Commerce, Mining, Finance

Evening Star, Issue 22892, 25 February 1938, Page 6

Commerce, Mining, Finance

N.Z.’s Balance of Trade

Milne and Choyce Dividends Wall Street finishe'd easier yesterday, the comparatively good turnover of 720,000 being recorded. Railroads dropped ,47 on the Dow Jones index, while industrials slipped 1.57. An easier trend in the base metals market aided in . causing a decline in Australian related shares, which lost all of yesterday’s advances. Commonwealth industrials closed uncertain, but other sections generally held late rates.; Business was poor. A further ..reduction in the unfavourable balance of trade with- foreign countries was made by New Zealand in 1937, due in some measure to the higher price of wool. Australian imports made' a handsome gain, leaving the Dominion with an unfavourable balance of £5,119,655. Exports for last year constituted a record, wool accounting for 58 per cent, of the increase of £9,961,439 on 1937 figures. Milne and Choyce have declared half-yearly interim dividends at the rate of preference 6 per cent, per annum, B preference 7 per cent, per annum, and ordinary shares and idebenture stock 5 per cent, per annum.;

PAST YEAR’S TRADE SOME FOREIGN GAINS HIGHER VALUE OF WOOL AUBTRALIAN lIUPMTS GROW ■ Duo in some measure to the higher price of wool New Zealand in 1937 further, reduced her' unfavourable balance of trade with foreign countries. Of 43 countries the Dominion in 1936 had an unfavourable balance with 30 of them. ! Last year l this figure was reduced to 26, three pf the gains being in Europe and only one within the Empire. The direction of trade with the leading Empire and foreign countries in •1937 was as follows: — . , Exports Imports Balance

GROWTH of imports. New Zealand's aggregate balance in 1937 was £10,552,684, compared with, £12,617,614 in 1936, the reduction being due to the growth of imports. iWith British countries the favourable balance . fell ■ from £16,293,771 to while in the case of foreign .the adverse balance was reduced to £2,480,650 from £3,676,157. The chief gain in Europe was a marked expansion in German trade, the balance swinging in favour of New Zealand for the first time since 1934. Trade with Denmark, although of considerably less monetary value than that with Germany, trebled in the past yeac, an unfavourable balance to New Zealand in 1936 being_ converted to a favourable one. Outside of Europe Japanese and United States trade expanded largely. With Japan New Zealand’s favourable balance rose to £1,509,737 last year from £234,405 in 1986, while in the case of the United States the balance against New Zealand of £2,444,961 in 1936 was reduced to £1,924,461. Wool entered largely into these movements in both cases. EMPIRE MOVEMENTS. "With Empire countries, apart from Great Britain, New Zealand’s adverse’ balance tended to increase, largely on account of the growth of the Australian and Canadian imports. Australia gained handsomely. The total value of the trade between the Commonwealth and the Dominion was £8,787,313, with a favourable balance of .£5,119,655 to ■ Australia. Canada’s favourable balance rose to £2,882,353 from £2,212,929. Exports for 1937 valued at £66,713,379 were, in terms of New Zealand currency, a record, rising £9,961,439 on i the 1936 figure. Wool, in spite of ■ smaller shipments, accounted for 58 ?er cent, of the ' increase, butter for 7 per cent., and lamb for 10 per cent. ’Apart from butter and meat, quanti--ties generally showed a decline, the en- . hanced prices contributing to the record. The import total at £56,160,695 was £11,901,809 great than in 1936, and has been exceeded once only—in 1920. The next highest total, apart from 1937, was recorded in 1925, with a figure of £52,425,757. The increase last year was an all-round one.

