I.—lo.

W. EVANS.]

71

Unprofitable Flour-milling. [Reprint from the Age of 12th February, 1901.] In the past on several occasions attention has been drawn to the unsatisfactory position flourmilling in Victoria has drifted into. There is little- need to repeat in detail the causes, they are now generally known; but a survey of the last issued balance-sheets of the companies engaged in the industry pretty well discloses the existing state of affairs. Taking first the capital accounts and the reserve fund (if any), the following table shows how the various companies stand: — „ ~ , Reserve Funds Company. subscribed Capital paid. and Credit Balances. £ £ £ James Gillespie and Co. ... ... 195,000 133,893 Melbourne Flour-milling Company ... 42,900 20,017 1,925 Water and Kerang United ... ... 50,000 20,000 10,404 James Malcolm ... ... ... 40,000 19,951 Wimmera North ... ... ... 35,000 19,938 D. Stratton and Co. ... ... ... 19,999* 5,706 L. Kickham... ... ... ... 30,000 24,000 586 Totals ... 442,3991 257,7984 18,621 It will be seen that the six limited and one proprietary limited company have paid-up capital (or capital credited as paid) aggregating £257,798 10s. out of an authorised total of £442,399 10s. Only four mills have credit balances, and only one (the Water and Kerang United) a reserve fund. The profit and loss accounts of the seven companies show the following figures : — Profit. Loss. Credit Balance. Debit Balance. n n n n James Gillespie ... 417 ... 1,229 Melbourne Flour ... ... 534 ... 1,925 Water and Kerang ... ... 1,856 ... 9,404 James Malcolm ... ... 1,437 ... ... 8,478 Wimmera North ... *5,583 ... 30,028 D. Stratton and Co. ... ... 99 ... 5,706 L. Kickham ... 187 586 Totals ... ... ... 3,926 6,187 17,621 39,735 It will be seen that profits were shown by four companies only, amounting to £3,926. If fair provision had been made for bad debts probably only one would have been able to show a profit— the Water and Kerang ; and the directors of that company state in their last report that they "regret that the milling industry shows no improvement. Transactions in wheat have been profitable, but the manufactured products of the company have not returned a fair profit." As a matter of fact, therefore, not one of the companies showed anything like a profit on the manufacture and sale of flour. The losses shown by the accounts for the past year exceed the profits by £2,261, while the debit balances at the close of the year's trading were £22,114 greater than tbe credit balances. The liabilities in most instances are out of all proportion to the business done. The figures from the last balance-sheets are as follow : — To Banks. Mortgagees. Others. £ £ £ James Gillespie and Co. ... ... 6,925 36,700 +1,732 Melbourne Milling Company ... ... 25,527 ... 5,920 Water and Kerang ... ... ... 213 ... 4,764 James Malcolm ... ... ... 26,116 ... 1,801 Wimmera North ... ... ... 37,114 ... 1,099 D, Stratton and Co. ... .. 16,547 3,442 L. Kickham ... ... ... ... 1,034 ... 4,275 Totals ... ... ... ... 96,929 53,247 23,033 The total is £173,209. As the mortgages are, we are informed, mostly on account of banks it will be seen that their share is over £150,000. The "other" liabilities in the above table include deposits, debit balances, bills, and sundry creditors. Turning to the assets and uncalled capital—-the two headings of interest to creditors—there is little of a reassuring character. The following is a comparison : — Uncalled Bills and „., Capital. g£kXt Book - debts - James Gillespie ... ... 61,117 146,018* 30,022 1,980 Melbourne Flour ... ... 21,450 45,298 7,171 918 Water and Kerang ... ... 30,000 29,493 7,478 James Malcolm ... ... 20,049 31,882 11,836 3,792 Wimmera North ... ... 12,250 18,051 7,458 2,965 D. Stratton and Co. ... ... 30,000 31,930 13,612 153 L. Kickham ... ... ... 6,000 25,419 4,150 326 Totals ... ... ... 180,866 328,091 81,727 10,134

* Including £4,424, provision for bad and doubtful debts. fNot including contingent liabilities, £4,362 { Provision for depreciation excluded.