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Further investigations have also been initiated into the control and prevention of sapstain on exotic timbers. Numerous chemicals for the control of stains and moulds are being developed, and as the results of trials by other authorities are received the most promising materials are submitted to tests representative of commercial conditions in the Dominion. Already it would appear that no difficulty will be faced in eliminating sapstains and moulds in the new sawmilling units now being' planned by the Department. Sporadic outbursts of alarm over the reported destruction of wooden buildings by borer attack have resulted in the initiation of a Dominion-wide survey by the Forest Entomologist as a priority project. Undue alarm has been caused by ill-advised propaganda. Undoubtedly a few structures have been seriously affected, but very many more, on the other hand, are entirely free from any attack, and the national survey now in course of progress is for the purpose of determining the incidence of attack by the more destructive insects. Where timbers are already infested owners are recommended to secure the services of a professional architect for the purpose of supervising treatment by specialists. In this connection it cannot be over emphasized that the basic essentials in such treatments are to remove infested timber wherever practicable, or otherwise to ensure that a sufficient quantity of a good wood preservative is forced into the interior of the timber. Incidentally, slight dampish conditions would appear to favour the activities of these insects, indicating that correction of these, either by improving ventilation or by correcting faulty plumbing, should be attended to. As regards new structures, both sawmillers and timber-merchants are fully alive to the necessity for avoiding serious repercussions upon the timber trade by the sale of infested timber, and are making active efforts to improve yard sanitation. Similarly, in the design of new structures, architects and builders may improve the resistance of buildings to borer attack by providing adequate ventilation to all timbers and by improving plumbing practices. With these precautions, wood-users may reasonably expect a serviceable life from buildings long in excess of any period for which they will remain as modern, usable structures. The question also arises whether or not, in the interests of public health, it should be compulsory for the sites of all dwellings to be covered with a mat of some material impervious to moisture. 7. Miscellaneous. Miscellaneous investigations undertaken during the year include the use of various timbers for pencil, clothes-peg, last, and butter-box manufacture. Following the successful shipment to Great Britain of several small parcels of butter packed in rimu boxes, arrangements were made with the Marketing Department to purchase 125 tons of butter packed in rimu boxes for further trial shipments to Great Britain. Similar trial shipments on a small scale have also been arranged in Australia, and it is anticipated that some definite indication as to the commercial practicability of this development will be available during the forthcoming year. CHAPTER IV,— THE TIMBER TRADE. 1. General. A production of 320,000,000 ft. board measure of sawn timber has been estimated for the year ending 31st March, 1937, and the same cut is predicted for the forthcoming year. These figures represent an increase of 27,000,000 ft. board measure over the cut of 293,000,000 ft. board measure reported by the Government Statistician for the year ending 31st March, 1936, and for which the State Forest Service prediction was 300,000,000 ft. board measure. The prediction of an annual cut, of 320,000,000 ft. board measure for the forthcoming year is premised on a revival of public confidence in private building, without which production would tend to fall materially. As anticipated in the previous annual report, the reported production for the year ended 31st March, 1936, registered an increased cut for all building timbers, but it is significant that the reported cut of white-pine for that period was actually lower than for the previous year. Not unexpectedly the reported cut of insignis pine attained a new record of 34,000,000 ft. board measure in this period, and it is not unlikely that a further increase to 40,000,000 ft. board measure may prove to have been attained during the year ending 31st March, 1937. 2. Domestic Market,s. The question of prices has already been reviewed in a preceding chapter of this report. Rising prices, admittedly, tend to contract demand, but in the initial stages of any period of economic recovery such as that now being experienced throughout the Dominion the effect is usually negligible. That some contraction in demand, however, has occurred during the latter part of the year is undeniable. At the commencement of the year merchants, for the first time since the depths of the depression, felt sufficient confidence in the building situation to warrant them in stocking up their yards almost to capacity, but a hiatus occurred until the recent announcement by the Government of the proposed rents for its new houses. The result of this announcement has been to revive public confidence in private building, and a more optomistio tone amongst builders and merchants augurs well for continued production at present levels. The limitation of the subsidy by the Unemployment Board to £700 structures made in January 1936, and the subsequent withdrawal of all subsidies at the end of September, 1936, served to explain, along with the other factors reviewed, the small increase in dwelling permits from 3,181 for the year ending 31st March, 1936, to only 3,282 for the period under review. The total value of permits for all classes of buildings increased, however, from £5,929,803 to £6,581,233, representing the highest total recorded since the year 31st March, 1930. The imported building softwoods, consisting almost wholly of Douglas fir and redwood, have shared in the increased demand for timber, but the trade is of negligible proportions, amounting to less than 7,000,000 ft. board measure and equal to less than 3 per cent, of the local production of building timbers. Doubtless importations would have been slightly larger had it not been for a shortage of vessels resulting from the shipping strike on the Pacific Coast of North America, another effect of which has been to accentuate marked increases in f.o.b. prices for these timbers.

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