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MORNINGTON TRAMWAY COMPANY.

An extraordinary general meeting of shareholders in the above company was held at Watson's Hotel last night, convened on requisition for the purposo of considering a resolution that Messrs H. Law, J. Hazlett, A. H. Jack, G. Esther, J. Mitchell, and N. Y. A. Wales be removed from their oflice as directors of tho said company, and that Mr A. Solomon bo appointed in [dace of Mr Law, Mr 11. North in place of Mr Hazlett, Mr W. G. Geddesin place of Mr Mitchell, Mr B. Sicvwright in place of Mr Jack, Mr A. P. Berens in place of Mr Wales, and Mr T. Tomlinson in plaee of Mr Esther. The requisition was signed by A. Solomon, W. G. Geddes, H. North, A. P. Berens, and S. Solomon. About thirty shareholders wcro present or represented, the chair being taken by Mr Henderson Law, chairman of directors. Mr A. Solomon : Although I happen unfortunately to be the largest shareholder iu this company, I should not have ventured to propose a sweeping resolution of this kind unless 1 and those acting with mo had first assured ourselves that wo represent a majority of the shareholders and shares. There arc forty-three shareholders in tho company, holding 21,000 shares, and of this number thoso acting with me represent twcnty-livn shareholder?! holding 12,(100 shares. Outside of us and the seven directors (who hold 1,500 shares) there arc only eleven shareholders, representing o/JOO shares unaccounted for. Of theso, thre'j arc tho children of one director and three are in England, and that leaves only five shareholders unaccounted for. We havo nothing whatever to say against the directors excepting in their capacity as directors of the company. That they arc honorable men of business we have no doubt whatever, and that they havo done their best I admit. But I hope to show that their best has been a miserable failure. I desire to say a word or two with reference to the peculiar wording of the resolution. The directors seem to labor under the apprehension that it is offensive, and purposely offensive. That is not so. It is simply in accordance with the articles of association. Clause 72 Bays: "The company in general meeting may remove any director before the expiration of his period of office, and may appoint another person in his stead." That rule made it necessary that one of the proposed directors should be pitted against one of the retiring Board. The position we take up is this: that if the majority of the shareholders are dissatisfied with tho management of tho company, and with tho results of that management, they have a perfect right to ask that thcro should be a change in tho board of directors, and wo say that under these circumstances the directors have no right to complain at all. If the company had been successful it would have been another matter. But that is not so. We are not getting any dividends, and our shares our quoted at about 50 per cent, discount, and scarcely saleable at that. Therofore we have a perfect right to ask for a change. The directors must remember that tho company is tho property of the shareholders, and not of tho directors; and the majority of the shareholders have a right to use that property as they think proper. In any case it seems to me that the directors have to a great extent brought this action upon themselves. In the first place they last year insisted on electing to the directorate, in spite of the protests of Mr Scoular and myself, two gentlemen who at tho timo resided iu London. That was a most extraordinary proceeding. And then again they declined to pay any attention to the representations made to them by a deputation of shareholders who waited upon them in Mr Mitchcli's oliico. Tho directors, by their refusal to entertain tho proposals of that deputation had seriously prejudiced the company's position with tho Mornington Borough Council. If during the time that no dividends were being paid representations bad been made to the Council asking permission to utop tho extension or asking a modification of the tcrniu on which it was run, probably aonicthiug would havo been granted, but by not doing no they have prejudiced the company to some extent. I believe the directors arc going to announce this evening that a (id dividend is to be paid, and what will be the result? If you go to the Mornington Council now they will say to you: " What right have you to any concession? You are a dividend-paying company." On this point thoso who aro acting with me entirely endorse the views expressed in a circular issued by Mr Hugh Macneil. We maintain that tho directors, some of whom are original promoters, have kept tho management in their own hands, and tho result has been miserable failure, and that under these circumstances we are right in asking for a change. Mr Law was one of the original promoters, and so far as my memory serves me, he has been chairman since the company was started.

