SAWMILLING SECTION.

Progress, Volume XIV, Issue 5, 1 January 1919, Page 408

SAWMILLING SECTION.

[This Section is published by arrangement with the Dominion Federated Sawmillers’ Association (Incorp.) in the interests of the Sawmilling Industry of N.Z.] Editor : W. T. IRVINE.

• In view of the request made by the Board of Trade notifying a number of millers in the North and South Islands to furnish a return of their cost of production, the method of making up the return

nas engaged the attention of our Advisory Committee and others. For instance, it is contended ill at interest on capital employed is a legitimate, item to debit against current revenue, and for the reason that in some cases most of the capital found for certain undertakings is raised by debentures, interest on which would, of course, be debited in the usual way without question. The same applies to interest on overdraft or mortgage; but if a firm or company has no borrowed capital and cannot debit interest on the capital employed, it is manifestly placed in an unfair position—for comparative purposes a company or firm which trades mostly upon borrowed capital. Other items that

should be debited in a complete cost account are,

of course, full depreciation of all machinery and plant; fire insurance on hush, trams and bridges, and upon value of plant machinery, timber, &c., not covered by a policy of. insurance. W T e further maintain that- a legitimate item of cost is personal supervision, which, in the case of a private firm, cannot be debited against revenue for income-tax

returns —although in the case of a limited company all managerial expenses may he debited. All this goes to show the value of having a standardised system of bookkeeping and costing, and it is hoped an effort may be made to educate members in this direction, as the comparison of costs, item by item, would then show either loose management, or less favourable Working conditions, 'where they appeared to be higher than others. * * * *

With regard to the actual increase in the price of timber as compared with pre-war rates, three interesting tables have been submitted by Mr. I. A. Bush for reproduction in this issue. These show

respectively the relative percentage increased cost of: (1) Building materials; (2) wages increase, and (3) increased price of sawmill requisites, the majority of the items showing an enormously higher percentage increase than that of timber. Most of the talk about the increased price of timber centres round the sawmiller and hits at him every time, but so far as the public are concerned this is manifestly wrong, and we contend the agitation should begin at the other end—the house end—and work back to the sawmiller. The completed house is where the owner or tenant feels the pinch, but as many intermediaries come between the miller and

the owner of the completed building— such as the waggoner of the timber to railway, railway or steamer freight, wharfage, cartage to merchants’ yard, sorting, stacking, and redelivering, cartage to site of building, merchants’ and contractors’ profits—i that there arc the proverbial hundred and one contributory causes towards the increased cost of the timber when it reaches the building. It is, therefore, in our opinion, impossible to fix the price of timber at any one point unless the price of all material, labour and services rendered in its production, and delivery up to that point, are also fixed. If an attempt were made to fix it on what might he considered an equitable basis to-day, it would certainly be inequitable to-morrow, because the

various factors contributing to the cost are in a constant state of flux.

An interesting paper appears in this issue on the loss in conversion of logs into sawn timber by Mr. Jos. Butler, K.T.C., Auckland, in which he presents a formula for ascertaining the loss in sawdust on the sawn area or surface, which must be an eye-opener for many of us. He advocates, as will. be noted, a standard for measuring the logs, and having ascertained the average loss of the saw-cut or kerf by all saws in general use, the result should not exceed one-sixth' of the sawn area, but this will depend partly upon, the saws in. use, the saw set, the sizes of timber cut, and the ability of the sawyers. It is further contended that by this means excessive loss by carelessness or otherwise, can be detected and the weak spot discovered and made capable of remedy.

A War Legislation and Statute Law Amendment Act, passed in the dying hours of the session just closed, serves to show what may be done by amendment in the Legislative Council and pushed through the Lower House without any chance of obtaining the necessary consideration of members. In this enactment, under Sub-section 2 (a) of Clause 29, the Commissioner of State Forests may “purchase and hire sawmills and machinery and cut and sell timber in State forests; (b) purchase private lands for addition to or protection of State forests, and under Subsection (6) the. Governor-in-Council may, from time to tiriie by Order-in-Council, make regulations for limiting the export from New Zealand of timber, whether in logs or sawn, and prohibiting, the sale of standing timber or the grant of licenses to cut standing timber, on public or private lands of any tenure, except subject to such conditions as may be prescribed. Now all this goes to show that we arc being governed more and more by Order-in-Council, under which it would appear the Government takes power to do anything it may please. Surely this is a thoroughly undemocratic move, which puts back the clock of our liberties several generations, and we are making it easier for extremists and ultra-democrats to sheet home their arguments that we are being governed by an autocracyso long as this state of things is allowed to continue.

* * * * The second sitting of the Timber Advisory Committee with the Board of Trade has just concluded its labours, the Committee itself having been augmented by a representative of the Builders and Contractors’ Federation in the person of Mr. W. H. Bennett (Wellington). The Committee sat for three days, and much good work was put through tending to make the machinery of the Timber Hegulations work more smoothly. This took the form of arranging easier methods for mills situated most favourably for continuing the export business, and not having a favourable local market, to enable them to get into closer touch with other mills in

local-requirement districts not so near to a port of shipment, so that . each could arrange with the ether for the adjustment of the exportable quota of white pine; and the form of declaration necessary to be made that the quantity required for home consumption was guaranteed and reservedwas arranged in simpler and more workable form.

# # * # The President of the Association (W. J. Butler. Esq.) writes as follows: Although there is every reason to believe that there will be a greatly increased demand for building timber in the near future, it is probable that closely following Peace there may be a slackening off of orders. While prices of hardware were rising there was no inducement to delay in the construction of buildings that could be finished in time to participate in the general high scale of prices; but with Peace here, and with the prospect of hardware prices declining, there will be a tendency to hesitate on the part of builders. It will be well for sawmillers not to be led into commitments for future supplies at reduced rates; but to pin their faith to the fact that on the other side of any slight depression that may meantime occur there are many years of good business ahead of them. **■ * *

An instance of how one may gather a wrong impression from a process of averaging is afforded by an article on "Building Costs" in November issue of "Progress.'' The per centages of increase in costs of 10 different commodities, necessary for a building, are given. The total of these is taken and divided by 10. It so happens that red pine is among the lowest, being shewn at 50% (this be it remembered is ex merchant) while spouting is shewn at 400%. In an ordinary building the value of spouting would be only a fraction of that of timber, yet by the process adopted it .would appear that the average increase in cost of red pine and spouting contained in a building was 225%. There are those who would accept the average as taken in the article referred to as being the per centage of increase as applied to a building comprised of those 10 commodities. This is obviously wrong.

# * * * Afforestation was the subject of an interesting and useful paper delivered at a meeting of the Canterbury Philosophical Institute last week by Mr. W. 11. Skinner, president of the institute, and Commissioner of Crown Lands. In the course of his address Mr. Skinner said that New Zealand was very near to a timber famine, and what had, been done to date to avert it was almost negligible. In the future the main forests would have to consist of imported trees’that were known to thrive in New Zealand, as the native trees were too slow of growth. The State must tackle the business with determination and scientific thoroughness,