DOMINION RUBBER CO., LTD.

Otago Daily Times, Issue 21649, 20 May 1932, Page 4

DOMINION RUBBER CO., LTD.

ANNUAL MEETING. The twenty-fourth annual general meeting of shareholders in the Dominion Rubber Company, Ltd., was held at the registered office of the company. New Zealand Express Company’s building, yesterday afternoon. There were 30 shareholders present. Mr Hugh Adam, chairman of directors, presided. ANNUAL REPORT. The annual report for the year ended November 30, 1931, stated: — The balance brought forward from last year was £lll3 16s 6d, and the loss for the year £2326 11s 6d. This shows a debit balance of £1212 15s, which has been written off against an internal provision made some years ago. The stock on hand at lasL. balance date of 49,2201 b, together with the 35,2281 b produced up to December 23, when the estate stopped tapping, were duly realised. All buildings and plant are in good order, and are taken in at fair valuation. ADOPTION OF REPORT. In moving the adoption of the report and balance sheet the cahirman said; — As you will recollect, the directors reported at the last annual meeting that they decided On November 19 to stop tapping, and had cabled the agents accordingly. It took a few weeks to clear matters up and give the labour force the notice required. I By December 23 tapping and rubber manufacturing had definitely ceased at the estate. _ All stocks of rubber were sold, realising an average price ot 3.39 d per lb, and the estate was placed on a care and maintenance ” basis. Our agents accepted a reduction in their fee for supervising, and the manager, the auditors, and the secretary also agreed to reductions in their remuneration. According to latest Imports all buildings, roads,- and bridges are in good order. The plantations ot mature and immature rubber are reported to be -clear of weeds and looking well. According to reports, the estate was never in better condition than it is to-day. As you will notice from the published report, the debit balance of the profit and loss account—£l2l2 15s—is provided for out of an interna] provision made some years ago. All attempts to come to an arrangement with the Dutch Government for control of the output of rubber have failed because/ for one thing, it was found to be impossible-to control the output of an unknown area of native rubber in the Dutch Bast Indies. The price has now dropped to 1 15-16 d per lb. The consumption of rubber by U.S.A. declined by 35,000 tons for the year, and world stocks increased by, 130,000 tons, _ and at the end- of March were in the vicinity of 600,000 tons. Last year’s figures were: Rubber P r °(|’ lc n e A’ 800,000 tons; rubber used, B7U,OUU tone; increase in stocks, 130,000 tons. From this you can judge how serious the position is. It is reported from The Hague that no fewer than 144 schemes for rubber control have been submitted for the consideration of the Joint Committee appointed to deal with the rubber industry. Those best able to speak are of opinion that it is better to have the situation cleared up and know exactly where they stand. However, as iar as our company is concerned, we can carry on under a “ care and maintenance plan, as closely as we can estimate, for a further'period of three years and a-halt, at least-that is, till the end of May, 1935. Beyond that we cannot see. We quote the following extract from the Straits Times of March 23:—“No possibility is too wild to be put forward seriously in Malaya to-day, and unfortunately none is . too wild to be discounted entirely in the present state of the world. We have not yet found our bearings in a stormy sea in which the faint and flickering beacon of restriction has' been extinguished. We do not yet know what is going to happen. But this we do know: Unless the world is headed for an economic collapse unprecedented in human history, unless this slmftp: fails to end on an upward curve as all other slumps have ended, the rubber industry is not a ruined industry. Unless We have lost faith in the inherent stability of human civilisation we cannot, even at this dark h°ur, lose'faith in the. stability of one of the world’s greatest industries. In two or perhaps three years the recovery must come.' 5 As the result of