COMMERCIAL

Southland Times, Issue 25308, 11 June 1935, Page 3

COMMERCIAL

DAIRY INDUSTRY. NATIONAL ASSOCIATION. ANNUAL REPORT. The annual report of the National Dairy Association of New Zealand states, in part:— Total gradings for the 1933-34 season were 139,337 tons butter and 105,139 tons cheese, compared with 127,779 and 100,998 tons respectively for the previous year, representing an increase in butterfat production of approximately 8 per cent. The present season opened under normal climatic conditions and early indications pointed to a further increase in production. Later, however, the whole Dominion was subjected to exceptionally hot, dry weather, the conditions being almost unprecedented in the history of the industry. Dried up pastures and general shortage of feed were reflected in falling milk supplies, with the result that production fell considerably behind the previous year. Fortunately the drought conditions terminated in most districts early in February,'and a .favourable late summer and autumn season was assured, which will in some measure balance the earlier set back. The gradings for nine months to the end of April, with corresponding figures for 1933-34 season, are as follows:—

Quality. Grading returns indicate that the quality of both butter and cheese has been maintained at approximately the standard of the previous year. While a definite advance, particularly in the quality of our cheese, would have been more welcome, it must be recognized that during the hot weather, both production and manufacturing conditions were unusually difficult. With regard to butter, some troubles were experienced with food flavours, while slit openness has again been in evidence in the cheese, but no complaints of a very serious nature have arisen. The difficulties encountered this season have again emphasized the necessity for the introduction of Dominion farm dairy instruction, a reform consistently advocated by this Conference for many years past. The Royal Commission in its report recommended that farm instruction be placed on a sound basis, and it is hoped that in spite of the financial difficulties involved, means can be found to put it into operation. Improvement in the quality of the raw product, and also more rational transport methods to eliminate overlapping, etc., must be brought about before we can hope to attain the higher level of quality in our butter and cheese which is so essential under present trading conditions. The following is the monthly average of prices realized on the London market for the twelve months ending May, with corresponding figures for last year:— BUTTER.

Herd-Testing. The production per cow for the 1933-34 season—22o.Bolb. of fat—constitutes a record. The credit for this record can be largely attributed to the wide ramifications of the herd-testing ! movement, not only in eliminating the low-producing cows but also through the heifer calf marketing scheme in supplying for herd replacements stock of proved breeding and butterfat backing. The estimated number of cows tested under the group system this season is approximately 255,000, a decrease of 20,000 cows in the number tested the previous season. It is anticipated that the total number of cows under test in the Dominion, including the association own samples’ figures, will exceed 275,000. The decrease can be attributed to the unsettled conditions of the overseas markets, with the possibility of restrictions and quotas being placed on dairy farm products. The value of herd testing is indisputable. In view of the facts disclosed from year to year, it is difficult to understand why the percentage of cows under test has hot been raised to at least 40 per cent, which could be regarded as the ideal. That herd testing is a sound practice is borne out in the increased production in the herds of those farmers who have consistently adopted herd testing over a series of years. In many cases the increase has been in excess of 1001 b. fat per cow. The logical conclusion to be drawn from the operations of herd testing is that if it pays the owners of approximately 300,000 cows to test their cows it must: necessarily follow that it would pay the owners to test the remaining 1,600,000 cows. The following is the considered opinion of Mr A. H. Cockayne, Assistant Director-General of Agriculture, in a letter written in 1933 to the federation supervisor of herd testing:—“lt does look to me as if it would be fair enough to say that cows when tested apparently produce about 201 b. fat per year more than when not tested, and if such be the case then the argument for every year testing is sound, 201 b of fat at 9d. being worth 15/- and testing not costing more than about 4/6 per cow.” An earnest appeal is made to dairy company directors to foster this essential part of the dairy industry, not only for the benefit of the individual supplier, but for the great benefit that will accrue to the industry as a whole. Keeping in mind the fact > that increased turnover on the farm means increased turnover to the dairy companies, thus reducing overhead costs, directors should recognize that herd testing can definitely assist to "h greater extent in improving the financial position of their suppliers, than can* any other single factor. To quote the words of the Dairy Industry Commission in this connection: “It is therefore a movement which is worthy of the greatest commendation.” Duty on Cement.

