FINANCE AND COMMERCE

Press, Volume LXXII, Issue 21760, 17 April 1936, Page 15

FINANCE AND COMMERCE

j . 'jl ■ , " ’■ I RESERVE BANK DIVIDEND drapers and the sales tax The Reserve Bank figures this week are published with the two items, capital and general reserve fund, shown as one. The capital has been added to the reserve, which now stands at £1,500.000.

Details of the assumption of the capital of the bank are now almost complete, and forms of application for either cash or an equivalent amount in Government stock have been posted to shareholders. The warrants for the dividend will be posted on May 1-

Sales tax will be among the items for discussion at the annual conference of the New Zealand Federation of drapers, clothiers, and boot retailers to be held in Wellington next week. The annual report of the organisation describes the tax as obnoxious.

reserve bank SHARES

final steps taken for purchase

DIVIDEND WARRANTS TO ISSUE

ON MAY I

(from Our Parliamentary Reporter.]

WELLINGTON, April 10.

The Anal steps have been taken to M y of! the private shareholders in the Reserve Bank of New Zealand, which is now wholly a State institution. Under the Reserve Bank of New Zealand Amendment Act. which came into force on April 1. all shares in the caoital of the Reserve Bank are deemed to be cancelled, and registered shareholders now have received Minted forms of application for payShareholders are entitled at their oD ti o n to receive for each share they hold either a sum of £6 5s in cash or a like amount in New Zealand Government 4 per cent, stock. Shareholders have also been informed lhat warrants for the dividend t>{ 5 per cent, on paid-up capital for the financial year ended March 31, will be posted to them on May 1.

WEEKLY STATEMENT

ASSETS AND LIABILITIES

:,rSCi3 ASSOCIATION TELEGRAM.)

WELLINGTON. April 16,

A Gazette issued to-night contains the following statement of the assets «ad liabilities of the Reserve Bank d New Zealand as at the close of business on April 13:—

Proportion of reserve (No. 7 less 5» to notes and otlier demand 11abiittieo. ’/3..195 per cent. The alteration most quickly noticeable in the figures this week is the rise is the general reserve fund of £500,000, which has followed the assumption of private capital by the Government. Oa the liabilities side, the figures show * reduction of £357,500 in demand liabilities to the State, and a reducUob of £297,000 in demand liabilities *o the trading banks. The note issue « increased by £73,400, a rise actuated for no doubt tfp the holiday otmand for money. Among the assets, * decrease of £560,800 is shown in sterling exchange held. Other assets •*« reduced by £13,900. BRITISH OVERSEAS TRADE SUBSTANTIAL increase IN IMPORTS IMPORTS SLIGHTLY HIGHER UUma OFFICIAL WIRELESS.) RUGBY. April 15. Preliminary figures for overseas in March show a substantial in*Tea*e in imports and a small increase ® exports compared with March, 1935. ~**t month, exports amounted to .L“®’^of)oo t compared with £35,111,000 month before, and £35.952,000 a JJf *2O- Rc-exnorts were £5.900,000, £5.651.000 in February and M 72.000 in March last vear. The •We of import wrs £ 08.052,000, comwith £62.317.000 in February m £60,507.000 in MarcJi. 1935.

drainage scheme

*UCKUmj WORK ID COST

£I IO,OOO

s*■***» mocuno* tclbobaw.)

; AUCKLAND. April 16for the subdivision and ikTT 0 ? 290 acres of land lying on between Mission Bay model s üburb, and its a* a residential area* are f! I Wbmitted to tii" Government tea*”® "My Council. Th" estimated *l.** buiWing operations and io * than 150 men other discharged. JiM if hj

CITY PROPERTY SOLD

UNION CHAMBERS; CASHEL STREET

An important sale of city real estate is announced. Situated in Cashel street, the property is known as the Union Chambers and is a two-storeyed building, housing four large retail shops on the ground floor, with offices upstairs. There is a large concrete store at the rear of the buildings and a right-of-way running from Oxford terrace at the rear of Turnbull and Jones’ premises, and this serves the whole property. The transaction was put through by a well-known firm of city agents. The sellers were Messrs John William Bates and John Edward Bates, of Christchurch, and the purchasers were the trustees of the G. D. Greenwood estate. The area of the property is 24 68-100 perches, having a frontage of 54 feet to Cashel street and a depth of 123 feet. The Union Chambers were originally in the estate of the late George Kuhphreys and were purchased by Ihe Messrs Bates some years ago. The. property has again changed hands at a price running well" into five figures A £62,000 Deal

