AUSTRAL CYCLE AGENCY

Auckland Star, Volume XXX, Issue 157, 5 July 1899, Page 8

AUSTRAL CYCLE AGENCY

THAT DREADFUL. STOCK QUESTION."

{ftom Our London Correspondent.)

The shareholders in the Austral Cycle Agency met together at Westminster Town Hall the other day to consider a proposition of the directors for voluntarily winding up that illconceived concern. In explaining the causes that have led up to the necessity for liquidation, Mr S; F. Edge aaid the Agency was formed to take over the Australian business of. the John Griffiths Cycle Corporation, Ltd., as from the 31st July, 1896. The position that it was in was reported upon and accounts sent over by a representative showed it" to be in a highly flourishing condition. At the same time their representative was continually writing and cabling for stock. On 12th October, 1896, he wrote: "Ship as much stock as you can," and on 20th October he wrote, "We are also doing a much larger cash trade than ever was done here before. We are working now on a very small stock, in fact, the matter of stock is enough to drive me mad, and if good supplies are not coming forward very soon I shall not know which way to turn for the best," On October 31st, 1896, he wrote, "You will notice in my profit and loss that the working expenses are getting towards. £30,000. I can reduce this by £10,000.a- year, guarantee a good cash trade with £ 100,000 more' turnover, reduce the larger balances £ 10,000 a year, and show a profit of £40,000 at least." As events turned out, however, these letters and cablegrams, for stock, while positively justified at the time, were not justified when the goods reached there, for the simple reason that everybody else had also taken very large stocks, and upon their arrival they were unable to sell them except at very greatly reduced prices. About. July, 1897, the directors not being satisfied at sending out thousands of pounds worth of goods, and not getting the money home from, Australia, sent out to make a searching investigation. Mr Fletcher told them, that everybody there had overbought, and this company, in common- with others, had its stock on hand, and could not dispose of it except at a very heavy loss. On August 29th he wrbte: "The stock question here-^thanks to your representative—is very dreadful. They have three times as much as they require, and it is very difficult to handle at present." The directors managed to finance the company through personal guarantees to the bank right through IS9S, until the beginning of the present year, when, .owing to heavy pressure being brought to bear upon them, it was decided to call the shareholrers together, * and put the facts before them. At the same time they sent a special representative out to Australia to realise all the stock that he could with the least possible loss, but he wrote to say that everything- in Australia was of a most gloomy character, and therefore, taking all these facts into consideration, the directors deemed it advisable to submit a resolution for voluntary liquidation.

The resolution was carried nem con only one shareholder venturing to chide the directors for not'having, made the shareholders acquainted with the progress of- the company before the need for liquidation arose.