MANUFACTURERS AND THE TARIFF.

Evening Star, Issue 9776, 5 August 1895, Page 1

MANUFACTURERS AND THE TARIFF.

CONDENSED OPINIONS,

GIVING EVIDENCE BEFORE THE TARIFF COMMISSION.

Mr William Gregg, of Gregg and Co., said that he had been connected with the coffeemaking industry in Dunedin for about thirtythree years. The present duty on coffee essence was 15 per cent., and he thought it should be increased to not less than double that, or 30 per cent. His reasons for urging the increase were that there was no bottle manufactory in the colony—they had to import bottles—and had to pay a duty of. 3d per lb on the raw material. Ha had been manufacturing coffee essence ou a moderate scale, but found it did not pay. He could not compete with the English manufacturer at that rate of duty ; in fact, the large importations of coffee essence all over the colony interfered considerably with the coffee trade. That had been going ou prominently for the last five years, but previously they did not feel it much. Suppose the duty were increased to the extentyon propose, what would he the effect as regards the price of the article to the consumer? Would the coffee essence prepared by you in Dunedin be purchasable at the same price or at a lower or higher price?—My idea is that the consumer would not suffer at all, simply because my intention is to place a coffee essence on the market equal to Symington’s, which is the popular brand and the best.

And as to price?-At about equal to tit,her essences imported hero, all charges paid, . . . You think a duty of i!() per rent, would effect the purpose you wish ?—Yes. With the purpose, I presume, of practically prohibiting the importation of the foreign article? With that additional duty wo could push our article to consumers, providing it is equal in quality, which I guarantee. I think the difference in duty would enable us to take the lead, instead of Symington's. A witness gave evidence before us to the effect that he did not think any duty less than 50 per cent, would have any prohibitive effect.—l think he asked that simply to encourage the present working of the raw material into manufactured coffee, without going into the essence.

The price of coffee essence made in the colony was Is 2d per bottle ; English-made, 11s 7d per dozen. He preferred fo see an ad valorem duty imposed, because otherwise an inferior article would be sent out at a very low cost. There was no coffee to speak of exported from here, as there was a protective duty at every port outside New Zealand. The general consumption of coffee had greatly decreased in the colony. Are you cognisant of a petition being presented to the House by Mr Pinkerton, which bears your signature, in July, 1834 ? The first paragraph in that petition sets forth the following “There is imported into New Zealand in bottles an article of commerce known as essence of coffee and chicory, the analysis of which by Mr Frank M. Allen, of Dunedin, certificated analyst, is afollows; Water, do.fiO per cent.; grape-sugar (glucose), 18.81! per cent. ; cane sugar, 34.80; soluble constituents of coffee, o.4fi ; ditto of chicory. 4.22. Total, 100.00.” Do you believe that is a correct analysis ?—I should not like to say. You signed that petition, did you not ?—Yes ; 1 signed it, but I cannot take the analysis as correct. It would appear that the proportion or caffeine as given in your evidence would be correct. Is that not so?—I would not think of putting up a manufacture of that sort and put my name to it.

It is very singular that your name should he attached to the petition, under the circumstances. My object in signing that petition was to get an increase of duty. The petition sets out an alleged fact which yon now contra vert?—l have tested the manufacture since that, and am prepared to do a certain thing on certain conditions, and to bring before the public a better article than they have now got. What witness meant was that he was prepared to put on the market an article that should contain three-fifths of caffeine, while the imported article contained only one-tenth. Bis only objection to an ad valorem duty at the present moment, without giving the matter much thought, war that some of the Home manufacturers might send out an article at 5s a dozen, or 2s 6d less than other men. They knew the duty they had to pay, and might put it in lower by making it weaker. He wanted to go on merit. Witness manufactured flavoring essences, as lemon, vanilla, etc,, and asked

