“COME ON NOW, MR LYSNAR!”

New Zealand Times, Volume LII, Issue 12151, 30 May 1925, Page 5

“COME ON NOW, MR LYSNAR!”

MINISTER OF AGRICULTURE CHALLENGES HIS ACCUSER SALE TO VESTEY’S DEFENDED “WOULD DO SAME AGAIN IN SAME CIRCUMSTANCES” “Come on now, Mr. Lysnar! I want it all out,” exclaimed Mr. Nosworthy, Minister for Agriculture, when his cross-examination began yesterday. Mr Nosworthy declared that he had no reason to bar the transfer of tho Poverty Bay Works to Vestey’s, and he would do the same again in the same circumstances. Sir Francis Bell also gave evidence.

When the commission resumed its hearing, Sir Francis Bell stated that in September, 1923, he was acting for the late Prime Minister, who was then absent in the Old Country. On September 17th, 1923, Mr Lysnar had an interview with him regarding the proposed sale of the Poverty Bay Meat Works to Vestey Brothers. .He and Mr Lysnar were on very friendly terms, and Mr Lysnar explained at considerable length the relations of the Poverty Bay Farmers’ Meat Company with the National Bank of New Zealand. Mr Lysnar was excited; and, if witness remembered it, not very coherent in his statements. Mr Lysnar told witness the story from his point of view on two heads. First, he said that the bank was unduly pressing the sale of a concern which was quite solvent and able to carry on if given time; and secondly, that the bank was selling the works to Vestey’s, who were a meat trust. Involved in the first statement was an allegation that the bank was selling the works under their value. At the time Mr Lysnar pressed upon witness that he should exercise what Mr Lysnar considered his paramount duty of stopping the sale and the transfer of the license. “I think,” added Sir Francis, “that Mr Lysnar misunderstood my position. The grant or refusal of the transfer of the license was purely a departmental matter for my colleague. My power in the matter was only to request iny colleague to refer such a matter to Cabinet. I oould not act myself: but I think Mr Lysnar thought I could.” AGREED TO WARN BANK. Sir John Findlay: Did yon make it clear to him, in regard to the sale by the National Bank, that you could not interfere on any point of justice or> injustice in the hank’s action, so long as it was legal, in realising its securities ? Sir Francis Bell: Yes. Mr Lysnar and I were personal friends, and I thought it necessary to say that, with regard to the bank, I would not lift my little finger as regards the exercise or non-exercise of its rights, or be concerned in any question of valuation or otherwise. He understood that. And upon the point he urged, that the sale to Vestey’s was agamßt the public interest, I said that I would see that the hank was warned that that was a matter that the Government must' decide, and that I would have to await my colleague’s arrival before going any further. Meanwhile the matter would be held up by my letter' of warning to the hank. Sir Francis added that he wrote a letter to the bank on those lines. “I think that Mr Lysnar thought I knew a great deal more about the position in Poverty Bay than I did. Otherwise I ’cannot understand how I came to be left in ignorance of the fact that there was another farmers’ meat works operating there. I did not know that fact, though I think it not unreasonable that Mr Lysnar should assume that I knew it.” Sir John Findlay: Had you known that there was another works being operated by Nelson, Ltd. (Vestey’s), under tho Act, would your letter to tho bank have been worded differ, ently? THE WORD “MONOPOLY.” Sir Francis Bell: It could not have been written. I could not have used the word monopoly. Mr Lysnar spoke of the danger of a monopoly, and I suppose I used his word. I did not know that it was a part of the conditions of the transfer of the Poverty Bay meat works to Vestey’s, that they would pull down their other works and not rebuild them. Mr Lysnar: That condition had not arisen. Sir Francis Bell: I did not know that. I don’t know that Mr Lysnar himself knew it. Mr Skerrett and Mr Myers said that the condition must have been made by SeptemDer 17th. Mr Lysnar: No, it was not made public. . _ ‘ Later on (proceeded Sir Francis), I had a discussion on the matter with the Minister for Agriculture; and, 1 think, the general manager of the National Bank was present. The matter was discussed and the question was put to me whether it was a question for a commission; but I asked that it be brought before Cabinet, and sinoe that was done 1 have not intervened in any way. .It was discus, sed by Cabinet, and referred to myself and Mr Nosworthy. The reference to myself was the usual form; it was really left to Mr Nosworthy. Cabinet itself would have decided the matWitness said that cables passed between the Minister for Agriculture, himself, and Mr Massey; and Mr Massey, as was his custom when witness was acting for him in his absence, left the matter to him to deal with. Mr Lysnar: I think that I delivered to you a letter the company had written to Mr Nosworthy? Sir Francis Bell: I think you did. Mr Lysnar: Owina to Mr Nosworthy’s absence, I could not deliver it to him, and therefore delivered it to Sir Francis Bell: I think I sent it on to Mr Nosworthy. Was it a long letter, Mr Lysnar? Mr Lysnar: Yes. Sir Francis: Then I didn’t read it (laughter), but sent it to Mr Nosworthy. MR NOSWORTHY EXPLAINS. The Hon. W. Nosworthy said that he was appointed Minister for Agriculture in September, 1919, on the dissolution of the National Government, his predecessor having been the late Hon. W. D. S. MacDonald. He gave evidence, on the same lines as Dr. Reakes (Director-General of Agriculture) had done the day before, as to the operations of Vestey Brothers in New Zealand, the transfer of ihe various meat export slaughterhouse licenses to them, and the passing by the National Government of tho Act of 1918.

