THE IMPLEMENT TRADE.

Press, Volume LXIII, Issue 12933, 12 October 1907, Page 5

THE IMPLEMENT TRADE.

. • ALLEGATIONS OF UNFAIR COMPETITION. FIRST SITTING OF BOARD OF • ENQUIRY. The Board constituted under the Agricultural Implement Manufacture, Importation and Sale Act, sat in the Provincial Council Chambers yesterday to liter charges of unfair competition on the part of the International Harvester Company of America, and the Jiassey Harris Company of America. All the members were present, Mr Justice Sim presiding. Mr Russell, with him -Mr Johnston, appeared for tho complainants; Mr T. W. Stringer, K.C., for the Crown; Mr Harper, with him Mr Hunt, tor the International Harvester Company; and Mr M. S. Brown for the .Massey Harris Company. THE CHARGES. The allegations against the companies cited were brought by Me&srs Cooper and Duncan, Liiniud. Booth, Macdunald and Co.. Limited, P. and D. Duncan, Andiews an-J Beaveu, Limited, and Reid and Gray. The charges, briefly, alleged that tne prices oi American-made implements imported into New Zealand hnve been materially reduced below tho prices gazetted under the xVet. and that competition on unfair lines is taking place, resulting in the undue oppression of the local industry. Spocinc charges were made that tne International Harvester Company on .May 21th, 190/. sold to H. .Uclntoeh, kaiapoi, a 15----coulter American combined drill for i2t> 10s, the gazetted price being £41, with £2 discount lor cash; and that o.i June 24th, the same company sold to H. Blacken, Loburn, a 13-coulter American drill for £26 10s, the gazetted price being £38, with £2 discount for cash. Other ©uses of alleged gross cutting of prices were in the possession ot the complainants. The Alawey Harris Company was charged with having made extravagant oreuit allowances on sec-ond-hand machined, or implements, taken in part payment for new machines; with having pirated the model of Booth, Macdonald and Co.'s, disc harrows; with having sold in New Zealand, harrows manufactured outside New Zealand, on that model, at prices lower than those- gazetted; and with having sold drills, disc harrows, and cultivators since June 28th, 1900, at prices lower than 'those specified in the Gazette. The Massey Harris Company was required by the complainants to produce at the enquiry all books and papers containing records of drills, disc harrows and cultivators cold by it in New Zealand since June 28ch, 19U6, with names of purchasers, prices, allowances, made on second-hand machines, and prices obtained on the re-sale of sec-ond-hand machines. OPENING OF THE CASE. Mr Russell, in opening, remarked upon the ambiguity of the wording of the Act, but its intent was clearly to assist local manufacturers, and that the industry in tho Dominion should not be menaced by outside competition. He proceeded to detail the history of the American Implement Trust. Mr Harper objected that this history wee tjuite outside the scope of the enquiry. Mr Justice Sim ruled that Mr Russell was entitled to deal with the history of tho company. Mr Harper protested against ex parte statements going forth which the complainants would make no attempt to prove. Mr Russell (continuing) eaid that Parliament in 1905 felt that certain industries were in grave danger owing to foreign competition. In order to conserve those industries the Act was passed. He explained that the surplus stocks of American manufacturers were dumped in the Dominion and cold at gricee against which it was impossible for the local manufacturers to successfully compete. In order to force sales, he would prove that in many coses uncommercial terms, such as credit over three end four years, were given. He detailed several instances of unfair trading -which he intended proving. Hβ held that all he had to prove was that the companies had reduced prices below tlvose gazetted. Mr Harper concurred with thieview. Mr Stringer said it was unnecessary to prove unfair trading, as, even if proved, the Act provided no ponalty. Mr Russell put the point whether goods manufactured in Canada were to be considered to be of British manufacture or of foreign manufacture. Mr Brown stated that for the purposes of the enquiry he was prepared to admit that the Massey Harris Company was not a British company. EVIDENCE AGAINST THE HARVESTER COMPANY. Hector Mclntosh, farmer, Kaiapoi, stated that in May. of the present year he had dealings with the International Harvester Company. He % met Mr Roberts, tho Company's canvasser, at Rangiora, who approached him regarding the purchase of a drill. A week after witness saw the canvasser, who offered him a 15-coulter Osborne grain manure drill for £25. Witness did not do any business. Subsequently Roberts told witness he had made a mistake in the price, which should have been £30. Roberts