The Chairman : No. Mr Solomon : For most of tho time at any rate. What has been the result ? For the past thrco years no dividends have been paid, and now our shares aro unsaleable at 50 per cent, discount. Is it unreasonable to say that a change of directors is wanted ? The same remarks apply with equal force to Mr Hazlett and Mr Hill Jack and others. Tho fact is that the extension should never have been made.—(Hear.) That is what is the matter. I am glad that Mr Wales said "Hear, hear," because some of tho geutlemen I havo named must have been responsible for that extension, I maintain that no sane man could have expected the extension line to pay for tho next fifty yoarii. I am sure that Mr Macneil, when he uaid that that line was only made to tuit the convenience of a few private gentlemen, spykt the truth ; and it ic, I consider, .-,

monstrous thing that the shareholders' money should have been used in that way when there was not tho slightest probability of the line paying. Wo have a steam tramway for the extension, and a line constructed at a Co3t of between L 4,000 and L 5,000, and the gross takings of this railway arc about 14 10s a week—about the earnings of a hansom cab ! The question may be asked what is my policy. Well, gentlemen, I do not feel called upon to (Inclose any policy, T simply say that I think we can do better than the present directors, and I am perfectly certain we could not do worse. You have managed this concern disastrously ; you have brought down our shares by o0 per cent. ; and no one can do worse. Without any desire to give offence, I may tay that I decline tuplacemuchrolianceon any figures that maybe brought forwa r d. My want of faith is born of experience. At the last meeting certain figures were put forward by tho manager as to the cost of working the extension, and the shareholders were afterwards told that these figures were all wrong. Worse than that, when tho tram was first started the returns given by the manager to the directors and given by tho directors to the shareholders showed that the extension was earning nearly L2O a week, which would have been sullicient to pay the interest on the cost of construction and the working expenses. When I asked how it was that the returns had fallen from L2O to L 4 10.3 a week, I was told that it was all nonsense, that the figures were wrong, and that the extension had never earned L2O a week. The accounts were so arranged aa to show that the extension had been earning three times as much as it did earn, and some of the earnings shown were those of the main line. Ido not know that it is much use arguing further. There is nobody to bo convinced but the directors, and it is not likely that they will bo convinced. I shall have tho opportunity of replying after the speakers on tho other side, and shall now content myself with moving the first resolution.

Mr 11. NoiiTii, in seconding the resolution, said that the deputation which waited upon tho acting chairman of tho company had got no satisfaction whatever, but had been snubbod. Mr James S.miti; : In what way was the Committee snubbed ?

Mr Noktii B.iid ho understood from Mr Macneil that the Committee could not get the slightest satisfaction from the chairman, and that every question they raised was pooh poohed. Ho (Mr North) believed the directors to be strict and honest and hardworking, and to have done their best. He thought they had got into a certain groove, out of which they would not go. The Chaikman : It has been moved and seconded that the present board of directors of this company, except Mr Watson, be removed, and tli?t the gentlemen named in the requisition for this meeting be appointed in their place. Mr Solomon is quite correct in saying that the proceedings whicli have led up to this point, if somewhat irregular, are quite in conformity with our articles of association. It is now, therefore, in the power of shareholders to get rid of six members of the present Hoard if they consider it is for their interest to do so. The directors desire that shareholders will bo guided solely by that consideration. The directors' own interest us shareholders is identical with yours. Why the movers in this matter have put us all to the trouble of holding this extraordinary general meeting, when the time for holding the ordinary annual general meeting is so closo at hand, docs not appear. I feel assured that the action of the leadors in the movement has been taken in order to annoy the present director;!

