Cornell University Library HD9011.4.G78 Interim report on meat, milk, and bacon 3 1924 013 906 353 „ DEPARTMENTAL COMMITTEE ON PRICES. COMMITTEE APPOINTED BY THE BOARD OF TBADE TO INVESTIGATE THE PRINCIPAL CAUSES WHICH HAVE LED TO THE INCREASE OF PRICES OF COMMODITIES SINCE THE BEGIINNING^ OE THE ¥AH. ;. INTERIM REPORT ^^ / ON V MEAT, MILK, AND BACON. Presented to both Houses of Parliament by Command of His IDajesty. ■L •n_^ LONDON : FEINTED UNDEE THE AUTHOEITT OF HIS MAJESTY'S STATIONEEY OFFICE By DAELING and SON, Limited, Bacon Steeet, E. To be purchased, either directly or through any Bookseller, from WYMAN and SONS, Limited, 29, Bkeams Buildings, Fetter Lane, E.G., 28, Abingdon Street, S.W., and 54, St. Mart Street, Cardiff; or H.M. STATIONEEY OFFICE (Scottish Branch), 23, Forth Street, Edinburgh; or E. PONSONBY, Limited, 116, Grafton Street, Dublin; ' or from the Agencies in the British Colonies and Dependencies, the United States of America and other Foreign Countries of T. FISHEE TJNWIN, Limited, London, W.C. [Gd. 8358.] Price £^.. 1916. CONTENTS. Page Minutes of Appointment '^ Repobt : — Introduction .. ** I. Prices in General 4 II. Meat Prices : — 1. Causes of Advance ... ... ... .. ... ... ... •.• "> 2. Exploitation of Sources ... ... ... ... ... 9 3. Transportation and Freight Charges ... ... ... 10 4. Profits and Costs of Distribution ... .. ... ... ... ... 10 III. Milk Prices : — 1. Causes of Advance ... ... .. ... ... ... ... ... 11 2. Profits and Costs of Distribution ... ... ... ... ... ... 12 IV. Bacon Prices 13 V. Recommendations 14 Memorandum appended by certain members of the Committee ... ... 17 Appendix to Report : — Table I. — Changes in Rates of Wages... ... ... ... ... ... 18 Table II. — Amount of Increase in Prices of certain Commodities in the United Kingdom ... 18 Table III. — Amount of Increase in Prices of various other Commodities in London ... ... ... ... ... ... ... ... 19 Table IV. — Imports of Bacon and Hams into the United Kingdom ... 19 Table v.— Cost of Meat and Milk Production , 20 cyjj j) g^r DEPARTMENTAL COMMITTEE ON PRICES. MINUTES OF APPOINTMENT. At the Council Chambek, Whitehall, This seventeenth day of June, 1916. Peesent : The Eight Honourable Walter Eunciman, M.P. The Board of Trade are pleased to appoint the following persons, namely : — The Eight Honourable John Mackinnon Eobertson, M.P. {Chairman), Mr. William Crawford Anderson, M.P., Professor W. J. Ashley, Mr. John P. Boland, M.P., Mr. Thomas Brodrick, Sir Gilbert Henry Claughton, Bart., Mr. John Eobert Clynes, M.P., Mr. Eowland Edmund Prothero, M.V.O., M.P., Mrs. Pember Eeeves, Mr. Thomas Shaw, and Sir William Capel Slaughter, to be a Committee to investigate the principal causes which have led to the increase of prices of commodities of general consumption since the beginning of the War, and to recommend such steps, if any, with a viejv to ameliorating the situation as appear practicable and expedient having regard to the necessity of maintaining adequate supplies. The Bpard are further pleased to appoint Mr. Edmund Cecil Eamsbottom to be Secretary to the said Committee. (Signed) WALTEE EUNCIMAN. At the Council Chamber, Whitehall, This twenty-second day of June, 1916. Present : The Eight Honourable Walter Eunciman, M.P. Eead this Board's Minute of the 17th June, 1916, appointing a Committee to investigate the principal causes which have led to the increase of prices of commodities of general consump- tion since the beginning of the War, and to recommend such steps, if any, with a view to ameliorating- the situation as appear practicable and expedient having regard to the necessity of maintaining adequate supplies. The Board of Trade are pleased to appoint Mr. D. Drummon'd Eraser to be an additional member of the said Committee. (Signed) WALTEE EUNCIMAN . (9261r— 14.) Wt. 29613—372. 5000. 10/16. D & S. Gr 4. A 2 INTERIM REPORT. To the Right Hon. Walter Runciman, M.P., President of the Board of Trade. SlE, On 17th June last you announced the appointment of eleven of us to be a Committee to investigate the principal causes which have led to the increase of prices of commodities of general consumption since the beginning of the war, and to recommend such steps, if any, with a view to ameliorating the situation, as appear practicable and expedient, having regard to the necessity of maintaining adequate supplies. A twelfth member was added to the Committee on 22nd June. Immediately on the receipt of our appointments we met as a Committee ; and between 22nd June and 21st September we have held 33 sittings, examining in all 66 witnesses, three of whom were recalled for further examination. At our first meeting we decided that after a general survey of prices and of the means so far used to control them, our proper course would be to concentrate successively on the main items of the investigation and to begin with the correlated problems of Meat, Milk, and Bacon. These have occupied us up to the present. In view of the pressing public interest of the whole question, and of the probable length of the Inquiry, we have thought it expedient to submit an interim Report on our Inquiry thus far ; and we propose, with your approval, to follow that course in our further investigations. We have now the honour to present the following interim Report on the topics mentioned, with a preliminary sketch of the movement of prices in general as between 1914 and 1916. I.— PRICES IN GENERAL. 