THE MIDDLEMAN.

Dominion, Volume 5, Issue 1534, 2 September 1912, Page 2

THE MIDDLEMAN.

AN AUTHORISED STATEMENT,

CASE FOR MERCHANTS' ASSOCIATION. Mr. Harold Beauchamp, president of the New Zealand Merchants' Association, makes the following statement in reply to the Cost of Living Commission's references to tlio association: — "We declined to recognise the Commission as a tribunal capable of giving fair, unbiased, and impartial consideration to the evidence submitted to them by members of tlio New Zealand Merchants' Association. It was in their opinion useless to submit their evidence lo a tribunal which was not expected to give it fair cunsideration. Mr. Fairbairn, one of the members of the Commission, has, we contend, been in avowed hostility to the association. We allege that Mr. Fairbairn possessed a strong bias against tho association and its members, and could not, wo submit, exercise that impartiality in considering and judging upon their evidence which the association was entitled to expect, and without which the inquiry would have been useless and a farce. Furthermore, tho association considered that a majority of tho other members of the Commission had had no commercial training or any particular knowledge of economics.

A QUESTION FOR ECONOMISTS. "The order of reference recognised that the subject was properly one of economics, and as such demanded that the Commission should'be'composed of men who had had a wide commercial experience, and who had some knowledge, at least elementary, of the principles of economics. It is submitted that a majority of tho Commissioners were bo manifestly lacking in these necessary qualifications that it was impossible that tho conclusion arrived at by them would be of any value in determining tho causes of the alleged increased cost of living, and what action, legislative or otherwise, should be tnken io bring about a rednction of such cost." Mr. Beauchamp observed that "It is a significant fact that the retail grocers who in their evidence given before tho .Commission, complained of the hardships inflicted upon tho retail trade by tho Merchants' Association, have in almost every case been customers of the firm of Fairhaitn, Wright and Company, of which firm Mr. Fairbairn is a principal. . It is also noticeable that Mr. Fairbairn led all tho evidence adduced by these witnesses, and is, so far as the press reports shows, the only member of the Commission who questioned his own accountant. .

MERCHANTS' SILENCE JUSTIFIED. "It rnust be plain to all reasonable men that the Merchants' Association and its members could not recognise the existing Commission as a fair or impartial tribunal. Besides, they wouldhaye stultified'themselves by giving evidence before them, and-submitting their case to such a tribunal. The Merchants' Association and its members have nothing; to conceal, .and before an impartial'and competent tribunal would have been prepared to give such' evidence and information as was in their power relating to the prices of articles of food, etc., extending over a long period of years. . . ! •

WHERE PROFITS COME FROM. . "So far as our profits-go,- they are by! no means largo if derived solely from tho goods department. The profits of this department are, in fact, infinitesimal: Ofcourse, (ho gieater tho turnover, • the greater the aggregate of profits. Thot magnitude of the turnover depends s upon the energy and capacity of the particular l firm. Tho important fact, too, tias to be considered that most of the merchants of .the Dominion do not confine- their attention wholly to -handling merchandise. That only forms one of several ■ departments. They havo shipping, insurance, and other agencies, and also - the execution of orders for primary products. Speaking for my own arm (W. M. Bannatyno and Co., Ltd.), I may say that if we depended entirely on tho profits which we make from the sale of 'merchandise we would be out of business in less than twolvo months. I think you may take our house as typical of most of thoni. The goods department is valuable to a certain extent, inasmuch as it dovetails in with the genera' business.

A NECESSARY FACTOR. "It is maintained that the wholesale market is, under the existing conditions of trade, a necessary factor in tho distribution of commodities. The services rendered by the wholesale merchants are efficient, and rendered at a cost which competition amongst themselves has reduced to a The merchant carries large- stocks, allows a certain amount of necessary credit, and maintains a staff of clerks, travellers, and sloremen. The net return, to a merchant in New Zealand on' his turnover does not exceed 1 per cent.j and tho net return on the capital emploved by him does not exceed from 7 to 8 per cent. Such a return cannot by any means be regarded as excessive. The'mercharit stands in a very different position to the indentor. who does not carry stocks, or, if. ho does carry stocks, "only >to a very limited extent. Moreover, except in very few instances, the indentor does not employ travellers, and his staff is of the very slenderest. His goods are supplied practically only to those who can pay prompt cash, and if the whole businere of New Zealand were pnt on this basis it would mean that at. least 80 per cent, of the Tetail traders would bo forced out of business and only the larpe strong firms could bono tn survive. The effect would immediately bo to vest a iiuge monopoly 111 foodstuffs.

