"BELOW COST."

Auckland Star, Volume LXIII, Issue 232, 30 September 1932, Page 3

"BELOW COST."

COAL TRADE PRICE CUTTING. MEETING OF WILTON COLLIERIES. TRADING LOSS OF £6500. Reference to price-cutting in the coal trade and suggested remedies for the general benefit of the Waikato companies were made at the third annual meeting of Wilton Collieries, Ltd., this morning. In moving the adoption of the balancesheet, which showed a loss on the year's trading of £0500, Mr. Hendry Luke, chairman of directors, regretted that there was not a better position to put before the shareholders. In his previous report he had commented that prices had been stabilised, but unfortunately that condition did not last long. During the past year the coal business had been conducted along absolutely senseless lines, and shareholders of all the Waikato mines must be dissatisfied with the manner in which the business had been controlled. Fixed prices had been agreed upon for round coal, but the price for slack, which represented 45 per cent of the output, had been forced down from 10/ a ton, free on the rail, to 6/6, which represented a loss to the whole of the Waikato companies of £25,000. It was true that the volume of trade had decreased owing to the depressed state of the country, but that did not warrant the senseless price-cutting. There were two remedies for the present position, continued Mr. Luke. One was an amalgamation of capital, which would mean a big saving in overhead expenses to the five Waikato companies. If they operated through one concern, there would be a return for every £1 invested, and the policy of selling below the cost of production would be eliminated. An alternative was a combined marketing association, by which means the shareholders would get the money which was at present being distributed among other individuals. While the company had suffered losses this year, every possible means of saving had been taken without affecting efficiency. The returns for the first three months of the present financial year, concluded the chairman, showed that the company was holding its own and represented a big increase over the similar period last year. Mr. J. A. Redpath mentioned that the loss in output had affected all the companies, and asked if full advantage of the position had been taken during the recent strike in the other Waikato mines. Mr. Luke replied that the sales had increased, but full advantage could not be taken of the opportunity because the miners would not allow the company to employ additional labour, nor would they work an extra day. Extra customers, however, had been got. He emphasised that the miners had stuck loyally to the company, and he did not wish his statement to convey anything derogatory to them. Questioned as to the possibility of amalgamation, Mr. Luke said that until personal ambitions were put aside the proposal would not get far. The two retiring directors, Messrs. J. A. Gentles and T. E. Clark, were re: elected, and the meeting closed with votes of thanks to the staff, the directors, and a tribute to the manner in which Mr. Luke had assisted the company.