THE POST-WAR SLUMP

Gisborne Times, Volume LXIV, Issue 10016, 1 February 1926, Page 3

THE POST-WAR SLUMP

HOW IT AFFECTED WOOLSTON TANNERIES. INTERESTING EVIDENCE AT INQUIRY. WELLINGTON, Jan. 29. The Woolston Tanneries Commission continued its investigation today. Before he proceeded with the evidence, Sir John Findlay said it would bo recalled that he had . raised the point earlier in the inquiry whether it came within the jurisdiction of the Commissioner to consider- whether there was any arrangement made by the Woolston Tanneries with the Board of Trade. He had communicated with the Attorney-General and with Sir Francis Bell and it was their desire that the point should not be pursued. They both expressed the wish that the whole case should be dealt with by the Commissioner.

Percy Norman Quarterrcan, accountant, of Christchurch, continued his evidence regarding the investigation made by-him of the books of the Woolston Tanneries, Ltd. Witness gave details of various oversea shipments made by the company during 1920-21. Chrome and calf shipments had resulted in a loss of £27,916, £10,440 of which was represented by loss upon re-valuation. The company was, with one exception, unable to sell'its chrome and calf in England and it all came back to New Zealand. The calf and chrome was subject to re-valuation as at September 30 1923 ; and was finally destroyed at a fire which occurred at the tanneries in 1924. Witness made a point of the fo!et that the Woolston Tanneries continued to manufacture chrome despite the fact that large quantities had been returned from England and were apparently unsaleable. Witness quoted figures* showing tlio drop which had taken place in the company’s business. The trouble appeared to be that the company bought oil the basis of the boom years. Sir John Hosking: Were they not justified in doing that? Witness: Ido not think so. I should have thought that, with the market as it was, _ the directors should have gone warily. Mr. Myers: That is exactly what they did. Sir John Hosking (to witness): In my opinion, all you can do is to conjecture as to what the company should have done and that is really of little value. Sir John Findlay: What was the real cause of the losses of the Woolston Tanneries? Witness: The collapse of the leather mtirket. He added tliat tlie position ,of the company was due vo the imprudent purchase of hides and embarrassed finance. Witness attributed the company’s position to the following causes:—

(1) The fact that the purchases of calf skins in 1919-20 were greatly in excess of requirements. (2) That the company was called upon to pay an average of 7ld per lb. more for hides in 1920 than in 1921. (3 That heavy losses were made from 1920 onwards on the export business. (4) That the company manufactured goods which subsequently proved to be unsaleable both in England and New Zealand. (5) That the company manufactured and shipped goods to England for the purpose of obtaining urgent financial assistance, the majority cf the goods being sold at low prices on being returned to New Zealand as unsaleable. ( (6) That the company was heavily interested financially in the Nearly £62,000 was in this venture which the company would have welcomed in 1920.

Witness was proceeding to give further Josses which the company had incurred in outside investments, when Sir John Hosking interposed: “Can vou tell us how much loss was due to the fall in the price of leather 3 Sir John Findlay: Sir, you can’t arrive at that until you know whether the company was forced to sacrifice its goods. . _ , . Mr. livers asked witness if he had found trace of any outside ventures from which a profit was made. Witness: No. Mr. Myers: You say that you saw no indication of secret reserves i Witness: That is so. John Edward Astley, tanner, ot Auckland, said he was the owner ot extensive works. He was president of the New Zealand Tanners’ Association from 1919 until 1925, and had been engaged in the tannery business all liis life. He estimated that the Woolston , Tanneries produced about one-fifth of the leather produced in New Zealand. .Before tho embargo was raised in 1 92.0 the Board of Trade made a request that tanners should quote a firnn price tor leather. He replied that the tanners were not inclined to quote unless the Board guaranteed a farm price for hides and skins.