LENDING COMPANY

Grey River Argus, 23 May 1942, Page 6

LENDING COMPANY

USE OF RESERVES. PA WELLINGTON, May 22. 'Mr Malcolm Fraser, chairman of the Equitable Building and Investment Co., told the shareholders that it would be obvious to them, from a study of the accounts, how much was taken in taxation, and how rnucn remained to shareholders. He kne\ that shareholders were ready, to carry the burden in the war struggle but since the accounts closed and the issue .of the balance-sheet, further increases in taxation had oeen announced.

The company’s business of making advances on first mortgage of cottage properties was such that even a very moderate dividend to shareholders was made p’ossible only by substantial reserves being built up out of the Company’s savings during the past sixty odd years.. The company had reserves of £155 to every £lOO of capital. Yet from the investment of this £255 (plus any profit from deposits) less) than 5 per cent, on the £lOO was obtainable. If the company had no reserves and all its funds wer e invested in first mortgage (as they were), at, say, an average of 5 per cent, interest, then slightly less than 11 per cent, would be available for shareholders. The company, formed, sixty years ago, could not, of course, be formed in the conditions existing to-day.