IRON INDUSTRY

Dominion, Volume 27, Issue 252, 21 July 1934, Page 9

IRON INDUSTRY

Unemployment Board Aid IMPORTERS’ OPPOSITION Opposition to the action of the Unemployment Board in subsidising the cost of investigating the possibilltes of establishing an iron and steel Industry at Onakaka (Nelson) is expressed in a resolution passed at a recent meeting of the council of the United Kingdom Manufacturers and New Zealand Representatives’ Association. The resolution is as follows: — “This association strongly protests against the use of the unemployment funds in an endeavour to establish an industry which has already been proved to have no economic possibility of success, as evidenced by the-Onakaka Iron and Steel Company Limited, which, despite generous Government assistance in the way of bounties, eventually went into liquidation with great loss to shareholders, debentureholders and ordinary creditors, and that the following facts be made public for the benefit of the taxpayers of New Zealand from whose pockets the subsidy has come :— “It is on record that for the five years to 1930, the total bounty paid by the State was £33,823, and the total losses on trading over the same period (before deducting the bounty) were £62,028. In 1930 the company owed the State £14,350 on loan account and accrued interest, plus £20,836 to the State Coal Department. It is doubtful whether State assistance has ever been carried to greater lengths in the case of any individual concern in the history of the Dominion, and despite this the company is now in liquidation. “It is stated that the proposal now is to establish a comprehensive iron and steel industry if the experts report favourably. There are no steel works in the world which cater comprehensively for the requirements of the iron and steel trade, each mill more or less dealing with one or more special product, and it would be economically impossible to start successfully the carrying on of Such an industry in this Dominion where the market is, comparatively speaking, extremely limited. “The report of the Tariff Commission states inter alia: ‘We do not think on the available evidence that the industry can be regarded as reasonably assured of sound opportunities of success. We think that to enable an iron industry to function satisfactorily it’must be capable of continuous operation, and be able to use the by-products commercially. The present consumption of pig iron in New; Zealand Is too small to permit of this being done. We do not think that it is in the best interests of New Zealand that a protective duty should be placed on pig iron.’ “This association feels that the report of the experts cannot be anything but unfavourable, and while perhaps no objection can be raised to private concerns wasting money on such an enterprise provided those behind it are in full possession of the facts and do not ask the general public to assist them, strong exception is taken by this association to the use of the unemployment funds for such a purpose in view of the fate of the previous project,<and the evidence that this local industry is not worthy of such extraordinary Government support.”