54 
THE TROPICAL 
AGRICULTURIST. [July r, 1889. 
The Chairman, in the course of a statement as to 
the position and prospects of the company said : — I 
think it well to take the opportunity of not only bring- 
ing before the notice of the shareholders the pros- 
pects of the company, but to give you a short outline 
of how the tobacco trade in Sumatra has developed. 
Tobacco cultivation was commenced in Sumatra in 
1865, and in that year 189 bales were sent to Am- 
sterdam and sold at prices which I should judge from 
the reports— from the evidence of the statistics — did 
not pay, as in 1866 and 1867 there was a slight de- 
crease. In 1868 the cultivation assumed larger pro- 
portions, and 890 bales were shipped to Amsterdam, 
and realised an approximate valuation of £17,000. It 
is needless for me to follow the whole course of the 
tobacco cultivation — it is enough to state that the 
wonderful extent of cultivation amounted in 1886 to 
139,512 bales, at an approximate valuation of £2,700,000. 
Naturally you would have supposed that the prices, 
from the increased production, would have been 
affected : but the demand has kept up with the sup- 
ply. Looking over the same statistics, which are 
almost official ones, and oan be vouched for by 
the leading brokers in Amsterdam, we find that 
the prices which opened at 2s 4d per lb. reached 
the highest point in 1873, when they touched 3s 
per lb. It was evident that the supply was rather 
in excess of the demand up to 18S0, as the price 
dropped till it reached Is lOd per lb. From that 
year, however — I believe, from the supply required by 
America — the prices gradually and steadily rose, till in 
] 886 we have the highest valuation, when it rose to 
2s. 7d. per lb. A great deal has been said about the 
1887 price ; in that year the average value was very low, 
and it was very easily accounted for. It was a bad 
year for the planters ; they had a wet season, and that 
is fully borne out by statements in the report of Messrs. 
Bigner and Herschel, tobacco brokers of Amsterdam. 
They end up their statement with regard to the future 
thus — "We still retain our good opinion for the future of 
Sumatra tobacco will be just as well appreciated as now, 
and that the demand will even grow larger." That this 
prophecy has been fulfilled there is not the slightest 
doubt, for the prices of this year are very much better 
than those of 1886, A few sales only have taken place 
this year ; but I had better quote the first sale. The 
first was a sale of Deli tobacco, which in 1883, with a 
percentage of broken leaf of 23 per cent., fetched c.141. 
In 1887, with a percentage of broken leaf of 16 per 
cent., it fetched o. 145, and iu 1888 it fetched c. 155, 
with 50 per cent, of broken leaf in it. This is 
not an exceptional case at all ; it has g'one through all 
the notes we have received of the sale. I should 
be glad to show you the comparative prices as com- 
pared with last year, and I calculate that it varies from 
25 per cent, to 75 per cent. A sale took place on 
May 10th, and there were at the sale several parcels be- 
longing to the Amsterdam Deli Company, which were 
sold at an ave rage of 157 cents. Of these parcels, imme- 
diately after the sale we received advices that a lot 
valued at 160 cents was resold at 205, a further lot, 
valued at 128J, was resold at 175 cents, and a further 
lot, valued at 119 cents, fetched the enormous value 
of 185 cents. The agents, in writing me, say that the 
competition was most exciting, and there were more 
bids made than he had ever seen before. There was 
some competition between the American and German 
buyers, the quality being good, and there being a great 
demand, owing to the shortness of the quantity last 
year. It iH necessary for us to make a distinction in 
the prices. There are in Sumatra three well-known 
tobacco growing districts — Deli, Lankat, and Sirdang. 
