TARIFF COMMISSION

Evening Star, Issue 21510, 7 September 1933, Page 13

TARIFF COMMISSION

SECOND DAY'S SITTING CROCKERY AND PAPER DUTIES The Tariff Commission continued its sitting this morning in the Supremo Court buildings. The members of the commission are Dr G. Craig (chairman), ; Professor B. E. Murphy, Mr J. B. Gow, and Mr G, A. Pascoe, and the secretary is Mr J. P. D. Johnson. Mr A.’ E. Mander appeared for the New Zealand Manufacturers’ Association and Mr F. Waite for the New Zealand Farmers’ Union. ENAMELLED WARE. Andrew Henson Allen, managing director of Allen, Son, and M'Clure Limited, agents for Kockums Emaljervork, Ronncby, Sweden, manufacturers of enamelled utensils, said that the present rate of duty on such utensils was 45 per cent, ad valorem, plus 9-14 per cent., equal to £6O 12s 9d per cent, when the kroner was at par with £l. Ho asked that a decided preference under the Customs tariff should be given to the products of Kockums Emaljerverk over similar products of other foreign manufacturers using wholly foreign materials on the grounds: (1) That Kockums enamelled utensils were substantially British in origin as they were made almost wholly from British raw materials. He submitted a British Consular certificate, certifying to the raw materials purchased from Great Britain during the year 1932 by Messrs Kockums Emaljerverk as disclosed by an examination of their books. In the previous year Messrs Kockums’s purchases of British raw materials _ were more than three times the quantity of finished enamelled goods shipped by tbom to the British Empire. (2) It was distinctly in the interests of British trade that manufacturers in foreign conntries > should bo encouraged to purchase British raw materials. (3) Tho prohibitive Customs duty to-which it was at present subject was penalising the British producer of raw materials and British shipping. (4) The New Zealand public desired a good quality ware, but the almost prohibitive duty now payable, compelled many intending purchasers of K.E.R. ware to accept inferior qualities and often at tho risk of health, as disclosed by a recent report of a test by the Auckland Hospital Board’s staff. (5) Kockums was the highest grade made in any factory and was absolutely free from antimony or any deleterious substance. The British Consular Service provided machinery for ascertaining from Kocknms Enialjorveuk the percentage of British materials used in the production of their utensils. That method was adopted during the war when proof from foreign manufacturers was required that no enemy raw materials entered into the production of their foods. For such sendees Kockums Imaljerverk were prepared to pay. In, 1925, out of Kockums’s entire purchases of raw materials 82J per cent, were of British origin, and imported by them direct from Great Britain. An article now admitted as British might be only 50 per cent. British in material and labour, and yet bo classed as British if the final process in manufacturing was done in Groat Britain, entitling it to New Zealand’s preferential duty of 20 per cent, ad valorem, in the case of enamelled utensils, Kockums ware had been as high as 75 per cent. British in origin, but because the final process in manufacturing took place in Sweden, duty was levied at the rate of 45 per cent, plus 9-40th, ad valorem, equal to £6O 12s 9d per cent. PREFERENTIAL DUTIES. Dealing with preferential duties, Mr Allen submitted the following resolution of the Associated Chambers of Commerce:—“ That whereas, under our Customs Act, articles made with the aid of foreign materials but finished in Great Britain are admitted as British for Customs duty purposes provided that at least 50 per cent, of tho labour and raw materials used in their production arc of British origin, some preference over the , rate of duty charged on goods wholly foreign should be given to articles finished in a foreign country but made from British raw materials, so that when finished the article is British in origin to the extent of, say, GO per cent.” The association folt that if that proposal were put into effect its result would bo a distinct stimulus to British trade. Mr Allen added that he felt that Customs taxation was often levied more for revenue than for protection purposes, and had much to do with the present disordered state of the world, High Customs tariffs were interrupting the natural flow of international trade and were consequently hindering economic recovery. There were some fortyodd countries eacli with their own Customs barriers for the protection of I heir own homo markets* but each on-, dcavonring to sell to other nations. Those countries were all more or loss endowed by Nature for the production of certain raw materials and foodstuffs, enabling thorn to specialise in the manufacture of certain commodities at a price lower than that obtainable in other countries. It was surely intended that humanity was to enjoy those benefits which it was now denied through prohibitive tariffs. As an instance, Britain was favoured for tho production of pottery, cutlery, cotton goods, steel products, coal, etc. Let her then reciprocate with such countries by interchanging goods and materials without the imposition of prohibitive Customs duties. The cost of living and production would then come down and the people would he strengthened to meet world competition. New Zealand must seek a wider market for the sale of her produce, but her present penal tariff prohibited such development and should be modified by a general scaling down of Customs ditty. His remarks, he said, did not apply to tho manufactured products of such countries as Japan which under present conditions would have to ho dealt with by means other than Customs duty. In reply to Professor Murphy, Mr Allen said he Imped lie was as British as anybody in the dominion, and lie stood for his own Empire first. Ho tried to take a wide view and a long view of the question, and tried to satisfy himself as to what would be for the ultimate good of tho _ Empire and the dominion, and lie said unhesitatingly that Now Zealand’s tariff was a penal tariff in many respects. It had always boon his opinion that New Zealand should ascertain the amount for duty on the home consumption price of the exporting country converted into sterling at the par late of exchange. In the course of further discussion Mr Allen said ho thought it would be admitted that something had to ho done to prevent Japan flooding not only this market, bat also the markets of the Empire. Professor Murphy: Wo had a lot of evidence on tho Japanese question up north. duties on paper. Howard L. Dolamoro, general manager of New Zealand Paper Mills Ltd.,

