Patea S.S. Company.

Patea Mail, 21 October 1880, Page 3

Patea S.S. Company.

PROPOSED NEW STEAMER. A general meeting of shareholders of the Patea Steam Shipping Company was held on Tuesday, at the company’s office, to pass the half-yearly report and balance sheet, declaring a dividend ; and to consider a proposed increase of capital for the purpose of running a second larger steamer. There were present Messrs Tapi in (in the chair), Tenncnt, 11. Williamson, Foreman, Wray, G. Horner, Christie, Adams, Conits, Gibson, ami Rev, P. W. Fairclough. REPORT AX 11 HAI.AXCE SHEET. The half-yearly report of directors stated • “ The operations of the Company have been very successful during the last six months, and profit and loss account shows a credit balance of £IO3B Os 2d, which the directors recommend shall be appropriated as follows : Dividend on 0G allotted shares of £6O each for half-year, at 16 per cent.. £720 ; balance carried to profit and loss new account, £3lB Os 2d. The dividend will he payable on Wednesday, 20th October. The directors think the time has come to extend the business of the Company, and recommend that the nominal capital he increased to £12,000, in 1200 shares of £lO each, in lieu of the present £SO shares. They would issue as many new shares as may be deemed advisable. In consideration of the value of original shares, owing to the prosperous state of the company, they further recommend that one fully paid up share of £lO be given for every £6O capital held by the present shareholders. Both old and new shareholders would then be placed on an equitable footing. If these propositions arc adopted by the meeting of shareholders to bo held on Tuesday, UUh instant, the directors purpose taking steps to purchase or build a new steamer, as soon as they see the applications for new shares warrant the same. As in any case the now shares would not be paid up before the end of the year, it is proposed to balance the company's books on the Gist December next, and declare an interim dividend to Hie present shareholders of whatever profit may then have accrued.” The balance sheet showed that the receipts for the half-year’s trading were —freights L2IOI IGs 10d, passage fares L 632 6s. towages LI 9, and deducting L 383 11s for rebates &c, and L3U3 8s for accounts outstanding, the receipts had been L22G6 2s lOd. Tin’s credit was increased by L 484 8s lid for cash in hand and outstanding accounts received .since previous half-year, and LI 12s Gd from sundries; making the total not receipts L 2702 4sld for six months ended September 30. The expenditure showed a total of L 1762 17s Gd, leaving a cash balance of L47G 2s Id. The directors recommended a dividend of 16 per cent, for the half-year, equal to 30 per annum ; thus absorbing L 720. The amount actually available for dividend would be cash in bank L47G 2s Id, and outstanding accounts L 303 8s ; together L 770 10s Id. Deducting L 720 for dividend, the apparent surplus would be L6l) 10s Id, which may ho regarded as covering possible losses on outstanding accounts. The amount allowed for depreciation on steamer is not shown. Tire book value is put at L 6,000. The workingexpenses for six months were—coal and water L 415 os Od, repairs Lll3 16s 7d, stores L 156 3s lid, salary and wages L 577 13s Gd, provider L 274 7s, and smaller items, making a total expenditure of L 1,752 17s Gd. Also a loan of L2OO had been repaid, and a bank overdraft of of L2SG IGs od, besides now office furniture L3G 10 7d, and fixtures on vessel L2l 13s. Gd. The report and balance sheet having been formally received, Mr Tenncnt intimated that he intended to move a resolution for increasing Ihc capital. A preliminary discussion ensued as to whether, by adopting the report, the meeting would not be committing itself to a resolution to increase the capital of the company, irrespective of the motion to follow. Mr 11. Wii.liamsox : Have you any information, or have you made inquiries as to new capital, or whether the trade would warrant an extra outlay ? Chairman : The directois find, and there is evidence in the Wakatu coming here with cargo trip for trip with the Baton, that there is trade sufficient for a second steamer. Our vessel is getting too small to do the general trade, and especially the trade in cattle ; and if we wont to keep the trade of the place together, it is very necessary to have a

