SAMOAN BANANAS.

Otago Witness, Issue 3995, 7 October 1930, Page 25

SAMOAN BANANAS.

DISHONEST SALES ALLEGED.

AUCTIONEERING FIRM CHARGED. WELLINGTON, October 1.

When the New Zealand Government commenced to import Samoan bananas it made arrangements with several auctioneering firms to market the fruit. The subsequent dealings in the fruit by Laery and Co., Ltd., led to the company being charged under the Secret Commissions Act, in the Magistrate’s Court to-day. It was alleged that the company was financially interested in the buying as well as the selling of the fruit, and further, that it had delivered false sales accounts to its principals, the External Affairs Department. Mr E. Page, S.M., was on the bench.

The Crown Prosecutor (Mr P. S. K. Macasscy) appeared for the Crown and Mr H. F. Johnson, K.C., with him Mr J. F. B. Stevenson, for the defendant company.

In opening the case for the prosecution Mr Macassey said that it would be shown that of a shipment of 310 cases 26 were sold privately to country buyers at prices showing a profit of £5 6s Bd, after allowing 21 per cent, to the purchaser and cartage and wharfage charges. It was submitted that Leary and Co. could not buy in at auction when acting for a vendor without disclosing The fact to the vendor. It was obvious that the sales were not honest. There was no sale of the cases at auction. They were sold at an increased price of 16s and 15s 6d a case, and the price returned to the department was Us a case.

Detective Sergeant Holmes said that on April 17, 1930, he executed a search warrant at the offices of Laery and Co., Ltd. By virtue of the warrant he took possession of a quantity of auction sheets and duplicate invoices, among which were the duplicate auction sheets of July 29 and July 30, 1929. On May 8 witness interviewed the secretary of the company, who stated that the duplicate auction sheets were regarded as the originals for office purposes. He knew M no system of filing the originals, and to the best of his knowledge they had been destroyed. Later, witness interviewed the clerks, whom he questioned regarding an entry in the auction sheets dated July 30. One admitted that he had made the entry regarding the purchase of bananas booked to the country district departments. Witness said that the sheet showed that 26 cases of bananas were sold to the country departments at Us per case. Stephen John Smith, secretary of rhe Cook Islands Administration in the External Affairs Department, said that in 1928 his department made arrangements with a Wellington fruitbrqker for the disposal of bananas by public auction. A fixed price of 5s a case was paid to the grower, the Government paying the freight and other charges into the auction room. Including the price of the fruit, it cost not more than approximately 16s a case to land the fruit in the auction room. Cross-examined: Witness said that he did not know that the custom of the auctioneering firms in buying in was universal. He still did not z think it was universal

Stephen John Smith, an employee of the Department of External Affairs, said he believed there was a standard schedule for Wellington, and the defendants’ prices conformed .with that schedule. He had always believed that country supplies were bought on the floor of the auction room. Charles Mitchell, fruiterer and confectioner, of Blenheim, said he had placed an order with the defendant company for two cases of lemons and five cases of Samoan bananas in July, 1929. In addition to the company’s price, which was 15s 6d a case, witness had paid the transport changes. He could not remember how the price was to be fixed. When he placed th* or-’er the price, given was supposed to be the auction price.

SALE METHODS QUESTIONED.

WELLINGTON, October 2. The case was continued to-day. John Michael Scott, inspector, Governmenu Audit Department, said he carried out an investigation of the records and books of the defendant company. Dealing with the particular consignment of bananas . which arrived by the Mau. loinare in July, 1929, the account sales showed that 31 cases were sold for Us. vV itness traced the auction sheets and found an entry on July 30 for 26 cas ■. of Samoan bananas booked to countr” departments at Us a case. There was an entry showing that -five other cases oi bananas had been sold to a Hindu hawker on July 29 at Us a case. Witness sai< his investigations proved that Laery am Co. were in the habit of taking cases of iruit and vegetables, etc., out of sale, these being subsequently shown on the following days auction sheets, and in some cases up to 10 days later than the actual sale. In the case under review they were shown as having been sold to countrv departments at Us a ease. In the course y' llness ’ s investigations he ascertained that those particular bananas were soiu to five country clients at 15s 6d and 16s a case on July 29. The bananas were actually sold and despatched to country clients before the entry was made in the auction .sheet. On the 26 cases of bananas sold. Laery and Co. made a profit of £5 6s 8d showing a net profit of 37 per cent. Thhhad not been accounted for. i J°l ins ton witness said that probably the seven allegations had been mad against the defendant company as a re suit of his report. . Mr Johnston: Did you interview a ma: in Witako Prison in regard to Laery am Co.?

Witness: Yes. I have to interview ; number, as I do the accounts at Witak< Prison.

Mr Johnston: Did you interview a pri sonet up there? Mr Macassey objected that the question was irrelevant.

The magistrate said he did not thiui the inquiries could carry them much fur ther in the mattter.

Mr Johnston: It may be a light matter for a gentleman in the Audit Department to have a firm which has been in business for 50 or 60 years, with a high reputation, attacked; but it is some advantage to know of the source from which the information has come, and if it is a disreputable source, how did the department come to make inquiries? Witness: We'had reason to believe that we were not getting true and correct account sales from this particular firm. Who believed?—Oh. I can’t divulge

I put it to you, you were the person to raise this suspicion? Will you deny it? Mr Macassey objected, and pleaded the protection of'the Act, and said that MrJohnston was trying to find out who had laid the complaint. The magistrate (to witness): Your answer is that you decline to say who originated this inquiry? Witness: Yes.

The case was adjourned until Wednesday to allow another witness from Pal merston North to be called.