SALE OF FLANNEL

Taihape Daily Times, 16 September 1919, Page 3

SALE OF FLANNEL

' ALLEGED PROFITEERING. ‘—l-—-CHARGE AGAINST GEORGE AND ‘ KERSLEY. -é. In hhe Magistr-ate’s Court at W9l Hngton on Friday afternoon, before Mr E. Page, S.M., the case of the Board of Trade V. George and Kersley, Ltd., was heard. Mr P. S. K. Macassey, of the Crown Law Office, appeared for the Depart mont, and Sir John Findlay, K_c__, with him Mr M. Myers for the defendants; George and Kersicy were charged that on September 3 they sold to Hua Audrey Bethel flannel known as No. 5 Shetland at a price which was 11:ron.sollably high, the opportunity of obtaining Vsuch price in New Zealand having arisen by reason of a scarcity of such goods in New Zealand caused by war conditions. - ’

Mr Macassey, in opening, said that; this was the first case of the kind in New Zealand. The information A was laid under section 21 of the War Regulations Act. 1918. Under this section it was an offence to sell goods ea. 21 price that was unreasonably high For some time past there had been numerous complaints made to the Board of Trade in reference to- the high prices rurling, especially in the drapery trade. The subject of the pcrs(‘~nt charge ;was flannel known as No. 5 Shetland flan‘iiel, and was manufactured by the Wellington Woollen Cor;pziny at Petone. It was the practice of drapers to add 50 per cent. to the cost price of goods, which would give a return of 33 1-3rd per cent.‘ on the turnover. He ilTu‘stratecl this point. and said that if the cost of an articix was 40/, the retailer would add 20/, making the selling price 60/, and that would yield a profit of one-third, or 33 I—3rd per cent. In the present case Miss Bethel purchased from George and Kerslcy, Ltd., two yards of th: flannel at 3/31:1 yard. The \\'llolcsa.‘r<' pre-warn price to the distributors was 10%-,d, and the Selling price to the publie was 1/2, showing a profit of ncal~ ly 4d a yard. The reason why tllc 1‘;tailcrs were not able to add 50 pt-1' cent. was because there was an English flannel known as “Doctor” flauynel that was selling at about the same ifigure. The wholesale price of this flannel today was 1/7: a yard, less 3:3} per ccnt., and the retail price of it at the DLC. and Te Aro House was was 2/6, and at Veiteh and Allan's: 2/4. The charge made by George and Kersley' was 3/3. which showed a. gross profit of 1/8, as against 4d prior to the War, and approximately 103 per cent. on the cost price." it was aread ily saleable z-.1-ti-cle, and there was no reason “W 113? this excessive profit: should have been charged. Mr Mucussey pointed out that a roll of this flannel contaiiied 55. yards to 56 ycul'd., and the vrholesalc value of the roll was about £4.79/.4: and the. profit mdae by George and 'Kersley was about £1 14/4 per 1-2311:: If this was turned over three times during the year the profit would be 3/ on a yearly capital -wt‘ £4 9/4. or over 100 per cent. on th outlay

Hua Audrey 84.-thel, emplo_VCd by the Board of 'l‘:-aide, said that she made the purchase‘ of 2' _v‘ardg of No. 5 Shotland fl:1111io1,’q:i11d paid 3/3 a yard for 11-. “ '~'

1 ..~\. E. Do"onns>", swcxetmy of tin: V\7ol« lillgton Wocillén Company, said that the price 61* Shetland fianllol be-for-3 HlO \\'a’l““".'\'a‘_\‘ 101.41, less 35,‘, per c:*llt_ Ah izivoimé _of the sale of flanxtml in .’lill_'/."(f'-.l’,"S)lf3’. ‘Co Guorge and Kc.-rs-loy at 1} 7§'.;'3:{.'lid"another of a. sale in .»‘-.ugusl , \\'i'-TL‘ produced. 011 October 3, 1919. al} order xviis received for S ].»,7C'CL'S of flannel and ot‘.~.cr goods. and the pricsc: of the flannel was 1/4.‘, 0:; August 15. 1919, there was’ another m'dcl' for flannel, tllc prion‘ Hm} hcin_s_:j 1/7.1.. Out of the two order,-3 for flan. 1101 only t\_\',o rolls could be supplied by the company. 'I°?1“c1-c was :1 gcllm-211‘ ,v.ho;-tagc of flannel; ihe.compall’_v had hem engaged on war" work and the dmnostic trade was Shut Off. Prior to the war they Wore able to supply all dmmulds and they had a reserve stock. The pro—war price was 10.’_.d, and they just cleared CXDOIIS(‘s at that price.

Tu Sir John Findlay: In the retail trade he l<n(,-w it was quite common to sell one art-i¢».le ai :1 low price ancl—reeover on another. The company 501'] this flannel to 25 customers in Wellingieon. 'l‘hvro had been additions mzrdc 'z'lfl’oc!ing the cost of production during the war period. .\li’red John Mullills, mz-inagcr of the Munchestr-r department Of the D_J.'.C., said that No. 5 Sheilmid flan--1101 was the cheapest flannel made, and was gr housuliolrl flannel. and was-ri-gamled as a _ “bread and butter ]ine.” Prior to the war the Cost .05 the flannel ivas 10},d and the selling price 1/2. Witness had no vgenierzil rule as to “adding a percentage "to the cost price; he Vras asked to'sl1ow“ ‘in certain p€1"~“‘1”3«ge on his A tLll'lleVerf and he arranged his prices according»Iy. M

To Mr Myers: He had "no uniform’ increase on the c'6st price of the xari ous goods i'n his department. The

ratio 01.‘ expenses to turnover in 1914»

was not known to him, and he did not know what it was now. The actual expenses since the war had increased considerably. ' Mr Myers: I am afraid I must as’: you this quesfion, for We want to bring evidence on’ the subject. What is the gross profit. that you have to get on your turnover?

Mr Macassey protested, and there was some arguifént.

The Magistar’t’ef' On What ground do you obpect to the question being asked

Ml‘ Mac/assey: Bec‘ause it is il-rel: vant.

The Magistrate: I am afraid I must allow the question to be asked.

Witness, in reply, said that the gross profit that he was expected to show was 27; per cent. His department was divided into sections, and the gross profits varied from 27% to 31 per cent_ on the turnover.

Mr Myers: What is the highest and (Continued on page 6_) * It’s quite true, as philosophers, say That “Where there's a will there’s a Way.” ’Tis the secret of business success And it comes to our aid in distress, When illness, or danger assails, Or when we’ve hard times to endure Firm will -be our trouble avails, Like Woods’ Great Peppermint Cure 8