offered to pay 30a out of his own pocket if witness would pay £27 10s, but he would riot agree to pay more than £26 10s, at which price he purchased. To Mr Harper: Mr Roberts told him that the machine was not up-to-date. He had the drill in use at present. John Petterick, farmer, Rangiora, stated that a year ago he purchased a 13-coulter grain and manure drill for £30, credit being given for a year. After delivery, Mr Roberts told witness that a drill exactly the same as he had purchased was for sale for £24. Mr McCommins of the Harvester Company, told witness a mistake had been made in quoting the last-mentioned price. Ultimately the price of the drill was reduced by £3. It did not work well, even after it was examined by the Company's expert, and a further reduction of £3 wae made. The drill was not now altogether satisfactory. In the winter of last year ho purchased from the same Company a three-disc i plough for £23. The Company allowed him £8 for a double-furrow plough, the Value of whjch witness estimated at £1 10s or £2. Leonard Braddley, farmer, near Temuka, stated that he purchased a 13----coulter American drill from the Harvester Company this year for £35. It had c grass seed box and other extras The nnrchasß money was payable by May Ist, 1908. The price for the drill, •vith grain, manure, and rape attachment, was £30, the grass box beinc £5 extra. fa To Mr Harper: When witness first saw the drill it was in c yard at Temuka in the open air. He would not be surprised to learn that tliP drill was there two years. It was badly damage/I with rust, and was very worn. To Mr Johnston : It was sold to witness as a second-hand drill. H. Blackett. farmer, Loburn, stated that in June last he purchased a new 13-coulter Osborne grain and manure drill, for which he was asked £27, but for which he paid £25 10s cash. To Mr Hunt: He was informed by the sellers that they were going out of Osborne machines, but they did not say that that was the reason why they were selling the machine cheap. To the Board: He paid the money in July last. . Arthur H. Darnley. farmer, Springston, stated that in November last he purchased from the Harvester Company a 13-coulter Deering drill

for £33, in addition to an old drill. He was to £21 in May, 1908, and the remainder in 1909. The old drill he had had in Use for about ten years. To Mr Harper: He possibly purchased the drill on October Bth, 1906. He was allowed £8 for the old drill, which he did not consider it was worth. Mr Harper drew attention to the fact that the Act had not been revived till October 23rd, 1906, so that this transaction was outside the scope of the Act. i W. J. Bunting, farmer, Woodend, stated that he bought a 15-coulter Osborne drill, for which he was to pay £30—half in May 1908, and the other half in May 1909. To Mr Harper: The machine was at tho Christchiirch Railway Station as he had returned it. He had paid nothing on it, and did not consider that he had ever owned the machine. John Walker, farmer, West Melton, stated that he purchased an Osborne disc harrow, a set of lever barrows and a moulder. Tho price for the disc harrow was £13 us. It was 21-inch diameter. There was to be a discount ot 5 per cent., but he was told afterwards that tho price quoted was as low as they could sell it at. The harrow was perfectly new. The price of the lever harrow was £1 1"«; the total paid for the three implements was £20. To Mr Hunt: Mc had made a sporting offer for tho three implements, and the Company's representative had accepted it. John Henloy, farmer, Lincoln, stated that he purchased an Osborne American 15-coulter drill from tho Harvester Company. He was to pay £50 for it, and he was given three years within which to pay it. He jwid tho first instalment, £20, in. April last. He also purchased a four-furrow disc plough for £27 10s. Charles .Squire, farmer. West Melton, stated ho bought a disc; harrow about a year ago from the Harvester Company". It had 20 discs, and was 20 inches in diameter. The price was £8 10s cash. The machine had been nut up to auction by Messrs Morrow, Bassett and Co., but "witness purchased from Mr Mclntosh, of the Harvester Company. To Mr Hunt: He heard that £8 hod been offered at auction for the machine. W. H. Judson suited he purchased a cultivator and a Daisy reaper from the Harvester Company for £3o 103. the cultivator being priced at £14 ss. He paid cash. A MANUFACTURER'S EVIDENCE. Alexander Storey Duncan, secretary to Cooper and Duncan, implement manufacturers, stated thet the gazetted price of a drill over 10 coulters was £39 10s. An 11-coulter Osborne wae gazetted at £35, plus £7 for turnip and rape feed less discount of £2 on drill and 103 on feeder, net £32 10s. A 13----coulter drill £38, plus £7 10s for turnip and rape seed box £45 10s. less £2 discount for cash