FINANCE AND COMMERCE

Press, Volume LXXVI, Issue 22908, 3 January 1940, Page 9

FINANCE AND COMMERCE

TIMARU WOOL CHEQUE

/ TOTAL .OF- £218,302 ' PAID OUT ! BALE PRICE AVERAGES £l6/7/11 *■ Wool producers in South Canterbury ■will benefit considerably from the gross proceeds of the first Timaru wool ap.praisement under the British Government’s purchase scheme, amounting to £218,302 IBs 4d, a statement to this ’ effect having been issued by the South Canterbury Woolbrokers’ Association. A total of 13,316 bales was offered, the price a bale being £l6 7s lid, an i increase of 26.6 per cent, compared | w ith the first sale of the 1938-39 season, : -when the proceeds from 15,572 bales ‘.was £201,802, an average of £l2 19s I a bale The increase in the return was thus £16,500. . ~ ■: The amount will be paid out immediately except that 5 per cent, will he retailed by +he Government until the t close of the season to cover any ad- ! justiri.ent necessary between the agreed ' j average purchase price and the ,ap--1 praised price. - ■ , i Preparation is now being maXW. in. the stores' for the next wool appraisement which will be made on January 25 a’third appraisement being made rvn February 22, urid a final one for tpe season s* aWr date. It is advised by the association that at futur*appraisements no star lots will be offered find ’that an offering below four bales will be either reclassed or grouped.

■ EXTENSIVE NEW LEGISLATION

ADDING TO WORK OF accountant “bewildering array of \v; ; ■ ACTS” ' “There ha? been such a welter of new enactments that it has ,heen most difficult f6r the average-businessman to keep pace, with thorniest aevalppments,” states the Accountants Jour- - nal”..in a review of last year. ft was inevitable that the introduction of .many p| :these measures should add considerably to the work and obligations of accountants and particularly of those who are classified as registered accountants. With so many of our commercial and industrial con- . cerns the matter, pf wage and staffedjiistmehts; to say nothing of the extra work -involved to the irntrigtions. has thrown a great S the-shoulders of our. members,, ipals -of firms, company direc? ■f business gPhCV", 'e had to contend, with a ,bog array and regulations ! affecting ,trade and industry. As the \ Questions - of costs, ' wages selling' and distribution expenses so vitally concern every OBtab-. lishraent the accountant has, of necessity. been called upon to furnish data in greater degree 'than probably has been the case for many years. Admittedly the advent Of the war made it necessary for the Government t0 introduce. measures! which, while, re-. ' strictfve an : character,' must bo sarded as desirable in the Qircum- \ To survey the war regulaan' outline would require far more; space than ws_ nave; avaUweventvre to ! nay that professiamitself hag not. even npw;'hkd-time tp dlgest'fully est alone tgCletentllne tneil , full meaning and implications. “

