BUSINESS & INVESTMENTS

ANSWER To FINANCIAL QUERIES

August 15 1924
BUSINESS & INVESTMENTS

ANSWER To FINANCIAL QUERIES

August 15 1924

ANSWER To FINANCIAL QUERIES

Question—Do you consider the Ontario Equitable Life and Accident Insurance Company a good investment for fair returns? How soon do you think they will be paying dividends? Any information concerning this company will be appreciated.—W. G. W., St.John, N, B.

Answer—The Ontario Equitable Life and Accident Insurance Company was organized in the fall of 1920 by a group of business men at Waterloo, Ont. The company was very successful in selling the first issue of its stock and in securing a substantial volume of insurance. Since that date the company has developed rapidly. The men in charge of the company have had wide experience in the insurance field and the directors are highly regarded in financial and business circles. The fourth annual statement of the company, for the year ended December 31, 1923, showed a gain of $11,633,564, insurance during the year. Life insurance in force at the end of the year totalled $24,830,903. The total assets amounted to $1,431,605, while policy reserves and other liabilities stand at $1,274,892, leaving capital and surplus at $156,713. The total income during 1923 amounted to $575,079, of which gross premiums totalled $501,162. There was an excess of income over disbursements of $232,275. Government deposits for the protection of policyholders total $234,000. The mortality for 1923 was 13.17 of the expected. It usually takes a number of years for a life insurance company to get to the dividend paying stage. Companies which have succeeded in building up a sales organization and in securing a substantial volume of business have returned handsome dividends to shareholders. The Ontario Equitable has made rapid progress. At present the company has an extensive field organization throughout Canada which reports a steady volume of business. The stock of this company is one which you should consider buying as a permanent investment with the idea of holding it. There is not a wide market for this stock.

Question—What is the present standing of the Monarch Knitting Company? — S.L.T., Ottawa.

Answer Frofits of the Monarch Knitting Company for 1923, after making provision for all bad and doubtful debts, and for depreciation and income taxes, were $113,887, which compares with $ 168,531 for 1922 and $28,653 for 1921. The disbursements consisted of dividends on the preference shares amounting to $52,500. The balance carried forward

from 1922 was $547,104 and the balance carried forward into 1924 in the credit of profit and loss accounts was $619,492, an increase of $62,000 for the year, and à new high point in the amount of undivided profits. The company’s experience during the past two years, as shown by the last annual report, is thoroughly satisfactory. Sales during 1923 showed an increase of five per cent, over the previous year. The net profits for the year after providing for all charges including Dominion income taxes, and after making an appropriation for depreciation on plant and machinery; amounted to $184,887. The directors set aside $70,000, to be added to plant and machinery depreciation reserve, making the total of this reserve, $527,149. The balance sheet shows liquid assets amounting to $1,719,122. The total assets are valued at $3,625,282, an increase of approximately $124,000 over the previous year. The liabilities include bank loans to the amount of $707,000, which compares with loans at the end of 1922 amounting to $611,000.

Question—I am holding some preferred and common shares of Tuckett’s Tobacco. Would like your opinion regarding this investment.—F.G.L., Toronto.

Answer—Tuckett’s Tobacco earned the preferred dividend of seven per cent, and the common dividend of four per cent, by a good margin during the last fiscal year’s operations, allowing $121,270. to be added to profit and loss when all charges were taken care of. That the year was a good one is shown by the fact that the earnings applicable to common shares, $8.48, were double those of 1923 and 1922 also. No doubt a great portion of this increase was due to the absorption of the Canadian business of Tobacco Trading Corp. The company is in a strong position, having a working capital just under the $2,000,000 margin.

Question—I have some bonds in the Bathurst Company, Ltd., and would like to know if they are safe?—C.A.W., Salmon Beach.

Answer—The Bathurst Company 6 ká per cent, first mortgage bonds are considered an excellent industrial investment.

Question—I would like to have your opinion of investing in the Title Guarantee and Trust Corporation of Canada. Are these first mortgage certificates safe?—W.T.R., Montreal.

Answer—The first mortgage certificates of the Title Guarantee and Trust Corporation of Canada are considered a good investment. The mortgages are on well selected Montreal, and suburban properties. The Title Guarantee and Trust merely look after the details of the business, including the collection of interest, legal details, etc. They also in addition to this service guarantee your loan on the properties. The Title Guarantee collects one half of one per cent, per annum. The company is very well managed and exercises the greatest care in choosing the mortages. It has a paid up capital of $1,000,000 and one of its rules is that it does not loan any of its own funds on mortgages. Its funds are invested in Government and Municipal bonds in order that the company may be able immediately to sell its securities to meet any situation. These first mortgage certificates are highly regarded. They have in addition to all the advantages of a well secured first mortgage a guarantee of real value. The men behind the Title Guarantee and Trust are highly regarded.

