FINANCE AND COMMERCE

Press, Volume LXXIII, Issue 22109, 3 June 1937, Page 13

FINANCE AND COMMERCE

SMALLER FAT STOCK YARDINGS

PROBLEM OF GOVERNMENT SPENDING

Yardings in the fat stock sections at the Addington market yesterday were mostly smaller than they have been recently when there has been a succession of heavy pennings The lamb offering was less than half that of last week. The better sorts sold at slightly more than export schedule rates, but as the butchers’ demand is slackening, others dragged. Mutton values responded to the small entry and rose over last week’s but fat cattle eased. ’

Continued Government spending in times of relative prosperity was described by Sir James Elder, chairman, at the annual meeting of the National Bank of Australasia last week as a menace to balanced recovery. He said that this constituted a major problem of recovery, and issued a warning that it could very easily be carried too far.

Bank shares, breweries, and some Australian industrials were active on the Christchurch Stock Exchange yesterday when there was an increased turnover. ’

BANKER GIVES WARNING

HEAVY GOVERNMENT SPENDING BORROWING DURING PROSPERITY The opinion that the outlook for the present year was bright was expressed by Sir James Elder, chairman of directors of the National Bank of Australasia, Ltd,, at the annual meeting, held in Melbourne last week. This optimistic forecast, however, was joined with a warning regarding the danger of a continuance of heavy Government expenditure. Sir James said that, although Government expenditure was a most important factor in the working of the financial system, legislators so far had given little evidence of their appreciation of the changed conditions. Borrowing for relief work and special taxation for unemployment purposes continued. While such expenditure ■was essential during the depression period its comlnuance at present leveis was a serious menace to a balanced revival and should be arrested. The rise in recent montns in. overseas prices of commodities was most opportune, because durmg one period of the year the resources ox the Australian banking system were under strain. The present comfortable banking position brought with it a much better outlook in the matter of London reserves, and. with both current payments and capital movements favourable to Australia, they would receive a considerable addition from tho year’s operations. However, the total was still below a sufficient figure. Further evidence of improving conditions was readily at hand. Sir James proceeded. However, recovery brough. its problems. There had been recently a rapid expansion of national income, which was associated with Government spending on a large scale and a highly liquid financial position. These conditions tended to rob investors and speculators of their usual caution and led to marked extension of industries without regard for markets or the possible course of prices. In the subsequent reaction some people profited, but the community suffered. Actions which would throw the upward movement out of balance should be avoided. Persistence in the belief that the financial animation of the last six months would be continued would lead to an unhealthy advance in international prices and costs, and to excessive luxury spending. Imports would rise disproportionately, and the position of the London funds would be affected. , Sir James said he was not suggesting that further economic recovery should be checked, but it was most important to ensure a balanced recovery. The Australian community was now faced with the problem of eliminating as many non-essential projects as possible, and of placing those which it adopted under the closest scrutiny.

WORLD CONSUMPTION OP TIN

BIG INCREASES IN RUSSIA AND U.S.A. Figures issued in the April bulletin tt the International Tin Research and Development Council, published by the Hague Statistical Office, give the world production of tin for the first quarter of the current year at 43,800 tons, against 39,005 tons m the corresponding quarter of 1936. World production for the year ended March, 1937, totalled 177,400 tons, against 147,000 tons in the previous 12 months. World consumption statistics' are available only fip to the end of February, the total f°r the year ended February, 1937, being 100,391 tons, which represents an Increase of about 7i per cent, over the figure for the previous year. An Important increase of more than 16 per cent, is recorded for tin consumption in the United States, where 78,287 tons were used in the year finder review. In Russia there was a Pfir cent. Increase, which places that country third among tin consuming Sountrles, with a record consumption W 10,453 tons. There was a slight de,crease in United Kingdom consumption, from 22,113 tons in the year ended jebruary, 1936, to 21,627 tons in the fear ended February, 1937. Consumption in Germany decreased by nearly • Per cent, and in Italy by about 57 Per cent. Among countries in which consumption increased substantially are France, with a 23 per cent, increase, •apan 31 per cent., Czechoslovakia 32 gjr cent, Belgium 23 per cent, and Poland 42 per cent, iThe tinplate and automobile indus«les are contributing very substanti--5:, *° the increased tin consumption year. In the year ended February, 62,700 tons of tin were used in world tinplate industry, against tons in the preceding year, JTJJfi® the world motor industry is esJinnn to have used 13,500 tons, against «.»00 tons. In January-February, 1937, Production of tinplate amounted * 662,000 tons, against 553,000 tons in -February, 1936, and world Production of automobiles in these per2“'totalled 982,000 vehicles and , ,'™o vehicles respectively. March, 1937, world visible Sj?cl« of tin increased by 720 tons to tons, representing approximately r*'Pw cent, of the , current annual consumption. At the end of 1936, world stocks stood at t°ns, and their ratio to consumption was 11.6 per cent. average cash price of standard t in March, 1937, was £283 5s 7d, as JWbpared with £233 19s 8d in Feb-

