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ASHBURTON WOOLLEN MANUFACTURING COMPANY

\ An extraordinary general meeting of j ' tha shareholders m the Aahburton Wool- l len Manufacturing Cjtnpany was held at I tho Aroade Chambers, yesterday after-) I noon. There were about thirty shart-j holdern proaont and proxies wt»re hell for a number of others Mr G, H. Greenwood, Chairman of Directors, presided. • The meeting was oalled to consider tht? following motion which was passed at a meeting on January 23: "That it has been proved to tho satisfaction of this meeting that the Company cannot, by reason of ito liabilities, oontlnue ita business, and that It la advisable to wind up the Bame, and It Ib accordingly hereby resolved that tbe Company be wound up voluntarily," The Chairman having read the motion aald that those who were present at 'th* meeting of January 23rd would have heard the reasons that were read by tho then Chairman for bringing farward such jja resolution, and those reasons were pretty conclusive to the mluds generally of those then present. As some of those now present might not have been at that meat Ing, and as he was not there himself, perhaps a few observations from blm might not be amiss. In all probability they would all readily understand that tbe real reason for tbe Company being In the present position was that they never had enough money to oarry on. When they , first started tho feeling of the shareholders, and of those chiefly Instrumental m commencing the undertaking was that If they oould get £10,000 subscribed they had a very fair prospeot of making the business ; a Buooesti. Tbere was a general feeling that for the sake of Ashbnrton the mill should be kept running, and that It would be a pity to see a property worth £13,000 go to wreok or be oarted out of our midst, The Dlreotors then bad every reason to believe from tho representations of those then helping them and working with thorn, and of those who were praotloal men and had all their lives been experts ln woollen goods that it wonld be wise to try and resuscitate the business. The foundation and root of all their difficulties at tbe present time was the want, all through, of sufficient money to enable them to oarry on. They got the faotory and a quantity of machinery and requisite appliance?, and It did not at the time seem as If a large sum of money wonld be rrqnlred to work the business, but they had sinoe fonnd out that they had baen mistaken. Then, a great deal of expense had bean necessitated to make the mill thoroughly efficient. A pump was requisite, and for this an outlay of between £200 and £300 was Incurred. It beoame necessary to bnild a dye-house and to fit It with vats and all other required appliances. The steam power was found Insufficient and and a third boiler had to be obtained. A good deal of expenee was Incurred for shafting, and a large sum had to be expended ln procuring bins to hold yarns. A fire proof boilding had to be ereoted for the reception of Borne maohlnery that ran very swiftly and was a frequent oause of fire In mills, and whioh had It remained tn the main bulldiog wonld have caused difficulty ln regard to Insnranoe. Then again some of the maohlnery whioh had beeu taken over should uot have been In the mill at all. The dlreotorshad not lost any money as far as they oonld see j up to a week ago they had not lost fifty pounds lv bsd debts, and that In the oooroe of four anoh years as they had patsed through was somothlug In their favor. When the season oame on for the purohase of wool the dlreotors found that they oould not mako any arrangements. Thoy did not exptct tho difficulty, but It aroße and so the pres.nt meeting had t"> be oiled. They had orders that wonld bave kept