NEWSPAPER TALK.

Pukekohe & Waiuku Times, Volume 3, Issue 238, 13 October 1914, Page 2

NEWSPAPER TALK.

AN IRREGULAR FLOTATION. OUR OFFER TO SELL. i Article Number l. ) We hav written a review of i "some points of discontent"; 'an ; ' extraordinary tcheme of company f j tlnation," and the legal need for declaring the "capital of a company." But as wc promised to print tj-day the text of our offer to selj • wc are holding over the foregoing criticisms. OUR OFFER TO SELL. j As a matter of public interest we would like at this juncture ti deal more tully with th 3 flotation of companies, and emphasise the ' need for the utmost good fatih when a canvass is being made for other 9 people's money. But we cannot 1 spare the space in this issue. We 3 offered to sell so as to avoid two papers being thrust upon a comj munity which in dull times like the present tinds a difficulty in eupt porting one. In the coarse of a lecture in Pukekohe last night Mr I H. D. Bedford, who is a lecturer on economics in tin Dunedin Unij versity, said he had made an in* g vcstigation of busin«sseß in the South Island and discovered that on 8 an average they only paid 10 per „ cent, profit on ihe capital invested. " Ytt to avoid this conflict-we were not afraid of it but we disliked it, t nevertheless—we offered to sell our business at such a price that it would return JO per cent clear i profit. When that offer was ref jected, and the "Smash the Times" • advocatss prevailed, we tried to - meet them hy offering to Bell at ' such a price as would have returned - them 13 p : r cent orotit, which is ■ three pr c?nt more tbun Mr 1 Bedford says is the averace business - profit. This dues not mean that WE J have made thirtetn per cent, or 3 even ten per cent on the price the • purchasers would hive to pay. t WE HAVE NOT DONE SO, be--1 cause the losses on the first twelve i months have yet to be taken into - account. We were giving that in. Here is the text of our first letter • addressed to cur agent, dated 28th , September, 1914: I "Dear Sir,—Pursuant to our eont versation we desire to ask you to act as our agent and hereby author- . is 3 you ti offer the "Pukrkuha and Waiuku Times" for sale. We are \ willirg to sell to a group of people, f say, Messrs Wily, Dell, O'Connor, j Hcnrv, Kavanagh and Russell, at , £SO deposit with agreement, 25 per ■ cant within cne month, and the r balance within six months. This r should give the group ample opportunity in which to iioat their com- (. pany. Interest tu be paid on j unpaid balances up to six months . at 6 per cent. p;r annum. We are 1 prepared to give delivery on Septem- , ber 30th inst, which h the end of ' a half-yearly period. The price for the business—ncw3piper ani job 2 printing, machinery, type, office \ furniture, records, documents, , agency organisation, circulation and good-will—will be such a sum which, if it had been investd on March 31st, 1913, woulj have returned 10 per centum interest per annum over the eighteen months period ended September 30th, 1914. This" price will be determined by an actuary appointed by the purchasers acting with an actuaty to - be appointed by ourselves. If thf.se ; two cannot agres then the points in . dispute will be referred to a third j actuary (to be appointed by the two already acting) fur settlement. I Each party will pay their own actuarial costs and if the referee be . needed his ensts will be bome in equal proportions. With regard to the building wc will either let it to ' the purchasers tor a term of 10 years ' at £9O per annum, the lessees to pay rates and insurances, or we will sell 1 ic at the original cost to us of land and building, fittings, etc., at terms ' to be arranged. The stock will be purchased by the purchasers at laid i down cost. (We bought just befoie the rise and 'have our newspaper > supplies arranged for at a low price » for another two years.) We will pay all liabilities in connection t with the business and collect all ' debts due as at September 30th.— Yours faithfully, Eames and Cargill." This offer was not entertained a r d subsequently (September 30th) we increased our offer so that the purchasers would have made 13 per cent on the price they paid; a value was Vj be put on each piece of ' machinery and the buyers were to be allowed rejections up to 33 per cent. Like our first offer this was "turned down" also. We said in our letter: "If the directors really wsnt the shareholders to receive dividends this is their opportunity, hut if the group that are strirring up the strife are out on a campaign of vengeance wc suppose that nothing will tempt them to buy." ThEy didn't buy! TWO COWS ON ONE ACRE. It is absurd to suppose that because one business can just get along two can also do so. Here is a specimen of a balarcj sheet:- £ Total income 110 Total expenditure 100 Profit for the year 10 That is with one business. Supposing that £llO is the total volume of money available for advertising the purchase of newspapers, and so on. This means that if two businesses arc operating the total available income will remain stationary, while the total cost of production will be doubled (in practice they will bo more than doubled). Thus at the end of the year the joint balance sheets would read: £. Total income 110 Total expenditure (two papers) 200 Loss for the year 90 Without any frilling that is what is occurring over and over again in , coualry pi ices in New Zealand where two papers arc being tried. Say. Mr Farmer, you have an acre ' which ran a cow pretty well last year. Supposing you put two cows < on it this year, what do you suppose ' the result would he? Wouldn't like 1 to buy shares in the butter-fat profits, would you? R