BLUE SPUR CONSOLIDATED GOLD COMPANY.

Otago Witness, Issue 1970, 22 August 1889, Page 11

BLUE SPUR CONSOLIDATED GOLD COMPANY.

Early in the month of May a meeting of the local shareholders in the above company was held at Lawrence to take into consideration the manner in wh'ch the affairs of the company were being conducted. The meeting, which wa3 presided over by Mr M'Nab, was largely attended, and the oatcorne was tha*. the following series of resolutions was ndopted : — 1. That up to the present time the management of the company has been moat unsatisfactory to the local shareholders, inasmuch as they have no voice in the management thereof ; nor "have they any means of knowing what is being done by the management, there fiofc having been any meeting of the local shareholders since the Consolidated Company commenced operations. 2. That, in the opinion of .the local shareholders, the position of the local board is unprecedented, the chairman of directors apparently being subject to no control ; and also by his having the power to appoint the other local director himself the shareholders are unrepresented in any way. 3. That the local shareholders having heard that Mr J. C. Brown represented to the London Board that it was insisted on as part of the agreement that> he (Mr J. O. Brown) should be appointed managing director for a period of three years, beg to inform the London Board most distinctly that no such proposition ever emanated from them ; and if suoh representation was made to them it was quite unauthorised, undeaired, and most decidedly against the ■wishes of the then mineowners. 4. That this meeting desires to represent to the ' London Board that, inasmuch as most of the local I shareholders being men who have themselves worked the mines to advantage for a considerable number of years, they should decidedly have a voice in the management thereof. j 5. That the local Board of Directors, consisting only of two men, is very unsatisfactory, as tho chairman having two votes to the other's one puts the whole of the power in the chairman's hands, and that in the opinion of the local shareholders the board should consist of not less than three, and that two out of the three should be elected by the local '

