COMMERCIAL

Southland Times, Issue 25360, 12 August 1935, Page 3

COMMERCIAL

FROZEN MEAT. (United Press Assn.—Telegraph Copyright.) (Rec. 6.30 p.m.) London, August 10. Frozen meat quotations are as follows, with prices for the previous week idso shown: — Aug. 4 Aug. 10. d d. N.Z. Sheep— Canterbury and North Island selected cressbred wethers and maiden ewes: 48-561 b 4( 41, 57-641 b 41 4) 65-721 b 4 4.1 Ewes: Under 481 b 2 J 2J 48-641 b 2? 22 65-721 b 2g 2g North Island; 48-561 b 4} 4g 57-641 b 4;l 4g 65-721 b 4 41 Australian Sheep— First quality crossbred and/or Merino wethers: 40-651 b 2 7 f 2 f i 30-501 b 2] 2', Second quality wethers: 30-501 b 2,, 2g Ewes: 30-551 b 2.3 2J Argentine Sheep— First quality crossbred wethers: 48-641 b 3? 3 s 65-721 b 31 31 Patagonian Sheep— Wethers and/or maiden ewes: Under 501 b 31 3J 50-601 b 3 3 Ewes: 40-501 b — — Argentine Lambs— First quality: 361 b and under 37-421 b _ 53 Second quality: Average about 281 L s,'i 5.j Patagonian Lambs — First quality: 361 b and under 5s 37-421 b 53 52Second quality: Average about 281 b a 25) N.Z. Lambs— Canterbury, first quality: 361 b and under 37-421 b 7 f 43-501 b <s Second quality: Average about 321 b 6s 6s Other South Island—--361b and under 7 s <ii 37-42’b 73 43-501 b 7 J 73 Selected North Island, including Downs: 361 b and wider 71 7 2 37-421 b 71- 7 J 43-501 b 7 A 7 A Second quality: Average about 321 b 61 6 2 Other North Island, First quality. 361 b and under 7} 7J 37-421 b 71 7 J Second quality: Average about 321 b 6’, 6Australian Lambs— Victorian, first quality: 361 b and under 6} — 37-421 b 6} — Second quality: 361 b and under 5j 5| Other States; first quality: 361 b and under 6 — 37-421 b 6 — All States; third quality: Average about 261 b 5J 5« N.Z. Frozen Beef— Ox fores (160-2201 b 22 Ox hinds (160-2201 b 3s 33 Australian Frozen Beef— Ox hinds (160115 and under) 33 33 Ox hinds (over 1601 b) 33 33 Ox crops (1001 b and under) 2| 2J Ox crops (over 1001 b) 2\ 2\ Argentine Chilled Beef— Ox fores (160-2201 b 2\ 23 Ox hinds (160-2201 b 4’ 41 N.Z. Pigs— First quality; 60-801 b 5? 5? 81-1001 b 51 51 101-1201 b 5i 51 Australian Pigs— First quality: 60-1001 b (average about 801 b) 5] 5J 101-1201 b 51 51New Zealand Chilled Beef— Ox hinds 3 33 Ox fores I 4 lj Australian Chilled Beef— Ox hinds 3 33 Ox crops I'l 1:1 Union of S. Africa Chilled Beef— Ox hinds 3} 3} Ox fores 1J 1JSouthern Rhodesia Chilled Beef— Ox hinds 2J 2., Ox fores I'l l:j DOMINION’S TRADE. DECREASE IN EXPORT RETURNS. JUNE STATISTICS. Statistics published in the current Abstract of Statistics, illustrating the state of business in June, reveal the normal off-season declines, the value of exports in particular being considerably lower than in May, while statistics of unemployment, bank debits, building activity, and other cognate series show the expected seasonal slackening in industrial activity. On the whole, statistics indicative of the business position in June compare favourably with corresponding figures for this month of last year, unemployment statistics, for example, pointing to a greater volume of employment than in June of last year. Since June virtually marks the close of the export season, trade statistics for the 12 months ended on June 30 are of particular interest. Generally speaking, the export season has been much less satisfactory than the previous season, exports• of wool, in particular, being some 29 per cent, lower in volume, and 52 per cent, lower in value than in 1933-34. The exceptionally dry summer affected dairy production, although apparently not to the extent that was anticipated earlier in the year. Exports of butter were 8.9 per cent., and of cheese 6.7 per cent., lower in quantity than in the previous June yeai. Exports of lamb, mutton, and pork were higher both in quantity and in value than in 1933-34, the increase in the case of pork during the last two seasons being an outstanding feature of recent trade statistics. The export trade in this commodity was relatively unimportant until quite recently, the 1934-35 export value (£1,313,502) being considerably higher than any previous figure. Exports and Imports. The value of exports of merchandise during the year ended June 30 exceeded that of commodity imports by £ (N.Z.) 8,652,370, equivalent to £6,955,000 on a sterling basis. During the previous June year, the value of exports, had exceeded that of imports by as much as £22,438,534 in New Zealand currency, or £17,951,000 on a sterling

