KAURI-GUM INDUSTRY (REPORT ON THE) FOR THE YEAR ENDED 31st MARCH, 1927.

Appendix to the Journals of the House of Representatives, 1927 Session I, C-12

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1927. NEW ZEALAND.

KAURI-GUM INDUSTRY (REPORT ON THE) FOR THE YEAR ENDED 31st MARCH, 1927.

Presented to both Houses of the General Assembly pursuant to Section 5 of the Kauri-gum Industry Amendment Act, 1914.

Department of Lands and Survey, Wellington, 30th July, 1927. Sir,— I have the honour to submit herewith the annual report under the Kauri-gum Industry Amendment Act, 1914, for the year ended 31st March, 1927. The Kauri-gum Control Act, 1925, came into force during the year, and the Control Board was appointed in the terms of the statute. I have, &c., J. B. Thompson, Under-Secretary. The Hon. A. D. McLeod, Minister of Lands.

REPORT OF THE KAURI-GUM SUPERINTENDENT. Export of Kauri-gum. For the year ended 31st March, 1927, the export amounted to 4,529 tons, of the value of £301,3-35, an average price of £66 per ton. The tonnage, value, and average price per ton of the export for the past eleven years are — Year ended Tonnage Average 31st March. Exported. Value. per ton. £ £ 1917 4,862 300,271 62 1918 4.636 304,852 66 1919 2,338 152,299 66 1920 4,726 310,611 66 1921 6,131 524.701 85 1922 3,968 391,304 98 1923 6,080 520,409 85 1924 6,923 640,712 92 1925 5,432 446,019 82 1926 5.495 414.420 75 1927 4,529 301,335 66 Details of the yearly export, and the country to which exported, from 1916 to 1927, are given below :—

Particulars of Kauri-gum exported from New Zealand from 1916 to 31st March, 1927, inclusive.

Country to 1st January to | 1st April, 1016, to I 1st April, 1917, to ; 1st April, 1918, to 1st April, 1919, to : 1st April, 1920, to which exported. 31st March, 1916. ; 31st March, 1917. ! 31st March, 1918. j 3lst March, 1919 31st March, 1920. | 31st March, 1921. Tons. £ Tons. £ Tons. £ Tons. £ j Tons. £ Tons. £ United States of 974 60,010 3,158 218,214 2,316 164,516 1,371 81,914 2,037 157,251 3,224 345,992 America United Kingdom 336 13,548 1,484 68,378 363 13,982 346 19,977 1,650 90,422' 2,544 149,422 Germany .. .. .. .. ■ • ■ • • • • • • • [ • • ■ • Canada .. 118 8,972 133 7,718 ],929 124,271 572 45,588 1,016 61,005 314 24,481 Australia .. 5 314 29 1,982 18 1,577 49 4,820 23 1,936, 49 4,802 Belgium * . . .. . • • • • • • • • • • • • • • • ■ • France .. •. • • • • • • • • • • • • • ■ • • ■ Austria-Hungary Russia .. • ■ • ■ 50 3,440 .. .. .. .. .. . Netherlands .. .. • • • • • ■ • • • • • • • • • • Sweden Italy .. .... • • • • • • • • • ■ Japan .... .. .. .. 10 506 .. .. . .. .. 4 Hong Kong .. j .. .. 8 539 .. .. Totals .. 1,433 82,844 4,862 300,271 4,636 304,852' 2,338 152,299 4,726 ; 310,614 ! 6,131 524,701

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Particulars of Kauri-gum exported, &c. —continued.

