THE Temuka Leader SATURDAY, NOVEMBER 2, 1901. COLD DREDGING.

Temuka Leader, Issue 3813, 2 November 1901, Page 2

THE Temuka Leader SATURDAY, NOVEMBER 2, 1901. COLD DREDGING.

The report'of the Mines Committee on the petition of Mr H. K. Easton touching some dredging companies floated by Mr W. K. Conic (Cook & Gray), which is now engrossing the attention of Par hi moot, discloses a state of moral turpitude which is certainly discreditable to the colony. The cases investigated wore twelve companies floated by Mr C ok, but in the Course ot the enquiry it came to light that others were equally as b“d as he was. For instance, a witness who was brought from Dunedin to give evidence against Air Cook had to admit th -t he had acta 1 as chairman of one of Hie companies for 12 mouths, although he had nor pai l his application fees ; that curing that time he took directors’ fees and travelling allowance, while his firm supplied the company with goods. During twelve months ho received out of the comnanies he was c mnecU'd with close on £4UO, and only paid about £IOO into them, No doubt, there are hundreds who have acted similarly, with the result that they killed the goose th»t was laying the golden oggs. i he dredging industry promised great things for New Zealand, but the greed and the avarice of these people have destroyed it for the tim • being, and it will be some time before confidence will be restored. (Joining now to the report on Air Easton’s petition, the allegations si t out in it were—(l) Messrs Cook and Cray were tho promoters, brokers, secretaries, and dire tors, while their office became the registered uffi e of the companies. 1 his was all proved, but Mr Gray appears to have had veiy little to do with it, as ho was in Auckland. Mr Cook worked tho whole thing. He went to the West Coast, to»k options over claims, promoted and floated the companies, acted as broker, while his clerk acted as secretary, and finally became a director of the companies. Thus ho received promoter’s shares, brokerage, director’s fees, and secretary’s salary 7, f«>r that went to him also. And worse still than this when the shares could not ho disposed of otherwise they 7 were allotted to persons ivh i apparently could not or would not pay, and on shares thus got rid of to start the company, and on which no money led Drttj received, brokerage was charged. “ in one C"iU|-any,” says Air Easton in ilia sworn testimony, “ one-seventh of the capital . was ailuted to an office cl tv k in i ho employment of Mr Cook, the promoted vendor, broker, director, and secro‘ary,” and hia office was the registered office, of the company. “ And yet Air Cook obtained brokerage on these share out of moneys paid in by genuine -Innaiiolde;a.” M is an oilier of the charges made by Mr Easton, and in support ot this ho points out that Mr Gray 7 —Mr Cook's partner repudiated the shares allotted to him after his linn had received brokerage on them. Air Gray was examined as a witness, on J he swore that Mr Cook assured him that he would never bo called on to pay more than the alio lIUHU t of one shilling. Mr ' Illicit, of Wellington, also swore the sum ■ thing, Mr Gray and others were summoned before the court in Dune in, and they defended the action on these grounds In nis evidence Mr Cook s w nre lint *■ the Magistrate d cided there was tn* nvnii’epresentati n, without hearing my side at all.” What the Magistrate decided, however, was that no agreement enti led into between Mr Cook and th--defendants could bind the company, so that Air Cook was not accurate in his a.-item-nt. The evidence on this point indicates that the companies were started in s line o isos for speculative purposes, without any intention of putting dredges on the ground. The idea of course was to boom the shares and scdl out. Mi ' ook’s great defence in all these cases wan that he hi hi 500 contributing shares, and his wife held another 500, making in a 1 1000 shares iu each. This wan true, and it is certain that Air Cook made no money on 7 , of these, but that was duo to the fact that the bottom fsil out of the dredging boom too soon. Had the boom lasted a few mouths longer, these shares would have gone to a premium, they would have been sold by M-- C»ok, and he would have made a fortune out ot hem Under any circumstances the r rmalinu of companies for spoculativi ourposoa is most reprehensible, and might o bo punished by law. Th re is no law at present to meet such cases, but there

ought to be, and we trust there will be before the present Session of Parliament comes to an end.

Another charge was that the directors transferred shares when all calls had not been paid up. This will be understood by the uninitiated by stating what happened to Mr Easton himself, He bought shares believing that all the calls had been paid, but found afterwards that they were not. He was thus made liable for the unpaid calls iu addition to the price he gave for the shares. Another charge was that persons signed the share register who wcro not shareholders. The law requires that seven shareholders shall sign the register, and in some cases three of the seven wore not shareholders at all, and those people attended meetings, moved and seconded resolutions, and performed all tho functions which are reserved for persons who have invested their money in tho concern. On one eventful occasion Mr Howes, Mr Cook’s chief clerk, turned Messrs Easton and Summerville off the Board of Directors by moans of proxies. Messrs Easton and Sooimerville became distasteful to Mr Cook, and when the annual meeting came it was decided they should be removed. Mr Howes moved that he himself and a Mr Pearce, who was not present, should be elected directors, and this was seconded by Hoisted, who was a paid servant in the etnp oyment of Mr Cook, but not a shareholder in tho company. A poll was taken, and Messrs Howes and Penrca were elected by the proxies h' Id by Mr Howes himself. We have not time to go more fully into the question in this article, but may return to it again. But scandalous as some of Mr Cook’s transactions are, there are others exactly as bad. Tal e the case of No Town Dredging (tornpany. In that case the capital w<s £II,OOO, and 8s in the £ had been paid up at the end of last year, and the call up :o ,iate was 18s in the £, and yet nut an attempt has been made to put a dredge on the ground. A week or so ago tho company was sued for £75, aud as they did not defend judgment went by do fault. Execution was put in, and the whole property of the company was sold for £GO. Now where is tho money the shareholders subscribed 'I Aud why did the directors allow their prope ty to slip away like that. The suspicion arises that they have spent all the money and could not pay Hie £75. This is the greatest scandal yet disci sed, aud something ought to bo done to put an end to the daylight robbery which is being carried on. The proper course tor the Government to take is to pass a short Act, stopping all dredging companies from smug for calls until a proper iuvestigatiou of heir position is made. There are diKMis upon dozens of claims, which are being nursed by the directors for the sake of the fees they get. They have no intention of going on, aud they will not wind up until all the money is spent If the Government acted fairly and justly to the people at large this is what they would do, but we are afraid at the rate things are going on there is no hope of it this session.