H.—44.

A good deal of helpful information lias been received from tlie New Zealand Trade Commissioner in Canada, and it has been mainly at his instigation that consideration has been given to placing the trade in export hides upon a better footing. The Department has co-operated with the Department of Agriculture and the Department of Scientific and Industrial Research, and meetings have been held from time to time with representatives of the exporters concerned. As an outcome of these negotiations regulations governing the licensing of traders in hides, and the preparation, treatment, classification, grading, and sale of New Zealand cattle and yearling hides and calf-skins have been prepared for submission to all parties concerned, and it is anticipated that these regulations will be issued in time to cover the next season's output. These regulations will provide, inter alia, for — (1) The licensing of exporters and dealers in hides ; (2) The exporter's registered mark to be clearly indicated upon each package of hides exported ; (3) Each hide shipped to be branded with a mark indicating first, second, and third grades for both freezer standard hides and abattoir standard hides ; and (4) The definitions of each particular grade. WHEAT, FLOUR, AND BREAD. During the year the Government's scheme for the rationalization of the wheat-growing, flourmilling, and bread-baking industries was formulated and put into operation. A great deal of work was involved in working out the detail of the scheme as it applied to the three industries concerned and to the individual i nits in each group. Wheat. —Under the Board of Trade (Wheat) Regulations, 1935-36, the practice adopted by the Wheat Purchase Board was largely followed, provision being made for the handling, under the new constituted Wheat Committee, of milling-quality wheat, through the customary channels —i.e., through authorized brokers appointed by the Committee. Purchase warrants are issued to the flour-mills from time to time in accordance with the allocation of wheat which has been made to them, and no broker is permitted to sell wheat to a miller unless a purchase warrant is held by the miller. The grower signs a purchase contract and the buyer a sale contract for each line. The new scheme has resulted in a higher price being paid to the grower to the extent of an average of 4d. per bushel. The average price paid to the grower this season ought to work out to at least 4s. Bd. per bushel less administration costs, the initial payments being made upon a basis of 4s. sd. per bushel. Canterbury, unfortunately, experienced adverse weather conditions when harvesting operations should have been in full swing, and, consequently, a great deal of the wheat commenced to sprout and the general quality became depreciated accordingly. Only wheat of milling quality came under the control of the Committee this year, but consideration is to be given as to the advisability of bringing the whole of the next season's crop under control. The aim of the Government's plan is to make New Zealand entirely self-supporting in regard to wheat-supplies. At all times a very close liaison is maintained as between the wheat-growers' organization and the Wheat Committee. Flour. —The rationalization scheme as applied to the flour-milling industry came into effect in February by the Wheat Committee displacing Distributors Ltd., and also bringing under control the output of all mills outside this organization. Prices were fixed upon a basis of £13 12s. delivered f.o.b. or f.o.r. Auckland, Wellington, Christchurch, Dunedin, thus effecting an equalization in the price of flour in both the North and South Islands. As an essential part of the plan an Order in Council was gazetted prohibiting the importation of flour except under permit issued under the hand of the Minister of Industries and Commerce, and by arrangement with the representatives of the bread-baking industry it was decided that each importer should be allowed to bring in for the remainder of the calendar year only a proportionate quantity of his customary trade. Unfortunately, the wet harvesting conditions in Canterbury had the effect of tending to keep the standard of the year's flour slightly below that of previous years, consequently the Government was forced to make early arrangements for the importation of a relatively small quantity of Canadian wheat for gristing here and it also allowed one shipment of Australian wheat to enter Auckland for mixing and gristing by the Auckland mills. The ultimate exclusion of imported flour would result in the manufacture in New Zealand of approximately 4,000 tons additional bran and pollard which are required to aid the development of the poultry, pig, and dairy production. Only very limited quantities of pollard are obtainable from overseas sources, and the value of the local production of both bran and pollard cannot be too strongly emphasized. Bread. —It naturally followed that consideration should be given to bringing the bread-baking industry of the Dominion within the scope of the proposals brought forward to rationalize these three industries which are so closely inter-related. Provision was, therefore, made for the fixation of bread prices at a common level in the four main centres and in certain towns in the South Island where flour was to be delivered at the basic price of £13 12s. (which reverts to the old standard rate which was in effect prior to the commencement of price-cutting amongst the flour-millers). In order to ensure that no advance would be made in the price of bread to the public, the Order in Council made on the 12th February contained a " blanket " provision that, in respect of all localities, other than those mentioned above, prices would be stabilized and held at the standard rates ruling on Saturday, the Bth February. By the standard price was meant the price at which the greater bulk of the bread was

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