LEATHER SALES.

Press, Volume LXII, Issue 18603, 30 January 1926, Page 15

LEATHER SALES.

ffOOLSTON TANNERIES' VENTURES. EXPORT failures. ACCOUNTANT TELLS OF OUTSIDE enterprises. (gweux. TO 'the PEESS "> WELLINGTON, January 29. it the Royal Commission to-day. bethe continuation of evidence was with, Sir John Findlay said IThe had raised the point earlier in if enquiry as to whether it came Vhin the jurisdiction of the Coramisr" consider whether there was arrangement made by Woolston Series with the Board of Trade. had communicated with the Attorand with Sir Francis S and it was their desire that the Lt should not be pursued They Mb expressed a wish that the whole c «a should be dealt with by the Commiffiioner. . Percy Nt>™an Quartermain s examination was continued by Sir John findlay. He gave evidence of large on the shipments to London in 919 end 1920, and 1920-21. In the former period shipments valued at $5 860 realised only about £BOOO. The 1920-21 shipments, valued at £35,955, in England resulted in a loss of £23 882. There were shipments of .(.fame 'and calf. The chrome came WV to New Zealand. Otie shipment ff&ptember, 1921, was sold at a pro£l37. The company sold ship"enta in England at great loss, but ««r» unable to sell their chrome and calf at any price, so that it was shipped w k to New Zealand. The original «fTline price of the chrome and calf wu M 987, and the revaluation price m 071 company had continued manufacturing chrome, although they Ud large stocks returned from England. He was told by Mr Wright, of ;L Tanneries Company, that they could not sell this stuff. "Insufficient Capital."

Witness was examined in regard to the capital of the company. He said tie capita! of the company, winch was doing a business of a quarter of a million, wis at one stago only £OOOO. The Commissioner ,nskeil what bearina this had. He thought it was purely a question for the shareholders—whether they could mako most money by paying up £40,000 capital or by advancing money to the company. It •was very much like 'shareholders making 'advances in anticipation of calls. Witness said his point was that the company was compelled thereby to realise on stocks to pay their depositors at.call.. Their losses wero duo to the collapse of the leather market, and the fact that the company liaxi , insufficient capital resources at their {i,mmand Bold on to their stocks until they wet© realisable. Sir John Badlay: Do you say that part of the loss alleged was due to lack of finance? ■ Wita«B: I do. Sir JolurJMay: How do you know thatP—lt is disclosed by the books.

3la coapfOiy was trading mostly -on borwsrdv.capital. Moreover, £60,000 m invested in boot factory enterjjrisea Md the company did not? have tlie mlbs of management of these companies in their own hands. If they Bid got in more capital they would sot hate had to sacrifice their stocks in the way they did. . Amongst their outside ventures was a goldmining ono —Boss Goldfields, Limited.

The Commissioner: This was something they had to take over? Witness.: No, n purchase. It was a co-partnership connected with Sims, Cooper. There was an advance of £15,000 for debentures, and at a certain timo £5700 was charged to Sims, Cooper. This remained for several jears. In the finish the loss was approximately £2OOO, which was written off..- The company had £15,000 in it for some time.

Mr Myers said that this had no waring. on the claim, as it was in prior

Six Causes. Witness attributed the company's position to the following causes:— (1) The fact that the purchase of Cilf-sldns in 1919-20 was greatly in «XCMB of requirements. (2) That tl le company was called "Pon to pay an average of 7Jd per gutid more for hides in 1920 than in

(3) That heavy losses were made 1020 onwards on export business. ; w That the company manufactured pods which subsequently proved to J* Unsaleable both in England ami Zealand. . (5) That tho company mnaufnetured Mo' (shipped goods to England for the Purpose of obtaining urgent financial M?istance, the majority of the goods Sold at low prices on being re0W en ' an< l as unsaleable. . (6) That the company was heavily ®'erested financially in X company, pearly £62,000 was in this venture, ™Cu the company wouid hiuo welkin 1920. *tt i 688 ,ras P r ° cce d'"g to give fur- ; Vttr losses which the company had inin outside investments, when Hosking interposed: "Can you how much loss was due to <the , »|ffl_the price of leather?" Findlay: You can't arrive mm until you know whether the was forced to sacrifice its

. Unprofitable Ventures. tra* ers as ked if witness had found raoa of any outside ventures from to-! 8 P r °lit was made, witness: Ko. ill} 5 !? expect to find them in Lm 00-^0, 'l.jon ask Mr Ollivier if there hidden reserves P—No. y S a . / ac t that the company also outside connexions in which a profit?— There was only ill ■V? aoh any money at thaf Jw S sa 'd he could not say »t a i OO 111 '-Tanneries sold any goods Barf;,! 6 /. P r * ce than other people. about that. He said ' Ne» < J rced sales in England and m well. He placed the ""M Sims, Cooper in the category. that * s any indication th&jj <**■ * eT€ exposed of at less kefc PncesP- Xo. io self '. B n °t a.forced sale—people \} h t same P™e as other salsa * ar 818 tho New Zealand ' !ooo?3J here was a loss M ha Xi?-? to "duce the sale there » SB ' " lt "ess admitted that if it wnalj nnt ,® a r k<jt ,n Zealand Ro °4s t« ILi ■■unpropoi' to send the ttiere. {?land to test the price

Mr Fiaancial Purposes." ■ e "S a » , /b?»ES? l l t 'T°- u know that I <S° r £ d "\ New Zealand? for a the goods Ptoses. P to Eugland for financial much, per- • tfur ® ose s of- realisation, as to

bo able to give security to the Bank for advances.

