IMPERIAL BUILDING AND INVESTMENT SOCIETY.

Evening Star, Issue 7449, 18 February 1888, Page 2

IMPERIAL BUILDING AND INVESTMENT SOCIETY.

The annual meeting of the Imperial Building and Investment Society wa« held last evening : at the D. /.M.O. Association's rooms. Mr R. 1 Chisholm (president) occupied the chair, and : there were about twenty members present. The Chairman, in moving the adoption of the report, said : 1 In moving the adoption of the fourteenth annual report and balance-sheet of the Imperial Building and Investment Society which by resolution has been taken as read, I need hardly say that probably both may be regarded by some of the shareholders at first eight as disappeinthg. Imesling shareholders naturally, ami f think equitably, under ordinary circumstances expect a fair return in the form of a dividend at the close of the year on the amount of their shares, and up to last year your directors were able to carry out this principle, recommending a dividend considerably in excess of the then current rate of interest. It is true that the continued depression determined the direc'ors to recommend much smaller dividends for the last three years, and that in the report now under consideration your directors, wisely I think, for reasons which I shall refer to a little later on, recommend no dividend; but while that is so, an analysis of the dividends paid by the Society give an average to the shareholders—including the present year, when no dividend is declared—of between 7 and 8 per cent., showing that the rate of interest the shareholders have been receiving on their investment in this Society up to the present on the aggregate is equal to, and probably in excess of, that they could have received from any other source, and certainly in excess of what they could hove received on fixed deposit with any bank or kindred institution. From the report you will see that the net profits for the year amount to L1,03117s lid, a result that cannot be regarded other than highly satisfactory considering the effect that a continued depression must have on ail such societies. From this sum, however, you will see the directors have written off L2OU 6s 31, interest charged on property in hand. The equity of this you will readily understand when I explain that the advances upon some of the properties referred to were made years ago, at a time when the value of securities wei e immensely in excess of what they are at present; and that although the amount then advanced has been materially reduced by exemption payments prior to taking them oyer, and subsequently by tents, etc., the directors think the margin between their present value and what they stand in the hooks of the Society is not sullloient to warrant them being loaded with interest. This, as you will see, leaves a balance to be dealt with of 1,825 12s Bd, which the directors recommend should be carried to guarantee account. The uncertainty of the real value of securities at the present time I need scarcely say necessitates the utmost consideration and caution in dealing with balances; and it is after mature and careful consideration your directors make this recommc idation, believing it to be the best in the interests of the shareholders and Society. Another and very important matter in the report to which I wish shortly to refer is the (aot that during the year a number of the shareholders had given notice cf withdrawal, consequent, no doubt, partly on the small dividend received last year, and a probable—in their minds—doubt as to the stability of the Society. As this fact became known the notices cf withdrawal increased, shareholders, no doubt, realising that if the dircc ors paid out these shares in lull it would absorb for some time ail avail ible funds, and any probable loss on any security would fall upon the remaining shareholders, Tbo directors gave the matter their careful consideration, and determined, in the interests of the S-clety, it would be best to refuse in the meantime to pay any shareholder wishing to withdraw, using the available funds to pay off debentures as they became due, and to put the whole matter before this meeting, strongly recommending those shareholders who have sent in notices to reconsider their decision and withdraw the same, as persistence in the course adopted will compel the directors to stop all advance on security, to use the revenue for some time solely to the paying of debentures and other prior indebtedness, which will practically mean a suspension of the real business of the Society, a liquidating of its off drs at a most inopportune time, a sacrifice of securities, and oinscqnent positive loss to all shareholders. The best evidence of the ultimate prospect of every shareholder receiving the full value of at least their shares is the fact that, despite the depression, still severe, the Society last year has made a net profit of L1,03117s lid, and that, too, on the face of the practical suspension of the real and most profitable business of the Society, through the notices of withdrawal referred to. So for, then, as I understand the position, the future of the Society remains with the shareholders. If they persist in their withdrawals, liquidatiou in justice to all shareholders must follow with a certain loss to all ff these arc retired, there is every prospect, with careful and judicious management, that the Society will return full value to the shareholders. I therefore beg to move the adoption of the report. Mr A. Judge said that he saw for the previous two years bonuses of 5 and 3 per cent, respectively, but this year none was declared, although the balance was larger than on the two occasions referred to. He could not see why a bonus should not be declared now. The Chairman 'said that he bad given the reasons in liis remarks when moving the adoption of the report. Ho might say that there had been a great many withdrawal? of late. Mr Mather said it seemed to him that the directors were not going to pay a dividend or allow withdrawals either, but were going to stick to the lot. It seemed a dog-in-the-manger policy altogether. Mr E. E. 0. Quick remarked that members should bear in mind that the times were exceedingly difficult, and that very few mortgaged properties would realise the amounts they were mortgaged for. Under the circumstances, he did not think it wise for members to withdraw their money. Mr Judge said it seemed to him an unfortunate thing that he should be an applicant, about twelve months ago, for a partial withdrawal, and had not got the money yet—it might, from all appearances, he twenty years before ho got it. He did not wish to cast reflections mi anyone, hut must say it seemed strange that when he wanted a paltry sum of from L2OO to L2(io he could nof got it. As to the declaration of a bonus, were not the directors bound by their rules to declare a bonus every year ? The i IJairman said that the rules did not require them to pay a bonus. No one felt more than the directors did the hardships of the shareholders, but they had to conserve the interests of the shareholders as a whole. If all the sbarehoUh rs were to withdraw, the Society would have to be liquidated. Mr T. M. Wilkinson remarked that if that was the position it would be better to liquidate at once. There were no borrowers, and the Society was doing nothing, so that if they went on in that way yeai‘ after year they would only make further losses The best thing to do would be to realise on their securities. The Chairman said he had given the directors’ views on the position ; the taking of any action rested with the shareholders. The motion for the adoption of the report was carried. The election of directors was then proceeded with, Messrs R. Chisholm, J. Hercus, and A. Gibson being re-elected, Mr Black was re-elected auditor. Mr Gardiner moved ‘‘That members should be allowed to borrow oh their shares at something less than the usurious rate of interest at present charged; say at 7 p6r cent., or less.” The Chairman said it would be better to put it as a recommendation to the directors. This course was adopted by Mr Gardiner, and the proceedings closed.