The Sphinx, Vol. 13, No. 191

              February 3rd
THE SPHINX
FINANCE and MATTERS FINANCIAL
London 26th January 1906.
THE ELECTION ACCOUNT.
Iu tlie earlier stages of the election, particularly, there was an unhealthy amount of political excitement throughout the country, which materially affected business during the past account. While brokers have had reason to complain of apathy on the part of clients, the actual effect produced upon market values by the political situation has been inconsiderable. For many weeks the City has been prepared for the ordeal, and the victory for the Liberal party has been from the commencement a foregone conclusion, though few anticipated that they would obtain such a huge majority. The decisive nature of the victory has helped to inspire confidence, as a weak Government, handicapped by a small majority, and in constant d inger of defeat, would ever have been a source of anxiety. As it is, the choice of the electorate has been made, for good or for ill, in no uncertain fashion, and we now know exactly how we stand with respect to many questions that have been much in the minds of thoughtful people for the past few years. The great fight between Freed Trade and Protection has been decid ;1 by a large vote, tempo arily. it may !>e in favour of the former, and we shall now havean opportunity of judging whether the trade revival of last year, for which the Stock Exchange has reason to be particularly thankful, is merely a last flicker of British industry, or whether, as we prefer to suppose, it is a movement which represents the natural recuperation after the Boev war, and is capable of extension, at any rate, during the life of the present Government, after which we are promised a return to the tariff question. Fortunately the change has occurred at a time when there is hardly a cloud on the International political horizon. The Morocco question, the most •difficult and dangerous i > hourly approaching settlement. Although the City may be, and indeed has been visited by a little uneasiness during the progress of the negociations, it is of the utmost importance to all the nations concerned that an understanding should be arrived at, and an ultimate agreement on the main points in dispute can he confidently anticipated.
Of great importance to the Stock Exchange is the attitude of the present Government towards national finance. In this respect it can only be said that if the promises of the new Chancellor of the Exchequer are carried out we shall have reason to he thankful. Briefly, bis intention is to reduce the National Debt, and with a continuance of friendly relations with other Powers, lie should he able to do much in this direction.
As to Chinese labour, it surely cannot lie that the new Ministry will sacrifice tlie future of an industry upon which the prosperity of the Transvaal depends, at the bidding of people who cannot be described, other than its “cranks,” It is a good omen that already there are rumours that responsible Government will soon lie given to tlie colony.
BANK RETURN
The past week has seen a further large reflux of currency from the provinces, which has gone to supplement the not inconsiderable inflow from abroad. The stock of bullion is higher by £1,465,000, of which £222,500 represents the net influx from abroad, while the note circulation shows a contraction of £137,000. The result is an addition of £1,602,000 to the total reserve, which has now been brought up to £22,613,000. The feature of the week is the large addition of £6,150,000 to the market’s resources, or “other” deposits, partly owing to an increase of £4,026,000 in its indebtedness to the Bank. Public deposits, on tlie other hand, are higher by only £77,000, although there was an increase of £600,000 in the Government securities. Owing to the comparatively large increase in the deposits, the reserve, though augmented, bears a lower proportion to tlie Bank’s liabilities than it did a week ago, the ratio being 40^ per cent, as against 42^ per cent.
HOME RAILWAYS.
Of tlie railway dividends recently announced the most interesting, perhaps, is that of the Lancashire and Yorkshire, as it affords some clue to tlie results that may be expected from other lines that depend largely on the mineral and marchendise traffic for their returns. This railway fared very well during the last half-year, owing to the activity in the cotton and kinded trades, but its prosperity is not exceptional, for other lines have also derived some benefit from the excellent condition of the cotton industry. The expansion in gross receipts of £89,000 of the Lancashire and Yorkshire was large, though not remarkable, aiid from the dividend just declared it is evident that a large portion of the additional revenue obtained was retained as extra net profit. The dividend is raised from 3^ to 4j^ per cent per annum, and tlie carry-forward is maintained at £31.000.
