CEMENT ALLEGATIONS.

Star (Christchurch), Issue 16571, 2 November 1921, Page 10

CEMENT ALLEGATIONS.

SITTING OF COMMISSION. (Per Press Association.) WELLINGTON, November 1. The cement inquiry was resumed today. Mr Perry, for Mr R. Masters, M.P.. aid that he had consulted the SolicitorGeneral, with the result that they had agreed upon the addition of a. sub-c.-iauee to the order of reference. Mr Justice Sim said that he could not •idd anything to the order of reference. If evidence on the point desired to be incorporated was put in and not objected to it would meet the case. Mr MacGregor and Mr Myers said that they wc d not object to anv evidence of the kind, and Mr Perry cxnreesed himself satisfied. Mr Perry said that Mr MacGregor had .agreed to the extension of the ' third clause to cover the phrase “ in restraint of trade.” Mr MacGrego'- said that this was not fairly stated. The agreement was obviously in restraint of trade, and it was j for Mr Masters to show that it was illegal. Mr Perry said it had been v.„y ' difficult for his ifide to obtain evidence because people who were the parties affected were not keen to give evidence as they were dependent on the other two companies for cement supplies. Still, he hoped to produce such evidence as would conclusively satisfy the commission that an agreement that was in restraint of trade wa3 illegal and that these companies might take advantage of the acute shortage of cement to start unreasonably high prices. Further, he hoped to show that the Board of Trade in authorising an increase had acted improperly and with a lack of judgment. The first witness called was Gerald Fitzgerald, civil engineer and deben-ture-holder, acting in the interests of absentee debenture-holders in the Golden Bay Company. He said that a meeting of debenture-holders appointed a committee after the agreement was signed and obtained legal advice. They feared that the- property was i deteriorating and goodwill was being lost, so that if the agreement held for twelve months or longer the business could not lx? picked up again and would get into the hands of rivals. As the Wilson Company took over their bags even if the agreement terminated it would require fifteen months to start business again. The company was being strictly bound as regarded reorganisation. Witness characterised this •ns an outrageous clause. They read it to display an intention of closing the works and imposing conditions that would prevent them ever reopening. In reply to counsel witness said that the debenture-holders regarded the agreement as ruinous to the Golden Bay Company. It looked as if they had walked into a trap. Asked what benefit th© shareholders were to get out of th© agreement witness considered they were anxious, or some of them, to make the public pay interest to the debenture-holders and escape themselves, but he admitted they were liable to the latter for £40,000 of uncalled capital. Mr Myers asked witness whether it was not a fact that Mr Thomas W ilson, one of the committee, had gone to Mr Elliot, who on behalf of Wilson’s Company told him the latter company would not object to th© re-opening of th© Golden Bay works at any time. Witness said lie believed something of the kind was said. It was before Mr Masters brought his charges. So that Mr Elliot wa 8 quite prepared on behalf of his company to see the works re-opened notwithstanding the agreement ?—1 could not go so far aa that. I wish to draw a distinction between what Mr Elliot told Mr Wilson and what the real facts may have been. Mr Myers : Draw any distinction you like. Witness: I did not believe it. I could not conceive that a company that was willing to pay a royalty of 4s a ton to close works would be willing next day to see them re-opened. Suppose Elliot at the outset had not desired th© agreement, but merely entered into it because it seemed to be helping the Golden Bay Company, and not injuring his own, would you still say you would not believe him ?—1 would find it difficult to understand the fact to be so, in conjunction with the language used in the agreement itself. Mr Perry: When you received a telegram from Mr Masters on April 28 there was still a market for cement?— Yes. If you were n director of the company you would not have entered into this agreement without further considers tion ?—That is my conviction. Robert Herson, stores manager of the Public Works Department, produced a. statement showing that the Department. ordered 000 tons of cement on January 13, arriving on May 12, 600 tons ordered on the same date arriving June 24, 1000 tons ordered on January 24 arriving on Juiie 24. England and Belgium supplied 1000 tons each at £lO 6s 3d and £9 8s 9d per ton c.i.f. paid. Comparing prices about the time of arrival the price of New Zealand cement at main ports wag between £9 and £9 5s per ton. It was purchased by the Department at the works at cost plus transport. Thus, for instance, the Auckland nrice might be lower than W ellington. The higher imported price would average a difference of 15s per ton greater than local cement. There was no shortage of cement in New Zealand at the time and the Department was inundated with offers of cementIho price paid by the Department was fixed by the Board of Trade. To the Solicitor-General: The cement ordered was urgently required. To Mr Myers: Conditions had changed. There was an oversupply of cement in June. ’ rh " K°y«l Commissioner: What was the cause of the change? Witness; Imported cement did not become available until December 1920. .Arthur Richard Masters, secretary of the farm of Masters, I.td., since 1915. said that the price of cement at the corks was £6 5s in December. 1920. and ~i 1/b after Januarv. it wig on April 23, 1921, that they were advised that cement had dropped by 37 s a ton Iho advice came from the Golden Bay I Company. r l hat was Is more than the rise authorised as from January 1 Some time after May 11, when they applied for 1500 tons, the company booked 1100 tons and sent 900 tons. Mr Perry: Do you remember how many tons of cement you had in hand when you received notification of th© drop in prices? Witness: About 120 tons. Mr Perry: W hat was the state of the demand for cement at that time ? W itness : A good demand. Mr Perry: Did you have any difficulty in. disposing of th© 1000 tons you ieeeived from Golden Bay?—No difficulty. Then at the timG you were informed Golden Bay was closing down, there was a good demand for cement?—Yes. Witness said that at the time when the works closed down there was a good demand for cement in Taranaki. To Mr MacGregor: His brother, Robert Masters, M.P.. took no active part. in the business of Masters, Ltd., since entering Parliament. He was not a member of the Taranaki Cement Distribution Committee. If the letter referred to hir? brother a member of

that committee it was a mistake. It was witness who was a member. Mr Myers asked if Mr Perry intended to call Mr Masters, M.P. Mr Perry said that he had not mad© up his mind. Mr Myers: Can you tell me how much cement you received from the Golden Bay Company from January 1, 1920, to the end of April, 1921? Witness : NoMr Myers: Then I will tell you. It was 300 tons. You were paying for that £7 12s per ton?—That is true. What price were you selling it at that time?—l could not say. What was the freight?—Thirty shillings a ton. What was the usual freight?—Twen-ty-five shillings. In January were you not endeavouring to get the Board of Trade uo give you a higher profit than what you had before?—l don’t know that we were, but I know we were not getting as much out of cement as we were before. Were you distributors in Taranaki during December, 1920, and January, 1921, endeavouring to obtain an authorisation from the Board of Trade to obtain an increased profit, not an increased percentage, an increased nrofit? Witness said he could not say what quantity of cement Masters and Co. disposed cf in the year. He said that they did not make as much profit when Gelling Wilson’s as when selling Golden Bay. The Commission will resume to-mor-row.