KUAOTUNU QUARTZ CRUSHING COMPANY.

New Zealand Herald, Volume XXVIII, Issue 8531, 3 April 1891, Page 3

KUAOTUNU QUARTZ CRUSHING COMPANY.

A STORMY MEETING. An extraordinary general meeting of the shareholders of the above company was held yesterday afternoon at the company's office, A.M.P. buildings, Queen-street. Mr. J. M. Alexander presided, there being about 24 gentlemen present. The object of the meeting was to consider the financial position of the company. The Chairman, in opening the proceedings, said that before they entered into the contract for the erection of the battery they were about £300 in arrears; but were afterwards informed that one gentieman, who had offered to take 1000 shares, had failed to do so, which circumstance increased the amount in arrear to about £500. Moreover, the original estimate of the cost was exceeded. The directors thought to meet the difficulty by inviting the shareholders to take up further shares, but they met with no response, and they therefore decided to call the shareholders together to consider the state of affairs.

Mr. Harrow stated that he believed that the 1000 shares referred to by the chairman were never really tendered for at all. The whole affair was simply fictitious. Mr. Cozens said that, in his opinion, every shareholder could call upon the directors to refund their money. The Chairman pointed out that the statement made by Mr. Harrow was entirely incorrect. The shares had been applied for by a gentleman at the Thames. Mr. Harrow wanted to know if Mr. Douglas was a shareholder as he had seen him voting at one of the meetings ? The Secretary stated that Mr. Douglas was not; and then read the application for the shares, the applicant being George Crocker, mine manager, of the Thames. This application stated that the sum of £50 was enclosed with it. Mr. Harrow: Where is the £50? They must have pocketed it. The Chairman stated that it never came to hand. He went on to say that the erection of the battery cost £3269, of which sum there was a balance due of about £1200, for which they had no funds. • Mr. Harrow said that enough had now transpired to show them that they had no confidence in the directors. He would propose a vote of want of confidence in them. The Chairman went on to say that the directors had no time to go through all the applications that were made for shares. However, they could hardly expect .their creditors to wait to be paid, and the directors wanted the shareholders to see their way to take up more shares and thus cover all their liabilities. He called attention to a letter which had been recently published by Mr. Hanchard, which stated that several gentlemen had not paid their first calls, and he pointed out, in reply, that only 10 per cent, was in arrears, which was not a large amount. Mr. Cozens asked how it was that a certain director had not paid his call? Mr. Harrow : Perhaps he is like me—a pauper. The Chairman went on to say that there had always been a quorum present at the meetings of the directors, with one exception. They had been most regular in their attendance. With regard to the payment of £200 Eer annum to the directors, that was to have een paid out of the profits, but as there had been no profits they had received nothing. Mr. Hanchard said that he had intended for several reasons not to pay the last call, but he received notice that he would be if he did not do so. He therefore paid up. With regard to the attendance of directors at the meetings, he was aware of one important meeting at which considerable business was transacted, there being no quorum present. Mr. Brett replied that he was present at the meeting referred to, when there was only two gentlemen present. They did nothing on the occasion. They only suggested certain things which were afterwards approved of at another meeting, He would also like it to be known that Mr. Hanchard asked them to lay a tramway to a certain claim in which he was interested, but he was told plainly that it could not be done. The letter of Mr. Hanchard referred to was written after this refusal. Mr. Hanchard flatly contradicted Mr. Brett's statement about the letter. With regard to the tramway, he was still prepared to make a proposition that it should be carried out. This line and several other similar ones would be a benefit to the company. Mr. Brett went on to say that he felt very much annoyed about what had been said of the appropriation of £200 by the directors. He had never received a penny. His object in taking up a share was only to give the affair a start, and he never hoped to make anything from it. He admitted that they had been misled in one or two things, and the grant of 1000 shares ought to be explained. Mr. Douglas had signed the original paper and attended the first meeting, and on that occasion he had ae much right to vote as anyone else. Mr. Hanchard said that Mr. Brett's admission that he was not aware of the provision made for the payment of £200 to the directors showed how a little they were interested in the affairs "of the company. He maintained that, in spite of what had been said, profits were being made. The articles of association were most ingeniously compiled for the protection of the directors. The Chairman said that, in his opinion, the directors of very few companies were acquainted with all that the articles of association contained. In this company the directors had rendered their services for nothing. As for himself, he never expected to get much out of the concern. Mr. Hanchard asked it there were any written contracts with other companies, and, if so, what were the names of the companies ? The Chairman replied that there were no written contracts. They had found it impossible to get such contracts. Mr. Hanchard stated that he took up shares under the idea that they had certain contracts, and he had, therefore, it appeared, been the victim of amistepresentation. The Chairman said that any contract would not have been binding, inasmuch as the battery had not been erected at the time stated in the contract.

