Commerce, Mining, Finance

Evening Star, Issue 23371, 14 September 1939, Page 9

Commerce, Mining, Finance

Metal Exchange Stabilises Prices

Gillespie’s Beach Earns Less

Australian Mining Scrip Still Hesitant

Australian metals continued to show hesitance on the investment market this morning, with some further slight losses recorded. Other sections were generally well supported, although wide margins remained. Gillespie’s Beach Gold Dredging reports a net profit of £J ,526, against last year’s figure of £3,964. The fall in gold recovery was partially compensated for in the better prices obtained.

The London Metal Exchange has fixed maximum prices for refined copper, lead, spelter, and zinc.

AUSTRALIAN ECONOMY REVIEW BY COMMONWEALTH BANK DIRECTORS' ANNUAL REPORT LONDON FUNDS SHOW DECLINE OF £10,000,000 In its report for the year ended J une SO, 1939, the Commonwealth Bank of Australia refers to its statement made in its half-yearly report to December, 1938, .when the board pointed out that ' the decline in export income threatened to have an adverse effect upon economic activity in Australia. “ The decline referred to has become more evident, but nevertheless activity is still at a high level. “ Unemployment in trade unions was ■ 9.7 per cent, in the second quarter of 1939, compared! with 8.6 per cent, in the corresponding quarter of 1938. More complete figures for New South Wales suggest that in June unemployment among males, including relief workers as unemployed, was 10.5 per cent., compared with 8 per cent, in June. 1938. “ Information available suggests that retail sales during the half-year show little change compared with those in •the corresponding period of 1938 ” Manufacturing statistics for New South Wales and Victoria show that in the period January to May, 1939. there ■was a slight decline in the value of sales compared with that in thd.same Jperibd of 1938. The decline-fe>New South Wales has been evident irt ind>ustries manufacturing durable consumers goods; in Victoria the output of dur- ' able producers’ goods has declined. Expenditure on plant and equipment shows a significant fall.. The figures for company profits declined throughout. 1938, but the profits of companies balancing in the first quarter of 1939 suggest some improvement. The number of companies balancing in this quarter is, however, small. EXPORT PRICES DECLINE. ' The decline in activity shown by the above figures is still small in view of the adverse influences to which Australia has been subject. Export prices declined! steadily from April, 1937, to May, 1939, during which period the fall was 38 per cent. In addition two larger States in particular suffered severely from bad seasons in 1938-39. In these circumstances the high level of internal activity maintained must be regarded as very satisfactory. “ Over the last two years there has been a fall in the prices of rural products at the same time as the prices of manufactured goods have shown a tendency to increase. This Australian experience is the reflection of a worldwide movement, and affects Australia not only through the difficulties of rural industries, but also because the prices of Australian exports have fallen much more heavily than import prices. In Australia wholesale prices have shown little change during the past year, but there has been a slight increase in retail prices. Wages have risen, but Lave not yet reached pre-depression levels.” LOAN MONEYS. : In the belief that the adverse influences affecting economic activity are the result of a disparity between export and import prices, which is likely to be reduced, the board has continued its policy of assisting Governments to finance their loan programmes and of Avoiding any undue contraction of credit. The financial position of Governments weakened during the year. In part this was due to the effects of drought. With the exception of the Commonwealth and Queensland all Governments have recorded deficits. The estimates of the States provided for net deficits of £441,000, whereas the actual net deficits were about £4,200,000. On the other hand, the Commonwealth, which originally expected to balance its Budget, had a surplus of £627.000. Government loan programmes for works showed a slight fall in 1938-39 compared with those of earlier years. This decline was more than offset by the in-

SUPPLIES IN WAR DANGER TO AUSTRALIA RESTRICTION OF IMPORTS Because of distance from many over■eas sources of important supplies, the effect on Australia of aerial attacks on merchant shipping; could not bo estimated by the experience of the last war, and supplies of raw materials and other imports might be restricted sufficiently to cause a shortage, Mr Arthur Burley, chairman of Berlci Limited, said at the annual meeting in Sydney. “ It is important for the welfare of our own industries,” he said, “that we maintain our regular buying habits and do not restrict our spending.” , Business of the company during the past year was more difficult, and extra effort was needed to maintain sales. “Costs rose, and an increase in prices was needed to coyer them, , .

