HOUSING . ON A SOUND FINANCIAL BASIS [To the Editor'
of the- SPECTATOR.] SM,—Five per cent. used to be the social reformer's Utopia. At' Letchworth the First Garden ' City, 'Ltd. has ' actually carried the' idea into ' reality, and 'Sir Ebenezer lloi.iard, Who died last summer, lived long enough to see his -Vision trans- kited into brickS and 'mortar. FOr the second year in suc- cession .the balance of profit remaining after-the payment of 011 prior charges; which have been met every year from the beginning of the enterprise twenty-five years ago, shoWS substantial surplus after the maximum dividend of 5 per cent. has been paid on the ordinary share capital of nearly
£195,000. •- •
For many years after 1903 no dividend was paid on the ordinary shares, but as profits continued to' grow a reserve fund for the payment of arrears of dividend, which, amounted to 1133,205,- was started. Following a decision:; of -Mr. Justice Tomlin, the directors threw all The- arrears ••into--a single sum instead of paying off the early yeara first: A yea* ago -this fund had grown -to a figure whicli-perinitted'a pay- ment of one-twentieth of the total, and now 'the-:•Sinplin; profits will allow a further fortieth to 'be paid off.-- One •nhay thus' ekpect the' whole -arrears 'to be • paid off within' seventeen years, after which time; riecording 'to the company's articles, all surplus profits after paying 5 per cent. on the ordinary share's -mush be devadd to eipenditiiie for the 'benefit of the town. Finally the inhabitants of Letchworth 'will have 'the option of buying out the company and 'of becOming their oWn landlord, in which case, no doubt, part 'of' the 'Capital- thus returned to the shareholders and debentinie-hOldeit "will' be used to finance another garden city.—I am, Sir, &c.,
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