the faotory working till tbe end of May, and orders, too. that would have paid tbem, besides whioh tbey had during the year given up the manufacture of goods whioh tbey found wore not profitable, and there seemed a fair prospeot of a successful year. He had not mentioned all the maohlnery whioh the Dlreotors had had to purohase, but he might now refer to the Installation of the eleotrlo light, tbe procuring of a twisting frame, and other requirements to make the factory effiol nt It was now efficient. In every res) ect, end anyone having the requisite oaplt.l to bay it would be f»blo to work it with compl^a sjooess. Then, as they all knew, Va.Direotors had had a great deal of trouble and difficulty In carrying on the business of the faotory. He did not desire to say anything as to -the Dlreotorn, but be oould not help mentioning that they had done their very best m the Interests of the shareholders, and had devoted their time and ability unsparingly ttfthe working of the eonoern. They had had difficulties to contend with In the way of ohanges In tbe staff, and tbe finding of oompetent men to fill vaoanoles He again read the motion, and said that he would be happy to afford any Information. Mr D. Wilson asked If to oirry the motion wpqld mean bringing the aff »lr to a standstill ? What would be the position of shareholders, depositors, and others Interested If the Company were wound up ? Mr Pnrnell, solioltor to the Company, said that the effeot would ba that the Company wonld Immediately go Into liquidation. The liquidator would wind Its affairs np as soon as advisable, having power by the Aot to oarry on the business as long as It was advantageous to do so The Chairman said that the. Directors had tried eyery means to' get additional capital. Mr Wilson asked If there was any chance of any looal buyer or Oompany taking the business np, or If the Dlreotors had come to any arrangement for advertising it In the English market. He did not think they <roqld get a bid from this district, bnt perhaps some of the other wro'len companies might feel lnqllned to take It up. The Chairman said that the Kalapol and Mosglel Companies had been asked if they would take It over, bnt they had replied that they did not ace their way to do ro. Mr M. Soott wanted to know If any seonrlty had been given over any of tho stook. Tbe Chairman said tho Dlreotors wonld be glad to give suoh Information after the meeting. He did not think it would be advisable, however, to do so at a publio meotlog. Several shareholders thought tho Information asked for ahonld be afforded, and a dlsonsslon took plaoo In reference to this matter. Mr Crisp, as proxy for Mrs Crisp, desired to ask a few questions. Hla proxy was not quite In order, bnt doubtless the Information asked for would be sfbrded him. The Chairman was doubtful whether he oould reply to questions pat by Mr Crisp His proxy was oot of order, and be had no locus standi. Mr Crisp said that thore was £150 of his money In tbe Company, and he thought he was entitled to ask Information on a few things the shareholders ought to know. Moisrs Friedlander and D. H. Brown, two of tho Directors, thought all InformaI tion should be afforded shareholders. The Chairman said there was nothing to aonceal, exoept one or two things, which, ln the Interest of tbe Company, should not ba divulged m a publio meeting, but which he would be glad to give information upon to shareholders afterwards. | Mr Crisp asked If at the time the balanoe-aheet appeared, Oot. 30th, the Dlreotors thought the Compauy cpnld oarry on. He pertalnly gathered from the balanoe-sneet that all was right. The Chairman oould not see bow he oonld reply to Mr Orisp, If the questions 1 were put through aDjr othor shaiefcoldsr ■<