Mr A, .Solomon': No, certainly not. The Chaikman : And that the said leaders have procured the co-operation cf_ certain shareholders by giving them wrong information. If these shareholders had been allowed to wait for the ordinary general meeting, when correct information wcu'd have been submitted to them 113 to the act 11 tl Mite of aH'uirs, they would not, I think, have been parties to these proceedings. Vou will naturally ask why the leaders in this movement wish to annoy the directors. There is no use beating about the bush--l will tell you why. Mr Solomon for some years past has made repeated attempts to obtain a scat on this Board. Mr A. Solomon : That is utterly untrue shamefully untrue. The Chaikman : The minutes of our meetings will show whether it is true or not. The shareholders have always rejected his candidature, and Mr Solomon lias chosen to construe this action of the shareholders as iin insult to him, for which the directors were responsible and should bo punished. Another leader his also attempted unsuccessfully to obtain a seat on the Board. Another leader's grievance is a very paltry one—perhaps he is abovo being influenced by it. It is the case, however, that formerly this company's supplies to a large amount were taken from his firm. Latterly the company has saved considerably by getting its supplies elsewhere. Mr W. Cow : Be good enough to state what firm you allude to. Mr W. Watson : A. Briscoe and Co.— (Laughter.) The Chaikman : Do not suppose, gentlemen, that the present Board are averse to new members of a right sort coming on to it. There is a vacancy now, caused by Mr Justice D?nniston's removal to Christchurch. In the tcrmi of the articles there will be other two vacancies in a few weeks, when the year ends. Moreover, any of tho present Board will gladly give place to good men. They have served you a good long time

JJr A. Solomon : And well they have done it, too. Tho Chaikmax : And served you well, although I say it. Let us havo some new blood infused into the Board. With bueh names on your Bharc-list as Messrß llallenstoin, Thomas Brown, W. L. Simpson, James Mills, Sievwright, Scoular, James rimith, Davie, and others, you can he at no loss for suitable men. As so many of you have been good enough to attend this evening in response to our nquest, I would like to make some reference to the past history, the present state, and future of this concern. To all shareholders, including the directors, no doubt the want of dividends for the past two years has been disappointing. The chief cause of this has been tho falling off of traffic which has been experienced, not by this tramway ulono, but by the other tramways in this City. For this, I think, you will hardly blame tho directors, but rather oondolo with them ; for 1 assuro you it has made their work very uphill for some timo past. It is gratifying to nuto that tho returns for somo weeks past havo compared favorably with those- of the corresponding weeks last year, indicative of u, favorable turn in tho tide. However, let ua glance at the past. You aro aware, gentlemen, that while this line was in course of construction it was expected that the then paid-up capital of 10s (id per share, together with L1'2,000 raised on debentures by tho company, would be sufficient for all its requirements. By the time tho works were completed and all the freehold which was neceseary was paid for, and working stores laid in, more than 1/2,000 extra was required. For this tho directors mado temporary arrangements, and if traffic had not fallen oft" the amount would scon havo been paid off out of profits. But with a reduced revenue it was practicable only to pay off part of tho amount from profits. To meet tho remainder it was deemed advisable to rais3Ll,s7a by calling up Is Gd per share more capital. Out of profits, besides this, an appropriation of LSOO has been made to meet depreciation in value of engino and boilers. These are tho reasons why no dividend was declared at end of last two years. We have pleasure in now being able to stato that tho company owes nothing except its debentures, and that at the end of our financial year there will be sufficient at crodit of tho company's bank account to pay a moderate dividend this year, if at the ordinary annual meeting shareholders bo desire. Iu addition to the special outgoings roferrod to, we have had a steady drain on our finances for keeping the condition of your property up to par. I may remind you that all parts of a tramway except engines and boilers aro supposed to be continually in courso of renewal, and so kept up to par. Notwithstanding unfounded reports to tho contrary—circulated for their own ends by the leaders of the present movement—l am glad to bo able to assure you that your property is in first class order and ci.'udittou, tWlii t!u>.t''i y of this elatcmtut, 1

