THE LEATHER PROBLEM.

Northern Advocate, 4 September 1919, Page 6

THE LEATHER PROBLEM.

LETTING IN LIGHT

FIXED PRICES OUR ONLY SAL-

VATION

Extraordinary as are the statements which have been made as to the prospective rise in the cost of boots and shoes, a little inquiry has revealed a position in the hides and leather trade that must by the man in the street be regarded as still more extraordinary. A "Dominion" reporter interviewed Mr C. J. Ward, boot manufacturer, who said a few evenings ago that the cost of labour in making a pair of boots was less now than it was eighteen years ago, but the public was paying a third as much again for its boots —in some cases more.

"As to the rising cost of boots I and shoes," said Mr Ward. "Weil, to go back a bit, I came out here in 1900 and the cost has been rising all the time. There have, of course, beea bulls, but never once have prices receded—they have always increased. As to the cause ,when I came out hides were fetching 3_d to 4d per lb, and sole leather B_d to 9d per lb. The trend even then was upward. The report of the Cost of Living Commission of 1912 refers to the general upward trend in the value of our products on the London markets (and hides are one of our products), and stated that he average increase from 1890 to 1911 was 66 per cent. Now there was nothing political about that as Dr. Hight was" the economic man on that commission, and would not state what was not fact. And whatever rise takes place in London is reflected here. That is a primary cause of the rise in prices.

"The tables of the Board of Trade for July, 1914—just before the war —show that hides were fetching from 7d to 7_d per lb in Wellington; main upper leather, which we call chrome, Is per foot, and sole leather Is 8d per lb. In July, 1916, hides had rism to from 93d to 112 d per lb (an average of 10id), chrome was selling at Is l_d per foot, and sole leather was 2s per lb. By July, 1919, hides were selling at Is l_d per lb, chrome uppers Is 5d per foot, and sole leather 2s 5d per lb. It will be seen from these figures that the proportionate increases between the different classes of leather has kept pretty close.

"Outside the tanners' requirements hides are now selling in New Zealand at Is 5d per lb, and in Australia for Is B£d per lb. I quote the New Zealand price advisedly—the price is Is 5d when they can get them. There have been no hide sales this week! That means there will no hide sales for a month. The freezing companies have been holding back their best hides for some time and only offering the rough hides at the fixed price, which was never intended should be the case, but now they are not offering any, in the hope I suppose, that the return of the political leaders may mean a relaxation of the regulations in their favour. The fixed price was the only hope of keeping down the prices, and if the Government does tamper with this matter, and let up on the fixed prices obtaining, there will be an outcry from one end of the Dominion to the other."

Mr Ward pointed out that the large proportion of the hides produced in New Zealand were used here, and it was not sound that the values received for the selected best hides that might be exported should be reflected on the inferior hides sold to the New Zealand tanners.

As to the larger question of the cause of the tremendously appreciated price of leather in America— whence most of the cost of living evils come—Mr Ward says that there the big jump in the price of leather is attributable to the operations of speculators outside the leather trade altogether, who see in hides a world's necessity, and who, with vast re-

sources at their command, start m to control tha law ox supply and demand just as they do with wheat, cotton, moat, and a lot of other things. These men see the economic value in hides, and they cut in between the producer and the tanner, and absolutely regulate the supply to the tanner, which enables them to charge their own price

Mr Ward quoted from the "Shoe and Leather Reporter" (an accredited American trade paper) of July 3, which said in an editorial note: "Packer branded cow hides (the cheapest leather) at 40 cents (Is 8d) should cause every cutter of sole leather to think seriously. There are men in the trade whose hair is not yet gray who can remember the time when branded cows could be bought in almost any quantity at around 3 cents (l_d) a pound. They are 60 per cent higher than at this time last year, while upper leather hides are from 82 to 100 per cent higher. When the World's Fair was in progress at Chicago in 1893 the best summer take-off of native and Texas steer hides was in large accumulation and difficult to sell at 5 cents (2_d) a pound. If any other staple industry could show an equal increase in the cost of its basic raw material it would probably make more capital out of it than the tanners are doing to-day."

The position in America had led to attempted reprisals on the speculators, for the "Reporter" in ..another article of the same issue says: "Recently the New York 'Tribune' printed an article concerning a meeting of the' Retail Shoe Dealers' Association of New York, in which stress was laid upon the alleged fact that tanners were buying hides off the backs of grazing herds of cattle. Of course, the impression is sought to be conveyed that tanners are cornering hides for speculative purposes, and this is one of the causes of the present sensational prices of leather and shoes. In "recent years tanners have bought hides ahead, and shoe manufacturers have bought leather ahead, but these purchases invariably were measures of protection against rising markets subjecting them to serious losses. Shoe manufacturers sent out their salesmen with samples months in advance of the season when these goods will be bought and worn by the consuming public. They are compelled to set prices upon this merchandise long before any of it is in process of manufacture. If they have reason to suppose that the leather market will advance they naturally endeavour to make contracts for leather for future delivery. This is technically known in the trade as 'covering.' The tanners, in their turn, are anxious to cover with raw material, and in many instances have bought hides ahead from the packers. It is perfectly true that hides have frequently been bought long before they were taken from the backs of the beasts, or, indeed, before the packers had bought the cattle. This development resulted from the growing scarcity of hides and skins. Twenty years ago the big packers carried immense stocks of hides, and no one ever dreamed of buying ahead."

It only needs to be explained that under the present regulations New Zealand tanners have first choice of selection of hides offered for sale at a fixed price, but Mr Ward states that the regulations are being evaded.