he would answer them 1 Mr D. Williamson said he was willing i to father Mr Crisp??, questions. Hi did not see why anything should be concealed from the sbareho'dero. They were the , persons who would lose the money, and j he h*d no doubt they wonld lose the I whole of It, and they had a right to obtain j all Information. [ The Chairman agreed with Mr William, son, bnt ho ~aa doubtful whether ho oould ana ver Mr Oriap, seeing ihat that gentlemail's proxy waa valuoleaß. Mr Wilson asked If the Bank of New Z.ialaud held a mortgage or a promise to mortgage, and if there were auy other scoured creditors. Thß Chairman said that tho Bank held a promise of mortgage over the mill. Mr Wilson asked If It was ovor the mill and maohlnery. Tbe Chairman eald they oould not tell, It would be for the liquidator to say. Mr M. Soott asked if there was any bill of s<tle or security given over the stook The Ohnirmtn Bald there was. Mr Soott asked to whom was the security given. Tbe Chairman thought that that waa the Directors' business. The shareholders had pot them there to manage the business. They had beea In a difficulty for want of money, and to carry on tbe mill It was absolutely necessary thoy shou'd obtain some, and the only way m whtoh It oould be done was by giving seonrlty over the atook. Mr Crisp said that the balanoe-sheet of four months ago didn't show that they were lo difficulties. The Chairman said that they were not In difficulties then, and they had no con ceptlon that any wonld arise. Tbey would not have raised the money on the stook If it had not boan absolutely necessary to do so, If they had not they would have had to shut up and everything would have been saorifioed. There was £7500 worth of yarn m stook, but if this were to ba sold It would not realise £1000, as all the other faotorles manufaotured their own yarn. The dlreotors therefore oonsldered It lueoessary to raise £3000 to keep the business going. Mc Steele thought It atrange that goods should be mortgaged when, acoording to the last balanae -sheet, there were orders on hand for six months to oomei The Chairman aald that the goods were ordered, not for delivery when finished, but months hence and accordingly they had to be kept ln stook. To keop the faotory golog and to pay for wages coals, etc., It was. necessary to raise money on these goods. The Directors got £3000 at 9 per oent, The goods were season's goods not to be, delivered till the seaion oameronnd. Mr Scott' asked when was the seonrlty given. Mr Crisp thought the Chairman's explanation explained the balance-sheet away. It was no balance-sheet at all. In reply to Mr Soott the Chairman said the security waa given on January 10. Mr Soott said that he went on January i.'-.b to withdraw a deposit of trust money made by him, but tbe Directors refneed hla application, although they had reoelved £3000 four daya previously. They were also advertising till January 19th inviting deposits, aud yet on the 14th they wonldn t pay him. The Chairman said that he supposed the Directors thought other things more neoessary. Mr Scott asked if the payment of the trust money deposited by him was not as I Impart.nt aa any other olatm. Did the I Dlreotors* pay away the £3000 In foar | days T Mr Purnell would llk,e %. remind the shareholders tb»t the Dlreotors found tbe Company In difficulties, and they had to raise this money to pay wages and other things. He depreoated shareholders making all aorta of loose statements ln a publio mooting, beoame they might get themselves into a difficulty, and a question might hereafter arise as between the secured aad unsecured creditors. . Thero ma. no bill of sale given ove? anything. The £3000 was raised on passing security , i— goods In stock. The Directors had to get It to avoid dosing the doo/s. In which case Mr Soott would have lost every peony of hli money, Mr H Friedlander said. th,a.t as ■ matter of faot the money was negotiated on Deoember 30th', not on January 10th aa had boen erroneomly statjd. The Chairman stated that through an oversight of the Score ary's he hud informed Mr Soott that the date was January 10. As Mr Friedlander had pointed ont It waa In reality Deoember 20, Mf A. Orr aald that £7500 was set down In the balance-sheet for wool, oils, eto. He took It tbat tbe money was raised to work up this raw material Into mauufaotnred goods. The Chairman said that waa no,. In reply to Mr J, Ward ihe Peoretary said that about £60Qhad been repaid. Mr Purnell said that the money waa borrowed on goods, and the lender would only part with the goods as he got his money returned. Mr Soott asked what had benome of all the goods manufaotured sinoe the last meeting. Mr Twentyman, the Secretary, said that they had been stored for safety m the town, v Mr Soott asked why he was not told by the saeretary when he went to hira, instead of being pointed to the empty Btore. The Chairman said the Brcre*a*y bad to right to give such information. The Directors had the management of the. business, Mr Scott aaked If he had note right as a shareholder to be Informed on such a point, and to Inspect the stock and books of th? Qompsny, bqt was tqM he only had a right to Inspeot the minute book. M* R. Aloorn said that he gathered there was £8700 on account of stook and bills payable. They owed altogether say £11.000, The atook was still to the good, and would, he supposed, realise within £1000 of the amount It was valued at. The property nas set down at £13,000, and If thay sold It for three or four thousand they wonld be able to pay depositors, the Bank, and aU the other eredltors, and If they disposed of the property for seven or eight thonssnd, there wonld be about five shillings por share to go to the shareholders. Mr M. Soott asked what had been done with tbe £3000. He was told that If he had been paid It would have bean a preference payment. If that were so, any other payment besides wages, would also be a preference payment. Mr H. Friedlander said that early m Deoember the faotory was turning ont large quantities of goods— about £1000 worth per fortnight, and the Dlreotors were at their wits'' ends how to obtain sufficient money to oarry on to pay wages, etc., till the goods were delivered. They obtained an adyanee, making themae'ves personally responsible for £150 eaoh The £3000 went In reduotlon of that cod to keep the mill going till now. The Dlreotors also made themselves personally liable for the £3000, as his brother who advanced the money wonld not take the goodß alone as seonrlty. He thought every information should be given to shsrebolders, but some of this Information would perbapa have been better given afterwards and not ln a public meeting. The Dlreotors, he wonld like to point ont, had folly as muoh at stake as the shareholders, and If the Directors looked after their own Interests {hey uiust also- work for those p,f the shareholder-*. Tho Chairman said that some of, the shareholders, to judge from their manner seemed to think the Directors £»d done something dishonest, .<- '!; ' j MrSpott. Wby dp H«l^^j}jL

