COMMERCIAL & FINANCIAL

Evening Post, Volume LXXXVII, Issue 118, 20 May 1914, Page 4

COMMERCIAL & FINANCIAL

Evening Post, Wednesday. From private correspondence and from other sources it is gathered that money is still very abundant in Australia, and this fact may explain tho seeming equanimity with which increased State taxation is regarded ; also that other fact, which it is difficult to explain, apart from the generally high level of pastoral and dairy products, that extra taxation on land, in New South Wales at any rate, has not had the "bursting-up" effects upon large estates that was anticipated and did in many instances actually take place. The Jarge sums of Australian money (all won from the soil) btill available for investment has had a. decidedly weakening effect upon the. Cornm.onwea.lth money market. But it has not so influenced tho financial stater of affairs in this country. In Australia, however, as in New Zealand, so Mr "as one can. ascertain the facts, there is no encouragement given by bankers to speculators* in suburban properties acquired for cutting up into suitable blocks for so-selling at substantial profit, if not at boom prices. In New South Wales, however, there is no mortgage tax, which in New Zealand the investor has to pay. This enables, so it is argued, tho Australian borrower to obtain his supplies at about g per cent, under tho rates mortgagors are asked ,to pay for accommodation in this country — a factor that has to be borno in mind in comparing Australian and New Zealand rates of interest. In the country districts of New Zealand to-day there is a strong demand for .legitimate banking accommodation, which it is understood is being very well mot, the money being required for genuine developmental purposes. In the city traders experience no difficulty in obtaining such facilities os i their standing entitles them to. _ Any immediate lowering of rates of interest on overdrafts, and also of fixed deposit?, seems to be contingent upon the Government reducing the rate of interest on Savings Bank accounts. SAVINGS BANKS.-The Sydney Daily Telegraph referring to the amalgamation of the Sydney Savings Bank with tho Government Savings Bank, describes it as tho second largest savings bank in tho Empire; its accumulated funds being £32,000,000. Tho largest savings bank in the Empire is tho British Post Office Bank with its accumulation of over £183,000,000. As far a's the Australian States and Now Zealand aro concerned, the depositors' balances, /taken in each instanco from the last balance-sheets, are as follow:—New South Wales «*. 31,200,000 Victoria .. H, „.. 22,500,000 Now Zealand ** tt , 17,000,000 - South Australia M ' »>. 0.000,000 Queensland ... -, „, 0,500,000 Western Australian 4,700,000 Commonwealth Bank (all States) ... , . 4,300,000 BANKING POSITION.-^-Mr. Unwell French in his recent presidential address to tho Institute of Bankers of New South Wales, BJiid that a. couple of years back there were- indications that the public were .launching out, and it became advisablo for the banks to right the position; and it was something to bo able to say that this had been accomplished by an upward move of only 1, per cont. in tho rates for deposits and advances. They nod strengthened thqir gold reserves, but he gave it as hie opinion as a. banker of fifty years' standing that there had never been atimo when our gold reserves in Australia had been too high. He regrettod that the Commormealih Government had somewhat departed from their original provision as to the gold backing of the Australian notes. But all over the world attention was being paid to this important matter, and stocks of the metal wero being augmented in all directions, including London, where he hoped shortly to sec records of those reserves regularly published. In Australia the banks had since the crisis 'dono milch 'to produce a steadiness in th& financial position. BIG DIVTDENDS.-Tho Colonial Diamond Mining Company of Gorman Southwest Africa is possibly the world's biggest dividend payer. It has "reduced" Its 1913 dividend by 1300 to 2500 per cent,, having paid 3800 for 1912. In 1910 24C0 per cent, was paid, and 2500, in 1911 The company's capital is only £500. Us managing director and chief shareholder was once a- railway official named Satuch. Ho will soon bo made Chairman of the Gorman Imperial Diamond Administration. INCOME TAX.—In the English Court of Appeal a very important decision has just been given relative to the liability to income-tax of tho profits of a company whoso business is carried on abroad. Tho facts of the page appear to bo that a company, which is incorporated under tho Companies Acts and has its registered offico in England, derived tho wholo of its profits from its properties and business which are situato and carried on abroad. The company has a London board of directors, but in accordance with tho articles of association tho entiro control and management of tho business becamo vested in a local board which hold its meetings in the place- where tho business was carried one. The local board received all sums duo to the company, and paid all expenses relating to tho business, and from tnno to time remitted to London out of tho profits made such sums as woro Necessary to pay tho dividends payablo in England and tho oxpenses of tho London Board. The Commissioners of Inland Revenue claimed income-tax on the whole lof the profits mado by the company, and this claim was supported by the judgment of the Court of King'b Bench. On an appeal from this finding the Court of Appeal has roversed tho .judgment, and has decided that tho tax is payable on such part of tho profits which go to England for distribution, and held thut it was immaterial to tho charge that tho London board could detcrmino how much of the profits should bo distributed.