A very unusual feature of the year's export is the fact that the tonnage exported to the United Kingdom exceeds that exported to the United States of America. A great deal of the kauri-gum exported to the United Kingdom is re-exported to the Continent of Europe, and there appears to be little doubt that the good showing made in the export to the United Kingdom is at least in part due to the fact that the new cellulose lacquers are not so freely used in Europe as in the United States. It would appear as if lacquers have permanently displaced varnishes to a very great extent in the motor-car industry in the United States, and that they have also made at least some headway in another form in the furniture trade. Whether the use of lacquers in the United Kingdom and on the Continent of Europe will have the same effect on the kauri trade as it has had in the United States remains to be seen. So far as kauri-gum is concerned, it is possible that a new process may enable the fossil kauri-gum to come into general use in the lacquer industry. If so, the result would probably be that very large quantities of kauri-gum would be required, and that the cellulose lacquers, instead of diminishing the demand, may actually increase it and provide an outlet at payable prices for a large proportion of the kauri-gum recovered. Research Work. Some four or five years ago a chemist commenced an investigation of the kauri-gum-bearing swamps and materials found therein. After a considerable amount of research he concentrated his work on the actual kauri-gum itself, with the result that he has discovered a solvent by the use of which the resin can be recovered in block form free from all impurities. It has, of course, always been known that the pure resin, could be recovered by the use of a solvent, but the difficulty was that all known solvents were too dear to use on a commercial scale with any hope of financial success. He has now, however, worked up a process whereby the use of a new solvent can be carried on commercially with every promise of success. Samples of resin produced by this process have been introduced to the varnish trade, and the indications are that there is a ready market for this new-process kauri if it can be sold at prices which will meet the manufacturers' views. Market Conditions. It was stated in last year's report that the trade was passing through the worst " slump " ever experienced, and little or no change for the better was apparent during the year under review. It has again been found that the quantity of kauri-gum exported from the City of Auckland has exceeded the quantity received there from the gum-producing districts. This year the excess of the quantity exported over that received amounted to more than 600 tons, and it is expected that the quantity received at Auckland during the current year will not be much greater than that of last year, even though a fairly good demand should develop. During the year gradings of all kinds, with the exception of good range grades, have gone off fairly well. Range gradings have been in poor demand, and as these are recovered mostly by men who specialize in digging range gum, and who are located in settled districts and can obtain other employment, the production has fallen off very considerably. It would require a very firm demand at better prices to stimulate any appreciable increase in the production of range gradings.

Country bo i 1st April, 1921, to , 1st April, 1922, to 1st April, 1923, to I 1st April, 1924, to 1st April, 1925, to 1st April, 1926, to which exported. 31st March, 1922. 31st March, 1923. 31st March, 1924. | 31st March, 1925. 8l9t March, 1926. 31st March, 1927. Tons. 1 £ Tons. £ Tons. £ Tons.! £ ; Tons. £ Tons. £ United States of 2,487, 266,922 3,742 367,946 4,197 449,117 2,624,' 250,379j 2,682 211,623 1,863 136,397 America United Kingdom 1,297 104,094 1,960 129,082 2,409 170,785 2,360 169,975 2,350 179,868 2,036 133,032 Germany .. 58 3,574 70 3,363 66 2,832 117 6,367, 107 4,670 127 5,432 Canada .. 89 9,64] 109 7,462 118 7,714 97 5.726 1 101 3,569 144 7,181 Australia .. 37 7,073 84 6,679 7 787 24 2,006, 9 1,198 15 911 Belgium 33 1,168 114 4,563 France .. .. .. .. .. 55 5,855 79 5,121, 135 9,136 89 6,980 Austria-Hungary .. .. .. .. .. .. .. .. Russia .. .. .. .. .. .. .. .. ! Netherlands .. : .. .. 90 4,381 38 1,582 53 1,917 46 1,809 34 1,950 Sweden .... .. 20 1,000 .. .. 20 820 .. .. 46 1,929 Italy .. .... .. 1 170 26 1,647 55 3,546 ! .. 2 51 2,469 Japan.. .. 4 326 7 393 3 162 22 1,027 10 476 Hong Kong .. .. .. .. .. .. .. .. | .. Denmark .... .. .. .. .. .. .. . . ! 10 350 China .. j .. .. .. .. • • ..... .. .. 15 Totals .. 3,968 391,304 6,080 520,409 6,923 640,712 5,432 446,019! 5,495 414,420 4,529 301,335

