System of Subsidies in New Zealand not a success.

But first I want to say a word or two about the Report of the Food and Materials Committee, a memorandum in connection with which has been placed before members of the Conference. I want more particularly to refer to the last two paragraphs. I do not think it will be news to many people when I say that in New Zealand we had considerable difficulty during the war, and even more serious difficulty after the war, with regard to certain articles. of produce. We gave the principle of subsidies a thoroughly good trial in connection with these articles, but I am bound to say that we were not particularly successful. They cost the Dominion a lot of money for which I cannot help thinking we did not get value.

Reduction of Profit Margins possible.

So far as the keeping of profits down to a reasonable rate is concerned, it is possible to prevent exploitation, and we proved it. I hope that effect will be given to the suggestion contained in the last paragraph but one of the Report of the Food and Materials Committee. I will not quote the whole of it, but the Committee say: While, for all these reasons, the Committee have felt compelled to reject all the alternatives they have been asked to consider, they emphatically agree that it is in the interests of both producer and consumer that profit margins should be as small as is reasonably possible. This is a common interest of the Home and the Dominion producer." With that I agree absolutely.

Problem of Marketing Beef in Great Britain.

The Prime Minister of Australia gave an instance of what is going on in connection with the marketing in England of Australian beef. I can endorse what he said. When I was in England in 1921-I am bound to say that matters have improved a little since then-a shipment of beef to this country was sent from a farm with which I was acquainted. About 150 carcases were sent over and they realised 33d. per lb. The cost of sending them, including slaughtering and other charges, was 31d. per lb. That left a 4d. per lb. for the producer-practically nothing. I am glad to say the position has improved a little since then; and, so far as New Zealand is concerned, we are trying the experiment of chilling beef. I do not know whether the experiment will be successful, but a shipment of chilled beef is on its way now from New Zealand in the hope that our producers will be better able to compete with South America, and particularly the Argentine. I agree with the Prime Minister of Australia that the problem with regard to beef is the most serious in this connection that the British Government have to tackle, and at present I do not quite see the way out of the difficulty, unless it be by a further extension of Preference-and I know what that is likely to mean when it comes before the British Parliament.

Margin of Profit on New Zealand Apples in Great Britain.

There is another illustration I want to supply as to the necessity for something in the way of limitation of profits. Since I have been in England on the present occasion I have had some correspondence from a firm who found it necessary to purchase a number of cases of New Zealand apples. We have been placing New Zealand apples on the British market for some time past The price which this firm-I have not the correspondence with me here --paid for the apples was at the rate of 25s. per case of 40 lb. I think that works out at 7d. per lb. for apples which were purchased by the case in the London market. Apple-growing is with us a struggling industry, though I have great hopes for it, and the Government have been encouraging it for a number of years past. But this is what has been happening in New Zealand. In order to encourage export, we guaranteed the apple-growers 1d. per lb. net. Last year we had a considerable deficit. I think we went to the bad about £12,000, but, at all events, the best that could happen to the New Zealand producer in connection with the price of his apples was 1d. per lb. That was all he received. The same apples were sold here in London at 74d. per lb. I think the margin is too large.

It is not for me to suggest what the British Government ought to do, but if there is no legislation already on the Statute Book to deal with such a case as that, then I think it ought to be placed there, and that matters such as this should be looked into. I do not mind a reasonable profit to the trader-not in the very slightest-I think he should get a fair and reasonable profit, but anything of this sort is little short of exploitation. I do not say the same about beef, because I am not so well up in that; what I mean is that I do not know the retail prices of beef at present.

Co-operative Marketing a Possible Solution.

The Chairman: Price control, even if you could apply it, would not give your man a better price. Is not what the producer has to do to go into the market and, by co-operative methods, sell himself?

Mr. Massey: That is exactly what they are proposing to do. I have had notice of some of the legislation for the next session of Parliament, and I understand they will ask for the necessary power for the control of the marketing of their own produce. I hope it will have as good an effect in connection with apples as it has had in connection with the export of meat. When I say meat, I mean mutton. and lamb; I am not speaking now of beef.

The Chairman: And your dairy produce too?

New Zealand becoming the Dairy Farm of the Empire.

Mr. Massey: Of course-the dairy farmers in New Zealand have already taken action. It has become a tremendous industry. The export of dairy produce from New Zealand to Britain last year amounted to nearly £18,000,000 worth, and it is still increasing rapidly. It may be selfish to suggest that New Zealand is going to

supply the British market with dairy produce altogether, but I believe we are going a long way towards it in the next few years. In fact, New Zealand is rapidly becoming the dairy farm of the Empire.

Tobacco-Growing in New Zealand.

As far as the other tariff items are concerned, New Zealand is interested in the proposal to extend the preference on tobacco from one-sixth to one-fourth. Tobacco-growing is another struggling industry in New Zealand. I am not going to predict that the industry will prove successful. All that I can say is that, so far as I am able to judge, the tobacco plant grows very luxuriantly in the Dominion. It has been suggested to me that the growth is too rank to produce a good smoking tobacco. I do not know if that is so, but I do know that we can produce plenty of what is called raw material. Whether we shall be able to produce good smoking tobacco remains to be seen. Personally, of course, I hope so. We are giving growers in New Zealand a little encouragement by way of preferential duties

Preference on Apples: Effect in New Zealand.

