The first ordinary general meeting of the Yue Kang Glue Factory Ca., Ld., was held at the offices of the Managers, Messrs. David & Ca. 16a, Peking Road, on. Tuesday, the 23rd ultimo. Mr. J. R. Twentyman presided, and there were also preseat Joo B.A. Clarke, C.T. Wong, and D. BL. David, Directors; W. A. GE. Platt, Legal Adviser; J. A. Stewart, A. C. Hunter, GF. Fondey, and H. Parrott.
The Chairman said—The report and accounts having been before you for some Gays, I presume that you will accept them gsvend. Your directors regret exceedingly Mat it shows a loss—and not x profit—of Tis 10,398.79 in the working during the year. "Our first drawback upon starting Sperations was the difficulty for a Jong time of procuring a quality of bone sufficient, Gnd it was nol until we resumed work in October that good cuslity could be obtained, The second check we met with was the Tack of working capital, When the machinery was finally set up and all expenses paid (hare was barely Tls. 5,000 in. cash left for working expenses, which was, of course, goon exhausted, and we were under the) necessity of contracting a loan of Tls. 5,000 more, together with an overdraft Tis, 2,502.11 with the bankers of the Company," The glue produced before the hot Weather set in wa of such a poor quality, that it was decided not to put it on the market for the present, and there was consequently 10 income derived therefrom. Operations were very much restricted from tue cause, a8 the running expenses had to be paid, and also for the reason that it was not possible to keep the plant running at ts fullest capacity owing to the lack of funds to provide for the purchase of bone. Considering these facts, therefore, it will be absolutely necessary to have more funds for carrying on the work, if it is to be worked ata profit—and it will be apparent to all that under the present conditions it will not be advisable to continue—and it is for tha reneon that the extraordinary general meeting has been called to succeed this one. there is anything to be further explained in reference to the accounts I shall be pleased to answer any questions. The working account is on the lable, and if any gentleman would like to see it 1 shall be pleased to produce it. It is very unfortunate that wwe are placed in a position of th d, but we have met with many difficul! all due deference to Mr. David, ment has not been just what it ought to b Perhaps it was not his fault, but there it i: staring us in the face, and I do not see how we can get out of the difficulty in any other way than by winding up the Company and calling for a certain amount from the shitreholders who wish to carry on business in any other way.
Mr, A.C. Hunter proposed, and Mr. J. A. Stewart seconded, that the report an accounts as presented be approved and passed.
The Chairman said that unfortunately they had not the quorum necessary for the extraordinary general meeting, and they would have to adjourn it for a week, according to their articles of association. They might then arrive at some method of finaneing by which they might be kept going. He honestly believed that there money in the business, Unfortunately just for the minute they were crippled for want of capital. He might mention that he had already approached one or two people, and he had got one firm who would place money at their disposal if they could satisfy them that the business could be worked successfully. Even the money this firm might produce, however, would be insufficient to enable them to go on. The next at the same time and place. directors' idea was to wind up the Camps and call upon each shareholder ta pay so much and retain his shares. By that means they would get the benefit of a larger divi-Gend later on. OF course there might, be some who would not be willing to do this, but the directors' idea was not to crowd out anyone, but to keep the place going and work at a profit.
it. J. A. Stewart—Is it not possible to get rid of the unissued shares?
The Chairman—We have been doing our level best to do that, but we have not had avery good compradore. Indeed we have had nothing good.
Mfr. J. A. Stewart—There appears to difficulty in continuing work during the hot weather.
The Chairman—Well, we could make' aufiicient during the cool months to cover this and still leave a return, Mr J. A. Stewart—What are these $1,961 for fees? And there is an amount for preliminary fe 'The Chairman—Yes, the preliminaries were for starting the business, The others are directors' fees which have not been paid.
Mr. J. A. Stewart—But is it usual for the directors to accept fees under these conditions? {e'Phe Chairman—The directors would be very pleased to accept them if there was a profit.