OBSTACLES TO TRADE REMOVAL OF BARRIERS AUSTRALIA'S CONTRIBUTION “ The Australian trade delegations to Great Britain and the United States of America, following as they do the visit of the Minister of Customs to New Zealand in December, are an earnest of the desire of our leaders to improve our trade relations with other countries and contribute a full share toward the restoration of international trade,” states the monthly summary of the National Bank of Australasia Limited. “ Much has been done in recent years toward encouraging the volume of Australia’s tirade with other countries—for

PRIDE OF WOOL FIXATION PROPOSALS FUTURE FORETOLD A movement to place minimum reserve prices on wool has been proposed and is being discussed in Australia. The ‘ Sydney Morning Herald’s 1 wool correspondent shows how in 1921 similar action was taken, the scheme then being based on an average price of 9d per ib, covering both merino and crossbred wools. “ Fortunately for those who promoted. the idea, commercial conditions' gradually improved in the world, and' wool shared in those brighter times,” states the writer. The greasy wool sold in Australia in subsequent seasons averaged: 1921-22, 12$d; 1922-23, 17Jd; 1923-24, 23]d; and 1924-25, '2s]d. Those higher prices were not due to the minimum price imposed. They were caused by the postwar boom in commodities generally, and the reserve price became inoperative. , Attempts, which ended in failure, were' made by Canada and the United -States to fix. the price of wheat. Price fixing is possible with a product which can be controlled, such as a manufacture; but the quantity of wool cannot be regulated. The proposal has less chance of success to-day than it had in the early 1920’5, because of the increase in the output of artificial fibres, particularly in Japan, Germany, and Italy, which countries have made efforts to curtail their wool imports. The pricefixing scheme could nob possibly succeed unless it was joined by New Zealand, Argentina, Uruguay, and South Africa. There was always' thp, danger of the minimum price becoming the maximum. Mr D. K. S. Campbell,' a well-known Australian writer on economic subjects, shows in the ‘ Sydney Morning Herald ’ how the grower himself has been the speculator—and lost. He gives concrete instances of wool withdrawn at auction in the early part of the season and subsequently sold at lower prices in February, as follow:

These are not isolated cases, for thousands of bales were withdrawn at auction, or withheld from auction, when values were much higher than they are to-day. Wool withdrawn from sale creates a surplus supply, which, in the circumstances of this season has . had a depressing effect on the market. Speculation by growers may be most injurious to the whole wool trade, and it has done more damage to the market than forward selling movements, which can only be safely, carried on when abundant supplies for some time ahead are available.

instance, the abolition of import embargoes and quotas and reductions in rates of duties and primage. The efforts made in 1936 to limit imports of certain classes of low-priced Japanese goods caused some contraction in trade with that country. Subsequently the Sino-Japanese military operations have further restricted trade between Australia and Japan, but this variation from the general movement was an outcome. of exceptional conditions. “ The increased exports, and more particularly the rapid growth of imports during recent years, provide definite evidence of Australia’s contribution to the restoration of world trade. The extent to which Australian oversea trade can be further expanded depends upon many factors, but the most important are the quantities of primary products available for export and the' prices realised for those products in world markets. “ What may be regarded as a constant factor limiting imports is the amount required each year to pay the interest on Australia’s Public Debt raised abroad and to cover the deficiency on various ‘ invisible ’ items. Altogether these require some £30,000,000 per annum—a weighty charge against any year’s exports, and particularly in periods of low prices or poor production.”

INTEREST BATES The return to the investor on his outlay based upon the latest dividends, works out as follows on the latest sales. Exchange is deducted in the case of Australia and added in the case of English stocks. When Government issues are included the calculations provides for redemption at maturity:— PER CENT. PER ANNUM. G. J. Coles £3 9s Id Woolworths (Sydney) ... £2 17s 2d New Zealand Breweries ...£3 14s 6d NEW YORK SHARE INDEX DOW JONES AVERAGES

FOWL WHEAT SCALE OF PRICES FOR SOUTH ISLAND {Pee United Press Association.] WELLINGTON, February 25. The Minister of Industries and Commerce, Hon. D. G. Sullivan, states that by arrangement with the South Island Brokers’ Advisory Committee a scale of prices has been agreed upon for fowl wheat for the present season. Under this scale the buying price froin growers will range from 5s sd, f.0.b., in February to 5s lid in September, the wholesale selling price from 5s 7d, f.0.b., in February to 6s Id in September, and the selling price ex store for five-sack lots from 5s lOd, sack lots from 5s lOd in February to 6s 4d in September. The monthly increments, which show slight increases, are designed to compensate merchants for holding wheat in store.- The f.o.b. wholesale price applies to 50-sack lots or more. Mr Sullivan said the arrangements applied to the South Island only. On account of the shortage of New Zealand wheat it was necessary to import all North Island requirements from overseas, and arrangements had been made to supply the North Island with Australian milling wheat, to. be sold to merchants. at 6s 4d on the wharf at main ports (sacks included).

