WATER WORKS COMPANY.

Otago Daily Times, Issue 3246, 2 July 1872, Page 3

WATER WORKS COMPANY.

~.• ■1- ■'' • - , .. COLOKBfc KITCMKHBE*H'MOftTGAOB.:. An adjourned meeting of the shareholders of the Dunedin Water Works <Jor»pany was held yeftarday, in Murray's Hall, liattray street. Mr R. Gillies presided. The GtiAt&MXX explained that only the business which w.-u* unfinished when the adjournment took place at the last meeting could -ho disposed of. H e would read, for the information of the meeting, the .following letter which bad since been received from the Corporation in reply to the offer urndo by the Company in respect to the sale of 'the Water Works, but no new btifiint-wi could bo taken np. City Council Ch>mbers, Dunedin, 29th Jnne, JS72. Sir—l have the honour, by direction of the Council, to acknowledge the receipt of .your letter of date as per margin, referring to previous correspondence in the matter of the negotiafcion/i /or thipiirchoKe by the City 'Corporation of Daticdin of the Dunedin Water Works Company's works and plant, and in reply, t," inform you that at a Rpecial meeting ytMtt;rilay the Council resolved to • accept the C'onipauyV offer as therein set forth, subject to a condition that the Council will asHumo only any legal responsibility which th« Company may 1j« under as regards Colonel KiUthtiriiir'H cl»tn.-~J have, &c, J. M. Makskv, Town Clerk. , The Cha^ji.'.i.Wi' continued : Of course, the Directors would tal:e such action in the matter as was dceine.r] necessary to protect the interests of the Company. At the present tiiuo, however, the meeting could not ]egi)!ly come io any decision regarding it. iff; had simply read the letter for the information of the shareholders. A deed, would be carefully drawn up, as -between the Company and the Corporation, and it would bo submitted to the shareholders for confirmation before the property actually pnsficd. Connected •with the business which remained over from the previous meeting were a motion and two amendments. The following motion was moved on that occasion by Mr A. Itounie, and seconded by Mr W. 11. lioyiinlds :—" That the action taken by the Directors in regard to •Colonel Kitchener's claim be approved, tind that they ha instructed to Uike all steps neccH'ary for tliu protection of the interoßt.l of the Company in regard to it." Upon that motion, Mr Q. W. Eliott moved, and Mr W. IF. Cutten seconded, as;m arnendmftnt :—"That the Directors be requested to give effect in every way to the agreement entered into with Colonel Kitchener vn the 7th January, 18G9, and that the shareholders recognise that the arrangement made with Colonel Kitchener wuh to the advantage of the Company at the time." A further amendment was afterwards moved by Mi* Hawthorne, Jtnrl seconded by Mi' Eliott, to the effect that ;i Committee of certain shareholders should,be appointed to investigate, in conjunction with the Directors, the matter of Colonel Kitchener's claim, and report to a future meeting. Those were the propositions wliich tlio ■meeting hnd now to consider. Mr Kk.vnik explained that since the previous meeting he had examined some documents in regard to the matter, and now felt disposed to withdraw his motion. Colonel Kitchener's claim was considered to be a doubtful one in a legal point of viow, but sorao of the Directors considered that he had a moral claim, and he (Mr | Rennie) thought that a compromise might i be effected «ia between the Company and Col. Kitchener. Therefore, with the consent of the seconder, he would withdraw his motion in the meantime. Mr "Rkvnolds said he would consent to the motion being withdrawn, but not for the same reasons a» those which had been urged by Mr Itennio. He consented, because the motion was brought forward bo that in the event of the Corporation not ■ agreeing to the resolution passed at the last meeting, the Directors should have full power to protect the interests of the ■Company. If tho Corporation took over the works, together with the whole of tho Company's liabilities, it would be for the Corporation to arrange with Col. Kitchen or. The Chaikmax : Mr Ronnie., having withdrawn his proposition, Mr Eliott's amendment becomes the substantive motion. A question then arose as to how Mr Hawthorne's amendment should be disposed of, seeing that the. mover waa not present. Mr'Ewott said that, as the original motion had been withdrawn, he had no hesitation in withdrawing as the seconder of Mr Hawthorne's amendment, because he now hoped that the amendment which he had himself moved would be carried. Mr Reynolds pointed out that the amendment could not be Withdrawn ■without the consent of both parties, He therefore proposed that the amendment should bo put to the meeting, and