BUSINESS & INVESTMENTS

ANSWERS To FINANCIAL QUERIES

April 1 1924
BUSINESS & INVESTMENTS

ANSWERS To FINANCIAL QUERIES

April 1 1924

ANSWERS To FINANCIAL QUERIES

Question—I am interested in the British Mortgage Loan Company of Ontario and would be much obliged if you could give me some information regarding its financial position.—R.W.D., Listowel, Ont.

Answer—The annual report for 1923 of the British Mortgage Loan Company of Ontario was very satisfactory. Every department showed an increase. The increase in deposits and debentures was $120,432.63 over 1922, and the increase in the number of new depositors for the year was 455. The total assets are given at $5,771,898.90, an increase of more than $244,770.75 from the previous year. The total earnings of the company during 1923 were $247,360.34, an increase of $12,692.92.

Question—What is your opinion of Canadian Salt common stock? Is the company in a good position and has it a ready market for its product?—T. W. S., Quebec.

Answer—During 1923 operating profits of the Canadian Salt Company amounted to $289,816, an increase of about $15,000 over the previous year. After meeting the bond interest and other charges and dividends and writing off $30,000 on account of new methods employed in bleaching, there was a substantial increase in the balance, which now stands at $283,901. The company is an old established one, and is considered to be in a secure position. The company has a I good market for its products and operates a thoroughly up-to-date plant. Several additions were made to the plant during 1923 which will increase the capacity and efficiency of the company’s plant.

Question—I am holding some class “A” preferred stock of Dominion Stores. Would you kindly give me your opinion of this stock?—L.R., Belleville, Ont.

Answer—The Dominion Stores have operated successfully so far and appear to be in a sound condition. The company has a large number of stores in Ontario and Quebec. The net profits for 1922 were $100,092, which represented a substantial increase over those of 1921. The stock is now listed but as the market for it is not very wide, the prices quoted are lower than they would otherwise be. The success of this business will depend largely on the individual organization

and the men behind it. The directors of the company are Robert Jackson, W. J. Bentland, Robert W. Jameson, Mordley Smith, John E. Jameson, W. T. Bate.

Question—I would appreciate very much whatever information you can give me regarding the financial position of the Prudential Trust Company.—J. L., Montreal.

Answer—According to the financial statement of the Prudential Trust Comany for 1923, a net profit of $2,342 was earned. More than $150,000 was taken from the profit and loss balance to cover estimated losses and adjustments. Gross revenue for the year is shown at $103,167, while costs of management, legal and all other expenses, amounted to $100,824. The sum of $78,151 was required to provide for estimated losses on revaluation of assets, and the further sum of $73,144 was debited as representing the difference between the par value of the old common stock and the new common stock issued in exchange.

Question—Please give me what information you can regarding the Canada Land and Irrigation Company. I own some of the seven per cent, debentures.— —G.McK., Calgary.

Answer—Owing to difficulties caused by the depression in Southern Alberta farming operations, a receiver has been appointed for the seven per cent, debentures of the Canada Land and Irrigation Company. A statement issued by the company says that nearly £3,000,000 has been put into the company by English investors for irrigation purposes. The low price of wheat and other products, heavy freight charges, excessive taxation, dear labor, restricted credit facilities, and high cost of living, have so operated against land sales and collections of instalments on land sold, that the directors are of the opinion that the present position and prospects do not afford justification for advising the stockholders to find fresh capital.

Question—I am considering purchasing bonds of the Keefer Realty Corporation of Montreal. Do you consider this a good investment for a business man?—W.G., Westmount, Quebec.

Answer—Bonds of the Keefer Realty Corporation are well secured and are considered a fair investment for a business man. The issue is being sponsored by a good investment house which is well adapted to keep up interest in the bonds, thus preventing loss or delay in the future to investors who may require to sell upon short notice.

Question—I am thinking of buying 1,000 shares of West Dome Lake. What do you think of the future of this mining company?—R. N., Hamilton.

