BRITISH GOODS

Dominion, Volume 15, Issue 30, 29 October 1921, Page 9

BRITISH GOODS

CAUSES OF OVER-IMPORTATION

TRADE COMMISSIONER’S VIEWS HOW THE TROUBLE OCCURRED IMPORTERS AND MANUFACTURERS BOTH BLAMED. Much discussion has taken place in commercial circles concerning the part played by British manufacturers in the heavy importations that caused financial difficulties in New Zealand late last year, and In the early part of this year. The matter is discussed in tho annual report of His Majesty’s Trade Commissioner (Mr. R, W. Dalton) to the Board of Trade. Some references to this report wero cabled to the Dominion recently from London, and Mr. Dalton has made fuller extracts available for publication in order that his views may be made clear. An Important portion of the report is as follows:

The total imports into New Zealand in the year 1920 were valued at 4161,595,828, as compared with 430,671,698 in the previous year. For the iirst five months of 1921 the imports have amounted to 421,743,211, as compared with 4118,962,133 tn the corresponding period of last year. With regard to the figures for the present- year, as compared with last, it has to lie noted that the deluge of importations in 1920 did not set in until well on In the year, and thatdlhe imports entered in the statistics in 1921 have been to a considerable extent goods which actually arrived last year, but were not cleared through the Customs owing to financial stringency. It has already been pointed out that the imports of last year have been a cause of considerable financial embarrassment to the Dominion. During the war and since the armistice up to the second quarter of last year there had been a great shortage in New Zealand of almost all classes of imported goods. At the same time the demand on the part of the general public was phenomenally large. The existence of this demand encouraged considerable purchasing on the part of the trading community, and the difficulty of getting delivery of goods which were urgently needed prompted buyers in many eases to order considerably more than they really needed in the hope of .getting a part, and to place the same order with more than one firm, in the hope that one at least would supply, the order to each being sufficient for their requirements. Early in June reports of a break in prices in the United Kingdom began to reach New Zealand.' In the first instance at least these reports were very considerably exaggerated, and they did a great deal of harm hero at a critical time. "Slump” news immediately affected the buying public, and an almost entire cessation of general buying synchronised with the time when very large shipments of goods began to arrive. During the second half of the year every ship brought full cargoes of goods to New Zealand, and it was not long before financial resources were exhausted. Tn many cases the goods arriving were deliveries m execution of orders which hud accumulated on the books of manufacturers over a long period. In the absence of financial facilities many importers were unable to take up their document's, many goods had to be left in bond, retail eales became the order of the day, and in some cases auction sales of newly-landed goods were the only recourse for those responsible for their imSptafion Even the largest firms in ew Zealand have found it very difficult to carry on with stocks accumulating, with banks pressing for reduction of overdrafts, and with no apparent outlet for the goods arriving. The seriousness of the situatien can hardly be underestimated, and it says a great deal for the old established firms here that they have been able to weather the storm as they have The Importers’ Responsibility. I would point out here that a great deal of the responsibility must rest on New Zealand importers for their excessive ordering and somewhat careless supervision of the numbers o' their orders still on the books of the manufacturers. A great many of the- larger importers will readily admit this responsibility. tt is usually those who have more recently taken up importing who seem to overlook certain essential factors of business. But generally the conditions of the recent abnormal period seem to have brought about a forgetfulness of the usual practices of commerce and of the sanctity of contracts. Under ordinary circumstances an order "for earliest pos siblo delivery” accepted and entered in the books of the manufacturers is there t.i bo executed as soon ns the manufacturer can execute it unless it is definitely cancelled in tho meantime. Immediately the manufacturer was able to execute he would therefore execute in the belief that the goods were needed, and it seems extraordinary that purchasers should presume that orders definitely given under the wide terms of "shipment at earliest possible date.” could be automatically cancelled by effluxion, of time, mid were therefore no longer on manufacturers’ books. Yet I have heard this statement advanced time and time again. Moreover, I suggest that anxious as the manufacturer might bo to meet his customers, ho could not possibly do so ■unless his customwr took the trouble to explain his exact position in regard to goods to be shipped. Otherwise an order still nn the books must, it seems to mo, remain an order to be shipped, Mr. Dalton discusses the responsibility of the British manufacturers in another portion of has report. Ife says: Careless Methods of Training. The-most serious complaint which ha.-, been heard here is that when demand from other markets ceased British firms immediately unloaded on the. New Zealand market goods in. completion of orders which had been given in many cases years before, and in total disregard of ordinary trade customs - which had been wall understood before the war by firms supplying the New Zealand market. It has even been said frequently that firms in the United Kingdom deliberately waited until prices had reached the peak to deliver these goods, and took care that advice of what they were doing should not Teach New Zealand until thci goods were actually on the water. Tn an earlier section of this report I have dealt with this matter from the point of view of the importer in New Zealand, and have pointed out that a good deal of tho difficulty which has risen owing to heavy deliveries has been duo to careless methods of trading in abnormal times. T think the same criticism may equally fairly be. laid at the door of many British firms. I clearly understand that’ it is no part of tho duty of British firms to supervise the operations of their ctstomers. that orders which arc definitely given for shipment at earliest date am ord.'-rs to-be definitely booked and shipped unless they are definitely cancelled for some good and sufficient reason, and that if those orders are not shipped nt the earliest date there is automatically established a right to cancel on the part of the purchaser. So that in so far He tho heavy shipments at peak prices are concerned British firms had every right to ship immediately they could, and would have placed themselves in a

