FINANCE AND COMMERCE.

Press, Volume LXIII, Issue 19140, 25 October 1927, Page 12

FINANCE AND COMMERCE.

BRITISH TRADE. MORE HOPEFUL OUTLOOK. WOOL RECUPERATES. {BT CABLS PRHSS ASSOCUTIOX— COPYRIGHT). (irSTRALLUf AND J-'-Z' CABLE ASSOCIATION.) LONDON, October 23. Although the gilt-edged section of the Stock Exchange has maintained a steadiness, despite a number of now issues, other departments have been irregular, notably certain of those industrial shares in which there has been so much activity recently. This, apparently, ■was largely due to profit taking by speculators. The settlement of tho Victorian loan lias been favourably commented on though some financial papers express burprise at its flotation, as they thought Australia's borrowiug 'programme was finished for the year. The price is regarded as reasonable, and a satisfactory subscription is anticipated, although there is unlikely to be any great rush for stock. Regarding the question of price, it is interesting to note that the Borough of Birkenhead's loan of £1,000,000 five per cent, stock was floated this week at 301}. The Stock Exchange thought it too dear, and the underwriters were left with 79 per cent.' There is a possibility of an increase In the number of trustee stocks, and perhaps less demand for Australian loans, as it is stated that the Canadian Provincial Premiers propose to approach tho British Government with a request to make their loans trustee stocks. Tlitherto they have not ranked as such, and the Canadian Premiers are anxious that they should have the same status as Australian State loans on this market. Dairy Produce. The buttor "trade continues very dull, but prices for Australian and New Zealand show little change, and it is generally <thought that the bottom has been reached. Tho statistical position certainly favours this view, for, according to the figures published by the "Grocer" (a weekly trade newspaper), the surplus at December 31st will be only 4000 tons, which is loss than one week's consumption. This figure is arrived at thus: — Present stocks in cold stores and private stores are estimated at 20,000tons; arrivals from New Zealand, Australia, .Argentina,' Denmark, and other countries to December 31st, 44,500 tons, giving a total of 64,500 tons. Eleven weeks', consumption at the rate of 0000 tons weekly amounts to 60,500 tons. The concessions which the shipping companies have offered in Australian butter freights are welcomed by the trade, but many importers fear that for this -season at any rate the quantity shipped' from Australia will not reach the 40,000 tons necessary to secure an allowance of 2i per cent. It is pointed out that only in three recent years, 3922, 1925, and 1926, have the imports of Australian butter exceeded 40,000 tons, while last season the total was only 30,216. It is feared that due to the belated start Australia will be unable to reach 40,000 tons, this season.

WOOI. ; In a general review of the wool posi-1 tion H; Dawson and Company write:— "The principal factors to be considered for the coming season's policy are that tho season opens with a clean start as regards supplies; that primary markets' stocks in England are lighter than usual;, and that France is moderately supplied, Germany perhaps less So, but the machinery there is well employed v with good orders to ensuro the maintenance of employment. There are evidences of a wprld-wid'o call for manufactured goods at reasonable values, and the trade would derive great encouragement' from a season of stable prices, •with minimum fluctuation." . , Tho writers add: "While the, outlook for tho Homo trade presents difflr eulties, it is probable that the more adverse .'factors are beginning to. lose force, and British industry is gradually, , recuperating and developing. The cost of living is still declining, the balance of money available for expenditure perhaps being greater. Foreign competition abroad-is less overwhelming, and ■with the lessening disparity in competi-_ five advantage tho excellence of English goods r is eroating a greater call. ,l llr seems certain that tho current season's clips will be easily absorbed, and the temporary scarcity in the consuming centres may force opening prices to a level at which the whole cannot bo marketed, and some declino be necessary as increasing supplies 1 exert the -usual financial pressure, and so induce caution."

According to the "Economist" newspaper's monthly trade review the situation shows a slow, but porsistent upward trend.. The signs of the times, however, are more than usually difficult to read, and it is not easy to say how far the more hopeful outlook of many business men is due to concrete developments. Thus the unemployment figures remain well above the million mark, ' and recently tended to rise very slightly. . , i ' On the other hand tho variety of contemporary ovidenco suggests that the volume of industrial activity is more than maintained. Tho heavy trades lave gained a little ground. The coal output is slightly increased, and the iron and steel output has been maintained at a. moderately high level, lne shipbuilding trade is better than for many months. ARTHUR COCKS AND COMPANY (N.S.W.J Arthur Cocks and Company, Ltd., shows a profit for its year of £14,343, ooavpared with *. 13,838 the previous year. The usual dividends of 10 per cent, on ordinary shares onl 7 and 8 per cent, on preference shares •ocount for £14,150, and £3013 is carried forward, against £2820 brought into the account. A comparison of accounts follows: — Year ended July 31st.

