NEW ENTERPRISE.

Auckland Star, Volume LXIX, Issue 4, 6 January 1938, Page 4

NEW ENTERPRISE.

AUCKLAND COMPANIES. CAPITAL REPRESENTED £1,362,940. INDUSTRIES STEADILY EXPAND. If the mmilwr of new companies launched each year is any criterion, the spirit of enterprise is flourishing in Auckland. Hardy a day passed in 1937 without a ik'W company being registered, and altogether there were 288. lew ot the people who see the list or companies registered appearing 11 out time to time m the "Star" give it more than a passing glance. Vet it is through the spirit of adventure here illustrated, that industrial progress is made. Generally the notice in the paper—the name of the new company, it>* objects, capital and subscribers —sums up the hopes of a group of people to establish a successful business. Irequently they go 110 further, failing even to get under way through lack of support, but in other cases workshops and factories are built, numbers of workmen employed, and fortunes won or lost. As a rille there is little general interest in the fate of those which fall by the way. Liquidation, voluntary or otherwise, receives a few lines in the daily paper, and few read the story between the lines—a story of high hope«Ljlashed by illluck or mismanagement. Twit year two old-established Aak-kland companies, whose names are household works, have foundered. Past Years Compared, The rise and fall of confidence in the industrial future and the passing of boom and slump are reflected to some extent in the numbers of new companies registered each year and the capital represented 1 he following comparisons are taken from recent records:— Nominal Companies Capital registered. & 1920 314 ii.o3ti.ooo 1030 292 1,763.000 1031 2iK) 1,50.1.004) 1032 200 1.418.000 1033 202 1.380,000 1034 22."» 957.000 3 03.1 232 12.375,000 1030 300 2.140.238 1037 288 1,362,940 The decline in the number registered and capital represented is taken by some local businessmen to be the result ol enterprise being retarded by rising waget and other costs. The record figure of increases of capital by existing com pa nit* shows, however, that local industry is b> no means standing still, in spite of these difficulties. During the pa*t year Tew companiet with very large capital have been formed In 1935 Forest Products, registered on Christmas Eve with a nominal capitalisation of £11,000,000. brought up a record total for the year. Since then the biggest •has been the Mutual Buyers' Association, formed in 1936 with a proposed capital of £250,000. Last year £100,000 was the largest, two companies, Fast Carburettors, Ltd., and the Credit and Finance Corporation, Ltd., being formed with this amount of nominal capital. The Waitakere Brick and Tile Company and Sylvia Mines both had a proposed figure of £75,000. The purposes of the different companies cover the widest range imaginable. In individual cases new enterprises wotrld be all things to all men if they achieved all the objects given in their articles. One, for instance, was registered a few months ago as a company of general merchants, farmers, live stock dealers, theatre proprietors, furniture makers, -hairdressers and tobacconists, all in one. A large number or motor sales and service companies have been formed, no fewer than 25 being registered during t'.ie year in Auckland alone. Keen competition in the radio industry and good scope for sales » indicated by the number of new ventures launched in this field. The enterprise of Japanese interests resulted in the registration of two large trading companies, Banno Bros. (X.Z.) Ltd., with a capital of £30.000, and F. Kanematsu (N.Z.), Ltd., £5000. In each case they are private companies, manufacturers' agents, merchants and importers. Existing Firms Expand. It appears from the comparison of la«t year with former years' registrations that progress has slowed down in the development of the city's industrial life. The reduction in numbers of companies formed and the aggregate of their nominal capital has been offset, however, by increases in the capital of existing companies. This year increases in capital reached the record total of £1,611.631 in the aggregate, compared with £839,630 the previous vear, £220,000 in 1935. £372,787 in 1934, £963,496 in 1933, and £380,358 in 1932. , The greatest increase in capital was registered by Hancock and Company, Ltd., who raised their capital in two successive steps by £400,000 to £625,000. The Westfield Freezing Company, Ltd.. added £349,000 to its former capital ot £1000, and the associated firm, W. and R. Fletcher, Ltd., raised its nominal capital from £ 1000 to £ 100,000. Close behind the meat company comes Wilsons Cement. Ltd., which doubled its capital by the addition of £300.000. This, however, involved no additional enterprise, merely a revaluation of assets. Other well known Auckland firms which made five-figure additions to their capital were Silknit, Ltd., Claude Neon Lights. Reo Motors, Hydra Bacon and the Colonial Ammunition Company. Nominal or Paid-up. It would be a mistake to assume that these sums were actually invested. In many cases the nominal capital is only partly subscribed, and even the amount subscribed is not necessarily all paid up. It happens sometim'es that an ambitious promoter will register his company with a large nominal capital in the hope of impressing persons whom he wishes to "rope in" as shareholders. He has no serious expectation of getting more than a fraction" of the nominal capital subscribed, and counts the extra amount required for stamp duties as money well spent. In other cases the promoters will fix the nominal capital much higher than is required for immediate needs, in order to avoid legal technicalities when subsequent business expansion justifies the application for fresh capital.