MEAT WORKS COMMISSION

Poverty Bay Herald, Volume LI, Issue 16719, 2 May 1925, Page 7

MEAT WORKS COMMISSION

TO-DAY’S PROCEEDINGS,

When tho -Meat Works Commission resumed this morning, William Frederick Ccderwnll, manager of the Gisborne yheepfarmers ’ Freezing Co., was called by Mr. - Lysnar. The witness stated his company controlled three works, Hicks Bay, Tokomaru Bay, and Kaiti. The works were owned hv the farmers of the district, and dicl no buying on their own account. The works at Kaiti had a killing capacity of up to 4500 sheep a clay, and had a storage capacity of 230,000. Tokomaru Bay had a killing capacity of 2500 sheep, and a storage capacity of about SO,OOO. At Hicks Bay 600 to SOO could be killed a day, and there was storage for about 60,000. Witness had seen Mr. Jones’ statement that the Meat Board had been responsible for a reduction of Is 9d per sheep in killing charges. He did not think the Meat Board was entitled to any credit for this, as the company entirely fixed its own charges. The percentages of seconds going through the company’s works in .1024 were 9.41 on mutton, 42.50 on lambs, and 61 on beef. The averages for rejects were, mutton, 1.221 per cent.; lamb, .1.33.1 per cent.; and beef 3.275 per cent. The works controlled by witness did not pay any commission to merchants for buying. Not doing so placed the company at a disadvantage, but the directors strongly refused To give preference to merchants and not to farmers. Tho commission, if paid at all, would have to be paid to everybody, and this would increase the charges to . the, producers. Vesteys, in buying stock, bought mainly on the hoof, the other buyer!; mostly purchased at per lb. The company had a buying agency on the mercantile side of the business for M. A. Elliott and Co. It was natural for a proprietary company to purchase on tho hoof, and Vesteys purchased stores as well as fats. Witness’s company could not follow this practice. Store stock purchased by Vesteys was carried on, by arrangements, on a grazing basis, by the farmers. Mr. Lysnar read a cable sent by Mr. Jones to Messrs Forsyth and Fraser, in which it was stated that the National Bank had put the receiver into Lysnar's works. Vesteys were offering £225,000 for the works and failing acceptance would build new works. The cable stated that the Gisborne Sheepfarmcrs ’ would prefer Vesteys to take over Lysnar’s works than for Vestcy’s to build new works, it being considered that two farmers’ works could not exist against new works built by Vesteys.

The witness said he had made a careful search and could find nothing recorded which gave anyone authority to make such, a statement on behalf of the company. To Mr. Myers, the witness said the proposal that the two farmers’ works should purchase Vesteys’ works was considered by his directors and turned down. The proposal emanated from Mr. Lysnar. In 1922-23 the killings in the district were 732,378 actual carcases. Last year 650,863 had been put through, with only two works operating. So far this year there was an increase of 39,000 over last year. He agreed that there was no room in the district for three large works. If Vesteys, instead of purchasing Waipaoa, had erected new works, witness believed that the two farmers ’ companies would have gone out. The same would apply if tho old works at Taruhcru had been modernised. Witness had no knowledge as to whether other buyers were available for the works than Vesteys. If Vesteys had remained in operation at Taruheru the purchase of Waipaoa would not have been a good investment for anyone. This being so, lie thought, the correct valuation of the Waipaoa works was the, market value of the time. At that particular time it might have been hard to find a buyer at all. The reduction in charges made by witness’ company was tho rpsult of the quantity of stock put through the works. The charges were the same in Vesteys ’ works as in the farmers’, and this apparently had not increased Vesteys’ killing charges. To Mr. Taylor the witness said his works had done as many as 500,000 sheep in a season, and was capable of doing more. This, however, depended on a number of factors, including the availability of labor, and the length of the season. On a basis of 4000 sheep a day—which was not high —his company could kill 22,000 a week. In a season extending over 30 weeks the company could handle 660,000, while, if the daily output were increased to 4,500 a day, the season's output would be 742,500. It was clear, therefore, that two works could easily handle the stock of tho district.

