AUSTRALIAN FINANCE.

Press, Volume LXV, Issue 19805, 18 December 1929, Page 12

AUSTRALIAN FINANCE.

STRINGENCY INEVITABLE. Reviewing the prospects of the money market, a representative of one of the principal Melbourne financial houses stated last week, that national income ■would be so much less this year that stringent financial conditions were inevitable. These must, in turn, affect the share market and the price of securities. A satisfactory feature of the market was the way in which nioney was being offered for the Commonwealth loan of £10,000,000. If interest could be stimulated during the nine business days remaining before the closing date, the greater portion of the amount required might yet be obtained. One factor that would stimulate applications was that nearly £4,000,000 in interest would be paid by the Treasury on December loth, the day before the loan would close. Generally speaking, interest rates remained firm on the money market, and it was difficult to obtain loan funds for -nunicipalities at 6 per cent. Overseas the position was still unsettled. The trade depression in the United States, following the Wall street crash, had affected British trade and share markets. Wellinformed quarters were expecting a reduction in the Bank of England rate to 5 per cent, before the end of the year. The gain last week of £2,500,000 in the Bank's gold reserves was an encouraging phase of the oversea position, but a definite change for the better could hardly be expected until after the settlements next month arising out of the Hatry failure. The decline in speculation in the United States had caused prices to advance in the New York bond market, bringing about a sharp rise in quotations of Australian dollar issues. This was probably what, had led to several New York financial houses enquiring in official quarters concerning the possibility of anotbfx Australian loan in the United States, to which the Prime Minister (Mr Scullin) had replied that the Federal Ministry had not been sounding the New York market for a loan, and had no intention of departing from the usual method of borrowing through the Loan Council. It is said that the number of new flotations in New York lately has been negligible, and that even the State's municipalities have hesitated to borrow in the open market. There have been no foreign issues of any sort. Banks Write to Treasurer. The Associated Banks of Victoria have forwarded to the Federal Treasurer (Mr Theodore) their views of the Bill now before the Federal Parliament, providing for the mobilisation of gold held in Australia. The opinions expressed by the banks have not been made available for publication, but it is said that' a reasonable case has been presented after a careful review of the difficult exchange position now prevailing. At the present juncture this is adverse to Australia, some merchants having had to pay as much as £lO2 5s for £IOO in London on telegraphic transfer. In 1925, when exchange was favourable to the Commonwealth, £10,000,000 in gold was imported into Australia, chiefly by the trading banks, to adjust the trade balance. This position will arise again, though not, of course, in the near future. When it arises, should the Act still be in operation giving the Commonwealth Bank the right to take over gold for notes, the trading banks feel that it would support their contention that they should be given credit in London for the gold which might be taken from them. 4 . E., S.. AND A. BANK. NET PROFIT, £601,262. Despite a number of adverse factors which obtained in various parts of the Commonwealth in 1928-29, the English, Scottish, and Australian Bank, Ltd., is able to report gross profits for the year ended June 30th only slightly below those of the previous term. They amount to 41,619,924. against £1,627,995. Expenses of management take £818,423, and income and other taxes £200,239, the total being £1,018,662, against £1,029,226, so that the net profit of £601,262 is higher than for 1927-28, when the amount was £598,769. Interim dividend of 5 per cent, free of income tax requires £150,000, and final dividend of 71 per cent., making 12J per cent, for the year free of tax. The allocations to the reserve are £BO,OOO, increasing that fund to £3,080,000; a sum of £IO,OOO is voted to officers' provident fund, £50,000 is placed to contingency account, £50,000 is applied to reduction in bank premises account, and £347,741 is carried forward, against £311,479 brought into the accounts. The balance-sheet figures disclose that deposits are higher by £343,230 on the year. Advances, however, are up £3,315,233. The demand for accommodation for primary industries and for the financing of trade has had to be met, and the increase denotes that the bank, in common with other institutions of the kind, has not been lacking in financial assistance in this respect. Bills payable are £359,341 more, but bills receivable show an increase of £734,328. Cash and bullion is £508,866 less than at the close of June, 1928, and cash at bankers and at short call is down £2,026.472. Investments are less by £769,601. The sum of £59,000 set aside in the previous year for the purchase of the balance of that amount of deferred inscribed deposit stock has been appropriated for this purpose, and this item now disappears from the accounts. The amount has been passed, as previously, to the credit of bank premises. Figures of the last two balance-sheets compare as under:— 1928. 1929. £ £ Capital paid-up .. 3.000,000 3.000,000 Reserve fund . . 2,944,249 3,015,000 Perpetual stocks .. 1,932,466 1,872,966 Deposits, etc. .. 33,391,267 33,734,497 Bills payable, etc. . ■ 3.244,796 2.891,324 Cash .. .. 9,916,009 7.380,671 Govt, securities . . 2,390,770 1,621,169 Bills receivable, etc., in transit . . 5,176,838 5,911,167 Advances, etc. . . 26,272,106 29,587,339 Premises, etc. .. 757,054 758,641 LONDON PRODUCE MARKETS. The Bank of New Zealand has received the following advice from its London office as at the close of business last week: Butter—Quiet. 164s per cwt. Cheese—Dull, white 88s to 89s per cwt, coloured .S7s per cwt. Frozen Meat—The market for wether mutton is quiet and unchanged. The market for ewes has improved owing to short supplies. There is a fair demand for lambs. The market for beef is short of supplies and prices are nominal. Wethers, light 6Jd to 6|d per lb. heavy oid to 6d per lb: ewes, 4d to 4fd per ib; lambs, 2's Sd to BJd per lb, B's 7Jd to Sid per lb, 4's TJd to 7Jd per ib, seconds 7d to 7Jd per lb; oz hinds, 6d to 6"Jd per lb: ox fores, 4Jd to 5d per lb: cow hinds, sid to s|d per lb; cow fores, 4Jd to Jjd per 3b. VICTORIA NYANZA SUGAR CO. Directors oi the Victoria Nyanza Sug3r Co., Ltd., have decided that the annual meeting of the company will be held on February 25th, and have declared a final dividend of 5 per cent, (to close the period ended April 30th, 1929), and 21 per cent, interim dividend for the current year, making Is 6d a share in a!!, payable on February 2 sth. JOHNSONVILLE STOCK SALE. [THE PRESS BpeeU! Service.] WELLINGTON, December 17At the Johnsonville etock sale to-day, there was a smaller yarding than usual of all classes of stock. Extra heavy bullocks made £l6 10s to £l7 15s. heavy bullocks £l4 12s 6d to £l6 2s 6d. medium and light bullocks £l3 to £l3 12s 6d; heavy wethers 27s to 3Ss. medium shorn wethers 265, heavy shorn ewes 18s 6d to 30« 3d; hoggete, good 23s 6d: lambs 19s to 34a.