248 WHEAT PRODUCTION IN NEW ZEALAND 



A President of the American Sugar Refining Company 

 has well said that "The tariff is the mother of trusts," 

 and the maternal relationship is well exemplified in this 

 case. Sheltered behind the import duty on flour, the 

 monopoly could raise the price to a high figure, but not 

 high enough to make imports from Australia profitable. 

 On the other hand, the price of wheat could be lowered 

 considerably, for London is our outside market, and 

 provided that New Zealand prices are not lower than 

 English prices by more than the cost of freight, insurance, 

 interest, and other shipping and landing charges, export 

 is relatively unprofitable.* With reduced prices the 

 margin of cultivation would probably recede, and pro- 

 duction would be limited to the higher grade lands, that 

 is, so long as sufficient supplies were forthcoming to 

 give the monopoly the maximum net revenue. But the 

 problem if pursued in detail would lead us into a 

 consideration of the relative positions of the various 

 rural industries, and indeed, the whole question of the 

 prosperity of the community in general. Enough has 

 been said to show the nature, extent, and operation of 

 the Flour Millers ' Association, the relation between it 

 and the wheat industry, and the fruitful path of investi- 

 gation it opens up. With the present regulation of 

 prices by the Government, the problem of monopoly is 

 out of the question. This, however, is no reason why it 

 should not be discussed. After-war conditions may 

 again be favourable to such a monopoly, and it is 

 necessary to realise now what attention is likely to be 

 given to trade combinations in the reconstruction policy, 

 if any, after the War. 



*At the present time when wheat is relatively scarce, the 

 miller is not in so fortunate a position. It is an interesting 

 subject of speculation, however, to reflect on the possibility of 

 an agreement with the farmers in times of scarcity. 



