Scottish+Investment+Company

=Scottish Investment Trust plc=

Company Number: SC001651 Date of Incorporation: 27 July 1887 Contact Details: 6 Albyn Place, Edinburgh, EH2 4NL Operating Details: Active, Public Limited Company Other names (if known): Edinburgh Scottish Investment Trust Co. Function of Company*: Security Broking & fund Management (6712) Headquarters/Base of Operations Location: Edinburgh Area of Operation: Customers across the UK


 * Taken from Standard Industrial Classification 2003, as used by Companies House in 2010

Records
Held By: Privately held, please contact the NRAS. Held under NRAS4207

Scope/type: Corporate records: Articles of association 1927; Directors minutes 1887-date; General Meetings Minutes 1929-date; Audit Committee Minutes1993-date; Trustees / Annual reports 1888-date; Signed Annual Reports 1962-1982; Shareholding Records: Stock Registers c1912–c1926; Dividend Journals 1936-1990; Register of transfers 1888-1945; Debenture Stock Transfer Registers1888–1928; Register of the Transfer of Cumulative 6% Preference & Ordinary Stock 1925–1945; Transfer Registers for A Preference & Ordinary Shares 1945-1963; Accounting records: General Ledgers1887-1982; Journals1954–1976; Foreign Currency Cash books 1988-1990; Cash books 1934-1987 (with gaps 1942-1964); Bank Journals 1956-1990; Securities Account Ledgers 1951- 1978; Dollar Loan Books 1997-1982; Temporary Loans Books 1976-1986; Investment Records: Investment Registers 1942-1962; Stock & Share Registers – Dead Accounts1925–1961; Stock & Share Registers Closed Accounts 1936–1979; Valuations of Investments 1926-1952; Register of Purchases & Sales1936–1988; Dealing Books1982-1998; Bank Books 1910-1918 and 1926-1927; Bonds and Share Certificates 1907-1934; Miscellaneous Investment-Related Documents c1880s-1920s; Management records: Registers of Documents Executed by Company1897–1975; Tested Messages Books 1971-1995; Expenses Books 1937-1994; Proxies 1964-1965; Petty Cash Book 1956-1993; Salaries Books 1937-1959; Management and Directors’ Fees Books 1927-1962; Underwriting Commissions Books1948-1977; Miscellaneous Management Documents including ‘Prints’ Volume containing prospectus, circulars to shareholders, proxies, chairman’s speeches, annual reports, statutory documents, newspaper cuttings, etc 1887-1979; Shared Records of the Scottish Investment Trust Ltd, Second Scottish Investment Trust Ltd and the United States Trust Company Ltd: Petty Cash Book 1936-1959; General Subject Files 1932-1956.

Conditions governing access/use: Please contact NRAS for details. Company is happy to allow access for genuine researchers, pending NRAS approval.

Related records: 4 petitions relating to this company lodged in the National Archives of Scotland

Company History
The Scottish Investment Trust Company Ltd was formed in July 1887 by John Gifford (a Christian philanthropist, founder of the Bankers Institute and brother of Adam, Lord Gifford), the Honorable Francis Jeffrey Moncrieff (son of the Lord Advocate and Captain of the Scottish rugby team) CA, Robert Jameson Torrie (stockbroker), William Holmes (MP for Paisley), James MacDonald (deputy keeper of the Great Seal of Scotland and sub agent to Gladstone), Chairman John Dick Peddie (of the family firm of J and A Peddie and Ivory, as well as being an eminent architect and MP), and with James Ivory as Secretary. Its aim was ‘to apply the principles of co-operation to the investment of money so that investorts may, by uniting their means, spread their investment over a wider field’ and gain ‘ a higher rate of interest with greater security and exemption from liability than if the amount subscribed by each shareholder were independently invested’. The company had an agreement with A Parish of Surrey, as their London broker, and initially undertook investments in Britain and the Empire. Its registered office from 1889 was, and remains, 6 Albyn Place. It had a nominal capital of £500,000 in £10 shares Share capital of £250,000 made up of £125,000 preferred and £125,000 deferred shares. At an early meeting of the directors it was agreed to set up three committees to specialize in handling investments: one to deal with insurance companies, government bonds and banks, the other to deal with railways and investment companies, the third to deal with all other types of investment.

