REFUSAL OF RATE

Gisborne Herald, Volume LXVII, Issue 20142, 11 January 1940, Page 6

REFUSAL OF RATE

PRICES AT MILL PAPER BOARD VALUES STATE INVESTIGATION MINISTER’S SURVEY REPLY TO MANAGER (Pnr Press Association.) WELLINGTON, this day. “I have had Mr. Horrocks’ price list for the products of his mill exhaustively examined by the Price Investigation Tribunal, the factory controller and the State Forest Service and by the Department of Industries and Commerce and, without exception and in definite and emphatic terms, they recommend against granting increases to the extent asked for by Whakatane Paper Mills Limited through Mr. Horrocks,’’ said the Minister of Supply, the Hon. D. G. Sullivan, in a statement issued last night.

“We wish to be absolutely fair to Mr. Horrocks, to the cardboard boxmaking industry and to the public,” continued the Minister, “and I am advised that the price increases authorised are such as should be satisfactory and profitable if the industry were conducted with reasonable efficiency and not overloaded with unnecessary charges. “We are not, however, prepared to allow Mr. Horrocks to pass on to industry and the community the cost of inefficiency, certain excessively high salaries and the adverse effect of only partial production when a reserved market will permit of greater production with consequential lower unit costs.

"For Mr. Horrocks to suggest that the Government is attempting to dictate to the Whakatane company is typical of his peculiar mentality as revealed by the fact that he has, on a number of previous occasions, endeavoured to force financial assistance from the Government by threats of discharging his workers.

Public to Judge

“The public will be able to judge the value of his statement that he is prepared to permit the cardboard boxmakers to have full access to his company’s costing records when I say that examination of these records indicates that little attention has in the past been devoted to such vital matters. “Since the outbreak of the war and its spread to the Scandinavian countries, it has been increasingly difficult to obtain supplies of cardboard, which is a very essential commodity in manufacture and trade to-day. The management of the Whakatane company is, of course, fully aware of this and no doubt considers that these war conditions place it in such a strong position that it can force the public to pay for its extravagance and mistakes and a substantial premium in addition, I can assure Mr. Horrocks and- the Whakatane company, and the public too, that this will not be permitted and the price increases granted by the Price Investigation Tribunal must be related to legitimate increases in costs.” Manager’s Attitude It was reported yesterday that notice of dismissal had been given to the employees of Whakatane Paper Mills Limited and there was every prospect that production would be suspended next week, following disagreement between the company and the Government concerning the prices the company is to charge for its paper board. A statement to that effect was made on Tuesday night by the managing director of the company, Mr. H. A. Horrocks. ’.‘We are an Australian company and although we are prepared to co-operate with the New Zealand Government to any reasonable extent, my directors do not feel justified in continuing the operations at unprofitable prices,” Mr. Horrocks said. “The refusal of the Price Tribunal to give reasonable consideration to the company’s new price list has brought about the present deadlock and until the controller of factories. Mr. G. A. Paseoe, is prepared to accord full recognition to manufacturing costs rising under wartime conditions and the Government industrial legislation, there is no sense in carrying on. Jobs of 232 Men “Some 232 men will be thrown out of employment and as the company’s wages bill approximates £I4OO a week a cessation of production, for however short a time, will mean a severe loss to the district,” Mr. Horrocks added. “As proof that the company is not profiteering and is endeavouring to serve the industrial needs of the Dominion, the box-makers have been invited to nominate a member of their association to join the directorate of the company and full access to the company’s costing records will be accorded the association.”

Mr. Horrocks said that there was a sharp conflict of opinion between the controller of factories and the directorate of the Whakatane paper mills as to the company's prices. The directors were not prepared to allow t'he mill to be run exclusively by bureaucratic control on a “heads-I-win—tails-you-lose” basis.

The Government’s attempt to substitute dictation for co-operation was strongly resented by Australian interests.