7o8 
THE  TROPICAL  AGRICULTURLH. 
[April  i, 
Prcfsrence  and  Ordinary  shares  of  Indian  Tea  Coin- 
panias  have  had  a considerable  rise.  The  market 
has  become  more  free  and  active,  and  the  en- 
larged dealings  are  the  result  of  greater  public  atten- 
tion being  attracted  to  this  class  of  security.  The 
widening  of  the  market  is  still  going  on,  and  it  is 
highly  probable  that  a furtlier  appreciation  et  prices 
will  take  place  during  the  next  few  mouths.  I’ur- 
chasers,  therefore,  need  be  under  little  apprehension 
that  they  are  buying  on  the  top  of  the  market.  On 
the  contrary,  we  are  of  opinion  that  the  present  is 
about  as  favourable  an  opportunity  for  “getting  in" 
as  they  are  likely  to  see  for  some  time  to  come. 
Compared  with  the  advance  that  has  occurred  in 
many  home  securities  of  ecpial  character  and  stand- 
ing, the  improvement  in  Tea  shares  li.is  been  only 
medoratc,  and  they  may  still  1)3  reg.irded  as  fairly 
chea))  As  we  have  said,  the  Preference,  shares  in 
even  the  best  companies  will  return  at  present 
quotations  a yield  cf  from  four  to  four  and  a-half 
per  cent.,  while  the  Ordinary  sh-ares  can  yet  be 
nought  at  figures  yielding  from  six  to  seven  per  cent., 
with  a very  fair  chance  of  a continuance  of  that  rate 
of  interest. 
It  is,  however,  with  the  Preference  shares  that  wo 
are  concerned  just  now,  and  for  the  conveniouce  of 
investors  we  subjoin  a table  showing  present  quota- 
tions and  yield  of  the  soundest  and  best-known  of  these 
securities  : — 
Interest  Value  of  Presem  Tield 
pel* 
cent. 
Name  of  Company. 
Share. 
b 
quota- 
tion. 
f 
per 
cent. 
7 
Dooars 
10 
17.i 
1 
(i 
•Tokai 
10 
15 
4 
r> 
British  Indian 
5 
5i 
■D; 
0 
Eungla 
10 
13i 
•U 
(1 
E.  India  and  Coylon 
10 
1:1 
G 
Cachar  and  Dooars.. 
10 
1:; 
4il 
GJ 
Singlo 
. 10 
It 
4^ 
7 
Chargola 
20s 
28s 
5 
All  of  these  shares,  with  the  exception  of  those  of 
the  Singlo  Company,  are  cumulative ; and  have  a 
preferential  claim  not  only  as  regards  interest,  but 
also  as  to  capital  in  the  event  of  a distribution  of 
assets.  A point  to  bear  in  mind  is  that  in  the 
majority  of  cases  not  more  than  one-third  to  one-half 
the  total  capital  takes  the  form  of  Preference  stock ; 
and  in  many  instances,  notably  in  that  of  the  Jokai, 
the  future  issue  of  such  stock  is  limited  to  a small 
proportion  by  the  Articles  of  Association.  It  may 
be  taken,  therefore,  that  as  a general  rule  the  value 
per  acre  as  represented  by  the  Preference  shares  is 
very  moderate — a fact  \vhich  naturally  adds  to  the 
worth  of  the  security.  A point  which  holdeis  of  Pre- 
ference shares  alw'ays  have  to  take  into  consideration 
is  the  possibility  of  a further  issue  of  Debentures 
being  placed  ahead  cf  them.  In  th's  respect  there 
need  be  little  present  apprehension  as  regards  the 
companies  mentioned,  or  indeed  as  regards  Tea 
companies  generally.  There  exists  a strong  feeling 
against  this  method  of  raising  money  as  tending  to 
weaken  the  status  of  the  share  capital,  and  few 
if  any,  of  the  companies  have  urgent  nojcsaity  to 
increase  their  funds.  In  reforence  to  the  possibility 
of  a further  appreciation  in  value,  the  fact,  that 
the  total  amount  of  available  Preference  slock  is 
comparatively  small  is  worth  bearing  in  mind. 
No  doubt  as  tlie  market  continues  to  open  up,  se\eral 
of  the  companies  that  have  not  already  done  so,  will  be 
inclined  to  split  their  shares  into  Preference  and  Or- 
dinary, and  this  tendency  is  already  observable  to 
some  extent.  Fresh  shares  will  also  be  issued  for  the 
purpose  of  acquiring  new  estates,  but  there  is  not  the 
slightest  fear  of  the  market  being  flooded  with  secu- 
rities of  this  class.  Another  question  of  the  first  im- 
portance to  investors  is  that  of  the  reserve  fund.  No 
industrial  company,  however  sound,  is  free  from  the 
vicissitudes  inseparable  from  trade  j and  in  addition  to 
fluctuations  of  this  kind,  planting  companies  are  also 
liable  to  the  risks  of  a bad  season  and  short  or  poor 
crops.  It  is  therefore  re-assurmg  to  find  that  the 
' maiority  of  the  ilea  companies  possess  an  adequate 
reserve  fund  in  some  form  or  ether,  either  in  the 
shape  of  undivided  profits,  or  else  in  extensions  of 
1 R96, 
ground  purchased  out  of  surplus  earnings.  This  last 
is,  of  course,  a form  of  reserve  which  is  open  to  some  ob- 
jection, since  it  is  not  liquid,  but  it  is  at  any  rate  a more 
tangible  asset  than  when  money  is  sunk  in  a purely 
manufactuiiug  business,  and  the  security  behind  the 
Pretcrence  shares  is  proportionately  increased.  In 
the  case  of  the  companies  mentioned  in  our  list  there 
is,  besides,  a substantial  reserve  in  actual  cash,  a 
circumstance  w'hich  will  no  doubt  tend  to  increase 
the  confidence  of  investors. 
