FALL IN PRICE OF FLAX.

Daily Southern Cross, Volume XXVI, Issue 3961, 3 May 1870, Page 5

FALL IN PRICE OF FLAX.

; To the Editor of the Daily Southern Cross. Sir, — The fall in the pr^ce of dressed flax (phormium tenax) will, no doubt, be a great disappointment to those who have invested their capital in this new industry, and may possibly deter many fr6m going into the business, who have been contemplating doing so. No doubt the difference between £52 10s. per ton, the top price obtained at the sales a few months ago, and the £30 to £31 which, we are informed, is likely to be the ruling price for the future, is a very serious one indeed ; but it does not therefore follQW, because such a fa}l has taken place, that the manufacture of this article is now an unprofitable one. The profit on the higher price was immense, considering the comparatively small amount of capital invested. At the same time, let us look at the figures, N and ascertain whether the lower quotation will not yet afford such a return upon the outlay as will prove flax-dressing, even in its present rudimentai'y stage, to be one of the most profitable industries, if not the most profitable, open to our colonists. The iirst thing to consider is the cost of the machinery. Where water is available, the outlay necessary to the starting of four flax machines, including buildings, &c, may be stated at not exceeding £600. If steam power is required, £1,000 will suffice. This estimate I am aware is considerably in excess of that given in the "Flax Commissioners' Ueport, but I believe it will be found to be the more correct one. These four machines will produce 6$ tons of dressed libre per week, if in constant work ; and to ensure this, and avoid loss of time, it is well to have a spare machine, so that, if any of the others get out of order, the driving belt can be shifted, and the hands kept employed who would otherwise be id c during repairs. The cost of production of the fibre must necessaiily vary according to circumstances. Where the mill-owner has a plentiful supply of green flax in his immediate neighbourhood, and has also water communication with Auckland, the cost, including allowances for wear and tear of machinery, conveyance to market, and all other expenses, would not exceed £10 per ton. Where steam power has* to be used, and the other conditions are not so favourable, we may add £4 per ton to this estimate, or say, an average cost of production of *12 per ton. The advices by the last mail from the various brokers intimate that it would be unwise to calculate on a higher price than £30 per ton for a good carefully dressed sample, and it is not improbable that for a few months the price may fall even lower. Our flax has a powerful combination to contend with at home. The importers of Manila fibre and Russian flax and hemp (the trade in which amounts to some millions sterling annually) are not likely to admit so powerful a rival without a, severe struggle, out of which, however, on account of the much lower price at which it can be laid down, it is bound to come triumphant. My home correspondents inform me that very many of the spinners and manufacturers, feeling assured, from the large quantities constantly arriving, that they can now depend upon a regular supply, are making all sorts ot experiments in the way of working up our flax m comoination with, or in substitution for, thejnore expensive fibres which they now use. That they -will succeed, no one, who knows anything of the difficulties which the skill of English manufacturing engineers ha\e ovcieome, will donbt for an instant. A&siiming then that the fibre is worth £30 pei ton in Kn^l inrt. -vye have next to consider what is its relative value here ; and this, of course, mainly depends upon the expense of shipments, weight, insurance, &c. I have now before me the account sales of a large parcel sold in London at that price, where the charges amounted to £10 2s. 4d. per ton; but in this instance the freight alone was £7 75. ; and the other charges, including 2£- per cent, commission and £1 percent, brokerage, seemed excessive. The value of the flax Laving decreased, the state of freight must likewise decrease. £5 ss. per ton has, 1 believe, been charged hitherto by the vessels from this port, but rom Melbourne £'3 and primage has been accepted. lam inclined to think that for properly pressed flax this would be a fair rate of freight, in which case something under 1 6 per ton ought to clear every expense from the time of shipment here until the proceeds are available at home. The value of a good sample of clean, well-dressed fibie in this matket ought to range from -<20 to £25 per ton. The profit and loss account would stand thus : — 6i tons dressed flax, at say ■20 per ton, £130. Average costof production,including wear and tear of machinery, &c, at £12 per ton, t 78 ; profit per week, £52, or £2,704 per annum. Deduct 20 per cent, to cover contingencies, and we have £2,1(53 a year as the net profit in an outlay of £000 or £1,000, as the case may be. I think I may safely challenge any one to indicate any other industry that can at all compare with this, either as regards the interest on the amount invested, or the extent of labour employed. Such a mill as I have referred to would afford employment to at least 35 hands— men, women, and boys — one good feature being, that whole families can be profitably engaged. It is most unfortunate that two of the staples of this province's trade should at the same time have declined in value ; but the depression is only a temporary one, and it will be well if the fall in the price of flax should cause the mill-owners to use more care in the dressing of the fibre, and thereby maintain the position that Auckland has already obtained in that respect over the other provinces. — Yours, &c., McVby.