FINANCE AND TRADE.

New Zealand Times, Volume XXVIII, Issue 6048, 5 November 1906, Page 9

FINANCE AND TRADE.

lIiNQITTKhII CO-OPERATIVE DAIRY COMPANY, LTD. ■Review of the Rangitikol Co-operalivo Dairy Company's (Ltd.) balnncoaheot for the year ended July 3bd, .“DOt!, the corresponding figures fort ha year iWi being within parent Hcccs: To-al asset*, £2077 (£2938). comprising buildings ami plant £2830. less written oil for depreciation £3lB, leaving £”>T2 (£2799); bills receivable, .£lOl (JSM7); etock of firewood on hand, £6O (nil). The liabilities includes— Capital paid rjp on 985 shams, £786 (on 000 shares £531); hank overdraft, nnpresonted cheques and accrued interest. £IBOB (.£2158); sundry creditor;, £Bl (£Bo);balunco of profit and loss account for the ycir 1000 was utilised in writing down buildings and plant. The credit balance was .£Ol7, us against £167 in 1005. Tlio profit and loss account I; thus stated:—Credits Balance from 1005. £)C7 (debtor ,CliGs); butter sold. .85010 (£6955); recoveries, rebate*, etc., £2f (£31); accounts owing for butter sold, nil (XT 17): lotal credits. J67W2 (£7135). Debits—Paid and duo to suppliers, £5490 (£1751); wage-s. including secretary and auditor, J)3 7.0 (.£300); firewood, X2JO (£UG); bank interest and charges, and office expenses, .£l3O (£177); working expenses, local cartage, butter boxes preservatives, etc., £4ll (£318); freight and cartage, commissions on butter, etc., £l7l (£881), Hit- balance of profit remaining (£317) was, as already stated, utilised for writing down buildings and plant. The balance in 1905 was £lB7. which was curried forward und included in the £317, The company Ims been flvo years in existence at the data to which tlio haw balance-sheet was made up, and the tliVector,:; make (ho following admission in tlio report attached to that balancesheet:—"Only £IOO lias been written off Uis depreciation on buildings and plant) since the formation of tho company." fortunately, the shareholders possessed an auditor wliu knew Ills duty, and was not afraid to discharge it; for wo find attached to ids certificate for tiic year 1805 a "tag” in these words:—‘Ta my opinion n I'onsonablo sum should be written off for depreciation of plant and buildings.'’ At tlio date of this gentle rebuke the Vfieet “buildings and plant" stood at £2701). and wo arc told by tho directors that £IOO had boon written off. Tho original cost, therefore-; wan £2BOO. If £IOOO of tide bo assumed to bo the cost of the buildings, und ,£IBOO the cost of tile plant, the amount which, in our opinion should have been written off up to July 31st, 1005, on tho basis of 7) per cent, for buildings and 10 per cent for plant, is close on £IOOO. Tbi,s. of course, takes for granted that tho Whole cost as above has stood from the formation of tho company. If. however, there have been material additions to buildings or plant during tho intervening period, the amount duo to bo written off would bo proportionately less. But, in any case, it appears to bo quite clear from the auditor's remark that the stun actually written off was unreasonable. Strange to soy, notwithstanding tho auditor's "tag,” the directors recommended that the balance of alleged profit, namely, £lB7 9s Id should be dealt with ns follows;—"That tho auditor be paid five guineas and tlio manager receive a bonus of £5, tho secretary a bonus of £3, and the assistant a bonus of £1 10s. Tho suppliers receive a bonus of Jd per pound on butter-fat supplied during last season." r ln olecting'to ignore tho auditor’s "tag” the directors accepted a gtave , responsi-. bility which on reflection'appears to have lone homo to them, for we find in tho report for the following year this para-graph:—'-'ln accordance ■' with the expressed wish of the auditor, your directors i decided to write off the whole of tho profit for the year, ns depreciation on the buildings and plant." The amount stated as profit for that year was £317 Ids 3d, which was written off, and the directors are to bo commended for oven this tardy recognition of their duty, but the fact remains that the previous year’s alleged balance of profit was distributed in faoo of tho auditor's warning. We are confident that with his intimate knowledge of the actual figures and position of tho company, ho would confirm our opinion that sufficient has not yet been written off by some hundreds of pounds. It is an easy matter to make largo distributions by refraining from attending to the proper pruning of assets. of a vanishing character.... . It is satisfactory to note that the paidup. share capital of tho company hie increased, and that .the liability , to. the bank has been reduced more than correspondingly. This company Is another instance in which inadequate information is famished. ■ Whilst for the year 1905 the quantity of milk supplied, the average. test, and the total butter fat produced, were given—as is the practice with every well-conducted company of the kind)—these essential particulars are conspicuous by their absence in the report for -tho year ended July 31st, 1906. The quantity of butter made and the overrun are, however, given, and from these figures we have managed to arrive approximately at tho quantity of milk received, butter fat produced, and average quantity of butter fat per 1001 b of milk, but wo have had to assume that tho milk was of the same quality os in 1905, when it took 25.5461 b to make one pound of butter. .The. first three items fn the first column of tho subjoined table of results are for the foregoing reasons approximate:— •lone -ions

