The Daily News. FRIDAY, OCTOBER 7, 1921. THE TIMBER INDUSTRY.

Taranaki Daily News, 7 October 1921, Page 4

The Daily News. FRIDAY, OCTOBER 7, 1921. THE TIMBER INDUSTRY.

The persistent rise in the price , of timber of late years has been the cause of much concern, besides materially restricting building operations. In a recent review of sawmillers’ pi-ices for New Zealand timber, the chairman of the Board of Trade (Hon. W. G. McDonald) has given some interesting information and statistics in support of the view that “the Board of Trade is satisfied that, when all the circumstances are taken into consideration, only a reasonable profit has been made generally, but those mills that are working on rights acquired on

| advantageous terms many years | ago are earning fairly lucrative profits as compared with the mi’is working under current royalty conditions.” It is stated that the board, in addition to enforcing restrictive measures in regard to export, has also exercised a control of the price of timber in the Dominion, inquiry into the reasons for increases being made before sanction was given, application for increase being refused unless supported by reliable cost data justifying the same, the guiding factor being the cost of production, it being considered that owing to the diversity of conditions operating in the industry, the, relation of profits to capital outlay afforded no true indication of results or a fair basis of comparison. There are approximately 350 mills operating under conditions which differ so widely that no general statement of cost is possible. Among the chief matters affecting the price of timber are royalties, the life of a mill, depreciation of assets, labor and working expenses, overhead charges and taxation. Royalty appears to vary from threepence to ten shillings per hundred feet, according to the nature of the bush, the kind of timber, and the date when the royalty was fixed. It is stated that the actual cost of a particular grade of timber in Wellington is 23s 2d per 1.00 feet, and that from, the West Coast this includes freight, charges of 7s 2d, leaving a net f.o.'b. return of sixteen shillings as compared with a net price on trucks at. Ohakune of eighteen shillings and sixpence, with railage only of 4s 3d. Naturally the cost of production varies at each mill in relation to the average price realised at millskids for timber produced at that mill, so that the variation in freight charges largely influences the millers’ actual return. The total cost of production per 100 feet is estimated to have run out at Ils l.lOd in 1918-19, 13s 8.05 d in 1919-20, and 17s 5.6 d in 1920-1, with royalties at 2s Id to 2s 3d. Felling, cross-cutting and hauling charges have increased from to over 31d, mill wages from 20-ld to 31Jd, and all other charges in proportion, though the overhead weighting has risen, from 15d to 29d, while the average price realised has risen from 14s 0.06 d to 20s the margin of profit .being approximately 3s Id. It is claimed that the present restriction of sales, due primarily to the stringency of finance, is adding to the cost of production, and that each year’s cutting involves heavier' charges for, tram extensions and haulage. The Minister’s only hope of lowering the cost of timber is by the elimination of waste and increased efficiency in production. Such a hope rests on a very frail basis. In fact, all the indications point to higher instead of lower prices. So far as the public are concerned, their only hope of obtaining cheaper timber supplies appears to depend on the free importation of Oregon, whereby the Dominion timber would be conserved and an impetus given to.the building trade. Vested interests are strong, but the Government should study the interests of the community before those of a particular industry.