larger boat. Our harbor is improved so much of late that since tho Patc.a was built she has become ton small ; although the rapid progress of tho place during eighteen months is almost attributable to our steamer trading direct with Wellington and Nelson. As to what steamers arc available for purchase at present, and other information required, the directors have taken steps to inform themselves, and Mr Tennent has been especially energetic in that matter. The directors feel fully satisfied that there is a trade for a larger boat. Mr Wieuamsox; 1 presume the Wakatn would still keep running, even if you got a second boat. It comes hero because tbcrc is trade, and unless you sec your way to drive the Wakatu out altogether, I don’t sec there is much reason for getting another boat. Chaiumax ; it is more for the settlers to take away their cattle and produce that the directors think a bigger boat should he put on ; also to make longer trips. Mr Amams ; If we intend giving an opportunity to merchants in other places who are to object to this report, which did not roach some of them in lime, I think we should adopt the balance sheet, and leave the report to another meeting. Air Tkxxext' : Two-thirds of the capital arc represented in this room, but any representations on behalf of absent shareholders could be considered. During the first year we were not able to declare a dividend, but wc have now arrived at the satisfactory position of recommending a dividend equal to 30 per cent, per annum. If those present think there is sufficient trade, oris likely to be, to warrant ns in putting on another boat, I don’t think it would materially influence tho decision whatever the outside shareholders might think. The directors have sufficient moans of knowing what would be the probable trade for another boat. It would be done in such a way as to get almost the entire cattle trade of the place. Wc propose to ask every one of tho settlers to take shares in this new boat in their own interest. Say wo could purchase a boat to cany GO head of cattle and perhaps 300 sheep in one trip, such a boat connected with the district would do a deal more good than another boat taking all the profits out of the place. There is no reason why we should try (o make profits for Messrs Cross Brothers. Wc could bring freight here as cheap as any outside boat could do it. There may be some small jealousy hi parts of the district as against a company at Patea, but it is really undeserved. If we put on another boat, we shall be able to treat persons all round with justice. J. am certain there is room for another boat. Wo have had to refuse repeated!}' lately to take cargoes such as timber ; and as for the cattle tradei it is a known fact that Mr Winks has been 1 down hero purchasing cattle and shipping them at Waitara or Wanganui. If we had a boat like the Kennedy, she could run down to the west coast of the other island with stock, earning perhaps LlOOi and would bring back a cargo of coal' Wc can sec that there is enough stuff'from Wellington coining here to keep two boats running. Wc should not look at the place as it is now. Wc have seen it increase one-third in population during the past six mouths. There would soon be more stock and wool to export. We think a suitable boat could he got for four or five thousand pounds, and I don’t think wc should bo running any great risk in increasing the capital of the company. Premising the report he adopted, wc should scud out circulars and lay the matter before the entire district, asking the settlers one and all to take an interest in the new boat. Of course you could not call up all this capital at once. A certain amount would bo paid on application, the other on allotment, and the rest at LI per month. We think it would be only fair to present shareholders to increase the value of their shares. You might oiler the new shares with a premium on them, or by some other means. Wo do not think our position is sufficiently strong for that, but we do consider it would be only doing justice to ourselves by giving each holder of 6 shares an extra share; that is a now LlO share for every L6O share at present held. As far as possible, wc tried to be fair to the outside public and also to ourselves in drawing up that report. Air Coutts : Not being in business here, but going about the district, I have tried to obtain the opinion of the few shareholders I have met with reference to the advisability of increasing the capital . I have asked whether they would be inclined to invest in the new undertaking ; and I am sorry to say I met with very little sympathy in the matter. A few of them look on the dividend we have declared as really very

small for the time the steamer has been running, and, with the exception of one, they would not be willing to go in for increasing their shares. I think a largo boat would be an utter failure. Cattle for Auckland would not go from Patea except on very favourable occasions because of the passage round tlie cape. Last week I asked two settlers atll.awera what assistance wc should bo likely to get, and I was told none. There arc four boats laid on at Waitara now, and they arc shipping cattle at 16s per head. I do tliiuk wc shall succeed at Nelson and the West Coast, hut I look upon Auckland as only a loss. As to Nelson, one shipload of cattle is going there every six weeks. As to the West Coast, wc have got the overland route from Canterbury to contend with. People want to buy lumps of land : they won’t care to go in heavily for steamers. Mr Texxext : As to whether any action taken by us would bind outside shareholders, of course no action taken by this meeting could bind any individual. As to the financial position, supposing wo spend L4O in advertising and sending round circulars, if the applications for shares wero not sufficient, wc could return the deposits. If wc had looked at this matter in this doubtful light when we first started this company, we had a great deal more to contend with then than now. Wc had a liver with a very bad bar, and wc did not know at all what trade we should have, and whether if we built a boat she would be able to come in and out at all times. So far it has been very successful. New shareholders coming into this company now come in with a boat that is paying, and paying very much. I cannot sec that wc arc miming any risk. We are simply trying what wc can do. If wc find that the settlors about llawcra, Carlyle, and Waverley, will not support us, we will drop the matter. Air Adams : Shrnclioldcrs invested their money in a mercantile boat, and you are compelling them to have shares in a cattle boat also. Air Tkxxext ; The boat wo shall get will be a trading boat just as much as this is, hut during the winter months, when slock can be run out profitably, wc should run stock. Air Christie : Before inclining any cost, it would he only fair that shareholders who arc absent should have a say in the matter. Air E. C. lloaxmi : There arc 21 shares held in Nelson and Wellington, out of OG, and tho 21 shares are held by 8 persons. Mr Adams proposed and Air Christie seconded that the balance sheet only ho adopted, leaving the report to a future meeting. This wasdisctisscd and negatived. The report and balance sheet were then adopted by a majority of llircc-fourths. increase of capital. AIT Texxent moved “That the capital of the Patea S.S. Co. be increased to 1.12,000, in 1200 shares of LlO each, on the terms recommended in the report : and that tiic directors bo authorised to issue new shares as they may deem advisable.” He said the matter had been sufficiently explained in the previous discussion. Alrll WilliaxsoX seconded tho motion. Air Girsox : As to the Wakatn running here, I think tho position of a boat owned by shareholders in the place would be different from that of a boat owned in Nelson and Wanganui. The same might have boon said when tho Clyde was doing: the whole of our trade ; yet the Clyde lias not ceased running. As .an importer, 1 would prefer to ship my goods in a boat owned in the place and trading direct, and one over which wc have some control as to her movements. In former limes I have lost heavily on the Wanganui bar through my goods having to go into Wanganui before coming on to Patea. The trade between this and Wellington is our chief trade. It is a trade that pays. Onefourth or one-fifth of our earnings arc from passenger fares, and a passenger trade would never be fostered by a boat calling at Wanganui in going to or from Patea. Passengers want to go direct in the shortest time : and if the passenger traffic has to go to Wanganui, that fact would depreciate the standing of our port and district, lam convinced that with a first-class steamer a very large passenger trade would he done between Patea and Wellington. As the rails get laid up the country, this would become the shortest route between Wellington and Auckland. Mr Williamson ; As to the Clyde and the Patea, the comparison is hardly the same as the Wakatu and the Patea, because they don’t run to the same port, while these two do. Air Girsox : The Wakatu as a rule takes her cargo into Wanganui, before coming here.