Before tho transfer of Nelson Brothers’ licenses in Hawke’s Bay and tlia. Giaboma district, .to .Vesjey’s, he

had an interview with the general manager of Veste.v’s in New Zealand. He knew then that Vestey’s had been operating in New Zealand for some years. He heard all the general manager had to say, and then indicated to him quite clearly that he was fully armed under section 7 of the Act of 1918. He warned him that he had other works under supervision besides Vestey’s, and that if there was anything against the public interest in the way their business was conducted —if he was thoroughly satisfied in his own mind—he would exercise his power to cancel the license without referring it to Cabinet, and that he would stand by his action. That was only a warning that the Government would not tolerate anything improper, or anything contrary to the intention of the Act—anything inimical to the publio interest. He had an interview with the manager of another meat works in the North Island, to discuss certain operations which he considered was not in the public interest, and also gave him to understand that, drastic as it might Beem, if things were not conducted on the right lines, which he indicated, they were in danger, at a moment’s notice, of finding themselves without a meat export licepse. That warning was given to them because of matters he had discovered by his own observation. He delayed for some months his approval of, the transfer of these licenses to Vestey’s, in order to permit of a thorough investigation being made; until he was satisfied_ that he 'had no reasonable grounds, in regard to the public interest, for refusing the transfers. “NOT COMMITTING MYSELF.” Mr Lysnar (added the Minister) cams to see me with regard to tie transfer of the license (of the Poverty Bay works), his object beang to ask me if I would undertake not to agree to the transfer of the license of the Poverty Bay freezing works to ' Vestey’s if Vestey’s became the purchasers of the works. He gave me to understand that the bank was proposing, or contemplating, the sale of the works to Vestey's. Perhaps he said they had made an offer. I do not remember. He objected to Vestey’s becoming the purchasers, 1 ecause they wers a meat trust. Sir John Findlay: Was anything said in criticism of the action of the bank? Mr Nosworthy: If I remember right. He objected to the bank contemplating or proposing the sale, on the ground that he did not want the works sold to Vestey’s, and he also led me to believe that the financial position of hte Poverty Bay Farmers’ Meat Freezing Company was all right if it. had time. Of course the matter of time was the essence of the matter in manv ways besides finance. I understood him to say that the position was very different from what the bank’s balance-sheet, which I had, led me to believe. He tried to get me to make -a statement that I would do v. hat I could to_ stop the sale, and I was not committing myself at all. Sir John Findlay: Was anything said by you to him as to yonr duty ? Mr Nosworthy: I pointed out to Mr lysnar that I had a duty to perform, and that to the best of mv ability I would do that duty. But I said that! I could not see how the Minister for Agrioulture—and I went further than that and said that I could not see how the Government —could interfere with the sale of the works by a creditor at its own discretion, if he was unable to secure the money from some other quarter to meet his liability, I looked upon it in the same way as if a hank or any firm asked a farmer to pay off his account and h© could not do so. APPROVING THE TRANSFER. Mr Nosworthy said he had had a report from Dr. Reakee as to the conduct of Vestry’s Hawke’a Bay and Gisborne works, and that report was that there was nothing to justify refusing or cancelling the licenses. As to the Poverty Bay ''license, also, Dr. Reakes reported that everything was all right; and, therefore, he had no reason why the transfer should he refused. He referred this matter io Cabinet before Sir Francis Bell could ask him to do so. Knowing Mr Lysnar and knowing the political position, he knew that there wonld have been more trouble about that license than about auy other in New Zealand; and for his own protection, and in order that nobody could say that, armed with the powers that he was under the Act, anything had been done autocratically, he determined before hec returned to Wellington to bring it before his colleagues. He brought it before Cabinet, the meeting was held on September 25th, and the matter was referred by Cabinet to the Acting-Prime Minister and himsslf to deal with. Afterwards Sir Francis Bell and he had a discussion on the whole position. It was after that, to the best of hia knowledge, that the interview took place between Sir Francis, himself, and Mr Jolly (general manager of the bank) on the vital question of tho transfer of the license to Vestey’s; and they came to the conclusion that there was only one course to pursue — that everything being legally m order under the Act, and the consent that was necessary being given by the local authority, the Government could only agree fo the transfer to Vestey’s. That was always assuming that Sir Francis Bell understood that he, as Minister for Agriculture, was satisfied that_ there was nothing against th» publio interest. NO OBJECTIONS RAISED.

