FINANCE AND COMMERCE

Press, Volume LXXIII, Issue 22083, 4 May 1937, Page 11

FINANCE AND COMMERCE

RECORD WOOL CHEQUE CAUTIOUS BRITISH MARKETS The realisation from wool sold in New Zealand in the season just finished was £14,903,257, according to figures supplied b y the New Zealand Woolbrokers' Association. This total is higher than any recorded before for wool sold in the Dominion. The average price a bale,. £22 9s, has been exceeded only six times before. The total quantity, 663,798 bales, has been exceeded only once, last season, when 756,833 bales were sold here. Though there has been some recovery in British markets, and investors are taking more interest in buying at the present low prices, an atmosphere of caution prevails. It is realised that there must soon be a reduction in the rate of expansion of company trading profits as expenses mount and as the home market approaches satisfaction. A desire for freer international trade is becoming stronger. Markets generally were brighter on the Christchurch Stock Exchange yesterday when trading was fairly free over a wide range of stocks. Values were firm and there were several recoveries.

I RECORD SEASON Dominion Wool Cheque TOTAL REALISATION £14,903,000 (PBKS3 ASSOCIATION TELKOBAM.) WELLINGTON, May 3. The New Zealand Woolbrokers* Assotlatton reports that in the season just aided 663,798 bales were sold for a ■Mai realisation of £14,903,257, comjared with £9,840,427 last year. ■ $& average price for the 1936-37 jeason was £22 9s a bale. Tfe figures given presumably refer Jw to the sales held from the end of ffinber, 1936, to the end of April, 1837. and thus cannot include oddments See held before or after that period. The'total cheque for wool sold m New Zealand this selling year will therefore almost certainly be greater ;Afln £15,000,000. In any case, the ' total is a record for New Zealand. 'The'nearest approach to this seasons ? total was the £14,755,247 obtained from tbelftle of 627,831 bales in 1918-19. \ The average a bale was in that season ' £23' los, a figure which was exceeded in 1927-28 when £23 18s 4d was obtained, and earlier, in the phenomenal year 1924-25, when £29 5s was receftuL Ilr'quantity of wool is the second largest to be sold in New Zealand, a recqfd having been set last year when .758,833 bales were disposed of in New Zealand. Since the beginning of thfr century the offerings of wool at Batmnicn sales have increased, partly because of the increase in the flocks 'at the country, and partly because as thft'larger holdings have been cut up, 'awe wool has been sold in New ZeaMthan shipped to England for sale. -HttJßgures vary greatly from year, to from the general increase, , the fariations: -being due to holding wepfrpjn a bad season to a better one, : the or'smaller amount of wool •hipped,'for Sale in England, and to :t smaller extent the variation in the total of the flocks.

COMPANY TAXATION

OVERSEAS TRADE INCREASES DOMINION FIGURES FOR TWO MONTHS HIGH TOTAL OF EXPOHTS IN FEBRUARY Figures demonstrating the improved financial conditions in New Zealand were quoted by the Minister for Agriculture (the Hon. W. Lee Martin), when speaking at Pukekapia. Exports for the first two months of the current year were £3,421,000 mote than those for the same period of 19JG and £5,242,000 above the figures for 1935. Imports for the same J-wo months were £1,794,000 higher than for the corresponding months of laso and £2,722,000 higher than for the corresponding months of 1935. Exports of merchandise during February last were valued at £8,730,755, one of the highest monthly totals recorded since February, 1929. The customs figures showed a marked increase, said Mr Martin. The average weekly value of bank debits to Individual customers' trading accounts during February was £22,015.860, the highest average recorded for any individual month since statistics became available in April, 1928. In December, 1936, the average net note circulation reached the highest point ever touched in the history of the Dominion. Bank deposits also reached an exceptionally high level during February, the average amount of deposit being £67,930,728, the highest monthly average since April, 1928.

ANALYSIS OF THE FIGURES "In spite of the fact that two Commissions appointed by the Government have gone exhaustively into the question of company taxation, agitation is now being made for the assessment of companies' profits for income tax purposes to be assessed to individual shareholders, instead of being collected in one sum froini the companies themselves/' says A Spectainr" In a letter to the &aixor ui «Th£ Press/' "Appropriately enough considerable light has been thrown on street of Statistics/ from; whicii the following information haa been taken. AssessaMe income, jearmge^ Individuals. Companies. Number of taxpayers 66.483,

In Thsds of £'s. £ * nn 177 12,113 Total income *• SS'onn 11.009 Assessable income .. 47,208 « Taxable balance .» 16,384 i. Tax assessed •• l > no .

