PROSPECTUS OF THE NATIONAL TOBACCO CO., LTD.

Otago Witness, Issue 3613, 12 June 1923, Page 46

PROSPECTUS OF THE NATIONAL TOBACCO CO., LTD.

THE KEY TO VAST POTENTIAL WEALTH. A MATTER CF GREAT IMPORTANCE. Never since the period when “Cambist.” urged his fellow citizens to invest in the great Bond emissions of the leading cooperative and manufacturing concerns, which resulted in the linanciai salvation of the Dominion, has he felt a greater responsioility to his readers than he does at the present moment. The subject of this prospectus and the possibilities ahead of the proposed company have obsessed his thinking moments. the tobacco-gi-otwing industry is one which has made fortunes for the producers of "my Lady Nicotine,” and. what is more, it still continues to be the most consistent producer of wealth for those who are engaged in its culture. This country industry suffers from fewer fluctuations in the price of the crop than that of any other primary product raised by intensive cultivation. One never reads of any crop failures, for it is practically free from the depredations of blight cr insect pests. Ii there are any fluctuations in the price of the field crops they are in movements tend ng rather to increased values than otherwise. Heavy rains and droughts do not impair the favourable prospects of the groving crops, for all tobacco raised lias its value «and all tobacco crops melt into HIGHER MONEY VALUES, no matter wliat the harvesting results amount to. So far as New Zealand is concerned, enough tobacco has been grown in various parts of the Dominion and on all sorts and conditions of land to prove beyond all manner of doubt that this culture i? both profitable and assured in the results obtained. Just, at present fairly large are .s are under cultivation on northern gur.i lands, on the almost barren country around Nelson, and on some oi the richest soils cf Hawke's Ray. In ail cases this enterprise has proved to be highly profitable to tae growers. The crops ot; the poorer lauds are simply wonderful, and it would appear as if this was the key to the problem of how to deal with these v.asie lands. It seems to "Cambist ihat what keeps the gum lands in the North in warteful langor.r is tile fact that so far all experimenters have been Lying to evolve "a treatment and rotation of ctops to bring such lands into agricultural farming use? The latter system does not produce immediately profitable returns, anti the lands brought in aie 100 costly by reason of the vast capital expenditure in voiced by these methods. Tobaceo-gro.y-ing from tlie rough state of these lands until they arrive at cropping time only takes from e ght months to a year, set tnat "money is coming in ’ on the very threshold of development. In other words, improving these lands l>y tobacco-culture xs a shorter process and a

more profitable matter than any other foim attempted to far. The crops raised in the district abovementioned have been cultivated in accordance with the best modern practice and under the expert tuition of Mr Gerhard llusheer. What has been accomplished sets die rule for all time i:i this Dominion. Tobacco, as a highly payable crop, is proyen *‘up to the hilt. ’ This infeientially settles the question of local supplies. llie. latter must increase from year to year. The Ricr.uficturing side of this industry probably supplies the greater profit, the greater wealth. In every part of the world where the manufacture of this soothing K'cessiiv lias be"ome established, enormous profits and great wealth have accrued. From time to time we get a glimpse ot tobacco wealth in the probate returns o. deceased millionaires. In the case of the tobacco trusts wo find another e\iueiieo of the great wealth following upon successful tobacco-growing. successful thbacco manufacturing, the combinal iciis cf capital interests arising from the vast accumulations cf gains, b nder the shadow of the tobacco trust there is still left enormous opportunities for outside manufacturers and =l.ll hotter prospects for me primary glower of “the weed. The chief opportunity rests ill supplying the exploded consumers wiih a good article which is approve.! by the tastes of this wide circle. Trusts are not an unmixed evil, however, lor trusts are only possible where great supplies cf capital have been amassed. VNtle in some eases the business of a trust c s to C'TiJJi, there is on the other hand the impotilion of a duty to support, or pre-s-rvo tae capitalistic state. There is not. to sav more about this matter here, but H is rwleva-.f to remark that the great tohwov, trust whether it wishes so or not. U

AN ASSURANCE FOR THE FUTURE erf tobacco growing and manufactuiing in this country. . . ri . , T*he orospectus of the National lobaceo Ccnmc:,‘y (I.t»l.) sots forth an amalgamation of two interests hitherto engaged in manufacturing and growing. Both of these intereu s were, of course, comparatively sneaking, very small in themselves, but nevertheless most important to the Dominion as a whole. Both branches of these two interests did not equal as profit-earning entities, for in neither of them was sulhcient capital embarked to givo either ore a decent opportunity to function properly. More capital was lequired The company now' offering preference -.hares carrying J per cent preferential dividend and preferential capital rights, is asking tor public supporl in order to extend and develop both branches. '1 he authorised capital is omj £SO 000 in £1 shares, of which £ls OU) are preferred and the balance is in ordinaries. Only the first, named are offered tor subscription ; the ordinaries are being held oyer for future requirements. There is in the prospectus a pro forma statement of the two interests above referred to. and from this it wilt be seen that £14,040 worth of sound assets are to be taken over by the -new ornoanv, also capital and other liabilities amounting to £14.040. less £1(50 of reserved profits. Most of the assets are miite liquid, and in their realisation Here should be considerable profit for the new company. There is no need to labour over the pro* forma statement here, for investors can readily understand the position by perusing the prospectus (which is very well tmd clearly set forth by the promoters Or the companv) themselves. On the face of the figures provided it, seems to Cambist, that fho best course has been followed m this matter. The old interests have arranged or compounded for fully paid up •hares and debentures; the latter at a

moderate rate of interest and with reasonable terms for redemption. The merger, as already pointed out., is well sustained bv sound assets, and the reserves, amounting to 23 per cent, of the combined capital (that is. the £7558 displayed in the pro forma statement), adds a financial fillip to an adroitly prepared document of unusual candour. '1 here is something alive and real about this flotation; there is ail established business in the manufacture and distribution of the various brands of tobacco; there are growers at present busy villi tiio tillage of coining crops; there is on the testimony of “Cambist ” himself, and of that generous patriot of Dunedin, Dr William M. Stenhouse, a desire to advance the production of native grown tobacco, for in both cases satisfaction with this company’s brands has been arrived ct through the solace of many a pipeful of the soothing mixtures, branded, manufactured, and selling throughout the Dominion by the old company. No one could accuse the present Government of helping anyone but the rich, yet IT MUST BE CONFESSED that, in the matter of excise duty on locally manufactured tobacco a very considerable concession has been granted. Tlie fact is that this industry lias become so well established and its value as an adjunct to other farming pursuits is so necessary that even the hard-shelled obstinacy of Toryism was forced to recognise some preference for the small man on the land. A small tobacco crop raised by the women and children cf the worried small settler has in many instances more than paid the big charge for interest due to bank or mortgagee “Cambist” bestows this genial blessing upon tins undertaking. Amidst the cloud.- arising from his pipe he sees ahead of this promotion the solid beginnings of a new national wealth-producing element based upon pleasant labour, just as sweet as rose-growing and more profitable than the slavish cow. He hopes that tile promoters of Tie company will succeed in gathering in an overflowing subscription for the shares, and that this will encourage them 10 emit all of the ordinaries held in reserve Further, he is glad to see prevision for piefs, lo be turned to ordinaries, and he hopes that soon the whole capitalisation will be under the latter designation. £30,000, all told, is but a small matter; it is but a start. But everyone can help and the wider the spread of the shares Lie better pleased should be the eminently respectable board of directors who are fathering the concern. Floreat Nicotine, so to speak, and so to act! —Advt.