The First 50 Years

Having completed 50 years as a Federation, it is fitting that we should briefly review our history to remind ourselves of our origins and of the debt we owe to t hose pioneers who laid the foundations of the organisation we have today.

The late Mr J.B. Waters, who in 1929 compiled a short history of the Federation, wrote that prior to 1895, and indeed up to the year 1917, the terms of sale and purchase for Grain, Seeds and Produce were in a chaotic condition both in our domestic and overseas trade. The majority of our merchants were unable to distinguish between Custom and Law, which lead to endless confusion and disastrous losses. There were no definite terms as to payment, credit being given indiscriminately, which led to a good deal of overtrading, and in the hard times of the Eighties and Nineties, many bankruptcies occurred.

About the year 1895 the merchants of Dunedin and Invercargill drew up a brief agreement containing three clauses in which Otago and Southland vendors undertook to sell only on the following conditions: Demand draft upon shipment, Bank exchange to be charged, and F.O.B. weights and quality to be the basis of contract. Later other South Island merchants joined in the arrangement which carried on until 1912. Mr W.E. Reynolds took the lead in those matters, and has consequently been referred to as “The Father of the Terms”. These simple conditions worked satisfactorily on the whole, but due to a lack of organisation lapses occurred and irregularities sometimes gave trouble.

The first local Association was formed in 1908 in Canterbury with Me C.H. Hewlett as President. This was followed by a general South Island meeting in 1912, which reaffirmed the Terms of 1895 and added two more clauses which were circulated to all merchants in New Zealand.

The 1914-18 War caused extreme market fluctuations, losses on shipments to Australia were heavy, and many buyers both at home and abroad were only too prone to reject on a falling market. In fact conditions of trade were so unsatisfactory that Mr W.E. Reynolds suggested that a standard form of contract should be drawn up under which all New Zealand trade could be carried on. Mr C.H. Hewlett and Mr Stronach Paterson in consultation with other leading merchants, eventually compiled “The 1917 Terms” which were issued at the end of that year by the local South Island Associations. These had by now been formed due to the missionary efforts of Messrs. Hewlett and Paterson, who had put in two years’ strenuous work visiting all the main South Island centres.

This drastic imposition of terms by South Island traders caused the North to rise up in arms, but after a good deal of correspondence and discussion a conference was held in Wellington in January, 1918, when Mr J.C. Young, of Palmerston North, occupied the chair. After three days of almost continuous debate an agreement was reached and the “1918” Terms” were issued. The North Island agreed to form District Associations and it was further decided to form “The Grain, Seed and Produce Merchants’ Federation of New Zealand”. In June a further Conference was held and the Federation was formed with Mr J.C. Young its first President.

Two matters in particular exercised the attention of the Federation in its early years – the Terms of Trade and Grading and the Conference minutes of those days reflect the work put into effecting a basis of operation for its members which would avoid the disputes which had hitherto plagued both buyer and seller. A procedure for Arbitration between members had been drawn up by Mr C.H. Hewlett and was proving invaluable. With few changes it has stood the test of time and is regarded by members today as an absolute security in their trade together. Incidentally the 1921 Conference reminded members “that it is not desirable to employ members of the legal fraternity as arbitrators” and by 1927 it was mandatory for arbitrators to be drawn from members of the trade. The Terms were a constant source of argument between the Northern buyer and the Southern seller as each sought an advantage from a parochial viewpoint. The minutes of 1921, recording a discussion on a remit, stated “the South Island representatives considered that if they agreed to the deletion of the desired words it was tantamount to parting with their birthright”. Compromise was always reached, reason usually prevailed, and slowly the Trade progressed in an orderly and responsible manner. Successive Executives have viewed with caution any attempt to alter the Terms without good reason, and although the 1923 Annual Report stated that “they are nearly as perfect as it is possible to make them,” not a Conference was held without some addition brought about through changing conditions and the combined experience of members. The Terms were continually refined until a reprint was adopted in 1937, but the process continues.

During the years substantial improvements were made to the Grading system, permanent grades being laid down for Potatoes, Chaff, Grain, etc. Arguments on Grading matters continued at length for many years and an important section of the Terms became that dealing with complaints against grade certificates. A Committee of the Federation was set up in 1925 to deal with all matters concerning grades, graders and grading, with power to fix grades for produce and to investigate complaints. The Grading Committee’s importance was marked by authority to pay its secretary £50 per annum, at a time when the Federation’s secretarial work as a whole was mainly confined to reporting the Annual Conference. A year earlier an Appeal Board was set up with power to adjudicate on complaints concerning Graders’ certificates.

The Grading Committee was often fair game for delegates to Conferences, and an angry 1928 remit “that the Grading Committee be abolished” has had its echoes many times in later years. Despite much criticism many excellent men have given freely of their time to this important section of the trade.

