BRITISH TRADE.

Press, Volume LXIV, Issue 19448, 23 October 1928, Page 10

BRITISH TRADE.

COTTON, SILK, AND FLAX. (By a Commercial Expert of the "Economist.") At the time of writing the Lancashire textile industry is dominated by American crop prospects. A number of important unofficial reports have been received, and these are engaging serious attention. Incidentally the annual report of Colonel H. G. Hester, the secretary of the New Orleans Cotton Exchange, who has an International reputation as a cotton statistician, has been received. He gives the commercial crop for the twelve months ended July 31st as 14,443,934 bales, which shows a decrease on the previous year of 4,761,995 bales. The forecasting of the cotton crop is invariably a hazardous enterprise, but this year the uncertain and complicating factors, are exceptionally numerous. In these circumstances there is considerable in making forecasts and wide margins are being allowed. The significance of two factors is particularly difficult to gauge. In the first place, the extent of the damage caused by the spring floods cannot be readily ascertained. In the second place, the depredations of tho boll weevil are very uncertain. There is the utmost divergence of evidence as to this latter point, some observers saying that infestation is negligible and others, including Dr. George D. Smith, taking the opposite view. One competent observer writes: "It would seem that the extremes between high and low for this crop will be within a range of 2,000,000 to 15,575,000 bales." Lancashire, of course, would prefer the higher figure, since a big crop means cheaper cotton and cheaper cotton means greater ability to sell in world markets. It remains to be seen to what extent Lancashire hopes are fulfilled..

The Artificial Silk Outlook. Tho publication of a disappointing report by Wardle and Davenport, the artificial- silk manufacturers has drawn attention to the less favourable position of the artificial silk industry. The net profit for the year ended June 30th last was £64,265, as compared with £96,312 for the preceding year; the dividend has been reduced from 20 per cent, to 15 per cent. Thero can be no doubt that trade in artificial silks was somewhat disappointing in the late spring and summer, The summer reaction is, of course, seasonal, but this year it-has been of exceptional severity. While the trade in yarns has been moderately well maintained that in fabrics has fallen off appreciably. The available evidence suggests that in Britain, America, and on the Continent production has, for the time being at least, outstripped demand. The slackening of demand has been especially noteworthy on the Continent. Apparently the production of the newer companies is beginning to make itself felt, as. was to be expected. The older companies, however, are doubtless better equipped to leather a difficult period. An occasional excess of production is the normal experience of most industries, but perhaps this danger is present in a very large degree in the artificial silk industry, since a large proportion of its output is subject to tile caprices of fashion. Of course* new uses and adaptations for the fabric are constantly being discovered, and there is every confidence that over a period of time the industry will show a progressive tendency. There are already signs that the worst of the summer setback is over and the autumn is being faced with greater confidence. ,

Flax'and linen. Flax pulling in tho North of Ireland is now over, and consequently autumn prospects are being discussed. On the whole, the outlook is only moderately encouraging. The present season's crops are reported to be fairly good. Considerable sales have already taken place, on© Scottish firm in particular having been a heavy buyer, and business is restricted. Tho present demand for yarn is confined to small orders for immediate needs, buyers pursuing a hand-to-mouth policy. No yarn is being imported, for home prices practically identical with those ruling on the Continent. The cloth section is featureless, and demand is quiet for most linens. London shippers have placed some useful orders. for dress linens and medium damasks, and enquiries are' reported for linen towels. The demand for dress linens is healthy and well maintained. Colonial orders for linen are coming in steadily, but United States buying remains disappointing. The outlook in Scotland seems a little brighter. Tho slight improvement in the demand for yarns has continued, and both dry and wet spins of flax have found buyers. Tow yarns, which have been Bomewhat cheaper, are even more promising, though business upon a wide scale has been prevented from developing owing to spinners sometimes not being able to accept the prices they have been offered. Sales of linen goods also show signs of reviving, Jbut the finer trade is very quiet. Interest is mainly centring in canvas. The general improvement, slight as it is, has resulted in spinners showing some interest in the raw material, which has continued, to remain steady. AUTOMOBILE AND GENERAL FINANCE COMPANY. The directors of Automobile and General Finance Company (Sydney) are asking shareholders to consent to a writing down of the capital of the company by 4s a share. Should the proposal be acceded to, shares will be paid up to 6s-oach, with tho exception of 10 shares, which are now paid up to £l, and which will then be paid up to 10s, The paid up" capital will be £123,773. The bal-ance-sheet which was issued in June showed a loss on the year's transactions amounting to £23,242. In addition, there were preliminary expenses and establishment account of £49,276. Included in the latter account was £46,001 brokerage, advertising, and expenses paid on shares sold. At the subsequent meeting of shareholders, two directors who were due for' retirement, including the then chairman, failed to secure re-election, their places, being taken by two other shareholders. Tho board as reconstituted proposes that tho preliminary expenses and establishment account of £49,276, and the amounts paid on forfeited shares, £3893, be written off. With the logs of last year there will then be shown a deficiency of £68,625, which represents slightly less than 3s 4d on each allotted share, excluding forfeited shares, and of this 3s 4d the establishment and preliminary expenses account is responsible for slightly moro than 2s 4d. In ordinary circumstances the directors point out this would be shown as a depreciating asset, to be written off at intervals from future profits. Tho course of writing down the capital is proposed as tho directors realise that shareholders are anxious to obtain dividends as soon as possible, and some may wißh. to sell their shares. The directors intend to get in all- outstanding calls wherever possible before the dato of the meeting, and to forfeit all shares not fully paid up to 10s by that date. The forfeited shares will be paid up. to various sums less , than 10s, and will be the property of the company. As Boon as it is ascertained how many shares are forfeited, a further statement of liabilities and assets will be prepared, and will be presented to the meeting of shareholders. As to those forfeited shares, after the reduction, they will become a 10s share paid up to three-fifths of the amount paid thereon at September 28th. If the proposed reduction is effected, the directors are of opinion that the face value of the shares will be fully covered by assets, and that there will be a surplus of approximately £11,500, which will be carried to a special reserve account, in addition to the reserve for doubtful debts and £4949 and forfeited shares reserve of £2336. The directors add that it is not their present intention to call up the shares beyond 6s.