THE WESTPORT COAL COMPANY LIMITED.

NZ Truth, Issue 755, 6 December 1919, Page 4

THE WESTPORT COAL COMPANY LIMITED.

Thirty-eighth Annual Report and

Balance Sheet

If there be one thing more exasperating- than coal m this country, "Cambist" would like to know of it. During the forty-five years that this hardworked scribe has put m here, coal haw always been a troublesome subject, m some form or other. In the past, the coal production was m excess of the demand. For the last live years, the demand has exceeded the production. Of course, two things have happened during the period mentioned. The population has nearly quadrupled, manufacturers have sprung into being, while at the same time the grimy army of miners has not swelled m equal proportions. Until the last couple of years the coal mine owners, imitating their titled confreres at the other end of the Empire, persisted m treating the coal miners "as if they were dogs," and housed them m vile "shanties" unworthy of our canine friends. No wonder, then, that coal mining did not attract recruits to that form of hazardous labor. Is it wonderful to find that the miners have "kicked"; have forced higher wages from the local "Barons," and "played the very deuce" with the abominablo monopoly which owns the coal resources of this country? Amongst the coal monopolists, the Wostport Coal Mining Co., Ltd., is the most powerful of tho "Barons." There are two good reasons for this position. The lirst is that the company secured THE BEST COAL MINING PROPERTY/ m the Dominion^ and the other is, that this company has always "worked hand m glove" with the Union Steam Ship Co. The latter -arrangement has proved very profitable to the companies concerned, oven though the public have been made to suffer m the prices they pay for the coal used under these conditions. From the foregoing, one would imagine, that the dividend which the Westport Coal Co. paid its fortunate shareholders, would be something enormous, but such is not the case. The balance sheet now to hand shows that only eight and three-quarter per cent, is the return upon the capital sunk m the business of this company. The balance sheet and the profit and loss account are so drawn that no one can say from these documents how wealthy this company really is, or how much profit it has managed to rak6 m for the period covered by the accounts. Of course, a candid statement of these facts would be most inconvenient at the present time. Do we not hear of "go-slow" methods on the part of tho coal -miners? Have we not been told about shipping difficulties etc., etc., and yet the blessed company does not pass its dividend. It is indeed wonderful how this persecuted concern has been able to earn anything for its benevolent shareholders, under the trying circumstances of the times. Ah, but see how small the dividend is. Only eight and three-quarter per cent, on £450,060 of paid up capital. Not having back files of the company's balance sheets, "Cambist" is unable to say how much water there is m the capital, or if there be no such thing. Company balance sheets are "NOT ALWAYS WHAT THEY SEEM.' That remark applies with force to the capital accounts of most of them. The point here is, how much actual cash have the shareholders invested m this company? The balance sheet is quite silent upon the matter, so this writer will not hazard an opinion on the subject. It will suffice to accept the sum of £450,000, as the total paid up capital of the concern. The next item is set down as "sundry liabilities" £133,---342, but m this connection there is no mention of how tho sum is arrived at. No one can say if these liabilities are to the company's own shareholders of to outside creditors. Considering- the wealth of the concern and other features of the balance sheet, "Cambist" is prompted to take this item as a brilliant piece of company camouflage. He looks upon the bald statement with suspicion, as he does not think any company, much less the Westport Coal Co., with so much cash at hand and so much invested money m its ownership, is at all likely to have outside creditors to the extent which this item would lead one to suppose. Under the circumstances noted, it is a great pity that the company has not taken its shareholders into its confidence, and it is also something that the public would be grateful to learn how this amount is made up. Insurance fund £57,254 is a large sum to have m hand for such a purpose. It looks as if the amount was only an inconvenient sum left on hand, that has GROWN BEYOND ITS STATED PURPOSE. In other words, the £57,254 appears to be a chronic reserve of previously gathered profits; especially when one finds that the "reserve fund" is put down at the paltry figure of £2276. The latter amount is as labored as a Scots joke. No one can regard the tiny item as a reflection of what this wealthy concern has put past during its history of profit gathering-. Without the smallest detail, property account stands at £271,920 as the first item on the assets side of the balance sheet. That small sum for the most valuable coal mine m New Zealand, with all its gear for working-, also steamer owned by the company, numerous hulks m various harbors, well-fitted depots m many towns, carts, horses and motors galore, etc., etc., tells the simple story of well written down assets, and the existence of a huge secret reserve of profits. This writer will not indulge m any guesses, but it is probable that if water is m the stock of the company, the capitalisation has largely come from this direction. Sundry debtors shows on open accounts £67,556, while for stocks the sum of £22,920 is 'set down. The items make between them a total of £90,476, which on the face of things appears quite a sound and valid asset; also one that there need be no misgivings about. This concern does not

have to give credit to weak marks, and its products are saleable at high prices at the present time. The next following items make an impressive showing. Loans and investments £190,689; sinking fund £65i750; cash m hand and m bank £56,874. Adding all together a grand total of £322,312 results. And THIS IS A COAL MINING COMPANY let it be noted; not a loan and investment company. How they do\ have to struggle against the exactions of tho miners and the Inchcape shipping combine. In spite of it all they pay a dividend of only eight and threequarters per cent, to the shareholders, while the bulk of a third of a million pounds is invested m interest bearing securities which more than earn the sum paid away as dividends. This is indeed an object lesson m finance, and It shows to what lengths capitalism can go m order to hide profiteering and throw duat m the eyes of the fool public that have to pay whatever they are charged for the products of the mines, and who have to put up with any old treatment from the Inchcape abomination that rules our shipping. But the elections will soon be over, and then things may happen. One of which might be a more liberal distribution of the fruits of profiteering. Possibly there will then be no need to humbug the public with an eight and three-quarters per cent, "divvy," and the docile grinning shareholders may either receive a parcel of watered stock or a bonus of about fifteen shilling's per share "to go on with." One thing about this matter which "Cambist" would like some light upon is the taxation question. He thinks tha such examples of foresight should be made prove a happy hunting ground for the tax gatherer. As most of the recent profits have come from the war, why not collar a large proportion or them for the State? That would be a means of GETTING AT THE "LAST SHILLING," and it might be used to compensate for the "last man" who shed his Vjlood for the protection of the profiteers. The profit and loss account does not impress one with the idea that a candid statement of income and expenditure has been given, neither does it, tin this writer's opinion, furnish sufficient evidence on which to baso j an opinion of the real earnings or profiteerings of the concern. The income of £99,872 tells us that £38,801 came from "steamer, hulks, depots, etc.," but there is not a> word here about interest earned on investments. "Profit on coal account, less bad and doubtful debts and depreciation" £61,071, does not indicate how much depreciation was written off, or whether the "struggling" concern made as much from coal now as it has always done. Still, the finish for the year is fairly hopeful. "Cambist" has no fear that this institution will ever fail to pay its shareholders a decent dividend, or to PILE UP IN SECRET RESERVES much gains m its financial barns. The fact is that the company is staggering •under a load of immediately realisable wealth, and for this happy condition they may thank the Liberals for theh fostering care m the past, and tho Tories for their kind protecting hands m the present, during the scope of operations. Let it not be forgotten that the careful use of monopolistic methods have done much, but last of all and perhaps not the least to be remembered, is the humble miner who has risked his life tearing- out from the bowels of the earth some millions of pounds of black diamonds, and that to this day the miners are a most discontented body of toiler's m the vineyard of the coal profiteers.