TEMUKA LINSEED COMPANY.

Timaru Herald, Volume XLI, Issue 3276, 27 March 1885, Page 2

TEMUKA LINSEED COMPANY.

The annual meeting of shareholders of the Temuka, Linseed, Oil, Cake and Fibre Company was held m the Wallingford Hotel on Wednesday evening. The attendance was fair. Mr John Talbot, Chairman of Directors, presided. The minutes of the previous annual meeting having been read and confirmed, the Secretary (Mr Ash well) read the Directors annual report and balance sheet as follows : — " Your Directors have the honor to place before you their annual report and balancesheet for the year ending 28th February, 1885. When we last met at the general meeting, twelve months ago, we informed you that a site had been purchased for the works, and that we intended to get scutching machinery as soon as possible ; also, that enquiries would be instituted with a view to ultimately introducing spinning machinery for the production of binding and other twines. «• We regret that the views which were then held of the Company's prospects witb. regard to the profitable preparation of fibre for export, have not been realized, and thafc ' the balance-sheet shows a considerable loss on the year's transactions, some explanation of which will naturally be expected. As you are aware, the initiation of any new undertaking always involves more or less expenditure, which afier experience shows to havo been avoidable. This lias happened m our caso, but is, perhaps, the moro excusable m consequence of there being no similar industries m the colony sufficiently advanced to act as a guide. We have also been led into some costly mistakes, notably the preparation of the native flax fibre, which will not recoup the Company for more than half the amount expeuded on its preparation. The experience we have gained also goes to show that European fibre cannot be profitably prepared for export, the returns from a small trial shipment only netting about £23 per ton. " Your Directors early recognised the fact that m all probability it would not pay, and therefore instituted enquiries as to the cost of a Bmall spinning plant, being of opinion that if a plant capable of turning out binding and other varieties of twine could be procured afc a cost within the Company's means, it would without doubt prove remunerative, as it would enable the Company to convert the fibre into a valuable and readily wdeable commodity. Tliis leads up to the most important subject of our report. "It will be remembered that when Mr Hayhurst was leaving for England last year he kindly undertook to look out for machinery for the Company, with especial reference to the preparation of fibre. JMJr Hayhurst was also written to later on, asking him to make enquiries about such a spinning plant as has already been alluded to, the cost not to exceed £1000. The Directors were at the same timo making similar enquiries m other quarters. " Mr Hayhurst, as ifc appears, having made enquiries, and being satisfied as to thl

description of plant most suitable for the requirements of tho Company, and m order to expcdilo matters, made arrangements at once for the purchase, and we were accordingly advised by him m a letter wliich came to hand by the mail leaving London on December •4th, that arrangements were almost completed with Messrs JBarroclougb, ot Manchester, for the machinery, the cost of which m Londou would be about £1400; the additional cost of setting np at Company's works, buildings freight, etc., would probably be £600 or £700. " Theso advices took the Directors considerably aback, especially as grave doubts had existed as to the advisability of taking up the spinning unless a plant could bo obtained at a co9t here not exceeding £1000, the available capital, it was deemed, not warranting a greater expenditure. In accordance with this opinion, a cablegram was immediately despatched that Mr Hayhurst must not purchase. A reply was received, followed by a letter from Mr Hayhurst, saying that the order not to purchase came too late, and that the machinery would be forwarded m February, and may therefore be expected m about two months from date. " In order that you may thoroughly understand the position, it is necessary to explain shortly our financial position. On reference to the balance sheet it will be seen that onehalf of the capital is called up. There is, however, some £500 unpaid, and the Bank overdraft is £874. It would therefore require another call of 10b per share m addition to the unpaid calls to pay off our present liabilities. Thero will then remain £2 per share available for the extension of_ the works. There are 759 shares on the register, but a considerable number of these are doubtful, and we deem it prudent to rely upon only about 650 of them. This would give an amount of £1300. It will therefore be seen that unless some special effort is made we cannot proceed with the spinning. "The Directors while stating that Mr Hayhurst, m proceeding to the purchase of machinery without further reference to the Company, clearly exceeded their intentions and instructions to him, at the same time recognise that he has acted with the best intentions to benefit the shareholders and the district generally, and are therefore greatly averse to causing him any trouble or expense. They are also fully persuaded that the plant he has purchased is a most suitable one, and havo very little doubt that the manufacture of all the varieties of twines and small rope, which the specifications of the machinery provide for working will prove remunerative. That it is an industry well suited to the district, and would prove of great public benefit, is beyond all reasonable doubt. " From the foregoing remarks on the position, it will be seen that the capital of the Company is inadequate to provide for the extension of the plant, and it is doubtful if any increase of the capital can bo effected m the face of the present commercial depression. Your Directors, however, having strong faith m the utility and ultimate success of the undertaking, are willing to give their personal guarantee m order to obtain the necessary balance of funds, provided the shareholders will allow the repayment of any amount that the Directors who guarantee may be called upon to pay over and above the amount of their shares, to be a first charge upon tho assets of the Company. " In filling up tne vacancies on the Directory it is necessary that the shareholders should only elect men who will join their co-directors m giving the requisite guarantee. It will be necessary for you to elect an auditor for the ensuing year. "John Talbot, " Chairman of Directors." The Chairman said the Directors wished to see the undertaking gone on with, and also .that the machinery purchased by JMr Hayhurst was most complete. Mr Postlethwaite spoke on the desirability of paying farmers as much as possible for their linseed crops. The Chairman, m reply, said thot it remained to be seen what price could be given. JMr Harrison desired to know whether suitable persons to work the machines would be sent out from Home. The Chairman said if the machines were purchased by the Company, steps would be at once taken to have operatives sent out. Mr Postlethwaite wished to ascertain whether the Directors were sure of a profit if spinning was undertaken. The Chairman, m reply, read a lotter from Messrs Barroclough and Semple, giving information m relation to the work that could be turned out and the cost. Mr Postlethwaite said before the machine was taken over, it should be passed by a competent man. The Chairman said that before the Directors received the letter from Mr Hayhurst notifying the purchase of the machine, it was thought better to wind up the Company, but they were now of opinion that if that courso was followed, the shareholders woidd lose amount paid on their shares, and tho Directors therefore thought they should risk the balance of their" shares, and go on, because if the undertaking was a success, it would bo of the, greatest benefit to the district, and there was every prospect of success. The Chairman then moved the adoption of the report and balance-sheet. Mr Postlethwaite, m seconding the motion, dwelt at some length on the difficulties that Directors of new industries had generally to meet, and m concluding soid the Directors of the Temuka Linseed Company deserved every praise for the manner m which they had studied the interests of the shareholders. The motion was then carried, and a vote of thanks, proposed by JMr Twomey, was passed to the Directors for lhe past year. Some discussion then ensued re the matter of guarantee to Directors, after which a resolution was unanimously carried to the effect that the Directors be guaranteed against any personal loss resulting from continuing operations and increasing plant. Messrs W. Wright, J. W. Miles and E. Brown were re-elected Directors. Mr Rout was re-elected Auditor. The Chairman, m moving a vote of thanks to the Secretary, expressed the satisfaction felt by himself and co-Directors at tho manner m which the Secretary performed the responsible duties of his office. The motion was duly seconded, carried and replied to. A vote of thanks to the Chairman terminated the meeting.