ONEHUNGA WOOLLEN MILLS. AN INDUSTRY IN DIFFICULTIES. Auckland, September 22.

Te Aroha News, Volume VI, Issue 302, 26 September 1888, Page 5

ONEHUNGA WOOLLEN MILLS. AN INDUSTRY IN DIFFICULTIES. Auckland, September 22.

Tiie shareholders of the North New Zealand Woollen Manufacturing Company met yesterday afternoon in the Insurance Buildings in response to a circular inviting them to consider, and, if deemed expedient, to pass the following resolution :— " That it has been proved to the satisfaction of this meeting that the Company cannot, by reason of its liabilities, continue its business, and that it is advisable to wind up tho same, and accordingly that the Company be wound up voluntarily." It was stated that should the above resolution be carried, a further resolution would bo proposed at the same meeting for the appointment of a liquidator or liquidators for the purpose of such winding up. There was a good attendance of about eighty shareholders. Mr R. C. Barstow, Chairman of Directors, presided. The circular convening tho meeting gave the following information respecting the reasons calling for this step: — "The Preference Share Prospectus, which was issued on the 11th of May last, set forth fully the position of the Company, and stated that it would be utterly impossible for the concern to be carried on unless more capital was forthcoming. The directors regret that the urgent appeal then made met with but slight responso, the shares applied for being quite inadequate to meet the Company's engagements, and, consequently, tho directors are now reluctantly compelled to call tho shareholders together and recommend that the Company be wound up. Notice of a meeting for that purpose is anneved. Prompt action is necessary to save the estate fiom being sacrificed, and, for the convenience of tho shareholders at a distance, and to ensure a good representation of members of the Company at the meeting now coin encd, the directors send herewith a form of proxj' in favour of the Chairman of the Com pan j , and failing him, a member of the Board ; and they i-equest that you will sign the foim in tho pi essence of a witness, and forwaid it to me by return mail. '* The Chairman briefly introduced the business for which the meeting had been convened. He was pleased at the large attendance, which he took as an evidence that their interest «as cenhed in the welfare of the Company, and that they were prepared to assist in the deliberations to decide what should be done. He read the circular some time ago l-elative to the proposed increase of capital. If that circular had been responded to to the extent of one half — that is 3,500 shares, the present difficulties could have been tided over. All the shares applied for were, however, 1,200, half of which the directors themselves offered to take. It was then proposed to issue shares with a ten per cent, preferential dividend, but hardly any shareholders came forward in response to the circular. It might be thought that the proposal to wind up the Company was something from the directors, but it was not so. They were anxious to carry on the Company, but the Bank were putting on pie^ure, and did not care a rap what became of the Company. The only course he saw open to the Company was this : Let it go into liquidation, and then get from as many shareholders as possible promises to go in for shares in a new company. Then they could buy the mill from their own liquidators. They were not in a position to retrieve the position by any other means. The Bank would step in next week and sell the property from them. The directors had begged, yes literally begged, from the Bank this time in which to hold the present meeting and see if anything could be done, He stated this because he saw a letter in the Stak that the directors had put the Company into liquidation in order that they might buy it themselves. This was not so. The directors were nearly the largest shareholders, but to show their confidence in the future of the Company, they were prepared to go in more largely than they had gone in yet. But of course the shareholders must come in and help them, and the more they went in for the better for themselves. The present position was that nearly every penny that had been put in was lost. If they raised enough to buy the mill they would regain the greater part, if not the whole amount, of what was lost. If the Bank got the mill, however, the shareholders would have no further show. The ownership would go South, or the mill would be shut up altogether. There was a proposal from the South to buy now, and he thought it was to get the machinery and close the mill altogether. He thought they should use strenuous exertions during the week to put themselves in possession of funds and keep to themselves an industry which they had looked to with pleasure and pride as a means to maintain themselves and families. He moved the resolution to wind up the Company. At the request of a shareholder, the letter of demand from the Bank of New South Wales was read. The total amount owing to the Bank was £16,413 8s sd. Mr Groom seconded the resolution, and asked what would be the smallest amount of capital that would enable the Company to go on. The Chairman replied that £15,000 was necessary. Some might think that the directors were foolish in going on with the mill as they had done, but many of the shares applied for had not been taken up through illness and other causes, and of £25,000 expected the directors had only got £16,000, and had thus been left struggling on. In reply to Mr Adamson, it was said there was only £1,300 to be called yet. Mr Adamson said he took up his shares to assist the wool industry, and rather than lose them he would stretch a point and pay three times as much. The Chairman said if everyone took the same view of the matter, they could tide over the difficulty. Mr Adamson failed to see why thsy should not pay the debt without going into liquidation. The Chairman pointed out that they could nob raise the necessary capital without re-forming the Company, and the new company could buy for £15,000 what cost £30,000. One way it would be a half loss, and the other way a total loss. In answer to another question, it was said that ot 600 shareholders 239 were in arrears. There were 3,360 persons who signed applications for shares and never paid a penny. The people misled the directors, and left them in the lurch. The Chairman said that if the Company were re-formed they could go to another bank and ask for the money to pay off the debt, and the money could be paid gradually by the shareholders in the nexfc eighteen months. He was confident of the future financial success of the mill ; the hands had all been trained now, and there were orders now to keep the mill at work for two months. Mr Hutchison, Chairman of the meeting at Qnehunga, gaid it appeared to him that

