Financial Notes

BRITISH RUN. DS VARIER.

Ara-mm.1Es with regard to the European outlook, to say . nothing Of its being Derby Week ending with the Whitsuntide holidays, have been, responsible for a further restriction of .; business on the Stock Exchange during the past week. The ; outstanding feature has been the dullness of British Fund- and some other Trustee securities. This has been due to the recent speech of- the Chancellor Of the Exchequer, in which.

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quite wisely, he gave' some warnings with regard to the growth . ! in the national e.1-penditure: In addition, Mr. Chamberlain (Continued on page 1016.) Financial Notes (Continued from page 1014.) also gave a, reminder of the fact.that abnormally cheap money cannot last for ever, a statement with which he coupled the further reminder that any rise in interest rates will involve increased Government expenditure in the shape of interest on its Treasury Bills. I think that this remark has been taken rather too literally by the market, as indicating an immediate change in money rates, whereas the Chancellor was careful to explain that there were no signs of any immediate change, The market for investment stocks has also been adversely affected by 'the number of Corporation Loans offered and the very partial success which has attended some of the flotations.

INCOME TAX CIIANGES.

In the course of his speech at the fifty-first annual meeting of the Incorporated Accountants, the President of the Society of Incorporated Accountants and Auditors, Mr. Wilson Bartlett, made some interesting references to the changes in Income Tax outlined in the recent Budget. Mr. Bartlett dealt at some length with the much discussed clause of the new Finance Bill dealing with income settled on children under so-called educational trusts, expressing the wish that the clause had been drafted in more comprehensible terms. He maintained that while- there was nothing to be said for trusts which the parent could revoke at any time, the position was different, in his opinion, in the case of irrevocable trusts. These trusts, he affirmed, disclosed an absolute intention on the part of the parents to alienate each year a definite portion of his income for educational purposes and maintenance, and it seemed reasonable, therefore, that in such a case the parent should be relieved of Income Tax in respect of the income. Moreover, he pointed out that the payment of an annuity in the circumstances indicated was open to those of moderate means, where the settlement of a capital sum would probably be out of the Tiestion.

INCOME TAX CODIFICATION.

Mr. Wilson Bartlett's observations, . h-3wever, were not confined to the subject of the Income 7 tx changes, for he made some interesting references to the i cent Report of the Committee on Income Tax Codification. He said that the accountancy profession would welcome any simplification of the accountant's labour and any clarification- of the law with which it was the duty of the taxpayer to comply. In response, therefore, to the Chancellor of the Exchequer's intimation that he would be glad to have the views of important repre- sentative. bodies on the Committee's, proposals, a sub-com- mittee had been set up to consider the recommendations in detail.

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HUDSON'S BAY RECOVERY.

The speech of the Governor of the Hudson's Bay CoMpany, Mr. 'Ashley Cooper, strengthened the good impression created by the recent Report, which gave every indication of this important undertaking having turned the corner. How substantial has been the recovery during recent years may be gathered from the fact that while the accounts for 1930 showed large losses; with further losses to be provided for in the two following years, for 1933 there was a profit of £28,000, for 1934 141,000, while for last year a profit was achieved of £145,000. The Directors have decided to use last year's profits and a portion of the Reserve for a repayment of £600,000 of Preference share capital. All the arrears of dividend for the past six years on that sum are to be included in the repayment, and Mr. Ashley Cooper expressed the hope that the half- year's Preference dividend would be paid on January let next, and that thereafter the company would be able to continue regular payments on the Preference shares.

INSURANCE AND FOREIGN LEGISLATION.

Addressing the shareholders of the Royal Insurance Company last Monday, the Chairman, Mr. A. E. Pattinson, referred at some length to the difficulties which British insurance companies are encountering in many foreign countries as the result of legislation of a hampering character. Needless to say, Mr. Pattinson made no objection to reasonable safeguards for the insuring public, but he expressed the conviction that the benefits to be obtained from a free insurance market far outweighed any immediate advantage that might seem to be derived from restrictive legislation. The heavy burden of taxation upon insurance companies also received comment. The Chairman of the Royal Insurance rqpintained that it would be misleading to gain the impression that the incidence of taxation affected the company merely to the extent of the provision of 1150,000 which appeared in the account*. In the past five years, he said, the burden • • • (Continued on page 1018.)

Financial Notes

(Continued from page 1016.) the company had borne in respect of British, Colonial and foreign taxes amounted, in the aggregate, -to over 25,000.000. while, in addition, there -were many items of taxation, stall as Stamp Duties, &c., which in the aggregate were considerable. As already shown in the Report, the-Royal had a good veer, with record underwriting profits.

