WORK STOPPED

Evening Post, Volume CXXVI, Issue 82, 4 October 1938, Page 12

WORK STOPPED

MEN DISMISSED

PULP PAPER FACTORY

FEAR OF SOCIALISATION

(By Telegraph—Press Association.)

ROTORUA, This Day,

Owing to failure, it is stated, of the Government to give a satisfactory assurance that in the event of its return at the election it will not socialise the paper pulp industry, construction on the Whakatane paper mills has been stopped until after the election. The whole of the men, numbering 155, are being paid off today.

Mr. H. A. Horricks, the managing director, said that the assurance had been asked for, together with a loan of £20,000 for wages, as evidence of the Labour Party's good faith. Matters had been brought to a head through Australian shareholders flatly refusing to pay their calls until the elections were decided, many indicating that if the Labour Party was returned they feared it would confiscate the assets. Until late yesterday afternoon he had reason to anticipate that the Government would grant both requirements. As these had not materialised he had decided to conserve the assets by avoiding further capital expenditure in the meantime and 'to review the position after the election.

"If the Government is sincere in its attitude that it will not socialise the industry, and is prepared to encourage the industry," said Mr. Horricks, "then the door is still open for it to comply with the company's requests."

The expenditure on the works was close on £500,000, said Mr. Horricks, and the plant was scheduled to go into operation in December. The company, which was incorporated in Australia, had 6000 shareholders in New Zealand who had invested close on £1,000,000 in the company, which had subscribed assets in forests and railways in addition to the Whakatane works. The company could call over £50,000 share capital in Australia, but he was not prepared to advise the Australian board to invest their funds in the Dominion until the present unsatisfactory position had been determined to the company's satisfaction.