for an increased duty on these. He did not ask tor & very extensive increase, but simply to 50 per cent. 7he local market was being inundated from Melbourne with essences manufactured in Melbourne, and they also came from America. English flavoring essences were not much imported ; America and Victoria pretty well commanded the New Zealand market. Essences could be made equally well here, under the supervision of the Customs, and an increased duty of 15 per cent, would enable local makers to compete favorably with the importer. There would be no increase of price to the consumer. The essences locally prepared were better than the English, because the local manufacturer must carry out certain preparations and work up toa certain standard, under the supervision of the Customs; every bottle had to be filled up properly. It would not be more advantageous indeed, it would be more cumbrous —to charge an excise duty in place of the fixed license f»o of £35 a year. The license system was the right way of keeping the quality up. They had to notify the Customs when they wanted to prepare essences, and the Customs sent down * man, for whom 12s a day was charged. Witness was also engaged in starch-making, chiefly from rice. This rice had to be imported, and on it there was a duty of £2 per ton for manufacturing into starch. In the manufacturers labored under the same disadvantage for several years, but ultimately found that they Could not pay £2 a ton duty on the raw material and compete against German and other manufacturers shipping their surplus stock to the colonics, to be sold for anything it might realise. An appeal was made to the House of Representatives, or the Tariff Commission, to concede the duty of £2 per ton on the raw article, which was granted by the Assembly. The starch manufacturers of Victoria have now no duty to pay. Bis firm wore paying £1,050 a year in wages, and employed sixteen hands, with the prospect of doubling the number before twelve months are over. They asked that the starch manufacturers in this colony should be placed in the same position as the Victorian.

James Neil, herbalist, stated that he employed four hands in his factory—two adults and two girls in addition to himself; in his other branches, nine hands. He paid the girls 15s a week. One of tiie men (not quite out of his time) got 30s a week, the other (a sort of laboring man). 32s 6d. He did not want anything taken olf the tariff, hut wished something put on manufactured goods, because they interfered seriously with makers like himself. Most chemists and druggists imported stuffs ready made. All pills in bulk, now admitted at 15 per cent., should be increased to 25 per cent., on the ground that they were made equally well here. It would not increase the cost to the consumer, but it would tend to make a good many of the chemists make the articles themselves. A chemist purchasing from witness would pay the difference in duty. The duty on the class of perfumes produced by witness was 12d per cent., aud it ought to be raised to 25 per cent, ml '‘cdoran for small bottles. Perfumes imported in small bottles of less than pints should also be charged 25 per cent, ml valonnn. All these articles could be manufactured here. The manufacturers at Home got a rebate from the export duty, which, practically speaking, gave them a big advantage over the local maker. The rebate Was in the value of the spirits, which were the foundation of the thing, and they paid only on the perfumery part. The local maker had to pay 15 per cent, on the articles used in manufacturing perfumes ; that should he 25 per cent. >a( r«h,n )n. They ought to he allowed to take the perfumes aud essences out of bond in bulk in quantities from one to five gallons and bottle as required, instead of having to fill the small bottles in bond. Medicinal tinctures which could be made here did not pay enough duty. The 15 per cent, on them should be raised to 25 per cent. As a manufacturer would you not think it an advantage to bottle it in a pure state rattier than send the perfume to the country to be bottled in an impure' state, and have the blame for an inferior article put on the manufacturer The chemists who sell it put their own names on it. It is only when we want to supply the trade with bulk quantities that wo ask lo take it out of bond in bulk quantities.

I suppose, as a matter of fact, tiiat in your business the retailers charge generally a sutii ciently large* profit, so that the difference of lb per cent, would not interfere with the price to the consumer /—I do not think that 10 or 15 per cent, will make any difference to the purchaser, A difference ought to he made between the raw and manufactured articles. The present duty was 15 per cent, all round. The duty ou the raw material should he retained, hut on the manufactured goods it should be doubled. The latter were bulky goods, and did not run into much money. Ife wanted a substantial duty, and would not object to 25 per cent, all round.

