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(2) Taking the more efficient companies as examples, it is found that wages-costs are approximately between 50 per cent, and 60 per cent, of the companies' total production costs — a vital factor and one that has a considerable bearing on the cost of lime. (3) Rents and royalties vary from as low as Id. per ton to as high as 2s. 6d. per ton, 0.9 per cent, to 16.5 per cent, of production costs. (4) The variability of stripping-costs is one of the features which makes any generalization of costs impracticable. Before lime can be quarried it is necessary to clear away all overburden of earth, so that the quality of the product is of the highest possible standard, consistent, of course, with the analysis of the limestone in the quarry. On viewing the various quarries the Committee was impressed with the variation in the amount of stripping that has to be done. Certain quarries require to strip only about 6 in. of earth, while in others the depth of overburden may be up to 10 ft,, or, as in one or two cases, up to 50 ft. Stripping-costs are frequently heavy, but a great reduction in costs has been brought about by recourse in some cases to mechanization and in others to sluicing. The Committee is of opinion that such methods might be more widely adopted. (5) Like stripping-costs, quarry-costs also show a high degree of variability; This is usually due to the different physical characteristics of the limestone in the various quarries. Costs of labour, explosives, repairing tools, &c., all vary according to the; hardness of the stone and the tightness of the quarry-face. (6) In a few cases the mill is situated some distance away from the quarry, involving a further expenditure in carting the spawls to the mill for crushing and pulverizing. Here again is one of the features which makes generalization impracticable. (7) Mill-costs —that is, the cost of crushing, drying, and pulverizing the limestone—are reasonably consistent except for the fact that some works dry the stone and others do not. Fuel-costs vary in accordance with the proximity of the works to the source of fuel-supply. Repairs to machinery arc heavy, as is to be expected in an industry such as this : (8) Delivery costs—that is, the cost of bagging the lime and delivering to the railhead — again are variable. There is a certain amount of consistency in bagging-costs, but the costs of delivery to the railhead naturally vary according to the distance the works are located from the rail point of despatch. (9) Management and selling expenses on the whole are not excessive, the chief variation being in the rates of commission payable to merchants or agents, these varying from-Is. per ton to 2s. 6d. per ton, or 10 per cent, to 17J per cent, on selling-price. (10) Some companies show quite an appreciable gross profit on bags, amounting in certain instances to a sum equivalent to the company's annual net profit. (11) In an industry such as this depreciation of buildings, plant, and machinery is a heavy item. If a company wishes to state its financial position accurately in its annual statement of account then full depreciation should be provided. There is a tendency on the part of some companies, especially private ones, not to charge depreciation in the accounts, and this practice is not advisable. As plant and buildings have little break-up value it is essential that allowance be made in depreciation not only for wear-and-tear, but also for the lifetime of the deposit. Few companies would appear to be making provision for the wastage in assets occasioned by the operations of the company, and consequently the values of same appear to be overstated in certain balance-sheets. On summing up the data in short, it appears that, generally speaking, the average lime-producing company is eking out a precarious existence, operating on a very small margin of profit, which profit, factors outside its control, such as weather, breakdown in machinery, and even the smallest increase, in wages-costs, could quickly reduce to a loss. The Committee considers that any increase in the price of lime is undesirable in the interests of national production, and that any increases in the cost of production should be met, if at all possible, by the more efficient operation of plant, particularly by securing increased output and a better spread of deliveries. THE PRICES OF AGRICULTURAL LIME. Prices of carbonate of lime range throughout the Dominion from 9s. to 235. per ton, while those for burnt lime vary from 235. to 465. per ton, an extensive range and one that serves to show how diversified conditions are within the industry. Only thirteen companies out of eighty-three produce burnt lime, ten of these companies being in the South Island and three in the North. As companies burning lime do not always keep separate production costs for this product it is difficult to comment at all on this section of the industry. The amount of burnt lime consumed is very small by comparison with the total amount of lime used, being approximately 5 per cent, of the total. The weighted average price for carbonate of lime throughout the Dominion is 13s. 9d. per ton (Appendix E —not printed). Prices appear to be fairly consistent in districts, competition no doubt accounting for this. I t must be stressed that the prices quoted are net to consumers. As the major proportion of the output is sold through merchants, discounts ranging from Is. to 2s. 6d. per ton apply in most cases.

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