BRITISH TRADE.

Press, Volume LXIII, Issue 19150, 5 November 1927, Page 16

BRITISH TRADE.

SHIPPING INDUSTRY. RETROSPECT AND PROSPECT. (VTRITTBN JOB THB FBSBS.) (By the Commercial Expert of the "Economist.") The "Economist" Index Number for whole-cargo shipping freights recorded an advance of 3.84 per cent, during August, the August figure being 122.75; against 118.21 for July. From time to time we have referred to the manner in which certain British shipping companies were affected by last year's coal strike. But sufficient time has now elapsed since the strike was ended to enable one to judge how it affected British shipping as a whole. Taking the accounts ol eighteen representative companies, exactly half of them returned higher profits for 192b than for the previous twelve months. But it is noteworthy that these nine include a fair percentage of the smaller companies and fheir increase in profits was not large. Among the more substantial companies whose earnings were higher are the Argentine Navigation Company, the Cunard Company. Furness, Withy and the Orient Steam But some of the larger companies returned lower profits and these include the Royal Mail Steam Packet, the Eagle Oil Transport, Elder, Dempster, the P. and O. Company, and the Oceanic Steam.

Turning to the ordinary dividend distributions, we find that of fifteen companies whose shares are quoted on the Stock Exchange three were unable to make an ordinary dividend payment; but these three made no payment last year. Three companies made reductions in their distributions, but one company—the Cunard—announced a small increase. At the present orices mam r of the shares give distinctly modest yields. It is thus clear that there is considerable optimism with regard to the shipping outlook. The outlook is undoubtedly better than it has been for some time past. Thus the president of the Chamber of Shipping says: "The outlook for British shipping is probably brighter to-day than it has been for many years." After stating that the prosperity of our shipping depends _ upon the prosperity of world trade in general and of Britain's trade in particular, he adds, "There are many hopeful signs." This hopefulness wilil doubtless encourage interest in the Shipping. Engineering, and Machinery Exhibition now being held in London.

The P. and 0. Company's New Capital ? Plans. In the preceding note we refer to the quiet optimism with which the Juture of shipping is viewed. This reading of the future is supported by the proposals of the Peninsular and Oriental Steam Navigation Company for an increase in its capital. The additional cUpital, it is stated, is required to pay for the new tonnage now being, and about to be built and for the 'general purposes of the company.. Clearly the P. and 0- Company have reasonable expectations of being able to employ'the new tonnage profitably, while it is evidently considered that the price of shipping: will not fall appreciably in the .near future. Incidentally a hitch has occurred in seeking the necessary powers, to make the new issue of capital. It was proposed to increase the deferred stock from £3,592,518 to £4,592,518 by the creation of £1,000,000 additional deferred stock, thus making with the addition of the existing preferred stock the total capital of the company £7,632,518. The new stock was first to be offered, on bonus terms, to the existing preferred and deferred stockholders. But the meeting of stockholders held to sanction the scheme was the scene of a protest which caused the chairman, Lerd Inchcape, to adjourn the meeting to October 12th. The protest casts no reflection whatever on the directors. The new capital, as everyone recognises, is needed to pay for new tonnage already ordered; and the bonus which the terms of the proposed issue offer to stockholders is welcome. The point, objected to by the deferred stockholders is that the benefit of this advantageous issue is extended to preferred as well as deferred stockholders. By the terms of the existing charter of the company, however, the, directors are bound to offer the opportunity of subscription to both equally. It will be interesting to see what denouement of the situation Lord Inchcape and his colleagues evolve in the next few weeks There is a case, no doubt, for the revision of the company's charter; but this can hardly be effected bv October 12th. One obvious way out of the difficulty would be to obtain the new capital required by an issue, of prior charge stock, and to scrap the present proposals. ' But there are reasons for doubting whether the Board would take this step.

Shipping Activity at British Ports. Britain's overseas' trad© is slow]y recovering from the effect of last year's disastrous coal strike. In particular, the August figures of exports are encouraging. This is clearly reflected in the figures relating to the movements of shipping at British ports during August. Thus the total of shipping, with cargoes, cleared was 5,642,094 tons, compared with 3,342,208 tens in August a year ago and 4,806,365 tons in August, 1925. The shipping entered shows a welcome decline in contrast with a year ago. But much leeway remains to be made goo before, Britain's overseas trade can be considered satisfactory. The annual report of the first port of the Kingdom—namely, the Port of London—for the year ended March 31st, 1927, is a further reminder of the disorganisation which British shipping suffered owing to the strike. The net register and deck cargo tonnage of shipping that left and entered and paid river tonnage dues shows an in- | crease in respect of foreign vessels and a decrease in respect of coastwise traffic. Thus the total of foreign was 30,604,196 tons as compared with 27,480,981 tons in 1926; the total of coastwise was 5,932,886 tons, against 8,371,039 tons in 1926. The financial position of the undertaking, however, shows an improvement as' compared with a year ago. The total revenue was £6,401,723, against £6,303,125, for 1926, and there was a balance of surplus revenue at £157.296, against a debit balance of £6528 a year ago. Dealing with the question of improvements, the report states: "Substantial progress has been mad© with the programme for bringing the undertaking and its equipment into a proper state of repair and an up-to-date condition. Further authorisations in pursuance of this policy have been made for the ensuing year."

CONCERN AT ADVANCE,

("the times.") (Received November 4th, 7.45 p.m.) LONDON, November 3. The "Time*" trade supplement says that Bradford's wool is advancing' dangerously in the opinion of many consumers, and is unable to-command compensating prices for tops, yarns and piece goods. The more labour that is put into wool the more difficult it is to make a profit. Disquietude is caused by the estimates of ths largely decreased Australian clip. It is unfortunate that .contradictory figures should bo sent out. There is need of reliable statistics of the number. 6f sheep in Australia and the collection of this should be simple. Ths great, difference between official and private* estimates makes one desßsir at agreement,