MUTUAL INVESTMENT SOCIETY MEETING.

New Zealand Mail, Issue 19, 3 June 1871, Page 4

MUTUAL INVESTMENT SOCIETY MEETING.

The Seventh Annual Meeting of Shareholders in this Society wa3 held at the Athen»um on Tuesday night at 7.30. J. Woodward, Esq., occupied the chair. The meeting was well attended.

The business of the meeting was opened by the ohairman reading the advertisement stating the business for which the meeting had been convened, and then called upon the manager to read the report for the year. Mr Alien then read the report and balance sheet. The following is the report : SEVENTH ANNUAL REPORT The committee regret that in the year just terminated no improvement has taken place in the state of affairs m this province, and, consequently, that the depression under which the pastoral and agricultural as well as the mercantile interests were suffering during the previous year, still restricts the operations of the society. This is especially noticeable as respects the realisation of shares, compelling the committee to resort almost entirely to advances by way of mortgage. In this way a large portion of the money of the society has been employed, but still leaving the bulk of the shares to be provided for when the respective classes of the society shall terminate. The whole of the mortgage on the Reclaimed Land has been paid off, and with a portion of this money a further investment has been made in Treasury Bills, raising the amount of those securities now held to £21,000. This amount is larger than is desirable, but as it precludes the necessity of keeping a large unproductive balance in the bank to meet possible demands on the deposit aocount, it cannot be regarded as disadvantageous to the society. The following are the statistics of each class, with a summary of the transactions in respect of each during the past year. The full particulars are in the balance sheet appended hereto. Class No. I. During the year 76 shares have been cancelled, and, as no new shares have been created, the number now current is 3,611, of which 1,372& are realised and 2,238£ unrealised. Advances on mortgage have been made to the extent of £15,922, and mortgages, representing £13,897 Is 9d, have been paid off, leaving the amount thus advanced £45,929 ss. A sum of £1,410 has been advanced on unrealised shares, making the total sum so advanced £4,767. A sum of £23,000 has been advanced to Class No. 2, by way of loan, of which £2,500 has been repaid. The accumulated profit in this class amounts to £l3 per share. Class No. 11. In this class 24 shares have been created during the year, 54 shares have been realised, 253 shares have been withdrawn, and 101 shares cancelled by repayment of advances. The Humber of shares current at the close of the year was 3,518, of which 425 are realised and 3093 unrealised. The sum of £36,198 has been advanced by ■way of mortgage, making the amount advanced on this account at the close of the year £36,324. A sum of £565 has also been advanced on unrealised shares but as 30 of these shares have since been cancelled the amount now stands at £334. The accumulated profit in this class is £1 17s 2d per share. MATTERS APEECTING THE SOCIETY AS A ■WHOLE. Bules of the Society.—ln compliance with a wish expressed at the last annual meeting, the rule*have been reprinted, but although,

this has been made known by an announcement in the society's office very few copies have been applied for. Eate of Interest.—The committee has had its attention directed to the reduction in the rate of interest in the colony generally, but has not as yet seen its way to make a change which would alter the constitution of the society. The matter is, however, kept in view, and, if the reduction should prove permanent, the committee will be prepared to submit some suggestions to the shareholders to meet the altered circumstances. Land Transfer Act.—The committee has had under consideration the Land Transfer Act of the last session of the General Assembly, and is convinced of the advantages that would accrue both to the society and to individual shareholders by having the lands on which advances have been made brought under the operation of the act, so that future transactions may be both expedited and cheapened. The committee has therefore resolved to suggest to the shareholders that if any considerable number shall express a wish to have their land brought under the act, the committee will take steps to have the manager of the society appointed a land broker, with the understanding (to which Mr Allen assents), that all fees are to belong to society. The committee will thus be able to offer to shareholders the following advantages : Ist. That no broker's fees be charged on properties whose declared value does not exceed £2OO.

