COMMERCE AND FINANCE

Otago Daily Times, Issue 21537, 8 January 1932, Page 2

COMMERCE AND FINANCE

LONDON STOCK EXCHANGE (British Official Wireless.) (United Press Association.) (By Electric Telegraph—Copyright.) RUGBY, January 6. When the Stock Exchange opened this morning the principal feature was the further substantial improvement in leading high-class investment securities, following yesterday's interest payments on consols (2J per cent.), etc., amounting to £6,500,000. The funding loan in particular rose i to 85 J,‘War Loan 5, and State Advances three-eighths to 96J, while several others improved one-eighth. PRICE OF FINE GOLD (United Press Association.) (By Electric Telegraph—Copyright.) LONDON, January 6. Fine gold is quoted at £6 2s 9d per ounce.

E.S. AND A. BANK A DIFFICULT YEAR. “The well-being of the banks is bound up with the well-being of the community That was -the keynote of the address to shareholders of the English, Scottish, and Australian Bank in London, by the chairman (Mr Andrew Williamson), The shrinkage of gross profits by £311,932, to £4,275,825, he said, “brought home with painful vividness how intimately the earning power and general prosperity of the bank were interlinked with the general welfare and prosperity of the whole community and how ludicrous the contentions of some Australian politicians that the troubles of Australia were largely brought about by the banks for their own selfish ends.” All necessary provisions for bad and doubtful debts, Mr Williamson said, had been charged to contingency reserves. From the reserve fund of £3,175,000 there had been transferred to a special reserve for depreciation in Australian currency the sum of £1.585,000, leaving in the free reserve fund the sum of £1,590,000. The £1.585.000 carried to special reserve represents what it would cost to bring over to London, at the rate of exchange ruling at the date of the balance sheet, the assets which, in the event of final settlement, would have to be dealt with in London. Mr Williamson said that the directors regarded the present abnormal exchange position as only a temporary phase, and that the exchange, at present so much against Australia, would, as trade improved and the balance swung more and more in favour of Australia, gradually return to par. In such event the special provision would no longer be required, and the amount so ear-marked would be restored to the general reserve fund. The directors believed that the provision would never require to be actually used. Mr Williamson expressed confidence in the future: "Provided that the conditions laid down in the Premiers’ Plan are faithfully observed in the spirit as well as in the letter, and that in the future politicians are not allowed to play fast* aiJ d loose with economic law, I have no fear for the future of Australia.”

NIPPON YUSEN KAISHA The semi-annual general meeting of Nippon Yusen Kaisha was held at iokio on November 27 last. ~ , , „ Mr Keukichi Kagami, president of the company, said that he regretted that the business for the terra under review had resulted in a net loss of yen 84,000, after fully providing for various reserves and the depreciations, amounting in all to yen 6,554,000. The gross earnings were yen 30,019,000, showing a decrease of yen '41,000 over the previous terra, and yen 4,250,000 as compared with the corresponding term last year. On the other hand, the company was able to reduce tne disbursements for the term by yen 2 010,000, as compared with the previous term, and yen 7,340,000 from the figures for the corresponding term last year. Such reduction was due to the enforcement of rigid economy and the fall in the prices of fuel, etc. The president recommended that the net loss be balanced with the amount brought forward from the previous term —viz., yen 539,000, and that the remainder, yen 454,000, be carried forward to the next account. He thought it hardly necessary to remind those present of the persistently prevailing depression in the world’s shipping industry, which was indeed growing from bad to ■worse.' He pointed out, however, that the enormous amount of shipping laid up idle everywhere throughout the world was continually a menace to the sound recovery from existing situation of shipping industry, inasmuch as a slight improvement in freight market was bound promptly to bring the idle tonnage to the arena of competition. Not to speak of the tariff walls, which were being put up higher and higher by almost all nations, only further to impede the already dwindling cargo movements, the president was very sorry to say that Japan was suffering from the effect' of the coming-off of the gold standard in Great Britain, and also ’of the serious boycott movement so systematically organised by the Chinese, These unfortunate affairs came almost simultaneously in the latter half of September, just too late to affect the company’s business of the term under review, but bound to develop far-reaching, serious consequences thereafter. The president concluded by saying that, in such adverse circumstances the company's operation was confronted with, he could not hold out any hopeful prospect for the ensuing term of six months, and 'he hoped that the shareholders would take •cognisance of the serious situation ahead, ■and maintain the spirit of perserverance in coping with the national crisis the country was now going through.