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Production during the Year. The kauri-gum received at Auckland from the gumfields for the past seven years is shown, month ,by month, in the following table : — Kauri-gum received in Auckland. 1920-21. 1921-22. 1922-23. 1923-24. 1924-25. 1925-26. 1928-27. Tons. Tons. Tons. Tons. Tons. Tons. Tons. April .. .. 612 191 543 480 439 483 338 May .. .. 532 331 514 613 501 330 332 June .. .. 370 358 654 459 344 395 362 July .. .. 434 404 548 352 363 399 401 August .. 376 368 689 522 407 326 392 September .. 577 508 781 450 373 403 287 October .. 447 420 610 490 471 299 229 November . . 371 482 601 612 427 486 341 December . . 339 285 667 576 591 410 325 Januarv .. 289 331 590 506 525 365 265 February .. 301 466 658 475 492 396 198 March " . . 359 608 700 537 520 541 441 5,007 4,752 7,546 6,072 5,453 4,833 3,911 For the first two months of the new year the arrivals at Auckland were —April, 317 tons, and May> 277 tons. The exports for these two months were—April, 471 tons, and May, 386 tons. Production on a Large Scale. The chief difficulty in the way of production on a large scale has been the inability to obtain laboursaving machinery, especially in the direction of enabling the companies to deliver gum-bearing material into the washing-machines at a cheaper rate than could be done by small parties of diggers working on their own account and in competition with these larger concerns. This was largely accounted for by the presence of considerable deposits of buried timber in most gum swamps. During the past year one company operating at Sweetwater, near Awanui, has made what appears to be the best attempt so far at large-scale production. Those connected with the operations have been carrying on investigations in regard to the digging and handling of gum-bearing soil for some considerable time, and a good deal of capital has been expended in bringing the company's plant to its present stage of efficiency. The process is a continuous one, the soil being carried on tram-lines to the plant, where it is dumped into hoppers, and from that point gravity is applied and the material is washed, freed from impurities, dried, and graded as it passes through the various stages. Shrinkage in Weight on Chalk: Grades. In the report for the year ended the 31st March, 1924, particulars were given of a test which is being made to illustrate the shrinkage of chalk gradings as a result of the almost continuous evaporation of moisture. The " chalk " selected for the test was a typical lot which had been purchased in the ordinary way, and which had been worked over a sieve at the store in Auckland, the chips and dust having been taken out as well as any woody pieces and any " hearty " chalk present. The gum was considered dry when first purchased, and had remained in the sack awaiting grading for some weeks. From a commercial point of view it was quite dry when graded. The trial sack was stored in a warm, sunny room with a good draught passing through. It is doubtful if any further loss will result while the gum remains sacked, since there has been no loss since April, 1926 ; but if the gum were crushed and air-dried it is very probable that a further appreciable shrinkage would take place as a result of the evaporation of moisture still contained within the larger pieces. A number of experiments made with what the trade regards as " dry chalk " showed shrinkages up to 35 per cent, when crushed and air-dried, and the shrinkage of the gum in this test when crushed and air-dried later on, will probably approximate that figure. The weighings to date, with percentages of shrinkages since the first weighing, are as follows : —

Date of Weighing. Weight, I losTto j Date of Weighing. ' Weight. | P^^° f Cwt. qr. lb. : Cwt. qr. lb. 1922—Feb. 1 .. 1 1 14 .. 1923—Feb. 1 .. 10 11 20-13 Mar. 1 .. 1 1 5 5-84 Mar. 1 .. 1 0 9 21-43 April 1 .. 1 1 0 9-09 April 4 .. 10 7 i 22-73 May 1 .. 1 0 25 11-04 May 1 . . 1 0 6 23-38 June 1 .. 1 0 23 12-33 June 1 .. 1 0 6 23-38 July 1 .. 1 0 21 13-63 Aug. 1 .. 1 0 5 24-03 Aug. 10 .. 1 0 19 14-93 1924—Feb. 1 .. 10 0 ! 27-27 Sept. 1 .. 1 0 19 14-93 July 1 .. 0 3 24 29-87 Oct. 6 .. 1 0 17 16-23 1925—Jan. 15 .. 0 3 24 29-87 Nov. 1 .. 1 0 16 16-88 1926—April 26 .. 0 3 20 i 32-47 Dec. 1 . . 1 0 14 18-18 Nov. 26 . . 0 3 20 1 32-47 1923—Jan. 3 .. 1 0 12 19-48 1927—June 13 .. 0 3 20 32-47 H. J. Lowe, Kauri-gum Superintendent.

