The Romance of the Land Boom.
The ' Argus ' devotes a leading article to the eighth half-yearly report of the Mercantile, Finance, Trustees, and Agency Company, which has just been issued. This company had a wonderful record during the boom, and a dividend of 50 per cent, to its shareholders about a year ago, and set aside a large sum as a dividend reserve fund. Its latest report, however, shows how fast the change is in the conditions of affairs, and it contains the announcement the L 350.000 is to be transferred to a suspense account, in order to meet any possible losses arising from the depreciation in the value of the securities held by the company. The' Argus' recapitulates the company's series of operations, which it declares as unexampled in the history of any large financial institution, viz.: (1) An issue of 100,000 shares in December, 1887, at a premium amounting to L 25.000 ; (2) an issue of 200,000 shares in June, 1888, at a premium amounting to L 625.000; (3) a writing up in December, 1888, of the share capital of L 225,000, largely at the expenso of premium on the last issue; and (4) a writing down in June, 18S9, of the reserve fund of L 350.000 to meet possible losses. The startling character of the writing down will be seen when it is stated that the profits (exclusive of L 35.000 written upon properties) nominally made by the company during tho four years it has been in existence, have amounted to L 329.486 or L 10.514 less than the amount of the loss as now anticipated. The article goes on to say : " Whatever may be the explanation of the courso pursued by the directors, it is pretty clear that the Mercantile, Finance, Trustees, and Agency Company is responsible in some measure for the manufacture of an altogether unwholesome period of iuflation and reckless speculation, and its concerns are, therefore, of direct interest to the public. The reason why large resources have been either squandered away or lockod up should be brought to light, if only for the purpose of revealing to the public thepitfalh surrounding the sudden developments of the company's transactions, It has very rarely occurred that any institution of importance has had to confess that it has probably lost for its shareholders a sum exceeding the whole of its net profits, and this is a point which suggests the necessity for the exercise of caution by bona fide investors when tempted by a morbid excitement to purchase shares which have become overgrown with a fungus of unsound premium.
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The Romance of the Land Boom., Evening Star, Issue 7963, 19 July 1889
The Romance of the Land Boom. Evening Star, Issue 7963, 19 July 1889
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