National Mortgage and Agency Company of New Zealand, Ltd.

NZ Truth, Issue 578, 15 July 1916, Page 4

National Mortgage and Agency Company of New Zealand, Ltd.

Report and Balance-sheet to Soptomber 30, 1915

It Is now three years since "Cambist" reviewed the above company, and a« the war has forced its loathsome influence on everything connected with finance and business, this writer turned to see how the, company has fared under the brutal conditions of the age. When the accounts for September, 1912, were dealt with m these columns, the tone of the chairman was particularly buoyant and cheerful. At that time the company had scored many records m its business and all concerned were Joyful. The gros3 profits were then given as £98,546, while now they are put down at £113,200, an Increase of £ 14,060. It would appear from these figures that the company was

PUTTING UP ANOTHER RECORD, and all that "Cambist" can say about it is that he regrets the profit and loss account is quitb worthless as a guido to the manner m which those huge profits havo beon gathered In. When ono is told that the "gross profit for the year, after making provision for bad and doubtful debts and depreciation on investments," is £113,206, it does not answer the query which such ample figures naturally prompt, and that Is: What are the gross profits? How much of them como from tho importing of "stagger-juice"? This company has a lot to do with the dealings In the liquor ring which J. Vigor Brown, M.P., girds at m Parliament. It is not likely that the National Mortgage and Agency Company Imports liquor for tho mere fun of importing tho "Joyful" Juice. That fact ought to moke It necessary for them to show In their accounts how much profit 1b made m the 1 importing or trading departments of their business. Then there aro the number of shipping agencies, hold by this company, besides the commissions and brokerages which have to bo paid by the "man on tho land." The company handles a largo trailo m all tho exports of wool, butter, and cheese, and no doubt owing to tho high prices that the farmer Is getting for these lines, a vast

INCREASE IN THE "HAKE-OFF" of such handlings has .fallen to this fortunate "middleman" concern. Now, this writer likes to sco prosperity favoring this fair land; but ho equally enjoys the statement which Is candid enough to set forth how tho prosperity is fostered. Perhaps because tills company Is English, with I*>rdn upon Its directorate, It doe.s not think It worth while to let us "blasted Colonials" know where It gathers up its enormous profits. But, whatever the reason for the "shut-your-mouth/* policy In tho profit and loss account, one thing Is quite clear: all the profits como out of the people of this Dominion. The noble I^>rd who Is chairman wtis good enough to make- this remark, "The business of the company . . . has bean satisfactory and well maintained." Now. 'Cambist." who Is only a "commoner," ventures to remark that tho noble Lord appears to be rather onesided In his remarks. Writer asks who Una been sailsned? Is It the farmer who pays through tho nose for every thlnjj that tho middleman Imposes upon him? Is it tho drinker of Imported "stajjger-Juico" who Is now pnyInjj more for his "nip" than In times past? Tho Lord, who made that tlno phras<\ may be very proud about the maintenance of profit*, and probably that h< why ho Is a director, but many farmers In this young country would be-Khul if som« rebates came to thorn hi the matter of shipping: and other charges. So far as "Cambist" can gather, no company elves its clients a modicum of relief while on the top wave of huffo profits. The business charges remain much the same at all times, nnd as n matter of fact, most of the charges ure unearned In the true sonKc of the word. Th<« sumo romurk applies to business profits. Tht luttt-r nrt> only a matter of combined urrnn^incntu mado by th«j "protlteen>." This hi a Kood tlmu to :mk what arc profit:;? And it U ulso a jjooil time to ui*k why the proilt on or charts of hundllnK a balo of wool ar«> no much jrreuier now ihun In th« pn«t. Somo d«y this writer will «how what these iharsoH roaily art* on «uch bale «l wool. «?id no doubt It W'UA. UK AS* KVK-OI'ENRR FOII the proph' of ihlrt country. This com-j-uuy m iuSth«T w«/r;m nor b«'U«r thun ti". i:t<m\ii't\i'iv>i m ih« % iuf iTwtt t«tj^. It i« v.-it f,>r prontJ*. v,h(i.h U UUvt u» llrul •■ ,-f'.U'<f:u-tt.iy uijtl wi-ll u;:MTilnl]if-.l " I!U' iov-'i «-yiitrjMt» :l» H UMl » Slit'll. '!')',« fiiii'i-uii <Mp|trtl tif Ihe <:ufsjt»nn>' (■; r.:;jy XioO.'.'fio. !,»«l on Uiirt th«-Ji- }-i .i liutiiUiy of jCtW.VOQ. The »h;irva urc !

