SCOTS COLLEGE

Evening Post, Volume CVIII, Issue 124, 21 November 1929, Page 10

SCOTS COLLEGE

£10,000 WANTED AT ONCE

AVEETING THE SALE

, FINANCIAL DIFFICULTIES

The circumstances leading up to the sale of Scots College, Miramar, to the Education Department for a sum of £38,000, were discussed at a largely-attended meeting of parents and of well-wishers of the college, held in St. John's Schoolroom, Dixon street, last evening. The hall was filled, but the meeting was not hostile in character. On the contrary, it was enthusiastic in the desire to try to find a means of carrying on the college, and as a first but essential step to that end it.was decided to try to raise £10,000 immediately for the purpose of meeting pressing financial requirements, and to approach the Government in an endeavour to avert the sale being consummated. Before the proceedings terminated several people present each offered £100 towards the £10,000, and it was intimated that at least £3500 was already in sight.

Mr. C. S. Black, chairman of the .Parents' Association, who presided, expressed gratification at the large attendance, and said all would deplore the necessity for the sale of the. college, ■which had made history and created very fine traditions. In all walks of life, Scots College old boys were doing well. He sympathised with the old boys in the threatened loss of their former school. Facts had to be faced,' however, and finance had been one of the chief stumbling blocks to the progress- of the college. It would be a great disappointment if, after all the work put in by the Board of Governors, the sale of the college was to be the end of their efforts.

"FOUGHT VALIANTLY."

Mr. J. T. Martin, chairman of the Board of Governors, said they had fought valiantly for the school for thirteen years, and they had always stressed the splendid work done by the college. The board had done its very best to keep the college going against most disheartening conditions. "In every overture made to the authorities of the Presbyterian Church, by deputation and correspondence, we have stressed the splendid work done by Scots College, its standing in the community, its hold on the boys, parents, and supporters, its traditions and ideals, and though we have always received the sympathy and moral support of the Church and the individual ministers, we were faced with the fact that the Church Property Board were only trustees, that neither that board nor the General Assembly of the Church -was responsible for our finances, that they had no fund under their control that could be legally attached for this purpose, and that, in short, the Board of Governors must find the finance outside the church," said Mr. Martin. "The arrangement entered into last November, when the General Assembly agreed to give us £500 per annum for five years to pay our interest, was done on the understanding that we would pay it back when in a position to do so. We only managed to secure this assistance by an assurance which the delegation from Scots College gave i-hat •we believed we would in 1929 experience an increase in boarders and hence reduce our yearly loss in revenue. We failed to secure the increased boarders. ''

Mr. Martin said that when the college scheme was first launched various donors subscribed a sum of £5290, and of this amount nearly £2000 was subscribed by the late Hon. J. G. W. Aitken. (Applause.) With this in hand, debentures were issued in 1919 to the extent of £19,881 at 6 per cent, interest, with a ten years' currency, maturing on Ist January, 1929. "Some 73 persons, many of whom were in small circumstances, took up these debentures in.sums varying from £25' to £1500. The security for these debentures were the college buildings, plant and grounds, but many of the debentureholders were under the mistaken idea that the church was responsible ■ for payment of interest and repayment of principal, and that in the event of failure recourse could be made direct to the General, Assembly. Legal opinion was repeatedly taken by debentureholders on this point, only to find that outside the security of buildings, plant and land they had no legitimate claim, and, anyway, careful examination of the debenture note issued to every deben-ture-holder clearly indicated that the debenture was on the college assets and on those only. In order to secure further funds, deposits were taken freely from time to time in sums of £50 to £1900, mostly on demand, some on fixed terms of two or three years at 64 to 7 per cent. In 1923 these deposits stood at £11,405. Additional funds from, time to time were secured by bank overdraft which was guaranteed personally by several members of the Board of Governors, and to-day the overdraft was approximately £2600. In 1923, when they had got into a chaotic condition, the building and land was "worth £33,994, against which there were responsible for debentures, £19,S81; deposits, £i 1,589; bank overdraft, £2522; mortgage on land, £1932; total, £35,924. A forced realisation of their securities would not at that time have produced £20,000, because there was no demand for the land and they were told that a school was an unsaleable proposition. The position became so serious that a meeting of debenture-holders and depositors was held en 24th April, 1924, in St. John's Schoolroom, when the Board of Governors explained that the college had lost £1334 on the year's operations, that they could not pay any interest for tlio following twelve months, that any precipitate action owing to their default would mc:iu that the debenture-holders would take possession of the school and land, and the deposit of £11,589 would bo lost. The meeting was a stormy one; some hard things were said by the creditors, but ultimately it was agreed that no useful purpose would be gained by forcing the position, and as many as could manage it agreed to forego their interest for one year. Many deben-ture-holders were unable to get along without their interest on which they depended, so the members of the board were repeatedly called on, not only in 1924, but also in subsquent years, to - put their hands in their pockets and contribute personally towards payment of interest to widows and others who badly needed the money. About this time the boara members alone contributed £1300 to the funds. In October, 1935, the Ijoard members personally called on debenture-holders and depositors, and having explained the financial ■' position, induced a number to agree to 'forego, interest for two or three years. In. the majority of cases the creditors agreed to accept interest at 3 per cent., and in a few instances the debentureholders made their debentures a donation to the college. "What we were afraid of then, and particularly strove against, was any combined action by the debenture-holders to realise on their assets," said Mr. Martin. "Had they done so at any period up to 1927, and particularly during 1923 to 1926, _ it would have meant that a forced realisation would have left the depositors of * 11,589 without a penny." Two de-

