COMPANY MEETINGS
THE MID-EUROPEAN CORPORATION
Tim fourteenth annual ordinary general meeting of the Mid-European Corporation Limited was held on May 23rd at Winchester House, Old Broad Street, E.C.
Mr. Norman Holden (Chairman of the company) presided and, in moving the adoption of the report and accounts, said : Gentlemen, the year with which we are dealing has been an extraordinary one. During the last few years I have been able to tell you of the steady appreciation in the value of our securities, so that while in June, 1932, the total depreciation of the combined companies, including losses written off in Lothbury Continental Company, was about £1,050,000, by March last year it had been reduced to £290,924, on the whole a satisfactory result. But in one single year the deprecia- tion has gone back to £827,159. A valuation made one month later showed that £68,118 of this amount had been recovered. This depreciation covers the whole field. Yet, for this same year, our net revenue, after debenture interest, income-tax and N.D.C., has improved from £50,639 to £54,485.
Such violent movements spread widely over all classes of our investments are unsettling, even though, as in our case, revenue has increased.
Does this heavy fall in security values foretell a comparable fall in earning power ? We cannot see any probability of such a fall. Does it mean a permanent change in the relation between capital value and interest and dividend return ? To some extent, this is probably so, but I cannot but conclude that a very large part of the fall is caused by fear of the future. The idea seems widespread that we are going back into a long-drawn-out depression. That there is a depression is obvious, but that it will result in continued decrease in trade and profits does not seem to be either proved or obvious. In some directions there are signs of a small recovery, and the correct view of the present position may well turn out to be that there is really only a lag of a comparatively short period. Probably many industrialists were frightened at the beginning of last year that there would be a shortage of materials and bought too heavily ahead to protect themselves against rapidly rising costs. They find them- selves with supplies of their raw materials greater than they can comfortably resell as finished goods, and, therefore, not only did they stop giving further orders, but postponed accepting deliveries as long as possible. But so soon as they reduce these stocks they will begin to buy again and business will expand once more.
Finally, your corporation has during the year reduced its bank overdraft from £102,944 to £28,928, and issued a further £37,024 of 4 per cent. debenture stock, making a total of £82,938 now in issue.
The reports and accounts were unanimously adopted.
Previous page