Proper concrete vards and surround-

ings on the farm, are highly important factors in the production of highest quality dairy produce, a point which was strongly stressed by Jast conference, when a remit was passed Urging the Government to remove the import duty on cement. During the tariff revision which took place last year, the Government saw fit to reduce the duty from £1 to 13/4 a ton, but the interests of the industry demand that the embargo should be totally removed in .order that supplies might be available at the lowest possible cost. .The matter is the subject of a remit on this year’s agenda, and no doubt further representations will be made by the conference. WAIHI GOLD MINING COMPANY. ANNUAL MEETING IN LONDON. CRUSHING BURDEN OF TAXATION. At the annual meeting of the Wftihi Gold Mining Company in London last month, Lieutenant-Colonel E. H. LBeddington, who has now been elected chairman, said that during 1934 they obtained from the mine £540,714 from an output of 229,351 tons of ore, as compared with £538,581 from 224,689 tons of ore for the previous year. “As the average price we obtained for our gold in 1934 was 11/7 per fine ounce more than we obtained in 1933, said the chairman, “you will appreciate that the management has had difficulty in maintaining the value of our headings which have fallen from 31/per ton —mine valuation—to 28/6 per ton, and that it is only the enhanced premium on gold that has enabled us to maintain the sterling value of our bullion sales. The average price of gold during 1934. has been £6 17/7.85d per fine ounce; our gold fortunately has realized £6 19/0.16d sterling per fine ounce and has realized a total premium for the year of £174,148. It is only the existence of the premium that enables us to pay dividends and to bear the onerous burden of taxation now inflicted upon us.” Although the tonnage crushed during 1934 exceeded that of 1933 by 4662 tons, yet the ore reserves in the general account at the end of the year showed a slight increase. On the other hand there was a decrease of about 1400 tons in the suspense reserve account. In other words, although they had, during the year, taken out of the mine some 229,000 tons of ore, yet the total ore reserves remained at approximately the same figures as at the end of 1933, with but little variation in the average values. These figures indicated that the efforts of the management in the problem of maintaining ore reserves had, in spite of increasing difficulties, met with a measure of success. The most important development work carried out was in the north-west portion of the property. They had devoted particular attention to this area, and at the present time work was proceeding on the north branch of the Martha lode at Nos. 3,4, 5,6, and 7 levels. Some 8000 tons of ore were mined from this section during the year. The chairman also gave details of the development work on the various levels. Crushing Taxation. “There is but little to add to the late chairman’s remarks last year about the crushing taxation that we have to bear,” said Colonel Beddington, “except that we are in complete agreement with them. I will mention, however, that in the case of our mine the longer this difficult lasts the more hazardous and difficult do our operations become. Ours is not a new mine with all its free life before it, but rather an old mine whose recent development has not been too encouraging. There is a large amount of low-grade ore in the mine which even with the premium at its present level is on the border line of payability. With taxation at its present level much of that ore will never be mined, and the data of the eventual closing down of the mine and the consequent throwing out of employment many excellent men at work there will be accelerated. Our aim is to mine as much of that low-grade ore as possible, and to sweeten it with highgrade, because it is only by maintaining a large output that we can keep costs within reasonable bounds. Year by year it becomes an increasingly difficult task for our executive to determine how they are to maintain the tonnage output, and at the same time ensure that the heading values are high enough not only to cover costs and the taxation, but also to provide a profit. The time will come when if the present taxation is maintained we shall have to decide between the present programme of a large output and mining low-grade ore with a consequently large number of men at work, and the alternative method of mining highgrade ore with a comparatively small number of employees prior to considering the closing down of the mine. I cannot say when that time will come—it depends largely on the price of gold and the burden of taxation, but undoubtedly each year that passes brings it nearer.” Provision for Staff. After referring to the loyalty and devotion of the staff in New Zealand, the chairman said that in this connection there was a note in the balance-sheet stating that certain miscellaneous small reserves and amounting to £24,968 8/which, as a whole, were no longer needed for the purposes for which they were originally provided, had been transferred to a reserve for stay provision. The proposal was now really a new one—it had often been in the mind of the late chairman who had discussed it with his colleagues, and it seemed to them desirable that some funds should be set aside for the eventual benefit of those old employees who had done so much to earn the dividends, and that the position should be regularized without further delay. In regard to the venture in Siam, the dredge had started working, and had produced to the end of last month 107 tons of tin. with an estimated mining nrofit of £7909: these results must not be taken as a forecast for the future, as the dredge had not yet got into regular working routine, nor had London office expenses or amortization been considered in arriving at that figure. Further, the financial results in the future must depend, in addition, on the price of tin and the regularity of values of the ground dredged. As soon as they were satisfied that the dredge was working regularly and normally, quarterly returns would be nublished. So far as things had gone he had no reason in any way to qualify the guarded optimism of the late chairman with regard to this venture. Payment of Dividends.

The chairman said that owing to various obstacles it was impossible to submit the directors’ new proposals at the meeting. These, however, would be submitted in the autumn. They would include the distribution of 3/- per share in some form or other on account of the money received from Horahora.