BUTTER.— Notwithstanding the great quantity of buttor in store as on 16th May, viz., 90,274 boxes, which'does not include- quantities in private stores, tho prieo is well maintained. There is a feeling, however, that a slight fall is imminent. According to tho Dairy Commissioner's showing 1 there wore 20,460 boxos moro than was so hold at this time last year. It is reported that several factories have moderated their prices. In one caso of a well-known make- 'an offer of ll^cl was refused by the makers, who held out for 12d, for March-ApriL-M.ay delivery. The same buttor ha'snOw chtinged 'hands .at Hid less -commission. Small parcels have becti sold to Africa- at 12d in bulk. Australia, however, is still doing pntcticnlly all tho African business available, except for special Now Zealand linos. Reference was inadt^ in this column last week to tho expansion of the Siberian dairying industry, and tho introduction of English capital and export knowledge into tho busine I^. By this week's mail tho London correspondent of Tho Post reports that the High Commissioner for New Zcalund (Hon. Thos. Mackenzie) submitted to tho Board of Trade a proposal, which was ucenpted, that Mr. Cook, H.M. Commercial Altacho to Russia, bViould make special enquiry into tho dairy industry of that country, tho possibilities of its development, and tho extent to which that development might go. Tho report, when received, Mr. Mackenzio said, would hnvo a. groat bearing upon New Zealand's future, inasmuch as Siberia has been looming somewhat largo as a competitor with Now Zealand and Australia, in tho London market.

WOOL.— Tho close of the London May sales would give every (satisfaction to tho wool grower. Furthermore, bright, as tho market was from \m point of view, there is every indication of good' price* being maintained for a long time ahead. Private cablegrams showed that, as 'compared with the previous salo ratei, tho following advances in prices wero recorded — Merinos : superfine, par to 5 per cent, rise ; medium. 5 per coiii. ; other doscriptiom, par to 5 per cent. ; super scoureds were unchanged ; medium to good scoured 5 per cent, to 7^ per cent. Crossbred — Fine, 5 per cent, to 7£ per cent. ; medium, auy change at all in favour of sellers ; course, par to 5 per cent. : seedy wools, 5 per cent. : lino ecoured, 5 per cent. ; other scoured, unchanged. Slipe : par to 5 per cent. Thero woro 190,000 bales a\uilablu, o f which America took 24,000. Bradford 321,000. Continent 2000. There were 3000 bales taried forward, and 40,000 woi'o not