Question—What progress is being made by Durant Motors of Canada?—H.S., Halifax, N.S.

Answer—The financial statement of Durant Motors of Canada for the year ended February 29, 1924, shows the company in a strong position, owing no bank debts and showing a satisfactory volume of business. The report shows the progress made by the company in the first two years of its existence. The first car was turned out at the Leaside, Ontario, plant August 1, 1922, and since that time the company has made and sold 70,507 Durant and Star cars at a total value of $9,652,678. Cash in hand and in banks, amounted to $145,158, and notes in the accounts receivable, stood at $329,141. A slight operating loss was shown for the year and this was explained by the general manager, Mr. Mulch, as being due to the fact that the new company has had a great Continued on page 11

Continued from page 8 deal of spirited competition from companies that had occupied that field for years. Progress made by the company is regarded by officials as being satisfactory and with the bulk of the missionary work behind them they believe the forthcoming months will produce a volume of business that will be entirely favorable.

Question—Would you be kind enough to give me the present standing of Gunn’s, Lid? I own some preferred stock and am wondering whether to sell or hold.—A.R.C., Windsor, Ont.

Answer—Gunn’s Ltd., like all the other packing concerns, has suffered reverses during the past few years, due to unsatisfactory conditions in the packing industry. However, the general markets have improved lately, so much so, that in the last six months or so Gunn’s preferred has appreciated from twenty-four to a high of around forty. The present quotations are in the neighborhood of 32; the reversion from the high reflects the tendency of the general market. Gunn’s, Ltd., has no funded debt and the preferred stock is the first charge of the company. If the company can weather the present situation successfully, the future for the preferred shareholders is bright. We think you have everything to gain by holding this stock.

Question—I hold two shares of preferred and thirty of common in Loew’s Windsor Theatre. A ,firm of brokers have offered to exchange my Loew's Windsor for stock in the Giffin Manufacturing Company, Toronto. They offer in exchange forty-five shares of Giffin preferred, par value a dollar, or thirty shares of preferred and fifteen common. Would you advise me to hold my stock or exchange in on the above basis?—E.B., Toronto.

Answer—It has been an uphill battle for Loew’s Windsor Theatre. The house is being operated at the present time under lease on a basis which gives the company sufficient to meet all charges, with a little over. The theatrical situation at Windsor has been improved and there are indications, that, although the company is going to have a long pull, there is no reason to believe why it should not ultimately work itself out. Some of the other Loew’s houses have been able to accomplish this. Of course the stock will have to be carried for some time to realize on it. The Giffin Manufacturing Company was incorporated in April of this year with an authorized capital of $40,000. The company succeeded to the business formerly conducted by John Thompson, 190 Richmond St., West, Toronto, purchasing the plant for $6,000, although the deal at the time of writing had not actually been put through. The company will manufacture hardware goods. The business which the Giffin Manufacturing Company is taking over has been established for some years. Owing to the fact that organization is not yet complete, we are not in a position to go fully into the company’s affairs. Capital stock of the company is being sold on the market with the intention of creating funds for the purchase of the plant. The plant and equipment has a valuation of $12,000. Giffin comes from the United States where he had experience in hardware lines. Money put in this venture of course can only be considered in the light of a speculation. We would not recommend an exchange at this time.

Question—Can you give me any information regarding the North Battleford Oil and Gas Company? I hold some of this stock and am anxious to know what is being done.—G.L.S., Victoria, B.C.; A.W. K., Edmonton, and several others.

Answer—The North Battleford Oil and Gas Company was originally operating under a Provincial charter. There was about $25,000 of stock not yet paid up. Later on the Mann River Oil and Gas Company, with a Dominion charter, was incorporated and took over the assets of the North Battleford Oil and Gas Company, issuing stock in settlement. Just lately a syndicate in Regina who held rights over 3,000 acres in Montana, amalgamated their interests with the Mann River Oil and Gas Company. We are not sure of the consideration, but understand that the Montana assets were valued at about $100,000 and the assets of Mann River Oil and Gas Company at about $75.000. The new company now owns one drill at Le Pas and one in

Montana. These drills, we understand, are both working. When the transfer of the North Battleford Oil and Gas Company to the Mann River Oil and Gas Company took place no doubt you would be notified. For further particulars regarding this company we advise you to write to the Mann River Oil and Gas Company. The secretary is J. W. Norton, North Battleford, Sask.