negatived1. The suggestion was adopted,.and..Mr j Hawthorne s'.amendment was rejected. The Chairmak then put Mr. Eliott's motion—namely, " That the Directors be requested to give offect in every way to the agreement entered'into ■with' Colonel Kitchener of the 7th, January, 1869, and ■that the shareholders recognise that the arrangement made with Colonel Kitchener was to the advantage of the Company at "the time." .Mr Eliott : Can I add anything to it 1 The Chairman : I think not. Mr Cutten said that in seconding the motion of Mr Eliott, he coxild not help expressing his opinion that Col. Kitchener was fully entitled to have the £5000 which'he'lent to the Company converted into shares ; ho was fully entitled to have them handed over to him at once, and also to participate in the advantages which 'would accruo from the.sale of the Works to the Corporation. He (Mr Cutten) considered that the terms upon which the Company had agreed to sell to the Corporation were not just. It was proposed to ;: give to holders of the 650 unguaranteed ': shares a premium of over 300 pfer ceiit. upon the money which they liad ad•vanced ; thoso fortunate gentlemen, therefore, wuuld receive- a profit of 300 per cent., whereas IColonel Kit«chcnor, although he certainly drove a hard bargain, v/as left out in the- bold.— (No.) He repeated that the sole of tho works to the Corporation upon any terms •such aa those which had been proposed, and by which certain shareholders were to receive a larger sum of money than •others in proportion to the money which they had advanced, would be unjust, and, he thought, illegal ; arid might lead to a Chancery suit that' would involve the Company in considerable expense. If they did not adopt a fair course, and if they ignored a capitalist who stood by the Company when it was in difficulty and danger, iney. would bo doing serion^ damage to the credit of the Province, and should they again require to seek the aid of capitalists, the transaction would be thrown in their faces. Capitalists would say in the future : " Recollect what you did with Colonel Kitchener. You took his money, reaped all the advantages derivable from" it, and when you sold out at a profit, you * shut him out in the oold." He did hope that the affair would be closed in the .spirit in which it was begun, so that]

people should not be justified in saying hereafter' that th« Company did not? do what was just and right. ' . - The Chaikmak said he wished to correct one statement which MrCuttenhad made, namely, that Colonel Kitchener had been deprived of the advantages connected with the (550 shares, because:on referring to the [list of shareholders he found tbat .Colonel Kitchener held 86..0f the 650, so -that-even if < Mr Ciittem's statement that a profit 0f.300 'per cent' would be obtained, were correct, which he (the chairman') did not admit. Colonel Kitchener held,about one-seventh of the entire number of the shares referred to. Therefore Mr Cutten's argument was calculated rather, to.- injure Colonel Kitchener. ' ' '" Mr Gvttks did not tindernt'ind that at all, Certainly, if Colonel Kitchener heJd 80 of thoao shares, lie would bo reimbursed to some extant. He would; be one of those gentlemen who'would profit at the expense of the original shareholders, because there could ■be no doubt that the original shareholders would suffer most under the circurrtt lances, the others, having advanced only' 30«, received £5. There could be no doubt that Colonel Kitchener was entitled to'receive those shares,, and ' the Director**,. a few months ago, acknowledged his right, and if circumstances had altered, if they were going to sell at a profit, that was no reason why they should refuse to let him have the shares. If C"»lonel Kitchener held 83 of the GoU shares, that would involve an injury to other shareholders ; but it did not affect, in any way, the question in connection with the original advance. ' j i .. . ■ The GifAiKMAir explained that he had not intended to say one w.ord in regard to Col. Kitchener ; he had simply wished to shew that he was not shut out, as Mr Cutten had remarked, He (the Chairman) expressed his opinion on the matter fully at a previous meeting. All the shareholders except, perhaps, Mr Cuttonj who was out of town at .the time, had an opportunity of getting Borne of the 050 shares. However, that was a matter that could not be discussed at that time. Mr TiATWiArz said it was a matter worthy, of consideration whether, under. i the circumstances, they ought to consider ' the business before them at .ill. The' 1 object of the meeting, as he understood it, was to discuss an agreement that had been pronounced' to' be illegal. ■' He did not think that the profit, Hieetin^ could be fairly