:
March 29, 1902.]-
elsewhere, where their comfort was more at- tended to.
Mr. G. F. VEITOH said that before the formal adopton of the report and accounts was put to the meeting, he would with their permission like to make a few remarks. In the first place, he would suggest the advisability iu the future of issuing the report at least a fortnight before the meeting so that
the shareholders-non-resident in
Colony -might be enabled, if they thought fit, to comment thereon. Now, as regarded the accounts, although they must do the general managers the justice of assuming that they had done the best in their opinion in the inter- ests of the Company, it would be difficult, he imagined, to find a better exemplification of the mischief arising from not leaving well alone than the present condition of the Company, They started the year 1901 in a splendid posi- tion. During the year, the gross earnings of the steamers Perla, Esmeralda, and Diamante were $196,902.71, less the profits attaching to the voyages of the new steamer Zufiro made in December-she commenced running on 30th November. This account of $196,902.71 was made up as follows, namely:-Amount written off for depreciation, $96,123.30; Exchange adjustment account, $49,689.48; balance of profit and loss $115,594.57-a total of Deducting the $264,747.97.
balance of $67,45.26, this left the total earnings at the amount stated, namely $196,902.71. Nothing in' the accounts was shown as to the cost of management, which he ventured to think should in future accounts be given. Then, as regarded depreciation, last year ten per cent, on the value of the Company's fleet was written off; this year a very much larger sum, $96,123.30, was set aside. He should be glad to hear how much of this applied to the three other steamers and bow much to the Zafiro. The latter was practically a brand new boat, and it seemed to him that the amount at present set aside provided by If with the old depreciation was excessive. flect the Company could make such a handsome showing, what was the object in contracting, especially at a time when the cost of shipbuild ing had perhaps reached its highest point of late years, for a couple of steamers of a gross tonnage of 5,078, tons costing up to the 31st December last 8,411,123.30. This item was curiously worded, and caused him to think a further amount would have to be added to this already enormous sum, His impressions might be wrong, but the Chairman would perhaps enlighten him. Further, would he kindly state the actual cost per ton of these new steamers? Taking £70,000 roughly as the price of each, he (the speaker) made out the cost per ton to be £27. 10s or thereabout, which when he knew of a steamer here-an eleven-knot buat, certainly not so elaborately fitted up-costing only about £13. 188 per ton, they would agree with him was a very high price to pay. It appeared to him that these steamers were ordered without any clear idea as to how the necessary funds to meet their cost were to be provided, consequently their present position us a Company was de plorable in the extreme. They owed their bankers $222,096,85, and a loan in London of $521,739.12 had to be met sooner or later. Some further information as to the terms and condi- tions of this loan should be given. Share holders acco ding to the report, showed their distrust by refusing to subscribe the additional capital asked for, which was hardly to be won- dered at. The shares of the Company, which, a few weeks ago, stood at a premium of 20 per cent., could - now be purchased at a discount of 40 per cent There was no money available to pay a dividend to share- holders, although the balance at credit of profit and loss was sufficient for a 10 per cent, dividend. The only people who did make money were the general managers. They got their 5 per cent. on all outward passage-money and freight from Hongkong and on all other retenue procured by them, also a commission of 21 per cent, on all disbursements made at Hongkong, and also a commission of 1 per cent on the amount received by the Company on the building, purchase, or sale by the Company of any steamer or vessel. What did the share. kolders get? Nothing! *(Applause).
- Mr. BRUTTON said he had had put into his hands by a body of shareholders a number of questions they would like to have answered,
CHINA OVERLAND TRADE REPORT
and he had a few remarks to make with reference to the reduction on the working expenses. He asked if the chairman would give answers if he read the questions one by jone,
The CHAIRMAN-Read them all. Mr. BBUTTON-I think it would be better if you answered the questions one after the other, because your answers might enable me to cut out certain of the questions I have now got, and I think it would save time
The CHAIRMAN-I think it would save time if I answered you pu the whole.
1
Mr. BRUTTON-I do not know what the shareholders think about that, but I think if the question were answered it would be the
means
The CHAIRMAN-Mr. Bruttop, I am chair- man, and I have the right to conduct the meet ing as I think best.
on
241
the general managers, but now, when they had got the capital of the Company increased by Ave-fold, there was a feeling that some reduction should be made, or that the Articles of Associa tion should be altered in some way so that the general managers should not get their 5 per cent., 24 per cent, and 1 per cent, on all the business of the Company. Therefore it was for the shareholders to show by their vote whether- there ought not to be some alteration here. Another point was the depreciation of $99,000. Did that sum include any depreciation on these two steamers, and if so, how much? He sub- mitted that by the Articles of Association →→→
Mr. VEITCH-Excuse me. The Bubi was not here then.
!
Mr. BRUTTON, continuing, said he was coming to that. He wanted to know whether that included depreciation of 5 per cent, on either or both of the new boats. The wording of the clause was that the five per cent, could only be deducted on the working of the steamers for the previous year.
The CHAIRMAN-Nothing of the kind, Mr. Brutton. Read the clause.
