CEMENT ENQUIRY

Press, Volume LVII, Issue 17294, 4 November 1921, Page 13

CEMENT ENQUIRY

YESTERDAY'S PROCEEDINGS. MB MASTERS GIVES EVIDENCE. ' (press association telegram.) WELLINGTON, November 3. At the Cement Enquiry to-day, Mr It. Masters, 31.P., gave evidence. He said ho made his speech in the Houso in what ho believed was tho public iuterest. He made no financial gaiu as a result. On tho contrary the speech was mado after full consideration. It had been suggested that he made the speech after receiving a letter from Wilson's Portland Cement Company. This was impossible. Tho letter was dated September 27th, and was passed on to him by his firm. He did not know when he received it, but it was impossible for ibo lotter to have reached him when he mude the speech. The only information ho had at tho time was that the Wilson company had circularised its agents Etating that his firm would be supplied with Wilson's cement in precisely tho same terms as those agents. It was absurd to suggest that he made the speech out of pique as the result of the letter dated September 27th cancelling that decision. On Mav 11th witness's firm received a letter from tho Golden Bay Company asking it to help it out of a difficulty by taking as much cement as possible and offering terms. These were such as had never been offered before or sought, and such as the firm said not consider were necessary. Then every concession tho company made to the firm was passed on to sub-agents if supplied. Mr Masters stated that he had a discussion with Mr Luttrell on tho question of closing down the works. Mr George Elliott's name never arose. Witness had suggested that it was unwise to close down tho works and that very likely the matter would be brought up in Parliament. Public opinion would be very much against closing down. Mr Luttrell 6aid he did not givo a damn for public opinion. He was out for lus own interests and that after all public opinion was only a nine days' wonder. There was no discussion whatever as to tho continuance of Mr Masters's agency. Witness naturally concluded that tha agency would go on when the works roopened. .. • Replying to Mr JJacGregor, witness said that, on oath, before the Commis- ! sion, he stood by everything he said in his speeches in Parliament in regard to his allegations. He confirmed his statement that the letter of Mr Luttrell, referred to in the speech by tho Minister of Industries and Commerce, contained misrepresentations. Counsel: You said it was a deliberate lie. Do you swear that? —Yes. , Continuing, witness denied having told Mr Luttrell that if ho did not malt© his position as agent sate no would bring t)he matter up in Parliament. What he referred to was tlia closing down of the works, ana he believed that that was also in the mmd of the secretary of the Golden Bay Co. (Mr E. Boulton). The conversation took place in May, a few weeks after the agreeinent between t)he companies. The Solicitor-General: What did you havo in your mind? —I have already told you quite intelligently. With eighty members in Parliament, it was natural that the closing down of tho works would bo mentioned there, und Mr Luttrell assumed that unless you continued to hold tlhe agency you would do it. He called you blackmailer, didn't he? —No, that is a deliberate lio. What is the use of quibblingP—l am not quibbling. It is not my habit. You can't bluff me. I am here to give my opinions. . As a high-minded representative or the people?—ln doing what I think right-. , , , ■ -j Witness read the agreement, lie 6a '"> before the conversation with My Luttrell. ' . ~ . The Solicitor-General: \ou said :n the House that tho agreement was a most criminal transaction? —Any agreement whioh closes down tho production of cement, under whidh.two companies pay £15,000, turn people out of work, force them to sell their homes at a loss, and send them through the country looking for work is immoral commerciI ally. I knew that I would lose tho agency, but if I had kept my mouth fJhut I would have continued getting coment from Wilson's. I had everything to lose By opening up the matter. The Solicitor-General: Purely on moral grounds when you found Masters, Ltd., could not get what they wanted? —I was not asking anything ior blasters, Ltd. . When did you make up your mmd that the £1 IBs per ton increase was not justified?—Wlhen 1 got certain information. From whom ?—I am not prepared to say. AVitness said' he received conies or the cost production sheets of tho Golden Bay Cement Company. Although questioned at great length by the SolicitorGeneral, he refused to disclose his sourco of information or tlhe date. He had given a bond of secrecy in regard to tho matter, and if questioned for a week would not divulge the name of his informant. » He had not obtained similar information in regard to the Wilson Company and tho Milium Company. Witness, in answer to further qii'3stious; of the Solicitor-General, said he got tho documents subsequent to May fast. He" could not givo the actual date. The Solicitor-General: Do you expect anyone to believe you? Who are the members of the Cement Trust you refer to? —The Wilson, Milburn, and Golden Bay Companies. You say the Board of Trad© assisted it by allowing the-price to be raised and not taking action about the agreement? —Yes, by reason of the fact that the Milburn Company did not take advantage of the lugher price, and, in view of a profit of £15,000., they paid a 7% per cent, dividend, and SJJ per cent, bonus. If they accepted the rise then, on the basis of the allocation, of stocks, 25,000 tons per annum, they would have made another £14,000. That fact showed that the increased price was not justified. Do you suggest that the Board of Trade is corrupt?—l do not say tliat. Or tliat they were bribed, as you say the companies were?—l do not suggest that. Nothing is further from my thoughts. Mr McDonald (the president is above suspicion?—l should certainly say 30. But it is his business to justify an increase of price?—l understand so. As a member of tho Taranaki Producers' Committee you accepted your sliare of the rise? —The distributors did not fix the price. His Honour: Did you got the benefit of it?—We had no choice, because the price was fixed by tho company. In reply to Mr Myers, witness said ho did not pay for the confidential information which ho received from an employee of tho company. He had no idea his charges would cause a political or party sensation. Ho denied that there was a shortage of New Zealand cement in January, 1921, as two thousand tons were sont to Taranaki within a few days of the granting of the increased price. He would not bo surprised at anything tho Government might do in commercial transactions. In reply to Mr White, witness said he regarded the Milburn Company as an honest concern, but at the time ho made his statement in Parliament he did not know whether the company had taken full advantage of tho price or not. He believed ten per cent, was a fair manufacturing profit for the Milburn Company, which had largely increased its profits since 1918. ite profit had increased fifty per cent, in one year. The evidence of Donald Gorddn'JobuBton, secretary of the Qnakaha Iron