Initial investments included shares in the Scottish-American investment company, the Scottish American mortgage company, the Dundee mortgage and trust investment company and the Australian land and finance company. They also invested in argentine government bonds, south and north American railway securities, investment trusts, financial institutions and shares in submarine cable, telephone and telegraph companies. Later gas, coal, tea and insurance companies were added. In 1888-1890 the dividend offered to ordinary shareholders was 6% and by 1890 the subscribed capital had been doubled. However, trying times were ahead for the company. Peddie died in 1891 and was succeeded as chairman by F J Moncrieff, just as the collapse of the Barings Brothers merchant bank was about to create a market crisis was alongside a political crisis in the Argentine which had contributed to its problems. During the early 1890s, the investment trust was forced to write down its investments as the depression deepened. However, it survived the period and in 1900 William Holmes became its third Chairman, succeeded by EA Davidson in 1903.

In the early years of the century, it still suffered the after effects of the major economic crisis of the end of the century but by 1910, it was offering ordinary shareholders a dividend of 5%; rising to 5.5% the following year and then reaching 6% once more in 1912, the level at which it remained until the end of the First World War. After the war ended, a number of rapid changes took place within the investment trust. In 1919 J M Dick Peddie became chairman, succeeded by James W Bowhill in 1921. In 1919, TJ Carlyle Gifford, perhaps the dominating figure in Scottish investment trusts in the 20th century, also joined the board, bringing 10 years experience in the field to this role. Changes to the management practices were also occurring. The Investment trust operated with only directors and a secretary until 1925. In that year the first manager was appointed: this was a board member RG Simpson. He was succeeded by R J Edgar in 1934, who was also secretary at the time. Rights issues also took place in 1924 and 1926, in which holders of ordinary shares were allotted one new share for every ordinary share held at par and then again in 1928, when they were offered the right to buy one new 5/- share at 15/- for every four old shares held and this revenue allowed significant new investments to be made in a booming market.

However, the entire world was on the verge of the great Depression. The SIT, though it survived as many other investment trusts did not, was still had hit by the collapse of the markets. Under the chairmanship T J Carlyle Gifford from 1930 until his retirement in 1962, the company picked a careful path through the difficult times. In 1931, its board consisted of Gifford, Charles Munro, Ian MacIntyre, Alexander Hutchison, R G Simpson (manager), R J Edgar (secretary) and John L H Tulloch (asst Secretary), its investment distribution was 28.78% bonds, 23.79% preference shares and 47.43% ordinary or deferred stocks or shares. Investment was spread in bonds, preference shares, deferred stock or shares across mainly the UK, Germany, Europe and North America. Its overseas focus also remained so that in the mid 1930s, only 35% of the company’s investments were in the UK.

In the later 1930s, as the markets began to rise once more, the fortunes of the Scottish investment Trust rose with them. In 1936, the company was once again able to offer ordinary shareholders a dividend of 2.5%, which rose to 4% in 1937 and remained there until 1944. However, the outbreak of the Second world war wrought a number of changes in its day to day operations. The chairman, Carlyle Gifford, was absent in the United States from 1939, having been asked by the British government to undertake the task of realizing requisitioned British dollar securities in order to raise this currency to fund the war effort. The Assistant Manager Robert Fisher had been posted to a government department and the secretary D C Reid was serving as an officer in the army. However, the outbreak of war did little to stifle the growth of the investment trust and by 1944 it held assets of £3,300,000. By the end of the war, c30% of assets were in fixed interest securities principle was to invest in well managed small, medium and large companies which were likely to achieve a good increase in earnings and dividends, but with few US stocks and shares remaining. The result was a dividend of 5% offered in 1945 and 1946 which rose to 7% in 1947 and 1948.