Interesting also is the price paid for another large city block known as Broadways Corner, the sale of which was announced earlier in the month. The figure has now been disclosed — £62,000. „ , The purchasers were the Colonial Mutual Life Assurance Society, Ltd., the vendor being Mr C. G. McKellar. The property was among the first blocks of land parcelled out in the city in 1851. It was owned by Mr F. W. Bilton. a schoolmaster, who, in January, 1856, leased part of it to Mr William Hobbs, who erected a merchant tailor’s shop on a site between the present Beresford and the “StarSun” office. Mr Hobbs acquired a lease over the rest of the block in the early ’sixties and subleased the land to various business people. In 1879 the lease ran out. The property reverted to Mr Bilton, but a year or two later Mr Hobbs was back in possession. Subsequently it underwent several other changes of ownership, being eventually acquired by Mr McKcllar.

WANGANUI WOOL RETURN

MORE THAN £1,000,000

FOR SEASON

LAST YEAR’S TOTAL DOUBLED

(paisa ASSOCIATIOK TELEGRAM.)

WANGANUI. April 16,

Proceeds amounting to more than £1,000,000 have been obtained Irons the’ wool 'disposed of at Wanganui during the season just concluded, A total of 84.807 bales were sold at an average price a bale of £l2 10s 10d, the gross realisation being £i : f.W,62b. The average price per lb was 8.144 d. Last season the gross realisations amounted to £421,939 and the average price was £8 11s 8d a bale, and 5.676 d per lb. . CANADIAN INTEREST RATES RECORD LOW LEVEL FOR TREASURY ISSUE ■ ccmited PRESS association-COPYRIGHT.) OTTAWA. April 16. A record low interest rate of ninetenths of 1 per hv the Government for 25,001X000 doi lars worth of three months Treasury SYDNEY MARKET SYDNEY, April 16. Wheat, country sidings, is quoted at ‘is 2>’(d a bushel, winch is equal to about 3s 9d ex trucks. Sydney. Flour —£9 10s. . Bran and Pollard—£6. potatoes—Tasmanian £8 10s to £9. Victorian £7 10s. Onions—Victorian brown £lO 10s. Maize—4s 3d. ADELAIDE Wheat—Growers’ lots 3s 7d. Flour—Bakers’ lots £9 12s 6d. ■ Bran and Pollard—£6 2s 6d. Q a ft; —Algerian Is 9d to Is lOd. Barldy—ls 10d to Is lid. PROPERTY SALES H Matson and Company report hay-u-,r» chid the property owned by Mrs in Hewitt’s road, to Mrs Andrew 5 Todd, at a satisfactory figure. dollar MARKET RATES The Associated Banks (other than the Rank of New South Wales) quoted the fouowms dollar rater New Zealand currency basis. They are hiect to alteration without notice. subject to y s A Canada. ' • . (Per £1 N.Z.) dol. dot. SclU”V— n964 3.98J T.T. ;; 3.00S 3.99.1 Buying- ' w 4.0U 4.038

ADVERSE TRADE BALANCE

AUSTRALIA AND UNITED STATES COMMONWEALTH EXAMINES TARIFFS (FROi[ OUR OWN CORRESPONDENT.) SYDNEY, April 9.

