HUGE EXPANSION

New Zealand Herald, Volume LXXII, Issue 22210, 10 September 1935, Page 5

HUGE EXPANSION

BROKEN HILL PROPRIETARY INTENTIONS OF COMPANY ACQUIRING WIDER INTERESTS Iho Broken Hill Proprietary Company, Limited, Melbourne, is entering on a huge scheme of expansion involving the extension and improvement of ironstone properties, collieries, steelworks, equipment, shipping services and electric-power plant and the establishment of a tinplate industry. As stated in the Hkram) on August 31, the company is increasing its capital, 1,493,854 shares of £1 each being offered to shareholders at 30s a share. With referenco to tho announcement that the next interim dividend would bo at the rate of Is 3d a share (against Is), the directors state "they sco no reason at this stage why tho rate should not be maintained."

Speaking at tho annual meeting in Melbourne, Mr. H. G. Darling, chairman of directors, said that with tho ever-increasing flow of orders the company'was approaching the point whero a great deal more capital could be used, not only to handle tho increasing volume of output, but also to manufacture new products, principally tinplates. Investigations into tho tinplate industry had been carried out by tho company's officers in various parts of tho world and tho company was now in a position to start on tho work of establishing this industry. Developing Gold Area

Mr. Darling enumerated many avenues 111 which tlio new capital would lio used. Ho said that there was also a possibility that the company's mine at Broken Hill would bo reoponcd in the near future. Prices of base metals wero still low, but tlio position was receiving tho careful consideration of the board.

The company had been testing a large alluvial gold area on the Macquario River, near Wellington, for some time. Tho chairman announced that tho company's mining officers, supported by outsido advice, believed tho working cf this ground should prove remunerative and that accordingly a company would bo formed to dovelop the area. / "Conversations aro at present proceeding as a result of which it is possible that tho company may acquire tho wholo of tho ordinary shares m Australian Iron and Steel, .Limited, ill exchange for a parcel of our shares, said ifi". Darling. "Shares issued for this purpose will definitely not possess any rights in connection with the new issue of 1,49H,854 shares. Tlio benefits of such an arrangement will bo mutual, as it will prevent unnecessary duplication of plant and effort. Progress ol Subsidiaries

Mr. Darling referred to the progress of subsidiaries and said tho company bad increased its interest in Australian Wire Hopes, Limited, and the Commonwealth Steel Company, Limited, and it had acquired Bullivants Australian Company Proprietary, Limited, the selling agents of the Australian Wire Ropo Company. On the motion of Sir Lonnon Raws the total remuneration of soven directors was increased from £o~(HJ to 4-7000.

NORTH OTAGO FARMERS

IMPROVEMENT IN RESULTS The net profit of the North Otago Farmers' Co-operative Association, Limited, for the year ended July 31, was £3282, tho best return lor nine voars and an increase of £6lB on tho 1933-34 figure. The debit in tho profit and loss appropriation account has been reduced to £4515. EXCHANGE RESTRICTIONS effect on business An aspect of the currency stabilisation problem that has received little attention, tho uncertainty caused by exchange restrictions, is .discussed by the London Times. Last year sterling suffered a depreciation in terms of gold of about 10 per cent and this depreciation tended to restrict trado still more between the sterling group and the gold bloc, tlio article states. Recently sterling in terms of the principal exchanges has shown much greater stability. But even if this stability wero maintained tho problem of thoso engaged in international trade would still bo unsolved. It is not merely the sharp fluctuations in the exchange rates which aro so disturbing to business; equally if not more important aro tho delays and tho uncertainty of payment. Sometimes payments aro not received for several months aftor tho debts aro due. Further, restrictions on remittances tend to increase rather than to diminish. Those engaged in international trado know to their cost that at any moment a Government may impose some fresh restriction on foreign payments. Thus traders desiro tho removal of exchange restrictions as much as stability of rates.

LOW SHIPPING FREIGHTS

EFFECT ON DEPRECIATION The effect of low freights on the shipping industry is discussed by the London Times, which states that for years many owners have not found it practicable to write down tho values of their ships to any figures approaching tho prices which would bo bid for tho vessels in the market. As tho values of ships normally declino with tho passage of years, provision for depreciation should bo mado out of freight earnings as a matter of course. Such allocation of earnings provides, in ordinary circumstances, tho means of replacing the vessels when, in tho passage of time, they become out of date. Yet such has been the low level of freight rates that they have often been inadequate to cover even the actual expenses necessary for making tho voyages, without allowing anything for tho proper writing down of tho values, quite apart from yielding any interest on the capital. So long as such a state of things exists British owners cannot afford to relax their efforts to try to restore the state of tho industry to a condition in which exponses shall be covered, provision shall bo made for depreciation, and interest shall bo earned on the capital.

SHEEPSKINS IN LONDON The following was the range of prices at the London sheepskins sales last week, according to a cablegram received by Dalgety and Company, Limited, from its London house:—Merino, threequarter to full-woolled, 7i|d to lid per lb.; quarter to half-woolled, 4}d to B.jd; fino crossbred, threequarter to fullwoolled, 73d to lOJd; medium and coarse crossbred, threequarter to fullwoollcd, 7lei to lOJd; fine crossbred, quarter to half-woolled, sjd to BJd; medium and coarse crossbred, quarter to half-woolled, 5d to crossbred, short and shorn, 4Jd to 6idj lambs, Cd to 9Jd.