1.—12.

90

[A. S. MALCOLM.

of private individuals. The temptation on the part of manufacturers to place the spirits on the market as a beverage would be almost irresistible, and that is one very strong reason why the Government should keep it under their control. The Chairman : What would you manufacture it from mostly ? Mr. Malcolm: In New Zealand last year an enormous quantity of potatoes were destroyed or went bad. That is a fairly common occurrence in New Zealand, and there could be no better raw material for the manufacture of spirits than damaged corn or damaged grain of any sort. In the South occasionally we have a surplus of turnips; they would be very valuable. Professor Duncan lays it down that sawdust could be used to advantage. I was surprised to read that, The Chairman: As a matter of fact, I made representations to the Government in my private capacity as a member, but I have not had any satisfactory answer in regard to the matter. Mr. Malcolm: I myself made representations to the Government, but I was anxious to have these representations supported by such an influential Committee as this. To my mind this is a matter of enormous importance to the country. This may mean millions a year if the Government can prevent a monopoly being attached to the manufacture of these spirits. Mr. Graigie: Will it get over the difficulty if the Government buy the whole output of New Zealand and keep it in their own hands?. Mr. Malcolm: The great advantage is to provide these spirits to the people at the lowest possible price. Why should they pay a middleman's profit? If private people do the distillation they would be tempted to put the article on the market as a beverage. Once private individuals get control the temptation to make gain means the passing of regulations, which are broken. Under Government control the spirits would be denaturalized and be made unfit for consumption as a beverage. Mr. Forbes: In the event of State control being carried, and in the event of there being State distilleries, could they combine the manufacture of commercial spirits and other spirits? Mr. Malcolm: If they wished, the Government could. They might have to use better material : that could be done. Charles A. Wilson, of the Wilson Malt-extract Company (Limited), examined. Some years ago I started the business. The English article was coming in, and had practically all the market. When the war commenced the English product stopped, and I got the benefit, and in the last few years business has been pretty successful. But while we are all right just now as far as malt-extract is concerned, when freights go back and grain at Home recedes to normal I will be in the same position as I was before the war. At the present rate of 20 per cent, it is hardly enough against the huge plants they have at Home. There is a 10-per-cent. preference duty, but really no foreign extract comes into the local market, That applies to extract for eating purposes in jars. The freight from Home on the jars is practically the same empty or full. The jars cannot be made in New Zealand; they are glass. We have increased our price on pre-war rates from 6d. to 7d. per pound, which shows that we are not exploiting the public. In malt-flour preparations there is a line that comes into New Zealand from Australia, called "bakerine." This article comes in at Is. per 100 lb., and is sold at 7d. or 7|d. per pound to the bakers. If I want to get malt from Australia I have to pay 2s. per bushel (40 lb.). If I import barley I have to pay Is. per bushel, which is double the rate of the maltflour preparation, which makes the raw material ever so much more costly to import than the manufactured article. It is a line we manufacture readily, and we have a good business in it, and we reckon we ought to get the whole lot of it. We want more protection on that line to have the trade instead of Australia having it. We have fifteen or sixteen married men working for us. Our main product is barley, of which we use five thousand or six thousand sacks annually. To Mr. Veitch.] I suggest that a reasonable tariff would be 20 or 25 per cent. It would put me on a good footing. We did not increase the local price on the bulk extracts when we might have done so. To the Chairman.] We make the barley into malt, getting most of the barley in New Zealand. Last year we got a little Australian. To Mr, Horns/)!/.] If prohibition is carried in April a lot of barley-producing land would go out of use. Our industry would tend to occupy that place. I am putting up -another malthouse, and it will consume another five thousand sacks. Next year I anticipate to put through ten thousand sacks. Ido not advocate that the duty should be taken off barley. To Mr. Craigie.] Bakers use our material for their yeast. In Auckland, Wellington, and other North Island places it keeps the bread from drying up and getting crumbly. Hayward Bros., of Christchurch, also manufacture a malt-flour preparation, and a tariff would also benefit them. Our business is expanding. To Mr. Forbes.] 1 would be prepared to submit my prices to the Board of Trade to show that I was not, under a high tariff, raising my prices unduly. To Mr. Veitch.] I pay good wages, and generally have no difficulty in getting suitable labour. .1. Greenfield, New Zealand Sugar of Milk and Casein Company (Limited), examined. The sugar-of-inilk industry is new in New Zealand. The company commenced operations in 1914 at Kdendale, manufacturing the sugar of milk from the by-product of the cheese-factory. We have approached the Railway Department regarding the classifying of the product with a view to giving us reasonable rates on the materials for manufacture. They consist mostly of muriatic acid. On that acid we have to pay a double rate. Sulphuric acid is really more dangerous, and is carried at a cheaper rate. We pay £13 19s. 4d. on every ton of acid we use in the factory, and we use a ton and a half, which makes the item pretty heavy, every week, On the sugar of