PRICE CONTROL

Evening Post, Volume CXL, Issue 59, 7 September 1945, Page 6

PRICE CONTROL

TIMBER INDUSTRY

PROGRESS THREATENED

No significant developments had occurred in the field of timber prices, and despite a number of rumours of black marketing and excessive prices, investigations disclosed no serious case of overcharging during the year, stated the Director of Forestry (Mr. A. R. Entrican) in the annual report of the State Forest Service presented in the House of Representatives yesterday. The report added that the office of the Timber Controller, however, had been forced to the reluctant conclusion tha,t the cumulative effect of longcontinued price control, dating back to 1936, had attained such proportions as to threaten enterprise and stifle progress in the industry. While the industry had never seriously challenged the dictum laid down in 1936 that price increases would be permitted only to an extent sufficient to cover proven increases in cost resulting either from higher wages or more costly supplies and equipment, it felt that the timelag involved in securing approval to some of those costs had imposede over the years such a burden on most operators that the reduced profit margin was • not commensurate with the risks involved. Concurrently with an economic study of the industry being made by the Forest Service, the national sawmillers' organisation was making an operating and financial survey which should throw much light on its earning capacity. There was little doubt, however, that unless the downward trend in unit profit margin was reversed, either by reduced costs or by increased prices specifically approved for that purpose, then the timber industry must languish under an everincreasing feeling of defeatism engendered by nine years of price control— a period, incidentally, three years longer than that under which any other industry had operated. It was confidently anticipated, stated the report, that with the accession of man-power in the post-war period no trouble would be experienced in rapidly attaining a production level adequate to the needs of the country's national economy. DISTRIBUTION DIFFICULTIES. Towards the latter part of last year transport difficulties had seriously upset timber distribution -in the North Island. For a period road trucks had been used to relieve the situation, and it was expected that the extra cost incurred, which was being met from the War Expenses Account by means of a subsidy, would total approximately £5000. Although there had been some improvement in rail transport, it had not been sufficient to shift current production, and stocks were steadily accumulating at bush sawmills, where they were virtually .immobilised. Due to shipping being unable to use the Little Wanganui Harbour, it had also been necessary to transport timber by road from Karamea to Westport the extra cost in this instance also being borne by the War Expenses Account. . "It is a most unfortunate anomaly, during a period of acute demand," adds the report, "that timber actually produced cannot be made available to consumers, due to transport short--3.OSS " The timber position had been less acute in the South Island, but with more frequent and widespread representations from local interests extending from Blenheim to Dunedin. and including Christchurch, with a wartime supply exceeding its pre : war figures, indicated that the position might soon deteriorate to a point where it would be necessary to determine consuming zones and quotas and organise end-use committees as in the North Island.