It  must  not  be  supposed  that  the  list  given  above 
by  any  means  exhausts  the  catalogue  of  shares  that 
call  be  safely  recommended  for  a purchase.  In  the 
table  of  shares  which  we  publish  weekly  there 
are  a number  of  othci's  whence  a selection  might 
he  made.  There  are  also  the  Ceylon  tea  com- 
panies’ shares,  which  are  at  present  neither  so 
well  known  nor  so  freely  dealt  i;i  as  those  of 
the  Indian  under lakiiigs,  but  nevertheless  present 
an  iittractive  and  improving  form  of  iiivest- 
incnt.  Tile  only  disadvantage  about  purchasing  the 
lessci-known  shares  is  that  the  acipiirement  or  dis- 
posal o them  might  necessitate  a little  more  nego- 
tiation than  ill  the  case  of  those  we  have  quoted. 
Doubtless  the  yield  might  as  a rule  he  a little  better, 
and  the  one  advaiitiige  must  be  set  against  the 
other.  However,  tiie  rctuni  even  upon  the  shares 
mentioued,  which  may  be  looked  upon  as  the  pick 
of  the  basket,  is  suificiently  alluring  in  these  days 
of  cheap  money  and  meagre  yields.  If  a thousand 
pounds  were  spread  over  the  eight  companies  in 
our  list,  the  investor  would  obtain  an  overhead  re- 
turn of  -l.\  per  cent,  together  with  a considerable 
prospect  of  an  improvement  in  capital  value.  The 
risk  of  depreciation  upon  an  investment  so  distri- 
buted would  bo  very  slight,  and  might  almost  be 
disregarded,  provided  no  great  calamity,  such  as  a 
war,  affected  the  industiq  ; for  in  iioimal  times  the 
market  is  absolutely  certain,  and  is  steadily  expand- 
ing, thereby  correcting  the  iiiciease  in  production. 
The  exhaustion  of  the  gardens,  moreover,  is  a con- 
lingency  to  remoto  that  it  may  be  eliminated  at 
present  from  consideration.  One  word  of  caution  is 
iijcessary  to  tlioso  who  are  thinking  of  investing  in 
Tea  companies’  Preforciice  shaies.  The  market, 
though  much  freer  than  it  used  to  he,  is  still  to 
some  extent  a limited  one,  and  if  a purchaser  insists 
npmi  buying  a jiaiticular  share  he  may  be  obliged 
by  the  1 onditions  prevailing  at  the  moment  to  give 
a highei  price  for  it  than  would  be  necessary  if 
ho  waited  for  a more  favourable  opportunity.  It  is 
therefore  advisable  to  give  a limit,  and  also  a little 
discretion,  as  to  time.  Put  it  is  better  still  to  allow 
the  broker  a lango  over  one  or  two  shares.  In  the 
list  above,  lliero  is  really  not  very  much  reason  why 
one  share  should  bo  prefened  to  another,  and  the 
boundtst  inHiiner  ofopi-iation  is  to  spread  the  amount 
available  ever  two  or  three  dilTereiit  securities.  As 
regards  the  general  position  of  the  companies,  both 
with  rcferencG  to  the  tea  produce  market  and  the 
increasing  popularity'  of  the  sliares,  our  anticipations 
of  a few  weeks  back  have  been  luoic  than  fulfilled. 
— Fi.iaucial  Tinies. 
^ 
Ml  . E,  E.  GiiEKN  o\  A Gkylon  Insect. — At  a 
in-cc-ting  of  the  Entoiijological  Society  on  P’ebniary 
5th,  Mr.  E.  E.  Gi  ceu  rcinailcod  that  in  the  Tranx.  Ent. 
For.,  1881,  f.  (lOl,  was  a short  paper  by  the  late 
Trolessor  J.  vl.  Westwoou,  decribing  a curious  little 
insect  fro.u  Gcyloii  under  ihe  name  of  /hiscniina 
lougisetosa.  I'rotessor  Wostwo.  d Ije  ieved  his  ty'pical 
specimens  lo  be  immature.  Mr.  Green  exhibited 
what  be  supposed  to  be  a hater  stiigo  of  the  same 
species.  He  said  his  exaiiiplo  differed  in  some  par- 
ticulars from  Westwood's  doscriptioii  ami  ngure — 
notably  in  the  proportions  of  the  caudal  mipeiidages. 
The  present  s^iecim.-n  was  taken  in  the  1\  n luh  ya 
district  of  Ceylon,  at.  an  elevation  of  about  -l.tiuO  feet. 
Mr  Green  said  lu-  had  1.-  ore  Ihun  once  seen  this 
in.-ieet  under  loose  i ieces  i.f  hark  mi  l in  crociees  of 
rocks,  and  had  always  lieen  strut  k liy  its  likeness  lo 
an  earwig  both  in  appt'.iiMiie.'  and  liabits. — Dr.  Sharp, 
Mossrs  McDachlan,  Gahan,  llliiulford  and  Iliinnson 
made  sonii-  remarks  on  the  tiuhject. — A 
F.o.  ].'-). 