1 DUNEDIN RUBUEB f FACTORY

, PROMOTER’S REPLY TO MINISTER«KAVE NOT HAD PAIR PEAL” ■ (pflaas ASB°siAW9*f iE.i-roawi-1 i DUNEDIN, January 2. “Tha- Miniater’s roply to pur statemerit Has-been brought to my notice, . Isaid 'Mf Neil Mcßae, managing, director ;of Neil Mcßae and, Company. promoter of a new company, ; Poiflte. (N.Z n In an Interview--. to-day* “I notice that Mr Sullivan states that a number of goods made In New Zealand, or, substitutes lor alternative material are. being pro duced here.tor, importations tri {•United Kingdom are being Permitted. “The position, .is- that of *b®.eomjpaqy’s estiiriated prOdac]iomof + £30.000 ifor th&.vc3Z. v £19.000 woiild [that arnriotmade in New- Zealand and iare produced in; a tt e jaative imaterials fiero. Thbae pro- - bibitedfrom all countraes-with. tpeeceptioh of -'the United- Kingdom,: bu ‘are considerably restricted, m somecases‘fJOQ .'per cent.-, and - In,.- most .as least 30 per cent. - ■.'x ' “In reply to Mr-Sullivan’s statement that this new industry .would Iwolv® the allocation of a substantial , { nh ou '3 < ' of overseas funds,, :I would gfik® _ 1? ' point out’that We require -onlyoOOU ’ worth of raw material in the first y e ar, and ah amount ; of ®SOO .for one machine which cannot b© rorinufacftu»evi in the Dominion. When it is. considered that we would pay-out approximately £IO,OOO in wages for-the first year and engage, a staff of 40, will be realised that the industry. is one that would assist rather than eiribarxass the Government, particularly as , We would not require to apply for any j raw materials’ from the United States- _• ■'of America or Canada,- .• ■ - i would • refer Mr Sullivan to a ter from us to the Department of ,\. Industries and Commerce of November A [34, 1939,; in Which we stated that we ' [withdrew our. application for raw mar . iterial from the United States. of .£ 1500 jas we had found that this material wag; [available in New Zealand. Therefore . !no purchases are required to be paid; for in dollars. ‘‘ r “Mr Sullivan says that we did not receive 1 an answer that our application would be granted. We are quite ’prepared, if' it is necessary, to - , prove our statement that;.we" were definitely assured that there would.be no difficulty, over the importation of- raw material for thia industry, and were .ere-; couraged to go ahead. It is, fully . realised that owing to, the heavy demand on availablesterling funds tne Government must necessarily give preference to industries : already established in the Dominion, .and, we expressed our willingness allfthrough the . negotiations ■ with the, department to ■ - co-operate in every Way possible. But - Why did his department nottedvise US tha£ the proposition could not be considered at present? -'As • . Viousiy, we have spent a considerable amount. and have been working, on, thei-ma’tter for’ll months. We con tend .: that! we have not had a fair deal in the matter, and as far as I am coricerned.it, .’--Is riot finished yet, _ ; i “I- would like to know why Mr Si|llivan, ■ - Htrined ;down;' made to -.the .press- that . such an industry would-, commence : : -manufacture;'in- Dunedip.- U Incident;- . -®Hy, we KaVe- not yet ’had areplyyto -' the-prepaid telegram-, which ive sent . / asklrig the name of the company which v Was- commencing’-, the manufacture! -of x rubber flooring and rubber mats in -- x Dunedin,” y • ■ - .x - ’'■> - .‘I-: .-

COMPANY NEWS

SMITH’S WEEKLY

The chairman of Smith’s Newspapers Ltd., Mr W. Bruce Rainsford, told shareholders that the return for their shares would probably be not less than 2s and not more than 10s in the £l. The annual meeting was adjourned because there was not a quorum, and Mr Rainsfqrd was speaking at an informal meeting which was held subsequently, Mr Rainsford said that he believed that National Press Proprietary, Ltd., which was operating “Smith's Weekly” on a rental basis, with the option of purchase at the end of three years, was making a profit. He explained that if the Victorian building of the company could be sold for £75,000, and if National Press Proprietary, Ltd., decided to purchase “Smith’s Weekly” at the end of the three years, the return to shareholders would be. about 10s. Heavy liabilities which the company- had had to meet, Mr Rainsford continued, included payments to two men, who had won “£5 a week for life” competitions. “Both thesq itieu were young and healthy, and our. estimated liability in this respect was £Booo,'' he said. “We made a settlement whereby £2700 in cash was paid to them.”

BRITISH WOOL STOCKS

HEAVY QUALITIES AVAILABLE HIGHER PRICES ; PAID FOB CROSSBREDS With,' purchases in Australia; New Zealand, South Africa. and. the united Kingdom clip, the 1 British Government Hag become the. world's greatest wool merchant, y. Great Britain is certainly well equipped with supplies, states the latest report of Winchcombe, Carson, Ltd, During the eight months before the commencement of the war, British imports of wool w e rc very heavy and re-exports were legg than usual. The quantify of imported raw material retained was the equivalent of 2>052,000 bales, being 40 per cent, more than the average far the corresponding period of the previous’ five years.’ The United Kingdom is,' therefore, in a particularly strong position. " Surprise has been expressed that prices for crossbred wools are on such gopd .levels compared with merinos. The New Zealand Clip. .97 per cent, crossbred, is sold to the British Government at only about Id per lb; sterling basis, less than* the Australian clip, 84 per cent, of which is merino. War-time conditions or preparation for such circumstances give a definite fillip to the use of cresgbreds for uniform purposes, The keeper demand for them was evident during the; 12 months firior to the war. In the more peaceful imes of 1935 46’s coarse crossbred tops were quoted in Bradford at 10Jd per lb and in August last were 7P per cent, dearer, Their present control < price is twice the’l93s level, but 64ja merino tops,are only 30 per cent, higher. ■ Crossbreds- are net in a favourable position because the British authorities, have a particular leaning towards pro-, ducers of them. Circumstances are the cause. Though about 75 per cent, of the World’s merino.'.wool is grown in ’ the British Empire, only annroximatelv 25 per cent. Of the world's Empire grown and that proportion includes India, the clip of which is all of carpet tj’pe, All other countries are peeking crossbreds, because, or otherwise, large bodies of men are ™|outffAmerican producers of crossbreds appear certam to find ■ a ready outlet for their din. transport may prove a even in that regard Argentina and UtUgUfiY a relatively short voyage- compared with Australia and New Zealand The time lost by the absoneejif sa*C s in Australia durmg September has now been fully recovered because of--the. rapidity with which appraisements hive been conducted. 1 With the current season’s clip and the c S£lu?^' e iikelv quantity of wool appraised is likek to be - a record for Australian market turnover, the nrevloug being 3 000.070 bales «v_ 1932-33. , That nuantitv 1“ likely to be exceeded by at Twwt-- 300,000 bales-

