Commerce, Mining, Finance

Evening Star, Issue 22954, 11 May 1938, Page 6

Commerce, Mining, Finance

Wool Prospects Brighter? Accounts of N.Z. Newspapers Good Outlook for Alloy Steel \ Heavy turnover continues in New York, over a millionshares changing hands yesterday on an easier market. Further slight gains were registered by Australian issues on the local Exchange this morning, but business remained , restricted. ' . t New Zealand Newspapers Ltd. report a net profit of '£49,053, compared with £48,006 in the previous period, for the 12 months ended March 31. Dividend has been raised from 7| to 8 per cent. ' Good*progress has been made by Alloy Steel (N.Z.) Ltd., according to its second annual accounts. The directors report an increase of 71 per cent, in output and 74 per cent, in the value of sales. The outlook for the coming year is exceptionally good. In sympathy with a more general ’feeling of confidence ■ in world commodity markets, wool prices have tended to brighten. As a result of the more hopeful commercial outlook, a restocking movement is possible among fabric merchants and retailers. x

FUTURE FOR WOOL AMERICA AND ITALY ,\ '■ NO IMMEDIATE CHANGE LIKELY 'A somewhat brighter tone has de- ’ veloped in the wool market of late, . prices showing a trend) in "sellers’ favour, states the latest report of Winchcombe, Carson Ltd. The improvement is in sympathy witfy a more general feeling of confidence in world commodity markets. In Europe, the tenseness noticeable a few weeks ago has been relieved, and monetary action. by the TJnitd States Government, it is' hoped, will revive industry in. that country and create ' a strong demand for raw materials from the primary producing countries. Immediate marked effect on, wool values does' not appear probable. Large quantities of the sheep’s staple are on hand in America. In addition to trade warehouse stocks, growers have fairly bulky weights of th 6 current season’s clip on hand unsold. Mill activity has been so reduced in the last year that the inquiry for supplies has not been sufficient to' produce acceptable figures for many sheepownors. The Government has granted pastoralists "loans to enable I them to carry on, pending the sale of wool which may be on hand, and) also to prevent the 1938 clip being rushed on to the market owing to financial pressure. ' Apart from the fact that the quantity of wool on _ hand in Australia suitable for America is now small, indications do not point to the United States urgently requiring imported supplies; but in the more distant future prosperous conditions in the country would • certainly have favourable results on trade. As a result of the mor.e hopeful commercial outlook, a, restocking movement is possible among fabric merchants and retailers. In Great Britain the output of the mills was much reduced from September to January, and unemployment among textile workers increased. A slight Turn for the better developed in February, and a favourable movement in wool prices should induce the distributing trade to replenish stocks. An English authority at mid-March expressed the view that a speedy understanding between Great Britain and Italy would have immediate effect on export trade. That necessity has materialised. In addition to its general results on peaceful conditions for European commerce, the English and Italian trades have a fair interchange of business. During 1937, Great Britain exported more than 1,000,0001 bof tops, and 504,000 square yards of woollens and worsteds to Italy. The ■ United Kingdom imported 4,228,000 square yards of Italian woollens during the same year. At the moment, the wools which appear to be in the strongest selling position are medium and coarse cross- - breds. Bradford quotations for medium and coarse cross-bred tops are higher than at this period- of 1936. but fine cross-hreds and all .merinos are cheaper. :The relative dearness of medium and "coarse cross-hreds is due to their scarcity, partly owing to the consumption of them which has proceeded for military purposes, and also as a result of the smaller quantities of them produced. The tendency has been for finer cross-hreds to be grown, because coarser types were very clfeap for some years.