£10, and £2 per share is all that is paid up. The reserve fund is, with £5000 profits added from this year's accounts, £230,000. From this it will be ; seen that the proprietors have £200,000 m the business and have manag-ed to scop up another £230,000 out of their customers during the forty years they have been m business. Evidently profits have been well maintahu. Ed, and, of course, many fat dividends have been distributed amongst the shareholders m the meantime. Coming to the liabilities of the company to its creditors, they total £958,215, of which £600,053 is on the interest-bearing debentures; sundry creditors aro £287.---135, while the amount on bills payable totals £90,129. All of these outside liabilities make a total of more than double the paid-up capital and reserve fund. Possibly such financing may make it necessary for "profits" and "charges" to be "well maintained." At the same time there must be very good grounds for being able to obtain so much credit, and that is a feather m the cap of the management. "Cambist" prefers the kind of finance which Is based upon actual paid-up capital. He is rather sick of this kind of thing. He is constantly hearing the "figure-head" of such companies telling the people to observe cauticn, and at the same time he notices the'"payment of taxes causes them much grief and makes them howl. But whatever the amount of taxation may be, let it [ always be fully remembered that the poor client Is the person who really pays, whether he Is the purchaser of the "stagger-Juice" or the shipper of a bale of wool, a box of butter or a crate of cheese. The thing that really dazzles this writer is the fact that a group of shareholders who have been m business for nearly half a century have only £200,000 paid-up capital. It Is MOST REMARKABLE CONSERVATISM. and accounts for much of the slow progress made m our national development. The actual . money, borrowed and owned, m this balance-sheet is £1,---383,218, an increase of £141,574 In three years. On the assets side of the balancesheet, premises, plant and furniture are only £45,381, a decrease of over £4000 m three years. Thia shows how quietly profits are disposed of, or, m other words, the real profits of the company are obscured from the prying eyes of inquisitive farmers, shareholders, and the general public. Goods on hand, etc, at £79,092 are also much below the level of the accounts m 1912. Between the two items referred to a matter of £9000 reduction is disclosed. Loans on mortgage and secured accounts at £493,160 are £64,000 more than m 1912. Cm-rent accounts £441,---666 are £31,000 increase. Taking all the debts owing to the company there is an increase of £59,600, which shows that some progress has been made In the living work of the concern. Cash, and Investments total £346,149, which is also a large advance on previous figures. Over £228,000 are invested m various Government securities, and to this cause mußt be attributed the heavy writings-down In values. If the company was really put for the business of the farmers of this country, and had that money employed m that direction, there would be less need for depreciation. When will financiers wake up to the living fact that all Stock Exchange securities **■ ARE A SOURCE OF LOSS? On the other hand, money loaned to persons who really produce wealth, gives good returns, and under prudent care, never requires appropriations from the profits earned. The world is so flooded with bond issues that one cannot expect these paper expedients to recover values at the same rate as they are issued. We shall have a great deal to watch In the course of the next few years. How arc the workers to be forced to pay interest upon all Bonds which have been foisted upon the market? Taxation will press upon tho workers. 1.c., all producers of wealth, m a manner never before experienced. All the same the shareholders have a 12% per cont. dividend paid to thorn free of income tax. £ 10,000 more are carried forward this year, and £5000, as already mentioned, are placed to the reserves. A sum of £ 1000 has been donated In aid of New Zealand wounded soldiers. Considering the enormous profl La made by the company, this is only fitting under tho circumstances. It is the capitalist who benefits entirely by the war. It is the safety of the £200.000, plus the 12ft per cent dividends that this company has to consider. No one need get excited over i these donations. The point that has to bo considered is whether donations ! are not a useful first trench thrown up I In defence against local taxes. The

NOBLE LORDS OP ENGLAND are more concerned about dividends and the way to stave off taxes. The sooner tho war Is finished, the better for us all. Let it be hoped that the country will not forget our soldiers, und the workers. There is need for watching here.