THE HEMP INDUSTRY.

Manawatu Herald, Volume XXXI, Issue 451, 2 March 1909, Page 3

THE HEMP INDUSTRY.

ROYALTIES AND WAGES. EMPLOYEES INTERVIEW HON. A. W. HOGG. (Dominion.) Three members of the Mauawatu Flaxmill Employees’ Union, Messrs G. S. Whibiey (president), Percy T. Robinson (secretary), and R. H. Dalhousie, interviewed the Minister for Labour (Hon. A. W. Hogg) at Wellington on Friday, and urged him to ask the Government to inquire into their contention that the real cause of the trouble in the flax industry is high royalties, and not the conditions imposed by the Arbitration Court Award.

In support of the view that the royalties were at the root of the trouble, Mr Robinson said that one flax estate in the Foxtou district was yielding 36 per cent, on the cost of the land now that flax was down in price, and had yielded 100 per cent, when flax was high. Those of the millers who had to pay royalties did not want wages reduced ; they wanted the royalties to come down.

The Minister : “Are you and the employers agreed in this matter-”

Mr Robinson: “Yes. Those who do not own the land, but have to pay royalties agree with us,” The royalties (continued Mr Robinson) had been greatly increased. They went up on account of the boom in flax, and when the fall came they did not come down in proportion. although they were reduced to a certain extent. The representatives of the Flaxmillers’ Association said they wanted revision of the award, and that nothing else would keep the industry going. One miller, however, had resigned from the association, because it refused to consider the question of royalties. The position was that millers who owned the flax they were milling bought it at boom prices, and now that the market had gone down, they wanted to take it out of the workers. AN ALLEGED “GAG CLAUSE.” The Minister then put a number of questions to Mr Robinson who stated in reply that about half the millers owned their flax, and they were keeping the mills at work, but only on sufferance. As far as .the Manawatu was concerned, |ouly two or three mills had closed laown, and that was because they (had no flax. The others were working just as they were in the boom two years ago. The Minister: “Is there a general desire on the part of the mill-owners that the men should work on different terms ?” Mr Dalhousie: “ A large majority of the Foxtou millers are convinced that it is the royalties, and not the wages, that are the cause of the trouble, but they don’t venture to make any public statement.” The cutting contracts were so framed that they were immediately convertible into a gag if the miller gave public utterance to any objection to the royalties he was paying- There was no slump at present, but there was simply not a boom, and it was, therefore, utterly unfair to charge the award with the present state of affairs. COST OP LABOUR AT FOXTON. The deputation handed to the Minister some typewritten sheets, showing cost of labour and royalties on certain Manawatu flax lands. The wages paid when fibre was ,£ii per ton, as taken from the books of a Foxton miller, were given as follows:—Engine driver £2, per week, stripper-keeper and feeder £2 8s per week, catcher ,£i 1 os per week, bench loader £2 2s per week, two fly boys £3 per week, washer £2 2s per week, paddockiug at 22s per ton, £8 16s, scutching and tow at 20s per ton, tramming and cutting 60 tons at 6s per ton, ,£lB, total labour cost for 8 tons of fibre, ,£4B 18s. Labour cost per ton, £6 2s 3d. It was stated that to-day’s price for “ good fair,” Wellington, was ,£2l. Difference in price, £lO. Difference in cost of labour per ton, £2 5s gd. The wages paid under the award by the same miller were shown as follow: —Manager £4 xos per ton, feeder £3, catcher £2 12s, bench loader £2 12s, two fly boys £4 16s, washer £2 Bs, rouseabout £2 2s, driver £2 1 os, driver £2 6s, head paddocker £2 14s, paddocker £2 Bs, scutchers (3) £ix Bs, tramming and cutting 60 tons at Bs, £24, total labour cost for 8 tons of fibre, £67 4s, labour cost per ton, £8 Bs. It was further stated :—‘ ‘ The miller whose figures are quoted above is milling Riverdale leaf. With wages on Scale A, he paid a royalty of 24s per ton dry fibre. To-day he pays 20 per cent on his contract pricesas a royalty charge. The block of flax from which he is cutting'measures 250 acres, 120 Acres of which gave him 18 months’ cutting. In this period he paid in royalty £2500, viz., £2O 16s 8d per acre, equivalent to a return of £77 jper acre per annum. His weekly royalty therefore averages £32, royalty onehalf the amount required for labour.” Mr Dalhousie informed the Minister that the miller who had supplied this information was prepared to submit his books for inspection by the Minister or any person appointed by him, but did not wish his name to appear in public, saying, “ It I open my mouth, I close my mill.” A MAKER UA CONTRACT. A synopsis of a contract offered to a member of the Flaxmill Employees’ Union and five partners by the- owners of the Makerua Estate Was submitted as follows ■

