POST-WAR TRADE

Dominion, Volume 12, Issue 121, 15 February 1919, Page 10

POST-WAR TRADE

BRITISH MANUFACTURERS AND OVERSEA BUYERS , OLD COUNTRY. METHODS . CRITICISED " . FOREIGN COMPETITION At the second annual meeting of the Wellington Branoh of. the New Zealand 'Association .of British Manufacturers and Agents, 'held in the Wellington Chamber of Commerce," 'interesting referenco was made to.the numerous problems that were oropping. up as the result of the termination of"h(fetilities. 1 In the course of his address, 7 in'moving tire'adoption of the annual.report,, the president (Mr. James Macintosh) said: , "For the past four years we have talked consistently of "post-war trade." 'Postwar trade, so far as'this association is ■concerned, meani primarily trade with Great' Britain. Most of us have, during the past few years, been in constant touch with' our principals regarding orgVriisatidn'"'forv trade, and we have been endeavouring, in the face of immense, difficulties, to keep together tho

connection in : our principals' goods which

was worked'up in pre-war years. Many , of us, owing to circumstances arising out : of. the war restriction of. exports from , Great Britain, tho commandeer of factory

outputs,, and the necessity of the British

: manufacturer'' diverting all his manufac- , fhres.f.or-war. purposes—havo received no Bupplfe. ' In" the meantime, our clients

have had to find fresh sources of supply,

Usually from other countries. We have now to start afresh to re-establish tho manufactures of our British principals on i the New Zealand market. .1 think most' ■of us realise -that the"transition" period | hetw-een-the-cessation •of hostilities and j the Teturn to normal trading will be a I difficult one in which ,to do business. From our point of. view, ono of the chief difficulties'- is ..that- our. .'clients are disinclined to buy, in the expectation that "thero will bfl a considerable drop in : | prices., ..So far ..as the British manufacturer is concerned,' it .is. very evident that the industrial unrest wiiich is prevailing ' in the Old .Country' must make it very diffil cn.lt for Trim to arrange his post-war proIptamme or. to sottlo his post-war prices, j No doubt- theeiv aro other .difficulties oon(fronting ■ the. British jeiipply,>nd, in.many cases, flnctuation in fiprice 'of : raw -materials,'.'anil difficulties (arising from the changing over from war ' requirements to ordinary trade reqnire- ! ments. Freight rates from the Old Comiitry have already; been reduced, and, al(though it has been, top early yet in the |Domim6n to have derived; benefit,, the (effect of -the reduction; of. ; freight'rates ■ must bo-felt.-in the course, of the next few months..

; A Possible Danger. " •'''-'Members of the association have found ; that, in gome cases, in approaching' their ! principals, they have teen informed' that 1 there are sufficient orders in hand to keep 1 factories going for the next two'years,' and it will he quite underetood that there ■ is 60IM apprehension ori 'tho part of many members ..that possibly ...their principals •■•may cater for markets -nearer at hand,' and, in. the meantime, neglect their mar- . Seta,.overseas. This market may >, from the ' manufacturer's: .point of •; *WVh a ? om P Jll ' a tiv6ly. .small one, but, , if be hopes to retain and to increase ; his pre.\\;ar trade in - the Dominion, he must realise' that, his• goods must be siroplied on tenus, and at prices which ■will meet' tlio 'more: active competition Tvhicli will jObtain from now onwards. "-Vgeiits in New Zealand have .often felt that their British principals do not ,a ways-appreciate -the conditions under o-". 1 ?- - f°°? s ■■ Imye ■ to ■ 1)0 ■ 6oW in 'New distances that have to be travelled, .the .number of comparatively houses that it is necessary to call on, and the consequent expense;in;;obtainiii«; business; Statistics of'the .trade, of' New Zealand' afford ample,; evidence, that, tho 'largest proportion of - ,;Nsw : : - Zealand's ' import trade has ;:been. .with .the United' Kinir--9ffisC. > .. nl 'fV-.,' ;that,. 'notwithstanding war-'•■coShtioiis, the. United ' Kingdom is stilrtho largest supplier to New Zealand,