2nd. That shareholders who prefer it may have all the fees paid by the society, the amount to remain as a debt upon the property, and to be paid, together with simple intereat at the rate of 10 per cent per annum, before the property is released, whenever that may require to be done. Election of Members of Committee.—Three members of committee, Messrs Allen, Woodward, and Yates, retire by notation, and Messrs Allen and Woodward being eligible, are proposed for re-election. Mr Yates has removed to a distant part of the province, and therefore does not again offer himself. His resign ation was tendered to the committee about the end of 1870, but as it Avas so near to the period when he would necessarily retire, the committee thought it more respectful to the shareholders not to accept his resignation and fill up the vacancy* as empowered by the rules, but to leave the choice of a new member to the society at its annual meeting. Two additional candidates, Messrs J. E. Nathan and Gh H. Vennell, have been proposed, so that for the first time in the history of the society there arq four candidates for the tnree vacant seats. As the proper course of pvoceeding under these circumstances did not appear to be clearly indicated by the rules, the committee consulted the solicitor of the society, and have made such arrangements as it is hoped will prove satisfactory to the shareholders. To do this the committee has had to exercise the power given by the 21st rule, and the construction that has been put on the rules bearing on the subject of the election, together with the general arrangements for the election, will be found as an appendix to this report. J. Woodward, Chairman.

Wellington, 16th May, 1871. On the Manager proceeding to read the appendix to the report, Mr Nathan signified his intention of withdrawing his name as one of the additional candidates as members of committee. The Chaibman said that in the ordinary course of business it devolved upon him to adoption of the report they had just faearcLread. The long experience of the kindness and consideration with which they had received him on all similar occasions encouraged him in the performance of his present onerous, and, in some respects, unsatisfactory duties —unsatisfactory because, as the report informed them, the society found themselves much in the position of a person having charge of a business which was not in the flourishing state he could have desired, or that previous anticipation might have led him to expect : their labor and responsibility appeared to be precisely in the inverse ratio to their success. Tbey had, however, the consciousness that what they had done was all that could be done. In proportion as that result had been not what they had hoped for, in so far might their affairs be said to be unsatisfactory. Apart from that, as far as he was aware, there was nothing that might not be passed almost without remark. The balance sheet which had been placed in their hands, and which they had just heard read, showed fully and clearly the present position of the society, and the nature of the operations which the society had engaged in. There was one point on which a misapprehension existed that he was very anxious to explain, as it involved a curiously apparent discrepancy in the report. In the first item, under the head " assets," class No. 2, it was stated that advances on shares amounted to £21,225, while in the body of the report they read that the advances were on 425 shares. A very slight exercise of arithmetical skill would, however, show that the figures were correct although they might seem to be incorrect. A question had been asked him that day which might perhaps have been entertained by many of those then present as to what was meant to be understood by the statement under the head " receipts on cash account, Class No. 2," to which he would answer it was interest received on mortgage on everything outside the amounts paid on realised shares. With this exception, he was not aware of anything in the accounts on which he need dwell; in fact, the real point of interest in the report was indicated in the second paragraph of the general statement. On the question of the rate of interest, considerable feeling seemed to be entertained abroad that the rate of interest hitherto obtaining