While creditors have decreased by £8426, there is a bank overdraft shown of £9239, of which £3564 is on building account. Debtors are lower by £3209, and there is an increase in etooks of £ll,llO. The report states that the business of the subsidiary in Queensland has naturally been affected by the advene' conditions prevailing in that State, but in the circumstances the results : of the Tear are satisfactory. In New Zealand there has been a severe trade depression, and the subsidiary there bad suffcred_ with; other- trade companies, but hiw cuslained no loss.' There are indications of 1 ft nmna trade.

. IRON AND COAL. ELECTRICAL INDUSTRY. (TTRITTES FOB THE TEESS.) (Bv the Commercial Expert of the •■Economist.' ') ' The Iron and Steel Outlook. Despite the fact that August is the height of the holiday season, the iron and steel world has not been uneventful. Manutacuirers are evidently making a determined effort to meet foreign competition. The Cleveland iron-toasters have announced a reauction of 'is (5U per ton in tlie price 01 pig-non, together with an audmona, reuueuon ol is wt per ton on export orders of a minimum of 000 tons. Ibis 1 olluws other reductions maue during tne year. Moreover, steei-masters Have instituted a reuate scheme under wnich consumers who buy omy British products will receive m the form of rebates substantial presents from time to time. It is clear that the imports of iron and steel are a serious menace to Home manufacturers, for these continue at the high rate of about 4,0u0,000 tons per annum. Whether the price reduction wiil haive the desired effect remains to be seen. It has certainly stimulated seme buying in domestic circles, but August is not a fair month by which to judge results. The Stock Exchange, at any rate, has placed a favourable interpretation upon the move. The majority of tho iron and steel shares, in common with many other industrials, iave advanced in the past few weeks and there can be no doubt that there is a danger that the upward movement will be overdone, if this has not already happened. It must he remembered that many British iron and steel companies have not only paid no ordinary dividends for some time past, but they are also in arrcar with their preference dividends, while recent allocations in respect of depreciation have not been generous. Obviously they will need a fair period of much better times than the present before they will be able to resume their ordinary dividend payments. Meanwhile, it is significant that the monthly production figures of iron and steel continue to show a declining tendency. Tho pigiron production dropped from 651,30-) tons in June to 640,800 tons in July and the steel production from 747,300 tons in June to 687.100 tons in July. At the time of writing it. is too early to predict the autumn prospects with confidence, hut it is noteworthy that there is no trace of conspicuous optimism in the producing centres.

The Coal Position. There is little change in the coal situation. If anything, the gloom has deepened. The Spanish Government decree imposing a licensing system on imports has disturbed British exporters, but it is possible that the importance of the Spanish market has been exaggerated. The British exports to Spain for the first six months of this year amounted to approximately 1 1-3 million tons. .This further-outbreak of economic nationalism, however, is certainly deplorable,. since 'it • does not help—to put it at the very lowest 1 -; the urgent work of the economic re-, habituation of. Europe. The sensitiveness of British exporters to conditions abroad is perhaps due to the unpromising domestic situation. The output has recently been on a lower scale. At no time since the end of June has the weekly output reached five, million and- since the middle of July the number of wage-earners employed has remained consistently below one million! It is true that demand has generally sufficed, to absorb tho reduced quantities of fuel available, prices being steady and tho market having a better tone. But no one can pretend that this is a satisfactory state of affairs. Indeed, We seem to be drifting back to the conditions that preceded the great strike of 1926. Meanwhile, the Government,'the owners, and the miners are unable, or unwilling, to make a solitary move to save the situation; The only obvious, hope for the industry lies in the systematic rationalisation recommended by the Samuel Commission, but the main proposals of that Royal Commission are being neglfcted by all parties concerned. It is to be hoped that the approach of winter will awaken at least one of the interested parties to the need for action. It is satisfactory, so far as it goes, that a large group of anthracite collieries : in South Wales have appointed a wellknown firm of coal factors as their sole selling agents for Home and foreign markets. Greater efficiency in marketing, it will be recalled, was one of tho recommendations of the Samuel Commission.

