MUNITION CONTRACT

Dominion, Volume 36, Issue 309, 24 September 1943, Page 6

MUNITION CONTRACT

Firm’s Reply To Minister’s

Statement

ALLEGED EVASION OF ISSUES “The reply by the Minister of Supply, published in ‘The Dominion’ to the story of how the Government was saved £16,082 on a munition contract, shows, as do all his public statements regarding munition production, how he is misled by departmental officers regarding tlie true position,” says a statement issued by Mr. R. Burn on behalf of the Precision Engi nee ring Company. “They carefully avoid making any attempt to reply to the allegations of departmental inefficiency, which was disclosed by our letter trod cheque for £.16,032, Unit have attempted the old-time method of defenye by seeking to attack us, as the conti tic tors, by mis-statements, half-truths ami withholding certain of the facts. “For mis-statements, lake one para-■-riiph alone: •Negotiations for an amicable settlement of the amount in dispute have completely lailed (though the contractor was granted interviews with War Cabinet and subsequently with the Hon. Air. Nash and myself) the company has threatened to sue the Crown for further payment.’ . “In the first place, no interviews weie asked for by us. The contractor was summarily instructed by the Director Ol Production to appear immediately before the War Cabinet, and the meeting be(wecn Mr. Nash, Mr. (Sullivan and the contractor was arranged lit the persona request, of the Minister himself, licit this interview was abortive because the Minister did not keep to his undertaking regarding the conditions of the interview is "purely incidental. Further, the company did not threaten fo sue the Crown for further payment. Petitions were actually served on the Crown on May -G 1943 for two claims, one of which they have' agreed to pay.. The other is stdl within the jurisdiction ot the Louits, consequently no reference can be imide at this stage to the specific allegation contained in the Minister s statement. _ “For half-1 ruths, take the Ministers statement: ’But it was not till the Munitions Department began to be suspicious of ills costs and his profits that the deml-lir-k arose and he refused to allow his books to be inspected.’ “Here the facts are: On every occasion when the cost accountants have visited the works they have 'been supplied with or given access to every relevant document or record in connexion with the contract they were checking. We certainly would not. on principle, permit litem to examine the confidential books or the balance-sheets of the company, because we believe it to ’be tlie sole prerogative of the Income Tax Department to have access to these documents, we did, however, on Hie specific request ot the Secretary of the Treasury, submit these documents to two of his responsible officers, and, at the same time, answered in writing, eacli and every one of their specific inquiries. “We -believe that tlie demands of the Government, on private businesses that they should submit their confidential documents for the perusal of any junior Government official to be just as much a filching away of our rights as their action in taking away, in so many instances, Hie rigth of appeal to lhe Supreme Court. As for withholding certain Jacts, we subiiiit our letter* of August 25, 194--, to the Treasury as under: “Following the writer’s telephone conversation of this date we append herewith Hie copy of a minute passed by the directors of the company : ■'That (lie managing director be authorized to complete an agreement with the Treasury on the following basis: That the company, while engaged on munition work, will return to the Treasury at the end of each financial year all profits in excess of its average net profit. Average net. profit to mean the average of Hie actual net profit for years 1936 to 1940 inclusive’.” n “We reiterate that, our objective in providing the demonstration to Government officials iu February, 1042, was, as engineers, to prove beyond a shadow of doubt, in even a layman’s mind, that munitions were not being provided in New Zealand in the quantities possible or as efficiently and economically as they should be; and to leave it to the powers that be to investigate tlie position and find Hie remedy. Our cheque should have provided the Government with 16,032 good reasons for appointing a Royal Commission to investigate the munitions position. Had this been done, I believe that the savings would have astonished even Hie Hon. Minister of Finance. “It is obvious that Mr. Sullivan has put his name to a typical Ministerial smoke-screen to hide tlie real issues and has tried to sidetrack the essential points by introducing irrolevancics.”