Financial Notes

spEcuLATioN INCREASING.

WHILE the Stock Markets as a whole continue to present a firm appearance, and while high-class investment stocks keep firm on the cheapness of money, there can be no question that activity is increasingly centring on the more speculative descriptions, while dealings themselves are probably of a more speculative character than they were a few weeks ago. Home Industrial shares continue to be active, especially the shares of all concerns likely to benefit in any way by Government expenditure on Defence, but the improvement in trade generally has also affected certain interests, and shipping shares are steadily rising.

GOLD SHADE ACTIVITY.

So far as the past week is concerned, however, tlie feature has undoubtedly been the activity and strength of some of the gold-mining shares under the lead of West Wits and Consolidated Goldfields, the latter company being a large holder of West Wits shares. The rise in West Wits has, of course, been sensational. The nominal value of the shares is only 10s., but at one time last year they were quoted at under 305., while even this year they stood at one time at 85s. Now, however, the price is nearer to £14 per share, the rise of the last week or two having been accentuated by the flotation of a subsidiary, the shares of which have been introduced to the markets at a very big premium, and as holders of West Wits shares have had the right to apply for a .certain number of the shares at par, these " rights " have constituted a substantial bonus.

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PETER ROBINSON PREFERENCES.

In these days when there is rather a tendency to challenge the rights of Preference shareholders, I think that the directors of Peter Robinson, Ltd., may be congratulated upon the course they have taken with regard to the 7 per cent. Cumulative Preference shareholders. These shares were issued at a time when even good industrial concerns had to pay a very high rate of interest on new capital owing to the general value of money. Since then, these com- panies have had to face high interest charges accompanied by a great slump in trade, so that it is scarcely surprising that the strain should have been a considerable one. In a circular now issued to the Preference shareholders of Peter Robinson it is pointed out that the annual fixed charge for interest on. Debenture Loan and interest on £950,000 in 7 per cent. Cuniulative Preference shares is too high compared with the profit-earning capacity of the company. The interim ordinary dividend has just been passed altogether, but the Preference interest has, of course, been duly met. Nevertheless, the strain on the company is recognised, and while the Preference shares stand in the market at about 26s., there is little doubt that the price would be even higher but for the narrow margin on which the company has been working.

A VOLUNTARY SCHEME.

It appears that the company's leasehold properties in Oxford Street are worth considerably more than the _figure at which they stand in- the 'balance-sheet, so. that there would be no difficulty in placing at par an issue of £750,000 of 4 per Cent. Debenture Stock secured by a second mortgage on the Crown and Western blocks of the Oxford Street property which are mortgaged to the Clerical, Medical and General Life Assurance Society. Therefore it is proposed to replace part ctf the existing 7 per Cent. Preference share's and incidentally a small outstanding amount (177.000) of existing 4 per Cent. Debenture Stock by a new issue of 4 per Cent. Debenture Stock redeedt: able by instalments over a period of years. The company is now offering to purchase up to 1475,000 of the existing 7 per Cent. Cumulative Preference shares of £1 at the price of 263. per £1 share, such price, at the option of the Preference shareholders accepting the offer, either to be paid in cash; with interest at 4 per cent. Ter annum. from. February 1st to the date of payment, or to be satisfied by the issue of 4 per Cert. Debenture Stock at par. The offer, which, it should be (Continued on page 384)

Financial Notes

(Continued from page 362.)

understood, is clearly a matter for voluntary acceptance, is conditional upon its acceptance on or before September 30th or such later date, if any, as the directors may determine in respect of not less than £200,000 of the issued Preference shares.

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A REASONABLE PROPOSAL.

The proposal seems to have a good deal to commend it both to the company and to the Preference shareholders. A ireorganisation of the capital on the lines proposed promises at the outset to secure a reduction in the annual interest charges of nearly £9,000, while the position of the Preference shareholders accepting the offer upon the assumption that they elect to take Debenture Stock and not cash for their shares will in respect of each 1100 of Preference shares surrendered be somewhat as follows :-As regards capital, their holding will be increased to £130, thus virtually representing the pricy of the Preference shares today. The annual income on the holding would of course be £5 4s., as against £7, but the security would become a second mortgage and charge on the company's entire undertaking and property instead of ranking as at present behind all the company's creditors, secured and unsecured, including creditors for money hereafter borrowed

by the company. * * *

PATERSON ENGINEERING.

Although at the recent general meeting of Paterson Engineering Co., Ltd., the Chairman, Mr. William Paterson, explained that the full effect of the additional capital was not fully reflected in the accounts for the past year, the position disclosed was nevertheless a good one, the trading profit show- ing a rise of just over 13,000, whilst the stock, the working progress and receipts on uncompleted contracts showed an advance on those of last year indicating increased trading activity. Moreover, the Chairman was able to state that as regards the current year the order-book showed a good increase