New Zealand R. S. A.

Digger (Invercargill RSA), Issue 24, 27 August 1920, Page 15

New Zealand R. S. A.

Control of

An explanation of the manner 'in which the Gov,ernment's timber control system is protecting the local .market is given in a statement given by the Minister-in-Charge ; oi regulations governing the export oi eertain varieties of building timber (Sir Francis Bell). He says that the export is controlled in such a manner that the limited permits do not reduce by one hoard or plank the maximum available 'for the New Zealand market. . The latest increase (as from 1st July) in the price of timber was wholly due to an increase of wages at the mills. The Board of Trade, says the Minister, has positive evidence that oii the average the factor of wages is responsible for 70 per oent of cost of timber at the mill. Despite the increase which millers have been allowed to make by reason of increased cost of production the price of building timber on the New Zealand market to-day is very much less than the figures offered for export, so that a large saving is effected for the people of New Zealand by the agrement under which the millers are not able to take advantage oi the world market. The prices fixed for New Zealand ports. At present it is impossible prices which could he obtained for export. The local prioes are based strietly on the cost of production with only a reasonable profit for the millers. When the regulations restricting export of building timber were gazetted, there was a fairiy large export with Australia by eertain mills. Action was immediately taken to reduce these mills' exportations and to prevent exportation by new mills. In the case of rimu the maximum quantity that could be exported during a year was definitely fixed by Order-in-Council, and provision was also made for a yearly reduction of that quantity so that mills which had formerly heen doing a large export trade could gradually readjust their business. As new mills cannot eomplain of hardship by a sudden proliibition of all export trade, they are not allowed to hegin exporting. The export of totara and heart matai has been absolutely prohibited. At no time since the quantities of eertain timbers for export were fixed have the quantities so allotted amounted to the maximum stated in the Order-in-Council. Since 1st April no export of , building timber whatever has been permitted except from the West Coast and the North of Auckland district. The export permits issued to these two districts are subject to the condition that full advantage must be taken of all shipping available for New eZaland ports. At' present it is impossible to lift from these outlying mills the whole of their output for the New Zealand market, and if export was absolutely prohibited, such a bar would not put another stick of building timber on the local markets. The only effect would be to block the mill skids, and then the mills would have to cea-se operations, with a loss to employers and workers alike. The Board of Trade; with the personal help of the Prime Minister, has been constantly endeavouring during the past years. to obtain adequate shipping for supplies of building timber for the Dominion's many needs. The output of the mills was larger for the past year than it has ever been, and this big production could have been increased if sufficient labour has been available. Even with the increasing supply a shortage of timber continues, because the demand continues to be abnormal (far in excess of the production). However, by the operation of the new building resolutions it is hoped that the position, in regard to essentail building, will be gradually improved, for the use of all timber is riow subject to permit, and the Board of Trade is checking the diversion. of timber to non-essential works at this stage. COPY OF LETTER RECEIVED FROM THE BOARD OF TRADE. Wellington, June 2nd., 1920. Dear Sir, — From the newspaper this morning the Board notes that- a discussion took place at the meeting of your Association yesterday, aird that a resolution was passed as follows : — "That in the opinion of this conference the present shortage of house property, the excessive prices thereof and the scarc-" ity 'of building operations is largely the direct result of the wholesale exportation of building timber by most of the large timber corporations througbout New Zealand, and that the Government be urged to stop such exportation and to commandeer all available building material for the erection of homes." I am directed by the Board to draw your attention to the fact that on UFh

August, 1919, an Order-in-Council was gazetted prescribing the maximum quantities of rimu and kauri that might be exported from New Zealand during the prescribed periods, a percentage ultimately reducing export to a minimum. Under this Order-in-Council no timber can -be exported without a. pormit being issued by the Board of Trade, j After considering the claims of the saw- . milling industry to export, in conjunction with the requirements of the New Zealand - ; market, the Board authorised the issue of , | permits in respeet of rimu, for the period | 1st July 1919, to 31st March 1920, amount- ! illS to 20,390,600ft., and in respeet of j kauri, for the period 1st October, 1919, to | 31st March, 1920, amounting to 3,267,000ft, Complete returns now to hand of the ex- | tent to. which tliese permits were operated ; show that the total quantity of rimu exported during the period above referred to ( was 8,503,000ft., and of kauri 384,00oit. | The whole of this export has taken place' | from the W7est Coast of the South Islanct i and North of Auckland mills. As showing I the effeet on the export trade of the con- ! trol exercised by the Board, I quote t..e , following figures in regard to the export of j rimu and kauri during re-cent years : —

