15

H.—3o

urged an increase of storage accommodation to meet the then requirements. At page 255 of the notes Mr. Duxfield is reported as having said, referring to freezingworks, " A good many have been closed. Eight or nine are now closed." Mention was made of the Taranaki Meat-works, the balance-sheet value of which was some £230,000, having recently been sold by the mortgagee for some £75,000. In this district Borthwicks were mentioned as being the competitor, and not Yesteys, and it is also to be noted that these works are going to be, or have been, turned into a manure or fertilizer works. Mention was also made during the hearing of freezing-works at Waingawa which had a capacity equal to, if not greater than, Mr. Lysnar's works, and which in September, 1923, had fallen into the hands of the mortgagee, and have been leased with an optional purchasing clause at a price somewhere in the vicinity of £140,000. The Kakariki works were referred to by one of Mr. Lysnar's witnesses as not at present being a saleable proposition. The Whakatane freezing-works were mentioned, and it was admitted by the chairman of directors of that company, who was called by Mr. Lysnar, that although these works had cost about £200,000, and he considered that it would cost at least that figure to replace them to-day, yet some time ago an offer to get them taken over by the ratepayers at a value of £100,000 had failed. It is true that Mr. Lysnar argued, and called evidence to support his argument, that the Whakatane works were unsuccessful because of the competition of Vesteys. There was no evidence called, however, to show that Vesteys were competitors in either Taranaki, Waingawa, or the Kakariki districts. Two Works sufficient for District. There seems to be no doubt that two freezing-works are ample for the Poverty Bay district. In Mr. Lysnar's letter of the 25th August, 1923, he says (inter alia), " In this way the sheep-farmers would only have the cost of two works to maintain instead of three as at present. Two would be ample for the requirements of the district, and at the same time would enable the killing to be done at a cheaper rate." Mr. Jones says, as reported at page 803 of the notes, that if they —Yesteys — had not rebuilt, and the three works existed as they were, there was not room for them. Mr. Cederwall, manager of the Gisborne Sheep-farmers' Company, said that his works could be enlarged at a reasonable cost, and that two works were better for getting labour than three works. Mr. Richmond, a witness called by Mr. Lysnar, as reported at page 1126, said that two works were sufficient for the district. Replacement Value of Works. Messrs. James and McCarthy made a valuation of the Waipaoa works in September, 1923. Their valuation was in effect a reaffirmation of a prior valuation. One of the witnesses said that he had been instructed by Mr. Lysnar to make the original valuation on a replacement basis. No criticism was made upon the correctness of the valuation of Messrs. James and McCarthy so far as a valuation on a replacement basis was concerned, but counsel opposed to Mr. Lysnar stated that they did not consider that cost or replacement basis was the proper test to apply. Mr. McCarthy quite frankly admitted that he did not feel competent to value freezing-works on the basisjof market value. He said, " No, that is not my job: that is a commercial man's job." He also admitted, on the next page (328), as follows : — We may take it, then, that you know that freezing-works are not a saleable commodity ? -—That is right. And that affects their saleable value ? —Yes. I suppose you know that quite a number of freezing-works have had difficulties during the last two years and the companies have been quite unable to sell them ? —That is a fact, of course, but it is out of my province. Ido not wish to discuss it.