The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1890-03-23
The English Brewery syndlcates.

The excitement which has been caused
in England by the decline in the profits of
Samuel Allsopp s. Sons, limited, one of the
great brewery corporations, with the re-
sulting fall in the market price of nearly
all brewery securities, marks the end of one
of those extraordinary crazeS that from
time to time afllict the English investor.
Like everything of the kind, the fashion or
fancy fer investing in brewery shares had
originally good foundation, and like
everything of the kind it has been over
done-with the usual result of large profits
to those who wentin early and great losses
to those who went in late.
The movementpracticaliy began with the
incorporation of the great Dublin brewery
of Guinness. The Guinness brewery is
the largest in the world, and was doing at
the time when it was tioated-lSS6-not
only very large, but growing business,
now amounting to something like million
and a half of barrels year. The capitali-
cation on this basis was not excessive, and
the stock has continued TO pay IL per cent.
dividends and now sells at e33 share, or
at the rate of 800 per cent on par of $40.
1t was natural that such results should
lead to the capitalization of other concerns,
and nearly all the important breweries in
Great Britain were taken up by limited
liability companies the Bristol, the
Walker, Liverpool, Manchester, Leeds, the
MenX, Whitebread and others.
The popularity of breweries shares in
England naturally suggested the capitaliza-
ton of American breweries, which were all
the more attractive to English investors
from the higher rates of interest prevailing
in this country. Where English companies
paid to AZ on their debentures, and to
per cent. on the preferred stock, the Amer
lean companies were all fioated on basis
of 6 per cent debentures, per cent pref
erence and an expectation of Is to 20 per
cent. dividends on the common stock.
Soon, all kinds of breweries were in the
market-bre werles that were running
down in business, brewerieS that had not
capital enough to go on, breweries that
never had amounted to anything, and hun
dreds of brokers, real estate men, impecu-
NOUS attorneys and cappers were securing
the country to secure options on any or
every brewery they could hear of. 1t
would then be announced in the news
papers that an English syndicate had pur-
chased So * Sos brewery at an enormous
price and was making arrangements to
conduct it.
The English syndicate had real exist
ence, but it did not buy all the breweries
that were offered to it, nor all that it might
have liked to buy. 1t was, in fact, the
clique already referred to, of directors in
London banks and trust companies and
others interested in the promotion of these
enterprises. They had an expert to visit
the United States and examine the brew
cries and their business. If he found il
promising, he would offer a round sum for
the establishment, the proprietor to retain
the management for a certain number OF
years and take payment partly in debent-
ures, preferred and common stock Thl
company would then be fioated on a basis
of the profits for this period, three or five
years, and if the promises were inviting
an amount of capital would be issued fan
in excess of the sum paid the owner, whC
would thus be undertaking to earn divi
dends on what was virtually watere(
stock. Of course, among all the option.
that were offered to the syndicate, they
selected those that looked the best and tina
afforded the best chance of profit to tn,
promoters. When a brewery was held a
its full value and the owner would no
agree to remain under any plan of owe
capitalization, the syndicate did not buy
| The English shareholders, however, shoy
, very little discrimination between goot
shares and bad. On the day of the meetin,
of the Alsopp company, all brewerie
shares, with the single exception of GUN
ness, Iell OH at an alarming rate II tn
London market. One of the very best O
the American companies dropped to SC
although it is still paying as high dividend
as when it sold at 130 The Bartholoma,
shares sold year ago at 1875, and, after tn
t payment OF Is per cent. dividend, the
: went up to 40 and l65 in October last. Il
, December another Is per cent dividen
was declared, but the market was so over
loaded with breweries stock that the share
Immediately began to fall. Not long ag
almost any brewery stock would comman
premium before it had paid a single div
dend: now they are all down together, tn
good and the bad.
: The furry will most affect the brewerie
> that were hoated last Some of these prot
. ably will not float at all. The four Bait
more breweries and the Indianapoli
breweries have been taken by the clique
but they are still in the hands of th
! original holders and it seems likely that tn
l new corporations will not materialize
3 In short, the floating of American brew
cries is practically at an end and the synd
cate is now devoting its attention to othe
: industries. Some of these will, no doub
3 be placed advantageously, and then, whe
some particular line of investment ha
proved profitable, it will in turn be worke
for all it is worth to the promoters.
/ At the Banks.