Me, J. A. Stewart—Under "Stock" there is an item of $5,000. Is that in hand?
The Chairman—Yes, that is glue. We have had a very bad compradore, and everything bad. The thing has not been worked in a satisfactory way, to my mind. The glue has not been sold as it ought to have been sold. Glue from home, no better than ours, realises Tls. 24. picul, and we have only been able to get Tls. 15a picul. The directors decided that that was not sufficient. We raised our price, and then the difficulty was to get them to take it, Undoubtedly we will get Tis 18 a picul, avd J think it Might even go to Tls. 20, because the glue is Arst-class, It is equal to anything from the European market, and that is why I say that. the Glue Factory, although it has ilad a bad beginning, has " future, if we can only carry it on.
SLA. Stewart—The item, "Sundry Debtors, $4.250""—is that considered good, bad, or indifferent money Mr. ©. F. Fondey—It represents book accounts, including the money owed by the compradore.
Mr. J. A. Stewart—Are you likely to collect that?
Mr. C. F. Fondey—Not all of it.
Mr. J. A. Stewart—Is the Company still at work?
The Chairman—Yes.
Mr. J. A. Stewart—Are the losses still Chairman—No. We are practically all right now. ing up, do you think there would be a li Joss sustained on the sale of the land and buildings The Chairmau—That depends on a variety of things. It is just possible that you would find someone to buy it and pay the value. If not the chances are that it would be a very bad business for the shareholders. The probability to-day is that it might bring pretty nearly half its value.
Mr. J. A. Stewart—I am afraid we are in a very bad way.
The Chairman—Yes, and we have to make the best of it.. Long ago I was disgusted with it, and wanted to get out of it. But I wanted to see the thing a success, and I believe yet that it could be made a success. I did not want to leave a sinking ship, and that is why I held on to it.
The motion before the meeting was carried, and the extraordinary general meeting was then adjourned until Tuesday The Directors have to submit to the Shareholders the report and accounts for the eleven months ending December 31st, 1900.
"Although the Company was formed late in January, work at the factory was not commenced until the latter part of April, at which time the machinery and plant, were finally installed and in working order.
Hardly had the work been fairly under way, and not much more than a month Inter when damp and hot weather set in, and after it was found that a considerable quantity of JIue was being spoiled in consequence, it was decided to close the works for the summer.
Work was not resumed until {October 15th, so that out of the eleven months, the factory was only running about 3} months, and all working expenses were incurred, with the exception of bone, coal and chemicals. engaged to do the work found, upon coming Temight be pointed out that the engineer to China, that he had to contend with entire: ly different climatic conditions from those at home, and also a much inferior quality of hone, so that but a little over 14 per cent was realised in glue from the amount of bone purchased and deducting from this the amount of glue spoilt from time to time by sudden hot spells, the percentage was brought down as low as 10 per cent.
This, together with an increase in the price of bone from Tis, 1.20 per picul to Tls. 1.83 per picul, as soon as buying commenced, and an unexpected increase in' the consumption and price of coal, go very largely toward making up the amount of the loss sustained, "From the time the factory resumed worl, Aitfenltios hogan to appear owing to the lack of bone on account of insufficient working capital, and from time to time work had to be temporarily suspended, and this not. only very materially lessened the production of the glue, but increased its cost, and instead of working 63 piculs of glue per day, the average has only been about 23 piculs, As the result of a careful estimate, it was found that, computing the value of the glue at Tls. 15 per picul, we were losing nearly is. 1.70 per picul by working this small quantity of bone, and that, by running at the full capacity of 65 piculs. per day, that loss could be turned into a profit, as the working expenses would be but little more, and the output double.
While we are aware that a considerable portion of this loss has been occasioned by. inexperience, which exists with every new venture, this being overcome, the further losses have been occasioned by a want of working capital, which has not only retarded the work, but has increased largely the cost of production.
J. RB, Twestyaas, Chairman:
Shanghai, 15th Apri 1901.
Text read from the printed page and cleaned; old type leaves the occasional error.