In putting »n 25 percent. you would not hurt the revenue?—lt would not help tiro reyonue much ultimately, but in the meantime it would assistboth revenue and tariff.

Then as to pills: there are a number of pills you do not make. The protection on these would cause the trade to get into your hands?-As regards patent medicines, I should like to suggest a very substantial increase on them—from Into ■lO per cent. Why, as a matter-ff fad, are not patent medicines very much used by poor people in the country? -Not so much as formerly, because a great deal of the local article is taking their place. For these patent medicines they have enormous protits. Uf course, they advertise very largely ; at the same time it would not make any difference to the consumer if they were raised.

Suppose tiio duty were raised, as you propose, would not you and others be likely to get all the business? It would help us a good deal, and would keep grocers ami others from spoiling tin trade by selling a 2s (id article at a prolit of Id oi 2d. Now they are selling a box that costs Is 2d for Is ;>d or Is old. If a duty uf 1!) per cent, wore imposed it might raise them to Is (id, which N a reason able price. But the profit will allow all that percentage to be paid. It appear.-- from your statement that thegrecers do not make much profit out of the patent medicine business—that the public got the benefit, and that the increased duty would simply be the increase of price which the public would pay for them —lt they paid Is (id it would be very little. A man does not wanl more than a box of pills in a month. . . .

INTE RESTING COR Eh SPON DENCK. While at Auckland the Commission examined Mr Robert Fenwick (manager for T. and S. Morrin, Limited). The Chairman: Feme evidence was given to us this morning by Mr Craig on the subject of cement. He has told us the history of certain transactions, bat there is one point upon which it has been thought advisable to refer to you. The transaction is as follows, according to Mr Craig:—ln November, 1894, tiie Railway Department called for tenders in Dunedin for the supply of New Zealand-made cement. Biiscor and Co., intending to tender, asked the Milburn Company for a price for cement, and obtained a quotation, on which basis they tendered. Something occurred which caused the tenders to be returned unopened, and fresh tenders were then called for the cement by the Public Works Department for the supply of cement for that department and the Railway Department conjointly. This was in December, 1894, and Brifcoe and ,Co. again tendered, presumedly on the basis of their first quotation, their tender being accepted. Application was then made to the Milburn Cement Company for cement by Briscoe and Co., but the former refused to supply them. Thereupon Briscoe wired to Morrin and Co. to purchase cement from Mr Wilson, of the Auckland Cement Works. Wilson supplitd the firm, who then sent the cement to Briscoe. It is stated tiiat as soon as this cement arrived atDunedin Mr Cakden (manager of the Milburn Company) came to Auckland and arranged with Mr AVilson on no account to supply any cement to Briscoe for this contract. Morrin and Co. subsequently ordered more cement from AVilson, and the latter refused to supply it. Mr ( raig informs us that he saw certain documents which proved that there was an organised boycott on the part of these two cement firms, the object being to eventually obtain a monopoly in the cement trade for the whole colony, one fn m to take the South Island and the other the North. It was suggested that you should be called, and that the documents should be produced proving this statement.

Mr Craig; Since I was examined I find that Mr Oakden had been to Sydney, and broke his journey here.

Mr Fenwick; This matter is really my own personal matter, and not Morrin and Co. : b. The purchase referred to was made by myself. The history you have given is practically the history of the transaction in detailed form, and I confirm Mr Craig’s statement, excepting as to the item that the transactions were conducted through Morrin and Co. They were really with me personally. Mr Stevens; Was it a personal transaction between you and Briscoe and Co., to the ex-

elusion of your firm ?—I was twenty-three years with Briscoe and Oc., and wo do a good deal of business with them. I was simply doing them a good turn, and as there was no profit in the transaction it was no use putting it through Moniu’s book. I produce the following telegram, which commences the correspondence !