- ' , Competitive Goods. following ..figures, taken.from, the reports of the British. Trade Cominiseioner.on the trade of New Zealand, and showing the percentage share of the IJwted. Eiigdom, , United. States and Japan in-"the., import .-triyle-of New. Zeainteresting. The percentages Trad© Commissioner has classified flSi'-'cpmpetitiva goods'':— 19il 1915 1916 1917 • -•'<*. '•'J. rp.o. pic. P.O. p.c. UnitedvKingdom... ■ 67.1 66.2 63.4 53.3 United States ... 11.2 13.2 16.9 213 Japan / . 1.0 1.9 2.7 10 table based on values 13 also . instructive ' . 1914 1915 1916 ' 1917 £ £ £ £ . '• IUS-W 10.3<17,a48 12,986,568 8,383,092 j£' S 1.847,371. 2,064,538 3,456,«52 3,360 055 | Japan - ..176,293 288,298 654,170 631*103 . Inere is reason for congratulation that Rich; a -volume of .trado with the , United_ Kingdom has been maintained in ;Rpite of war conditions involving restrictions in. majiufabturo and exnort from' the United Kingdom-tho wonder -is, thM.i;.,supli : ;. .a;;.';,yohme of' supplies has been possible. But it is 'also evident that" the two chief CtTOetitow. of . tho ,United Kingdom for jiNew trade-7-tho United States ' '? have shown large increases during the war period not only in volumo but also in percentage, sliaro of 'competitive goods.' Commodities from these countries have been, put up6n tho Now Zealand. market which were previously purchased; almost exclusively from tho .United Kingdom. There is no. denying "that at times the. quality of ,tho article was not up to tho British standard, but it is also the fact that, in tho case of both Japanese and American's goofo, tho ?1 many articles has much improved; indeed, the quality of numerous articles manufactured in the United States has always been: good. Tho factthat new sources of supply have become available to tho New Zealand importer, and that goods of American and Japanese manufacture have becofno known upon the.'mftrket, will result in keen competition, ."for-'-'post-war requirements. " British Manufacturers Not Alive,

"At a recent meeting of tho council of thovAssociation considerable apprehension was expressed, regarding tho attitude of many British, manufacturers towards the Dominion market. With the cessation of hostilities agents in the Dominion for British manufacturers have naturally .communicated with their principals to ascertain,-tho conditions upon which tlicy intend to prosecuto their post-war trade in the Dominion, And the conclusion is fcrced upon members of ■ the association that many British manufacturers are rot alive to tho competition from tho United States and Japan which now exists in New Zealand in articles of trado which were previously largely purchased from the United Kingdom. They apparent!? fail to appreciate the offorts that are being made to organise and retain that trade in the.Dominion. An instance was quoted at. a meeting of a firm of motor Importers'who, in December last, sent cabled inquiries to a British motor manufacturing : company and to an American motor-house, -asking tho conditions under which each would respectively supply certain cars and suitable spares. "In twenty-four hours a cabled roply was received from the American house, offering 5000 dollars worth of spares upon consignment. The British house took fourteen days to reply to the effect that cars and spaTes could only bo supplied on -cash paymont: in London prior to shipment, and demanding'to know tho rniniiiiiim number of cars required. In another caiso an engineering importing firm instanced « cablo quotation at anadvance. of ICO per .cent, received from a. British engineering firm for cerimp.qtfoiv.fQijnd- thab-lie liau. to'coirfpelo against.ftX,^m4'ncah.'engine qiiote(i-at : .33 i-3 -petAcent/:;less than (lie' BriEislf engine. ,

- :, :6'ritish Sentiment in New Zealand. The sentiment in New ' Zealand . un< idcfubtedly is to, favour goods'of British manufacture as against other imported goods, but the fact cannot be ignored Jbat .prices ia .generally tho determining

factorj even harbour boards, public bodies, and Government Departments are largely guided by price when procuring supplies. Apart, however, from these aspects, wo know that the British manufacturer can and does- produce an article equal to, and, in most cases, Superior to anything produced elsewhere, and it is the'aim of the members of the association, with the active cooperation of their principals in the matter of prompt supplies, suitable prices and terms, to build up and increase the volume of British trade in this Dominion. "As trading conditions gradually come back 'to normal, there will be many matters which will requiro to be closely watched by the association. There is the possibility of a revision of the Customs tariff, involving, it is hoped, the removal of many existing anomalies, and, on some articles, an alteration. in the basis of assessing Customs duty. This is a matter in which members of the association are vitally interested,'and, should alterations in the tariff be proposed, upon which they will require to give a great deal of, careful thought and attention.