Mr. Hanchakd contended that if there were misrepresentations, he had a perfect legal right to recover his money. He would see about doing so. Mr. Harrow stated that he was indue ed to take up shares by Mr. Cook, the secretary, who came to him and showed him a long list of those who had agreed to take up shares. Some of these gentlemen were not shareholders.

The Chairman explained that at the meeting for the formation of the company he had mentioned that those who had signed /to take up shares in the syndicate were not bound to take shares in the company, and some gentlemen no doubt took advantage of this circumstance. It was a pity Mr. Cook was not here to defend himself. He (the speaker) could not of course do so for him. and it must be remembered that no verbal statement by Mr. Cook was binding on the directors.

Mr. Harrow : Everything connected with Auckland is a swindle. All are d d swindlers. I am a d d swindler myself. You need not take any notice of what I say. Everyone knows I am a pauper and lunatic as well. Mr. Brown said that he had been induced to join the company in hopes of profit, and he thought that would apply to the majority of them. Hones were held out of very large profits. He would like to know how the cost of the battery came to be underestimated, and why the erection was so long delayed ? Also, why £44 was paid as wages before anything was crushed, and how was it that the battery was not saving the gold ? Were the pans any good at all ? It was said that the pans could not keep the stampers going, and he thought that this should be rectified. The battery should have had a fair trial and everything set to rights before the companies were asked to send their quartz to be crushed. The battery manager should have found out in the first week that the battery was not saving the gold. He was afraid its reputation would soon stink on the fields. He thought that a committee of investigation should be appointed from among the shareholders. He wanted to find out how these faults had arisen, and who was responsible for them. ' _ . Mr. Hanchard said that he had given notice that he would move a resolution to the same effect. He would therefore move»

That a committee of shareholders be appointed to investigate the affairs of the company, such committee to consist of Messrs. Cozens, Jones, and the mover." The committee would want access to all the documents, and the assistance of the secretary. The company was in a most dangerous condition. Mr. Brett said that up to the present time they had no proof but that the battery was doing well. It was not right to say that the battery was a failure, because they did not know that such was the case, although it might be so. The parties who had crushed there up to the present time seemed to have been satisfied. Mr. Hanchard stated that no doubt they had a first-class plant, but no wet process could save the gold at Kuaotunu. They wanted more pans; two more were necessary to keep the battery going. Mr. Brown remarked that he had arrived at his opinion upon evidence. The Mariposa crushing promised to give 2oz to the ton, while an assay at Auckland produced 14oz. He thought that the battery was not doing its work, and that the manager had not done his duty. He believed the mine manager was simply a nominee of Mr. Bull, and that his election was a farce,

The Secretary then read the mine manager's report, in which he stated that he had the battery going for 12 days of 24 hours, and in that time he had crushed 196 tons ma,de up as follows -. —Red Mercury, 50 tons ; John Bull, 90 tons; Mariposa, 20 tons; Otama, 20 tons (now crushing); and the Kuaotunu, 16 tons (now crushing). The Otama has 150 tons to put through and the Kuaotunu 100 tons. He had to clean the pans three times during the 12 days,, which process takes eight hours. He had been putting through about 100 tons per week, and he hoped to put through more when the small trial lots were disposed of and the larger 100-ton lots started upon ; but up to the present time the stampers had been rather too much for the pans." However, he had been able to regulate them by giving them less drop, but owing to the difference in the quartz brought he would not advise more pans. He had not lost any silver, and in the Red Mercury they had 74 ounces-of amalgam out of the pans, 100 ounces out of the plates, and 30 ounces out of the box. In regard to the assay made by the Red Mercury, the only reason he could give was that there was that light float gold in it which the pans would not save.