was being permanently altered, and that therefore it was time the society should be prepared to make some alteration also. This feeling the committee had become aware of, and fully sympathised with the motive. He would even go further, and say, not speaking, of course, in his position as chairman of the society, but as a member of the community, that it was felt by the committee as a most desirable thing that the rate of interest should be reduced, and the community receive any corresponding benefit; but when it was sought to make a practical application of it to the circumstances of the society, that was altogether a different matter. With reference to what they were told in the report, as regarded Class 11., it was quite clear that such a large number of shares as they had remaining in their integrity, and requiring to be provided for, indicated the necessity of some sort of change. No doubt, the progress of this class had not by any means answered the expectations which were entertained at the time it was floated. Erom all the experience he had had it seemed not 'to be so much a question of rate of interest as a question of demand for money, as it had been apparent for & considerable time that the same demand for money did not now exist that the society had experienced in the early days. Many of those present could remember the time when there would be 40 or 50 competitors for a single share, and that only one, or two at most, would excite that competition. The true business of the committee was the advantageous working of the society, and that, he thought, should no longer be limited to. the town. Their operations should also extend to the country—in encouraging and aiding settlers who were really making the country of the future. This could not be done by encouraging multitudes of small buildings within this town or in any other town. Unfortunately, however, there had been a very small disposition evinced by settlers to extend their operations in this way during the last two or three years. There had been no increase to their numbers from any new occupations, or new fields of enterprise; and the consequence was that the society, like everybody else, had to some extent been affected by the prevailing depression. From this it appeared that to reduce their terms of interest, leaving everything else unchanged, would effect no good purpose. It was not part of the business of the evening to discuss that question, as it involved many others of too delicate a nature to be gone into without preparation, which could only be dealt with by a special meeting called for that purpose. By this means the views of the whole body of the shareholders might be ascertained thereupon. In the meantime, he might be permitted to say on this subject of the reduction of interest, that there were two modes in which a reduction could be initiated. It might be done by reducing the rate now chargedtoshareholdersin realising their shares, or that a smaller payment by them might answer the purposes of the society. This, however, he thought would be but a small relief. Supposing they went back to the rule so successfully adopted in the society which expired lately—the Land on Deferred Payments—and reduced from 15s to 13s 4d per month, did they think they were likely to realise any more than they were doing now ? He confessed that neither his experience nor judgment could warrant him in holding such a view; and he should only be glad to find that his judgment had betrayed him. Another mode, and apparently a tangible and easy one, which presented itself, was to reduce their rate of interest on money lent on mortgage. That he did not look on as their proper business. They were only justified in resorting to that when the demand by their own shareholders ceased. They had, of course, been made aware in the course of business that changes had taken place in monetary transactions, and that capital was being obtained at lesser rates of interest than the society had been in the habit of charging ; and the question naturally arose —Why don't we also do it, and not allow our money to accumulate ? Well, the accounts did not show any very large accumulation in that way. They had had large accumulations of course, as all of them were well aware, to the amount at one time of £615,000. It was also true that they had met the case, and accepted a favorable offer, by which they allowed a large sum of money to go at a lower rate of interest than they had been in the practice of accepting; but they had only consulted the interest of the shareholders in doing so. If they reduced their rate of interest to, say, nine per cent, they were simply acting in contravention of their rule which required that ten per cent should be paid. If this was calculated month by month it would be found that it would realise just about £SO per share in ten years. He ■ would therefore ask them, how could they be expected to pay ten per cent were they to receive only nine ? This'was an unanswerable argument, and they had therefore put in the body of the report that any permanent reduc- , tion in the rate of interest must involve some alteration in the constitution of the society. How this might accord with the existing interests of the society was an open question; but no doubt the day would come when some such alteration must inevitably ensue ; but that day time alone could reveal. While they were carrying on their operations under certain rules, it was not for them to set those rules aside in order to secure some temporary advantage. Owing to the courtesy of Mr Nathan, the number of the committee would remain in future as it had been ; and although they had onerous and responsible duties devolving upon them, they should do as they had done before—not by giving way to a momentary pressure, but by taking that course which circumstances seemed to point to as the best to follow. No doubt the shareholders of the society, as well as the whole business community, experienced the effects of the fluctuations in the English money market, where money collected occasionally to such excess as to lead to abnormal development* la

