FINANCE STOCKS AND MINING

Free Lance, Volume XVIII, Issue 948, 12 September 1918, Page 8

FINANCE STOCKS AND MINING

OKD continues to accumulate m the Bank o fi England, the latest fiomres showing a hoard of £68,886,000 against £68,018,000 in the previous week and £51,824,000 -a year ago. There is now over £17,000,000 more gold in the Bank than there was a year ago. * * * * This piling up of gold is due to the large note circulation, the amount of this last week being £57,61d,UUU as compared with £40,407,000 the increase being over £il7,ooo ? uUu, or about the same as the increase m tlie gold reserve. The deposits of the Government with the Bank total £04,910,000 or just about sufficient to meet the war expenditure for five days.

The financial resources of Britain, however, are such that so far no diiiiculty has been experienced in finding all thei money required for carrying on the war. The daily sales of Exchequer bonds, war savings certificates, together with the inflow of are sufficient for the purpose. Britain is still dependent upon the United States for loans, and a cable message received a day or two ago from New York stated that thei American Government had granted Britain a further credit of £80,000,000. This is no doubt required for the purpose of paying for the supplies that are being obtained from the United States, Canada and the _ South American Republics, but particularly Argentine.

The Argentine has an enormous surplus of wheat, oats and maize, and the British Government has contracted to take the whole of the cereal surplus, particularly wheat. This will account • for the preference given to Argentina in the matter of shipping as compared with Australia and New Zealand. Because the journey is so much shorter fewer ships are needed to lift the Argentine produce besides the fact that abundant supplies of breadstuffs are available. The wheat-growers of the "United States aret being strongly encouraged to expand the wheat production for at 8s 4d (which is the price offered by the Government for the next crop) there must be huge profits in the business.

This big price is no criterion of what should bei offered the farmers of NewZealand by the New Zealand Government for wheat production. By the time the next American crop is ready to be harvested the American Army in France will have expanded to several million men who must be fed, and American wheat would be imich easier to transport and deal with than, say, wheat grown in Australia or New land or even India.

Once more New Plymouth is talking hopefully of thei iron-sand industry. At the smelting works at Moturoa the furnace has been reconstructed on improved lines and an excellent grey iron of uniform quality is now being turned out. "We are further told that the metallurgical problem is regarded as definitely settled. Iron ana oil have engaged the attention of speculators in New Plymouth for a great number of years, and," while both have been produced at times, neither has as yet turned out a commercial success.

The recovery of iron from the ironsand has got to be solved, and it may be that the metallurgical problem is really solved now. But. is it solved in such a way as to make the industry a profitable.one? After the war the demand for iron and steel will be more {>ronounced than ever, and if New Zeaand pig iron of good quality can be produced at a low rate, then there will be plenty of money in the business and plenty of work for plenty of people. It is one thing to secure the iron and it is quite another thins; to secure it in a way to make the business a commercial sudcess.

We shaJl soon be able to tell what the commercial prospects'' are. If it is a real success the Government will be asked to provide a subsidy for a certain fixed output. But if it is not a success will the Government be urged to acquire any patent rights that may exist and to exploit the industry "in the - interests of the country?"

The estimated expenditure of the United States for the fiscal year ending on June 30 next is 24,000,000,000 dollars, or expressed in sterling £4,900,000,000, and it is suggested by the Secretary to the Treasury that onethird of this amount, that is, 8,000,-

000,000 dollars (£1,600,000,000), shall be raised from revenue, and it is in connection with this that the new taxes are to be imposed as cabled last week. And these new taxes are formidable, especially the income taxes. On an income of £500 the tax is £6, on £1000 the tax is £36, on £2000 the tax totals £169, on £10,000 it is £2499, on £20,000 the tax will amount to £7800, and on £200,0000 incomes the tax-gatherer will take £129,400, or more than 69 per cent.

This means that the big capitalist has to pay the piper, as no doubt he should, but this heavy taxation is bound to give rise to a new problem. If a man with an income of £200,000 is obliged to yield up 70 per cent, the desire to earn a big income is killed and men with capital will decline to engage in new ventures or lend the money for the purpose, because out of every additional pound sterling of income 14s must go to the tax-gatherer. The incentive for earning more money will be, destroyed, and this may have a very detrimental effect on the nation. Wliat is happening in the matter of taxation in the United Kingdom is also happening in other countries, especially in the British Empire.

In France and Italy, too, very heavy taxation has been found necessary, but in Germany and Austria- it is difficult to say what is going ,to happen. In Germany very little additional taxation has been imposed if we omit the excess profits tax, while, of Austria's .financial methods very little is known. Both countries must very near the verge of bankruptcy, for besides their own enormous war costs they will hav© some substantial indemnities and refunds to make to Belgium, France, Serbia, Roumania, and Montenegro, and probably to Russia also. t

The Auckland Farmers' Freezing Company, Ltd., has closed a remarkably profitable year notwithstanding the many difficulties that have existed owing to' the shortage of shipping. After providing for depreciation and income tax the profit for the year is shown as £22,711 14s Id which, with £2975 3s 7d brought forward from last year, makes a total of £25,686 17s Bd. Out of this amount it is proposed to allocate £9500 for the payment of a dividend of 8 per cetnt., to add £12,000 to the reserve fund, and to carry forward £4186 17s Bd.

