SIR JULIUS VOGEL AND THE TELEPHONE COMPANY.

Temuka Leader, Issue 1300, 7 February 1885, Page 3

SIR JULIUS VOGEL AND THE TELEPHONE COMPANY.

Sir Julius Vogel forwards the following communication to tb.f> New Zealand Herald concerning his connection with the Consolidated Telephone Company : To the Editor.—Sir,—l am in receipt of the second report of the Investigating Committee of the Consolidated Telephone Company, and 1 send you a copy of it, together with one of ihe first reports. It was in reference to the 5 j cqnd repoft that the j,elegram appeared from the Preßs Association in which ic was stat' d that the Company intended to sue me for the "enormous profits" I had made. The malice of the telegram is evident, because nothing appears in \hd report of "enormous profits/' taking "the extreme prices quoted, but which the report iriferentially admits' that I did not realise. As It states that sales took place overj a long

period previous to the high rates, the amounts could not be disignated enormous. As a matter of fact, though I have not particulars with me, I am certain that the profits on the whole of my 3330 share did not exceed or even amount fo £7OO. The first report states that 1 was allotted 150 shares, and second that T allotted myself 3330 shares. Both statements are incorrect. I did not allot any shares to myself. I indicated my wish to take 3330 shares, and the Board allotted them to me. I was not, to the best of my belief, on the Committee of allotment. J may have been, and probably was, at the Boaid meeting which confirmed the Committee's work. The shares in the Company were applied for _ nearly six times over, and when it was decided not to allot pro rata, it was of course necessary to make the allotment by arbitrary decision. I had been engaged in lengthened negotiations for arranging terms of Gower's sale, and but that I was going on to the Board I would have been entitled to, and could have claimed, a large commission ; and the Board, recognising my exertions, paid me the compliment of allowing me to name those friends amongst applicants to whom I desired allotments to be made, to an amount, including shares I took myself, of 15,000. Ido not think I fully availed myeelf of the privilege ; but, if I did, what possible objection could there bet Is it not a common practice for Directors to indicate those of their friends amongst the applicants to whom they wish allotments to be made? The general complaint against Companies is that the Directors do not take a sufficient interest in them. I gave the best possible guarantee of my opinion of th 6 Company's prospects, and surely outof 150,000 shares it was not excessive to aslf that the applications of my friends to the extent of less than 12,000 shares should be granted, besides 3000 to myself. Then it is alleged that the allotment to me was informal, because my application was only for 1000 shares. I believe it is a common practice for Directors not to send in applications, but to indicate at meetings of the|Board, prior to allotment, how many shares they wish. The thing happens every day, application and allotment to be paid in one. I have no memoranda with me, but it may be that my initial application before allotment was considered was tor 1000 shares only, but it is stated that the application number was altered from 1000 to 5000. lam quite certain that this was not done by my directions, and it is evident that no one could have made the alteration without an authority to warrant it. If the application for "the other 4000 cannot be found it is probably mislaid. As I must have paid application and allotment money for the shares, what object could 1 have in not signing an application 1 The Report states that the Board are advised by Counsel that they have grounds of action against me, bat the facts were not rightly stated, and I am advised that they have no case, or if they had it would be a very | technical one, and would involve the dia. turbance of many other allotments. The report makes a point of a circular sent out by the Directors in December, 1881, Btating that they expected to be able to continue to pay dividends at the rate of 10 per cent. At that time their prospeots fully warranted the statement. There seemed to be five years of such dividends in view from several contracts, apart from the ordinary business of the Company as sole licensed manufacturers of telephones in Great Britain. It would serve no purpose to inflict on your readers an explanation of how the Post Office most unexpectedly exercised aright to withdraw from the major portion of its contract, and how a second contract was compromised for a small payment. These disasters occurred during my last visit to Australia, and when I returned to England the Company, which I left" as I thought in a brilliant position, was surrounded with difficulties. It appears now from the report of the Committee that the Company has lost a quarter of its capital—about £60,000 which is much less than the value of the contract with the Post Office so unexpectedly upset, and for which a large consideration was paid. It is proposed to write off 5s in the pound, but the shareholders have received 3« in the pound by way of dividend, so they lose only 2s in the pound, and interest up to date. It is expected that the Company will pay a dividend this year, but I cannot further pursue this subject of the Company's affairs without undluy trespassing on your indulgence. I think I have said enough to show you that the question between the Consolidated Telephone Company and myself is in the nature of a private dispute that does not concern the public, and that it was a cruel thing of the correspondent to telegraph about the report, knowing as he did that until I received it I had no means of replying to his unfair representations of what that report am, etc, Julius Vosel. February 2nd, 1885.