fresh information that we . have obtained, we are in communication with our agents in regard to further “cuts” in the working expenses of the estate, and we feel sure that material savings can be made and will be accomplished. In this connection it may interest you to know how rigidly expenses of production have been dealt with in Malaya. One estate last year produced 397,0001 b at an all-in cost of 2.44 d per lb. A second estate turned out 263,5001 b at an. all-in cost of 2.75 d per lb. We quote as follows: As for the Dutch, their position must be worse than ours. So long as they remain on the gold standard they will be handicapped to the extent of. about 30 per •cent, in competing with us. No, most decidedly not, we have . not heard , the last word on the subject. The British and Netherlands governments, in association with representatives of rubber growers, in British and Dutch overseas territories have been engaged in negotiations in order to see whether a practicable scheme for the improvement of the rubber situation could be devised. In the course of these negotiations the British and Netherlands Governments have consulted the Governments of Ceylon, Malaya and the Netherlands . Indies. o After a careful review of the situation the two Governments have been forced to the conclusion that under present conditions it is impossible to frame and operate an international scheme which would guarantee the effective regulation of the production or export of rubber. Our best thanks are due to Messrs Boustead and Co., Ltd., for the care and attention . given to the company s affairs, and to the manager (M.r Fisher), who controls the estate, and works under their direct supervision. Mr Harman Reeves Seconded the motion. Judging by the attendance* he said, one would think the company was going--to pay. a 20 per cent, dividend, instead of lyhich shareholders were present to, more or less, condole with their chairman on a gloomy outlook for the rubber industry. Of course, they were all hoping the tide would turn—they were hoping the same thing for the primary products of the Dominion—and that before long the outlook would be brighter. It was gratifying to know that, when rubber was at the peak price, the directors of the company adopted a conservative policy, such as was adopted by most Dunedin companies, in building up reserves. ■lf that had not been done in the good times this company would probably have j*een out of existence to-day. It was due to the careful management of the company in the past that they had £SOOO or £6OOO worth of Government .stock to carry on with for, say, the next three years and a-half even if no rubber was sold. By that time, they hoped, the market • would have improved and the company would once more resume its dividend-paying career.— (Applause.) Mr Robert Milligan said that the rubber industry periodically struck bad times —that was to be the company was experiencing a bad time just now. The position, however, was not without hope, and they might be satisfied that, sooner or later, the tide would turn and the operations of rubber companies would again be successful and dividends would be secured for the shareholders. There were four points that were gratifying at the present time. in connection with tho company. The first point was that the former directors had the foresight to set aside certain reserves from the profits that would enable the company to carry on for three years and a-half at the least if the estate did not in the meantime resume tapping. The second point, which was extremely satisfactory, was that the condition of the estate was excellent. The third point was that the expense of running the estate on a care and maintenance basis had been reduced to a minimum. Steps taken recently by the directors had resulted in a further saving of about £SOO a year. The fourth point was that the shipment of rubber from the East during the firsl three months of this year had gone down by 20,000 tons. These were gratifying features, and if the company carried on and waited until the clouds had rolled by the shareholders would, he hoped, receive their dividends in a comparatively short time.— (Applause.) The motion was carried. DIRECTOR AND AUDITORS.