Mr Robert Fenwick, T. S. Motrin. Auckland. —i’hicf returned all well. Suggests 1 ask you sec AVilson and try to get him toquoto us for lime and cement. Government eontract. Milbuni Company boycotting us, and cannot got AVilsonunote direct. Try and fix this for e.s. AVe shall all appreciate it much if it conies off. Reply collect, -llfttn Macs' kil, jun., Dunedin.

On receipt of this telegram I sent for Mr AVilson, and be came up and said that he did not wish to send any cement to L’unedin on account of the Milbuni Company having refused to quote at all for this contract. 1 said, you need not consider Briscoe in the matter at all, you can soli to me personally. He gave me no direct answer then, but next day he gave me a price—viz., 5s 6d a big. I telegraphed that to Dunedin, ami Briscoe accepted it. I then received rim following letters of the 2nd and 12th March

Dunedin, 2nd March, 1895. My Dv'a 1-V-iiwirk, -bast-Saturday 1 .-.cut you a 'udayml win-, a-king for a price for cement and lime from AVilson. A week has gone, and we have bad no reply. lam not altogether surprised, bcause wo ba\ e all along felt that AVilson has been pulling with the Millmrn Lime and Cement *' niipany. 'these people, represented by the manager, Halolm. Jack White the lawyer, and Brindley, insurance man, have simply bov rotted u'. They qimted us i'l! 12s per ton fur the railway ••outraot. We did not a.-k :> price when the two -h-partmeiils were eombmed under one schedule, hot tendered on too price we hot for the railway. When we got the roiitraet they declared that we hj id taken " their' ••ontruet away, and they would imt allow us to make any profit out of it. There i a let more to (.•!!, Imt the story is too long to put ou pip'-r. Meantime we are landing ICO ■ -.isle- oii.i-nt. Knight-Recall's, ex Kaiigitiki, and are advertising it to consumers at tls per i- isk. v- hi v. ill make them 10.-e about 2s lid ou a'l their sale- mit'hlc of u c Ibuv is that y 1 would gill- a h.l to euriuv these chaps, and 1 believe if i* van be done that you will do it for us. ■'surely Mr Wil.-on, under the cirriim.-tanocs, and i t face id’ the fa 'f that we handed him over tile AVellingr-.ii contract, will imt continue to blindly van with a .oiim'ii which i- callable of -such dirty h'l.'iie-.ss. I Dave if to you to rub it in thick. Meantime, with regards to Ritchie and yourself—i am, Co'., Until MacM'.ii., Mr Robert Kenv. iek. Mcs-rs T. and S. Morris, i.united. Auckland,--I'he chief still here well, tic was ih lighted with your reception and treatmeal of him in Auckland. Dunedin, 12th March, 1895. My 1 tear Fenwick, A’our letter of the tith inst. Vis just re relied me. 1 reply at once, returning Mi-'srsJ. AA’iDeu and Co.'s letter. It is inqtprt cat that 'mi should write accepting this offer. Will you plea-g do ami wc shall hold you M.deuinifted from any !■.— arising in consequence of your action. I’ra' tm imt write Messrs AVilson anything but a have •,ovcptance of their offer, so t bat the contract w i'l he constituted by the terms of their own letter. Did it.-trike you to mb it into Mr AA'ilson that we handed over our contract to him in AVclliugton voluntarily ' He must know that, and study feels some sense of obligation. AVait till 1 get alongside of him. However, I quite agree with yon. Ido not believ ewo could have got this ourselves, and we will nut fergot it. -Vours, e(c., llfuii Mao Mill., jf.v. Auckland, Tth March, 1895.

