TANNERIES CASE UNDER REVIEW.

Star (Christchurch), Issue 17756, 28 January 1926, Page 8

TANNERIES CASE UNDER REVIEW.

CHARGE OF PROFITEERING WAS MADE 3Y MINISTER.

(Special to the “ Star.”) WELLINGTON, January 28. Before the Woolston Tanneries Commission William George M’Donald continued his evidence in regard to the operations of the Board of Trade. The witness made it plain that there were three conferences prior to the removal of the embargo. At one of these meetings suggestions of profiteering were made by tanners against tanners and bootmakers, principally tan-

Witness referred to the Board of Trade Act of 1919, which gave the board extremely wide powers. Sir John Findlay: It was an extraordinary Act. It even gave the board the right to regulate my fees. (Laughter.) Sir John Hosking: And salaries. Sir John Findlay: Yes, and salaries. The witness: Inferentially it did away with the Legislative Council, but that is not generally known. Suggestions of profiteering against the \V oolston Tanneries were fairly frequent at that stage, said the witness, but investigation revealed that there was no over-charging on the part of the company. Following the first two conferences, he was of opinion that the embargo should be retained, and that that would be done, but at the third conference held in the Prime Minister's room it was evident that the Government had changed its policy in regard to the embargo. They were bent on the removal of the embargo, but were still in favour of a standardised boot. At the time Mr Ollivier undertook to assist in the standardised boot scheme. He knew that the Government s policy was to remove the embargo. Sir John Findlay (to witness) : So far as the removal of the embargo is concerned, the Woolston Tanneries have no cause for complaint. Sir John liosking: Is not that for me to decide ? Replying to Sir John Findlay, the witness said that when in Wellington the Board of Trade met every day. Sir John Findlay: You did not offer Ollivier any inducement to carry Although you preferred him to carry

Owing to the. action of the board, notwithstanding the removal of the embargo boots did not go up commensurate with the price of hides. Hides advanced 100 per cent and boots did not go up more than 66 2-3 per cent. If there was an increase of 100 per cent in leather, he would expect a 100 per cent increase in the price of boots. the time of his conversation with Mr Ollivier he did not expect a slump. As a matter of fact, he did not think the slump occurred in New Zealand in 1920. He thought it did not commence until 1921. Mr Myers: I think, sir, that in the Supreme Court action you said that you would have to take judicial cognisance of the slump from September 1920. Sir John Hosking: I may have done so. I know no mortgages extension cases. I have to take judicial cognisance of the slump. As a matter of fact, some of the highest prices were paid for land in 1920. Sir John Findlay: The price of leather slumped towards the end of 1920? Witness: Yes. He expressed the opinion that no matter what course the Woolston Tanneries followed they would have lost money. Sir John Findlay: It is conceivable, I think, that they would not have lost if'it had not been for the collapse of the American market?—That is quite conceivable. There was no promise on your part to see Mr Ollivier through?—No. No indemnity or guarantee was offered? —None whatever. The Board of Trade never contemplated any indemnity*. Sir John liosking: If it had not been for Mr Ollivier’s offer the standardisation of the boot scheme would have gone by the board?—Absolutely. Sir John Findlay; It did go by the board anyway. Sir John Hosking: Yes, but the fact remains that it was a scheme which the Government was anxious to carry through. Sir John Findlay: If Mr Ollivier, as a business man, had agreed to carry out the scheme and had said to the Government, 'lf I lose will you indemnify me against loss?’ do you think any responsible Minister would have agreed to it? Witness: Why not? It has been done in other cases. Sir John Findlay: I am coming to that. Those cases were entirely different. Proceeding, witness stated that the suggestion was made by one of the Ministers that Woolston Tanneries, Ltd., should be prosecuted for profiteering, but he (witness) declined to have anything to do with the prosecution. Sir John Findlay: Have you any record of that suggestion by Mr Lee? —I did not say it was Mr Lee. Have y°u any record from any Minister?—No, the suggestion was made in the course of a conversation. During subsequent cross-examination Mr M’Donald stated that he was empowered to make any arrangement with Ollivier, and any arrangement he made would stand. Sir John Findlay: You, in fact, were the board? Witness: Well, there’s no use being modest about, it; I was the board. And any decision of yours bound the board? Yes, of course. I want to make it plain that I had the assistance of very capable officers in this particular business. I had the whole-hearted support of two other members of the Replying to Sir John Findlay, the witness said that, as far as he knew, all tanners experienced a bad time owing to the removal of the embargo. Other tanners had to come into line with Woolston so far as the charges were concerned. Sir John Findlay: If Woolston Tanneries had refused to carry on, there would have been a famine of New Zealand leather? Yes. of New Zealand leather, but of course there would still have been importations. Other tanners did not have difficulty in getting hides? Oh yes, they did. They should not have had as much difficulty as Woolston. How was that? Because they‘did not have such large quantities to buy, and because they did not have, to contend with a feeling of antagonism. Referring again to the. standardised boot. Sir John asked the witness if it was not a fact that that scheme was aimed at relieving the public from the effects of the war. Sir John Hosking: Not so much of the war as of profiteering. In reply to Mr Myers, the witness

said that Woolston Tanneries suffered a special loss which other tanners did not suffer.

SIR JOHN FINDLAY OPENS CASE FOR THE GOVERNMENT.

Opening the case for the Government,. Sir John Findlay' said that the withdrawal of the first claim had eased his task. He had thought that the main ground of the petitioner would be the removal of the embargo, but now he had to meet what was practically a new case. Ollivier would have to show that he had a justifiable expectation that the Government would come to his assistance and relief. He submitted that that expectation could not have existed in Ollivier’s mind, as Mr M’Donald had sworn that he had offered Ollivier no inducement to carry' on and stabilise prices. In none of the conversations with M’Donald had Ollivier referred to the possibility of receiving compensation. The whole matter was a commercial one, and should be regarded in a commercial manner. Sir John liosking said that the analogy was not altogether a good one. There was surely' a difference between negotiations with the Government and those between business people. The Government in the present case might have re-imposed the embargo, for instance. Sir John Findlay: Say a man contracts with the Government and sustains loss. Is he entitled to compensation from the Government? Sir John Hosking: Well, that, has been done. Sir John Findlay: Then every man who makes a loss in dealings with the Government, is-entitled to compensation ? Sir John Hosking. Not at all He added that, he did not intend to look on the case as a business one. Sir John Findlay submitted that Ollivier was not acting as a philanthropist, but, was acting on motives of commercial profit.