0. A. LOUGHNAN.]

89

I.—lo

as to what quantity he put out. What Mr. Jameson said on that subject was perfectly true. Mr. Heslop was trying to get out of his obligation. It is perfectly untrue, as Mr. Heslop says in that letter, that he was prevented by tbe association from fulfilling the order. What happened was this : that the Co-operative Society was being supplied by the association with flour at current prices at the time of its dispute with Heslop, but the association would not carry out Mr. Heslop's contract and deliver flour at a lower price in pursuance of his previous contract. Mr. Heslop did not want to do it himself, and he was using the association as a lever to get out of his obligation. The association had nothing to do with it, and tbe answer to the whole thing is the fact that the Co-opera-tive Bakery was getting its flour the whole time from the association. Then, we come to the question of the Auckland mills. Now, what is there objectionable in the position with regard to Auckland ? The association has not got an agency in Auckland. It had an agency, but it found it was an unprofitable agency, and withdrew its agent. It allowed each miller to pour as much flour as he liked into Auckland. It simply cut Auckland out of the scope of its operations, just the same as Sydney is outside. There are no associated mills in Auckland ; the trade was not remunerative. It was a cutting trade, because the Auckland millers resented the southern competition and made it a cutting trade. The association, when they went up there, found it was a losing trade, and that their 5-per-cent. commission was not sufficient to cover them ; consequently they left Auckland. Now Auckland is practically a free port, and millers can put into it as much flour as into any free port. Mr. Taylor: They have got their local market at their own price. Mr. Loughnan : Of course they have their local market, but if millers choose to pour flour into Auckland or elsewhere, in addition to supplying local demands, who is to prevent them ? It is not the function of the association to do so. It is the function of Mr. Taylor to prove that the association is connected with the matter. I say there is no connection between tbe association and the business in Auckland. Then, with regard to the charge of coercion of the bakers. Well, we have had five bakers before the Committee, and they have all given similar evidence. The Wellington bakers, Mr. Isaac and Mr. Beynon, did not prove that the association was singular in refusing them flour. Mr. Isaac says he never asked the association, because he knew it was no use. Mr. Beynon did ask through Mr. Mitchell, of Leary and Co. Mr. Mitchell says, " I did refuse him, because the bakers said that if I supplied that man with flour they would not give me any of their trade." The association was in the same position as the other mills. The fact is proved in Wellington, because Isaac tried to get "Golden Gem" and "Silver Dust," both free flours, and could not get them, because the representatives of the manufacturers were doing business with the associated bakers, and dared not supply them. And there are other illustrations. In Palmerston North the bakers dared me to give a certain man flour. But that is not the result of the Flour-millers' Association, but the result of a combination amongst tbe bakers. A great deal of capital has been made by Mr. Taylor as to some of the millers being members of the price committee, and he seemed to think that it is material to this question what the price of bread is. Now, surely tbe association has not anything to do with the price of bread. That might or might not be exorbitant. We do not know. We have nothing to do with that —that is a Bakers' Union matter. However, the Bakers' Union seems to be very much like the F l lour-millers' Association —that is, that they did not succeed in controlling all their members. The cutting miller seems to exist, and the cutting baker also seems to exist. You need only take tbe case of the Co-operative Bakery in Christchurch. There is only £d. difference in the 4 lb. loaf there between them and the Bakers' Union price; and yet there is the fact that on tbe first six months' working they show a loss. How great the loss is we are not told. Now, how much is the public being exploited ? How much can you put up or down the price of the 4 lb. loaf when there is only a difference of £d. between the men who cut at a loss and the Bakers' Union ? You cannot cut it any finer; you cannot charge finer because is the smallest coin we are dealing with, and in consequence I submit that in Christchurch the prices are down to the minimum. Now, it is suggested that Mr. Williams says he was making a fortune by charging s|d. for the 4 lb. loaf with flour at £12, but Mr. Woodfield, another of Mr. Taylor's witnesses, says that his society was actually making a loss when charging s£d. with flour at £10. Mr. Taylor ; He said he charged in that his horses and carts and other preliminary expenses. Mr. Loughnan : I never knew a man in the Bankruptcy Court who did not assert that if he had only been left alone he would have made a profit. What Mr. Woodfield said was that he anticipated there would be a profit on the bakery in the future. The Chairman: He said he had made a loss on the grocery, that he thought he could make the bakery pay, and that there were certain departments he could make 10 per cent. on. Mr. Loughnan : I think you will find also that he said there had been a loss on his baking account, and he accounted for it by saying that the preliminary expenses had to be charged to it. However, it is perfectly clear that the competition is very sharp in bread. I do not think it is necessary for me to say anything more about the limitation of the output, because that must be thoroughly understood now by all members of the Committee, and I have gone very elaborately into it in my printed reply to Mr. Taylor's charges. But Mr. Taylor is wrong in contradicting Mr. Wood's evidence. He will find that the last exports of flour from the colony were in 1902. They fell off half what they had been in 1901, the year when the Commonwealth came into existence. Mr. Taylor: The export in 1901 was a mere bagatelle. Mr. Loughnan : Yes. The year before it was twice as much, and the year before that it was twice as much again, so that it will be seen that the export was killed by the duty placed on flour by the Commonwealth. Mr. Taylor says that the Flour-millers' Association is creating a monopoly. In reply to that we say that if the association were to be wound up 12—1. 10.