CEMENT PRICES.

Taranaki Daily News, 5 October 1921, Page 5

CEMENT PRICES.

THE ALLEGED COMBINE. MINISTER’S REPLY TO CHARGES. AN INQUIRY TO BE HELD. By Telegraph.—Press Association Wellington, Last Night. The allegations of the existence of a cement trust, made in the House of Representatives last week by Mr. R. Masters (member for Stratford), were replied to in the House to-night by the Hon. E. P. Lee, President of the Board of Trade. Mr. Lee said many of the statements were inaccurate. The member had not minced matters, characterising certain transactions as not only irregular, but even criminal, on the part of the cement companies and of the Board of Trade. Replying to the closing of the Golden Bay works, the Minister said members complained about the Board of Trade’s control of the industry and price-fixing up to May last, when the agreement v r as made between the companies. In ISIS, as the result of investigation, the selling price of cement was fixed at £4 16s a ton, an increase of £1 on the pre-war rate. The Board of Trade’s purpose was to review prices in the light of circumstances. In January, 1921, the price of cement delivered at Wellington was fixed at £9 13s 6d a ton, and the Board of Trade says this price was fully justified. BEGINNING OF CONTROL. The Minister compared the prices fixed in Australia for cement with those prevailing in New Zealand. Imported cement could not be obtained at anything like so low a price as that fixed for the local product by the Board of Trade. When Golden Bay and Wilson’s made an increase of 36s’ a ton in the price, Milburn did not raise its price. As the result of complaints the Board of Trade, in June, 1920, took over the rationing of cement, which was allocated for the most essential works. This meant increased cost by reason of the need for distribution in small quantities. He had endeavored to see that this distribution was carried out as fairly as possible.

There were many people who did not Lke the restriction, and the member for Stratford was among these, so he felt there must be some connection between his disappointment and his statements. The Board of Trade distributed 63,000 tons of cement, and in the same period only 6923 tons were imported. To ameliorate the position the duty on imported cement was raised temporarily, though the price of this was still very high, owing to the freight. The New Zealapd works were able to produce ample cement for the Dominion’s needs and for export. COMPANIES’ PROFITS. The shortage in supply was due to a shortage of coal; only half of the coal required by the works was obtainable, and the price of that was very high. The Golden Bay Company paid a dividend of 5 per cent, in I®lB and 1919, but in 1920 and 1921 no profits wore available. The Milburn Company paid dividends throughout, but Wilson’s Portland Company paid none in 1920 and only 5 per cent, in 1921. The Golden Bay Company’s business had been described as one of the most successful secondary industries in the Dominion, tut difficulties arose, and when a syndicate of speculators came along and offered a good price for the business, the shareholders accepted it. The Board of Trade could not interfere with legitimate sale from one company to another.

Mr. Luttrell, managing director of the Golden Bay Company, had written to him (Mr. Lee) stating that those who stood behind the Golden Bay Company were responsible for an overcraft by February amounting to about £40,000. At this stage it was desired to increase the capital, and this was likely to be accomplished when the financial slump came along. At this time Mr. Elliott, of Wilson's Company, told Mr. Luttrell that he intended to reduce the selling price, but Mr. Luttrell had pointed out that this would involve the elosing of the Golden Bay works, and he suggested that the other two companies should increase their output, and the Golden Pay Company could cease for twelve months. An arrangement was made on this basis, the Golden Bay Company receiving a payment enabling it to meet its liabilities. “AGREEMENT NOT ILLEGAL.” The Minister said Mr. Luttrell was a contractor, and in his connection with the Golden Bay Company, he was actuated to secure supplies for his business, as he was quite entitled to do. The agreement was neither illegal, immoral nor criminal, as it had been described by the member for Stratford, who had charged the Government with responsibility. Therefore, the Minister said he proposed to submit the matter tor investigation and decision by those whose opinion would have full weight, and the member . for Stratford would have an opportunity of putting hie case before them. The closing of the Golden Bay Company was regrettable, by reason of the hardship caused by those employed there, but the conditions of the trade left no other alternative. The price of cement had not been increased as the result of the agreement, and there were plentiful supplies. No restriction of building had followed by reason of this combination; the works eould not be kept open just to meet local requirements. Mr. Lee said he intended to ask the Government to set up an impartial tribunal to ascertain if the Board of Trade, or the parties to this cement agreement, had been guilty of any wrongdoing. CASE STILL STANDS. Mr. H. Atmore (Nelson) said the case • gainst the cement companies, as preferred by the member for Stratford (who was only carrying out a public dutv) still stood. The Golden Bay works were more advantageously situated than any other in New Zealand, yet it was closed, to the detriment of the people. The Government was opposed to American trusts, yet it permitted a local combine to act in restraint of trade. The latter was surely as evil as the former. Mr. Atmore pointed out the fact that cement for the new ironworks at Onakaka, only 11 miles from Tarakohe (the Golden Bay works site) had to be obtained from Auckland or Dunedin. He added that he had been informed that the price of cement in Nelson had gone up 6s or 7s, although Tarakohe was only 40 miles away, with works in the midst of a large limestone deposit, and alongside a d»«p-wat«r harbor,