CREAM CARTAGE CONTRACT

Opotiki News, Volume I, Issue 75, 26 August 1938, Page 2

CREAM CARTAGE CONTRACT

DISPUTE BETWEEN CARRIERS HEARD BY LICENSING AUTHORITY A n«V Qpplxtfw.ti.on, for a continuous goods service license • between Capo Runaway and To Kaha, in which the applicant, Mr B. Callaghan of Waihau Bay, desired to carry Cream, backloading ■ with general' goods, and passengers, was heard before Mr E. J. Phelan, No. 1 Licensing Authority. ■ at the Courthouse on Wednesday. The ' case was one which is being watched with interest bv carriers in this district I*, ’ J as well as all over New Zealand. Mr, Callaghan ,was represented by Mr E. A. Bunkall while Mr N. V. Hodgson represented -Air W. J. Walker and Messrs Drake Bros., who opposed the application.

It was explained that as the result of tenders being called by the Te Kalia Co-operative Dairy Co. Ltd. for cream cartage from Capo Runaway to Te Kaha, three tenders were received. The successful tenderer was Mr Callaghan, who now applied for a transport license.

Mr Phelan said that evidence was required to show that the lowest tenderer could not economically carry out .the contract.

Mr Bunkall said, that Mr Callaghan did the carting for four years and lost the contract to Air Walker, the previous successful tenderer. He submitted a ‘petition. bearing the signatures of a large number of Coast residents supporting Air Callaghan’s application.

Air Hodgson submitted that the petition had a limited value as peoplehad been misinformed as to its contents.

Air Bunkall contended that Air Callaghan would he receiving £7O extra money than was receieved by the pre-

vious tenderer. • Air W. Walker, chairman of directors of the company was called to give evidence to show that the directors were not prepared to have the previous contractor again. Air Bunkall said, that he could show evidence of collusion between Abe two unsuccessful tenderers.

Air Hodgson insisted that the evidence should be shown. Ai'r Phelan said that the chief issuewas whether the successful tenderer was too low or too high.

Mr Hislop submitted! that- - Mr Phelan had the power to fix a price. Mr T. H. Pearson, secretary of the To Kalrn company was called to giveevidence concerning the cartage eontract-. The term of the contract wasfor three vears and -t-lie tenders received were: Mr W. J. Walker, Jd flat rate; Mr B. Callaghan, fd for first two years, and )d for third year;. Messrs Drake Bros. T3-16d flat rate. The reduction in the price for the ■third year was due to the expected, bridging of the llaukokore and Kereu rivers. Increased production was also expected in 12 to 18 months when it was expected the factory would •reach its capacity of 350 tons per annum.

Mr Hodgson said that in case Mr Callaghan’s price was found to be uneconomic. it would be as well to know why Mr Walker could not have the contract.

Mr Pearson said that there had been trouble with Mr Walker and referred to minutes of the company’smeetings showing correspondence toMr Walker re cream cartage. Witness said that the contract was not carried out to tlics satisfaction of the directors. The letter in reply from Mr Callaghan stated that his contract was t-o do the whole run and not a portion. The writer said he had carried out the contract during the previous two years to the best of his ability during which time he had received littlo consideration from the company.

Mr Pearson said that there hacl been other . unpleasant incidents. When questioned by Mr Hodgson, witness said tlqit he knew that Mr Allison, a director of the dairy company was tlie father-in-law of Mr Callaghan. He did not know how many other directors were related to Mr Callaghan. There had been no complaints at .the directors’ meeting about Mr Callaghan. The contract required that in the event of the Raukokore river being flooded, cream should bo picked up on' the factory side of the river. That condition was not in the old contract. . t Mr Hodgson: Do you know tli£i\ one day last month the . cream should have gone over on a Monday and

cream on this side of the jjivor was not picked: up 2 Witness replied that he did not know and there had been no complaints at the directors’ meeting. Mr Pearson said that he was not personally familiar with the conditions on the Coast. The factory had employed Drake Bros, to cart cream which was put across the river. Mr .Hodgson said that M'r Walker had made representations for concessions as he had to employ a man on a horse to carry cream across the Keren river at Gd per can. Ultimately Mr Walker was given concessions owing to increased difficulties. In reply to a question by Mr Hodgson, Mr Pe'hrson admitted that it was a comijp'oW thihg for contractors to apply ; for assistance. Mr Walker had applied only twice. Mr Phelan said that there must be some cause for. antagonism.. * •’ ( Mr Hodgson said chat on dozens of occasions Mr -Walker did enjploy: Drake Bros, although the contract did not require it. In reply to a question by Mr Bunkall, Mr Pearson said that a percentage of money .had been held hack as a guarantee .that the contract would be fulfilled. Days for delivery 'were not set out in advance. ‘ V ,