A VLVA VOtt TAIUVF PRICKS. ■ "The manufacturer of Roods, whether in England, New Zealand, or elsewhere, finds it essential io his business that lio should prevent ruinous competition in the prices at which his goods arc fold. He finds that if goods aro sold at unfairly low ' prices with a view to attracting business in other lines, which is the usual motive for this line of action, the sale of his manufactured articles will certainly decrease and it is manifest run a great risk of being forced out of the market in all countries where they aro in use. The Merchants' Association and its president hold that it is essential, therefore, in the interests of the manufacturer's business that his goods should l>e sold by wholesaler anil retailer at a price yielding a reasonable profit and so prevent such goods' from being forced out of the market. The evidence on this point before tho commission was conclusive. Similarly ■ the association in fixing a tariff price for certain lilies was actuated by the., same reasons as the manufacturer. The association felt that unfair and ruinous competition was not in the interests of the public, and did not in the long run result in the cheapening of prices to the public. Such competition, too, was liable to lie of infinite hardship to those merchants wliose capital was not sufficient to stand the strain'of continued loss from year to year.

RENTS, BOOTS, AND CLOTHES. "Rents, boots, and clothes aro unquestionably commodities a port from tho articles -handled by .merchants which have largely increased in price of late years, At the saino time, I may be permitted to point out that I have been speaking only as a merchant and as president of t'lie Merchants' Association. . "As to whether rents and tho prices of clothing and boots have increased, and added their quota to tho public burden, and as to whether tho Commission sufficiently stressed inquiry on the causts for increase under these headings, the most activo member of tho Commission was Mr, Fairbairn, and he has expert knowledge with regard to the values of groceries and food products generally, and ho confined his questions to information. hearing upon .matters with which he was most familiar. Tho evidence which was tendered by those witnesses who were .customers of Fairbairn, Wright, and Co. related almost exclusively to Colman s mustard, Keiller's marmalade, and Van llouten's cocoa. Now, statistics for the Dominion of New Zealand for tho year 1910 give the following particulars as to tlio value of the imports of these lines:— Mustard ! 13,194 Infants' and invalids' food 10,248 Cocoa 58,HW Jams and jellies II.SSi A total of 103,025 "This total comprises all brands of the items mentioned, and therefore includes the brands upm -which the several witnesses were examined. The population of New Zealand in 1910 is stated to have been 1,002,678 persons, the average "nunibor of persons to a. honshold 4.82, .a total number of households of 208,002, approximately equal to a consumption of tha above commodities of 10s. per annum per family.

"l'he cost of living has been, or may be, increased by tho fact that in home lines H or 15 ounces have been given to the pound and sorno 'dozens' Jiavo been 'tens,' and short-weight, spread over a year, would amount to a considerable loss to tho consumer,' but I do not think short weight—i.e., 14a?.. or 15oz. to tho pound inipackoted goods purporting to be full IGoz.Ho the pound—lifts had anything to do with increasing tho cost of living. The • practice of short weight in such goods-is not at all general. I believe it is the desire of the merchants individually and as a wholo to supply goods which profess to be, and actually are, what they fire represented to bp in respect to both weight and quality." ■Mr. Beauchamp furnishes_ particulars gathered by the association in Auckland, wiiich show the following rises in the prices of loeallv-produced "necessaries of life."... They shpw the following advances per cent, on prices ruling ten years ago; Bacon 25 per cent, dearer, hams 20 per cent., cheese 20 per cent., eggs 10 per cent., butter 10 per cent., potatoes 50 per cent., onions 50 per cent., oatmeal 50' per cent., flour 10 per cent. "There can be no doubt," Mr. Beauchamp says, "that there has been an increase in the price of the primary food nroducts produced in the Dominion, such as butter, meat, and cheese, but the increase in the cost of these lines is entirely the result of the high prices ruling in the Home markets, nnd the improved quality of the produce. The price of these staple lines of food products in New Zealand is determined not bv the local market, but by the conditions for the time being prevailing, in the English and European markets, over which merchants in New Zealand had no control and could exercise no influence.