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KAURI-GUM INDUSTRY ACCOUNT. Receipts and Account fob Year ended 31st March, 1927. Receipts. £ s. d. Payments. £ s. d. Cash in Public Account, Ist April, 1926.. 3,441 18 5 Wages to workmen and gum-buyers .. 621 5 1 Sales of gum .. .. .. 6,913 5 2 Purchase of sacks and cases .. .. 379 15 3" Credits in reductions of expenditure under Purchase of gum .. .. .. 166 0 5section 4 of the Kauri-gum Industry Freight, cartage, &c. .. .. . . 687 16 11 Amendment Act, 1914 .. .. 192 16 5 General expenses .. .. .. 1,331 4 4 Miscellaneous receipts .. .. 3 4 6 Refund of portion advances from Consolidated Fund .. .. .. 5,000 0 0 Cash in Public Account at 31st March, 1927 2,365 2 6 £10,551 4 6 £10,551 4 6 Trading Account for Year ended 31st March, 1927. £ s. d. £ s. d. To Gum on hand, Ist April, 1926 .. 58,797 8 6 By Sales of gum .. .. .. 5,860 12 2 Purchases of gum .. .. 74 18 9 Gum on hand, 31st March, 1927 .. 53,152 17 0 Wages .. .. .. .. 625 10 11 Balance —Gross loss carried to Profit Freight inward .. .. .. 84 5 3 and Loss Account .. .. 568 14 3 £59,582 3 5 £59,582 3 5 Profit and Loss Account for Year ended 31st March, 1927. £ s. d. £ s. d. To Trading Account—Gross loss for year 568 14 3 By Balance —Net loss for year carried Freights outward .. .. * .. 423 311 down .. .. .. .. 5,759 3 1 General expenses .. .. .. 916 3 Cables, &c. .. .. .. 19 9 1 Sacks and gum-cases .. .. 273 8 1 Fire insurance .. .. .. 170 8 8 Printing and stationery .. .. 22 12 3 Depreciation .. .. .. 50 2 6 Travelling-expenses .. .. 2 4 11 Rent .. .. .. .. 500 0 0 Salaries .. .. .. .. 536 7 10 Debenture interest .. .. 3,101 5 4 £5,759 3 1 £5,759 3 1 To Balance —Loss carried forward from £ s. d. By Balance—Accumulated loss to 31st £ s. d. previous years .. .. .. 17,478 9 0 March, 1927 .. .. .. 23,237 12 1 Net loss for year brought down .. 5,759 3 1 £23,237 12 1 £23,237 12 1 Balance-sheet as at 31st March, 1927. Liabilities. £ s. d. Assets. £ s. d. Loan Account— .. Land at face-works and elsewhere, with Debentures issued .. .. .. 75,000 0 0 building, fences, and improvements .. 5,046 15 0 Crown Lands Account .. .. 500 0 0 Vacuum-tank, fittings, and plant, and Consolidated Fund (net) .. .. 5,000 0 0 royalty short workings .. .. 2,900 610 Sundry creditors for supplies, &c. .. 270 14 9 Plant and store fittings .. .. 150 13 1 Sundry creditors for gum-purchases . . 48 17 2 Tools, Auckland and depots .. .. 28 18 4 Sundry creditors for miscellaneous .. 184 11 8 Live and dead stock-.. .. .. 34 11 9 Consolidated Fund, for interest paid on Furniture and office fittings .. .. 77 611 debentures .. .. .. 6,422 17 8 Sacks, gum-cases, &c. .. .. 283 13 6 Interest accrued but not due on debentures 1,262 13 5 Charges paid in advance ... 87 3 5 Reserve Account .. .. .. 617 13 10 Gum on hand .. .. .. 53,152 17 0' Gum on consignment .. .. 782 17 2 Sundry debtors, miscellaneous .. 64 2 8 Advances on gum .. .. . . 477 14 5 Investment in Public Debt Redemption Fund at 31st March, 1927 .. .. 617 13 10 Profit and Loss Account .. .. 23,237 12 1 Cash in Public Account at 31st March, 1927 2,365 2 6 £89,307 8 6 £89,307 8 6 H. J. Lowe, Kauri-gum Superintendent. 1 hereby certify that the statements of Receipts and Payments, Trading, and Profit and Loss Accounts, and Balance-sheet have been duly examined and compared with the relative books and documents submitted for audit and correctly state the position as disclosed thereby. The following comments are appended : (1) The value of stocks on hand has been accepted on the certificate of the Kauri-gum Superintendent. (2) In the absence of statutory authority the account has not been charged with any portion of the amount paid by the Consolidated Fund for the redemption of the loans raised for the purposes of this account. —J. H. Fowler, Deputy Controller and Auditor General. Note. —No profits have been earned in lespect of this account against which a charge for debtredemption could in any case be made.—J. H. O'Donnell, Controller of Accounts.

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