INFLATED VALUES

Dominion, Volume 13, Issue 71, 17 December 1919, Page 10

INFLATED VALUES

SOME PACTS FOR STATE PURCHASE ADVOCATES. LIQUOR TRADE'S TERRIBLE PROSPERITY. (Published by Arrangement.) The following, quoted from a remarkable article in the "Daily Ncwa" by . "A.G.G.." shows the terrible prosperity which has come to tho Drink Trade • owing to the war, and the danger thrtt the inflated value of its stock will be used to rob the public if and ■when State Purchase comes about. Mr. Garduier takes the tell-tale figures for the year before the war, 1913, and compares them with tho figures for 1917. "Here is a tablo giving a comparison of the liquor consumed rnd the money paid in these two years," he says:— Consumption Drink bill, in barrels. £ 1913 92,000,000 160,700,000 1917 37,000,000 259,000,000 That is to say, in 1917, for rather mora than one-third of tho commodity sold, tho trade pocketed nearly J2103.000.0n0 more than it .received in 1013. Its trade was cut down by nearly two-thirds, and its receipts went tin by more than a third. Tho explanation is simple enough. As it reduced the quality it put np tho price. The consumer raid more and more tho less he got rnd tho worse it became. Profits by Leaps End Bounds. "The result was what might be expected in such circumstances. Tho profits of the breweries went up by leaps and bounds. In the 'Economist/ of March 1 there was a comparison of the profits of the leading firms in 1915-16 and the two following years. Here are a few typical cases: —. 1915-10. 1917-18. J> £ Arnold Perrett UAV /O-ffi B aS3 437,120 Ind, Coofe" ' 2,«4 202,953 Allsopp's .°C,BU 181,002 Thrcliall's £O.SSS 239,05G Watney, Convbo 2(;G,009 472,971 In tho case of.fifteen firms the profits in two years had risen, after the payment of debenture interest and all administrative expenses, from .£2,591,060 to,, .£1,164 OJS, an aggregate increase of oyer* a million and a half. Dividends bounded up joyfully. PeiTeU's. who had paid nothing in 1914, paid 33 1-3 per cent. in 1917-18. Tlielfall's went from 9 to 30, Whitbread's from 2 to 7, Tnd and Coope from nil to 7J, and so on. Giving Capital Away as Dividends. "But we must not look to dividends or oven to the declared profits to see what was happening. Tho food fortune wis too crcat to be revealed in its naked cliaracter.f For example, Tnd, Coono made W 953 tout the actual sum distributed" was only .£20,671. In some cases lingo poWs went to'reserves mothers new shares were created out of reserve and so the dividend was kept at ft furuie that would not shock the public Hero is a newsnaper extract. January 22, 1918:<''Mitchell and Butlers, the Birmingham brewers, to-day decided to make a further distribution oJ near y £500 flflfl undivided profits in the form of additional share capital to existing holders. About .£300,000 .was so rni>itnli«pd, and the chairman, Mr. Waters Butler, said there had been evidence of an increasing tendency to State control and ultimately to purchase after the war. Ihe _ State ■ should, therefore, have some indication of the ciipital values with which it was dealing.' Tell-Talo Share Prices. "Beautifully simple, isn't it But there is one place where Ihe truth will out. no matter what ingenuities are employed. Tt. is in tho market prico of the share'. Merc is a little table of tho price of shares which will thrown a flood of li"ht on the facts:— 1 ° 1915. 1917. 1919. Allsopn's 2 - 5 5 ® City of London 12., 91 1»» Guinness 213} 307S 89JI AVatney 10 85 1«9 From these figures it will be seen that anyone who invested ,12000 in. say, Allsopp's, even as Into as 1915-long after the war had commenced—now holds shares to the value of „CBG,OOO, a net gain of .ESl.OflO. Even in this eolden age of the profiteer, this is a record that will not bo easily surpassed."

The first open-air market to bo started at Birmingham as an attempt to solve tho problem of hish prices has been successfully inauguraled at South Ynrdley. Considerablo public interest was shown in tho experiment, and tho stallholders were kept busy. It was stated that the Roods were beintf sold at about 30 per cent. b»low shop prieca.