COMMERCE AND FINANCE

Otago Daily Times, Issue 23213, 10 June 1937, Page 16

COMMERCE AND FINANCE

LOCAL) AND OVERSEAS MARKETS

COMPANY BALANCE SHEETS WILSONS (N.Z.) PORTLAND CEMENT. LTD. Paid-up capital: 1918-33. £600,000; 193-1-37. £300,000 Marine Dlrldenct

The net proflt continues to increase and, at £59,1189, shows an advance similar'to that of the previous year. The dividend rate recommended is 15 per cent. —the same, excluding the jubilee bonus, as for 1935-36—which will leave £14,889 to add to the undivided surplus carried to the current year. During the past six years, proprietors and reserves have shared in the net proflt as follows:

As formerly, the profit and loss account statement gives no detail. The information that the net profit has been arrived at, after full provision for depreciation, bad debts, taxes, and all j other expenses has been made, con-"| veys little to the reader. The one iljem of expense mentioned—directors' fees, £l4so—is entered elsewhere.' The. profit of the subsidiary company is not, included. With these-bare facts, the shareholder is expected'to be satisfied. ■ At £152,058, thei fixed .asset group; has risen by nearly :£ 3000. As the ex-. tent of the provision is not given, no indication is afforded , of the year's capital' expenditure. ; In the past, the policy of writing down the fixed assets has.,been stringently,, adhered to, and although their present book value does riptjhear; visible, sighs of this during the-past year, there is,, no reason to assuipe: that .it, has not been followed. With 4he variety of the assets held, the'task 'of arriving at, a basis of a general'depreciation provision may be somewhat: complicated. The limestone deposits alone* on. which the welfare of the*company-may.be' said to depend, will iWresent a difficult problem. Although the relation of the ■ fixed section to the total assets has increased, this is due.,rnore ,to\the drop in the liquid section, owing to the' outlay necessitated^-by '. the Jubilee bonus, than to the. increase in the' fixed assets. The illations; have been 1 asunder:— - ;'v'.-, ■?: '■'% ' r';/;='. i ).'•■'

Notwithstanding the demand of £150,000 upon.tjhe cash assets to meet the jubilee'"bonus a • year ago, the largest liquid item is New Zealand Government, securities, which, at £137,715, are practically unaffected. The basis of valuation of them is not stated. Other investments consist of shares in other companies (unspecified) at ££33;502;, and mortgages and unpaid purchase money for land sold at £12,797, both, of .which are little altered. Investments in outside concerns thus total £184,014, exclusive of the holding of £50,000 hi the subsidiary company of Wilsons Collieries, Ltd. Stocks at £30,910 and sundry debtors at £48,463 are both again larger, from which it may be inferred that the turnover is on the increase. Cash, as a result of the bonus payment, is substantially' • reduced, but, nevertheless, on current account and deposit is as high as £13,028. On the other side, the.amount owing to the subsidiary company has risen to £2339, but otherwise the liabilities are smaller. The rest are all comprised under sundry creditors, which, contrary to the movements in stock and sundry debtors, have decreased to £61,494. As the provision for income tax is included and may be expected to be larger than it was 12 months ago, the general creditors would, seem to have diminished. Marine insurance reserve remains at £ 15,000, and general reserve account at £50.000. It has been preferred to leave the undistributed balance of £14,889 of the net profit unallocated, instead of transferring a part to general reserve. ' With the floating balance, general reserves are raised to £77,241, their growth having been in no way retarded by the recent bonus distribution. CANADIAN WHEAT (United Press Association) (By Electric Telegraph—Copyright) WINNIPEG, June 8. Wheat jumped four cents overnight on account of unfavourable weather reports, winds, and the lack of rain. In Alberta and Saskatchewan there are prospects of an 85 per cent, average yield. -.-■ ~, ,• ■ . . '

