Too Much Money

Anxieties of Morris Hedstrom Directors

GENTLEMEN whose hobby is the study of balance-sheets are invited to consider the statement of accounts for the year ended March 31 last, issued by Morris Hedstrom, Ltd., the well-known Fiji trading company which operates in Fiji, Tonga and Samoa:—

Early in the war period, this company was able to change part of its stocks and other shrinkable things into cash, and this policy was followed. It was a sound and careful policy; but it was not needed.

The Jap invasion was halted on the borders of the MH territories; all mer chandise increased rapidly in value; every primary industry in the three Ter ritories boomed—especially copra; and the directors ended the 1942-3 year with the shocking profit of £80,927, a consider able proportion of which has had to be added to various reserves.

The company now has sufficient money invested in plantations, stores, buildings, land, plant, merchandise and sundry debtors nearly to cover the whole amount of its invested capital, so that the extra ordinary sum of £680,000, which it actually holds in cash and first-class investments, is really all surplus funds belonging to shareholders.

The directors are quite frank about the matter. “Considerable difficulty is being found in utilising the amount of money the company has available,” they report; and they add that, if the post-war period does not present opportunities for profit able utilisation of these funds in the Pacific Islands, it may be necessary to return a proportion of their capital to the shareholders.

Assets

1943. 1942. £ £ Plantations, Land, Buildings 237,800 283,791 Plant, Furniture, etc 17,728 20,787 Merchandise 221,123 249,297 Debts owing to Co 126,456 110,729' Cash 286,507 228,632 Shares in Subsidiaries 87,072 87,637 Gov’t and Municipal Stocks .. 312,425 47,586 Industrial, etc., Shares 85,782 47,766

Liabilities

1943. 1942. £ £ Subscribed Capital 739,613 739,613 Accumulated Reserves 374,720 200,698 In Profit and Loss A/c — Brought forward 94,624 86,601 Profit for year 80,747 54,949 Trade Debts and Liabilities .. 132,927 68,446