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16th December 1938
Page 65
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Which of the following most accurately describes the problem?


At the Second Annual General Meeting of the Company held on December 12th, 1958, Mr. Dunn. in moving the report and recommending a 10% dividend, said in the course of his speech:— • ' • •


The onlinary,capital of the Company that will rank for dividend for the year ending May 31st, 1939, will be substantially increased, as there will he A300..000 of ordinary capital Outstanding. The new money that, was subscribed in the quieter days prevailing in the world last May has only been invested • to the extent of about one-third, Your Board were of...the opinion that on account of the falling activity in internal trade, and certain controversies in our own industry, it was wiser to proceed with the utmost caution, and to sacrifice to some extent if necessary a single year s income rather than jeopardise our capital position by buying at what would afterwards appear to be inflated figures: The position of the -security markets deteriorated at an accelerated pace almost immediately after we had replenished our coffers, and I believe that we are in a peculiarly fortunate position to be so very -strong financially at this time. Active negotiations are now in progress with a number of companies whose acquisition would materially strengthen our group.


In the last six months there has been an increase in fuel costs through taxation, arid in' wages, which_ are the two heaviest items on the hauliers' bill.


Your Board have carefully reviewed the matter of depreciation and have settled an effective lite varying from three years for-the lightest type of vehicles, to longer periods for the heavier and more expensive types. Both the class of work on which a fleet is employed and its standard of maintenance are important points when considering depreciation policy, and the standard we have adopted as a minimum we believe to be sound, and it will only be varied after very special consideration. All but the heaviest types of vehicle are depreciated at rates considerably higher than those allowed for tax purposes by the Inland Revenue authorities. We have imposed an additional check on our standard by deciding to review the conditions of each fleet at the end of every accounting period, and if we find that the book value in any ease is too high, additional depreciation will be charged. ACQUISITION POLICY.

We are anxious to bring into our Group

companies whose activities can be carried on in collaboration with our own at an increased efficiency for a smaller overhead cost. increased efficiency should . come from the more even balancing of loads, and decreased overhead costs from the elimination of duplicated facilities ailch as depots and theuse by each of our companies of plant and personnel belonging to Other. meni. bees of the Group. Therefore each new company, as it jains the organisation, creates both for Itself and for the Group a value that was previously non-existent.

In negotiation with other concerns who wish to join us, hesitation is often found over the question of loss of independence. However, this is not such an important factor as it appears at first sight, as the control of a road transport organisation must remain decentralised. Any other polls], would destroy the vital advantages that this form of carriage enjoys—the pereonal relationship between the trader and the carrier, and the complete flexibility of the service offered. Ajgain, a man who has built On a business often wishes to retain some equity interest in its future. Your Board look with favour on arrangements of this nature.

You will probably like, to hear something of the activities of the group of companies under Transport Service' control. Our SUbSidiaTiCS at present number 25, but we hope, in the next six months, to reduce the number by at feast 5 through the absorption of certain smaller enterprises into bigger unite in the satire area, thus reducing administrative, accountancy -and secretariat work. Our Companies are engaged in many different types of work, long-distance haulage cd bulk loads, long-distance haulage of small, local collection and delivery, freight-broking, that is the contracting and consequent cubcontracting of goods for delivery on ma coo other than our awn, and last but not least, the regulat supply of transport by contract aver long periods. Al] these activitiesare carried on over all area embracing England, Wales, and South Scotland. Our fleet has a carrying capacity of Well over 3,000 tons and in addition there are regularly working for us, though belonging to independent operators, vehicles which in the aggregate constitute a very large fleet. It would take too long to review in detail all the phases of this work and compare the profits drawn from each of the rough divisions that I have made in the type of work done. But as you have doubtless, realised from the attention that the Press has given to the subject of Road and Rail competition, the rates received are in many eases uneatislactory. It is not the policy of Transport Services to build a transport system that parallels the Railway system. The Railway system of the country was developed before 'electricity and oil were used as pninary sources of power by. industry. In consequence many industries to-day are not conveniently situated' •to receive and deliver their pods by means -al the Railway. Certain points are more directly connected by road than by rail. In certain Instances packing charges can be dispensed with if.transhipment can be avoided. There is a vast, amount of work that can better be carried by road than by rail. The Railways are asking for complete -freedom from all rate control, but it should be borne in Mitlit that the Transport Advisory Council, a body representative of all transport interests appointed by Statute to advise the Minister, issued as long ago as J oly, 1937, a very comprehensive report on the subject of services and rates. The report stated that any attempt to dictate services and to endeavour to decide that certain goods should go by certain forms of transport Would be impracticable mud would certainty dot be tolerated by public opinion, and advised that co-orciinatLon betweeu the various forms of transport shoMel be arrived at through valuntary efforts and voluntary agreement.

The Railway Companies, few in number, are well organised and able to speak with one vaice at the Council table, Road Transport has in its ranks, as well as many large companies, matiy thousands al individual hauliers and indeed many different associations representative ot these interests. It is up to the Road Transport industry to produce, as soon as possible, a body that can unquestionably speak for it as a whole. For any Road, Rates Schedules to be effective and of use to the trader they Must have proper regard to the Rates Schedules of any other form of transport,and our own economic position. It is impossible to overestimate the importance to your Company of the decisions that may be taken in the immediate future by the Government of the day in regard to the regulations under which we and other formspublic transport work, and in regard to whic we and others hare asked for a revision in many particulars. The fair and just solution of these problems will determine the position which the professional haulier is to hold in the industrial scheme of the country as a whole.. However, our organisation daily becomes stronger and better equipped to play a leading part in so ordering our own group of Companies that an efficient service to the public can be given and at the same time yield us a fair reward.

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