PRICE OF DRAIN PIPES.

Otago Witness, Issue 3871, 22 May 1928, Page 61

PRICE OF DRAIN PIPES.

AN ALLEGED COMBINE.

THE ALLEGATION REFUTED.

The Christchurch Drainage Board last week decided to place with the Napier Concrete Company an order for £5OOO worth of drain pipes. It was apparently influenced in its decision by the fact that an agreement, to which the three pipe manufacturing concerns in Christchurch are parties, -was read at the meeting by one of the members, who stated that the board was being exploited by a combine, and suggested tiiat the board should make its own pipes. Mr P. M’Skimming, of the Homebush Pipe Company, one ot the parties to the agreement, has replied, in a letter to tne chairman of the Drainage Board, to the allegations against the pipe manufacturers. The following is the text of the letter:—

My attention has been called to the press report of the last meeting of the Drainage Board, which must at first glance create the impression that the pipe manufacturers of this city have been exploiting your board. The publication of r. private agreement surreptitiously obtained must, I think, disturb the conscience of the person who disclosed same more than it does me, being a party to it. It is admitted the world over that trade agreements are essential to the conduct of business as it is to-day, and more particularly so in connection with your drainage contract supplies, which call for quantities far greater than any one pipe works of this city is able to manufacture. In fact, ourselves as well as Messrs Murphy Bros, and J. Austin and Sons have found it necessary to considerably increase their plant to cope with the demands of the present Drainage Board requirements. It has always been the custom of your Drainage Board, going back over a Jong number of years, to deal, not with any one particular works in Christchurch, but to make an agreement with the three works combined, at prices agreed upon. The publication of the discussion at your meeting will lead the people of this city to believe that the local works had instituted this agreement to exploit the board and increase the price on you. I wish to state, however, that no increase has taken’ place in the price of pipes or fittings; in fact, there has been a slight decrease in some of the materials since I purchased the Homebush works from the Deans family, and the same position applies to Messrs Murphy Bros., who purchased the Christchurch Brick Company, and since then have carried on their trade here at exactly the same prices which Mr Horsley was selling at.

You will therefore see that the agreement with the Hume Pipe Company did not in any way increase the price of pipes to the Christchurch Drainage Board, but, if anything, reduced same.

The letter to the board from the Napier Pipe Company, and published along with the discussion at your meeting, is certainly intended to create the impression that the price of pipes is too high in Christchurch, and urges that if they are given a share of the supplies, it would have the effect of a general break in rates. To prove that this offer is not one of a benevolent benefactor to the board, I wish to advise t\it the contract prices which the Napier Pipe Company, with headquarters in Auckland, charge in that city, are considerably higher than our present rates to you, and certainly much higher than the present offer which fjis Auckland firm has now made. This obviously proves that the present cut rate’ is given for the purpose of enabling this firm to get established in Christchurch. To prove my bona fides in. connection with the suggestion of exploitation, I wish to make this offer to your board. It is now fully three years since I purchased the Homebush works, and I am prepared that you appoint an accredited auditor of this city to inspect the company’s books, and have access to the last three balance sheets, and if he is of opinion that the income earned is greater than what is reasonable on the amount of capital invested, I am willing to immediately drop my prices to what he considers a fair rate. Further than this I feel sure that I can induce. Mr John Deans, the late owner of* the works, to produce the previous five years’ balance sheets, when the company was operating on higher prices than it is to-day. As an additional proof of my sincerity I am prepared to offer to the Christchurch Drainage Board the sale of the Homebush works at the price of the exact cost to me, and will give immediate delivery.

The object of my writing this letter is to prove that there has been no exploitation by the local manufacturers, and that agreements made to prevent loss and distress in an industry can be carried out in an honourable way and without injury to the public. ■"

As so much publicity has already been given to-the, statements made at your meeting, 1 feel compelled to hand a copy of this letter to the press, and trust I will have your endorsement of this action. If you wish to further investigate any of the statements which I have made, I shall be very glad to meet your board and discuss the question, as should have been done in the first instance, considering that the Homebush Company has been suppliers to the Christchurch Drainage Board for the last forty years.