COST OF LIVING.

Dominion, Volume 5, Issue 1465, 13 June 1912, Page 6

COST OF LIVING.

TRADE METHODS. EVIDENCE BEFORE THE COMMISSION. INTERESTING CORRESPONDENCE. (By Telegraph.-Press Association.) Christcluirch, Juno 12. The Cost of Living Commission resumed to-day. Mr. Arthur Smith (of J. M. Heywood end Co., carriers) stated that twenty years ago the cost of wholesale cartage was Is. Id. per ton dead weight, and Is.. 3d. measurement. The prices now were 9d. and Is. Thero was a free and open market, merchants being able to engage any carrier they liked, i'lio present rates had been the result of competition. Tho wages of .drivers twenty years ago were >t tho rate of Gs. per duy. The same Jmen were now earning Bs. per day. An Express wagon two years ago cost ,£35, now the same vehicle cost ,£55. There •■was - no combination of employers. It "was a caso of every man for himself owing to tho competition of outsiders .who were under no restrictions as to conditions of labour. Drivers worked 47} hours per week for. the weekly wage, and in addition worked .7 hours per week attending horses, but they'were paid for holidays and broken time. Sir." A, 0. Nottingham (representative of J eyes' Sanitary Compound) .stated that •lie did not belong to the Merchants' Association. and sold his goods to anyone. Tho Merchants' Association. wanted him to tariff certain, articles and sell them at a higher price. The negotiations were by letter and by interview. He could produce the letter or a copy of it. Tho request in the letter, ho simply referred back to the association, and told the association to .fix tho matter up themselves, •but he intended to sell tho article at'the price ho was in the custom of selling it.', The. president of the association colled on his principals in London, and endeavoured to get them to sell only to the association, or to appoint the association the distributors in the Dominion. His principals referred the matter to him and ho decided to' go on as lie had been going, and to stay outside the association. Mr. Fairfcairn: If Joyes' fluid had been scaled, who would have paid?—" The public would have borne tho increased cost." Is it within your knowledge that Mr. •Harold Beauchamp, until rec+nfly chairman, of the Bank of New Zealand, chairman of the Merchants' Association of Wellington,' and the head of the firm of Bannatyne: and Co,, called on your principals in London in order to "get exclu|ivc controL of their manufactures in'the Vominion?—'"Yes." ■--■ ~ Cost of: Boots, Mr. 'William 'Williams, boot machine operator, aad vice-president of the New Zealand- Federated Boot 'iYado Workers, stated that twelve years ago under tho log or piece;.system the labour'cost of a .pair of boote was 45., divided up as follows.— 2s. for; benching, anil 2s. 'for -finishing. Tinder the present system the wages ccst would not exceed Is. Gd. This boot would sell for 20s.' The last three years was the only period during the past thirty-five years that he had had constant'employment. He "had no time" for the retail portion of the trade, as most of tho increased cost-to. the public, as far as boots Rre concerned, was due to tho retailers. The Chairman: Please speak of your own knowledge. You are not in the retail trade. Witness: No; but I have experience of its methods,, and I: know that what I say is absolute fact. Continuing, witness said he had seen exhibited in a retailer's window boots which' bore a ticket describing them as "Clarke's celebrated 225.-Gd. ner pair." On examining them ho found them to bo of local manufacture, and to have cost 10s. Gd. There was no local firm named Clarke. The New Zealand worker in eight hours' work produced moro than the British worker in ten hours. The British worker received.-3Gs. per week, and the New Zealand worker 4Gs. Gd. ' To the Chairman: There was one NewZealand factory which produced good work, but stamped their boots "Brockley," "Philadelphia, "British made," or "G'oinmqnwealtn," for no other purpose than' the exploitation of the public. The purchasers, seeing that the boots were branded and appeared to be high-grade American"or British boots, were prepared to pay tho prices asked, • whereas the boots nero . made iu a New Zealand factory. The manufacturers in so stamping their goods were out for business, but it meant that no matter how the New Zealand worker exerted himself he got no credit. Instead of the boot manufacturer being the dominant factor in tiio boot trade, the retailers were the dominant factor. Mr. M. J. O'Brien, boot manufacturer, stated that the previous witness's estimate of tho cost of labour (which did , not include stitching) was not quite accurate. A boot, the wholesale price of which was 155.. would cost for benching twelve years.ago from Is. l()d. to 25., and for finishing Is. Gd. to Is. Bd., or an average of 3s. Gd. instead of 4s. The price nowadays would lie about 3s. 3d., benching being the same, and finishing Is. to Is, 2d. There was no demand for cheap boots. New Zealand manufacturers could compete with the best imported article. Referring to the brands put on New Zealand boots mentioned bv the previous witness, he slated that this was a demand created, by the public, and by the retailer. ■ Butter. Mr. Clias. P. Agar,-secretary of the Tai 'l'apit Dairy Company, stated that his company was a co-operative one, the whole of the pruceeds of the sale of butter, plus working expenses, being paid back to the suppliers. The chairman: What becomes of the surplus produced in the summer?