COMMERCIAL

Southland Times, Issue 19460, 27 January 1925, Page 2

COMMERCIAL

BAINFIELD ROMNEYS. FRIDAY’S SALE. A great opportunity presents itself to Southland farmers at the final sale of ‘‘Bainfield” Romneys, which is to be held at Waitoru, close to Wallacetown township, on Friday, on account of Mr W. D. Hunt. These sheep are famous throughout New Zealand for their great constitution and hardiness, also for the great weight and quality of their wool. Owing to the high price and great scarcity of good ewes it behoves farmers to purchase the very beet sires available and keep their own ewe lambs. TOKONUI SALE. YESTERDAY’S AUCTION. Messrs Hunter Bros, and Rice report a small yarding with prices well up to ruling market rates at yesterday’s sale. The firm sold:— Sheep: 25 2th wethers at 37/-; 49 lambs at 28/6. Cattle: 5 fat forward steers at £8 12/6; 1 dairy heifer £4 15/-, 1 do £4 12/6, 2 do at £2 15/-; 10 18-month steers at £2 11/-, 2 do heifers at £2 5/-, 13 do at £2 1/-, 4 do at 18/-. TALLOW. THE LONDON MARKET. The New Zealand Loan and Mercantile Agency Company has received the following cablegram from their London house: — We quote present spot values for the following descriptions of tallow: Fine mutton 55/3 per cwt., good beef 52/6 per cwt, mixed 47/3. Market quiet. BUTTER AND CHEESE. PREVAILING LONDON QUOTATIONS. Henderson and Co., are in receipt of the ’following cable, dated 23rd inst, from their London principals, Messrs Lovell and Christmas, Ltd.: ‘To-day’s official quotations: First-grade salted New Zealand 156/to 158/-, exceptional 160/-, unsalted 164/-. First-grade white and coloured cheese 93/to 94/-. Lower butter and cheese prices have improved the demand which is steady at present prices, and which we hope will continue.” The New Zealand Loan and Mercantile Co., is advised as follows:—“Butter: Choicest salted is steadier at from 158/- to 160/- per cwt. Cheese: The market is quiet at from 92/- to 94/- per cwt.” The National Mortgage and Agency Co., is advised from London by Messrs A. J. Mills and Co., as follows:—Butter: Steadier. Salted 156/- to 158/- per cwt; unsalted 162/- to 164/- per cwt. Cheese: Steady. White and coloured 94/- per cwt. The New Zealand Producers Co-operative marketing Association weekly cabled market report from London dated January 23 is as follows: Butter: The market has showed an improved demand during the past week. New Zealand salted is at from 157/- to 158/- Unsalted 164/-, Australian 146/- to 148/-, Argentine 144/- to 146/-, Danish 196/-. The market will not improve at present owing to the very large arrivals from New Zealand, Australia and Argentina during the next few months. Cheese: The market is quiet, but steady. New Zealand white and coloured are at from 93/- to 94/-, Canadian old stored 98/- to 102/-, Australian 88/- to 92/-.

INVERCARGILL STOCK EXCHANGE. YESTERDAY'S CALL-OVER. At yesterday’s call-over of (he Invercargill Stocl£ Exchange sales were, reported as follows: Bank of New Zealand 61/9. Southland Frozen Meat £1 (ord.), r 33/-. Southland Frozen Meat 10/- (ord.), r 16/6. QUOTATIONS. Quotations are as follow: Bank of Australasia, b £l3 7/6, s £l3 15/-. Commercial Bank, b 31/3. National Bank, b £6 15/-. Bank of New Zealand, b 61/3. Union Bank, b £l4 7/-. West port Coal, s 34/-. N.Z. Coal and Oil, s 4/-. National Insurance Co., s 73/-. N.Z. Insurance Co., s 31/9. Standard Insurance Co., b 41/9. Perpetual Trustees (Dunedin ), b 41/-. Southland Frozen Meat Co., (£1 ord.), b 33/-; (10/- ord.), b 16/6; (£1 pref.), b 33/-. k Union S.S. Co., b 20/-. Mosgiel Woollen Mills, s £6 5/-. D.I.C. (pref.), s 20/6. McLeod Bros.’ Soap, b £l5. N.Z. Drug Co., b 60/-. N.Z. Drug (rights), b 4/6. N.Z. Express (pref.), b 17/-. N.Z. Milk Products, b 25/-. N.Z. Paper Mills, b 20/9, s 21/6. N.Z. Sugar of Milk, s 26/-. War Bonds, 1930, b £97. Inscribed Stock, 1938, b £97. War Bonds, 1938, b £97. Inscribed Stock, 1939, b £97. War Bonds, 1939, b £97. Soldier Settlement Loan Bonds, 1933, 54 per cent., b £lOO. Soldier Settlement Loan Inscribed, 54 per cent., b £lOO. Bluff Harbour Board, s par. Sales r, par.