JAPAN’S TRADE SERIOUS DISLOCATION LACK OF FOREIGN ASSETS HUSBANDING HER FINANCIAL RESOURCES Japan’s attempt to increase her economic control of Eastern Asia has led to serious dislocation of her foreign trade position. Lacking foreign assets or credit standing abroad, Japan has been forced to husband her financial resources and rigidly control imports, war materials, finally being affected, although other or “ peace ” commodities have borne the brunt of the restrictions. The shift of Japanese trade to the so-called “ yen bloc ’’—the still ill-defined and imperfectly consolidated area in China and Manchuria now under Japan’s military, •political, and economic control — is one of the most striking consequences of the Sino-Japanese War. The total excess of imports rose to 607.000. yen in 1937, as compared with 71,000,000 yen in 1936, but this was converted to an export surplus of 60.000. yen in 1938. _ This was the result of the increased shipments to the “ yen bloc,” largely capital goods for Manchuria as but comparatively small amounts have gone to China as yet. The apparent favourable' balance was based on the transfer of capital rather shipments in the ordinary course of

trade, and temporarily at least this represents a further drain on Japan’s financial position. These figures take no account of the cost of military operations. Excluding the “ yen bloc ” the unfavourable balance was 922,000,000 in 1937 and 623,000,000 yen in 1938 The securing of the necessary foreign exchange to meet such balances has been one of the most serious problems confronting the Japanese authorities. Gold shipments to the United States in 1937 reached a value of 246,464,000 dollars. For 1938 the total was 168,740,000 dollars, and for the first five months of 1939 71,232,000 dollars. Gold production in both Japan and Korea has, greatly expanded during recent years, the combined total in 1932 being 714,000 fine ounces, as compared with 1,530,000 in 1938. _ Japan (including Korea) ranked sixth among the' world’s producers of gold last year. _ Budget deficits have been recurrent since the occupation of Manchukuo, but with the present operations in China have risen from hundreds of millions of yen to thousands of millions, with no signs of abatement. The Japanese national debt, which amounted to 9,613,000,000 yen on March 31, 1935, had increased to 16,000,000 by December, 1938, and has continued to rise during the current year.

crease in State deficits and by Commonwealth Government borrowing for defence. ASSETS AND LIABILITIES. The balance sheet for June 30, 1938, compared with that for June 30, 1939, is as follows: — LIABILITIES.

* Including Treasury hills. It will be observed that the money at short call in London on June 30, 1939, was £10,338.851 less than for June of last year, and it was less by £5,877,590 than was the amount shown at short call in Loudon at December 31, 1938. Juno is the close of the export year. Ordinarily the “ wool money ” would begin to loom largely in -the second half of the year, but for the present the Australian selling season is in suspense.

GILLESPIE’S BEACH NET PROFIT DOWN £2,538 AT £1,426 GOLD RECOVERY LESS BY 385 OUNCES DREDGE NOW WORKING SOUTHWARD ON LOW VALUE GROUND Net profit of £1,426, against £3,964 last year, is recorded in the seventh annual report and balance sheet of the Gillespie’s Beach Gold Dredging Company Ltd. for the year ended June 30. Gold recovery was 3850 z lower, mainly due to lost operating time. The dredge is now proceeding towards the southern end of the claim. The year under review has been called upon to carry extra heavy expenditures for repairs and alterations as indicated last year, states the directors’ report. These comprise chiefly a new ladder, alterations to tailings elevator, and the provision of sponsons. These sponsous, Jfm -to t>% »*« ,*< »% »% »%

June 30, June 30, 1038. 1030. £ £ Capital 4.000.000 4,000,000 Reserve fund 3 581,187 2,762,477 Rural Credits Dcpaitmcnt— Capital 2,000,000 2,000,000 Reserve Fund 303,576 310,360 Development Fund 27,881 21,028 Deposits, accrued interest, and rebate 83,057,294 81 832,780 Bills pnvoble and other liabilities b, Uj8,545 7,480,060 ASSl-TS Coin, bullion, and cash balances ... ... 1 273,011 1,453 316 Australian notes 3,548 343 3,048,980 Money at short call in London 27,076,731 10,737,883 Investments— British, colonial, and Government securities ... 18,330,841 15,887,087 Commonwealth Government securities * 30,000.060 38,592,435 Bills receivable in London and In transit 3,474,365 2,707,520 Bills discounted, loans and other sums due to the bank ... 15,201,050 10,023,305 Bank premises 058,170 010,817 100,031,485 08,422,321