THE FAILURE OF THE FLAX INDUSTRY.

Nelson Evening Mail, Volume VII, Issue 71, 22 March 1872, Page 2

THE FAILURE OF THE FLAX INDUSTRY.

The Taranaki Herald says :-— We have received the following letter from Mr. Thomas Kelly, M.H.R., and as it deals with a subject of vital importance not only to this Province but to the whole Colony, we give it the greatest publicity in our power : — To the Editor of the I'aranaki Herald, Sir, — For my own information, I bave taken the trouble to collect the details of the charges and lossts of all kinds in cident to the shipping of pfrormium to the Londou market. lam persuaded that, with fair play and intelligent organisation, this industry will ultimately gain an important position in the Colony. It is afc present struggling to establish itself in the face of many adverse circumstances — not the least of which is the excessive For remainder of news see fourth page.

charges and losses which the manufacturer has to submit to in order to place the fibre on the , London market. The best way in my opinion to obtain redress for this, is by the publication of objectionable facts, and thus draw public attention to the matter. I draw the following statement from what actually resulted from the shipping of. thirty-two tons of fibre by the Cape Egmont Flax- dressing Company, from Opunake, via Wellington, to Loudon, by the ship England. It will be observed that the value of the fibre was £28 in the London market, but, of this sum, only £15 9s. 3d. was received by the company, the balance, £12 10s. 9d. per ton, being absorbed in various ways, and t y all manner of persons, under all manner of pretensions. There are three items of loss to lhe producer to wbich I will specially refer, as they appear to me at once to require a remedy. The first is sea damage. It will be seen that a loss of £26 133. 3d. is occasioned by sea-damage, — that is, I suppose, owing to the ship not being water-tight, or else by allowing the fibre to be soiled by contact with dirty cargo. Why should this fall on the manufacturer when he pays a high price to the ship for carrying his goods ? Why should the neglect or penuriousness of owners or captain, in not repairing vessel, fall on the shipper ? Au alteration in this system should at once be agitated for. The second injustice is that the manufacturer does not receive the full amount for which the flax is sold; an allowance is made to the purchaser of 3|- per cent., equal, iv this case to oue pound per ton. This is but ore of those senseless customs of trade which should be at once abolished, as the loss evidently falls on the producer. The third heavy item is the £5 per cent commission charged by the New Zealand Loan Company. It appears to me, that every item that the ingenuity of man, and that man a commission agent, could possibly charge is charged before. The only plea for this heavy charge is to cover risk. I am informed that the Loan Company charge this per centage because the fibre is only insured against total los?, aud in the event of a shipment being materially damaged so as to be rendered unsaleable, and the shipper being unable to pay the advance made by the Loan Company, that they would sustain heavy loss. But the Company takes sufficient care to guard itself against such a contingency, as they do not make advances to shaky individuals or companies to such an extent r.s to incur any great risk ; but even if the risk is estimated for, surely it is not so great as to require 2-g- per cent, in addition to the usual per centage when insurance against total loss is only 2 per cent. In the present transaction I find that the risk incurred by the Loan Company was on an advance of £640, but it will be perceived that the 5 per cent, is charged on gross proceeds — £874 10s. 3d. — which includes a sura of £134 to be paid to the Egmoot Company in New Plymouth, and the £32 15s. lid. discount remitted to the purchaser. To charge a commission on a sum which is not credited to the macufacturer is peculiarly ingenious, and typical of the commercial ordeal through which the fibre has to run, and the black mail it has to submit to. The unfortunate condition of the flax industry io New Zealand is a matter of reproach to us as colonists. Here we have a valuable raw material ready to hand, which has cost us neither labor or money ; we have sufficient labor and ample capital in the colony to make it a splendid success if we could only bring them together on a fair basis ; yet we find it impossible in practice to do so, which shows that a radical change is required iv our industrial organisation in order to utilise the wealth scattered round us. As at present worked, no person is permanently benefited. The mill owner sinks his money to give a temporary benefit to the operative, the merchant, the ship owner, and the money lender, while by a system of fair division of proceeds it would settle down into a permanent industry unequalled in its colonising power by any at present carried on in New Zealand. N Yours, &c, Thomas Kelly, Chairman Cape Egmont Flax Company.