positors proposed that if the board would give them 50 per cent, of the amount standing to their credit in the books they would give a clean receipt. It was a very tempting offer, and in both cases the amounts were large. They set uut to obtain the necessaryfunds, ai_d eventually sue&eeded in obtaining sufficient money to accept the offer, which amounted to 10s in the ■£1. That really -amounted to a substantial donation from those depositors to the college.

WHEN TROUBLES BEGAN.

"Our real troubles started in January this year, when the debentures matured and wo had to find the £18,140, in terms of our promise," continued Mr. Martin. "We prepared for this by making an eifort in October last year to induce debenture-holders to accept a. reduction for cash, and last December informed them that we hoped to secure, by mortgaging our assets, a sum that would enable us to pay off our liabilities. We found afterwards that we could not raise the necessary amount, and on 25th March this year, wrote explaining the position and asked them again to extend their patience till we could devise some other means for raising the necessary money. We tried the Bank of New Zealand and two other banks, two of the leading life insurance companies, two large trusts, and one private concern, but all to no purpose. The invariable reply was that a school is a bad asset on which to lend money, that in case of liquidation there are no buyers for schools, that our balance-sheets showed we were incurring an annual loss, and that liquidation of a school would be highly unpopular. We wanted £25,000 at least to pay debenture-holders and depositors, but could not raise £20,000. Having failed to find the depositors' and de-benture-holders' money, we made another attempt to press the Commission of the General Assembly to help us out by guaranteeing the interest and the mortgage to the Bank of New Zealand, the •bank having agreed to find the money, if the Church would put up the necessary guarantee. The Church replied that it had not the legal power to undertake such a guarantee, and that even if it were agreeable, certain legislation would have to be passed by Parliament to give the necessary authority, and that in any event nothing definite could be done till the Assembly met in Dunedin in March next year. The board repeatedly discussed the question of canvassing the community for.finance and pupils, as they had repeatedly done in former years, but ministers and business niembers objected. Canvassing is not a pleasant business; moreover, this board has done it so often that they are heartily sick of the idea, particularly as previous efforts have been so poor, the total amount secured by way of donations and cancelled debentures and deposits over the past seven years being approximately £7000. We found in our canvassing that many people who would support a church college for girls would not do the same for boys. Some took lip the attitude that parents who favoured sectarian schools should pay for the luxury themselves; that the public Schools answered all requirements, and there was no demand for a boys' college, and so on. I remember supplying one energetic member of the board with the names of thirteen influential and prosperous farmers in the Masterton and Manawatu districts, yet only in two cases did he succeed in securing any help. Prominent and wealthy Presbyterians in Wellington City and in the provinces refused straight out to assist a Presbyterian college. If you have any doubt about the matter, consult the six ministers on Scots College Board. That these schools are not popular with Presbyterians is proved from the fact that even ia a Presbyterian stronghold like Dunedin the M'Glashan College, the only church school in Otago, cannot be made to pay, and has been in financial difficulties for a number of years."

