THE FLAX INDUSTRY.

Manawatu Herald, Volume LI, Issue 4547, 23 December 1930, Page 1

THE FLAX INDUSTRY.

COURT’S DECISION THIS WEEK

Seeking a reduction in wn to I.os per (lav, tlie fhixiuillers b before 1 the Arbitration Court at the view to reaching an adjust make it praetieablc* for the ind given concerning the costs of | with current market, values. h Mr Justidb Frazer presided. With him on the Bench were Messrs A. L. Alonteith and W. 0. Prime as employees’ and employers’ assessors respectively. Mr AY. Bromley appeared as advocate tor the Manawiitn Elaxmillts Itiaplovees’ Industrial Union, with him being associated Mr P. T. Robinson, the secretary of that organisation. Mr T. 0. Bishop (Wellington) seated the ease lor the Flaxmillers Association, being supported by tire Now Zealand president (Mr D. ROgilvie), Messrs A. E. Alabin, 11. Greig, Herman Seifert and others. Notice of application to amend the Wellington industrial district llaxlaills employees’ award, dated June 28, 1927, bad previously been made by one of the parties, Ross Rough and Co., Ltd., by reducing ail wages and - piecework rates specified in Clause 4 by 33 L-3 per cent. The grounds ol tiio application were that the conditions of the industry had altered inasmuch as the price of hemp had fallen since the award was made to such an extent as would not permit of the industry being carried on if the w.ages and rales of pay specified m the award remained in force. Power to amend the award in ease of an alteration of the conditions of the industry was stated to have been reserved by the Court when the award was made. . Outlining the application, Air liishop stated that it was not in order, but the Workers’ Union lrad consented to its coming forward, showing an appreciation of the need for bringing the matter before the tribunal. “The employers have exhausted every means of arranging an adjustment of the wages question,” added Mr Bishop, “and they are now before the Court, which is really their last hope. They have endeavoured to carry on and have unsuccessfully appealed to the Government for assistance in the way of a subsidy. There is altogether too great disparity m soiling prices iwul tlie costs ol produo tio». The industry is at a standstill, and unless a rearrangement ol costs is made, it will remain in that position.” Mr Bromley said it was an overstatement to suggest that the union had waived its objection to an application which was out of order because of an appreciation of the difficulties besetting the industry. It had merely consented not to insist on technical formalities. No overtures had been made to the men for an adjustment by the millers before the application bad been filed for a variation of the award. Mr Bromley sought an assurance that the millers would abide by l lie decision of the Court and undertake to start their mills upon the basis arrived at. He expressed a doubt about that unless the decision was in a certain direction. Mr Bishop said the mills would start it llu; Court could make such provision as would enable them to do so. Even if the wage in the industry to-day were 10s per clay the millers would still lose money. That would not bridge the gap in prices. .MILLERS ANXIOUS TO START.' Air Justice Frazer: 1 take it that the millers are anxious to start ? Mr Bishop: Absolutely. The nulls will start as soon as possible after January 1 if losses can be reduced. There is a difference of £5 or TO per fun between tire costs of production and the prices returned. If we can get that down to LI, the millers will be ready to start. They want no profit and no interest. All- Bromley said that in the past the price of hemp hud been £SO a ton, instead of £lB, but the award had not been increased in proportion. Other awards had been made providing for variations where circumstances changed. Unless that could be done, passive resistance would probably be olfored. ••The Court tries to adhere to standards where they exist, although it lias been blamed for doing so. It has a well-known policy,” stated Air .Justice Frazer, who added that a departure had been made in the ease ol the shearing awards. Air Bromley said no provision was made for a sliding scale in tile application by the millers. They demanded a definite reduction ol 33 1-3 per cent to LOs a day. which was an absurd figure. ' Air Bishop asked if Air Bromley was prepared to accept the ligures submitted by the millers concerning tile facts as to the selling price and the costs of production. Air Bromley: 1 think that you will have-to prove the costs of production. Air Bishop: Well, we will proceed in Ahat way. DETAILS OF COSTS: Arthur Alabin, chairman of directors of Aliranui Ltd., and connected with the industry for forty years, stated that the jinn concerned commented 1 operations in May', 1927. He submitted a schedule ol milling costs at £ls 0s Id. in addition to a royalty of 7s 8d on green flax. Overhead expenses accounted for £l2 Is Id, making. a total cost of £27 Us Sd at the mill. The price at the mill last year was £2O 9s 9d per ton, showing a loss on milling of 19s lid per ton. In addition-there had been-a capital expenditure of ,07740 on development works, interest oil which had not been provided for at all. When operations commenced, the price was £32 5s f.o.b. per ton in Wellington, but jt later fell to £3O in 1928, and £27 17s in 1929. ' Tlie price to-day was difficult to gauge, as no flax was being produced, but a high price in the world’s markets would be £l9 10s per ton. The 1913 price was £25 per ton, plus tow, making it £27. Sisal, witness added, had been a factor in forcing, down flax prices, owing to tre competition of that product being produced by cheap labour in East Africa, and Java. Sisal was being landed from 11 Java in Australia to•v at a lower price than flax could

