VESTEY CASE

New Zealand Times, Volume LII, Issue 12093, 21 March 1925, Page 14

VESTEY CASE

EVIDENCE RULED OUT NO GENERAL STATEMENTS AS TO EVILS OF TRUSTS. CHAIRMAN’S PRONOUNCEMENT. The fourth day’s sitting took place yesterday at Parliament Buildings of the Royal Commission appointed to inquire into the charges made by Mr W. D. Lysnar (Gisborne) in the House of Representatives last session against the Minister for Agriculture (the Hon. W. Nosworthy) and Mr David Jones (chairman of the Meat Control Board) with regard to tlieir acquiescence in the sale of the Poverty Bay Fanners’ Meat Company’s works to Messrs Vestey Bros. The commission comprises Messrs J. Alexander (barrister, Auckland), chairman, and G. Fitzgerald and A. Macintosh (Wellington). Sir John Findlay, K.C., with him Mr O. H. Taylor, appeared on behalf of the Government; Mr O. P, Skerrett, K.C., with him Mr C. A. L. Treadwell, for the Meat Board; and Mr M. Myers, K.C., with him Mr T. O. A. Hislop, for the National Bank; while Mr W. D. Lysnar, with him Mr H. F. Johnston, represented the Poverty Bay Farmers’ Meat Company. “The commission,” announced the chairman, “has considered the question of the admissibility of evidence as to resolutions (passed by Farmers’ Unions), etc., ns to the evils of trusts generally. They have given consideration to the very logical and foroeful argument of Mr Johnston, and are of opinion that Mr Johnston has said all that could possibly be Baid as to the admissibility of evidence of this nature. But, in view of the wording of the order of reference and in view of the fact that this commission is not directed to inquire into or regarding the necessity or expediency of any proposed legislation, they do not ’see that they can allow evidence ■ which would be admissible before a Parliamentary OommjSttee. Mr Skerrett and Sir John Findlay have agreed—and, I take it, with a desire of not preventing any possible evidence that may he brought forward by you—that they have no objection to evidence as to facts, and facts in -Connection with the conduct of Vestej’’s business in New Zealand, being adduced. The commission, certainly, will not allow evidence which might be deemed to be expert evidence, or evidence ,of opinion of one class of the community as to what they think the lew should be, to be brought forward. That will not help the commission to deal with and arrive at a conclusion and be able to report upon the questions which have been referred to it, these questions being very clearly and definitely set out MR LYSNAR, ACQUIESCE©.

Mr Lysnar: I cheerfully accept your ruling, Mr Commissioner; and we will obey it in every detail so far as we are able. We have no desire to force on the commission anything that it may consider will not assist it. We have got the evidence from all over New Zealand, both of representatives of farmers and the freezing industry; and your decision will relieve us of a number of witnesses. We will confine ourselves absolutely to evidence that you regard as that is the facts as to Vestey’s business and its operations in Now Zealand. / HOROTIU WORKS AND VESTEY’S. Robert Dickinson Duxfield (Auckland), Dominion vice-president of the New Zealand Farmers’ Union, was called by Mr Lysnar to give evidence as to the position of the farmers’ freezing works at Horotiu, near Hamilton, in consequence of the operations of Vestey Bros. The Auckland and Waikato farmers, stated Mr Duxfield, succeeded in. establishing in 1915 a farmers’ freezing works on purely co-opera-tive lines. The works —a branch of the Auckland Farmers’ Freezing Co., in’ which was a shareholder—did not traffic in meat at all. They commenced killing in January, 1916. Before the works were started the value of stock was very low owing to the limited markets. Hellaby’s then had a monopoly in the district. The works were among the largest in the Dominion ; their killing capacity was 3000 sheep and 220 cattle per day, and they had a Storage capacity of ,260 dozen carcases. He thought the value of the works was easily a quarter of a million; and they were dome very Well until the stock was all taken away from them by Vestey’s buying it up and railing it to their Auckland works, between 70 and 80 miles away. During the first season they had “a full board,” and the company did all