MINING NEWS MOUNT LYELL REPORT The following is the Mount Lyell Mining and Railway Company's progress report for the fortnight ended May 26: Mines.—North Mount. Lyell: 4174 tons' extracted. Crown Lyell: 487 tons extracted. West Lyell: 25,094 tons extracted. Prince Lyell: 1005 tons extracted. Lyell Tharsis: 600 tons extracted, Lyell Comstock: 3548 tons extracted. On No. 9 level, main crosscut to 54ft through porphyry and grey mineralised' schist. Work was then suspended. No. 1 deep hole to 21ft through mineralised schist. Reduction Works—The furnace was in blast for the full period, 8340 tons of refinery anodes being made for the current year. Concentrator.—The mill operated for 336 hours arid treated 32.929 tons of ore, producing 2036 tons of concentrates. Copper Refinery.—The tank house was in operation throughout the fortnight, 538 tons cathode copper being produced. The total for the current year is 8876 tons. ALEXANDER MINES REPORT The Alexander Gold Mines, Ltd.; submitted the following report for the month of May:— Battery Department.—Three hundred and sixty tons of ore were crushed, yielding 1630 zof melted gold. < Cyanide Department.—This department treated 250 tons of sands, which yielded 38oz of bullion, and 250 z were recovered from slags, making a total of 630 z, the estimated value of which was ' £1541. Eight tons of concentrates, valued at £232, were saved. In estimating the above values, gold has been taken, at £7 5s per fine ounce. . LODES IN OTAGO j GLENORCHY AND,BENDIGO "Lodes ai Gienorchy and Bendigo " was the subject of a.paper submitted to the* • Wellington Philosophical Society recently by'Mr J. Henderson. ; Th,e village: of Glenorchy, he said, was built on the flats at the head of Lake Wakatipu, on the east shore at the mouth.of the Reese River. In the Glenorchy, district the evidence of former glaciatiori was impressive. The Glenorchy lode was on the flanks of Mount Judah, east of the gorge of the Buckler Burn, 600 feet above the strearn. and about a mile and a-half east of! the village. The filling consisted principally of crushed country and quartz; calcite, scheelite, pyrite, arid arsenopyrite occurred in smaller, amounts. There was usually a little gold, and, at a few points, rich auriferous: quartz had been found. Tungstite, the yellow powdery oxide of ' tungsieri, ■ had been seen near the outcrops;, but was rare. The quartz was .more or less continuous throughout; the face of a drive practically always showed some. quartz. Some of the lodes had'been traced half, a mile or more, and the Glenorchy lode probably underlaid the> whole mass of Mount Judah. The Bendigo lode, Mr Henderson said, was near Cromwell. The lodes of this area were practically abandoned in 1900 after 30 years of active work, during which well over £500,000 in gold was won. The lode consisted' chiefly ofr crushed -schist traversed by irregular seamed'veinlets and stringers of quartz. ; MOUNT MORGAN SHARES , REASONS FOR DECLINE OPINIONS IN AUSTRALIA The recent heavy fall in the price of Mount Morgan shares is attributed by the Australasian of May 29 not so much to false rumours about the possibility of the company not paying its usual interim dividend as to heavy liquidation of the shares to cover speculative operations in the Australian and other iriarkets. The Sydney Bulletin's comment on the shares in this company is to the effect that " the long-term position seems sound if estimates of ore reserves are correct and costs do not rise. Considerable development on the mine, however, appears to be required before the dividend position will become attractive. In carrying out that development it may be necessary for a space to retain a substantial proportion of the profits in order to meet the cost. Nevertheless, the dividend promised for July is assured, and should be well covered by earnings." STERLING COUNTRIES WILL. PROSPERITY LAST? " We may perhaps epitomise the year 1936 as memorable for ushering in an extension of the sterling bloc prosperity to the rest of the world," states the Swedish Chamber of Commerce for Australia, New Zealand, and the South Sea Islands, in its annual report. The chamber adds, however, that although something like the beginning of a boom began at the end of the year, the general situation cannot be viewed without misgivings. Too many nations are pursuing a policy of secluded self-sufficiency, and, though in many cases domestic activities have developed tremendously, international trade is still lagging far behind. Too much of the apparent prosperity is based on a feverish armaments race between the different political camps. There is an uncomfortable feeling abroad that such a prosperity cannot last. " However," the report adds, " strong forces are also at work aiming to unite mankind and to, free it from the bogy of sanguinary strife. There is a growing consciousness that no nation can live unto itself. Reciprocal trade agreements and the general extension of the most-favoured-nation treatment have provided one of the principal means by which a return to freer trade among the nations has been sought . during the past year, and considerable progress has been made in this, direction." GOLD PRODUCTION IN SOUTH AFRICA WHAT GOING " OFF- GOLD " HAS MEANT TO THE MINES ' ' ' In his address at the recent annual meeting of the Transvaal Chamber of Mines, the retiring chairman. Mr G. H Beatty, gave some interesting comparative figures in respect, to the gold production of the Witwatersrand f for the vears 1932 (before South Africa went off gold) and 1936. The latter year was, as he remarked, the fourth year since the old standard value of gold was shelved, and it is therefore Interesting to compare some of the salient features of the Witwatersrand

While the average yield per ton last year was 1.912 dwt, or 25 per cent, lower, and working costs per, ton 3d lower than in 1932, the working profit was 5s higher, owing to the increased price in gold.

