N.Z. AND RIVER PLATE LAND MORTGAGE CO.

Press, Volume LI, Issue 8737, 8 March 1894, Page 5

N.Z. AND RIVER PLATE LAND MORTGAGE CO.

! m - ■ [FROM OCR SPECIAL CORRESPONDENT.) | LONDON, January 27. Tiiis Comp&ny is known to have beea in a wither unsatisfactory position for some time and important negotiations were commenced ! six or seven month* since by Mr A. G. ■ Horton, one of the Directors of the New : Zealand Company—who is at present in England—on behalf of that Company and , New Zealand shareholder* to ascertain the true position of the Land Mortgage Company and to place it upon a different footing, and also to give New Zealand shareholders proper representation on the Board of Directors. This action, I believe, was j taken at the direct instigation of the New Zealand Insurance Company. At a later period the Agent-General for the colony (Sir Westby Perceval) aleo came forward, so j he informs mc, at the request of numerous shareholders in Christcburch and elsewhere, and joined in the negotiations. For some month* past, both these gentlemen have ' been engaged in thi3 very important work with the old Directors of the New Zealand and River Plat* Land Mortgage Company. { Sir Westby and Mr Horton represented the interest of a large proportion of the New Zealand shareholders, who number aboat two thirds of the whole proprietary. 1 am glad to be able to relate that they have sncceeded in carrying every point for which they contended. I learn from Sir Westby Perceval, to whose courtesy I am indebted for all my information on the subject, that the principal things for which he and Mr Horton strove were: -Ist. That a ! radical change should be made in the Directorate, giving the New Zealand shareholders a direct and much larger representation on the Board. With this object it was proposed that the Board should be changed by the addition of Directors who should be gentlemen intimately connected with New Zealand, and should assist in the formulation and recommendations as to the future-policy and conduct of the Company, after having made themselves thoroughly acquainted with its present position. 2nd. That pending the full reconsideration of the whole position by the proposed new Directorate, j the profits for the past year should not be distributed, but that the question of discri- | bution should be left to the decision of the new Hoard. 3rd. That until the shareholders should have had an opportunity of considering the recommendations as to the future policy and coudact of the Company, no fresh investments should be made iv the River Plate, but that any moneys falling in from investments ia that country snould in the meantime not be re-invested there, but should be invested temporarily in English Consols pending the full re-consideration of the situation. I understand from Sir Westby that although the Directors at first made a stand against the proposed measures, they expressed themselves as very desirous to meet bo far as possible the wishes of the New Zealand shareholders, and in the end, as I have said, everything was settled in a thoroughly satisfactory manner. Sir We3tby Perceval and Mr Horton are naturally much gratified that their exertions have beeu attended with such complete success. The agreement finally arrived at is embodied in the following report, which (on account of its great importance to many in New Zealand) I append iv full :— "The Directors have much pleasure in submitting to the shareholders their tenth annual report and balance sheet containing statement of accounts. -The net profit, for the year ended 31st October, 1893, iueluding £2407 19s 7d brought forward from the* preceding year, amounts to £13,711 4s 2d. Of this, the Directors have appropriated £1572 17s lid to interest paid and accrued on capital paid in advance ; and they recommend that the balance of £12,138 63 3d should be raised to £17,133 6s 3d by the transfer of £5000 from the Detained Dividend Fund, and applied as follows:—To Reserve Fund, £710"5 13s 3d ; to be carried forward, £10,032 133; total, £17,133 6s 3d. During the year the -Directors have sold some of the Company's properties in New Zealand and some of the Company's investments in London. The prices realised by these taies amouht to~ £2/,Gj 13s 3d below coat. The Directors have also written off a further sum of £700 on account of the . Company's mortgages. These amounts have been deducted from the Reserve Fond. The decrease in the Reserve Fund by the above deductions will bai more than compensated by the proposed addition of £7105 13s 3d from the profits for the year, and the Reserve Fund will then stand at £30,000, invested iv Consols. The Directors have to state with great regret; that on account of prolonged absence iv Australia Mr, Thomas Russell has retired from the Board, and that in cqnsequeuco of ceasing to reside in London Sir William Tyrone Power has also resigned hie seat. In March last the Directors arrived at the conculsion that in the interests of the Company it was advisable that a call of £1 per share should be made—half to be paid