RESTRICTIONS ON BANK ADVANCES

Press, Volume LXXXIV, Issue 25447, 19 March 1948, Page 10

RESTRICTIONS ON BANK ADVANCES

RELAXATION URGED The need for some relaxation of present restrictions on bank advances, to enable investors to take advantage Of new share issues, was urged by the chairman of directors of Macduffs, Ltd., Mr T. N. Gibbs, at the annual meeting of shareholders in Wellington on Tuesday. The issue of new shares by companies was still Rnder strict control by the Minister 'of Finance under War-time Emergency Regulations, said Mr Gibbs. Dur-

ing the war period it was not permissible to invite shareholders or the public to take up new capital. Now the Minister of Finance had decided that bank overdrafts were too high. Companies and individuals were therefore not permitted to use bank overdrafts for capital expenditure and were now encouraged to issue new shares for that purpose. “There is perhaps a case for this policy under present financial conditions in the Dominion,” said Mi* Gibbs. “One is well conscious of the many millions on deposit with trading banks and savings banks, and the amount of money generally in the hands of the public. There is certainly a plentiful fund of money available for investment.

“Indeed it has been commonplace to say that avenues of investment are restricted and consequently much money stands idle. Attention might well be drawn then to the present favourable opportunity for investment in well-estab-lished companies, through the large number of new share issues now being made by such companies.

Shareholders’ Position “One aspect of the situation, however, requires a little attention. On the one hand the present policy sends the companies to their shareholders for capital funds, mostly at premiums dictated by the Minister’s officers, and on the other the ReServe Bank instructs the trading banks not to advance money to share investors. The person who is a regular share investor does not often hold money idle in the bank. He may, therefore, wish to borrow temporarily from his bank until he can make a suitable adjustment in his affairs. As a general rule this is not permissible, and the shareholder is faced with an embarrassment as to how to finance the allocation of shares made to him. In Australia banking advances are made for new capital issues if repayment can be made within one year from income or six months at most from capital funds that are definitely in sight? The matter would not be of much moment if only a few share issues were on offer, but at the present there are a large number of issues somewliat crowding the market at the same time. There is a strong case for some easing of banking facilities to meet this situatioii, as well as for special measures to acquaint the holders of idle bank money of present investment opportunities.” GROCERY NOTES ,K A ?'?. ce from th J? Custom, Department is that licences will be granted for the Importation of dried apricots and peaehes from .Australia and South Africa to the extent of 100 per cent, of the value of the applicant’s imports of these goods from all sources ii? 1938. Allocations of sago and tapioca have been fixed on the same terms as for the 1947 season. Delivery of a number of lines urgently wanted by the trade is being held up by the wharf trouble at Auckland. The unloading of the date shipment is proceeding, but -it will be some days before sufficient supplies will be available-to make a general distribution, and this will still leave Christchurch’s quota a long way from here.

A shjßiment of figs from Turkey has reached Lyttelton. According to merchants, these figs are a very popular braid which was a household name in the trade in pre-war days. - Packers have advised that supplies of two old-established brands of English caustic soda will be ready soon, packed in 21b tins, and for whien prices have been approved at 3s distrirte tOWn and 36 5d 121 country Norwegian Sardines.—Although the present season’s catch is practically exhausted, importers have received offers of isolated parcels at prices showing a very definite increase. With the next season’s pack not available until May or June, and with stpeks short, special interest is being shown, as the new pack prices are anticiP a }c d , to b ? 38 high as those now ruling. Citric Acid.—With no import licences for the 1948 period being issued for Belgian citric acid,ait was thought that this might be in short supply. However, it is now ascertained that good stocks are held by manufacturers and wholesalers, and buyers are not interested in offers of British lines, the prices of which have advanced 2d per lb. This is still below recent shipments of Belgian supplies. Further supplies are yet to come to hand, and these will land ex the Karamea. which is due next week. Brazil Nut Kernels In Shell.—Recent cabled advices indicate that there is a possibility of offers shortly being made through a London shipper. So far no prices are to hand, but with the limited assortment of nuts available buyers will welcome the opportunity to cover their requirements when prices are named. Passionfruit Pulp—This line, for which there has always been a strong demand, has in the past been in very short supply. This year, however, with a good crop of fruit, there’ should be no difficulty in fulfilling the demand. One packer is now offering in 4,8, and 16oz bottles, with deliveries commencing this month. Certain difficulties are being experienced in securing sufficient bottles of the right type, and this ma*y limit the supply. New Zealand Canned Fish.—One wellknown packer supplying the local market has now found that the demand has practically disappeared with the recent imports of tinned fish from overseas. This has in no way affected the local industry, as Australia is keen to absorb supplies of any available canned fish from New Zealand, and recent shipments of canned trevalli, kahawai and marlin have met with a ready sale. STOCK SALES ST. ANDREWS There was a yarding of 120 head of fat cattle at yesterday’s St. Andrews sale. The quality was very mixed. Competition from the trade was steady, with values inclined to harden. Prime heavy steers made £lB 2s 6d to £22 17s 6d, prime £l5 2s 6d to £l7 7s 6d, light to medium £.12 7s 6d to £l3 17s 6d; prime heifers £1323 6d to £l5 7s 6d, light to medium £9 2s 6d to £l2 17s 6d; prime heavy cows, £l2 7s 6d to £l5 17s 6d, light to medium £6 17s 6d to £lO 2s 6d.

There was only a small yarding of fat sheep, and because of congestion at the freezing works, competition was restricted. The average yarding of store sheep met poor competition, and sales-were hard to complete. Best Romney cross two-toooth ewes made to 39s 6d, medium to 35s 6d. With lambs to 19s 6d; two, four, six, and eight-tooth Romney ewes to 325, prime heavy ewes to 25s 6d, prime wethers to 36s 6d. COMPANY NEWS/ N.Z. Woolpack Profits.—The net profit of New Zealand Woolpack and Textiles, Ltd., Foxton. for the year ended December 31. was £2492, against £2533 last year and £1512 in 1945. dividends of 4 per cent., unchanged, on A and B scares are recommended. requiring £2200, leaving £292 to increase the carry-forward to £3561. Reserves have been increased by £20,000 and stocks show an increase of £30,201 to £51.563? Bank credit is £13,780 lower at £7575. N.Z. and Australian Land Company.— The directors of the New Zealand and Australian Land Company recommend a reduction of the company’s capital by £500,000 sterling by returning 5s in the £ of the £2.000,000 sterling ordinary stock. The company in 1947 repaid £1,000.000 sterling of 4 per cent, cumulative preference stock.— FLAX STRAW INTO LINEN YARN NEW CHEMICAL PROCESS A new, cheap method to convert flax straw into linen yam in four or five hours was demonstrated last month at the University, of Minnesota, United States. A most important new feature of the method is a chemical process which removes gums and other waste material from the flax fibre, a process which takes only a half to three-quarters of an hour. The demonstration came after several years of work begun by Dr. R. E. Montanna, and carried on by Dr. L. H. Reyerson, professor of chemistry, and Dr. E. J. Admur, research assistant. Their purpose was to find a use for flax straw; Minnesota and North and South Dakota grow 72 per cent, of all flax produced in the United States. Until recently the straw—about 2,000,000 tons a year—was burned, and now about a quarter of the total is used to make cigarette paper. Much of the remainder, Dr. Reyerson believes, could be profitaby used to make linen. A complete linen factory has been set up at the university and the last machines arrived only a few weeks ago.