History of Broken Hill Proprietary is One of Courage and Enterprise

Otago Daily Times, Issue 27092, 28 May 1949, Page 3

History of Broken Hill Proprietary is One of Courage and Enterprise

By Gregory

INVESTMENT MARKET

Highlight of the week on ’Change was the announcement that Broken Hill Proprietary had applied for Commonwealth Treasury consent to the issue of an additional 4,628,300 shares of £ 1 each at a premium of 10/-. Consent was forthcoming two days later and the issue will consequently be offered to shareholders in the proportion of 1 for 3. Whereas the announcement, or even the rumour, of a new issue would excite the market and advance share prices in days gone by, current routine and good sense lower values when an issue of any magnitude is at stake because of the deleterious effect of the consequent heavy selling of “ rights ” by estates and shareholders who prefer “ windfall ” income to increased capital holding.

Mosgiel Woollen added its quota of news-of-the-week and circulated its decision to issue the remaining 1155 £5 shares (paid to £4) at a stiff premium of £6 per share. Holders of 20 shares will gain an additional share at a cost of £lO, and it is the intention of the company to subdivide its cumbersome shares into £1 units paid to 16/- each.

Encouraged by the regular and pleasant nature of company news during the four weeks of May the market during the week under review was agreeably buoyant and prices in the main were firmer. Woolworths, Ltd., edged back in tune with their movemnt on the Sydney market and brewery issues were easier in sympathy with New Zealand Breweries, which were still trying to locate bottom. *‘ Rights ” to Felt and Textiles of Australia and British Tobacco had daily quotations but few sales, and the “ rights ” to Consolidated Finance were on oiler at sixpence without takers. Romance of Private Enterprise

Invariably, almost innevitably, complete and condensed histories of the romance of Broken Hill begin with a fateful game of euchre played in a boundary-rider’s shack in the lonely New South Wales “ outback ” in 1884 when a “ new chum by the name of Cox, and George McCulloch, manager of the Mount Gipps sheep station for whom he worked, elected to play a game to decide' whether the price of a one-fourteenth share in the syndicate which had pegged out the mountain of ore should change hands at £l2O or the £2OO asked by McCulloch. If the element of chance or luck has story-writing appeal, amateur historians would better serve their readers by casting back another 40 years to a luckless day in October, 1844, when the English explorer Captain Charles Sturt, accompanying the renowned English navigator, Captain Matthew Flinders, stood on a “ broken hill ” hoping to confirm the existence of a legendary inland sea which his second-in-command, one John Poole, had “ discovered." From his vantage point S(urt saw the sea all right, but he realised ‘that it was a particularly

vivid mirage. Disappointed, he chipped and scuffled specimen of rock from the sterile hill and carried them to analysts of the South Australian Government. Officialdom lost them—and Australia waited for another few generations for a boundary rider by the name of Charles -n to unearth the treasure of the ugly ai'-spised " mountain of mullock.” From-this point the story begins and in its infancy it is a story of courage, determination and faith, typical of the influence of those characteristics in the subsequent development of the mine. We have used the expression previously in this column and do not hesitate again to describe the Broken Hill Proprietary Company as a superb monument to the efficiency of private enterprise. Any of the latter day “isms” can be made to work, temporarily at any rate. ir they .don tne mask ana brandish the pistol of the highwayman and carefully select as their victims to-oay's custoaians or' yesterday’s enterprise: but like their modern prototype, the black marketeers, or the “spiv,” they contribute_nothing—or add nothing—to’ the stature of the undertaking and needs must rely on fresh victims to sustain their magic. The- Broken Hill Proprietary issue will extract, £6,942,450 from the investment resources of Australia and New Zealand, raise the capital of the company to £18,513,200, and ensure for generations to come its unassailed reputation as the industrial giant of the southern sphere.The company has made many new issues of capital down, through the years, and nearly always at premiums of its own making, but this column is reasonably dure of its facts when it says that all such premiums were subsequently capitalised and handed back to shareholders in the form of bonus shares. In 1940, for instance, ho less than £4,445,000 was capitalised by a bonus issue on the basis of 64 free shares for every 100 held, and the £4,000,000 or so involved represented exactly the premiums gathered in in two previous issues in 1935 and 1937. A ye'ar „ later (1941) shareholders were offered £2.465.118 new shares at par. As an alternative to advising investors “ never sell BHP shares,” this column would vary the advice only to the extent of saying " never sell BHP shares unless you expect to buy back more of them cheaper.” The enterprise of a boundary rider opened up the wealth of the “ fabulous Hill,” and the .first “ capitalists ” to exploit its untold riches were a sheep station manager, a sheep overseer, a storekeeper, a contractor, a station hand, and a boundary rider and his mate. As luck would have it, their first shaft was sunk on the poorest part of the lode, and disheartened some members of the syndicate, who sold their interest. Some sold half-shares, and it was one of these which cost the immigrant Cox £l2O. He quickly fades from the picture, however, but had he held his fourteenth share for a mere six years he would have netted an astonishing £1,250,000. To-day the “ BHP ” itself is the boundary rider of Australia. From its mills have come thousands upon thousands of miles of fencing wire, barbed wire, and netting, wire. The railway system of Australia criss-crosses a continent and six States on rails from the mills of Newcastle. Call it Rylands, Lysaghts, Commonwealth Steel, Stewart and Lloyds, Australian .Iron and Steel—whether the name be branded on yery sheet of roofing iron in Australia, on water pipes, rolling stock, or anything made of Steel or iron, it is still Broken Hill Proprietary. None can, compete with its efficiency, all eventually throw in their lot. There is an interesting link with Dunedin in the history of a totally-owned subsidiary which operates under the name of Titan Nail and Wire Proprietary, Ltd. Originally called the Titan Engineering Works, the company was formed in Melbourne in 1888 by Mr John Rose, who had pioneered the manufacture of barbed wire in Dunedin, but migrated to Australia in search of greater facilities and markets • for his enterprise. After his death in 1921, his son Walter Rose, carried on and expanded the business, and in 1933 on his retirement the Broken Hill Company acquired the undertaking.