In Deli the tobacco produced sells at an approximate 
average of 2i. 7.^-d. per lb.; in Lankat, 2s. 9d.; while 
lor Scrdang 2s. 2d. was realised, showing that while 
Lankat is superior to Deli, Sirdang is rather inferior 
to both. Our property is in Sirdang. To buy property 
in either of the other districts is almost impossible, 
except at excessive rates. I can vouch for the sale 
of a portion of land which I sold in Deli for £10,000, 
arid, except at very high rates, it is almost impossible 
to pur chase it. It is impossible to obtain virgin 
land in Deli such as wo have in Sirdang. 1 shall now 
go on to the cost price of tobacco, so that we 
may arrive at some conclusion as to the probable 
margin of profit. The cost of production is from 
Is. 4d. to Is. 6d. per lb.; but, of coarse, we must have 
good management to do that. With good manage- 
ment it should not exceed 1$. 6d., including sale 
charges at Amsterdam. That leaves a good profit on 
the average sale of Sirdang tobacco, wtych in 1886 
fetched 2s. 2d. per lb. The estates that the company 
now have have been pronounced by the manager to be 
the best in Sirdang, so that I think we are justified iu 
taking this 2s. 2d. per lb. as a fair average quotation for 
what wo should get for our product, without taking note 
of the rise in the recent sales. In addition to this, we 
have the great advantage of having a large amount of 
virgin soil, and also estates in thoroughgoing order, 
fully stocked with everything that is required for a to- 
bacco company, and they have produced this year 500,000 
lb. of tobacco. We have, moreover, a guarantee for 
the present year of £6,000 profit on the present crop. 
This has not been founded on any doubtful figures, but 
was based on absolute calculation of what one of the 
vendors' estates made in 1886. With these facilities, 
and the subscription of capital (upon which all calls 
have been paid), and with good management, we think 
our company will bear comparison with any company 
which has been started in London for the cultivation of 
tobacco. I do not wish to disparage any other com- 
pany ; I wish simply to put before you the factSj and 
allow you to draw the comparison, knowing the ac tual 
position of the company— that we are in as good a po- 
sition, if not better, than any other. Nearly everything 
in the profitof thecompany depends on the management, 
and I think the shareholders will have some satisfaction 
in knowing that most of the members of the board 
have an intimate knowledge of the business, and have 
devoted themselves to the cultivation of tobacco in 
Sumatra, and have an actual practical knowledge of 
the working. Two of them have lived in Sumatra for 
many years, and are judges of the soil, acquainted 
with the native rajahs, and have heen on good terms 
with the governing authorities. I think, therefore, 
you have a good property. We cannot, of course 
say anything about the future of prices ; but if prices 
hold, as they promise to do, the prospects of the com- 
pany promise to be very successful. I read in the 
paper this morning a report that the Dutch had been 
coming into contact with the Achinese at Edi, and 
the public may think that will affect the tobacco in- 
dustry in the southern districts of Sumatra : but the 
railway facilities are so great that any fear is ou of 
the question. The Achinese are not natives of he 
country, and the only possible harm they could do 
would We out of mere revenge, which the Dutch c m- 
pany could cope with and prevent. If there is any q u es- 
tion any shareholder would like to ask I shall be very 
glad to give any information. 
Mr. Henderson asked how long the soil would con- 
tinue to bear tobacco? How many crops would the 
same soil give ? 
The Chairman said the average cultivation on 
estates of similar size to theirs was 500 acres. They 
possessed about 27,000 acres, of which they might 
fairly say that 16,000 acres were good for the 
cultivation of tobacco. Taking 500 acres— or, if they 
extended the cultivation, they could go on for six- 
teen years without using the same ground. In Deli 
and Lankat it had bean found in all case3 that the 
second crop was quite as good if the ground was 
allowed sufficient time to rest — from five to ten 
years— it was quite as good, if not better. He 
knew estates in which he was interested where the 
secret of cultivation had been kept, where the se- 
cond crop sold at the highest price the estate had 
ever realised. They knew it would do for two years, 
but whether it would do for three years they could 
not say, but that would take them on to fifty years. 
Perhaps it might be as well to mention that at a 
sale ou May 10th the prices were kept secret ; but 
had recently heen divulged, and they learned that 
the prodnet of an estate next to theirs in Sirdang 
had fetched a price which was almost unknown, viz., 
165 cents, which was equivalent to 2s. 9d. a pound. 
