PRICE OF TIMBER.

Hokitika Guardian, 28 September 1923, Page 4

PRICE OF TIMBER.

SOME hidden factors. lii a country where so many of the liqusoft and other buildings are of wooden construction, the price of timber must over be an absorbing question, inure particularly when the demand for houses finds its natural sequel in a boom in building. Some felling factors being upon the present range of timber prices were supplied to the New Zealand ‘'Herald” recently bv Mr •T. Butler, managing director of the Kami Timber Company. Iu making a review of timber piices there are, said Mr Butler, several factors of costs hidden from the public that must be taken into account. Rates and taxes form a considerable proportion of the suwmillcr’s expenditure, and to some it may come as a surprising statement that many trees nc*v standing have had rates and taxes paid on them each year for the last 110 years. Obviously, therefore, when the interest on this expenditure, tugetlier " itb the original capital investment, is taken into account, the yearly additional cost to the miller is considerable. Then, there is the fact that each iiee, owing to the handier ones being taken first costs a little more to win than the one previously felled. Account must also be taken of the steady progressive charges, made by the llarhmir Board in respect of dues payable on timber. As regards railways, no reduction in costs lias been made li r the carriage of timber, while rents of railway sidings have been increased, KFb'FCT OF ROYAbTIKS.

1 )oalii! 14 witli tile question oi' Oovern--111011 i royalties. ?slr 15iiLier said these have increased very rapidly during the pawl few years. am] iliis, naturally. las reacted upon timber prices. The casual observer would think that if royalty went up Is ];er 100 supwriicial led this would mean that the timber, to meet the extra charge, should only so up Is per 100 ft. That was not so. because the Is was based upon the quantity of timber when in the tree. This, however, in the process of conversion, lost at least 'Jo per cent, of its original V| u a 111 it y. Coiiscquei.hly, so far iis the sawn product was concerned. tile timber bad increased Is Id, besides the interest on the additional outlay. The fact that timber is now being worked which only a few years ago was doomed la be quite inaccessible, was also a reason why limber costs could not be cheapened. .V case in point wrs supplied by the workers at Kauaetrattga. That bush was abandoned years ago as it was then considered impossible to work. Since then some £OO.OOO bad l;e(*n spent in tramways ami booms, and in building dams and clearing creeks, with the result that the timber bad been made available for tec use of the Dominion. All tlie.se works bad necessitated a heavy expenditure for upkeep and the continual adding on of those expenses bad to bo borne by the timber. .Mr Butler pointed out that just the opposite effect took place when ordinary eai tiny was considered. For in-V-taiKC. the mail from Auckland to Ouohuuga Ind been, within quite ie-

ceiit times, transformed from a very indilfei'ent madway to one of smooth sltrlace. that should lend itself to cheaper traction. Yet, so far as ho knew, the (■olive,vino companies bad not not: cheapened their eh a roes on account of that advantage.

In reply ie the criticism;!: suggestion that timber piiccs had not been reduced because the mnungenicnl of the mills leol Iw-niue sluggish and iutiii'. lereiil. Mi liullci said the best answer io that uas iippdied by a visit to any Ot the Auckland mills. Stab an inspection would, be felt convinced, enable tbe critic to salisiy binisell indubitably whether or mu both plant and "oikefs were not highly efficient. I’IIOFITS OF 1 in; IMIFSTKV.

Questioned as to pn. tils derived by tlto limber industry, Mr I’.milci- said it »a< only nm'-.ssry In glsnne down 'h”M- li'-t. mid matte dedtutimis ato the vidi'e of timber proposition'-. "You will find,” lio said. “that. talcin;r llio aefunl paid-up i.ipital into oonsiderat ion. and ignoring any watering

of stock, timber investments have not been nearly so profitable as purely financial or insurance companies. It is true that- some of the commodities used by the miller have come down in price, but those only form a very small percentage of the outlay attachable to*prodneiiou. It is also Hue that in-come-tax. postages, ami telegrams have been reduced, but these reductions do not nearly compensate for the additional costs that | ilo up as times gees on. I nless the larger items, such as wages, royalties, and railway freights are lowered, there will be no chance of timber prices being reduced. FLOODS AND FIRM LOSSES, ‘■flint is the position to-day: but continued Mr Butler. "1 should like to mention one or two other factors of which the public take little cognisance, in some districts, although rates and taxe> are paid annually for many years on timber, without using any roads for its conveyance, as soon the reads are used special heavy charges are made fur the abnormal traffic, and while this is fair, there is no credit given for the many yea:s that taxes have been paid and the roads mg trod at all. Flood damages, especially that caused by legs (liiltine, is an tins con but unavoidable expanse, and still another is the loss of hushes by lire: this L a risk so great that insuiame (ompanies will not entertain it. These arc charges that have lo be borne by timber and which iu tin' aggregate, are heavy. But they do not appear when making a super licini examination of costs.”