PRICE INQUIRY

Waikato Times, Volume 126, Issue 21039, 15 February 1940, Page 14

PRICE INQUIRY

WHAKATANE MILLS examination of manager ESTIMATES OF OUTPUT (By Telegraph. —Press Association) WELLINGTON, Wednesday The Price Investigation Tribunal’s hearing of the Whakatane Paper Mills’ application to be allowed to increase prices was continued this morning. Dr. N. A. Foden, for the Crown, questioned Mr H. A. Horrocks, managing director of the company, about items in the capital account of £536,000. Mr Horrocks said he had to go to Sydney to a board meeting at the time of the Government officers’ visit to the mill, but he told his officers before going to give the Government officers every item ot information they wanted to see. The Government officers told him themselves that Mr Brown, the company’s secretary, had been very helpful. If the Government officers did not get all the information they wanted at the mill it was their own fault. At Dr. Foden’s request steps were taken to have all accounts which made up the total of £586,000 sent to Wellington, also wages accounts. Travelling Expenses Mr Horrocks admitted that there had not been the co-ordination between the engineering officers of the company there might have been. He had now been placed in supreme charge. Dr. Foden: You were allowed travelling expenses in addition to your salary? Mr Horrocks: Last year. Dr. Foden: I am informed they amounted to £lsoo.—Last year was an exceptional year for the company. I must have visited Australia at least half a dozen times, but our Sydney office has now been practically closed and it will not be necessary to go over more than once a year. Our chief expense is trips to Wellington to see Government officials. Dr. Foden: Your estimates as to the output of your mills have varied, have they not? In 1927 you estimated the output at 20,000 tons, in 1939 at 15.000 and in 1940 at 10,000. I put it to you, your mill can turn out more than 10,000 tons.—lf we can turn out 12,000 tons this year we will consider it a good year. Cost of Establishment Continuing Mr Horrocks said the company had estimated they would have to find £360.000 to establish the mill, but increased ccsts had brought this up to £500,000. Dr. Foden: Do you suggest that at this stage manufacturers and the public should have to pay for the mistakes of the company’s technical advisers? Mr Horrocks: Yes, I do suggest they should have to pay for the mistakes. as we have a very fine plant at Whakatane.

Dr. Foden: Do you suggest that as a result of the initial order'you have received from Australia there is a prospect of a good trade being built up?—Yes, as there is a scarcity due to the c bsencc of Swedish board. We are trying to get our product on to the Australian market and do not expect a profit on the first order. A New Zealand firm asked us to make a trial lot of 50 tons, but we refused, as we were concentrating on a Hamilton order.

Dr. Foden: Did you ever have to stop manufacturing because you had run out of coal, wood or lampblack? Yes. It only needs a short stoppage at Huntly to cause a shortage of coal. On one or two occasions our steamer had mishaps and there was a shortage of wood. £50,000 in Freights Dr. Foden: You estimate that next year you will pay out £50,000 in railway freights and £12,000 in shipping freights?—Yes, that would be on both inward and outward consignments, about 67.000 tons of cargo. Dr. Foden: There has been delay in deliveries at times. What has been the cause of that?—Simply that our customers have all wanted their orders supplied at the same time. The hearing will be resumed tomorrow morning.

SALARIES OF OFFICERS MAINTENANCE EXPENDITURE DENIAL OF REDUNDANCY (By Telegraph.—Press Association) WELLINGTON, Thursday The tribunal today resumed the cross-examination of Horrocks in the Whakatane Paper Mills’ application in connection with the salaries paid to administrative officers of the company. Horrocks said that Brown, secretary of the company, was previously his partner in a law office. When Horrocks was appointed managing director of the paper mills he offered Brown the secretaryship at £IOOO a year. The partnership was dissolved and Brown went to Whakatane. Witness said he had scaled down his own salary but did not think there was ground for reducing Brown’s. The services of Brown, Wright (the accountant) and Langton (cost accountant) were all indispensable. There was no overlapping and no redundancy. Under £SOOO a year was being spent on the maintainance of the company’s forests. The amount last year was £4439, including depreciation on loggoing equipment. The whole operation of making firebreaks and roads was done by three men. Expenditure at the mill in producing cardboard and all operations tied up to it was £250,000 a year. Therefore to suggest that some of the amount of the salaries paid to administrative officers should be allotted to forestry did not make sense to him.

Questioned about complaints from shareholders, he said the only complaints were about not yet having received their interest.