CIVIL SERVICE SUPPLY ASSOCIATION.

Te Aroha News, Volume VII, Issue 457, 26 March 1890, Page 4

CIVIL SERVICE SUPPLY ASSOCIATION.

EXTRAORDINARY MEETING OF •; SHAREHOLDERS. Auckland, March 22. An extraordinary general meeting of the shareholders of the Civil Service Supply Association of New Zealand (Limited) was held at the Queen-street premises yesterday afternoon, for the purpose of consider-• ing and, if thought advisable, passing the following extraordinary resolution: —“ That it has been proved to the satisfaction of this meeting that the Association cannot, by reason of its liabilities, continue its business, and that it is advisable to windup the same, and accordingly that the Asspciation be wound up voluntarily.” There were about thirty or forty shareholders present, and Captain Daldy (Chairman of Directors) presided. Mr Bankart said before they considered that resolution he thought there should be some furbher investigation into the affairs of the Association. The Chairman urged that they should proceed in an orderly manner, the first business being the resolution contained in the printed circular. He therefore moved that resolution. In doing so, he need make only a few remarks as to the necessity of passing such a resolution. The balance-sheet, which was placed in the hands of sharehalders a fortnight ago, showed they could not carry on business any longer ; consequently they must cease business. Mr Cozens seconded the resolution. Mr Bankart eaid, beforeconsidering such a resolution, which might well be termed an extraordinary resolution, they should have an investigation into the circumstances that lefl to such a climax, though, unfortunately, no uncommon one in the life of an Auckland company. At the previous halfyearly meeting they were assured that the business was a prosperous one and that £IOO out of the half - year’s profit had been placed to the reduction of the preliminary expenses in place of declaring a dividend. On being recently called together to receive the report of the last half year, they were told that the enormous loss of £3OO per month had been sustained, when they had every reason to ex.pect something very difierpnb, as the general trade of the city had been improving by the presence of the fleet, the jubilee rejoicings, etc., and all this without the shadow of an explanation. He thought, it must be manifest to all that their working expenses were out of all proportion to their capital. He would like to know the particulars of the last six months’ trading, and to see if it were practicable to bring about a different state of things. Their auditor assured them that all was well up to August last. What was needed was a statement in detail of each branch in stock, salaries, rents, stationery, cartage, and other working expenses. They were informed at the previous meeting that about £4O a week was incurred over and above the salaries of the working assistants, etc., and yet in the London Association one paid manager conducted the whole business for many years in one warehouse. He (Mr Bankart) therefore submitted that these numerous branches, entailing a large staff of assistants and increased stock, as well as the supply of others than members, or giving credit, was nob contemplated by the articles of association, and, moreover, Captain Daldy admitted as much at their last meeting, and that the directors had violated the articles of association in two particulars—in giving credit, and by supplying the general public. It would be in the recollection of members that at the first meeting of shareholders, the directors of the Association bound themselves to be personally responsible for any credit that might be given in contravention of the articles of association. One practical manager and one central establishment was all they required. There were no grocers m this town, or this colony, that could support such an official staff as they employed, whilst with one manager and a small staff a good business still existed for the benefit of the shareholders. What had they to do with opening an agency and shipping department within the last few weeks, as had been stated in the report ? He would like to have a denial of the report that they had built a store at Helensville, and in conclusion would submit the following amendment: “ That three or four gentlemen be selected to go through the books, accounts, etc., with the managing director and his staff, and present to a future meeting a statement in detail of the working of each branch, and that of the central establishment, showing the various salaries and gratuities paid in lieu of notice to managers and assistants, and the stock, rents, stationery, cartage, and other expenses incurred during the last six months, from August Ist, 1889, and be authorised to take the necessary steps to close the various branches, if not already closed, and give notice to the managing director and all other managers and employees, \yith the view of confining the business to one establishment, and that managed by bub one working, practical manager, an assistant, and a" small staff whj.ch will be at once satisfactory to the wholesale houses aqd the shareholders.” Mr Williams seconded the amendment.

Mr Lester said he would like to know whether any pressure had been brought to bear upon the directors so as to cause the proposition of the resolution moved by the Chairman to wind up the Association. It seemed bo him that the report presented at their last meeting had been in. the first instance highly favourable. Judging by the construction of that report, it seemed as though what was at first drawn up as a favourable report had been subsequently combined with an unfavourable report. It appeared, also, by the printed notice as though the directors had not entirely made up their minds to go into liquidation, and it had nob, as a matter of fact, been proved to his (the speaker's) satisfaction that it was entirely necessary to wind up the business. As a shareholder, ho did not place any great value on his shares, but he thought it would be a great satisfaction to all of them to know how the money had gone. If it were only for the credit of Auckland, and for the credit of men in high official positions, t would be well for the whole thing to be cleared up.' The Chairman, in reply, said .there had been no pressure whatever brought to bear upon the directors to cause them to resolve upon proposing such a course. When the balance-sheet was placed jn their hands by the auditor, jbhey said, “We must stop this sort of thing j we are nob in 'a position to go on.” When they commenced to draw up their report, they had not received the balancesheet corrected by the auditor. They did riot get the balance-sheet until within the last two days, and then ‘ they saw that it would be better to wind up. Mr Edwards said he could not understand how they got to be in such a position when they gave a genjbleman £3OO a-year 1 to look after the interests of thef Association; He had been robbed' by" this Assotaafciob';

and there were others who had been robbed, and he considered it to be a great scandal.

The Chairman : I must call you to order, Mr Edwards.