1. The statistics regularly published in the Board of Trade Labour Gazette, which appear to the Committee to be carefully compiled and trustworthy, have exhibited the increase in retail food prices since the beginning of the war. In the following official Table is giveii a percentage comparison of the level of food prices at 1st September, '1916, in relation to the prices of July, 1914: — - Percentage Increase from July, 1914, to I'st September, 1916. Article. Large Towns (populations over 50,000). Small Towns and Villages. United Kingdom. Beef, British : — Eibs * Thin Flank Beef, Chilled or -Frozen :— Eibs Thin Plank Mutton, British : — Legs Breast Mutton, Frozen : — Legs Breast Bacon (streaky) Fish , Flour (households) Bread Tea Sugar (granulated) Butter :— Fresh Salt Cheese Margarine Eggs (fresh) Potatoes 61 87 83 102 57 92 89 123 49 103 59 ' 58 51 166 39 48 ' 47 45 20 86 55 ■ 59 • 72 76 92 54 68 80 111 42 70 65 50 50 160 32 49 49 48 17 78 49 60 80 80 97 55 80 84 117 46 87 62 54 50 163 85 48 48 46 18 82 52 All above articles (weighted percentage increase)... 68 62 65 2. The "weighting" process, by which special significance is given to the increases that chiefly count in working-class expenditure, may be taken to yield a fair idea of the rise in the average cost of food, assuming that there has been no change in the character and quantity of .the commodities purchased. To these figures may be added the statement that prices of EEPORT. vegetables have also, in most cases, increased to a considerable extent. On tbe other band, it is to be observed that the increased duties on tea and sugar account for 6 per cent, of the toi^l rise, leaving 59 per cent, as tbe result of the market conditions. , 3. The Committee have taken coinpetent evidence as to tbe manner and degree in wbicb tbe • general rise in prices bas affected tbe life of tbe people ; tbougb tbey were satisfied in advance tbat considerable hardship must be involved. The fact that increase of rents in general has been prohibited by legislation, and that other items of expenditure have not risen on the average so much as food, does not counterbalance the general pressure. In the words of the Director of tlie Department of Labour Statistics of the Board of Trade in September, 1916, " It may be estimated that the average increase in the cost of living of the working-classes, between July, 1914, and tbe present time, taking food, rent, clothing, fuel and light and miscellaneous expenditure into consideration, is about 45 per cent., disregarding increased taxation and assuming tbat the standard of living has not been modified in view of war conditions." 4. No statistics are available to show the extent to which the total earnings (as distinct from rates of wages) have increased since the beginning of the War. Figures have been supplied by the Dep'artment of Labour Statistics, and are given in an Appendix (Table I.), indicating the estimated effect of the war bonuses and increases in nominal rates of wages which have been granted to workpeople of the manual labour classes (excluding salaried officials and clerks, shop assistants and domestic servants), from the beginning of August, 1914, to the end of August, 1916, so far as reported to tbat Department. Generally speaking, the increases in rates of wages are much below those recorded in the price of food and other necessaries. The figures, however, do not include the increases in earnings which have resulted from greater regularity of employ- ment, additional overtime and night-work, substitution of piece-work for time-work, speeding up of piece-work, transference of individuals from less to more highly paid employments, and other factors which have tended to raise the actual earnings quite apart from the increases in rates; so that these latter in many .cases fall far short of indicating the total increase in wages. 5. The evidence taken goes to show tbat there is less total distress in the country than in an ordinary year of peace, the majority of the classes which chronically suffer from distress being in iinusually regular employment, and that this, together with the higher wages earned by, and the greater needs of, so many skilled and unskilled workers employed directly and indirectly in the production of munitions of war, has tended to increase considerably, in some directions, the total demand for food. On the other hand, certain classes normally in regular employment, whose earnings have not risen in the same proportion as the cost of living — for example, the cotton operatives and some classes of day-wage workers and labourers — are hard pressed by the rise in prices, and actually have to curtail their consumption, even though the pressure of high prices may have been mitigated, in some cases, by the employment of members of a family in munition works, and by the opening of better paid occupations to women. Many people in receipt of small fixed incomes necessarily also feel tbe pressure ; and it is obvious that while the total receipts of families past school age may have greatly increased, a family of the same class in which children are within school age may suffer exceptionally. 6. Any practicable method of checking tbe rise in prices, therefore, should anxiously be considered. Thus far, the rise in retail food, prices has been broadly continuous since the outbreak of the war. After tbe 15 per cent, increase registered on August 8th, 1914 (which was below tbe earlier figtijes of the week), had fallen to 10 per cent, in September, 1914, the upward movement has been as shown by the following figures, relating to the beginning of each month : — Per Cent. Per .Cent. 1914: October 12 1915- October 40 November ... ... ... 13 November ... ... ... 41 December ... ... ... 16 December ... ... ... 44 1915: January 18 1916: January 45 February ... 22 February 47 March 24 March 48 April 24 April 49 May 26 May 55 June 32 June 59 July 32i July ... 