LOAN AND MERCANTILE AGENCY COMPANY.

Press, Volume LX, Issue 11487, 21 January 1903, Page 9

LOAN AND MERCANTILE AGENCY COMPANY.

THE ANNUAL MEETING.

SOME CRITICISMS AND A REPLY. (from ora own correspondent.) •• LONDON, December 12. iite ennual meeting of the shareholders In the New Zealand Loan and Me'roantile Agency Company was held yesterday afternoon at Winchester House, Old Broad street. Mr Dawea presided, and there was • good attendance. In moving the adoption of th» report and Wanoe-ahfet (which I sent you laat week), Ike Cbaitmaa regretted that he had to report the death of Mr Oswald, .who was 4ne of the original directors appointed to the new Board of th* Company. The vaoancy created by Mr Oswald's d*eath had been filled by Mr Warrington Laing, who bad been engaged for a good many years h business in Queensland, and who had •I*o an intimate knowledge of the frozen OMt industry.

Dealing with the report and balancetheet, the Chairman remarked that the remit of the year's working was that after payment of interest on the prior loan and Moond debenture stocks, there remained 1 the nan el £533, which wa* carried to the credit of the third debenture stock interest account, increasing that amount to ' £1238. The year ander review had been i most anxious one, owing to the drought -in Australia. The owners of stock had tan put to great expense in artificial bating in order to keep their cheep ana stock alive. He .was glad to say that the pKwpeote of rain weire better than when tb* accounts closed on the last day of June. * New Zealand had had. a fair season, and " {trices imd tilled; generally higher. Londen •nmngs showed a marked increase. ' OTer tih« previous y«ar, and the company bud xtaaasrf for anticipating further im- . Wwement from this source in the future. : " fy* quantity of wool handled by the Wtnpury was considerably higher than last je»r, in epite of the drought. Values of wool generally had been in an upward direction, amd" for tthe finest greasy merino - the advance, in comparison with this time * lut year, bad now reached fully 40 per • «Hrt>, while in the «ase of crossbred wool the improvement ranged from 40 to 80 per ~ ceat., coarse qualities, which for so loin; remained at tuch an unsatisfactory level, - jwtioipatnig kt a marked degree. The ovtktok for the maintenance of existing T«hwa might be regarded as favourable, ■ad. while the recent advance in crossbred psoduce emphasised the fact that fashion **a eelting in the direction of a coarser »tjie of l&biric—which would improve the . 3t*w Zealand business amd the export of ' ttutton from Australia—in view of the nmrtkge of merino, the demand for fine *w>l was likely to be well maintained, bowsed attention had been given in Aus-te««ai(ip-particukrly in New Zealand—to **• development of butter. The comply had good liopea of enlarging its , JSfWtious in butter us well as in cheese. ]MU frozen meat the quantities dealt with , •wiped a satisfactory increase. The busi- **• done by the company in taJlow, flax, W*% etc., fcad beeu upon an increased K»l».

next to the balance-sheet, the winutn remarked tihat under capital paid jfcrtwottld be observed that the ordonary ««» of £9, with 1C& paid, luul been re**Wl by 4928, which kid been forfeit* i jjwreeadened. The capital paid up on 2« e&aiw, £1288, formal part, of the JJ*** account. Current accounts we: - e j*fry DI99.SK, which meant that their 2*** iudebtednese was decreased by this J**"*- The aioount of £108,214 New SSrjd Land waa increased by ?*•*• Thci was cash belonging to the ?**«<ion employed l in th<s company's I?™***- On tne other «ide of the ac"J* tJ *re *as a liability of the Asso~*™*a Tinder the same heading of £552,658, wJiieh there was this cash asset. balance was fully represented !>y etc., belonging to the Assoriiiy suspense accounts which totalled j*j»*'*> *na <i new item in the balance- , JjrJJ.' l^e ivniount standing to the r t^*s, account had arisen 7»*| Tarious sources outaide the ordinary 2fc? °* l^*'r butfiness, and could Oβ treated aa lvrenue appertaining to jvar: therfiore a- suspense JSP* 8 * had been opened, the proceeds of • Srjjl <w»ld Lo utilis.?d in t.h<? future for Jw* purpwswj and in whatever way deriu3*»t The Mooroes from which that arose were various, such as r<• r*** on prefejtaice »hure*i since 1897. ie"•Jjw* on prrfertii'.e »hat*s before 1897, re- ' uSS* old "hares by the Of- & I. J^* oe * Ter » an< i oa forfeited aharta, «tc.

Contingent liabilities were considerably reduced, for during the year the Board" had completed the nj-organiation of the capital account of the New Zealand Land Association, and had reduced the nominal issued capital of that Company to substantially the figure at which it, had" stood in the Company's own balance-sheet since 1897. They had also re-organised the Association's debenture issue, which -was now put upon a permanent basis in the shape of debenture stock. These alterations had enabled the directors to strike out of their belanca-

