FINANCE AND COMMERCE

Press, Volume LXXIII, Issue 22110, 4 June 1937, Page 13

FINANCE AND COMMERCE

—^ IMPROVED DOMINION PROSPERITY LONDON MARKETS MORE CHEERFUL A survey of the year ending March qi iqw • u Canterbury Chamber of X £ measure of recovery m New Zealand during 1936. Better export prices have had their influence on the economy of the councrv and most sections of commerce are in a healthy state. The dropping of the armaments contribution by the Govern ment has had an immediate effect nn PH+iov. i , governnow cheerful. Gold continues tsufiS ' "* about the action of the United States g nervousness The Reserve Bank figures this week show a decrease of £48,000 m the note issue. Demand linhmnJi T [ aec J ease of £462,900 higher, but those SfhL T \°? £ 43,30 D. Other demand liabilities £SIOO lower. The sterline ™ by £609,80 °- The

IMPROVED TRADE CONDITIONS

Influence of Export Prices ! GROWTH OF SPENDING POWER Business activity in New Zealand always follows closely the rise and fall of export values, states that the latest bulletin of the Canterbury Chamber of Commerce. The fall in export receipts from about £NZSSm. in 1928-2 D to £NZ3Sm. in 1931-32 contracted income, spending power and demand, and reduced heavily the value both of internal business and of imports. Since 1932 export values have been rising and since 1933 the rise has been increased by reason of the higher exchange rates ruling. For years ending March 31, exports fetched neany £NZ4Sm. in 1934-35, nearly £NZSOm. in 1935-36, and reached the highest figure ever recorded, £NZ6O.23m. in 1936-37. In response mainly to the consequent rise in income and spending power, internal business has increased and the increase has been reflected in a higher demand for imports. Imports were £NZ4Bm. in 1929, fell to litre more than half, £N.Z.24.6m. in 1932 and, for the years ending with Mai\.h, were £NZ32.6m. in 1934-35, £NZ37.4m. in 1935-33, and reached £NZ47.6m. in 1933-37. Over the last year tha increase in imports has been £NZIO.22m. and in exports £NZIO.62m. The excess of exports over imports has increased from £NZI2.O2m. to £NZI2.6m. The outstanding increase in export values for the year was in the case of wool, which accounted for £NZ5.33m., or more than half, of the total increase. Butter and cheese combined" accounted for £NZ3.I6m. of the remainder. The chief increases in the value of exports" for the last two years are shown below. *• Chief Increases in Exports, 1935-36 and 1936-37. (All millions.) 1a35-3j. 1936-37. Incr. Butter .. 13,737 15,967 2,230 Cheese .. 4,312 5 r 254 942 Frozen lamb ~ , 7,802 8,539 737 Babbit skins .. 426 756 330 Sheep Skins .. 1,391 1.827 436 Woof .. 10,427 . 15,787 5,360 The increase in imports is the direct result of the growth of spending power and demand which has followed mairuy from the expansion of exports. Most of the increase in imports indicates an all-round expansion in consumption, but some part is probably due to the building up of larger stocks to meet the increased demand. Increases in imports were spread over a wide range of goods. Comparing the proportionate increases, the most striking were in railway and tram plant, 100 per cent.; carpets, 59 per cent; woollen piece goods, 58 per cent.; wireless apparatus, 56 per cent.; agricultural machinery, 53 per cent.; motor soirit, 46 per cent.; electrical goods, 45 per cent.; motor Vehicles, 37 per cent; and apparel in clothing, 38 per cent. These increases indicate a big expansion in demand for both capital equipment and consumption goods. Banking The high receipts for exports during the year and the comfortable excess of exports over imports have maintained bank deposits at a high level. In making comparisons with past years, however, it must be remembered that the compilation of the bank returns has been altered by the establishment of the Reserve Bank. Government deposits and advances, which were formerly shown in full in the trading bank returns, now appear mainly in the returns of the Reserve Bank. Hence to make comparisons with years before 1934 it is necessary to add Government deposits and advances at the Reserve Bank to total deposits and advances at the. trading banks. The results will give figures for all deposits and advances comparable ■with those in the trading bank, returns before the Reserve Bank was established. This is done in \the table be-. low, which compares deposits and ad- I vances for the ave-age of the March quarters from 1928 to 1937 and shows the net bank funds held abroad since that figure became available. Total Bank Deposits, Advances; and Net Funds Abroad £NZ millions

These figures show a substantial rise in advances. While deposits increased little more than £NZIm. during the last year, advances increased by £NZllm. Despite the loss of business following the transfer to the Reserve Bank of advances against dairy produce exported, the trading banks advanced an additional £NZ3.22m. to their customers, while the Reserve Bank, which up to a year ago had had made no advances, advanced £NZ7.79m. to the Government, mainly to finance the export of dairy produce. It is usual for the banks' overseas funds to rise and fall with i the excess of deposits over advances in New Zealand, and, comparing the March quarters of 1936 and 1937, the correspondence is very close. Both the excess of deposits and the net total of bank funds held abroad declined by about £NZIOm. Internal Conditions | The rise in. advances is itself an Indication of increasing business and