Important developments are expected in trade between Australia and the United States as a result of decisions of a sub-committee appointed by the Federal Cabinet to report on methods of correcting the Commonwealth’s unfavourable balance. The sub-committee has established a basis on which imports from the United States will be restricted. Officers.of the Commerce and Customs Departments are working out a system of quotas and high duties for consideration of the sub-committee. Strict secrecy is being kept about the proposed methods of correcting the adverse trade balance, because they involve wide tariff amendments, and no details will be known until Parliament is informed at the endofthe month. The sub-committee will meet next week in Canberra to complete recommendations for the Cabinet. So urgently is the rectification of the adverse balance regarded by the Cabinet, that some action will be taxen soon after Parliament meets, at the end of the month. The sub-committee will report _on the quantity and value of goods imported which compete with similar goods manufactured in Australia and Britain, the classes of imports which may be regarded as luxury items, and also on those imported commodities which are essential to Australian industry. The sub-committee has also considered the possible effect of action against the United States on employment in Australia. m .. The principal imports from the United States include petrol, lubricating oils, machinery, motor-car chassis and parts, tobacco, undressed timber, films, drugs, chemicals, and printing machinery. Since 1923-24 the trade balance has. favoured the United States by more than £200,000,000. For the five years between 1925-26 ana 1929-30 Australia’s adverse trade balance with the United States reached an average of about £25,000,000 a year. From 1931-32 to 1934-35 it reached an average of £7,250,000, and for the 10 years ended 1934-35. the average was £18,000.000 a year. For the first seven years months of the current financial year the imports from the United States were £7,800,000 and the exports £3,200,000. Latest estimates show that the adverse balance for the full year will be about £10,000,000, in spite of the fact that the United States has bought more Australian wool, owing to a shortage in America. The Government fears that the "resent trend is towards the pre-depression figures. Motor-cars, petrol, and oils, and unmanufactured tobacco are the largest items in Australia’s imports from Arnerica. Cars represent £2,000,000 a year, and oil and petrol £1,360,000, and tobacco £1,250,000. The difficulty about any action tending to curb_ the impoitation of American cars is that it would interfere with the chassis-as-sembling and body-building industries in Australia. . , Purchases from Australia by the United States are principally hides, skins and wool, tallow, concentrates, and sausage casings. In correcting the adverse balance, the Government will take every precaution to safeguard Australian em* ployment now provided by American trading. The gravest problem is to strike out chassis imports without endangering employment in Australian industries. Action may be gradual to enable British replacement of Amencan cars to develop without the dislocation of local industries. Oil and petrol can be replaced by the ample competitive supply from British sources. The film industry may not be affected, since, except by a drastic quota, it would not be vulnerable in the tariff field. Tobacco may present a delicate problem. Penalty duties may cause a serious upset in a trade which gives not only vast local employment, but also creates a market for the growing industry in Australian tobacco —used chiefly for mixture. The Government will also take account of the valuable contribution which tobacco makes to excise revenue. The appointment of the Cabinet subcommittee followed a statement in the House of Representatives by the Minister in charge of trade treaties (Sir Henry Gullet), who said that the adverse balance was a menace to Australia’s economic position, an ° .f*“ nressed the hope that the United States Government would recognise that Australia was compelled to .axe action by her economic and financial position. The Government’s decision had been reached onlv after repeated efforts during the last two years to induce the United States to enter into trade treaty negotiations had met witn continued refusals. . , . The one note of warning uttered in discussions on the Government s probable action was that of the eminent Melbourne economist. Professor D. . Copland, who said that no action should be taken, to disturb the good relations of the two great Englishspeaking nations by tariff and trade controversies. the metals market

PRICE OF SILVER

(UNITED PRESS ASSOCIATION—COPYRIGHT.)

LONDON, April 15. Silver is quoted: Spot 201 d, forward 20 5-16 d a fine ounce.

SALE OF HORSES

H. Matson and Company report that at their special sale of cobs, hacks, ronies and light harness horses an entry of 33 head was submitted and a largo quantity of harness, gear, and vehicles. There was a good demand for harness and gear and gn excellent clearance resulted. The horses were competed for strongly up to the recent basis of values, and a good clearance was made, the following being the principal sales; On account of E. C. McDermott, Christchurch. thoroughbred mare, Lightning Raid, Bgns; D. Cameron, Addington, thoroughbred gelding, aged, sgns, brown cob, 7 years. 12gns; L. Donald, Ashburton 6-year-old cob gelding, lojgns; 1. Powell, New Brighton, cream pony mare sgns: J. E. Early. Christchurch, harness gelding. 4yrs, Bgns; W. McGarry, New Brighton. 8-year-old harness gelding. Signs; H. H. Gardiner, , Purau, pony gelding, aged, 7igns; various clients. Master Tommy, 4 years, harness gelding. lOgns, grey pony gelding 6 2 ■ms half-draught mare aged ILfgns. t ioroughbred gelding by Thurnam Bgns. chestnut gelding Excursion 7£gns, black geldipg by Last Pointer Bgns.

AUSTRALIAN BANK INTEREST^

RISE CONSIDERED TO BE INEVITABLE MELBOURNE INSTITUTION’S VIEW

Economic and financial conditions made the increase in interest rates by the banks inevitable. That much is gathered from an article on the subject in the April summary of the National Bank of Australasia. That the increase did not take place eariier, it is hinted, was due to P Ol1 * 1^ 1 9°nsiderations. The increase of one-half ner cent in the rates of interest allowed on fixed deposits which was announced by two of their memo on March 2 the summary states, was made effective by all the i trading banks on March 24. The public offer of £1,000,000 of Treasury bills having a currency of three months and bearing interest at 1? per cent., the summary continues, “was not the cause of tn increase. It may have precipitated action by some of the banks. On the other hand, the majority of banks may have preferred to wait until after tne Treasury bill issue closed. Certainly, by deferring their announcement they avoided action which wouM have hopelessly prejudiced the Treasury bill issue. As it happened, the public subscribed for only £315,000 out of the £1,000,000 offered, but this poor response is indicative of a rise in the whole structure of interest rates rather than of a reaction to the increase in rates allowed on bank deposits, undue importance is being placed upon the rise of one-half per cent, in bank deposit rates, and too little attention is being given to the forces which affect interest rates in general.

