ARMAMENTS COMBINES.

Lyttelton Times, Volume CXV, Issue 16559, 25 May 1914, Page 6

ARMAMENTS COMBINES.

Trade in armaments is brisk at the present time and the profits of the concerns engaged in the production of guns and warships naturally are Targe. Nothing else, could be expected at a period when the civilised nations are preparing for war with reckless zeal. But the London “ Economist,” a financial journal of assured standing, is doing a good service to the Empire by analysing the balance-sheets of tho armaments firms more fully than an ordinary reader could hope to do and pointing some of the morals that are to be drawn from the figures. Last year the firm of Armstrong, Whitworth, Ltd., for example, made a net profit of £B/56,673 and after paying a dividend of 12} per cent, added £133,000 to its reserve and carried £323,000 forward to the current year’s accounts. During tho year a distribution was made from the reserve fund of £802.500 in ordinary shares to shareholders, and as this practice has been followed in previous years the nominal dividend by no means represents tho return received by the fortunate shareholders on their actual cash investments. The firm is building battleships for Britain, Brazil and Chili in its English yards and at the samo time is providing Dreadnoughts for Italy through a subsidiary company operating on Italian

soil. “ The habit of reckoning Italy as a possible naval antagonist to this country,” says tho “Economist,” *“ may serve to increase Armstrong’s profits both from the British ami from the subsidiary Italian source. For il England, however vaguely or indirectly, is thought to bo building against Italy, Italy will build against England. Therein lies the shareholders’ monetary profit and the lasting danger to the public of both countries.” The demand that Britain should put a squadron of Dreadnoughts into the Mediterranean to meet the forces of ‘‘ Germany's allies,” Italy and Austria, has been heard frequently during the last year or two. Turning to a famous German firm, the Deutsche Waffen und Munitionsfnbriken, the London journal mentions that tho concern has large and profitable works in Belgium, Italy and France. Its dividend last year was nominally at the rate of 32 per cent, but actually was very much higher, since the capital had been “watered” in tho familiar way. This year the shareholders have been handed new stock to the amount of £750,000 issued at 107 per cent, although the market price of flip existing shares is 624 per cent. “It may bo mentioned,” says the “Economist,” “that it was -this same firm which some time ago earned unenviable notoriety through the story of an attempt to get printed in a French newspaper falso rumours of a further increaso in armaments. It is said to have placed its materials and inventions at the disposal of the Russian Government, another instance, together with its associated companies, of the ’strangely international character of tho armament industry.” The records of these great concerns, which provide nations with the means of mutual destruction, must arouse anxiety wherever they are understood. It is bad enough that preparations for war should be required by civilised peoples at this stage of history. That the production of armaments should bo made an international business, divorced entirely from national loyalty and patriotism, will seem to tho sensitivo mind simply horrible.