“ The plant for the entire mill was on the ground. The contractors were to pay per annum rent, to keep all drains clean. (Mr Greig, in his evidence before the Labour Bills Committee estimated this item at ,£2OO per annum), and to keep all fences in repair. In addition to this, they had to deposit a bond of ,£3OO, or failing this, to guarantee to sell their entire output through the estate. It will be noticed that this last restriction practically precluded them from taking advantage of the slightly belter price usually ruling for ‘“spot” fibre. The scale of royalty to be charged was as follows :

London Royalty Royalty Advamv Trice per ton per ton of Royalty green dry per ton leaf. tlbre. libre.

£ £ s d £ s d £ s d 20 0 2 0 o 16 o 21 026100040 22 030140 040 23 0 40 1120 080 24 046 il6 o 040 25 0702x60 100 26 0 86 3 80 0120 27 0110480 I 00 28 013 0 5 40 016 o 29 014 6 516 o 0120 30 016 6 612 o 016 o 31 01S6 7 80 0160 32 130940 116 o 33 1 60 10 80 140 34 1 8011 40 016 0 35 1 10 0 12 00 016 o

“ In estimating royalty on the dry fibre, we have taken a basis of 8 tons of green leaf to the ton ot ■fibre.” MOUTOA ESTATE. The following particulars were given as to the Moutoa Estate : “ The Assets Realisation Board handled this estate for many years, charging a royalty ranging from is per ton at the lowest point of the market to 3s 6d per ton at the highest. The top price during this period was £27 xos, the average yield per acre at this time was 30 tons. Taking the price paid by the present owners, £7 xos, as a basis, this would give a return on invested capital of 23 J 3 per cent.

“ At the top price of the recent boom, £39, the royalty charged was £1 2S 6d per ton green. On the same basis as the foregoing (£7 xos per acre) this gives a return of 100 per cent per annum 011 invested capital. This calculation is based on a yield of 20 tons per acre, to allow for a very rapid depreciation caused by neglected drainage, blight, etc. The present royalty paid is 8s 6d per ton green. The price on the same basis as both the foregoing, gives a return ot 36 per cent per annum on invested capital. “ In an ordinary mill’s entire staff there are 22 men, receiving under award rates an aggregate of 26s per hour. The royalty paid by such a mill, using Moutoa leaf at present prices, would work out at xos 6d per hour. “ The following are the principal items in the contract under which millers dress Moutoa leaf: —(1) A charge of £3OO is made, irrespective ot royalty, for the right to cut. (2) Three months’ notice will nullify the right to cut. (3) No rebate is given if the right is taken away. (4) No guarantee is given that the right will not be taken away. (5) The lact of any miller stopping cutting without permission from the estate manager, or failing to start after receiving notice, is equivalent to cancelling the right to cut. (6) In the event of any miller selling his mill, his purchaser is required to pay another £3OO. This payment is to accompany each change in the proprietary of the mill.” The following was stated to be an actual example of cutting right charges: Hickson and Reeves were three days late with their royalty payment; they were fined £l5O, Hickson sold his halfshare to Broad, who paid £l5O. This sale was not completed, and Hickson came back on payment of £3OO. Hickson sold to J. Rose, who paid another £3OO. Thus £9OO was taken from one mill within twelve mouths for cutting rights. RIVERDALE estate. “ This is a case,” it was stated, “ in which the royalty is charged on a precentage basis. There is a charge of £3OO for the right to cut, as in the case of the Moutoa. The royalty charged is 20 per cent, on the selling price. The estate comprises 3000 acres, allotted as follows:—Two mills, L. Seifert, 500 acres; two mills, Broad and Reeves, 1000 acres; one mill, Hennessy and Gibbs, 250 acres ; one mill, Green Flaxdressing Company, 500 acres ; one mill, W. Walden, 250 acres; one mill, Page and Co., 500 acres (two years not working). “The amount of royalty paid by the above mills in one season was £13,000. The smallest monthly royalty paid by a milling firm was £132 ; the highest, £328. During the entire season they paid £I4OO in royalty. The previous season their payment exceeded £2OOO. When the recent fall in values took place all the millers on this estate formed a deputation and suggested the alteration of the 20 per cent, royalty to the following proportionate scale: —Price of hemp, £2l and under, 10 per cent, royalty ; £22 to £24, 15 per cent; £ 2 5 to £27. 20 per cent. ; £2B to 30, 25 per cent.; £3l and over, 30 per cent. This was refused, with a recommendation to reduce wages instead, and failing that to lower the cutters’ rates, which were not under an award. HEATON PARK ESTATE. “ This was in the hands of the Rhodes Trustees, who charged in 1900 15s. per ton on the dry fibre. In 1905 this was raised to xos 6d per ton on the green leaf. In 1900