Irresistible Trade Movements

“The new rates are the same as the banks allowed between February, 1933, and April, 1934. They did not check the progress of industry then, why should thev do so now' This question, however, avoids the issue, which may roughly be stated as ‘Why have the banks raised deposit rates?’ A full answer would take much space, but in short form it may be stated that it was because the rise was forced upon them in widespread and irresistible movements in trade, investment, finance, and associated economic activities. “Outside observers have wondered why the rise was so long delayed. The increasing intrusion of politics into business of all kinds —including banking—provides one reason. It was known that any action likely to restrict the abnormally easy condition which has been the main characteristic of the money market during the last three years would be made a political issue of first-rank importance. Also, it was hoped that the higher prices ruling this season for wool, wheat, butter, and metals would provide a large favourable trade balance, with a consequent increase in Australia’s banking reserves in London. As it happened, the value of imports rose also, expectations of a growth in reserves faded away, and a rise in interest rates could be no longer deferred. “The effects of an easy money market in conjunction with a great increase in all forms of economic activity uoon the banking structure of this country are to be seen in the published statistics of bank assets and liabilities. These show that £27,000,000 were added to bank advances between December, 1932, and 1935. If deposits had kept pace with this expansion it could be assumed that the increased advances were being made out of the savings of the community. As it happened, £12.000.000 came out of the liquid resources of the banks, which involved a corresponding shrinkage in Australian banking reserves in London. Changing Money Market “The money market has been changing gradually during the last 18 months, and its condition of case has tended to give way to a normal condition —one in which interest rates are high enough to induce an enlarged volume of new savings, while new borrowings tend to shrink under the influence of rising rates. The movement may be retarded by sundry expedients. but it is undoubted that when the supply of new monetary savings is smaller than the demand for loans at a given level of interest rates, those rates will tfend to move upward. The opposite movement takes place when new savings exceed the effective demand of borrowers. “Though during the last year bark deposit and lending rates have reacted very slightly to the upward pressure other sections of the money market have shewn definite hardening tendencies. There are various indexes showing the general trend. The index of preference share prices dropped from 140 ii February, 1935. to 133 in February ibis year. The not return on Commonwealth Government 4 per cent, consols moved as shown below: —

Alternatives for the Future “The interest rate on high-class first mortgage loans increased from 4 to 4J per cent, during the 12 months ended March, while the rate on goodclass leans to municipal bodies increased from 3i to 41 per cent, over the same period. These figures are approximate, but they do not overstate the movement. The banks could not persist in ignoring the changes in the money market. Present conditions indicate that they were slow rather than hasty in their action. “Future movements will be determined by the interplay of economic forces. If Australia lives within its income and steadily adds to those stabilising reserves which it holds in London, the upward tendency in interest ratos may be checked. If, however, those reserves are reduced some one or more unfavourable results will accurc. It may be that interest rates will rise further, that the exchange premium on sterling will be increased, or that tariff and other restrictions against imports will be extended. An alternative is currency or credit inflation. but the dangers of that expedient are too well known to. require restatement here.”

RABBITSKIN SALE

HIGH PRICES IN DUNEDIN Dalgely and Company, Ltd., Dunedin. report as follows; — There was a large offering at Tuesday’s rabbitskin sale, the high prices of recent sales resulting in considerably increased quantities compared with corresponding sales last season. There was again a very keen demand from the United States for all grades, and new season’s incoming winters sold to 73d. with early autumns at 54d and late autumns to 62d. Early-caught grades, such as racks and summers, sold very well at prices Id to 3d higher than last sale. The following are prices realised for our main grades:— Light racks 41Jd per lb, prime racks 43£ d, dawny autumns 44d, early autumns 54Jd, late autumns 62d, incoming winters 73d, autumn does 36d, early autumns (spotted) 443 d, late autumns (spotted) 48d, autumn bucks 58d, summer does 283 d, summer bucks 35d, milky 27|d, summer broken 28} d, autumn broken 35d, runners 33|d, small 21 id, summer blacks autumn blacks 35K summer fawns 380.

