IRON LAW OF COSTS

Evening Post, Volume CXIII, Issue 9, 12 January 1927, Page 14

IRON LAW OF COSTS

LOST LEATHER TRADE

I PRODUCTION FIGURES TOO HIGH AUSTRALIAN TANNERS' LOT. In the list of Austraha's exported | manufaetmes, leather, has'fallen from a high position to nearly bottom. Exports of .Australian leather to London have fallen so rapidly that this season it is estimated that the quantity exported will be about one third of that

The ±alling-off m Australian Ic-athei exports to Britain is duo partly to deficiencies of wattle-tanning as compaied with oak-tanning, but mostly to a rise in the Australian production cost, fcmch, at any rate, is the contention of an article in the "Argus."

SENT AWAY AS HIDES. "Before the war laigo quantities of Australian leather wore used by English tanners ana manufacturers, but owing to the increase in the cost of production it is now almost impossible for Australian leathers to find a satisfactory market m London. As a icsult, the bulk of Australian leather is now es.poj.ted m its law state, thafris m the form' of hides, and consequently Australian workmen aro losing the employment which would be given by more extensive tanning operations. Beiore the war labour charges on the converting of a hide into leather weie approximately 9 per cent, of its value, mis charge has now risen to about 23 per cent., and if the 44-hour week becomes operative throughout Australia the increase will be much greater. The cost of raw tanning material has also mci cased by the imposition of a duty of £3 a ,ton on wattle bark imported from South Africa, whence a largo proportion of Australian supplies are de-' rived." ' _ There is a demand in the East for i inferior or "offal" leather mado m Australia, but what can be done with the better parts of tho hide? "At present the * best oveiseas market for Australian leather is found in the East, but the demand there is; restricted to leathers of inferior giades, such as belly and shoulder leathers. To supply this trade with China and other Eastern countries it,is, therefore, necessary to produce much more leather of better quality than can be used for the in"ternal trade, as hides are not dissected accoiaing to quality when m the raw state. Once hides are delivered at the tannery it is necessary for them' to be tanned throughout, as the piactice of cutting them up, tanning the mfeuor parts, and. then exporting the better portions 'in tho hair,' 'would not be sound economically. There is, theiefore, a largo supply of first-grade leather which it is impossible to sell in Australia, and for which theie is no outlet overseas, as its value in tho world's markets in not sufficiently high to pay for the cost of its pioduction in Australia. .. . The class of evport trade that is now being done is shown by the fact^that the average price a 1b of all leather exported last year was about llja, or only a little above the price of belly leather. In 1922 the aveiage price of export leather was Is Id a lb, the difference being caused by the fa,lling-off ,of trade with London and the increase of the trade m offal leathers with the East. Australian tanners aie of opinion that the only way in which to improve the piospects of export trade in leather is to ieduce the cost of production. London trade would be legained if Aushahan leather could be sold at a prieo commensuiatolwith a labour charge of 12 per cent, on the conversion of hides into leather, or about half the present rates. v This, it is contended, could bo brought about by increasing the output of each workman by leplacmg the present wage system by pieeewoik. On piecework the men would.be able to earn as much as, 1 or more than, they receive at present. Tho advantage to the workmen would be in the additional employment which would be afforded if the hides now exported in the law state were manufactured into leather in Australia." /

T ANNHia As to the tanning: "Methods of tanning are largely the cause of the difficulty m making satisfactory sales of Australian leather in London. Leather pioduced here is fetter suited to this climate than is English leather. Aus-,, tralian tanners use wattle bark, which produces a soft, durable leather, well able ito withstand the attrition of dry, gritty roads, when made up into footwoar. Wlien used m the wet climate of however, Australian leather becomes spongy, and ' absorbs moisture. English leather is tanned witk oak bark, and is left in the pits for a much longer period than is usual m Australia. The finished pioduet is hard and unyielding, and is able to withstand the continued contact with the wet r ground and streets of England in winter. When used in, Austialia, English leather is not so satisfactory, as the dry, hard surfaces soon wear it away.. Some Australian tanners have attempted to produce leather suitable to English requirements, but it was found that the cost of importing tanning materials, and the length of time | occupied m producing the finished , aiticle, made the process unprofitable. < English tanners and manufacturers, therefore, regard Australian leather almost as a raw matenal, and when they purchase it they retan it to suit their requirements. This means that its value is much depreciated."