Witness: Yes. Mr Myers: They were -afterwards sold in the New Zealand market? Witness: No, they were not sold. Witness added that lie was told that this stock was useless. Mr Myers: Did you make any enquiry on that point ?—No. You suggested that the company was financially embarrassed. Do you mean that it was pressed by its creditors? — I would not like to sav.

The «ompany gave you any information you asked for?— Yes. Is there anything to indicate that the company was being pressed by its creditors, leaving out the Bank of New Zealand, which was paid off within hours?— Their transactions with Sims, Cooper and Co. In that cas© the money was wanted urgently. To Sir John Findlay: It was Mr Wright, the secretary to the company, who had told him that the coods returned from England were unmarketable. Mr Wright had been "with the company for 18 years. A Tanner's Evidence. John Edward Astley, tanner, of Auckland, called by Sir John Findlay, said his works were of an extensive kind. After Woolston, Glendermid, Dunedin, was the largest in the Dominion. His works would come in nest in order. He had been president of the New Zealand Tanners' Association during the years referred to in the case. New Zealand tanners outside Woolston produced 4-sths of the leather made in New Zealand. There were 15 or 16 other tanners in New Zealand. In 1920 his firm tanned weekly 400 or 450 hides. Before the raising of the embargo enquiries for fixed prices were made by the Board of Trade. By that time the tanners guessed there would be an embargo. On behalf of the tanners witness told the Board they would not quote firm prices unless the Board of Trade guaranteed fixed prices for hides and skins. He said that possibly the tanners would quote for three months. He recommended the Board to approach the tanners individually, and ask if they would quote, as there was a probability that individual tanners would quote if asked. After the embargo was removed probably he would have quoted. It was an ordinary thing for tanners to quote for some months ahead. When the embargo was lifted ho did not close down his tannery. He bought hides at the high figures and lost money. Other tanners would lose, too. They fixed their own sale prices. The Board of Trade did not interfere-. The Commissioner: Strange! Witness added that they had no knowledge of the Woolston prices. He was not compelled to arrange his prices according to what Woolston was charging. Price was not the only factor in selling leather. Quality came in. When the embargo was lifted they had practically no hides in stock. They carried on all the time, fulfilling contracts, though having to pay the higher prices for leather. He would not' like to say his company had made serious losses. They avoided buying at peak prices as far as they could.' Tanners in the Association were working on the same principle. If he had been asked to quote firm prices for three months in early March, 1920, he would havo done so. They never departed from this principle. Tho standardised boot scheme had no chance of success at all; that was the general opinion of tho tanners. It was not a factor in regard to the sale of leather. Ik 1921 representations were made about a 25 per cent, duty on boots. The Woolston Tanneries agreed with the others to 25 per cent. Subsequently, he believed, they changed their attitude, and intimated to the Government that they would be satisfied with 15 per cent. No Danger of Leather Famine. Sir John Findlay: It has been suggested that if the.Woolston Tanneries had closed down in February, after the removal of the embargo, there would have been a famine in leather in New Zealand. Witness:. I cannot understand that. If all tho tanners closed down to-day there would not be a famine for the next six months, even if nothing camo in. The supplies in hand and in process of finishing would be sufficient to carry on for that time.

To My Myers There would eventually have been a scarcity of New Zealand leathor. It was true that in regard to sole leather they had to look a long way ahead, because it took longer to manufacture. Half of his manufacture would be solo leather. There was also a proportion of bag and harness leather. He would have preferred tho embargo to have been kept on. The Association tannors had to sell in competition with -Woolston. He did not concern himself with Woolston prices. Immediately tho price of hides went up, tho tanners put up their prices.' While tho prices went up they bought cautiously, but satisfied their requirements. He had no hesitation in saying ho would quote firm for three months if he wanted the business. Standardised Boots. John William Collins, secretary to the Department of Industries and Commerce, said he had been secretary •of tho Board of Trade. He confirmed the evidence he gave before tho M to Z Petitions Committee of the House of Eepresentatives. He read a lengthy statement regarding tho negotiations with the Woolston Tanneries. One telegram stated that the company had purchased hides for six months. Woolston Tanneries were interested in the firm of Ward and Co., which took the leading part in regard to the manufacture of standardised boots. Thus in March Woolston Tanneries were quoting for leather to be sold to a company in which they wera considerably interested.

Mr Myers: That was later on. Sir John Findlny: No; we say it was then.

Witness's statement contained the correspondence' between Mr Ollivier and the Department. He gave evidence regarding the standardised boot scheme, which failed to satisfy the public. There were only a few firms that undertook the making of the boots. The firm of Ward and Co. mado SO out of 100 of all the standard boots that were made. Witness stated that immediately the embargo was removed there was no possible hope for the success of the standard footwear scheme. The Board's records showed that it was not enthusiastically taken up by either manufacturers, distributors, or retailers. This was possibly due to the fact that the rate of profit on production was fixed by the Board at about 16 per cent., and the ratio of profit to the retailer at 20 to 25 per cent. Very few manufacturers in the dominion were strongly interested in the proposal. Only Ward and Co. in Wellington took much interest in it, and they practically made SO per cent, of the footwear that reached the market. . .

Witness proceeded to quote statistics concerning the importation of leather and boots and shoes into the Dominion, showing the result of the lifting of tne embargo. The whole trouble of the Woolston Tanneries was due to the e °" 1 " petition of these importations. figures were:—Leather imports, 191;, £227 021- IS2O £707,146; boots and shoes,'l9l9, £442,901; 1920, £1,189,603. To Mr Myers, witness said tho wooifirin that gave the Government any asston Tanneries were the only tanj ? sistance in regard to the standar se boot scheme#