61 August 34 August 60 September 35 September 65 At different points the increases stand mainly for rises in particular items. Thus the winter rise of 1914-5 represented mainly flour and bread; in May, 1915, the increase was chiefly ascribable to meat; and in September the upward movement was from the increased duties on tea and sugar; while the rise in April-May of this year stands chiefly for advances in the price of meat, sugar and potatoes, the rise in sugar being due to new taxation, and the rise in potatoes partly to the lateness of tbe new crop ; and that in August, 1916, is mainly accounted for by increases in the prices of bread, flour, butter and .eggs. In the Appendix (Tables II. and III.), official lists are given showing the incrisases in the actual average retail prices of the articles dealt with in the percentage statements above given, and of a number of other foods of common consumption. 7. In regard to clothing the statistical data available are not so extensive as those drawn upon for food prices ; but the following Table, made up from selected cases, and supplied to 9075 A 3 DEPARTMENTAL COMMITTEE ON PRICES. the Committee by the Department of Labour Statistics of the Board of Trade, may be taken as broadly representative of the upward movement in the prices of standard articles of clothing and boots : — Average Percentage Increases in the Prices of the undermentioned Clothing Materials, Articles of Clothing, and Boots, between July, 1914, and September, 1916. Article or Material. "1 1st July, 1915. 1st December, 1915. 1st March, 1916. 1st June, 1916. 1st September. 1916. Per cent. Per cent. Pet- cent. Per cent. Per cent. Woollen material for garments 35 50 60 65 75 Woollen underclothing and hosiery 35 60 70 80 90 Men's suits and overcoats 15 20 30 30 40 Cotton material for garments 10 20 30 40 50 Cotton underclothing and hosiery ... 5 20 30 40 50 Boots and shoes ;— Men's heavy 30 45 55 65 75 Men's light 25 35 40 50 60 Women's 20 30 40 50 60 Children's 25 35 50 60 70 Prom some points of view, the figures gain in significance if translated into terms of money. Thus, Derby tweeds for men's clothing, priced at 3s. to 4s. before the war, have increased to bs. and 65. a yard. Women's costume cloth, 2s. Qd. a yard before the war, on 1st September, 1916, was about 4s. 9d. Men's woollen vests, then 2s. 9d. to 3s., now average about Qs., and ready-made suits have increased, for example, from 30*. to 42s. and 45s. Cotton print at 6d. to 7d. before the war is now 8^d. to 9d. a yard; white calico, then 4J«Z., is now G^d. a yard. Men's heavy boots at 8s. Ud. in July, 1914, were 15s. 6d. to 16s. Qd. a pair at the beginning of September, 1916. Women's boots, formerly at 6s. lid., had advanced to 10s. 6d. and lis. 6d. These figures, it should he stated, are given not as average prices, but as examples of the changes which have been reported. 8. The principal remaining item in average expenditure as affected by the war is that of coal, concerning which it has to be noted that prices vary greatly as between coal producing areas and others. Thus, while in Lancashire and Yorkshire increases of 3s. to 5s. per ton are noted as between July, 1914, and September, 1916, in the south of England and in Ireland prices have risen as much as 14s. and 15s. per ton. The following Table gives the course of retail prices in 1915-1916, the average price in July, 1914, being 25s. 4d!. for London and 22s. bd. for the 30 provincial towns included in the Table. In the case of London the average is reached by taking the mean of the prices quoted for Derby Brights, Kitchen coal, and Nuts; in the case of the provincial towns the figure given is the average of the price paid for the coal most popular in each town : — Date. Average Price per Ton at the beginning of each Month. Average Percentage Increase between, July, 19'14, and the beginning of each Month. London.* Provincial 'Towns. London.* Provincial Towns. 1915. s. d. s. d. Per cent. Per cent. January 29 4 23 5 16 5 February ... 32^ 4 25 5 28 13 March 34 4 26 9 36 19 April 34 4 27 2 36 21 May 31 4 27 3 24 22 June 31 6 27 9 24 24 July 31 6 27 10 24 24 August 31 6 28 2 24 26 September .., 81 6 27 11 24 25 October 31 6 28 1 24 25 November ... 32 4 28 5 28 27 December ... 32 4 28 8 28 28 1916. January 32 4 28 11 28 29 February 32 4 29 0- 28 29 March 33 4 29 2 32 30 April 33 4 29 4 32 31 May 33 4 29 4 32 31 June 33 4 29 7 32 32 July 33 4 29 8 32 32 August 33 4 29 9 32 33 September 33 4 29 9 32 33 * The figures for London are exclusive of the extra charge of 1«. per ton made in districts south of the Thames since lat October, 1915. KEPOHl. ' 9. The pit-head price of coal was regulated in 1915 by the Price of Coal (Limitation) Act, which imposed penalties for asking or taking a price exceeding by more than a standard amount (4.S. per ton) the price for coal of the same description, sold under similar conditions, in the period July, 1913, to June, 1914. In London and various important centres throughout the country, also, the leading coal merchants have undertaken to limit the charges added by them to the cost of coal, as delivered to the merchants, or not to advance prices above an agreed level without consultation with the municipal authorities, in the first place. In .London, further steps have been taken with a view to preventing the exploitation of the poorest buyers of coal in the event of temporary difficulties in regard to supplies. A definite schedule of prices for sales of coal in small quantities has been established, and the London County Council requires this schedule to be kept posted up in the small shops where coal is sold in pennyworths and similar small quantities. II.— MEAT PEICES. 1. Causes of Advance. 