right financially. This year, however, they were not operating at all, except that they were temporarily being used as abattoirs for Hamilton. This.. was because Vestey’s went out into the paddocks, and 'bought “on the hoof” for spot cash, taking all the stock away from the locality and making the works of ho value to the farmers. They had a way, too, of buying all the farts and stores, putting the fats into the works and the store* into their holding paddocks. Th»y had a number or buyers acting for them, and railed the stock to their Westfield works. They had been so active this eeasoii' that Horotiii was not operating at all. “VESTEY’S GOT ALiL THE STOCK." Vestey’s had got all the stock that Would otherwise have gone through Hbxotiu. Vestey’a had also made a determined effort to get' all the storage of butter, 'by offering what the farmers considered too low a price, but they could not do so because of the farmers’ freezing works. The feeling of the farmers was that Ve»tey’s were acting detrimentally to them, as was the nature of trusts They manipulated the markets; ana that was the reason the Farmers’ Union had taken the matter up. H« asked the chairman if a statement as to the feelings of the farmers in regard to the sale of the Poverty Bay works to Vestey’s would be relevant The chairlhan: We are here to hear faicte. The same sort of controversy is going on at the present time about butter.. The merchants have orie view; the dairy farmers and butter factories hove other views; and other sections of the community have still other views. -But we are here to hear facts. CROSS-EXAMINATION. By Mr Skerrett: The works were opened during the war when the Government commandeer was in operation. Mr Skerrett -. Do you know that it J® notorious that during the war and to-day there were .and are too many freezing works in New Zealand? _ Witness: Yes; we had enough works before Westfield was established. "We did not need it.. Replying to further questions h© said that that position was calculated to cause keen competition and shut down farmin's’ works. The Auckland arid the Horotiu works wore able to make advances to farmers. Mr Skerrett: But, Apparently, they wera not in a position to do to to a sufficient extent to finance the farmers. . \ Witness, further cross-examined by Mr Skerrett, said, that the Gear ComP an y arid the New Zealand Refrigerating Company also operated in a large way m the North Island; but they had all their capital " invested in the Dominion. j Mr Skerrett: T) J you suggest that all these companies should be closed? WHAT THE FARMERS WANT. .Witness: We go so far as to say that they should not traffic in meat. Mr Skerrett; Do you desire all com- j panics that buy meat on their own account tel be closed Up? Witness: That is not the primary desire. Orir primary desire is to protect the faimers. Mi Skerrett: And you require that all the existing freezirig companies Should, he prevented from buying arid' exporting stock on their own account? j Witness: We havo not gone to that drastic length yet. Mr Skerrett : Is that what you require? Witness r What we require is to put: our meat industry on a safe basis. It is Our opinion that, that is the only Way to safeguard ihe farmers’ interests. Mr Skerrett: Is it not a fact,.that, from." the titae the Government commandeer. of 'meat ceased your company' i was in trouble P ! Witness: No. j Mr Skerrebt The farttiere were better suited by Vestey's manner of doing business than by voure? Witness: Yes; because they got cash But will that always continue? The possession of * the freezing works con-

trols the position. Mr Skerrett: Do you know that the export license of a freezing works is renOiv-ahle from year to year at the direction of the Minister for Agriculture ? “SHOWN IN THE ARGENTINE.” _ Witness* “Yes ; but it hag been shown in the Argentine that, unless you control the freezing works, the farmers, are powerless. 'Hie companies simply close doWli the Works, end the farmers have the rtock in the paddocks bt & hSaVy loss, Mr Skerrettßut we are not dealwith facts in Hhe Argentine. The Minister for Agriculture hero Can refuse a meat-export license to works if he is not Satisfied with the manner in which they ate' conducted. The witness: But Such safegtiards are absolutely useless* if freezing works are in the control of the vested interests. They simply close them down; and the farmers are left as in the Argentine. He added that there were many cooperative freezing companies in New Zealand that Were successful,’ but there were a great many f that had been closed up. He could not 'say whether there Were any farmers’ co-operative freezing companies in the Argentine. He was nOt sufficiently conversant with the position there to give any details. Replying to Sir John Findlay, the witness said that the farmers Were placed in their present awkward position through, their endeavour to meet the requirements 01 the Government for more cold storage during the war. Sir John: I have the assurance of Dr Realms (Director of Agriculture) that in no case were the farmers urged to erect additional Works. All they Were urged to do Was,, in their 6Wfi interest, to erect additional storage. Is that correct? '» Witness: Yes; but they ' could not erect storage if they had not works. “OFF THE HOOKS’’ AND “ON THE HOOF.” Re-examined fey Mr Lyshar, witness Said that the Auckland Farmers’ Freezing Company made it part of their ’business, to »uy live stock on behalf of exporters. But they generally bought “off the hooks” (dead meat), not “On the; hoof” (live stock). Mr Skerrett: Bid they buy live stock on behalf Of large exporters? , Witness: I am not conversant With that. Mr Skerrett: If I put it that your eompany has purchased stock on behalf of very large exporters, would you deny that ?. Witness: I (believe they have. FREEZING FOR SPECULATORS. Mr Skerrett: Are you not aware that these large exporter® have buyers who buy liVe Stack op. the hOof; and that stock is ffOzen by the Auckland Farmers’ Freezing <3omipany, on behalf of' these speculators? Witness: Yes; w% have no Objection to that. It does not alter the position that the farmers still control the works. The Chairtoan: If Yeatey’s shut up their Wofks for a year, do you not think that the Minister for Agriculture, Un* I der the Act, Would have the right to! refute to renew the license of I those Works Oft the grouftd that they were, not carrying them Oft in accord- : ance With the public interest? . Witness: Yes; hut I ani assuming I that the whole of the freezing Works were in the ’hands of the trusts. I don’t think Veetev’s would attempt j that under the legal and general condi- {