shall now quote from the Government inspector of tramwaya' report. After his laßt monthly inspection, Mr Barclay writes: — " Having made a careful examination on the 3rd June of botli the main line and extension cablo tramways, together with the engines, cables, and rolling stock used thereon, I have pleasure in certifying that all are at present and have been maintained in an efficient condition." Mr Crawford, Government inspector of engines and boilers, also certifier under date Dili ult. : "On inspection of your boilers I find thorn both in first-elas3 order and condition." Some considerable time ago we had drawings mado of an alteration aud improvement viz., a loop-line near the engine shed, which will enable the dummies to be run oiteuer without much extra expense, and so enable us to overtako the extra traffic we expect during tho coming season. This alteration is intended to be made next month, It will not ccst very much. Gentlemen, I have referred to tho reduction of traffic and consequent reduction of revenue which we have experienced during what is called "tho depression." To meet this wc applied ourselves to the reduction of expenses in every way which did not interfere with tho proper maintenance and efficient working of tho tramways. I have had an abstract made of all the balance-sheets issued by the company. Any shareholder who wishes it can have a copy of this. It shows how the exponses havo been year by year curtailed to meet the reduced revenue, and it also shows how all tho profits earned have been appropriated. I havo also had prepared, and have now before me, an approximate balance-sheet to show how the company will stand at the end of the current year, on the 30th inst. It shows that for tho past year the balance of revenue over working expenses of. every kind is L 1,430, or equal to 5:; per cent, on the amount of the company's paid-up capital and debentures. When this is carried into the profit and loss account, and interest on debentures lias been charged thereto, there remains a balance at the credit of profit and loss of L 1.007 83 9d, equal to 8£ per cent, on tho paid-up capital of the company, which will bo available for appropriation as shareholders at the annual meeting may decide. To accomplish this task, while oar revenue until the last few weeks has been steadily decreasing, has been no easy task for your directors and manager. It lias been done with a reduced population, and with a reduced scale of fares, for, as you know, our fareß are lower than thoße of any other tramway in the City. With roference to some of Mr Solomon's remarks, I may now state that when he quotes tho very largo number of shareholders he gives us as among his supporters, I think ho is reckoning on many who aro not his supporters. As to the present directors being responsible for the making of tho extension line, I suppose they arc entitled to bear their sharo of the responsibility. No doubt the line was made rather early. It wus expected at the time it was proposed that the population would increase, but instead of that the population had been decreasing. Very soon afterwards it became evident that tho lino would not prove a profitable one, and the directors of the day (Mr Bastings was then chairman) did all they could to retard tho works. They were urged on by certain shareholders, notably Mr Solomon, to push on tho works, and the minutes of one of tho annual meetings, which are now before me, confirm what I state.

Mr Solomon : Will you read that, please? • The Chairman proceeded to read an extract from the minutes.

Mr Solomon : Is that what you call urging ? The Chairman : Yes. Mr Solomon said that Mr Denniston had on that occasion urged the construction of the line within tho specified period, and he (Mr Solomon) supported Mr Denniston simply in order to savs the company from becoming involved in a lawsuit. TIIO Chahlman : You became a shareholder when you knew that tho extension was to bo made. Mr Solomon : Oh, no ; 1 did not.

The Cmaikman" said that the friction that had been spoken of between tho directors and shareholders occurred while lie was in tho Old Country. He believed that reflections had been cast on tho Board, which he felt to be littlo called for, knowing how /.Luloua in the interests of the shareholders all the directors had always been. Mr jO\v siiid ho was present to represent Mr Hugh Macneil. The chairman had spoken in such a personal way that he could not be misunderstood when he rcforrcd to one of tho movers in the present matter being influenced by personal spleen because his firm had lost the company's business. So far from this being the fact, he (Mr Gow) believed it could be shown that the spleen was entirely on tho other side. Mr Macneil's first interference with the Mornington Tramway Company was in September, ISSO, and the second was on the 14th January, ISS7. Curiously enough, it was on the back of this entry that it was stated that the account for tho importing of ropeß was removed from A. Briscoe and Co,, and he asked why '! Mr G. Esther : Because we can get them at much loos price. Mr Gow did not believe that Mr Macneil knew at this moment that tho account had been removed, and yet the chairman tried to force such an explanation as personal spleen upon Mr Macneil'd attitude. It seemed quite childish, petty, insignificant, that a man like Mr Law Ehould try to place such an explanation on Mr Macuoil's aclion. In reply to Mr Smith,

