MINUTES OF EVIDENCE. 



107 



13 August, 1919.] 



SIR WILLIAM H. BEVEKIDGE, K.C.B. 



[ Continued. 



are very large differences in the actual cost of pro- 

 duction of milk under different circumstances? No, 

 I have no doubt they vary greatly. 



2638. The costs do vary very much? Yes. 



2639. You do not attribute the variation in the 

 estimates either to an intentional or an unintentional 

 error on the part of the calculator? I do not say 

 I should pin my faith to all the estimates. I do 

 not suppose the facts vary as much as the estimates 

 do. 



2640. But you think they do vary very widely? 

 I am sure they do. 



2641. On the whole where you have had really 

 accurate accounts these have been kept by men who 

 have been carefully counting the costs of their pro- 

 duction? Yes. 



2642. These are the men who would naturally keep 

 the closest check upon their costs? Yes. 



2643. They would be the most economical producers 

 on the whole? Yes. 



2644. Their accounts would really be representing 

 chiefly the cost of production in the most skilful and 

 economical hands? Generally. I must guard that by 

 saying that of course some people may adopt over 

 elaborate methods which do not pay their way which 

 are not worth while. 



2645. But speaking generally that is so? Yes, I 

 should expect to find them the more efficient. 



2646. You have advocated to-day the policy of the 

 permanent control of the milk trade. It was stated 

 in the newspapers some time ago that that policy had 

 been abandoned by the Government that a decision 

 against it hact been registered? Certainly.- 



2647. The Food Controller is a member of the 

 Government ? Yes. 



3648. He therefore participates in that decision!- 

 Certainly. 



2649. It is only your personal view that you are 

 putting to us to-day that there should be permanent 

 control of the milk trade. I just want to get the 

 fact? Yes. I will simply state the facts. The Food 

 Controller, as he himself stated, did put up a pro- 

 posal for permanent milk control, and recommended it 

 to the Government. The Government did not accept 

 it. I do not know whether that has altered the Food 

 Controller's view or not now; I have not asked him. 

 I suggest that you should ask him yourself; that is 

 the position. 



2650. So that it is a little difficult perhaps to distin- 

 guish the exact shades of approval and disapproval 

 in these matters. The policy was the policy of the 

 Food Ministry? Yes. 



2651. But it was not accepted by the Government? 

 No. 



2652. But you still put it forward for our considera- 

 tion:' I did not treat you as a War Cabinet to 

 which I was putting a definite proposal. I thought 

 that I was asked whether in my view there was 

 any case in which guarantees were desirable, and 

 I said that I thought they were desirable in the case 

 of milk. I should say that I am not sure the case is 

 proved for them in anything else; I do not know about 

 the other things. 



2653. It is a very important and far-reaching pro- 

 posal of course. You said in evidence just now that 

 there are great variations of cost in the production 

 of milk? Yes. 



2654. If the object of the Government were to in- 

 crease or even to maintain at its present level the 

 production of milk, it would necessarily have to give 

 such a price' as would not throw out of business any 

 large number of more expensive producers? A price 

 that would not throw out more people than it would 

 attract in ; that is how I should put it. 



2055. If you take the existing producers your price 

 would need to be on such a scale as would not throw 

 out any considerable proportion of them unless you 

 had something more than a hope of getting in others 

 to take their places. I mean to say, people do not 

 srnd a notice that they are going to resign their 

 position as milk producers : they simply sell off 

 their cows? They usually sell them to a more effi- 

 cient producer. 



2656. You would have to fix your price with regard 

 to the maintenance of the existing supply? Cer- 

 tainly. 



2657. And you would have to recognise that part 

 of the supply which is produced at a very high cost? 

 It is purely a question of degree how far down you 

 would go. 



2658. Quite so, but you would have to go down a 

 good long way as you did in the case of potatoes? I 

 think I should recognise that a number of these 

 people who are producing at a high cost now since 

 they are selling in a competitive market are not find- 

 ing it as expensive as they say, so they are content 

 to go on for some reason or another without a profit. 



2659. Does it not occur to you that people regard 

 rather differently a price fixed by the Government 

 than they do a price for which they have to look 

 according to the accidents of the market? The money 

 is the same in their pockets. 



2660. Yes, but they look at the tilings in rather a 

 different way, do they not? I am sure you recognise 

 that you would have to consider the most expensive 

 part of the production in fixing your prices let us 

 assume it was a third part of the production. Sup- 

 posing you take some milk which is produced very 

 cheaply, and some which is produced moderately 

 cheaply, and some which is produced at great cost. 

 You would not say you could afford to do without 

 all of that which is produced at a relatively high 

 cost? No, not all of it, if it was a third, certainly. 



2661. If the price were fixed to cover uneconomical 

 producers, and the economical producers raised their 

 average produce from 500, we will say, to 800 or, 900 

 gallons, they would naturally make large profits? 

 Vi's, they would. 



2662. Those profits would be likely to attract con- 

 siderable attention and criticism as in the case of 

 Lincolnshire potatoes? I should think they might. 



2663. All these prices would require to be constantly 

 discussed in the future as they have been in the past. 

 with some such body as the Consumers' Council or the 

 House of Commons? Or the House of Commons. 



2664. Therefore, you would perpetually have all the 

 more economical producers of milk under the lash of 

 public criticism? I ithink that the public could be 

 educated. 



2665. It would require some education to avoid 

 criticism. It does not correspond with your present 

 experience, does it? I think that the public need 

 some education in the necessity of recognising that 

 the efficient people must be allowed exceptional profits 

 if you wish to stimulate efficiency. 



2666. For a period of years the efficient producer 

 would be a sort of whipping-boy? I do not think he 

 would suffer. 



2667. Do you think that sort of thing is good for 

 an industry, that an efficient producer should be sub- 

 ject to an insinuation of getting a subsidy from 

 the State? I do not want to deny these criticisms of 

 State control. It is a question whether it is better 

 or worse than the alternative. 



2668. Could you have a State guarantee of milk 

 prices without State purchase of all the milk? I do 

 not think you could have it without the State pur- 

 chase, we will say, at least of the wholesale milk. 



2669. Are not the chief evils of the milk trade in 

 the retail distribution? What evils are you referring 

 to? 



2670. The loss of quality of the milk on the way to 

 the consumer and the waste of labour in its distribu- 

 tion. Are not those evils far more widespread in the 

 retail than in the wholesale trade? I do not know 

 that they are more widespread in the retail trade 

 which operates directly from the farmer to the con- 

 sumer. 



2671. I am talking of the retail trade as between 

 the wholesale trade and the consumer? If you take 

 the case of London, I think you would have to tako 

 the retail trade necessarily. 



2672. The Government would have to conduct the 

 business? I think in London, certainly. 



2673. On its retail side as well as its wholesale side? 

 Yes, practically. 



2674. That would be a very large undertaking, 

 would it not, by way of Government trmling? Tt 

 would have been thought so before the war. 