1. In the light of the general movement of prices above indicated, the rise in that of meat is scarcely surprising. During the last five months of 1914 the retail prices of British beef and mutton showed but little increase, the average being about Id. per lb. In the early part of 1915 a steady advance occurred, and at the beginning of May the total increase from July, 1914, averaged l^d. A further sharp rise in May, 1915, brought prices to 3d. per lb. above the pre-war level; but during the remainder of the year the fluctuations were small, and 1916 opened with prices about the level of the previous June. The following Table compares the wholesale prices at Smithfield Market of certain descriptions of dressed meat, both British and foreign, in January, 1914, and January, 1916.* Description. r- ■ Average Price in January, 1914. Average Price in January, 1916. Increase in January, 1916, as compared with January, 1914. Per cwt. Per cwt Per lb. BEEir. s. d. s. d. d. Scotch Short Sides 64 9 86 4 2-31 English 60 44 76 8i 1-75 Irish (Port killed) 58 4 74 4i 1-72 Argentine Chilled :— Hind Quarter 49 7 81 8 3-44 Fore Quarter 39 8 60 8 2-25 Mutton. Scotch ... /. 75 10 95 8 2-13 English 71 9 87 6 1-69 New Zealand Frozen 48 8 72 4 2-54 Argentine Frozen 42 3i 70 2-97 Australian Frozen 42 65 4 2-50 Lamb. New Zealand Frozen 72 4 74 Hi 0-28 Argentine Frozen 58 Oi 71 5i 1-44 Australian Frozen 58 05 70 9i 1-37 Pork. British 68 10 98 3-18 * The prices quoted are those reported for Meat of First Quality in the " Return of Market Prices " issued weekly by the Board of Agriculture and Fisheries, except in the case of New Zealand Frozen Mutton, the prices of which are not shown in the Weekly Return of Market Prices for both of the periods compared. The prices quoted for New Zealand Frozen Mutton have been extracted from the " Meat Trades Journal." 2. During the present year there was a continuous rise in the retail price of British meat until June, and although there has been slight change since then, retail prices at 1st September, 1916, averaged about b^d. per lb. above those of July, 1914. To a certain extent this increase can be at once accounted for in terms of cost of production, which has steadily risen. The number of cattle in the United Kingdom remained practically the same after a year of war, ,the figures being 12,184,000 in June, 1914, and 12,171,000 in 1915; and the provisional figure' for the present year shows an increase of about 280,000 over that for 1915. With a view to keeping up supplies of all kinds, the Government at an early stage of the war put restrictions on the export of feeding stuffs, including oilcakes, maize, barley, and oats, and also on fertilisers, and the Department of Agriculture and Technical Instruction for Ireland appealed to the farmers to. maintain the nunlbers of the breeding stocksand young animals in that country. Neverthe- 9075 A 4 8 DEPARTMENTAL COMMITTEE ON PRICES. less the prices of feeding stuffs wid fertilisers have risen greatly, as shown by the particulars given in the Appendix (Table V.), from which the following figures are extractea. ^ Average Price per Ton before the War. Feeding Stuffs :— Linseed Cake Cotton Seed Cake Soya Bean Cake Maize Meal Fertilisers : — Nitrate of Soda (best 95 per cent, pure) Basic Slag (prime quality, 20/34 per cent, phos.)' Sulphate of Ammonia Average Price per Ton in July, 1916. £ s. d. 12 15 9 9 15 9 12 2 6 11 8 5 6 17 12 r 3. Agricultural wages have also risen in consequence of the shortage of labour ; so that some rise in British meat prices was to be 'expected even if there were not an advance m those of imported meat, which normally forms over 40 per cent, of tl^^ ^^t^"'^ \^°.^'"^P*\°^;„,S^} such an advance has concurrently taken place; the mam reason m this case being the abnormal demand for frozen meat for the armies of the Allies. Before the war the main and almost the only European market for frozen and chilled meat was the British. I^ot only, however did the War 0£ace on the outbreak of war, place a large new demand for frozen meat which has progressively increased, but the French and Italian Governments were now compelled to follow the example of this country, and to supply their armies with imported frozen meat. In the middle of 1915 the French cattle herd had been reduced by 2,300,000 head, partly owing to the ravages of war, and partly to the demands of the French army. Foreign imports thus became a necessity. The greatly increased demand thus made upon the world s stocks usually a,vailable for British consumption has led, under existing conditions, to a great general advance m price. Not only do the new British armies in the field and in home-training consume very much more per head than was the case in time of peace, but the French and Italian armies also make a new demand on the extra-European supply. Consequently, meat prices have risen in neutral countries in general, as well as among the belligerents of the Entente. In the Central Empires they have risen veAy much more, as is indicated by the following figures, which show the per- centage rise in retail prices from the beginning of the war up to the end of July, 1916 (the latest date for which comparable figures are available) : — Berlin. Vienna. Beef Mutton 198 179 344 United Kingdom. (Large Towns.) 75* 75* 4. The British rise becomes at once fully intelligible when we note the movement of supply. The United Kingdom statistics of importation for the last five years are as follows : — 1911. 1912. 1913. 