I'ear Sir,--We hereby oiler to deliver to your • eater our Portland cement, f.o.b. Auckland, at 5s hj i net per bag of Ifiolb net. We cannot guarantee n> supply every order, but will do our best. We also oti'er oar hydraulic lime, f.o.b. Auckland, at '.b hd net per ban of three bushels. This quota- ■ i ni applies to export only, in orders of one or more tuns, with one clear week’s notice wherever practicable, for local trade the discount will be id per cent, otf our yard prices of cement and lime -namely, cement, Us Ud per bay; hydraulic Mm*.-, 4s; shell limf, rjs tM. T>eliviT3’ extra. Ibices subject to aVcmtiouat a month’s notice, "at all existing arrangements respected. This niter t" lap e if not accepted within fourteen days from date, Yours, etc., John Wilson and Co, Wilson then asked mo how much cement was wanted, and I told him I would wire Dunedin and find out. The following correspondence then took place, to which I can add nothing. I The telegrams are all sent by MvMacneil, jun,, r j Mr Fenwick. J U-•uglily, about lon ton- will bo required this \ ear.

Ship quickly tldU bags cement. Contract price -. Uu your best.

Words cannot express my feelings. ( look to ymi to either coax or coerce Wilson into delivering. ’■ this what we banded him over our Wul1i 11 et" 11 contract for? I ••nil it basest ingratitude. < : cllat!y on Munowai ; ask him to help you.

T-uy luu ton-; m mice. Reply v hen done so. Increa.-c order for cement to 25b lons, la-livery -(•lead o\ er tv. o mouths. Bravo. My regard- to i.'r.ii;;. Buy another l.Vj t-m.-- hm .linn -.lnly delivery. Waul r.iHi t’cis in all. Helivery spread til! < ictober, if possible. 1 tiirn'<lin. IBh April, Is'Ju.

My Hear Fenwick. - V.-ur telegram saying Wili-on declines to ship us .mv more cement reached me this morning. I wired you to coax or coerce him into delivery. 1 hope you will he

■iM'- to ilo mu' or tin- ofIKT. I remember v. viting. and, I tliiiik, wiring yon, to “ see I’,at von accept hi' oiler in writing. Xo ilouht uni did thi-', and « ill tliei'etove* he aMe to lu.ikr hiin Hiini-ly of give liiia notii’o that you 11 ill iun oto iviivlia-e at hi, ri.-k an.l expense. That means tiki! 'vo will debit him with any losx i u unxil by rca-on of having to purchase Milbum r oueut. S\X have said nothing before about our handing over tin; Wellington contract; but now 1 think the time is inopportune to rub that into Mr Wilson, anil how he can reroii'-ile it to his eona ieui'c to ao hack upon people who treated him so well in that matter is a mystery to me. 1 tlo not want to cal! him any hard names, although the temptation is almost irresistible. 1 leave the matter entirely in your hands, hoping that you will not let it re-t, if you have to keep at Wilson every week and every mouth of this year. Mr Wibon's mind mu,l 'nave been poisoned against os somewhere, probably by lies. 1 think tills should he r 'lnc'ciited to him. If we could only find out wliat the bond is l ouneetiug these two voueerus we might help Wilson to defy the other man and he pei ltidly independent of him. If you have not succeeded when this letter reaches you, ■le yon think thi-- last idea is worth looking intor because, e\en if it cost us money. I should be inclined to go a l"iig wav out of my road to checkmate our bumptious and objectionable neighbors. I have only one more thing to add, and that is . if von do not succeed ill getting Wilson to come ti’lein -. I mean to hive the whole ease written ■nit, and take it up myself to Mr It. J. Seddon, ’(’render N• ■ w i'ealand : and I mean to enter as

