PAPER MILLS.

Auckland Star, Volume LXVII, Issue 207, 2 September 1936, Page 10

PAPER MILLS.

COMPANY'S AFFAIRS,

BILL BEFORE PARLIAMENT. ALLOWED TO PROCEED. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, Tuesday. The whole of this afternoon's sitting of the House of Representatives was taken up with a further discussion on the affairs of the Whakatane Paper Mills, Ltd. The company has introduced a' private bill —the Whakatane Paper Mills, Ltd., Water Supply Empowering Bill, which lias been reported on by the Selection Committee and the Industries and Commerce Committee.

The Selection Committee recommended that the bill be allowed to proceed with amendments, and the Industries and Commerce Committee recommended that it be not allowed to proceed without further investigation, the committee being of opinion that there should be an exhaustive examination by the Government into the question of the economic and commercial utilisation of New Zealand's exotic forests.

Mr. E. .T. Howard (Government, Christehurch South), chairman of the .Select Committee, which first considered ! the bill, explained that if-tiie bill were | passed the company could not. proceed | without a license from the Health ! Department to take water from the | river. The Select Committee had re- ! ported that the bill be allowed to proj coed with amendments and lie moved ' I that that report bo agreed to. The 3 j whole matter, he said, could be ended , | by carrying the motion, and the com- . | pany could not proceed further until i I the license was issued by the Health * I Department. "We do not want to leave , a suggestion that there was something \ that had not been disclosed, when we , are satisfied that matters are all right," | lie said. 1 Differing Viewpoints. : The Minister of Industries and Com-' ; merce, Mr. Sullivan, said that in regard] to the proposals of the Whakatane Paper Mills, Limited, both the Govern-, meht and the Industries and Commerce Committee, to which the company's bill; was referred, were faced with conflicting | and indeed diametrically opposed vicw-j p'pints. "The majority of the directors,) perhaps all of them," he said, "appear' jto have complete confidence in their advisers and in the prospects of establishing a successful industry. On the I other hand, both the Forestry Department and a special committee of investigation which was set up by myself have reported to me that the proposed mill which tlie company desires to set up will be 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 the chance of success, and that if the company is allowed to proceed the loss of the share- • holders' capital would be inevitable. Masses of Evidence. "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 (Mr. J. S. Barton, S.M.), seem to make it highly desirable that there should be an independent investigation concerning the forestry activities and methods of afforestation companies to determine as far as possible what course it is desirable to follow in order to ensure the economic and commercial development of the exotic, forests of New Zealand." In the event of the investigation as recommended by the Industries and Commerce { Committee being decided upon by Parliament, said the Minister, it was 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. Did Not Apply. Mr. C. H. Burnett (Government, Tauranga), who is in charge of the bill, said that Mr. Barton's statement (reported elsewhere) did not apply to the company mentioned in the bill. It had converted its bonds into a full issue of shares. It was clear that the communication received by the Minister had reference to the policy of the bond system in connection with the promotion of companies. That decision was not known to the company before it commenced its issue. A cable he had received from the managing director indicated that the company had confirmed the purchase of machinery. Everything that had to be done by a bona fide ':ompany had been done in respect to the establishment and development of a business. Parliament he thought was going a little too far. It was not fair to hold up the matter when go much capital had been invested to develop the industry. •, "Hidden Reason." Mr. W. J. Poison (National, Strat-. ford) said the matter had been thoroughly investigated and he believed the Health Department had no objection to issuing a license to the company. For : some hidden reason someone had said the industry should not be allowed to proceed. He alleged that there had been considerable mismanagement of State forests and much money had been wasted, and lie considered that the State Forestry Department was in no position to throw stones at the company. Mr. J. Hodgens (Government, Palmerston), chairman of the Industries and Commerce Committee, said the recommendation of that committee was almost unanimous. It seemed from the evidence, he said, that if the bill were passed, further capital would at once be raised. Mr. J. G. Coates (National. Kaipara) said the company should be allowed to proceed with the manufacture of boxes and wall-board and such products, but should not embark on a huge expenditure to manufacture newsprint until the Government was satisfied that the. industry had possibilities. Forestry Department Defended. The Commissioner of State Forests (Mr. Langstone), said that the Forestry Department wanted to be a source of information. He was surprised at the imputations that had been made against the Department. Mr. S. G. Holland (National, Christ- \ church North) • said the allegations against the company came from the Forestry Department, and he felt that a further investigation was needed. [ After further discussion Mr. ■ Howard's motion, that the bill be allowed to proceed with, amendments, was carried. j