1914. ^ 1915. Chilled Beef Frozen Beef Frozen Mutton Tons. 196,652 170,936 260,645 To 193,823 205,780 242,935 Tons. 262,400 197,644 260,213 Tons. 240,611 201,355 252,462 Tons. 130,927 299,052 232,946 All the above 628,233 642,538 720,257 694,428 662,925 5. In 1915 the imported frozen beef was almost entirely used for consumption by the Allied Forces; and the consumption of the Armies (including the direct importation of frozen beef to the Continent for military purposes) was so great that not only was there a reduction of about one-half in the supply of chilled beef for the British civilian population but it was necessary to increase the total production of frozen and chilled meat in South America. The demand was so strong that the imports of chilled and frozen beef from the United States to the United. Kingdom (formerly considerable but reduced from 1907 onwards almost to the vanishing point) recovered in 1915 to 50,068 tons. On the other hand the imports of frozen mutton from Australia were nearly 25 per cent, lower in 1915 than in 1913, on account of the destructive drought. At the same time the home-grown supply of beef and mutton experienced only a slight increase, and the imports. of live and fresh-killed stock fell from- 11,175 tons in 1913 to 2,552 tons in 1915. In 1916, the growing Army demands have still further reduced the quantity of beef and mutton available for general consumption. According to one expert calculation, whereas the imported supply formerly constituted 40 per cent, of the whole con- sumption, it now constitutes rather less than 20 per cent, of the civilian consumption. 6. This statement furnishes the main explanation of the fact that while the retail meat trade has greatly shrunk, many hundreds of shops being closed, high prices continue to be maintained. As a result, on th« one hand, of the reduction of the imported supplies and attendant high prices and, on the other hand, of the appeals made by the Government to the * These figures relate to British meat. The increase in the price of chilled or frozen meat averaged about 100 per cent. EEPOET. y citizens in general to curtail their use of meat, it is estimated that the civilian consumption of beef and mutton has latterly been reduced by about one-sixth. Seeing that very large numbers of the workers engaged on munitions or doing other arduous work under an increased strain require more than the normal allowance of meat food, it may be further inferred that the reduced consumption by citizens not so situated has been so considerable as to keep prices lower than they would otherwise have been. 2. Exploitation of Sotteces. 7. The securing of an adequate meat supply for their armies was naturally one of the first concerns of the Allied Powers; and the British Government has from an early stage operated on behalf of the Allies as well as on its own. The chief sources of established supply were the Argentine Eepublic, Uruguay, and the Australasian Dominions; but new works had been opened in China, Venezuela and Madagascar ; large developments were possible in Brazil ; and some increase could be looked for from Canada and South Africa. As national tastes in meat vary, the British demand has continued to be met in the main from former sources, while Uruguay, Venezuela and Mad»gascar have been drawn upon for France, and China and Brazil for Italy. As regards the supply from Australia and New Zealand, the nation is under a debt of gratitude to the Dominions for their prompt co-operation. In August, 1914, the Queensland Government passed an Act giving them full control over the meat supplies of the State for Imperial purposes; and New South Wales passed a similar Act early in 1915. When, in February, 1915, the Australian and New Zealand Governments agreed to purchase on behalf of the mother country all the beef, mutton, and lamb available for export, f.o.b. prices were amicably arranged in all the States, and the whole exportable supply was duly shipped. Unfortunately, the severe drought of 1915, which destroyed a large quantity of stock, greatly curtailed Australian supplies, thus tending to raise prices still further. 8. The prices in New Zealand before the war and at the beginning of March, 1915, may be compared as follows. I'he figures for 1915 are the f.o.b. prices agreed by the New Zealand Government. Corresponding figures for June and July, 1914, are not available, and those given are based on the c.i.f. prices for those months, less freight and other expenses. They are believed to be fairly comparable with the figures for March, 1915. Beef, prime ox Wethers, 1st quality, 72 lbs. and under Ewes, 1st quality, 72 lbs. and under ... Lamb, especially prime Lamb, 1st quality, 42 lbs. and under ... Queensland beef was lower, the price in that case having been fixed at a somewhat earlier \ date. While, however. New Zealand prices have not been altered since the scheme was started, the shortage caused by the drought has caused the Queensland price to be raised by about 8 or 9 per cent. 9. All the Australasian supply not required for Army purposes is put on the home market, and the price obtained by the Board of Trade has to cover not only the f.o.b. price, but also the costs of storage on land, freight, insurance, and landing and selling expenses. 10. South American supplies, of course, cannot be similarly regulated in the Allied interest, and the situation there is determined by the ordinary play of commercial motives, with the important modification that the British Government controls the insulated shipping required for transport. 