— During the first few mouths there was always a risk,: as the keeping quality of tho butter was unreliable. Onco they got on to reliable butter they kept as much as they could in store, but could, never hold sufficient for local requirements. Tile price of butter was regulated by the price in London, South Africa, and .San Francisco.;: The London'price for last reason averaged Is. per lb. That was en exceptionally good year, and the price obtained was ljd. higher than usual. The price : of butter for local consumption. Was based, on the rates of the amount, of butter ■ in store for. the requirements .of the market. Last winter 'butter was sold locally at Is. 6d. retail, but at that price it did not pay the company, as people could not eat butter at that price, and his 'company had never recovered tho ground then lost. The company kept tho local price of butter at such a price that prevented competition on the part of North Islaiid factories. T.ast winter, North Island' butter was sold in Christohureh at Is. 5d., but Id. per lb. was not the difference in price between fresh and stored butter in winter time. Anyone who is a judge of butter would take stored butter in winter in preference to fresh butter, the last-mentioned possessing food flavours. In winter the companies did not refuse to supply retailers who did not sell at the price fixed. At the present time some retailors were making a butter a "cut" line. I General Labourer's Point of View. Mr. Harry Arthur Campbell, a general labourer, stated that he was appointed by the General Labourers' Union to give evidence. His opinion was that tho in- \ creased cost of living was duo to land i speculation, and to the ever-increasing price of land. No man could get a bouse in Christcluirch worth living in for le=s than 12s. Gd. per week, and a general labourer could not afford that when lie was only earning Is. per hour while at Tho Chalrjnan: What does a general labourer's wages average, allowing for wet days?— About 325. per week. Of this l's pet 1 week goes for rent, leaving 20s. for food, clothing, and other necessaries. He copld assure the Commission that there was n numbtv of lab.Hirers in Christehureli who were li\iug below a fair living. The.v were not living is human beings ought io live, and wero not being provided with sufficient food, Nothing, and shelter. Witness, continuing, suggested that a rcmedv for the r.ise in the cost of living >ras to stop land snrnilatinn. and - the way lo do that was for I lie Sja'.o to to*" the- difference between Ihe paid for land and. the price at which il was <:ilbpeqnentlv Mild, less the coM, of improve--meats, 'There should be a highex land

tax, especially on land held by monopol-1 ists. He . knew of scores of general labourers (particularly married men) anxious to go into the country if they, were 1 assured of a fair living and of getting a comfortable house. They objected U going out to live in barns, as some of them had to do in the past. The Milling Trade. ' 31 r. W. 1!. Gardiner, ilourmiller, of Cust, stated that tho area in wheat in New Zealand this year was roughly onethird less thnn during the previous year. In the milling trade wages had increased from 10 to 15 per cent., niul the hours ot labour had been reduced. . The chairman: Who fixes tho price of vour flour at present?—We are guided a.t present by the New; Zealand I'lourmillcrs jissoqiatiou, of which our firm was at ono time a member, but ceased to be since last October. There is no common understanding at present. The llourmilling industry is iu a most peculiar position. The profit on an expenditure of X 9 i)s. id. is only 4s. Bd. or roughly 2.\ tier cent. Al'tor producing a ton ot flour tho miller gets 4s. Bd. and has to provide oiit of this depreciation of plant, interest on capital, rates and taxes, and other charges. This state of things had obtained since last November, and owing to -these peculiar circumstances millers were not holding their owli. The present conditions were due to several millers breaking away from the association, which had thereupon started to cut. When the Flow-millers' Association controlled his firm they had to submit to the rules of the association, and had^-to.