THE FLAX CRISIS

Dominion, Volume 1, Issue 148, 17 March 1908, Page 5

THE FLAX CRISIS

AUCKLAND HARD HIT.' - - fifty mills-will CLOSE-DOWN i'K ■: '' n >?U\ artici(! ..the, crisis un' tlio' flax industry (says our: correspondent) ,• tho " Aucki „.v.. -land Star.", says a heavy blow has been bustaincd.by tho industry, and the. bottom has v ..hopn v practically' knocked 'cleatf '.out' of vtho' ■~ market,;.-Hemp|'is'worth.£ls. per ton less toi il.ay.i.than .it .was',.;twelve' 'months ago. The consequence is- that ;riiany of- the' flax-mills throughout tho Dominion will bo compelled . to close down, 1 and, thousands of hands will bo '. ittrovnix.oiit of work.' During 'tho coming .. .winter efforts in different parts of. tl\e Do- . ;>minion ■toy.ensure readjustment'- of wages' with the workers-have been without avail. In somo cases the awards made by tho Arbi- _•••.. ;trat:o:i Court v/nre fixed at a tiran when" the ■: V industry.;.was. booming,., and. tho; wages'.', scale .'- 'is now..so much .out of the questionth'afc'many .'. -of ' the; millers•-.will 'have.'no\ option but to closo down. . : -.' .'/• v"'- ' -."Cheap .-Labour end.: Depressed • .Markets;' • , Mr. H. 0. Johnson, Government.hemp iEvader, in an _ interview,' attributed the crisis j- to ay series of circumstances. In. tho first plapo,. the financial crisis' m . tho world's markets, which 1 had such . a drastic effect 'thG'. woolyand/gumvsales;; naturally , ex- • tended also to'homp. The Manila output has . , boon a record one, and Manila hemp, which is ■v. produced under ■ cheap labour conditions, is of i / ■..■ finer quality than the Now Zealand articlo: In South America, where cheap labour ,also , .predominates, tho sisal output has far ex- ... oeeded that of previous seasons. Sisal is not i , nearly so good as-tho hemp wo produce, but :,it'cari.he sold;'at,a,cheaper rate. , -The result )' 1 of .those .combined. influences, is - that' values . - hayo decreased, : . and thcprice of flax is £15 , ... peri ton less to-day that twelve months ago. j " How will the present crisis affect local millers?'' Mr. Johnson was asked. ... . "Manymillers must close down until there ... is a^. recovery,'J was the: reply. "At tho . sa ®o : time,those, mills ' which'* aro "putting through'.their. own flax must necessarily have : an,advantage over those who have to purchase from outside sources " ' . "

'A'Hopeful View. ' '. if, hemp.industry is in,a stage of,,collapse?"< • - . the ./Goyemmerit;.grader /answered.; .".The position is serious enough, , but it-is simply a fluctuation: ...We havo had .. . a. boom, and..the .boom has. buret. When r-' G.-TV quality of Hemp was,selling, at- £38 ~ per ton, tho use was not any more permanent - .-/than the fluctuation's likely to bo.permanerit ■ now. To.those millers whopnll bo compelled . .to close doun the.situation.is.serious enough. ~~T- f -Many-workers, will be thrown' out, and the . machinery,-will bo,apt to becomo-scrap iron fonwant of use., Ono of tho difficulties I do ; i : foresee; is'that, , when' foreign manufacturers' . ' .have,.turned .-their - attention: to other fibres, : v ■ t-liprO raay,-be sqine clifTjCnlty iji- again getting ■ - our'-jold footing on the market .when -valuer improve " ' Fifty Mills tOsGlose. . . ' iln,the opinion'of"Mr.' Robert Burns, of the - • firm of Messrs.', John Burns>and: Co ,' the . ~ crisis,which", has arisen in connection'with t-hev . flax industry means- that, at-least fifty mills . ill close ~do>vn- in- the -Auckland' Province, ■ y ; a,id that'fully 700 mcn will 'he- thrown- out of , "Prices for (New -Zealand flax;". Mr. Burns statedj-;" ; aro governed, by Manda -and South : Amoncaji:. sisal, i Last year-very high prices .ruled, fqr. the/ fibre;..-owing m a'large, mea-' . .. sure-to the shortage in Manila m 1906 In -1907- there a -decrease 111 tho world's ...coroal.crop,- with the- result; that less binder ' I'equirpd. The therefore, 1 -had large carry-overs'."'' At, to-day's price's,very few Tnillers ; in New/Zealand/can' afford ■■ to.' continue .work,- and the. great or number ~;A-■ will close downs''V--" (.j'Pr.",-.' r.-.M, -, ,i