To Mr. Jones the witness said the Meat Board had not seriously interfered, with the grading at the works, which had varied. The percentages of seconds were, in 3922-23, 32.59 for sheep, 48.2 for lambs, and 5.9 for beef; in 3923-24, 35.17 for sheep,.sl.ol for lamb, and II.G for beef. Witness did not think it possible for a fat sheep to weight only 281bs. •

Mr. 1 Jones: Do you think, with the good fences you have , round your works, that a good-sized hare might have got in in mistake? (Laughter.) —Continuing, the witness said later conditions were better with only the two works than with the three. The price of sheep on the district had no effect on the killing charges, and it went without string that reduced charges benefited the producers. Had the three works been operating in the district it would have been impossible to make a reduction in the charges. Some of the directors of the Poverty Bay Company had supported witness’s company, the numbers in 3923-24 and 1924-25 being as follows:—Mr. Bowen 1004 m 3923-24, and one in 1924-25; Mr. Black, 9255 (rf235), Mr. G. Coop, 3615 ((15163; Mr. Field, 1050 (1048); Mr. Lysnar, 217 (1988), Miss Lysnar, 2398 (2053); Parker Bros. 5090 (0); Mr. Witters, 1250 (382); Mr. H. Williams, 3740 (2097); Mr. E. J. Williams, 780 (564); Williams Bros., 429 (0); a total of 27,438 in 1923-24, and 15,884 in 1924-25. Mr. Jqncs: Mr. Field told us lie froze 1.0,000 or 12,000 sheep annually, and put about' 50 per cent, through your v\orks. Witness: He may have sold some on the hoof, of course. The witness said that if the directors of tho Poverty Bay Company put their stock through the Gisborne works it. would materially assist, the company. He thought that, if the directors bf the Poverty Bay Company Were sincere in their efforts to control the trusts they would put their stock through tho farmers ’ works. Witness did not think it was profitable to have one ship to transport the output of tho works. It would not suit his company in any base, and he thought it was essential that early and regular shipments should bp made. To the chairman, the witness said

the proposal to purchase Vesteys' works came before his directors on September 13, 1923, the chairman stating that he had brought it up at the request of Mr. Lysnar. Mr. Lysnar: Was not the question on that date one of stopping the sale to Vesteys?—l think both questions were discussed at tho same time.

But prior to that date.there was a suggestion that the farmers of the district should purchase Vesteys out? —Yes. But Vesteys told you-that the works were not for sale.

Mr. Lysnar: Y’es: Their letter to that effect was received on August 30. Do you still think your directors considered the purchase on September 13? —Yes. I don’t think Mr. Nolan ever seriously considered the project, because the money could not be obtained at the ,time. If it had cropped up now it might have been possible to do something. Mr. Lysnar continued to question Mr. Ccderwall until the chairman interrupted and reminded Mr. Lysnar that he could not cross-examine his own witness.

Mr. Lysnar: But I did not call him to give evidence on this at all. Mr. Myers: The position is that Mr. Lysnar called Mr. Ccderwall to give evidence on a certain point. We got from him other evidence that Mr. Lysnar did not want. Ido not object to his cross-examining the witness on that point. Mr. Ccderwall is quite capable of looking after himself. (Laughter.) Mr. Jones: Let him go on. We are gotjing the facts out. Mr. Lysnar continued to ask questions regarding the proposal 1o buy out Vesteys. The chairman: I think you would show good judgment, Mr. Lysnar. il. you leave the question alone. You will only get more answers you do not want. . To other questions the witness said that prior to the erection of tho Waipaoa works there had been some congestion at the works, but this was due to the shipping. Tt was not correct. to say that for several years prior to .19*15 both works had to lofuso stock because of the congestion. There was always a rush in certain months ot the year, and killings had to bo regulated. After 19.16 there was greater congestion, and the works had to refuse non-shareholders’ stock. Witness knew from his own experience that the killings could not be spread over the season, but that stock had to be taken as it came in. The capacity of a works, therefore, was the amount of stock it could handle in, say, a given week. reference to the possible capacity of the works was qualified by the statement that everything depended on the killings being spread over 30 weeks. This he knew to be impossible. The normal killings for the district ho estimated at from 800,000 to 900,000, but the stock had been reduced in the boom period, and largo numbers of store sheep were being shipped,from the district. The district had largo tracts of valuable land behind it, and this was gradually ’being developed. Even if conditions were returned to normal, and with the natural increase which would come, he thought that the two works could carry on the district. Mr. Myers: In any case tho three works would have to carry on until the extra development took place. Mr. Lysnar: It is a question of which works had to go.

Mr. Myers: That is pretty obvious. (Laughter.) Mr. Lysnar (to the witness): Do you think there is any chance of Vesteys putting your company out of business? —Oh, I don’t think so. Do any of your directors think so ? —I am not prepared to sperik for them. Mr. Lysnar continued to put.questions in regard.to the effect of Vesteys operations. „ ■

Mr. Myers: Even a trust, you know, is entitled to justice. Mr. Lysnar: Yes; but what "sort of justice? Is it justice for the Meat Board and the Government to allow this octopus to swallow up a poor little farmers’ company? (Laughter.) Further questioned, the witness said that if all overseas operators but one were excluded from operating in the Dominion it would naturally affect the competition for the works at a forced sale. Of the stock put through the works last season 84 per cent, was on account of exporters and only 16 per cent, was on buyers’ account. Mr. Lysnar: And the figures you put before this Commission were on tho basis op- the 16 per cent, only ? —Not necessarily. I want a straight out answer to that question. Give mo yes or no? —I cannot tell

Mr. Lysnar (heatedly): Will you answer me “Yes,” or “No?” —I am not going ) Mr. Lysnar: Give me “Yes” or “No?”