THE SHAREMARKET. YESTERDAY’S TRANSACTIONS. (Per United Press Association). CHRISTCHURCH, January 26. Sales reported: Kauri Timber 30/6, New Zealand and River Plate 20/6, New Zealand loan and Mercantile (ordinary stock), £95 10/-. AUCKLAND, January 26. Sales: New Zealand Breweries Debentures 21/9; Bank of New Zealand 61/6; National Bank of New Zealand £6 lf>/-; Taupiri Coal 17/-; Auckland Gas 25/-; Northern Steamship 16/6; Kauri Timber 30/6; Kawarau 25/-. DAIRY PRODUCE. N.Z. LOAN AND MERCANTILE AGENCY COMPANY. COMPETITIVE CONTINENTAL BUTTER PRODUCERS. LONDON, December 16. As shareholders were aware, said Mr A. Shepherd, speaking as Chairman at the annual meeting of the New Zealand Loan and Mercantile Agency Company, on December 1, the principal business of the company was the handling and realisation of wool, and, therefore, the position as regards this commodity in the Commonwealth and the Dominion must be of great interest to all stockbrokers. While in 1923-24 the total Australian clip was smaller than the preceding one, the falling off in production proved to be less than was generally looked for. The number of bales was stated to be 1,779,000, as against 1,918,000 for the previous year. In New Zealand, on the other hand, a slight increase of 5230 bales was shown, the clip being estimated at 588,680, as compared with ,583,440 bales in 1922-23. In addition to the new clip to be dealt with during the period under review, there remained on hand at June 30, 1923, some 523,000 bales in the hands of “Bawra.” Periodical offerings of these wools were made in London, Liverpool and Hull, and a final clearance of stocks was effected in May last. The bulk of the season’s clip was disposed of at the various selling centres in Australia and New Zealand, some 1,698,000 bales being sold in Australia. and 503.800 bales in the Do-

minion, and there was in consequence a marked in the quantity shipped on growers’ account for sale in London. APPRECIATION IN VALUES. The course of the market for wool, notwithstanding numerous unfavourable factors which from time to time affected trade and finance in this and Continental countries, was most satisfactory to the producer, the market almost consistently moving upwards, with the result that values in London on June 30, 1924, as compared with those current 12 months previously, showed an appreciation on merino of from 15 to 20 per cent, on fine crossbreds of 20 per cent, on medium crossbreds of 50 per cent, and on coarse crossbreds of 75 per cent. Taking that portion of the clips sold in the Commonwealth and the Dominion, the average per bale realised was £7 more than that of the previous season. Since -the close of the company’s financial year, the upward movement had continued, and present values show a further market! advance. While the quantity of bales in Australia was less in the present year than in the previous year, the number of bales in New Zealand was slightly larger, but in both cases the value of the amount of wool handled was much greater, being for both countries £6,696,000, in 1923-24, as against £5,779,000 in 1922-23. FOREIGN DEMAND. Strong buying support for the New Zealand and Australian clip was furnished from the Continent. The French section was particularly active, while Germany at times also /perated freely. America operated to a smaller extent than in some former years, that country’s purchases amounting to some 128,000 bales, as against 237,000 bales in 1922-23. During recent years the growing importance of Japan as a consumer of fine wool had been a feature of the Australian sales, and last season substantial purchases came from that quarter. PRODUCTION AND REQUIREMENTS. “The primary cause for the existing high level of wool values is no doubt to be found in the fact that production, particularly of merino, during the past few years, has failed to keep pace with the world’s requirements,” said Mr Shepherd. “The deficiency during the past and previous seasons was met from stocks in the hands of ‘Bawra,’ but these having been cleared, and it is believed gone into consumption, it would appear that the current production will not suffice to meet the world’s demands. An estimate of the world’s sheep flocks attached to the third annual report issued by ‘Bawra’ places the numbers at 551.624,000, as against 626,163,000 pre-war, while Sir Arthur Goldfinch, in his survey of the wool position, estimates the world’s production of wool (omitting Russia, Turkey and Asia—other than Japan), at 2845 million pounds, and in 1923 of 2840 million pounds which, taking the average for those two years, reveals a deficiency of, say, 15 per cent. “Taking a general survey of the position, apart from outside influences of a political or financial nature, which may adversely affect trade genarally, any marked retrograde movement in the value of wool during the next twelve months appears improbable. A return to more normal conditions on the Continent would indicate the maintenance of prices at a high level as likely to continue until production is materially increased.” In the season embraced by the accounts the company handled in Australia 176,336 bales, of a value of £5,619,000, as against 210,655 bales, of a value of £5,074,000 in 1922-23. The corresponding figures for New Zealand were 49,240 bales, of a value of £1,076,000 in 1923-24, as against 45,401 bales of a value of £705,687. INCREASED FOREIGN OUTPUT. The importation of butter into the United Kingdom daring the 12 months ending June 30 from Australia and New Zealand were considerably smaller than those received during the 1922-23 season, being a decrease of nearly 9000 tons in the case of Australia, and 11,700 tons in the case of New Zealand. It had, however, to be pointed out that the actual production of butter and cheese in New Zealand fell but little below tjiat ;of the preceding on?), which constituted a record for the Dominion. The average value of butter imported into the United Kingdom for the season worked out at 168/- per cwt for New Zealand, and 177/3 for Australia. While these are below the figures for the preceding season, they were about 60 per cent above the pre-war level. On the other hand, supplies of dairy produce from Denmark, Holland and other Continental countries were increased, and it may be noted that after seven years’ cessation, shipments from Russia were resumed, some 2300 tons coming from tht country to the United Kingdom. In the case of the Argentine, also, development is indicated by an increase in dairy exports of over 5000 tons. FROZEN MEAT. Shipments of mutton and lamb from Australia and New Zealand showed a considerable falling off, the decrease in Australia being some 3,600.000 carcases, and from New Zealand some 1,100,000 carcases. Broadly speaking, a good demand was experienced throughout. Arrivals of South American mutton showed an increase of 267,000 carcases, although there was a fall-ing-off in lambs of 237,000. Quantities of frozen beef shipped, both from Australia and New Zealand, showed a considerable decrease. Since June 30 the market here for both mutton and lamb had shown marked improvement, and arrivals of lamb have recently barely sufficed for trade requirements. There are practically no old stocks held in New Zealand, and accordingly the position is more favourable than was the case a year ago. CURRENCY SHORTAGE. Shareholders doubtless knew that considerable difficulty had arisen in connection with the transfer of money from this country to Australia and, to a less extent, to New Zealand. The situation was so acute that it became obvious that some method of increasing the amount of currency available in Australia, at the same time guarding against the dangers of inflation, had become of vital importance. The Commonwealth Bank, in conjunction with other banks in Australia, had accordingly arranged a scheme which had for its object a pool for the purchase of bills on London, and had arranged for the issue of some £15,000,000 of new currency on terms which provided for the return of the notes at the end of the season. This action appeared to have met the case temporarily, at any rate, and the current sales in Australia were now proceeding satisfactorily, although the rates for transfer of money to Australia still continued high.