MINING

GOLDEN SANDS YEAR PROFIT OF £3554 The report and balance-sheet of Golden Sands, Ltd., show that the year’s operations —to March 31—have been very profitable. Dividends equalling 25 per cent, of the capital have been paid, and the balance after this distribution was £2126, including £321 brought down from last year. The annual meeting of shareholders will be held at Christchurch on April 30. The report of the directors is as follows: —

The number of shifts worked during the period under review is 638, as compared with 487 mentioned in our previous report. The shifting of the plaint to its present position occupying two months and a half of the present year, necessary repairs and alterations throughout the year, and the Christmas vacation, represented a loss of 292 shifts. Therefore the production is actually the result of a little over eight months’ sluicing. The total amount of gold produced during the year is 824 ounces 7dwt, of a net value of £6095 13s Id. Two dividends. totalling 25 per cent., have been paid during the year. The annual accounts disclose a net profit of £3554 16s 6d, which, after adding the amount of £321 15s 6d brought forward from last year, and deducting the sum of £1750 paid in dividends during the year, leaves £2126 12s to be dealt with, and your directors propose to allocate this sum

The retiring director, Mr James Murphy, being eligible, offers himself for re-election. Mr W. S. Mac Gibbon, the company’s auditor, retires, but offers himself for re-election, FOREIGN EXCHANGES

FOREIGN EXCHANGE RATES The Bank of New South Wales, Christchurch, quoted the following rates as ruling yesterday for its sales and purchases of foreign exchange. The rates are subject to alteration without notice:— Buying. Selling.

THE SALES TAX

RETAILERS’ CASE FOR REDUCTION GOVERNMENT ATTITUDE AWAITED The sales tax, among a number of questions of importance to the drapery, clothing, and boot retail trading sections, will be discussed at a conference of the trades to be opened in Wellington next Tuesday. The annual report of the Federation of Drapers, Clothiers, and Boot Retailers congratulates the Government on its great success in its appeal to the elec<trs, and wishes it every success in its administration.

The report notes that members of the Government when in Opposition expressed their disapproval of > the sales tax, and the question of abolishing it was discussed a good deal during the election campaign. “Since the election, however, the Government has not disclosed anything as to its intentions,” the report adds. “The revenue collected from this source in 1935 was £2,389,939, an increase of 12.9 per cent, over the 1934 figure. “The magnitude of this sum must weigh both with those who seek the abolition of the tax and those who favour its retention, and one of the difficulties to be overcome by the former will be the one undoubtedly confronting the Government of collecting a similar amount by any other means. There is no doubt that the tax has been an entirely obnoxious one from the viewpoint of the retail trader. “A material reduction in the rate of tax or its entire abolition will be the desire of the whole commercial community, and we suggest that our organisation should co-operate with the chamber of commerce and other sections of the retail trade in endeavouring to attain our objective.” The federation describes the Government’s desire to improve the standard of living of the lower-paid workers as laudable. “It is a desire with which we may be whole-heartedly in sympathy,” the report adds, “but the legislative programme announced cannot fail to raise all costs of production and distribution, and until it is disclosed to what extent costs will be raised and how far higher costs can be reflected in prices without restricting the volume of trade, anxiety will continue to be felt. “Meanwhile we feel sure that members will unanimously approve the earnest way in which the Cabinet has set itself to the task of dealing with the many problems needing solution, and will be more than willing to cooperate with the Government in every practicable way for the good of the community as a whole.”

The conference will discuss the cashorder system of trading; chain stores; itinerant traders and auctioneers: foreign competition; the 40-hour week; statistical services; election-day closing; distribution of goods to unemployed: rubber shoes and children’s health; and other subjects of general and trade interest.

AUDITORS AND DIRECTORS

SOME CONFUSION OF

THOUGHT

There is occasional conflict of opinion on the functions and responsibilities of auditors, particularly when they are concerned with the accounts of public companies. This question drew sopie concise comment recently from Mr A. E. Cutforth, president of the English Society of Chartered Accountants. "No little confusion of thought,” he said, “is noticeable occasionally in regard to a professional accountant’s functions. One hears at times the view expressed that the scope of our duties as auditors to public companies ought to be wider and that we should express opinions to the shareholders on matters concerning the administration of a company’s affairs by its board; and it has been suggested that if the definition of our duties in the Companies Act is not sufficiently wide for this purpose the law should be suitably amended. “One can appreciate some of the reasons which have contributed to this viewpoint. The public knows that, as liquidators and receivers, professional accountants have to undertake administrative functions. In effect, they become for a limited period the managers of businesses; and frequently they carry out these duties with signal success. The public also hears from time to time that the directors of this or that company have called in Mr X. or Mr Y.. chartered accountant, to undertake an enquiry into the affairs of a company generally, not excluding questions of administration. In fact, Mr X. or Mr Y. is asked to perform the functions of a business doctor. But to argue from the particular to the general is always dangerous; and it would be entirely wrong to assume that because certain professional accountants may in certain circumstances be called in to undertake or to criticise executive functions, there should be superimposed upon every audit of a public company’s accounts as at present understood a kind of management audit. Boards of public companies have their own sphere of work, and auditors,have theirs. The directors of a company are, or should be, chosen for their experience and skill in connexion with the administration of the particular class of business carried on by that company. What justification can there'be for regarding auditors in general as being on a higher plane than directors in matters of' business management and policy, and for making the auditor a kind of examiner and the directors an examinee? How many auditors would regard themselves as qualified to fill such a role? And how many directors of experience and standing would be prepared to be placed in such an invidious and subordinate position? This country has an instinctive dislike to a policy whereunder checks and controls are imposed on individuals which not only restrict their freedom of action but in effect limit their responsibilities and lower their status. Most people feel that it is better that* the individual should be given full responsibility and wide freedom' of action; and then, if he fails, he must bear the results of his failure.