basis. The exceptionally high balance on account of visible trade in 1933-34 was caused mainly bj' the unexpectedly good prices realized for wool in that season increasing substantially the value of exports, while imports remained at the very low levels of the • slump period. The increase in import trade during 1934-35 to something approaching the 1930-31 level, combined with the lower returns in respect of exports, has been responsible for the marked reduction in the visible balance of trade. The credit balance on account of commodity trade during the June year just past (£8,652,370 in New Zealand currency) is not sufficiently large to meet the normal outflow for invisible items, such as interest payments, etc., so that some slight reduction may be expected in the abnormally high level of London funds to the credit of the Dominion, which accumulated from previous seasons’ trading. Prices of New Zealand butter on the London market have shown a definite upward tendency during the last two months, New Zealand salted butter being quoted at from 92/- to 93/- (sterling) per hundredweight, on July 26, the market being firm at this price’. During May prices fluctuated between 77/- and 82/-. Cheese prices have not shared in this increase, the demand for this commodity being at present quiet, with a slight falling tendency in prices. The lamb market is firm, prices being inclined to harden; while the market for mutton is quiet. The beef market is poor, low prices for Argentine beef affecting the demand for the New Zealand product. New Zealand Government stock amounting to £10,135,800 at 5 per cent, per annum recently matured in London. Of this amount £8,000,000 was successfully converted to 3 per cent, stock, the issue price being 981. The remaining £2,135,800 was paid in cash, part of this amount being drawn from the sterling exchange holdings of the Reserve Bank, which fell by £(N.Z.) 1,281,840 between June 24 and July 15, the bank’s liabilities to the New Zealand Government falling by a similar amount. Overseas Trade. The value of exports during June was £3,227,259 as compared with £4,326,229 in May, the fall between May and June being indicative of the close of the export season. Exports of all the principal export commodities show substantial decreases in quantity as compared with the May totals, the greatest fall in any item of importance being observed in the case of wool. Exports of this commodity totalled 33,165 bales in June, the May total being 73,466 bales. Nevertheless, the June, 1935, export of wool was substantially higher than the figure for the same month of last year, when 26,436 bales were exported. Imports during June were also materially lower than in May, the June total value of £2,356,025 being the lowest monthly figure recorded since June of last year, when the total was £1,728,176. It should be noted that although the value of imports in June, 1935, was 22 per cent, lower than in May, and 31 per cent, lower than the peak level during the last four years (£3,411,118 in October last) .the total last month was not abnormally low for a June month. In fact, it was the highest June figure for five years past. During the last 12 months, imports have shown a substantial advance from the low levels of the previous three June years. Banking. The average weekly value of bank debits placed to individual customers accounts (excluding Government) during the month of June was £11,949,637, the highest total in a June month since 1930. The lowest June figure during the last five years was recorded in June, 1932, the June, 1935, figure representing an increase of 17.4 per cent, over that for June, 1932. The average amount on deposit with the trading banks fell from £61,869,063 in May, to £61,063,988 in June. Fixed deposits rose very slightly (by £36,941), while deposits on current account fell by £871,024. With the wane of the farm-production season a sharp fall is normally shown in free deposits between May and June, the decline on this occasion being in keeping with this seasonal tendency. An unusual feature of the statistics of trading banks is the slight rise shown in the average amount of outstanding advances. During each of the previous five years, a fall sometimes of appreciable magnitude—is observed in advances for June. The ratio ot advances to deposits has risen from 70.85 per cent, in May to 71.83 per cent, in June. The quarterly statistics of trading banks show that during the June quarter Government securities held bv the trading banks averaged £5.506,312 as compared with £26,886.244 in the June quarter of 1934 (the Reserve Bank did not commence operations until August, 1934), while the ratio of advances plus Government securities to deposits has fallen from 105.37 per cent, in the June quarter of 1934 to 79.85 _per cent. in the June quarter of 1935. Statistics of the overseas assets ot trading banks on account of New Zealand business on June 24 show that these assets totalled £24,496,608, while the sterling exchange reserve of the Reserve Bank was £22,813,024. Deducting the overseas liabilities of trading banks on account of New Zealand business (£1,285,800), the net overseas funds of all banks on that totalled £46,023.854, as compared with £46 580.938 on May 27—a decrease of £557,084. All these amounts are expressed in terms of New Zealand currency. RESERVE BANK. FIRST COMPLETE YEAR. REVIEW OF TRANSACTIONS. The first full year’s operation of the Reserve Bank of New Zealand was completed on July 31, the bank haying opened for business on August 1, 1934. In a review of the year, the New Zealand Herald says that before this moment arrived one announcement of first-class importance had been made. On July 19 there appeared an official statement to the effect that the bank proposed to retain, for a long period, the rates of exchange in London then existing. Coincident with the opening of the bank appeared the announcement of an official bank rate—4 per cent for the discount of first-class bills. This remained unchanged until recently, when a reduction of 31 per cent was announced. Roughly a week after the opening, the completion was made public. It was stated that on August 1 the Government drew a cheque for nearly £22,000,000 on the Public Account, that day transferred to the Reserve Bank. The power to do so arose because the surplus sterling held by the Government in London through the operation of the Banks Indemnity (Exchange) Act had been handed over to the bank and the Government had been credited with its price in New Zealand currency on the books of the Reserve Bank. This huge cheque was Paid into the Public Account Disbursement Account held by the North End Wellington, branch of the Bank of New Zealand. It was then drawn on to redeem the Treasury bills the trading banks held in return for the surplus sterling which the Government had acquired from them in London. One Striking Movement. One movement of bank funds under Reserve Bank auspices has been sufficiently striking to be worth remarking though the final figures are not available. This is the growth of London balances held on New Zealand account by all the banks. A return compiled by the trading banks showing their position at July 30 last year was gazetted