matters of finance; but by equally simple and rapid processes, these were often subverted and turned back again. It was quite possible —he did not venture on the prediction—from what they had last heard from the English moneyj market, and they might, six months hence, hear of a' directly opposite state of things there: they might hear of large demands for money, and of interest being correspondingly raised ; and, looking at the matter in this way, which was not at all improbable, they might see here a reaction towards a higher rate than obtained now. As a colonist, he need not say that he desired to see the rate of interest reduced; but he was by no means sure that the time had come in which that should be done. It was pertinent to the subject to observe that in times of difficulty such as they had been passing through, the affairs of this society, perhaps more so than any other, had received the anxious and careful attention of the committee for the welfare of all —and he used the word advisedly. They had for years been managing, as their representatives, a company in which had been invested no inconsiderable sum of money—in many cases not merely savings, but a man's living, his all; and when on them rested the whole responsibility, and an unfettered discretionary power, no one could say that they had ever rigidly and unnecessarily enforced their demands. They had ever sought to deal kindly by allowing a little relaxation of the rules, and allowing matters to stand over, or making some change in the arrangements, so that a man might not be driven into dire extremities —at least so far as they might do so consistently with their duties and obligations to the society. It was, therefore, matter of gratification and pride that they could look on past years with such a retrospect. Having spoken of depression—a depression of which they were all more or less aware, and all equally regretted —he did not do so despondingly, nor abating one jot of hope in the future of the colony. The usefulness of these societies had been largely appreciated already, and their usefulness would be continued. The late respected chief of the province had often expressed how much the province was indebted to the operations of societies like this; and even the gentleman who at present filled the same high position entertained similar feelings. Among, other things, he might, not inappropriately, say that during the many years he had served with the gentlemen composing the present committee a time when various subjects presented themselves on which men's minds were divided no word was spoken on politics, or any such matter as might afford ground for disagreement ; and yet he knew well they were all prepared to take their part in all movements at the proper time. Of the transactions of the society, and its consequent usefulness to the communitr, they would form an estimate when he told thim that from 1856 to 1871 they had received jearly £388,000 ; and in the Second Class series they had received just upon £77,000 ; so that altogether they had had the control of at least £400,000, as the accounts would show. He had that day been told by a gentleman that the society would require watching. The remark had no reference to the management, as if they would require any watchfulness; but it implied that there was a time of speculation coming that would burst upon them from various quarters, and that in consequence the steadiness and prudence of the society would be tested severely within the next two or three years. The gentleman who said that was, from his experience and acquirements, as well capable of making such a prediction as any man could be. While he was hardly prepared to concur in such expectations, he still felt very sanguine that a large expansion would take place, and in which the power of the society might be beneficially brought to bear. Another point in the report to which he wished to invite their special attention was the.operation of the Land Transfer Act, passed last session. The committee had expressed their willingness and desire to aid the shareholders, if they desired it, in bringing their land under the operation of this Act—a measure which he need hardly say he considered of a highly useful nature. He was exceedingly gratified, no less than sur" prised, to hear his friend Mr Hart, in the last conversation they had together, say most deliberately that he was delighted at the prospect of being relieved from the exceedingly complicated and intricate questions frequently arising under the former system, and suggested the propriety of taking advantage of the Act. If they chose, they could therefore have their property soon placed in such a position that they would have no difficulty be dealing with ifrin future ; and, as the report expressed it, it could be done for them both cheaply and expeditiously. They were told by a gentleman from a neighboring colony, where a similar act was in operation that a property worth a large amount of money which he was anxious to dispose of had been satisfactorily conveyed in a very short time. He received an offer on Saturday and was on board a steamer on his way elsewhere with his money in his pocket, all arrangements having been completed, on Monday morning at 10 o'clock. It was therefore evident that, with all due respect to old English notions, the measure was sound and practical. It would be something inconsistent if he did not advocate such a form of transfer, for during a number of years the committee had dealings with landed property, and these transactions had always been to them a constant source of the greatest anxiety and solicitude, and they had always wished they had some cheap and simple means for dealing with land from time to time brought before them. Anyone who had had any experience in the examination of titles, in turning up masses of papers and parchments, as the auditors had constantly to do, must see that the Transfer Act was a measure of very great value indeed to them. He thought therefow

