FINANCE and COMMERCE

Dominion, Volume 24, Issue 80, 29 December 1930, Page 12

FINANCE and COMMERCE

TOE MONEY MARKET Spurt hi GB-edged Stocks THE AUSTRALIAN LOAN (RW . W er The reduction In the American discount rate to 3 per cent, resulted In a fillip to eilt-edged stocks on Christmas Eve, all British and Indian funds advancing a PP re " clably. Australian did not participate In the rise, and the few in which there was dealing showed a drop of 81. . , The “Financial Times,” in an editorial, welcomes the Australian loan result asi a proof that Investors are willing to smooth the way toward the unpleasant task or reducing the cost of production.- The paper savs the Premiers’, Conference resolutions . Se -Still uhlmplemented, but if the work; ers' are willing to match the I action, it will be a long step forward. New. York, December 26. The rate for call money stood at 2 per 'cent, all day. The final figures in the Commonwealth 228 000.000 cash and conversion loan announced last Tuesday show that has been oversubscribed by While Treasury officials are naturally delighted at its success, a significant feature is that £25,178,610, or nearly &> per cent, of the total amount has been invested in the 6 per cent, loan, maturing in two years. Only £4,320,380 has been Invested for the ten-year period, and only £246,200 for the 20-year Period Of the total subscribed, £18,918,830 represented cash applications by 103,60- sub- ' scribers, while £10,831.450 was converted by 13,403 subscribers. The unusually high percentage of cash applications is ascribed to the magnificent response made by the, public to Sir. Lyons' appeal, when the success of the loan was in the balance. The following table shows the amount subscribed by the various States: —

Victoria contributed nearly half of the total amount. New South Wales and Vic; toria together contributed more than 75 per cent. One of the most striking features of the success of the loan was the tremendous number of small subscriptions, • particularly in its closing'stages. On two previous occasions only—during the war—have the number of subscriptions in a Commonwealth loan been exceeded. It was explained that the amount oversubscribed can be used only for the redemption of Commonwealth and State securities. ! It is not available for new works, either in the Commonwealth or in the States. The ratio of apportionment between’ the Commonwealth and the States of this excess has not yet been determined, but this will probably be done ,early in the new year. , Of the bonds and stock maturing on December 1 15, £7,755,040 worth has actually been redeemed, but £1,101,010 worth has been neither converted nor redeemed. The Treasury will retain this amount until advice has been received from the bond holders, .but no further interest will be paid on them. *

NATIONAL BANK OF N.Z. Interim Dividend Payment on January 3 of the interim dividend for the.half-year ended September 30, 1030, at the rate of 12 per cent, per annum, free of tax, is announced by the general manager of the National Bank of New Zealand. The dividend is at the same rate „ as for the corresponding period of last year. In the last balance-sheet, the bank’s liquid assets stood at £6,201,000, equivalent to 42 per cent., or 8/5 in the £ of its total liabilities to the public, and for S£l of its own funds, the bank Is ng only £3/11/6 of the public’s money, which is an exceptionally strong position. WAIRARAPA FARMERS’ CO-OP. • ® .. ~ . No Interim Dividend A circular has been issued to shareholders in tho Wairarapa Farmers’ Cooperative Association advising them that no interim dividend on preference shares will be paid for the half-year ending on January 31. The notice explains that this decision is due to reduction of turnover and decline in the ratio of profit without corresponding .. reduction of expenses, though members of the staff have accepted a "cut” in salaries. The ordinary capital of the company at July’3l was £39,045 and the preference capital, £250,000. Whep its finances were, reorganised in 1928, the preference shareholders agreed to accept tho dividend for that year in half-yearly instalments over the next six years. At the beginning of this • year, the company paid an interim dividend of 3} per cent., the fraction representing Instalment of arrears, but the final dividend was only 2} per cent. MEAT EXPORT LEVY Reduction of 25 per cent. < ■ /./ ■ ■ _ •' The New Zealand Meat Producers’ Board, at its recent meeting, passed a resolution that the levy payable on meat exported from New Zealand should be reduced by 25 per cent, in respect of meat shipped in the exporting vessel on and after January 1, 1931. ' Members of the board also decided to reduce their honoraria by 20 per cent., and this ■decision will also take effect as from January 1, 1931.