UNITED STATES / '-AND. WAR. ..

ADVANTAGES only TEMPORARY losses MUST EVENTUATE in -a recent' survey of the possible .economic effects pf .war States,-the Guaranty Trust Company of. New York »reache*' the conclusion tha^^QtheKor not tho - United States remains neutral, a prolonged war will entail a loss of manpower, destruction of property, and industrial disorganisation, and in the long run win. favourably bn tye country.-Nautralftj may mitigate these effects, but it, cannot prevent them. . -In the.final analysis the surveyjpoints out, any temporary advantage that American business may gam in world markets as a result of the war Will be Sorb than paid -for in . subsequent losses due to the industrial paralysis Equally inevitable, and even more disastrous in the end; will financial disorder that is likely to follow iw thewake of war. The immediate effects of the outbreak of war, concludes .the survey, have been less-unfavourable than .many persons, apparently feared; and the results over, a somewhat longer period m ev give every superficial indication of exceptional prosperity. But _in the final reckoning the losses to the United ’States, along with the .rest of the world, will be incalculable, '

ALLIES’ AMERICAN , ’ ■ ASSETS

HUGE SUM READILY AVAILABLE According to estimates made in the United States, Great, Britain and France ;have , ' assets worth about £1,750,000 1 0 r o,' readily convertible into dollar balances for-purchasing Amerir can goods. The total comprises the Allies’ gold stacks together w.ith their riaticnals’ holdings of - American securities and bank balances in the United -—The s gold holding of the - British Exchange Equalisation Account is -put at £soo,ooo,ooo; vthat,-of the Bank of France, arid' the French . Stabilisation Fund at £625,000,000. Allied holdings of easily realisable American secun* Ties' plus,bank balances,- are valued ;at about i£500;000,000. ■ The reiriainmg £125,000,006 consists of gold earmarked in America- -. . - ‘ Commenting on the extent of these resources, • the -i ?‘Wrill' Stfeet -Journal” notes, that -white they .do not differ •greatly - ' 'from .those which’ the Allies had at" the beginning':o£ the war in ,1914,' they are much, more liquid; ; .