CANADA’S GOLD FURTHER INCREASED PRODUCTION. When commodity prices fall, as they have done during the last few years, the value of gold increases as each unit of gold will purchase more goods. . Falling prices in a depression are generally accompanied by lower wages. As a result of both these factors gold mining becomes more profitable, and new mines are opened, or old and previously unprofitable workings are reopened. When, in addition, the currency of a country loses value, a further stimulus is given production. All three of these factors have been experienced in Canada, with the result that- while in 1930 its gold production was valued at 43,453,000 dollars, the production for 1931, it is estimated, will exceed 55,000,000 dollars. Since 1924 there have been increases each year in the gold produced in Canada, until in 1930. with an output of 2,102,068 fine ounces, it assumed the position of the largest but one gold producing country in the world. In 1931 a number of new goldfields were discovered and opened up, while several districts which had not produced gold for a number of years were enabled to ship in fairly substantial quantities. Explorations are being made on an increasing scale. Modern metallurgical plants are being erected, and the number of men employed is increasing. So great has the effect of declining prices and wages been that while the interim report of the Gold Delegation of the Financial Committee of the League of Nations estimated that it would be 1940 before Canada produced more than 46,000,000 dollars of gold, this figure was considerably exceeded in 1931.

LOCAL AND OVERSEAS MARKETS.

DAIRY PRODUCE The New Zealand Loan and Mercantile Agency Company, Ltd., has received the following cablegram from its London house under date January 6:— Butter. —New Zealand choicest salted, 100 s to 101 s. Cheese. —White, 595; coloured, 56s to 575. Business is at a standstill owing to strike of dockers. TALLOW SALES (United Press Association.) (By Electric Telegraph—Copyright.) LONDON, January 6. At the tallow sales 831 casks were offered and 373 were sold at Is to Is 6d decline. Mutton: Fine, 255; medium, 21s 6d. Beef: Fine, 265; medium, 21s. COMPANY BALANCE SHEET NEW ZEALAND LOAN & MERCANTILE AGENCY COMPANY, LTD.

Paid-up capital: 1919, £1,823,514; 192026, £2,000,000; 1927-31, £2,500,00. Debenture stock, £1,700,000.

The trading for the past financial year has produced a deficiency of £148,464, to meet which the sum of £155,000 has been withdrawn from reserves. Halfway through the year, when the ultimate result could not be foreseen, a six months’ dividend was paid on the 6£ per cent, preference stock, which eventually meant that the amount (£16,250) formed a further recourse to reserves. As, however, that sum has been charged direct, there is a surplus of £6536 added to the floating balance, making £18,998 brought forward to the current season.

An appreciable reduction has been effected in the administration expenses, while taxation, in accordance with the trading results, is down to less than onehalf of that of 1929-30. The fall in the gross profit is ascribed both to the lower prices prevailing for the primary industries and to the special provision that bad to be made in consequence to meet the altered position of the company’s clients. With these two factors operating, it may not be surprising to find the gross return reduced to the extent it has been, but the fact of the position having been taken in hand now may make matters rim the more smoothly in the future. In their relation to gross profit, the charges have stood as follows; —

The issued first and second mortgage debenture stocks remain at £1,700,000. As this money is acquired at the cheap rate of 4 per cent., the benefit to the borrower is obvious, when the amount approximates two-thirds of the paid-up capital. Another interest-incurring item consists of temporary advances, inclusive of those from the bank, standing at £411,543. Their extensive rise during the previous two years has been not only checked, but considerably counteracted. The reduction in bills payable to £2936 may be taken as an indication of the altered conditions, while the miscellaneous creditors’ group, having had to bear the brunt of the adverse trading balance, is'down to £565,848. It speaks well for the strength of the hidden reserves when £166,250 can be withdrawn without the general reserve account being touched. It is not disclosed how far tne miscellaneous creditors’ group may still consist of reserves, but, with the general reserve intact and the floating balance, there is an aggregate of £518,998, which is slightly higher than the general reserves figure at June, 1930. Cash assets remain strong. They aggregate £700,430, of which £235,858 is in bank. Gilt-edge securities account for £295,708, and held nearly £30,000 in addition at their market value at the close of the financial year. Shares in subsidiary and other companies come to £168,864. The transfer of the money to this purpose from employment in gilt-edge investment must have affected the security to an extent which doubtless has been partly compensated by the larger revenue earned. With low produce prices and extra provision to meet bad and doubtful debts, secured loans and other advances might have been expected to be reduced, but, at £3,200,291, they have risen further. While the increase in them in recent years has not been abnormal, it has nevertheless been steady. Some reduction has taken place in current accounts, which stand at £860,970, while advances on wool and produce at £311,728 are little altered. Inclusive of bills receivable (£7468), the total sum employed in financing clients was £4,380,457, or a decrease of over £120,000 Merchandise, at £237,380, has made a further drop, due perhaps chiefly to reduced values. It holds, however, a much larger proportion of the gross profit than formerly. By a reduction to £395,558, premises and stores have dropped some £15,000. This difference is too large to be accounted for by the ordinary depreciation allowance, so that probably some realisation has taken place. The position among the assets occupied by the fixed section is scarcely influential enough to have a predominating effect, but there is room for a secret reserve within it. No prbvision has been made in the accounts for depreciation due to the adverse exchanges between New Zealand and Australia on the one hand and Britain on the other. The view has been taken that these rates of exchange are likely to be temporary to a large degree and will gradually disappear. Time will show how far this optimism is justified. A further contingency is the sum of £66,250 outstanding in respect of the preference stock dividend. That is a matter that will require attention before the claims of ordinary stockholders for a distribution can be considered.

