CROWN'S CASE

Bay of Plenty Beacon, Volume 2, Issue 127, 23 February 1940, Page 5

CROWN'S CASE

PAPER MILLS INQUIRY

HIGH TRANSPORT COSTS

The hearing li3 r the Price Investigation Tribunal of the application I) 3' t lie Whakatane Paper Mills, Li in ited, to increase the prices of the cardboard it manufactures was carried another stage when Dr Foden outlined the nature of evidence for the Crown, whose answer to the company's application, he said, would be that a case had not yet been satisfactorily established for the new prices sought. The history of the mill seemed to be what might lie called a serial story of erroneous estimates. The picture had changed with kaleidoscopic rapidity during the few years of the mill's existence. The Crown would endeavour to satisfy the tribunal that this factory, which, it was submitted, had proved uneconomic, should, not be turned into an economic con cern at the public expense. Professor Corbin,, technical forestry adviser to the company, said it would be more costly to bring timber from the Pukahunui block to the mill than from Matakaua Island. In any case the timber at Pukahunui was being reserved not for the production of cardboard but ultimately for newsprint. Criticism of Books. John Bernard Prendergast, an officer of the Industries and Commerce Department, who carried out an investigation at the factory, said he was of the opinion that the books did not go as far as they should have done in stating, the company's exact position. Witness said 20 per cent of the cost of Whakatane- products was represented bj' transport costs. This was abnormally high. If the company got the prices it wanted the' public would be paying these costs. Transport costs were high because of the site. Every pennyworth of raw material, including coal, had to be transported. In addition the product had to be transported out. Judge's Suggestion. His Honor suggested that after an adjournment accountants of both sides should confer and see what could be agreed on in regard to mill expenditure and the capital account of £586,000. The case could not lie decided without something definite about this. William Crabb Ward, technical officer to the - Government timber price commission and production and marketing officer of the State Forest Service, said regarding a statement that for pulping purposes pinus insignis would not keep, he could best point to 400 cords being kept for use as posts by the State Forest Service. From his examination of the costing ledger at the mill, this was not one, in witness' opinion, on which a costing system could be based. The labour cost per cord was given at £1 2s 611. He was prepared to concede to the company that the labour obtainable at Matakana Island could hardly be termed fully efficient in the sense of timber cutting and loading, but at the outside the cost per cord should not be more than 17s. Scrapping of Railway. Dealing with the logging on Mata kana Island, witness said the position as it was explained to him was that the company knew that it had to log timber off the island for a period of years. It placed the wharf adjacent to the first block of trees which it intended to mill, and put down a railway line from the wharf to the area. Witness said that in his opinion to put down a line and then n couple of months later to scrap the whole thing in favour of motor-lor-ries did not show sound organisation. No one, unless absolutely forced to do it, would contemplate carting logs by motor4orry if it could be done by tram line. Every mill in New Zealand had a tram line if it was possible to put it down. Dr N. A. Foden, representing the Crown: This estimated payment of 18s (kl a cord; jvvhat will it .amount to annually?— They will be paying out £11,300 in motor lorry hire. In reply to questions from Dr. Foden, witness said that the only advantages he could see in the mill being at Whakatane was water power. Witness was still in the box when the seventh day's proceedings ended.