204
22
203
Ignoring for our present purposes the minor pier and harbour authorities and the undertakings of the Cart Navigation and Port Glasgow Harbour, we turn to the larger undertakings already described.
(73) Clyde Navigation Trust: The total capital expenditure from 1810 to 1944 amounted to £12,959,445. Against this, outstanding loans amounted to £8,776,704. The Sinking Fund Account stood at £2,193,601, and the Reserve and Depreciation Account at £1,795,556, the balance being covered by Suspense Accounts and Sundry Balances. Except during the depression of the early 1930's, the annual revenue has since 1920 exceeded £1,000,000.
The borrowed capital is provided as follows:-
4 per cent. Funded Debt
31 per cent.
F
J
31 per cent.
J
3 per cent.
JJ
Bonds (28-4 per cent.)
518,182 199,999
200,000
1,047,076
6,081,923
The prices ruling during the last two years for the Funded Debt have been-
23
out by the Admiralty. The total cost of all these works is estimated at over £750,000. Amongst the works which had to be executed mainly out of public funds was the reconstruction of Princes Pier at a cost of £225,000, at a time when Princes Pier was still standing in the Balance Sheet at a figure of over £45,000, being the same figure as in the Balance Sheet of 1913, plus £19,000 expended under the Act of 1913. This heavy expenditure had to be incurred at a period of the war when labour and materials were very short, in order to prevent the pier from becoming a danger to navigation.
While the position has to some extent been rectified by the heavy expendi- ture from public funds, we are bound to point out that the accounts, based as they are on the prime cost of works constructed many years ago, show figures which seem to have little relation to the present value of wasting and obsolescent assets.
(75) For reasons which will appear more fully in Part II of this report, we add certain further particulars. The prices at which transactions in the various stocks have been recorded in recent years are as follows:-
4 per cent.
3 per cent.
3 per cent.
3 per cent.
100
101
87
874
80
81+
76
78
The invested money is drawn from all parts of Scotland, and to a small extent from England and abroad.
(74) Greenock Harbour Trust: Owing to past capital reconstructions and the method in which the accounts are kept, it is not easy to present the parallel position. The assets, as shown in the accounts, and consisting mainly of the expenditure actually incurred upon the undertaking since the inception, amount to £1,901,019. The loan capital since 1913 has consisted of
A 3 per cent. Debenture Stock
B 4 per cent. Preferred Debenture Stock
B Deferred Debenture Stock
£
398,245
367,562
735,125
Junė, 1939
1940
1941
1942
1943 1944
May, 1945
A. 3 per cent. Deb. Stk.
B. 4 per cent. Pref. Deb. Stk.
B. Defd. Deb. Stk.
60
531
783
563 54-56} 541-591
42
5
32-35
8-12
32-36
8-12
75 -85 781-831 81
70 -80
74-79
721
30 35 29-34 26
To the extent of about £476,000 the B Deferred Debenture Stock is held by the Greenock Harbour Associated Stockholders Limited, and this stock constitutes that company's principal asset. The nominal prices ruling for the shares of the holding company were:-
June, 1939
1940
1941
1942
1943 1944
s. d.
ΙΟ
II 6 ΙΟ 6 16 29/3-35/-
£1,500,933
Sinking fund provisions have been applied to the £100,000 borrowed under the Act of 1913 and £40,000 of this debt has been written off; but with relatively inconsiderable exceptions nothing has been written off out of revenue against the pre-1913 expenditure of about £1,500,000, now represented by works upwards of 60 years old. Between 1913 and 1941 the holders of the B Deferred Debenture Stock, being virtually in the position of ordinary share- holders, were entitled to, and received, the free balance of revenue, if any. It was only in 1941 that Parliamentary powers were procured for the formation of a Suspense Fund for deferred repairs. In 1943 further powers were obtained authorising the creation of a Reserve Fund after paying the Deferred Debentures a minimum of 1 per cent., the amount of the Reserve being limited to £40,000, and the amounts to be set aside requiring a two-thirds majority of the Trustees. As 6 of the 17 trustees represent the Debenture Holders, they would be in a position to veto an application to reserve.
During the present war large sums have been expended on works, with the consent of the Ministry of War Transport, on the basis of high percentage government grant, and extensive additions and improvements were carried
The
(76) None of the debenture stocks is compulsorily redeemable. financial policy prescribed by s. 185 of the Act of 1913 requires that the revenues of the undertaking shall be applied (a) in operational expenses; (b) in repairing and maintaining the port and harbours; (c) in payment of interest on the two senior stocks; (d) in setting aside annually to reserve a sum not exceeding £1,000; and (e) in provision of interest and sinking fund for the £100,000 borrowed under the 1913 Act. Any balance after meeting these charges goes to the B Deferred Debenture stockholders.
(77) The interest on the A and B Deferred Debenture Stocks (amounting to over £28,000 per annum less tax) has been regularly paid since 1913. The Corporation of Greenock had to meet one annual payment under their guarantee of the new borrowing under the Act of 1913. The payments to the B Deferred Debenture holders per £100 of the nominal value of the stock have varied from nil to 3 per cent., the average over the last 31 years being 1-11/6 per cent., and the interest during the last three years being 2 per cent. Since the capital reconstruction of 1913 the B Deferred Debenture Holders have thus withdrawn from the undertaking in interest payments over £350,000.