Mv.'iu i protest;)-. jM'.-.-iiiie about such deliberate c lilii'i'ju mi Hie part "f colonial manufacturers to •I'tc not only i’.-, Imt the < iovevmiient- si Iso. 1 | :-haU be nMe to demonstrate, from ilo- \.-vy fa't that Wilson has Icon selling hi-, 0.-inti;! to us a* ds (id a bait, that the Aui klaml and IhmeiUu concerns had an agreement before the tenders dosed by which they lioped I" slate tiic (iovernment on the price of their cement. How will this lie in with their i,t t" (!;'• Tar it!'' Commission for an increase of than ; ! do not think they are likely to get what they are asking, fur if we are driven to say all we know, and taking it altogether, I think Mr Wilson will fVit'l, if lie persists in Ids obstinacy and mistin'':-, that wo have a little more power at headquarters in Wellington than either he or the other man suspects. I think I had Getter stop now, lie *:iu.se 1 hegiu to foe! warm on this subject, and I hope I have said enough to show you the way we look at this thing. It amounts to this: that wo will try every reasonable means to pull with those colonial manufacturers, hut if they persist in this boycott we shall d" all we know to upset their s'hemes with the Government. —'S ours, etc., (I. Mu'.neii., jun. Hubert leuwick, Auckland.’

The Chairman; Do you wish to add anything?—On one telegram [produced] there is an endorsement as follows : " Shipping twenty tons Tuesday, and will ship twenty tons forthcoming week.” This endorsement is in Wilson’s clerk’s writing. On the following Monday, I think it was, Oakdeu turned up here, and got Wilson to s’gn an agreement. Subsequently, our engineer, who had met Oakdeu in Auckland, informed me that Oakdeu told him that he (Oakdeu) had upset somebody in the matter of a supplv of cement for a railway contract in Dunedin by getting Wilson to hind himself do vn not to supply it. I told him that it was myself who was referred to. One more shipment of twenty tons was sent after this, and then Wilson sent word to me that he would ship no more cement. He gave me no explanation whatever, although I tried to get one. I then employed Mr Craig to sec what he could do, and that was how ho came on the scene. Would not an action for damages have laid icdnst these people for not completing their contract with you?-I imagine not from the wording of their letter. Mr Tanner: I understand that Briscoe and C j. tendered to the Railway Department on the strength of a quotation they obtained from the Milburu Company, that their tender was ao :epted, and that then the Milburu Company refused to supply any cement ?—That is practically it. What was their reason for doing that when they had given Briscoe a quotation ?—Their exp'anation is that the Railway Commissioners hid advertised for their ordinary two years’ contract, but before the tenders reached Wellington notice was sent to tho tenderers that tr° contract had been postponed. Then the Public Works Department issued fresh tenders for the same contract, and Briscoe’s firm again tendered on their former price, as they thought that ic would stand good with Oakdeu, and their tender svas accepted. He, however, refused positively to supply any cement, upm the ground that his coutiact was for the supply of c'im-nr to rip Public Works Department, and not to the railways. A. at the iMium u Company’s original quotation was t.> buppiv the railway contracts only?— Yes. ,

Mr Fenwick: We pay a duty of 2s now, and w * do nut object to it ; but we certainly do o -jpct to a duty of 4s, which, I understand, is as ted for by the local people. Mr Stevens: Did I understand you to say that the Government had called for tenders for the supply of cement for the whole colony, and that a certain tender was accepted by the Government ’.'—Yes ; Briscoe’s was accepted for Dunedin and Wellington.

And, further, thM after this tender wis accepted a Government officer Went to Briscoe, Macncil, and Go. and asked them to hand back their acceptance of the contract?— Yes; and a tender of Hudson (Wilson’s agent, *1 understand) was accepted in lieu of it. Therefore, the persons who originally tendered did not receive any further consideration K—No, and, seeing that Briscoe’s firm had handed their tender back in a very liberal manner, I think that Wilson might have treated them a little more liberally. AVas the object in getting the tender back to enable AVilspn’s agent (Hudson) to get the contract instead of the others ?—Briscoe's firm did not know who was to get the contract. They thought that some mistake had been made, and rather than get anyone into trouble Mr Macneil, sen,, handed the acceptance of his tender back.

Then, further tenders were not called forV— No, Wilson’s agent (Hudson's) tender was, I understand, accepted.