MR LYSNAR’S CHARGES

Hokitika Guardian, 21 March 1925, Page 1

MR LYSNAR’S CHARGES

COMMISSION OF INQUIRY

Y EST.E R DAY’S PR ()CE ED INO S,

WELLINGTON, .March 19,

'file chairman of the Meat Commission to-day gave a ruling restricting the right of Mr L.vsnar to introduce evidence as to the necessity or expediency of any proposed legislation, with a view to recommendations from the commission in that direction.

The chairman said he took the opportunity of making clear what the order of reference allowed. He dealt in turn with several submissions made by Mr Lysnar in regard to the admissibility of evidence, and drew attention to the fact that Mr Lysnar’,s third point relating to the necessity, or expediency, of any proposed legislation was not covered by the order of reference. Ho suggested that Mr Lysnar should hereafter confine himself definitely to the matters referred to in the order of reference.

M.r Lysnar agreed that the order of reference did not sneeiically direct the commission in the mutter under notice. Mis only point was that the usefulness of the inquiry was restricted. Anthony Rowlands, general manager of several companies in the meat trade in Auckland district controlled by Yostev Brothers, was called by Sir John Findlay (appearing for the Government). Examined by Sir John Findlav, ho said that Yes toy Brothers buy live stock in open competition with others, hut only to the extent necessary to make an economic output. They always gave preference to private farmers who had stock for kill-

Your works are open for the use of all?—Yes. They arc a public utility. 80 far as I know we have never had a complaint except from Mr Lysnar about anyone not being able to get space.

Are these facilities largely used by the people of this country?—Yes, both farmers and exporters. Any of the methods mentioned by Mr Lysnar as being followed by Yosteys in New Zealand actually being followed here?—Not in our organisation. An organisation which kept its capital liquid and used it to huv up products, said witness, was in a stronger position to he a danger to the public than an organisation which invested its capital for the carrying on of business. "Where an organisation provided public utilities there was no such evil. Yosteys’ notion had been to provide a public utility. There had never been any resistance to the renewal of Vcstey Brothers’ slaughtering license.

Sir John Findlay: AY he re does the meat you purchase chiefly go to?— Chiefly (o London for the use'of shops and wholesale depots and of the British public. There were 40,000 meat shops in Great Britain and Vcstey Brothers controlled about 2300 of them. What was the condition of the Poverty Bar Farmers’ Meat Company's work's when you purchased them?— Disgraceful. The engineers estimated it would lie necessary to spend C 15,090 before Yosteys could operate in the works and a total of £28,000 within eighteen months or two years. Questioned In- Air Lysnar, witness said that Vcstey Brothers used their proliis for the purpose of extending their works. Mr Lysnar: You declare no dividends I hen?- It is not necessary for a private company to declare dividends.

Wlmt do tin' shareholders get lor their interest ? Nothing whatever. Replying further to Aly Lysnar witness said that they had refused to freeze for Armour and Go. in Auckland. That was owing to the war. Their refusal was not because Armour,■ were in competition with them hut because they did not wish to appear to he associated with Armours as the Government was asking questions about them as to who was giving them facilities. Questioned as to Yosteys transaction in regard to war heel witness said that he did not know that Yosteys dropped the price of beef by 3d a lb or by any other amount at that time. He understood that the price was controlled by the Imperial Government. He thought it was all a mare’s nest, lie added that the company drew some of their moat for the works from Wairarapa and Hawke’s Bay districts, when they could huv to advantage. It gave commissions to merchants, stock and station agents and others who could influence the putting ol meat their way. That was the general custom of the trade in New Zealand, not only in the Gisborne district but in other districts where the company did not operate. Mr l.vsnar asked for items of repairs and renovations to the Poverty Bay workers elfeeted by Vcstey Brothers. Witness said they covered two foolscap pages, lie could not give them from memory, hut would supply a copy. The chairman said lie thought it only fair that the witness’s attention should he drawn lo the following clause in Mr l.ysnnr’s letter:—“ln conclusion it is quite apparent lrom all the circimv stnncvs that Mr Jones in particular and the Meat Board set themselves out to assist in breaking up a local company to satisfy the bank’s desire, and for the benefit of the biggest combine in the world.”