COMPANY NEWS

J. R. M’KENZIE, LIMITED J. R. McKenzie, Ltd., advise that they have acquired property in Stratford, and propose in the near future opening a branch of their business. Plans for the new store are being prepared, and when completed the Stratford store will be one of the most up-to-date of its kind in the Dominion. COMMONWEALTH WOOL The Commonwealth Wool and Produce Company, Ltd., reports a profit ci £26.621 for the year ended March 31, compared with £22,403 the previous year and £11,883 for 1931-35. The profit is struck after providing the usual subsidy to the employees’ provident fund. Provision for depreciation amounted to £5763. The dividend is increased from 5 per cent, to 6 per cent., the distribution requiring £43,127. A refund to constituents of 20 per cent of commission on sales of wool requires £7057. A sum of £3OOO is to be allocated to general reserve, and £3231 will be carried forward, against £1615 brought forward. Gross profit increased by £11,589 to £163,493. The report states that the average range of wool values has been highly satisfactory, a feature of the sales being the prominence of American buyers. Sheep values were at a h ; gh level throughout the year, but the cattle position has been unsatisfactory. Business in store cattle is difficult to transact, and dry weather is forcing the realisation in the metropolitan markets of many lines below fat standard. GORDON AND GOTCH Profits of Gordon and Gotch (Australasia), Ltd., continue to expand. For the half-year ended March 31, the tracing profit was £7B 850, against £74,631 the previous half-year, and the net profit £45,235, against £41,970. Following is a comparison of bal-ance-sheet items: ' Half-year ended Mch. 31 Sep. 30 Mch. 31 1936 1936 1937 £ £ £ Net profit .. 37,592 41,970 45,235 Div., pref, 8 p.c. p.a. 4,000 4,000 4,000 Div., ord., * p.c. p.a, 12 *l2 12 Div., ord., 'amount 30,000 30,000 30,000 To gen. reserves To contingen- • cies reserve 6,000 5,000 Forward .. 26,365 29,336 30.571 Trading profit .. 66,052 74,631 78.850 Taxation provision 9,281 13,708 13,341 DEVONPORT STEAM FERRY [THE PRESS Special Service.] AUCKLAND, June 2. A net profit ttf £19.022, a decrease of £625 on the previous year, is shown in the accounts t of the Devonport Steam Ferry Company, Ltd., for the year ended April 30. Dividend for the year is unchanged at 5 per cent., absorbing £7500. Allowance for income tax, writing down shares, and writing off the cost of the Milford swimming pool requires £10,168, leaving £2343 to be carried forward, against £989 brought into the accounts. PROPERTY ACQUIRED BY BANK OF N.Z. AUCKLAND CITY PURCHASE tPEESS ASSOCIATION TELEGRAM.* AUCKLAND, June 2. Another purchase of a Queen street property has been made by the Bank of New Zealand. To-day it acquired the three-storey building on the east side of Queen street above Wellesley street, occupied on the ground floor by Barry and Beale, Ltd., Lido Milk Bar, and Cathay House. The Seller is Mr W. H. Bartlett, who once occupied a part of the premises. The price paid works out at a little more than £6OO a foot of frontage. The Queen street frontage is 33 feet and there is a depth of 82J feet. In the middle of last month it was announced that the bank had purchased a three-storey shop and office building on the southern corner of Queen and Swanson streets, as the first step toward the erection of a large modern building to replace the one which has housed its Auckland branch for about 70 years. The price was not then disclosed. The bank’s purchase to-day was to open a subsidiary branch office. BRITISH EXCHEQUER RETURNS (BBITISB OFFICIAL WIEELEBB.I RUGBY. June 1 Exchequer returns show that the total .ordinary revenue amounts to £98,276,168, compared with £91.025,416 at the corresponding date lasft year. The total ordinary expenditure is £119,689,847. compared with £121.376,342 at the corresponding date in 1936. PROPERTY SALE Baker Bros., real estate agents, 166 Manchester street, report having sold, on account of Messrs Rudkin and Lee, a section in Allan street. Riccarton, to Mr Taylor. Also, on account ox the same vendors, section in Rudleigh avenue to Mr Gas^*”