MINING OKARITO DREDGE. Messrs W. A. Mitson and Co., secretaries of the Okarito Five Mile Beach Gold Dredging Company, Ltd., advise that dredging was resumed at 5 p.m. on Tuesday. KILDARE CONSOLIDATED GOLD MINING COMPANY, LTD. The secretary of the Kildare Consolidated Gold Mining Company, Ltd., reports that at the close of the year a washup was completed and 85oz lldwt of gold were won) v ;w CHICAGO WHEAT MARKET (United Press Association.) i (By Electric Telegraph—Copyright.) NEW YORK, January 6. Chicago wheat quotations: March, 55J cents per bushel; May, 57; July, 561; September, 57R New York wheat, 68 3-8. SYDNEY WOOL SALES (Unlte'd Press Association.) (By Electric -Telegraph--Copyright.) SYDNEY, January 7. (Received Jan. 7, at 10 p.m.) At the wool sales 7882 bales were offered and, 7251 were sold, while 1371 were disposed of privately. Competition continues to be animated, especially on Japanese account, while all , the best features of the previous day were repeated. Excellent clearances were made at late rates* and greasy merino made im. LONDON METAL MARKET (United Press Association.) (By Electric Telegraph—Copyright.) LONDON, January 8. Following are the official quotations In the metal market:—

SYDNEY STOCK EXCHANGE BANK , SECTION INACTIVE. (United Press Association.) • (By Electric Telegraph—Copyright.) SYDNEY, January 7.'. (Received Jan. 7, at 10 p.m.) - The Stock Exchange reopened quietly and the market was firm. Sellers were not disposed to force matters owing to the complete release of Government Savings Bank deposits next week, and the hardening of wool prices. Australian consolidated bonds and stock showed fractional rises, buyers often failing to locate sellers. The bank section was inactive, and' the Bank of New South Wales fell 2s 6d to £3O 17s 6d. Colonial Sugar fell 12s fid to £45 ss, British Tobacco rose 6d to 31s 6d, and Broken Hill Proprietary 3d to 17s 3d.

AUSTRALIAN MARKETS (United Press Association.) (By Electric Telegraph—Copyright.) SYDNEY, January 7. (Received Jan. 7, at 11 p.m.) Wheat: Ex trucks, Sydney, 3e 2Jd: country stations, 2s 7Jdi Flour, £lO. ' • Pollard, £5. Bran, £4 10s. Potatoes: Local new, £8; Tasmanian, £9 IQs. • Onions: Victorian Globe, £l2. Oats: White and Algerian, 2s 6d. Maize, 3s 7d. ADELAIDE, January 7. Wheat, 3s 2d. Flour, £8 10s. Onions, £8 10s. Oats, Is 9d. FOREIGN EXCHANGES. (British Official Wireless.) (United Press Association.) (By Electric Telegraph—Copyright.)

RUSSIAN WHEAT INCREASED BRITISH IMPORTS. Imports' of .wheat into Great Britain during the 12 months ended August 31, 1931, totalled 5,746,000 tons, compared with 5,011,000 ton s for the previous year, representing an increase of 15 per cent. The greatest relative increase in supply came from Russia, that country’s contribution having increased from 61,000 tons in 1929-30 ,to 1,397,000 tons last year. Canada, Australia, and India also shipped larger quantities. Imports from Canada in 1930-1931 were 1,415,000 tons (1,148,000 tons in 1929-30); from Australia, 1,013,000 tons (665,000); and from India, .113,000 tons (77,000 tons). A large decrease was recorded in imports from Argentina (1930-31 total 874,000 tons, aa against 1.720.000 in 1929-30), and a smaller falling off from the United States (760,000 tons compared with 1,086,000 tons). Imports of wheat flour decreased from 567.000 tons in 1920-30 to 554,000 tons last season, the greatest reduction being in United States supplies. Barley imports were increased materially, the total for 1930-31 being 850,000 tons, as against 617,000 tons in the previous 12 months. There was also a substantial increase in arrivals of oats and maize, mainly from Argentina. In the course of a statement in the House of Commons on November 26, the Minister of Agriculture mentioned that a discussion would shortly be initiated with the interests concerned with a view to an early application of the principle of the quota to wheat for milling. It is gathered from other sources that the Government proposes to make it obligatory on millers to use 15 per cent, of British wheat in milling mixtures. Nothing official has been said regarding the proportion of. Empire-grown grain to be used, though it is understood that the proportion will be 55 per cent. Millers are said to be opposed to the quota system and advocate a straight-out duty on foreign wheat. British farmers are reputed to favour a duty on ail imported wheat, with preference to Dominion produce.

