WAR FORTUNES

Otago Daily Times, Issue 16917, 1 February 1917, Page 10

WAR FORTUNES

HOW SOME INDUSTRIES HAVE BENEFITED. There are now some 4COO controlled firms which are making munitions and doing other war work. Many millions of excess profits are being earned by these firms, due absolutely to the war, and subject, of course, under the Budget, like all other excess profits, to the tax of 60 per cerft. "Wealth beyond the dreams of avarice " has thus been placed in the hands of a great number of employers and shareholders, who probably in 'pre-war days were already in the enjoyment of snug, comfortable incomes—in many cases fat fortunes—from their various industries. If the munition workers have participated —and few will deny they have—in this unprecedented prosperity, 'keeping in view the enormous increase in the cost of living they will not have such a great deal left after all to invest in war savings certificates or other gilt-edged securities. More than any other business, it may be said without fear of contradiction, the shipping industry has proved a veritable JM Dorado to those fortunate individuals who have their money invested in ships. Ihe net earnings in this lucrative occupation are estimated to have risen from 20 millions in 1913 to 250 millions in 1916. Ihe profits are so great that a steamer is reported to pay for her entire cost in two voyages. In the House of Commons last December Mr Goldstone, M.P., quoted an instance which went one better. He said : " I want to quote one instance give'n upon excellent authority that one ship sailing from San Francisco was chartered for £80,000. Probably she was a very large steamer, and may have been in the region of 10,000 tons; but my information is that, at that rate of charter, she probablv paid for herself in that one voyage." — The Shipowners' El Dorado,,— Romantic stories are related at Cardiff of the huge fortunes amassed by ship-owners and coal-owners during the war. One ship-owning firm is reputed to have made profits amounting to £3,000,000. Many other firms have also made vast sums One company, with five boats, is' said to have made £100,000 profits on last year's working, aad set aside £80,000 to'meet excess profits tax and £20,000 to reserve. The total profits for the previous year was ?oi c ' ■- 1. ln - the first three months in iyis eight shipping companies made in profits £1,201,795. In the first three months of 1916 the same eight concerns made a profit of £2,140,508, or an increase of 77 per cent. The report .of the White Star hno shows that the profit for last year, after providing a very large sum for excess profits tax and other contingencies, amounted to the enormous figure of £1,868,285. -Dividends amounting to 65 per cent, have already been paid. There is money in any "old tab" at the present-time. The demand for ships pi every sort continues unabated, and boats of all ages and sizes fetch hishlvmflated prices. J One ship, which cost £80,000 to build in 1912, has just fetched £160.000, and another, constructed in 1902, has'been disposed of for £235,000, though it realised only £75,000 last year and £31,500 in 1910. An 11-year-old craft, which commanded £26,200 in 1914 and £100,000 next year, has now brought in £185,000; and a 19-year-old vessel, which w:is worth £18..000 in 1905 and £28,000 la « year, has lately been knocked down for £110*000 Ships have recently been sold in Glasgow at £200,000, which prior to the war cost only £80,000 to build. — Easily-earned Fortunes.—

The case of the " tramp " owners was referred to in Parliament by Mr Houston, M.P. He knew one, lie said, who fised four of his steamers from the Argentine on open charter at 16s per ton; the charterer pf one of these boats relet that boat at 655, and made £14,000 profit. Many men who have had no previous connection with shipping have found it a very profitable alliance. One young Glasgow man, for instance, was left a legacy of £500 in 1914. He invested it in a shipping concern. His first year's profits were £350. His second year brought him £815. Quite a tidy sum for two years' trading! Instances are aJso told of young clerks and others who, earning about £3°a week at the beginning of the war, saw their opportunity, and invested in the purchase, of old steamers. As a result of their enterprise they have become comparatively wealthy men, residing in country mansions, and possessing motor cars. — Black Diamonds Indeed. Great profits have also been made in tho coal trade. As a matter of fact, the coalowners and their confreres in the iron and engineering industries are not far behind the shipowners in the enormous profits which they have, to put it bluntlv, made out of the war.

Anent/ this very important industry, the following extract from the minutes of the War Emergency Workers' National Committee, June 3, 1915, possesses a peculiarly personal interest for Glasgow people especially, as they " pay the piper " in the case referred to.

The secretary read the following notes of a letter received from a reliable correspondent in Glasgow, indicating the difficulties experienced in renewing municipal coal contracts:—

"The various committees of the Glasgow Corporation are buying for immediate needs only, as if they were to place their contracts for a year at present prices it would mean an increased charge of £400,000, as compared with last °vear's prices for the same quantity and qualities of coaL

" The gas department is now in the market for 750.000 tons, and if compelled to pay present prices the extra charge on this lot alone, according to the manager would be £300,000. Because of the high