MINING

BULOLO Mr Fred. G. Dunn, attorney for Cl.itha Deve opment, Ltd., has received the following advices concerning Bulolo dredging:—‘The reduced April output was due to changing the courses of two dredges, which required the digging of a large volume of tailings and some overburden. The May return will also be affected by these changes, but it is expected that by June production will be more nearly normal, -the management endeavours to keep tne monthly production fairly even, but the ground varies greatly in value Jh ere ar e times when on account ot high bedrock or other adverse dredging conditions the course of a dredge must be suddenly changed, necessitating dredging ground of lywer than average value and sometimes of worthless tailings and overburden.” MINING HOUSE CONCESSIONS The secretary of the Mining House Concessions, Ltd., reports the following progress during May;— Adams area—^The gold produced amounted to 16oz lldwt, approximate value £l2O. Expenditure for this period, including the mine manager’s salary, amounted to £53 16s 3d. Fennings area—The tribute work produced approximately oioz of gold, value about £45, ol which one-sixth reverts to the company. No expenditure is borne by tne company, as the working costs are met by the tribute party. An improvement in the water supply is reported. WHITES ELECTRIC The directors of the Whites Electric Gold Dredging Company (Barrytown), Ltd., report that good progress has been made in the work of altering the tables on the dredge. To date the tables have been completely dismantled, and most of the main bearers lor the tables have been erected. All the necessary materials have been delivered to the dredge site. RIMU DREDGE The Rimu gold dredge return to May 31, for 134 hours’ work, and 57,212 yards excavated, was 260.75 crude ounces. SLIGHTLY BETTER TONE WOOL MARKET DEVELOPMENTS STRONG STATISTICAL POSITION The wool market shows a slightly better tone than during recent weeks, states the latest report of Winchcombe, Carson, Ltd., Sydney. Prices for local fellmongered lines have not yet displayed any improvement, but inquiries for them have been more p.'e ti'ul. That development shows that the sheep’s staple is wanted by consumers provided the cost .of it is not too high. Commodity prices generally are more stable than a few weeks ago, indicating a regain in confidence. In itself the wool market has been the basic strength more or less to maintain its position. The influence ot the law of supply and demand is In its favour. On the Continent, in Great Britain, and Japan, the statistical position from s. llers’ standpoint has rarely been stronger than at present. Warn industry throughout the world more active and employment more plentiful than during the last eight years, the read is open for a continued consumption of wool fully adequate to absorb the quantity produced. In the United Stales, heavy importations of the sheep’s staple have rebuilt the quantities on hand to some degree. At the close of March last the stock of apparel wool held by manufacturers and dealers was 212,000,000 ib, being 24,000,0001 b more than a year previously, but some rebuilding in that regard was necessary as at the end of 1933 the quantity ot wool held was the smallest recorded for 17 years. At mid-April an American report stated that orders tor men’s wear fabric on hand in the United States were 55.000,000 yards, being yards greater than 12 months before. New business nas not been as readily secured as some months ago, particularly in women’s goods. The United States government has been taking steps to check any tendency to a speculative boom. Tnat effort has had general effect on trade, but its objective is desirable. Traders, m addition to wool-growers, will gain more benefit from the continuance ot moderate prices for their products than from a short period of spectacular figures followed by the inevitable “burst” resulting in monetary losses and months of uncertainty until confident feelings are restored. No appreciable increase in the United States clip is probable during this year, and it is likely that America will again be an important influence on the world’s wool markets. Her present negotiations with England respecting the eliminaffon of the tariff barriers which are hindering world trade, raise hopes of more sustained orders for Australian wool Irom the States than were experienced during the 10 years before the current season. The wool market has presented some unusual differences of late, in Bradford prices lor tops have been maintained for six consecutive weeks, ot s merino tops be.ng quoted at 39d. By way of contrast, Continental • futures' top markets have varied considerably, receding to the basis ol iasl February. Yorkshire concerns apparently have more conllaence in the raw material position than their Continental neighbours. Frequently tne English trade has been charged witn “bearing” tactics. Current circumstances give no cause for complaint m mat .respect. THE METALS MARKET

DAIRY PRODUCE MARKET LONDON, June 1. The butter market is quiet. Danish 113 s. Choicest salted New Zealand 110 s, Australian 109 s; unsaited New Zealand Ills, Australian

LONDON, June 1. May 31. June 1. Copper— £ s. d. £ s. d. Standard, spot 58 1 3 59 17 6 Forward 57 2 7i 58 6 3 Electrolytic 62 0 0 64 0 0 to 64 0 0 65 0 0 Wire bars 64 0 0 65 0 0 Lead— Spot 23 8 9 23 17 6 Forward 23 6 3 23 15 0 Spelter— Spot 22 2 6 22 15 0 Forward 22 2 6 22 18 9 TinSpot 245 17 6 249 7 6 Forward 244 17 6 248 2 6 Silver — Fine, per 02 20id 20id Standard, per oz. m 21 id 21 id