CATTLE RANCHES IN AMERICA.

Waikato Times, Volume XXXI, Issue 2510, 11 August 1888, Page 2 (Supplement)

CATTLE RANCHES IN AMERICA.

Tun Economist a short time ago gave statistics of a number of cat'le companies iu America owned by English and Souti li capitalists which havo been very unsatisfactory investments. There are many causes for this, and I would like to place before tho readers of tho Economist, (some of whom arc probably owners iu the said companies) a few of the reasons why their investments havo been ao uureinunerative.

In the first place, tho purchase pricoin most cases (at, tho time of purchase by the English people) was un a basis of four times their actual value. This alone, with a constantly fulling market during the past, K"VPii or eight years, wuiild bo sufficient to ruin any company, cattlo having declined more tliau one-half duiing this period. Many of these (and other ranches) purchased" their cattle by what cattle men call book account, meaning by this, what the books call for on the ranch, not making any deduction for losses during tho time tho ranch had been established, whil) they should have bought by actual count and rcbranding. By purchasing by bo ik account, they paid, in some instances, for twice and three times the number of cattle that were actually delivered, Many of the ranches in America were located upon the public domain or Government laud, so as to secure the feed for the cattle without cost, and the rapid development and settlement of the country has kept encroaching and crowding upon the ranchmen, until their ranges were cramped, and in some oases ruined, and they were obliged to fend cattle to market that they should have kept. Many ranches were located on the prairies of Dakota, Nebraska, Wyoming, and Montana, which is the hnd of the blizzard. Some parts of the States and territories are very beautiful, if the cattlo had good warm barns to shelter them |whcn the blizzards come ; but to stand out on the prairie, and find their own feed, with the snow two feet deep, the thermometer thirty to sixty degrees below zero, and the wind blowing a hurricane, is quite another matter. It has been proved that tho above localities are too far north, and too cold for the successful breeding and raising the range cattle on the open prairie. While the "Tass is excellent,, and while the cattle may get through a few winters without great loss to their numbers, there will then come a season which will sweep off thousands, and the profits of former seasons are swept away. Then comes the management. In many cases it has been of tho very lowest kind—a management that would ruin any kind of business, as well as the most favourable undertaking of any public company. I will relate an experience I had to illustrate this kind of management. I visited a ranch several years ago, located in tho Western part of America, owned by English capitalists. This ranch would answer the description, in nearly every particular, of what I have previously described. I found on that ranch "a manager, drawing a salary of nearly £5,000 per annum, and an assistant manager, drawing a salary of £1,2-50 per annum : in addition, they had spent thousands of pounds sterling in worthless improvements so far as the cattle business was concerned. I found on this Western prairie ranch, located many, many miles from a railroad, servants dressed in red livery, and many other things fully as ridiculous. Tho men who should have devoted the greater part of their time to tho management of the company's business, spent most of their time hunting and fishing, a very pleasant pastime ; but tho company should not have been made to pay for it at such a high price. I could have furnished, at that time, a manager for that company better qualified for tho position in every way (practical knowledge of the cattle business and general business ability) than the two managers combined, at a salary of £100 per annum ; he would have been a man of good character, of good habits, of good business ability, a graduate of a university, and with a thorough knowledge of the busine-s, leirned (as it only can be thoroughly) iu the saddle on a horse's back, working as a "cowboy," and he would have been vouched for by tho largest cattle men of America. The ranch would not only have had a better manager in every way, but the management would have been an economical one in every department ; there would not, only have been a savins* of the difference between £100 and £0,200 in salaries, but there would not have been servants in livery or castles on tho prairies, and every penny of the money would havo been used to its best advantage for tho benefit, of tho shareholders. I ouly cite these things to prove my assertions of poor management. There is no need to mention the name of this company : suffice it to say that the company is owned by English shareholders, and is still iu operation, though it is hoped they have learned something since that time; but the company will never pay a dividend, on account of other reasons mentioned in this communica'ion. It is very unfortunate for tho Engli-h people that they went into their investments in American ranches at the time they did, on account of going into them when they wero booming, when they were the fashionable craze, and -when everybody wanted them, for the reason that on account of thN they were swindled at tho very start.. Tho public, however, are very peculiar. They make their investments in whatever is the fashionable craze, (especially if the board of directors are wflll-known men), regardless of the merits of the investment, or whether it is chcap at tho price offered. I should like to say a word on this fashionable craze as it has been brought to my mind. It seems at the present moment to be mining shares. I wish to make a prediction here, based upon the results of the same kind of a craze several years ago in America. It is this : While there may be a few good mines, they are mostly rubbish, and in most cases I should as soon think of throwing money into the river Thames as to purchase their shares, fcr in either case I should consider it lost. Not ten out of 100 mining companies will ever pay back the money invested. There is an old adage, that one person can see as far into a rock as another, so I would advise investments on top of the ground, where they can be seen occasionally ; they will turn out much more satisfactorily if good judgment is used in making them. An old rule in making investments is as follows :—" The time to buy is when things are cheap ; the time to sell is when they are dear ; the time to purchase is when everybody wants to sell ; and the time to sell is when everybody wants to buy." If this rule is followed, combined with good judgment as to the investments made, it will generally lead to good results. As to cattle ranches in Afierioa, although tho popular craze i» against them at tho present moment, now is tho very time t<* purchase thorn, for tho following reasons : —

First, because if a ranch is well located, well adapted to tho breeding and raising of cattle, aud is bought at, its actual and not at a fictitious value, there is no bu*ines< that offers at (he present time siir.li and sure returns (if reasonably wellmanaged) with .-o little risk. Secondly, because beef is one of the necessary articltß of life, and neverduring a period of twenty-five years could cattle be bought at such low prices as at the present time. Thirdly, bccause cattle in all probability will never lie lower than at the present time, with every probability of their being much higher, aud because tlicy can be purchased at such a price as t • pay a handsome profit. My reasons for predicting higher prices for cattle are based upon the following facts. American people are getting to be more and more a beef-eating poople,

The crowding of the ranches on the publie dom iin during the past few years has caused tho selling of larger numbers of cattle that were not ready or fit for the market. The groat shipment from iheso ranches, and the very low prices prevailing, has placed the farmers of the older States, such as lowa, Minnesota, Illinois, &c., in the position that their cattle cost them much more than they brought in the market, because they have to feed them on corn, so they have sold their corn at good prices, and shipped everything in the shape of stock to market during tho past two years. All this has decreased the number ot cattle very largely, while at the same time the population is increasing enormously, emigration being very largo all the time. These, and other reasons connected with the j trade, lead me to look forward to a largo advance in beef cattle within a few years.

In closing, I would say to the English people, deal or associate yourself in bnsiness only with those who can furnish you with good references. If possible, in making such an investment, go to America, or send someone to visit the property before purchasing, and I am sure the purchase of a cattle ranch at the present lmvprioes, following such instructions as I have named, will give to yon the most profitable investment yon have ever made in the United Stateß; but there must be no £5,000 salaries or servants in liveries on cattle ranchcs if you wish good dividends.—The Economist, May 12.