From The Past

NZ Truth, Issue 1127, 7 July 1927, Page 4

From The Past

xports of- phormium-flb're (excluding tow) and covering the period ffoni 1858 down to 1921. - a it is found that m. 1889, J7,084 tons of dressed fibre, excluding tow, were exported at an average price of £21 per ton. . Six years later — 1895— the exported tonnage was down to 1806 , tons— average price £11/13/- per ton— but rose to 28,547 m -19.07 when the price averaged £29 per ton. From then till 1921 production dropped to 9643, from which it has steadily risen. „■■•■' ■ *'■ Yellow leaf disease/and steadily decreasing prices from the 1918 peak of £55 per ton were the two factors which brought about the extremely low level of exports m 1921.. ■ But it does not follow; that production is ever, likely to return to such a level. All. the evidence- available is directly opposed to spch a probability. Since then the complete recovery of Manawatu flax from the yellow leaf disease together with the considerably higher prices obtained for hemp m th 6 intervening period have given such impetus to the industry as is reflected m the export figures under consideration. •.■■■'■■■ ■.''■'.' .- '■ , ■•;' . * As a matter of. fact all the evir dence now available points' to our present level of export being maintained.' - , .-■'• Interest m this most important fibre industry is, being rapidly awakened m the Dominion, where "numerous flax ventures have been floated m recent ye*ars. • ■/.■■' As most of these will come into production within three or four years the export lever should then rise and provided overseas buyers can depend upon regular supplies . of high-class fibre good prices should be maintained. Flaxmllling companies have for years past enjoyed- exemption from income-tax. , Exactly why this should continue is notiaft all plain to "Eiat Lux," who has perused many flax prospectuses wherein the. estimated profits range from' 10% per cent, up to 75 per cent, per annum. If profits on » such a scale can be earned/why should not the industry pay income-tax? . " . •. ■ Aperatiye Methods , . Regarding the future .working of .this new company it is pointed out : that two courses are open to it. The first is to work all the land itself and. the second is to sell •off 100 acre blocks to old. retainers and others and buy the green flax output from them. The. .return to Miranui; Limited, would appear ip be ; about the same m each case 1 provided- it could buy its green deaf from its- flax farmers a't"2B/--per ton on mahi tramlines.' ' /Now this figure has been bothering "Fiat Lux" for quite a ; tiime and he cannot reconcile if with an 'article written by A. L.-Seifert and published m the N.Z. Journal of Agriculture, February 21, 1921, entitled:. "Phormium Tenax as a Farm Crop." . Therein Seifert advocates the planting of phormium tenax as a farm crop and points out- that . the ' cutting and handling of planted flax all m orderly rows would be much less than m "wild" grown areas. , r , ' He goes on tb say that before farmers could be expected; to • plant for cbnimercial purposes they must naturally^ be .satisfied that a fair price will be paid'for the flax they grow. : In he states that should the farmer cut and deliver his leaf to the mill he should get on an average £2 pcr 5 - ton for it. " Allowing, say, 2/- per ton for transport froiti the main tramlines where under Mifcanui, Ltd.'s suggestion the farhier.is t6 ; deliver the leaf, there still remains a/ difference' against the flax farmer of 25\per cent, m the average price \suggested 'by Seifert m 1921 and Miranui's present suggested ' price.Surely costs have not fallen 25 •':■■ per cfent. since 1921; at- any rate ; the* value of fjhe hemp ; has not re- ■ ceded iji th'at\ proportion. 'If 'Miranui, Ltd., sells its 100 acre blocks and\pays \£2 per ton for leaf at its mill its prospectus profits are going to be, reduced by about £3600 per annum. \ ; S • • There are many points about Miranui, Limited, /whion are ..not cleared up m the prospectui^but the two* fundamental ones oni; which; intending investors should be {enlightened are: (i)- The cohfli£i.^ r ;and valuation of the flax, the {and and the plant. \ (2.) tThe measure |of success which has' attended- the efforts' of .the vendor company; m the imme-.diate-p'ast. ' / ■ 'T ' .If these basic points' are satisfactorily cleared upT theni "Fiat Lux" Twbuld have no Siesitation m recommending the inv^stmeflt, as -the flax industry is m hisj opinion a most at - trkctive. one. ( . . i- j-r ■; 1 .. ■.' .. i. . .

i A.. and *L. Seifert, Ltd.'s accounts I for the past five years m the hands of I a public accountant would have yielded I a wealth of informative statistical ,and I financial detail which would or should 1- have proved invaluable to prospective = investors. , = "Fiat Lux" cannot offer any explanation of this error of omission on the = part of the promoters. , | It passeth the understanding of man. I On page four of the prospectus is a I statement which is very liable to be 1 I misunderstood by persons who have 1 but a superficial knowledge of the | industry. , I The page is headed: "A Prosperous I Established Industry. Recent Increas- | es In Output And Export." 1 It then goes on to quote flgures^sup- = plied by the Government Statistician I showing that the 1926 output of 20,798 | tons of dressed fibre and tow was a 47 1 per cent, increase over 1922 m quani tity and 64 per cent, increase m value, i This writer does not question these • figures at all; but he does seriously question the following paragraph:"The above information plainly shows that the flax industry is not