Combines in the Electrical Industry. The electrical industry in this country has been frequently subjected to the criticism that it has lent itself unduly to the formation of "rings" and "combines," intended to| maintain prices and control production. This criticism is answered and the electrical industry is studied, in detail, in a volume entitled "Combines and Trusts in the Electrical Industry," - published 'by the British Electrical and Allied Manufacturers' Association. . It' is pointed out that the electrical industry has, through effective combination and the observance of reasonable standards of production and price, maintained its position against foreign competition of the most determined nature; it has become.the leading export branch of the engineering industry and has brought this country easily into the first place among the exporters of the world in electrical goods. But the view is expressed that, if it is to retain this position, it must be prepared for action, for it has still to meet the competition of iuterational groups with very great financial and political resources. Two possible courses are indicated: either to form closer associations with German and American manufacturing concerns, and so become absorbed in the international combine which may be formed ultimately, or to tighten up its own organisations, form a compact group of manufacturers with a common policy both in manufacture (prices and orders) and in finance, and at the same time strengthen the central association. It cannot continue in the present system —where too much concession is still made to the theory of individual concerns with individual policies and badly-regulated conditions of production and price—and remain in existence. The industry can meet the conditions that make action necessary if it combines now much more effectively than hitherto, but, on a conservative estimate, it has not more than two years in which to effect the necessary changes before Jthe testing period will come. It is not a question of technical but of administrative efficiency. NAPIER HARBOUR BOARD DEBENTURES. (bt cable—peess association— copyright.) (australia!? ahd k.z aito 6tjh cabls.) (Received October 31th, 10.50 p.m.) LONDON, October 24. The Napier Harbour Board's 5J per cent, debenture issue yieldß £5 83 lid per cent.

GOLDEN RAIN. BREAK OF DROUGHT. CROPS IN NEW SOUTH WALES. (FKOII OUB OVTK CORRESPONDENT.) SYDNEY, October 13. It. is perhaps impossible to estimate in actual money the wealth of the recent rain in New South Wales, even if it were too late for some parts, for even where it was light, it came just in time to save a considcraole proportion of the wueat crop. While the harvest is liken' to be one of tlie lightest tor many years, the position, without the rain of the last few days, would have been infinitely worse, and such, indeed, as to cause grave anxiety. In the new wheat districts of the west, the possible total failure of the crop was causing some concern. The wheat yield will now. be sufficient for local consumption and for seed, and will, in addition, provide a .small (surplus for export. The rain, incidentally, once again • played a fateful part in the life of tlie Royal Agricultural Society. It was the irony of fate that the rain which means so much to those on whose support the Royal Show relies should haivo brought disaster to that , pageant at Easter. Then last week the society staged the Spring Show primarily, one imagines, to help it to recoup its sever;'; losses at Easter. Once again the rain t-ipoilt everything. As Sydney weal her cannot seemingly be relied upon, either 'at Easter or in the spring, the society will perhaps, as a gamble, stage its next Royal Show in the winter on the off chance of experiencing then the rosy light of sunshine of which it has now been twice, cruelly cheated .this year.

CANADIAN WHEAT. HUGE HARVEST RETURNS. (dt CABLE—PRESS ASSOCIATION—COrYBIGIIT.) (Sydney "Sun" Service.) OTTAWA, October 23. With the threshing outfits working all night under tho glare of automobile headlights, Canada's wheat crop continues to be rushed to the market as never before. Thursday's record was beaten bv Friday, with 7,300.0C0 bushels accepted by the elevators during the 24 hours. This day's . harvest alone fills 90 one-third of which is moving towards the Pacific and the remainder towards the Atlantic seaboard, en route to England. Phenomenal yields are reported from many districts. One farmer on the extreme northern frontier harvested 85 bushels to the acre off new land costing £2 an acre. INCREASED WOOL PRICES NOT FAVOURED. (A-DSTKALIAH AND K.Z. CABLi ASSOCIATIOX.) (Received October 24th, 9.40 p.m.) LONDON, October 24. The Bradford correspondent of the "Financial Times" commenting on the hardening values of wool in Australia says .it would appear that some people are becoming anxious as to the sufficiency of the. season's clips to meet the d mand for merinos and crossbreds until thenext clip is available. Tho present position of British buyers is unenviable. Manufacturers have sufficient difficulty iii -making a profit and they c nsider that higher wool prices will mean a curtailment of business.

