AN "IRON RING?"

Evening Post, Volume CI, Issue 128, 31 May 1921, Page 7

AN "IRON RING?"

OUTSIDER AND BOYCOTT

TWO INTERESTING LETTERS

ALLEGED BREACH OF CPNTRACT.

Bre.ach of contract was alleged as the basis of a claim for £597 Is 4d damages brought by A. E. Hislop, Ltd.,' against the Aldington IrOh Rolling Mills, Ltd.; before' Mr. Justice Hoskiftg.. in the Supreme Court to-day. Mr. T. Neave appeared for the plaintiff, Mr. F. S.. Wilding for the . defence: Mr. Hector M'Leod was foremari'of the jury. The statement of claim alleged that on or1 about 17th June; 1918, the partiep entered into a contract whereby the" plaintiff firm agreed to act as sole, agents for the defendants in the North Island; to prepare their premises for the reception of the' goods and to cease from buying bar and shoeing iron elsewhere. The defendants; it was alleged, agreed to supply the plaintiff company at Auckland with 20 tans, and at Wellington, frith 20 tons, of iron on consignment) Uhd to keep the stock tip to that tjiiantity at both place's, at a'priee not greater tliari the wholesale market price, of the defendant company. It .was, further al-' leged that', the plaintiff Company had carried out its contract, but after making one consignment to Auckland about July, 1918, the' defendants, without, notice, cancelled the contract; The plaintiffs; had made special arrangemeftis/at considerable expense/ The sum claimed as - damages included £47'-Is 4d as special damages, and £550 general dairiages. The statement of defence was • a general denial (if the claims. In His address to the jury, Mr. H; Neave stressed the irtlpoftdnti point that Hislop i Ltd., had tsfuse'd io be bdttiid by the prices ,of the ■''ring1' in sale's to consumers. ■ ■ His Honour: "Did this combination apply to all the iron sold to the Adding^ ton concern as well?" / Mr. Neave: "We are' riot' yet-fully apprised of, the ramifications of the ring, your. Honour." • /Counsel (further explained that the plaintiffs reckoned ovef.' the/whole of their sales on a, gross profit of about 10 per cent. The contract *as for the space al twelve months; after,which the existing terms might be'revised. A consignment of some seven torts'was sent to Auckland, and the travellers' of the plaintiff firm went round securing Orders for the, iron. ,To the -amazement of the plaintiffs there came, oh the 27th July the following .astonishing letter marked, "confidential,'' a'nj addressed to Mr. A. R. Hislop: •" ..•;. , ,

(Confidential.) "'■' ' : ■ .-27 th July, 1918; Messrs. A. E. Hislop, Ltd.; Wellington.. ' ."' ,

Sir, —We regret.-very much tbhave to tell you that we. have got bitrselves into itii awkward position witli the wholesalers of bar H'ori through our. assbciiitibn with your good selves. They prae-r tieally, tell us that they.do not regard your firm as entitled to customary wholesalers' terihs, and further, that they resent your cutting prices to.the extent that we must make .a chbipe between their trade ■ and yours, that ii we continue to supply they will discontinue buying from us. As our policy is to do business only with, wholesale traders, and we depend entirely, upon them, we are compelled to capitulate to their deriiahd, arid close our relations with you. . We regret exceedingly to find ourselves, in this humiliating fix, but apparently there is no other way out of it. ... We want to say fhat ■we appreciate very much your friendly attitude towards us.. This makes it all the more, difficult and humiliating to have to write you in this strain.—Yours faithfully, , N ..•■..-■ ■ ' ■• ' GEO. BOOTH, Christchurch. . To this the plaintiff replied-:—"Your astonishing letter of 27th inst. reached us this day. It matters not to us whether the association- to which you refer have decided that we are not wholesale merchants. . . . With reference to their ring and consequent boycott of our firm, that is a matter with which we may deal hi a higher place, and the buyers of iron may be enlightened throughout New Zealand as to what is taking place, and what might Government aiid Parliament say to the fact that we are driven to import iron from Australia or elsewhere, because we.aye boycotted by New Zealand manufacturers,. because w& are content with a fair profit- and will not be parties tb ah exploiting ring of wholesalers. . . „. Perhaps you may regret the action you have taken, for rings' like the one that has got you 'under, the whip' will only consider your company as long as it suits their Burpose. ..."