Average a taxpayer £22 £648 Assessable incomes of £9OOO •' More "In Class 1, the table goes only up to incomes of £9OOO or more. Taking the corresponding figures torCgJthe following results are disclosed. Class X Class 1 l' 7 Number of taxpayers g 4 £ Assessable income .. 40,535 8 606 000 Taxable balance ... 37,616 3 66 Tax assessed •• ***>** "This means that 197 companies contributed 54 per cent of the total mfrequently used in P£X invested in companies "escape mcome tax! Surely th e P figures quoted gE&s sarJS b H€i S incoSes P who have t modest holdInftS Tffi? maxSm^rate 31 whfh individually, they fondly belilvf would be a mere bagatelleoverlOoMttg the fact that what they SSIS gain one way. they would probablv lose another. • _. ; _ t , c+ "And that is just the point. It must be dbvious that to recover the same amount of total tax, the incidence on the lower grades would have to be pnormously increased, and then there would be a row! It would be difficult to estimate what this merease a head of taxpayer would amount to but one has onlv to remember, as a single example how. much of the capital of all the co-ooerative trading associations of Npw Zealand is subscribed by large numbers of shareholders in small amount who pay no income tax at an, how difficult it would be to Sh "Sne h exoedient has been suggested of imposing a flat rate on company dividends or profits and assessing the Balance to individual shareholders, but here again, anomalies would arise for the simple reason that such a flat rate would not discriminate between large and small incomes. In any case, the additional expense in collecting the £4 000,000 odd. or whatever the Government thinks it will need for the coming year—probably a good deal more—would tot up to a considerable sum, and. mark you. could # only be recovered by proportionately increased taxation. ~'... Ul * "In the present disquieting state-of affairs in New Zealand, financial and economic, it is impossible to venture any sort of forecast, but the least likely eventuality is anv serious alteration in the incidence of taxation of companies.

LONDON MARKET QUIETER Investors Show Caution In Purchases EFFECTS OF PROFIT TAX EXAGGERATED CDimiD PRESS ASSOCIATIOH—OOPYEIOHT.) LONDON, May 2.' There are already signs that markets will be more sober next week. Liquidation has spent itself, but it is unwise to prophesy, and Thursday's settlement is awaited with some anxiety, as heavy differences must be me\ if it passes without trouble. Investors are already nibbling at bargains which in more normal times would be considered too good to miss. ' The financial press is advising cautious purchases, stressing the attractiveness of certain industrials and forecasting a sharp recovery in rubbers, of which dealers are short of stocks The'"Economist" considers that Mr Chamberlain is undoubtedly right in stressing that the effects of orofits tax are exaggerated. Nevertheless, normal conditions are impossible until tax uncertainties are cleared up. Present quotations of many sound shares are the result of fear rather than of the careful weighing of investment factors. • , . ■ Scope for further all-round increase in earnings of industry on the scale of the last four years is becoming narrower. Costs are rising, labour is xesI tive. Opportunities for increasing profits of some developing industries still 1 exist, but it will not be surprising if any major rise in equities is over. Importance of Exports One result of the present heartsearching has been to focus attention on the importance of maintaining Britain's export trade. There is a growing feeling that manufacturers should not allow rearmament orders to leact to a disequilibrium in industry or to draw off productive activity from the export trades, on which Britain's prosnf*t*itv i*£sts A movement in favour of a revision of the Ottawa Agreement is increasing, and even the Government is realising the importance of a widening of the area of world trade and of a lowering of tariff barriers in order to encourage foreign countries to buy more British have suffered from heavy selling, but have withstood it reasonably well. The "Financial News" considers that the long-term trend of commodities should be definitely upwards though, henceforth it will be more selective. The strength of wool is especially notable, and. if Russian competition develoos next week, prices will go St ßutt l er h ?s r " quiet on a rather difficult market, but Tooley street merchants do not anticipate a break in prices. Supplies of fresh apples appear to be inadequate to meet the Strong demand, and prices are firm. This situation is likely to continue, as buyers are short of stocks.

REVENUE OF POST -OFFICE

INCREASE IN LAST YEAR MORE MONEY IN SAVINGS BANK ■ ■ ' / (PfIESS ASSOCIATION TELEGRAM.) " t WELLINGTON, May 3. Post Office revenue for the year aided March 31 was £3,884,000, cornPared with £3,550,000 in 1935-38. The 1 »aln totals and increases were: — • Increase. ' •' . * £ <•-£■• .'. 1,366,000 . 405,000 jfelegrams .. 334,000 28,000 W& , .. 565,000 03.000 Telephones .. 1,339,000 86,000 The toll traffic in March was the .Jr* c fl record, there being 1,268,500 -'SmSJS* I^OII3 - The revenue was The, number of telegrams, ' 2»W#? B ft* highest for seven years, woept for December and February, W (during the Napier earthquake). ''si?£jwjlowing are the Post Office . «™gs Bank figures for the year: Del»n,o«^i£3o>B77.ooo; withdrawals : &u M '" amount to the credit of S2? 3itor s at March 31, 1037. £58,065,000 ■inKF* *. iih £52,916.000 on March ; w »l»3p, an increase of £5,149,000.