The South Eastern dividend proves to be rather better than the recent profit statement had led the shareholdei-s to expect. It may be as well to mention that the joint profits of this line and the Chatham showed an improvement of of £38.000, of which about £22.500 came from the South Eastern partner. The balance brought into the account was nearly £2,500 better than in 1905. The amount was sufficient to enable the directors to raise the ordinary dividend by i percent per annum on the ordinary stock, but it seemed too much to hope that they would l>e able to recommend such an advance. It is, therefore, an agreeable surprise to find the Company not only increasing the dividend, but also increasing its carry-forward by £7.000. the dividend rate being 4i per cent per annum as against 4 per cent, and the carry-forward £12.000 as against £5.000. No mention is made of any transfer from reserve, and it is not likely that fund would have been drawn upon at a time when it has to bear the exceptional expenditure caused by the Charing Cross accident, which is estimated at £60,000. This deduction should be neutralised or made good by the receipt for £60,000 Lorn the Charing Cross and Hampstead Tube Company, in consideration of peimission granted to construct a station in the forecourt of Charing Cross terminus. The damage done will, therefore, lie practically free of cost, which must he good news to the shareholders, as it looked at one time as if their interests would suffer considerably owing to the accident.
CENTRAL LONDON DIVIDEND
The Twopenny Tube is justly celebrated for the smooth running of its train s, and its finances are in an equally happy condition. For the past half-year the stereotyped 4 per cent, is paid upon the Ordinary and Preferred. For the whole of 1905 the Deferred receives 4 per cent., as for 1904 and the stock at 87 offers the very respectable return of £4 11s 6d per cent. The yield on the Preferred, at 105, is £3 16s, and on the Ordinary, at 96, it is £4 3<. a rate of interest which, on the whole, would be difficult to better, having regard to the substantial nature of the security. The carry-forward is £25,394, as compared with £22,111 at this time last year. A sum of £10.000 is placed to reserve, against £30.000 a year ago, and that fund now stands at £72.500. This, it is true, represents less than 2h per cent, of the issued capital, but, as compared with most of our railway giants, the Twopenny Tube is but an infant in arms.
HOME RAILWAY TRAFFICS
Increases .are shrwn throughout by the returns of the Heavy lines of the Home Railways. A gain of £6,000 is exhibited by the North-Western, while a year ago there was a loss of £7,000. so that the aggregate is £17.000 to the good for the expired three weeks of the half year. In the case of the North-Eastern an addition is given of £8,992, going against the much smaller decline of £3.872 in the corresponding period ; and the Midland registers an increase of £2,583, following upon the falling off of £1.041. As to the Great Central an advance is marked of £5.030, topping one of £1,654. The Lancashire and Yorkshire also has an expansion of £2.850, comparing with one of £467. and the South-Western gives a gain of £800. going against one of £2.000. As regards the Scotch lines, the Caledonian records another increase of £2.042. and the North British of £5,189, although comparison is with a falling off at the same time last yegr. The aggregates for 25 weeks covered to date are £62,692 and £36,275 higher respectively. The Great Northern has an addition of £688, the Great Western of £3,000. and the North Staffordshire of £1,234, all being against losses last year. South Easterns have a gain of £331, as against £1431 in 1905.
CANADIANS
TRUNK PACIFIC DIAMONDS ?
The Grand Trunk Pacific Railway appeals to the imagination, not only by reason of its magnitude, but also because romantic possibilities attach to its development of new territory. Far from being a bleak and sterile region, the district' to be traversed is deemed to be a possible Gol-conda. A mineralogist representing Tiffany and Co. has been considering the diamondiferous prospects of Northern Ontario, and inclines to the opinion that rich discoveries may 1 w made by the surveying parties which are being sent out by the Government. It is a far cry from Kimberly to Canada, but South African interests might do worse than keep an eye on Dominion diamonds.