NOT ALL PRESBYTERIANS.

Of the 71 boarders at the college, how many were Presbyterians? asked Mr. Martin. Not 50 per cent., and presumably the same proportions would be found among the day boys. A voice: "All the better." (Lausrhter.) fe

"There may be a good deal in that," replied Mr. Martin. "A large proportion of the boys are Anglicans, and we are very pleased that such a large number of parents of the Anglican and Methodist faiths send their boys to our school. It is the boarders who make the school pay, and if less than half of the 71 are Presbyterians, then it seems to me that the community for which the college was set up does Dot care whether it exists or not." Mr. Martin paid a warm tribute to the hard work which the Rev. Dr. Gibb and the Key. J. M'Caw had done in trying to obtain financial assistance for the college. Dr. Gibb had stood up to a great iiglit heroically, and ho did not know anybody wllo had done more for the college. (Loud applause.) Scots College had been going back at the rate of nearly £1345 per annum during the past seven years, and even if they raised the money to-morrow to pay off the debenture-holders, £17,140, and depositors £7489,' bank overdraft £.2000, a total of £27,220, they would have to pay off the full bank "interest on that load, which, at 6 per cent., was equal to £1633 per annum. In addition to the £1345 annual loss, the col- | lege had absorbed all the donations made over thirteen years, amounting to £16,244. By accepting the Education Department's offer of £38,000 for the college, land, and equipment, they could honourably discharge all ■ their liabilities, and thereby keep faith with the depositors and debenture-holders, who had shown such exemplary patience and forbearance in accepting interest at half rates and standing out of their money for so long. If th^y did not do that, then they must raise by mortgage or other means £24,629 to pay the principal in debentures and deposits, and ask both classes to forego accumulated interest. All the debenturoholders were not Presbyterian sym pathisers; many of them had told him that they had no concern in the school. They placed their money in the college as an investment, and they wanted it out. In addition to finding this £24----629 on which they had assets to show worth approximately £37,000 to £40,000, they must find at least within twelve months £10,000 in hard cash as free donations to carry on the school, and on which they would pay no interest. It was the heavy interest bill which the college liad been forced to face from its very inception, and which was due to working on borrowed capital instead of free donations of at least £15,000, which was the primary reason why they were there that night. The annual expenditure on Scots is approximately £10,000 per annum, all of which has to be secured from revenue from boarders and clay boys' fees. In addition to finding £25,000 by way of mortgage and £10,000 in hard cash, it seemed that a big effort would require to be made to increase the boardern to 100.

The board had done its utmost during past years to place the college in a strong financial position, and every member of the board extremely regretted the present position. Moreover, if a way out could be found and their debts to others honourably discharged, they would go ahead again resolutely! It was after careful consideration of all the facts and due sense of their responsibilities to the parents, boys (old and new), teachers, debenture-holders, and depositors, and all those interested in the college, that the board had un-' animously passed the following resoluti6n: —"Resolved, that the financial position of Scotß College be placed before the commission of assembly with a statement that the board cannot carry on the college without further financial assistance from the church, and

failing that the board leaves it to the church to decide whether the college shall continue or take the responsibility of closing down the present school by accepting the offer sent on by the board from the Education Department for the purchase of the college and equipment for the sum of £38,000." Messrs. A. F. Smith, Page, and he were the delegates appointed to meet the Commission of the General Assembly, and were supported by a strong delegation from the Old Boys' Association, Messrs. Hurley, Campbell, and Mason. The Old Boys put up a good fighting speech, which all present appreciated. The Commission, however, recommended the church trustees to accept the Education Department's offer to purchase the college for £35,000, and the church trustees met and agreed to do so.

MINISTER'S REFUSAL.

