SHARES & MINING

Observer, Volume XXXVII, Issue 49, 11 August 1917, Page 20

SHARES & MINING

[By BDi.uoNisff.]

THe report of the directors of the Wellington Woollen Manufacturing Company for the year ended June 30th, is apparently a laboured effort to give as little information as possible or to conceal as much of the fact. The company has done exceedingly well, mainly, if not entirely, because of the war and the profits are exceedingly large. In this respect, the AVellington Woollen Company is not singular for there are numerous other concerns 'that are at present making huge profit.

The gross profit earned during the twelve months including rent and transfer foes totalled £51,294 18s 4d, and the not profit amounted to £26,908 4s, or a little more than 50 per cent, of the gross profits. Out of this the very substantial sum of £5000 has been Avritten off for depreciation. No doubt the machinery has been kept running at high pressure on war Avork, and therefore the amount Avritten off for depreciation may be regarded as quite reasonable/ This leaves £21,908 4s to Avhich must be added £11,638 lis sd, making a total of £33,546 15s 3d.

There has been placed to rcservefund £7,500, Avhich Avill make that fund up to £50,000, a further sum of £2000 is added to the Fire Insurance lieserve bringing that reserve up £5050. The dividend for the year is at the rate of 10 per cent. 6 per cent of Avhich Avas paid as an interim dividend and a bonus of 3 per cent lias also been declared, making 13 per cent, for the year and absorbing £14,995 10s, " loavinir £9051 5s 5d to be carried forward.

The Wellington Gas Company is experiencing a very strenuous time and although declared an essential industry it is unable to supply the citizens of Wellington with tine full measure of gas. The company must be losing very heavily, but there is a. big principle involved and the Government itself is being tested The company is being, or Avas held up by seventeen men engaged in the retort house. These men Avere earning on the average over £4 per Aveek and Avere exceptionally well . treated. They demanded 'higher Avages when the agreement Avith the company expired, and this Avas refused. Tire men are not unionists. and therefore do not come -within the scope of the Arbitration Act. They gaA'e notice of intention to leave the service of the company and before that notice expired, the industry was declared to be essential. The men Avere brought before the Magistrate on a charge of hem? - parties to a seditious strike and Avere convicted. Before imposing any penalty the lmagi'strate gave the men a Aveek to consider their position, and at the end'of that period Iflieir counsel intimated that tbe. men stood firm. The company had offered to take back as many of the men as possible according to seniority of service, but this thov refused and further indicated that even, if the company were■ prepared to take all the men back they Avould not return to work unless granted an increase of Avages. That is, thov insisted upon their original terms. The mcii wore fined £5 each and _ costs.

Since then a conference was held at which the Prime Minister, the chairman of the Gas Company (Dr. Prendongast Knight) and two labour representatives were present, when an. agreement was reached by which the company agreed to immediately take on eight of the men, and t<> take on the others as soon as room could be made for them, in the meanwhile the Public Works Department to fiiul the latter with work close to Wellington. This agreement was repudiated by the men and there the matter stands In the meanwhile the waterside workers refuse to unload a vessel with coal for the company, consequently the company is unable to manufacture gas sufficient for the city and many industries! using gas are greatly inconvenienced, and many of these industries are engaged on war work.

It is time the Government took some drastic action to end an intolerable situation. Tho principal offenders iioav are not the gas-AVork-ei-s but the Avatersiders who refuse to unload a ship load of coal from the State coal mines. Will the Government act or is it afraid of labour? The State sells coal from itis mines and is unable to deli aw it and apparently the State is in no better position than the private firm, consequently there is no advantage in State oAViiership. It seems A-ery ridiculous, if- not very humiliating,, that seventeen men should be the means of makintr 60,000 or 70,000 people suffer.

It would be too much to expectthat the third War Budget Avill be acclaimed by everyone. When taxation is imposed there is always sure to be a Avbolo crop of objections and complaints and' yet Aye have not reached the limit of taxation for the Avar expenditure tends to increase and the end of the war seems as far off as ever. Broadly speaking, the Budget is very satisfactory and the Finance Minister has adopted one or tAVo courses 'hitherto unknoAvn in our history but Avhich are nevertheless prudent at the present juncture. « * •

The surplus for the past financial year amounts to the formidable sum of £4,308,777. and in the previous year the surplus Avas over £2,000.----000.

In normal times there Avould be no justification for extracting such excessive amounts from the people but just noAV this appears to be fully' justified. The Finance Minister is building up a reserve fund and is investing the money in London to be available in a time of pressure. At present about £7,000,000 is invested- in London, and the prudence of this will be readily realised. The deposits in the Post Office Savings Bank are rapidly expanding ow'msr to the extreme prosperity brought about through Avar prices. When the Avar terminates there is bound to be a sharp demand by the depositors for their money and large sums are certain to be withdrawn The Sfate must be prepared for this demand, and the Finance Minister i.s adopting the right course in creating a reserve fund that could be made available at very,- short notice.

There is another aspect of the matter that needs to be touched upon. The fixed obligations of the Dominion. Last year the amount paid by way of interest and sinkingfund Avas £823,994 more than in-'the previous year, and there is bound to be another A-ery substantial increase in the current year. The Government is taking authority to borrow £24,000,000, half of which is to be issued immediately. The rate of-in-terest is 4| per cent, and the larger amount Avhich must eventually., be obtained means an addition to the interest bill of £1,080,000. This hill last year amounted to £4,014.792. and with the interest to be paid on ..the additional.loan .the interest bill Avill amount to £5,094,792.

But that is not all. On present indications there is no likelihood of the war ending by March 31, 1918 and if it does terminate in the summer of that year, our war expenditure for 1918-19 will be quite £24.----000,000 which would mean a further addition of £1,080,000 to the interest bill makng the total £6.----174,792, without taking into consideration the interest on loans that may he raised for public works. And this does not exhaust our liabilities for there will be the War Pensions, the amount for which is steadily increasing. It Avill thus be seen that as the result of the Avar we will have very heavy liabilities to meet for many years and it is only right that as much should be obtained from the people now while they are ahle to find the money without feeling the pinch.

For the current year the Finance Minister estimates to have a surplus of about £1,200,000, but it will probably be more, but that will depend upon the facilities that may ho available for the shipment of produce. If Aye can realise on our produce there will be ample funds and the income tax Avill be large, but if on the other hand the produce is held up the position will be very difficult. In any case Avhen the Avar ends there Avill be some shrinkage in revenue Avithout any curtailment in our obligations so that Aye may look forward to a further increase in taxation.

The neiv taxes to be imposed this session appear to be fair in their incidence. The excess profits tax is to be abolished and in its place Aye are to haA T e a special income tax Avhich: is estimated to produce a> very large sum. Apparently this tax is to fall Avith some seA'erity on largo incomes, and that being so some of the joint stock companies yieldingbig profits Avill feel the tax. It is probable, too, that it-will affect tho market value of shares. However, until the Taxing Bill is brought down the effects can only be a matter of guess work.

The Loan Bill has practically got through Parliament and the prospectus ought soon to be in the hands of the public. It is the duty of everyone to help in this matter for the money must be found. £12,000,000 is not a formidable sum for the people to find in their present prosperous condition, and the Avealthv classes must set an example to the others.