NORTHERN STEAM CO.

New Zealand Herald, Volume LXX, Issue 21506, 1 June 1933, Page 7

NORTHERN STEAM CO.

REVIEW. BY CHAIRMAN RAILWAV EIOARD'S METHODS QUESTION OF DEPRECIATION The s'2n.d annual meeting of shareholders of the Northern Steamship Company, Limited; was held yesterday, Mr. A. 'l3. Roberton, chairman of directors, presiding. Detail:? of tlie accounts of the company for the year ended March 31 were published in the Herald on May 29.. Before ;;oing into details of these Mr. Ro'bcrton referred to the loss both the company and the community had suffered by the :leath during the year of the company's late chairman, Mr. Charles Rhodes, who had served as a director for 13(1 years. The directors had placed on record a minute of appreciation of his service to the company. "The results of the company's operations for the past yeur are similar to those of other shipping concerns," stated Mr. Ruberton. "This year many oif the largest shipping companies in the world have made losses, and the shipping business, in the Dominion is no exception. Shipping companies are particularly affected inasmuch as it costs a.» much to send a ship to sea half * cwipty as fully loaded. Although the decrease in tonnage carried by our fleet ?K largo we appear to hare obtained our fair share; of what has offered. Exchange and 53lies Taa: "Laiit year our late chairman said '!he directors thought there were signs of improvement, but circumstances have occurred which have not allowed this to continue. With the imposition oi: the 'ls per cent exchange last year and the sales tax this year, both importations and sales of goods have received a sc ere check, in addition to the already lower price:i being received by tho primary producers. Though tho exchange w£.s raised primarily ,to assist the producers, it is certain that they got very lit tie advantage this last season, owing to the bulk of the produce having been shipped before the rise. "Shareholders are fully aware of the long sustained claims of the trading community that their operations should be freec! from State interference, and that if Sta'ie trading departments aro to be c-ontinued they, should be subjected to tie same taxation and conditions as; are imposed by law on pri-vately-owned concerns. No relief ha 3 been given,, and apparently emboldened bv tho fact that the Government lias not. mo red in the matter the Railway Department has in one way or another violated nearly every law lad down by statutes and regulations for trading • concerns, and every principle of fair trading and sound trading. Surely the recently created Railway Board cannot be aware of the tactics employed by thei department, or they would not tolerate them. One example will suffice—the giving of special ratei; and privileges to favoured individuals and districts which are not offered to others..

Wages of Seamen "That ve are not singular in protesting against the Railway Department methods of doing business is shown by, th=. intention of the various liarl>our boards and other shipping companies to meet in conference and expose the fallacy of the department's claims that it is acting in the interests .of ';hf; whole country. "Owing to the Government practio ally closing down all public works iin. the country districts, a gres,t deal of freighting was lost 110 us. Bridge and road material ceased to be shipped and many men in these districts- were put out oi : work. ' The seamen's agreement expired ia August list. Up to that date these workers had enjoyed full wage's when all oi:her workers ha:l received a reduction of 1(1 per cent. Some other unions had even accepted a further 5 per cent cut. On- the basis of the cost of liviiag figures laiit August the shipowners were (?nl/itlcd 1;o a- 20 per cent reduction in seamen's wages, but were prepared to compromise at 15 per cent.. After six months' deliberation,-, without being a'ble to get 7 a : final agreement, new workiiag conditions, as agreed to with the union's executive council, -vrere put into force on May 1. The men, declined to accept these conditions an,d went on strike, causing considerable losa to the. shipowners, to say nothing of disorganisation of urade. "When it is considered that the se*a~ men of New Zealand are the highest p?.idl seamen in thn world to-day, and tie employer provides food and accommoclation, there wai, no justification for this hok'-np. We feel our men went out unwillingly."

y Value of the Fleet Dealing with the balance-sheet, the chairman said_special repair work done djring the year i-hould considerably lighten for :;;ome time* the cost of annual overhaul of the vessels concerned. The increasing of the exchange rate, together with the sa.les tax, had added' materially to the cost cf running vessels. TLat had conve as an additional burden at a, time when the company had to help the position for the primary producers and retain its business. Investments and deposits by subsidiary companies had each been reduced. From time to time advances had been made to a, subsidiary, which were treated as a. fixed loan, while the subsidiary deposited its surpluses from time to time with the company. As the full lor:n would not now be required by the subsidiary the deposit had been, transferred in reduction of its loan account. Depreciation of the fleet was a very difficult matter to adjust and provide for. While a vessel was in commission md earning a profit it provided for its own depreciation, but the moment its trade became unprofitable and it had to be laid up, it, of course, became a charge on the earnings of those vessels still in commission, until it was either rccomnissioned or sold. When sold a vessel rarely reali : ed the sum at which it stood in the hooks after years of reasonable depreciation, and the balance remaining hfid to be written off. Assets of Company There was a substantial reserve fund in insurance accounts which was available for augmenting the appropriation for depreciation from time to time. A survey of the whole assets of the company "disclosed that if the non-commis-sioned portion of the fleet were written down to zero there would still be sufficient value in the remaining assets to leave a substantial surplus over liabilities. including capital. That opinion was based on valuations considered reasonable to-day for a. going concern, but it was impossible for anyone to judge how ! far those valuations might be affected by future conditions. Regret was ■ expressed by the -chair* man: that no dividend could be recommended this year, but the advisability of strengthening the position of th«* company against possible further economic disturbance made the paying of a dividend out of reserve inadvisable. As to the future, it was useless to try to state dogmatically what was in store, but given a return to 1930-31 tonnage figures, it was b«slievecl there wan still a gooc! future for the company, although iib. would take somo l ittle time for trade to recover. T,U(; report and balance-sheet were adopted. The retiring .directors, Messrs. E. W. Evans, E. H. Rhodes and A. 4* Hutchinsoli, Weir! re-elected.