“All who have watched during recent years the development of the accountancy profession must realise —and indeed expect—that the demands on the services of professional accountants as expert advisers on financial and economic matters will increase. And the members of our profession should welcome this widening field of activity. “The professional accountant who is specially called in to advise has considerable freedom of choice; frequently he can' himself decide the scope of his enquiry, and if he thinks, fit he can expressly exclude from . his review matters which concern management, and he can make it clear in his report that he has done so. But an auditor of a company’s accounts who as an integral part of his statutory duty was expected to review and to criticise matters of management and administration would be in an entirely different—and I suggest an impossible —position.” STUDHOLME STOCK SALE A good attendance of buyers and a keen demand for all sorts met the fairly heavy yarding at yesterday’s stock sale at Studholme. A pleasing feature was the firm tone evident throughout the sale of aged ewes, for which the market rose by Is to Is 6d a head above the prices ruling at the sale on April 11. Practically a complete clearance was made. It la evident that many farmers have not yet filled their quotas. Only two lines of fat ewes were entered and sold. Store ewes made to 255. and fat lambs to 2is Id. Four Bprder Leicester rams made Signs.

RESERVE BANK LEGISLATION

ABUNDANT FUNDS IN NEW ZEALAND COMMENT BY PROFESSOR TOCKER “In the absence of definite knowledge of the Government’s financial policy, it is impossible to say what the full effects of the Reserve Bank legislation will be,” said Professor A. H. Tocker, professor of economics at Canterbury University College, in an interview yesterday. “The removal of lending limits places the responsibility of managing the assets of the bank on the management where it rightly belongs. If this responsibility is exercised wisely there is nothing to fear from the change that has been made; but whether the Government will borrow’—and what is more important will spend—wisely, is a question that can be answered only when the Government’s policy is fully known. “Apart from the change in ownership of the control of the bank, the importance of which is the use made of that control, the most significant features of the amendment bill are provisions, first, for giving the bank control over exchange funds held abroad, and second, for removing restrictions on the bank’s powers of lending. It is not clear from the amendment bill,” said Professor Tocker, “whether the bank is expected to take over the whole of the exchange reserves held at present by the trading banks, but it appears likely that exchange reserves now divided between the Reserve Bank and trading banks will be pooled in a greater measure than before. If this is so it should result in more economy and more effective use of these reserves, for a reserve is like a police force—better concentrated in one spot and available for use where’ necessary, than diffused and scattered over a wide area.” Effects of Recent Legislation The original of the Reserve Bank Act confined the bank’s lending powers within narrow channels, said Professor Tocker. The object of the most recent central bank legislation was to maintain soundness and liquidity of the Central Bank’s assets. With trading banks it was usual to provide no such restricting legislation, but to leave the disposal of assets and maintenance of sums and liquidity to the discretion of the bankers concerned. There appeared to be no good reason for believing that central bankers were less capable of managing assets than trading bankers. The change made in New Zealand, while removing the limits on government borrowing, placed the responsibility of keeping loans made within proper limits on the Reserve Bank itself.

Under the original legislation the Reserve Bank made no loans other than small investments, and exercised little of that influence in the money market generally expected of a central bank and usually implied through its lending policy. The new conditions allowed a greater flexibility to the bank, and if it lent fairly freely to the Government it would create by its loans the necessary instrument of market control. Bank funds in Now Zealand were so abundant at present that there was ample room for lending. While such lending should be spread over the market as.a whole rather than confined to the Reserve Bank alone, the bank could safely lend several millions and still keep well within the limits of liquidity required.

SYDNEY STOCK EXCHANGE

. INVESTMENT MARKET QUIET

PRICES STEADIER (ciutid rs>s3 association— coprmioHT.) SYDNEY. April 16. When the Sydney Stack Exchange resumed after 'the Easter vacation, the tone of the Investment market was quiet and steadier than before the holidays, as operators are waiting for the market to settle down. Commonwealth loans were active but irregular.