CHEAP MONEY POLICY BENEFITS AUSTRALIA QUESTIONS AS TO VALUE The policy of abundant money and a low rat© of interest has another side than that of the borrower. What of the lender? Can the rate'of interest be so low that saving will be discouraged? , In the ultimate result the persons and organisations who make savings provide the money for loans, whether to Governments, to industry, or to commerce. In Australia, money, judging by the bank figures recently available, shows signs of hardening, and in Britain money rates have markedly hardened during the past year (states the Sydney ‘ Morning Herald In these circumstances the subject can be discussed free from any. suspicion of endeavouring to influence immediate policy. Abundant and cheap money is naturally favoured_ by Governments. Jt iseminently suitable to their Budgets, and is especially useful for conversion operations. This leaves the temptation open to Governments to use the resources which they have to .keep interest rates down," and especially those of Government stocks. Sir Ernest Benn, who is a publisher, and also chairman and managing director of the' United Kingdom Temperance and General Providence Institution, raised _ the question at the annual meeting in London recently. The matter vitally affected, He pointed out, all holders of policies of life assurance and depositors in savings banks, and they were the bulk of the population. On their saving side, he said this portion of the population was ignored by the advocates of cheap money. ~ With hist' contention that savers are at least as valuable to the community as spenders, and far more valuable than spendthrifts, there will be general agreement. It is true that a borrowers’ market has been forced on them in Britain by artificial means, but there is another side to the picture. Would those people who save in small amounts, and they are the people to whom Sir Ernest Benn referred, have been able to save as much as they have the past four years if there had not been .this management which 'gave, and is giving, the country cheap and plentiful money? So far as' can humanly be Seen, it has been the cheap and plentiful money which has been a great factor in the recovery which has taken place. INDUSTRY EXPANDS. The great expansion in industry which has occurred in Australia since recovery is a testimony to the usefulness of cheap money, and. that there are indications now of a tightening of money in Australia is perhaps due to the fact that management has not been carried so far here as in Great Britain. Nevertheless, that industry in* Great Britain has not used what money is available is probably due not to unwillingness, but to a knowledge that it cannot be profitably employed.

So far as the British situation is concerned, the cheap money policy, combined with a policy of raising prices, has been of significant service to Australia, but at the expense of the British investor and consumer, , Sir Ernest Benn declares. But has Sir Ernest, Benn told the lull effect of this seemingly contradictory policy when applied to money on the one hand, and commodities on the other P Had money not become cheaper, and had commodities, wheat, and wool, for example, not advanced in price, would Australia have been able to pay with the same facility that she has done the interest on her oversea debt? So far as Australia is concerned, the policy has been of advantage not only to herself, but also to Great Britain. FARMERS' TRADING HEAVY TURNOVER The directors of the Farmers’ Trading Company Limited, the big Auckland department store company, have decided that a dividend of 7 per cent, be paid on ordinary shares, also the usual dividend on all classes of preference shares. The ordinary dividend is at the same rate as that paid last year, as against 5 per cent, in 1936. Profits for the year ended March 31 showed an increase on those of the previous 12 months, when earnings were 2104,236. Sales direct to the consumer, for the first time in the history of the company, exceeded £2,000,000. compared with £1,890,553 in the 1936-37 year..

COMPANY NEWS 7 NEW ZEALAND NEWSPAPERS PROFIT AND DIVIDEND UP DISTRIBUTION OF 8 PER CENT. [Pee United Press Association.] AUCKLAND, May 10. A net profit of £49,053 is shown in the accounts of New Zealand Newspapers Ltd. for the year ended March 31. This compares with £48,006 in 1937. A dividend of 8d a share of 16s 8d is recommended, making Is 4d a share for the year, compared with Is 3d in the previous year. The directors’ report states that the amount brought forward was £28,985, which, with the net profit, gives £7B 038, from which £19,917 was paid in interim dividends, leaving £58,121 available. Final dividend recommendation will require £19,917, leaving £38,204' to be carried forward. The retiring directors, Messrs E. Anderson and W. H. E. Flint, are eligible for re-election. Results over the last three years have been.— 19 3 6< 1937. 1933. £> £ Gross profit 109,343 112,998 134,265 Net profit 47,695 48,006 49,053 Div. per cent. 6 . 7J 8 ALLOY STEEL (N.Z.) DIVIDEND DF I PER CENT. “OUTLOOK EXCEPTIONALLY GOOD" The directors report that the company’s business is showing very gratifying expansion as its products become known. For the year under review the output of steel increased by 71 per cent., and. the value- of sales increased by 74 per cent., by comparison with the previous year’s figures. During the last three months the plant has been worked at its utmost capacity, and the volume of business offering is such that the . directors have under consideration the immediate installation of another electric- steel furnace and a further extension to the foundry buildings. Plant and buildings have been maintained in first-class condition, and improved where necessary. Ample provision has been made for depreciation, whilst stocks' and stores have been brought into the accounts at conservative figures.