KEWS.

[, I UNITED BUILDING '& SOCIETY ['. {fNCKEASED NET PROFIT ■ -Sfat Btoflt of £5122 against £4833 ■ ; S ™**ftWvioua year, was earned by ; <&}*sss Building Society of qhristm 1? ff e nnanent) for the year ended ", s?* 31, 2937. Dividend will remain ■ ?\| Per cent. ' dfce.directdrs* report states that the g*gce of unpaid premiums on Starr- , R «t loans was reduced during the ; £* r w £Bl6, against which there is a ;' fund for a similar amount. Gen- :. £*L rei! erve fund, which stood at "Sm^J ear a S°. now stands at £4604, having occurred -in rej™nglng certain free of interest loans ■ -- qS'- mortgages. • S? reserve funds remain unchanged, ' <hS e Pwncipal items of the balance- , are as follows: .'■: Year ended Mch. 31. 1936. 1937. 'filWdSS? 1 ; •• ■- 4.838 5.122 (amount) .. 4,026 4.258 ;2fij nl 438 apital •• 83.121 85,142 I' ' a«iVl!! atl (dividend. I and Uon ' general .. 12,613 12.650 return,, pre- ■ ;• v 889 ' 615 ftp t 7"? '' *• " 2 » 481 3*432 '^SHSt M 42 " MBI •■'- "hares cured ° a f«JtS2Uv 0n mortgag'i 106,198 111.938 ??WKnVn*« •• .. 2.648 2.648 «S»Sw*&i' •• 5,942 4,282 K*«cSi«i!? I J' otß •• 672 588 loans .. 889 , eia SpT- ■' - S2O 346.

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PROPERTY SALES

Mesrs Baker Bros., real estate agents, 166 Manchester, gtraet, ttojrft having sold on account Of the Public Trustee, in the estate of the late. A. Moore, a four-roomed house and section ■m Parfc road, Addington, to Mr K^g^

TIMBER MILLING IN TAURANGA

AUSTRALIAN ENTERPRISE TO BEGIN THIS YEAR [THE PRESS Special Servlce.J AUCKLAND, May 3. The first timber-milling 'organisation in New Zealand to be financed with Australian capital will begin operations on native timber in the Tauranga district on May 14, according to the chairman of Erectors of the company (Brigadier-General. H. W. °* Sydrley), who arrived by the Mon-» tercv The company, which has been registered as tfie Existing Forests Timber Milling Company, Ltd., has a capital of apprbximately £IOO,OOO and was formed originally as a bond issue in Australia, and is the first bond-issuing native forest company to come to fruition in New Zealand. It has one of ihe most up-to-date inland mills in New Zealand, which is expected to have a daily output of 40,000 feet of rimu and tawa'timber. Brigadier-General Lloyd said Ami the mill would give employment to 100 men. Rimu would be produced for Ihe New Zealand market, and tawa timber for the Australian and overseas markets. A special kiln would be installed for drying the tawa timber, the value of which was realised more in Australia than New Zealand. The mill would also be an outlet for other timber in the district.

FOREIGN EXCHANGES (BBITI8H otnciih WIHEtESfl.) RUGBY. May 1. Par. April 30 i. Mayl. Paris, It. to £1 124.21 1103-18 ,110g New York, dol. to £1 4.866 4.0413-16. .4.941-16 Montreal, dol. to £1 4.866 4.93 13-16 4.93} Brussels, belgas to £1 35 29.281 29.25 Geneva, fr. to £1 25.2215 21.595 21.58 Amsterdam, fl. to £1 12.107 9.011 9.001 Milan, lire to £1 92.45 9315-16 932 Berlin, reichmarken to £1 20.43 12.30 12.29 Copenhagen, kr. to £1 18.159 19.401 19.401 Stockholm. kr. to £1 18.159 22.40 22.40 Oslo, kr. to £1 18.159 19,90 19.90 Vienna, schgs. to £1 34.585 261 26J Prague, kr. to £1 164.25 141J 1412 . Helsirgfors, marks to £1 193.23 2281 2261 Madrid, pesetas to £1 25.2215 — — Lisbon, escodos to £1 110 110 3-16 110 3-16 Athens, drach ■ to £1 375 5471 5471 Bucharest. lei to £1 843.6 672J 6721 Belgrade, dinars 276.3 215 215 Rio de Janeiro. pence to milrejs 5.899 4J 4i Buenos Aires, pence to dol. 51 — — . Montevideo, pence to dol. * 391 39J Bombay, pence to rupee 19 181 18J Shanghai, pence to dol. * 14 9-16 14 5-16 Hong Kong. pence to yen • •' 14 15-16 14 15-16 Yokohama. pence to yen • 14 14 Batavla, guilders 12.107 — - —* Warsaw, par zlotys to £1 43.36 — •— •Determined by price of silver.