COMMERCIAL ITEMS.

Dominion, Volume 6, Issue 1633, 27 December 1912, Page 8

COMMERCIAL ITEMS.

■ . BRITISH ASSETS. The report of the Comptroller and Audi-tor-General upon the Consolidated Fund, of the United Kingdom for the year ended March 3i last has been issued as a. White Paper. It' is pointed out in- connection with the €inking funds under national,debt services that under the Eevenue Act of 1911 the income and expenditure for the two years 1959-10 and 1910-11 were to be aggregated', for the purpose of calculating tho old sinking fund iu the latter year, and the surplus of in-come over expenditure in the.two years was £5,605,765 14s. 2d. Of this, sum, £5,250,000 was appropriated, as follows;—(a) To tho development fund, in lieu of .the sums to be issued out of" the consolidated fund in the three years ending March 31. 1915, £1,500,000; (b) to an account to be available ■ for the purposes of the provision of, or making grants in.aid to sanatoria, etc., £1,5M,0C0; and (o) to the-Government of the East Africa Protectorate -hy wav of Joan,. £260,000. ■ The only ■ issue during 1911-12 .out -of these amounts wa5.,,£47,000 .from the, last-named., amount ■in'-.December last.. The totol issues, from the .Exchequer to the ,National Debt ■ Commissioners on account of tlie . sinking' funds during the veur w'ere:-01d, . £2.356,765; new, £4,447,706: and annuity, -£15,547. The total of £6,320,019, added to the unapplied balance of £2,181,102 in the. hands of the national debt commissioners, oh April 1, 1911, made tho total amount a|>i'plicableto the reduction of debt £9,001,121. >Of 'this/sum £5,759,358 was applied "as follows :—Purchase and cancellation of Consols; £4,759,858, and Exchequer bonds £1,000.CCO, leaving o. balance.unapplied on March '317,1aet of: £3,241,262.' ;The"total payments from the Excheeiuvi' to local taxation accounts under the" various Acts were:—England, £6,995,118; Scotland, £1.174.019; and Ireland. £1,<67,2«i; total, £9,630,399. ■ The "capital liabilities of the State", disclose thart, the following assets, of an os--timatcd'.,Value of £47,750.386, may be considered as a set-off to the total amount for which-the'-State was indebted on March 31:- ■ - .". , .. Estimated market value df Suez './'£' ' . Canal shares .'. ..." 44,046,000 Advances from the'.Exchequer unI'ropaid- biillion , ; .;,..;......... ' 250,000 lioan., to' the Government of the East Africa Protectorate .47,000 Contribution of colonies t« capital -,-, expenditure on :the Pacific Cable ■ 1,327,386 Nominal value-of debenture etock of the Cunard-Steamship Coin- -,■ ■ ••.-.'• ■• pa-iiy,'' held as'.fsceurtty. -for re-- . ' payment,of advances under the. .'■ - , Cunard agrcoment (3loney)Act, 190-1 .:....;.................;.■....'.... '. 2,080,000' In addition to'the above, the Exchequer I balances at the Baiiks o! England' and Ireland amounted to £11,468,591. .'.,._ ..BANK CREDIT IN ETJSSIA. 'The British at Kharkov (Russia), writing on the system,of, bank. credit, pre.vailing in ,'iliat country,;states, according 'to-tho "Board of Ti-adc Journal," that ."the usual ..form of-procedure is for the Arm reauiriuK credit to apply to the bank, naming -the- sum 'they wfeh to borrow, and giving such inforcnartion as the bank may require to enable it to judge of the .financial- standing of the firm. Printed filling in. can- be -had at the bank for this' purpose. In most cases credit is taken from several banks, thus distributing the risk. The promissory notes to be deposited with tho bank are 'endorsed by tho person obtaining 'the-credit under the.-clause 'value received. from

Bank.', About SO per cent, of the value "of ;the '• pr'omlssoi-y" ncrte is' gcnerally advanced by the. bank. These prpnica-ory notes ore not circulated, but.remain in.de-. posit.at the bank, and. when they, become due are withdrawn and replaced by others payable at a later date. The bank will also take upon itself, if desired, the collection of the money, charging a commisGenerally I per cent, above the official, bank'rate.ls. charged for such credit.

