THE FIRST CHANCE GOLD DREDGING COMPANY.

Otago Daily Times, Issue 12415, 26 July 1902, Page 10

THE FIRST CHANCE GOLD DREDGING COMPANY.

TO THE EDITOR. Sin,—l would esteem it a favour it you would insert tiio following letter in your valuable paper. By doing so I venture to assert that you will bo doing a favour for manv of your contributors, and I will have attained the* object I desire—namely, the warning of any hardworking, thrifty person who may have a fewpounds to invest. Being in this position myself nearly two yeats ago, I decided to take up shares in the First Chance Dredging Company, Tho dredge comnienecd to work on July i, 1901. After working for about three months the dredge had to close down on account oi tho high river. On August 30, 1901, the second annual meeting was held, and the following report was put forward by the directors:— "The first week's return'of 40oz lodwt gave promise of better results than have been realised; still on the wholo the results have been satisfactory, as up to the 31st July a total of G3oz 13'lwt 9gr were obtained, tho money value being £245 2s 3d.* Your directors feel sure that before long good returns may be looked for, as the dredges immediately above are doing very well, and there is every reason to believe that your claim is equally rich. Few dredges have done anything like so well during the first month as your dredge has done. " Your directors hope before long -to reach Iko dividend-paying stage, and trust shareholders will continue to have faith in tho venture, and not sacrifice their shares, and thus lose their interest in what is undoubtedly a valuable properly." Barely two months later I received the following:— October IC—"Your directors have found it necessary to issue four hundred (100) debentures of £5 .each, equal to the value of £2000, bearing interest at the rate of 20 per cent, per annum, terminable in 12 months, and redeemable by ballot at any time on giving 30 days' notice. The security for such debentures to bo a first mortgage over the dredge and claim. Interest payable half-yearly." A month later I received the following notico called a meeting for the purpose of considering and, if thought fit, passing an extraordinary resolution to tho effect-" That it has been proved that the company cannot, by reason of its liabilities, carry on, and that- it is advisablo

to wind up name, and that the company bo wound up voluntarily, and dial a liquidator be appointed."

At the meeting held JTovcmbsr 01, ]901, after a gnoil ileal ft! avgimicnl bv the two parties, the one wanting the '100 debenture-, to be issued and the other a reconstruction, it was carried that the debentures be issued, imd nearly all ot the debentures were taken up before the meeting terminated. I may stats that I took up my share of debentures, still having good faith in the dredge, which belonged to a company of 11,000 shares e.t £1 each, and which had only worked about three months and by no means disgraced herself in that time. Shareholders who attended that meeting will bear me out ill saying (hat Messrs Sievwright Bros, deserve great, praiso for the determined stand they made against reconstruction, urging that it WG3 not fair to iho original shareholders. After it had been decided to issue the debentures, the chairman director (Mr James) told the meeting that lie favuured a reconstruction. Ho niso told tho meeting that the debonture money would pov off tho debts and leave about £100. Tho dredge would be laid up during the winter months, and it would cost about £3 .1 yoek during this idle time. The dredge remained idle for r.botit six months, commencing work about tho second week in May; that time at £3 per week would mean a cost of £72. Thus, when tho dredge started work there must liave been £328 in hand; yet after'the dredge-had worked a little over two weeks I was surprised to receive a notice to. the efieet tlmt a meeting would be held on June 30 to consider and, if thought fit, pass an extraordinary resolution to the effect " that it has been proved that the company cannot, by reason of its liabilities, carry on,'and that it is advisable to wind up came, and that the company be wound up voluntarily, and that a liquidator be appointed." To say that I was surprised on receiving this notice is putting it very mildly. Only fancy, working two whole, weeks, and.then advise liquidation; no money owing outside the company, and the debentures being held by the shareholders, and none of them pressing their claims.

Tho meeting was held, the directors carried their wishes—liquidation, reconstruction,—and if 1, who bad nearly £100 in the old company, wished to bo a shareholder in-the new company I could ap'ily for a certain number of slm-ros, paying 10s a share down when X applied and-103 a. share down when'the directors kindly allowed me tho shares.' Though my faith ill tho dredge was still as good as ever, my pockets were almost empty; my head contained more knowledge of the peculiar ways of directors than when I placed my hard-earned cash in dredging shares. I believe the dredge wa3 sold privately for a little over £'2000 ; 3300 shares were sold for £1 each, and 3500 shares wore given away, and the. new comnany was started, and at the end of the second week I received a notice—of liquidation, did you say? Oh, no! The-dredgehad started nt the bottom of the claim, .and the first week obtained 1470z; sceornl week, so far, 117oz, Marvellous, is it not? I say that I believe the old dredge was sold for so-and-so, as tlio only information I can receive is from tho man in the street, for, as soon as I wis uuablo to forward another £1 for every share that I had already paid £1 for, I ceased to hold any interest in tho old company or the new company, and I could goto tho devil for all the directors cared; and to think that I had assisted to vote these gentlemen to that position to guard my interests! If a business man owning £11,000 worth of goods callcd a meeting of creditors, saying lie was bankrupt,, as His debts amounted to f509, tho authorities would deem it necessary to place him in a lunatic osvium, deeming him mad or is really what took place with tho directors of the First Chance Dredging Company.

In conclusion, I wish to state that as a- shareholder and debenture-holder in tho old company, I will gladly make one of a, number to test-the legality of the directors' act-ion in giving away that which I partly own.—l am, ctc., No. 2 Ehtkrprise Disappointed.

TO THE EDITOR. Sir,—lt is ju3t poasiblo (lint the frozen-out shareholders may have ft " second chance" for their lost money, aud i would advise those unfortunates to carefully sift tho lata liquation actions and make sure that everything Svas legally done and confirmed by second general meeting, as provided by the Companies Act-. If tho very clever people who forced on and benefited by tho liquidation have made a slip, or not complied with every legal point, then .I any "Go for them," and refuse to sanction the evident unnecessarily rushedthrougli liquidation of this company. I am prepared to contribute my mito towards thoroughly sifting the whole matter, including the reason that 'the dredge did not tost the present ground before.-

-I nm, etc., Indigkant Ikvestor.

TO THE EDITOR. SIR,-r-I think "Eniei-priso Disappointed," who writes in to-day's Times, will meet with considerable support if lie calls a meeting. Although I would be unable to attend I shall bo glad to assist in any way possible. I cannot help thinking that shareholders were iuifuirly treated when the plan to get the capital written down succeeded. II the writer referred to, desires it, I wou!d-be<glad if you would give him my name antl : address

.—I am, etc., Victim.