“DISASTROUS YEAR”

Taranaki Daily News, 10 September 1921, Page 10

“DISASTROUS YEAR”

THE DRAPERY TRADE; POSITION IN WELLINGTON. DECREASED BUYING POWER. Wellington, Sept, f. During the sitting of the Arbitration Court some interesting evidence was tendered by Frederick G. Page, director of one of the largest drapery establishments in Wellington. He said, that among shop assistants generally there was now more unemployment that there had been since 1909. The position had developed very seriously within the last three months. If an advance in wages were maae they would have no alternative but to cull out quite a number of less efficient members of the firm’s staff. So numerous were applications for employment that he had reached the position where he had refused to interview applicants. There had been a tremendous decrease in the buying power of the public. Therefore it had been decided to unload as much as possible, to get rid of it.

In the last 20 years it had been the policy of the firm to make provision by way of depreciation for contingencies ps they arose. Those depreciations accumulating in the last 20 years were absolutely wiped out in the last year’s trading. The position was that dividends must be paid out of reserve fund, not out of prolts. Mr. Grenfell, for the employers: The profits are not there to pay dividends. Witness: 1 am prepared to prove it by putting an auditor in the witness box. He will swear our last 12 months’ trading was disastrous. In regard to boots, witness said most people who traded in footwear realised they were going to be faced with a considerable loss before they were done. Mr. Grenfell: What ia the reason? Witness: The fact that goods are being sold to-day at somewhere beneath cost price. In regard to taxation witness stated the Government was taking more than the shareholders received in dividends.

Mr. Croskery, for the union, raised the question of war profits. Witness: No, there were no war pro-

His Honor Mr. Justice Frazer: The war period was no more profitable than any other ?

Witness: Any profits made went into stock at higher prices. His Honor: From one thing and another the war period need not have existed, as far as profit'is concerned? Witness: That is the position. Mr. Croskery: You say your firm made no war profits Do you mean to say that during the war period your firm has not. made , increased profits over and above per-war periods? Witness: We have to make provision—

“That is not the point,” interrupted Mr. Croskery. “What I want io know is, do you mean to tell this Court that during the period of the war your bal-ance-sheets did not ehow increased profits o<er what they did prior to the war?” Witness: Pro rata, no.

“That is a most astonishing statement,” commented Mr. Croskery.

Another witness was asked if he could confirm the statement by Page that last year had been disastrous. Witness replied there could be no doubt on the point. “We have had to sell at replacement value,” he said, “which meant great loss in nearly every case.” Mr. Grenfell: So that the year’s transactions have proved anything but profitable ? “1 have not got ray balance-sheet out,” replied witness, “but I am frightened to see it.”

Mr. Grenfell: You are not able to say to what extent the loss has been?

“No,” answered the witness, “but it goes into thousands.”