THE IRON INDUSTRY.

Dominion, Volume 5, Issue 1454, 31 May 1912, Page 6

THE IRON INDUSTRY.

NATIONALISATION PROPOSALS. AXD PRIVATE EXTEHPIUSE. Inferring to tlis iron industry, Mr. Mackenzie said There is a great deal to be said in favour of faking over all tho lights acquired anil starting State iron works; but as against the advantages these facts must' be noted: 1. Owing to the absence of an outside market, the works would, he on a small scale, and would grow but slowly. 2. The cost per lon of any product is greater when the factory is small than if the output is large. This is especially the ease with iron and steel, owing to die costliness of the plant required in a modern iron and steel mill. 3. The State could not, as a. private company can, establish trade in a foreign marKct, give long credit, cut rales, etc. The arrangement that can probably be made by the Xew Zealand Government with investors combines the advantages of private enterprise and nationalisation together. All the experimental work, the obtaining of markets, the responsibility for losses, and unforeseen expenditure is to be undertaken by private enterprise. The share of the State is a contribution based on a . minimum amount to be actually expended in the development of tho industry. The actual amount will bo much larger than this minimum; how much it is not possible to say, but it may be two or three times as. great. After tho. works are actively in operation, the State will have at the end of, say, twenty years, a right fo take everything over at a. fair and reasonable valuation. At the end of forty years the whole of the works, ' plant, rights and goodwill of the company will go to llio State without any compensation at all. A very important i part of the proposed arrangement is that all iron and steel required by tho Government is to be supplied at cost price, plus 5 per cent. It is expected that iron and steel girders, rails, bars, and ; other goods can be made in Xew Zealand at a very low cost. XVilll the extension of our railway system, the replacing of light rails by heavier ones, tho substitution of inn bridges for wooden ones, and the increasing consumption of iron ami steel in our public buildings and public works, the country will almost from the first gain more in cheaper supplies than the whole cost of the annual subsidy. I An Immediate Development. 1 Tho investors have large interests in ' South America and elsewhere, and will S at once establish rail and girder mills , for supplying their own requirements. ' This means a rapid growth of the works. * The State or a local company would not have an immediate output for its mills, J and it would of necessity be many years J before they would be of any importance. | liy accepting the otter now made, these j advantages will be obtained:— 1. Modern up-to-date iron and steel 1 mills will be in working order in the shortest possible time. _ j 2. Owing to the interests of the invest- 1 ors in other countries, a large immediate j output is assured. There is no necessity > in their case for creating a market. .3. The Government will get all its iron I and steel goods at a low figure, probably f sufficiently low fo recoup the State tho 1 whole of the annual subsidy. !

J. A right to resume on full compensation will be given after twenty years. 5. All tho plant, rights, and goodwill of tho company wjjl pass to the State at the end of forty years, without any compensation whatever. Taranaki is specially interested in the development of the iron and steel industry. The railway from Stratford to the Main Trunk line'will cross the great coal belt extending from the Waikato southwards, and it may within a few years bo possible to obtain largo supplies of good coal in Xew Plymouth much cheaper than elsewhere in Now Zealand.