27

B.—S

A. SEIEERT.]

You would pay no income-tax even if you made a profit ?—No, not now. W e have been put on the same footing as the farmers lately, and that has very materially altered our'position. Mr. Weston.] The price of fibre is governed by world competition ?—Yes, that is so. So that, as far as the passing-on the amount of tax, you could not do so by increasing the price of your fibre ? —That is so. Other people producing fibre are not affected by taxation. During the war the profits distributed by the flax-millers were very large ?—For a while they were, but before that we had extremely low prices. From 1916 onwards you had good years ? — years, but we did not pay out much in dividends. I know of one speculation in flax where the industry made enormous profits during the war ? — For a while we had lean years, and then we had four good years, and we have had four bad years now. Yellow-leaf has been most destructive. In our case we had nine machines going before, and we had to cut them down to two. There is every chance of the industry going ahead again, but one can never be sure. We went several years without paying any dividends. We paid out one dividend for six years. Ido not think any of our dividends were more than moderate. And then this yellow-leaf and low prices came along, and for years we have had no dividends. We have had to take tremendous risks and to extend our tram-lines for some miles, and we do not know whether it will be a success, and if we do make a success it is taken from us. Mr. Shirtcliffe.] But you are not paying anything at all now in income-tax ? —No, but this Commission is set up with a view to altering the Act. Mr. Weston.] Your industry is one in which the prices arc determined by world competition. The whole history of the industry has been one of good years and lean years —for a short time you would have prosperity and then bad years would come along ?—Yes. The people who are in the industry have been in it for a long time. They have had the foresight which was required to run the industry. Mr. Shirtcliffe.] To what extent do you ©stimate the yellow-leaf has affected the yields : what percentage of the profit which you should have made has been lost through yellow-leaf I —Our land had no value except to be converted into grassland. We have adopted a new way of cutting, and we were only working two machines, and then we went back to three, four, and five, and we have now six, and we hope to again get nine machines working. It is costing a great deal more to cut the flax. May we take it that the yellow-loaf has accounted for the major portion of your losses ? —Yes, but we do not pay any income-tax. Our balance-sheet shows a loss. Had it not been for the yellow-leaf disease in all probability you would have shown reasonable, profits ? —ln all probability. We cannot run the industry without having its ups and downs. But then when we make a little it is taken from us at a staggering rate. Our neighbours are making a lot of money because their concerns are smaller. A few people joined me with their capital, and I have run their concern, and because of that co-operation I am suffering injury. Mr. Weston.] Could you not form a partnership and then be on the same footing as a single trader ? —I think I would prefer it to be a company. Mr. Shirtcliffe.] You hope that you are going to get rid of the yellow-leaf disease —there are signs of it disappearing ? —Yes. And you hope to get your nine machines working again ? —Yes. And with a little better market you will be in a good position ? —Yes. And then you will be in a very fortunate position under the present legislation ? —Yes. I am not complaining about the present Act, but this Commission is set up to consider taxation generally, with a view to altering it. You say that no industrial concern can possibly pay ss. lOd. in the pound ?—That is my opinion. I consider it slow destruction that will destroy our industries. Are you able to show that the principal industries of the Dominion are not able to pay at the present rate % —I think lam able to show that. Here is a list of industries : 8 per cent, paid by C. M. Banks, who are printers, publishers, and stationery retailers and manufacturers ; Donaghy's Rope and Twine Company, 10 per cent. '\ —One twine company is in competition with another. Arc they not in competition with imported twine ? —No. There is the Milburn Lime and Cement Company, paying 10 per cent. ?—That is in competition with others. You cannot run lime-works much smaller than theirs. 1 thought there was overproduction ?—The lowest size for running a flax-mill would be one strip of 250 tons a year. There is the New Zealand Drug Company, which pays 10 per cent. ? —Weil, people must have drugs. But this company is a large manufacturing concern as well ; they control a very large industry in this country ? —Do you think the industries in New Zealand are progressing as rapidly as they should. ? That is not the point. I want to see how far your contention applies to the industries, and that is what lam trying to get at. There is the New Zealand Paper-mills, paying 7-| per cent. All these companies have fair reserves accumulated. I cannot tell you how much they are putting by annually. There is Sharland and Co., paying 7 per cent. ; Scoullar Company, 8 per cent. ; Smith and Smith, 6 per cent.; Wellington Cordial Company, 6 per cent.; Whitcombe and Tombs, 8 per cent.; Wilson's Portland Cement Company, 1\ per cent. ; Kauri Timber Company, 8 per cent. ; Leyland O'Brien, 10 per cent. ; Taurangamutu Company, 15 per cent. ; Mosgiel Woollens, 11 per cent. ; Wellington Woollens, 14 per cent. This is the latest share list that I have got. Now, take the coal companies : Hikurangi, 8 per cent. ; Taupiri, 1\ per cent. ; Wcstport, 12$ per cent. ; Waipa, 8 per cent. ; the gas companies all paid good dividends, and I suppose you will contend that they pass it on ? —Yes ; and the lending companies pass it on. The unfortunate thing is that the big