254  ' THE  TROPICAL 
exiimination  of  tho  accounts  of  the  prin- 
cipal producing  compauies  for  1895.  The  cur- 
rent number  of  “ The  Investors’  Review’’  has 
tome  very  hard  things  to  say  about  the  group, 
and  though  some  of  tliem  are  perfectl3'  roa.ioiiablo. 
some  of  them  appear  to  us  to  be  unnecessarily  des- 
pondent, if  not  a trifle  unfair.  Our  contemporary 
auggests  that  the  delay  in  the  publication  of  Indian 
tea  companies’  reports  baa  been  caused  to  some  ex- 
tent by  “ preparations  for  ‘ consolidation’ — a term 
which  appears  likely  to  bear  in  the  future  as  ill  a 
name  in  tho  tea  share  market  as  in  the  Kaffir  circus.” 
Wo  have  already  drawn  one  comparison  between 
the  Indian  plantations  and  South  African  mines, 
but  the  points  of  resemblance  are  surely  few  in 
number,  and  in  tho  present  case  we  fail  to  see  the 
reason  for  the  association  of  the  two  classes  of  enter- 
prise. Kaffir  consolidations  are  “another  story,”  but 
consolidations  are  not  necessarily  bad,  and  in 
many  ways  are  productive  of  excellent  effects. 
The  whole  question  rests  on  the  merits  of 
individual  scbemes,  and  our  contemporary, 
while  peering  into  the  future,  when  “ consolidations  ” 
and  their  accompanying  evils  have  done  their  fell 
work,”  makes  no  attempt  to  show  that  the  various 
plans  that  have  been  carried  through  recently  have,  as 
a whole,  involved  unfairness  to  shareholders,  or  that 
they  have  made  loopholes  for  plunder.  Most  of  them 
indeed,  have  been  framed  on  equitable  lines,  and  have 
been  justified  by  the  appreciation  in  market  values. 
The  criticism  that  some  of  the  companies  show  a 
regrettable  inclination  to  divide  their  profit  right  uj) 
to  the  hilt  is  certainly  justified  in  some  cases;  but 
here  again  there  is  something  to  be  said  on  the  other 
side.  Many  of  the  concerns  whose  financial  methods 
are  questioned  in  this  respect  have  devoted  large 
sums  from  revenue  to  betterment  purposes,  and 
although  the  possession  of  large  reserves  is  obviously 
an  advantage,  and  the  equalisation  of  dividends  an 
eminently  desirable  policy,  it  cannot  fairly  be  said 
that  the  companies  have  been  altogether  indifferent 
to  future  needs. 
It  lia.s  brought  forth  the  following  letter  and 
furtl'.er  editorial  comment: — 
INDIAN  TEA  COMPANIES. 
(To  the  Editor  of  the  Financial  Times.) 
Sir, — Your  carefully-written  article  of  10th  inst.  is 
calculated  to  lead  many  investors  to  pay  more  at- 
tention than  they  have  hitherto  done  to  tho  tea  in- 
dustry ; and  as  it  is  difficult  for  anyone  outside  the 
trade  to  get  tho  materials  for  forming  a sound 
judgment  when  choosing  a company  in  which  to 
invest,  it  may  be  useful  to  your  clients  to  have  a 
standard,  the  more  so  as  all  tea  plantations  are  not 
equally  good  or  safe. 
The  best  criterion  is  the  average  price  por  planted 
acre  which  a company’s  capital  shows,  taking  the 
share  at  its  market  quotation. 
Let  me  take  as  an  illustration  two  of  the  concerns 
you  name  in  your  article,  namely,  the  old  Assam 
Company  and  the  Leboug  Company  in  Darjeeling. 
The  Assam  Company’s  capital  of  .£187,000  at  £59 
■per  share  equals  £555,000,  less  £50,000  reserve  fund, 
equals  £505,000,  for  its  10,100  acres  of  tea,  that  is, 
about  £50  per  acre.  The  Lebong  Company’s  capital 
of  £05ifi60  a,t  £18  per  share  equals  .£118,000,  lessre- 
£18  000  reserve  fund  and  working  capital,  equals 
£100,000  for  its  1,550  acres  of  tea  ; this  i.s,  about 
£(55  per  acre. 
Ttese  two  companies  represent  the  oldest  planta- 
tiom  districts  which  produce  the  finest 
^ea’^^fbeir  produce  commands  a higii  premium  in 
and  they  may,  therefore,  be  safely  taken 
as  tie  standard  by  which  other  concerns  should  be 
YQ^ed. 
Mie  reason  why  these  and  several  other  old  com- 
^aies  are  now  paying  such  high  dividends,  in  spite 
of  he  comparatively  low  piice  of  tea,  is  that  in 
b-yone  years,  instead  of  dividing  all  their  profits, 
the  have  largely  extended  their  plantations  out 
of  ivenuc,  of  which  policy  they  are  now  reaping 
thJjenefit.  This,  of  course,  is  not  generally  known. 