shareholders at a general -meeting, the present remuneration to be divided between the two bo elected. ... . , 6. That the London Board be asked to explain their action in sending Mr Jackson here as an expert at a salary of £350 and travelling expenses, especially as his services are of no value to the company, as he has been nnable up to the present to point out or make any suggestions on matters requiring attention. 7. That a copy of the resolutions passed at this meeting be forwarded to the chairman of the London Board of Directors, and that they be signed by the chairman of the meeting; also, that a committee consisting of Messrs J. M'Kintay, A. M'Nab, W. Johnston, E. Ellis, and I>. M'lntosh, be appointed to conduct all correspondence between the London Board and the local shareholders. In pursuance of the instruction contained in thp sixth resolution, Mr M'Nab, as chairman of the meeting above referred to, and as one of the sub-committee appointed, forwarded a letter covering the resolutions to Sir Walter Buller, chairman of the London Board of Directors of the Consolidated Company, who has submitted the following reply, which has been placed at the disposal of the Tuapeka Times for publication: — Blue Spur a'nd'Qabrier« Gully Consolidated Gold Company (Limited). 8 Victoria Chambers, Victoria street, London, S.W., 27fch June 1889. Alexander M'Nab, Big., (Ohairmsnof meetingof Blue Spur shareholders), Lawrence. Dear Sir,— l have to acknowledge receipt of your letter of 3rd May, covering copies of re*olutions passed at a meeting of shareholders in the Blue Spur and Gabriel's Gully Consolidated Gold Company (Limited) held at Lawrence on the evening^of Thursday, 2nd Say. Your letter was plaqed before my colleagues and duly considered at yosterdav'i meeting of the board. I need hardly say that the resolutions, expressive as they appear to be of the views of the majority of the local shareholders, are entitled to, and have duly receiTed, the most careful attention on the part of the board. I will now proceed to notice them seriatim •— Resolution 1. — The management of the mines cannot have been more unsatisfactory to the local shareholders than it has been to the London Board. Aa I have already explained to Sir Eobert Stout, our msst serious complaint against Mr Brown was that juat at the time of our statutory meeting, in May last year, we were iuduced by two successive tele#raphie reports from th* colony, showing £600 worth of gold won from the mines at a cost of only JBfiO, to encourage the shareholders to expect immediate large returns; and that then we were left for months together in total ignorance of what was being done at the mines, and of the reasons for tha persistent Bilence ; whilst the result for all the subsequent months have shown that the coat of getting out the gold is considerably more than a tenth. The board could not resist the conclusion that they had been deliberately deceived in this respect, and ma3e to deceive others. When, at length, tho London Board Jippointed a local inspector, with instructions to make frequent visits to the mines «nd to inspect the b"oks of the company — to act independently' of the locnl board, and to report, by letter weekly, and by cable monthly, for the information of the shareholders in this country— Mr Brown resented the appointment, apparently regarding tho inspector in the light of a " spy and detective," and persistently disobeyed tho instructions of the tendon Bonrd with regard to such inspector. Under these circumstances, tho London directors felt that it would be quite impossible for them to administer the affairs of the company ia New Zealand with credit to themselves or to the satisfaction of the general body of shareholders. Resolution 2.— The objections raised by the local shareholders have been practically anticipated by the action of tho subscribing shareholders in this country, who, in the exercise of the powers conferred by section 88 of the articles of association, hate by resolution passed at an "extraordinary meeting," convened tor that purpose, removed the local directors from office. Resolution 3. — The London board fully recognise the force of what is stated in this resolution, and aro most anxious to be in touch with the local shareholders, whose practical experience in the working of the mines ought to be of great value to the company. The experiment of a local board of directors luving signally failed, the London board, who have in any caae to bear the responsibility, have decided to take the entire control into their own hands, and to administer the affairs of the company in New Zealand through a general manager, who will bs directly accountable to the head office, but will be instructed to take the local shareholders into hie confidence at all times, and to invite their co-operation and assistance in the prosecution of a very difficult undertaking. .Resolution 4.— The statement referred to in tbis resolution was certainly put forward by the promoter iv this country as a reason for the clause in the agreement to which it refers. But as both Mr J. C. Brown and the New Zealand vendors disclaim ir. t there is nothing to be gained by saying anything further on the subject. Jieaolutiou 5. — As ■ o the recommendation contained in this resolution, I can only refer you to my observations on the third resolution. Even if the London Board were prepared to advocate such a course aB tho appointment of three local directors, I am persuaded (hat, in the light of recent events, the subscribing shareholders in this country would never entertain the proposal for a moment. Ilesolution 6.— My observations iv . egard to the first resolution will, I think, explain sufficiently the necessity for the appointment of an inspector. What the board wanted was not so much a " mining fx[»«rt " as a thoroughly honest and. capable man whose reports they could place before the subscribing shareholders without the slightest misgiving. Mr Howard Jack Eon came to the board very highly recommended, and subsequent events have, in the opinion of the board, amply justified his appointment ; for it was not till we had appointed an inspector that Mr Brown seemed to realise the necessity of keeping the head office informed of what he was doing or proposing to do at the mines, Fow that the local directors have been removed, it becomes necessary to appoint a general manager, who will act under a power of attorney, and represent the company in New Zealand. The able and exhaustive reports received from Mr Howard Jackson by every mail since his appointment induce the board to believe that he is specially fitted for such a position. But as the correctness of this view can only be determined by results, we have decided to make the office a provisional one, and Mr Jackson's appointment as general manager (as from the 21st inst.) is accordingly only up to the end of the present year ; thm leaving the board free at the end of that time to renew the engagement or to make other arrangements, as circumstances may require. Eesolution 7. — In thanking you for sending so promptly copies of the resolutions passed af; your meeting, I need hardly assure you of the desire of the board to act in harmony -with the local shareholders, and to co-operate with them as far as possible. With this view £ shall be at a'l times glad to receive and attend fo any suggestions or : eeommendations that your committee may have to offer. I shall feel obliged by your communicating to your committee and, in whatever manner you may think desirable, to the local shareholders generally, the sontonta of this letter.— l am, dear Bir, faithfully yours, W. L. Buller, Chairman.