11. The settlement of prices has from an early stage been entrusted to Sir Thomas B. Robinson, K.C.M.G., Agent-General for Queensland, who, with the consent of his Government, placed his services at the disposal of the Board of Trade, and has subsequently negotiated the purchases of the French and Italian Governments, competition in buying being thus advan- tageously averted. Under the preliminary British 'contract, prices were fixed according to the market rate of the week following the landing of the meat. A new contract was made with the River Plate meat companies from 1st May, 1915, which lasted till 30th June, 1916. Though the quantity to be provided was more than double that arranged for in the first contract, the price was little higher than the average of those previously paid, and actually lower than the landed value of cargoes being delivered at the time the second contract came into force. 12. Seeing, however, that the beef demand of the Allied Forces exceeds the total importa- tion into the United Kingdom in 1913, no practicable pressure could have prevented a great advance on previous prices. A new contract has now been negotiated for a still larger supply from the River Plate at a price 7 per cent, above that of the second contract. This will run till three months after the end of the war, subject to three months' notice on either side. Save for the meat available for importation on the private account of the meat companies, this contract covers the whole production of the flocks and herds of the Argentine and Uruguay. The general opinion of expert witnesses, in which the Committee concur, is that, considering all the circum- stances of an abnormal situation, the buying on behalf of the Board of Trade has been economical. 13. To complete, as far as possible, the machinery of supply from this quarter, the Board of Trade has leased from one of the British meat companies a freezing-works in the Argentine which had been idle for some years, arranging that that company should manage it on terms which make the remuneration depend on the amount of saving effected. 9075 4 5 June and July, 1914. March, 1915 Per lb. Per lb. 3P. 4ld. 3P. ^d. 3K U. bd. bid- ^d. b\d. 10 DEPARTMENTAL COMMITTEE ON PEICES. 14. The evidence laid before tlip Committee goes to prove that there has been a considerable rise in the f.o.b. price of meat in South America since the beginning of the war. Figures supplied confidentially by different witnesses show increases, in the case of beef, ranging from 50 to 80 per cent, on the pre-war figures. A large proportion of this increase has gone to the cattle raisers in the Argentine, but the evidence before the Committee does not enable them to measure it accxirately. 3. Transportation and Freight Charges. 15. The great difficulty as to imported meat supply throughout the war has been the shortage of shipping. The outbreak of war had the effect of suddenly and greatly raising prices,; and the rise once established, it could not be wholly removed by any care of administration, in view of the urgency of the demand. In May, June, and July, .1914, the wholesale price of Argentine chilled beef averaged nearly 44*. per cwt., and in September, 1914, it averaged GOs. 3d. After that date there was a fall in the price, and though there was another period of high prices in the summer of 1915, at the beginning of 1916 the average was less than 11*. above that for September, 1914. The arrest in the autumn of 1914 was effected by the intervention of the Government to moderate the rise of Plate freights for meat. Systematic shipping arrangements were afterwards made, and the insulated spaces on all British ships trading to South America and Australia were requisitioned, so that freights were regulated in a manner which prevented any serious addition to meat prices on that score. During the early part of the war, for sufficient reasons, one British-owned line was allowed to continue running between the River Plate, and New York, but the amount of meat carried by it to the United States was relatively small and latterly that line too has been restricted for meat to British service. 16. The result is that though rates on meat for the civilian population have risen by 30 to 60 per cent.' above pre-war figures, freights, being thus regulated, do not constitute a main item in the increased cost of imported meat, the average amount, including the increase during the war, being not more than Id. per lb. The high wholesale prices of foreign meat, therefdre, subsist by reason of the reduced amount available for civilian use, the high general demand, and the limitation, of means of transport. The last-named factor includes the handling of cargoes in port and by rail; and the frequent congestions in the docks, which so seriously limited the working power of ships, played an important part in the restriction of supplies. But tonnage, too, has been inadequate. Before the war, the insulated steamers in the River Plate trade could carry 560,000 tons of meat in a year : to-day they can carry only 450,000 tons. Australasian insulated steamers before the war could also carry about 560,000 tons of meat in a year; to-day their meat capacity is 520,000 tons. Their tonnage, however, is largely required for butter, cheese, rabbits, and fruit, so that they carried only 273,000 tons of meat in 1913 and 283,000 tons in 1915, showing a slight gain. On the other hand several meat-carrying steamers have been wrecked or sunk by the enemy ; and though there have been added to the Australasian fleet interned steamers capable of carrying about 12,000 tons per annum, and to the Plate fleet vessels formerly trading to neutral countries with an annual capacity of 80,000 tons, the meat- carrying power of all combined is no, greater than that available before the war, while the demand of the Allies, as above indicated, is considerably greater. Only by an increase of» insulated tonnage, seconded by rapid handling in the ports, can the imported meat supply for civilian consumption be effectually increased. Given such an increase, we are of opinion that larger quantities could be imported from the Australasian Dominions, and probably from other quarters. 