TARIFF REVISION

Evening Star, Issue 21519, 18 September 1933, Page 11

TARIFF REVISION

COMMISSION HEARS FURTHER EVIDENCE MASTER PRINTERS’ REPRESENTATIONS RETENTION OF PRESENT DUTIES GENERALLY URGED _ The Tariff Commission resumed its sitting this morning, all the members being present—viz., Dr Craig (chairman), Professor Murphy, Mr J. B. Gow, and Mr D. A. Pascoe. The commission this morning heard further evidence in support of the statement presented in the north by the Federation of Master Printers of New Zealand (Incorporated), on whose behalf Mr E. W, Clarkson (secretary) appeared. BOXES AND CARTONS. Mr St. Clair Ferguson, for the Phoenix Company Limited, presented evidence in support of tne statement of the federation in respect of the box and carton-making departments of his firm. He said that, though the firm was not a member or the association, it concurred in the resolution opposing any increase in the duties of basic materials used in the printing and allied industries, and any reduction in the rates of duty imposed on finished, manufactured products of the printing Industry, especially cartons and collapsible boxes. Owing to a large turnover, their operating costs were comparatively low, which was, of course, greatly beneficial to production. If through the adoption of a duty on the basic materials for box-making, their costs, and therefore prices, for this outside business were increased, there would be a strong possibility of them losing a large portion of the New Zealand trade to the British manufacturers. “ We submit that we are not sheltering behind the present duties on the finished articles, but that any increase in our cost of production may cause a smaller volume of business to be available,” said Mr Ferguson. “ The present duty on the manufactured articles acts more as a compensation for the extra costs of our raw materials as compared with United Kingdom manufacturers. We are a long distance from the raw material markets, and in addition to the extra freight charges we have to bear, we are forced to carry exceedingly largo stocks as compared with the British manufacturer, who can replenish within a few hours. Then, of course, the wages rates are much higher in this branch of manufacturing in New Zealand than in the United Kingdom, as included in the statement by the Federation of Master Printers. We cannot. support representations from the United Kingdom manufacturers for a duty on foreign box boards, as this would prove a particularly heavy burden to us. Owing to the inability of the United Kingdom manufacturers to supply 80 per cent, of the varieties of boards wo require, this request is diametrically opposite to our desires that there should be no increase in the duties on basic materials. Finally, we submit that we, along with tho other firms listed in our schedule, are fully capable of supplying the whole of .the New Zealand market for our manufactures. If the total trade available should diminish, the ultimate result would be that the number employed in the industry would be very much reduced.” DUTY ON ENVELOPES. Mr J. B. Robertson, factory manager of the ‘ Evening Star’ Company Ltd.,, said his company associated itself with the general statement of the federation. He desired to make special representation for the retention of the present tariff duties on finished or manufactured envelopes and the free entry of paper used in their manufacture. The company specialised in the manufacture of envelopes, aiyl was one of the largest producers in the dominion. The appeal was based on this particular branch of the industry, whicli at present was protected by the following duties:—Envelopes (plain)—2s per cent. British preference, 45 per cent, general tariff. Envelopes (printed)— 30 per cent. British preference, 50 per cent, general tariff. Production had increased steadily up to the end of 1929, and considerable capital outlay had been effected during the last d:cade in addition to plant. Distance from'mar-