on, drill and 10a on feeder, net £43. A 15-coulter, £41, plus turnip and rape seeder £8, less £2 cash discount on drill end 10s discount on seeder, net £46 10s. At the time tho terms wore half of the purchase money in four months and the other in. six months; or one-third on shipment, one-third in ten months, and one-third in 22 months. The drill purchased by H. Mclntosh for £32 10s cash should have been £39 —a reduction of 32.05 per cent. Pettrick should have paid for his 13-coulter drill £40. A 13-coulter with grain and manure, turnip and rape and grass box, for which £35 was paid, should have been £53 10s. A harrow for which £8 10s was paid, should have been £15 15s. The cultivator purchased by the witness Judson for £13 should have been £15 ss. Tho Harvester Company, since the gazetting of prices, had lowered their prices. He produced a printed list of the prices of McCormick machines and implements. ■Mr Harper said that the list had no reference to tho implements under consideration. Witness stated that according to the gazetted list the price of a 12 by 20 disc harrow was £13 15s cash, according to the new McCormick list it was £12 ss; for 16 by 20 there was a reduction, of £1 10s and of £2 in cultivators. His firm were absolutely unable to compete against such prices, and if no relief was forthcoming they would have to seriously consider going right out of the manufacture of drills, disc harrows, and cultivators. The practice of tho Harvester Company in sending men to start machines was worth 20s or 30s, according to distance. Local firms could not afford this. Extra commission that had to be paid canvossers had increased the cost by 7J per cent. To Mr Harper: Tho proposed agreement in 1900 to keep up prices emanated from the Massey Harris Company. He could not say that he had ever seen the agreement. He could not say that the list of prices gazetted of New Zealand implements was never varied. When an alteration was made it was when they were forced by the opposition, and was very trivial, and they never made money out of it. His firm could execute orders for 100 drills between the present and the end of the year. They had lost orders through the reduction of prices by importers of foreign-made implements. His firm had sold a Canadian disc three-furrow plough for £14 lls, the gazetted price being £23 10s cash. The machine was a samnle one. To Mr Stringer: Hia firm did not manufacture absolutely for stock purposes—they would not have in stock 50 drills already finished. The question of price largely influenced farmers in deciding upon "which make of machine or implement they would buy. The volume of trade had fallen off in certain lines since the Harvester Company st-irt-ed business in New Zealand, especially in drills and disc harrows. The tendency of the Act had not been to improve the business of New Zealand firms. His company paid a dividend this year of (5 per cent, end the year before of 5 per cent. The fact that their engineering business had' gone ahead enabled them *° Pay the higher dividend this year. He thought that one way of giving relief under the Act. was by the payment Lj i government of 33 per cent, on all scheduled goods sold. They should be placed in a position to meet American competition." Seven per cent..on capital was the profit New Zealand manufacturers should obtain To Mr Russell • If the Harvester Company brought the prices of drills down to £10 they wanted tho Government to give such a bonus as would allow them U> compete, and they woul.l therefore chum £10 from the Government on all drills sold. Tr Mr Harper: He did not consider that a protective duty would meet the Mr Justice Sim suggested to Mr Ru*. soil that the Board should have further information as to the remedy that should be applied. Mr HuMell thought that the relief should take the form of a bonus ot from lo to 33 per cent. Th* manufacturers would forward a list of drills sold and claim drawback thereon The canr l a ? sera of the local manufacturers should be in a position to tell a farmer that they could supply implements at the price quoted by the Harvester Company. Mr Stringer asked if the Harvester Company sold five drills below price and a hundred at the gazetted price, was the New Zealand manufacturer to be paid bonus on all implements sold. Mr Russell said that if the Company sold below the gazetted price they practically fixed the price. Martin James Fitzgibbon, farmer. Loburn, stated that he bought from the Harvester Company in June of this year a 13-coulter grain and manure drill for £25. The terms were half tho amount in twelve months, and the remainder in the year following. It was an American drill, and was bought as a new drill. To Mr Hunt: The canvasser told him that the company was -losing the agency, and wanted to sell them off.

