ROMANCE IN SUGAR

Otago Daily Times, Issue 27386, 11 May 1950, Page 4

ROMANCE IN SUGAR

Typical Story Of v Modest Investment i By Gregory The new issue of shares to shareholders of the Colonial Sugar Refining Company, Ltd., announced this week is the fourteenth increase in capital of the company in this century—the second for which shareholders have had to pay and the first for which they are required to pay a premium (£7 a £2O share). Currently valued on the Stock Exchange at some £67 a share the issue is nevertheless a generous one and perpetuates the industrial romance of a company which, from its humble beginnings in 1842, today controls assets conservatively valued at £34,000,000. The story that follows is typical of the many which can be told of moderate wealth accruing from / a small investment in Colonial Sugar shares.

“ Millie, which is the more important thing on the table, salt or sugar? ” Millie plumped for salt, Bert for sugar. The newlyweds were sitting at breakfast in their tiny flat in the staff quarters on the top storey of one of Dunedin’s foremost hotels. The year was 1900, and prosperity was ■ at an alltime peak in Dunedin, the dredging' boom was in full swing, the hotels were crowded with option holders, option seekers, and overseas mining magnates interested in the new-fancied Otago invention—the gold dredge. Tips were good, and Bert, who had invested the first £SO he had ever accumulated in furnishing the flat and taking unto himself Millie, had every reason to be thoroughly satisfied with his investment. As a matter of fact, the conversation which he initiated at the breakfast table was a preamble to informing Millie that, in spite of the fact that they had been married for only three months, there was already another £SO, meticulously counted and neatly folded “ in the tan shoes at the bottom of the tin trunk.” Millie was an assistant cook in the hotel. Bert a waiter, and with three stock exchanges—the Equity, the Otago, and the Dunedin—within a stone's throw of their flat and all the conversation in the lounge and dining room revolving around shares, it was not surprising that they should be mildly attracted to the investment opportunities of the stock exchange. But Bert was a great deal wiser than those he served in the course of his work day, and. eschewing the some 350 gold companies listed on the Dunedin Stock Exchange in that year, he searched amongst the 63 investment shares for a suitable vehicle to carry his modest savings. There were no get-rich-quick names in the investment section, no Koh-i-noor Gold Dredging Company, nor Golden Horseshoe, nor Eldorado Dredging Company; neither were they mentioned in the newspaper headlines of rich strikes, bonanza yields, and sensational over-night profits. The £1 shares of the Hartley and Riley Dredging Company could be bought for £ls, with the promise of real wealth to compensate buyers—but Bert chose sugar.

It must have taken a great effort to shun the promised land and embrace the prosaic crystalline, but Bert made his choice. It must .have taken effort, too, to enter the sanctum of the rich, the make-believe-rich, and the hope-to-be-rich and place his modest order for one share. Time has erased the detail as to how much he paid or from whom he bought, but he did buy one of the £2O shares of the Colonial Sugar Refining Company, Ltd., which probably cost him about £37. Before the year was out he had bought another, and in his lifetime he was subsequently to buy another four or five.

For all his faith in sugar, Bert probably did not know, and co.uldn’t have guessed, that the affairs of Colonial ougar were to boom and that the finances of the company were to expand enormously in the next 20 to 30 years. Bonus shares, cash bonuses and other gitts went out to shareholders with monotonous regularity and Bert’s holding of the £2O share of Colonial Sugar doubled, redoubled and again redoubled. For the record, here is the recital of the company’s activities within the century: 1903: New issue raising capital from £1,702,000 to £2.000,000. 1907: Paid capital raised to £2,500,000 by the issue of bonus 1908: Bonus issue of £350,000. 1910: Bonus issue of £150,000. 1913: Bonus issue of £250,000. 1915: Bonus shares in a subsidiary £3,250,000. .. 1921: Shares in subsidiary called in and cashed £1,625,000. 1921: Capital returned £650,000. 1923: Shares in subsidiary called in and cashed £1,625,000. 1923: Fiji company liquidated and bonus shares issued £650,000. 1924: Further bonus from Fiji liquidation £1,625,000. nn 1927: Bonus shares issued £9 <5,000. 1934: Bonus shares issued £5,850,000. , u , , , . 1950: New issue for cash 1 for o at £27 per share. Only once, in 1903, did Bert have to pay for a new issue shaie, but never did he suffer the ignominy of paying a premium for a new issue by Colonial Sugar, such a thing had not happened in the 29 years of his sharehc'ding, nor did he live to see the day. * * * * It is over 20 years since we stood idly contemplating the narrowing ribbon of a North- Canterbury highway while he told me the story. The seivice car was late and tied t<? a post Bert's post—a little red signal flag flapped in the nor’-wester. I sold my shares last year,” he continued and got enough to buy this hotel and nearly a * thousand ’ working capital besides You must have working capital,’’ he concluded, perhaps unconsciously wresting from the! past a homily so frequently propounded in hotel lounges, but rarely practised in the dredging boom nearly 30 years earlier.