WOOLLEN MILLS FINANCE.

Press, Volume LXIX, Issue 20919, 28 July 1933, Page 12

WOOLLEN MILLS FINANCE.

REVISION OF DUTIES. PROPOSALS BEFORE TARIFF v COMMISSION. V [THE PRESS Special Service.'] WELLINGTON, July 27. Representations on behalf of the New Zealand Woollen Mill Owners' Association were made to-day to the Tariff Commission. In a prepared statement, the association sought a revision of taxation respecting imported "shoddy" materials, stating that if this were done, between 300 and 400 workers could be employed in New Zealand mills. "The New Zealand woollen industry la a key industry, as the great bulk of its raw material is the wool produced by the farmers of New Zealand," the statement read. "Although It is not generally recognised by the latter, the competition of the New Zealand mills plays a very important part in. the prices realised for all classes of wool grown in New Zealand, particularly merino, halfbred, and fine crossbred If the competition of the local mills were eliminated, we affirm that the tendency would be toward lowered prices especially for finer wools. The value of the competition of the New Zealand mills in this respect cannot be over-estimated and should be recognised by the Government and the farmers of New Zealand. Definite Proposals. "We are not seeking any increase In the duties on hosiery, underwear, or yarns, but we strongly advocate that our recommendations placed before the Minister for Customs on numerous occasions in respect of shoddy, or materials made from remade wool, should receive the earnest consideration of this commission. The following are our requests in this respect:— That in addition to any duty otherwise payable a special duty be imposed on tweeds, serges, and suitings of wool or containing wool weighing not less than six and a half ounces a square yard, the current domestic values of which for every 16 inches in width or fraction do not exceed the respective values set forth hereunder, the figures in the second column representing the rate of duty proposed for every 16 inches in width or fraction (in addition to any customs duty otherwise payable):— [Where the current domestic value for every 16 inches in width or fraction thereof: Does not exceed IOJd a yard .. 2id a yard Exceeds IOJd, but doejs not exceed Is a yard .. ljd a yard Exceeds Is, but does not exceed Is lid a yard 3d a yard If these duties were imposed on all imported shoddy materials, the industry could employ between 300 and 400 extra workers in the New Zealand mills. This added production of pure wool textiles would mean the employment of hundreds of extra workers (male and female) in the clothing and mantle trades, and also increased purchases of wool, including greater competition for crossbred wools. Service for Consumer. Although the first cost for the pure wool clothing would be slightly higher, the consumer would get better service, and therefore better value for the money expended. Contrary to the statements made by certain organisations, the New Zealand woollen manufacturers had not taken advantage of the 25 per cent exchange rate, as prices had not been advanced by them since the exchange rate was advanced, although the New Zealand mills, as compared with tne British manufacturers, were paying this exchange on all their wool and other raw materials. The added cost on the finished goods in this respect would be aproximately 8 per cent. "Statements have been made on numerous occasions to the effect that the New Zealand woolleni manufacturers base their factory selling prices on British prices plus duty, exchange and landing charges," the statement adds. "We give these statements an absolute denial. In many cases, particularly as against competition witn imported textiles made from 'shoddy, we are compelled to cut our prices unduly to meet this unfair competition. In regular lines our prices are based entirely on the actual cost of production irrespective of the landed cost of similar goods. Local competition again compels this. Effect of Higher Duties. "If however, duties were decreased, the tendency would be for increased imports with a corresponding reduction of the market available for New Zealand mills. This in turn would increase relative overheads and costs of production in New Zealand, and thus still further tend to hamper the local industry. Our contention is that increased output means decreased costs and vice versa. "As far as we are aware, no British manufacturers of textiles and hosiery have so far presented requests for a reduction in our present direct tariff on woollen goods. Any such requests which have been made, appear to have come from manufacturers' agents whose interests are naturally on the lines of expanded importations" Factors in Production Costs. In support of their claim, the representatives of the woollen mills stated that the total capital invested in the New Zealand woollen industry in 1932 was £1,674,084. The New Zealand mills were compelled to make their purchases of wool within a period of approximately four months in competition with the world's buyers, therefore a good deal more capital was required under this heading by the New Zealand mills as compared with the British manufacturers. Another factor in production costs was the price paid for loan capital. Until quite recently, and for a number of years before 1933, the New Zealand bank rate was between 6 and 7 per cent, this rate being 1 per cent, to 2 per cent above the British rate. This additional capital charge permeated New Zealand charges throughout. A flourishing clothing industry meant: (a) Increased purchases of wool by the New Zealand mills. (b) Increased production of textiles and a lowering of costs. (c) Employment to many young New Zealanders leaving school every year. (d) Cheaper clothing for the people. (e) Increased purchasing power by the extra persons employed in all the allied industries, and additions to Government revenue in the form of taxation. Two- Problems. The New Zealand clothing manufacturers were confronted with two problems which have their reaction on the woollen industry: (a) Importations of clothing made from shoddy materials. (b) End of season jobbing. The wooilen manufacturers supported the submHMom of the clothing trades in respec •• hr importations «r clothing mi . .rom shoddy materials. End-of-s jobbing, particularly in the women's section of the clothing trade, was also a very serious problem confronting these trades. They strongly supported the contentions put forward on these points. These Industries were very closely allied to the woollen industry, so "therefore any further reduction on woollen or containing wool apparel, burnt have its effect oa jkbe woollen