at the end of August. The Reserve Bank’s holding of sterling exchange in the first week of its existence was shown in its first return gazetted on August 9. The latest comparable figures are those at June 24, the date on which the last available monthly return of the trading banks was compiled. The sterling balances of the Reserve Bank and the combined trading banks, valued in New Zealand currency, at the two periods, are as follows:— 1934 R. Bank T. Banks Total August £24,480,0-19 £8,821,538 £33,307,587 1935 R. Bank T. Banks Total June 24 22.813,024 18,082,794 41,495,818 The comparison shows that though between the two dates the Reserve Bank’s holding of sterling has fallen by more than £1,600,000, the trading banks have increased theirs by over £9,800,000. As a result, the sterling assets held in London on New Zealand account have increased by some £8,188,000 during the period of 11 months for which the figures are available. They have grown from £33,307,587 in New Zealand currency to £41,495,818. SALES TAX OPPOSED. PLEA FOR ABOLITION. CHAMBERS OF COMMERCE. That, in view of New Zealand's improved financial position, it should be possible to abolish the sales tax without having recourse to the imposition of any further alternative taxation is the suggestion made in a statement issued by the Associated Chambers of Commerce. It is pointed out that the detailed figures relating to the taxation revenue for 1934-35, which reached a record level, strongly support the contention that the sales tax could be abolished without upsetting national budgeting. The statement says the figures show that, compared with 1933-34, the taxation revenue for the last financial year, not counting unemployment taxation, has increased by £3,118,000, producing with other receipts added, an excess of receipts over expenditure of £1,626,000. If the sales tax, which yielded £2,170,000 in 1934-35, were abolished, the gap to be bridged in order to square the Budget was represented by £544,000. The finding of this sum would be governed by a number of considerations. Stimulus to Business. Practically every item of taxation revenue was showing a firm improvement and should continue to give an improved yield. Abolition of the sales tax would further improve the yield from Customs and excise duties, Through the greater sale of commodities at present subject to sales tax. Through the greater sale of commodities relieved of the sales tax the yield from income tax on traders would continue to improve, while further measures of economy in Government expenditure could well be explored. “The argument of improvement in revenues as a balancing factor is borne out by the well-spread nature of the improvement in the 1934-35 figures,” continues the statement. "These are as follows:—Customs revenue improvement in the previous year, 14 per cent.; beer duty, 2 per cent; motor vehicles taxation, 12 per cent; income tax, 28 per cent; duty on instruments 19 per cent; totalisator revenue, 9 per cent; stamps taxation, 17 per cent; sales tax, 17 per cent; film hire tax, 34 per cent. ‘■Estimates Too Modest.” ‘‘lndeed, the ultra-caution exercised over the last two years in the official estimates of taxation revenue is shown by the fact that the total taxation yield in 1933-34 was actually £845,000 more than estimated, the estimates being too modest in the case of every tax item except two. Again, in 1934-35, the total yield from taxation has proved to be £872,000 greater than the official estimates allowed for under the last Budget. By tempering official caution in revenue estimating with a little ; more optimism, justified by the experience of the last two years; by infusing a strain of boldness into