THE LEATHER PROBLEM

Dominion, Volume 12, Issue 285, 28 August 1919, Page 8

THE LEATHER PROBLEM

LETTING IN LIGHT

FIXED PRICES OUR ONLY SALVATION

Extraordinary as are the statements whioh have been made as to the prospective rise in the cost of hoots and shoes, a little inquiry has revealed a position in the hides and leather trade that must by the man in the street be regarded as still more' extraordinary. A Dominion reporter interviewed Mr. C. ,T. Ward, boot manufacturer, who said a few evenings ago that the cost of labour in 'making a pair of boots was less now than it was eighteen years ago, but the public was paying a third as much again for its boots—in some oases more. "A s to the rising cost of boots and shoes/' 6aid Mr. Ward. "Well, to go back a bit, I came out hero in 1900, and the cost has been rising all the time. There have, of course, been bulls, but never once have prices receded— they have always increased. As to the cause, when I came out hides were fetching 34dto 4d. per lb., and sole leather BJd. to 9d. per lb; The trend oven then was upward. The report of the Cost of Living Commission of 1!)12 refers to the general upward trend in the value of our produets on the London markets (and hides are one of 'our products), and stated that the avorage increase from 1890 to 1911 was 66 per cent. Now there was nothing political about that, as Dr. Eight Was the economic man on that commission, and would not state what was not fact. And whatever, rise takes place in London is refleoted here. That is a primary cause of the rise in prices. "The tables of the Boqru of Trade for My, 1914—just before the war—(show that hides were fetching from 7d. to 75-d. per lb. in Wellington; main upper leather, which we call chrome, Is. per foot, and sole leather Is. Bd. per lb. Iu July, 191G, hides had risen to from 93d. to lljd. per lb (an average of 10Jd.), on-rome was selling at Is. ljd. per foot, and' sole leather for 2s. per lb. By July, 1919, hides were soiling at Is. ljd. per lb., clvrome uppers Is. sd. per foot, and 6010 leather 2s. sd. per lb. It will bo seen from theso figures that the proportionate incre.i69 betw6on the different classos of leather has kept pretty close. "Outside the tanners' requirements hide's are now selling in New Zealand at Is. sd. per lb., and in Australia for Is. BJd. per lb. I quote the Now Zealand price advisedly—the price is la. sd. when they can get them. There have been no hido sales this week! That means ther® will bo no hide sales for a month. The freezing companies have been holding back their best hides for some time and only offering the rough hides at the fixed price, whicli was never intended should be the case, but now they are not offering any, in the hope, I suppose, that the return of tie political leaders may mean a relaxation of the reflations in their favour. The fixed price was the only hope of keeping down the prices, and if tho Government does tamper with this matter, and let up on the fixed prices obtaining,,there will bo an outcry from one end of tho Dominion to tho other." . Mr. Ward pointed out that tho larger proportion of tho hide 3 produced in New Zealand wore used hero, and it was not sound that the values received for tho selected best hides that might be exported should bo reflected on the inferior hides sokl to tho New Zealand tanners. As to the larger question of the oause of the tremendously appreciated price of leather in America—'whence most of,the cost of living evils come—Mr. Ward says that there the big jump in tho 'price of leather is attributable to the operations of speculators outside the leather trade altogether, -who see. in hides a world's necessity, and who, with vast resources at their command, start in to control the law of supply and demand just as they do with wheat, cotton,meat, and a lot of other things. Theso men see the economic value iii hides, and they cut in between the producer and the tanner, and absolutely regulate tho supply to the tanner, which enables them to charge their own price Mr. Ward quoted from the "Shoe and Leather Reporter" (an accredited American trade paper) of July 3, which said in an editorial note: "Packer branded cow hides (tho cheapest leather) at 10 cents (Is. Bd.) should cause every cutter of solo lea,ther to think seriously. There are men in the trade whoso hair is not yet gray who can remember tho time when branded cows could be bought in almost any quantity at around 3 cents a pound. They are CO per cent, higher than at this time last year, while upper leathor hides are from '82 to 100 per . cant. higher.. When the World's Fair was in progress at Chicago in 1893 tho best summer tako-off of native and Texas steer hides was in largo accumulation and difficult to sell at 5 cents. (2Jd.) u pound. If any other staple industry could show iiu equal increase in the cost of its basic raw material it would probably, make more capital out of it than tho tanners are doing to-day." The position in America hod led to', attempted reprisals on tho speculator, for ilhe.,, "Reporter" in another article of the same issue says: "Recently the New York 'Tribune' printed an article concerning a meeting of the Retail Shoe Dealers' Association of New York, in which stress was laid upon the alleged fact that tanners were buying- hides off the backs of grazing herds of cattle. Of course, the impression is sought to be conveyed that tanners, are cornering hides for speculative purposes, and this is one of the' causes of the present sensational prices of leather and shoes. In recent years tanners have bought hides ahead, and shoe manufacturers have bought leather ahead, but theso _ purchases invariably- were measures'of protection against rising markets subjecting tii em to serious losses. Shoe 'manufacturers sent out their salesmon with samples months in advance of the season when these goods will be bought and worn l>y the consuming public. They are compejtcd to set' prices upon this merchandise long before any of it is in process of manufacture. If they liavo reason to suppose that the leather market will advance they naturally endeavour to make contracts for leather for future delivery. This is technically known in the trade as 'covering.' The tanners, in their turn, are anxious to cover with Taw material, and in untmy instances have bought hides ahead from the packers. It is perfectly (rue that hides have frequently been bought lofcg before they were taken from the backs of the beasts, or, indeed, liefore - the packers had bought the cattle. - This development resulted from the growing scarcity of hides and skins. Twenty years ago tho hie packers carried immense stock':, of hi<les, and no one ever dreamed cf buy-' imr ahead." It ort'y needs to - bo explained that snuler the present regulations New Zealand tanners have first choice or selection of hides offered for sale at, a fixed price, but Mr. Ward states that the regulations are being evaded.