BUSINESS IN WARTIME

Waikato Times, Volume 127, Issue 29241, 11 October 1940, Page 4

BUSINESS IN WARTIME

The experience of the Farmers’ Co-operative Auctioneering Company in the past year affords a useful illustration of the conditions under which firms dealing largely with the industry of primary production have to operate at the present time. Favourable conditions last autumn and winter and an almost unprecedented spring have to a large extent been instrumental in increasing the company’s turnover by £406,745, but nevertheless prudent management has been necessary to provide shareholders with a reasonable return. By far the greatest profit out of the whole of the year’s operations was made by the State. On a total turnover of £2,299,464 the company made a gross profit of £186,829. Working expenses amounted to £117,397 and the net profit was £69,432. Of that sum the Government takes in taxation £43,000. In other words, to earn 26s for its shareholders the company had to earn 43s for the State. The chairman of directors has further analysed the taxation figures and shows that while 2s in the pound collected from the company goes towards paying war expenses, 9s 9d in the pound is earmarked for civil expenditure. Shareholders whose capital and enterprise have made this earning possible certainly receive a meagre share of the profits by comparison with what is appropriated by the State. The taxation for war purposes does not give much cause for complaint but the levy on industrial enterprise for the purposes of civil expenditure certainly does seem to be out of proportion. Perhaps the experience of this company is hardly typical of that of similar enterprises throughout the country, for it was in an exceptionally favourable condition to meet the shocks of war. For instance, its liabilities at the moment represent only 6.27 of its assets. Rather remarkably, every branch of its activity resulted in a profit in the past year, though the net return is only 3 per cent, over the whole volume of business. In view of the dislocation caused by import restrictions, particularly in the merchandise trade, and the necessity in some cases to resort to rationing, the result must be regarded as very satisfactory from a business point of view.