Messrs H. E. Wilson (retiring director) and Alexander Gilchrist were nominated for the vacancy on the board of directors, and on a vote being taken Mr Gilchrist was elected, the number of votes cast being; Gilchrist 13,844. Wilson 13,350. Mr Gilchrist thanked his supporters, and said he hoped he would make a useful member of the board. Mr Wilson thanked the shareholders who had voted for him, and congratulated Mr Gilchrist on his election.

Messrs Brodrick and Chalmers (Dunedin) were reappointed auditors, the chairman stating that all the auditing could be done here in the meantime. v COMPANY BALANCE SHEETS THE COLONIAL SUGAR REFINING COMPANY, LTD. Paid-up capital: March, 1919-Septembcr, 1920, £3,250,000; March, 1921-Sep-tcmber, 1923, £2,600,000; March, 1924March, 1927,, £4,875,000; September, 1927-March, 1932, £5,850,000. Dividend & Bonus.

Net Per Per Half-year tlloscrves. Profit. share, annum.

This company was favoured on the whole with satisfactory climatic conditions in Australia during the past season, and the estimate of the sugar crop there was exceeded, this helping to make up for the shortage in Fiji, due to hurricanes. In spite of the low selling prices, the net profit for the six months comes out at £370,509, which is sufficient to pay the customary dividend and bonus of 25s per share and leave a balance 'of £4884 to be retained in the business. As usual, no details are given regarding the profit and loss portion of the accounts, but from the chairman’s remarks at the recent meeting it is learned that the trading balance, as far as Fiji is concerned, would have been on the wrong side had it not been for the benefirof the high rate of exchange received owing to most of the payments being made in London. Although at the close of the SeptemberMarch season the aggregate of assets usually stands higher than at the end of the other six months, the total of £15,084,159 on this occasion eclipses all previous figures. The increase is due chiefly to the most liquid group—cash balances, bank deposits and remittances in transit —which has risen to £3,684,459. Apparently this difference has come about partly at the expense of sundry debtors, loans and advances, and other investments, which stand at £1,822,922, or some £300,000 under their aggregate at March, 1931. 'The flow from the less to the more liquid group is in sympathy with the general trend at the present time. The stocks and Queensland Government paymerits group has fallen to" £2,258,884, a movement which may be the direct outcome of the unprecedently low prices quoted for sugar lately. Stocks of material (£330.770) maintain a fairly even level. ... Among the fixed assets, it is the sugar mills in Fiji and their adjuncts that show the greatest difference. Their gross figure has risen to £2,974,525, or by some £60,000, but direction the expenditure has been made does not appear. The periodical depreciation allowance, instead of forming a reduction of the book value, is apparently credited to the fund established for that purpose. The Australian sugar mills group, which makes a more valuable property tffan the Fijian, has fallen to £2,375,722, but, considering its magnitude, it does not seem susceptible to any great alteration. lipfineries, at £2,980,600, still constitute the largest fixed asset, beside which the distillery, at £125,265, looks comparatively insignificant. When ocean steamers and office premises, both of which are unchanged, are added, the fixed assets total £6,987,124. When compared with their figure of September last their increase is under 1 per cent. The liquid group on the other hand has risen nearly 15 per cent. ■ The one definite group of liabilities is sundry creditors, which have risen to £1,488,484. Although this is approximately £200,000 under their amount at March, 1931, it is higher than those previously recorded. In an abstract balance sheet, detail must necessarily be omitted, but among creditors of that extent there is room for considerable diversity in their constitution. The indeterminate item of suspense* accounts' which had remained almost stationary and then fell slightly, has resumed its upward course and, at £3.037,331, exceeds all its former aggregates. " Reserves, which have never gone back, have made a more than average increase. The -general fund is unaltered, but replacement and depreciation fund has reached £2,078',937. This figure is equivalent to more than one-third of the book value of the fixed assets, and seems to be increasing more rapidly than the properties it is destined to reconstitute. Employees’ Provident Fund and Benefit Society have risen to £163,757 and £17,893 respectively, and are doubtless fully represented by investments earmarked for their special purposes. The floating balance, which had been somewhat depleted, has been restored almost to its high level of three years ago. It may be noted that reserve fund has not been augmented at, any of the latest four halfyearly balances. A transfer of £IOO,OOO from the net surplus to reserve fund seemed to be made as a matter of course; but, although that allocation has been discontinued meanwhile, it does not follow . necessarily that reserves are not being strengthened to a similar extent by some other, process. NEW ZEALAND APPLES , (United Press Association.) (By Electric Telegraph—Copyright.) LONDON, May 18. The Zealandie’s and Tamaroa’s New Zealand apples realised: —Jonathans, Delicious, and Dunns, 10s to 12s; Cleopatras, Adams, and Wolseleys, 10s to Us. LONDON METAL MARKET (United -Press Association.) (By Electric Telegraph-Copyright.) . LONDON, May 18. (Received May 10, at B.IS p.m.) Following are the official quotations In the metal market:—

