VESTEY INQUIRY

New Zealand Times, Volume LII, Issue 12161, 11 June 1925, Page 9

VESTEY INQUIRY

YESTERDAY’S SITTINGS MR LYSNAR’S ADDRESS CONTINUED CAUSE OF COMPANY’S RUIN NOT THE SHIP, BUT BANK’S PEREMPTORY DEMAND.” Mr W. D. Lysnar, M.P., continued liis address yesterday before the Royal Commission sot up to inquire into the sale to Vestey Brothers of the Poverty Bay Farmers’ Meat Company’s works. Messrs J. Alexander (chairman), A. Molntosh, and G. Fitzgerald constitute the Commission. Sir John Findlay, K.C., with him Mr C. H. Taylor, represented the Government and the Agricultural Department; Mr C. P. Skerrett, Iv.C., with him Mr C. A. L. Treadwell, the Meat Export Control Board: and Air M. Myers, K.C., with him Mr T. C. A. Hislop, the National Bank of New Zealand; while Air Lysnar. with him Air H. F. Johnston, appeared on behalf of the Poverty Bay Farmers’ Meat Company. Quoting figures in support of his statement, Mr Lysnar claimed that by the end of its financial year in August, 1923, the Aleat Company had paid off more than £50,000 of its overdraft to the bank, and that after paying its interest to the bank it had made a profit on the year’s working of £3BOO. If the interest were ignored, they bad made a profit of over £14,000 that year. Yet Mr Jolly (manager of idle National Bank) had told the Minister for Agriculture that the company was hopelessly insolvent, and could not pav principal and interest! He did not inform the Alinister that the company had reduced its overdraft by that £50,000; nor that the j company had paid its interest and still j showed- a profit of £3BOO. If the statement that Air Jolly had made was Correct, there would have been some j reason and fairness in his request to j the Alinister. But his statement was | not correct, and he (Air Lysnar) con- j fidently asked the Commission to find j that it was not correct, and that the ; company, if it had been given time, j could have carried on. Air Jolly’s | statement unquestionably influenced ■ the Alinister, as similar statements j had influenced the chairman of the Meat Board; hut, as he had shown, - that statement was not borne out by facts. The £50,000 was found mainly out of call money; and that showed that the shares were some good—not worthless, as stated by Air Jolly. If j the hank had been charging the com. | pany 5) ter cent-., as formerly, instead of 7 per cent., on its overdraft, the profit on the year would have been considerably more than £3BOO only. ,