prices of coal, the cost of household gas is to bo raised from Is lid to 2s 6d per 1000 cubic feet. — Municipalities and Dear Coal.— " Liast year tho tram department bought 50,000 tons of coal at an average cost of 10s B|d per ton. Oilers' were recently invited for a six months' supply, and the quotations recommended for acceptance averaged 17s W%d per ton, an increase of 67 par cent. compared with last year. . . " The Electricity Committee has not yet placed its annual' contracts, but a small quantity of splint and smithy coal was bought at prices ranging from 20s to 20s 6d per ton, as against 12s 9d to 13s 3d a year ago." The gas atid electricity departments of the Birmingham Corporation are paying at least £200,000 more per year for coal than before the outbreak of war. The London County Council is to-day paving to coal-owners increases, varying according to quality, from 9s 6d to 15s 9d piton—the latter for Welsh steam, representing the difference between last year's figure of 25s 3d against to-day's 41s. With prices like these operating it is not surprising that a leading Scottish coal company last year made a 'proiit of £89,866 on the 12 months' working, while this year's profit is reported to "have- reached theory handsome figure of £224,058. Not a few people—espeeiailj those people who «re not in intimate touch with coal-mming centres and the hardy heroes who extract the coal from out the bowels of the earth—firmly believe that all the increases in the price of coal are due to the greedy demands of the miner. iSever was there a bigger mistake. The following statement is taken from the report of the committee appointed bv tho Board of Trade to inquire into the causes of the present rise in the rttail price of coal for domestic use:—"We have no doubt that the rise (in price) is considerably above the increase in cost of production and distribution which can reasonably be put down to the war. The cost of production at the mine has not, on a high estimate, risen more than Is per ton. One eminent authority has stated to us that that figure is preposterously high."

— The Engineering Trade.— While the earnings of employees in many trades have increased considerably since the war—in the case of members/of the Amalgamated Society of Engineers it is estimated at about £2,0CO;O00 a yearmany employers in the same industry have been making proportionate profits. Even though half of the extra war profits go to the State there is a goodly margin left for tirms.

One of the largest engineering firms in the West of Scotland, for instance in 1914 showed a profit of £51.096, and in the report for the present year this has been increased to £119.060. A famous Sheffield steel company in 1914 was £10,419' to the good; in 1915 it was £103,509, or 50 per cent, on the paid-up capital. Equally satisfactory was the balance sheet of one of the big projectile concerns. With a nominal capital of only £12,499 it has during 1915 m«de a profit of £194,136— after providing for the new taxes. Many manufacturers who formerly made articles of luxury have adapted their works to necessary, goods. Motor-car manufacturers have reaped a harvest by concentrating their attention on war vehicles instead of private cars, .and the boom in military motor-driven vehicles has been so great that new works have been erected in different centres. One of the big motor firms has declared a profit of £252,107 on the current year's turnover, as against £85,037 in 1915. A big London firm which specialises in crepe and mourning material, after allowing for' depreciation, income tax, etc., announces that its profits for last year were £741.667.

These very fine figures were, however, completely knocked into the proverbial cocked hat the other day when J. and P; Coats, the famous thread makers, disclosed what proved -to be their biggest budget. For many years past Coats (as a contemporary facetiously put it) has been regarded as synonymous with heavy chunks of gold, imposing mansions on the Firth and palatial steam yachts. The tradition was well maintained with the recent announcement that the year's profits had reached the stylish and record amount of £3.387,395.

How much of this truly extraordinary sum is due to war work we will not attempt to estimate : the problem is respectfully left to our readers—it will probably be all that will be left to most of them 1

-i-Trawler Skippers' Big Earnings. Trawler skippers driving their own motor cars and trawler skippers' wives and daughters clad in costly furs is one of the results ot the war. No industry has suffered more than the fishing trade owing to the restricted fishing area and the fact that hundreds of trawlers and their crews have been commandeered by the Admiralty for mine-sweeping and other purposes. But " It's an ill wind that blows nobody good," and the comparatively few people ■who have been left to carry on Va-i fishing business are making more money than ever they did. In ordinary times a teawler away on a week's fishinp; makes on an average about £150 per catch. It all depends on the state of the market. At present fish is so scarce that catches of £ICOO for a -week's fishing are quite common, while boats that have gone farther afield to Iceland (a four weeks' trip) or the Faroe Islands (which usually occupies about three weeks) have made nearly double that sum. Several catches landed at Grimsby recently have made over £2000, and one'at Hull 'fetched over £3000. Trawler skippers are paid £2 a week and 9 per cent, on the catch, so a skipper fortunate enough to get a good catch and land his fish when the supply is poor may pocket £90 for his week's work. — Dear Potatoes.— High freights are undoubtedly one of the causes of the tremendously inflated price of foodstuffs which the public are asked to pay to-day. We are all familiar —too familiar, indeed—with said prices; but the recent alarming increase in the price of potatoes is making the public' crv out for speedy Government action in the matter.

As recently stated in these columns, potato-dealers from the North of England report an abnormal state of affairs. The crop in Scotland is so poor thab Scottish merchants are sending orders to Yorkshire. Such a proceeding has never before been known. It is an illustration of " sending coal to Newcastle."

A few days ago Dunbar potatoes realised £11 a ton in Jidinburgh. One firm has paid as much as £95 an acre for Perthshire potatoes. Under the most favourable circumstances the first cost -will work out at between £8 and £10 a ton. Before the war £25 to £30 an acre was considered a fair price. _A little over two months ago a South Lincolnshire farmer sold his 1000 acres of growing potatoes at £40 an acre, on the assumption that the price would be £5 a ton. Hβ made a profit of over £20,000, but the purchaser is in a position to sell to-day at double the price he gave, and to make a profit on the deal of £40,000. Imagine £60,000 from 1000 acres of ■potatoes ! So much for the romance of, the humble tuber, the staple food of so many hundreds of thousands of poor people, who will soon grimly wonder where the " romance " comes in. if to-day's abnormal prices are not immediately readjusted, and potato exploiters taught that- theTe is a limit to profit-mongering, even although the nation is in the throes of a great war.