IRON AND STEEL

Evening Post, Volume CXVII, Issue 18, 21 July 1934, Page 11

IRON AND STEEL

POSSIBILITIES AT ONEKAKA

INVESTIdATION SUBSIDY

OPPOSED

The statement that the Unemployment Board is subsidising tho cost of the investigation of tho possibilities of establishing an iron and steel industry at Onekaka (Nelson) was discussed at a recorit meeting of tho council of the United. Kingdom Manufacturers' and Now Zealand Representatives' Association, and the following resolution, was passed:—

"This association strongly protests against the uso of the unemployment funds in an endeavour to establish an industry which hasjalready been proved to have no economic possibility of success, as evidenced by the Onekaka Iron and Steel Company, Ltd., which, despite generous Government assistance in the way of bounties, eventually went into liquidation with great loss to shareholders", debenture holders, 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: ' .

v "It ia on record that for the fivo 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. Iri 1930 tho'company owed the State £14,350 on loan account and accrued interest, plus £20,836 to the Stato: Coal LDopartment. ' It is doubtful whothor State assistance lias 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 iri liquidation.

"It is stated that the proposal now is to establish n comprehensive iron and steel industry if the experts report favourably. Thero^tire no steel works in the world whieli,'cater, comprehensively for the requirements of tho iron and steel trade, each mill more or less dealing with one or more special .products, and it would be economically impossible to start successfully the carrying on of such an industry in this Dpniiniori where tho market is, comparatively speaking,- extremely limited. "The report of tho. 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. Wo think that to enable an iron industry to function satisfactorily it must be capable of.'continuous, oporation and be ablo to uso the by-products eoriimercially. The present. consumption of pig iron in New Zealand is too sn.all to permit of this boirig done. We do not think that it is in tho best interests of New Zealand that a protec: tivo duty should bo placed on pig iron.'

"This association feels that tho report of the-.esperts,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. tho facts and do? not ask the general public to assist them, strong exception; is taken by this association to.tho;uso. of.the unemployment funds for such a purposo in view of the fate of the provious project, and the eviderice that this local industry is not iworthyt of such extraordinary Government support." .':. -,-. ••■