Soft Drinks

When Prohibition ended many a U. S. investor believed that soft drink corporations like Coca-Cola would suffer, while companies making ginger ale and carbonated water as "mixings" would greatly benefit. Last week this belief was definitely exploded when Coca-Cola common marched into a new all-time high of $200 a share and Canada Dry Ginger Ale sank to a two-year low of $8.75. Canada Dry's directors had cut the quarterly dividend from 25-c- to 10-c- a share. White Rock Mineral Springs Co. sold off to a three-year low the week before when its directors likewise sliced dividends.

Repeal has had markedly different effects on White Rock and Canada Dry. White Rock apparently suffered from the competition of cheaper carbonated waters. Canada Dry's main trouble, on the other hand, lay in the fact that with Repeal, it went into the liquor business. It bought an interest in a brewery, secured exclusive U. S. sales rights on Johnny Walker Scotch whiskey, Sandeman's wines and Cinzano vermouth. Finally it began marketing Canada Dry gin. The company now admits that these liquor ventures were not altogether successful. Net profit for 1934 of $439,500 was, according to President Parry Dorland Saylor, "not all that we hoped it would be." Like many another liquor company, Canada Dry had overestimated U. S. liquor consumption, taken a substantial loss on sales through price markdowns.

On Coca-Cola, which has successfully weathered every change in public taste for 48 years, Repeal had no effect. Whereas the average soft drink begins to lose favor after five years, Coca-Cola has shown no sign of fading vogue since a patent medicine man named Pemberton first concocted it in 1886. Every management that takes control makes more money than its predecessors. The Candlers of Atlanta, who got the company in 1892, rose from humble druggists to become one of Atlanta's richest families. Asa Candler sold out for $25,000,000 in 1919 to a group of Georgia capitalists headed by Ernest Woodruff, who with his son, President Robert W. Woodruff, now controls the company.* Since 1919 Coca-Cola has earned more than $120,000,000, split its common stock two-for-one. Last week it had the distinction of being the highest priced active stock on the New York Stock Exchange.

*Only Candler prominent in Coca-Cola today is the founder's son, Charles Howard, a director. Best known Candler in Atlanta is another son, Asa Griggs Jr., who keeps a zoo with three elephants in the front yard of his Druid Hills estate. Last month Asa Candler Jr., reported to be in financial difficulties, put up his pipe organ for sale, offered his house to the Decatur (Ga.) American Legion and his zoo to the city. Week later the Georgia Court of Appeals ordered him to pay $10,000 damages to a woman neighbor who charged that a baboon jumped over the wall of the zoo, devoured $60 in currency out of her purse.

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