INQUIRY ENDS

New Zealand Herald, Volume LXXVII, Issue 23591, 27 February 1940, Page 8

INQUIRY ENDS

WHAKATANE MILLS FINAL INCIDENT ATTORNEY AND JUDGE QUESTION OF CLOSING [BY TELEGRAPH —PRESS ASSOCIATION] WELLINGTON, Monday A statement that the company would be unable to carry on beyond the end of this week was made by the Isew Zealand attorney. Mr. H. A. Horrocks, at the conclusion to-day of thc hearing of the application by \\liakatane Paper Mills, Limited, to the Price Investigation Tribunal for permission to increase cardboard prices. This statement came most unexpectedly and was in reply to a, question by Mr. Vf • Perry, for users of Whakatane cardboard, as to the position of orders lodged pending the tribunal's decision. "We are losing money and have been losing it for so long "that we are used to it," said Mr. Horrocks. -Unfortunately, our creditors—" Mr. Justice Hunter, president- of tne tribunal: What has this to do with the tribunal? Mr. Horrocks replied that Mr. lerry had asked the question and he was giving him the position. "The company cannot carry on beyond the end o this week," said Mr. Horrocks. Then we will have finished all our orders for the January-February cycle and will have to close down." His Honor: I think you are illadvised to make this little speech. You have got from the tribunal all you require and now it has to adjourn. Further Statement Stopped Mr. Horrocks rose to make some further, statement when His Honor said: "Oh, Mr. Horrocks, I do not think you ought to make another speech. You have counsel, you know. Mr. H. P. Richmond, leading counsel for the company, had already left the inquiry, but Mr. W. G. Clavis, second counsel, said endeavours were being made in the interim to come to some arrangement, as boxmakers realised it was difficult for the company to carry on. There were several witnesses to-dav before the evidence was concluded and the remainder of the day was occupied with the addresses of Dr. N. A. Foden, for the Crown, and Mr. Richmond, for the company. The tribunal's decision will be given in writing to the parties, who will then confer with accountancy and other advisers. There will then be a further sitting of the tribunal to arrive at a final decision. . Submissions for Crown

Dr. Foden submitted that the book assets of the company should not be accepted without a check. The alternatives were either to take a valuation, which would take some time, or fix an arbitrary figure. He submitted that the evidence had established certain inefficiency in the operatimi of the mill which was incorporated into thfe prices asked. .The management could not be blamed for not yet having dovetailed all the manufacturing processes, said counsel, and it could be said that if the inquiry had done nothing else it had impressed the company's advisers and officers with the desirability concentrating still more carefully on Seeing" there was no overlapping or loss of efficiency. He contended also that the initial loss of £26,000 should be spread over a period of years and not brought immediately into the cost of production. Company's Request

Mr. Richmond said, in reply to Dr. Foden's submission that there had been a good deal of inefficiency, that there was not in his opinion a tittle of evidence of this. It had been said repeatedly that there was some evidence of extravagance or inefficiency because the company's estimate in 1934 was £350,000, whereas in fact the mill and everything about it cost more than £500,000. It was utter and entire confusion of thought to state this as indicating extravagance or inefficiency. There was no nexus between the estimate in 1934 and tlie actual cost in 1937. If the mill had not yet started all cardboard would have had to be imported, but the cost would have been greater than for Whakatane board. The company wanted a price to enable it to work on a commercial basis. Mr. Perry said that if the tribunal permitted the company to increase prices, users asked for authority to pass on the bare amount of the increase, no more. Users asked that such price as was fixed should be freight paid to the nearest port or station of the user. Also, it was asked that such increases as were made should not aoplv to contracts entered into before the last hearing. »