LOSSES ON FRUIT

New Zealand Times, Volume LIII, Issue 12619, 2 December 1926, Page 4

LOSSES ON FRUIT

A MERCHANT’S FAILURE “HOPES WITH HOLES IN THEM” FACTS PRESENTED TO CREDITORS Severe losses occasioned in regard to dealings in the fruit business were attributed as being largely responsible for the failure of Alfred George Wallace, merchant, of Wellington, who faced a meeting of creditors in his bankrupt estate yesterday. The district official assignee, Mr S. C. Tansley presided, and after certain of bankrupt’s business transactions had been inquired into several points raised were referred to the Crown. Solicitor for an expression of opinion. • The total debts in the estate were shown as being £6562 16s—unsecured creditors £4975 8s 4d, and secured creditors £2750-r-while the assets were £B2l 9s 2d, leaving a deficiency of £5741 5s lOd. A FLOURISHING BUSINESS » Bankrupt, in hij statement, explained that in. 1921 he took over the fruit business of the Fruitgrowers’ Federation, of Vhich he was manager, and gradually it assumed large proportions. With a view to securing further business he was subsequently induced to make a trip to Rarotonga, California, British Columbia, and Fiji, but before leaving he left instructions for the erection of new premises in Allen street. These he took possession of in April, 1924, and provision was made for offices for rental. The latter did not let as readily as anticipated, and remained unoccupied for two years, making the approximate loss • round about £BOO, He endeavoured to introduce a customs and shipping department into his business under capable management, but this venture proved unsuccessful Following his return fromabroad, after making satisfactory business arrangements, an embargo was placed on importations from California by virtue of the fact that foot and mouth disease was prevalent in the States, following which no fruit or pfoduce from these parts will be admitted till the present month—the first in three years. His commission on Californian fruits until the embargo was placed ’ on these lines would average £750 to £IOOO annually. The Wellington rate of commission, whioh had stood at 10 per cent., had now been reduced to 7\ per oent. for over two years, and this also affected the earnings of his business very considerably. EXPECTATIONS NOT FULFILLED Bankrupt further pointed out that he also purchased fair quantities of island fruits, this proving unfortunate, inasmuch as from May to December, 1925, heavy and continuous rains affected the market and values, in conse'quenoe of which he lost heavily. In a venture with Island fruit two years previously he cleared £lOl6, being half share in the profits for 12 months. Last December, anticipating a reasonable improvement of conditions for theChristmas trading, lie purchased extra quantities of bananas costing 14s, but which sold at 7s to 7s 6d a case. For the first time in 18 months also Canadian apples, usually worth 20s a case, and costing about 17s a case, sold at 8s and 12s 6d a case—a solid loss. In December last a loss of £350 was occasioned in respect to a shipment of Sydney oranges, which were inspected and ordered to be destroyed. DRAFTS TURNED DOWN * “I realised my losses on both island and Canadian fruits were suffering, but figured that my. summer and autumn trade, which previously had | always been good, would assist to re- i coup these losses, but this trade was I not nearly so good this year as pre- i viously.” In keeping with the values of Canadian apples, lie added, the market was correspondingly low for New Zealand fruits, reducing commission in this regard to a minimum. In May aiid June he entered into contracts for forward sales of New Zealand potatoe's, and this proved a nominal profit in some instances and a loss in others. The people to whom sales were made continually turned down his drafts, and this affected his position with' his bank. His bad debts amounted to £321, arid more may have to be added. Bankrupt . further stated that' he did not attend races or even neglect his' business for a few hours. Since the statement was made, bankrupt has disposed of his house property for £2150, a motor truck for £29(J, and the business for £3OO. Bankrupt, a married man' with six of family, said he had some furniture, which had been purchased by his wife fifteen or twenty years ago. He had supplied the means for the purdhases. The assignee: Did you keep a trust account in connection with your business? —No. 1 suppose you know that that is a breach of the Austioneers Act?—l took the business from the Fruit Federation, and followed the same practice that was originally instituted. I don’t think any firm in Wellington keeps such an account, as it means a multiplication of accounts. “NO DEFENCE” Counsel for bankrupt: A lot of them don’t know the provision exists in the Act. The assignee: Of course that is no defence. Mr Wiren: With regard to goods you received from Sydney, you dealt largely with Price and Piggot?—Not largely, but occasionally. Bankrupt admitted that in July, 1926, lie received fruit from the firm mentioned valued at £2OB, £149 11s 6d, £94 16s 9d, £75 6s, and £l2l Is 6d; The assignee: Whitt is the purpose of this examination? Air Wiren.: I am trying to show, on behalf of Martin and Luke (fruit merchants, of Sydne/O that when the bankrupt sent in orders in May, he knew he had no possibility of meeting them. Bankrupt: I had my business under offer at that time for £3OOO, and also had prospects of securing additional capital. Previous to August of this year you had not dealt with Alartin and Luke for some time?—Not right along the line, but they sent me quotations. After August 6th Price and Piggot were unwilling to supply you further? —I could have fixed the orders through. I suggest that you then cabled to Martin and Luke?—Not altogether. I had occasion to inspect some of their oranges; they were, fine samples, and I preferred the better quality article. The assignee: When you ordered this fruit how did you expect to pay for it when/ you knew you were deeply involved ? —I had several things in mind: the Californian fruit which was striving was worth • £1000; I had hopes of letting' my rooms, and the coqimission which had previously been charged amounted to £ISOO a year. With reasonable luck I could not have gone wrong. fcio when you got a lot of credit from

: Price and Company you flew acrqss to ; Martin and Luke?—That does not actually follow, because I Bad dealt with I them previously. I gave preference to j Price and Piggot. Air Wiren observed that at the end of July cheques outstanding amounted to £2980, and the bank overdraft was £SOO. “The only way you could have paid were for your hopes to have eventuated.” remarked a creditor. Bankrupt: They were sound hopes. CHEQUES returned Mr Wiren: But they are hopes with holes in them now. Mr Hislop: After you had cheques dishonoured, do you recollect having unsigned cheques returned ?—We got some back occasionally. » Mr Wiren said it seemed to him that severe 1 matters should be referred to the Crown Solicitor for his opinion. Firstly, the question of the trust account wanted ,to be inquired into; secondly, that riankrunt incurred debts with Martin and Luke, haying no possibility of paying; and.'thirdly, he Sent cheques on September 3rd," when already he had been interviewed by Mr Hislop, and knew there was no possibility of them being met. The meeting was adjourned sine die, and the points raised are to be referred to the Crown Solicitor for opinion. In the meantime bankrupt’s car. which is 'regarded as being worth at least £4OO, is to be auctioned.