COST OF LIVING COMMISSION.

Auckland Star, Volume XLIII, Issue 215, 7 September 1912, Page 10

COST OF LIVING COMMISSION.

REPLY TO A CRITIC.

"Mr A. J. Entrican was seen again this morning by a representative of the 'Auckland Star" with respect to a letter published criticising his remarks anent the report of the Cost of Living Commission.

"Yes." remarked Mr Kntrican. "I noticed the letter. Mr Louisson asserts thai his object was to defend Mr Fairliiiirn. who i* .-. personal friend, [iiit he did nut admit outright ihiit he is a partner in the firm of Fairbairn. Wright anil Co. In his letter Mr Lonisson stales il) that Mr Fair};iirn occupied a seat on the Commission renins! his inclination, and that the Vrcmier (the linn. Thos. Mackenzie) brought pressure to hear upon Mr Fairbairn a.nd forced him against his inclinaion to occupy this position: and (i) that the Hon. the Premier's sole reason for so doing was that Mr Fairbairn was Hie only man that could prevent the Commission being- ilolinlerl by the ' concocted evidence' thai would be placed "tetVire it by the merchants of the Dominion.

-Now r think Hint most thoughtful and imprejiuiiml people will pome to tho conclusion that, it is :i must scandalous charpp to make iTiinst the merchants of this country. f!v>( hoy would i-omo 3>efnre the Ooinnr->•-in with 'concocted" "evidence," and I as a raerchiini on behalf I of mv colleagues resent such a charge ! s<- being a prose libel on a body of men | thai are admitted by Mr Fairbairn as i firing ' over the average intelligence.' J contend that Mr Louis.«on's letter is an entire justification of the action of the Federated Merchants in objecting to | Mr Fairbnirn being ;i member of the I Commission. Mr Louisson admits that j Mr Fairhnirn's pood sense led him to dec'ir.e to art. ami I would be glad to Jrarn whet kind of pressure it was which j mi'nl him to sit against his own convictions. Mr Lrmissnn does explain thai V\e reason was that Mr Fairbairn's knowledge was the only thing to protect ti" CoinnmMon from the 'concocted evidence of the merchant?.' which is not ■ riiii-li of ii compliment to (he rest of the j members <~f the Commission, besides he- I ir>c a plur upon (!■■' merchants of the ?n:ivtry. "Mr Louisson state* flint the matter of )..«■ profits is hesitle the question. I lvg to differ. This is the point at issue. Vγ Lniiixßon and Mr Fnirbairn have . araeterised the members of the Mcr- . i.int.-' Association as "conspirators. , as flawing the public, as boycotting; certain frrns. a.' forming; illegal combines, etc. I'nw if poods are being cut. at less than average working expenses? Then they are being sold at a loss, and is thorp «!iy breach of any law in the traders of any community putting up the price of i ; iose goods in order to obtain fair profit? 'Not un extortionate profit, which is a lireni-li of the law.) The Government its' ■!>' found it necessary to arrange a 1 • ri;T on fire insurance as they were not p-'ttinjr living profit. In this'connection .1 would like to print out that with regard to sugar, in my previous interview T stated the profit on sugar did not amount to the average working expenses Try 13 per cent, and I still maintain this ! • quite correct and not misleading. I may retort that Mr Louisson's statement . Hint ">/ per cent would cover the cost of working the sucnr business (which is not 1/ per ton) is absolute nonsense. Mr 3"a.irbaim says in hit. <■-. atement to the Minister of Commerce that the total value of the sugar re.linrd in Xew Zealand amounts to i'fiOO.ooo. Suppose the ■ of a J quantity was put through one broker at 5/ prr cent, it would only mount to £1,500 per annum, a sum totally inadequate to pay salaries, rent, Ftamps end telegrams, not talking of delivery. J have worked out the actual cost, of delivery and find it, to be 1/R per ton. without allowing anything for handling and delivery from store. That is really 0/fi per £100.. as against .">/ per (-£IOO, so there ivould be a loss on Mr Louisson's estimate of 4/6 per ton, without allowing anything for bad debt?, for which 1 per cent must always be reckrncd. Tt is true that we (jet a discount tor spot cash of A per ent, but as merchants from the 2.ith of August deliver Fiigar to retailers as from the first , * of September, and payment is not due till The 20th of October, the consequence is that we really give two months' credit, and our loss in interest is really more than the discount referred to. I quite admit that all the sugar is not delivered on the 20th of the month, but buyers usually arrange it so as to get the benefit of the longer credit for most of their purchases. The last item referred to is a special brand of infants' food. He charges the merchants with appropriating; the whole of the remission of duty. 15 per cent., and states that the merchants pocket 16A per cent over this transaction. This statement is without foundation, and his figures are entirely -wrong. Mr Louisson states that previous to the remission of duty this line was wholesaled at 0/7. I have looked into this matter. Before the reduction of duty in 1907 the line referred to was costing fVfi per dozen tins to land, less 2J per cent., and was being sold in Auckland at from 10/ to 10/6, less 2J per cent in a. month. Now, instead of merchants maintaining this price in Auckland after the reduction of duty, sales were continually made by several houses here at S/fi per dozen, less 2J per cent, in gross lots. The amount of duty removed was 1/2$ per dozen, so at 8/6 there was a .reduction of 1/6 per dozen, or a drop in duty of 1/2.} per dozen, which did not leave merchants 21 per cent profit. That ■was the reason ■which led to merchants arranging a tariff on this particular line in order to make a living profit. I have examined the price lists of two leading retail firms. and find this particular line is listed at 10/ a dozen, and in the other fit 9/0. I would also like to point out that, supposing the merchant did not reduce the cost when the ad valorem duty was removed, he would not pocket 161 per cent, and this shows how little is known about the costing of goods, as the duty is levied on the Home cost with 10 per cent added, and will be much less on the landed cost."