N.Z. LAND AND INCOME TAX BILL, With reference to the question of taxation, the Chairman was able to state that a substantial reduction in the rate of income tax payable in New Zealand was proposed under the Land and Income Tax Bill, which had recently been passed by the House of Representatives. If the provisions of the Bill were agreed to, the maximum rate of income tax would be reduced to about 1/-, and the land tax by about 5 per cent. It was sincerely to be hoped that this Bill would pass all the requisite stages and become effective. He did not know whether it had been considered advisable to adopt the important recommendation of the Royal Commission—that the present system of taxing companies in New Zealand upon their local income as though they were individuals, which bears so hardly upon the larger institutions subject to taxation at the maximum rate, as in the case of this company, should be altered to a personal tax upon the stockholders at their appropriate rate as was the case in this country. He hoped that the Government of New Zealand would adopt the recommendation on this point, as also on the question of reciprocal relief to double taxation. It was undoubtedly in the interests of the people of New Zealand, as well as of investors here, that capital should be attracted to the Dominion and not discouraged by heavy taxation charges. Regarding the company’s interests in New Zealand, stockholders knew that conditions of business there had been extraordinarily difficult during the last few years, but these had materially improved. During the year under review the company’s business had benefited thereby, and the stockholders might rest assured that the Board. with the

able assistance of Mr Morgan (the chief inspector in New Zealand) and the local Board, were doing everything in their power to restore the company’s business to the satisfactory position it formerly enjoyed. Mr R. A. Holmes had been appointed Chairman of the local Board in New Zealand, and Hon. W. Downie Stewart had been nominated to a seat on that Board. The directors were satisfied that the interests of the company would be benefited by these appointments. SIX PER CENT DIVIDEND.

The accounts showed that the directors had written off the premises account £lO,OOO, and had appropriated to the staff benevolent fund £5OOO. After payment of the preference dividend they now recommend on the ordinary stock at the rate of 6 per cent less income tax, as against 4 per cent, tax free, last year. The reason for recommending that the dividend be paid on this occasion less tax rather than free of tax arose from the fact that the Finance Act of last session introduced a clause providing that every dividend warrant drawn after November 30, 1924, should be accompanied by a statement showing certain specified particulars. It appeared, therefore, that the most satisfactory way of meeting this requirement was to revert to the procedure of paying the dividend less tax. As the company was entitled to a deduction from income tax in respect of tax paid by it in Australia afld New Zealand, the rate at which income tax would be deducetd from (he dividend would on this occasion be 2/3 per pound. The result, therefore, to the ordinary shareholder was that instead of receiving in respect of each £lOO of ordinary stock held a net dividend of £4, as he did last year, he will this year receive a nett dividend of £5 6/6, or a nett increase of £1 6/6.

Mr A. M. Mitchison seconded the resolution for the adoption of the report and accounts, and after some discussion it was unanimously carried.

The Chairman proposed the re-election of Mr W. W. Paine as a director, seconded by Mr A. F. Wood, and unanimously agreed to. The re-election tn the Board of the other retiring director, Lord Richie of Dundee, was also unanimously approved on the motion of Mr Arthur Mitchison, seconded by Mr Clive L. Baillieu