R. COBBE, LTD.

Bay of Plenty Beacon, Volume 10, Issue 51, 18 November 1946, Page 8

R. COBBE, LTD.

■ LAND SALES VALUER

ACTING FOR VENDORS

TAURANGA AND OHOPE, WHAKATANE

We regret that we must again refer to some of the appalling losses '.being suffered by the business community and the hard-pressed purchasing public through the lack of business experience on the part of Messrs. Nash and Sullivan.

These gentlemen, utterly without previous knowledge of the import .business, have rushed blindly into the purchase of millions of pounds . .worth of merchandise and when confronted by the U.S.A. sellers in particular, were like sheep without a shepherd, but unfortunately the taxpayer paid and continues to pay the shearing bill.

We give for the information of our clients, some extracts from the Government Auditor General’s scathing report on these Ministerial purchases. The Auditor General cannot be dismissed from his office unless by Act of Parliament, and being thus protected, is able to handle these matters with the gloves off, EXTRACTS FROM GOVERNMENT AUDITOR GENERAL’S REPORT ON MINISTERIAL PURCHASES Following are details: — Multiwall Paper Bags For Cement Bags totalling 1,400,000 were purchased in Australia at a price of £30,153. They were deemed" unsuitable. The Golden Bay Cement Company would not buy them. Wilson’s Portland Cement Company bought 655,000,. but at the date of inquiry (October, 1944) it had not paid the account as it considered the price too high. Stocks were damaged by excessive -handling, rats, etc. The Ministry of Supply still has 570,000 bags in stock. Jute Jute to the value of £112,000 was bought in India in 1943. It arrived in hanks (much of it tangled) instead of on cones. An attempt was made to sell it in Australia, as it was unsuitable for use in New Zealand, but the attempt was unsuccessful. Some of it, prepared by the Japanese prisoners of war, has been * used for manufacture.

Flashlight Bulbs

A cash purchase made in the United States ordered in September, 1942, delivered in September, 1943, when private importations were also arriving. Landed cost £37,229; may be sold for £24,033. Two years’ supply. Saucepans A cash purchase from the United "States. As the Ministry and the trade were both importing, the market was flooded. Some of the saucepans arrived without lids and some with two lids for each saucepan. The balance' of the Ministry’s stock of two pint saucepans (70,000) cannot be sold in New Zealand, and attempts are being made to sell it in Australia. Many of the saucepans Tiave concave bottoms, unsuitable ior use on electric ranges. King Tip Steel for Heel Tips 400 tons, in bars, were purchased in the United Kingdom in 1942, being estimated requirements for one year, including anticipated demands for the Armed Forces; 314 tons still on hand, estimated to last several years. Woodpulp Lend-Lease Sold to (1) N.Z. Paper Mills, Ltd., a direct sale. Debit balance in books at June 30, 1944, £270,000. As wood pulp deteriorates, and as company is holding stocks two years old, it is claiming relief. No further action had been taken as at the date of audit’s inquiry. (2) Whakatane Paper Mills, Ltd., originally shown in Ministry’s books as a direct sale, but later changed to consignment. The company pays as the woodpulp is used. Stock held at June 30, 1944, £IOO,OOO.

Calcium Chloride

Purchased in the United States ior Imperial Chemical Industries, Ltd., 633 tons solid and 219 tons flaked, all to be packed in drums. Arrived packed in multiwall paper bags. 1.C.1. declined to accept 357 tons, value £IO,OBO, in damaged containers as the chemical liquifies on exposure to air, and this was taken into reserve stocks at Karariki. Private stocks 'were also available. Thirty-five tons disposed of in May, 1944, but it was anticipated that the release thereafter would be more irequent. 1.C.1. sold 350 tons out of its own stock to Auckland Farmers’

Freezing Company on condition that i.Lnistry stood loss, on evaporation. Claims not yet finalised.

Tinplate (Lend-Lease)

Tinplate'ffis distributed by Gollin and Co. for the Ministry, but the Audit Office 'was unable to comment in detail on the stocks held. On June 22, 1944, stocks held by Government and the trade were stated by the Ministry to be 400,000 boxes, valued at £5 each, and it was decided to reduce future importations to a minimum and to use odd sizes, if possible, to fill orders, even if a loss of up to 10 per cent, is incurred.

X-Ray Equipment (Lend-Lease)

In 1943 the New Zealand Supply Mission, Washington, was asked by the British Supply Mission for New Zealand’s 1944 X-ray programme, and, not knowing that, if a lendlease X-ray programme is accepted it goes immediately into production, the New Zealand . Mission replied that the 1944 requirements would be the same as for 1943. When the actual programme for 1944 was prepared in Wellington it differed from the 1943 one. The Ministry disposed of some of the 1944 supplies which were arriving in 1944, but there is little possibility of immediate sale of the whole surplus. ‘Loss unascertained as supplies not yet costed. Grindery (Lend-Lease) Ministry brought up to 40 tons of hobnails of a wrong size; too long; unsaleable.