HIGHER STANDARD OP LIVING. "If is also clear that a further increase in' the cost of living is duo to the higher standard of living wbi'ch has obtained in New Zealand, in common with tho whole of the civilised world. Personally, I attribute the increased cost of living, in a few words, to (1) rates of wages of workers; CI) a shortening of the hours of employment; (3) diminished output of work as compared with former years; and extravagance characterising A Llj classes of tho community. Whether it is for tho good of humanity generally or not I am r.ot prepared to say. On the other band, I am quite prepared to admit, that the conditions of life are much more pleasant to-day than they were a quarter of a century ago.' "With regard to the contribution of the members' of the Merchants' Association to tho pav roll of New Zealand, the members of it (and-tlicm only) employ <00 married men 1102 single men, and pay for salaries rikl rii annual sum amountiiig to .1304,109.

RANGE OP PRICES. ."The following table lias been compiled bv professional, accountants from the books of a well-known Wellington firm, and shows tho range of prices of, such goods as the members of the association handle for the year mentioned. Tho prices are those charged by merchants to storekeepers. Market fluctuations have to be taken into account in the consideration -ot tho table:—

Hi A HTl /Si fit f^ HA V 6 0 o 8 ? 0° 11 J l fc 0° Ik'l l h 8 I » Add. Tart -.-.lb. - - JJ • J « » J ? « \ J \ °„ J I B^1H!N!H!UMiniH.!| hi j K ;.»« « n o n «i * »»» «.» o i2 . Clothes 5 5 ? § § t 3 n o 1 31 0 1 31 0 1 31 0 1 4J 0 1 4 Cocoa, rrys ... ; S 1 n r 4 3 0 3 4 0 3 9 0 J 4 (I 3 3 0 3 7. 0 3 2 Cocoa. noutcli B ... o 4 8 0 4 3 0 0 6 . 0 0 53 0 0 51 0 0 51 O O 5 Cornflour,. B.ail«IP. ° 07* »■ " ' „ „ ,i o 0 31 0 0'31 0 O 3 0 0 23 \0 0 JJ cornflour.jnd qual. - o 0 5 ° J 3 4 I 6 0 1 2, 0 0 11 0 0 111 \0 0 9 Cream Tartar 0 1 7 0 1 9 0 1 » ■, M 0 0 4 0 0 5 0 0 31 Currants ! n ! ! v ! I ( 0 6 4 0 6 0 0 6 3 0 5 9 0 5 6 Herrings, Fresh ...... 0 7 0 0 6 3 ? 5 ? 099 09.3 093 07 3 070 Herrings, Kippered.. 0 11 3 0 11 0 0 9 9 0 }l 0 ■ B g ( 090 07 3 069 Herrinjrs. m Tomato - . -■ OlO & 14 15 0 u 15 0 8 15 0 9 5 0 9 6 8 Flour, ZCO's 13 10 0 8 10 0 10 0 » 11 0 0 13 5 0 . , , 'J'S ! 