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The Pamphlet Collection of Sir Robert Stout: Volume 70

Excerpt from Minute of Meeting of Local Board held in Dunedin, N.Z., 17th November, 1892

Excerpt from Minute of Meeting of Local Board held in Dunedin, N.Z., 17th November, 1892.

The Secretary's letters dated 6th October, and excerpt from minute of Directors' meeting held on 28th September, were read.

After discussion the following resolution was unanimously agreed to, viz.:—" The members of the Local Board desire to place on record their opinion as to the course adopted, and its probable consequences to the interests of the Shareholders. They desire to do this not only as the local advisers of the Company, and, therefore, to some extent responsible to the Shareholders, but in their individual capacity as considerable Shareholders in the Company, and therefore personally interested in a favourable realisation of its assets."

First.—As to the resolution removing Mr Bartleman from the managership and themselves from the position of Local Directors. They would not complain of this action were it at all likely that anything would be gained by the Company from this step, but they are of opinion that their large experience and local knowledge have been, and would continue to be, of great service to the Company in getting the best realisation possible for the Company's remaining assets. If this is unduly hurried, and especially if it is undertaken by persons who do not posses local knowledge and experience, it will infallibly result in a sacrifice of the Company's assets, and thereby a probable loss of all the Company's paid-up capital, and a possible call in addition. In order to show how carefully and page 4 successfully they have dealt with the securities realised since the date of Mr Dobson's valuation (in 1890) they would point out the large sum which they have realised for the Company in excess of these valuations. In addition to loans paid off and securities realised which were valued by Mr Dobson at or above the amounts owing to the Company, 34 securities, valued by Mr Dobson (below their face values) at £36,381 have produced £51,584, a surplus of £15,203, equal to fully 40 per cent, over his valuations. These are as follows, viz.:—
Property. Owing. Dobson's Valuation. Realised.
No. 1 £3,334 £2,260 £3,146
No. 2 2,198 1,271 1,527
No. 3 1,100 935 1,100
No. 4 850 677 782
No. 5 2,931 2,422 2,931
No. 6 2,550 1,275 2,550
No. 7 3,000 1,500 3,000
No. 8 350 357 400
No. 9 500 360 500
No. 10 1,000 720 1.000
No. 11 1,607 Nil 614
No. 12 145 Nil 150
No. 13 1,178 532 1,200
No. 14 2,000 1,923 2,000
No. 15 1,278 750 1,100
No. 16 658 640 658
No. 17 450 250 450
No. 18 838 400 800
No. 19 1,553 750 1,950
No. 20 1,500 1,420 1,500
No. 21 1,000 750 1,000
No. 22 7,705 5,506 8,085
No. 23 100 56 100
No. 24 1.453 1,193 1,453
No. 25 2,710 1,753 2,710
No. 26 248 211 300
Carryforward £27,911 £40,796
page 5
Brought forward £27,911 £40,796
No. 27 450 328 450
No. 28 850 486 850
No. 29 900 710 900
No. 30 4,000 3,850 4,000
No. 31 519 Nil 310
No. 32 1.200 546 1,200
No. 33 220 78 168
No. 34 2,700 2,472 2,700
£36,381 £51,584

This shows conclusively that they were correct in their opinion (see minute of 19th August, 1892) as to Mr Dobson's competence as a valuer of land in this part of New Zealand.

Second.—The appointment of Mr Dobson as Sole Manager in the Colony seems to them very questionable policy in the interests of Shareholders. Mr Dobson is a resident of Napier, in the North Island of New Zealand—some six hundred miles from the part of the Colony where nearly all the Company's securities are situated, his experience in connection with land in South Canterbury, Otago and Southland is certainly very small. His hurried run through the securities two years ago did not materially add to his knowledge on the subject, and the unreliable nature of his report clearly shows this to be the case.

Third.—They think that the substance of the private correspondence between Mr Lawrie and Mr Dobson, to which the minute refers, should have been communicated to the Local Board, so that they mignt have had an opportunity of replying to any strictures Mr Dobson may have seen fit to make in regard to them, and they think the Directors have not acted in a straitforward way in listening to ear parte statements without giving them an opportunity of replying.

Fourth.—They feel sure that by a forced and rapid realisation, such as the Directors propose, great lost will result to the Shareholders, properties will be sacrificed at very much below their real value, and many of the Company's clients who are gradually improving their position and working out their liabilities, will be ruined. In realising properties in the Colony, it must be page 6 borne in mind that it is not simply a question of a moderate reduction in price that will secure purchasers. It is very much more a question of finding a person who is prepared to buy at all, and in cases of forced sales properties as a rule are simply sacrificed. By a gradual realisation, such as the Local Board have been carrying on, they believe the Company would eventually come out without material loss to the Shareholders, but by a forced realisation they are satisfied that their interests, along with those of the other Shareholders, will be very materially and unnecessarily prejudiced.