SHARES & MINING

Observer, Volume XXXVI, Issue 49, 12 August 1916, Page 20

SHARES & MINING

[By Btjllionist.]

THE directors of the Christchurch Gas Company have reduced the interim dividend from 5 per cent, to 4 per cent., and explain that, owing to the considerable sums which the company will have to meet due to increased taxation, war bonus to a section of the employees, halt pay to those at the. front, and large advances in the cost of material and coal, it has been deemed prudent, pending consideration of the full accounts at the close of the year to make a reduction in the interim dividend.

The first annual report of the Otaihape Farmers' Meat and Produce Company, covering operations from January to June, 1916, must be considered extremely satisfactory. After providing for all accrued charges, and estimating stocks on hand' and in transit at conservative values, the. operations of the company show a profit of £2083, beingequal to 12 per cent, on the subscribed capital. The whole of this profit is. carried forward. The total quantities of stock slaughtered during; the period were: Sheep 33,186, lambs 18,292, cattle 1650, calves 56 —the equivalent, of 71,502 sheep.

The British Tobacco Company (Australia) Ltd. announces an increase in the amount of ordinary capital issued from £3,702,244 to £3,734,529 by the issue of 33,285 ordinary shares, which have been allotted to the trustees of the employees' trust, as. provided by the company's articles of association.

There has. been no fresh development with respect to the alleged purchase *>f the Union Steam Ship Company by the P. and 0. Company. The rumour of the negotiations was apparently without foundation, but is served the purpose of enabling some holders of Union shares to get out with a huge profit. The Union Company is: doing very well, and could probably pay a larger dividend than the last, but. if there is any increase in dividend there would at once be a powerful demand for the reduction of freights and fares, and it is difficult to see how such a demand could be resisted. Furthermore, the precedent set by the Commonwealth Government in purchasing a line of steamers, will operate against any company endeavouring to make undue profits. The Australian precedent will, sooner or later, be accepted in New Zealand, and a ferry service between Lyttelton and Wellington is one of the probabilities of the near future. i

A closer check on joint sl*sck companies after t,he war seems to be inevitable. These concern® are becoming very powerful with their huge capitals, and the ramifications of their business penetrate all grades of society. The larger companies are beginning to appreciate the importance of providing pensions for employees or giving the latter some tangible interest in the business in the. shape of shares. The greatest menace in joint stock enterprise is the company that is. disloyal to its employees, * and, unfortunately, there are too many of such concerns. Employees are looked upon as so many machines, there is. never any chance of promotion, and the managers are only held in check through fear of the Arbitration Court. It is ; these companies that are creating trade unionists. , ;

Last week there was a substantial withdrawal of gold from the Bank of England, the amount taken for export being approximately £1,443,----000. This movement is natural at this time of the year, because of the crop movements. Harvest operations are now in full swing in Europe and North America, and. in view of the high prices ruling for all produce, the desire will be to gather in every ounce, of stuff. It is probable that harvest operations are the cause of the present lull in the fighting, especially on the West front.

The loss of gold from the Bank of England is only temporary, and presently the metal will flow back, in addition to the new gold from the mines, especially the mines of South Africa. Money is dear in London just now, and'as it. is required for harvest purposes the Government may suffer in its loan operations. This, again, will be only a temporary matter. It was reported the other day that the Bank of England will not during the duration of the war publish its holding of gold bullion, and some people jumped to the conclusion that this referred to the gold coin and bullion in the Issue Department, which, of course, was quite wrong.

Besides the. gold belonging to the Issue Department of the Bank of England the Bank holds other stocks. For instance, the British Treasury owns a very substantial stock of gold which is being held against the State's note; issue. Then, again, it is probable that the Bank is storing some of the yellow metal for other British joint stock banks, arid also for foreign banks, and perhaps also for foreign treasuries, like Russia, Fiance and Japan. It is these outside stocks, of gold that are not to be disclosed in the future.

The Commonwealth war loan is apparently a huge success. The total' amount subscribed is not yet known, but the State is assured of £21,750,800. There was a great rush of applicants on the closing day, and although the Federal Treasurer complains that some of the larger financial institutions might have given greater help, the Federal Government has done very well. The results are sufficient to tide the Government over the next six months in its war expenditure. In addition to the local loan the Federal Government raised £4,000,000 in London for public works, paying the high rate of 5£ per cent. The money was obtained without any great trouble whatever. It. would be interesting* to know to what extent the Federal loan was supported, by the working classes.

The Financial Minister of New Zealand, Sir Joseph Ward, has intimated that he will be placing a war loan for £8,000,000 on the local market, and wq have no. doubt that if judiciously handled it. will prove a huge success. There is. undoubtedly an enormous amount of idle money in the country, of which the working classes hold a considerable proportion, and a special appeal should be made to the workers to invest their savings in war stock. This is a matter of sound, thorough advertising on the lines adopted by the Imperial Government.

The Commonwealth trade returns for the year ended June 30th are not so favourable as would appear. The exports totalled £74,906,240, as. compared with £60,592,576 in the previous year. These figures show the substantial gain of over fourteen millions. The imports were valued at £77,377,447, compared with £64,----431,827, an increase of nearly thirteen millions sterling. But the balance of trade is: against the Commonwealth, as the imports exceed the exports by about £2,500,000, that is to say the Commonwealth had to pay out more than it. received.

The abstract of statistics issued by the New Zealand Government does not give the trade of the year, but for the six months to June 30th last the exports totalled £20,388,679,

against £17,770,220, an increase of £2,618,459. The imports for the six months totalled £11,969,814, as against £9,508,987, the increase being £2,460,827, or very nearly as large as the increase in the exports, but the total exports for the six months exceeded the imports by the enormous sum of £8,418,865, or enough to meet the. local war loan.

If Sir Joseph Ward can secure £8,000,000 he will have sufficient to pay New Zealand's war expenditure for eight months, and by that time the war may be over, or at least approaching the end. It would be a good thing for New Zealand to have this gilt edged security floating around, for so far the only investment appears to have been land that has long been turned into a gamble, and we have also our gold mining and racing gamblers. The Finance Minister must endeavour to create a market for the war loan stock, especially if it is. desired that the working classes should invest in the stock.

The deputation of workers who waited on Mr Asquith the other day submitted some, rather difficult problems for the British Prime Minister to consider. Labour desires that there will be a reversion to trade union practices after the war. This is a very open matter ,for the conditions after the war will not be the same as they were, before the war, and it may be absolutely impossible to re-establish old practices. It is time it was recognised that the war has caused a revolution in our industrial, economical and social life, and that matters cannot be the same. The situation will have to be. viewed from a new angle.

The straits to which the Central Powers and their allies are being reduced financially was fully illustrated by a Reuter telegram. Germany sent Turkey a whole heap of depreciated and practically worthless Government bonds, and against these Turkey is issuing notes. If the bonds are worthless the notes must be more so. Famine and poverty and the Russian Bear are hugging Turkey very closely, and the "Sick Man" of the' East must shortly be flung out of Europe.