' Company, as to tho purchase of cement-, closed tho caso for Mr Masters. ' Tho Case for the Defence. lu opening the case for the defence, tho Solicitor-General said, so far as the Board of Trade was concerned, tho position had developed front a personal grievance on the part of Mr Master?, a couutry storekeeper, which, bottled up for some months, was fomented by a political party spirit, and developed into a legal difficulty in which tho companies? wero charged* with criminal practices, and tho Board of Trad© waa charpd with complicity, and finally involved a serious allegation of impropriety on the part- of a Government Department responsible to tho people. Council denied that any evidence lind been adduced showing that a cement combine had been formed to exploit the public. He commented ou the delay of Mr Masters in entering tho witness box, and on his obtaining information from a tainted source. It was ;v painful and pitiful sight to w>e a member of Parliament enter tho witness box and ovade telling the truth by sheltering behind somo unknown man. Mr W. G. Macdonald, President of the Board of Trade, submitted a statement on oath dealing with thq reasons for fixing the price at £4 18s in 1918 when the Australian price was £4 19s, and tho increased costs incurred from time to time subsequent to July, 1919. Ho reviewed, at length live position of all the companies and the oversea prices, and contended that tho reasonableness of tho Board's prices was illustrated by the fact that the prices per ton f.0.1i. London and Liverpool paid for cement of British manufacture and imported to New Zealand, landed, were between £lO Is 2d and £l6 lUs 6d per ton between tho months of July aud December, 1920. Mr Macdonald also referred in detail to the shortago of coal and the adoption and extension of the allocation system. Had tho companies been allowed a t'reo market, prices much in excess of those sanctioned by tho Board would have been available to them. Ho accepted personally the solo responsibility of tho Board granting an increase of 36s per ton to the Golden Bay and Wilson'B companies. Mr Wilson, his colleaguo, was a debenture holder in one of tho companies, and for that reason witness considered it was undosirablo that lie should tako an active part in dealing with applications. Ono of tbo reasons for tho granting of the increase to the Golden Bay Company *as tho need for considerable expenditure on repairs to tho works. The Wilson Company, in support of their application for increased prices, showed increased costs since tho date of the last increase of lis 7u per ton. Mr Macdonald submitted a return showing that the coment imported from 1920 to May, 1921, totalling 90,000 tons, was landed at a cost ranging up to £ls per ton. The companies were advised at a conference on December 10th that an increase of 36s per ton had been approved to take effect from January Ist, 1921, makingvthe Wellington retail prioe £9 13a 6d, equivalent to £7 lOb per ton Tarakohc. After the close of tno Wilson Company's financial year, an investigation of their accounts bv the Board s accountant showed tho Tesult of the year's trading at prices approved by the Board, including three months at £9 13s 6d Wellngton, had not produced unreasonable profits. The balance-sheet of the Golden Bay Company for the year ended June 30th, 1921, showed financial results to justify the increases in tho price allowed. Tho agreement between the companies was a result of the drop in the demand for cement in New Zealand and as the outlook was anything but bright for tho cement industry, it was absolutely necessary that the output in New Zealand should bo restricted, as it was in excess of what the puOlio could absorb. He was compelled to admit it was necessary for the cement producers to curtail their operations, the only other course being for all the companies to produce at their normal rate with, a result that in a short spaco of time the' whole of their stores would have been loaded. The. companies then must have ceased operations until they were able to reduce stocks. They could only j-uu intermittently at considerablyincreased cost. The host method, in t e public interest, appeared to lain to be that actually adopted by the companies, that the works with the highest cost of production should ceaso operations, thereby allowing the other companies to contnue to produce to their normal canactty. As a return for the avoidance of increase cost of production thus mode possible, two of the companies contributed to tlie Golden Bay &mpany on the basis of sales a sum sufficient to enable that company to meet obligations and maintain * or J? plant. Almost simultaneously with tho execution of this agreement among the companies, the prioe of cement wafl reduced from £9 13s 6d to £7 17s 6d pc f ton Wellington. Under these circumstances it was not considered that any action under the Board of Trade Act was necessary or desirable. Tho inquiry was ad]ourned till to-mor-jow.