LIABILITIES £ s. d i!' General Reserve Fund . . 1,500,000 0 0 O Bank note.; 10.342.532 0 0 <3f Dementi liabilities — v S : ate 7.920,7150 17 11 ■ Bsr.i.s 8.826,027 19 5 no 0<bt.T 87.088 1 3 Time deposits 0» Liafch.bes i’i currencies other than New Zealand currency 15? Oihcr liab'l lies .. 95.268 5 C To*s! 28,772,497 4 1 ASSETS i') Reserve — 'a) Gold 2.801.733 0 0 Up Sterling excint.30 23.939,325 16 4 <c» Gold exchange <8) Subsidiary coin 200,129 4 10 18) Discounts— <a) Commercial and agricultural bills <b> Tretsury and local body bills — 110* Advancer — <a) To Stale or State undcrlal:ings (bt To other public authorities ‘ci Other •Hi Investments 1,809,048 2 0 Bank buildings U3> Other assets 22,261 0 11 Total 28,772,497 4 I

LONDON, April 16. April 14. April lb. Copper— Standard, spot Forward Electrolytic .. to • • £ s. 37 4 37 10 41 5 41 15 d. 4.V n 0 0 £ s. 37 4 37 10 41 0 41 5 a. 4', 7.1 0 0 Wire bars .. 41 15 0 41 5 0 Lead — Spot Forward 16 1 16 5 3 0 16 0 16 3 0 9 Spelter — Spot Forward 15 2 15 7 6 6 15 1 15 6 3 3 TinSpot 210 12 6 209 12 6 Forward (3 6 203 17 months) 204 2 8 Silver — Fine, per oz. 20 l-16d 20,1 d Standard, per oz. 21 |d 21gd

Return includ- . ing redemption per cent. 1934— £ d. December 15 .. ..353 1935— ' March 15 ..383 June 15 .. 3 10 1 September 15 .. .. 3 16 4 December 15 .. .. 3 14 2 1936March 15 .. 3 37 7

as follows: — £ s. d. Balance brought forward from last year 321 15 6 Profit for year - .. 3554 16 6 3876 12 0 Less 25 per cent, dividends paid 1750 0 0 £2126 12 0 Write off — Plant extension and improvement (making the total written off £1295 16s lid) 803 8 6 Plant, machinery, construction and development (making a total written off £1522 16s 5d) 307 16 5 Directors’ fees to March 21,' 1936 (already sanctioned) 200 0 0 Audit fees 15 15 0 Provision for income tax March 31, 1936 46 9 9 Balance, carry forward .. 753 2 4 £2126 12 0

(BRITISH OFFICIAL WIEELES3.) Paris, fr. lo £1 RUGBY, April 15. Par. April 14. April 15. 124.21 74 61-64 74 61-64 New York, dol. to £1 4.866 4.941 4.941 Montreal, dol. to £1 4.866 4.961 4.97g Brussels, belgas to £ 1 35 29.21 29.21 Geneva. fr. to £1 25.2215 15.16 15.161 Amsterdam, fl. to £1 12.107 7.27J 7.272 Milan, lire to £ 1 84.26 62 11-16 62 11-16 Berlin, reichmarken to £ 1 20.43 12.28 12.28 Oslo, kr to £1 18.159 19.90i 19.901 Stockholm, kr. to £1 18.159 22.391 22.391 Copenhagen, kr. to £1 18.159 22.391 22.391 Vienna, schgs. to £1 34.585 261 261 Prague, kr. to £1 164.25 119 7-16 1193 Helsingfors, marks to £1 193.23 227 227 Madrid, pesetas to £1 25.2215 36 3-16 36 3-16 Lisbon, escudos to £1 110 1082 1082 Athens, drach to £1 875 520 520 Bucharest, lei to £1 818.6 670 670 Belgrade, dinars 25.2215 21.7 21.7 Rio de Janeiro, pence to milrels 4.899 41 41 Buenos Aires, pence to dol. 51 Montevideo, pence to dol. 51 391 391 Bombay, pence to rupee 19 181 181 Shanghai, pence to dol. « 141 141 Hong Kong, penes to dol. * 15 13-16 15 13-10 Yokohama, pence to yen • 14 1-32 14 1-32 Batavia, guilders 12.107 7.241 7.241 Warsaw, par zlotys 1o £1 43.38 ♦Determined by price of silver.