LOYALTY OF SHAREHOLDERS In 1923, some 220,000 lambs and sheep "were killed at the company’s works, as against 140,000 only the year before. This was the result of the appeal made to the shareholders to support loyally the company’s works, and showed that the shareholders were prepared to do so. With Richmond and Armour’s guarantee to put a certain amount of stock through the company’s works, the company would have killed more than 200,000 sheep and lambs in 1924; and on this the managing secretary estimated that they would make a profit of £26,000. Even taking it at £20,000, that was, he, submitted, proof that .the company | could have carried on and ultimately 1 met all its liabilities. He contended; • that the true value of the company’s works was not less than £410,000, and j that the Admiral Codrington was reasonably worth at least £150,000, not the £70,000 stated by Mr Jolly. That figure was, he urged, ridiculous, as the valuation of a vessel that it had been shown could earn interest on far more than £70,000. He maintained that, if the Admiral Codrington were wiped off the company's balance-sheet altogether, the company at the end of August, 1923, was £24,600 better off than before the boat was purchased Yet Mr Jolly had said that the Admiral Codrington had caused the company’s ruin. “The only thing that caused our ruin,” he exclaimed, “was the peremptory demand of the hank, not the boat It ia not fair, it is not just, it is .not reasonable that that allegation should go forth. These facta are unquestionably true, despite the wave of the hand and the gesture, ‘The ship caused your ruin!’ ” ' “BANK MADE NO LOSS” The bank, declared Mr Lysnar, had made no loss by the company. Mr Jolly’a statement that the bank bad lost £43,000 —let alone the £90,000 shown by one of tho balancesheets put in—was “entirely fallacious.” Sir John Findlay: Is that allowing for the bank’s concession of £20,000 to the guarantors? Mr Lysnar: There was no concession. I will show the Commission that there waa no concession. Sir John Findlay: Did the guarantors actually pay anything? Mr Hislop : Are they not now being financed by the hank? Mr Lysnar declared that Mr Jolly had done it all “to get the works to Vcstey’s;” and that there had been no loss in fact. “THE FAVOURED TRUST” One trust, he added, had been allowed to itep in and acquire the works, while the other trusts were not allowed to compete. Thus the favoured trust had been able to dictate its own terms, and buy a.t its own price; and that trust was one of the biggest, if not the biggeßt, and most widespread in the world “GROSS MISUSE OF FIGURES” Mr Hislop cited figures to show that the bank’s loss was at least £40,000. H 6 characterised Mr Lysnar’s statement to the contrary as “a gross misuse of figures and an improper deduction to draw from the evidence before the commission.'' Afr Lysnar contended that he had proved his point by analysing Mr Jolly’s own figures Air Hislop said that Mr Lysnar had arrived at his result by taking figures out of one statement and putting them into another. The chairman: The commission will look carefully into the matter. Later Air Lysnar, replying to an interjection by Sir John Findlay, said that the Minister, having let one competitor in—and that tho greatest and most dangerous of all the trusts—should have let thorn all in. He (Afr Lysnar) either would keep them all out, or lot them all in. Fir John Findlay: So long as they will pnv'enough. yr.. x.vsrar said that he had been putfiig stock through Vestey's while L'— commission had been sitting. Ho admitfc' it. Ho made. no bonnui.out it. Ho-Jind to put the stock

through Vestey’s, or else make a still greater sacrifice. Was he to blame for that? He maintained that he was not; that the Alinister was to blame for allowing Vestey’s to be there, for allowing Vestey’s to be in that position. The Minister was failing in his duty m allowing Vestey’s to operate. But since he did allow them to operate, he held that he (Air Lysnarl was legitimately, legally, and rightly entitled to use them. The matter could not be settled by counsel merely waving a hand and saying,, “You use the works.” Mr Lysnar contended at some length that was nothing in Sir Francis Bell’s evidence to suggest that the Alinister for Agriculture had not the power to refuse the licenses to Vestey’s if he considered that the facts justified such a refusal; and both Sir Francis Bell’s evidence and that of Mr Nosworthy showed that Cabinet and Sir Francis left the decision to Mr Nosworthy. The responsibility for tho decision, therefore, lie held, rested entirely upon Mr Nosworthy. The Government was not responsible; and. from the first, he (Mr Lysnar) had refused to hold tho Government responsible. Sir John Findlay: But Sir Francia Bell has distinctly said that he accepted the responsibility. Air Lysnar: I don’t care. The Government was not responsible. ,He maintained that it was the Alinister’s duty to refuse the license, unless Vestey’s could show cause why it should have beer, granted. (At this Sir John Findlay laughed aloud.) “NOT HALF-WAY THROUGH” At 5 p.m. last night, Air Lysnar, replying to u question by the chairman said that he must admit that he had not yet got half-way through his address. (Laughter). He was quite willing to go on. Sir John Findlay remarked that he could not but admire bis friend’s capacity for going on; but he must confess that his (Sir John’s) power to sit listening to him was not equal to Air Lysnar’s power to go on. (Laughter.) ’Hie commission adjourned to 10 o’clock this morning. Sir John Findlay: We have Air Lysnar’s assurance, at any rate, that he will not disappoint us by finishing to-morrow. (Laughter.) Air Treadwell (to Mr Lysnar) ; Will you finish thus week? (Laughter.)