“That is,” said the chairman, “a pretty direct charge, it seems to me, and it is a direct charge against more than Mr Jones. What have you got to say about that?” Witness: It is a complete misstatement, especially about our being the largest combine in the world. It is a misstatement ol our prospect us. Out organisation is the largest of its kind in tho world for handling the products mentioned in the prospectus, luit there are larger combines in the world. The chairman : However, that is not the main thing. ‘ In October, 1923, you say you learnt the bank had_ approached your people in England to see if they would improve their offer. You can see that clause in Mr Lysnar’s letter can lie construed that you had approached the hank. Now. do you know anything of your company approaching the bank so that the bank would get “Air Jones in particular and the" Meat Board to assist in breaking up a local company?’

Witness: No, sir. Aly feeling all the t-inio was that my own people were indifferent. It was only by very strong representations on my part that I could get them interested in the idea, in the first place, of extending their works in New Zealand and rebuilding them, and in the second place entertaining a proposal such as ibis. The pressure was all from this end. We were anxious not to lose the good clientele we had in the Gisborne district, and not to break up the organisation which we have built up over many years. Our London people were indifferent. Their experience had not been very satisfactory and my impression was, therefore, that all efforts to bring about business were initiated at this end. So far as I am concerned we looked to negotiations between myself and Air Lysnar to bring him to the point where [ could put something definite before my people, hut after an interview at the works it became clear that the directors were really anxious to sell and that Mr Lysnar was prepared to put before the shareholders the real situation. 1 told the London people the position, and that it was no use attempting further negotiations with MiLysnar. I think the hankers here saw that I was not going to spend any more time on it with Air Lysnar, and they took it up with my people in London to see if they would he willing to improve the offer. Tho chairman: Do you know what value the hank put upon these works in their conditions of sale through the registrar ? Witness: They put the price on that was paid. The chairman: That is a gross £223,000 or’net £193,000. Mr Myers. That is so. Robert Dickinson Duxfield, Auckland, Dominion vice-president of the New Zealand Farmers’ Union, was sworn. Mr Lysnar was proceeding to question him with regard to the dangers of trusts and combines. Mr Skerrett strongly objected that such evidence was not relevant and did not come within the order of reference of the Commission. Air Johnston said the danger ol trusts was the very question the Commission was set up to inquire into. That, he urged, was the very difficulty that the Government had to deal with, whether tlie rights of a mortgagee were to put restrictions on the alienation of freezing works. The Government was put in a very embarrassing position, and that position was shown in the correspondence before the Commission. Ilis learned friends might think that the rights of a mortgagee or a hank were so important that no countervailing interest should prevail against thorn, and that in fact was the view taken by the Government at the time. There was another view, that the dangers of these trusts were so great to the general body of producers, not only to the particular company bought out. tliat even the rights of mortgagees would have to give way to them. ’I hey suggested that was the very difficulty, the very point that faced the Government. It was complained that producers’ rights and interests were being prejudiced, and that was the very reason why the Commission was set up. because the Minister ant? the Government were accused ot having given awav and having regarded the rights of the mortgagee to lie attack-

M,- Myers: Not the rights of the mortgagee, life credit of the country. or .Johnston said the National Bank in London might take a very different view of the interests of producers from that taken by the farmers and people here, and they would instruct. Mr Jolly, their manager, accordingly. The point at issue was whether the chairman of the Aleat Board or (he Minister had acted contrary to Ids statutory duty and contrary to public interest. \Yas it not, therefore. necessary that tho Commission should know what Huv public interest in this matter was?

Sir John Findlay said that the Government: did not want to take exception to evidence in regard to trusts on merely technical grounds. He was prepared to admit any evidence to show that Yosteys was a trust to the knowledge of the Minister, hut merely speculative evidence that trusts in general were an evil was not relevant. That was not combated by the (oivermm lit.

T|, t , chairman said that when the transfer of the ’Poverty Bay works was consented to Nelsons, Ltd., already had a license for their works m the Gisborne district. Mr Johnston, in reply to that point, agreed that the works were out ol date and practically derelict, and that possession of a license for them did not justify the Minister in transferring to them a license for the Poverty Bay Company’s works.

After discussion the Commission reserved the point find adjourned until to-morrow.