> H. M. Keith, farmer, Loburn, ■teted > that he purchased a drill from the Har- ! vester Company for £2fcaeh. To Mr Hunt: The canvaneer told . witness that they had only a few left, i and they would not be obtainable cheaper later on. Henry Charles Thompson* salesman. National Mortgage Company, Timaru, stated that the Company were agents for c Christchureh manufacturing farm. The unfair competition of the Harvester Company and other foreign companies, by taking back old drills and by quoting low prices, had affected trade enormously, and had seriously interfered with the sale of local manufactured implements. To Mr Hunt: After four months, if the price of locnl manufactured implements was not paid, 8 per cent, interest was charged. G. F. Henley, auctioneer for Dalgety and Co., stated that he had .been connected with the snlo of reapers and hinders for 13 years. For twelve years lie was the Moflborough agent for Morrow. Bassett and Co., and P. and D. Duncan. The effect of the competition of tho Harvester Company had been bad, owing to the terms given, and the prices at which the implements were sold. The sale of discs, disc harrows and drills had decreased, <snd there wns no means of remedying mntters except by action by the Government. To Mr Harper: Witness did net opp!y for the agency of the> Harvester Company in Blenheim. The conir nany asked him to retain it« agency, but "they would not accept the agreement as'he amended it. The Harvester Company mr»de differential prices, selling the same machine for £5 or £10 iv one man. compared with the price charged another. James Keir, a director of P. and D. Duncan, gave evidence as to the nature of tho operations of the New Zealand manufacturers of implements. The manufacturers had not been able to seciun any benefit under section 10 of the Act. "although P. and D. Duncan had a claim in for £170 at present. This closed tho case for the complainants. Mr Russell intimated that be desired to withdraw the charges against the Massey Harris Company, as they were trivinl compared with tbose against the Harvester Company. Leave was granted. THE CASE FOR THE DEFENCE. M.r Harper referred to the fact that practically only one manufacturer had given evidence in support, of the complaint. The Act applied to persona who must be tho importers of the implements sold under the gazetted price, and he intended to show that the company lie .represented wore not the importers of the implements regarding which evidence was Riven. When the Harvester Company started operations in the Dominion they did not immediately begin to import, but had taken over the agency for the Osborne Company. Ho would' also show that since the statement of prices was gazetted the Harvester Company had' kept to those prices. He thought that he could dismiss the allegations regarding the Company's method of canvassing and the terms offered; it wae not the Company's fault that it was rich enough to adopt these means, and these terms. The Act was on its trial, and it was a diffioult matter for the complainants to make out a case under it. He called the following evidence:— Charlee iuclntosh, salesman of the Harvester Company, stated that he had held' that position for fifteen months, and was previously, for seven or eight years, employed in a similar position by Morrow, Bassett anid Company. The Osborne Company were at first represented by Dalgety and Company, and latterly the Company opened a branch. Morrow, Bassott and Company Trere importers of implements, and when they discontinued business the Harvester Company bought some of the goods. The same company bought some drills from the Oeborne Company, when they gave up business. Witness had seen these drills, and would know them. They had been imported over twelve months before they were purchased by tho Harvester Company. Having lost the agency of the Osborne drills the Harvester Company desired to clear them out, and! sell their own drills— MoCormiok and Deering. The Oeborne drills were got rid of as speedily as possible. The Harvester Company did net import any of these drills, but had been importing Deering and McCormick drills. The drill sold to H. Mclntosh was one of those bought locally by the Harvester Company. Asked regarding the other drills upon which evidence was given, witness stated, in respect to the sales he had effected, that the machines had not been imported by the Harvester Company. He stated that the prices quoted by the Harvester Company were not lower than the gazetted'prices. To Mr Russell: Two years and a> half were given in which to pay for implements. He had sold some drills at different prices to different people, but the lower priced implements were old. The price of a 13 coulter drill was £27 cash. The man who bought for cash got no advantage over tlw.- person who got terms. This was all the evidence called for the defence. COUNSELS ADDRESSES. Mr Stringer supported Mr Harper's contention that the conditions of the Act only applied to firms or persons selling machines that they themselves had imported at prices lower than those gazetted. He did not think the Act would apply to a case where a company that had imported implements cold out to a local purchaser who should be entitled to sell at any price he liked. If the local purchaser did not possess that right then the machines he bought, if not saleable at the gazetted prices, would have to be sent to tho scrap-iron heap. Counsel further contended that the complainants had not led sufficient evidence to enable the Board to make any report at all. By sections 7 and 8 the Board was to report in writing to the Commissioner of Customs whether any steps were desirable for the protection of the industry, and to do so the Board ought to have had general evidence that the industry was being affected by the operations of the. foreign importers. The only evidence, was that of the secretary of Messrs Cooper and Duncan,, and obviously the state of affairs described by him might be due to other causes. No evidence that the industry as a whole ia languishing had been given and therefore it appeared impossible to make any recommendations. Mr Harper eaid he had nothing to add to his previous remarks. Mr Russell ridiculed the contention that the Act did not operate unless the persons selling below the gazetted prices were also the actual importers. If that contention were sound then all that the Harvester Company had to do -was to raise up their Mr MoIntosh and get him to import several machines, retire from business, and sell out to tho Harvester Company, which would then be able to sell the imjjoited machines at any price they liked. He oontended that the intention of the Act was to deal with the sale of imported machinery. There was nothing in the Act to justify.the very narrow construction placed upon it. There was sufficient evidence before the Board to enable them to answer the question: Has the Harvester Company been selling American goods at prices below those in the schedule? There was evidence that the price of the goods had been materially rodneed, and it had been proved conclusively that the New Zealand implement makers were entitled to relief. This concluded the proceedings, and the Board, in accordance with the provisions of the Act, trill report direct to Kie Commissioner of Customs.