BUSINESS & INVESTMENTS

ANSWERS TO QUERIES

May 15 1922
BUSINESS & INVESTMENTS

ANSWERS TO QUERIES

May 15 1922

ANSWERS TO QUERIES

BUSINESS & INVESTMENTS

Question—I would like your opinion of “The Gold Pan Mine” in Northern Manitoba. What is the company doing at present?—H.G. Mimico Beach, Ont. • Answer—We have not been successful in obtaining a quotation on stock of the Gold Pan Mine. There are no dealings in the stock locally, nor is it listed in the Winnipeg Stock Exchange. The Company appears to be in the promotion stage and therefore it is early to judge of its real worth. As with practically all mining propositions it cannot be regarded as other than a gamble at the present stage. It is reported that outside interests have leased the property with a view to developing it.

Question—I would like your opinion as to the standing of the Gresham Insurance Co. also Riordon Pulp and Paper Co. A.K., Baliscan, P.Q.

Answer—The Gresham Company is an old English concern which has always held a high reputation. It operates under the Department of Insurance at Ottawa. We would regard it as safe.

Riordon has been one of the most disastrous of big industrial ventures in Canada. Over-expansion under conditions of war-

time inflation and too optimistic management resulted in a reaction which took the common stock down from more than 200 to around 2, while the effect on the preferred stock was little less spectacular. For a time it appeared that the company would be forced into liquidation and it is not yet out of the woods by any means. However, there has recently been an improvement in the situation and the preferred stock in the last fortnight has sold up from 6 to 15 and is now quoted around 13. We are inclined to believe that the pulp and paper industry will continue to be one of the great Canadian industries and that over an extended period the company’s securities should improve if it can get its financing adjusted on a permanent

As to not losing money on preferred stocks, the significance of preferred is merely that dividends will be paid out of profits on the preferred stock before any distribution is made on the common stock. There is no definite status to preferred stock at any time because it only takes preference after bond or other prior obligations.

Question—Should like any informaton you have regarding La Paz Oil Corporation—Subscriber, Vancouver, B. C.

Answer—The La Paz Oil Corporation, has properties in the Mexican Oil fields and is financed largely by Canadian and British capital. As an oil proposition, it has more than the usual attraction of such securities but it can by no means be classed as a conservative investment. The nature of the business renders the stock speculative, but we see no objection to the purchase of a small block if you can afford to take a chance.

Question—I would like your opinion of the L. R. Steel Corporation. Would you think it is a safe investment for a widow of small means?—A. W., London, Ont.

Answer—We could not advise you to buy stock in the L. R. Steel Realty and Development Corporation as anything but a speculation and in our opinion not a very attractive one at that. It should not be considered by a person like yourself with whom we believe safety of principal is more important than the chance of obtaining a larger income.

Question—Is the Northern Life Assurance a reliable company to insure with?— R. McD., Vancouver.

Answer—The Northern Life Assurance is chartered by the federal government, and carries the necessary deposits. It is quite safe to insure with.

Question—I want to know in what way Beaver Consolidated mines are connected uñth the Kirkland Lake Gold Mine.— C.D., Black Lake, Que.

Answer—Beaver Consolidated Mines is interested in Kirkland Lake Gold Mining Co. through a large stock interest. Beaver owns 1,743,050 shares, out of the 2,000,000 shares issued by Kirkland Lake, an amount more than ample to give it control.

Question—What do you think of the Fraser Co.'s 8’s, 190,1—A. J., Smiths Falls, Ont.

Answer—The Fraser Company is one of the oldest-established paper companies in Canada, and offers the further safeguard to investors in that its operations embrace lumbering on a large scale. The securities you mention form an attractive investment for a business man. We regret that we have not an extra copy of the statement, but would suggest that you write to the Company’s secretary.

Question—What do you think of the Osigian Silk Corporation as an Investment"! Do you consider the growing of silk in Ontario a practical proposition"!—Subscriber, Mitchell,’ Ont.

Answer—We would certainly advise against putting money into Osigian Silk of Canada as anything like a safe investment. Experiments in silk worm culture in Canada have been carried on for some time, we understand, and with some success but we doubt very much whether the climatic conditions in Canada are such as to lead to the establishment of an industry on an extensive commercial basis. Little has been accomplished in this direction in the United States. Then in addition to the question of climate there is the question of labor. A big industry has been built up in the Orient and our opinion is that the great bulk of silk supplied in this

c o untry will continue to come from Japan and China.

We are not saying that there are insurmountable difficulties in the way of the establishment of a silk industry in this country but from the investors’ standpoint we doubt if it could be made a financial success within a period to make it anything but a long chance speculation.

Question—What is your opinion of Porcupine V. N. T. at present price as a speculative purchase? J. W., Montreal.

Answer—With the mining stocks in a state of unusual buoyancy and with operations in the mining camps likely to expand we look for a still further appreciation in price of a number of listed mining securities. We regard Porcupine V. N. T. as a favorable speculative buy at present prices.

Question—What do you think of Bancroft Marbles as an investment"! C.A.L., Toronto.

Answer—If absolute safety of principal is an essential requirement we would recommend you to retain your holdings of Victory bonds rather than sell for the sake of reinvesting in this stock.