Witness also discussed the mattet thoroughly with Mr Jones (chairman of the Meat Board), and learnt the opinion be had since expressed before the commission: that the board took the view that there were no grounds for refusing the transfer. The local authority also raised no objection; though, if there had been any murmur against ihe transfer, it would, sorely, have c©mo to hand at the time from the county council representing the farmers <f ’he district. But the county council, gave unqualified approval to the 'transfer of the slaughterhouse license, without which he could not have approved the transfer of tha meat-export license. Qeustioned by Sir John Findlay aa

to Mr Lysnar’s charges against him, the Minister said that it was pot true that he had hot given Mr Lysnar full opportunity to discuss the matter with him. Ho gavo him every opportunity. He always gave everybody a show. It was absolutely incorrect that he had approved the transfer before he knew or the approval of the slaughterhouse license by the local authority. Under the Act he could not have done so. It was also absolutely untrue that he had failed, or that the Government had failed, to keep their promise with regard to the suppression of' trusts. The Reform Government had taken all the precautions that had- been taken by the National Government against the trusts. It was the National Government that let Vestey’s into the country; and the Reform Government had controlled them, with the result that up to the present it had found no reason to treat Vestey’e otherwise than they had been treated. It was the National Government that passed the Amending Act of 1918; and, with the powers given by section 7 of that Act. he bad felt himself able to control any attempt at trust methods. In fact, he had felt that he had to be careful not to do any injustice, and that be must exercise great care and thought before contemplating any drastic action. The anti-trust powers under this Act and the Meat Export Control Act were greater than those under any British or Australian statutes, or under the laws of any country in the world.