-regulate the output and chargo the prices fixed by the association. Witness, continuing, stated that the loss through bad debts amounted in the Flourmillers' Association to i per cent., which was not so very heavy on ,a turnover, of three-quarters of a million sterling per annum; Uit it .was heavy to a small man. The possibility of competition from Australia steadied prices in' New Zealand, for despite the 20s. duty the much larger places in Melbourne and Sydney could produce an euorinous quantity, and the greater the quantity produced the less was the cost. Tho freight by sailing vessel from Melbourne to Lyttelton was 9s. per ton, the same rate charged by the Union Company between. Auckland 'and Lyttclton. He was. informed that' Adelaide dealers were propared lo land flour in Auckland at 10s. abovo •the present ruling pnee in the Dominion, which was about 30s, below the Australian price. It was customary for Australian flourmillers to dump their surplus into tho Dominion, if circumstances were favourable. Land and Wheat. Mr David Jones, farmer, stated that the price of land had increased very much. . The rate of interest falling had been one cause. Seventeen years ago a farm was bought at .£l7 por acre, money being at 7 per cent. Two years ago the same farm was sold at .£35 per acre, money being at s'per cent. The cost ot farm labour had gone np a great deal. Ho did. not-know, a single article that was increased in price as lhe_ result the inoreased cost of. land. Ono factoi. in the rise in the price of land was that the.quality of-.the stock w.as. greater, lhe. price -of'land did'-riot affect tho price-of-wheat, as would be borne dut, imiiess stated, by figures he handed in. W bust a farmer ho got .£7 for 40 bushels ot wheat, tho product of one acre and a quarter; the 'miller after the ' manufacture,' got flour, bran, pollard, valued at ,18 19=. Jd., and the baker produced bread, valued at £U ss. These figures showed, as far as tho producer' was concerned, that he was producing' as cheaply as he could, lhe export of wheat was steadily declining, despite the fact that the whole of Southland had gone in for grain growing. Iho present year's wheat harvest was the mo.-.t prolific in Canterbury that lie remembered, otherwise they Would have had to import. The.v would have to import next year, as the area was insufficient to meet iocal requirements.' The problem in regard to-wheat growing was insufficiency I of labour. It was sometants stated that the farmers did not pa.v sufficient wages to induce labour to go into the country, | but during the past twenty years tho wages, of farrn workers had been increased 50 per cent. Eighty per cent, of the farmers in Canterbury to-day had been farm labourers, and men who had worked for wages. If sufficient labour had been available at the proper time., potatoes would not have been. over. .£2 per ton. Bacon was likely to be dearer owing to no boy labour being available, tho Government having blocked farmers getting inoTC Sedgwick boys. Five hundred boys could bo absorbed by the farmers of the Dominion. The farmers at present were building houses for men who were going out into t country, but-; more should bo (lone in this matter. Recentlv a Tcmplcton farm of 1000 acres .was settled by the Government with ten settlers, and though the production would be greater, tho export would be decreased because there would be moro consumers in the country. If workers' dwellings were provided in tho country, workers could save on milk, butter, vegetables, and cheese, which represented 37 per ccnt. of the cost of his household. Twenty years ago witness's father sold mutton from his cart at 2)d. per lb. for forequarters, 3d. for sides, and 3!d. 'for legs. To-day, by buying for cash, and taking it from the shop, meat could be bought at the same price. For'wether mutton farmers received 2id. per lb. on the books, and for ewe mutton barely lj-il. The prico of mutton delivered to tho shop of a large butcher ill Clnistchurch had been in 1910, wethers 2.47 d. per lb., ewe 1.17 d. por lb; 1911, wether 2.89 d. per lb., ewe l.Gld. per lb.; 1912, wether 3.19 d. per lb., ewe l.illd. per lb. With the rise in the price at its highest point iu the three years a cheap shop was started, and it dealt largely in ewe mutton, in which there was no competition with the freezing works. In 1912 the pricc was high, as a result of a dry season- Tho year before last- two-thirds of the trade in Christchurch' was ewe mutton purchased at no more than 2d. per' lb. In the difference between the wholesale and retail prices a big cut went to labour. If tho protection on wheat were" removed tho prico of bread would be much higher inside five years. Boots iu his family represented 90 - per cent, more than bread, and the cost of boots was pressing hard on growing families. In a house built in 1897 18J per cent, went to labour, and in 1911 labour took 33 per cent. Land could be purchased within 2{ miles of Cathedral Square for .till per acre. The figures lie had given the commission showed that tho New Zealand producer was producing as cheaply as any producer in the world, and that the price of land did not enter into the question of the increase in tho_ cost of living. As the dairying business" extended probably pig raising would increase. If would encourage farmers to provide dwellings if they got some relief, from the graduated 'tax when they provided such dwellings. In theory farmers got exemption for improvements, but in practice they did not, and at