aheet the contingent' liability -cm shares held by the Company in the Land Association. On the other side of the account, cash with bankers, etc., there had been an increase of about £84,000. and it now stood at £234,054, which was somewhat large; but those balances had been placed upon d<_>jKwit from time to time, and us deposit rat«s bad ruled rather high, the Company had benefited by the interest earned. The Board had preferred that while the drought looted, new and fresh advances /should b« limited, keeping in hand "rather larger cash balances so.as to meet any unexpected requirement. Advances on wool and produce were reduced. Under secured loans and other advances and properties and stocks belonging to the company, a decrease of £171,796 would be noticed; tnw was accounted for by the realisation of properties during the year, and provision thai had been made for known ioesee of sheep, etc. Mt-i'chandt'e was increase*] about £30,000; this represented station supplies, atoivH, etc., on the eale of which a very satisfactory commission was earned by the company. Dealing , next with the profit and loss account, the Chairman noted that it would bf observed that charges account had gone up £987. The ordinary charges appertaining to the business of "the year had been reduced by about £2000, but there were certain items this year of a special character amounting to* about £3000 included in the accounts which were not, and coulci not 1)i- connected! with the ordinary expenditure. Income tax in New Zealand and London had increased by £1317, while the revenue from commission, interest, and properties, after making the neceseary provision for losses of cheep, etc., and for bad and doubtful debts, showed an increase of £2720. With regard to the trustees' ocr-

titicutes, the directors had been doing their

best to prepare the ground for passing the scheme which they had in view by overcoming objections raised thereto on behalf of one or two of the principal holders of the certificates. He believed they had made satisfactory progress in that direction, but some time must in any case elapse before they were in a position to proceed with their scheme. 1» conclusion, the Chairman referred to a circular which had been issued to come of the shareholders and to the Press, by Dr. Moody, and then formally moved the adoption of the report and balance-sheet. The motion having be*« duly seconded, Dr. Moody said they had a report which showed the Company to be unable to pay interest even on ite third debenture stock.

During the past five years the charges had been enormously increased, the increase being about £25,000. No satisfactory ex-

pltuiation of that, he ventured to say, had been given. They had heard a good deal about the drought in. Australia. But the company had vciy large interests in New Zealand, where things had been very bright. He took it that the company had

larger interests in New Zealand than Messrs Dalgety and Co., or than Mews

Goldsborougb, Mort and Co., yet during the past two years Messrs Dα-lgety ana Co. Nad had an expenses ratio of about 35 per cent., Messrs Goldsborough, Mort and Company's was about 40 per cent., and the Loan and 'Mercantile 'had the enor-

mous ratio of 63 per cent., which wa? altogether out of proportion to the earnings. Yet he could get no information about it. Hβ could get no information ac to any of the directors having visited the colonies since their election. Relatives in Sydney had informed him that in spite of the contraction in business there the company still continued to advertise on the most lavish ecale, and to solicit business on terms which must be the reverse of profitable. Then they Had very fine offices in Baeinghall street. What was the rent? ("Oh." "Come, come," and "Don't talk twaddle.") Then the company owned shares and debentures jn the New Zea-

land Land Association. That meant t*ro sets of directors and auditors, and he had been unable to get any information about t hat. He altogether disapproved a system of finance which could to© described as

"wheels within wheels." He waa not personally hoetil* to the Board, but they had forced him to issue his circular.

Mr Charles Pharazyn eaid from the Chairman's speech and from various reasons, he believed the Company was going

to make a start and be a, successful Company. There wae every reason to expect that. In (reply to Mr Cumming, the Chairman eaid the . Board believed the balance-sheet represented the capital of the Company. He believed the Company was strong, and he believed when the trustee certificates were cancelled, the shares, when they weri able to pay a small dividend upon them, wuuld become of value, and it .would not 'or necessaoy for shareholders to pay £4 to get rid of them. The Chairman, in replying to Dr. Moody, complained of the means adopted by that gentleman to bring the state of the Company before the shareholders. The firstpoint In the circular was that the aaset" had been written down £3,000,000. "brought about by disgraceful' management." {" Absurd.") The present Board was not responsible for that. Then Dr. Moody complained that they drew special attention to the '"valuable mercantile connection' , of the company. He should continue lo draw that attention. Shareholders knew there was no probability of receiving dividends on the ordinary or preference shares until the trustee certificates were cancelled.

It was the main object of the Board to deal with those certificate*. In five years they

had lost sheep to the value of £120,000; that lose had all Seen provided out of revenue. That, waa something. As to compaiiison with other companies, there waa no recognised system of bookkeeping in sucli companies, and comparisons therefore were out of the question. Aβ to Dr. Moody not having had information, he had been shown the accounts of the Land Association in the office. They could not let the accousita go out of the office.

("Hear, hear.") Tuen, while Dr. Moody complained! m Mβ circular, he increased hia holding in the company. And as to t>h« Land Association, if they buried that tomorrow they would never carry a scheme for dealing with the ffbstee certificates. The resolution to adopt the report having betn carried, Mr Pharasyn proposed—"That this meeting regrets that Dr. * G. T. Moody has thought proper to address «• circular to certain holders in this company, in which

lie unfairly criticises the conduct of the Board; ttiis meeting deprecates ?uch action, and considers any such public criticism is uncalled for and impolitic, and now , expresses full confidence in the ability and integrity of the directors." He said he had hear 3of Dr. Moody as a scientific man. but never as a business man. SaUu-ie* paid to men of large business houses may seem big to those paid , in -half-starred scientific institutions; but £1000 a year was Tery little to pay for brains in business. Mr Broughton, as a large shareholder, seconded the resolution. Dr. Moody rose to reply, when there was considerable interruption, the meeting having already been a prolonged one There were cries of " We have had enough of this." Eventually Mr Pharazyn, at the Chairman's suggestion, withdrew his proposition. (Dr. Moody: "I am quite prepared to stand by every statement I have nuide. , ) It wan "decided by a large majority to close the discussion. The retiring directors and auditors having been elected, the proceeding closed with the customary votes of thanks.