FIFTY CENT WHEAT Slump in Canada CHICAGO’S LOW LEVEL (Rec. December 28, 5.5 p.m.) New York, December 27. In Chicago to-day. July wheat fell to 62} cents, the lowest point since July 1, 1896. Sagging maize prices and considerable selling by local professionals with little support depressed wheat until slight support appeared near the close. Despite the break m maize, July wheat at Its lowest point was G| cents below July maize. Wheat closed as follows December, cents; March, 80 cents; May, 81£ cents; July, 62 7-8 cents. News from Winnipeg states that wheat slumped as low as 50 cents on Saturday, but with meagre offerings and the entry of investment buyers, it snapped back to higher levels, December closed at o- 7-s cents; May, 55} cents; and July, 56} cents Writing on October 7, the Canadian correspondent of the “Economist” said: The western harvest was completed under very favourable conditions, and the grading returns’ show that the wheat 0f'1930 is of very high quality, about two-thirds of the samples received in Winnipeg securing a grade above No. 2. But the price for October wheat has sagged to a point lower than has ever been known since the Winnipeg Grain Exchange opened for business, and with the export demand continuing very feeble, wheat is piling up the elevators both ■ at the lake ports and in the countries. The volume of the wheat crop of 1930 is estimated to be in the neighbourhood of! 380 million bushels, and when the large carryover from 1929 Is taken Into account, Canada will have more than 300 million bushels to dispose of during the present crop year. The co-operative wheat pools are still involved in great difficulties, but it is dimcult for the private grain traders to hold them up to obloquy as one of. the largest private grain traders operating in Winnipeg has lately come to grave disaster. Not only are his personal liabilities heavy, but it is an open secret that as the result of his speculative operations the reserves of both a well-known milling corporation and a leading grain company have been practically wiped out. The foreign trade returns show a steadily declining trend. Among intelligent Canadians there is no denial of an apprehension that the Oominion is facing a very difficult winter, and also that a period of lean years probably lies ahead. The whole country Is at present in the grip of a serious economic depression, which affects . practically .every branch of Industry and agriculture, and which at tho moment shows no signs of lifting. With wheat selling (at the beginning of October) on a basis of little more than 70 cents per bushel No. 1 Northern at Fort William, the average western farmer is receiving something between 45 and 55 cents per bushel for his crop, and this means that the purchasing power of the three prairie provinces has been reduced by at least 30 per cent., compared with the level prevailing a year ago, when it was lower than It had been for some years. The inevitable curtailment of orders from the West has been responsible for a marked slowing down of industrial activities in the Eastern provinces and the earnings of the transportation companies have suffered severely. Agnin the mining industry is for the time being, almost flat , upon grade copper mine will be closed down its back; practically every silver and lowthis winter, and only the gold mines, which have substantial bodies of ore to work, a"re likely to show any profit. The difficulties of the newsprint industry have become aggravated during the summer months, as the depression in the United States has been forcing a steady reduction in the size of American newspapers, and during August the Canadian newsprint mills were only able to operate at 66.4 per cent/ of their capacity, as compared with a ratio of 71.3 per cent, in July and 83.6 per cent, in August, 1929; the total output of the Canadian mills for August was 202,043 tons, as compared with 216,798 tons in July. The lumbering industry is also suffering from the diminished building construction, and the winter’s cut is likely to be small. For the first five months of the present fiscal year the total value of the foreign trade is estimated at 779 million dollars, as compared with a total of 1045 millions for tho parallel period of 1929. In this five months period there has been little' change in the adverse balance, which lias only fallen from 77 to 74 million dollars.