dangerous position if they had not. While admitting all this, however, it can hardly be gainsaid that it is part of the duty of sellers to maintain good will on tho part of purchasers and to avoid embarrassing them if embarrassment can bo In a country as far away as Now Zealand it is necessary to have orders placed a long time ahead, and it has been a definite practice of traders boro to have tho orders shipped in instalments during tho year. .This practice has been well known to manufacturers and buying agents for years, and I submit that it was the duty of firms at Home at least to respect this practice, and up to a point to endeavour to ascertain the exact wishes of their customers in regard to shipments. I think this could have boon done without weakening tho position of the mnufacturcr in regard to his contracts with his customers. "Goods Not to Sample.” A further complaint affects tho shipment of goods which wero not to sample, and hero again I think these cases have been duo rather to laxity than to definite intent. Wo are all inclined to ffarget (that for Jjtwo or ithner year* buyers were feverShtessly anxious to get any goods, they could whether to sample or not, that tho depression came extraordinarily rapidly, and that it was only when goods became difficult to sell that the buyer began seriously to compare deliveries with the samples. To Re-establish Confidence.

It is very important that firms at Home should understand exactly what the feeling in New Zealand is regarding them, whether that feeling is justified oi not. After careful examination of complaints made to me- I am satisfied that there is a small percentage of cases in which this feeling is fully justified. In the great majority of cases I am equally satisfied that it is not justified. In practically all cases I «m convinced that the cause of tho trouble where ever blame may rest, is laxity to pr ® A 1_ oils abnormal conditions. But whether the manufacturer or the importer is to blame so long as the feeling exists neire that British firms are not above suspicion it must be tho urgent need of tho moment for the firms themselves to endeavour to clear themselves, to deal as leniently as they can with embarrassed traders 'here, who are also in many cases disgruntled, and at all events to get back to that probity and regular system of trading which existed before the war. I do not propose to deal with tny other aspects of the question of British trading methods in New Zealand, because I believe that the one <hing essential now in New Zealand above and beyond all others is the adoption of methods to reVestablisli . confidence! m Bntid.i commercial practice which, in my opinion unjustifiably has been rudeJy shaken. General feeling here both among the general public and on tho part of trade, ia still strongly m favour of the development of British trade with New Zealand, and all sections of the public are anxious to be convinced that their former faith in British systems of trade need not be revised. Personally I have done all I possibly can to this end and it must remain for firms themselves to deal with the situation in so far as if concerns them individually.