TRANSACTIONS IN GOLD (British Official Wireless) (United Press Association) (By Electric Telegraph—Copyright) RUGBY, June 8. Gold valued at approximately £1,248,000 was disposed of at £7 0s 7d an ounce. NEW GUINEA GOLD SHARES ,•■ (United Press Association) " (By Electric Telegraph—Copyright) LONDON, June 8. New Guinea Gold shares are quoted at Is 7Jd. MOUNT LYELL SHARES (United Press Association) (By Electric Telegraph—Copyright) LONDON, June 8. Mount Lyell shares are quoted at 32s 6d. ANTWERP FUTURES (United Press Association) (By Electric Telegraph— Copyright) LONDON, June 8. Antwerp futures' are quiet. July, 33}d; October and December, 33Jd. "A SOLUTION OF THE INVESTMENT PROBLEM " MERITS OF INVESTMENT TRUST SHARES An instructive and interesting brochure on investment trusts in Australia has been issued by the pioneer of the movement in the Commonwealth, Were's Investment Trust, Ltd., and its two associated companies, National Reliance Investment Trust, Ltd., and Capel Court Investment Trust (Australia). Ltd. The brochure gives a lucid explanation of the operations of investment trust companies of the "management" type, as distinct from "fixed" or "unit" trusts. Investment trusts of the management type form an ideal channel for the investment of funds by persons who have neither the time nor the facilities for studying the stock and share market. These investment trust companies are a form of . co-operative investment under the direction of experts, designed as. a scientific method of extracting from-the share market whatever, benefits lie in the economic circumstances of the time, and protecting shareholders against adverse influences. Risks are reduced to a minimum owing to the spread and diversification of the investments, while over a term of years shareholders have a reasonable expectation of rising income and augmented capital security through the accumulation of income-earning funds. In addition, opportunities are fur* .nished for shareholders, through new share issues on favourable terms, to increase holdings and build up a "nest egg." A management trust, in contradistinction from the fixed or unit trust, may invest its. capital over the full range of the investment market, embracing bonds and debentures and other fixed interest stocks and industrial and other equity stocks. GUINEA AIRWAYS, LTD. Accounts of Guinea Airways, Ltd., for the year ended February 28 show a net profit of £13,887, compared with £25,876 for the previous year. Dividends for the year amounted to 2s 6d a share (12J per cent.), as against 4s a share in 1935-36. Since 1929 the tonnage transported by the company has increased from 434 to 6705, passengers carried have increased from 869 to 11,869, gross revenue from £44,066 to £96,134, and net revenue from £6226 to £13,887. The average freight charge on cargo has decreased from 10.61 d to 2.49 d. The directors report that the lower average freight rate together with rer duced passenger fares resulted in the lower profit . for the year. The directors state that it should be clearly understood that present plans for expansion have no direct bearing on the success of the tender to the Federal Government for the proposed Sydney-New Guinea air route. IMPERIAL TRADE Vital problems affecting Imperial trade are raised by the suggestions made that there is a distinct possibility of a trade agreement being concluded between Britain and the United States. If such an agreement were concluded, a great fillip would be given to the recovery of international trade and commerce. It is true, as was recently pointed out in a cable message from London, that Britain, rather than the dominions, has been reluctant to fall in with a general movement toward freer trade, although it has paid the principle abundant lip-service. In brief (the Melbourne Argus says), the vital difference between the trade policies of the two great English-speaking nations is that, whereas Britain has concluded a number of strictly bi-lateral agreements with other nations, the agreements concluded by the United States contain in nearly every case a "most-favoured-nation" clause. The inclusion of a " most-favoured-nation clause means that any tariff concession made by one of the contracting parties in favour of a third nation, automatically inures for the benefit of the other contracting party. If, for instance, the United States and Canada mutually conceded each other most favoured treatment, and the United States subsequently lowered duties in favour of, say, Paraguay, it would be obliged to lower them to the same extent in favour of Canada,-and vice versa. Since 1934 the United States has entered into reciprocal trade agreements with 13 different countries, including Canada, most of which afforded most-favoured-nation treatment without discrimination. The effect of this type of agreement is to make tariff reductions general over a broad front, and thus it tends to stimulate international trade. It is. indeed, a paradox that the United States, which until very recently was the arch priest of protectionism, is now following trading policy, in some ways more liberal than that of Britain. Britain is differently placed from the United States, for preferences granted at Ottawa in 1932 consolidated, as it were, a form of an Empire Customs Union. The treaties negotiated at Ottawa expire in August next. In the tripartite monetary agreement concluded in September last between Britain. France, and the United States, the signatories declared that the success of the plan to bring about stability of currencies was linked with the development of international trade. There are undoubtedly great difficulties in the .way of Britain according to the United States a freer market for primary products, as has been suggested, but the presence in London of all the Dominion Prime Ministers wi ensure; at least, that the proposals will be thoroughly examined and considered by those parties vitally interested.