Answer—West Dome Lake is regarded as a good purchase at the present price. The company has large holdings, favorably located west of the Dome. Underground developments are progressing favorably.

Question—I would greatly appreciate receiving your opinion regarding Matachewan Canadian Gold. What progress has been made?—H.A.D., Prince Albert, Sask.

Answer—Matachewan Canadian Gold is a good property which has known ore bodies, revealed by diamond drill, of considerable value. An effort has been made during the past year to finance it, without success. Negotiations are said to be on at present with some big interests which may result in securing sufficient capital to develop the property. Granting this capital, the property has prospects of becoming a producer in the future.

Question—Can you give me some upto-date information regarding the following companies: Ames-Holden Tire, and P. L. Robertson Manufacturing Company? I own some bonds in the latter company. —A.W.T., Montreal.

Answer—The first annual report of the Ames-Holden Tire since the reorganization of the company, and the complete divorcement of interest from the former parent company, AmesHolden-McCready, just issued, reveals an unsatisfactory profit showing, that reflects the difficulties of the present condition in the Canadian rubber goods industry. The company had a trading profit that was sufficient to meet depreciation, and interest on first mortgage bonds, but

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-which fell short of meeting interest on income bonds. Trading profits for the year were $103,102. The sum of $61,664 was written off for depreciation. Interest •on first mortgage bonds required $70,500. These two deductions left a balance of $33,937. Provision for interests on income bonds, accumulated, but not paid, were $73,402, thus creating a deficit of $39,464 for the year. The company’s total sales for the year showed an increase of about thirteen per cent, as compared with those of the previous year. A. J. Nesbit, president of the company, when the report was issued, stated that, in view of the acute conditions prevailing in the tire and rubber industry, the directors of the company deemed it wise to withhold any payment of the income bond interest, so as to conserve the liquid resources of the company. Since 1921 there has been an improvement in the business of P. L. Robertson Manufacturing Company. While the company experienced difficulty in making substantial earnings prior to 1921, its connections appear to be well laid throughout Canada. Extensions were made to plants and equipment in 1921 for which a bond issue was sold in 1922. Recent reports indicate that the company has been making satisfactory progress. The bonds seem well secured by assets and should prove satisfactory. Of course, the bonds of this company have not a very wide margin and should you want to sell them quickly, you might have to do so at a sacrifice.

Question—Can you give me any information regarding the standing of the Standard Reliance Assets? What is the outlook for the shareholders?—IV.S.TV., Hantsport, N.S.

Answer—The outlook for the stockholders of the Standard Reliance Assets is steadily improving. In the distant future there is the possibility that they will get one hundred cents on the dollar. Assets, or claims, at one time of questionable value, are being rounded into shape. One instance of many was of a substantial claim that seemed hopeless. Just recently it returned one hundred cents on the dollar. At the time of the liquidation of the old company, the value of_the whole assets was shown to be $675,000 short of the claim of preferred creditors, which stood at $5,400,000. At the_end of 1922 the deficiency stood at $495,920. There is reasonable grounds for belief that this has been materially reduced, but it may not be possible to show the total reduction in the 1923 statement which is about due. One reason for this is that most of the assets are vacant lands, and in most cases, the distribution of this is on a five-year agreement. One of the subsidiaries, the Dovercourt Land, shows satisfactory improvement. In 1921 it lost $55,000, while in 1922 it showed a profit of $22,000 and in 1923 its showing will also be satisfactory. During the past year half a million dollars in vacant lands was disposed of. Thus, instead of paying taxes on this land, the concern is now getting interest on the money. Shareholders are now receiving two and a half per cent, every six months. This is sent to them as interest. It is, in reality, however, equivalent to a payment on principal.

Question—What is the present position of the Canada Furniture Manufacturers, H oodstock f>nt?—JM.B., Jefferson, Iowa.

