C. J. REAKES.

57

I.—lob.

next year ? -Well, if these companies become sufficiently powerful in any one country they can, when it; suits their ends, manipulate the markets by putting down the price to the producer; and that was a particularly striking case which I quoted where there was a stable and reliable selling-market in Europe, Still, you must admit that, it; is the markets eif the weirld which are' most important tei us. As long as we have I In- markets eif the world eipe-n to us we have our own produce here with which we can elo what; we like. It is far more; important that Armour and Co. should not the control of the market than that he should have control of the buying situation, as long as they cannot block tho markets of the world against us? There is this difference: it is beyond our power to control what they do in their own country or othe:r countries outside of New Zealand, except that in Great Britain we can get the co-operation eif the: Imperial Government. As far as the buying here is concerned we can control that, anel it is up to us at the present time to realize' the position we are in. Really we have got to decide whether we- are going to let this company into the Dominion, to be followed probably by the other companies which, upon evidence, have shown themselves to be eie:trimental to the countries where they arc already established. But as long as the markets are open to us and we own the' stuff here, are we not free to send it to those markets independently of Armemr and Co. ? Ye-s; but we must provide for the; intermediate handling. Them is it not important that Armour and Co. should be- kept out eif control in that respect ?—We must endeavour to keep control of that, but as regards the emtside British markets it is more difficult for Armour and Co. to control the distributing end than the buying end. If a license were granted to Armour anel Co., what control would they gain by that over this end, seeing that the whole of the stuff he:re belongs to the: producer, and the markets of the world are open to us and we can compete with Armour and Co. in the markets of the- work) — what detriment is it going to be to us if the:y get their license' ?- It is quite obvious that the granting of a license to Armour and Co. is not going to immediately give them control Of the fat stock in this country, but it is opening the door to the so-called trust companies, because, as I was careful to point out in my evidence, the abandonment of the reason which now e-xists for refusing the license would mean that that reason could not be addue:ed in re-specf to Swift, Morris, Cudahy, or Wilsem. Then we might find, in the course of a few years, the condition of things that exists in South America, where the percentage of their trade went up from 30 to 68 per cent., and where they obtained sufficient control to be able to manipulate the: producers' market. What was the, competition in America during the war against Armour and Co., and what is the competition there against them? —As I stated, to some extent these large: companies are: in competition with each other. If you read the reports you will see that there are- a largo number of companies engaged in tho meat trade, but many are more or less subsidiary to the " Big Five." Who controls the other 4-0 per cent, in the- Argentine ?—The " Big Five " had 68 jie;r cent, (now 57 per cent.), and there is one. Argentine e:ompany and the- British companies. But over a period they deliberately put up the price of fat stock to the producer, and they deliberately put down the selling-price in London -that is, for beef with the result that the British companies, after standing up to it for a few months, we;re losing sei much money that they had to make terms with the American companies, with the 're-sult that, the Argentine; and British companies lost a further percentage; of the Argentine: output. But there, are plenty of people who, whe-n they see money to be made out of any concern, will go into it, and if Armour and Co. are making a big profit it will always be open to anybody to compete with them ?-- But they have sueii an enormous reserve of capital that they can afford to lose money for a time, and so make their competitors lose- sei much inone-y that they cannot carry on any longer. You admit that economic efficiency is usually the cause- of success in pretty well all businesses ? — Ye-s. Do you think it is a fair thing that if a freezing company make's KM) per cent, profit they should reduce their charges tei the producers ?—Yes, especially if they earn those profits out of the charges thoy make to the producers ; but it has to be borne in mind that very large sales were made last year of accumulated stocks eif tallow, pelts, anel so on. One, company I know eif produced a better than ever before because it unloaded a heavy quantity of its accumulated stocks during that year. But it does not matter what they make their memey out of : thery make- additional profits, and that is a reason why they should reduce their charges? If they an- making more- than a, fair and reasonable profit they should certainly reduce their charges. You believe in healthy competition in the Londem market because you think that is advantageous to us : eleies not the same thing apply in New Zealand ? Ye-s ; but what I would like tei point out is that all the records of these American companies point very strongly to their indulging in very unhealthy competition. Will not the same unhealthy competition get em in London ?—Judging by the fact that the Imperial Government last year set up a special Committee to deal with this and other questions, anel having a knowledge eif the feeling of the Imperial Government towards the Ne-w Zealand Government, I am sure the: Imperial Government will be willing anel glad to co-operato with us in safeguarding our interests in London. Do you think that the Imperial Government Department gave us a fair deal during the war ? It was generally understood that the- American people got a very big advantage over us at the Londem end during the war ?—As a matter of fact, I can tell the Committee that the Imperial authorities have told us that, owing to the extreme necessities of the: times them, and the absolute necessity for them to have urgent and adequate, supplies of meat, they had practically to accept the terms of the Argentine companies as to the conditions of their contract. Mr. Jennings : Who is the purchaser or adviser of the Imperial Government for food-supplies : is he' an official of the Agricultural Department ? No; during tho greater part of the war the meat business of the Imperial Government was in the hands eif the Board of Trade (British), and the gentleman who was taking a leading part in the: work was Sir Thomas Robinson ; but at the present time the' meat business is in the hands of the' Foexl Ministry.

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