London — £ N.Z. to £100 stg. T.T. 124 124/10 O.D. 123/10 124/8/9 Australia— £ A. to £100 N.Z. T.T. 101 100/10 O.D, 101 100/10 Fiji— £ F. to £100 N.Z. T.T. 90/7/6 89 O.D. 90/7/6 89 New York— Dol. to £1 N.Z. T.T. 3.99£ 3.95J O.D. 4.01 3.963 Montreal— Dol. to £1 N.Z. T.T. 4.02 3.98J O.D. 4.031 3.99 Austria — Schgs. to £1 N.Z. T.T. — 20.77 O.D. — 20.79 Belgium— Belgas to £1 N.Z. T.T. — 23.333 O.D. — 23.344 Czechoslovakia — Crowns to £1 N.Z. T.T. — 94.98 O.D. — 95.03 Denmark— Kroner to £1 N.Z. T.T. 18.203 17.893 0:D. 18.263 17.903 France — Francs to £1 N.Z. T.T. 60.76 59.93 O.D. 61.21 59.97 Germany— Reichmarks to £1 N.Z. T.T. — 9.789 O.D. — 9.794 Holland— Florins to £1 N.Z. T.T. 5.947 5.797 O.D. 6.007 5.801 Italy— Lire to £1 N.Z. t:t. — — O.D. — — Java— Florins to £1 N.Z. T.T. 5.917 5.757 O.D. 5.977 5.701 Norway— Kroner to £1 N.Z. T.T. 16.183 15.893 O.D. 16.243 15.903 Sweden — Kronor to £1 N.Z. T.T. 15.785 15.490 O.D. 15.845 15.500 Switzerland— Francs fto £1 N.Z. T.T. 12.353 12.083 O.D. 12.458 12.088 Noumea— Francs to £1 N.Z. T.T. 62.56 58.56 O.D. 63.01 58.62 Papeete— Francs to £1 N.Z. T.T. 62.56 58.71 O.D. 63.01 58.77 Hong Kong— N.Z. pence to dol. T.T. 18 57-64 20 25-64 O.D. 18 51-64 20 23-64 India and Ceylon— N.Z. pence to rup. T.T. 22 9-64 22 57-64 O.D. 22 3-64 22S Japan— N.Z. pence to yen T.T. — 17 39-64 O.D. — 17 19-32 Shanghai— N.Z. pence to dol. T.T. 17 17-64 18 41-64 O.D. 17 5-64 18| Singapore— N.Z. pence to dol. T.T. 34 27-64 35 31-64 O.D. 34 15-64 35 15-32 T.T. reptesents Telegraphic Transfer. O.D. represents On Demand.

Morning Sales Commonwealth Bonds— 31 per cent, 1948 (ex interest) £ s. 97 5 d. 0 4 per cent., 1938 102 12 6 4 per cent., 1941 (ex interest) 101 10 , 0 4 per cent., 1947 102 0 0 4 per cent., 1950 102 ? 6 4 per cent., 1953 , , 102 10 0 4 per cent., 1955 „ . 102 12 6 4 per cent., 1959 (ex Interest) 100 18 r » 4 per cent., 1961 , , 102 1 Z Bank of New South Wales , , 33 10 0 New Zealand Insurance . „ 2 19 9 Associated Newspapers (pref.) 1 4 0 Meggitts 1 5 0 Woolworths (first pref.) •• 1 19 0 • Afternoon Sales Bank of New South Wales 33 10 0 Colonial Sugar 42 7 6 Mercantile Mutual Insurance 1 11 9 Associated Newspapers 1 2 7* Automatic Totalisators 1 0 6 Howard Smith (ex div.) 0 16 9 Australian Gas A 7 12 6 Newcastle Gas A and C 0 12 3 British Tobacco 2 0 3 Tooths Brewery 2 12 6 Drug Houses of Australia 1 10 0 Australian Glass 4 3 6 Dunlop Perdriau 0 14 8 Goldsbrough. Mort 1 11 9 Wilcox Mofflln 0 11 4 Morris Hedstrom 1 5 6 Greater J, D. Williams 0 7 9 Henry Jones 2 0 0 Farmers 1 9 3 General Industries 0 18 6 R. Fowler 0 13 6 Claude Neon 2 19 0 Australian Wood Pipe 0 11 6 Hackshalls 0 17 0 Mark Foy 1 3 10J James Stedman 0 18 0 W. R. Carpenter 2 2 9 Sargents 1 5 10J Mount Morgan 0 16 6 Broken Hill Prop. 3 0 0 South Broken Hill 5 14 0 Rawang Tin 0 9 4 Larut Tin 0 12 0 Placer Development 5 15 6 Emperor Gold 0 12 4 Loloma 1 0 0 MELBOURNE Amalgamated Zinc .. £ s. 0 10 d. 8 Australian Cement 4 3 0 Electrolytic Zinc 1 17 6 Herald and Weekly Times 3 11 3 British Tobacco 2 0 3 E., S., and A. Bank 6 6 0 - ' Emperor Gold 0 12 4 Loloma - .. 0 19 9