COAL, MINES CONTROL.

New Zealand Herald, Volume LVI, Issue 17213, 15 July 1919, Page 8

COAL, MINES CONTROL.

NATIONALISATION ISSUE. A "LABOUR VIEWPOINT. REPLY TO THE MINISTER. It? 1 - JEtEOaAJB.—OWN COUiRBSPONDEJST:]. . ; -.;,;.... WELmiGTQN, Monday. ■"■',' A reply has been made by Mr. H. E. Holland. M.P., to the acting-chairman of 'the Board of Trade, the Hon. W. I). S. Mac Donald, regarding ..Labour proposals fir the nationalising .of the coal trade, in course of which he. states mat, there ■was no misunderstanding whatever on the paH of either of the labour -conferences of the board's recommendation. Copies of the report were obtained, and the proposals were carefully examined and unanimously condemned. It was true that the board expressed the opinion that " some form of nationalisation was urgently needed," but the board's proposal was not nationalisation at all, but as a Labour resolution described it*the semi-private control of the industry, with State-gUaranteed dividends for owners. " The proposal," continues Mi-. Holland, " is that all existing companies shall corn© within the jurisdiction of the proposed board, and this, of course, means that dividends, risk rate, and bonuses are ifco be provided for all of the companies concerned, notwithstanding that certain ■of the mines may not have hitherto paid dividends. The idea of the State entering jinlfco a sort of co-partnership with mineowners under an arrangement which would make the owners' dividends the first charge on the industry, with risk rate added, and this to be followed by a bonus, if profits perm*, is something the people are not likely to approve." After referring to Mr. Mac Donald's discussion of the incidence of the interest on 4he capital of mines, the reply proceeds: "It does not appear to have occurred to the acting-chairman that if the mines were being purchased outright by the State sound methods would dictate that only such mines be purchased as were worth purchasing, nor that when money is borrowed for such a purpose it is borrowed for a. fixed term, whereas the board's proposal appears to amount to a guarantee of interest in perpetuity. But there is really no reason to discuss these aspects of the question,, because the need to borrow money disappears before the fact that New Zealand had, at the end of the last financial year, a surplus of £15,000,000. The amount of the .paid-up capital m all the privately-owned coal ■ IP 1 "?*? °l *»" e Zealand, excluding Roa (in liquidation), Tara'tu, and Tyneside, for which figures are not (riven hi \the board's report, is less than £1,300,000, and, since some of the mines would not bo worth i purchasing, it may be assumed that the amount of the paid-up capital in the mines | ™, taking over would be less than £.1,000,000. If it is further assumed that the price to be paid for the mines taken over will be based on the amount of the paid up capita], £1,000,000 would have to be provided, and it) would be absurd to talk about the need to borrow money at high interest with 15 times the amount required in Government coffers. "How safe the undertaking-if the public ownership of the coal industry would prove, as well as how profitable an investment, coal mining has proved, may be ascertained from the reports covering the operations of the State mines during the past 15 ears - For instance, the gross cap&al expenditure on State coal mines March 51 - 191 8, amounted to £359,730, and £208,400 of this amount has now been written off out of profits for depreciation, etc., being nearly 58 per cent, of the total capital embarked, fhie, despite the manner m which charges have been loading up against State mines in favour of the Railway Department, ordinary profits, heavy interest charges, and other handicaps." .. ========