question, which certainly needed investigation but was unlikely to be settled quickly. " Mr. Eraser agreed that such a condition need not go in the agreements. "Conclusion (3). " It was agreed " (a) That consideration should be given by the two Governments to the question of the period to be covered by the scheme for governmental sales and purchases. " (b) That the agreements now being negotiated need not be delayed for the inclusion of a decision on this subject. " 4. Prices and Profit. —Mr. Eraser referred to the question of the prices at which New Zealand foodstuffs might be sold and the question of profits derived therefrom. In the case of butter, for example, the New Zealand producer would know what was being paid for his butter and that it was being sold first hand at 1455. Personally he realized that many charges were involved between the buying and the selling-price, but the margin at present looked large, and he was most anxious to prevent any idea spreading in New Zealand that those engaged in marketing New Zealand butter were making unreasonable profits, or that a relatively low price for New Zealand butter was enabling the British Government to pay relatively high prices for Continental butters. " Mr. Morrison said that he could assure the Deputy Prime Minister that the Ministry were determined through their control to ensure that only fair margins of profit were made and that the New Zealand and other butters reached the consumer at the lowest possible price. As things stood at present it was probable that the Ministry's butter account was running at a loss and there was certainly no intention to operate it for a profit. So far as was possible, within the limits of wartime freights, insurance, and other costs, every effort would be made to preserve the ordinary differentials between New Zealand and other butters. If owing to circumstances it could be shown at the end of the war that substantial profits had been made out of New Zealand butter by the United Kingdom Government, consideration could, of course, be given to the question of their appropriate distribution. " Conclusion 4. " It was agreed, To take note of the statements by Mr. Eraser and the Minister of Eood as set out above. "5. Further Supplies from New Zealand. —Mr. Fraser said that New Zealand were anxious to help in every possible way, but they were without knowledge as to the direction in which they could usefully develop additional supplies. Were there any other commodities other than those already covered in which they could be of assistance ? He mentioned particularly the possibility of sending tinned vegetables. " Conclusion 5. " It was agreed, That the Minister of Food, after inquiring, should communicate with the High Commissioner for New Zealand regarding suggestions for additional foodstuffs from New Zealand for this country." SUMMARY OF NEGOTIATIONS WITH UNITED KINGDOM GOVERNMENT REGARDING FOOD AND OTHER SUPPLIES. Apart from the main negotiations covering wool, dairy-produce, and meat, the scope of discussion was from time to time extended to cover hides, pelts, tallow, canned meats, scheelite, apples, and woolly sheep-skins. A record of the discussions and final agreements secured in these instances is included in the detailed summary covering all negotiations which now follows: —• Wool. Summary of Negotiations for Purchase and Sale of New Zealand Wool-clip. 1939, 13th September— The United Kingdom Government Ministry of Supply communicated to the New Zealand Government (and to the Australian Government also in identical terms) the following memorandum of suggested wool-purchase terms : — (1) His Majesty's Government in the United Kingdom to purchase the whole of the New Zealand wool-clip. This might apply to the clips during the period of the war and the following clip. (2) The New Zealand Government to be the sole agent for the purchase of the clip. (3) Wool required for New Zealand local manufacture to be excluded from the purchase scheme. (4) Wool lying in New Zealand already bought on British or Allied account to go forward if for British or Allied destinations. (5) To the purchase-price agreed upon (delivered to warehouse at port of shipment) there should be added a charge not exceeding per pound to cover all expenses to on board ship.

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