COMMERCIAL ITEMS

Dominion, Volume 10, Issue 2966, 3 January 1917, Page 8

COMMERCIAL ITEMS

( Customs duties collected at tho port of Wellington yesterday amounted to £3206 2s. Bd. MYSTERIES OF BALANOE-SllEKTfi. Tho mysteries of balance-sheets form tho subject of au interesting .article in tho "Economist" of November 4, which, it would bo worth tho while of all investors to peruse. To them tho art of l-eading-balance-sheets is o{ tho greatest possible value, and before putting money into any concern they should go carefully through several statements of accounts, in order . to get as true an idea ns iiossible of its ' financial strength. .In most companies, 1 espeoially thoso idontiQcd with industries, ' tho great danger is not that they will . under-estimato their liabilities, but that thoy will ovor-ostimato ttelr assets. This ■ is dono by taking credit for debts that ' are. doubtful, putting too great a. value, on buildings' aud stock, and refraining from a proper allowance for deprcifttion ' of machinery and plant. Tho fact of ■ the matter is that most published balancesheets of companies «ro intended rather '■■ to conceal than to reveal tho truth and if the compilers wore told that thoir state--1 ment was difficult to understand , they would smile aud say that they wero glad to Ileal- of it. But something can be dono with balance-sheets, oven by outsiders, if they compare oho year's figures with another's, and note tho tendenoy at work. If tho biff items of fixed assets ore increasing moro quickly thau tho profits, something is vrronfj, states the writer of ' the article. Watch tho movements of stock-in-trade, see how investments relate to profits. It is only investors who compare industrial balance-sheets and profit and loss accounts over a. number of years that cau read the secrets. To thoso who fail to take this trouble the real position will continue to remain wrapped in mystery. INDIA'S WAK FINANCE. Apart from the negative services of ceasing to make demands on tho London money market and osiittinK to import gold India can point to financial achievements jiotwcen 1914-16—tho -war period—of considerable significance. Thoso includethe repurchase- of rupee- paper, £1500,000; repurchase of v industrial securities, £1000,000; investments in Uritisi Govcrnnicut securities, £3,000,000; repayment of temporary debts, £75000,000; new paper currency securities, £8,000,000; and new gold standard securities, £6,000,000, making a I total of £27,000,000. In ceasing to import, euormous quantities of gold most of which, in peace times wont directly to swell the hidden hoards of tho people, India has incurred no perceptible injury, whilst it has avoided much criminal waste. Smaller funds have been looked up in bullion, utilised solely for ornament, and tho balance has become available for productive investment, whilst in the absence of normal' supplies of sovereigns trado has been conducted -with equal convenience by means of notes and rupees. CtttJDITIONS IN AMERICA. Commenting upon business conditions and prospects in tho United States, Messrs. Haillor and Quereau, of New York under dato November 6, state that trade is very active and thero is a constant tondeucy to advance prices. This, they add, "renders tho export trade extromely difficult, for high, prices combined with Mgh freights make delivered cost beyond buyers views as to value. Tliie is resulting in a decrease in orders for both Australia and Jtew Zealand, and tho volunie of merchandise now going forward is much less than we have known it for a number of vears In view of existing conditions in \ustralia and New Zealand, it is not surprising that buyers hesitate about -ven-tui-ing vacy largely in carrying stacks, aud until mere is an increased demand or supplies become greatly reduced we do- not anticipate any large flloreaso in volume of trade. In the direction of Australia,, wo are still finding difficulty in securing tonnage, and recently, charter cost has been advanced, so that all indications point to continuance of a very strong freight market, at least during our coming winter season. Should any active demand come for tonnage to load for Europe, wo will no doubt see very large advances in charter cost of steamers."