Budgetary methods; by restraining any tendency to increase State expenditure; and by again reviewing the whole field of Government services for the purpose of further economies, it should be quite possible now, in the country’s improved financial position, to completely abolish the sales tax without recourse to the imposition of any further alternative taxation.” RAW MATERIALS. (United Press Assn. —Telegraph Copyright.) (Rec. 6.30 p.m.) London, August 10. Friday’s closing prices for raw materials with those of last week in parentheses, were as follows: — Cotton. —Spot, 6.48 d a lb (6.68 d September delivery, 6.03 d (6.21 d Rubber.—Para, 4/d a lb (4£d); plantation smoked, s’,d (s'id). Jute—August-SepZember delivery, £lB 2/6 a ton (£9 15/-). Hemp.—August-September deliveries, £l6 15/- a ton (not quoted). Copra — August-September, South Sea. £9 10/- a ton (not quoted), smoked, £9 10/- (not quoted); plantation Rabaul, £lO 10/- (not quoted). Linseed 0i1.—£24 10/- a ton (£24 15/-). Turpentine—43/9. HIDES MARKET. (United Press Assn.—Telegraph Copyright.) London, August 10. Quotations for hides are as follows:— Meatworks (dry-salted).—Queens-land 351 b to 451 b, 5.1 d 301 b to 401 b. s’d; 251 b to 351 b, sd; 201 b to 301 b, sd. New South Wales, 351 b to 451 b, 6d; 301 b to 401 b, 5Jd; 251 b to 351 b, 5Jd; 201 b to 301 b, s]d. Meatworks (wet-salted). —Queensland, 501 b to 601 b, 33d; 401 b to 501 b, 3Jd. New South Wales, 501 b to 601 b, 4Jd; 401 b to 501 b, 41. Victorian abattoirs, 501 b to 601 b, 3Jd; 401 b to 501 b, 3/d. AUSTRALIAN COMPANIES. NET PROFITS INCREASE. A comparison made by the Sydney Morning Herald of the results, of 28 public companies published during the first half of this year with the corresponding figures of last year shows a substantial improvement over practically the whole field of industry. The aggregate net profits reported this year were £1,832,365, compared with £l,396,999 last year. The improvement is slightly more than 31 per cent. The companies selected comprise retail stores, steamship companies, suppliers of gas, electric light and power, companies manufacturing equipment, and material for the construction industries, pastoral companies, motor distributors, Island traders, glass and hosiery manufacturers and brewers. Motor distributing houses make the best showing with an increase in net profits of 192.2 per cent, although as there are only two the field is not fully covered. The improvement in each case, however, has been very marked, and each company has been able to pay arrears of preference dividend. Companies supplying the construction trades are next on the list, with an increase of net profits amounting to 146.8 per cent. The revival has proceeded hand in hand with the revival of building and real estate, and with increased expenditure on the equipment of factories. Retail stores have continued the improvement noted last year. Each of the five included in the list reported better results this year than last, and only one reported a loss.

More modest improvements were recorded by the steamship companies and by those supplying gas and electricity.

The pastoral group, the only one to show a regression, was obviously affected by the decline in wool values during the latter part of 1934. As regards dividends, the comparison is equally encouraging. Six of the companies arranged for the payment of arrears of preference dividend. Seven increased their rates of ordinary dividend, and only three decreased them. In the fourth case the actual rate was lower, but the distribution was on increased capital. The rest had either not reached the dividend stage or had declared dividends on the same basis as those of the previous year. .