PETROLEUM.

Taranaki Daily News, Volume XLVII, Issue 8108, 12 May 1906, Page 2

PETROLEUM.

A NOTE OP WARNING. TO THE EDITOR. Sib, —Not only the shareholders of the Moturoa Company, but also the people of Taranaki, have reason to be grateful to you for your very powerful and able leader on this subject. At the present rate of shares, the property of the Moturoa Company is well worth £50,000, which is the price in paid-up shares that is said to have been arranged for from a Wellington syndicate, who are in return to beoome the sole owners of the company's property. From a pecuniary point of view it would be better to sell shares at £6O per share, and have done with it. But, if Mr Pair's estimate of the oil is correct (for, of course, that is all we have to go on)—and that it is generally believed that it is oorrect, the present prices of shares conclusively prove—the oompany's property is worth far more than the £50,000 fully paid-up shares (not oash, mark you) for which the shareholders are asked to sell to outsiders, and it would therefore be a mistake, commercially, to deal with the Wellington syndicate But the company was subscribed, not for shareselling, but to get oil and manufacture it into kerosene and other products. If the Taranaki company sells to a Wellington company, especially one that loads itself with £50,000 of fully paid-up shares and speculative brokerage and law costs, and does not, before the sale, underwrite its contributing shares, Taranaki loses all assurance of bona fide work being done. As you say, it is not yet too late j in faot, there is nothing whatever yet done which compromises, or is binding on, the shareholders, as Messrs Fair and H. Weston went to Wellington without consulting them, and witheut any authority to sell. I cannot believe that they have professed to make any binding agreement. What I understand took place was communication with a Wellington solicit, r, aad Mr Harcoart, a very pushing Wellington shareb 'oker and auctioneer, and probably some othor persons, and the result was that they (evidently hurriedly, as they wefe only a fow days in Wellington) came to an und rslanding that they would recommend the sale. It is rumoured that it was stipulated as conditions that a firm, which shall be nameless, should be the solicitors of the company, and get £SOOO (cither in cash or paid-up shares, and either out of the present shareholders or out of the new company) and that Mr Harcourt's firm should be the sole brokers, and no shares be allotted except through them, and that Mr Fair should j be engaged at £IOOO per annum, but this I cannot believo. Neither Mr Fair nor Mr Weston, whatever their qualifications may be in other respects, would surely take upon themselves a taA requiring deep commercial ability and business experience which the sale of the undertaking and arranging for flotation of the new company involves, still less to consent to such peculiar conditions. It appears that the other directors met them the morning after they returned, and expressed their approval of the project, and there the matter rests. That this is binding on the shareholders is simply ridiculous, and, in the interests of themselves and of Taranaki, it is to be hoped that they 1 will " read and inwardly digest" your able leader, and refuse to sacrifice themselves and the district. There are ! no printed Articles of Association of the present company, but I cannot be- : lieve that any such unusual power is given to the directors as that of selling the whole undertaking; indeed, it would be unusual to give oven the shareholders themselves such a power. Surely, their property being worth £50,000, the present company can easily raise (either on mortgage or debentures or preference shares, and thoy could afford to pay good interest for the money), the few thousands necessary to sink a few more bore 3, and Mr Fair says he can strike equally good oil elsewhere at any time, and then they would have no difficulty in financing themselves, so as to erect »j refinery and establish the industry per. manently. By this means Taranaki' would be protected, and any chance of the wrecking of the enterprise by mere speculation and stock-jobbing would be ayoided.—l am, etc., .One Interested,