Answer—The Canada Furniture Manufacturers was incorporated under Ontario laws in 1911 with an authorized capital of $3,000,000, of which $2,000,000 was cumulative preferred stock and the balance common stock. They commenced operations with common stock all issued, and $575,000 of the preferred stock allotted for a number of factories in Ontario. The preferred stock was to be sold to the public and the proceeds were to be given to the concern that formed the merger, to complete the purchases. The shares did not sell very rapidly and a further allottment of preferred stock was given until more than $2,000,000 shares were issued. Sixteen furniture factories In various towns in Ontario were included in the merger. The concern was overcapitalized and was reported as having difficulties in placing its finance and organization on a healthy basis. For several years it maintained a head office at Toronto, but in 1914 this was removed to Woodstock and as a consequence overhead expenses were reduced considerably.

Since commencing operations the company closed some of the factories and built a new one at Waterloo, while of late years the Woodstock plant has been materially extended. For several years during the war period, the company made substantial headway, but lately conditions in the furniture business have been quiet and as a consequence the company has been operating on a very limited scale during the past year or so. According to the company’s financial statement for 1922 assets were $3,020,285.87 and liabilities $755,321.17, leaving a surplus of $2,204,904.74. During 1923 this surplus was reduced by some $120,123.30. The liabilities of the company are understood to be chiefly with the banks, where it has all along had good accommodation. In some quarters the opinion is expressed that the company’s turnover is small in proportion to the amount invested and that the overhead expenses have been high. The company maintains branches at Kitchener, Waterloo, Wingham, and Seaforth, Ontario, and also has wholesale storerooms at Toronto and Winnipeg. The officers of the company are: J. R. Shaw, president and general manager; Joseph Orr, vice-president and sales manager; Mark Rowe, secretary-treasurer. Orr and Rowe have had long experience in the furniture business and are considered capable and reliable. J. R. Shaw 'is a lawyer and is well regarded.

Question—Please let me have your opinion as to Canadian Machinery Corporation. I hold a bond, some preferred and some common stock. The preferred stock has not paid a dividend for more than two years. What is the reason for this?—-S.J., London, Ontario.

Answer—During 1923 the business of the Canadian Machinery Corporation reflected the unsatisfactory conditions which have prevailed in the machinery trade for some time. It is not expected, however, that the annual report for 1923, while not showing any great improvement, will be any worse than the previous year. With this company it is largely a case of waiting^ for an improvement in business. The chief hope in this connection lies in the direction of the resumption of buying by the railways.v There is practically no market for the company’s securities under prevailing conditions.

Question—Kindly advise me as to the reliability of the Saskatchewan General Trusts Corporation, Regina. I have some shares in this corporation and would appreciate it if you could give me its present financial standing.—W. K., Saskatoon.

Answer—The profits of the Saskatchewan General Trusts Corporation for 1923 amounted to $12,735 as compared with $1,786 during 1922. The balance sheet shows assets of $3,532,736. The estates and agencies under administration increased approximately $600,000, to $3,224,477. The reserve has been increased to $70,000 to which can be added the amount of the profit and loss, $4,511, and also profits pending realizing, amounting to $25,089. This corporation makes a specialty of handling deceased persons’ estates, and living trusts. The greater part of the capital funds are used for financing estates under the corporation’s own administration. In making advances to estates the company has a greater margin of security than it would have in straight,loans. As the estates and properties financed are continually being sold and cleaned up, the money so loaned is fairly liquid. The actual capital liquid assets at the end of the year amounted to $39,000, which is a fair proportion to carry according to the corporation’s paid up capital, which stands at $173,716.87. The corporation does not borrow money from the bank.

Subscribers to MACLEAN’S MAGAZINE deñring advice in regard to Canadian industrial investments, or life insurance problems, will be. answered freely. Inquiries should be addressed to the Financial Editor of MACLEAN’S MAGAZINE and a stamped, addressed enveloped enclosed.

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