The Daily Telegraph. SATURDAY, SEPTEMBER 27, 1884.

Daily Telegraph (Napier), Issue 4114, 27 September 1884, Page 2

The Daily Telegraph. SATURDAY, SEPTEMBER 27, 1884.

Undeh the heading of "A Model Board," Money, of July 30, an English journal of high standing, publishes a very severe article dealing with the directors of a certain public company, the interest in the article as regards colonists arising from the fact that one of those directors was Sir Julius Vogel. The company referred to is the Consolidated Telephone Construction and Maintenance Company. Fourteen months previously the journal in question had written in the following strain of some companies placed on the market:—" The names of thorougly intelligent and respectable business men are now-a-days lent to projects which have primarily for their object the payment of largo sums to promoters, whose own names would carry no weight whatever, but probably the reverse. But wo said then we had to do with the results shown by some companies which evidently, from the names on the directorate, were the offspring of a ' telephone ring.' " Then follows a long examination of the position of the company, reprinted from its former article, and which did not speak well of the company or its solvency. "We also pointed out that Sir Julius Vogel, Colonel Gouraud, P. Carnegy, J. P. Bigelow, and Howard Spenslow were amongst tho directors of the parent concern, and also interested in tho others. We said that these were no doubt gentlemen of social position, but men whose business qualifications were only known in connection with such companies ; that the shares of the companies had been at a premium, and that whilst at a premium those of the vendors had been freely sold. And we showed that the concerns were interlinked, and that suspicions must attach to all concerned in bnsiness of such nature, in which bad _ reports follow good reports, and fluctuations in market prices are extreme." As if that might be considered light sparring-, the article goes on, "We distinctly hold tho opinion that it is impossible to be connected with undertakings in which the interest of the promoters rather than the benefit of the public or the shareholder is the chief object, and not bo besmirched with that brush that tars so many of the shady characters who form the sombre background of city life. A committee of investigation had been appointed, and when their report was submitted Colonel Gouraud, Mr Carnegy, and Mr Spensley were called upon and did resign. "Indignation was expressed at the fact which transpired that Colonel Gouraud and Sir Julius Vogel (who had ceased to be a director were on the allotment committee together." From the report we learn that when tho shares were allotted, on the 21st April 1881, Jtoo total applications amounted to Bib,bit, and oi these applications for 092,712 shares wore refused. These refusals did not debar the directors from allotting themselves shares far in excess of their applications. Sir Julius Vogel applied for "1,000 shares, and had 15,000 allotted to him, nf which he at present holds 625, having sold in the interim 14,375 ; Gouraud, who applied for G,OOO shares, got 15,000, of which he holds at present 625, having disposed of 14,375 in the interim. Those two directors were on tho allotment committee. Sir A. Armstrong, who did not occupy a place on that committee, thoucrh a director, only got 2,500 shares out of 0,"b00 applied for. The capital subscribed was £200,000, F. A. Gower, tho promoter, and a director receiving £137,-105, chiefly in cash, and that while the agreement with him handed over the whole of two patents for the whole world (except for France and North America), as a matter of fact this was not the case. Gouraud and his associates had already sold the Oriental patents to another company; the European patents had already been given to tho Edifion-Gowcr-Bell Company, and in reality this model board had given up the

Gower patent to the latter company, had provided it with £15,000 working capital and lent it £10,000, and was itself working in Portugal under the Gower patent. All that the Edison interest provided were the Edison patents and the concession to work in Portugal, which had cost a few hundreds only." In April and July, ISB2, we learn, dividends at the rate of 10 per cent were paid, and the one pound shares were sold at fifty shillings. In 1883, when no dividends were paid, the shares gradually receded from H, their opening price, to j-, the lattery being "the ruling quotation since.. The article concludes as follows :—" Now, it will be seen what opportunities were to tho hand of these persons, who, absolutely behind the scenes, refused allotments to others, allotted themselves five times the amount of their own applications, and having- thus got 32,500 of thuso shares, then at a premium, have since sold out 30,625. And these persons, forsooth, were acting in a trust capacity for others, and in this way discharged their trust. We do not know what epithet to select by which to describe their conduct. We would rather leave it to each of our readers to form his own opinion ; for the word we should select would, we fear, besmirch our paper almost as much as such conduct besmirches the reputation of the 'model board.' "