BANKRUPT SAWMILLER.

Taranaki Daily News, 17 December 1921, Page 7

BANKRUPT SAWMILLER.

DEFICIENCY OF £1503. NO OFFER TO CREDITORS. AN AWAKING VENTURE. A meeting of creditors in the estate of Reginald Clarence Mason, sawmiller, of Awakino, was held in the office of the Deputy Official Assignee, New Plymouth, yesterday. Mr. C. H. Croker appeared for several creditors, and Mr. L. Etherington for bankrupt. The statement of bankrupt showed the total assets at £1605 and the liabilities at £3lOB, leaving a deficiency of £1503. The statement continued: “Prior to 1916, when I enlisted and went to the front, I was on a farm near Gisborne. I was away till May, 1918, when I returned. For a time I was an out-patient in hospital. I had practically no capital. I went to Awakino in November, 1920, to erect a house for Mr. C. C. Gaisford. Just then Waterson’s lease of the mill expired and at Mr. Gaisford’s suggestion, who offered to back me financially up to £250, I agreed to purchase the mill from Leech and Sumner for £5OO, for which I paid £5O deposit, and the balance of £450 was secured by promissory notes. No solicitor was engaged. Mr. Gaisford guaranteed my account at the Bank of New Zealand up to £250. For the £5OO I also got the timber royalty over about 5000 acres and the mill plant. The engine was not strong enough and I agreed to purchase another engine from Mr. A. Spiers, of Foxton, for £3OO. I paid £25 deposit and the balance was secured by an instrument by way of security, providing for payment half-yearly of £5O and a final payment of £75 and interest 6 per cent. Nothing has been paid beyond the first £25. I also purchased a winch and wire rope from Laird’s Agency Co., Auckland, for about £240. I paid down £5O and the balance is owing. I put some men on to start felling and cutting and constructing a tramway. . . . . REASON FOR FAILURE.

“I knew practically nothing about sawmilling, but it was my intention to engage a manager who did know the business. I employed a manager at £32 per month. ... I had to employ about 8 men, and their wages came to about £32. I ought to have had more men, but I could not afford it. I was beginning to cart timber when a big slip came down and blocked the road from the mill for two months. In September I had to go to hospital and undergo an operation. At the same time my wife had to go into hospital for six weeks. In April I purchased a motor car from A. G. Faulkner for £2OO, paying £3O deposit, £BO to be paid in three months and £l4O in twelve months. I turned the car into a lorry for carting timber. I realised things were not going well, and on consulting with the manager and some of the men we thought we could pull through all right with local orders, but these did not come asy required. I ran the cook-house and charged the men 25s a week for food, but it was run at a loss. I attribute my failure to the fact that I had insufficient capital. Then there were the breakdowns and accidents to machinery, though wages were going on as .usual. If I had an experienced sawmiller I should never have taken over the plant as it was. I have no funds and regret that I can make no offer.” LIST OF CREDITORS. [ The following is a list of the unsecured creditors: —C. C. Gaisford (Bulls) £250; Jones and Sandford (New Plymouth) £250; J. McNeil (New Plymouth) £109; K. V. Breach (New Plymouth) £‘2o9; Lairds Agency Co. (Auckland) £190; F. H. Robertson and Co. (New Plymouth) £101; Halliwell, Spratt and Thomson (Hawera) £5; A. Carter (Awakino) £1.3; Taranaki Hospital Board £6; T. Avery (New Plymouth) £3; J. E. Nixon and Co. (N-»v Plymouth) £1; G. H. Oliver (Te Kuiti) £l2; D. Murray and Co. (Wangan ’•) £l3; Stainton and Co. (New Plymouth) £l2; F. E. Wilson (New Plymouth) £3; Arnold and Co. (New Plymouth’£26; New Zealand Rubber and Tyre Co. (Wellington) £27; Rennie and Co. (Waitara) £2 15s; Rowe and Calder (Waitara) £1 Us; Pufchafi and Co. (Urenui) £1 7s; Jas. Ross (Awakino) £2; W. C. Audish (Awakino) 5/6; Wesley and Thomas (Awakino) £2 15s; C. H. Johnston (Waitara) £39; United Insurance Co. (New Plymouth) £10; Rollo and Millai (New Plymouth) £3 10s; Wilson’s Motor Supplies Co. (Eltham) £10; J C. McGregor (Awakino) £1 10a; H. L. Northern and Co. (Awakino) £67: S. N. Fincham (Mokau) £5O; Taranaki Daily News (New Plymouth £1; Cooper, Rapley and Rutherfurd (Palmerston North) £6; Leech and Sumner (Awakhio) £450; .1. E. Nixon and Co. (New Plymouth) £96; H. Webb (Awakino) £8; Mrs. Box (Mokau) £3; Mokau Harbor Board 19s; total £2057.

