6

[j. W. POTNTON.

1.—16.

19. In this proposal it assumes the Government should take the product, but there is no price mentioned. It may cast a further obligation on the Government to purchase?— That could be made optional. That at present is an obligation on the company—an offer by the company. The State would not be likely to buy at a higher price than it could get the material abroad. 20. What is the intention of the clause? —It is an offer by the syndicate, not a desire to bind the Government. The offer can be accepted or refused —it can be taken optionally. If the thing were on a huge scale it would be a small concern to the syndicate. If they were producing 200,000 tons the amount the State would take would be infinitesimal. 21. Hon. Mr. McKenzie.] Are you acquainted with Parapara? —Yes, I have been there twice. 22. Have you any knowledge as to the probable quantity of ore existing there? —No. 23. Do you think it is a safe calculation to say 250,000,000 tons?—l put it at 200,000,000 tons. 24. This £650,000 that you refer to is the estimate for the erection of their works—the erection of what?— That is the amount they say they will put in, for which they require a subsidy of 5 per cent. 25. They must produce 65,000 tons of iron or steel before they get, the subsidy. Can you give the Committee an idea how much it would cost to produce 65,000 tons of iron or steel? —It depends on the capital sunk in the concern. 26. I mean the cost of production—labour, and so on? —The labour there would be very slight; both at Taranaki and Parapara there need be very little skilled labour. In some other countries you would have to sink a distance in the earth to get iron-ore, and you would have to get skilled labour to mine the ore. Both at Taranaki and Parapara ordinary labourers would do the work, and if necessary the company could get it done by contract. The cost of labour there has been estimated at 2s. per ton; a general estimate would mean taking it at Is. 6d. per ton. 27. You are referring to getting the ore; I am referring to the whole cost? —I want to impress the Committee with the cost of light labour to produce pig iron. The cost of production varies considerably : some estimate £1 7s. 6d. per ton, but it varies considerably. 28. You have not gone into the question of electric smelting as against blast furnaces? —I have read several pamphlets on it. 29. Have you any idea of the difference in cost? —Electric smelting itself is a costly process. 30. Electric smelting is only applied to the highest class of steel? —That is so. 31. Supposing this 65,000 tons of iron was imported, how much would that cost?— The present price of pig iron varies from £4 15s. to £5 10s. or more. 32. I mean, manufactured —girders, rails, &c. ? —About £7 a ton to £10 and £11 in iron bars. 33. And steel? —It depends on. the quality—some is a very high price. 34. About £9 a ton? —More than that. Pig iron is over £5 10s. •35. Have you gone into the question of the quantity of iron, and steel imported last year?— I have it on record. The total production throughout the world is about 50,000,000 tons a year. 36. The total imports into this country? —I have not gone into that. Mr. G. M. Thomson: The quantity imported to the 31st March, 1911, for the year, including everything —iron, steel, corrugated sheets, wire, and all—was 146,000 tons, valued at £1,510,000 : that is taken from the Statistics. 37. Hon. Mr. McKenzie.] Dr. Bell stated that there were 22,000,000 tons in the Washbourn Block : that is the outcrop at the back ?—Close to the shore. 38. Practically less than 100 acres? —Yes. 39. The Chairman.] What do you estimate the total value of the State's contribution to this proposed scheme at?— So-much a year. 40. The total would be £I,3oo,ooo?—Yes. 41. Working it, out from Laurie's Tables I make it £3,900,000? —You are reckoning interest on that. 42. That is the amount the State is proposing to invest if the yearly contribution were put into a credit account at 5 per cent. It would amount to £3,900,000? —In this case we do not reckon the amount paid as accumulations. It is paid away under contract for services rendered. 43. I understand the proposed company want an agreement from the State to take all its iron and steel at cost price plus 5 per cent. : would that be a low price? —That is a matter for cost of production. If the iron were produced at a much less rate than in England there would be the cost of freight, and then you would have to take off the value of production here. Say freight was £1, and the cost £3 or £4; if produced out here at £3, you would add 3s. and get the iron for that as against what freight you paid in addition to the price paid in England. 44. What do you understand is the actual cost price?— Cost price at the furnace. 45. Not of merchant's iron? —No. 46. Is it not your experience that when the company has an assured market the cost is apt to go up?— The cost price is that of production at the furnace. 47. Is not the cost price apt to be a very high one owing to the fact of an assured market and no competition?— You would have to compete. 48. You would not advocate that the State should give an assurance of its custom?— No. This is an offer by the syndicate. The State may be paying far more to the syndicate than to any other companies producing. 49. Mr. Skerrett.] I understand you formed a clear opinion that it is to the interest of the country that the State should assist the formation and development of the iron industry in New Zealand? —Yes.