TRAM RAILS TENDER.

New Zealand Herald, Volume LXIII, Issue 19412, 21 August 1926, Page 13

TRAM RAILS TENDER.

LOWER AMERICAN PRICE. WHY IT WAS POSSIBLE. PLACING SURPLUS STOCKS. CONDITIONS OF DELIVERY. The decision of the Auckland City Council to accept the tender of the Cargo Fleet Iron Company, for the supply of 600 tons of steel rails at £9097 for the tramways —conditional on delivery at the end of the year—led to some inquiries; concerning the difference in this amount, which was the highest tender, and £6570, the price quoted in the lowest tender, that of the United States Steel Company. Although prices submitted showed a difference of £2527, this does not allow fpr the extra duty that would be placed on the American order, which the Tramways Committee recommended should be accepted. On the principle that preference should be given to" British goods the council did not endorse the recommendation, and as the only British tender that guaranteed delivery in the specified time was the highest, this was accepted. The other manufacturers specified that delivery was subject to a settlement of the coal dispute. Pittsburgh's Surplus Stock. Actually the American tender would total more than the price quoted, £6596 19s 4d, as this is tho c.i. f.e. rate only. With the addition of the 20 per cent, protective duty and 1 per cent, primage duty, which are based on ad valorem assessment on the home consumption price, the amount would total £7851, the home consumption rate being about £SBOO.

It has been explained that American export quotations are lower than the home consumption price, because of the necessity of keeping the mills continuously active. While the demand in the home markets kept the mills busy, that activity, it is said, gave rise to a certain amount of surplus stock, which was set apart for export and quoted at a lower rate.

"It is not an attempt at dumping,," said one importer of American steel products yestarday. "Personally I am quite 'easy' about American orders, but I do not think, especially in view of the wide market in the United States itself, that there was any reasou other than the accretion of surplus stocks." The Loss in Duty. •

Mr. A. G. Graham, manager of Briis- j coe and Co., agents for the United States Steel Company, drew attention yesterday to the loss in duty that would result from the City Council's rejection of the American tender. This would amount to about £l2oo—which formed a good proportion oi the difference between the American quotation and that of the successful .tender. But he recognised that Auckland would have to pay in any case. Mr. H. P. Taylor, who tendered on behalf of the Cargo Fleet Iron Co..*, is confident that the tender will be fulfilled in the contract time. He claims that all the tenders except those of the Cargo Fleet Iron Company and the United States Steel Company were informal, as they did not promise delivery in the contract time. They quoted subject to the resumption of the work in the British mines. Orders quoted on that basis consequently showed a much lower price. The extra amount of the successful tender was explained by the fact that pending the settlement of the coal trouble the manufacturers had to use imported coal and face higher transport costs. Had they quoted on the same basis their price would have 'been m line with the other tenders. Aspects of Competition. The difference between the successful tender and the American quotation .is thus about £1266, and about £BOO higher than the tenders which were quoted subject to the settlement of the industrial trouble in Britain. Allowing for the reduction made on the American tender in consideration of its being surplus stock, this suggests that under normal conditions Britain and America would be on an equal basis in the marketing of steel products. One importer incidentally made the comment that British manufacturers did not co-operate as sincerely as they might in ! the Dominions to think Imperially when making their orders. He gave as an instance a practice which he said was common among Canadian importers. To adjust the difference between the £4" duty on United States imports and the £2 duty charged on the Canadian article, the Canadian manufacturer managed to make his tender more acceptable by quoting an extra £1 17s 6d. In this way he succeeded not only in defeating the American competitor but also in securing for himself the benefit of the protection tarriff.