Air Coutts : As to the Clyde not being run off, I hear complaints to the contrary. If the Wakatu got a respectable cargo, she would come direct to Patea, as she did the last trip. Wcmust be prepared to compete with boats far superior to the Patea, now that the river is much improved. Freights would probably be reduced to 15s a ton. Wc should not go into it blindly. Mr Tkxxext: I say that by putting on another steamer, it will probably prevent larger boats from taking the traffic. If wo confine ourselves to the Patea, we shall soon see much larger boats running here, and so lose our passenger traffic. Wc want to meet the times. The Patea was suitable to the place two years ago, and she will do very well as an auxiliary to a larger one. As to the freight being reduced to 16s per ton, if reduced by tho Patea it would perhaps not pay us, but if wo would carry 120 tons in a large boat, with only one extra man’s wages, that would pay at los, while tho smaller boat would not. Air Coutts : The arguments don’t appear to me conclusive. Air Adams: The value of the Patea would depreciate with the price of the freight. Mr G IKSOX : The value of tho Patea is determined by the value of the shares. Air Coutts : As to the value of the shares, the idea of 16 per cent, sticking out worked a great big oracle. (Laughter.) Air Girsox : The argument amounts to this, that a L 3,000 boat in this trade is worth L 5,000 to us. Air Texxext : As long as this boat pays a fair interest on its capital, you can say the Patea is honestly worth it. If we can get a boat for L 3,000 or L 4,000 suitable for this trade, we should simply issue sufficient shares that would pay for the boat. We believe that we can purchase a boat for L 4,000 or L6,00t), and if so wo should not require to increase the capital to LI 2,000. Air Christie : Supposing the directors go in for purchasing a vessel, and suppose they get a loan or advance on the vessel before the shares arc fully paid up. individual shareholders would hocomcliablctw the unpaid capital in this way, that if the vessel did not realise the amount of mortgage on tho second steamer, the company’s other assets would become chargeable with the remainder. Air Girsox ; 1 cannot understand the remark. Is it that the shareholders would bo responsible for the unpaid capital of the company ? Chairman' : Yes, if they incurred the liability. But I understand the directors will not incur that debt until sufficient shares arc taken up. Air Christie : I understood Air Tenncnt to say a very different thing. Mr Tkxxext : There are 100 shares of LSO each paid up. You cannot force any shareholder to pay more than the LSO. Persons who have paid their liabilities upon present shares cannot be hound by the new shares, Ido not say wo should have any right to mortgage tho Patea. The mortgage would be on the new vessel. Chairman ; Your directors own at least half this vessel. Surely they arc not to be distrusted. Their interests and yours are identical. Air Fairim.ouoii : Suppose you succeed in getting the new boat by raising LO,OOO, and suppose the company gets into difficulties, your remaining shares are not then saleable ; and supposing the company smashes up, are not tho other shareholders responsible for (he 25 per cent ? Air Texxext : Yes, I am inclined to think so. Air E. C. Horner here read the clause in the Act which provides that shareholders in limited liability companies arc not responsible for more than the paid-up value of shares. Mr Coutts moved, as an amendment, “ That in the event of sufficient encouragement being offered by the outside the directors increase the capital to 1,200 shares of LlO each.” Air Adams seconded the amendment. Chairman : This amendment is quite in accordance with what the directors intend to carry out. Mr Adams : It is down on paper there, at any rate. Air Texxext : We should have to call a special meeting to confirm this raising of Irtish capital, according to the Act. The amendment was put to the meeting, and lost. The motion to increase tho capital to L 12,000 at the discretion of directors was put and carried without dissent. The meeting terminated.