It will ho scon that whilst in tho case,of tho Rangitikei Co-op, tho average pricereceived for butter v>n& about Jcl. per j pound le*s. this was more- than made up , m the smaller cost of market inf? tho but-1 tor and taking the average cost of manu-i i'acturing and marketing together, tho nercOiiUigo in tho ca.se of the Jiangiti/coi ; (Jo.-op. war, only 1.5)12. as against 3.431 forth© Apiti Co.-op., or about lid per pound: in favour of tho former company, tho netj result being also to tho advantage of the. Kangitikei Co.-op. to tho extent of about Ul per pound. The lower cost or marketing in the case of tho Rangitikei Co.-op. anpears to bo duo to the fact that in 100 G tho butter wae disposed of locally, whereas in 1005 there wore shipments to London. Aa wo havo already pointed out in these columns it should not be the aim of tho suppliers, who are also shareholders, to bleed the company for the last farthing of profit, but rather to see that depreciation of their assets is adequately r provided for, so that in the event of a rainy day they may find that their capital has not vanished. GOVERNMENT SECURITIES. Tim financial crisis in London has been gradually becoming more and more acijto •Wing the past few week*. Heavy Boldms of investment stock havo no doubt b.H'ii compelled to realise, while smaller holders havo probably shown increased t desire to quit the lines most affected by i tho slump. Tile fate of the South Australian conversion loan has already been j commented on in our columns, and the j Premier of Victoria has accurately diagnosed tlio prospect in regard to his own j State's conversion Io«T* of four million i pounds bv instructing the Victorian Agent-General in London 'to inform, bondholders that the Government m • pre- ( pared to purchase the stock now it the holders give consideration in the way or discount." The Victorian Premier is evidently alive to the acuteness or tho financial situation in London and sees in the difficulties of the underwriters—who are probably still the main holders of his bonds—an opportunity to make capital out of their necessity. Being himself in the comfortable position of having made independent arrangements tor tlio payment off of the loan from this isido at maturity, ho appears to be bent on extracting a big discount. It is an ill wind that blows nobody any good.; In view of the general gloom m Eondon it is satisfactory to note how well all Australasian Government securities have maintained values during the trying period. Tho following table si lows the middle prices of Consols and Australasian Government securities for the four weeks from October 6 to October 27. also the open market raje and the Bank of England rate during the same period: 1

Jtiamc rare a o The improved outlook is reflected in a rise of ss. in that sensitive financial barometer Consuls, which were cabled on the 28fch inst. as standing at .£B6, whilst the open market rate for three months’ bills is 5| per cent., or 7-16 d higher than the rate cabled on the 27th inst., seemingly indicating- that although • the gravity of -tho situation at the Bank of England has been momentarily relieved, tne tension in tho open market remains severe. THE WOOL INDUSTRY. Some remarkable figures were published in a recent i&suo of the "Sydney Morning Herald," from which it can at once be soon who are Australia's beat customers so far as wool is concerned, and how much of the staple went into local consumption. The -figures are for tho last two seasons. 1905-6 and 1904-5 1

