TAX ON SHARES

New Zealand Herald, Volume LXXV, Issue 22963, 15 February 1938, Page 7

TAX ON SHARES

MELBOURNE DISTURBED DECLINE IN BUSINESS ARBITRAGE DEALING LOST Til addition to the general easiness which has affected Stock Fxchange business since the New Year, trading on the Melbourne Exchange has 'been extraordinarily quiet. One of the principal reasons for these conditions is stated, to be the virtual cessation of arbitrage dealing as a direct result of the new stamp tax. Arbitrage dealing, which is not confuted to securities, consists of bu.ving in centres where values are relatively cheap and selling again in centres where dearer lovely prevail. Such operations, which are worldwide, could, until the imposition of the new Victorian tax of 6d in £lO on transfers, be carried out on very fine margins in Melbourne. Its elimination is claimed to bo having an adverse effect on the market, although there is a section of opinion which considers thin aspect is being exaggerated by the Melbourne brokers. One stockbroker, in emphasising the decline in business in Melbourne, has suggested that the tax, if it is to be retained, should be administered as in New South Wales, where the stamp duties become payable only when the share is actually transferred at the companies' offices. ' The premier, Mr. A. A. Diinstaii, in replying to criticism, said the object of the new stamp tax on marketable securities was to extend the field of taxation. Before the tax was introduced the stamp duty on transfers of real estate was too high, he continued. This impost had been reduced under the new Act, because the Government desired to encourage people to buy their own homes. The Ministry's action in effecting this provision in the Act, which imposed the tax on shares, had been approved generally. The Victorian tax, \ per cent, was much lower than that in Britain, which was 1 per cent. In Britain, £'20.000,000 was received from the tax each year, and there was no criticism.

CARRIER AUSTRALASIA \ . LOSS SHOWN LAST YEAR RESULT OF TRADE DIVERSION Preliminary figures of trading of Carrier Australasia, Limited, Melbourne, for the year ended December 31, 1937, indicate that it will not be possible to declare a dividend, and aggregate results point to a considerable loss for the year, according to a statement issued by the directors. Against this, however, is the credit balance brought forward from 1936. The annual meeting will be held at the end of next month. The dividend in 1936 was 10 per cent. "There , were considerable orders in hand in May, and other valuable contracts seemed imminent, but the smooth and profitable working of the' business was interfered with to a con-siderable-extent by the trade diversion policy of the Federal Government," the directors stated. "This created difficulties relative to the importation of necessary parts and equipment from America, and thereby threw additional cost upon the company to an extent which could not then bo foreseen. "Our new factory will be ready to undertake production in two months' time, and a favourable revision of the Commonwealth policy is shortly anticipated. Delays and disappointments of the nature suffered for some time should then be past. Several contracts which the board had reason to anticipate would be secured by the company in the latter half of the year were delayed from various causes, and ultimately two at least of these contracts which wero substantial were secured by competitors. "With the completion of the factory," the directors' statement adds, "the directors believe that the company will be well placed to operate at a reasonable profit. With the company's present technical knowledge and equipment it is in a position to give absolute satisfaction to its customers. The board is satisfied that the present financial position is sound, while the outlook for future business is good. The contracts hooked in January, 1938, were more than double in value those , of any other January."

THE PRICE OF STEEL

REPLY TO CRITICISM PRODUCERS' POINT OF VIEW Sheffield steelmakers strongly resent the criticism that is being levelled against them by certain producers on the question of price, according to Engineering. Air. Lewis Chapman, managing direci tor <>[ William Jos.sop and Sons, ! Limited, Shoflield, says:—"Our critics have apparently forgotten the depression of the steel industry over a long period of years, when users dictated the price policy. They have forgotten that during those years prices were uneconomic, and in many cases were below actual cost. They have minimised the concession liuulo by tlio steel industry to the coal industry to maintain peace, and have made no allowance for the steel industry having restored a sound basis out of past chaos. All these increases in cost liavp made the moderate increases in steel prices reasonable. It is regrettable that tlys industry, which has kept itself on its feet through a long period of depression, should now be subjected to criticisms and attacks on the part of users in certain other industries which have been in a more fortunate position." The flow of orders in both the steel and engineering trades has been well maintained. Steel-producing sections arc operating to capacity, but cannot, supply enough steel to go round. Orders are steadily accumulating. Business is brisk in all types of machinery. Crushing equipment is on order for export, while there is a strong inland demand for concrete and cement mixers, and light types of crushing machines used in connection with road construction. AH kinds of special steels are in demand. Tool works are butv, while the light foundries are accounting for record outputs.

PERMANENT INVESTMENT CANTERBURY ASSOCIATION Net profit of £O7ll is shown in tho accounts of the Permanent Investment and Loan Association of Canterbury foT tho year ended December 31. The amount compares with £'4919 last year. Dividend is maintained at 4J per ceiit, requiring £4500. A transfer of £SOO \ra| s made to the reserve fund, leaving to Ih> carried forward, against £B3l> brought "into tho accounts. The financial statement shows receipts from mortgages, inscribed stocks, and debentures repaid at £11,894, deposits at £57,012, and interest at £8197. ? ho . Payments loans took 7?'*;'?> ( deposits £54,657 and dividends £4500. Expenses of management were £l4ll.