. MINUTES OF EVIDENCE. 



89 



23 September, 1919.] 



MR. JAMES DONALDSON. 



[Continued. 



and require to buy less from other countries where 

 the rate of exchange was against us. You would bo 

 helping in that way. 



11.691. Broadly speaking, the national wealth is 

 increased, is it not, by devoting our labour and 

 capital to those undertakings which pay best? 1 

 do not know that I could quite follow that. I do 

 not know that I would agree. 



11.692. It seems to me rather obvious? No. You 

 are getting certain advantages, I maintain, from 

 helping agriculture. 



11.693. You will agree with me, at all events, that 

 we shall have to consider, as we are looking after 

 the national interests, whether it will really pay us 

 best to increase the labour and capital devoted to 

 agriculture, or, on the other hand, give more atten- 

 tion to shipbuilding, mining, engineering, and so on? 

 I quite agree to that. 



11.694. And if an industry cannot pay ite way with- 

 out a subsidy from the taxpayers it cannot be said 

 to be very profitable to the nation to put labour and 

 capital into it? That is for the Cabinet or for the 

 nation, if you like, or for Parliament to decide. If 

 they want a certain thing from agriculture, there it 

 is; but if you leave us to our own devices, the whole 

 of the statement shows that we are not coming to 

 you as suppliants at all. Leave us to our own devices, 

 and we are not suppliants. 



11.695. But you would agree with me that if prices 

 greatly in excess of world prices are guaranteed for 

 home cereals, one of the consequences because I 

 understand you are simply putting before us alterna- 

 tive consequences and not recommending policies 

 of fixing guaranteed prices would be to impose a great 

 additional burden upon the taxpayer? I think that 

 follows ; but in return I have told you already that 

 you would be getting something, at any rate, by the 

 rate of exchange going in your favour. 



11.696. But I thought just now you said that the 

 rate of exchange was likely to alter in our favour in 

 any case? No, I did not say so. That is not my 

 opinion at all. 



11.697. But if the rate of exchange is not likely to 

 alter in our favour -in any case, then I argue that the 

 rate of exchange is a factor which, apart from any 

 guarantees , will tend to keep up the price of imports? 

 I quite agree, to the amount that that exchange 

 affects the price. 



11.698. Take an instance : Suppose we were to get 

 back our wheat, say, to the position of 1874? That 

 is something just under four million acres. 



11.699. We were then growing, roughly, 3,600,000 

 acres. You mentioned just now a guarantee of 80s.? 

 For this next year's crop. 



11.700. If the guarantee were 70s. a quarter on the 

 same basis as the Corn Production Act, and the world 

 price went down not to pre-war figures, but merely 

 to 60s. and stopped there, the guarantee for wheat 

 alone would then involve an annual burden on the 

 taxpayer of 7,200,000? Again I say, when this 

 matter is argued out it will come on policy. 



11.701. I do not want you to think that I am hostile 

 to any policy of guarantees ; but I would like to know 

 whether the Union which you represent have con- 

 sidered that the question may be regarded from two 

 points of view; or, rather, that there is a difference in 

 kind between a protective guaarantee and a guarantee 

 which is in the nature of an insurance. May I ex- 

 plain what I mean? I think I have got what you 

 mean. 



11.702. Whether you have fixed your guarantee at 

 a price which will make any enterprises in agriculture 

 which would otherwise be unprofitable artificially 

 profitable, or whether you simply fix your figure at a 

 price which is likely to be below the world's prices, 

 but will prevent the farmer from being deterred by 

 any uncertainty whirh is not really justified by the 

 facts? But by farming up to it you will find the law 

 of diminishing returns comes in at once. You cannot 

 Ket away from the law of diminishing returns, try 

 how you will. Tt has been tried for the last 40 years, 

 ami we know from -:ul <'xperience. 



11.703. I do not think you quite follow mo. I am 

 only asking you whether you have appreciated the 



fact that there are two sorts of guarantees one 

 which is protective and the other an insurance? Yes, 

 assurance to be an assurance could not be, I take it, 

 below the prices of foreign commodities which were 

 imported; otherwise, it would be no insurance, to my 

 mind. 



11.704. Surely it would be an insurance against 

 prices coming down in a particular year; it would 

 make the farmer feel secure of that minimum? I do 

 not know on what basis you are going to fix your in- 

 surance. If you would tell me that, then I could give 

 you an answer. 



11.705. I am just suggesting this to you, that sup- 

 posing you are deciding that a certain figure would 

 for a certain number of years be fairly safe from the 

 point of view of the taxpayer, and would not be likely 

 to call upon the taxpayer for a large sum of money 

 except in a particular year when there was an extra 

 supply from abroad, might not that encourage the 

 farmer to some extent? Might it not save him from 

 his own uncertainty, so far as world prices are con- 

 cerned, and give him the benefit of expert opinion 

 about world prices? So long as the farmer was 

 assured in his own mind that he had a certain price 

 guaranteed to him that he could furnish that product 

 at, you could depend upon the farmer producing it. 



11.706. He would farm up to the level of that 

 price:'- -He would farm up to the level of that price. 



11.707. To turn to another point, I understand you 

 think that the physique of countrymen is better 

 than that of townsmen? That is my impression, and 

 the impression of countrymen anyhow. 



11.708. Therefore, the encouragement of agricul- 

 ture would tend to improve the physique of the 

 nation? That is our impression. It has been called 

 into question to-day, and I am not in a position to 

 prove or to disapprove it. 



11.709. But have you not heard farmers say they 

 cannot afford to pay as good wages as employers in 

 towns, because farm labourers are such crocks? 

 Simply because the crocks that were left to us were 

 alj that wore left to us, because the good men will 

 go to the towns. We could not afford to keep those 

 men. That is exactly what I want to do: to keep 

 the good men with us and remain with us, and so 

 raise the standard. 



11.710. In answer to Mr. Cautley you agreed, I 

 think, that agricultural wages were driven down to 

 a very low level in the bad period of the nineties. Is 

 not it within your knowledge that agricultural wages 

 were lower in what are sometimes called " the good 

 old days " before 1874, than they were in the subse- 

 quent period of depression? I- think it would be 

 absolutely futile to go back to the " good old days," 

 because they are washed away entirely; they have 

 left no impression on the present day farmer at all. 



11.711. But is it not a matter of fact that the 

 wages were actually lower then? I have heard so. 

 I did not farm in England in those times, and I 

 can only speak of what I know myself; but I do say 

 that the impression which was gained of getting 

 labour at 8s. or 9s. a week is a thing of the past 

 and obsolete I think it is absolutely futile. 



11.712. I was only wanting to get at the question 

 ol wages being driven down? I think it is quite 

 futile to go back 40 years ago. 



11.713. You are aware that the prices of food and 

 other necessaries that a labourer had to buy, were 

 lower in the former period of depression ? I am 

 quite aware of that; but even then he was not well- 

 fed. 



11.714. In answer to Mr. Green you said Jihat you 

 die 1 not think the fact that farmers were buying their 

 land was any evidence of confidence in the future, 

 but that they only bought their farms as the alterna- 

 tive to being turned out? Yes, that is so in a great 

 many cases. 



11.715. Is not it the fact that in many cases these 

 farmers have paid high prices for their farms? Yes; 

 that is a question of emergency, again. I said it was 

 an emergency, and it is still, because they pay prices 

 which they know are too high. 