General Gross Net Dividend Juno 30 Reserves. lleturn. Profit. Pref. Ord. £ £ £ p.e. p.O. 1919 .. , 701.718 631,182 138,228 5 8 1920 , 723,192 711.200 121,748 5 tO’/a 1021 , 617,305 105,507 *16,187 5 1'4 1922 . 518,118 605,212 38,143 5 12 1023 , 521,031 511,879 92.583 5 14 1021 , 627,768 617,188 121,726 5 8 1025 . 639,818 505,832 141.890 5 7 1928 , 545,288 616,014 136.041 5 7 1927 . 647,597 603.517 148.992 5 & 6</a 7M. 1928 . 651,198 660,151 178.099 5 &,0>A 8 1029 . 558,412 679.482 170,710 5 & 0% 8 1930 , 512,463 566,124 70,551 6 & 6 >4 4 1931 . 518,098 298.625 *148.484 — & 3 % — * Loss. t Free of Income i tax.

Administration etc.. Expenses. Taxes. Total. Ratio to Gross Profit. 6 £ £ p.c. 1918-19 .. 297.597 127.357 424.954 07.83 1019-20 .. 328,444 158.070 480,514 08.40 1920-21 .. 342,418 101,330 443.764 89.54 1021-22 .. 312,073 88.390 401,000 79.39 1922-23 .. 305,303 45,933 351.200 63.03 1023-24 317.280 30.468 347.744 03.52 1024-25 .. 332.904 42.778 375.742 63.08 1925-20 350,881 61,492 402,373 65.31 1920-27 326.104 50.421 370,625 02.39 1027-28 .. 334,008 72,257 400,355 01.63 1028-29 .. 363,899 57.807 421.700 02.07 1920-30 .. 381,489 30.085 420.574 74.22 1030-31 .. 360,602 18.486 378,988 126.95

Ton. Copper, spot £38 13 m llise £1 1. 3 Copper, forward .. .. SO 0 IVi Rise 3 10 9 Electrolytic, spot .. • • 45 10 0. No change > Electrolytic, forward .. 47 10 0 No change' > Wire bars .. 47 10 0 No change Lead, spot .. .. 15 3 0 Rise 0 2 8 Lead, forward „ 15 3 9 No change Spelter, spot .. .. 14 7 6 Rise 0 1 S Spelter, forward .. 14 18 1014 No change Tin. spot ., .. 137 11 3 Fall 1 15 0 Tin, forward .. .. 140 11 3 . Fall S 0 0 Oz. Silver, fine .. .. 20 3-16d Fall S-lOd Silver, standard .. 21 13-16d FaU 3-lGd

ETJGBT, January 6. Par. ' Jan.,5. Jan. 6. Paris, ft to £1 .. 85 11-10 85 7-10 Brussels, belgas to £1 35 24.2214 2414 Oslo. In to £1 .. .. 18.150 18% 18% Stockholm, kr to £1 .. • • 18.150 17 11-18 17% Copenhagen, kr to £1 .. 18.150 18 3-32 18% Berlin, marks to £1 ... 20.43 14.20 14% . Montreal, dal to £1 .. 4.88 2-3 3.0914 3.96 New tork. do) to. £1 4.88 2-3 3.36% 3.35% Yokohama, pence to yen .. 25.15 25% 25 Hongkong, pence to dol 25.15 17% 17% ;, Bombay, pence to rupee 18 18 9-84 18% Batavia. Borins to £1 12.107 8.43 — Milan, lire to £1 .. • • 92.45 66% 68 1-16 Amsterdam, guild to £1 12.107 8.38 8.86 Prague, to to £1 .. 24.02 11414 113% Genova, kr to £1 .. 25.2214 17.2814 17 3-16 Vienna. echlKlngs to £1 24.6514 30 30 Helsingfors, marks to £1 193.334 230 230% Madrid, pesetas to £1 25.2214 SO 15-10 30% Athens, drachma to £1 25.2214 280 202% Lisbon, escudos to £1 5.2014 109% 109% Bucharest, lei to £1 037 570 805 Bit de Janeiro, pence mllrels .. .. to 18 4% 4%’ Buenos ' Aires, pence pesos «. .. .. .. to 47.82 40% 40% Shanghai, pence to tael 23% 23 11-10 23 11-18 Montevideo, pence to peso 61 3114 31%