The Income Tax. "In response to representations made by other commercial bodies regarding income taxation, the Minister of Finance, while holding out no hope of alteration during the war period, intimated that, in his opinion, the whole basis of the assessment of incomes for taxation purposes would require to be reviewed. I need hardly remind membefs of this Association that they are peculiarly interested in that portion of our Income Tax Act which makes them personally , responsible for payment of income tax on business done in New Zealand by their principals. It is universally felt among agents that, however justifiable as a matter of prin-ciple-it may be to ask overseas traders to pay income tax in New Zealand on business dono in the Dominion, as a matter of practice it is questionable whether all overseas traders are treated alike. The question of liability, seems really to depend upon methods of trading., A British or other overseas manufacturer may have extensive business relations with New Zealand, and yet not be liable under the provisions of the Act. It would also be very interesting to know to, what extent American, Continental, and 1 Eastern houses who have agents in New Zealand contribute to the income tax revenue.

"Thero is also the vexatious question of double income tax," the unfairness of which has been, the more brought into relief by tho heavy rates of income tax ■payable both in the United Kingdom anil in the Dominion. The high rates of taxation compelled a modification of the practice of taxing incomes in two countries. This is a matter which will also require to be closely watched by the association during the next few years."

An All-round Discussion. In seconding the'motion, Mr. Charles Richardson ' said that it was becoming the practice of some i' Government departments and local bodies to. obtain their supplies through the medium of the High Commissioners office, and also various harbour boards were purchasing through London exporting houses, and sending their engineers abroad. If such engineers were going to buy supplies for their boards when abroad he did riot think it was in the best interests of tho community. As far as the High Commissioner's office was concerned, he pointed out that there were only a limited nilmber of exporters on the list, and it was to the disadvantage of all the others, whereas agents hero were prepared to give quotations of a wider range. British linns with an agent" here were actually at a disadvantage. In the Commonwealth there were conditions in contract which provided that any local body, company, or firm doing business with tho.-Government must have au agent in the Commonwealth who could serve (legally) or to whom service could be given.

■ Mr. G. Scott, speaking on the aspect of .'the. motor-car and accessories business, spoke of the lines oil which the British manufacturer was prepared to do business. Prior to the war lie was asking for, tho 'minimum turnover, but now lie was insisting on n larger-.minimum of purchases annually before lie would appoint an agent. The position was that tho British manufacturer had been oft' the market for four years, whereas tho American manufacturer had been very muoh on the market, and was well organised. The Americans were .cfiiite alive to the value of the New Zealand-trade, and wero offering special inducements for their ngents to push their goods. On the other hand the British manufacturer had a good chance, as jfablic sentiment was-with him, and he should offer reasonable terms and priccs to meet the !'foreign competition. Jlv.'L. Ashcroft Edwards said ' that prior to the war the British way of selling goods to nil agent was to inquire how many cars were wanted, and to send about a quarter of . that number. Americans, on the other hand, were prepared to enter into a contract for any supply, and turned tliem out in great style. A mail ordering 2(10 cars from England was lucky to get GO, but with America ho would get tlie lot, wliiqh had been sometimes embarrassing to importers used only to the British way. Mr. J. 11'. Hyder emphasised tho lack of uniformity in conditions of contracts, nud urged that it was possible to have a set of contract conditions that would .bo fair to tho purchasers, the agents, and the manufacturers. The Engineers Association at Homo had drawn up such conditions, and they had been accepted in the Commonwealth and South Africa, mid thoy hoped .to have theni adopted here. Mr. James Fleming referred to the position agents here found themselves in after war broke out. They had made contracts and had them confirmed ,but an Imperial Act had roleased them'from their obligations. In New Zealand no such Act had been passed. It was true that some relief had been given as to the date of delivery. In tho case of many local bodies agents' found themselves unable to fulfil contracts at pre-war prices, whilst others were .doing business" at 300 or -100 per cqnt. in advance of pre-war prices.

The motion to adopt the import was earned.