The Gazette 1911-12

14

The Gazette of the incorporated Law Society of Ireland.

1 9 11.

[JUNE,

the result is that its market price is con siderably depreciated. The difference in price between Mature and Immature Stock, instead of being £1 7s. 6d. per cent., is, in practice, £2 5s. Od. per cent., and sometimes more. From the foregoing it will be seen that a considerable loss is incurred by selling Immature Stock. A somewhat similar difficulty arose with regard to the 2£ per cent. Guaranteed Land Stock (redeemable 1921) issued under the Purchase of Land (Ireland) Act, 1891. This Stock was also Immature from the date of its creation until the following dividend day. There was practically no market for it for some years, and the usual manner in which it was realised was, by first exchanging it for 2£ per cent. Consols (dividend reducible to 2-| per cent, in 1903) in pursuance of a power in the Act of 1891. It is understood that, where Immature Stock issued under the Act of 1891 was exchanged for Consols, the dividend on the Consols was made good (a) by the Land Commission, out of the selling estate, by a transfer to the Bank of Ireland of an amount of the accruing interest on the Immature Stock equal to the dividend, and, when the interest was insufficient, the deficit was paid out of the proceeds of the sale of the Consols ; or (b) in the majority of cases, by the Stock-holder himself or his broker, paying into the Bank of Ireland in cash the full amount of the dividend. A similar arrangement might now be made between the Treasury, the Land Commission, and the Bank of Ireland, which should apply not only to the Guaranteed 2|- per cent. Stock issued under the Irish Land Act, 1909, but also to the Guaranteed 3 per cent. Stock issued under the same Act. The Council suggest:— That the National Debt Commissioners should authorise the Bank of Ireland to convert, at the request of the Irish Land Commission, Immature Stock into Mature Stock on payment to the Bank of the full half-year's dividend on the Stock; such dividend to be provided out of the proceeds of the sale of the Stock. From enquiries made at the Bank of Ireland it would appear that there will be no difficulty

Irish Land Act, 1909.

IN

COUNCIL

THE

BY

MEMORANDUM REFERENCE

TO IMMATURE GUARANTEED 2f PER CENT. STOCK AND IMMATURE GUARANTEED 3 PER CENT. STOCK. Guaranteed 2f per cent. Stock created under the Irish Land Act, 1909, is described as either " Immature " or " Mature." (A) " Immature" is the description applicable to the Stock between the date of its creation and the date of the dividend day next after its creation, and during that period interest, and not dividend, is payable upon it. From and after the dividend day first ensuing after its creation, the regular half- yearly dividend begins to accrue. The interest which accrues during the Immature period is paid by the National Debt Commissioners to the Land Commis sion to the credit of the particular estate in respect of which Stock was created.and that interest is the property of the original allottee of the Stock, and is at the rate at which the Stock subsequently bears dividend. When, therefore, Immature Stock is sold, a dividend for the benefit of the purchaser does not begin to accrue until the dividend day next after the creation of the Stock : in other words, the purchaser buys it "ex dividend " for the half-year in which the Stock was created. (B) " Mature," on the other hand, is the description applicable to the Stock from and after the date of the dividend day first ensuing after its creation, and it carries regular half-yearly dividends fronj that date, and when sold carries a dividend to a purchaser from the previous 1st January or 1st July, as the case may be. As Immature Stock only becomes Mature on passing a gale day, it follows that the actual difference in value between the two classes of Stock ought to be the amount of one half-year's dividend, or £1 7s. 6d. per cent. Immature Stock, being non-dividend paying, is not available by trustees as an investment, and, under a Treasury Regula tion, this class of Stock is not inscribed in the books of the Bank of England, thus restricting the market for this Stock to Ireland. For these reasons principally, it is difficult to market the Immature Stock, and SALE OF