tions prevailing in New Zealand to-day. They would be a]one in their action. Mr Lysnai- intiinatCd that: itt deference to theiComiriishicn’s ruling, lie would not call further witnessed he had on the same - lines. The chairman Said that the commissions- hud the gentlemen opposite did tot Object to evidence as to facts in regard to Vestey’s operations in New Zealand, hut only to evidence in re. gard to- trusts generally. Mr lysnar-s opening statement RESUMED. ,Mr LyShar then proceeded. With his opening Statement which had already tasted for two dayß when it was interrupted at 11 a.m. on Thursday by the 'calling of Mr Anthony Rowlands, . of Auckland* Vestey’s general manager in New Zealand, to give evidence. "THE kaiser of the meat * Board.” Mr Lysnar Was referring to the Meat Board excluding the Admiral Oodfiftgton from the New Zealand trade, when Mr Myers asked if tile NSW Zealand farmers wanted to run their own ships. 'Mr Lyshar: Certainly ; the wisest thing they CoUld do. Me added that the dairy farmers to-day were losing 3d a ; pound On their butter-fat. because there were no ships W-heft Wanted. Last season, by ten ships landing butter in London in one 'month. „tfie New Zealand producers had lust £500,000; and thp same sort of thing had happened this year, with the result that, while Danish butter stood at 2 lt)s, NeW Zealand hUttfer was down to 150 s to lfiOs. Mr David) Jones (chairman of the Meat Beard) knew of that, and was helping the interests Of the big' man in that Way. He (Mr Lvsnar) did not blame the member® of the hoard, but Mr Jones, who said: “I did. this” and “I did that,” bob “The board did this or that.” ” Mr MYfers: I suppose it ie “Mr Jones and (he Government;.” (jLaughtev.) Mr tynSar: He is the Kaiser of the Meat Board. . . .* I blame the Government no more than the members of the hoard. “WILL BE VERY STRONG CON- : FLIOT.” Later Mr Myers asked Mr Lysnar What would have happened if he had succeeded in inducing the Meat Board not to OdSiSent to the hale to Vestey’s or to transfer the license.

Mr Lyshar: Everything would have gone oft as before. Mr Jelly said that’ the bank would aend for Us to carry' 6*. Mr Myers: Indeed! 1 Want that down,. Sir. \ Mr Lyshar repeated his statement. Mr Myers: There Will be a very strong conflict on that, if Mr Lyshar swears that. _ Mr Lyshar': If you get the truth, you will get that. , Mr Myers: We won’t discute What is the truth how, Mr Lysnar. Do you mean u’S to understand that Mr Jolly I was practically inviting you to get the j 1 sale stopped i and that if you got it I stopped, the bank would ask you to; carry on? |- Mr Lysnar said that Mr Jolly cer- , taihly said that. ! > Mr Myers: Mr jolly still doesn’t ex- • peCt that you will ever lead the Ar- • changel Gabriel’s choir. (Laughter.) j Sir John Findlay: 1 suppose you know j that they had put the receiver in—a very drastic stop, wasn’t it? |( BANK’S “WRONG INFORMATION P’’ . Mr Lywiar: I know ; but they could > 1

ni>t made us bankrupt. He aliened that the bank had supplied wrong information as to the position of his oonjpany to the chairman df the Meat Board, and to the Minister for Agriculture. Evidence, he declared, would be given in support of that. He did not know what action they would have to take in regard to the statement that the company was bankrupt. I Mr Skerrett: I should treat it with | silent Contempt. (Laughter.) I Sir John Findlay: You "will agree that ; in the ordinary way a man’s banker is i the best judge of-his position. You can’t blame the Minister for believing what your banker said,. Mr Lysnar: Yes, I agree with that. He alleged that the bank kept the company “stringing on for two days,” while the Meat Board whs making up its mind whether to agree to the transfer of the license to Vestey’s ot not. He did not fchihk that Was fair. Till the board had made up its mind the bank

did not tell the company its own decision. HowCver, he Would not go into that statement. The chairman: That “bankrupt” statement? Mr Lysnar: Yes. If he went into it, he added, hfe might take a day or two to get through with it. But it did seem that the Meat Board, particularly the chairman, was acting on information received from the bank. This was shown, he contended, by the cable sent-' by Mr Tones on September JSiid. 1023, to Messrs Fraser and Forsyth, London, which stated, inter alia, “NatidhSl Bank NeW Zealand, Ltd., put receiver into Lysnar’s works. Manager bank 6aw me and disclosed hopeless Condition of works and Admiral CddriUgtott.” The Meat Board and the -Minister had been acting uptVn Biich information Tvithoiit disclosing it to the director of the company. That was the uhfbrtuhate part of it. THREE HAYS’ MAfEMENT BNMft. Han<ii&E in a ftumiber of documents.

bearing on the ca6e, Mr Lysnar closed his opehing statement at 3-30 p.m. it thus lasted practically three days. A considerable discussion took place as to procedure and Other matters; and at 5.30 p.m. the Commission adjourned till 11 a.m. on Tuesday.