AUSTRALIAN STOCK EXCHANGES (United Press Association.) (By Electric Telegraph—Copyright.) SYDNEY, May 19. (Received May 19. at 9.15 p.m.) There was a further contraction in the volume of business on the Stock Exchange to-day, but prices were not appreciably affected. Sales: Commercial Bank of Sydney, £l6 ss; Bank of New South Wales, £27 15s; Colonial Sugar, £44 10s; Fairymead Sugar, 23s Gd; Queensland Insurance, 445; Australian Gas (A). 114 s 6d; Australian Gas (B), 115 s; Tooths, 27s 7ld; Toohcys, 17s Carlton Brewery. 31s; Dunlop Pcrdriau, 12s 2d; British Tobacco, 31s .lid; Burns, Philp, 40. s 3d; Winchcombe, Carson, 19s; Goldsbroughs, 25s 3d; Broken Hill Proprietory, 16s 3d; South Broken Hill (six weeks), 435; Zinc/Corporation; 26s 6d; Four per cent. Commonweal!) Bonds—l93B £94 11s 3d; 1941, £9O 18s 9d; 1944, £B9 11s 3d; 1947. £BB 7s Gd; 1953. £BB 7s Od; 1955, £BB 15s; 1959, £B7 7s 6d; 1961, £B7 10s. Mornim* sales: Four per cent. Bonds--1938, £94 13s 9d; 1941, £9O 15s; 1953, £BB 7 S 6d; 1061. £B7 12s 6d; Bank of New South Wales, £27 15s; Colonial Sugar, £44 10s; Goldsbrough, Mort, 25s lid; Toohcys. 17s Od: Tooths. 27s 6d. \ MELBOURNE. May 19. (Received May 19. at 9.15 p.m.) Sales: Commercial Bank of Australia (pref.), £7 Is; Goldsbrough, Morts, 25s 41d; Metropolitan Gas, £lO Gs; Herald and 'l’lnies, 475; Dunlop Perdriau (pref.), 265; Mount Lyell, 19s Sd.

PUBLIC FINANCE IN THE UNITED STATES BANKING PUBLICATION’S SURVEY. The latest issue of the Guaranty Survey, which is the monthly review by the Guaranty Trust Company of New York, of business and financial conditions in the United States, contains the following interesting comments: — ' “ Apparently we are facing a similar problem to that which —because it was not solved—brought disaster to the financial systems of many other countries during this period. In these countries, the governing bodies, under the pressure of popular demand and political greed, increased public expenses and services beyond the capacity of their economic structures to pay, with inevitable, disastrous results. Unless the American people can be made to realise that money for governmental expenditure can come only from the pockets of American taxpayers, with a restrictive effect on both individual effort and general business, there is an imminent threat that we may be forced to meet the difficulties that have so seriously handicapped other countries. ’ “ The combined expenditures of Federal. State, and local governments in the United States in 1929 were 347 per cent, larger than in 1913. During the same period, the national income increased only 148 per cent, and the population only 25.9 per cent. Governmental expenditures, according to the National Industrial Conference Board, increased twice as fast as national income and more than three times as fast as population. Preliminary estimates from unofficial sources/place the national income in 1931 at about 52,500,000,000 dollars and the total governmental expenditures at 14,000,000,900 dollars. If these figures are correct, they mean that more than one-fourth of every person’s time last year was spent in earning money to be paid out in taxes. “As far as the Federal Government is concerned, the situation has reached a point where neither more borrowing nor more taxation can be resorted to ■without a threat of disastrous results. The American people in general do not realise to what extent the scale of Federal Government costs has increased in the last few years. For some time after the end of the World War, economy was practised: the public debt was reduced, and Federal tax rates were lowered. Now the situation is reversed, and the Federal Government has joined State and local governments in the list of excessive spenders. “ It is anomalous that in the depression year of 1932 it is costing aigiroximately a billion and a-quarter dollars more to rqu the Government than in the relatively prosperous year of 1927. The difference between the levels of Federal Government expenditures in 1932 ’ and in. 1927 is more than the amount to be raised by additional Federal taxes under the new Revenue Bill to balance the budget ih 1933. If the rate of expenditure could be restored to the 1927 level, it would be unnecessary to impose any new Federal taxes whatever. It is true that Congress has somewhat obscured the situation in the public mind by threatening to pass a Tax Bill that would place unnecessary burdens on the economic system of the country. But the fact remains that under no conceivable set of tax rates could such an increase in governmental expenditure be supported without imposing a crushing burden on American business. The question is not primarily one of paripg Government salaries or shaving budgets, but of curtailing Government activities for which we cannot afford to pay. The assumption that money/for thase mounting extravagances can be raised by following the slogan ‘ Soak v the rich ’ is utterly fallacious, for such a policy will simply exterminate ‘ the rich ’ and eliminate the very sources of revenue.” TOOTH AND* CO. The Stock Exchange Association has received a cable message stating that the directors of Messrs Tooth and Co.' have declared an interim dividend at the rate of 8 per cent, per annum. SOUTHLAND FREEZING WORKS V • _i (Special to Daily Times.) INVERCARGILL, May 19. The Southland Freezing Works continue to be very busy and are still handling large numbers of lambs, while a few eives and wethers are now going into the works. The end of the season is definitely in sight, but it is probable that the works will not close until the end of June. The tallies at all three works are ahead of those to the corresponding period of last year, and it is certain that the record established in the previous season will be exceeded my many thousands. The total handling of lambs at the works last year was within striking distance, of 1,900,000 head, and this number has almost been reached this season, with still a month of killing to be carried out. AUSTRALIAN MARKETS (United Press Association.) (By Electric Telegraph—Copyright.) SYDNEY, May 19. , (Recetived May 19, at 10.40 p.m.) Wheat. —Ex trucks, Sydney, 3s 24d per bushel; country qtations, 2s 7jd. Flour, £lO per ton. Pollard, £5 ss. Bran, £4 ss. Potatoes. —Tasmanian,--£0 10s per ton; Victorian, £5 10s. Onions. —Victorian Brown, £l9 per ton; New Zealand, £lB. Gaits, 2s 6d per bushel. Maize, 4s 6d per bushel. , AUSTRALIAN STOCKS (United Press Association.) . (By Electric Telegraph—Copyright.) LONDON,'May 18. Australian Government stocks are active, mostly at about yesterday’s quotations.

