Report of the British Insulite Company

CITY NOTES, REPORTS, MEETINGS, &c.

British Insulite Company (Limited).

THE second ordinary general meeting of the shareholders of the above-named company was held at the Guildhall Tavern, Gresham Street, on Monday afternoon, the Right Hon. E. P. Bouverie presiding.

The Secretary having read the notice convening the meeting,

The Chairman said: Gentlemen, under our articles of association there is a provision that the annual general meeting shall be held yam year, and that if no special time or place is prescribed by a general meeting, that meeting shall be held on the first Monday in February in every year. In accordance with that article of association this meeting has been called, for the purpose of submitting to you a statement of accounts and for other ordinary business of the company; and in submitting those accounts and report, which have been sent round to you in print, I shall deem it my duty to occupy your time for a few moments in explaining what the position of the company is. In the first place, I should say, you are aware it has been in existence for about eight months. The latter part of May was the time when the company was formed. Since then we have had to set to work at the board to get the operations of the company set in motion. The accounts which you have in your hands really set forth the position of the company; but there is an ambiguity in one item of those accounts, on the creditor side, which I shall be glad to explain to you. First, there is what has been received on the debtor's side. There is an item debited to "Sundry creditors," and a moiety of this is for directors' fees, which, I should mention, have been unpaid. We thought as the company was inchoate, or not at work, we should not at present draw our fees. That makes one-half of the item of "Sundry creditors" on the debit side. On the other side there is the amount of cash payments and legal expenses, and the first is the item "By patents, machinery, &c." Then come the next five items — 2, 3, 4, 5, and 6, beginning at "Leasehold property" and ending "By cash at bankers'," all of which are really assets of the company, as to each of which I should like to say few words. Leasehold property with improvements have been entered in the accounts at cost; and I shall say something of the site in my general observations. We have established our works, and I should mention we ware enabled, after some difficulty, to find whist I think is a perfectly appropriate site, and that we bought it at a very low figure with some machinery which was then not in use by the vendor, having belonged to people who had failed, and we got it at value far less than that which we are told is the real value. The board have had the site—the leasehold which we have got—valued. It is eminently fitted for our purposes; and apart from the machinery which we got therein, which was included in the £1,925, a very competent surveyor, not at all exaggerated in his ideas of the value of property, and with great knowledge and experience of leasehold property, put the lease alone as worth £2,000, and the machinery we got thrown in we have valued to us at about £700. So we made a good bargain. We got for £1,925 what we are told is worth about £2,700. The plant and machinery have been purchased alone. That does not include the whole of the plant, nor the material which we have acquired, and which appears as "Stock-in-hand," some of which is of a valuable character, and which we thought it prudent to lay in a good stock of before commencing operations, for fear the price would be raised; and I hear, if sold in the market, it would be worth more than what we gave for it. So it stands as cash or equal to cash in our books. "Cash at bankers" speaks for itself. Altogether I make out, without going into the valuation of the lease at the higher rate, what we have put it at there shows meets of over £7,000. Then there is the charge for "Preliminary expenses," which always accompanies the establishment of a company, which I do not think is excessive. That would have of course, in future arrangements, to be spread over a short plod of years. It is a fair capital charge, a large part of which consists in advertising—more than half. Then there are "Sundry administration expenses," which I can give the details of if they are asked for by the meeting, and of which one-half are already paid. I think what I have said will enable you to see that we in most respects are ready to begin operations, but unfortunately up to the present period we have not been able to commence work. We have got the building and materials, and we wished and hoped to have the machinery. The main part of the profit which is expected to be derived—I may say the whole profit—from the manufacture of this material will be got from making it in a large way and in a cheap and economical manner. The great merits of this patent invention to which we have a right is that it produces a material which is in large request, which hp necessary to electric existence, and which can be produced by this process better and cheaper than anything which is known in nature. The result is, if we are right in our anticipation, that there must be a very large demand for a variety of electrical purposes for the stuff we shall be able to produce, and the cheaper the way we can produce it, the larger the profit that will be made by the manufacture. There have been considerable minor improvements made in the method of manufacture since this matter was first invented. An improvement in treating it has been hit upon. Before, it was out into blocks, but now they had got it to such consistency that they could press it into any shape in moulds. Having to do that on a large scale in a cheap way involved the erection of some more machinery. The first difficulty we had to contend with was to get a place to carry on our works. We wanted them near a railway or the River, as we had to deal with matters of large bulk; and another consideration was that it should be out of the way, because in making the stuff we have to make there are many odours which are supposed to be offensive, and we know by experience in the small works established by the parent company in Westminster, great complaints were made by the authorities as to what was called a nuisance in the neighbourhood, and legal steps were threatened to shut up the works. After making one or two efforts in another direction, we succeeded in finding a site at Charlton which eminently fitted all characteristics—within fifty yards of the station. It has access to the River and to the railway, and is not out of the way, has no population round it, and combines everything we want for the purposes of our manufacture. We have the site on lease for thirty-four years at a moderate rent. Having got the site—this took us some time—we did not get the conveyance till September. Then we set about getting the machinery, but we found the machine makers so of work that they were very unwilling to promise to have all delivered by a certain time. We have only been able to get the machinery piecemeal, and the last thing which hung fire was the engine, which has only to-day been delivered. The engine-makers had to be written to by our lawyers -and the work was hurried on. We hope to get to work la the wares of the next two or three weeks, and produce what we propose. Now, of course, with new inventions like this, the expectation that this stuff will be required, that there will be a large demand for it, is, more or less, a speculation. When you have a monopoly of something which people do not care much about, or a thing which is a matter of fashion—say, crinolines—it is possible the demand may cease, or the fashion may change, and that may be left landed with no real desire—no valuable desire—for that which you produce. But when you produce what fray be called a necessary of existence of any kind, and if you have a practical monopoly of it, and if you are able to produce it better and cheaper than any one else, all those who require it must come to you, and you will make a large profit. That is the principle upon which we stand. We believe we have by our patent the right of making something which all electricians must have for use for appliances for telephony and electricity, and for all the various things for which an insulating material is necessary for all electrical operations. One of the commonest things which we are to manufacture are the insulators you see in the telegraph posts. We believe ours will be made cheaper and better than those of porcelain. We have supplied some to the Post-office some months ago, and they have been sufficiently satisfied with the result of their experience of the material as to ask us to make a tender for a large order quite recently. So the result of that must have been satisfactory. But besides that there are an infinite number of things to which insulation is common. We know how largely the development of the application of electricity to ordinary affairs is going on now, and we think we have got something which is a necessary ingredient in that application. If it is true, and I believe it to be true, we have got hold of a very valuable thing, and if the crop is nurtured and is managed in the proper way we ought to have got hold of a very good business. It is in the future and remains to be decided by experience. We have done nothing but laid the foundation. We could not get a site and the machinery all ready-made out of the bowels of the earth or the brains of an inventor. Now we have got that we hope to be able to produce our stuff at a very large profit. I am a full believer in it myself and have a considerable stake in it. Although I belonged to the original parent Insulite Company I not only put what came out of it but a good deal more into this company, and I ant satisfied that in a reasonable time it should be a very good property. I do not know whether you will be persuaded, but I hope you will be, of the value of the property you have got hold of; and I hope you will not be deterred from believing, owing to the delays that have taken place, that the property in which you have made a venture is a deteriorated or a damaged one. On the contrary, I believe I am speaking the opinion of the board, as I am my own, when I say there is no reason, as far as I am aware, to believe such to be the case. But we have learned since, and every step we have taken has gone to satisfy me since the company was formed of the great utility of this invention. We have got Dr. Fleming, a gentleman of great knowledge and ability, in the room, and I am glad to say he is a great believer in the concern himself. I am afraid I have kept you at a greater length than I intended; but Dr. Fleming is prepared to show some method in which this material can be practically used. I shall be glad to answer any questions which may be put, and in the meantime I will move that the report and accounts be received and adopted. I am reminded that Sir Wm. Thomson, who is the greatest possible authority on these matters, has written in the strongest terms of praise in this matter. There is no reason to doubt the correctness of his views. They are in confirmation of those we entertain ourselves.