present the more a farmer improved his farm the higher was his taxation. As a practical farmer Ke did not believe it was possible to arrive at the unimproved value of farm lands, and consequently it would be more equitable to tax on the capital value, the unimproved values given by the Government gave a handle to believers in single-fax theories, but there was no justification for such values. Flour and Boots. Mr. G. F. Simpson stated he had been a Ilourmiller for the past ten years, and did not belong to the association, anil never belonged'to it. At the current pricc of flour he had to get his profits out of tho sale of bran and pollard. It cost ss. more to produco a ton of llour than was received for it. Mr. J. N. Dufeu stated that ho was a- bootmaker, who possessed a retail shop, and had been about 20 years iu business. Shop rents were higher than they ought to be, but the shopkeeper had no* option, because if lie went out or complained there was always someone ready to go in. Provided people were willing to live ns they lived 20 rears ago, there had been no' increase in the cost of living with the oxception of increases in the house rent, and meat. The duty should be taken off boots and shoes that could not profitably made iu the Dominion. Soiiie Letters. Mr. G. I;', liowe, accountant for Messr-s. V'tiirbairn, Wright, and Co., stated that he possessed some inturniatiou regarding .the scaled prices introduced by the .Merchants' Association in September last. Ilis principal considered (hat (lie law had been broken by tho New Zealand merchants, who had entered into an agreement lo control the prico of sugar, and his principal had addressed the lollowing lctlcr (o the Minister lor Commerce. Witness read the fust, scnleiu-e of the loiter. Mr. M'Donald: J don't, think this ielttr ■ should be read, seeing I hat proceedings are peudiug against the company.

Tho chairman (to Mr. M'Donald): Tou think it 6honld be handed to us? Mr.-M'Donald: Yes. We might see it. Witness handod in tho letter, and proposed to read on of the 6amo subject addressed to tho then Attorney-General. The chairman: Does it deal with tho sugar monopoly? Witness: Yes, there is somo reference to it. The chairman: Well, put it in also. The letter was not read, but was handed in. Witness stated that' the proof of the allegations made in the letter just handed in was contained in correspondence ho would quote from. AVitness first quoted from a letter to the. proprietors of Coleman's mustard, in which his principal wrote:—"Our reasons for having refused to accept tho selling conditions iu New Zealand for your proprietories are: (1) That the wholesale prices are too high. (2) That no protection is given to the retailer. (3) That in view of the fact that yon supply certain retailers on the same terms us wholesalers it is obviously unfair that traders in competition with these favoured retailers should be compelled to pay 12V per cent, more for the same goods. Coleman's D.S.F. nmst'iril, Mb. and lib., costs Is. 2d. per lb. in store, Christcluirch and Dunedin. Scale rates, Is. 'id. per lb." Further on. the writer trusted that Coleman's would see their way "either to reduce the profits or permit any retailer ordering a stipulated quantity of your goods to buy direct oil equal tonus with other retailers. II you cannot see your way to fall in lyitn our suggestions, we have no alternative but to accept the selling The tariff was submitted by Coleman's in a communication dated August U, IJII. Witness stated that the scaled price (net) for Coleman s niustard in boxes was lGs., .and his (inn's price before the scale was introduced was Its. 5d.. starch 475. Gd., and 4as. bd. per cwt. The manufacturers prices of these articles had not been altered, but there had been a reduction in t.io duty On mustard.' Robinson's groats (in less than six dozen, lots and more than one dozen) sc?lc 7s. Gd., liis firm's price, 75.; Ifobinsotfs barley, 7s. Gd. and G«. 10(1. On October 14, 1911, the proprietors of Neave's Food wrote to his principals: "Having received complaints froiu New .Zealand merchants as to underselling of Mr. Neave's Food by the retail trade m that Dominion, we have dccidetl that the selling price to the retailers be fixed at 9s. Gd. per dossen, less the ordinary terms allowed them, and tlius^ensure the merchants a fair profit. We have therefore agreed that from the commencement ot the year we can only supply direct to merchants who are willing to comply with these terms, and ill receiving any orders hereafter, we shall assume that the merchants agree to tiiis condition, which we need hardly point out is to their mutual benefit.'' An invoice attached showed that 150 dozen Is. Neave's Food was charged at 95., less 20 per cent., and less 2\- per cent. Witness stated that before" the duty was removed, the wholesale prico of Neave's Food was between 9s. 7d. and 10s. The scale price at present was 9s. Gd., which-showed that practically the reduction of duty had made no difference in price to the retailer. Mr. Fairbnirn: The general public has not 'benefited?— No.

