1882 Scrapbook of Newspaper Clippings Vo 1 029

16

[Letterhead]
CHARLES H. ROYCE, NO. 1 BROADWAY, NEW YORK.
CABLE ADDRESS: "ORION, NEW YORK,"
TELEPHONE NO., 4907 CORTLANDT.

CORPORATE PROPERTIES
AND SECURITIES

CEMETERY STOCK AS AN INVESTMENT.

Comparatively few investors are acquainted with the value of Cemetery stocks, as an investment,
and many have never even thought of them in this connection. This is not strange, however, since the
majority of Cemeteries are owned by Associations, and managed in the interest of the locality where they
are situated without any idea of profit, beyond the amount required for the preservation and beautifying
of the Cemetery itself; at least this is the case in almost all the small towns and villages. In the larger
cities, however, the formation of Cemetery Companies issuing shares, and conducted upon a business
basis, is the most usual method. The laws of the State define explicitly the power of these Companies,
and they are restricted in such manner as to insure perfect safety to the stockholders.

The usual method is for a few responsible men to organize a Company, and having secured a
Charter, to purchase a plot of ground sufficiently large and adapted for the purpose, and proceed to lay
out and prepare the same for Cemetery use.

Cemetery lots are sold, usually, at 75 cents to $1.50 and as high as $2.00 per square foot. The
average price can be safely estimated at $1.00. As there are 43,560 square feet in one acre, the enormous
returns which must accrue to the original stockholder, when the lots are all finally sold, will be readily
seen.

It may require 20 or 25 years to dispose of all the lots, but it is a mere question of time, and the
final result is the same whether dividends are immediate or not. The stockholder gets the full benefit
some time within that period whenever the land is sold. To make the value of stock still clearer, take
as an illustration a Cemetery of 100 acres, chartered, and conducted as an investment for a period of 20
years. The result will be approximately as follows :

100 acres original pruchase.
25 [acres] deducted for walks, road, etc.
–--
75 acres available for lots.

75 acres x 43,560 = 3,267,000 square feet x $1.00	$3,267,000
Deduct 1/2 reserved by law as improvement fund	$1,633,500
Profit for stockholders	$1,633,500

Dividing the original investment into 5000 shares (the usual method,) and estimating the cost of the
land and necessary improvements at $250,000–or $50.00 per share, we will find that at the end of 20
years, the lots having been all sold and money divided, the stockholders will have received for each
share bought as follows :

Net amount to be divided among the stockholders as above is $1,633,500, which is equal to
$326.70 for each of the 5000 shares. Taking 100 shares as example, it figures as follows :

100 shares at $326.70		$32,670 00
100 [shares] cost at $50.00 share	$5,000.
Interest on $5,000 at 7 per cent., 20 years	7,000.	$12,000 00
Net profit on each 100 shares		$20,670 00

This is equal to 20 per cent. per annum additional upon the original capital of $5,000. In other
words, each original shareholder recieved back his money and an average interest for 20 years of 27
per cent. per annum.

The above estimate is made for a cemetery organized under the laws of New York State, which re-
quires that one-half of the amount received for lots be retained as a permanent fund for the preserva-
tion and improvement of the cemetery.

Each State has its own cemetery laws. The estimate is based on a period of 20 years, but if it
requires 25 years to dispose of all the lots, the investment would still pay largely in excess of any-
thing that can be found in the market, while at the same time there is an absolute safety as in real
estate mortgages.

Under the New York State law all cemetery property is exempt from taxation. With the large
annual increase in the population of New York, the number of deaths must increase correspondingly,
and the demand for burial lots will be much larger the next ten years, than during the last ten.
Most of the old cemeteries are already full, or so nearly so that the price of lots has been advanced
to very high figures, and this is turning the attention of the public to the new cemeteeries, and their
sales of lots are increasing at a very rapid rate.

In addition to my regular business in Street Railroads, Gas properties, etc., I am making a
specialty of these stocks and shall be pleased to furnish further information to anyone wishing to
buy or sell them.

Respectfully yours,
CHAS. H. ROYCE.