AUSTIN WALSH AND CO., LIMITED.

New Zealand Herald, Volume XLI, Issue 12624, 3 August 1904, Page 3

AUSTIN WALSH AND CO., LIMITED.

THE COMPANY TO BE WOUND UP.An adjourned extraordinary general meeting of shareholders in Austin Walsh and Co., Limited, .was held at the company's office yesterday, Mr. Austin Walsh presiding. Mr. Francis Hull, at the outset, said that he thought they should try and give publicity to the fact that this company had been, a3 ho alleged, practically boycotted by the tobacco monopoly. Ho contended that the company was being forced into liquidation, thus compelling tho shareholders to lose their money. He thought a very strong representation should be made to the Government on the matter. .. Tho secretary then read a report, compiled by the chairman. This stated, inter alia, that it was with regret- that the directors met the shareholders with the statement that tho company oould not, by reason of its liabilities, continue its business, and that it was advisable to wind up the same. To the shareholders this action on the part of the directors might seem rather precipitate, but he (the chairman) thought when they were fully acquainted with the circumstances t.iey would agree that the course proposed was both inevitable and advisable, unless financial assistance of a substantial nature was to be extended to the company to enable it to tide over the present crisis in its affairs. The company was an amalgamation of two businesses, viz., that of the Auckland company of Austin Walsh and Co. with the i'iii .tobacco Company, Limited. The business of the company had been for a long time past hampered by want of capital, and rendered unprofitable by reason of its opponents in. business having secured a monopoly, which they wore exercising in a manner detrimental to the company. As a result of the tactics adopted by these monopolists the sales and profits and resources of the company had been so seriously affected that the directors had to become personally responsible to its bankers for large monetary advances, and further, had, as late as November last, to advance the large sum of £1000 in cash to enable the company to meet some of its engagements. This shortness of capital so interfered with the company's plantation operations in the Fijis that it ,was found impossible to carry them on any longer, and, accordingly, the managing director and secretary proceeded there in June last, with the object of either disposing of the company s Fiji plantation and factory or of closing them down. Owing largely to the fact that reports had been circulated that the monopolists contemplated establishing themselves in Fiji, and would crush out any opposition, no capital was forthcoming for investment in the enterprise, and the only alternative was to close down the Fiji plantation and factory, and to sell off the liquid assets, which was done at a very heavy loss to the company. This shrinkage in the assets of the company, coupled with financial embarrassment in this country, owing to shortness of capital, had necessitated that meeting, and the accompanying proposition for winding-up. With legitimate opposition the company could have fairly held its own, if was believed, with results entirely satisfactory to the shareholders. By the combined monopoly of a. trust, tho wholesale and retail traders of New Zealand were compelled to boycott this, one of the most promising industries yet established in our midst; for not only was the company largo employers of labour, but it was formerly growing a large and increasing proportion of the bacco it used in the English colony of 1* iji. The position was being grappled with by our Government during the present session, and remedial legislation was, he (the chairman) thought, in preparation, but unless the shareholders could assist the directors in easing the financial strain the remedy would come too late to save tho company. In consequence of the tactics pursued by the tobacco trust, the directors were obliged to establish branches in Wellington, Christchurch, and Dunedin, and engage representatives to those citics to canvass the retailers throughout these districts. This necessitated considerable outlay being incurred in order to keep the company's goods prominently before the trade. Besides the capital sunk in this direction the stocking of the various branches with dutypaid goods had been a serious drain on the company's limited capital, and the resulting business would have been greatly increased had the company not been always hampered by want of money to enable it to clear from the various bonded stocks, thus preventing it adequately supplying headquarters and branches, orders having to remain unexecuted through tho above cause. With reference ] to the overdraft at the bank a debenture over the whole of the assets of the company was given to tho guarantors, under which they had the power of appointing a receiver to tako possession of the company's assets, in order to provide for tho amounts advanced and guaranteed by them. Under these circumstances any appointment of a liquidator must be approved of by them, and it had accordingly been suggested that two liquidators be appointed, one to represent the interests of the shareholders, the other to represent- the interests of the guarantors. The balance-sheet, which was laid on the tablo, showed the company to have a debit balance of liabilities over assets of £4715 3s lOd. A loss of £3311 15s 6d was shown in connection with the Fiji business. Liabilities included bank overdraft £4652 9s 2d, and sundrv creditors £2858 6s lOd. Mr. Hull thought the chairman's report should be laid before the Government. The latter might be prepared to take over the company, and start with it as a nucleus of a State tobacco business. Mr. A. fi&rina said he war; afraid the bank would not wait. It did not appear that, the Premier had thought out a scheme yet for dealing with the tobacco industry question. _ Mr. R. B. Dufaur said the company's business, owing to its opponents, was working at a heavy loss, and they had not the wherewithal to send anyone to Wellington to interview the Premier. Only the other day he (Mr. Dufaur) had had to pay out of his private account some of the wages of the company's employees. Unless shareholders t were prepared to assist, and to assist largely, in financing the company, there was no alternative but to wind up. Mr. Hanna: If anyone will take my position as guarantor he can have all my shares for nothing. Mr. Dufaur: The same here. Mr. Banna said they wore merely dissipating their assets all the time they waited. He did not think that Mr. Seddon would tackle the tobacco monopoly until he had got the liquor question off his hands. In any caso, he did not see how the Premier could tackle it unless he made it a State monopoly. The Chairman then moved, " That it has been proved to the satisfaction of the company that it cannot continue to do business, and that it is advisable to wind-up accordingly; and that Messrs. J. J. Odium and W. B. A. Morrison be appointed liquidators for the purpose of winding up tho affairs of the company.'' Dr. King seconded the motion. In reply to a shareholder, Mr. Dufaur said the company's position first became known to the directors upon the return of the chairman and secretary from Fiji in June. They had found that the affair could net be sold as a going concern, and that the goods and plantations had to be sacrificed. At the lastannual meeting the Fiji assets stood at £6900, and after realising them they appeared on tho sent balance-sheet at £1000. This did not enable the company to pay 20s in the £, and the directors therefore did not feel justified in carrying on any longer without calling the shareholders together. The motion providing for the winding up of the company was put and carried. It was agreed, on the motion of Mr. Cottle, to have copies of tho chairman's reportprinted, and circulated amongst all M.TI.R.'s.