I I Notwithstanding this reduction in ex- ! port, the output of timber from sawmills in New Zealand has been very materially increased, thus providing for the New Zealand market a much larger supply of i building timber than has been available at any time in the- history of the Dominion. All export permits issued hitherto have been subject to a reservation that they might be suspended by the Board at any time • should any user of timber in , the Dominion be unable to obtain a supply ' and be willing to avail himself of the timber destined for export. The whole of the export of building timber at the present time is taking place : from the West Coast of the South Island and from the North of Auckland province. , The- West Coast sawmills, if shipping were 1 available, could place a la-rge proportion of their output in Wellington and Christchurch, but the North of Auckland mills, i especially Hokianga mills, are called upon to pay a very high rate of freight to the New Zealand market, and at the present time shipping from Hokianga to New Zealand ports is practically unobtainable. Should, however, the Board he able to arrange shipping from Hokianga to any New Zealand market, the timber produced in that district will become available for use in New Zealand. In fact, ~during the last few days arrangements have been made with the Poblic WTorks Department to place an order for a substantial amount of timber with the Hokianga mills, this being possible as arrangements could be made for the Government steamer to lift ihe timber. The present abnormal demand for building timber in the North Island has resulted in the whole of the output of the Ma-in Trunk mills being absorbed into the district betwen N,ew Plymouth, Whanganui, Palmerston North, Napier, and Auckland, with the result that Wellington is almost entirely depedent on the West Coast of the South Island for its supplies. The diffieulty her.e lies solely. in the shortage of suitable shipping. The statement reported as ha'ving fccen made by Mr Harper, one of the tlelegates to your Confrence, is substantially correct as far as the position on the W7est Coast is concerned. Ali the shipping at present available from the West Coast for timber to New Zealand ports is being fully utilised, and should it be found possible to make further space for timber available, the West Coast sawmillers will supply. In regard to prices, sthe Board's accountants recently investigated the sawmiller's costs of production, and the Board has fixed prices for timber in New Zealand without taking into consideration the lact that much higher prices can be obtained by export. The prices are fixed purely on the basis of cost, to allow a reasonable return on the capital invested in the industry. As illustrating the diffieulties of the position, I am directed by the Board to point out that some of your memhers have recently acquired sawmilling areas on the West Coast of the South Island, and have commenced operations, and they naturally feel aggrieved at being compelled to

place their output on the New Zealand market at New Zealand prices when they could obtain a much higher price by export to Australia, The position in regard to the shipping difficulty experieuced arises from the fact that New Zealand is a coal importer from Australia, and timber, especially from the West Coast, provides suitable back loading for the coal boats. If this back loading' were not available it is obvious the cost of carriage of coal would be considerably increased. Considering all the circumstances of the case, it is difficult- to see what more the Government could do -to restrict export without iriflicting oonsiderable fiinancial loss on the sawmilling industry, and probably causing unemployment, Although, as pointed out above, the production of timber has considerably increased in New Zealand, it has not- yet reached its maximum on account of the fact that this industry along with others, is feeling the effects of the acute labour shortage. For instance, employment could be found for double the number of men in some districts. - 5 - You will see from the above that two facts are clearly deducible 1.— That the production of timber at present is greater than at any time in the Dominion's history. 2.— That the export of building timber has practically ceased, except from Hokianga and the West Coast of the South Island, and that any further restriction of export could not result in making more building timber available for New Zealand unless more shipping could be provided. The Right Hon. the Prime Minister, in a recent statement, made the informatbn contained herein known to. the public, but possibly this may not have come under the notice of the members of your Associatio.r. — Youife faithfully, (Sgd.) J. W. COLLINS, Secretary.

1 j Year. Rimu. Kauri. ! 1916 ... ... 15,312,000 12,411,600 1917 ... ... 22,167,000 14,047,62a 1918 ... ... 30,391,000 7,707,411 1919 ... ... 8,503,000 384,000 (9 months). (5 months). !