Mr. Hanchard pointed out that at the rate of 95 tons per week it was not paying as well as the Try Fluke battery, which was an obsolete one. The concern would never pay at this rate. Mr. Harrow said it was no use having all the directors in Auckland. Some_ of them should be on the spot, but as things-were they never saw the place. Mr. Cozens said he would expect to be paid for his services on the proposed committee. If they expected to get good work they must pay for it. He thought the amount to be paid should be added to the resolution. One gentleman present thought the committee should take their "chance with the directors, and be paid out of the profits. Mr. Brett remarked that if Mr. Hanchard saw the £200 for the directors looming in the distance, he was quite willing to retire in his favour. Mr. Cozens stated that one director had not even paid his allotment money, which was a proof of bad management. When he (Mr. Cozens) paid his call he was told that all the others had been paid. This turned out to be an untruth.

The Chairman said he did not know what they were going to investigate. He thought the proposal amounted to a want of confidence in the directors, and he would retire if it was passed. He did not think that there was anything to make a respectable meeting of citizens pass such a vote of censure. The accounts of the company were on the table before them if they wanted to investigate them. He thought that the battery was a success, although there might be a few alterations necessary. At the first meeting there was some talk of having an old plant, but the directors set their face against this, and after consultation with the best authorities they decided to get Mr. Bull to put up the plant. The stampers and pane were also put up after taking the best advice. He did not see what more could have been done under the circumstances.' •It had not been fully demonstrated yet that the pans were not sufficient for the stampers. Nothing more could have been done, and he did not see what there was to investigate.

Mr. Hanchard stated that he did not mean to pass a vote of censure. Unless the investigation took place he would simply forfeit what he had paid, rather than put his hand in his pocket. He did not see whythe directors should object. Rev. P. Mason said that it appeared that the company was now £1300 in debt, which was a very unsatisfactory state. The required alterations would no doubt bring this up to £1500, and there was no prospect of working this off. They must either forfeit their shares or subscribe more liberally. Mr. Cozens thought that the chairman took up a very bad tone in threatening to resign. It made it appear that there was something to hide; if not, there was no need to object. This meeting was only called because pressure was brought to bear. The Chairman and Mr. Brett: That is not true.

Mr. Cozens continued, that one person had made a proposition for 1000 shares, and stated that therewith was sent £50; but that £50 never came to hand. This showed that there was something to be looked into. This was not a vote of censure—in fact the investigators might have to compliment the directors. He was told the 6000 shares were taken up when he was asked to subscrible. That number had not yet been taken up. ■ Mr. Mason asked if the directors had a good prospect of a supply of quartz to keep the battery going. Mr. Brett replied that two companies alone would keep" the battery going. There was no danger in this way. The shareholders must put their hands in their pockets or they must wind up. Mr. Hanchard said that he noticed in the accounts that the secretary's expenses for three journeys to the battery was £20 10s. Two guineas a journey was enough for him. The directors must expect them to be a set of fools. Mr. Brett said that when elected he stated plainly he would not be able to attend all the meetings. Mr. Jones asked for his name to be withdrawn from the proposed committee. Some of the statements made were calculated todamage the interests of the company. They only wanted something to crush. The debt of £1300 was not very serious. They were only precipitating the whole matter. At the annual meeting of the shareholders no one made any attack upon the directors, bat they were all re-elected. Mr. Cozens said that he nad no notice- of the meeting. The shareholders were quite ignorant of what was to be done. Mr. Jones thought it unfair to state that, the directors were receiving £200 when thej were not. Mr. Hanchard offered to substitute thj name of Mr. Brown for Mr. Jones on the committee of inquiry. He placed Mr. Jones on the list because he was a friend of Mr. Cook. He objected to lose his mone7 without a struggle. Mr. Brown did not imply anything like financial mismanagement. His references to mismanagement were such things as the delay in opening the battery, and the employment of the men before the quarczwts ready, whereby £11 per week was w&sted. He would withdraw his name from the committee. Mr. Hanchard thought the whole thing was rotten, and he was inclined to put his scrip in the fire. Mr. Brown said that it came like a thunderbolt upon him when he found tint the company was in such a state of debt, but he did not think the matter irretrievable. The shares should be offered to the oris ring shareholders, at a discount of 10 per con*. * Mr. Cozens-: I will give you 300 at v.discount of 25 per cent. Mr. Hanchard : I will give you lOOattft discount of 50 per cent. Mr. Brett pointed out that in twelve days 196 tons had been crushed, a considerable profit being realised thereby. Ke wi»s prepared to take Mr. Hanchard's shares ou the terms stated. Mr. Brown then moved that the oaefitog adjourn for a week. The motion was agreed to.