H.---44

12

Taking each of the above items in order :-

Coal — Actual Figures.

The increase on the average cost for the half-year is therefore 4s. 3-Bd. per ton. Owing to the coal shortage the company has been compelled to take half the usual quantity of large coal at an advanced price. At the end of 1917 the company's contracts with the New Zealand State Coal Department expired, and these contracts were very favourable to the company- namely, 18s. to 21s. sd. per ton of coal, c.i.f.e., Miramar Wharf. Provided that freights do not advance, the prices the company expect to pay per ton, c.i.f.e., Miramar Wharf, for coal are as follows : Largo. Small, Average. s. d. s. d. s. d. State coal .. ~ . . 30 6 26 0 28 3 Westport coal . . . . . . 28 11 26 5 27 8 1 , . at j.l i on o cq a on ~ : present price. Newcastle coal .. .. . . 32 3 28 3 30 31 1 ' To these figures has to be added Is. per ton handling-charges into store. On the above figures the company therefore estimates the cost of coal for the year at an all-round figure of 30s. per ton, without taking into account probable increases in freights which may have to be met. Depreciation (Total, £11,398.) The evidence showed that the directors of the company had not been satisfied that a sufficient amount was being set aside to cover depreciation, and early this year a sub-committee of the directors spent some months in investigating the subject. As a result the company, after considering the report of this special committee, resolved to adopt the amount set aside for depreciation, £11,398, as recommended by that committee, whi<;h the Board of Trade, after analysis, considers to be reasonable. Increase in Wages. The increase in wages lor 1918, estimated at £5,300, appears to be a fairly accurate one, as since the Board heard evidence upon the matter an agreement has been come to between the company and its employees under the Industrial ('onciliation and Arbitration Act, making a, close estimate practicable. The. increase in wages to those engaged on the manufacturing side will equal approximately £4,178, and the balance, £1,122, represents the extra, war bonus granted on the Bth May. 1917. to officers engaged in the distribution department —viz., 5 per cent, on £22,447. Income. The estimated increased income from the sale of gas in the year 1918 upon that for the year 1916 will be— i 360,000,000 cub. ft. sold at the increased price of Is. Bd. per cubic fool . . 30,000 Less by operation of sliding scale (discounts) . . . . . . . . 2,500 Leaving a net total of .. .. ..£27,500 As will be seen from the table shown on page II of this report, (lie estimated direct loss based on these estimates for the year 1918 will amount to £1,532. Residuals. In its inquiry the Board went fully into the matter of income received by the company for the sale of its residuals- tar and coke. Tar. It appears that the whole of the tar manufactured by the company is sold to two purchasers—(a) The Restar Limited, of Wanganui, who have a five-years contract from August, 1914, for 150,000 gallons pin- annum at lid. per gallon; (b) the City Corporation of Wellington, at 4£d. per gallon. The company state that owing to the almost exclusive use of New Zealand coals this residual is expected to be considerably reduced, as less tar is obtained from local coal than was formerly the case, when a large proportion of Australian coal was carbonized. Coke. The company's price for coke has been increased from 245. per ton in 19.13 to 275. per ton in August, 1917. The selling-price in Wellington for this product has been considerably lower than in other towns of the Dominion, due in normal times to the low cost, of coal. in estimating the increased profits from the sale of residuals during 1918 it was considered that owing to the probable reduced income from tar and the rapidly increasing cost of cartage and handling coke from Miramar it would not be safe to place the increased profit for 1918 at. more than

Pe Period. eriod. Tons carbonized ,,,,,,, , . Handling1 ii ,ul Cost m „ , ,,, i , p Sin,-,, ! Cop1 l"' r '""■ charges store ' inoluded. Year 1916 Half-year 1917 31,145 . . ; 16.095 "~~ " ~ ~ £ s. d. a. <l. 29.219 18 9-1 0 5-1 18.709 23 2-9 1 1-3