called 9.11 adjourned meeting of the Company, because, besides the Directors, there were not more than six shareholders present. Seeing, therefore, that there were so few shareholders present, and also that they had been advised that the agreement was illegal, ho thought it would be inexpedient to come to any resolution which would probably be set aside in a Court of Law. There was not any-' tiling like a majority of shareholders present, and he was prepared for one to take every proper step to set aside every resolution that might be come to approving of the agreement. He might also say that, in doing so, he did not act on any new ground, although previously, sorao persons were pleased to say that he hnd assumed ■ new grounds for the purpose of securing outside popularity, and other nonsense of ■ that kind ; but the Directors knew at the time" the agreement was executed that he opposed it. Ho opposed it in 1860, and Ji'e opposed it still; and seeing that it luid not been confirmed in any way by the shareholders', no action of the Directors referred to by Mr Cutten could make it a, good agreement. Colonel Kitchener-wait 1 entitled to £'50<X), and nothing more. Considering that Colonel Kitchener would make a handsome profit of £3000 or £4000 otit of the concern, ho thought that they could not look upon him as an object deserving sympathy, but rather as a lucky man. He (Mr Bathgate) asked whether it would not bo better to adjourn the matter nine die, and let it drop. The idea' of a joint stock company being told that they were involved in a moral obligation about which the shareholders had been kept j in the dark until lately, was absurd. There | was no legal or moral obligation. There] could bo no moral obligation in reference J to a set of circumstances that never were contemplated by the contracting parties j when the bond in question was entered into. Had Colonel Kitchener understood in the first instance that there would be a certain profit, and with'that'view alone he entered into the transaction, there might' bo a moral obligation, btit Mr Elliott could not say that that was the case. :The position therefore assumed on Colonel' Kitchener's behalf was 'uutenable. He moved, as an amendment, that the meeting for the consideration of this question be adjourned aim die. Mr Rknnie seconded the amendment. Mi* Rkywolds, referring to the remarks which Mr Cutten had made regarding Colonel Kitchener's claim, to the shares, said he understood that when the works were handed over to the Corporation they would stand in the «ame position as the Company, and therefore if Colonel Kitchener was entitled legally or morally, or in any other way, to the shares, the Corporation would no doubt give them to him ; if not, he would not get them. Regarding the 050 shares issued, the Chairman was quite 'correct in stating that every shareholder had'an opportunity of taking up his proportion; He thought it would be better to leave the matter in the hands of the Directors, allowing them to draw up the, draft of a .deed of agreement between the Corporation and the Company, whioh could be submitted to another meeting of the shareholders. Mr Eliott • spoke in support of' Colonel Kitchener's claim, pointing out that if Colonel Kitchener,, instead of lending the £5000 to the Com-, pany on the terms agreed upon, had bought shares in the open market, he would have realised a better profit than that which he'now asked: If the document in question was -ultra--vires, they ought to consider his moral claim, and he (Mr Eliott) was sure that no person, on reading the Reventh and eighth clauses of the agreement, would say that Colonel Kitchener had not a clear'moral right to demand the whole of the shares, including the 100 for wliich he tendered the money recently. Therefore he must ask the Chairman to put his" motion to the meeting ; and he hoped that they would not allow it to go forth to the world that they had sanctioned an act of repudiationMr Bathgatb denied that there had been any repudiation. Mr Bathgate'si amendment was then put, nine shareholders. voting for it, and two against' it. Counting shares, the numbers were 328 as against 160. ; Mr Quick suggested, that although CoL Kitchener might not be entitled to all he claimed, he was perhaps entitled to something, and therefore it would perhaps be as well to appoint a certain' nrimber of shareholders to take such steps aa might, result in a compromise. The Chairman said he believed he was justified in saying on behalf ,of the Directors, that they would take the question intid consideration,, and do all that, was fair and equitable between the parties. , At any rate, he would pledge himseif to dp, so^^ :-...:./„ . •; *. The meeting then adjourned.