Mr Edwards : l am determined to speak my mind;

The Chairman : Well, you must confine your remarks within reasonable bounds. You may find all the fault you can with us, but go no further than that.

Mr Edwards, proceeding, said that two years ago they had a manager at £2 per week. They dismissed him and got Mr Earle, making him manager at so much as £3O per month. That gentleman could noc raise the returns above £llO, and yet he was getting £3O a month from a business in its infancy. The Chairman said he would reply to some of the remarks made by Mr Edwards. Naturally that gentleman felt very sore, and he (the Chairman) likewise felt very sore. They had been very foolish, but they had been very foolish so far as theft 1 own interests were concerned, for the directors and their families held one-third of the shares of the Company, and whatever loss was sustained they would be the greatest sufferers. He stood to lose £I,OOO himself in this concern, and Mr Wildingstood to lose nearly £2OO. If they had wanted to swindle they could have withdrawn a great deal of that money, but when they found the position the affairs of the Association were in they said; “We will shut the door, and allow no one to take anything out of it." They had stood in the breach and had tried to carry the business on, but without success. He wished he could tell how it was that the loss had come about, but he could not fathom it himself. They had tried everything they po-sibly could, but they had not succeeded in tracing where the deficiency was. He had a very good idea where the loss came in, but he could not prove anything beyond that there had been a loss of £ICO on butter during the last half-year. They took over Earle and Montgomery’s business because they were recommended to take it over. They took every precaution in taking this step by going into the books. Mr Earle was recommended as one of the best men to carry on the business of the Association.

Mr Cox was of opinion that Mr Edwards’ case was one of peculiar hardship. He was dependent upon the successful investment of a certain sum of inopey, and within six months ago he spoke to the managing director of this Association on the subject, and Mr Wilding assured him that the Association was a safe investment, and that he (Mr Wilding) was himself putting in another £IOO. Mr Edwards then put in £l5O, and within six months, or less, the whole thing collapsed. The Chairman, in explanation, said that at the very time this interview took place between Mr Edwards and Mr Wilding, the directors were so much in the dark that he (the Chairman) took 150 shares as well as Mr Edwards. Mr Wilding took 100 shares, and Captain Worsp took 100 shares. Did the shareholders think they would have done so if they had known the affairs of the Company were going to the bad ?

Mr Wilding, speaking with reference to his interview with Mr Edwards, said that what Mr Edwards had stated was correct to a certain point. Mr Edwards came to his office and asked for information pretty much in the way he stated. He (Mr Wilding), however, refused to give him any advice whatever. He said, “Captain Daldy and myself have taken additional Bharcs ourselves ; if you like to take that as an indication, do so.” As far as he (Mr Wilding) was concerned, he had never once, from the very first until the present time, asked anyone to take a share in the concern. Mr Edwards said ho was induced to come to Mr Wilding by an agent of the Association. He went into Mr Wilding’s office, and ho asked, “Are you buying for cash, do you sell for cash, and have you any bank overdraft?” and he replied, “We have nothing of the kind." He (Mr Edwards) then observed, “You did not pay a dividend last half year and Mr Wilding replied, “We expect to pay one this.” Of course, there was also Captain Daldy’sspeech as to things being in an excellent state. He now asked was this all true, or had the directors entirely deceived the shareholders in the statements made that they had been buying for cash, and selling for cash, while they were buying on credit all along ? The Chairman : I say we have been buying for cash. ing on credit.

The Chairman : We have been paying on the month’s purchase. Mr Cheal said he did nob pub so much blame on the directors as did some shareholders, although he believed the directors had been guilty of an error in judgment. Captain Daldy said he did nob know where the money had gone. He (Mr Cheal) found the Association had been supplying goods to outsiders, and that these goods had been supplied at too low rates, and it had been a case of cut-throat euchre. That might be right enough if they had made sufficient allowance for depreciation, but they had not taken this precaution. The Chairman agreed with Mr Cheal that they had been supplying goods at prices at which they should never have been supplied, but they were deluded into it. It was impossible to ascertain anything. of this kind except at the expiry of the halfyearly periods, their turn-oyer being some £4,000 a month. The anipndrhenb moved by Mr Bankart was put to the meeting and lost, only four votes being recorded in its favour and about sixteen against.

The Chairman moved, “That Mr H. Wilding be appointed liquidator for the purpose of such winding up,” and this was also agreed to. The Chairman moved, “That Mr E. P. Dufaur, as representing the largest creditor in the estate and who was nob a director in any shape or form, and W. C. Daldy, beappointed to supervise all matters that may arise in such liquidation.” Mr Cozens seconded the resolution.

Mr Jno. Douglas was proposed by a shareholder to take the place of Captain Daldy, but this amendment was not seconded, and the motion was carried. The Chairman then moved, and it was agreed, “ That the remuneration of the liquidator be the same as Mr Wilding is receiving at the present time, at the rate of £3OO per annum.” He added that they hoped to have the affairs wound up in a month, or two months at the outside. Mr Edwards moved, “ That the conduct of the directors in withholding from the shareholders the true state of the finances of this Association, and at the same time publishing such flaming reports with reference to the prospects of the institution, and its capacity for usefulness, is highly reprehensible. ” ' ' * .'' Mr Bankart seconded the resolution, which was put and lost. • . ' ' ijir Cozens then moved, “ the directors be thanked for.their services, and that the shareholders; while regretting the result, feel satisfied that the directors brought business ability and intelligence to bear in the management of-the affairs of the Association;.” . ' - ' •'

This was seconded ana carried, and tht rough minutes having been rehd, the ineee irig concluded. v. ‘-v- . - a-vi-