NEW COMPANIES Recent Registrations II Registration of the’ following new companies is reported in the “Mercantile Gazette”:— London Markets (Wellington), Ltd.; private company; 100 Dixon Street, Wellington. Capital, £BOOO, into 18 shares of £5OO each. Subscribers: Wellington—Gibsons and Paterson, Ltd., 5, M. L. Kowley 2, W. T. Easson 2, H. Edwards 2, F. B. Smith 2, G. Gapes 1, T. B. Morris 1, B. Smith 2, W. H. Gibson 1. ‘Objects: To acquire by purchase, lease or otherwise, any land , and develop-and turn the same into account. Smith, Weston J., Ltd.; private company. Palmerston North. Capital, £250, into 250 shares of £1 each. Subscribers: Palmerston North—W. J. Smith 200, Dorothy Smith 50.'- Jeweller, watchmaker, and fancy goods dealer, etc. De Luxe Miniature Golf, Ltd.; private company, Kent Terrace) Wellington. Capital, £025, into 025 shares of £1 each. Subscribers: Wellington—J. McCrorie 157, C. B. Mercer 150. Palmerston North—J. C. Carter 150, E. C. Turner 156. Worth’s, Ltd.; private company, 24 Manners Street, Wellington. Capital, £750, into 750 shares of £1 each. Subscribers: Wellington —H. Levy 400, Mary Levy 350. Objects: To purchase as a going concern the business known as “Worth’s,” and to carry, on business of silk .mercers, costtiimiers, furriers, etc. O.K. Motors, Ltd.; private company, Petone. • Capital, £l5O, Into 150 shares of £1 each. Subscribers.: Petone—W. H. McGowan, J. W. Smith. Belmont—A. W. Doran. 50 shares each. Motor engineers, repairers, cleaners, etc. Bignell Construction Co., Ltd.; private, company, Wanganui. Capital, £5OO, into 500 . shares of £1 each. Subscribers: WanganuJ—M. G. Bignell 499, G. F. Lomas I. Builders and contractors. Daroux Emasculators, Ltd.; private company, 34 Customhouse Quay, Wellington. Capital, £2OOO, into 2000 shares of £1 each. Subscribers: Manakau —L. Daroux 1000. Wellington—W. Lindsay 165, J. H. Wild 135, C. E. Robertson 100, J. C. Irving 100, S. G. Phillips-50, H. P. Toose 50, E. L. Officer 50, A. N. Smith 50, L. M. Johnson 50, C. G. Fox 50, T. F. G. Wilson 50, R. W. Steel 25, G. R. McKellar 25. Ashburton —A. A. McDonald 50. Auckland — W. G. Vial 25, J. H. Sloan 25. Objects: Purchase and deal in an invention relating to an improved castrating tool or instrument. Co-operative Motors Repairs, Ltd.; private company, 250-252 Wakefield Street, Wellington. Capital, £5OO, into 500 shares of £1 each. Subscribers: Wellington—L. H. Staples, W. R. Sulsted, G. D. Mclnnes, J. L. Harrison, C. V. Farr.all, 100 shares each. Objects: To import, manufacture, buy, sell, and repair all classes of motor vehicles. , Battersby and Co.. Ltd.: private company, 25 Willis Street, Wellington. Capital, £5OO, into 500 shares of £1 each. Subscribers: Wellington —E. N. Battersby 250, C. W. Hammer 250. Merchant Tailors, Northern H.B. Co-op. Rural Intermediate Credit Association, Ltd. Subscribers-. Havelock North —J. H. Joll, B. Chambers, T. A. Cooper. Mangatahi—W. J. Livingston, G. Russell, R. E. Talbot. Hastings— J. L. Masterson, W. C. Growcott, A. R. F. Allen, J. A. Miller, J. W. Mcßobbie. Ngatarawa —A. Jolly. Mangateretere—D. A. Smith, W. Tucker. Karamu—A. W. Allen. Taradale—A. F. Perkins, F. K. Martin. Pakowhal—T. E. Stanford. Korokipo—F. C. V. Ericksen. Meeanee —E. T. Downing. Premier Service Station,. Ltd.; private company, Hastings. Capital. £2500, into £1 shares. Subscribers: Hastings—D. G. Round 50, S. Round 2450. Objects: To acquire and take over as a going concern the business of petrol and.oil store station now carried on by Chas. Martin. Gisborne Quarrying Co., Ltd.:_ private company, Gisborne. Capital, £l5OO, into 1500 shares of £1 each. Subscribers: Gisborne —T. J. Adair, A. C. Cooke. J. E. Gardner, A. Kirk, C. W. Kirk, 11. Witters, 250 shares each. Objects: Quarrying, mining, etc. Golden Gate. Ltd.: private company. Capital, £5OO, in 500 shares of £1 each. Subscribers: Greymouth—W. T. Blackmun 450, W. Blackmun 25, W. P. McCarthy 25. Objects: Goldmining, etc. AUCTION SALES TO-DAY. Johnsonville Sale, 10.30 a.m. (W.S, and Co. LtA, and Ar & W, Ltd.)