SOCIAL SECURITY FUND

ACCOUNTS FOR HALFYEAR LARGE CASH BALANCE IN HAND Receipts into' the Social Security Fund lor the half-year, ended September 30, 1939, the first six months of the operation of the- act, totalled £5,739,000, according to figures published in the Reserve Bank’s latest statistical summary. Payments for administration and the various benefits in operation in that time amounted to £3,980,000. The largest item among the receipts was. the / £4,555,000 obtained from the charge on wages. The registration levy brought in £403,000, and £750,000 came from a transfer from the Consolidated Fund. Age benefits were the largest item on the expenditure side, amounting to £2,571,000. Invalidity and widows’ benefits took, £366,000 and £305,000. Administration and emergency benefits are shown together at £200,000. ■Unemployment benefits took £1,61,000. The statement shows a cash balance in hand at September 30 of £190,000. Securities held are shown at £600,000, and’ imprests outstanding at £960,000. The . figures are a- follow^: Receipts , ■ ' ■ Social Security charge ... 4,555,000 Registration levy . - 403,000 Penalties and fines .. . 20,000 Transfer from Consolidated Fund -. ■ 750.000 Other n 11,000 Total . • 5,739,000 Net Expenditure _ £ , Benefits— . , , s , Administration and emarg- . . enoy ■ - 209,000 Medical and hospital ~ 193,000 Age • • 2,571,000 Invalidity .. 360,Q0Q Widows’ ’ • • 305,000 Sickness .. £7.000 Family . •• §§>29B Miners . • 30,000 Orphans’ • • 5,000 Maori War .. Unemployment ... 161,600 3,989,000 Cash balance • .. 190,000 ■ imprests outstanding . ~ ogo.ooo Securities held •• 600,000 » Total . *• 5,739,000 LITTLE CHANGE YET EFFECTS OP WAR ON AUSTRALIA „ - *j 1 >r ' SHORTAGES OF MATERIAL PROBABLE Up to the present economic" conditions in Australia have shown relatively Jittle',adverse effect of the change from a peace to war-time footing, according to the monthly review of the National Bank of Australasia, ; This favourable position is, attributed to the Commonwealth being so far distant from "the main theatre of war. No doubt, the review continues, in bourse of time shortages? of imported goods \will lead to considerable difnculty in certain industries, but, so far, supplies of nearly, all llnss mave been adequate to. cover needs, deficiencies .which have appeared being due mainly to rationing of stocks by distributing houses.” Some such course of action Is a necessary safeguard against, over-buying by manufacturers and;retailers. Also It may prevent acute shortages from.de-. veldpirig, as while stocks are being conserved endeavours can be made tp draw upon new sources "of supply, and the local manufacture of various lines can be developed. / ■ ’ “The change has been accompanied by much-increased demands?. not gmy to, purchases made InantlcipaUomofrls ported materials... , ■ .. ' * “Another important factor is the restriction of some imports an » of others': due to causes such, as "the closure of sources 'of supply, shipping facturlrs to complete qrders, rising prices in overseas markets,. hosts for freight, insurance, and,, m some markets, exchange. To tKese mUkt be added the import brought into force on December !. These changes have, already: stimulated local production of various sections of hnfh nrimary and' secondary industry, on the ton* of business in general.

AUSTRALIAN COMPANY PROFITS

.CAUTIOUS DIVIDEND’ POLICY Net profits' of"70' : Australian companies covering a. representative range as disclosed . in, publlshed during*: the second- half of 193” : were' maintained at a level approximating that of the previous Tear. Profits for the .year ended represented 10.9 per cent. on. Paid capital, against slightly more than 11 '.per cent, for the previous trading yeaxv Dividends ■' were about 4. per cent, lower, .suggesting, the Sydney Stock Exchange Research, ; and Statistical Bureau points out, in an analysis^of the figures, that : directors bad adopted a policy of cautious conservation. The aggregate; results of ; 70 companies compare as follows; ■ : ■ 1038. 1939. £ , • £ .. Paid capital .. 70,440*709 • 71*212,159 Net nrOflta .. 7,€85.609 7.808.928 Total dividends ; 6,672,341 6,391,473 During the year ended in, the second half of 1938, the companies appropriated 84.8 per cent. of. net earnings for the* payment of dividends, but for 1939 the proportion .'dropped .to-- 81.8 . per Co L,ower profits for the 1939 year were earned' by 27 . companies, representing about 38i per cent. • Increases Were, recorded by 43 companies, or 61 £ per cent, of the total number. . , Discussing the, present trend of profits, the survey draws attention to the important change's since the; outbreak of war. Which - will create a set oif conditions substantially different to thode Which prevailed during 'the period before September. .

SYDNEY STOCK EXCHANGE

" ' Only a small volume of business was transacted on the Stock Exchange yesterdays Quotations .were -generally . firm., Broken Hill Proprietary.; the last. .of Which last year, was .at £3 19s ,3d*. reached •the record high level of iM Is. 1 •

■ ' ' ; Morning Sales - £ s. d. Australian Consolidated - Indus- . •■tries 1 19.0. Broken Hill Proprietary 3.19 6 . David Jones - >• •• - 1.13,- 0 - Dunlop .Perdriau .. ■ • •• Howard Smith ' .♦« ... •* 0 18 6. 31 9 «

■ • Afternoon Sales d. £ s. Woolworths . j- , . •• • •• ■ Broken HiU Proprietary — 1 4 2 1 9 ■ 8. 12 0 0 Sargents •• . XiSTUt ■ .■> Colonial Sugar »• »» 1 0 49 10 6 Mount -Morgan ■.* , •> ■ • . .*• o, a 1 10 ■ 8 Mount iJyeU •• 11 Morts Dock - , ■ •• •• : 0 17 6 Australian Consolidated Indus- - tries ■■ !l 19 3 Emperor ■ v. •• .• 0 14 a ■ 6 0 ZU>c Corporation; ' •• Commercial v Bank- of Sydney •« ■■ 4--6 18 11