AFFORESTATION

Ashburton Guardian, Volume 56, Issue 275, 2 September 1936, Page 3

AFFORESTATION

OPERATIONS IN NEW ZEALAND. MINISTER AND COMPANIES. (Per Press Association.) AVELLINGTON, Sept. 1. AVhen the matter of the AV hakatane Paper Mills Bill was before the House of Representatives to-day, the following statement was read by the Hon. D. G. Sullivan. Before he left New Zealand on a trip abroad, Mr J. S. Barton, S.M., chairman of the Bondholders’ Commission, waited upon me and told me he was very worried concerning the operations of afforestation companies. He urged! upon the Government the very urgent necessity that existed for a thorough investigation into the activities of these companies. After a discussion I suggested to Mr Barton that he put his submissions in writing, and this he uidertook to do. After a considerable interview, due to ill-health, Mr Barton wrote to me, embodying in his letter some of the submissions he had made to me in our conversation. In his letter Mr Barton said, inter alia: Large Captal Involved. “In my opinion an inquiry by the Government into this industry is much overdue. I recommend that it be undertaken for the following reasons: (a) A large amount of capital, probably exceeding £8,000,00Q, has been invested in it, and further capital is being sought within and without the Dominion; (b) a large proportion of this sum of £8,000,000 has been supplied from abroad and the credit of the Dominion tends to be involved; (c) inquiries into certain aspects of the subject are being pressed for in Australia, and I think it would be wise for the Government to anticipate a request from abroad); (d) officers of the Department have given a great deal of time and attention to the subject matter, and I know that they also hold the above views strongly.” In the same letter Mr Barton referred to sales in India of New Zealand afforestation bonds, and said that was an urgent matter calling for legisla tion as certain companies were actively pushing selling campaigns in the East based on wholly misleading statements and creating a problem that was bound, in his opinion, to result in a demand for an inquiry in future. A remedy would then almost certainly bo impossible, and he was anxious to prevent such practices. AVhakatane Paper Mills, Ltd., was not referred to by Mr Barton as that company, appears to have confined its sales to New Zealand and Australia, but inquiries have reached the New Zealand Government from averseas Governments in response to representations from their various citizens concerning the activities of the afforestation companies of this country. Conflicting Viewpoints. In regard to the proposals of the Whakatane Paper Mills, both the Government and the Industries and Commerce Committee to which the Company’s Bill was referred are faced with conflicting and indeed diametrically opposed viewpoints. A majority of the directors, perhaps all of them appear to have complete confidence in their advisers and in the prospects of establishing a successful industry. On the other hand both the Forestry Department and the special committee of investigation which was set up by myself •have reported to me that the proposed mill which the company desires to set up will he definitely uneconomic in operation, that it could not get even a fair proportion of the available local market without the protection of a prohibitive tariff, that it would mean price increases to New Zealand consumers, that the available market is not sufficiently large for economic production, that such a large proportion of the company’s capital has been expended on excessive company promotion expenses, that that factor in itself would probably alone be sufficient to destroy its chance of success, and that if the company is allowed to proceed the loss of shareholders’ capital would, be inevitable Tribunal to bo Set Up. These conflicting viewpoints, supported, by masses of evidence on either side, in addition to the other considerations referred to, including the advice of the chairman of the Bondholders’ Commission and representations made by overseas Governments, seem to make it highly desirable that there should be an independent investigation concerning forestry activities and the methods of afforestation companies to determine as far as possible what course it is desirable to follow in order to ensure'the economic aiul commercial development of the exotic forests of New Zealand. In the event of such an investigation as recommended by the Industries and Commerce Committee being decided upon by Parliament, it is the intention of the Government to give immediate effect to the recommendation and appoint a tribunal to examine and report on the issues submitted at the earliest possible moment. A REPORT ADOPTED. AVELLINGTON, Sept. 1. The matter of the AVhakatane Paper Mills, Ltd. AVater Supply Empowering Bill was further considered in the House of Representatives to-day, when Air E. J. Howard moved that the report of the committee he adopted. Mr Howard said the matter was still in the hands of the Government to say whether the company should be allowed to proceed. The company could not then proceed further until the Health Depaurtment had given it a license, If there was some special reason why the company should not proceed, it could probably be ascertained between now and the time a license was applied for. After some discussion the report was adopted.