Tune i, 1895.] THE TROPICAL AGRICULTURIST. 
807 
sere many good Companies among them, although in 
one or two cases it is evident that there is a desire 
to spread expenditure upon new plantiags over future 
years without regard to the difficulties that may 
arise later. 
So far has concentration and expansion proceeded, 
that no less than twelve Indian companies produce 
between l,500,OL)Olb. and 4,000 lb. of tea each per annum, 
while one Ceylon Company turns out over 4,000,000 lb. 
per annum, and about half a dozen others have an 
out-put ranging from 600,000 to 800,000 lb. per 
annum. A table issued by Mr. George Seton, who 
lias done much to popularise investment in Indian 
tea companies, gives particulars regarding the capi- 
talisation and working of thirty-six principal Indian 
companies, the averages of which, for 1893, may be 
summarised as follows — 
Average. 
Capital cost per acre under tea £ 41 
Crop per mature acre . . 475 lb. 
Receipts per lb. sold . . 9 43d. 
Expenses per lb. sold . . 771d. 
Profit per lb. sold .. P72d. 
Profit on capital employed . . 7'12 per cent. 
Dividend on share capital . . 6 25 per cent. 
Proportion of reserve and balance 
forward to capital . . 8'31 per cent. 
These figures must only be taken as averages, but 
they reflect very creditably upon the industry. Share- 
holders, in comparing the results of one particular 
company with these averages, should be careful to 
take every contingency into account, for a company 
which produces a high grade of tea is likely to be 
capitalised higher per acre, but then this ought to 
be counterbalanced oy a better price, and consequently 
larger profit per acre. Given average management 
with a fair situation, and it seems clear that a 
company that answers to these averages, whose 
figures are toned down from the fact that no less 
than seven of the companies included paid no divi- 
dend at all during 1893, should pay fairly well. It 
might be added that a low capitalisation, moderate 
price for the tea, and large outturn, are much better 
conditions for a company than a small outturn, a 
high price, and consequently larger profit per lb. 
Should competition become keener, it is clear that 
the large companies, moderately capitalised, well 
equipped, and turning out a large quantity of tea 
per annum, will fare best in the contest. This is all 
the more important as it is possible that an increase 
in the competition between India and Ceylon may 
lead to the "grading" of tea, much in the same way 
as coffee and wheat are now treated. It would cer- 
tainly lead to a saving in commissions and broker- 
ages if the principal Assam growths, for instance, were 
graded in Assam into Assam No. 1, No. 2, and so forth. 
The competition between plantation and plantation, 
although it has proved a healthy source of develop- 
ment of improvement, has probably done its work, 
and, with outside competition of great severity, it 
might well be done without. The finest qualities, 
of course, could not bo merged into tho general 
body of tea, but the greater bulk of the output 
could well bo classified into half a dozen grades. 
Tho consumer might continue to buy his article 
under the fantastic names bestowed by grocers' 
factors upon their wares, but wholesale transaction 
could very well be conducted in grade. Such a 
change would certainly be resisted vigorously by 
thoso interested, but if prices are forced down much 
lowor, it will become a question whether the whole 
loss is to fall upon the producer, or whether others 
shall bear their part. 
Finally, should competition develop severely, tho 
better situated Indian companies would find relief 
to a certain extent from tho forced abandonment of 
tea-growing in other parts of India. Only in Assam 
and a portion of Bengal can tea production be said 
to flourish, and even in those provinces they arc dis- 
tricts which do not do well. A marked decline in price 
would very likely lead to the production of the North- 
West Proviuces, tho Punjaub, Madras, Burma and 
the Kangra Valley being soriously reduced, for the 
yield per aero in thoso districts is generally bolo\y 
500 lb and the jpticea obtained are not high as a, reds 
Summarised briefly, this tea-growing industry is 
subject to the ills and dangers that always beset a 
planting or agricultural industry. The weather, dis- 
ease, and insect pests at times will be leagued against 
it, but probably it is less seriously afflicted in this 
way than many other products grown under like con- 
ditions. On the other hand, many of the companies 
have developed into solid undertakings strong enough 
to beat down ephemeral competition, and even the 
speculative classes are rather chary of entering upon 
a business which locks up capital for some years 
without return. Competition must, however become 
keener, probably leading to a further reduction iu 
price, and possibly this will affect profits to a partial 
extent. At the same time, the return upon invest- 
ments in these companies is still high enough to allow 
of these considerations being faced. Only of course, 
there are tea companies and tea companies, and the 
sounder concerns will naturally be better fitted to 
cope with any difficulty. Given such a concern its 
preference or debenture capital should prove a sound 
investment, which will in reality be more secure 
than many such issues of companies in other channels 
of business which are priced at a higher level in the 
market. The Ordinary Shares must, to a certain ex- 
tent, partake of a speculative character, but not in 
the bad sense of the term, and if only in buying a 
due regard is paid to the chances of the industry, the 
return obtained upon an investment should prove 
high enough in average years to allow a bad season 
or two to oe faced with equanimity. 
SALE OF CINNAMON ESTATE. 
A Correction. — An error has crept in regarding 
the sale of the cinnamon estate at Ekela. The 
price should have been R19.600 and not R16,550.— ■ 
Cor., local "Examiner." 
OUR TEA COMPANY IN AMERICA. 
The letter from our Tea Commissioner to the 
United States to which reference is made in our 
London Correspondent's last communication is 
scarcely explicit enough to enable us to determine 
from it what progress had been made by him. 
It is probably the case that most people will think 
the time passed by Mr. Mackenzie in America has 
been brief as compared with even the preliminary 
work to be performed. Of course we cannot say 
that the matter is to be regarded in this light 
until we are fully in possession of knowledge 
as to what that gentleman lias been able to 
accomplish. It would certainly seem, however, as 
if the work assigned to him had been very rapidly 
got through. So far as it is possible to conclude 
ironi tlic brief abstract of his letter furnished 
to us, our Commissioner would appear to have 
come to the conclusion that it may be the wiser 
course bo work with established agencies and 
through the regular channels of trade than to 
attempt to follow any new course involving 
isolation of effort on our part. We do not say 
that his letter fully warrants this con- 
clusion, but in tho absence of any state- 
ment of his view as to future policy we 
think the surmise abo\e made is to be jus- 
tified. And it could hardly be the case that, if 
Mr. Mackenzie had deemed a more heroic plan 
advisable, he would be quitting America with- 
out having arranged the details of such a scheme. 
That he proposes to do so induces the belief 
that he thinks no such scheme to be practicable. 
The program sketched out for him from this 
end was one which must have demanded for its 
fulfilment much more arrangement than could 
probably have been made in the short time 
devoted to his visit. >o doubt he had 
early discoverQil obstacles to the proposals tha^ 