“The board recommends you to declare a final dividend for 1934 at the usual rate of 1/- per share, free of tax,” concluded the chairman, “and it has further declared an interim dividend of 6d per share, free of tax, on account of 1935. This is necessitated by the fact that the profits of the Martha Gold Mining Company (Waihi), Ltd., will have to be capitalized from January 1 to March 16 in accordance with the Companies Act—i.e., from the date of purchasing the Waihi assets in New Zealand until the date of incorporation of the Martha Company; in consequence. the Martha Company may have difficulty next November in declaring an interim dividend of more than 6d per share, and by this method you will receive the usual 1/- per share, only instead of it being all paid

as usual in November, you will this year receive 6d in May and the other 6d in November. I will now move: That the directors’ report and statement of accounts to December 31, 1934, as submitted to this meeting be received and adopted, and that a final dividend for the year (No. 139) of 1/- per share, free of income tax, be now declared, and that the balance of revenue, amounting to £87,242 13/5 be carried forward.” The resolution was carried unanimously. WORLD CURRENCY. STABILIZATION PROBLEM. France’s difficulties (writes a financial expert) focus attention on the world currency problem, particularly as France was reported early this year to be in favour of a currency exchange stabilization agreement based on a sterling, franc, and dollar pact. At present the world may be divided into a least four groups of countries, each group holding on to a different monetary system. The largest group consists of those countries which have abandoned the gold standard, and whose currencies have depreciated from 40 to 90 per cent. This includes England, the dominions, Scandinavia and Finland, Esthonia, Japan, Spain, Greece and the South , American countries. The second group comprises countries which, to use the words of the Netherlands Trading Society, have “propped up the gold standard with a security system which practically deprives it of its worth.” In these countries the official money value has no longei’ a connection with real value. The group includes Germany, Austria, Hungary, Jugoslavia, and, in a sense also, Italy. The third group comprises countries which have reduced the gold value of their currencies, but have subseqrrently returned to the gold standard. They are the United States, Czechoslovakia, and Belgium. The fourth group has remained on the gold standard. This includes France, the Netherlands, and Switzerland.

Now the greatest difficulty facing these groups in the way of currency agreement and in the elimination of upsetting developments like the speculative attack on the franc is whether to return to gold, to adhere to gold, or to adopt some of goods standard. In the United States the question has, at least provisionally, been resolved in favour of gold. In England‘and other countries of the sterling group it is still in. suspense. But granted a general return to gold, there is still the question as to what level the countries will adopt for stabilization on gold. For various countries in the first and second groups, as the trading society points out. there is also the practical difficulty of foreign payments being so extensive that the free gold standard might not be maintained without special arrangements made beforehand. Finally, it is not yet clear how the gold standard would operate in the long run if business between countries remained hampered by quotas, high import duties, import prohibitions, and similar weapons of what has come to be known as “trade warfare.” GORDON AND GOTCH, LTD.

In the half-year ended March 31, Gordon and Gotch (Australasia), Ltd., earned a profit of £31,690, compared with £33,027 for the previous six months, and £36 828 for the period ended March 31, 1934. A sum of £25,564 is brought into the accounts and the usual dividends of 5. per cent, on the ordinary shares and 4 per cent, on the preference shares absorb £29,000, leaving £28,224 to be carried forward.

Butter Butter 1934-35 Tons (salted) 120,255 (unsalted) 4,863 1933-34 Tons 127,023 4,539 125,118 131,962 Cheese Cheese Decrease = 4.90% Tons (coloured) 26,162 (white) 57,949 Tons 31,053 64.041 84,111 95,094 Decrease = 11.55%

Month 1934-35 1933-34 June 77/- 79/78/- 81/July 74/- 75/78/- 80/August 79/- 81/88/- 90/r September 71/- 73/98/- 102/October 66/- 68/96/- 101/November 73/- 75/82/- 86/December 73/- 74/68/- 71/January 81/- 85/66/- 67/February 85/- 87/69/- 70/March 74/- 75/71/- 72/April 76/- 78/71/- 72/May 77/- 78/76/- 77/CHEESE. White.; Month 1934-35 1933-34 June 48/6 49/47/- 48/July 48/- 48/6 48/- 49/August 49/- 49/6 48/- 49/September 47/6 48/51/- 53/October 49/- 49/6 49/- 50/November 51/6 52/50/- 51/December 45/- 46/48/- 49/January 46/6 47/45/- 46/February 47/6 48/43/- 44/March 45/- 45/6 43/- 44/April 44/6 45/43/- 44/May ' 43/6 44/44/- 45/Coloured. Month 1934-35 1933-34 June 46/- 46/6 52/- 53/July 45/- 45/6 51/- 52/August ■ 46/- 46/6 51/- 52/September 45/- 45/6 52/- 54/October 49/-- 49/6 48/- 49/November 50/9 51/49/- 50/December 45/- 1,46/45/- 46/January 46/- 47/43/- 45/February 47/- 48/45/- 46/March 45/6 46/3 44/- 45/April 46/- 46/6 43/- 44/May 44/6 45/43/- 44/-