The hinterland of Auckland is being rapidly settled, and there will be an increasing demand for freezing; companies. Dairying is thriving in the Auckland Province and sheep farming is bound to extend as more country gets opened up. The Auckland Farmers Company has arranged with the North Auckland Freezing Company to erect works at North Auckland as soon as the end of the war ig in sight, and from present indications the end appears td%e not very far away. Storage accommodation appears to be as much a problem in the North as it is here, notwithstanding that the Auckland company has storage for 700,000 601b carcases.

The balance-sheet of the Golden Bay Cement Works, Ltd., for the year ended June 30th last shows a net profit of £4376 3s, to which has to be added £4959 0s 3d, making a total of £9335 3s 3d. Out of this a dividend of 5 per cent., absorbing £3000 is to be paid, leaving! £6335 3s 3d to be carried forward. The Company has done very well, notwithstanding that competition during the year has been very keen, while all stores together with freights and other charges have advanced considerably, thje income tax alone amounting to over £3000.

At Burnside, fat cattle exhibited an advance of 10s per head on the previous week's quotations. Prime bullocks £20 to £24 7s 6d, medium £17 toi £18 10s, light £14 to £16 ss, medium cows and heifers £12 10s to' £14 10s, light and inferior £10 10s to £11 15s. At Addington, extra prime steers made up to £30 10s, prime steers £19 15s to £26, ordinary steers £9 10s to £19, extra prime heifers £16 15s, prime heifers £15 to £16, ordinary heifers £8 12s 6d to } £14 10s, prime cows £17 to £18 2s 6d, ordinary cows £9 5s to £16 15s. At Feilding, fat bullocks made £16 17s 6d to £18 7s 6d; at Car-ter-ton, light fat cows realised £10 to £10 6s; at Palmerston North, £11; at Rangiotu, £10; at Levin, £9 5s to £11. At Westfield, the prices were: Steers £13 10s to £25 10s, cows and heifers £9 to £17 10s.

At Burnside, extra prime wethers made 58s 9d, prime wethers 49s to 545, medium wethers 42s 6d to 465, light wethers 34s to 395, extra prime ewes 50s: 9d, prime ewes 42s 9d to 465, medium ewes 34s to 395, lighter ewes 30s, fat hoggets 27s to 30s 9d. The prices realised at were: Extra prime wethers to 61s 6d, prime wethers 44s 6d to 51s, medium wethers 40s to 445, lighter wethers 35s to 39s 6d, hoggets 30s to 42s 6d. At Feilding, fat wethers made 39s 6d and fat ewes 28s 3d to 31s 9d; at Masterton, fat

ewes sold at 28s lOd to 31s; and at Pakiatua, fat hoggets realised 30s. At Westfield the prices were: Extra heavy prime wethers 46s to 52s 6d, heavy prime wethers 41s to 455,. medium to heavy wethers ,38s to 40s, lighter wethers 32s to 37s 6d, extra heavy prime ewes 40s to 43s 3d, good fatl ewes 33s to 375, others 27s to 325, extra prima hoggets 36s 6d to 41s 9d, prime hoggets 29s to 345.

At Addington, choppers sold at £5 to £8 10s, baconers at £4 10s to £6 15s, porkers 50s to 80s. At Westfield, large choppers and heavy baconers made £7 to £10 Is, small choppers and light baconeirsi £4 10s to £6 10s, large porkers £3 10s to £4 ss, medium porkers 55s to 655, small porkers 42s to 50s.

Investment shares continue very firm and brokers report brisk business. National Bank, buyers £6 3s; Bank of New 'Zealand (old) buyers £13, (new issue) buyers £18; Equitable Building, buyers £9; National Mortgage, buyers £4 4s; New Zealand Loan and Mercantile (ordinary 6toek), buyers £87; Wei-

lington Investment, sellers lis; Wellington Gas (£10), buyers £11: National Insurance, buyers £3 Is 9d; New Zealand Insurance, buyers £10; South! British Insurance,- buyers £6 6s 6dj Standard Insurance, buyers £2 4s j Meat Export (£5), buyers £4 17s 6d: Meat Export (52s 6d), buyers 47s 6dj Auckland Trams (ordinary), buyers 19a 9d; Huddart Parker (ordinary) buyers £2 3s 6d, (preference) buyers 20s 9d; P. and O. Deferred Stock, sales £425j Kaiapoi Woollen (ordinary), buyers £7 ss; Taupiri Coal, buyers 19s 9d: Westport Coal, buyers 30s 3d; Westporfc Stockton (ordinary) sales 8s Bd, (preference) sales lis; Kauri Timber (33s paid), buyers 295; Leyland O'Brien, buyers 27 s; Taringamutu Totara, buyers 19s 9d; Colonial Sugar, buyers £23 j D.I.C. (preference), buyers 20s; Golden Bay Cement, buyers 19s 9d cum dir.; New Zaalaijd Paper Mills, buyers 22s 6d; Wilson Cement, sales 14s.

Recent quotations for mining shares were: Talisman, buyers 9s 6d; Waihii, sellers 41s; Grand Junction, sellers 13s 9d; Westland Gold, buyers 30s.