that they should avail themselves of the Act as farasthey could. They should get their manager appointed a land broker, so that the smaller shareholders might be enabled to have their land brought under "the operation of the Act without the payment of anything but the broker's fee which the Act permits. The charge might be taken entirely by the society, and be made an ultimate charge upon the property. Were this done, there was no doubt that in a few years hence it would have to be admitted that the interest ot both the society and community had been materially benefitted. As to another matter which, by the graceful remarks of Mr Nathan, he was relieved of the necessity of referring to, he trusted that the shareholders would see that no evidence of exclusiveness had been displayed. There had been a vacancy which occurred three or four months ago, but the committee could not, and did not fill it. It certainly had so happened that the committee had kept together; it might be looted upon as a high mark of their genereus confidence that never had anyone been nominated in competition with the retiring members of the committee. Personally, he felt bound to express his obligations at the courtesy which dictated Mr Nathan to do what he had done, in declining to allow his name to stand as a candidate for the committee, thereby preventing that unpleasantness which must unavoidably have been experienced to some extent by the rejected candidate. Although he had exchanged no words with his colleague, Mr Allen, he felt quite sure he expressed his sentiments as well as his own. After expressing his willingness to answer any questions, the Chairman moved that the report as read be adooted. Mr jJranSPIELD seconded the report, which he was very well satisfied with, and thought it reflected very favorably on the committee; but he regretted that they could not have seen their way to lower the present high rate of interest, when ifc was well known that any amount of money could be procured in the town at 8 per cent. He would like to know how it was they could loan money to the Government at 6 per cent (No, no) and not offer the same accommodation to shareholders. He did not think it was a good principle—nor the principle at the foundation of these societies—to squeeze as much money as they could out of the small borrowers to the advantage of those who had more capital. As to the objection that it was contrary to the rules of the society to lower the rate of interest, he could hardly see the force or justice of it. The Chairman rose to explain that a misapprehension existed. Mr Dransfield admitted the correction, but held that it was a distinction without a difference, and that practically the borrower had to pay twelve per cent for his money. Mr Dransfield then said he had great pleasure in seconding the adoption of the raport and balance sheet.

In reply to Toomath, The Chairman said that at the last meeting a resolution was pa?sed granting an honorarium of £SO to the secretary and treasurer ; that afterwards a motion was brought forward to make the payment annual; that, however, had been declined by them. Mr Toomath said that any such recognition should proceed from the committee, and not from any member of the meeting who might choose to propose such a thing. He entirely concurred with the remarks of Mr Dransfield, that ho good reason could be possibly urged against the shareholders obtaining money at less than twelve per cent while the General Government obtained advances at six per cent. He thought, besides, that realised shareholders should have the preference in obtaining advances on such rates. The Chairman rose to explain away a general apprehension which existed regarding the £IO,OOO advanced to the General Government. It was not so much a question of what rate of interest the money was lent at, as it was a question of what they were going to do with a very large sum of money for which no outlet presented itself just then. The money they had lent to the General Government was so transferred that they could lay their hands upon it at a moment's notice. This surely was better than allowing the money to lie idle. (3eai*, hear.) Mr Seed thought there was one point lost sight of by the previous speaker, viz, that this society differed in its constitution greatly from the first one. A very large number of persons it was well known had invested in the second class simply as an investment, with not the slightest intention of ever realising. There was one thing, however, that if the society were compelled to invest their accumulation in treasury bills the time had obviously arrived for them to make an alteration.

The Chairman said the whole of the money lent out at anything less than 10 per cent interest represented deposits. The Chairman begged to explain to Mr Toomath that his so-called dissent on the question of reducing the rate of interest was not that he was opposed to such an idea j but that it was not consonant to the rules of the association, as at present constructed, to do so. Mr Seed wished to know whether the question of reducing the rate of interest would receive the attention of the directors, so that it might be at a future time brought before the shareholders.

The Chairman : Certainly. The Chairman said they must recollect that they had been threatened with a difficulty in investing their surplus money at several periods of their existence as a society ; but he ■was happy to say that they had always succeeded in finding an outlet. Should such an event occur at any time, and the committee find any difficulty in advantageously disposing of the company's money, shareholders might rest assured that they would have the matter brought before them without delay.

The report was then put and adopted. Messrs Woodward and Allen were then re-elected members of the committee, and Mr G. H. Vennell an additional member. Messrs Woodward and Allen briefly returned thanks. On the motion of Mr Seed, the previous auditors, Messrs D. Bainie, C. T. Batkin, and John Knowles, were re-elected, and to receive an honorarium of ten guineas for the ensuing year. The Chairman, in seconding the proposition of Mr Seed, referred in flattering terms to the difficult and intricate nature of the duties of these gentlemen, and to the highly satisfactory manner in which they had performed those onerous duties.

This being all the business before the meeting, a vote of thanks was given to the Chairman, and the meeting broke up.