APPLICATION FOR VARIATION OF AWARD

Palmerston X., IDcc. 20. ges of MU I-II jut cent from los rought an important, test case Palmerston North to-day, with meat of costs which would ustry to resume. 'Evidence was production and the disparity be landed from New Zealand. ’I lie actual wage cost'was L‘l2 10s 3d per ton. A reduction of 33 1-3 per cent, would bring iL to L'S 10s Bid. Even with that wage reduction there would still lie a heavy loss, but be was prepared to stale that the mill would start if a reduction could be effected, to bring I lie production costs to a little over £25 per ton f.o.b. The average price for fibre over a long period had been £25 per ton. To a large extent, excess profits made during tinwar and not absorbed by taxation, bad gone back into the industry for development purposes. There had been no fat dividends paid. It was at present impossible to carry on, and the swamps were going back. New Zca land fibre bad a recognised place in the market owing to its standard quality, but the supply could not be maintained. The flax industry had been a good one in the past for New Zealand! and. given encouragement, the miller,- could re-establish the industry’. Air Bromley sought information concerning the distribution of profits made during the war period, and was informed that there was no trace of them. They had been made and spent. Air Bromley: There was no-.argu-ment when hemp was at £SO a ton for increased wages. Is it reasonable to expect the men to accept lower rates now ? Air Alabin : It is impssihlc to carry on the industry at present costs. The loss is too great. Ibe mills could not reopen on a wage even of 11s per day. Replying to Air Bromley, who asked a question concerning the running of stock on flax properties. Air Alabin stated that it was not important. That was done merely to keep down growth. There was no profit in the operations. This year there would probably be a loss. To Ah- Justice Frazer, witness said Lliat flax royalties had come down. The mills would always pay royalties whenever possible in order to increase their output. Eivdencc was next given by Harry Greig, the supervising director ol a company carrying on operation-. at Tokomaru, who stated that tlie Company had a property of (541 acres, tlie capital value of which wa,- oyer £14,(300. The total cost of production was £2B 0s 2d . a ton. No provision was made for depreciation or interest on share capital. The company had been operating for about 31 years. Ho could not give an assurance that bis company’ would carry on if the reduction sought wore obtained, as it would still mean a loss ol Iroin £3 to £5 per toll. Every effort would be made if the loss could be financed. Flax was waiting to lie cut for an output of 450 tons per year. Normally they employed 38 men in tlie actual milling besides seasonal workers. All- Bishop: Could you obtain your labour at the rates sought here-' Air Greig: Alen have publicly expressed themselves as willing to work at that- wage. LAND LESS PRODUCTIVE. Replying to Air Bromley, witness stated that the land was not producing so much flax per acre as it did fii teeil years ago. As a flax-growing proposition land in the Alakerua area bad not the same value to-day as previously, when it used to command a premium over grass land. “We have not the money to make the conversion to glass land ‘ Values are in the melting put. All- Justice Frazer said that if the price of butter remained at its present level, dairy land values must drop all over the country. Air Greig said his company was practically at the end of its resources. When the decision of the Court was made it would meet to decide whether it was possible to resume operations again. , , Mr Bromlov: You mean you would decide- whether the decision was acceptable. , , . M Air Greig said Ins company would have to go into the matter to see whether it was possible to tide ovoi tnc orises. The wages to lie accepted by tli© men would he left to their disoietion. They did not have to work lor tlie millers. Mr Bromley: Oh, yes, they dp. Mr Greig added that the application had been made out of sheer necessity. Mr Bromley: Do you tlnnk that in the event of the workers being called upon to share the burden in times like this they should share the good times of prosperity again?Mr Greig: Yes, but the millers should first be recouped for tlie losses incurred in the meantime. Mr Bromley said that tlie workers should have participated in past prosperity. He believed that they weie paid "no more than award rates. Mr Justice Frazer: We know that during good times in other industries the award rales were regarded as a minimum, and that higher rates weie frequently paid. lie did not know wiuvfc was the ease in the flax industry. LOSS LAST SEASON. Donald Ogilvie, director of ltoss, Rough and Co., and president ot the New Zealand Flaxmillers’ Association, stated that, based on a normal output, the costs of production, after allowing for a 33J per cent, reduction m wages, were £22 7s Bd, showing a loss ot £i 2s Bd. An average loss of 15s 3d per ton' was made on operations last season. The 1910 award 1 provided rates about equivalent to a 33J per cent, reduction and the costs then were £-> 11s lid per ton. Costs had been cut down in every possible direction. Nothing was provided for depreciation or land taxation. He could obtain labour at the reduced rates and men had ottered to start. His company was prepared to start operations providing the reduction asked for was granted. ~s Mr. Monteith,-on the Bench, looking over the staff figures, observed that (Concluded on page 4).