THE AUSTRALIAN LOAN (United Press Association) (By Electric Telegraph—Copyright) LONDON, June 8. The underwriting of the Australian loan is believed to have caused dullness in gilt-edged securities, but Australian stocks and gold shares maintained their initial advances. Hoarders have ceased to liquidate gold commodities. The weakest feature of the day was cotton. Rubber and metals were also dull. LONDON STOCK EXCHANGE (United Press Association) (By Electric Telegraph—Copyright) LONDON. June 8. Dalgety, 4 per cent., £9B: British Tobacco, 38s 9d; Goldsbrough, Mort, 30s (nominal); Dalgety, £8 15s; P. and O. Deferred, 32s 9d. AUSTRALIAN STOCK EXCHANGES (United Press Association) (By Electric Telegraph—Copyright) SYDNEY, June 9. (Received June 9, at 11 p.m.) Although business was again restricted on the Stock Exchange, the market continues steady, excepting metal shares, which are inclined to drift. THE MORNING SALES

MELBOURNE, June 9. Bonds showed a further advance, but investments were quiet, with no definite trend in Barriers and gold. £ s. d.

HIGHGATES STORES, LTD. NEW SYDNEY FLOTATION .Highgates, Ltd., Chain Credit Stores of Australia, is being floated in Sydney. The nominal capital is £500,000 in 2.000,000 shares of 5s each, of which 600,000 shares are being offered to the public at par, and will he substantially underwritten. A total of 60,000 shares is being issued to the founder directors and others (or .40,000 shares in all if the company goes to allotment on a subscribed capital of less than 600,000 shares) and 1,340,000 shares are being held in reserve of which 50,000 shares are intended for application by employees to give them a financial interest in.the business. The company is in no way connected with any other chain store company in Australia, and will not compete with the. usual variety chain store, as its trading will be mainly the sale of general merchandise on short-term controlled credit, t —.. DEMAND FOR DIAMONDS CONTINUED IMPROVEMENT • The largest diamond producing corporation in the world, De Beers Consolidated Mines, Ltd., in Kimberley, South Africa, has issued its annual report for last year, and it shows the continued improvement in the diamond trade. The demand for diamonds, states the report, continues to expand, and the prospects for 1937 are satisfactory. In the accounts is shown an unappropriated balance of £1,329,000, as against an unappropriated balance of £54,800 a year earlier. The company's diamond account amounts to £2,242,802. Added to those figures are interests and dividends on investments, £843,850; profit on investments realised, £416,700; making a total of £3,570,500. Expenditure was £639,700, leaving a balance of £2,930,800. There was £1,200,000 arrear dividend due to holders of preference shares, which was, however, more than covered by the unappropriated balance. Fraser and Co., selling agents for Otago and Oamaru Egg Circles, report as under:— Eggs: Poultry farm eggs, market rates. Butter: Separator pats, 9d to 9Jd per lb. Tallow, 15s to 17s per cwt. Pigs: Good bacon weights, 6Jd to 7d per lb; overweights, 2d to 3d per lb; porkers, 6Jd per lb. - Potatoes, 6s 6d to 7s per cwt. Chaff, £5 15s to £6 per ton, sacks extra. Whole fowl wheat, 6s to 6s 3d per bushel. Canterbury onions, 8s to 9s per cwt. Honey: Bulk, 7d per lb; 101 b tins, 6s 6d; 21b pottles, Is 3d. Poultry: White Leghorn hens, 4s to ss; heavy breeds, 5s to 6s 6d; cockerels, light 2s 3d to 4s, heavy 7s to 8s; roosters. Is 4d to 2s; ducks, 3s to 4s; ducklings, 5s to 6s fall per pair); turkey gobblers, 8d to 9d per lb, live weight; hens, 7d to 8d per lb. We stock "Palmer's" chick food, " National " meatmeal, leg rings Is per dozen (special quotes for quantities). We are Otago agents for "Gamble" electric incubators and the "Betteridge" egg cleaning table. Particulars on application. We are agents for "Champion" egg crates, " Isco " cod liver oil for poultry. Prices on application. Consignors please note that all pigs and poultry must arrive not later than Wednesday morning of each week. We have a stock of poultry crates on hand for the use of our clients.

