Dunedin+Investment+Growth

=[|Dunedin Income Growth Investment Trust PLC]=

Company Number: SC000881 Date of Incorporation: 24 March 1879 Contact Details: 7th Floor Princes Street Edinburgh Operating Details: Active (Public Limited Company) Other names (if known): The First Scottish American Trust PLC Function of Company*: Other financial Intermediation (6523) Headquarters/Base of Operations Location: Dundee (though subsidiaries based in Edinburgh and Glasgow) Area of Operation: Investment in the US, majority of trustees in the UK


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

Records
Held By: Dundee City Council Archives GB251/GD/EFM

Scope/type: Dunedin Worldwide Investment Trust Plc; minutes, 1990-1994. First Scottish American Trust Co. Ltd.; Minutes, 1873-1995. Accounting records, 1937-1961. Registers of members, 1880-1935. Circulars, notices of meetings, reports, 1873-1939, stockholders' minute books, 1954-1990. Second Scottish American Trust Co. Ltd.; Minutes, 1873-1970. Accounting records, 1910-1970. Register of members, 1879-1938. Circulars and reports, 1875-1939, stockholders' minute book, 1954-1969. Third Scottish American Trust Co. Ltd.; Minutes, 1874-1970. Accounting records, 1910-1970. Registers of members, 1879-1934. Circulars and reports, 1875-1940, stockholders' minute book, 1954-1969.

Conditions governing access/use: Open

Related records: all held by Dundee Council Archives under the same fonds as the above: Northern American Trust Co. Ltd.; Minutes, 1896-1990. Accounting records, 1897-1965. Registers of members, 1896-1951. Circulars and reports, 1896-1939, stockholders' minute book, 1954-1984. Edinburgh Investment Trust Ltd.; Minutes, 1889-1975. Accounting records, 1889-1934. Registers of members, 1889-1913. Registers of Directors, 1926-1948. Photographs of managers, secretaries and directors, 1889-c1968. Frames of composite photographs of office-bearers, 1889-1994. Scottish United Investors Ltd.; Minutes, 1928-1961. Reports and accounts, 1928-1961. Scottish Consolidated Trust Ltd.; Minutes, 1927-1961. Reports and accounts, 1927-1961. Scottish Allied Investors Ltd.; Minutes, 1928-1961. Registers of members, 1913-1929. Accounting records, 1911-1934. Scottish United Investors Ltd.; Minutes, 1924-1983. Accounting records, 1940-1970. Reports, 1928-1961. Glasgow Industrial Finance (Development) Ltd.; Minutes, 1948-1961. South Western Investment Trust Ltd.; Minutes, 1944-1948.Camperdown Trust Co. Ltd, Minutes, 1966-1970, stockholders' minute book, 1954-1969. Second Edinburgh Investment Trust Ltd; Minutes, 1948-1951.

Company History
The Scottish American Investment Trust Company was established in Dundee on the 1st February 1873. Its board consisted of John Sharp, Thomas Cox of the Jute manufacturing family, John Guild, Thomas Smith and Robert Fleming.

The initial proposed issue was of £150,000, a figure that was raised to £300,000 to cope with the demand. The prospectus signalled that each £100 certificate would pay interest of 6% pa and that the trust would be wound up after 10 years. The trust’s investment policy was solely focussed on ‘The bonds of States, cities, railroads, and other corporations in the US, but chiefly in the mortgage bonds of railroads’.

Despite its launch at the beginning of a six-year economic depression in the United States, the trust prospered due to a policy of investing in established, lower-risk bonds on trunk line railways that paid an average of 7% to investors. A Second issue was announced in September 1873, with a Third Issue in 1875, both for £400,000. These three issues were converted to separate companies in 1879 under the Joint Stock Companies Act. By this stage, the First Scottish American Investment Trust Company, as it was by then known, had accumulated reserve funds of around £26,000 and was made up of ordinary share capital. John Guild was chairman of the company while Robert Fleming remained secretary for fifteen years, despite his increasing involvement in London after he established Robert Fleming and Co.

By 1879, the investments of the company were worth £350,000 over and above their £1,000,000 book value, despite the general economic depression of the time. In the early 1880s, in the grip of a depression, the company held the view that their relative immunity from the problems that afflicted other investment trusts, having to borrowings and the share being fully paid up.

In the 1890s, during the Barings Crisis, their conservative borrowing policy meant that they did not suffer the problems of certain other investment trusts in this period. The annual dividend was reduced from 15% to 12.5% but did not drop further.

In the later 19th century, the borrowing policy of the company was extremely cautious and limited to relatively small amounts on a temporary basis. This was enshrined in 1895’s limitation of the directors’ borrowing powers to 15% of capital. Only in 1910 did the trustees of all three of the Scottish American Investment Trust Companies undertook a review of their investment and borrowing policies. As a result, shareholders agreed that the directors could now borrow (on a temporary or permanent basis) a sum equal to the nominal capital ; in fact, while the company’s shares were selling at double their face value, the directors took the chance only to borrow an amount equal to the total par value of the shares. Subsequently, debenture stock was issued by all three for the first time in their histories, the first Scottish American issuing £132,600 4% debentures in that year, rising to £250,00 at the same rate the following year, the level at which the company’s loans remained until 1929.

Investment policies were also diversified around the first decade of the 20th century. While an amalgamation of the three was considered before being dropped amidst fears that such a step would invalidate long-held holdings as trust securities. For the ordinary shareholders of the First Scottish American, the dividend issued in 1910 and 1911 was 4%, rising to 4.5% in 1930 and remaining there until 1924, when it rose once more to 5% and then to 5.5 in 1925 and 1926, then again to 5.75% in 1927. These relatively low dividends were a deliberate policy of the investment trust to build up reserves: by contrast with the dividend, the percentage earned in 1910 was over 9%, and over 11% from 1912 to 1914; it them fell back to over 9% 1915-1919, then rose to just under 11% in 1920, over 12% 1920-1923 and then consistently rising year on year until 1931 when it reached 35¾%. Consequently, on 1st July 1927, the £300,000 capital stock was split 60:40 to become 180,000 4% preference and 120,000 ordinary shares. The capital was then increased to £240,000 and £160,000 respectively, amounting to a rights issue. The dividend for 1928 more than doubled from the previous year to 12%, rising to 12.5% in 1929, 13% in 1930 and 13.5% in 1931.

By 1931, the breakdown of the investment portfolio between bonds, preference, and ordinary of deferred stocks was 53.7%, 28.2% and 18.1%. The Depression after the Wall Street Crash of 1929 was a difficult time for investment trusts and many disappeared at this time. However the Scottish American Investment Trusts were able to continue to pay dividends due to their previous, cautious reserve and borrowing policies, despite the value of their investments falling from 1930 and a fall in revenue from 1932.

In 1932 the directors of the company were: A W Robertson Durham, CA, Charles Munro (manager), J Wilson Brodie CA, Alexander Maitland KC, T M Murray WS and R O Pitman WS. Secretary was A D F Torrance CA.

The First, Second and Third Scottish American Investment trust Companies merged into a single company – the First Scottish American Trust Company Ltd – in 1969. In 1984 the Edinburgh Investment Trust, First Scottish American and the Northern American Trust merged as part of the establishment of Dunedin Fund Managers. First Scottish was renamed Dunedin Income Growth Investment trust in 1990. It is still an active company to date. In February 2005, the board of directors comprised of Max Ward, Jean Matterson and John Scott.

Thanks and acknowledgement to Dundee City Archives and Richard Cullen for use of this information