The Temuka Leader SATURDAY, NOVEMBER 11, 1882. THE LINSEED INDUSTRY.

Temuka Leader, Issue 1029, 11 November 1882, Page 2

The Temuka Leader SATURDAY, NOVEMBER 11, 1882. THE LINSEED INDUSTRY.

The prospectus of the Temuka Lineeed Oil, Cake, and Fibre Company is now before the public. We think the directors might easily have made the prospectus much more attractive, and given a great deal more information regarding the Linseed industry than they have done. The prospectus is more remarkable for what has been left out of it than for what has been inserted in it. The facts on which stress is laid in the prospectus are : that £44,429 worth of binding twine and cordage is annually imported into New Zealand ; that last year 229,029 gallons of oil, costing £33,385 were imported ; that a bonus of £SOO is offered by the Government for the first 10,000 gallons of oil manufactured in the colony, and that there is also a protective duty of 6d per gallon on oil. It is further stated that the price of oil-cake in the English market for fattening stock is £l2 per ton, and that therefore it would pay to export it if the local demand was not equal to supply. All these facts are put very forcibly before the public, and there is no doubt but that they are very strong arguments in favor of the enterprise, but there is not a word in the prospectus which would show intending shareholders how it would pay them to invest their money in shares in the company. This, we think, ought not to have been overlooked, as there is nothing so well calculated to ensure the speedy disposal of shares, as facts and figures showing the profit to be realised from capital invested in the project. Up to the time that the Provisional Directors were appointed we took great interest in this project, but since then we have been studiously excluded from their meetings and consequently we have no information respecting the inquiries which they instituted into the working of the enterprise. We, however, previously to this, made inquiries on our own account, with the result that we think we can supply what has been omitted from the prospectus —that is, how it will pay shareholders to invest their money with the company, and also how it will pay farmers to grow flax. Mr Murphy, Secretary to the Christchurch Agricultural and Pastoral Association, editor of the New Zealand Country Journal, and Secretary to the Cristchurch Linseed Company, is a gentleman who may be looked up to as an authority on such matters. In a very exhaustive pamphlet on the Linseeed industry he states that, after paying £2 pei acre for rent, buying seed, ploughing and preparing the land, and mowing, carting, threshing, retting, grassing, crushing, and scutching the straw, it will yield the farmer £8 10s per acre clear of all expenses. Now everyone knows that to allow £2 per acre rent for land is more than sufficient, and as Mr Murphy is equally liberal in his allowances for other expenses, we think that the farmers’ profits will be much larger than Mr Murphy sets them down at—that is, £8 10s per acre, For instance, Mr Murphy sets down the buying value of seed at 10s per bushel, and its selling value at Gs per bushel. That, shows that he lias made liberal allowances for all contingencies, and even looking at things from the worst point of view the fanner is bound to he handsomely paid for liis labor in cultivating flax. Now, as to whether it would pay a company to manufacture twine, we have the following facts to lay before our readers : —The American machine, said to be the best that can be obtained, can turn out 800 lbs of twine in a day of 8 hours, or 4800 lbs in a week, which at 9d per lb gives a weekly income of £IBO. According to Mr Pearce the quantity of straw required for the production of 4800!bs of twine is 17 l-7th tons, and at £3 per ton that would give £sl 9s. In Mr Murphy’s pamphlet provision is made for the farmer to rett, grass, crush, and scutch the straw, and even after doing all these things his profit is set down at £8 10s per acre. But we think that the farmer will find it more advantageous to sell the straw in its raw state to the factory, and consequently we will accept that as the most profitable course that will be adopted. The raw material for the week’s work will, therefore, as stated above, be 17

1-7th tons, at £3 per ton—£sl 9s, and Mr Pearce is our authority for the cost of the labor employed, as follows: Two men for rettmg at 7s per day, or £4 4s per week, and two men for scutching at 7s per day, or £4 4s per week. This sum of £8 8s per week would fit the raw material for the factory, and the cost of manufacturing the fibre into twine is set down as follows ;—Manager and Clerk, £4 10s ; three men, at 8s per day, £7 4s per week ; eight boys, at 12s per week each, £4 16s ; and one laborer at £2 per week. Thus the weekly wages are made out to be £26 18s, while the price of the raw material is £sl 9s. These two sums added together will make the total weekly expenses £7B 7s, which, if subtracted from the total weekly receipts of £IBO, will leave the weekly profit of the Company £lOl 13s, Setting the £l 13s aside for insuring the premises, we get £IOO a week in round numbers as the profits of the Company. At one of the preliminary meetings Mr Mendelson said there Were about 30 tons of twine imported annually into South Canterbury. He is our authority for that statement, and he certainly ought to know something about it. These 30 tons of twine would take all the straw that would grow on 120 acres of land, and would I employ the factory, working at the rate of eight hours a day, for 14 weeks, and as the net earnings would be £IOO per week, that would leave a net profit of £I4OO, or nearly 15 per cent on £IO,OOO, the proposed capital of the Company. Thus it will be seen that it would pay even to manufacture for local consumption alone. But surely if 30 tons of twine can be disposed of in South Canterbury it will be very easy for the Company to dispose of 70 tons mere of it throughout the colony, without exporting one pound of it. That would be the product of about 400 acres of land, and would keep the factory going for about 47 weeks of the year. Thus the 400 acres of land would yield to the farming classes, at a net profit of £8 10s per acre, £3200, and the net profit of the Company for 47 weeks’ work at £IOO per week would be £4700; or the total amount which would accrue to the district from the linseed industry would be £BIOO. The data on which we have founded this calculation has been supplied to us by persons who ought to know, and therefore we fancy they must be correct. Ti ny mount at any rate be 50 per cent wrong, but even if they were, and that the profits were 50 per cent less than we have stated them to be, shares in the Linseed Company would still be a profitable investment. We have set down the net earnings of the Company for 47 weeks at £4700, but even if that is 50 per cent over-estimated there is still a profit of £2300, or more than 20 per cent on a capital of £IO,OOO. There is still to bo added to this, the profit which would accrue from the manufacture of oil. The prospectus points out that £33,385 worth of oil were imported into New Zealand last year. The price of the linseed from which the oil is made is higher at Some than in this colony, consequently English manufacturers can have no advantage over the local factory in that respect. The price of labor is lower at Home than here, but then there is 6d per gallon duty on the imported oil, and that, together with freight, and many other expenses, will render it easy for the local factory to compete successfully with the imported article. Then as regards the manufacture of of cake for cattle, we fancy the establishment of the refrigerating process will obviate the necessity for exporting that article. As the frozen meat industry is developed, the demand’ for cattle will proportionately increase, and fanners are bound to resort to artificial means of fattening them. From whatever point of view the industry may be looked upon, therefore, there can ho but one opinion with regard to it, and that is that its establishment is one of the most important steps that has ever been taken, not alone in this district, but in any part of the colony. Nobody can form the faintest idea of the magnitude it may reach ; it is impossible to over-estimate its value to the district, and consequently we sincerely trust that the shares will bs taken up rapidly. There is one tiling in its favor— Mr K. Sando has been appointed broker, and we firmly believe that if there is any possibility of floating the Company he will do so. If it does not float it will not be for want of energy on Mr Sando’s part. We trust our readers will take up shares in this industry, a« it will benefit every section of the community, and that many of the shares will not be allowed to go out of the district.