CONDITIONS IN AMERICA.

New Zealand Herald, Volume LXIII, Issue 19303, 16 April 1926, Page 15

CONDITIONS IN AMERICA.

BAN ON BAKING COMBINE

MOTORS ON TIME-PAYMENTS

The market letter of Messrs. John Dunn, Son and Company, of New York, dated March 8, states that notwithstanding some hesitancy in certain lines, trade continues very active and the volume of business is only slightly less than in recent months and well beyond what it was at their time last year. Most industries are well supplied with orders that will ensure a continuation of the present rate of production until well into the spring months. The recent collapse in quotations of speculative shares should be construed as a favourable development, as prices for many issues h,-id been manipulated to absurdly high levels. The fact that the Government refused to permit a projected combination of four important railroad lines was in some measure responsible for the recent liquidation on the Stock Exchange. As it is known that the present administration is favourably inclined toward such combinations, it is probable that the terms of this particular transaction were unsatisfactory rather than that the principle of railroad combinations was not approved. The Government has also enjoined a proposed merger of the most important baking companies in the country having a combined capital of £200,000,000, on the ground that such a combination would be a monopoly with power to regulate the price of bread. The settlement of the coal strike early in the month and the passage by Congress of a bill modifying income and other taxes to an extent that will save 'he taxpayers some £80.000,000 during the present year were the most important developments of the month on the constructive side. The reductions made will amount to 20 to 30 per cent, on small incomes, and in the cn.se of surtaxes on very large incomes will call for payments some 50 per cent, less than last year. The tax on corporation earnings is increased from 12j per cent, to per cent., but the capital stock tax is to he abolished entirely,; which will compensate for the slight advance. The production of automobiles shows no signs of decreasing, the output for January having been 4 per cent, more than for December, and 38 per cent, above that of January, 1925. The General Motors Corporation showed net earnings for the year 1.925 of £23,000,000, equivalent to 20.99 per cent, on the ordinary shares after charges and preferred dividends. During the past seven years sales have aggregated £760,000,000, of which over £200.000,000 was financed on an instalment basis. The losses in respect to this latter business amounted to only oneseventh of 1 per cent, In contrast to the prosperity of the automobile industry may be mentioned the fact that the Pacific Mills, one of the world's largest producers of cotton and worsted goods, passed its dividend on the ordinary shares. This is the first, omission since 1883, payments having been regularly madfi since that time at varying rates up to 12 per cent, per annum.