STOCK MARKETS BRIGHT '

DEFENCE CONTRIBUTION REACTION GOLD HOARDERS STILL NERVOUS (UNITED PBESS ASSOCIATION—COPYRIGHT.) LONDON, June 2. Boomlike conditions returned to the Stock Exchange as a result of the death of the defence contribution, and a long list oi advances was recorded along a broad frcnt. The city editor of the Associated Press learns that Treasury experts have meanwhile begun consultations with repres. ntatives of trade and industry, indicating that the Government is not' repeating its error of not considering business advice, The new tax is expected to resemble tho old corporation profits tax. The city hopes that some means will be found for roping in debenture preference shareholders, as it is considered unfair that the whole burden of rearmament should be placed on one class of investors. Cabinet is discussing the Treasury reports this afternoon. The gold scare is now the only factor holding back the markets. Despite the United States Treasury's flat denial that it,is not reducing the price of gold, hoarders are acutely nervous, and the market is daily flooded with sellers. Dr. Trip, president of the Netherlands Bank, recommends international regulation of gold production. He considers that the restriction of output is preferable to reducing the Erice, and that it should be accepted y the producers in their own interests.

SYDNEY WOOL SALE

FLEECE REMAINS FIRM CRUTCHINGS EASIER (itkitxo pbess association—coptbioht.) (Received June 3, 10.40 p.m.) ■'■ * SYDNEY. June 3. The Wool Selling Brokers' Association held an auction sale to-day of a picked portion of twe of the catalogues of smaller lots, available at the concluding series of the 1936-37 wool season. There was good general competition and pr.ces, compared with the last auctions in April, showed practically no change for all fleece showing good length of staple, but other descriptions were 5 per cent. lower. Crutchings declined 7i per cent AUSTRALIAN PRODUCE SYDNEY MARKET SYDNEY, June 3. Wheat prices have eased on reports from America of more favourable crops there. Bagged wheat is nominally 5s 4d a bushel, and country lots 4s 6d, equal to 5s Id, ex trucks, Sydney.' Flour—£l3. Bran —£6 10s. / Pollard—£7. ' Fotatoes--Tasmanian, £5 10s; others £4 10s. Onions—Brown, £11; white, £ls. Maize—Yellow 6s, white 5s lOd. j expanding demand for funds. Further evidence of substantial improvement in domestic business is given by most of the statistical series available. Significant comparisons of the March quarter's figures for the last three years are set out in the table below: — Comparisons for March Quarters 1935. 1936. 1937.

1936) Registered unemployed .. 35,600 3_!000 27,900 These figures show increases, over th„ last two years, of 38 per cent, in note circulation, 45 per cent, in bank debits, and 43 per cent, in the yield of sales tax. Free bank deposits have also increased 36 per cent, over the same period. These figures suggest - that the expansion in the value of business over the last two years has been in the neighbourhood of 40 per cent. Mortgage business, land transfers, and building all showed substantial increases in 1935-36, but the increase is less in the latest year. Both import and coastal tonnage has increased considerably. All the price indexes given, except that for share prices, are rising, the increase being greatest in export prices, which fell most in the depression, and which are still the lowest group relative to the pre-war base. Wages have risen appreciably, and the numbers unemployed, excluding those in. full-time subsidised employment, have fallen. Over the last two years, however, the numbers employed on public works have increased by nearly 8000. For the nine months* ended December, public works expenditure increased from £NZI.O6m. in 1936 to £NZ2.37m. in 1937. This increased expenditure has assisted higher exrirt receipts in stimulating increased demand and business activity,

MINING

MAORI GULLY YEAR NET PROFIT. OP £3564 The third annual report of the directors of the Maori Gully Gold-Dredg-ing Company for the year ending March 31, states, inter alia, that the yield of retorted gold was 15430z 12dwt, of a total value of £ 11,534 16s, compared with the previous year's figures of 19130z 14dwt, valued at £14,238. The net working profit for the year, alter allowing for income tax, was £3534 6s Id. The amount brought forward from the previous year's profit and loss account after writing off preliminary expenses and brokerage, etc., was £957 9s sd, and this amount added to the current year's working profit of £3534 6s Id. makes a total of £4521 15s 6d to be dealt with. Out of this amount a dividend (the third) of Id a share, absorbing £2OOO, was paid in July last making a total return to sharp- '■ holders oi 25 per cent, in ths two years the company has been operating. „ T il e balance left from last year was £*5D7 17s Bd. Out of this amount the directors decided to write £2500 off tne mining rights account, leaving a [hakneo of £7 17s 8d to be carried forward to the credit of profit and loss appropriation account. As was indicated at the last annual meeting, the matter of acquiring another area for dredging purposes has been engaging the attention of thp directors. Quite a number of likely areas have been placed under offer, but no decision will be arrived at until after the annual meeting, as it is des.red that the shareholders should have an opportunity of expressing their views on the directors' proposals. During the last few weeks excellent returns have been obtained, and it is expected that by the end of the year, unless anything unforeseen occurs, ample funds will be in hand to cover the cost of acquiring another area, a ? u the disman tling, and re-erection * ! u f ' dge on same - The directors feel that if a suitable " area can be obtained at a reasonable cost there is every reason to believe that snareholders will yet have returned to them the whole ox their capital, plus substantial dividends. In April, Mr W. Gktos, owing to inability to spare toe necessary tune to attend to the company's anairs, resigneu his seat on hie directorate, and xvxr S. Burnett Wmte, ox dreymcuLn, was appointed to the vacancy, naess'-s C. iticiiardson and A. A. Snannon are ihe rearing oirecuors, and oner vnemseives xOi- ro-eiecion. Eaiance-sneet items show that the dreaging account snowed a of £43ou. Assets induced casn at oamc on current account casn at .bank on fixed ucposi.. £iouj, goxd premiums rtceivaoxe £27j ss, tnese sterns, With rents and insurance paid in aavuiice, maiang a touai ox £uuxy lus in Uie doaung assets.