V.O.C.'S CONTRACTS.

Presiding at the recent annual meeting of Venezuelan Oil Concessions,- Lord Bearsted made some interesting state- ments with regard to the company's new sale contracts. He said that the new contract would be for a period of live years and that prices paid would vary -with the fluctuations of world prices for petroleum piodticts, with a minimum price. He also stated that -a new short-term contract had been concluded with the Canadian Eagle .Company covering the sale of two million barrels of oil during the present year, to take the place of the agreement which expired at the end of 1935. Lord Bearsted told the shareholders that, as a first step towards providing further reserves of proved territory for the future, the company is undertaking ex- ploratory drilling along the Bolivar District coast. Four productive wells were completed during the last few months in the Tia Juana region between Lagunillas and La Rosa.

CABLE AND WIRELESS.

The speech by Mr. Denison-Pender at the recent annual meeting of Cable and Wireless (Holding), _ Limited, was chiefly noteworthy for his references to the extent to which the company's revenues were still hampered by the restriction of world trade and for his reference to the problem of acute competition and the company's relations with the Govern- ment. With regard to the competition, Mr. Denison-Pender said that new wireless routes are constantly springing up in all parts of the world, many of them being opened by foreign Governments pt uneconomic rates ; in other words, with the help of foreign subsidies.

FUTURE OF TfIE UNION-CASTLE LINE.

Those who are interested in that fine old shipping company, the Union-Castle Mail Steamship Company, either as share- holders or even as travellers, will have noted with satis- faction the statements made by the Chairman, Mr. Robertson F. Gibb, at the recent annual meeting of the company. On the one hand, having regard to past experience, there* has been a very natural desire on the part of the Preference shareholders and the directors that there should be no chance of the ownership of the Ordinary Stock ever falling again under the absolute control-of an individual or a small group. On the other hand, there ha i been a certain amount of dis- satisfaction on the part of the Ordinary shareholders with regard to the question of voting rights. . It is satisfactori, to note that Mr. Gibb was able to state that the points at issue were in course of satisfactory arrangement. Those con- trolling the Ordinary Stock, which is the most important remaining asset in the Royal Mail Realisation Scheme, have agreed that it shall be widely spread .among the investing public either by '

KEY FLATS.

At the recent annual general meeting of London County Freehold and Leasehold Properties, the , Chairman, Sir William J. M. Burton, referred to the -success which has attended the scheme of what is now known as Key Flats. The Managing Director, Mr. T. J. Cullen, stated- that the lettings during the past year had been very good and the Ordinary stock of the Company has earned 14 per cent. for the year, while, he said, in a full year, the earnings should he 15 per cent. Resolutions were passed at an extraordinary general meeting providing the means of obtaining additional capital when required, though the Chairman stated that they had no intention of making an immediate issue.

BEECHAIIS PROFITS.

If we judgeby the remarks of Mr. Philip Hill at last Monday- meeting of Becchttms Pills, Ltd., there would seem to be every (Continued on-pay:e 1019.)

Financial Notes

(Continued front page 10184 prospect of a further extension in the company's activities and profits. Last year there was an expansion in the net profit of no less than 1.138,000, but Mr. Hill stated that this was attributable to their Home trade, whereas the Directors had always been of the opinion that the main expansion of their business lay in Oversea markets, while at present they had scarcely touched the fringe of that business, the difficulty having been the allocation of the necessary funds for extension out of revenue. With the establishment of the development reserve the company, he said, could attack this side of the business in an energetic manner and he pointed out that the building up of this reserve, while increasing the security and capital value of the Preferred shares, affects the Deferred dividend, the allocation of 165,000 of the fund this year being equivalent to a further 26 per cent, dividend on-the Deferred shares. He therefore felt that Preferred shareholders would agree with the proposed increase of capital and thus encourage Deferred shareholders to put still larger amounts to development reserve, which he was convinced would be to the advantage of all concerned.

AN INSURANCE CENTENARY.

The Liverpool and London and Globe Insurance Company has marked its centenary by a new high record of business in the Life account, and at the recent hundredth annual meeting the Chairman, Mr. A. E. Pattinson, pointed out that Insurance, by protecting the interests created by men, existed chiefly among those peoples who valued property and life, and the higher the standard of living the greater the need for and the development of Insurance. In the course of his speech, Mr. Pattinson referred to the many hindrances in Insurance business resulting from Government action in various countries. Instancing Mexico, he said the requirements were so onerous that early last year all British and foreign com- panies ceased to operate in that country. Insurance, said Mr. Pattinson, only asked for reasonable treatment and con- sideration—a modest requirement in these days of Govern- ment subsidies and special aids to national industries.

A. W. K.