NEW YORK SHARE INDEX DOW JONES AVERAGES

MINING NEWS REPORTS AND RETURNS RIMU DREDGE [Per United Press Association.] HOKITIKA, May 11. (Rimii dredge return: 294.250 z for 132 J hours; 55,546 yards treated, OVERSEAS TRADE NEW ZEALAND FIGURES SMALLER MARGIN REVEALED [Per United Press Association.] WELLINGTON, May 10. Overseas trade figures for New Zealand are as follows (specie excluded) :

All-the above values are expressed in terms of New Zealand currency. The value of the specie excluded is as follows :—March, 1938, exports, nil; imports, £18,600; three months ended March, 1938, exports, £500; imports, £21,079. AUSTRALIAN STOCK EXCHANGES Press Association—By Telegraph—Copyright SYDNEY, May 10. Renewed buying inquiry on the Stock Exchange to-day produced one of the brightest markets for months. The turnover was heavy, and industrials, particularly front-rank shares, continued to advance. Sales included:

The balance owing on the purchase, of the company’s property, which stood at £4,879 in last year’s accounts, and which was secured by mortgage and debenture in favour of the New Zealand ’Electric Steel Works Ltd. has been completely paid off during the year. The outlook for the coming year is exceptionally good. The net profit, after deducting working expenses, rates, taxes, full depreciation, and all other charges, including staff bonus, amounts to £4,119 2s 7d ; to which is added the balance brought forward from last year of £466 4s 6d; making available for distribution the sum of £4,585. 7s Id. The directors recommend this should be dealt with as follow’s:-—To a final dividend payment of 34 per cent., which together with per cent, interim dividend paid in October, 1937, totals 6 per cent, for the year, £1,500; provision for income tax, £850; and to write off preliminary expenses and brokerage- account, £1,500; leaving a total to be carried forward of £735 7s Id. In accordance with the Articles of Association all the directors retire. The Articles of Association provide that the number of directors shall not bo more than seven and not less than three. It is the recommendation of the board that the number of directors be five, including the nominee director appointed by Australian Alloy Steel 1 Ltd. INVESTMENT MARKET “ LITTLE REAL BUYING STRENGTH" The official organ of the Stock Exchange Association of New’ Zealand, reviewing business during April, observes that “ Although markets at the beginning of the month were dull and many stocks suffered a further writing down, a brighter tone was evident before the Exchanges closed for the Easter vacation, and greater activity was shown in some sections. After Easter markets opened cautiously, and except in some isolated cases there appeared to be little real buying strength. “ An improvement in the published figures of many companies and increased dividends failed to. arouse investors. The Prime Minister’s announcement of a surplus of approximately £BOO,OOO for the financial year ended March 31, 1938, which was accompanied hy a promise of a heavier burden of taxation to provide additional social services, was not calculated to act as a market reviver.” HAWKE'S BAY FRUIT RECORD SEASON EXPECTED [Per UniteP Press Association.] ’ I HASTINGS, May 10. With nine days- to go before the closing of the fruit, export season, Hawke’s Bay is expected to break the export record hy at least 20,000 cases. This statement was made to-day by the orchard instructor to the Department of Agriculture in Hastings, Mr N. J. Adamson. It is anticipated that by the time the season closes on Saturday week the number of export eases will exceed 335,000'. Last year frost destroyed nearly the whole crop. The previous export record was approximately 314,000 cases in 1934. The total number of cases produced in the province during the season will probably be more than 1,000,000. TAUPIRI GOAL MINES PROFIT UP; DIVIDEND UNCHANGED fPer United Press Association.] AUCKLAND, May 10. An improvement in the earnings is shown in the accounts of Taupiri Coal Mines Ltd. for the year ended March 31. The net profit is £1,550 higher at £9.363, and the dividend recommended is again Is a share, equal to 5 per cent.