the average value of fibre was £2O 2s. In 1903 the average value of fibre was £25 18s. Rise in value, £5 16s (28*4 per cent.) Rise in royalty, £3 9s (460 per cent.) Increased cost of production, as given by Mr Greig, equals £ 1 3s per ton of dry fibre, a 12 >2 per cent rise. “awfully exacting.” Mr Dalhousie drew the Minister’s special attention to the clause in Moutoa conditions enabling the proprietors to close any mill at three months’ notice, involving the loss of the ,£3OO paid for cutting rights. The Minister . “ I see the terms are awfully exacting.” He thought the fullest publicity should be given to the matter. Flaxmilling provided a great deal of employment, and no doubt most of the money in the industry went to labour. Mr Dalhousie then quoted the following rates of weekly wages paid by a Foxton miller : —Feeder £2 1 2S, catcher £ 2 , bench loader £2, shakers and rouseabouts £1 16s, paddocker £2 6s, scutcher £2 1 os, three cutters ,£4 each, one cutter £2 7s, one cutter £2 16s. It would be seen that the highest wages were paid to the cutters, who were not under the award, and that was not exceptional. THE AWARD. In reply to questions asked by Mr Hogg, Mr Robinson stated that the minimum award wages were from 7s a day (for rouseabouts) to 1 os- The union considered that some classes of the employees did not get justice by the award, but their idea was to observe it loyally as long as it remained in force, and then to try to obtain justice for all employees. The hours were 48 per week. Mr Dalhousie said most of Foxtou millers were payiug more than the award rates. Thus, the award rates for drivers was £2 6s a week, washers 8s a day, and rouseabouts 7s a day, while they were getting £2 xos, 9s, and 8s respectively. The deputation did not wish to complain, but they thought it was illogical to ask tor the award rates to be reduced while higher rates were being paid. WILL THE MILLS CLOSE DOWN ? The Minister asked whether the union feared that an alteration of the award would be forced upon them. Mr Robinson said that what they feared was that the mills would be closed. Some time ago Mr Ross called a meeting and said the mills were not paying. He (Mr Robinson) asked Mr Ross if he would submit his books to a public accountant, so that his statement might be substantiated, but he refused. The employers then said that if the men would not consent to a reduction in wages, they would close the mills. They did so, but opened them again afterwards. The same course was now threatened again. This would be much more serious for the men now than it was twelve months ago, because of the present amount of unemployment. Mr Dalhousie urged that inquiry should be made into all the conditions of the industry. the minister’s STATEMENT. The Minister said he could not promise that a commission would be appointed, or an inquiry institued. All he could do was to lay the whole matter before Cabinet, and if his colleagues thought proper, steps would be taken to have the whole matter investigated. The figures that had been submitted to him bore outlthe contention that since the price of flax increased, the royalties had gone up to a very high rate, and, apparently, although a reduction had taken place, heavy royalties were still maintained. This must be severe on those who had invested their money in mills and machinery, but had no flax bearing land. The deputation knew how difficult it was to deal with land-owners, once they had become possessed of the property of the Crown. When land became private property, the control of the State was almost gone, and this was particularly unfortunate in view of the effects that might follow in connection with the labour market. The laud was the mainstay of labour, and, in his opinion, it was a pity that greater care was not taken to reserve land containing valuable mineral 01 vegetable products in the hands of the State for labour purposes. He would do all he could to have prominence given to the facts and figures that had been laid before him, and he thought that if full publicity was given, the aggressors, unless they were very callous, must feel acutely what they were doing. It was for Cabinet to decide whether there should be an investigation, and, if so, what form it should take.