"ABSOLUTE BOYCOTT."

Dominion, Volume 4, Issue 1123, 10 May 1911, Page 6

"ABSOLUTE BOYCOTT."

SHORT BUT STRENUOUS FIGHT. CHRISTCHURCH WHOLESALE CLUB. STATEMENT BY MANAGING DIRECTOR. ' (By Telegraph.—Special Correspondents Christchurch, May 9. Early in last week the debenture-hold-ers entered into possession, of the premises in Manchester Street of the Wholesale Club, Ltd. A few days later a meeting of the. principal creditors was called and a statement of the concern, assets, and liabilities was laid before it. It was stated, it is understood, that the liabilities amounted to ,£13,919, not including goods in bond for ,£3OOO. The assets shown wero stock (face value) .£IO,OOO, fittings ,£2200, uncalled capital .£6500. It was estimated that in the event of realisation the stock might bring 12s. 6d. in tlie ,£ and the fittings iooo. It is understood that the debenture-hold-ers claim amounts to ,£3OOO. At that meeting a committee was set up to go further into the matter. An adjourned meeting of the committee Was held yesterday afternoon when it' was thought some offer .might bo received for the club ns a going concern. No suth offer, however, was forthcoming. . No other feasible Echeme for carrying on being brought forward, and the debenture holders being still in possession, it was decided that the premises should be closcd and the slock put up for tender.

The club's tribulations and difficulties and the reasons for its failure were stated by Mr. George Davies, the managing director, to a "Times" reporter.

"When wo started the club," he said, "we felt sure that we had found an economic principle of trading which could be worked in the interests of the public and of all concerned. In the first' place we knew- that the essence of safe, trading was sound buying. In order to placo ourselves on a sound foundation for buying we sold our wares for the' start at a very small, profit.. 'We had been going only a fortnight when some of the warehouses in the city established an absolute boycott. We went as far as to go direct to tho warehouses with cash in our hands. Even then they refused to supply us with goods. And people call this a free, country ! However, we were not to be daunted. 'We bought out a warehouse, and took over all the goods it had landing. We could see that the boycott would bo too strong for us unless we organised a much larger concern sufficiently capitalised. There was a lot pf talk' about our balance-sheet at that time, but we were at our wits' ends to take stock, and issued balance-sheets. Just then we published a prospectus in the newspapers. The chares were absolutely rushed on the first day. If we had been left alone we have every reason to believe; the undertaking would have been a brilliant for all parties, but as soon as the prospectus was issued one of tlio city journals took up a very antagonistic attitude. The result was that the demand for shares fell off considerably, and in order to save the position the directors put their own monoy up, and subscribed for the shares. AYc then removed from Worcester Street, where we had started, to larger premises in Manchester Street, af.d began operations there. Mr. Alcorn and I took upon ourselves,, in consideration of the interests of all, to guauinteo the club to tho extent of' or' .more in' -fighting tho strenuous boycott, and in Irving to save both shareholders ■ and creditors we, have been quite conscientious. 'We: have put in our money to the last penny, and we have lost practically everything. Our concern has shown a most remarkable growth during the 12 months it has been in existence. A turnover of ,£IOOO a week has been built up. It required only a little additional capital to obtain the goods tho people needed, and tho concern could have had a turnover at tho present time of about .£ISOO a week. I know that the principle upon which the club worked is new to New Zealand, but it certainly is not new to other countries, where it has been adopted with advantage to the concerns, to the shareholders, and to the public/ In Sydney, for instance, tho Civil Service Co-operative Society started with a capital of about- ,£IO,OOO. In ten years it had built up a turnover of about .£260,000 a year, and it paid its shareholders a bonus of 11J per cent, on purchases and a dividend of 10 per cent, on share capital, and accumulated reserves to tile extent of .£30,000. I repeat that the whole thing has been a short but Strenuous fight between the organised trade of tho city and the wholesale club the organised trndo fought ns wo certainly should have fought if we had been on the other side, we acknowkdje our defeat. \\e have shown our confidence in the most practical \jay possible in the proposition we placed, before the public We have done our best-wo can do no more.