X investor  will  naturally  desire  to  know  what  is 
tlj^rospect  of  the  value  of  tea  holding  up ; having, 
AGRICULTURIST  [Oct.  r,  1896. 
no  doubt,  heard  tho  foreboding  repox'ts  of  over- 
production. 
At  the  moment  it  is  doubtful  if  the  supply  will 
equal  requirements,  which  arc  constantly  enlarging, 
as  the  weather  in  ludia  has  shortened  the  quantity, 
while  giving  finer  quality  than  last  season  ; not  in  all 
districts,  but  in  Assam  to  a marked  degree. 
The  immediate  effect  has  been  to  raise  the  price  of 
the  best  growths  in  Mincing-lane  pence  per  pound,  as 
compared  with  last  season’s  value ; and  we  find  the 
buyers,  not  the  producers,  showing  some  anxiety  as  to 
the  future. 
It  is  desirable  when  investing  in  tea-planting  com- 
fianies  to  discriminate  between  those  which  have  their 
and  in  the  districts  which  have  proved  their  ability  to 
yield  fine  tea  during  a long  period  of  years,  and  those 
which  have  not  ; and  to  examine  the  record  of  each 
company  during  the  last  five  seasons,  which  have  in- 
cluded bad  as  well  as  good  harvests. 
The  details  are  now  compiled  and  published  by  your 
weekly  contemporary,  the  “ Home  and  Colonial  Mail.” 
—I  am,  i£c.,  A Tea  Bhokeu. 
11th  Aug.,  1896. 
Investors  who  have  turned  their  attention  to  the 
market  in  Indian  Tea  Companies’  shares  will  find 
some  good  advice  in  our  correspondence  columns 
from  “ A Tea  Broker.”  Our  correspondent  agrees 
with  the  views  expressed  in  the  article  on  the  sub- 
ject that  appeared  in  Monday’s  issue,  and  points 
out  the  importance  of  intending  purchasers  studying 
the  average  price  per  planted  acre  shown  by  the 
capital  of  a company.  The  point  Is  one  that  we  have 
previously  emphasized,  but  with  tho  increasing  popu- 
larity of  the  market,  it  is  well  worth  repeating.  Our 
statements  concerning  the  probable  course  of  firices 
for  the  Indian  produce  are  confirmed,  and  our  cor- 
respondent adds  that  it  is  doubtful  if  the  supply- 
will  equal  requirements,  and  that  buyers  are  showing 
some  anxiety  as  to  the  future.  'This  fact  can  hardly  fail 
to  produce  a cheerful  effect  on  the  quotations  for  shares, 
especi-illy  those  of  the  better-known  companies. 
So  that  tlie  ba.sis  on  which  Tea  Companies  are 
formed  is  likely  to  be  carefully  scanned  in  future. 
Still,  the  great  difference  in  the  real  value  per  acre, 
of  different  proj)ertie.s  in  ditt’erent,  or  even  tlie 
same,  districts,  is  what  home  investors  can  never 
judge,  by  mere  ligure  comjiarisons. 
Among  new  tea  companies,  or  rather  busine.ss, 
— is  the  e.xtension  of  tlie 
“ nURN.SIDIC  company’.s” 
imrcliases  and  capital.  No  doulit  you  have  pub- 
lishcd  the  original  iiro.sjiectus : here  is  the  snp- 
[ilementary  one : — 
BUIINSIDE  TEA  company  OP  CEYLON,  LIMITED. 
Incorporated  under  the  Companies  Acts,  1862 
to  1890. 
Capital,  in  5.000  shares  of  £10  each  . . £.50,000 
Original  Issue  . , . , 20,000 
Balance  Unissued  . . . . £’30,tX)0 
The  £15,000  shares  now  to  be  issued  will  make  with 
the  £20,000  original  issue  the  present  ishied  share 
capital  £35,000. 
'The  £7,500  Debentures  now  to  be  issued  will 
make  with  the  £7,000  Debentures  original  issue  the 
amount  of  the  Debentures  issued  £14,500. 
The  1,500  Shares  now  offered  for  public  subscrip- 
tion are  to  be  payable  as  follows  : — 
£1  on  Application;  £3  on  Allotment;  and  tho 
balance  when  called  for  with  an  interval  of  not  less 
than  two  months  between  each  call. 
It  is  not  intended  to  call  up  more  than  £5  per 
share. 
The  remaining  £5  per  share,  total  £7,500,  will  bo 
specifically  charged  to  secure  the  Debentures  of  the 
Company,  the  amount  of  which  is  limited  not  to 
exceed  the  uncalled  Capital  of  the  Conqiany  for  the 
time  being  and  which  will  bo  further  secured  by  a 
floating  charge  upon  tho  other  property  of  the 
Company. 
'The  Debentures  carry  interest  at  5 por  cent,  per 
annum,  and  are  pryabfo  on  31st  Docombor,  1901. 
Subscriptions  for  tho  ,£T,.500  Debentures  aro 
payable  ; — 