said the business of tho company was carried on at paper mills at Woodhaugh and at Mataura, and consisted of paper making in most of its branches, cardboard making in the lighter weights, and the manufacture of carpet and insulating felts. Romanufacture of all those items was carried on extensively by both the company and other concerns. In respect to paper, bags Mr Dolamore asked that the present rate of protection (British preferential 25 per cent, and general 55 per cent.) be retained. In respect of those bags involving a fair amount of labour the protection was quite inadequate to permit profitable manufacture here. That was due to the low rates paid for young labour in Great Britain. It was found, however, that on the larger sizes the local manufacturers could hold their own, and as tho principal manufacturer in the dominion Ids company was content to lot matters stand as they were. A considerable amount of labour was absorbed throughout New Zealand in this branch of tho industry, and they knew that protection in bulk was essential to successfully manufacture. In respect, to carpet and paper folt, almost wholly a New Zealand product, a small measure of protection was suggested. He asked for protection of 10 per cent. British and 25 per cent, general. The company would raise no objection to free admission of felt required for industrial or constructional purposes. In regard to wrapping paper, it was a matter of supremo importance to the local industry that the item should stand as at present. Any alteration in the tariff in a downward direction would certainly jeopardise the existence of the local manufacturers. For many years the Canadian manufacturers through their agents in this country had definitely threatened their existence. Those mills, many of them owned for the greater part by United States capitalists, would go to almost any extreme to embarass them. The company had been harassed by the dumping policy of the Canadian mills for many years, and any reduction in the tariff would most certainly make tim position more acute than ever. English competition was as a general rule quite, fair. It would be significant to the. commission that they had on occasions been asked by the Canadian agents to raise their pieces, hut had refused to do so unless their costs warranted such a step and by refusing had kept prices down. ’ The fact that creped toilet paper was admitted to this country free under the British preferential tariff was si matter' of some concern tp them. A plant had been laid down, and not long afterwards the classification of the line was altered and the enterprise defeated. Mr Dolamore said the company desired to urge the desirability of placing a protective tariff upon newsprint imported into New Zealand for purposes other than the printing of newspapers. Newsprint was being used for a variety of other purposes, including wrapping, and it was considered it was not the intention of former commissions or tho Customs Department that there should bo free entry for other than newspaper proprietors. . " The approximate proportion winch the total New Zealand output boro to the total New Zealand requirements was difficult to estimate. Ho would place it at 70 per cent., and, in doing so, ho had disregarded consideration of all industrial wrapping paper such as greaseproof, vegetable parchment, apple wrapping, newsprint, etc. After referring to higher wages and other heavy costs in other directions in New Zealand, Air Dolamore .said the wrapping industry in Great Britain had been largely built up by the protection afforded during the past few years. The duty there at present was 25 per cent, ad valorem. A reduction of tho protection accorded in New Zealand would never lower production, lighten costs per ton of manufacture, unemployment both inside and outside the mills, a reduced consumption of electric power and coal (at present the company was burning 11,000 tons of coal per annum), and less timber and locally-produced raw material. Professor Murphy said lie could hardly reconcile Mr Dolamore’s statement that an alteration in the tariff would jeopardise theMocal manufacturers of wrapping paper with the published figures of the company’s very excellent balance-sheet. As far as lie could make out from Press reports', tho company had done very well since 1929, and even in the present difficult times had made a profit of £37,000 to £45,000. Expenses undoubtedly had gone up, but during that period it had been able to show a dividend of just under 8 per cent. That did not look as if tho company was in jeopardy and the shares were quoted at 28s. He considered -the company was very sound and stable and that the figures were very creditable. Mr Dolamore replied that . a shading of tariffs would certainly mean competition from Canada, and if they could not keep the works going twenty-four hours a day they would be done for. Professor Murphy said lie did not think the profits were exorbitant, hut tho balance-sheet suggested to his mind that tho company had a little margin to work on. It raised the presumption that it could work on a lower duty. Mr Dolamore said that shareholders wore paid 7 per cent., aijd 1 per cent, was being carried forward. Ho considered tho shareholders were entitled to 7 per cent. Professor Murphy: I am not saying they are not. I would be pleased to see them getting 70 per cent. What we need in this country is profits. Mr Dolamore said that if their protection was interfered with they would not be able to pay 7 per cent, or anything like it. The commission then went into committee to hear further evidence.