Tho Chairman said that tho bnrdeu of Mr Macneil's complaint was that he could not always get a covered carriage to travel in on the line, and that he had to travel in what he called tho death-dealing dummy.— (Laughter,) Referring to Mr Macneil's circular, he said it betrayed an utter ignorance of tr-c financial and mechanie.il working of the line; and ho was suro that Mr Macneil, if hero, would regret having written it. Mr Leaky said that he held a power of attorney from Mr Bastings, aud he now learned that Mr Solomon held Mr Bastings's proxy. Ho would ask tho chairman's ruling aa to which of the two should act. Tho Chairman : I am informed by the company's solicitor (Mr Sim) that you being hero is the samo as Mr Bastings, and does away with the proxy. Mr R. H. Leary then inquired from Mr Solomon tho reason why ono member of tho Board was proposed to be allowed to remain.

Mr Solomon : For this reason—that wo aro advised that if wo removed every member of tho Board tho thing would stop ; and it being necessary from a legal point of view, wo left the mo3t harmless member, my friend Mr Watson.-(Laughter.) Mr Leary thought it wua uudesirable that a company should be managed year after year by tho same men— (hear)—but at the same timo Mr Solomon had not convinced him that tho resolution should be passed. He would not move an amendment, but would suggest that tho directors should retire in a body at tho next meeting. Ho thought the proper time to removo directors was tho annual meeting, and he should vote for new blood being put on tho Board, but he could not voto for the resolution, for ho thought it would bo a reflection on a sot of honorable men who had for years worked hard and obtained little nay. Mr Davie rose to speak.

Mr Solomon : Excuse mo. Who do you represent ? Mr Davie : Myself. Mr Solomon : You are not a shareholder, Mr Davie : Yes I am. Mr Solomon : Since when ? The Chairman : Mr Davie holds 250 shares.

Mr Solomon : I did not see his name on the register when I searched it on Friday. Mr Davie : Yes, on Friday I was a shareholder.

Mr Solomon : On Friday morning you were not.

Mr Davie : I think I was. Mr A. Solomon : All right. Go on. I see what we are coming to now. Mr Davie said he agreed with Mr Loary that in concerns like that they should sometimes have an introduction of new blood, but he thought that Mr Solomon and his friends should have gathered up their strength for tho annual meeting, and then nominated two gentlemen in opposition to the two retiring directors. He was uofc prepared to say that such a course would be successful, but it would be a fair and legitimate course, If, however,, tho circumaluncta w'tro siuh as to justify the p'reWenfc

meeting, he thought the shareholders should be afforded an opportunity of voting by ballot for those candidates they thought most eligible. Mr A. Solomon : You can do so now. Mr Davie : Not so. They were in the position of having a series of men pitted one against the other. They had Mr Solomon pitted against M r Law. There might bo many shareholders of tho opinion that Mr Solomon was a desirable man to have on the Board and, looking at his business capacity, the speaker could not say he was an undesirable man—but there would be many shareholders of tho opinion that Mr Solomon was not a fit and proper man to bo chairman in place of Mr Law, for that was the intention of the whole movement. He denied that Mr Solomon had made out a case to warrant them in asking tho removal of tho directors from office.

Mr W. L. Simi'.son pointed out that no explanation had been made as to whether they were prepared to accept Mr Leary's suggestion. If so, he would be prepared to go into that, but he was not prepared to vote with Mr Solomon on the indictment ho had framed.

