Share and MININIG

Observer, Volume XXVII, Issue 36, 25 May 1907, Page 20

Share and MININIG

By Obadiah

fIHHE London money market is I weaker. The Bank of Eng- •* . land has lost £72/, 000 of gold, : an 4 the reserve circulation and dek posits are all lower than a week ago, but the proportion of reserve to liabilities has increased slightly. The shrinkages have had a marked effect on the open market, for the billbrokers of Lombard-street have advanced their rate by 5s per cent. • • • We shall most likely have a stiff } money market presently, for the Yankees have developed another j gamble, and this time it is in the ■■; wheat pits of Chicago. Wheat has J touched a dollar a bushel on two occasions since the boom commenced, and many fortunes have been made f. and lost. This mania for gambling { on the exchange is a serious matter, / for it causes disturbances in coun--1 tries far apart. The wheat gamble | can be kept going for some weeks : yet, or at least until the harvests of .Europe and North America are gathered, consequently monetary disturbances will continue. ■ • • • The position of the money market in Australasia is satisfactory, but it . must be admitted that while there are large supplies of credit the demands are very pronounced. In Aus- : tralia the conversion of enterprises into joint stock companies is absorbing a considerable amount of ; money, but the demands of the State Governments are the disturbing factor. In this colony the in- ; creased capital demands of existing ; joint companies are the disturbing '. element. However, I believe there : are ample funds to meet present demands, consequently there should be no change in rates. * * • The directors of Sharland and Co., Limited, have decided to issue 21,275 preference £1 shares, which will be entitled to a preference dividend of 6 per cent. When these are issued the share capital of the company will be £75,000, a very large capital for so small a concern. The open liabilities, bank overdraft, etc., according to the balanceSheet, total £2*2,600 17s 7d, and it is to reduce this indebtedness, main- : ly> that the preference shares are ? to be issued. The increased in- ' debtedness, according to the chair- ! man, was owing to increased stock ; arid book debts, consequent upon i growth in the business. But will not the same thing recur even a*ter the additional capital comes in ? ' . • * • ! jThen, again, it is a big question whether it is worth while from a shareholders' point of view to in- : crease the gross turnover, because '. tljie experience of last year was that although there was a decided expansion in the turnover, the net profits were less. Shareholders are nbt likely to endorse this dissolving view. It is problematical whether the directors have got a thorough gj*ip of the intricacies of the business. What appears to be wanting is economic business management — the kind of management that sets tjie best results from the least expenditure. * • m Mere increase in the turnover does not necessarily imply good management, and while it may be freely admittted that the best efforts have been given in the case of Sharland and Co., JLimited, still the best results have not been obtained, or, rather, results commensurate with the efforts have not been achieved. The management must be judged by results, ' and the results -are expressed 'in net' profits, not in an. expanding turnover.

Efi eotive management is the pressing need in a good many businesses in New Zealand. There is far too much waste of money in most concerns, and New Zealand has yet to produce men capable of overcoming this waste.

There are now three colonial companeis appealing to investors for capital, and all three are issuing preference shares. The Wellington Woollen Company is appealing tor a large sum, with every prospect of success. The " New Zealand Times " Company is about to issue 30,000 preference shares of £1 each, which will be taken up by some budding politicians and others, and now comes Sharland and Co. with an issue of £21,275. Since £4,200 is already promised by a section of the shareholders it is very probable that the whole amount wall be subscribed. It will be necessary to hold up the market value of the old shares at par, at least : otherwise the public may regard the old issue as a better investment at a discount than the new lot at par.

The wool sales closed last week, and notwithstanding all the talk about recovery in values, a good many classes of wool were depressed. Further, it is evident that values did not come up to expectations, otherwise the carry-over would not have amounted to so large a number of bales as 15,000. The decline, however, was exceedingly small, and not one to cause any concern. The hemp market is steady, with an upward tendency, for prices nave actually risen slightly.

If the reported shortage in the wheat crop turns out to be correct, there is sure to be a very heavy carry-over of binder twine, and next year will see hemp prices drop. Butter is still dull, but cheese, I am glad to notice, is improving. It seems likely now that cheese will meet with a good market for some time to come. Ifrozen meat is steady, and so is tallow.

The trade returns of the colony for the year ended 31st March, as compiled by the "N.Z. Trade Review," are very interesting and very satisfactory. The value of the exports of New Zealand produce for the year totalled £19,277,640, as against £16,115,609 in the previous year. This shows an increase of £3,162. U31, equal to about 20 per cent., which is very pleasing indeed, and the increase appears to be pretty evenjy distributed between expansion in' quantity and higher prices realised.

Thus, the quantity of wool exported increased by 14| per cent., while the increase in value added 10 per cent. In frozen meat the increase is due entirely to the quantity. The total exports — that is, including exports and specie — amounted to £19,531,588, as against £16,267,329 in the previous year. Of the three million increase, over two million accrues in the North Island, and one million in the South Island. Wellington easily holds first place in exports, being £500,000 more than Auckland, which comes next.

