FEW PAY DIVIDENDS

Chronicle (Levin), 19 July 1947, Page 5

FEW PAY DIVIDENDS

(Special Correspondent.)

Private Forests Declared A Failure

Received Rriciay, 7.0. p.m. LONDON, July 18,. Tlie opiriion tlmt privately owbed afforestation companies operattng- iii New Zealand were still ir. the rnain heavily over-eapitaLsec and that few can- be expected ti. pay any dividend at all from net ximber sturnpages, although those ■entering' the f'orest utilisation field, may ameliorate this position b} way of profits from utilisatioi ventures, was expressed by Mr. F W. Foster, mspector in charge of the management division of the New Zealand State Forestry Service, in a paper presented to the fifth Empire Forestry Conference. His survey described many of the companies as hard-pressed to find finance' for annnal company fees, local rates and a b~re mini mum of forest mamtenance, and jiointed out that they could' not go to the market for further fully paid share capital vvhile their ex.sting shares were at a discount. Although the bondholders were now " theoreti'cally coherent" in regard to company poiicy and management, in practice they were no.t because they were distributed in many eountries thus allovving small well organised groups or local owners to control the destinies ot new share companies. OutJinimg the growth of privately owned afforestation companies in the Dominion, Mu Fo.ster said that the great bulk of their forests were planted during the boom period between 1923 and 1930 and were the direct result of "get rick quick" company promotion. Investors were commonly promised a return of £500 at the end of 20 years for every £25 subscribed. The vardstick rvas the rapidity of tree growth and this aecounted for 91 per cent of priv ately owned plantations being under fast growing species and the insignis pine. This policy was subsequently modified by a number of companies which entered the forest utilisation field by way of manufacturing forest products sucfi as wgllboard, wrapping and kraft paper, sawn timber and minor products. This included the growing and harvesting of 'raw wood matbriai ,to supply to utilisation factories now operated by the forest owners. The report pomts out that although the New Zealand Government found it necessary fo investigate the rights oi bondholders in these companies, subsequent. legislation and the Bondholders [ncorpor.ation Co.himission set up in 1930 dealt only Ivith the financial „ ,$sp6Cts; At. oue' sMge- it was proposed; in the bondholders^ interests, to make an impartial inve'stigation into thf physical condi^ion pf the forests ann economic possibilities of their utilisaf.ion but this was not done. The survey claims that the privately owned forests " pra,eti.cally without exception" are unimproved by stand 1 oleaning, thinning,, pruning or othei ( lilvicultural attention. Only in tnt . 8tate forests is fire protection of a reasonably good standard. 8ome com l pany forests have excellent firebreakf out littie eJse and in many forests fin - protection is woefully inadequate. ir the latter plant-ing often extended righi i to the boundary fences and even on u > publie roadsides and firebreaks weri 3 either absent or in a dirty condition . The firefighting equipment and organis- , ation, moreover, were often most inaae ; quate ' if not entirely lacking. Thesi conil'itions were hardly fair to the own- ! ers of well proteeted and orgamset forests in the same loeality, with thc , resmc that, in the broad public inter- [ est, the effieient forest owners hac , ofteu to turn out their men to fighl someone else's fireMr. Foster expressed the opinion thal , some measure 'of -government control ! over private^ 1. pwned "rj |orests, tfisougn somewliat late,' wbuld' bdnefit ' th^ na i tional forest' positioii' thrbugh improvea i silviculture protection and manage ment.