IDLE CAPITAL

Evening Post, Volume CXVI, Issue 25, 29 July 1933, Page 14

IDLE CAPITAL

"SHELL" COMPANY'S YEAR

CURRENCY DIFFICULTIES

"Evening Post," July 29.

Viscount Bearstead, chairman of the "Shell" Transport and Trading Company, Ltd., London, addressing shareholders at the recent annual meeting, pointed out that the profits for the year were slightly increased. But, he added, "the great increase in our own cash is, unfortunately, not a reflection of increased profits, but of decreased trade and .falling prices. The lower the price of oil and the smaller the volume handled, the less cash we neoU for the day to day financing of our business. "To give you a wider picture of how much capital we have awaiting a turn of the trade tide, I may' tell you that the Shell-Royal Dutch Group as a whole have no less than £35,000,000 in liquid respurces, while the affiliated companies have a further £16,000,000 available. In addition we have our Oji 1 stocks, amounting in all to several millions of tons, entirely

uncharged. ''"•.( "While this idle capital is at present comparatively unremuherative, it is at any rate an earnest that, come what may, your company and its colleagues are financially equipped to weather iiny storm. . But the mere possession and safeguarding of vast sums of ready money is itself an everpresent anxiety when.no currency is stable. CURRENCY COMPLEX. "At the present time we, in common with all traders, are handicapped by never knowing if the pride of oil as calculated, yhether buying or Belling, will be returnable to us at any given rate. On the ■whole we have been successful in getting our moneys remitted, and have comparatively small blocked balances. We have, regardless of gold values, pinned our faith for the most part tjo sterling, and I do not think we have, or 4 shall have, any reason to regret it. "This currency question is one of the difficulties which we share with all other trades, but I would call your attention'to one handicap of which we bear more than our fair share. I refer to taxation; I doubt whether amy prime commodity is, or ever has beeii, so mulcted. On the trade of our group for 1932 the direct taxation, exlusive of income tax on profits, was about £50,,000,000. Against this the shareholders received- in dividends just under £6,000,0(10, on most of which they bsyve to pay income tax. These figures -speak for themselves." WORLDCS OIL SUPPLIES. Having referred in detail to the distribu- . tibn of profits, on petrol sold, Viscount Bearstead said that of Is 5d per gallon, the, retail- prifce, 8d was collected in taxation; 2%d peW gallon represented c.i.f. cost,, and GUd covers landing and storage charges, loss,' inland carriage, delivery charges, and selling costs. In short, 84 per cent, of Che total retail price was collected in taxation. Of the 294 d per gallon ci.i.f. cost a large part of the oil imported was nepresentedby freights earned ty British steamers, which were Britishbuilt, Smannied, and supplied. He then referred to tthe fall in the world's production of petaroleum, by 10,000,000 tons during 1932, T^hile the "Shell's" own group1 production : increased by about . ,400,000 tons., Thfe "Shell" is and always had been protagonists of conservation. "In previous years," he said, "we took the lead in reetriction and carried our own share rather beyond what was fair in our endeavour to give a lead. The present Blight inctease still leaves our share of curtailment well above the average taken over the Hast three years. "This brings me to the general position, whifeh I can only describe as pror foundly unsatisfactory. Conference after conference has been held, and decision after decision has been taken, only to be nullified 'by short-sighted ( and selfish interests. AMERICA THE PROBLEM. "As in so many other matters, it is in 'America' -that the real difficulty and the real solution are to be found, and in the end I hope that the instinct of self-preser-vation -vyill give results even if industrial statesmanship fails; . Ji'We ijtre, of course, very directly interested in, recent proposals—not in this country '(.nljv-regarding the taxation of road usjers, and in some cases their restriction. "We can only view with grave concern aiay proposals which would result in suppressing, or even stifling, a growing industry in the'interests of an older-estab-lished mode of transport. . . "TlnS British manufacturer and scientist have uecovered for this country the leadership of the Diesel oil industry;'the present taxation bids fair to lose them that position."- ' ■■■•.-.