CORRESPONDENC

Wairarapa Daily Times, Volume XV, Issue 4389, 10 April 1893, Page 3

CORRESPONDENC

tiasterton Blacksmith and Wheelwright Company.

[to hie editor. w.d, times.]

Sir,—Rovertingto my former letter on the subject of the Blacksmith Company's affairs, I would ask your permission lo explain what appears to some of tho shareholders to be the weak point inlho Company's management. The directors—or atloastsomo of them—aro too fond of posing at their annual meetings aspublio benefactors, and are not sufficiently exact in their statements, Vaguo assertions that the Company is doing a 1 first-class business, and that it is in a 1 satisfactory position are not ro -assur--1 ing to shareholders, who are well aware that tho Company's financial position is far from strong, and who can see for themselves from the published accounts that tho margin of profits in its transactions is iusullirient. If tho directors had taken the shareholders into their confidence at the late meeting, and had shown that they realised the position and were prepared to take steps to put the affairs of the Company on a sounder basis, in that case, sir, I am satisfied thut the shareholders would have cordially supported any proposals the directors had to make. A policy of drift cannot inspire confidence, and after the recent meeting tho directors cannot expect to be successful in placing fresh shares, unless they remove the impression that their action has created, Tho directors admit that they have not sufficient capital; tboy seem to despair of raising more; and in face of that thoy lake credit for extending their business, talk of further extension, and say that it is impossible to reduce their stock or curtail their expenditure. Thoy are working on borrowed capital; thoy have no liquid assets; they buy on credit and sell on credit; their profits are small; and they nre not improving their financial position. Un the othe"r hand they havo a good business which with careful management might be made a profitable one. It appears to mo that, as prudent men, the directors have only two courses opon to them. They may raise fresh capital —by the issue ot preferential shares if necessary; or they must reduce their slock, raise their tariff—if it can bo raised—nndcut down their expenditure. To talk of making further outlays with the yiew of extending their business without- providing more capital, is mere foolishness, and it would bo unreasonable tooxpeot either shareholders or tho public to provide more capital without showing good prospects of earning adequate profits and paying fair dividends—l am, Sir, youis etc, A Shareholder. Masterton, Bth April, 1883.