Railroads. Industrials. Turnover. ... 23.19 117.93 1.040.000 May 9 ... 23.50 119.43 1,020,000 ... 22.64 117.21 560,000 May 6 ... 22,90 117.16 1,020,000 ... 21.57 113.46 690,000 May 4 ... 21.51 113.88 550,000 May 3. ... 21.45 112.70 470,000 May 2 ... 20.95 110.09 350,000 Apl. 28 ... 21.21 111.98 540,000 Apl. 27 ... 27.73 115.25 420,000 Apl. 26 ... 21.83 113.94 440,000 Apl'. 25 ... 22.09 116.23 400,000 Apl. 21 ... 21.33 115.40 600,000 Apl. 20 ... 21.26 „ 114.90 780,000 Apl. 12 ... 22.40 * 113.88 600,000 Apl. 11 ... 23.48 112.93 1,000,000 1938. Highest ... 32.33 134.35 Lowest ... 19.00 98.95 1937 Highest ... 64.86 194.40 Lowest ... 28.01 113.64

For March. 1938. 1937. 1936. S £ '£ Exports .. . 7,366,000 7,509,000 7,448,000 Imports .. Excess of , 4,907,000 4,606,000 3,038,000 exports 2,459,000 2,903,000 4,410,000 Three Months Ended March. 1938. 1937. 1936. £ £ £ Exports .. . 20,575,000 22,280,000 18,798,000 Imports .. Excess of . 14,887,000 12,983,000 9,622,000 exports 5,688,000 9,297,000 9,176,000 Twelve Months Ended March. . 1938. 1937. 1936. £ ‘ £ £ Exports .. . 65,008,000 60,235,000 49,676,000 Imports .. Excess of . 58,065,000 47,621,000 37,440,000 - exports 6,943,000 12,614,000 12,236,000

£ s. d. Bank of New South Wales 32 10 0 Associated News ... I 1 9 Howard Smith 1 1 i7* British Tobacco ... -... ... 2 9 0 Tooths 2 17 9 Tooheys 1 12 6 Carlton Brewery 3 6 3 Australian Glass 4 15 3 Dunlop Perdriau 1 2 n Anthony Hordern 0 18 n 4-J General Industries 0 19 Kandos 1 5 0 Bankers and Traders 1 10 0 Cumberland Paper 1 7 0 William Atkins 1 2 6 W. Adams ... 0 16 14 Malleys ... 1 1 3 Standard Cement • 1 0 0 J. Fielding 4 3 6 Australasian Paper Australian. General Insur1 11 6 ance 0 16 0 Perpetual Trustee ... ... 4 14 0 Wool worths 1 2 6 Meggitts * 1 12 3 Felt and Textiles 1 13 6 Sargents 1 7 104 Gordon and Gotch ... ... 2 12 3 Victoria Nyanza 0 16 6 Goldsbrough, Mort 1 11 14 Wilcox, Mofflin 0 8 0 Fairymead Sugar 1 13 3 Mount Morgan 0 9 2 Mount Lyell 1 7 0 Broken Hill Proprietary ... 3 2 0 North Broken Hill 2 8 9 South Broken Hill ... ... 1 10 9 Rawang 0 8 11 Kramat Tin ... 0 12 11 Peninsula Tin 1 5 6 Larut 0 13 0 Emperor Gold 0 11 9 Taranaki Oil 0 7 11 MELBOURNE, May 10. There was a better tone and greater activity on the market to-day. included: Sales Commercial Bank of Aus- £ s. d. tralia 0 16 5 National Bank (£5 paid) 7 0 6 National Bank (£10 paid) 14 2 0 Adelaide Steam 1 14 0 Howard Smith 1 1 7 G. J. Coles 4 2 0 Drug Houses Australian Iron and Steel 1 5 4* (pref.) 1 7 9 Goldsbrough, Mort Australian Paper Mfrs. 1 11 0 (pref.) Australian Paper Mfrs. 1 5 3 (15s paid) 1 Herald ’ and ‘ Times ’ ... Australian Foundation In0 19 3 2 19 3 vest Trust 0 4 5 Electrolytic Zinc 2 2 3 Electrolytic Zinc (pref.) ... 2 7 0 Yarra Falls 1 IS 0 Mount Lyell 1 7 3 Broken Hill Proprietary ... 3 2 0 North Broken Hill 2 8 6 Loloma Gold ... 1 2 9