FINANCIAL NOTES

INVESTMENTS LOWER.

DEPRESSED conditions in the markets for investment securities and buoyancy in some of the speculative sections, such as rubber shares and the shares of base metal companies, have constituted the outstanding feature of the Stock Exchange during the past few days. In another column, I deal fully with some of the causes for the fall in high-class investment stocks and also with the reasons for the rise in rubber and metal shares.

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COURTAULDS' PROFITS.

• The latest Report of Courtaulds Limited for the year ending December 31st last shows that the net trading profit was £4,508,149, this total being reached after depreciation provision and including the final dividend for 1935, and the interim for 1936 on the Company's American investment. The profit compares with £4,168,747 for 1935, while the net profit was £2,391,458 compared with £2,203,063 for 1935. The final dividend of 7 per cent. is to be paid less tax, making a total

dividend for the year of £m 5s. 7d. per cent. gross as against £9 16s. 8d. for 1935. The directors state that there was an improvement in home manufacturing profits and a much increased weight of rayon staple fibre was sold.

* * * * BANKING IN CHINA.

An outstanding feature in the accounts of the Hongkong and Shanghai Banking Corporation for the past year was the substantial increase in Deposits and Loans in Currency, and as the exchange was Is. 21-d. against Is. 31d. a year earlier, the greater part of the expansion was also reflected in the sterling figures. The net profit for the year was $15,107,000 against $12,089,000, a reflection of better trade conditions in the East. Owing to the lower exchange, however, the dividend cost considerably more, as the interim dividend in the previous year was paid at a rate of as. 20. After allowing for the £5 los. dividend and transferring $1,o00,000 to Premises, a balance of $3,340,790 is carried forward.

FROM STRENGTH TO STRENGTH.

The Prudential Assurance Company goes from strength to strength and each year the almost astronomical figures in the Report become larger. As already announced, the Company is maintaining its rate of bonus in the Ordinary Branch at 46s. per cent. on whole life and 4os. per cent. on endowment assurances. These bonuses in themselves absorb an amount of £2,629,000 out of a total surplus disclosed in the annual valua- tion of £3,518,000. After allowing for the bonus, the share- holders' proportion of profit, £277,528, and transferring £14,600 to Contingency Fund, a balance of £596,428 is carried forward. The interest rate assumed in the valuation is 3 per cent., while the very fine rate was earned of £4 9s. 4d. net, an increase of Id. per cent. on last year's rate. In the Industrial Branch, the surplus was £6,458,446. The bonus to policyholders costs £4,o27,000, to Outdoor Staff there is allotted £671,123, to Profit and Loss £878,722, to Contingency Fund £293,000, leaving £588,864 to be carried forward. The total cash amount allotted in Industrial Branch bonuses since profit-sharing was started is £47,353,735. The balance-sheet shows that the Company increased its holdings of British Government securities last year by some £5,000,000 at £88,5oo,000 exclusive of Trade Facilities stocks.

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GOVERNMENT CONTROL.

I am glad to see that at this week's meeting of the United Kingdom Provident Institution, Sir Ernest J. P. Benn, without necessarily criticising the extent to which Government control over finance and business is extending, said he considered the matter was one which should receive more public recog- nition than it has at present had. Governments now, he maintained, attempt to control the price of money and the rates of exchange as well as the liberty of their peoples to trade with each other. " We may," he said, " in fact on the economic side of Government be helping to evolve a world- wide system of bureaucratic management operating everywhere in much the same way, although under very different systems of political Government." And later in his address, Sir Ernest Benn said : " A silent revolution has in fact occurred, and the Bank Rate and the rates of exchange are no longer indices pointing to the natural state of markets but are based on theory or rather so much of theory as happens at the moment to be understood by, or acceptable to, the bureaucrats of

the world." — • * - * - * *

A PROSPEROUS INDUSTRY.

At the present moment there is probably no more prosperous industry in the country than the iron and steel, and the latest Report of the Lancashire Steel Corporation, which represents the amalgamation and rationalisation of the activities of Pearson and Knowles, Wigan Coal and Iron, Partington Steel and Rylands Bros. shows most satisfactory progress. The earnings of the group were more than £91,000 above those of the previous year. Depreciation provision, however, was raised by £36",0oo to £15o,000, a further sum of ,C25,000 was set aside towards the cost of a scheme of staff superan- nuation, while .£20,000 has been reserved against possible fluctuations in raw materials and the General Reserve is raised to £H5,000 by a transfer of £25,000 from the profits of the year and the consolidation with it of an investment reserve of £40,000 and a Contingencies Reserve of £5o,000

_______ rimfeel on pate 498,) _

FINANCIAL NOTES (Continued from page 496.) no longer required. The dividend on the Ordinary capital is 5 per cent, against 4 per cent. and the balance-sheet is a strong one with cash reserves of nearly £800,000.

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VICKERS' DIVIDEND UP.

Although of course engaged in the manufacture of arma- ments, Vickers, Ltd., is also actively engaged in other matters allied to the iron and steel industry, and the directors are able to recommend a dividend for the past year of ro per cent. as compared with 8 per cent. a year ago, although the present payment is made on 5o per cent. more capital than a year ago. The dividend now proposed is therefore equivalent to 15 per cent. on the old capital as against 8 per cent. for 1935.

* * * * HALIFAX BUILDING.

The Building Societies, like the Prudential, seem by no means to have reached their limit of activity. The latest Report of the Halifax Building Society shows that assets were increased during the past financial year by £6,240,000 to £114,327,576. The directors state that for the third year in succession the total advances on mortgage exceeded kzopoo,000, while sums due on mortgages were increased by £6,253,660 to £92,195,988. The profit for the year amounted to £2,904,665, and the directors are able to maintain a bonus at the same rate as for the previous year. Share and deposit funds were increased by £5,931,541 to £1o9,3o6,258. Reserves and undivided profits now amount to more than

5 per cent. of the mortgage assets. * * s *

SCOTTISH .TEMPERANCE AND GENERAL ASSURANCE.

The current year is the quinquennial valuation and bonus year of the Scottish Temperance and General Assurance Co., Ltd., and the latest report is an excellent one, showing that in 1936 the Company achieved the fifth successive record year. The Life funds of the Company now exceed £8,000,000 while the Life premium income figure is in excess of £600,000. Moreover, the ratio of all expenses has been kept down to 14.82 per cent. of the premiums. At the annual meeting the Chairman stated that in the absence of any unprecedented happening this year the prospects of a substantial bonus allocation are good. * * * *

MAPLES' GOOD RESULTS.

The latest report of Maple and Co. shows that the Company's business is prospering, the dividend now recommended on the Ordinary stock being 6 per cent., making a total distribution for the year of 81 per cent., the comparison being with 7 per cent. in the previous year. The report shows also that £5,03o is allotted to the Staff Benevolent Fund with £27,883 carried forward to the Ordinary stockholders' Reserve Account.

At the present price the Ordinary shares give an approximate yield of 5 per cent.

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EAGLE STAR DIVIDEND.

The Eagle Star and British Dominions Insurance Co. has issued a very satisfactory dividend statement, the final dividend of 21 per cent. making 27/ per cent. for the year. It is also intimated that a first interim for the current year will be 6N per cent., thus on the basis of previous practice, putting the quarterly dividend on the basis of 271 per cent. per annum.

A. W. K.