The Atlas Assurance Company, Limited, during the year ±- earned in its fire department a .net preium income of £952,532. The net claims were £868,668, £410,141 being on account of the San Francisco fire. As expenses and commissions took £855,340 the fire fund was reduced by £281,476 to £538,919. It is mentioned that had it not been for the San Francisco fire the year was a favourable one and would have shown an underwriting profit of £145,095. The profit and loss account received £30,309 from interest on fire and shareholders' funds, and £23,230 was transferred from the reserve. The dividend for the year is equal to 5s per share, and the total funds after raying the dividend will be £2,820,855.

The first annual report of the Wellington Harbour Ferries, Limited, covering the period to 31st March, is very satisfactory, inasmuch as there is a profit of £1981 in the first year's trading. The paid v~ capital oi the company is, £27,317 and the value of

the shipping property is placed at £25,120, after writing off -J. 603. The goodwill has been written down by £250 and stants at £750. Perhaps the directors would not have erred if they had written off £500. The profit on general working is £6303, and it will be interesting to see how the current year's operations will compare with the figures now presented. During the year arrangements were concluded with the Wellington Steam Ferry Company, Limited, whereby this comEanv agreed to lease a piece of the •ay's Bay property, erecting thereupon a water chute at a cost of £1302 18s 3d. Of this amount, £302 18s 3d was written off. The venture has been sufficiently satisfactory in the opinion of the directors to justify them in providing at Day's Bay more attractions of a similar nature.

The prospectus of the Dannevirke Gas Company, which is in the hands of Mr J. M. Lennox, may safely be recommended to investors. As a rule, gas stock pays good and steady dividends, and the stock is invariably at a substantial premium. This Dannevirke enterprize should be no exception. The town has a population of 4000., and is in the centre of a prosperous agricultural district, so that the prospects aro first-class. The shares are offered at £5. Mr Lennox invites early application, as it is expected that the capital required will be over-sub-scribed.

The Parker Lamb Timber Company, which appears to be doing a sound business, has declared the usual dividend of ten per cent. With the shares at 6s premium, and a ten per cent, return, the shareholders have nothing to complain of.

The market for investment stocks is steady, but, so far as mining is concerned, it continues to be very weak and lifeless.

Bank of New Zealands continue to be steadily enquired for at £10 ss, but sellers ask £10 Bs. » • •

Several parcels of National Banks were done during the week up to £5 9s 6d. There are still buyers at £5 9s.

Insurance stocks ape all in demand, but are firmly held. New Zealands are a shade easier, with buyers at £4 7s. South British are wanted at £5 6s, and Nationals, ex div., at 275.

Standards have been done at 245, which is an improved price, and buyers are still offering 23s 9d. * • •

There were one or two sales of Taupiri Coals during the week at 19s 6d, with buyers left at 19s. Somehow, this stock does not appear able to maintain par price, notwithstanding the steady dividends. Probably, the intention of the lirectors to acquire more property ay be the cause.

Devonport Ferrys, which are always strongly held, have been done at 355. Buyers offer 34s 3d.

Kauri Timbers continue to be in favour with investors. For contributings, 8s Id was paid this week, and 8s is still on offer.

Auckland Tramways also continue to engage attention. The latest sale of ordinary shares was at 24s 6d. ' There are buyers of -^reference at 23s 3d and ordinary at 24s 3d, which is a trifle easier.

Waihis are still firm at £9 7s. The dividend of 3s and bonus of 3s will be paid next week. * • • Waiotahis have eased slightly since last week. Buyers offer 23s yd-

Talismans have improved since the cable was sent Home announcing the value of the ore in the new lode at No. 13 level at £9. Snares are worth about 38s.

May Queens are a trifle better at 2s lid. When all doubt about the Government subsidy is finally set at rest, they should see higher prices. • • •

Tairua Broken Hills advanced this week to 4s sd, a good deal of business being done, but the shares have eased again to 4s 2d. The prospects, are good just now.

Shares in the Ngatiawa mine at Great Barrier were quoted for the first time this week, and business, was done at Is 7d and Is 6d. The Puru Consolidated battery is being put up on the mine, and should bq in operation seven or eight weeks hence. The show is a good one. • • •

The Eclipse is being wound un. Mr H. Adams was the successful tender^ er for the plant at £400. IVxore. disappointed expectations. '

Though the Waihi Extended has got the reef at No. 4 level, shares have fallen to 6s, which would seemi to indicate that the show is not as good as was expected. Operations are being delayed by an accident. :-

" They talk about the vanity of a woman, but the vanity of an actor is just as pronounced. He is so struck on himsf-li' that lie' likes to be netted he is just human." — Andrew Mack.

Ininii-diiitoly upon his return from America Mr- (Jeorge Titheradge was engaj-'oil jor tlie J(sad in a new London company, wliich is being or}';iiMM (] chiefly for the production oi SliaUespcarian plays.

Mr M. i\Tnrf-us is at present acting as n>nrmfT i manager of Messrs J. and K. Tsi it's picture show 'The Kelly (iaitg. 1 '

IV! r SfiutJcy Walnolp, who toured New /.i-u'fMui with Mr J. C. Williamson's ( i)in|iaiii(;B which were headed by Air (jnyliT Hastings and Miss litt.«'ll lininp has been transferred to.ih<- Julius Knight Company, at present appearing at the Sydney I{<>\ ill.

l.n liny, Ik).sco n-nrl Talma, the con-jiu-or.s «.•. lv, Loured New Zealand last your, h;ui; just concluded a two inontlis' \ isifc to Lisbon, in Portugal.