TIMBER INTERESTS MERGE

Sun (Auckland), Volume III, Issue 667, 20 May 1929, Page 8

TIMBER INTERESTS MERGE

BY the amalgamation of their interests into one producing and marketing concern, the Ring Country and district timbermillers have taken an important step for their own protection. Though at first sight the benefits this move will confer may be obscure, closer examination shows that under the new arrangement much wasteful competition can be eliminated. Since competition is nominally the life of trade, consumers may view its elimination with concern, and fear a trend toward higher prices. The fact is, however, that competition in the timber trade, and particularly at the milling end, has had a seriously devitalising effect. Prices should he lower, rather than higher, as a result of its removal.

Timber prices have all along been governed by an understanding between the federated millers, so from that aspect there is no new development to be feared. But in the past there has been a feverish struggle for the production of the heart timber prescribed under the fastidious building regulations of such bodies as the Auckland City Council. Even the Government, while placing a ban on the export of sap timber to overseas markets, declined to permit its external use in State-assisted dwellings. The result found millers striving to produce heart timber, with the rest of the log an almost useless burden in their yards. Naturally, their inability to use the sap timber raised the price of the superior lines. A substantial step toward the mitigation of this disastrous waste was made when a committee of experts representing the millers, the Forestry Department, and the building trade, defined a new grade of timber, by which a wider market will be found for the medium classification between heart and sap. This, coupled with the reopening of the export trade, gives millers a satisfactory opportunity to quit otherwise dead stocks. Another favourable factor is that the amalgamation will allow regulation of output in ratio to fluctuating demand. Both the forests and the capital of the millers will thereby be conserved. Ordinarily such a course would involve curtailment of services and staff. Without stating details of their policy, the combined millers have announced that all the mills their interests represent will he kept working. Whether this means at full strength or with only skeleton crews is a different matter. The King Country milling towns have suffered enough through the slump in timber to justify the fervent hope that no further curtailments will be necessary. On the other hand, the combined strength of the millers should now enable them to embark on a vigorous export policy, as well as a local campaign to popularise New Zealand timber. Experience in big organisations overseas lias shown that fronr all points of view the sinister atmosphere often associated with trusts and cartels is unwarranted. The effective and economical methods thus achieved have paved the way for some of America’s greatest industrial successes. In a smaller way, this new move may do the same for New Zealand timber.