DOMINION’S TRADE

Imports Curtailed EXPORT VALUES DOWN Exports continue at approximately the same level as the previous month, although compared with November of 1929. a substantial decrease Is recorded, equivalent to 16.8 per cent., states the December Abstract of Statistics" In an analysis of the November exports and imports figures, which were published in The Dominion on Wednesday. As a rule the export trade reaches a much higher figure. during November than was attained this year, the total being £424,000, or 10. l per cent, below the average for the month for the precedin An fi analysis'of the principal commodities exported lays the burden of this depression In trade principally upon woo!, which has declined in value by £130,000. or 71.8 ner cent., compared with November of last vear. The depreciation on the overseas markets in the prices received for butter and cheese in recent months has pad the effect of reversing a 6.8 per cent, increase in quantity exported of these commodities to a 22.3 per cent, decrease in value. Considerable decreases were also experienced in the case of timber (£30,000), coal (~24,OOO). hides and skins (£17,000), wheat (£16.000), and phormium fibre (£10,000). Against this may be set a substantial brightening In the frozen meat export trade the Increases for the month over November ■ 1929. amounting in the case or mutton'to £88,000; lamb, £66,000; and recession in export trade as outlined above is but a phase of the general trend experienced throughout the vear Taking the aggregate for the eleven months of the year to date, it appears that the total value has declined by £9,000,000. or 17.7 per cent., a figure, morenvpr that is 8.6 per cent, below the level attained as an average for the last five vpnrq for a similar period. Wool, again, his been the depreciating influence throughout the period. A 155 per ceat, drop in quantity exported during the eleven months combined With a decline in values has caused a drop of over £7 000 000 in the value of wool exports, equivalent to 49.4 per cent. The average export price per pound was only 9.01 d„ a figure 40 per cent, lower than that realised during 1929, and 32.8 per cent, inferior to the average prices obtaining during the 1S There appears to be little doubt that the deflation in the overseas markets •of the Dominion’s primary products has contributed largely toward the present Prevalent economic depression. Practically all the staple commodities exported have suifered a depreciation in value. Even, the frozen meat trade, although in a firmer position than most other products, records a falling-oil in unit value during the eleven months just past as compared with a similar period of 1929, while butter and cheese have exhibited a falling tendency practically continuously. . In spite, however, of a low price-level,* the frozen meat trade shows an improvement over last year, inasmuch as the total, value of the exports to date are 4.3 per cent, ahead of 1929 for lamb and 30 per cent, for mutton. Much the same position, on the other hand, obtains in the case of butter and cheese for the cumulative period, as has already been cited in regard to the monthly movement—viz., deflated prices have resulted in increased output being met with decreased aggregate values; in the case of butter equivalent to 3.i> per cent., and for cheese 7 per cent. The import trade of the Dominion also suffered a severe depression during November. The value of imports recorded for the month was no less than 29.9 per cent, below that for November. 1929, and 25.2 per cent, below the average for the month for the past five years. The decrease was spread fairly uniformly over the principals items, the greatest decline being recorded in the case of motor vehicles, etc. (£83,000). , The aggregate for the eleven months shows a decided slackening oft. and, is easily the lowest level attained in recent years. The total value of the Imports for the 1930 period was £5,000,000, or 11 per cent, below that for 1929, and 6.2 per cent, below the average for the preceding five years. 1

PUBUC FINANCE . ■, The Trend in Australia Trends in Australian public finance are dealt with by Professor D. B. Copland, dean of the faculty of commerce at Melbourne University, in an article published by the Bank of New South Wales in its periodical circular. The article, which is accompanied by graphs, notes that in 1024-25 production was at its maximum. The high prices of wool and wheat largely account for tho great increase in production in 1923-24 and 1924-25. In the annexed table it is seen that after 1924-25 the value of production declined, but taxation and public expenditure continued to Increase. Taking the rates of expenditure, taxation, and Interest to production,, expenditure took in 1924-25 35.3 per cent, of the production, and in 1928-29 43 per cent. Taxation. which provides money for expenditure, amounted to 16.4 per'cent, of production in 1924-25 and 19.7 per. cent, in 1928-29, while interest on public debt, which is included in expenditure, was 10.2 per cent, of production in 1924-25 and 12.3 per cent, in 1928-29. The tables and ratios bring out very strikingly the increase in the burden of taxation and interest since the war. The great increase in State taxation is some indication of the degree to which loan expenditure and State enterprises have failed to produce the necessary revenue to meet interest on capital. The increase in the burden of overseas interest is an unpleasant reminder of (a) the rapid rate at which the overseas debt has been accumulated in the past 10 years, and (b) the rise in the average rate of Interest on the debt. Figures for production and expenditure for 1929-30 comparable with those given In the tables are not available. Taxation, has increased and a fall in production took place on account of the fall in prices of goods. The burden of Interest, taxation, ?nd expenditure may therefore be expected to have risen again in 1929-30. it must ml remembered that deficits have been incurred bv most Governments in the past two years, and had budgets been balanced taxation would have been still higher. .

LOW-PRICED WOOL Sydney Average, Bd. Wool has sold readily during the halfyear’s Sydney sales, which closed on December 18. Over the period, 90 per cent, of the quantity offered has sold at auction. The market has certainly not been overloaded with wool. On many occasions, when much larger offerings have been made, considerably higher prices have been realised. The figures below show the quantity of wool sold on the market from July 1 to the Christmas recess during the past five years and the average price greasy obtained: — ' . Average

The price for 1030 is approximate, the exact figure not yet being available. Smaller offerings locally are not likely to have had anay effect on prices. The low price of wool has not been due to any special ill confined to the textile industry, but to the generally indifferent condition of world trade as a whole.

Number of Amount State. applications received. New South Wales .. 32,012 £9,082,430 Victoria ........ ... 55,018 13,048,160 ... 11,597 ' 2,942.330 South Australia ... 8,793 2,369,940 Western Australia .. -1,945 875,030 ... 4,040 852,390 Total . ... 117,005 £29,750,280

Bales. price. 1026 lea.' 1027 , 564,240 18Jd. 1028 ....... 540,759 17(1. 1929 , 433,794 lid. 1930 472,364 8d.