498 
THE TROPICAL AGRICUL TURIST. 
[Jan. 1, 1903. 
without any provision for wear and tear. To 
arrive at some practical purpose let us divide 
these 45 companies into two; i.e., (hat proportion 
which pays oves 5| per cent or its capital, and 
that proportion wh'ch pays less than 5^ per C'^nt. 
1 have cliosen 5.^ per cent, as I look upon it as the 
mean average rate upon which loans can be ob- 
tiinedon fair tea property, either on mortgage, or 
in the form of debentures. Consequently, before 
any profit to the ordinary shareholder can be paid 
interest upon debentures and mortgages, and any 
intervening preference share dividend, has to be 
covered. From this table I gather that 15 of 
these companies paid 5| per cent, and over and .SO 
companies paid less than 5J per cent. Furthermore 
that these 30 companies, of themselves, oiily 
aggregate a total profit on their capital of 2'17 
per cent. and this, too, without any 
allowance being previously deducted for 
depreci'-'tion of buildings, or machinery, or, in 
fact, in any manner whatever. The proportions in 
acreage, actually work out as follows : — 
15 Companies 55,104 acres 29 per cent. 
30 do 132,311 do 71 do 
45 do 187,415 do 100 do 
It will thus be seen, that a little more tha^ 
2 to 1 represents the larger part ; but I sha'' 
adhere to one-third and two-thirds, as the simplest 
form of investigation, and quite near enough for 
general purposes. 
seventy-onk per cent of the industry 
Worked at a loss, 
I notice the average price obtained for produce 
per pound in the London maiket from thei'e45 
companies is 7-61d, which is slightly higher than 
the average for all teas from India during 
1901 ; while in Ceylon, although teas on 
the whole obtain a lower price, they also 
entail a lower average cost of production. 
Thus all considered, this carefully arranged 
table may be taken to represent approximately 
a section in every detail of the British tea 
industry generally. The only disparity that might 
arise being in the slight difference of average cost of 
production between India and Ceylon, which is 
practically equalised by the slightly lower price 
obtained for Ceylon teas. Thus all things con- 
sidered, the analogy is a fair one, and if it errs it 
is slightly on the side of a more favourable result 
for the 45 companies. It may, therefore,- I think, 
be concluded that under present conditions, one- 
third of the British tea industry is paying its 
owners over, and two-thirds are paying under, the 
borrowing rate of capital. Now, if thi^ order were 
reversed, so that two-thirds paid over the borrow- 
ing rate, and one-third only 2.17 per cent, I could 
almost understand the wisdom of leaving it to the 
so-called laws of self-adjustment. But here we 
have actually 71 per cent, of the entire industry 
being worked at a loss, v-iithont any apparent 
reasonable and combined effort being made for its 
redemption. 
OEIQINAL COST. APPRECIATION AND 
DKPRECIATION. 
Putting down the total extent of the Indian 
and Ceylon tea gardens at 900,<,>00 acres, which 
is sliglitly under I he computed area, and costing 
in the aggregate £40 an acre to bring into full 
bearing including land purchase, buildings, 
machinery, communications with interest on 
money until productive, we have a total cost of 
£36,000,000. In reckoning £40 an acre as the cost 
of bringing tea-land into bearing in India and 
Ceylon, I do not imply that that its value ha 
remained at £40 ; for some has becomti mord 
valuable and some has depteciated ; what I meas 
is that everything fairly considered, from 
Darjeeling to Ceylon, anii where work is rightly 
completed, that the figures I state will be fairly 
close. One certain fnct is evident, the more land 
planted with tea just now, the less the value of the 
whole industry ; or exnressed in other words, every 
extra acre opened now means something taken 
from, rather than added to the general value of 
the whole, as indeed may he reckoned any 
unnecessarily excessive production, no matter how 
small. The cost of the industi y may be understood 
better in the following tables : — 
ITS COST AS DESCRIBED ABOVE. 
300,000 acres paying over 9 per cent, costing 
£40 per acre, £12,000,000 
600,000 acres paying 2-17 per cent, costing 
£40 per acre, £24,000,000 
900,000 acres averaging 3.50 per cent, profit 
costing £40 per acre, £36,000,000 
COST BETTER ANALYSED AS FOLLOWS :— 
300,000 acres paying satisfaotorily, cost £12,000,000 
(exhausted in paying interest 
at 5^ per cent cost £9,000,000 
chiefly ordinary shares abso- 
lutely unprofitable cost £15,000.000 
90C.0C0 £36,000,000 
Thus far I have dealt with cost. It 
will be well now to consider how far 
this original cost has altered under the 
fair and legitimate, or, unbiassed process of supply 
and demand. 
AN APPROXIMATE NORMAL VALUE. 
300,0i'0 acres at ±60 the acre £18.000,000 
550,000 „ £31 „ £17 0 0.(100 
50,000 „ £20 „ £1000.000 
900,000 ,, £40 „ £''6,000,000 
Some explanation m iy be necessary in arriving 
at these figures : why one third is valued at sixty 
pounds the .acre and nearly tvvo-thirds at no more 
than thirty-one. My reason is that the smaller 
proportion pays over € per cent on invested 
capital, and the larger only at present 2.17 per 
cent ; but I cannot believe otherwise than if the 
same premedit.ated care were exercised by the 
sellers, that the buyers exercise in buying, and 
which sooner or later tliey will hive to adont 
whether they like it or not, that this great disparity 
could not exist. For apart from all other cause*, 
if a body of labourers, retailers or wholesale 
dealers, part with what they put into the market 
at less than it costs, or what I may denote as "a 
living wage," not only is much needless suffering 
entailed, but in nine cases out of ten it is nobody's 
fault but their own. On the other hand, £31 an 
acre may appear relatively high, compared with 
what pays 9 per cent.; but we must remember it is 
the bulk of the. industry which has during the last 
three months been suffering from an over-supply, 
of, at most, possibly 2 to 3 per cent, on the actual 
yearly rcqnire(nents of the market — say, 11 days' 
consumption A quantity, far beneath tlie increase 
that may any year arise from a favourable 
flushing season, and probably less than a fourth of 
what v/ould follow a reversion to the grade of 
plucking adopted. practically every where,Hp to two 
years ago. The final 50 0')0 .acres, valued at £-'0 
an acre, is relatively, probably for its worth, the 
highest valuation of the whole ; yet its total val(i,e 
