WIRE ROPE.

Auckland Star, Volume LXVII, Issue 172, 22 July 1936, Page 11

WIRE ROPE.

FURTHER DISCUSSION.

HARBOUR BOARD TENDERS. BRITISH FIRMS DEFENDED. Tliorc was further discussion at a meeting of the Auckland Harbour Board yesterday relating to copies of correspondence with His Majesty's Trade Commissioner and a memorandum prepared by the Department of Overseas Trade dealing with wire rope contracts. The memorandum covered an investigation by the Board of Trade's Department of Overseas Trade into published statements and criticisms of British manufacturers connected with the calling of tenders for wire.rope in 1935.

The memorandum stated that the past practice of the board in restricting the source of its supplies to British countries had been much appreciated, and concern was felt that the board decided to withdraw that measure of British preference. The principal accusation levelled against British manufacturers was that they had taken advantage of the board's practice to charge unduly high prices when tendering. The criticism appeared to lie that a price ring had been formed by the wire rope manufacturers in the United Kingdom under cover of the preferential clause, and that when the board decided to place 110 order on the first call for tenders, and made a further call open to foreign competition, there was an appreciable reduction in the prices tendered by United Kingdom firms. Price Agreement. The memorandum said that admittedly a price agreement had been put into force by the Federation of Wire Rope of Great Britain, but certain tenders called for some measure of reduction, and that was permitted. In the case of the Auckland Harbour Board it was 10 per cent below the domestic price. The fact that United Kingdom manufacturers submitted tenders 10 per cent below the price tendered in answer to the first call was due to the omission in the second call for sales tax, as it had been ascertained that no sales tax was payable. In both tenders the United Kingdom firms quoted on the basis that the exchange rate allowance would be at the buyer's charge. The second call specified also a smaller supply of wire rope than the first. The pVices were calculated on precisely the same basis as the first tenders. A suggestion that the second tenders were reduced owing to fear of foreign competition was not true, and unfair to the British firms concerned.

As regards tho much-reduced price at which German competitors eventually secured the board's order, the United Kingdom firms stated that the domestic price in Germany for wire rope was approximately equivalent, type for type, to the domestic price in the United Kingdom, and it was considered that the subsidising of exports was " the cause of the disparity between the British and German quotations.

Mr. T. A. Bishop said that the report bore out the contention of those who supported giving the tender to British manufacturers. He would like to move an amendment that the explanation be accepted, and that in future the British preference clause be reinstated in all contracts.

Mr. A. S. Sutherland suggested that the board had been too hasty in its past action. Future Policy. The chairman, Mr. C. G. Macindoe, said that the only matter before the board was the receiving of the incmerandum, and the future policy could bo brought up at any time. They were not tied to any fixed policy, but they had been forced into ono by circumstances with which tho board members were familiar. All things being equal, the board would give preference to British manufacturers, but the board when dealing with public funds had to use discretion and not waste public money. He was sorry that tho matter had been brought up at that juncture.

The chairman ruled the amendment out of order. He added that the whole thing explained itself, and no policy matter was affected by the resolution. The memorandum was received.