CHALLENGE TO MR LYSNAR. Sir John: Mr Lysnar says that you listen to the big financiers and not to the farmers. Mr Nosworthy: I would, like Mr Lysnar to name any financial institution that brought any pressure to bear upon me or upon the Government. It is absolutely untrue. I don’t see that he has any grounds for saying that I would not listen to the farmers, seeing that during the whole of my political life I have been doing all I can to assist the primary producers. Mr Nosworthy also denied that the trusts dominated the Government. The Government had been absolutely froe from any such domination. During the discussion with Mr Jolly, he stated that, assuming everything was found to be in order, he- could see no reason why the transfer should not be granted to Vestey’s, but he stipulated that the bank should give the guarantors of the bank and all the other farmers - concerned every possible' fighting chance to recover themselves. This Mr Jolly agreed to; and witness had every reason to believe that the people had been more than satisfied with the treatment they had received from the National Bank. On no occasion, added the Minister, had he refused to discuss the matter with Mr Lysnar or with a deputation from the Gisborne Farmers’ Union. Mr Lysnar’s allegation that he had been subject to any financial pressure in regard to this business was absolutely incorrect. ‘‘l take the opportunity,” he exclaimed, “to challenge Mr Lysnar to name any firm or institution that has put any pressure upon me or attempted to bribe me. He is trying to make me out a weak kind of criminal.” Mr Johnston said that there was no imputation of bribery. Mr Lysnar had withdrawn anything that might seem to suggest that. Mr Nosworthy: I want it all out. Come on now. Mr Lysnar. I want everything brought out. I have given you the opportunity to prove it. “GENERALLY SPEAKING.’ 4 Cross-examined by Mr Lysnar, the Minister said that the Government was opposed to all trusts and combines. The chairman said that that seemed " "a very wide: statement; as the butter people at Home were complaining that the dairy farmers bore constituted a trust, and were forcing up the price of butter.-He supposed that the Minister meant that the Government was opposed to any trust or combine that was acting detrimentally to the public interest. The Minister said that that was to. ' But generally speaking, the Government was against the trusts. Mr Lysnar asked whether the commission had not arisen out of some trouble in connection ryith certain amendments proposed to the Meat Export Control Act —amendments by Mr Lysnar which the Minister had 'characterised as against the policy of the Government and the country, and likely to lead to revolution. The Minister said that he strongly opposed the amendments, but did not recollect using those words. The chairman: May we take it that certain rhetorical expressions were used ? Mr Nosworthy: There was a display of fireworks that night. Sir John Findlay objected to the repetition of some fiery debate in Parliament, which had no more to do with the object of the commission than the man in the moon. The chairman: We take it that this was merely a preliminary canter on Mr Lyenar’a part, and that he would soon come down to earnest work. Mr Lysnar: That’s all it is. The chairman said that the commission was not there to keep one eye, or two eyes, on the general election; but to deal with the very serious and important matters referred to it. Replying to further questions by Mr Lysnar, the Minister said that he had got a quantity of information as to the position of the Poverty Bay Meat Company from correspondence and other papers supplied by the bank; also a lot of information from Mr Lysnar; and he had two balance-sheets, one drawn up by the bank and one by the company. “EATING THEIR VITALS.” Questioned as to why he had not refused the transfer of the Poverty Bay Company’s license to Vestey’s, the Minister asked, “Why should I be any moro unjust to Vaster Brothers, who had not/broken the law, than to anybody else ?” If anything had been done wrong, he added, let Mr Lysnar tako action against the Government. Mr Lysnar: You know of the complaints by The farmers that Vestey’s wero eating their vitals out? (Laughter.) Mr Nosworthy: I know enough about farmers to know that their complaints are not always correct. You said in the House that Vestey’s were eating the vitals out of everybody; but you were dealing with Vestey’s yourself. What about your vitals? (Laughter.) Mr Lysnar: We won’t discuss that. (I.aughter.) But was it fair for you to allow Vestey’s to operate there The Minister: Quite. They had not broken the law. Mr Lysnar (continuing): And then, when the company was in trouble, owing to that competition, transfer the license to Vestev’s? Sir John Findlav objected that the ouestion was not fair. They said that Vestey’s competition was not the cause of the trouble. It was the ship and the management. Mr Lysnar asked whether the fact that Vestey’s were allowed to continue operating Nelson Brothers’ works at Hawko’s Bay and Gisborne months before the transfers of the licenses were granted di not show that Vestey’s dominated, and not the Minister. Sir John Findlav: That is most unfair; quito improper. Replving to the chairman, Mr Lysnar said that he was not wanting to \ry Vestey Brothers now, hut the

Minister. He contended that Vestey Brothers had been allowed to carry on the works in question in their own name before the transfer of the license, and that constituted a breach of the Act.

Sir John Findlay said that Dr Reakes had explained the matter fully the previous day. Mr Lysnar putting several questions as to matters of detail, the Minister exclaimed, “You take up a hundred things; and a man would need to swat for a week to answer every one ol thdem.” (Laughter.) • Mr Lysnar pressed the witness to say whether he had not said in the House that every farmer who was mixed up with the Meat Trust and did, business with the Meat Trust was an enemy to the country. The Minister said that he did not recollect the Words; hut if he did that included Mr Lysnar, because he did business with the Vestey’s, whom he called a meat trust. (Laughter.) Mr Lysnar contended that the Minister was mixed up with the trust, inasmuch as lie had allowed Vestey’s to operate in New Zealand. The Minister •• You are so darned inconsistent, if I may say so. You are one thing in the House, and quite another outside. Has any one thing that has happened in the course of this commission' shaken anything of what I said in the House in my speech of October 27th ? Yet the country lias been put to all this expense! Mr Lysnar: I should sav that it has shaken a very great, deal. A FINANCIAL LANDSLIDE. The chairman: I suppose you had a pretty good idea of the financial straits that the farmers were in about that time?

The Minister: Yes, and before that time. He realised, he added, in reply to other questions, that some, if not many, of the farmers' in the company might have difficulty in meeting their calls, if calls were made by the' company. He realised that if this sale to perhaps the only purchaser were missed, it might lead to a financial landslide that would be most detrimental not only to the farmers of the Poverty Bay district but to the Dominion as a whole; and he felt that if the Government interfered with the bank’s right to sell the works it would have a most unfortunate effect as regards farmers who wanted to borrow in the future and upon the credit of the Dominion as a whole. He was of opinion that the transfer of the Poverty Bay Meat Works’ license, to Vestey’s was in the best interests of the Poverty Bay farmers and of the Dominion as a whole. In spite, of all the criticism he had been subjected to, he would, under the same circumstances, do the same thing again. He had carried out his duty, and would do it again, no matter what happened. The Commission adjourned till 11 o’clock on Monday morning.