BILL TO PROCEED

Poverty Bay Herald, Volume LXIII, Issue 19123, 18 September 1936, Page 10

BILL TO PROCEED

WHAKATANE PAPER MILLS

ATI'ITUEB OF GOVERHMEMT

long official statement

PROJECT NOT APPItOVEL)

(I’cr Press Association.)

WELLINGTON, last night

o i desire on behalt of the Lovornmeat lo make a. statement selling oul clearly its attitude towards l.fie proposition which the company which has jiroinoted the Vdiakatanc Paper Mills Limited Water'Supply Empowering Bill, now defore the Council, Ims in view,” said the Leader of the Legislative Council, the Hon. M. Eagan, in the Council to-day. “At the outset I would like to point out that the company is entirely free to begin its operations without the consent of Parliament, and regardless of whether or not this bill becomes law, provided, of course, that it obtains a permit under that portion of the Health Act relating to offensive trades.

“At ill'st sight, the measure appears to be concerned solely with the granting of permission to a public company for the faking ol a relatively small ijiuiiitily of water i rom the Wliakntano River for its manufacturing purposes, and it was on this basis that the bill was lirst dealt with by a Committee of Selection in the House of Representatives, which was assisted bv representatives of the Departments of Lands and Survey and Internal Affairs, etc. When this committee reported back, however, the general operations and proposals of the company were subjected to searching criticism, so much so that the bill was referred further to the Industries and Commerce Committee. Under those circumstances, it was entirely logical that this committee should investigate the economic and industrial features of llie company’s activities and proposals. NATIONAL IN VESTIG ATION “Its recommendation that; the 'bib should no! lie allowed to proceed, coupled with I ltd suggestion that a national investigation should bo carried out immediately into the physical 'condition of I lie w hole of the forests owned by afforestation companies, and into -Iho economic possibilities of their utilisation, is an indication that the committee was not

satisfied, either with the general possibilities of pulp and paper manufacture in New Zealand at the present time, or of tho prospects of this particular company. The Government, likewise, is far from satisfied on the same matter, so much so that it would prefer that further operations be stayed until the Goveriuncut’s investigations into the utilisation of forest products have 'been .completed.

“The Government desires to stress that a national investigation will be of an entirely constructive diameter aimed at procuring (he best available foresters and sawmill and pulp and to make specific recommendations both for their management and the economic utilisation of their grown products.

“It hits been .claimed that Parliament cannot undertake the duty iff sitting in judgment upon all company proposals. To a great extent this is correct, but a charge has also been made that both the previous Government and this Government, together with Government departments, have singled out Whukutauc Paper Mills, Limited, for obstructive treatment. Such is entirely contrary to fact. MUST BE ON SOUND LINES

“Neither this, nor any other company, has been singled out for aggressive attack, but when a company commences negotiations with the Government, and makes proposals which impinge upon public interest, it becomes the business of the Government and its departments of Slate to interest themselves in its activities. If is not the desire or the intention of (lie Government to place any obstacles in the way of industrial enterprise. Rather, it is anxious to assist and encourage such enterprise, but it must be on sound lines, and every action, cither taken or contemplated, has been solely for the purpose of conserving shareholders’ rights and moneys, “The question now arises as to whether or not the Government should further interfere in this matter. It has already drawn attention, and does so again, to the very serious doubts which exist in the minds of those best qualified to judge as to tins general activities and proposals of the company. Such a. view is not arrived at lightly, and it is hoped, therefore, that shareholders and directors will agree quite voluntarily to suspend operations until they have the benefits of a national investigation to guide their future activities, The Government proposes,. however, to leave lids' entirely ill Llie bands of (lie shareholders and the directors, and to allow the bill to proceed, hut in doing this, it wishes it io he clearly understood that so tar as tho company’s activities and proposals aru thought to be removed from economic and technical possibilities that it emphasises the following points: NO TARIFF PROTECTION' (a) That I lie company must realise that the passing of legislation does not imply Government approval of their activities and proposals. (b) That pending tho rcsulls of a national investigation, (lie company should refrain from asking its, own shareholders or investing public for further capital, but in U'lo event of so doing if should include iu all such requests in tho form either of Jotters, sales literature, or prospectuses, a, notice slating (hut no action of flic. Government, either in passing (ho enabling legislation or in granting licenses, etc., can bo construed as implying Government approval of its activities and proposals. (e) That the company must dispose of its effluent to (lie satisfaction of the flculUi Department and avoid any pollution of the atmosphere in this connection. if is understood that tho company has already agreed to this eilect.

(d) That llie company cannot expect financial assistance from the Government in the form of tarilf protection, etc., claiming as it does that no protection is required, and that the industry cv.n be prolitably operated. (e) Thai, seeing that it claims to have adequate supplies of pulpwood :in its own forests, it cannot rely in any way upon pulpwood supplies from State exot-io forests 1 , realising that these have been established primarily for the supply of sawn timber, that tho demand for sawn logs will take precedence over that for pulpwood, and that m no event will pulpwood ho sold except at prices remunerative to the State and by public competition. “With those views on record, shareholders will embark ,ou any develop-

meats with « full knowledge of the Government’s views on the matter. NO STATE OPPOSITION. "Whakalane Paper Mills Limited will receive no opposition from any State department, but the Government is concerned about the physical state of the exotic forests of all companies, and it regards it as a duty to investigate their position from the utilisation point of view. It requires to have definite information both as to rate of growth, etc., utul as lo what extent local conditions will allow the establish men t of a successful pulp and paper industry. "In conclusion, I desire to emphasise that the Royal Commission on company promotion, presided over by Mr. .1. S. Barton, investigated only the financial methods of forestry companies. The subsequent Bondholders Incorporation Act was confined likewise lo the provision of financial and legal machinery for reorganising companies. In the ultimate analysis, however, (lie financial stability of companies is directly dependent upon Hie state of their forests, their management, and their utilisation, and it is this basic consideration which leads the Government to believe that national investigation along these lines is of fundamental importance.”

The Hon. R. C. Robbins moved the second reading of (lie hill. He said that if the second reading were carried it would not prevent the Council from thoroughly investigating the proposal.

The lion. R. Masters said that any inquiry should embrace not only tho Whakalane company, but similar companies.

Mr. Fagan said that an inquiry would be made at an early date. The Hon. W. H. Mclntyre asked why this particular company should have ils affairs investigated. Was there any suggestion that it was connected with tlie 'McArthur Trust, or something similar? The hill Mas read a second time and referred to a Select- Committee.