THE FLAX INDUSTRY.

New Zealand Herald, Volume LXIII, Issue 19509, 13 December 1926, Page 16

THE FLAX INDUSTRY.

FLOATING COMPANIES. METHODS REVIEWED. BY H.A.S. Four years ago the New Zealand flax industry was at a lower ebb than it had been at any time during the past 30 years. To-day it has largely recovered and the future is more promising than ever bofore. The promise of the future lies in scientific research. As a result of this promise there broke out about 18 months ago, &n epidemic of flax company flotations. Previously the industry had been financed by private companies and individuals—oven the largest concerns. Now for the first timo the genoral public is being asked to invest in it. As to the nature of the flotations, their effect upon the investing public and upon the industry lot ns now consider. Investors art) of two types; the canny and the foolish. The latter is always seeking the moon; failing that he wants 50 per cent, dividend. The promoters of some of these ventures appealed to the unreasoning investor, by promise of enormous profits. Even though the profits might be reasonable in theory, there is still the practical difficulty of realising them. Without highly qualified direction rio flax company can become profitable. Flax is indeed one of the most technical industries in the land. For the milling department there are undoubtedly many good men available. But for flax growing—who is there with practical knowledge ? The fact is these flotations are premature. Effects on Industry. There will be two results—one of benefit and one of harm. During the next two years the investors in some of these concerns will, no doubt, realise their disappointment. Then flax will receive a very bad name as an investment. This will make difficult the securing of public capital for future flax propositions, no matter whether they be good or bad. It will take quite seven or eight years for this prejudice to die. While it exists, the results will be harmful to the industry, especially in the Auckland Province, for it is there that the recent flotations have been made. But there are too many investors elsewhere, so that the results will be widespread.

What is there of benefit 1 The experience and knowledge that will undoubtedly bo gained from the efforts of the concerns under review. Such knowledge always benefits the industry as a whole. The holder of flax shares would be wise to renounce hope of vast profits at an early date. Then let him use his influence to secure the best possible management for his company. Knowledge as to the best course to adopt cannot always be gained in a day, that is w r hen it comes to questions of flax planting. In some cases it would be advisable to establish an experimental station or stations upon the property. There the soil and varieties of flax could be studied before launching out on extensive planting operations. A difficulty in this, however, is that the delay would cause the interest bill to grow. But where planting is contemplated knowledge will be of more value than haste. General Conclusions, Probably several of these flax-planting concerns reviewed will eventually become dividend-paying—but only if sound methods are adopted, and the profits will take longer to come and be never so big as was stated upon the prospectus. The ill effects of this boom will in time disappear and the benefits of knowledge gained will remain. Such events occur in the lives of all industries, and are, we must suppose, part of their natural growth. Those who wish to put in a flax experimental station are well advised to thoroughly cultivate the ground. Generally it is best to select a fertile area, unless one has special reasons for wishing to try another class of land. Often fertile land is too wet to cultivate readily in winter. In such cases it is good policy to plough it up now and fallow it till late autumn. The planting can be done with good results as early as the second week of April. As to which is the best month to plant there is no definite proof that there is any best. Good results have been obtained from plantings made over the six months from April to September inclusive. The difficulty with planting in the drier months is that the plant receives a serious set-back and in some cases dies. Preparation for Flax. On suitable land a crop of turnips would be an excellent preparatory crop. These could be fed off by July and the land shallow-ploughed and then worked up thoroughly, the planting being done in the spring. Those desiring a flax plantation mnst realise that it is useless to start cne unless they intend to carry it on for a number of years. After planting it there is a three or four years' wait before the crop comes to maturity. The value of the result is very great. But as with all good things an effort must be made to attain that result.