Mr. Myers: This is cross-examina-tion with a vengeance. Mr. Lysnar: Well, you gave me per mission to cross-examine.

The chairman: But not to treat the witness as hostile.

Mr. Lysnar: But lie is hostile; ho has been absolutely misleading the Commission. (To tho witness): Now give me a straight-out answer. The chairman: Wait a minute, Mr. Lysnar. So far you have conducted your examination in Gisborne in a quick, fair, and dignified manner. I would suggest to you that you should continue on the same lines.

Mr. Lysnar: I will endeavor to do so; but when tho witness takes an attitude like this I naturally get a little heated.

The witness told the chairman that ho could not say definitely that his figures dealt only with 16 per cent, of the stock handlod. Sometimes stock killed for exporters might not lose the identity of tho original owner. In other cases it would merely lie shown in the exporter’s name and the identity of the breeder might, be lost. Mr. Lysnar: You have given figures of the number of sheep I put through your works?—Yes. Those are sheep I put through on my own account? —Yes.

And sheep I sold to an agent would not, bo included in your returns? —No. The chairman; But it would be shown in the buyer’s name, ex Lysnar, would it not.? —That is so.

Mr. Lysnar: But if he buys on the hoof the ex-Lysnar would not come in? —That is so. There are. three methods of buying—on the hoof, on the hooks, and on owner ’s account.

And it is only when it is on owner’s account that the “ex” comes in?— It is then in his own name. If it is bought per lb the “cx’ r Tomos in also. The witness said that if stock was sold at per lb., the killing sheets went to the agent and not to the owner., but, in some cases the owners made application for copies of the sheets. To put stock through Ivniti works instead of Waipaoa would, in some cases, mean two days’ extra driving, and a consequent loss of weight. He did not think it. likely i that the Haiti works were getting all the stock of the Poverty Bay directors that was sold on the hoof.

Mr. .Tones: We know they are not. Mr. Feld, Mr. Witters, Mr. Coop, and Mr. Lysnar have all admitted putting stock through Vesteys. In reference to shipping, Mr. Coderwall told Mr. Lysnar that one vessel could be used in conjunction with other shipping facilities —providing everything was satisfactory. The chairman: We have evidence, Mr Lysnar, that your own shareholders sent stock past your own works because of the delay in shipping. To Mr. Jones, the witness said the congestion at the works since 1916 was due to the shipping conditions occasioned by the war, and by the large quantity of stock sent in for killing. To the chairman the witness said tho reduced rates for the Kaiti works were passed on October 12, 1923, before the sale of the Waipaoa works to Vesteys. At the time it was generally known that Waipaoa works would either close down or be sold to Vesteys. The, chairman: There is a dispute as to the reason for a reduction of the charges. Do you consider it was the result of the contemplated purchase of the works, and the closing down .of the old works? —I should say that influenced the directors.

It was anticipated that the closing down of one of the works would increase the turnover, and reduce the overhead expenses?-—That is so. To Mr. Mclntosh, the witness said the merchants who received commissions from Vesteys gave very little return for it. The merchant merely influenced the stock „through the works, paying the commission, and did practically nothing 1o earn it. Alexander Campbell Steele, sheepfanner, of Tnlumga, called by Mr. Bowen, stated that he held 101 shares in the Poverty Bay Company, having taken them to enable him to secure space in the works. Mr. Lysnar had asked him to take shipping shares, being very anxious that witness should become a shareholder. He informed witness that the shipping was to be kept entirely free from the works’ account. He considered that the shipping department was largely the means of wrecking the company, and that he had lost his shares as a result of the failure of the vessel. He and others had been accused of disloyalty to the works, but they had been compelled to quit their stock in the best market. He had lost heavily on stock put through the Poverty Bay works, and he was compelled to sell elsewhere. He was not at all satisfied with the way the works were being run, and he sold his stock .to Nelson Bros. Even tho directors of tho company sold their stock elsewhere, so small shareholders could not.be blamed for disloyalty. To Mr. Lysnar the witness said he did not put his stock through Vesteys’ works, but sold direct to Vesteys agents. , . At this stage the Commission adjourned until this afternoon.