CAPITAL HALVED

Northern Advocate, 8 June 1933, Page 7

CAPITAL HALVED

PORTLAND CEMENT COMPANY SHARES AT 10/- EACH. I’fi’Ol'OSALS EX DOR SKI). (Special lo “Nor(Hera Advocate.”) AUCKLAND, This Day. The chief feature of the gathering uf shareholders in Wilsons (New Zealand) Portland Cement Company, hell veslerday, was the consideration of proposals for a change in capital that had been recommended by the directors. In this connection, t lie chairman Sir (leorfje EUiol, formally moved tin; following resolutions: ‘‘That the capital of the company be reduced from £OOO,OOO, divided into 000,000 shares of £l. each, to £;;on,Oim, divided into 000,000 shares of in/- each, and that such reduction he effected by returning to the holders of the f 500, (M.H.1 shares paid-up capital to the extent of 10/ per share, such return of capital to be carried out in manner following, that is to

4 4 (a) The amount of capital to ha returned to each shareholder, calculated at the rale of lu/- per share, shall he ascertained and increased by - per cent, and all amounts of under to and all fractions of to shall then he paid in cash. 44 (,b) The remaining balance due to each shareholder shall then he satisfied by transferring to such shareholder New Zealand Government inscribed stock maturing on May .15, JUlot, equivalent in face value to such balance. ’’ The chairman said there was little to add lo the circular which had been ahead,V sent to shareholders. He said that si net* the inception of the company the directors had adopted an ultra-conservative policy and had reduced very substantially the standing values of their fixed assets instead of setting np liquid reserves. The idea was to bo in a position to make provision to deal with any drastic changes that might come in the cement industry. Such changes had not coni'e about aii<l the company now had a plant that was capable of dealing with four times the present output. The directors felt that the shareholders might as well have the Government bonds held by the company and it would not affect the company's working position, A large number of proxies had been received in approval of the directors' proposals. One had come to hand from a small shareholder who wished it to be handed to someone in. the room who ■would be prepared to vote against the proposal. Mis reason for objecting was that he considered that he would receive loss annually by the proposed change. Sir George Elliot dealt with this objection, stating that the writer was under a misapprehension. The company’s main source of protit-making ia the past had not been from iuvestmciist, but from. cement making, and its capacity in this respect would not be prejudiced by the proposed capital changes.

The suggestion had been made that the board should return cash to shareholders. instead of bonds, but the directors had felt it might prejudice the value of the bonds if a block of £llOO, (Hill had to be dealt with. This would nut. be the case if the bonds were distributed. The motion was seconded by Mr A. B. b’oberton. Small Holders Secure.

In the discussion which followed, .Mr B. ('. Benner expressed the view that shareholders holding 100 shares or less would have a dilliculty in placing their portion of bonds at what seemed to be the market value of the stock. He suggested that in the case of these small holdings the company might, pav out in cash and take the responsibility of marketing the debentures which would mil aggregate morn than alum: .tig’,(lo(l. h’eplying to this, the chairman stated that the company had an oiler from a broker who was quite prepared to take all these broken parcels at £OO I-V. They would, therefore, receive more than cash value. Hollowing the explanation of the chairman, .Mr Kenner expressed his satisfaction and withdrew an amendment which lu‘ had moved. A further extraordinary general meeting will be held on Wednesday, June gS, to consider the confirmation of the foregoing resolutions, and in view of legal technicalities to be observed the ‘proposals are not likely to be effective for another six weeks. The chairman’s motion was canned without dissent. EFFECT ON EMPLOYMENT. M HASH BBS OH PEI.IH.H. HHBMA.VHNT W’OBK PLANS. SIB (I. i:U.BIT’S VIEWS. (Special io “Northern Advocate.“> AI GKHAXD, Tliis Day. la his annua! address to shareholders in Wilsons Portland (N’.Z.I (Vinenf 1 ('n., I lie chairman of directors, Sir Geo. Elliot drew special attention to the falling off in the sale of cement and. its elTeel upon employment. After stating that the cnrtailm.enl of Govern ! mental, local body and private spending had been severely felt in building and allied industries. Sir George Elliot continued:

•‘lt has been estimated that over t'b per cent of expenditure on building ami construction work goes directly or indirectly in wages, and the tightening of the purse strings has also caused unemployment in the ranks of professional men such as engineers, architects and contractors. The position is no worse in New Zealand than in other parts ot the world, but that is little consolation to the man out of employment.

‘•How to get our vast army of unemployed back into useful work is a problem demanding the attention not only of the Government, but of every thoughtful person who has the welfare of the Dominion and its people at heart.

“By luxation, the*. Government has established an Huoinployment i’nnd producing some £4,Odd, 000 per anmiin to assist men on relief works. The rneinployment Board which administers this fund is to be congratulated on the work it is doing, and also on its endeavour to give preference to works with some degree of permanence. It is employing men for the improvement of roads, school grounds, clearing land • for farming, cutting drains and minor building operations, etc. Thi' board might go further, and with the co-operation of Government and local bodies start sm-h works

as sewerage, water impounding dams, concrete roads, etc. —works of a permanent nature required in many localities which would remain valuable assets after the depression had passed a wav.

Restoring Prosperity. 41 For works of this nature, it is true that a. portion of the unemployment funds would be spent on the purchase of materials, such as pipes, metal, sand, cement, timber, etc,, but a policy of such wise expenditure would not only find work for the unemployed, but would restore to some degree

prosperitv to many industries that are at present languishing. Take, for example, the purchase of Portland cement for construction of permanent concrete roads. Immediately a large number of extra men would be employed at the cement works, while coal mining, quarrying, haulage of raw materials, plant repairs, rail and steamer transport, waterside work, etc,, would- In* given such an impetus that men now on relief work would reenter the ranks of local industrial concerns, with a consequent relief to unemployment levies. Furthermore, the Unemployment Board would leave a mauument behind them that v\ould stand to their credit for many years to come.

Concrete Eoading Cited. “The chief of the U.B.A. Bureau of Public Eoads has taken a cement concrete road as an example and has been... able to clearly show that 91 per cent" of its finished cost goes in wages. “Admittedly the direct wages paid out on the job may only represent about 20 per cent of the total cost, but the money paid out for materials, upkeep of plant, transport, etc., etc., all contribute their proportions to the amount paid in wages, it is estimated that fully 2000 miles of rural highway throughout the Dominion have passed the traffic density where gravel maintenance is no longer economical. On some portions the wastage in maintenance and excessive vehicle costs is a burden on the community. “It surely would be infinitely preferable to stimulate local industries, by diverting the greater portion of unemplovment expenditure to the provision of urgently needed permanent works than to spend large sums on work of a non-productive nature.”