The Evening Star MONDAY, OCTOBER 27, 1873.

Evening Star, Issue 3334, 27 October 1873, Page 2

The Evening Star MONDAY, OCTOBER 27, 1873.

We cannot compliment the Chairman of the Waterworks Company on the manner in which he brought before the shareholders the question of selling the property to the Corporation. It purlins may have been a right course to obtain their renewed sanction of the sale ; but it could not bo necessary to rake up all the unpleasant circumstances attending previous negotiations, nor to provoke a revival of those personal animosities which should have been buried when once a resolution to sell had been arrived at. At the same time, we think the reasons given by him for selling, and still more emphatically those withheld because the reporters of the Press were present, were amply sufficient to lead the shareholders to be more ready to part with their shares, than for the Corporation to be anxious to purchase. What those facts were which it would not no to have published, avc think a fair subject for inquiry ; for it seems just possible that 111036 “ shrewd business men on the Directory of the Company,” who have earned the warm commendations of the Dally Times “for using every attempt at coercion as a weapon, not only to defend themselves, hut to fortify their position, and increase the value of the property,” have managed by their shrewdness to get a very handsome price for Avhat may turn out a bad bargain for the City. The report of the discussion, published at length in the morning papers, should be carefully considered. We think the article on the subject in the Daily Times on Friday one of the most singular exhibitions of commercial ethics that lias ever been given to the world since the days of the “Unjust .Steward,” It advocates principles that, if generally received and acted upon by commercial men, would do away with that faith that it has always been an Englishman’s boast he could put in the honor and fair dealing of his countrymen. It justifies what cannot be considered other than sharp practice in the means adopted to obtain higher prices for shares that, on its representations would otherwise have been obtained “ for very little over par;” and could the statements in that precious specimen of the, morality of what assumes to be the “ leading journal ” be relied on, it would seem that the liberality and good faith of the people of the City have been taken undue advantage of in the negotiations that have led to the resolution by the Waterworks Company to sell. We can make every allowance for the position of the directors of a company. They are entrusted by the shareholders with the care and management of their property, and in every fair and honorable Avay it is their duty to see that it is not sacrificed. But avc ask what is to be inferred from the folloAving passage in the Chairman’s speech, and the reply given to Mr Wilk.il: : There Wits another tiling. Remarks hail Leon made as t<» the dividends paid running up as high as 20 per cent., hut it was a mistake to suppose that in their position they could go on paying such dividends. Tiicdr capital was nearly expended. They had no capital to enable them to supply the increasing number of houses. They were bound to create a reserve fund. Uf course the shareholders would get the money that was reserved, and they might take it as a certainty that for a number of years they ivoujd not get a dividend of 10 percent. A Voice : It is 12 just now. Mr Gillies : And nobody knows better than Mr Wilkie why. But the question Avas whether it would be wise in the future to pay more than 10 per cent., seeing that they would have to extend their works.

Is it inferring too nine]) when tlio conclusion is arrived svt that iljo “ shrewd business men on the Directory ” had an eye to the renewal of the negotiations ; and especially to the handle that might be made of a 12 per cent, dividend to obtain a better price 1 It must confessed to the honor of the Chairman that at any rate he was straightforward in his exposition of the state of affairs. Neither the Corporation nor the shareholders can be deceived as to the certainty that in future, through the necessity lor further outlay, and lor reasons withheld because ol the presence of the a representatives of the Dress,” the dividend will not ho ten per cent. —how much less is not even hinted at. The shareholders, with this prospect before them, have a certainty of 1) per cent, on the first cost of their shares for lifty years if they sell. The J)aili/ TiniP.s on Friday, with the customary modesty of its writers, tells the public this waterworks a flair is one with which, “ perhaps,” it. has u no business to meddle,” We consider it is one with which it is our duly to meddle, on behalf of the City at large ; for it is not a private matter but a public one; and our reading of Friday’s proceedings is, that to sell at £ls a share is a positive advantage to the shareholders; but to purcha.se at that

price is a very (loul)tful one to the City. But the Corporation, other conditions being unaltered, is, we consider, hound to fulfil its engagement, although the Company Ims given fair ground for hesitation hy its proceedings and the disclosures at the meeting.