AUCKLAND GAS COMPANY

New Zealand Herald, Volume LVIII, Issue 17700, 8 February 1921, Page 6

AUCKLAND GAS COMPANY

MEETING OF SHAREHOLDERS. COAL SHORTAGE DIFFICULTY. The fifty-ninth annual meeting of ' the Auckland Gas Co., Ltd., was held Testerday, 35 shareholders heing present. The chairman of directors, Mr. J. H. Upton, presided. In moving the adoption of the report and balance-sheet, a precis of which was published in the Herald on January 29, the chairman stated that the past year had been a very difficult one for managers of gas companies, the chief difficulty being that of coal supply. .. " We draw our supplies from the West Coast mines of New Zealand, and from the Maitland coalfield of New South Wales," he said. " Due to & variety of causes, there has been a progressive shrinkage in output from both these sources, although there are ample reserves of unmined coal, with the result that the supply is not equal to the demand, and we are experiencing a shortage which was never more acute than at the present time. "As you are aware, coal users no longer are free in the matter of supply. If they were fortunate enough to get shipments- they could not be sure tha* the coal would be available for their own purposes. There is a department known as the N.Z. Coal Control Department, which 'rations' all coal, whether produced locally or not, and takes from him that hath and gives to him that hath not. The department works through a local committee, which is supposed to allocate the coal in the best interests of the whole community, and I fear that but for the local knowledge of the committee our company would sometimes have been at a loss to get its claim represented at headquarters At the same time, I must freely admit that the department has always shown itself ready to help ns when at our last gasp, but that is just our difficulty, that we have so often been allowed to get to the last gasp! The fact is that the department does not seem able to appreciate how large our requirement* are, and that We require more coal than any other two gas companies in the Dominion. Problem Must be Paced. "The root of all the trouble is the diminished and diminishing output of the be any better off with perfect freedom of °°, Ion £ M . s *PP!y is not equal to demand, the operations of the Coal Control Department should be continued, in 2k L u * he more industries should have preference in supplies. We nave not received quite as much preference as we think should have been accorded to us, with the result that we have suffered more from coal shortage than any other large gas company in the Dominion. In the interests of the Dominion the problem of declining coal supplies must sdoner or later be resolutely faced and solved. The importation of coal at immense cost from countries many thousends of miles away is only a temporary palliative, and cannot long continue. When the problem is solved, freedom of action will eome again; Jo continue in departmental leading strings is more than common sense or liberty can contemplate with any satisfaction. / "It haa been said, why did the Gas Company not accumulate a stock of coal? Well, we had a stock of 14,000 tons at the outbreak of war, but we carbonise 70,000 tons a year, and our few thousands of tons soon were exhausted, and we have never since been able to get in more than two or three weeks' supply. The other serious question has been the demand for higher wages, which has been reflected in the price of gas, but, while unfortunate, it does not involve stoppage of manufacture. Greater Cost of Less Coal. "Coal has cost £32,027 more than last year, while we have carbonised 2120 tons less in quantity. Labour has cost £21,878; move than 1919, and rates and taxes are increased by £4573. These items make up the chief excess of costs, though everything we touch or require costs more. Gas pressuro has had to be Reduced at intervals thrdugh the year, and once we were shut down for 14 days* together. This has caused endless trouble and annoyance. as well as loss to our consumers, while to the company it has resulted in making the sale of gas 45,000.000 c.f. less than it would have been had there been no periods of reduced pressure and total stoppage. " We have thus lost revenue from this quantity of gas and the corresponding quantity of coke and residual products, while for the period of stoppage our labour and other charges have only shown a very slight corresponding reduction. "It is satisfactory, however, to report that the demand fon, gas.' is as brisk as ever: Consumers have increased in number by 978, the highest increase since 1915, while the sale of stoves has increased by 1657, making a total sold of 12,666 and on hire ,3829. Profits and Dividend. " Our total receipts on, working account amount 'to £368,745 8s lOd and expenditure to £321,222 16s lid, leaving a profit of £47,522 lis lid. As the dividend re quired is £55,314 3s Bd, there is a deficiency of £7,791 lis 9d, but as we have a balance at profit and loss that need not disturb us. You may ask why should there be a deficiency ? I mentioned to you when Jast we met that the object we kept constantly in view was only*' to make as much profit as would pay the dividend. Income tax, 7s 6d in the £, with 8s 9d in prospect, makes one cautious, but at times like these it is very difficult just to hit the mark. What really happened was thut we delayed raising the price t\so months too'lohg. " We started the year with a greatlyaugmented wages bill as the result of an agreement under the Labour Disputes Investigation Act. On the top of this' w© have paid bonuses in accordance with Arbitration Court decisions from May 1 and November 1, although there was no legal obligation to do eo in the case o"f workers, covered by agreements. We have had to meet rising costs of coal and freight, and of, in fact, everything we use, and, in addition, we have had to purchase considerable quantities of very high-priced coal in our endeavour to keep up a continuous supply of gas. Prospects o! Seduced Price. *' To meet these increases we have had to. increase the price of gas, but we.think that something In the way of reduction may be possible later in the year if the coal position does not ■ get worse and there is no further "rise in wages. " T*" s j year-'s" capital expenditure amounts .to £36,861, which made a call necessary; the call (2s 6d) was mad© for January 31. The total capital expend dlture to date is £953,868. - " I cannot conclude without calling your attention to rates and taxes, £34,663 4e 7d, an increase of £4573. and that is not the end. Surely responsible people will realise some time or other that the large and increasing exemptions of public properties and activities render the burden to be borne by private enterprises more and more grievous. But this is a great and difficult matter of policy, and here I can do no more trrftfa refer to it and point out how it affects this company." The report and balance-sheet were tdopted without discussion. The two retiring directors—Mr. Thomas Peacock and Dr. T. W. Leys—were unanimously re-elected on the motion of Mr. George Elliot, seconded by Mr. A. Osrk. Mr. J ; P. Buddie and Mr. W. W. Bruce were re-appointed auditors at the present remuneration of £75 a year-each, A vote of thanks to the directors and staff was moved by Mr. V. J. Larper They hadL had to face; many ' difficulties, he said, and it was only fair to tell thpm that their efforts were appreciated Mr. Upton replied on behalf of the directors, and Mr. James Lowe, manager, and Mr. W.. F. Stewart, behalf, of the staff. f; The chairman announced that the dividend will be paid to-day. - ;