Further correspondence explained the position of the "boycott Jo tlie plaintiff's clients, who strongly resented the attitude of the defendant firm. The Farmers' Association was recommended not, to sell "scrap" to the defendants.!. The damages, according to the counsel, were estimated on a turnover in a year of £10,000, at a gross profit of l 6 per cent.—£looo. Olit of this would come the expenses estimated at 3 to 5 pelcent. Damages were estimated on a basis of the. net profit or £550—a very moderate estimate.

EVIDENCE OF PLAINTIFF.

Alexander ft Hislop, managing director of the plaintiff firm, explained the negotiations which led to the conclusion of the contract with the defendants. His firjn had been importing iron early in 1914. Unfortunately, the war intervened, and' on account of the embargo placed by Britain oil the exportation of these lines it was riot possible to "continue, importing.. A 'considerable number of orders sent in 1914 were not filled on. account of the embargo. About 1916, Mr. Waller, representing / the Addingtpn Boiling Mills, commenced to call to endeavour to get business for. his company. Witness decided to give the Addiugton iron. a run and placed orders with the company. Mr. Waller came to the conclusion that the' plaintiff firm was popular with tho - users of iron, and suggested an v agency for tlio North Island: Witness met the manager and secretary of the defendant • firm while he was visiting Christchtirch, a.iid.discussed the matter. Later witness received, a. call .from. Mr. Booth, chairman of directors of the Addihgton mills. The question , way fully discussed then, including proiitfe, .on'a sliding scale from 20 per cent, to 2£ pel- cent, discount from the defendants, and the average profit ,

would work jnlfc at an. average of about 10 per cent.. Everything 'was satisfactorily arranged, on the lines-indicated by, the"statement-of claim. The defendants' representatives 'expressed themselves highly satisfied with the. arrangements, and. said tliey looked forward to a large business. The agreement :was for twelve ■ months, to be renewed, if mutually satisfactory. The -question of the al-% leß;ed "ring" in Wellington was discussed. Witness-said it was only fair to'tell Mr. Booth there WAS A ring or nssocintion ih Wellington';'ajid that his firm did not belong to it. His business. policy had always been to avoid -such combinations. As a matter of fact, most of- t-hd British, firms they represented would resent their joining any such combine. If Mr. Booth carried but, the arrangement, he felt quite satisfied he -would be meetins WM' trouble from the members of the Wellington; association. Mr. "ftoothls reply -was ; "That does not trouble •

a bit. You are prepared to do business on fair lines, and that's all I want." That closed the interview.

. • Witness then gave instructions that one of his travellers should devote the ■whole of his time to visiting iron users in the city and suburbs, notifying them of the arrangement made with the Addington Company and endeavouring to secure orders. The traveller spent most of the time between the date of the contract and its repudiation. When the repudiation took place fortunately the plaintiff's customers did not hold theni to their contract. The quality of the Addington iron ore was quito satisfactory. At the present time it was difficult to secure supplies from the Broken Hill Proprietary in Australia on account of strikes. Witness tried the Iron Rolling Mills of Otago, but found himself again faced- with the difficulty of the "Ring." To Mr. Wilding: The Auckland branch of the firm had tried to purchase from the Otago mills after the end of the Addington contract. The actual date of the contract made with Mr. Booth he could not fix, but it was the end of May or early in June.! At this stago the Court adjourned till the afternoon.

At the resumption of proceedings, Mr. Wilding read a letter from the Auckland branch of the plaintiff firm to the plaintiffs' head office, urging that the matter be placed before Parliament as an exploitation of the public.

(Proceeding.)