offered. The prospects for the first big crutching sale, to be held horo on 12th June, aro extremely good. Already privato buyers aro operating 1 in tho country for crutchinge, paying very good prices for till likely lines. HEMP.— Tho big Moutoa Swamp, Foxton, from which sorno eight mills draw supplies, closes to-morrow for the winter. There has this year boon a general envlier closing of swamps and mills in pursuance- of a conservative policy adopted by producers with a. view to improving tho quality of tho flax leaf. Probably thero will bo no reopening of Manuwatu mills for tho next ten to twelve weeks. Prices to millers to-day were as follow: — Good fair grade, £22 10s per ton; high point fair, £21 sa; low point fair, £19 103. Tow.— No. 1, £8 15s per ton; No. 2, £7 15s. PRODUCE. — A considerable quantity of Australian flour is now distributing in Wellington, and at up tho line ports. It is selling at £10 10s, as against £10 5s to £10 10b for New Zealand flour, f.o.b. South Island ports. Southern mill prices are in some enses 5s per ton above this quotation. From Australia supplies of pollard are also being drawn, the local supply be [ ing unequal to the demand. New Zealand fowl wheat is ruling at 3s lid to 4s per bushel, f.o.b. South Island ports. Potatoes aro easier this week at £4- 5s to £410s per ton, f.o.b. Lyttolton and other ( .Southern ports. Oats aro very firm at Is lid to 2s per bushel for sparrowbills, and 2s to 2s Id for gartons. GEOCERIES. — Californian canned pears havo advanced by 6d per dozen water grado and 3d per dozen for seconds. Reports from Smyrna show that locusts have I affected tho sultana crop. Mildura currant stocks aro exhausted, and thero is nothing available for export to New Zealand. Sultanad from s this quarter, however, aro etill offering. Burmah candles j have been advanced id per pound. Spccu- ' lativo salmon prices for next season's output aa'o out, showing an advance of 20 to 25 por cent, on last season's opening rates. Small stocks of Cohoes aro still offoi'ing, but it is expected that prices for this grado will shortly advance. Stocks of pinks are roportod exhausted. TEA. — At tho Colombo sales last week prices wero easier all round, owing to large quantities offering. Tho qualities offering wore described 'as poor. HARDWARE.— -In evidence giveh before the Inter-Stato Commission sitting in Melbourno, it was Btated that tho Southern Star Nail and Wire Company Proprietary, Ltd., consisted of eight manufacturing firms. Admission to this company required a vote of 75 per, cent, of members. A rebate of 12-^ per cent, was mttdo to purchasers of th nails conditional upon no purchase of similar goods was mado to purchasers of the nails consumers was £2 per ton more than the total labour cost in the factory. The unsatisfactory position of tho Continental iron and steel markets is described in Messrs. William Jacks and Co. f s circular, dated London, 27th March Aftpr previously reaching a, limit, which left no profit whatever to tho manufacturers, prices declined during March still further^ This is_ chiefly due to tho •entire Continent having increased their output to an enormous extent, and as works there are financed to a much greater extent than in Fngland by the banks, it is necessary that tho output should be sold as made. At present £4 5a may be taken as tho basis price for steel bars, which ir marvellously low considering tho higher price 3 now ruling for pig-iron atid fuel compared with previous periods of depression, as well as the increased wages and taxation now prevalent there as welj as hero. Somo of the leading authorities think that no great improvement will bo seen until 1918-19, but at £4 5s basis there is nothing to .justify buyers_ holding back then requiroinontg, as the? silver lining to the cloud might bdcomo visible any moment, . In the United Kingdom, the position is' somewhat bettor, as tho balance of work carried over from' last ypiu* is still considerable; but the break-up of tho Scottish steel combine is only ono of many signs that wo ara in for a period of lower prices. The fall,, however, will bp gradual, aS coal 'remains firm, and any reduction iv wages is. mot with, '.ho throat of labour troubles. P'or this reason pig-iron of every description keeps wondoi'fully steady, and, the srnallric&s^of the stocks will lead to tho fall being very gradual. Three tenders for pipes for Rydo (New South Wales), Waterworks, wero recently received.' They were as follow;—' • £ < Mannesmann (German) .. 14.728 Stewart and Lloyds (English) 16,071 G. and 'C Hoskins (Australian) 22,303 Acceptance was deferred by the Metropolitan Board of Water Supply. Locallymade pipes Avere favoured, and it was decided to call for fresh tenders.