As the work of the Federation grew so the calls on the time of the Executive and Committees became greater, and at the 1933 Conference the President, Mr L.G.K. Steven, made the first suggestion for a permanent officer to take care of the Federation activities. Although the matter was raised at Conference continually from then on, it was not until 1940 that approval was finally granted “to employ a paid Secretary – a full time or part time one”.

From its inception in 1918 to 1939 the Federation has been largely concerned with the domestic problems of trading members, but after 1939 two major events changed the whole concept and pattern of Federation work.

  1. The advent of a Labour Government and its policy of economic control and regulation.

  2. The Second World Ward, which accentuated the policy in (1) above, i.e. Economic stabilisation, price control, industry (including agriculture control for ware purposes).

Prior to this the work of the Federation was handled from the office of the President – even then a fairly onerous and time-consuming duty for both the President and his clerical staff.

With the new conditions as outlined in (1) and (2) above – this could clearly not continue: Mr H.B. Martin was appointed in April, 1941, and from that time the Federation has had its registered headquarters in Wellington.

This decision in itself generated additional work for the Federation – there was no longer a reluctance to saddle an over-burdened President with extra work. In addition, the years of ware imposed important responsibilities on all national organisations – particularly those associated with agriculture.

The Federation was consulted by Government on many issues affecting the trade, and so there grew up a degree of liaison and co-operation with Government and Government Departments which had not been dreamed of in earlier years. Federation was represented on various Government Committees. Advisory Boards and Statutory boards were created – in each case the Federation being involved.

During the war and immediate post war periods scarcely a day passed that the Federation representatives were not called upon to consult with some Government Department or attend some meeting. The subjects ranged from ways and means of increasing production of key commodities, to the provision of foodstuffs for the armed forces in the South Pacific, shipping programmes and rationing to the public. These duties became so important and onerous that precedent was departed from and the late Mr J.R. Virtue of Wellington, who was elected President in 1941, held that office for three years in succession, a decision which was influenced to a large degree by the suggestion from the Government that such a course would be greatly welcomed in official quarters. In that period there was also established a “Commercial Advisory Committee” to the Primary Production Council and Department of Agriculture. This Committee comprised five of our Wellington members. It made a most valuable contribution to the agriculture aspect of the war effort and in the post war settlement period.

Another feature introduced at this time was the need to visit Associations throughout the country. This began as a necessity in order to brief members in their obligations during the war period, to explain national policy to them and to solicit their assistance and co-operation. The visit to each Association by Federal officials, every two years, has now become an established and valued custom.

For similar reasons the Annual Conference became of vital importance in providing the opportunity for members throughout New Zealand to meet and discuss and hammer out the new and unusual problems which faced the trade – in a situation where control of the economy and regimentation of commerce and industry had acquired proportions never previously encountered.

From the Federation’s point of view, and in retrospect, those difficult times and the need to subordinate differences of interests, of location, etc., was probably a blessing in disguise and a turning point in relations between members. This improved understanding between members, and particularly between North and South, was further fostered by the decision to hold the Annual Conference at various resorts throughout New Zealand, where everyone was under the one roof – where business and social contacts were made. That policy has been continued to this day and it is fair comment that the old North and South feud has disappeared and the unity of members would be unrecognisable to those early pioneers who created the organisation 50 years ago.

Control and regulation once imposed is frequently hard to eradicate because conditions of trading change to accommodate the new situation. But the policy of the Federation has always been for free enterprise and for the utmost trading freedom for members. So it is that n the post war years its efforts were directed to continuing to act for members in all matters of Government negotiation, Price Control, Import-Export Control, in the many facets of agricultural enterprise, and in all to strive to restore trading freedom to its members. In this it has had a slow but worthwhile measure of success.

This world in which we live is changing all the time. Economic planning has become an integral part of the policy of all nations to a great or lesser degree, and conditions today in this country are vastly different from those which prevailed fifty years ago. Our Federation has changed to meet these new conditions. The work it undertakes now is far wider and more complicated than was ever envisaged in those early days when its very formation was provoked by the need to establish certain basic agreements between members in a trade which was free of restriction and more highly competitive. Our Federation has a key role in the grain, seed and produce trade of New Zealand and the vast amount, and variety of work undertaken by our Secretarial office, our Executive and the many Sub-Committees who assist them, is such that it has shown itself to be not only vital to every member, but also vital to the agricultural economy of New Zealand.

Finally, let us pay tribute to all those who, in these last fifty years, have contributed so much in voluntary time and effort to bring our organisation to its position of distinction in this year 1968. As has been said in similar circumstances, “Hats off to the past, coats off to the future.”