As regards apples, as I have already indicated, we are particularly concerned in that industry, and I think that 5s. per cwt. will go some considerable way to assist the fruit-growers in my country-and they need it. Apple-growing is only a young industry yet in the Dominion, but already no less than an area of 31,000 acres is planted in orchards —which, of course, include other fruits, but mostly consist of apple trees. That is a fairly good commencement. Of the 31,000 acres, I have no doubt that about 28,000 acres are apples. The apples are of good quality; there is no question about that. We have been rather unfortunate in that several shipments have been damaged, but I think the fault was in the handling of the apples, not keeping them just at the right temperature on the voyage. I do not suggest that absolutely, but I think so. But I believe there is the making of a fine industry in New Zealand in the growth of apples. It is not a new thing; it is a new thing as far as export is concerned, but there are settlers in the northern district of the Dominion who went on to the land sixty years ago, and who grew apples very successfully. These men started practically with very little capital or experience, because they came from the manufacturing centres of Britain and settled on the land in its natural state, with practically no good market and nothing but their own industry to help them. I cannot remember one who has not acquired a competency by his own industry.

These settlers at first had to depend largely on fish, which was very plentiful; they grew maize to a certain extent, and vegetables, and incidentally most of the clothing for their children was made out of the flour sacks that brought the flour for their consumption. We have now gone rather past those days. However, I am sanguine about apple-growing, and I welcome this extension of preference.

Prospect of opening up Canned Salmon Industry.

It may be news to some of the members of the Conference that New Zealand is also interested in the canning of salmon. I was pessimistic about the acclimatisation of salmon in New Zealand waters for a long time. New Zealanders tried to acclimatise salmon many years ago, and had very little to show for it for a long time. But there are plenty of fish now. We have not allowed the public to take fish for export yet, but I think we shall be able to do so next season. I know the salmon are doing very well indeed. There are two varieties, the quinnat salmon and the Atlantic. I had a beautiful fish sent to me not long ago weighing 26 pounds. Fishermen state that the salmon abound in hundreds of thousands. I am looking forward in a year or two to our entrance into the market with canned salmon.

Honey Export increasing.

Then there is another growing industry in which we are greatly interested, and that is honey. Last year we exported to England 1,187,000 lbs. of honey. That is a very good start. The increase in the export is to some extent due to the fact that a number of partially incapacitated men who came back from the war and whose pensions provided only a bare living, were given the opportunity of going in for either poultry farming or bee farming. A number of them are taking up bee farming, and have been fairly successful, and they will increase. I am confident there will be production in the future much greater than that which I have just quoted.

Wine Production in New Zealand.

I do not know that wine can be produced to any extent in New Zealand; I am not sanguine about it. But we can grow grapes. We have more than one climate in our country, but I think generally the atmosphere is too moist. There are two wine-growing districts, Central Otago, and Hawkes Bay on the east coast, which are quite dry enough, and good wine is produced in the latter district. But in other parts I doubt whether we could make it a great success.

Trade with Russia and Empire Development.

I think it is quite likely we shall come into competition with Canada in exporting barley before very long, because we have a good deal of land suitable for that particular purpose. In reference to the Russian wheat proposal, I think just at present, when we are struggling to assist in lifting the depression from the United Kingdom, that what has been suggested by the papers is a very dangerous experiment. I do not want to say that I hope the people concerned will lose their money, but I do think that it would be very much better for the Empire as a whole if, instead of going to Russia for the purpose of development, they should assist in developing parts of the oversea Dominions. There is plenty of opportunity to do that. I am not suggesting that New Zealand can export wheat to any extent, because I am afraid the cost of production would be too heavy. We grow very big crops, but the

financial balance to the producer is very small. But I know what Canada can do. I have crossed Canada so often that I know something about her producing capacity, and I have not the slightest hesitation in saying that Canada could produce enough wheat for the whole Empire if it became necessary; and Australia could do it, too, or at all events can increase the quantity it at present produces.

Britain's Growing Market in New Zealand.

The Prime Minister of Australia, referring to the purchases that are being made by the people of the Dominions from Britain, mentioned the fact, and I have no doubt it is correct, that in 1913 New Zealand purchased £10,000,000 worth of goods from Britain. This is approximately correct, but for the first six months only of the present year we purchased over £10,000,000 worth of goods from Britain. I know that business has increased enormously, and I do not need to say that we are going to do our best to place some very large orders for machinery and metal manufactures, and to take advantage of the arrangements of the British Government to encourage the purchase by the oversea Dominions of their supplies in the British markets, and thereby assist in lifting the depression, and providing employment for those who are experiencing difficulty in finding it now.

New Zealand's Preference Policy.

Now just another word or two about the principle of Preference. We all know that Canada led the way in the principle of Preference; I remember the legislation being agreed to perfectly well, and there are very few of us who disagreed with it at the time. I am very glad to see that the idea has developed; all the Empire has taken it up to a certain extent. New Zealand has increased her preferences enormously. She commenced in 1907 in a very small way. About forty articles or commodities were given preference, and now the number has risen to 425, and I am prepared to ask Parliament to go further if the British Government-and I am not making any bargain, because I am simply suggesting reciprocity-if the British Government will simply continue in what they propose to do, i.e., to extend the preference as opportunity offers.

The Changing Attitude of the British Public towards Imperial Preference.

I said that I had some idea of the difficulties that will be met with later on, and I can see these difficulties in the distance. So far as I am able to judge I do not think there will be any difficulty in the British Parliament about the commodities which have been mentioned here this morning, but I believe that the British public are being educated up to the necessity of making the Empire a selfsupporting Empire, and I think we should all work in that direction.

I have come across a number of public men in this country, men who take an interest in public affairs, men some of whom have been in the British legislature at different times. A very influential man said to me: "At one time Free Trade was my religion, but I begin