Mar. SI. General Bosecroi. Insurance Fund. Net Profit. »nfl Bonus. e £ £ p.c. 1920 . .. 10.093 — 12.972 — 1932 , .. 17.SCT 3.007 11,9*9 3U 1934 , .. 34.821 8,127 50.70S 7 11-12 1926 . .. 79.312 17,115 80,111 10 1818 , .. 135.680 30.367 88.245 10 1930 . .. 178.M8 34,507 80,955 12K 1932 , .. 178.310 37.030 02.05S 10 1931 . .. 170.088 38,292 45.743 10 198J5 . .. 180.091 38.644 47.243 Utt 1936 . .. 02.352 15.000 53.223 65 193T .. .. 77.811 13.000 59.889 15

Seturn on DIs. C»pit«L tribute*!. Retained ' •' t- ' "•" ■ P.O. , P.O. ■ P.C.-' 1931-32 .. . . .. 10.49 " 10.00' '.48 10*36-33 .. . .'■.A 8.07 . 10.00 ' *3.33 1033-31 .. . . .. 15.24 10.00 5.24 1934-35 .. . . .. 15.75 13.75 3.00 1938-36 .. . . .. 17.74 15.00 2.74 1935-37 .. . , .. -16.88'-. * Minus. 15.00 4.96

Filled . Tint Asset*. - .14410 to Told. M»r. »1. AlllBtl ' ■Kjrad, Liquid. Hi £ p.c. P.O. ISM .. .. S3C861 845.266 82. ST 17.73 1923 .. .. 501.295 735.501 01.84 31.60 1924 .. .. 414.480 736,841 60.27 43.73 1926 .. .. 41C, 800 794.935 52.31 47.69 ins .. .. 406,911 808,391 40,97 53.03 1930 .. .. 297.932 916.987 32.49 67.51 1932 .. .. 237,801 877,423 27.11 72.89 1934 .. .. 191,373 530,315 34.37 05.63 193S .. .. 107.847 673.462 29.27 70.73 1931 .. .. 14P.303 626.584 23.83 76.17 1937 .. .. 152,059 478,474 31.78 68.22

gold production:— 1932 1936 ' Tons milled 34,906,450 48,221,120 Yield per ton, dwt 6.481 4.569 Working rev. per ton 27s Od 32s Od Working costs per ton .. 19s Od 18s 9d Working profit per ton .. ' 8s Od 13s 3d

£ s. d-. Commonwealth Bonds— 31 p.c., 1948 100 12 6 4 p.c, 1938 103 7 6 102 6 3 4 p.c, 1944 103 17 6 Bank of New South Wales 36 5 0 0 19 9 Coles 0 5 10 Mark Foy (pref.) 1 1 0 2 15 9 ADDITIONAL SALES Bank of New South Wales 36 5 0 Comm. Bank of Sydney .. 22 0 0 47 12 6 United Insurance 10 14 0 3 11 9 2 10 3 2 16 3 1 13 6 5 10 6 1 3 0 1 9 3 2 7 3 1 0 4.', Gibson and Howes .. 1 11 3 Anthony Hordern .. .. 0 19 9 Standard Cement .. 0 16 9 Woolworths (N.Z.) .. .. 8 2 0 1 11 0 1 12 0 0 13 6 2 3 6

Comm. Bank of Australia .. 0 18 11 National Bank (£5 paid) .. 7 7 0 5 10 0 1 6 n Australian Glass 4 12 0 1 3 0 2 16 0 Electrolytic Zinc (pref.) .. 2 18 0 0 13 6 4 0 3 South Broken Hill .. .. 2 10 0 0 16 4 Loloma 0 19 6 1 4 / 3