ended £ £ s. p.c. Mar. 1910 .. 1,592,851 147,811 17 7 Mar. 1923 .. 2,158,003 251,395 20 12% Mar. 192-4* . 2,339,817 073.039 45 12 13-16 Sen. 1924 .. 2,438,287 324.078 20 10 1 Mar. 1925 .. 2,711.008 435,070 25 1214 Sep. 1925 .. 2.833.013 404.828 25 1214 Mar. 1928 .. 2,900,556 396.104 25 1214 Sop. 1928 .. 3,140,930 408,444 25 1214 Mar. 1927 .. 3,274,527 424,353 25 1214 Sep. 1027 .. 2.490,571 476,510 25 1214 Mar. 1928 .. 2.807.151 490,112 25 1214 Sep. 1928 .. 2,942,014 409,157 25 1214 Mar. 1029 .. 3,289,402 507,149 25 1214 Sep. 1929 .. 3,435,952 405,493 25 1214 Mar. 1930 .. 3,082,329 445.337 '25 1214 Sep. 1030 .. 3,737.738 350,720 25 1214. Mar. 1931 .. 3.959,903 384.097 / 25 12% Sep. 1031 .. 4,070.687 373.812 25 1214 Mar. 1032 .. 4.342,720 370,509 •’25 12% • One year’s trading. t Including beneflt funds.

Copper, spot .. .. . Ton. . £28 C 3 No change , Copper, forward .. . ,. 28 9 i'A Fall £0 0 7>A 0 No change Electrolytic! forward . ,. 33 15 0 No change Wire bars .. . •' .. 33 15 0 No change Lead, apot .. .. . . 10 1C 3 Fall 0 2 G Lead, forward .. . ,. 11 2 c Rise 0 1 3 Spelter, spot . 12 10 0 Ulse 0 1 3 Spelter, forward. .. . ,. 11 Id 3 Rise 0 1 S Tin, spot ■ 0 Rise 2 f e Tin, forward 9 Rise 2 10 0 Silver, standard .. . Silver, fine Oz. . msd . 18!4d Fall 3-10d Fall 3-lCd