Question—What do you think of ‘the soundness of an investment of several thousand dollars in the recent issue of Bell Telephone stock, quoted at 106"! Subscriber, Pori Perry, Ont.

Answer—We recommend, without qualification, the stock of the Bell Telephone Company as an investment. The company has an unusually attractive dividend record, and emerged from the trying times last year unscathed. With operating expenses down the company is more than earning its dividend, and unless unforeseen developments occur look for their continuation.

Question—Would like a little information regarding Canada Bread Common stock. W. F. R., Toronto.

Answer—Canada Bread common, as you are probably aware, does not carry dividends, and hence is selling at this low level in comparison with the preferred. The company is doing well and the common looks like a good speculation, especially with the market in its present buoyant state.

Question—Do you consider Union Bank stock a suitable investment"! Could you suggest one more suitable"! J. M., Clearwater, Man.

Answer—We look upon Union Bank Stock as an attractive investment at 140. We would suggest, however, that you diversify your investments rather than place all or a large part of your savings in one security, no matter how alluring it may be. Any of the other bank stocks would be suitable for your purpose or federal or provincial bonds. Several listed securities favorably regarded from an investment standpoint are Consumer’s Gas, Montreal Power, Mackay common and preferred.

Question—Would you give me your opinion re the standing of the Canadian and United Stales Oil Refining Corporation, Limited"! J. C., Winnipeg.

Answer—We see little attraction in the stock of Canadian and United States Oil Refining Corp. and would advise you to seek some other investment which offers a greater possibility of profit. It is true that this company has returned dividends to shareholders and has recently reported the bringing in of a new producing well, nevertheless we i egard this as much too speculative for the small investor.

Question—Do you consider the Merchants’ Casualty a responsible company to insure with"! H. G. M., Edmonton.

Answer—The Merchants Casualty Company is regularly assessed by the Manitoba Government, and carries the necessary deposits. It is likewise subject to inspection by the Manitoba insurance department. We believe these safeguards sufficient to make the companv safe to insure with.

Question—Do you consider the Canada National Fire Inc. a good investment"! Subscriber H. G., Brandon, Man.

Answer—Canada National Fire is a progressive company, and one which we believe offers a reasonable margin of security to shareholders as well as an attractive return. Dividends to share-

holders during 1921, we are informed, exceeded in amount that of any other Canadian fire insurance company. The loss ratio of 42.73 per cent, in a year of exceptional difficulty for fire insurance companies indicates that this company was fortunate in the selection of its risks. There is some interlocking of directorates here, which in the opinion of some constitutes a weakness, but the record of the company has been satisfactoiy and we would not advise against the investment of a moderate sum.

Question—I want information as to how to form or have formed a company to undertake the manufacture of a new machine. I have invented a very good machine and want this information to help me dispose of my patent. H.A., Marengo, Sask.

Answer—For details as to the formation of a new company it would be advisable to consult your lawyer, as he will better appreciate your requirements. Before putting shares in the market in your province you would have to convince the Public Utilities Commission that you mean serious business, as the sale of securities is closely supervised in Saskatchewan, we understand. We know of several firms in Toronto which undertake promotion of this nature, but whether they would undertake a proposition so far away is doubtful.

Question—Do you think Lake Shore mine a good investment"! Also what is your opinion of Schumacher"! W. B.. Waubaushene, Ont.

Answer—Lake Shore is booked to go to higher levels, when the mining markets get active again. Schumacher should strengthen in sympathy with the improved sentiment now prevailing.

Question—What do you think of an investment cf say $200 in Commonwealth Life and Accident Insurance Company"! M.C.N., Hamilton, Ont.

Answer—If you purchase stock in the Commonwealth Life and Accident Insurance Company, you must be prepared to wait for returns. Every insurance company in its early operations must conserve revenue even to the extent of depriving shareholders of dividends if it is to be built on a sound foundation, and for this reason insurance stocks are not always popular with investors. With efficient management the shareholders of Commonwealth Life should eventually profit. A moderate purchase would not be out of place if you can afford to have your money unproductive of returns for a term of years.

Question—Will you please give me any information you can regarding the La Pat Oil Corporation of Toronto. B.Y.C., Kelowna, B.C.

Answer—The La Paz Oil Corporation has properties in the Mexican Oil Fields, and is financed largely by Canadian and British capital. As an oil proposition, it has more than the usual attraction of such securities but it can by no means be classed as a safe investment. The nature of the business renders the stock speculative, but we see no objection to the purchase of a small block if you can afford to take a chance.

Question—I would like the address of some company that make a business of buying up mortgages. I have a first mortgage on a property sold in 1918 for $90,000. It has been reduced by payments till only $18,600 remains and the writer wishes to sell it. H.A., Medicine Hat, Alta.

Answer—The Canada Permanent

Mortgage Corporation has branches throughout the West, and we feel sure would be glad to relieve you of the mortgage you hold.

We would advise you to communicate with the head office of this company, Toronto Street, Toronto, or to a branch in the West, whose address you may have.

Answers will be given freely to subscribers to MacLean’s Magazine in regard to Canadian industrial investments (if a stamped addressed envelope is enclosed) by addressing Financial Editor, MacLean’s. Magaz-