WAR ASSETS INQUIRY

Press, Volume LXXXII, Issue 24954, 15 August 1946, Page 4

WAR ASSETS INQUIRY

Commission Hears Evidence

STATEMENT BY TREASURY

(P.A.) WELLINGTON, August 14. The Commission of Inquiry into the disposal of vehicles by the War Assets Realisation Board continued its sittings to-day. The Solicitor-General (Mr H. E. Evans, K.C.) led the evidence. The Munitions Controller, William George Milne Colquhoun, detailed arrangements for the reclamation of vehicles written off by the United States authorities. Until instructions were received in September, 1945, to cease the intake of vehicles 2642 trucks were reconditioned. The termination of the reclamation project brought about the question of the disposal of surplus vehicles, and the United States authorities offered Dodge and GMC trucks at 125 dollars each, and Jeeps and Dodges at 100 dollars. When these terms were offered to companies the Ford company was not interested. General Motors thought it might take a limited number of GMC’s, and Todd Motors eventually abandoned the negotiations. The reason why a conference in October, 1945, rejected the United States offer was that the dollar cost of the vehicles was not considered worth while. It was thought that dollar funds could be better used, as the demand would be purely speculative, and it was known that about 125 new trucks were then being assembled by Ford and General Motors. The latter firm later indicated that they were not interested in the purchase of GMC trucks.

Cross-examined by Mr T. P. Cleary (counsel for the board), the witness said the description of the vehicles in a booklet on the efforts of the reclamation project as “automotive derelicts,” “warworn wrecks,” etc., was substantially fair. It was necessary, owing to the conditions of vehicles, to “cannabilise” more and more from other vehicles not actually on the rebuilding line. As such vehicles waiting in the park were, in addition, deteriorating, the offer to sell by the United States authorities was not looked on with any enthusiasm. To Mr W. E. Leicester, counsel for Messrs W. S. Goosman, W. A. Sheat, R. G. Gerard, and W. J. Broadfoot, the witness said he was not aware of any sale of tyres off the vehicles in small quantities to the public to test the value of tyres, for which the basic valuation of £lO each had been set by the board. Up to the end pf the war the vehicles had been considered economically repairable only because of the reclamation setup here, and battle conditions in the islands. The witness had had to ask the United States Command not to send "rubbish” to be reclaimed, but it had been necessary to save as many as possible. He was not aware of any appraisal of value at the time that the GMC trucks were offered to General Motors at £42 each, or the Dodges and Jeeps at £33 each. He presumed the United States authorities considered the question of possible relative demand in nominating those prices.

Sale of Winches The witness said he knew of no inspection by a Government department, or of records held by them, by which the number of winches available could be ascertained, but had had to accept Colonel Sullivan’s statement. Asked if in the light of the knowledge that winches from the vehicles had been sold for £25 and £55, he did not agree that his estimate of their value was an over estimate. The witness said he did not think that more than the total amount of his estimate would be received from the sale of winches if half of them were sold. It was a question of the demand for them. He did not think the value of them as taken over by Gillies and Sons was more than £5500. When he discussed with the general manager of the board methods of disposal, he thought auctioning by the board was worth full consideration.

Douglas William Ashleigh Barker presented a statement on behalf of the Treasury Department, in which it was stated that when outright purchase was being considered it was realised that the value of tyres and winches would be more than sufficient to justify the price of 50,000 dollars for the vehicles which was approved. To Mr Cleary, the witness said in coming to that conclusion the Treasury had the assistance of officers in the Ministry of Supply, who knew about the tyres, and of the War Assets Realisation Board. The cost of clearing the park was always in the mind of people considering the transaction, and was by no means the least important. No price for 50,000 cases of spares, the purchase of which was rejected, was discussed with the United States authorities, because it was thought that only a fraction of them would be in demand, and it would not only be a waste of public money to buy them, but a waste of dollars. He did not know what they would be valued at, but the figure would be astronomical. The Treasury still considered that the right thing had been done about them. The commissioner, Mr J. R. Bartholomew, asked the witness why a valuation of the tyres had not been obtained when seven weeks had apparently been available for that. The witness replied that seven weeks had elapsed between the first formation of the proposed deal and its conclusion, but the Americans engaged in liquidating the assets were in New Zealand only a week. A tentative price had to be arranged before the end of November. Reason for Urgency The commissioner: What was the immediate urgency in fixing a price? The witness: The purchase of these vehicles became part of a deal including a vast amount of other material. The urgency was to get up to the Pacific before that material was claimed by the Dutch or the French, or tipped into the sea. Answering further questions by the commissioner, the witness pointed out that an estimate of the value of the tyres given the Treasury was £BO,OOO, and the approved price to be paid for vehicles was considerably less than that. He knew of no estimates of the cost of cleaning up the park being obtained, the estimate of the War Assets Realisation Board being accepted.* Unpredictable events in the last six months had favoured very much the purchasers of the vehicles from the Government, on which it was said large profits were being made, said counsel for the War Assets Realisation Board (Mr Cleary) in opening for the board. He suggested that the successful tenderer for the G.M.C. trucks Would agree with that when he was giving evidence. The fact that Wellington had experienced one of the mildest autumns and winters for many years had assisted the purchaser of those trucks to make progress, but more important than that was the fact that the supply of new and second-hand vehicles expected to come on the market late last year and this year had not come on the market in the large numbers expected. The release of 582 Army trucks had been held up pending the conclusion of the lend-lease accounts, though he understood those accounts had just been completed. New vehicles had not been imported in the quantities expected. In the result the successful tenderers had an excellent opportunity to place a large number of vehicles on a market starved during the war at artificial prices not under control. They could not have done that had new vehicles come on the market, or had they had to compete with army vehicles, he said. Mr S. G. Stephenson, counsel for Brigadier H. E. Avery, general manager of the board, said he Would call quite a number of witnesses. Representatives of the companies which had been reconditioning the American vehicles would give facts and figures to show what was involved in reconditioning. He submitted that the real complaint against the board could be formulated in three questions: should the board have adopted some method of disposal other than by public tender? If the method of public tender was properly adopted, should the vehicles have been made available in smaller lots? In any event, should the board have obtained a valuation of the vehicles? The commission rose until to-morrow.