The quantity of Australian wool exported' to the United Kingdom fell'in one year 1 per cent., whilst the quantity taken by foreign countries (excluding Japan and China) increased by 7 por cent, of the whole output. There are. therefore, not only clear indications that the wool market is being transferred from London to Sydney and Melbourneto which point the best buyers now migrate, and where British Travers are outbid by foreign—but the destination of the wool is being changed to foreign countries. The irresistible conclusion to be drawn from the figures published by our Sydney contemporary is that the great wool-buying centre Bradford will in the counse of time—perhaps not very many years honce—be superseded; and the question is asked—Who will owp tho ships that will then carry away the wool? THU WHEAT MARKET. A week ago cable advices from Loudon were to the effect that cargoes were steady. April offering at 30e. and August at 30s 9d, whilst for parcels afloat the quotation was 28s 9d to 20s. On October 20 the English market was less buoyant, owing to the visible supply in America and large stocks at Russian ports, with little change in prices. Australian now crop —all ports January-Eebruary—were quoted 29b 10id, and South Australian De-cembor-Jannary at SOs. lid. Cargoes were quiet. 31s. 6d. being asked for South Australian Auguet-September shipment, and 30b. Sd. for Victorian January and February shipment. Tl>6 latest advices (October 27) aro that the lighter estimates of tho crop in the North Western states had steadied tho American market, and that cargoes were in little demand. Quotations wore:—South Australian September shipment. 31s ; all Australian’ports January-Eebruary shipment. 29s 9d; and Australian spot, which was slow of sale 31.* to 31e 6d. The New Zealand wheat market was flat, short berry being quoted 28s to 295; long berry 29s to 30s. Tho American visible supply of wheat east off the Rocky Mountains is estimated at 64,536,000 bushels. The Board of Trade return for August shows that whilst the imports into tho United Kingdom of wheat from Australia have been well maintained, those from New Zealand show a considerable falling Off tho value in August being £3OO only, as’against .£34,685 and =£25,121 for the corresponding month of 1905 and 1901 respectively. As a set off, however, the value of frozen mutton imported from Now Zealand increased from .£338,560 to ‘M-,1 nos and of wool from £292,143 to ~£368,275.’ __ THE MEAT MARKET. From Messrs Weddell and Co.'s market report of 21st September, 1906 we are able to prepare the following table showing the total number of carcases of frozen mutton and lamb and quarters of beef imported into the United Kingdom during the three weeks from September Jet to September 20th, and for the eight

"Including chilled. THE BUTTER MARKET. The London butter market is dull. Danish being quoted at 1235.. a fall of 2s. since September 22nd,but an improvement of Is since last week. Colonial butter is quiet, with 116 s as top price for salted and unsalted. and from 1120 to Ills as the best price for the bulk of Victorian and New South Wales. Seeing that choicest Victorian and Now South Wales were quoted a week ago as high as 116 s, and Queensland unsalted as high as 118 s, the mild weather being experienced and the high prices reached have had a depressing effect upon the market. since all colonial butter was in strong demand a month ago with a hardening tendency, especially for unsalted.

Sept. 29. Oct. 27 £ 8 £ & Consols, 2i p.c. ... 86 10 85 15 N.S.W.. 4 p.c. ... 108 10 109 0 N.S.WV, p.c. ... 08 0 98 10 N.S.W., 3 p.c. ... 86 0 86 0 Victorian, p.c. ... 105 0 105 0 Victorian. 31 p.c. ... 09 0 99 0 Victorian, 3 p.c. ... 88 10 89 0 S. Australian 3i p.c. 100 0 100 0 S. Australian, 3 p.c. 87 10 , 86 0 Queensland, 4 p.c. 105 10 105 10 Queensland, 31 p.c. 99 0 ■ 98 0 Queensland, 3 p.c.... 86 to 86 0 N.Z.. 4 n.c. ... 107 10 103 0 N.Z.. 34 p.c. ... 100 0 100 0 N.Z., 3 p.c 89 0 88 10 W. AustrTn, 31 p.c. 100 0 97 0 W. Austr'ln. 34 p.c. 88 0 86 0 Tasmanian, 31 p.c.x; 99 10 99 10 Tasmanian, 3 p.c. ... 89 0 89 0 Per cent. Percent Open market rate 4 5-16 5 5-16 Bank rate 4 6

wo seasons, iuuo-o an a i3U§-D "05-6 '04-5 Per Per Bales. cent. cent. United Kingdom 379,850 28 29 Continent 766.469 57 50 United States America and Canada 83,676 6 8 Japan, China and India. ... Local manufacturers, fellmongors, and speculators 11.033 1 3 113,897 8 10

