MOTOR AGENT'S FAILURE.

New Zealand Herald, Volume LIX, Issue 18225, 19 October 1922, Page 8

MOTOR AGENT'S FAILURE.

———■ ■»> i DEPRECIATION OF STOCK, j CHRISTCHURCH BANKRtJPTCY. [BY TELEGRAPH. —OWN COIIBESPONDENT.] CHKISTCHTJECH. Wednesday. " A meeting of creditors in the bankrupt estate of Joseph Hamlet, a well-known figure in the local motor trade, was held to-day. Bankrupt in his sworn statement said he started business as a motor importer in 1915. "At that time I had £800 of my own, and three men guaranteed me at the bank for £5000 each. I carried on a motor business until' August, 1920, and continued during the whole feriod to make money. In September, 920, I turned my business into a limited liability company, with, a capital of £25,000 of 25,000 fully paid up £1 shares. Of these shares I held 14,000, and J. J. Dougall and Walter Hill, of Chnstchurch, took 5500 each. The sum of £14,000 represented by assets in my business as it stood in September, 1920. Some three months, later, when conditions were shockingly bad owing to the slump, ana we were overloaded with expensive stock, I volunteered to place 5000 of my shares to a reserve fund of Joseph Hamlet Company, Ltd., in the event of a bad year. One of the conditions of my appointment waß that I was made managing director, with a five years' engagement at £600 per year, plus 10 per cent, of the net amount, available for dividends. I would also get the dividends on my scrip. Judging by past results from the business, I confidently expected to draw not leas than £3000 per year. However, the slump continued, and we lost and continued to lose money owing to the value of our stock depreciating and overhead expenses running all the tune. My private trouble was that during the first'year of this contract I had to pay £320 fifo insurance (I was insured for-£10.000), and I had entered into a contract which I could not break for renting a furnished house at £350 per year. As there were no dividends from the company, this left me with less than, nothing to live on, and I began to get into debt. I' borrowed money on the generally-shared' expectation that business conditions would rapidly become normal. Creditors, began to press, and I was forced to file my petition." . The Official Assignee: How much do you think you have spent on the racecourse during the last six months or so? Bankrupt: I won a bit more than I j ever lost. That did not cost me anyj thing. I did nothing except locally, and I did nothing unless I knew something. I certainly won more than I lost. The Assignee: "Have you any record of what you spent or lost ? Bankrupt: No. I did not go indiscriminately to back horses. If I knew an owner who had something that he told me was good, well then I might back it. At a later stage bankrupt said his trouble was that he had put all his eggs into one basket, and that basket nad dropped. After considerable discussion a creditor moved that bankrupt should retain his furniture. Hamlet, he said, had been associated with a business that had paid under his management, but when the slump came his business had craatlv , fallen. 4 J The motion was carried unanimously.