The Chairman stated that only the specific business for which an extraordinary meeting was called could be dealt with at that extraordinary meeting. Mr Simpson : Yes, but you might indicate whether you would at the annual meeting be prepared to resign in a body, and then you would carry the votes to-night. Mr A. Solomon said that if the directors would promise to do that he would withdraw his resolution. Mr Wai.es said the directors were not to be oii3ted by threats, and for the sake of catching voteß that night ho would not resign. Ho spoke for himself, but ho thought the others agreed with him. Mr Simpson wished an indication as to whether the directors would resign at tho annual meeting. Mr Walks : I am not prepared to answer that to-night. Mr T. Brown said he was one of the deputation to the directors, and when they met a little friction took place—unintentionally perhaps on both aides —but it was by no means of the character indicated by Mr North.—(Hear.) They were received courteously, and had an opportunity of making a statement, but to accuse the chairmanof snubbing the deputation was to accuse him wrongly.—(Hear,) Ho did not know any stronger reason could be given for desiring a change in the management than the nonpayment of the concern, and he agreed that tho reappointment of the directors was a mistake. He also thought tho Board ought to havo accepted Mr Hill Jack's resignation when it was placed in their hands before Mr Jack went to London. He thought both parties that night woro wrong. He strongly agreed that new blood would be of great benefit to the Board, but ho would not accept the sweeping reform that was proposed. The great mistake he thought had been in not calling up the whole of the capital. Replying to Mr Smith, The Chairman said the Board unofficially understood from the members of the Mornington Council that it was useless to attempt to stop the extension, Mr J. Sooulak was convinced they need not ask the Mornington Council to stop the line. Individually, and as mayor, he would object to it. Mr Smith thought it was manifestly unfair to seek to make the present directors responsible for the mistake that had been made in regard to the extension line, and not a syllablo had been uttered to show how by different management a dividend might havo been obtained. Ho had never known a weaker case than that brought forward by Mr Solomon. Ho took it that the regulation providing for tho removal of directors only applied to casos whero there had been { a gross abuse of their powers by the direc- , tors, who were, therefore, worthy of ignominious dismissal; but in tho present case the directors had admittedly dono their best, and to dismiss them in the way proposed would be to cast an unmerited slur upon them, Mr Walks said he cared little for the result, and he would only say this—and he did not say it in any disparagement of tho gentlemen who woro proposed—that ho did not think any of them were equal to thoso whom they were pitted against.— (Laughter.) Mr S. Solomon said it appeared to him that there was only oae head to the charge against tho directors, and that was that generally speaking—no matter from what cause—the company had beon a lamentable failure, and ho did not think that any gentleman who had spoken would deny that, if that wero the case, tho shareholders who had large sums of money involvod had a right to say that they preferred to try if other men could not do better than the present directors had done. He thought tho movers of the resolution would find that it would bo lost, but he would say this : that although it would be lost, the majority of shareholders would favor it, and the directors would rotain their seats by a majority of the shares in tho company. It was a very significant fact—it might bo a very innocent one, though he took leave to doubt it—that tho most active opponent of tho resolution obtained his interest in the company on Friday last; and he challenged the directors with this : that if the vote had been taken on Thursday last they would have been ousted from office, although they would that night ho retained. Mr A. Solomon, in replying, said that ho had acted honestly and conscientiously in the interests of the company. He had no desire to be a director of the company, and if this motion was negatived never would bo a director. He had done what wa3 right and honest, and proper and just, and if he was beaten owing to the distribution of shares he would put up with it.

Mr Leary : Withdraw tho motion,

Mr S. Solomon : Certainly not. Mr A. Solomon : No ; seo what we aro beaten by, with all the distribution of shares. A show of hands resulted in ten hands being held up in favor of the motion and ninoteen against. A poll was demanded, and a ballot having been taken the result was declared to be— For the resolution, 3,440 shares; against, 5,855 shares; majority, 2,415 shares. In several oasos proxies held by Mr Solomon were nullified by later proxies held by Mr Wales.

The Chairman, in declaring the resolution to bo lost, said that within tho last week tho transfers amounted to 865 votes, so that did not affect tho result at all.

The meeting terminated at 10.40 p.m.

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Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/ESD18890618.2.36

Bibliographic details

MORNINGTON TRAMWAY COMPANY., Issue 7936, 18 June 1889

Word Count
5,123

MORNINGTON TRAMWAY COMPANY. Issue 7936, 18 June 1889

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