1806. 1905. lbs. lbs. JMilk received 4,177,843 3,631.117 Average tort Butter fat produced 144,727 3.93 1-12,137 Actual average per 1001b3 of milk 3.46-4 3.914 Butter made 163,542 160,321 Over-run per cent, of butter fat 18.000 12.732 Milk to one pound' Of butter ... _ ... —■ 25.546 Pence. Pence. .Average prtco _ received for butter 10.198 10.640 Average coot per lb of manufacture ... 1.66-1 1.403 Average cost per lb 1.320 of marketing 0.218 Average cost per lb ox manufacturing and marketing 1.912 3.723 Average price netted per lb of butter sol d 8.286 7.917 Average prfoe paid per lb of butter fa t 8.833 8.022 For the purpose of comparison. wo also trlvo tho following table, which includes the working results of the Aniti Cooperative Dairy Company, reviewed in our issue of 24th ult*. the figures in each soeo being for the year 1906 only: — Bangitikei lbs. Apiti. lira. Milk received 4.177.843 5,560,341 Average teat — 4.120 Butter fat produced 144,737 216,431 Actual' average per lOOlbs of milk 3461 3.802 Butter made' 163,543 242,919 ■Overrun per cent. of butter fat 13.000 12,243 \Iilfc to lib of butter — 22.889 Ponce. Pence. Average price received for batter ..... jlO.198 11.055 Average cost per lb 1.66-1 of manufacture ... 1.943 Average cost per lb 0.248 of marketing 1.488 Average cost pot lb of manufacturing 1.913 and marketing ... ‘3.431 Average price 8,286 netted per lb 7,624 'Average price paid per lb pf butter assa 3.463

months fro n January 1st to August 31st, 1006: — An™ -New River IrriJia, Zealand. Plate. Jan uary 94,031 43,223 2,6,5.54 t cb i'lnry 91.4(7 41,054 166,3:-.l .March S7.06G 112,367 180,253 April ... 51,137 230,112 213,144 May ... 3.-!,073 1,180 177,673 241,517 274,095 264.0)3 July 11,037 232,318 323,922 August 22.1>-;3 285,617 2,2,067 Total for mouthy 8 •190,069 1,366,510 1,961,362 Tor 3 weeks e n d t d hi o p t e ruber 20 ... 31,022 75,032 333,960 - “ — ‘ Gran total a 131,09! 1,141,572 2,165,338 I! a t i o o f lota) for 3 countries 10.03 35.70 53.63 Frozen Lamb—C lus•Sew River tralin. Zealand. Plate. January 312,758 3,020 12,627 February ... 204,6-18 03,349 10,951 March ... 159,722 181,379 17,778 April ... ... 128,401 370,873 13,91)9 May ... 47,100 401,236 28,622 Juno ... 11,169 -184.633 11,333 July ... 4,738 349,171 19,280 August... ... 2,558 355,001 2,325 Total foi 8 116,961 months 871,0343,178,777 For 3 weeks ended Sept. 107,847 20th ... 3,561 984 Grand total 871,653 2,286,624 117,9-18 Ratio of total tor 3.60 3 countries 26.67 69.73 Frozen Beef—Quarters. . Aus. tralia. Zealand River Plato" J annary ... 3,851 1.020 160,902 February ... 6,126 1,131 142,584 March... ft? June ... ;;; 358 481 3.188 14,169 140,688 175,561 * 243 11,907 11,583 168.131 155,081 July ... — 23,287 161,003 August... ... 3,000 16,160 113,223 / ( Total foi 8 1,318,977 months 13,058 82,773 Tor 3 weeks ended Sent 130,763 20th 1 9,297 Grand total 13,063 92.070 1,318.810 Ratio of total for 6.33 c.billArb 93.77 8 countries .90 -nr>ln rlin o