4. Profits and Costs oe Distribution. 17. It may be l^ken as certain that considerably increased profits have been made during the war by cattle breeders in the United Kingdom and in the foreign countries, especially South America, chiefly drawn upon for the meat supply of the Allies. This is the first main iteni in the increase of price ; and as regards the cattle breeders of the United Kingdom it is partly offset by the increased cost of labour and of feeding stuffs. An increased amount of capital being thus involved in the handling of the product at each stage, it may be assumed that additional profits have been reaped at some of them. 18. So much has been said of the large profits of Meat Trusts and other meat dealers that the Committee have been at special pains to investigate in that direction. The impor- tation of meat from the River Plate (including Bahia Blanca) is in the hands of seven firms. Two of these, the British and Argentine Meat Co., Ltd., and the Smithfield and Argentine Meat Co., Ltd., are British; one, the Compania Sansinena de Carnes Congeladas, is a native (Argentine) company; and the other four, viz.. Archer and Co.-, Ltd., Armour and Co., Ltd., the Swift Beef Co., Ltd., and the Morris Beef Co., Ltd., though registered in this country and claimed to be independent companies, are commonly believed to be owned or controlled by the large American meat packers, viz., Wilson and Co., Incorporated (formerly Sulzberger and Sons Co.), Armour and Co., Swift and Co., and Morris and Co. Sociedad Anonima "La Blanca," Compania Argentina de Carnes Congeladas, another Argentine firm which imports separately, is owned by Armour and Co. and Morris and Co. 19. Three of the freezing works in the Argentine are owned by the two British companies. The Sansinena Co. owns two works in the Argentine and one, through a subsidiary company, in Uruguay. Four other works in the Argentine and one in Uruguay are owned by companies vrhich, though separately registered in the Argentine and Uruguay, are believed to be controlled hj the American firms. Another works has recently been opened by a third British company EEPOET., 11 {the Union Cold Storage Co., Ltd.), but from it no meat has yet been imported. Of the total amount of beef exported from the Plate, about two-thirds is stated to be produced by the American firms and only one-third by the two British and one native companies. The American companies also produce about one-half of the export of mutton. There is in addition a trade in mutton from Patagonia, where there are five freezing works. Two of those are under the control of Swift and Co. ; the others export through the agency of British firms. 20. The Committee find that at the outbreak of war the largest profits were made by the importing meat companies who held the available stocks. Owing to shortage of shipping, cattle prices in the Argentine did not rise greatly for some months; but thereafter they rose considerably. The prices latterly paid to the meat companies are certainly remunerative. For example, one of the two British companies has paid a 12^ per cent, dividend for 1915, besides putting £100,000 to reserve. In 1914 that company had paid no dividend, and in 1913 neither of the two concerns which, at the end of the year, amalgamated to form that company, paid any trading dividend, though one distributed a bonus from reserve. It would appear, in fact, that for some time before the war, as a result of rivalry between the English and American meat companies, the British public was getting its imported meat at lower prices than it would otherwise have paid. There seems no reason, further, to doubt the statement that although the company in question did well on the year 1915, it was for some months actually losing on all the meat it supplied. In its retail business it appears to have made little or no profit. The other British company showed a total profit of over £142,000 in 1915 as compared with less than £26,000 in 1914, and a loss in 1913. Details of the dividends of the " British- American " meat firms, which are private companies, are not available to the Committee, but it was admitted by the representative of one of these companies that profits had been made in 1914-15 after two years of loss in 1912 and 1913. On the whole, however, no such profits appear to have been made in the meat importing trade as are recorded in some of the leading " war industries." 21. Nor does it appear from the evidence that meat prices have been inflated by means of the use of cold storage. Chilled meat has to be sold fairly promptly; and frozen meat trings a lower price. The broad fact remains that in the home-meat trade profits made go mainly to the breeders, the graziers in the case of Ireland, and the jobbers; and in the case of meat imported from North and South America, to the breeders and the meat importing companies. But the substantial cause of increased profits is rather the shortage of supply than any process of combination; and but for the Government control of colonial meat, prices might be higher. Reduction of prices at foreign and home sources of supply is obviously difficult under 'existing circumstances. 