TRADE AND FINANCE

Evening Post, Volume CXXIV, Issue 138, 8 December 1937, Page 16

TRADE AND FINANCE

PRODUCE & MARKET REPORTS FROM DAY TO DAY

A PROSPEROUS YEAR

BUT SOME ANXIETY

BUSINESS IN NEW ZEALAND

(By Air.) XFrom "The Post's" Representative.)

LONDON, November 20.

The outlook in New Zealand was described by the Hon. E. W. Parker, chairman of Dalgety and Co., as "giving cause for some anxiety." In his address to shareholders at the annual meeting this week, he said Australian conditions had been exceedingly prosperous and that the outlook for the future was satisfactory. The Federal elections indicated that one might look forward to a further period of settled Government.

Turning his attention to New Zealand he said that the Dominion had also enjoyed a prosperous year. "Farmers generally, with the improvement that has taken place in the price of their products and despite a considerable increase in production costs, have made good profits," he added. "The rise in production costs has been mostly caused by legislation passed by the present Government, and this increased burden is likely to be recurring so that provision should be made in these good times to meet any setback which may happen in the future.

HIGH EXPENSES

"The guaranteed price fixed for dairy produce, as far as can be gathered, will result in a loss for the past season of £500,000, and this money presumably will have to come out of ;|he pocket of the taxpayer. "Wages have been increased and there has been no relief in taxation, so that our expenses have been heavily affected for the worse and large provisions have had to be made to cover future taxation. The outlook, therefore, in the Dominion, gives cause for. some anxiety. Had it not been for these heavy provisions the New Zealand results would have shown an improvement on those of last year. However, our branches in Australia did much better and it is owing to the better results achieved there that I am able to place before you such satisfactory figures today. 'The New Zealand exchange rate, like that of the Commonwealth, remains unchanged, and I notice recently that the Minister of Industries and Commerce stated he could not see much chance of any alteration in the exchange rate for the time being, so that evidently we cannot look for any relief at present.

HEAVY TAXATION,

"Taxation in the Commonwealth and the Dominion is still a very heavy burden," said Mr. Parker, adding: "I see little prospect of. relief in this direction. In fact, as I have already mentioned, the burden is an increasing one in New Zealand, and at the present rate of progress—if you can call, it progress—the Dominion bids fair to become' one of the most heavilytaxed countries in the world per capita of its population."

The record of the 1936-37 wool-selling season added one of the brightest chapters to wool history. It witnessed the culmination of the recovery from the effects of the depression and the demand was so widely distributed that it ultimately embraced almost every description of the staple. It has seldom, if ever, been keener or more sustained, being fostered by a combination of circumstances rarely equalled.

The company, as usual, held the premier position as the- largest wool-sell-ing house in the world.'- . In 1936-37 it sold in Australia, New Zealand, and London 594,032 bales, against 608,175 the previous season.

WOOL PROSPECTS

"I am afraid that New Zealand wool growers will have to reconcile themselves to rather lower values than the substantially high ones which were prevailing last season," he said. "The average per bale in 1936-37 was £22 6s Bd, or nearly £2 higher than the Australian average. "This shows the keen demand which was ruling for halfbreds and crossbreds and although we look forward to fair competition for these at the coming sales, values are likely to be considerably down. "Japan may buy some crossbreds, as she is doing at present in Melbourne, but a doubtful section is the American one, the position in the United States being st the moment an extremely nervous one. Stocks and shares have been tumbling down rapidly and all commodity prices have fallen sharply. It must be remembered, too, that last year the demand for Coronation decorations and the like was to an appreciable- extent responsible for the level to which crossbreds were raised. Japan also was a keen buyer in the Dominion and is not expected to operate so freely this season.

"The wool market today is in a very unstable position." He was not sure if the limit of the fall had been reached, but the general opinion seemed to be that early in the New Year orders would be put out and the market should recover somewhat, although it was not expected that last year's high prices would be reached. The annual report and accounts were adopted. The final dividend was approved. The chairman said that in view of increasing tax burdens, it was all the more gratifying that a slightly larger distribution could be made than in the previous year.

The Hon. E. W. Parker, Mr. John Macmillan, and General the Hon. Sir Herbert Lawrence, retiring directors, were re-elected. A motion of thanks to the chairman, directors, local boards, and staff, moved by Mr. R. E. O'Hara and seconded by Sir Alexander Herdman (Auckland), was carried.