Mr. BRUTTON said he was open to correo- tion, and read the clause. Proceeding, he submitted that the clanse meant deprecia-
the on
steamers which had been tion working and earning profits for the Com. pany. Therefore, shareholders would like to know what portion, if any, of that $99,000' was written off for depreciation of these two new steamers. There was another point and that was whether it was considered necessary that that Company, with a small fleet, should have a marine superintendent: He thought he was right in saying that other steamship companies -the Douglas Steamship Company with a fleet of six steamers had no superintendent, and it seemed to him that the earnings of the Company with increased capital were so small that some attempt should be made by the management to cut down all possible expenses so that there should be some return
(Applause). It seemed. for the shareholders. to him that they had got their cake in these two ships but they got precious little chance of getting their bite (aughter). The capital. had not been subscribed for. and until the capital was subscribed for, it seemed that the earnings had got to be taken up for the next few years to pay for these ships. Therefore, they had got their cake, they could look at it, but they could not get a bite of it. In the first place. he would move that the report and accounts, as submitted to the meeting, be not passed.
Mr. BRUTTON said the shareholders had listened with a great deal of pleasure to the remarks made by Mr. Veitch, and it occurred to him that if the shareholders were to pass the resolution proposed by the chairman it would imply that they were fully satisfied with the general managers. The first point that occur. red to him was whether the general nanagers were justified, looking at the, report and no- counts for 1899-1900, in asking the shareholders to adopt the large increase in the capital of the Company. Mr. Veitch had clearly pointed out the exart position of the Company in 1899- 1900. In 1 99, the capital of the Company was $310,000, the net profits amounted to $96.000 odd, and the shareholders were paid a dividend of 10 per cent. In 1900, with practically a similar capital-he thought he was right in saying that, because the extra capital not being subscribed until the end of 1900, he und rstood, was not used-the net profits amounted to $143,000. That was practically 30 per cent. on the capital. In 1901, on a capital of $1,000,000, the profit amounted to $115,000 odd, which was practically 11 per cent. the increased capital. Now, the ques- tion was-Did the earnings for 1899-1900 warrant the general managers going to the expense of ordering these two new steamers? He presumed he was right in saying-as he had no answers to his questions-that when this increase of capital was asked for on 14th April, 1900, the general managers contem- plated that that increase would be sufficient to pay for the two steamers, or, at any rate, if not sufficient to pay for them, the earnings. after allowing for a dividend of say 10 per cent., would be sufficent, in time, to pay for them. He said this because on 23rd March, 1901, the Chairman in his speech said, “I have been asked by several shareholders why we don't declare a larger dividend, and the answer I gave them was You can't eat your cake and Therefore, it was proposed to still have it.'" pay a dividend of five per cent. and to use the balance in putting it towards payment of the new steamers. That, he submitted led the
Mr. BBUTTON proceeded to put his questions shareholders to believe, and rightly too, that
as follows:-When did you first contemplate. they should have a ten per cent, dividend down at any rate, and that there would be sufficient purchasing these two steamers? On 14th out of the e raings to go towards the cost of April, 1900, when the capital of the Company At that time, there was was increased to $1,000,0 0, did you then know the two new steamers, a balance of $600,000), that was on the increased what the cost of these steamers was to be? On capital, which could be used towards the the 14th of April. 1900, if they knew that the .in 1901, at increase of capital was not sufficient to pay payment of these new steamers.
for the two steamers, was it not the duty of the end of the year, the general managers asked for a further increase of capital to $900.000. the general managers to inform the share- The whole question, therefore, for the shareholders that that increase would not be holders was whether they were going to adopt sufficient and that they intended to ask a these accounts as they stood or whether they further increase? What was the purchase cost were going to express by their vote their dis of the Diamante? As the Zofiro and Rubi satisfaction with the management of the Com- were to cost so much more than the Diamante, pany, because if, a. it was contended, the receipts should not shareholders have been informed of the and earnings of the Company did not warrant fact before the steamers were ordered? The the general managers increasing the capital Diamante cost something like four lakhs and fivefold as had been done, then certain of the the two new steamers over seven lakhs - what- shareholders were of opinion that the general was the total amount of profits to be applied managers did wrong in doing as they did. towards the cost of the new steamers? What was the working expense of the fleet for 1901 P (Applause). It was very easy, he knew, for any one to be wise after the event, but the question Did that include the general managers' commis was, was it necessary, in the interests of the Com- sion, and what would be the general managers' pany, to increase the capital to that extent? commission for 1901? Depreciation $99,463: Mr. Veitch, continued the speaker, had also men- did this sum indicate depreciation of new tioned the remuneration of the general managers. steamers? If so, how much? Now there was a feeling among certain share. holders that when the capital of the Company was $300,000, 5 per cent, 24 per cent and 1 per cent. mentioned in clause 10 of the Articles. might be a very fair and good remuneration for
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The CHAIRMAN-You cannot make that motion. You have simply to vote against my proposition.
Mr. BRUTTON-I move that the resolution be not carried
The CHAIRMAN-You cannot move a resolu. tion of amendment; you simply vote against my proposition. You, a lawyer, ought to know that.
The CHAIRMAN—Are there any other ob
H servations to be made?
Mr E. S. Jos FH-How many firms tendered for the building of the two new boats, and who gla
L were they?
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