GOVERNMENT “TAP LOANS”

Press, Volume LXXXIV, Issue 25679, 16 December 1948, Page 10

GOVERNMENT “TAP LOANS”

STOCK EXCHANGE CHAIRMAN’S CRITICISM (P.A.) AUCKLAND. December 15. “I have previously protested against this ‘tap loan’ method of finance and 1 do so again,” said Mr Keith N. Buttle, chairman of the Auckland Stock Ex- ' change, and president of the Stock Exchange Association of New Zealand, at the Auckland Stock Exchange’s annual meeting to-day. Through most of the year, said Mr Buttle, the Government had had on offer for public subscription a 3 per Cent, loan with a 17-year currency to provide funds for various public requirements. x "This is the third of these issues, popularly known as ‘tap loans,’ which has been offered in as many years,” he continued. The proper method, he said, was to issue a prospectus for a loan of a certain definite amount for certain specified requirements, with fixed opening and closing dates. When the loan was subscribed the Government should then keep out of the market entirely for the balance of the year. This would have a healthy Influence on the whole of the Government loan section, and, in the long run, would react to the benefit of the State. "I would strongly recommend, also, that in future investors be given the alternative of a shorter currency, say five years, at a slightly lower interest rate,” said Mr Buttle. "It is becoming increasingly clear that 17 years is not an ideal currency for a Government loan under present market conditions.” COMPANY NEWS Denhard Bakeries, Ltd.r—An interim dividend of 4 per cent, on preference snares for the six months ended Octooer 31 (subject to a deduction of Is bd m the £ to cover social security charge) will be paid on Wednesday, Decemoer 15. Australian Motorists' Petrol Profit.— The Australian Motorists’ Petrol Company, Ltd., and suosidianes, show a much larger profit of £164,444 for the year ended September 30, compared with £61,285 last year. Ordinary dividend of 7| per cent, (last year 6 per cent., half tax free), and b per. cent, preference dividend require £76,796, and £26,b80 is placed to reserve. Turnover was £4,287,346, of which £3,bb5,747 came from sales and £621,599 from the shipping department. Much ot the profit came from snipping activities, the directors state. New Zealand shareholders will receive £6 0s 5d for the ordinary payment and £4 16s 4d per cent, tor the preference distribution. Swan Brewery.—A consolidated net profit of £78,475 for the half-year ended September 30 has been earned by the Swan Brewery Company, Ltd., Perth, and subsidiaries. This compares with £125,667 for the half-year to March 31, 1948, and £86,725 for the corresponding half-year to September 30, 1947. For the full year to September 30, consolidated net profit was £204,142, a decrease of £10,428. The parent company’s profit for the last year was £187,720, a decrease of £12,998, after allowing £16,605 less for taxation at £109,887 Ordinary dividend of 25 per cent. (Is 3d a 5s share), with 6 per cent, preference, takes £197,605. MINING ' Bulolo Gold Dredging, Ltd.—For the month of October seven dredges handled 725,500 cubic yards of gravel for a total tecovery of approximately 3403 ounces of fine gold. Due to the necessary coursing ot the dredges the total yardage handled and the yield a yard were both considerably below average and this condition may more or less continue for the next two or three months. Fijian Results—The net profit of Emperor Mines, Ltd., for the year ended June 30, shows a reduction from £105,503. Australian currency, to £56,367, but net earnings of the associated company, Loloma (Fiji) Gold Mines, N.L., increased by £7310 to £88,839. The reduced profit of Emperor Mines, Ltd., was due to increased development, which was justified by good results on No. 7 level, state the directors. The higher costs of min-, ing a large proportion of sulphide ore also contributed to the reduced profit. After treatment of 148,370 tons of ore in the year, ore reserves were 25,000 tons higher at 900,000 tons, estimated at 7.8 dwt a ton. RESERVE BANK RETURN A further expansion in the note issue to meet the requirements of the Christmas trading period and a drop of £254,000 in sterling funds are shown in the Reserve Bank figures for the week ended December 8. Details are as follows. the figures for the previous week being given in parenthesis:— Liabilities.—General reserve fund. £1,500,000 (same); bpnk notes, £51,016.000 (£50,462,000); demand liabilities: State. £10.568.000 (£9,020,000); banks, £58,750,000 (£60,719,000); other, £314,000 (£280,000); liabilities in currencies other than New Zealand currency, £20,000 (£15,000); other liabilities. £3.538,000 (£3,539,000) Total, £( N.Z.) 125,707.000 (£125.538,000). Assets.—Gold, £2,802,000 (same); sterling exchange. New Zealand currency. £42,177,000 (£42,430,000); subsidiary coin. £52,000 (£49,000); advances to State marketing organisations, £Bll,OOO (£729,000); for other purposes, £41,252,000 (£41,081,000); other advances, £3.306,000 (£3,293.000); investments. £16,124,000 (same); other assets, £19,183,000 (£19,028,000). Total, £ (N.Z.)125,707.000 (£125,538,000). Proportion of reserve to notes and other demand liabilities, 37.264 per cent. (37.532 per cent.).