r-'-- . /,' : / iTho Wage "Question.! yt .-j/V I'i - ?^^li®-^solu^y^n6';dSubt'',attui'^ .continued , Mr. BurtiSj, " unless thb millers n . .tyoj k .a. loss. .In -Welliugton. tho. lla\-millers ;-.a_re, ; bbu'n'd; to' a":'wages : Scale/by/an';',Ai-bitra-. tipii Court award. is no elasticity in tho cost of production there, and the position•is worso .than hero.. In the' Auckland' Pro- ,, viricej'-sdjiie,. of the workers/have 1 , agreed to • but •it is (only-'.a : very /few. :. millers,-, working^;under'. exceptionally favour- - ;ab!b l , circumstances,, who will-be ablo to continue operations.. , / '

Manila Diverted; / ;• - V- ■' Tho,• financial uncertainty . in. America," Mr. Burns . adjiftl,,is theprincipal, causeof the present fall. Our• firm sends a'repre-, ;.;;seiitai(iy6 - toAmerica-,each year .with, instruc- ■ ;-tions .to; enter'rintoVcontrhcts forthe' season. This week • we. received;: from, him a?letter,- in which he saifl tho binder twind manufacturers - ..were.-; keeping the, pnees down. .'lt:was. not because' -they :,could,'; not; get -orders l for:, their manufactures, but' .they:; could' not raise ithe .nioney to" finance'.the .purchaso of the raw:material.; The result is-that no.one is .trying to sell; in America • binder . twine makers are not in - a position to - buy'. America usually takes - most of the'. Manila ■j crop. But thi3 year the Manila outputsis -being shipped to England; ,and the London market is heavily supplied." |....

MR. BOURKE'S OPINION ON THE FLAX S'TUATIOK. ,-, v Asked\to state his opinion on the present • -V .crisis: in the flax industry, and the state of -' '.the.;hemp market/ Mr.• Bourke,said;'..iiv the ; course'.ot an mtefyiew,at Aiicklaritl:: '"A-jot of. peoplo arc funking it, but my.candid opinion .is that'-the market, is like' all, others,' subject to fluctuations. -Owing'to "the financial tightness in America a! slump has i'set. in in the '"fibro market. ; It:'niay last'a year,'-it may last longer;..but ultimately, I 'think, prices' will .-.improve;.'. I: have just'closed down tho last' of-my- mills,.: but/.that. by no > meari S; . that,;l am . going, to let them go.',to ruin. .'ln fact,, at ;/Waikalfa I .am installing l a gas / plant, and with -lower -royalties,. and 'provided tho..'employees are', prepared, to listen to -reason,- this ; mill -may: be:got: going nextseason. If the: men are prepared to suspend- • ■•tho Arbitration Court's awardjand meet .the . employers, .'lj don't /consider'there: is any: . great cause/for,-' alarm. /' In - anycaso, lion--' -... over,- a/grcat; quantity of grown blade has, .been destroyed, this year from the swamps ./ I have. , already seeni in tho'Auckland prp t ' •' vinco.!'; Mr.; Boiirko : went on to say that he had most of;this niills closed, for some timo,' .. ; and Questioned;.as. to the reason,. he,replied:, ," Bccaiis(Ll, found I could buy flax at n lower-cost/than I-'c'ould mill it-whero.'l had to .pay; royalties!.' ,I;_considei',":;ho..-added, :. "that the^highiroyalties..charged -by. owners' -..-of the'grown; blade has more/to do, with the ..present.' .crisis .than -!' the existing . labour troubles.' Another;point is this:'l do not ,consider-.that Mie present!system >of grading' .is all that, could be desired. : Owing to the ; . absence of the, chief hemp grader the graders . in tho different ports .: seem to be . at/sixes and sevens.Their'decisions frequently' are • considerably, at variance,, one man going .. points higher'than : another, or vice versa, . This ,has' had a serious'.effect upon the flax-' . millers of the.,Domini6n;■ and.l say.unhe'si■y tutingly ; that- the ? alteration -of tho grading,system lias.been anything but beneficial to ■the flaxmilling ,industry, in New. Zealand." :,