The secured creditors were: A. G. Faulkner (Awakino) £170; A. Spiers (Foxton) £275; total £445. The estimated value of securities was £475. BANKRUPT’S EXAMINATION. Examined under oath, bankrupt said in ahswer to Mr. J. McNeil that he could produce a statement to show what he did with the money secured from the creditors in advance on orders for timber. Mr. Etheriagton said the books would snow how the money was spent. Mr. Croker, to bankrupt: Knowing that yo.i couli not supply local orders you came to New Plymouth for orders for the whole output of your mill. Bankrupt: I had no local orders. The total amount of timber turned out by the mill was about 30,000 feet, practically six days’ work if the mill had been in good order. The Deputy Official Assignee: Did you sell the output of the mill Bankrupt: Yes to Jones and Sandford. The D.0.A.: Then how could you sell to these creditors to these creditors? Mr. Croker: if he had disclosed his true position to those from whom he had secured advances on orders the orders would never have been given. The D.0.A.: Practically securing money on false pretences. Mr. McNeil said he advanced £lOO on his order, understanding that the timber was already cut. A creditor: My timber was also supposed to be cut when I gave the order, but it is not cut yet. I ordered 14,000 feet and on calling at the mill later found that the manager had never heard my name. Bankrupt: There is a good half of the timber cut now.

Mr. McNeil: Did you cut any of mine? Mr. Croker: And did you cut any for Jones ai.d Sanford, who had first call? How could you come and tell the New Plymouth creditors that portion of their orders were cut? Bankrupt said that Jones and Sanford had only agreed to take a certain an -it of timber per month, and as the tii. r had to be taken from the bush as they came to it in different lengths he thought he could supply all with a certain amount of timber.

Mt. McNeil said he wanted to know what became of the iqoney advanced on orders. Referring to the bankrupt’s cheque butts, Mr. McNeil said it was shown that £l3O was spent at the White Hart Hotel in five days. Mr. Etherington to bankrupt: You did not put any of this money away?—No. Mr. McNeil said the mill hands stayed on without being paid their wages on the strength of the orders from New Plymouth. Mr. Croker: The men are under the impression that the position had been seriously misrepresented to them. He was sorry for bankrupt’s position, but he was obliged to press the matter. The D.0.A.: If the creditors wish to prosecute bankrupt there are apparently sufficient grounds to go on. Mr. Croker thought it was of little use going into the books until the Crown Prosecutor had examined them. Mr. McNeil wished to go into the case further. He stated there was an item showing that bankrupt had spent over £lOO in one month in “personal” expenses. Bankrupt: Tha.t was when I went to see Spiers about a log-hauler. x Mr. Etherington: Do you bet?—No, very little.

Referring again to the cheque butts, Mr. McNeil said bankrupt had further spent £l2O in one week in personal and travelling expenses. Bakrupt: That was when I got mar-

Mr. McNeil: Did you not Know when you were spending all this money you would have to account for it some day —I thought I could ?arry the mill to SU Mr. McNeil; Living at the rate of £2OOO a year. Mr. Breach said that because bankrupt held trust money there was no reason why he should spend it at Christmas time. He was spending the creditors’ money, not his own. Bankrupt said he had made no offer to the creditors because he had been threatened with prosecution and was afraid to say anything. Mr. McNeil: You were not threatened with prosecution: that is a downright lie. We only tried to show you that you were doing wrong in spending the money Bankrupt: I don’t suggest that you actually threaten prosecution, but you spoke of false pretences. Mr. McNeil: We simply wanted to know what happened to our money, and you would make no answer. The D.0.A.: Is there any chance of your uncle helping you? Bankrupt sa<id his mother had written to his uncle on his behalf, but he had received no answer. Mr. Croker then moved that the meeting be adjourned till February 1 to en-

able Mason to communicate with his uncle, and that no further action be taken in the meantime. The motion was carried. The creditors decided to offer the milling plant for sale.