0 9 6 0 7 6 0 10 6 0 10 6 0 12 6 Salmon 086 0, B 9 0 10 0 0 „ n n n £ n in n nflO 0 B 9 076 076 066 053 Sardines, Vs J f .« «W ® ' " ® 049 0 43 039 033 0J3 Sardines, 5'b 0 5 6 0 5 3 0 5 0 ( „ „ n „ n 5 0 0 4» 0 0 4* 0 n 21 Pates „ - ® J i 5 S li 0 0 6* II (1 4J 0 0 43 0 0 «3 0 0 4 Maearoni 0 0 10 0 0 « 0 0 6 „ ? fi , , , 0 7 „ 0 T 3 0 7 6 M'm'lnde. KoIIIt's.. 0 8 6 0 8 0 0 7 3 0 7 3 .0 6 9 0 6 6 0 6 4 0 6 9 Anclo-Sivirq Milk ... 0 9 0 0 8 6\ 0 7 0 „ , fi Hi 0 1 51' n 1 5* n 1 4 P.S.F 0 1 7J II 1 6*\ 0- 1 , 0 0 9 009 00 f5 007 Mustard. Durham... 0 0 8 I ,'„'l I Ml » # I 0 0 6 0 0 6} 0 0 57 qnltn.nns 111. 0 0 7* 0 0 7A 0 0 61- n fi fi n 5 6 0 5 6 0 5 3 0 5 0 fi'n Rvrup, 2*8, doa. - 0 8 6 0 7 3 0 3 3 0 2 9 0 1 9 0 1 6 0 0 10 XiitmcirB lh- 0 4 0 0 3 3 0 3 3 u I0 0 11 1" 0 14 0 0 14 5 0 13 10 0 Oatmeal ton 22 0 0 13 0 0 16 10 0 12 10 0 15 0 0 17 10 0 14 0 0 14 0 0 15 10 0 Tn™ do*. - 0 6 0 0 4 -6 0 5 0 0 4 6 0 4 3 0 4 0 0 3 11 !,v"U>m. i{ttl..n H 0 0 1 9 0 1 8 n 1 41 0 1 4} -tO 0 9J 0 Oil on 1H Peas owt. 1 4 0 1 2 0 0 18 0 0 16 0 0 14 6 0 15 0 0 16 0 0 17 0 cwt. 16 6 1 J 0 10 0 12 0 1 0 0 0 17 0 0 16 6 0 15 6 ..11). n n ?1 0 II 3 0 0 2J 0 0 2J 0 0 11 0 0 11 0 0 2J 0 0 2| Salt, Fine 056 04 0 05 -9 04 ,9 0 4'6 0 2 9 033 046 0 4 6 ■PflTjpr-r 0 12 0.12013. — ' — — — \COvd'» Food - 0 10 II 011 0 0 10 6 0 10 6 0 10 6 +0 9 0 0 9 6 Porta Ciu-'tals -0 9 « = 0 * 0 n 7 f. 0 8 I) 0 5 6 0 5 6 0 5 6 0 5.6 Starch. Colwan'a H>. 0 0 41 0 0 41 0 ?0 j! U 0 51 U 0 51 0 0 51 0 0 5Ji 0 0 5 Soap 1st.. Ilmls, „ 7 ft „ c n n „ fi 0 5 { 0 s 0 0 4 9 0 4 10 (i 4 10 Siiirnr 1....PWI. "''.0210166166 ISO 1 1 41 1 1 0' 1 0 0 \'o 2..2 0 (i- 1 17 0 1 5 6 1 5 6 1 1 0 1 0 1* t 0 6 0 19 6 Tani,>V Hi. 0 0 41-0 0 I 0 0 3 0 0 ?! I'd II 0 0 15 0, 15 6 1 3 0 t,L,.i,, i1<w. - - - 0.6.6 H( ft 5 I OSS 046 V/i.-ifi*; ■oin if'i"".* 1 060 043 046 046 03 61 03 21 037 03 10 C ?n." r - Ki? " Sy ?'d'"r - ' - 0 13. 6 0 13 0 0 12 6 n 12 3 0 12 3 0 12 6 c»r-'ini.«""vnr v n' r ' - - - - 0 ir 6 0 9 6 0 8 6 n 8 0 '•nrrlini??;'Xor'n. - - 0 6 6 0 5 41 0 5 fl 0 U I.ih. ■ — w. *•* 006. 005 0 0 4? •iintv nf t'i. *** lb. remoTed» tHjilf, ?H. per lb» • tDuty remoTcd* r er 6W^#