MOSSY CREEK RETURN

(PRESS ASSOCIATION TELEGRAM.) GREYMOUTH, June 3. The Messy Creek return was 290z 9dwt for 7334 yards in 131 hours. RESERVE HANK FIGURES JVEEKLY STATEMENT ASSETS AND LIABILITIES (PRESS ASSOCIATION TELEORAU.) WELLINGTON, June 3. A Gazette issued to-night contains the following stat3ment of the assets and liabilities of the Reserve Bank of New Zealand, as at the close of business on May 31:— Liabilities £ s. d. (1) General reserve • fund .. .. 1,500,000 0 0 (2) Bank notes .. 12,974,590 10 0 *3) Demand liabilities—(a) State ~ 7,383,790 7 9 (b) Banks .. 10,133,952 18 6 (c) Other .. 971,143 14 6 (4) Time deposits .. (5) Liabilities in currencies other than New Zealand currency .. .. (6) Other # liabilities 123,761 8 11 Total .. 33,087,238 1 7 Assets (7) Reserve—(a) Gold .. .. 2,801,791 0 0 <b> Sterling exchange .. 22,327,094 13 8 (c) Gold exchange (8) Subsidiary coin .. 111,624 1 1 (9) Discounts—"(a) Commercial and agricultural bills (b) Treasury and local body bills (10) Advances—(a) To the State or State undertakings— (l) Dairy industry account .. 4,673,119 10 10 (2) For other purposes .. .. . 200,000 0 0 (b) To other public authorities .. (c) Other .. (11) Investments .. 2,906,450 0 0 (12) Bank buildings (13) Other assets .. 67,159 14 1 Total .. 33,087,238 19 8 Proportion of reserve (No. 7 No. 5) to notes and other demand liabilities 79.866 per cent.

COMPANY NEWS

WILSON'S CEMENT [THE PRESS Special Service.] AUCKLAND, June 3. An increase of £6660 in net profit is shown in the accounts of Wilson's (N.Z.) Portland Cement, Ltd., for the year ended March 31. Net earnings were £59,889, against £53,229 a year ago. ij'ull provision has been made for depreciation, bad deb Is, taxes, and other expenses. The directors recommend a final dividend of 9d a snare, making' again • 15 per cent, for the year. After this distribution the floating balance will be raised from-£14,889 to £27,241. The amount brought in was -£12,352, making available £72,241. An interim dividend of 9d a share absorbed £22,500, and the final dividend of a similar amount requires the same sum, leaving £27,241 to be carried forward.

GOLDSBROUGH, MORT

\ _____ A final dividend of 6 per cent, is recommended by the directors of Goldsbrough, Mort and Company, Ltd., making a total of 8 per c.nt. for the year ended March 31. The dividend is payable this month. The rate is an improvement of 1 per cent, on that of the previous year. In 1934-35, 6 per cent, was paid.

■ i m w '55 -a §T3 u <u o o p. HP fo o 0J43 1928 .. 52.34 46.07 6.27 — 1929 .. 58.21 46.36 11.85 — 1930 .. 57.47 53.68 3.79 — 1931 .. 54.14 54.33 -0.19 ■ — 1932 .. 53.33 50.23 3.10 — 1933 .. 55.17 48.50 6.67 ■ — 1934 .. 62 f 31 41.57 20.74 — 1935 .. 71.54 43.07 28.47 43.17 1936 .. 72.20 44.64, 27.56 41.22 1937 .. 73.33 55.65 17.68 % 1.43

Note circulation £NZm. 6.20 6.90 8.60 ' Bank debits, £NZm. 14.3 16.4 20.T Sales tax, *NZm. .55 .63 .79 Mortgages registered, £NZm. 2.9 4.0 4.2 Mortgages discharged, £NZm. 3.7 3.8 4.6 Land transfers. £NZrn. 2.6 3.4 4.0 Building permits £NZm. ■ .85 1.38 1.29 Exports, 1000 " tons 300 320 290 Imports, 1000 tons 430 540 610 Coastal tonnage, 1000 410 410 490 Export prices Wholesale prices .. 107 121 137 136 139 146 Retail prices .. 132 134 143 Share prices 103 . 101 99 Wages .. 140 145 163 ! • (Dec,