THE SOUTHLAND FROZEN MEAT COMPANY.

Southland Times, Issue 17656, 14 February 1916, Page 2

THE SOUTHLAND FROZEN MEAT COMPANY.

To the Editor. Sir, —in his latest letter Mr Handyside commits himself to the astounding, statement that "liquid assets" and "reserve fund" are synonymous terms, and that a company holding liquid assets has no need to create another reserve fund. Again taking tlie case of the Bank of Australasia, which both Mr Handysido and I agree to accept as a model. According to Air Handyside as the Bank holds liquid assets running into millions sterling it has no need of a reserve fund. Observe, however, that the Bank’s directors disagree with Mr Handyside on this point, for notwithstanding the large proportion of liquid assets held by the Bank they have built up a very substantial reserve fund of £2,750,000, over four-fifths of which, according to their published advertisement, is employed in the Bank's own business.

If Mr Handyside still maintains that "liquid assets" and "reserve fund" arc synonymous terms it does more credit to his obstinacy tli an to his understanding of tlie English language or his knowledge of accountancy. Mr Handysidc's proposal that the company's reserves should he used in replacing the shareholders' capital which was previously lost and written off, shows his amazing ignorance of the company's business, on which he considers himself qualified to lecture the directors. Their replacement of the lost capital was effected some years ago by tlie directors, and out of the same reserve account. But his suggestion gives away the whole of his case against the directors, because lie lias always scoffed at tlie company's reserves as having no real existence in fact, because they were not Invested outside the business. Mr Handysidc’s suggestion is of course a tardy admission that the reserves are real and substantial and not ynaglnary or illusory, and it is an unwitting tribute to and vindication of the policy pursued by tlie directors. Gould Air Handyside nevertheless not bo persuaded to publish the balance sheet of tlie Nightcaps Coal Co. as a model for others ? In conclusion let me say I took Mr Handyside’s advice and did not attend the meeting on Saturday. He is quite sound on some matters and his bark is very much worse than his bite. —I am, etc., J. E. WATSON. 12Ui February. P.S.—Air McQueen raised the point that Mr Handyside's return to the attack is a breach of agreement, this reply to the latter’s criticism is without prejudice.—J.E.W.