WARD AND CO., LTD. The balance-sheet of Ward aud Co., Ltd., for the past year shows as follows:

' The "Investment Digest l ' comments as "follows: —The presumable cause of tho lower revenue was that the 1926 year had the benofit for a time of the income from assets, which wore distributed among the shareholders in August, 1925, and also from properties sold in that year. Part of the fall in revenue: was compensated, by reduced expenditure, and the decreaso in net profit was only £4638 to £9282. Ths sum was £7lB short of the ; 10 per cent, dividend, a matter of little "consequence having regard to the .very .substantial reserves of £176,382. Tho company is virtually an investment company, and practically all the assets are liquid and the real estate mainly represents tho one hotel property unsold, in which the company has a three-quarter interest. The assets are undorstood to be very conservatively valued and the shares should be a sound investment for permanent holding. Not cscsts, 45s 3d per £1 share fully paid.

KAITAKI PARA RUBBER. Kaitaki Para Kubber Estates, Ltd., a company producing from plantations m Papua, made a profit of £9757 during the year ended June 30th last, compared with £11,590 made tho ten months ended June 30th, 1926. The reason of the smaller profit was the fall in the price of rubber. Rubber produced increased to 245,3521b from 188,2871b. Dividend paid is lower by 1J per cent., .being 11$ per cent., and accounts for £8438. A sum of £ISOO is allocated to equalisation of dividends account, and £IOOO is transferred to the reserve fund, leaving £1033 to be carried forward, against £2215 brought into the account. A comparison of accounts follows: —

An interim dividend of Is 6d per share, declared since the closing of the accounts, is not included in the accounts for the year shown above. Since the previous report, the area of the property of the compauy has been increased by the purchase of 100 acres. The Singapore brokers of the company report that the company's No. 1 smoked 6heet is equal to- London standard quality. Tie manager, in the course pi hi 3 report, informs shareholders that with the approval of the directors he obtained from the Dutch plantations at Java 5000 rubber seeds, which, though not of the most expensive grade, were from trees yielding from three to five times more than the average yield of other trees in the Papuan field. The seeds have germinated in a satisfactory manner. More seeds have been ordered-for next year, among them being a small number of the very best seeds.

1936. 1927. 2Cet profits ..£13,333 £14,343 Div., cad., p-c-10 10 DiY., ord., amount .. 11,825 11,625 Div., 7 per cent. pr*f. .« 1,503 1,503 Piv., 8 per cent. pref. 622 saa Curried forward .'.* 2,830 3,013 LIABILITIES— Capitalist prei. .. 21,170 21,470 2nd vnt. .. 10,375 10,275 Ord. .. 118,255 118,255 ReEerres .. 10,000 10,000 Mortgage. .. 25,000 20,000 Bank ,. — • 9,289 6undry creditors .. 67,912 59,486 AS9ETSFrcchold property .. 48,553 46,561 Stocks .. 89,109 100,219 Sundry debtors, etc. •. 79,570 76,361 Investments .. 43,508 37,050 Fixtures .. 5,865 4,467 Cash .. 2,114 114

Year s 1927. - -Dec. Liabilities. June 30,--:-Inc. Capital: Paid up in 10s '- ~ shares f.p. 50,000 — ■Reserve Fund 103,116594 Freehold Prop'. Dep. Re'-' serve . .. 2000 —- Mortgage Dep. Reserve 11,00044000 P., and L. Account 5266— 4718 Shareholders' Funds ., 231,382— 1312 Creditors • 27884988 Tax. Reserve 521341 Creditors' Distribution aVcount : • 239,383— 6a39 6602 Assets. Advances (Secured) an( i Investments 209,517— 1778 N.Z. Government War Loan 3800— 5500 Freehold Properties 13,463 ■ — Debtors 132— 56 Bis. Receivable 237542375 Cash 10,096— 239.3S3— 1703 6662

10 months, Year. June 30, June 30th, 1926. 1927. Production, lb 188,287 245,352 Profit £11,590 £9,757 Dividend, per cent. .. 1-5 115 Amount of dividend 9,375 S.43S To equalisation of dividends 1,500 To reserve fund — 1,000 Forward .. " 2,213 1,033 Liabilities — Capital 75.007 75,007 Reserve for taxation 1.500 1,018 Bank .. 1,799 1,600 Creditors -1,593 1 2,620 Assets— Plantation and buildings ... •■ Plan* and vehicles 72,057 2.168 73,249 1,789 Rubber stocks 2,550 1,332 Stores .. i. • 453 482 Debtors .. 2,336 1,690 * Live stock 568 737 Unexpired labour contracts S34 710 Investments 3,655 3,755 Cash 459 °