Electric Cable (Lend-Lease)

In 1942 the Post and Telegraph Department was asked to duplicate communications systems in New Zealand for military purposes. Orders were placed in New Zealand for 4,300,000. Due to changed condi-

tions, duplication not now necessary. Post and Telegraph Department may be permitted to use this for ordinary maintenance. Seven hundred thousand feet approximately of vulcanised indiarubber cable, orders duplicated in error by New Zealand Supply Mission, Washington. Attempts being made to sell this at present. Slow-moving stock of cable being sold for particular purposes through Public Works Department (quantity unascertained) but debtors not being charged promptly (for example, the Manawatu Power Board lines, erected in December, 1943, not yet charged).

Cotton Shirting or Sheeting (Lend-

Lease)

Some 1,320,000 yards arrived in New Zealand, valued at £70,380. Not suitable and rejected. Sold to United States Joint Purchasing Board for full cost. Being used as meat wraps. Nuts and Bolts (Lend-Lease) Valued £60,000 (partly estimated). Sold in 1943 to Ajax Nut and Bolt Company, Ltd., which paid £20,000 on account. Price disputed by company. No debit yet established in ledger. Copper Cable (Lend-Lease) Seven hundred and forty miles, costing £3O 5s per mile. Ordered as stranded; supplied as solid, type not used in New Zealand. A small quantity taken by air force, and 50 miles by railways as an experiment, but bulk supply appears to be unusable.

Guillotine Plate Shears (LendLease)

Order was placed with the High Commissioner in London for shears for Richardson, McCabe and Co. (on account Cable and Co.); estimated cost, £2580. High Commissioner advised that Machine Tool Control had decided machine to be supplied by the United States, Richardson, McCabe and Co. stated they would not pay more for the American machine than the British machine cost. Ministry inquired from Washington whether the order could be stopped or the machine sold in the United States, but were unsuccessful. A machine, somewhat different from the original ordered in the United Kingdom, and spare parts ultimately arrived; landed cost £27,750 (including sales tax). Richardson, McCable and Co. refused to accept at that figure. Finally sold to Railways Department for £SBOO.

Acetate Fibre Tape (Lend-Lease) New Zealand and Australia were asked by United Kingdom each to supply 1,000,000 fibre boxes of butter. Boxes ordered by Timber Controller. United States authorities advised that acetate tape was the only proper material to seal edges. Boxes arrived November and December,, 1943, but not the machine to affix the tape. It was found that locally-produced tape, much cheaper, was satisfactory. Controller tried to stop order in U.S.A. Was unsuccessful. Tape was imported by Ministry and charged to Dairy Board, £43,769. Timber Controller since took back stock and endeavoured to dispose of it through the War As-

sets Realisation Board but at date of inquiry had again approached the dairy industry.

Khaki Drill

In 1942, 6,165,000 yards various widths imported from United Kingdom and India. In 1943, 9,125,000 yards from India and the United States. A further order from the United States, 1,800,000 yards, cancelled. Stocks held at present total 9,000,000 yards. Estimated surplus after end of 1945, 7,000,000 yards. Other matters mentioned by the Audit Department were: Goods sent to wrong destinations—e.g., molasses diverted from Auckland to Dunedin instead of the Internal Marketing Division—cost £7OO to £BOO (a clerk mistook the word “Division” for “Dunedin”); bright wire held in stores not weatherproof in Auckland, Wellington and Christchurch —cash allowances for depreciation of nail wire, partly caused by this, £9000; faulty packing sometimes beyond control of Ministry—e.g., towels arrived in cardboard bales, bundles, or loose, subject to pillage; goods stored in stores sometimes without caretakers; delay in issuing accounts to debtors; delay in dealing with marine insurance and claims; stores work in textile section consistently in arrears, and delay in proving that lend-lease supplies have been accounted for.

We ask our numerous farmer clients to read this list and to ask themselves why huge losses such as these should be a charge on the War Loans. Last week Mr Sullivan defended the tin plate purchase on the ground that he had now sold the lot, but he forgot to say that owing to wrong sizes having been bought, it was sold at a loss of over £200,000 on the two millions involved.

He also stated that the purchase of 40 tons of hobnails for farmers’ boots was not his fault because they had sent a set of blue prints with the order, but some U.S.A. manufacturer had a line of 40 tons half an inch too long and regarded Mr Sullivan as a suitable man to unload these utterly unsaleable nails on. Until Messrs. Nash and Sullivan took up purchasing, no man in the boot trade ever heard of engineering blue prints being required to purchase hobnails, but probably this intricate job kept one of Mr Sullivan’s staff going for a week.

We are tired of this endless interference by inexperienced Ministers, and above all things, at the intolerable burden being placed on the shoulders of the men and women who have to keep their homes in the face of these endless wasteful and foolish purchases. Let us give one final example of a purchase made by Mr Nash when in U.S.A. He bought 1,320,000 yards of socalled shirting, but it is what is known in the American cotton States as Negro sweat shirting, being similar to a poor quality mosquito netting. This was bought to make shirts for N.Z. farmers, but as it was unsaleable, is now being used to cover, not the farmer’s body, but the meat he sends to the freezing works.

Mr Nash states he is going to run a ‘bank soon, but he will require a very big Bank if he is going to pay these gigantic losses amounting to millions out of his financial institution. P.B.A. R. COBBE.