SPOTLIGHT’S REPLY TO MR. MURDOCH.

Hawera Star, Volume XLIX, 30 August 1929, Page 9

SPOTLIGHT’S REPLY TO MR. MURDOCH.

(To the Editor)

Sir, —Praise be, I have get* Mr Murdoch into the open at last. 1 have written three letters in all, and. I reality began to think that Mr Murdoch was not going to embark on a controversy in reply: but I never thought, Mr Editor. that Mr Murdoch! would allow himself to drop so easily into a. tnaip. The Power Board members are going through the country with a. slogan to the effect that as there are so many thousands of ratepayers to choose a, Power .Board from that it follows as &

necessary cordlaiiy that the very bestmen a,re chosen. I would have thought that one- had only to consider the type of men we get in Parliament- to have found an answer to this hofld assertion, and as Mr Murdoch is the chairman of the Power Board I suppose I may be entitled to say that he must lie “the brightest star in the, constellation.” Is he ?

Now let’s take liis statement and analyse it. Mr Murdoch siays : “I. flatly contradict Spotlight’s statement that it was 1 on lai capital of only £26,ooothat the company paid its 16 per cant and 20 per cent, dividends. The capital was £53,050. and the year that- yielded the shareholders 20 per cent, showed net profit of £8242.” Now, I may he an irreverent being, as Mr Murdoch characterises me, bat 1 am not a fool, and I have sufficient common sense to make full enquiries before I make assertions. The" capital of the oompiamy when the ] 6 o?r rent, and 20 per cent, dividends were paid was certainly £53,000. but it was made m> as follows :

Total £53.050 The preference shareholders got at fixed dividend of 7 i>er cent. The £13,765 ordinary shams received 16 per oent. and l 20 per cent, respectively and the “C” shareholders received nothing at all. So that I am not merely correct, Mir Murdoch, m stating that the dividend was paid on £26,000 odd, hut 1 have understated' the position because the dividend of 20 per cent, was only on £13.765, and that is why, when the share capital was reorganised on tlie valuation of 1927 and was brought up to the capital value of the assets (£80,000), the dividend, as Mr Murdoch admits, readied only 8 per cent. The Power Board has got to make a dividend, not on £BO,OOO, but on £136,000 or more by the. time one adds i tlie expenses paid out in connection with the award and preliminary expenses. So. Mir Murdoch. where arc thesp wonderful profits that you- talk so glibly about? However, mistakes am easily made, and I prefer to be not particularly cruel about Mr Murdoch's dreadful faux pas, but what I am concerned about is that a man who is at the head of the Power Board and is recognised to have business acumen could so readily deceive himself, because a mere schoolboy would have known there was something ; wrong with the statement that the net profits were £8242, and that 20 per cent, wa® paid on £53,000. Get your pencil out, Mr Murdoch, and! see whether it works out, and don’t forget in doing so that vou have got .first to deduct income, tax from the net profits. Now, dealing with Mr Murdoch’s ■second bold statement that them are such wonderful future possibilities in the scheme. I must confess that lam astounded to think that Mr Murdoch is prepared to quote the company’s experts as to the future possibilities of the Power Board. These men were there for the purpose of showing what a wonderful concern the company was, and what a big price the Power _ Board ,should pay for it, and they evidently exceeded beyond expectations. _ "Why does not Mr Murdoch quote, his own experts as to the value of the company’s undertaking, because, just as the company’s experts song high, so tlie Power Board’s sang low, for. as everybody knowts, evidence, given in a easels quite a different thing from the considered opinion of an independent expert-. Dear me, 1 begin to get quite worried. When Mr Bone was liere he stated, so definitely that £67,000 was an ample price for the company’s undertaking and whatever .information the Power Board did not have they certainly did have- the amount of revenue that was coming in each year, for this was public property, and disclosed in every balance-sheet. Yet, with the knowledge, of the annual revenue, which after all is the deciding factor, Mr Bone quite frankly stated that it could not he made to pay lat £140,000, which the company was asking; .but, mark you. after the arbitration with that wonderful sang froid wliicSi: so characterises local body administration, Mr Murdoch is telling the’ ratepayers thlait it is a gold mine a.t a figure Mr Bone characterised as “.ridiculous.” There you are. Mr Murdoch, you have got to swallow vour medicine this time. But never mind. Power Board tadtministration is something quite new here, and. like the rest of New Zealand, the local Power Board has got to learn to crawl before it can walk and to profit by its mistakes.—l am, eta., SPOTLIGHT,

Plreferenoe shares .. £12,760 Ordinary shares; .... .. 13,765 “0” shares .. 26,525