THE SEARCH FOR COLD MANDATED ALLUVIALS Shareholders of Mandated Alluviais, N.L. (New Guinea), at an extraordinary meeting, approved, of a proposal to issue debentures of £lO each, to a total value of £3,000, at a flat rate of interest of 10 per cent. Repayment will be made in six months. It was explained that the money was needed partly to pay the wages of the men employed on the field. The directors, of the company together subscribed £SOO. REPORTS AND RETURNS EMPEROR MILL OPERATIONS The management of Emperor Gold Mining Company Ltd. (Fiji), reporting on treatment operations in the period ended January 26, when the first clean-up with the new plant was made, states that the lower average grade of the ore sent to the new mill, 6.Bdwt, was due to a large amount of 3dwt to 4dwt ore, which was gathered from overburden removal and allowed to accumulate for delivery to the new mill during the breaking-in period. Residues averaged o.6dwt, but it is hoped to improve on this figure. New labour crews are working well, and operation of all equipment under adverse weather conditions during the period was very satisfactory. Minor adjustments continue to be made, but the whole plant was on scheduled tonnage during the last 10 daj's of the period. Development has been curtailed owing to labour being used on the crushing section of the new mill. LOLOMA VALUES Loloma (Fiji) Gold Mines, N.L., reports a continuance of the good values met recently in development at the bottom (224 ft) level. The south drive off the main east crosscut at 60ft has been extended to 592 ft. The average assay value for the last 33ft of driving was 38dwt a ton over a width of 84in.

SYDNEY WOOL SALES Press Association—By Telegraph—Copyright SYDNEY, February 24. There was wider competition at the wool sales to-day, with excellent support from Yorkshire and the Continent. Greasy merino made to 22jd. The offerings totalled 10.673 halos, of which 9.570 were sold, while 964 were disposed of privately 4

£000 £000 £000 • (N.Z.) (N.Z.) (N.Z.) Britain’ ... ... .50,725 28,187 +22,538 Canada 1,667 4,550 —2,883 Australia ... ... 1,8246,944 —5,120 Total British 54,781 41,990 +12,792 Belgium 701 • 518 +182 /franco 1,015 193 +822 ; Germany 918 869 ~ +49 Netherlands 111 241 •• —130 Poland 166 15 +151 Butch £. Indies 42,237 —2,233 Japan 3,132 1,622 +1,520 United States ... 4,796 6,720 -1,924 Total foreign 11,689 , 14,170 —2,480

Withdrawn at auction. Sold. d. d. Aug. 30 ... ... 17 Feb. 7 11 Aug. 30 ... ... 154 Feb. 7 104 Aug. 30 ... ... 164 Feb. 7 104 9 ... ... 19 Feb. 8 144 Sept. 9 ... ... 194 Feb. 8 14 Sept. 9 ... Sept. 27 ... ... 10 Feb. 8 74 ... 183 Feb. 15 144 Sept. 27 ... ... 164 Feb, 15 13 Sept. 27 ...‘ ... 184 Feb. 15 134

Feb. 24 30.05 130.85 720,000 Feb. 23 .. 30.52 132.41 1,300,000 Feb. 21 „ 29.35 129.49 760,000 Fob; 19 .. 28.76 127.50 290,000 Feb. 18 28.66 126.29 770,000 Feb. 17 .. ,. 29.30 127.59 860,000 Feb. 16 28.71 124.90 470,000 Feb.'15 .. „ 29.04 124.93 520,000 Feb. 14 29.16 125.97 400,000 Feb. 11 28.96 124.94 390,000 Feb. 10 .. 29.11 . 125.54 ' 630,000 Feb. 9 .. ,. 28.13 125.00 750,000 1938. • Highest .. . 32.33 134.35 Lowest .. . 27.08 118,49 1937. Highest .. . 64.86 194.40 Lowest .. . 28.91 113.64