on Ist July, 1893, and half on Ist January, 1894. The Directors deeply regretted to take this step, but they were convinced that ifc was advisable in order to strengthen the position of the Company, and subsequent events have confirmed their view 3. At the date ojf the accounts only the firsfc instalment of the call wae due, and of this about 86 petjf cent, had been paid. More has been since rjgeived and the Directors have every reasowo believe that about 90 per cent,"« the wfiole call will ultimately be pbmined. As stated in previous reports, the on mortgage and investments of, the Company in London stand at cost price, less the pro-' vision which has from time-to time been made against them. This ia more than they would realise at the present moment, and in view of the increase of capital provided by the call, it appears expedient to. the Directors that they should now be written down. When this is done, however, the Directors deaire to take the opinion of shareholders on certain points in connection with the future policy of the Company. The Directors would have wished to deal with the matter at the meeting which is now convened, but this would nob allow time for communicating with New Zealand shareholders, who number more than one-half of the Company. The Directors therefore propose to formulate recommendations as to the future policy, and to send them to every shareholder, and to submit them to » general meeting, which will be convened for the special purpose of considering them. Owing to tbe large number of New Zealand shareholders it is impossible to consult them in the manner in which shareholders on the London register can be consulted. Moreover, the Colonial Board has cow been abolished, and the Directors have received representations from a large number of New Zealand shareholders asking that the Board may be increased by the addition of Directors intimately connected with New Zealand, who, it is suggested, should join the Board and assist in the formulation of the recommendations as to future policy, after haying fully acquainted themselves with the present position of the Company. The number of Directors is sow three leu than the original number, aud the Directors accordingly recommend that . Mr Louis Arthur Nathan, ef Dashwood House, New Broad street, E.C., Mr James McCosh Ciark, of Messrs Archibald Clark and Sons, 7 Edmund Place, E.C., and Mr Henry James Gibbe, Deputy-Chairman of the Union Steamship Company of New Zealand, Limited, 18 Walbrook, E.C., be elected to join the Board, being assured that these gentlemen will be acceptable to the New Zealand shareholders. In view also of the representations received from New Zealand the Directors think it better that an immediate distribution out of the amount carried forward should not be made until the new Directors, whom it i 3 proposed to elect, shall have had an opportunity of examining the present position of the Company and considering the suggestions as to future policy. It is for this reason that at the present meeting they do not recommend a dividend to ba declared, although the earnings for the year <»re sufficient for a moderate one. Many of she New Zealand shareholders deaire that the is vestments in the' River Plate shall nob be increased at present, but your Directors consider that to contract the investments in South America would injure the earning power of the Company, and that moneys as they fall in should be reinvested so that the present volume of securities in the River Plate may be maintained. As the Directors, however, dMire that representations of shareholders shall reosire the nuwfc careful consideration,

and that every opportunity m»y be given to the new Directors to folly understand (he present position of tho Company, the Directors have decided thut, pending the consideration by the shareholders of the suggested rocomniaudations as to future policy, no fresh capital shall be invested either va the River Plate or in New Zealand, and that any moceys be invested temporarily in Console in London or used to pay off debenturea. The contraction of earning power in tee short period of time will be small and more than compensated for by the increased confidence the proposal will give to the New Zealand shareholders. The Directors are gratified to say that the colony of New Zealand continues to progress in a most encouraging manner, and the monetary troubles in Australasia have not arrested that improvement nor have they affected the Company in any way. Notwithstanding the financial and political difficulties which the Government of the Argentine Confederation has had to encounter, the country continues to develope rapidly, and the Directors regard the results of the business of the Company in Argentina during the current year as highly satisfactory. In accordant* with the regulations of the Articles of Association, Mr H. J. Briatow retiree from the Board of Directors, bub offers himself for re-election. The English Auditor, Mr C. T. Moore, also retires, but is eligible for reelection and again offers his services."