J Tho Ohalrm<to : B-joausa it is the advice I of the lawyer, and because It la not j advisable In tbo interests of shareholders. ; Any information oan be obtained after tbe meeting. Mr Scott aald that he attended tbe meeting on January 18th, and what little was aeo.rtained had to be dragged out like (t was now, i Mr J. Orr BBked how It was If the j Directors had not tha Interests of the I Company at heart they made themselves liable for the money which had been raised. If the goods wore Imperfect or rejected then the Directors would have to pay. Mr Soott said that they were told In I'ie laat balanoe-sheet tbat tho faotory was doing a profitable business, wbb working night and day, and bad orders for four months ahead. Mr J. Orr said they could, not go on without material. If they could not arr-nqe with tbe Bank so as to obtain wool tbey oonld not oarry on. Mr Soott asked why was tbe advertisement kept m the paper till January 19th whan the Directors knew they were ln difficulties 1 Mr Friedlander said that tho advertisement was a standing one, and had been overlooked* Mr R. Aloorn said that It seemed to him as a shareholder that they could not Improve the poqltiou, and the only thing to be done was to appoint a l^uldator. If they*got a buye* for the property at one-third what It oost tha Company, they would be able to pay the depositors and everyone to whom they owed money, and the shareholders would also get about five shillings out of It. In the Interests of depositors and shareholders he moved the resolution, the meeting had been oalled to oonslder, and which appears above, Mr Andrew Orr seconded. Mr J. Ward said that if ho stood alone he wonld move an amendment. Be was not at all satisfied with the position of afftlra Certain rumors had been extensively circulated as to tbe management, and the manner In whioh the questions had been answered left him more dissatisfied than before He would move as an amendnnnt to the motion, " Tbat there be a committee of enquiry appointed, and that they report a month from date." The Chairman: Will yon find the money In the meantime to oarry on the business ? Mr Ward : I simply move that amendment. The Chairman : Yon wilt have to find the money then. Mr Steola seconded Mr Ward's amendment. - The loss from the fire at the faotory was pnt down as £400, but at the tlma It occurred it was stated at only £80 or £100. As Mr Ward had said, Strange rumors were going about, aud he thought it would be well If a committee of enquiry were appointed, so that shareholders might know the real fao s. The Ohalrann said that at the time of the fire the manager said the loss did not exoeed £100, but It was subsequently fonnd that the loss was greatly estlmaledMr Steele asked if the building destroyed was losured. Th? Chairman said the shed contained waste, and no Company would insure It* Mr Purnell said that he was a shareholder aa well as Mr Ward aud Mr Steele, and he was as muoh Interested m the Company. , He would like to see It go on, but that was impossible. The only way was $o go voluntarily Into liquidation. If they did not, some oredltor of the Com* pany would tako aotlon againßt them, and they would be forced oompulsorlly Into liquidation, with the result that everything they had would be sacrificed. Aa It was they oould appoint their own liquidator, and do something In the oheapeat and most advantageous way. He did not know w at th<» rumors referred to were, but even supposing then* to be true, It did not affect the shareholders now. They must face the position. Mr Steele ahd the other shareholders should have attended the annnal meeting which lapsed, Instead of coming there and taking np the position they now did. He would suggest to Mr Ward, strictly In the Interest of the shareholders, to withdraw his amendment. He had a large interest m the Company, and from the beginning bo took every opportunity of gaining Information He was satisfied t^e Bisectors had done their best They might have ' made mistakes j It was bnt natural they should do so, having no experience In the businoss. The key to the whole difficulty was that they had not enough money. If tbey had had a few thousands more oipltal they wonld have been paying dividends this day. Bat whether the Directors had done ifell or HI the shareholders had to faoe tbe position. The only sensible way was to wind up tbe Company voluntarily. Even If they adjourned they might In the meantime be brought Into oonrt, and be forced to go Into liquidation, Mr Ward said that the balance-sheet disolosed one of two things. He said it with diffidenoe, for the Directors were all men of recognised character and standing m the commercial world, bnt when he looked at the laßt hajance sheet he found it eminently tmsattefaotory. It pointed to one of two conclusions, either that the Directors didn't know their noeition, or, 1 on the other hand, knowing it, they bad not the moral courage to disqloso it to the shareholders. Mr Ward proceeded to criticise the ba'smco-Bheet, and the Chairman replied. Mr Steele said, m reference to M" Purnell'e remark that the shareholders should have turned np at the annu.l meeting, that the bfclance-Bheet stated the affairs of the Company to bj iv a satisfactory slate. Tbe Direotors should have faced the position theD, instead of ooming down now with such a resolution, after telling them that everything was oomfortable, The shareholders could not swallow thai resolution without discussion and explanation. Mr Beatell, though sympathising with Mr Steele, agreed with Mr Purnell tbat shareholders should have attended the annual meeting. The balanoe-sheet did not show everything to be satisfactory as stated by Mr Steele ; it showed a failing off of £400 on the previous year. The Chairman said m reference to Mr Steole's remarks about the Direotors not disclosing tbe position of affairs, that the presont difficulties were not m existence when the balance-sheet was drawn np, and there was no reason to anticipate them. Mr D. Wilson quite sympathised, with the romarke of Mr Ward and Mr Steele. He did not feel satisfied at all at the way m whioh affairs had been managed. He oame to the meeting Intending to vote against the motion, but he won d now like Mr Ward to withdraw his: amendment, as he conld see no good that would come from It The only hope for the Company was to go into liquidation, and if they did not do so volantnrily they wonld be forced to, and then the result would be bad for the shareholders, depositors, and everyone else, Mr R. Aloorn said that anyone who Btudied the balanoe-Bheet would see that 2\ e lnnA cr A t n . ot iQ a B° od o°- d iton. *Id,UUO of their oapital was m the build •ng and plant aud unless they could borrow £16,000 or £18,000 they could not carry on for another year. Tho only hope for the shareholders was by selling. Ho did not think that they, would get anything themselves, but they might get ss, The only way of paying their creditors, and that should be th© first consideration, was by going lutfi liquidation. Unleaa they did thjs-the; concern would go into the : hands of vtbe bapff, on whom they wonld have no hold," such as thoy had on their owo-liquiiator, withdrew his 4prafomt% ' -■!)

