AN UNPROFITABLE CONCERN.

South Canterbury Times, Issue 2486, 9 March 1881, Page 2

AN UNPROFITABLE CONCERN.

The half-yearly meeting of the Standard Fire and Marine Insuranee Company was held in Dunedin on Monday, Mr John Reid in the chair.

The Directors’ report stated—'• The result of the half-year’s business, owing 1o heavy losses, both fire and marine, has proved eminently unprofitable. “ Your Directors suggest that a sum of of £7500 be taken from the reserve fund and placed to credit of an account to make provision for outstanding and unadjusted losses ; and that a farther sum of £3500 be transferred to profit and loss account.” The Chairman apologised for the bad position of affairs, and moved the adoption of the report. This was seconded by a Tokomairiro man, who deplored the Company’s misfortunes. Mr hcnnic moved that steps be taken to wind the Company up as it was going to the dogs at the rate of £ISOOO a year.

Mr D. Campbell said that he noticed the item in the balance-sheet for commissions, salaries, and charges was no less a sum than £055(1. He did not know whether this was a reduction upon the last halfyear’s charges, but he knew that the Company had not been sufficiently successful to warrant such an expenditure. The Chairman said that the questions were such as were not usually answered at a general meeting. Mr Campbell—We have a right to put these questions, and I insist on them being answered.

A Shareholder—l think, Mr Chairman, there should be no secret about it. The meeting has a right to inquire about the expenses of the previous half-year, A Shareholder—ls it a fact that the Chairman of Directors has a salary of £SOO per year ? The Chairman—l have been Chairman of Directors for some time, and my salary has been £25 per year. Mr Lees—ls it a fact that Mr Charles Eeid has been elected Chairman at a salary of £SOO per annum 1 The Chairman—That is another question.

A Shareholder—l do not think you should blink any question. The Chairman—l would not blink any clear legitimate question. Mr Lees has now asked a fair question—“ls it a fact that Mr Charles Reid has been elected chairman of directors at a salary of £SOO per annum?” To that I will answer as succinctly as possible. When Mr Reid sent in his resignation, it was a matter of great importance to the directors to get a successor, and having got a successor, it was of equal importance to tnc directors, that he should make it his business to have a thorough and exhaustive investigation into every agency of the Company both in Australia and New Zealand, Before that could be effected it was necessary to make arrangements for some one to occupy the position he had to assume here during the time he was away. Hence in the interests of the country it was deemed advisable to secure Mr Reid ;s services for that time, and for a subsequent period it was arranged that he should be paid a salary of £so',) per annum. The directors did that on very mature consideration, and in the best interests of the Company. The Hon. W. H. Reynolds-—Does that cease now ? The Chairman —No ; it commences now. He has.had his salary as general manager until Mr Fisher assumed office. The Hon. W, H. Reynolds—How long does it continue? The Chairman—lt is from year to year. A Voice—ls it necessary to have two managers ? The Chairman—There are not two managers. It is the only legal way Mr Reid’s services could be rctaine 1. If I continue a director I shall consider myself bound to carry out the arrangements, at any rate for 12 months. Mr North —Will his engagement terminate then ? The Chairman—The directors could not make the engagement for more than one year. They were not empowered to commit the Company for three years. The Hon. W. H. Reynolds—Do I understand you to say that it was an understood thing that it should be for three years ? The Chairman—lt was, if my memory serves rne aright. Mr Lees considered that two chairmen of directors were not required. The Chairman explained that Mr Charles Reid had not yet assumed office. Mr Campbell—Do I understand that Mr Charles Reid is to have £SOO a year, and the manager £ISOO a year ? The Chairman—That is correct. Mr Campbell—Two thousand pounds a year for the two ? The Chairman—That is correct, Mr Campbell—Well, then, I shall have no hesitation in seconding Mr Rennie’s resolution. The Hon, W, H. Reynolds said that if the management of the Company was to cost £2OOO per annum, it would be gross folly to continue the Company a day longer. He thought they had had quite sufficient experience of the management of the Company to know that the longer it existed the less probability there was of getting anything out of it. —(Applause.) Mr Walter spoke in favor of the Company being wound up or amalgamated. The Chairman said he did not blame the shareholders for expressing dissatisfaction at the position of the Company.

Mr Bennie moved—“ That the directors be requested to convene a special meeting of the shareholders to consider the advisability of winding up the Company, or of taking what other steps may be necessary.” Mr Sievwright (the Company’s solicitor) said that it was perfectly competent to put the resolution.

Mr Joel expressed his surprise that a gentleman was to be appointed at a salary of £SOO per annum to continue to mismanage the, business of the Company. It was a fact that that gentleman had mismanaged the Company, and nothing could be more disastrous than to retain his services.

The Chairman said he fully sympathised with those who boldly expressed dissatisfaction ; hut at the same time he had good hope for the future. The Hon. Mr Reynolds said it was clear that the Company never could pay while so much was paid to the managers. The Chairman—As Mr Reynolds is aware, there is one manager in Dunedin to whom a sum nearly equal to that is paid. The Hon Mr Reynolds—l am aware that there is a large salary paid to one manager, but the one Company is prosperous, and the other going to ruin—the management of the one has been good, and that of the other ruinous.

The Chairman—Our manager has not had a show.

The Hon Mr Reynolds—The directors are responsible to the shareholders, and they ought to have seen how things were going. On the question being put Mr Rennie’s resolution was lost—l2 voting for and 2.1 against it. Mr Joel then suggested that the meeting should express an opinion upon the engagement of Mr C. Reid as managing

director at a salary of £SOO per annum. Seeing that the losses had occurred through Mr Rei ’s mismanagement, he did not think his services should be retained, and he moved— •* That Mr Reid’s services be dispensed with.” He thought past experience should be some guide to them, and that it would be better to give Mr Reid the £SOO and be done with him.

The Chairman suggested that the matter shoidd be left to the directors.

Mr Joel thought the meeting should express an opinion on the question, and that to dispense with Mr Reid’s services would be the-best guarantee of future success. The motion was put as follows—“ That tht services of the managing director be dispensed with,” and was carried, 13 voting for and 5 against it.