The . next witness was Mr L. Hz’ Brown, supervisor of the Native Development scheme for the past four and a-lialf years. Witness stated that lie was very familiar with road conditions on the Coast. The units” under the scheme supplied 280,000 pounds. Practically the whole of the scheme was at the far, end of the Coast. Witness was interested in getting cream up as often as possible and lie also had a great financial interest. He had 100 per cent, orders on units and amounts ranging from one-third to the whole amount were taken. Deplorable conditions existed during the last three years, chiefly from the Keren to the Cape, where culverts, bridges and the tides had to he contended with. A lot of flooding and washouts occurred during the summer months, and the estimated loss of cream last season was £ISOO. Witness had been caught more during the last two years by flooded rivers. Two years ago the Raukokore and; Keren rivers shifted their courses away from the low level bridges. It was previously possible to get across the bridges during floods. Witness was fairly familiar with the cream cartage and had seen cream go sicross the river on drays when he thought it humanly impossible. He

had heai;d both complaints and praise but the complaints came from people living at the Cape. Favourable opinions were expressed by those living near the river. There was little prospect of any marked improvements in conditions within 2 years. Production would not increase greatly, for another five years as the lower end was at peak while the scheme at the Cape end was for shoe]) and cattle.

Mr John Waititi, a farmer at Capo Runaway, said he knew of casts where Mr . Walker had not delivered cream when the river was not in flood. Witness mentioned the Ist June of last year when Walker collected his erdam, and: later witness saw the truck near Wailmu Bay going back in the other direction. 'J he driver told him tile river was too high. When lie was at a hui gathering a half ton truck; passed having crossed the river, as did also one of Drake Bros.’ Later the cream truck arrived at the place with a load o! Potaka Maoris for a tangi. 'Later two of Walker’s trucks came up over the rivers to. take back loads ot Maoris. In reply to Mr Hodgson, witness said that cream was being delivered three times a week. He had heard that the rivers rose and fell rapidly. Witness could not say whether or not lie was an uncle of Callaghan’s. Witness also did not know whether cream had been carted last Friday nor whether it lnid gone up on Saturday. Mr Hodgson said that the cream liadi not gone up until Tuesday and yet the mail had been able to get down to the Cape on Saturday.

Mr Callaghan was the next witness who said that conditions during the four years when he held the contsnet were worse than now. He used a buggy, horse and waggon. Witness now had a 3-ton V 8 Ford and prices were in advance of previous prices, the output greater and the district progressive. The price was reduced the third year on account of bridges and increased production. Ihe company approved of his tender and lie estimated the cartage of passengers would he worth about £SO per year. He had been told by the manager time if lie ycoukln’t get up on the Saturday lidt- to get up until Monday. Mr AY. J. AVallter gave evidence and showed that be had been running for the last three years oil a contract at the same figure as Callaghan’s tender and bad shown a. loss.

Alr .Phelan said that he had »•> evidence before him that AA'aiker had not carried out liis contract satisiactorilv.

Air Phelan told All* Hodgson and Air Bunkail that they were to submit full figures- of amounts obtained from the factory for cartage and also the running costs. AA hen this had been done, the accountant would be. sent down to check all figures and report to him. If Callaghan’s figures showed that he has taken too contract at an uneconomic price the Authority assured them that lie would not grant a license.

CARTAGE RATES “Oil various occasions,” stated ill' E. J. Pliclan. Xo. 1 Licensing Authority, at a sitting of the Authority hold in Opotiki on Wednesday last, “I have stated that before 1. could give consideration to the question of fixing prices, I would have to he quite satisfied that every attempt had been made by the parties concerned to arrive at an amicable settlement. “Although I have .reports of the holding of various conferences,” stated ill' Phelan, “1 am not at' all satisfied that at these conferences a serious attempt has been made to arrive at a,settlement. At this stage it cannot be argued that I have given any indication as to.what the rates should he. although it has been suggested that the Raglan County rate schedule might he taken as a guide, not so much perhaps as roJJuds the actual prices, hut as to the form in which the rate schedule should he prepared. ,“1 am aware,” stated Mr Phelan, “that iu some instances the carriers have submitted schedules in the hope [ that they, would he accented, and further 1 am informed that in submitting these schedules it has been stated that they had met with my approval. If this has been done it is entirely incorrect, for in only one or two isolated cases have I approved of rate schedules, and then only either by the consent of nil the interested parties, or in the ease of Raglan County these rates were fixed after a public hearing. It is no use representations being made to me indicating that conferences have failed, and that my assistance is sought, unless 1 am assured that every avenue has. been explored., and that all interested paj-t-

ies have taken an active part in the negotiations. This assurance cannot be given to me until such time as the farmers, cither business interests, and the carriers have given serious consideration to the schedule or schedules submitted by any of the interested parties.

“The fact that one party has submitted a schedule with which the other disagrees is not sufficient to justify my taking further action. J. am, of the opinion that most conferences have been of this nature, and I have yet to learn that at the conferences which have been held, the schedules under consideration have been carefully analysed. “As stated on previous occasions,” said Mr Phelan, “the fixing of rates i s after all a matter which can best be dealt with by the parties who are most vitally concerned, and who know the exact peculiarities of the district over which the'rates are to apply.” The secretary of the Opotiki Carriers’ Association, Mr Hislop, informed Air Phelan that a meeting of all interested parties had been held in Opotiki, and a scale of charges agreeable to both users and operators in the Opotiki district had been arrived at.