22. Where price control is practicable — that is, in the case of the Australasian meat put on the market by the Government — it appears to be efficiently applied. The firms who formerly received the Australasian supplies, some 25 in number, act as selling agents for the Board of Trade, receiving a commission of 1 per cent, for sales ex ship, and 2 per cent, for other sales. They are held bound to sell the meat in the usual manner, generally to distributors, but also to large retailers who in the past bought direct from the importing houses, so that as far as possible it shall pass through the usual channels and in the usual quantities. In no case are the wholesale distributors allowed to add more than ^d. per lb. to the price at which they buy from the selling agents. When supply runs short, the distribution is pro rata. Price lists are published weekly by the Incorporated Society of Meat Importers ; and the distributors are held bound to sell only to bond fide retailersin the old proportions, all speculation being forbidden. Selling agents who were formerly in the habit of supplying meat to their own wholesale or retail branches may do so in proportionate quantities ; but in that case they get no commission, and the price they pay is fixed by assessors appointed by the Board of Trade. 23. No price is laid down for retailers; but the wholesale selling policy probably secures a general check on inflation, the instructions to the agents being that they should aim at steady and moderate prices. At times of special shortage stocks are husbanded in order to prevent a period •of extreme scarcity; but prices are on the whole well restrained. In June and July, 1915, for instance, the Board of Trade price for best Canterbury lamb ran about 8^d. per lb. ; but at the end of December it fell to about 7d. : and the 8|•• ,, id. „ bd. 8d. and 8id. 3fd.- ■ 83 „ Plum (Red ) - .- „ id. and i\d. 7id. „ 8d. 34d. 82 • „ Strawberry bd. to 6d. 8id. to lOd. 3id. 68 -Marmalade, Oran ge „ Hd. „ 5Jd. 7d. to lOd. 4d. 89 Syrup, Golden per 2 lbs. 6d. llid. 5^d. 92 Treacle ... bhd. and M. lid. bid. 91 Cocoa, in packets or tins per i lb. lid. to Is. i\d. lOid. to Is. 5id. 2d. 17 CofEee per lb. Is. 3d. to Is. 6d. Is. 6d. „ Is. lOd. 3id. 21 Milk, Condensed ■ English... „ bid. 8id. 3d. 55 Imported .. ... .■■ „ &d. 8id. • 2id. 42 Pickles, Mixed per pint %id. Is. lid. bd. 59 Lard per lb. Id. to 9d. 9d. to Is. 2id. 31 TABLE IV. QUANTITIES AND AVERAGE DECLARED VALUES OP BACON AND HAMS IMPORTED INTO THE UNITED KINGDOM PROM THE UNDERMENTIONED COUNTRIES IN THE YEARS 1911 TO 1915, AND IN THE FIRST SIX MONTHS OP 1914 AND 1916. [Compiled from the Annual and Monthly Statements relating to the Trade of the United KingdomJ. Year. United States of America. Denmark. Canada. Other Countries. Total. A. — Quantities. 1911 1912 1913 1914 1915 Cwts. 2,705,138 2,518,344 2,563,938 2,297,763 4,893,623 Cwts. 2,123,727 2,319,756 2,336,195 2,716,366 2,063,431 Cwts. ■678,102 461,926 333,604 401,271 980,151 Cwts. 316,582 231,949 479,148 521,510 66,630 Cwts. 5,823,549 5,531,975 5,712,885 5,936,910 8,003,835 January to June : — 1914: 1916 1,257,719 3,360,206 1,355,007* 839,466* 169,190 831,134 299,678* 29,659* 3,081,594 5,060,465 B.— Average Declared Values. 1 £ s. d.. £ s. d.« £ s. d. £ s. d. £ s. d. 1911 2 17 6 3 3 1 2 18 9 2 18 4 2 19 9 1912 2 18 4 3 7 6 3 11 2 19 6 3 2 6 1913 3 8 11 3 15 11 3 11 11 3 6 4 3 11 9 1914 3 11 3 3 13 2 3 11 11 3 5 11 3 11 9 1915 3 12 4 8 6 3 16 4 3 11 I 3 16 9 January to June : — 1914 3 7 10 3 10 7 3 8 11 3 2 7 3 8 7 1916 4 10 5 4 6 4 7 4 4 2 4 5 11 * For the periods January to June, 1914, and January to June, 1916, the small imports of hams from Denmark, which are not shown separately in the Accounts relating to Trade and Navigation, are included in the totals for " Other Countries." • 20 APPENDIX. TABLE V. COST OP MEAT AND MILK PRODUCTION. A.— Pjsices of Store Cattle, Dairy Cows, Feeding Stuffs (Imported and Home-produced) AND Fertilisers in England and Wales. [From information supplied by the Board of Agriculture and Fisheries.] Store Cattle : — Yearlings... Two-year-olds Three-year-olds Dairy Cows Feeding Stuffs : — Linseed Cake Cotton Seed Cake Soya Bean Cake Maize Meal Home-Geown Produce : — Roots : — Mangolds Swedes Carrots Parsnips Cabbages Hay:— Clover Meadow Oat Straw Wheat Straw 'Feeding Barley Maize (Plate) Brewers' Grains : — Ale, wet ... „ dry Potatoes ... Fertilisers : — Nitrate of Soda (best 96 per cent, pure) Basic Slag (prim^ quality 20/34 per cent Phos.) Sulphate of Ammonia per head ton Comparative Market Prices.* Before the War. £ «. 9 10 13 14 46 15 20 7 ... „ » ... ,} )j n 1) ... „ j» 11 cwt. doz. j» ton ... ,f J? '• 17 ?i J) )» per 400 lbs. „ 480 lbs. .. per ton jj » ij ?j ■) „ JJ 1) JJ d. 10 3 8 In 1916. 19 1 1 6 3 11 3 9 11 4 17 4 5 6 2 16 6 2 16 1 5 7t 15 7 17 6 9 7 13 11 8 10 14 1 16 £ s. d. 13 12 20 8 26 15 30 19 12 15 9 9 15 9 12 2 6 11 8 1 5 1 6 6 14 6 4 11 16 7 9 6 6 9 6 4 11 6 3 17 2 6 5 2 10 7 .11 8 12 6 6 18 5 3 6 17 12 1 * The figures given for 1916 are the average prices at certain markets in July, except in the cases of potatoes (for. which the figures relate to August), and roots (for which March, April, or May prices are given). The pre-war prices are averages for the corresponding months in the years 1911, 1912, and 1913, except that the prices of fertilisers are for December. For certain items, for which prices are not available for each of the three years 1911, 1912, and 1913, the figures given relate to one or two of those years. f Black Sea. B.— Increases in Cash Rates of Agricultural Wages. \^From information supplied by the Department of Labour Statistics of the Board. of Trade.] There has been a marked upward movement in agricultural wages since the war started. In England and Wales, while the amount of increase varies to some extent in different parts of the country, generally speaking it may be said to vary between limits of 3s. and 6s. per week, tending to exceed these amounts in districts where the competition of other industries has been specially felt. In most parts of Scotland, wages have risen to an even greater extent than in England, the usual limits bf increase being 48. to 8s. or 9s. per week, the higher amounts predominating.