TRUNK TRAFFIC
For the third week of January the Grand Trunk reports a traffic increase of £9,682, towards which all sections of the company’s system contributed—the main line with £6,022, the Western branch with £2,692, the Canada-Atlantic with £520, and the Detroit section with £448. The past week’s gain follows one of £15,111 in the corresponding week of last year. Added to the gain of £15.079 for tlie preceding fortnight, the augmentation now reported | brings the total improvement for the three completed weeks
of January up to £24.761. Iu the corresponding period of last year there was an aggregate gain of £26.679, so that in respect of gross traffic receipts the position is £51.440 better than in 1904.
CANPAC TRAFFIC
In each of the completed three weeks of the New Year the Canpac’s gro%s traffic has shown an increase approximating to a quarter of a million dollars compared with the corresponding period. The actual aggregate increase for those three weeks is 770.000 dols. The past week’s contribution to that gain was 259.000 dols, following an improvement of 125.000 dols. last year. Such capacity for expansion is impressive, and the Can} ac, still a long way short of its maximum possibilities lias been economical of working costs latterly. In spite of the increase note I, the shares closed lower than Weine>day’s making-up price
in sympathy with the sharp break in Yankees in the Street yesterday followed by a further decline.
HUDSON BAYS
These shares have had a further rise, during the week to 841. During the first two days of the new account they therefore have appreciated 21 points, and are 2? higher than they were at the settlement in the middle of the month. It looks therefore as if they were being supported from the same quarter that sent them up to 89 last jeir, which was the highest on reco.d, and was touched la t August. Look at the difference a year ago f At this time last year they were at 43^, to which point they had come up fiom a lower figure, but that is a chance which is not likely to recur. Happy is the man who was a heavy bull at that time. Last autumn it seemed a certainty they would at all events reach 90. and if still a little short of that, anything may happen if New York take a hand in the game.
ARGENTINE RAILS
Have been very quiet this week, and the traffics that have just come to hand, are not quite up to what we have been receiving lately.
The Buenos Ayres and Pacific alone had a showy traffic return for last week, the increase of £8.621 being quite up to that progressive company’s recent fine form, and making the aggregate gain since July 1st no less than £222.215. The other increases are : Rosario £4.285, Great Southern £1.995, and B.A. Western £1.195. while the Argentine Great Western is £1.073 and the Entre Rios £501 to the bad. The Rosario's take, going against a comparatively poor one last year, leaves a deficit of £2.675 on the current half-year but the Great Southern's £77,159. on top of a big* increase a twelvemonth ago, makes the credit balance since July 1st £326,721.
The carry over, which was easily arranged on a basis of 6.^ per cent contango against the bulls disclosed no great* change in the state of the account. The. rate was quite stiff enough for the punters with differences on the wrong side in the small stock, and it will make a hole in the “ten bob” margin on Rosies.
Throg Morton.
investment.
Increass of Income by World-Wide IqvestqeqL
CONTENTS.
The Stock Markets: How to profit by Them.
Investment and Speculation: Past Present, and Future.
The Science of Investment.
The Theory of Successful Speculation.
How and when to Operate in Home Rails.
How and When to Operate in American Railways.
Points Concerning American Rails.
How to Invest in Alines.
Guiding Principles for Investors in Mines.
The Controlling Groups in tlTe Mining Market.
Guiding Principles for Investors in New Issues.
Guiding Principles for Speculators.
Marginal Investment:The Prudent Operator’s Favourite Method Explained.
I n<talment Investment. Investment for Small Capitalists.
Call Option : The System Fully Explained. Mr. Arthur Crump, late City Editor of “The Times,” described Options as the most scientific and prudent way of operating on the Stock Exchange.
Insurance as a means of Raising, Saving, and Investing Money.
Protection of Capital and Increase of Income.
The Rearrangement and Readjustment of Investments.
Stock Exchange Terms. Investment Tables.
Post Free on mentioni/ny THE SPHINX. The Secretary,
LONDON & PARIS EXCHANCE, Ltd., BASILDON HOUSE, BANK. LONDON, E.C.