kets necessitated buying in large tonnage and anticipating supplies six to eight months ahead, in consequence of which capital was tied up in varied and expensive stocks of basic materials, which had to be continually on hand. Materials (writing paper and gum) foxenvelope making were of British origin, and Manila glazed on one side was Scandinavian, and could not be supplied on a competitive basis by British manufacturers. Witness referred to the wage disparity between New Zealand and Britain. Under the present Customs tariff the production of New Zealand’s full requirements had been taken care of by dominion factories, there being up-to-date and ample facilities for production. Even under these conditions orders for full capacity output were difficult to obtain, and buyers were fully safeguarded by somewhat intense internal competition. Their costs being standardised, they kept no individual cost sheets, but costs were compiled periodically. These conditions made envelope manufacturing on a paying basis m New Zealand a difficult proposition, and any advantage to he importer over present tariff dutie: would compel them to close down the department and disponse with the services of at least eight employees. PRESENT TARIFF AN ENCOURAGEMENT. Herbert Coull, a director of Messrs Coull, Somerville, Wilkie Ltd. said his company supported in particular the request of the federation that there should be no alteration in the Customs tariff by way of: (1) Increased duties on basic raw materials; (2) reduced duties on finished printing products imported. His company claimed to be, if not the largest commercial printing concern in the dominion, at least the second largest and pre-eminent in the production of all classes of' colour work. Relying on continuance of the present tariff the company erected buildings and bought machinery sufficient to manufacture any class' of work generally required in Now Zealand on an economic basis of production,, and they employed skilled artisans who had virtually i ermanent positions. In the main, work done was for direct individual customers’ orders 1 They, however, manufactured Christmas cards, generally of_ local subjects of scenery, plants, bird life, and Maori. These were manufactured in large quantities and sold to retailers. Prior to their entering on those lines British and American houses showed a range of subjects to choose from, and they were now grouping orders in the same way to compete. Large and varied stocks of paper and other materials wore imported, of which 'approximately 90 per cent, were British. Generally speaking, the printing industry of the dominion was engaged in the production of a very varied range of work and in quantities which, owing to the small population on which to work, did not compare with the orders which could be placed with similar lines overseas. At the same time, they were essential to the operations of the main industrial industries in New Zealand. . . . Many of the overseas houses who catered for export business possessed an advantage when dealing with the world’s markets of being able to distribute the cost of the initial work necessary for the production of high-grade printing over a number of requirements from different countries for similar goods, by using the main portion of the design over several orders and merely altering the name or some minor part of the work. The benefit of quantity reduction cost was thereby gained, and a position established which, unless assisted by a reasonable protection, could not bo met by a dominion house, especially when quantities of a limited amount only were placed with a local supplier against the large orders placed overseas. Witness gave the advantage which British manufacturers enjoyed in grade 3 cities as follows:—Machine composition, 42 per cent.; hand composition, 34 per cent.; machinists, 41 per cent.; bookbinders, 41 per cent.; and female workers, 53 per cent. • . . He maintained that the present tariff was not “ protection,” but encouragement and requested its maintenance. INFLUENCE OF EXCHANGE. £ lr J- 6. Jeffery, managing director or Messrs Williamson, Jeffery Ltd., tendered evidence in support of the representations made by the federation. He said that his firm was established in 1922, the object being to enter into the wholesaling of manufactured stationery and stationers’ supplies. Under the encouragement of the then existing tariff on manufactured stationery, for the making of such goods on economic lines, fast-running automatic machinery, requiring the employment of skilled operatives, was installed. Such plant was, in the main, purchased from Great Britain. Even prior to the rise in exchange they wore making satisfactory progress in securing an increasing share of the local trade, their goods being competitive for quality and value. With the raising of the exchange rate to 25 per cent, competition from overseas was minimised. Unfortunately, owing to the reduced purchasing power of the community, the benefits accruing from a market sheltered from overseas competition had been almost nullified, and production costs in accordance had inclined to increase. For the main part their productions conformed to the articles tabulated under class 5 of the schedule of tariff items submitted by the Federation of Master Printers of New Zealand. The following articles were tabulated under class sAccount books, scribbling hooks, letter books, copying letter books, guard books, copy books, drawing books, scribbling and

letter books, billhead, invoice, _ and statement forms, blotting pads, printed, lithographed, and ruled stationery. His firm also cut and boxed carbon papers. They estimated the proportion of British materials used at approximately 85 per cent, of the total, and in such materials as leathers, • glue and boards used were as fpr as possible New Zealand-made goods. “ We ask for the maintenance of existing tariff duties so that when exchange returns to normal wo may still enjoy the opportunities to compete enjoyed prior, to the,rise in exchange, and which encouraged us to develop our plant,” said Mr Jeffery. “ Owing to the distance from our sources of supply and necessity for reconditioning of paper after lengthy period of compressed packing, it is necessary to carry in stocks approximately four Inonths supply of raw materials, involving overheads in capital outlay, storage charges, etc. In addition to our. manufacturing activities we are largely engaged in the selling to the retail trade of imported stationery sundry lines. As in the purchases of raw materials for* our fac tory we here again purchase wherever possible from United Kingdom sources. Continued ability to manufacture means an outlet for British manufacturers of raw materials and machinery, coastwise shipping, and railway freight on our manufactured goods, consumption of power and heat in manufacturing processes, besides enabling the direct employment of workers by us under ideal working conditions.” A SPECIALISED BRANCH. • Mr ,0. B. Smith, of the firm of Messrs C, B. Smith Limited, associated himself with the statement of the federation, and made representations regarding the clause of the classification relating to counter check books. He said his firm was the pioneer firm formed for the manufacture of counter check books in New Zealand, commencing in 1897. _At that time all counter books were being manufactured in Australia, but since commencing business .seven additional firms had started the manufacture of the books in New Zealand. As the trade grew the late Mr C. B. Smith improved his machinery to meet the' demand, and the business had grown considerably, the firm still being the premier firm for the counter book manufacture in New Zealand. .. . From time to time further adjustments and improvements had been made to the machinery, and they were now the manufacturers of a great many special lines of docket books, rolls, etc. It was necessary for the firm to carry a stock of paper of six months’ supply, whereas English competitors did not require to tie up considerable capital in that way, as their requirements m paper, etc., could be secured either from local mills or the Continent within very short notice. Wages were also higher here than in Britain. In a general way tho largest orders obtained by rscw Zealand manufacturers for counter books were based on one year’s supply for the customer, which served to prevent overstocking and financial outlay whereas English manufacturers had been in the habit of contracting for a five years’ supply, with naturally finer prices but correspondingly heavier financial outlay. ._ • • They were now using an increasing quantity of British materials. Empire countries as a source of supply of basic materials were commencing to show improvement, to tho end that they were now using an increasing proportion of British materials, at present approximately 60 per cent. If tho market for counterbooks were thrown open to overseas competition, the eight New Zealand manufacturers, whose overall turnover at present had shrunk approximately 30 per cent, from what it was a few years ago, would be in danger of being put out of business. It was desirable that in the interests of tho counterbook manufacturers of New Zealand they should retain a free market for paper coming into the country, and it was requested that the existing tariff regarding those items remain unaltered. Professor Murphy asked if tho witness considered there were too many firms engaged in this special branch for this country. . Witness replied in the affirmative. Ho added that most of the firms had fairly extensive business in other lines.