After the war, there was a general desire amongst Scottish investment trusts in general to return to the USA market. This was hampered by exchange control restriction being retained by the UK government until the end of the decade and it was not until 1949 that the SIT could increase its US holdings. In 1952, the company was in a position to capitalize some of its reserves and create 1,000,000 new ordinary shares of 5 shillings each and distribute them as a bonus issue in a proportion of 1 new share for every 1 unit of stock held. The dividend of the following year was 12% (equivalent of 24% the previous year), rising to 25% in 1954, 35% in 1955 and 40% in 1956 & 1957. In 1958, when the dividend reached 44% the board began preparing for another bonus issue: this time, monies from reserves were capitalized and applied in paying up in full 2,000,000 newly created shares of 5 shillings each. This was completed in March 1959. By that year, the investment trust’s holdings were spread across 59.8% UK and Commonwealth and 39.8% North America with only 0.4% in other areas. Also by this stage, only 3.7% of these were in fixed return securities.

These results were overseen by a changing investment management team. In 1950, D I Ball was appointed manager, supported from 1953 by T R (Rob) MacGregor. The pair were joined by J R Glen in 1969, just before Ball’s retirement in the following year. The results they achieved from the early 1950s was largely due to them and their developing strategies of taking steps towards investing in Europe and the Far East. By 1956, the WWII period’s necessarily inward-looking investment strategy had been overturned and overseas investment once more amounted to at least 50% of the portfolio.

In March 1960, further steps were taken to modernize the investment trust and Preferred and A Preferred Stockholders were asked to give up certain of their voting rights in return for a 0.5% increase in their dividend. Results for ordinary shareholders also continued to improve, with 31% offered in 1960 and 1961, rising to 35% in 1962 (the year when Carlyle Gifford retired from the chair and the board) and 40% in 1963.

By 1962, the company had assets of £40 Million with 49.4% of its holdings in UK and the Commonwealth, 48.8% in the United States (this area would peak at 50.8% three years later) and 1.8% in other locations. The following year, the SIT proposed one more to capitalize reserves and create 8,000,000 new ordinary shares of 5 shillings each, raising the authorized capital to £4,250,000) and distribute them as a bonus issue on a basis of 2 new shares for every 1 unit of stock held. This was carried out in April 1964, with the result that at the end of that year ordinary shareholders were offered a dividend of 16% (equivalent to 48% when compared to the previous year’s 40%). This year on year rise continued, but at a more gradual rate: 18.5% in 1965-1966 and 19% in 1967-1968. In the last year of the decade, the company’s authorized capital was raised once more to £8,750,000. £4,500,000 was then capitalized from reserve funds and applied in paying up in full 18,000,000 new ordinary shares of 5 shilling each in order to bring the issued capital more into line with the actual assets held. These were then distributed as a bonus issued to shareholders in the proportion of 3 new shares for every 2 old shares held.

In 1969, a dividend of 7.6% was issued, followed by of 8.2% the following year. By this stage, 54.1% of securities held by the SIT were in the UK, with only 44.7% in the USA. This was the start of a gradual move away from USA as an area of investment and into countries with stronger currencies. In 1971, the dividend paid in the first year after decimalization was 2.15p (compared with the previous year’s equivalent of 2.05p. this rose again to 2.3p in 1972 but fell sharply to 1.75p in 1973 as the effects of a world-wide recession were felt. However, it rose again to 2.05 in 1974 and 1975.

In 1974, Angus Grossart had been appointed the youngest member of the board. The following year he was appointed chairman on the recommendation of his departing predecessor Sir William MacEwan Younger. Beginning in January 2004, the management restructured the investment portfolio, reducing the number of holdings and merging the regional portfolios into one global portfolio. While the stock selection has been considered good in recent years, these changes have been made to improve NAV performance by giving more emphasis to the best stock selection ideas from around the world.

The above information developed by the BACS in 2006. Record holdings reused with permission from the NRAS