To whom has that duty gone?—To the merchants, who have kept it. They have kept' that in addition to tho profit made before?— Yes; that is so; aiul tliiS profit made before tfas not so, great as it is now.

Witness then read correspondence regarding "Sapon,"i the (New Zealand), agents for wliich, on November 3. 11)11, regretted that they could not fulfil an order for Christcluircli, "without breaking current contract?, which wo trust yon will recognise renders our doing so impossible. There is a tariff for sapon in Christchnrch which we would ask you to sign. "When this is done it will give us much pleasure"' to send on your Christchnrch orders. The tariff at present operative in Christcluircli is, in our opinion, too high, and does not leave sufficient profifr to retailers. It is probable that n tariff .will be adopted for the whole-Sof the Dominion which will deal equitably with all concerned." "Witness stated that the scale price for Sapon Gd. packets, in case lots, was 51s. Gd., and his firm's price was 51s. The smaller line 225. Gd. and 20s. Gd.

Witness then read a letter to his principal from Messrs. .Tas. Kciller And Sons, Ltd., dated London, August 4, 1911. It stated: "Wo .have been recently compelled to take stops to prevent the persistent cutting of our marmalade and conserves in New Zealand, and with this end in view we have effected an understanding with the Merchant Trade Association of New Zealand, which comprises all tho foremost and_ most influential wholesale distributors in Now Zealand, by wliich we agreed to decline to accept indents, cither direct or through London indent agents, for other than members of tho association. We can assure you that this action is taken solely in our mutual interests, and has been strongly advocated for some considerable time by all tho larger distributing houses. We appeal with confidence for your support by requesting you to disclose the name of the indentor when ordering, which the circumstances as explained above compel us to have knowledge of: Needless to mention, we wish this information simply to satisfy ourselves whether tho firm are members of (he association, and for no other purpose." The proprietors of Van Houten's cocoa wrote from Wees, Holland., on August J, 1911: "We regret to have to bring to your notice a complaint which has reached us. It comes from New Zealand, and relates to one of yonr customers. Messrs. Fairbairn, Wright and Co., of Dunedin, Christchnrch, Wellington, and Auckland. Members of the wholesale trade out thero are complaining to us that this firm lias adopted a policy of cutting prices, to the detriment of the trade generally, and we have been approached with the object of getting the firm in question to adopt the ruling prices for Tan Houten's cocoa, instead of underselling. We suggest that you writo to them, and endeavour to get them to conform to the trade in tho matter of the price for Van Ronten's cocoa, as by underselling, a state of things is created which ends- to tho disadvantage of all concerned in the trade. We trust yon will bring about the desired result and wo feel sure you will c-o----operato with us in the matter as wo endeavour to inaintaiu prices as much as possible in the interests of both wholesaler and retailer." Witness (continuing) stated that' his principal had forwarded an order to tho British Empire Trading Company for 11 ca-ses of tobacco and cigarettes for shipment to Christcluircli and eight for Dunedin. 'The Dominion representative of tl'ie company on October 9, 1911, after acknowledging receipt of tho order, added: "We beg to state, however, that we are not at present opening any new accounts and therefore have not, entertained your order." Mr. Fairbairn: What was the inference drawn from that?—" That it was through the operations of the Wholesale Merchants' Association." Witness (continuing) stated that the prices of galvanised hollowware. had been recently scaled with the cffect that thero wos a largo increase iu prices. An eleveninch bucket was increased in price about 20 per cent. The old price was 10s., less 10 per cent, and the present ouo 15s. 9(1., less varying discounts, thero being a I sliding scale with a maximum of 33 1-3 per 'cent, and 5 per ccnt, and for ordinary traders 20 per cent and 2J per cent. 111 - . Fairbairn: Who gets tho maximum discount:-'—"The hardworo people for quantifies of .£50." Continuing, ho stated that his principal had issued a circular informing the firm's clients that tho firm was arranging to import galvanised hollowware at prices much less than those quoted by New Zealand manufacturers. Mr. Fairbairn: What is the general effect of these advances? Who gains bv them, when goods are scaled?—" The Merchant gains by them. They are not passed on to the retailer at all." i'ou know a number of line.s swiled that are imported by retailers at exactly the same price that is paid wholesale?—" Yes, the public ale paying two profits, one to the wholesaler and Hie other to the retailer." The Commission then adjourned. .