"The system of 'proiniesary notes renewable at six-monithly intervals up to the termination of. the sales'. credit" is, of course, ari arrangement between the foreign manufacturer and'his Russian agent, The former can only use six • months' promissory notes for depositing in the bank,whilst he sells to his agent on eighteen to thirty months' credit (this, is a term of credit bv no means unusual in the trade with flour-milling' machinery, gas engines, etc.). An agreement on the following lines is drawn up between the manufacturer and his. agent or customer—(l) that the sale' is made payable on such and such 'terms-cay. one-third every six months; (2) that the agent has to give the manufacturer six months' promissory notoß for the full amount; (3) that after six months the niamif aeturer accepts, one-third in ca&h and two-thirds' in\new promissory notes- and returns the original promissory notes; and (<S) that these promissory notes will not be circulated, and arc solely to be -used for the purpose of deposit with a. bank. - -. "This.method,, of course, requires a certain, amount-of mutual conffdence; but it i's"ffequently practised. The purchaser or agent puts himself at the mercy of the manufacturer, and the manufaeturer might be put to very severe straits if the bank refused the exchange of the promissory notes when they become due. It must beborno in mind, however, that all these are working for their mutual interests. It is not in the bank's interest to cripple or bankrupt the manufacturer, and-it would ruin.the manufacturer's trade if he treated his customer unfairly. It may be ar,gued 'that the critical time will come, a pause and general ruin, in case of national calamity, such as war or famine. Eussia has passed through all these stages between 1903 and 1907, and hardly any money was .lost through tin's banking operation; on the contrary, it is extraordinary how little "money was lost during these years. Where firms failed they were the ■ financially' weak ones who-could not get the bank credit, which is limited to businesses of sound, financial standing, and these can safely reckon on'support from the banks in time of trouble."

:■•? ;- -OIL-FOEL ON RAILWAYS. . In the report of the United States Geological Survey, covering the production of petroleum in 1911, 'is given the following statistics of fuel oil consumption, by the railroads in North America:— RAILROAD CONSUMPTION, 1906-1911. Miles of line, Barrels of oil Tear. ■ part coal.' consumed; 19D6" - 15,577,677 1907 13,573 18,849,803 ■ •■'• 1908 15,174' 16,870,882 , ,1909 17,676 19,905,335 -■■ 1910' :..'. 22,709 23.817.M6 ;■':.'• 1911 27,368 27,774,821 The above table of railroad consumption of' fuel oil is given because it is practicable to present .sufficiently accurate statistics to show the marked gain in each recent year, and because this life is especially.popular, because of the added comforts from freedom from coal cinders, because of avoiding the danger of forest fires, and Sarticularly because of the saving in laour. In fact, tho weight of trains .where coal ia burned on mountain divisions is limited by.the endurance of the fireman, until the coal can be replaced by oil. In recommending the adoption of fuel oil on the mountain divisions of the Canadian Pacific railway, William White, Second Vice-president, states that one of the reasons for ■ this change is the removal of danger from the conflagrations in the great' forests of Britifh Columbia. He also alludes to the failure of the immense locomotives now in use, saying: "It is Mot the failure of the locomotives; it is in the. 'failure "-of the fireman." A fireman ■ shovellii!",'coal on one of these locomotives for a distance of 130 miles ie physically exhausted before getting. to the end of the run. Tho Southern Pacific uecs over 12C0 oil-burning locomotives; the Santa Peover 800; the Xort.he.rn Pacific 20, and the Great Northern 115. Thus- far in locomor five use oil has simply replaced coal under bc.iiore, but within the last year a locomotive has been constructed in Switzerland on. the Dic?ol principle, and is being subjected to thorough practical tests.