As a result of representations which had been made to him, Mr. Martin said that he had communicated with the Minister of Education, asking whether the option could not be left open for four weeks. That night he had received the following reply from the Hon. H. Atmore:—

Have received telegram from my Department intimating that parents Scots College meeting to-night to consider raising fund carry on, and asking whether Government will suspend purchase and give a month to arrange finance. ' I regret I cannot see my way to comply with request. The negotiations were conducted with the trustees, who fully understood and appreciated the position, and after due consideration definitely accepted in writing the offer made by the Government.

Mr. A. P. Smith considered that an effort should be made to retain the college, even if only to perpetuate the memory of the late Mr. Aitken. Their big fight had taken place five years ago, when they wero "well in the cart". Mr. Martin, if he had time, could tell them of businesses that had lost money in the slump years, but which were still able to ""sit up and take nourishment." A tradition was being built up around the college, and he knew of cases where money had been willed to the institution. He had told the Commission that it would not be to their credit as a Church if thc-y could not get £10,000 in a month but he could see that there was "nothing doing." "They were hit, wounded, and 3u hospital before a shot was fired," remarked Mr. Smith amidst laughter. "Wo had some of our ministers wobbling; we did not know which side of the- fence they were on, but we have a very fair idea now." Mr. W. Hopkirk and the Rev. J. H. Mackenzie were the two stalwarts on the Commission who had opposed the sale of the college. Mr. Smith said he felt that he had a duty to the memory of his father and a duty to his own sons to see if the sale of the college could be legitimately prevented. The college had been founded to the glory of God, and he did not want to see it turned into a State school. They should aim at getting the £10,000 instead of hauling down the flag. .If the Church deserted the school, then he would feel that he would have- to know where he stood with the Church. (Hear, hear.) An amount of £10,000 could not be raised in a few minutes, but that afternoon he had received promises amounting to £2200 in hard cash, therefore he did not believe that they would be quitters. (Applause.)

WAS IT INVALID?

The Rev. Dr. Gibb said he held that the Commission, in arge-eirig to the sale, had acted ultra vires, absolutely in contradiction to the letter of the law and the fundamental policy of the Presbyterian Church throughout the world. It was a palpable absurdity to say that the General Assembly, consisting of 200 ministers and 100 laymen, would entrust the disposal of property to a few men scattered up and down tho regions adjacent to Wellington. He was sure that the Commission's action was invalid. He had been responsible for starting'the college, but a mistake had been made in vacating the premises in Hobson street until they had a large sum of .money accumulated. The question noiV was how they were to increase the number of boarders to 100. If they could get that number and could induce the Government to let them carry on,- then the way was clear. He was satisfied that the college would become one of the greatest schools in the Dominion, but tho decision to sell was a calamity, .a ■ shame for the board, and for himself a bitter humiliation.

The Eev. J. H. Mackenzie, Clerk of the General Assembly, defended the authority of the Commission to act, but he said that ho had opposed the sale of the college, contending that the whole thing was irregular, in that all the- necessary formalities had not been completed in a proper manner. The executive of the trustees—four people in Wellington—had passed the resolution to sell. When an executive was dealing with a matter of £38,000 it ought to pause to see if more of the trustees could not be called together. The trustees did not have the requisite document before them because it was still in his possession. If the trustees had committed themselves to the sale, they had done so in the most irregular fashion possible. They had had no written statement before them as to what had been done in Commission. "This business has impressed mo with its haste and its secrecy," remarked Mr. Mackenzie to an accompaniment of hear, hears from a number of those present. He hoped the necessary amount of money would be• raised so that the college- could go on.

PREPARED TO GO AHEAD.

In the course of further discussion, Mr. Martin said the board would go ahead if it could find the money.

Mr. Malcolm Praser said that if £10,000 could, be'found within a fortnight he was sure that they would not have to sell. "If you havo the £10,000," he- added, "I have not the slightest doubt that the Minister will cancel the sale. If you have not, he will not do so."

Mr. M. Plimmcr, president of the Old Boys' Association, gave an assurance that that body would do all it. could "to remedy the evil that has been done."

On the motion of Mr. G. 11. Scott, seconded by Mr. D. Virtue, a committee of eight persons, with power to add to their number, was set up for the purpose of co-operating with the College Governors to raise £10,000 1o carry on the college, and to negotiate with the Government for the release of the Church trustees regarding the offer of sale. ■