IRON AND STEEL WORKS

New Zealand Herald, Volume LXXI, Issue 21859, 23 July 1934, Page 11

IRON AND STEEL WORKS

ONEKAKA POSSIBILITIES PROTEST AGAINST SUBSIDY PAST LOSSES RECALLED A protest .against the action of the Unemployment Board in subsidising tho cost of an investigation of the possibilities of establishing the iron and steel industry at Onekaka, Nelson, was made at a recent meeting of the United Kingdom Manufacturers and New Zealand Representatives' Association. It was stated that the industry has already been proved to have no economic, possibility of success. "The Onekaka Iron and Steel Company, Limited," states the protest, "in spite of generous Government assistance in the way of bounties, eventually went into liquidation with great loss to shareholders, debenture-holders and ordinary creditors, and the following facts are made public for the benefit of the taxpayers of New Zealand from whose pockets the subsidy has come." Losses in Five Years Dealing with the five years to 1930. the report of the association states that 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 £02,028. In 1930 the company owed tho State £14,350 on loan account and accrued interest, plus £20,836 to the State Coal Department. It was doubtful whether State assistance had ever been carried to greater lengths in the case of any individual concenj in the history of the Dominion and, in spite of this, the company was now in liquidation. It was stated that the proposal was to establish a comprehensive iron and steel industry if the experts reported favourably. There were no steel works in the world wliicli catered comprehensively for the requirements of the iron and steel trade, each mill more or les.s dealing with one or more special product, and it would be economically impossible to start successfully the carrying on of such an industry in this Dominion, where the market was, comparatively speaking, extrsmely limited. Tariff Commission's Reference A reference to the industry was made by the recent Tariff Commission which stated, inter alia, "We do not think, on the available evidence, that the industry can be regarded as reasonably assured of sound opportunities of success. We think that to enable an iron industry to function satisfactorily it must be capable of continuous opeiation and be able to us£ the by-products commercially. The present consumption of pig iron in New Zealand is too small to permit of this being done. We do not think that it is in the best interests of New Zealand that a protective duty should be placed on pig iron." "The report of the experts cannot be anything but unfavourable," states the association in conclusion. "While perhaps no objection can be raised to private concerns wasting monej' on such an enterprise, provided those behind it are in full possession of the facts and do not ask the general public to assist them, strong exception is taken by this association to the use of the Unemployment Fund for such a purpose in view of tho fate of tho previous project, and tho evidence that this local industry is not. worthy of such extraordinary Government support."