GROWTH OF BUSINESS

Evening Post, Volume CXXIII, Issue 40, 17 February 1937, Page 14

GROWTH OF BUSINESS

NOW WORLD-WIDE

(From "The Post's" Represeniaiive.) LONDON, January 30.

"Eighty years ago, in 1857, my father, Mr. Joseph Natnan, began in Wellington, New Zealand as a private trader. In 1874 he started to trade as Joseph Nathan and Co., and in 1876 he opened an office in London. The English company was founded in 1899, becoming a public company in 1913. The first issue of shares to the public was made in 1919. Today that company is a world-wide organisation with 16 subsidiary and associated companies trading, in every continent." This comment was made by Mr. Alec Nathan, chairman of the company, at the thirty-seventh annual general meeting in London this week. The subsidiary and associated companies include Glaxo Laboratories, Ltd., and Messrs. Trengrouse and Nathan, Ltd. (New Zealand). Net profit of the company realised last year was £85,166. A dividend of 8 per cent, less tax will be paid on ordinary shares. ' Mr. Nathan explained that the company was at present in a transition stage between a trading and a holding company. The coming year would see completion of its financial reorganisation, when the principal assets would consist of shares in its subsidiary companies and properties. The company's activites now fell into two broad classifications —the sale of products of its own manufacture under its own proprietary trade marks, and merchandise and produce distributing businesses. The former was carried on as Glaxo Laboratories, Ltd., and its various subsidiaries, which had again shown satisfactory progress in trading and prot, with increased prestige and reputation. NEW ZEALAND SUBSIDIARY. Messrs. Trengrouse and Nathan, Ltd., the New Zealand subsidiary, had again worked under difficult and unsettled conditions. "The New Zealand Government," said Mr. Nathan, "has instituted a new method of handling butter and cheese. Through the offices of the Dairy Board in London, this dairy produce is allotted to certain nouses to sell on commission. The Government exerts control and supervision over its sale. We are hopeful that this new method of handling New Zealand butter and cheese will have a beneficial effect on this business. "Since last meeting, the New Zealand trading department has been incorporated under the name of Joseph Nathan and Company (N.Z.), Ltd. This section has had a satisfactory year with increased profits. SOCIALISM AND TAXATION. "The Government in New Zealand has adopted a policy of intensified socialisation of industry," Mr. Nathan continued. "The main object of the new legislation is to ensure for all classes of the community a fair standard of living. To gain that object, the immediate procedure has been to increase, directly and indirectly, the cost of doing business for the purpose of reducing the income of those who can afford such reduction, and to transfer it to those of the community les,s favoured. If the process is successful it will increase the standard of living and the purchasing and spending power of the large bulk of the community, increase the prosperity of the Dominion as a whole, and cause our trading connection to be of more value. "The most onerous burden we have to carry as a result of this new legislation is the substantial increase in'taxation of companies. "New Zealand is probably unique in imposing on company income graduated taxes rising to 7s 6d in the £ on moderate-sized companies. In most other countries income taxes are graduated according to the income, not of the • companies, but of the individual shareholders receiving company dividends. , , "The total effect will probably be that the profits of the company in New Zealand this coming, year may not show the expansion of previous years. In spite of that, we do not view the future with fear or alarm, as our business in that country is so well and ably directed and supervised." In Australia, as in New Zealand, the business of the company had shown marked improvement, the profit being substantially above that of preceding y6Mr.' Nathan called attention to the financial structure of the company—9s per cent, of the company's capital is in shares having a right to a cumulative dividend. During the depression the company was unable to pay dividends on more than 28 per cent, of its cumulative capital, and those dividends accumulated: "It is remarkable that within so short a space of time, the company, should have succeeded in eliminating those arrears," Mr. Nathan concluded.