it was a case of the Bank getting everything on one hand, or the big shareholders getting it on the othor. The small shareholders were shut out either way. He thought that some means should bo dovisod to avoid liquidation, and if possible to pay off the debt, without winding up the Company. The Chairman asked if there was anyone who was likely to advanco them such a sum of money. The Bank would tako possession on Monday week. A shareholder : But it must be sold by auction. The Chairman did not think so. Mr Batger explained that it was necessary .to go into liquidation one way or the othor. The desire of the directors was to roalise to the best advantage. Inquiries wore mado as to the cause of the present' difficulties seeing that the balance-sheet showed a profit of £190. The Chairman reminded the shareholders of the statement made by Mr Justico j Gillies in the recent caso in tho Supreme Court that the accounts had been cooked. i The weavers were also green, and some of their productions were poor and had to be sold for slops. There was really a loss of some £400 or £500 instead of a profit. Mr Burns suggested that the meeting should be adjourned for a week in order to give the shareholders and public a chance to subscribe a portion of tho money, and tho balance could be got on mortgage He moved, " That this meeting adjourn for a week, in order to give the shareholders and public an opportunity to subscribe £10,000, preferenco stock to be issued at the rate of 5s on application and 53 per month." The Chairman said it would be too lato, next Friday, as the Bank would tako possession on the following Monday. The amendment would have been all right if more time could have been begged from the Bank. Mr Brookfield said the Bank would step in quite as readily if the concern was in liquidation as they would if it was not. Mr Adamson seconded the amendment moved by Mr Burns. Mr Groom asked if tho directors had tried to mortgage the property outside the Bank, and if so what was the largest amount offered. The Chairman replied that £5,000 was the most offered. Some of these institutions could not lend money on the machinery, and only the land and building which cost £9,000. Mr Groom suggested that the shareholders present should be canvassed with the object of ascertaining how many preferential shares would be "taken up. Mr Caughey asked if there was any possibility of the concern bein^ a payable one if preferential shares were taken up. The Chairman was sure it would. They were paying their bankers nine per cent, interest, and that alone was a good dividend^ They wanted a few pieces of extra machinery and then could get on very well. They had difficulty at first until the warehouses were satisfied of the quality of their productions. There were only several pieces in stock, and orders were in for several hundreds of pieces, and others were refused. Mr Caughey stated that an impression prevailed that there was fault in the management, and that the goods were sold far too cheaply. The Chairman replied that in one instance the late Secretary went out and sold some pieces at a price below what it could be produced for, but the directors were unaware of it until some time after. Mr Bridgman said he bought some of those_ pieces. The price was so low that he said that if this was the way the Onehunga Company were going on they would soon come to grief. The Chairman said their attention was drawn to the matter by Messrs A. Clark and Son. The directors were not aware of this till then, N"o goods had been sacrificed since then. Mr Bridgman said the productions were of good quality, and he sold a great deal of the company's goods. He believed the Company could be made a success and was himself prepared to take up more shares. Mr Dilworth suggested the adjournment of the meeting till next Wednesday. In the meantime, the shareholders might be appealed to, and the number of shares they were prepared to take up ascertained. The adjournment till Wednesday was agreed to, and the Secretary proceeded to receive applications for new shares, which were subscribed in the room to the number of 660.