. I Mr Alcorn's motion was then put te the j meeting and carried without dissent, ' thuogh some of the shareholders refrained from voting. ' ' . Tho Chairman was sorry tbat snoh a step should have to be taken, bnt there was no way out of It. The faot waa they hid uot been supported as they should have been m this district. They only wanted a few thousands to pot them out of all their dlffioulths. Mr Soott aiked why the Dlreotors bad advertised for deposits and taken people m, when they knew they were In difficulties. Tbe Chairman said It was a standing advertisement, and had escaped theii I notloe. » Mr Friedlander aald that nobody had been token In. Mr J. Orr stated that ai soon as tha slightest dffioulty beoame apparent tht Direo>ors instructed the Seotetary not tt take any more deposits. Mr J. Orr moved that Mr Twentyman be appointed liquidator at a remuneration of £5 a week and l_ per cent, on tht gross assets. He thoaght the meeting would agree with him that no one more competent oould be obtained, as Mr Twentyman was thoroughly versed In all the details of the business. Mr Williamson seconded the motion, whioh was oarrled. Mr D. Wilson asked how' long the liquidator would oarry on the business, and if he would oarry It on m the hopes of getting a purchaser. Mr H. Friedlander said that the Directors had deoided to ask the share. i holders' permltaion for the liquidator to oarry on. For the business to be sold to advantage It must be sold as a going concern. The liquidator oonld get aooommodation from the Bank and advertise the faotory either lo the oolony or at Home. He thought ihe shareholders Bhould congratulate themselves on having secured Mr Twentyman as liquidator. He proposed a motion reoommendiog the liquidator to oarry the buslneas^on, and pointed ont that nnless they ooinpletttl the orders on hand they might have some claims for damages against them* ' Mr A. Orr seconded Mr Frledlandet'e motion. He oononrred t that Mr Twentyman was the best they oonld get for the offioaof liquidator. He was only Horry that gentleman was not with the Company from its commencement, Mr H. Friedlander said that before separating he bad something to say. He was sorry to hear some of the remarks that had been made and the amendment that had hsen proposed, and he wonld like to challenge any of the shareholders to appoint a committee of enquiry. If they liked to take It up he wonld throw they challenge out. Mr Soott said that If the other Director* had been as opeu as Mr Friedlander the amendment would never have bees brought forward. . Mr R, Aloorn proposed a vote of thank* to the Dlreotors, who, he waa satisfied. had done their best all through. The Chairman returned thanke on behalf of the Dlreotors, and again pointed out that all their difficulties were doe to want of oapital. Kaiapol had £150.000, Mosßlel £100,000, and Wellington, aJoO.OOO. The meeting then olosed.

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Permanent link to this item

http://paperspast.natlib.govt.nz/newspapers/AG18890209.2.7

Bibliographic details

ASHBURTON WOOLLEN MANUFACTURING COMPANY, Ashburton Guardian, Volume VII, Issue 2059, 9 February 1889

Word Count
4,430

ASHBURTON WOOLLEN MANUFACTURING COMPANY Ashburton Guardian, Volume VII, Issue 2059, 9 February 1889

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