A shareholder seconded the resolution for the adoption of the report and accounts.

Dr. Fleming said, in response to an invitation, he would offer a few remarks. He was well aware of the proverbial sanguineness of the inventor, and he also rose with a sense of the responsibility to keep within the strictest limits of moderation in his remarks. But he thought he might venture to claim a hearing on the ground that he was the largest shareholder in the company, and that as the chairman had said, anything they might have taken out of the old company they had put into this, and more besides. He had with him some samples of materials and articles which they had made, for they had not been altogether idle in the interval. They had beep preparing a series of articles which they expected to supply very soon in large quantities. They had before them Sir William Thomson's report on the material, in which be expressed himself to the effect that theirs was an insulating material of exceptional value. He, Dr. Fleming, was perfectly confident that as soon as they were able to produce the telegraph insulators in sufficient quantities they would have practically a very large business. With regard to the cells they made, he felt that they were far preferable to those in use. The cells manufactured by this company could be sent by parcels post ready charged. It could be used for electric bells and burglar alarms with very alight trouble. What limited the use of these appliances was the difficulty of charging the batteries; but their insulite cells could be charged once for all for a very long time; they could be handled with the greatest freedom, could be thrown about and subjected to pretty rough usage without injury. They had a battery cell and bell combined in such a way that by simply hanging it up against a wall, had an electric bell ready for action. So a burglar alarm be attached to a window by merely putting up a bit of wire and connecting it with one of their batteries; and this would ring the moment the window was opened, and not cease till it was closed again hear). On such work as that they bad a monopoly, because glass or earthenware cells could not be sent out ready charged. Another important application of their insulite, which would play no insignificant part in the immediate future, was the manufacture of insulators for the electric railways, for the purpose of insulating the rails. Such insulators as these they had been asked to send to the Portrush Electrical Railway in the North of Ireland which was being laid the Messrs. Siemens. They had done so, and it had been found that these insulators would do just what they wanted, and almost nothing else would. Glass or earthenware was too easily fractured. In this respect alone they ought to be able to do a large business as soon as they were able to produce it in sufficient quantities. Then another thing which they were able to do in connection with electrical engineering was to produce the electric light. Not one person in a hundred thousand was prepared to meet the cost or inconvenience of a steam-engine and dynamo on their premises, and when they did have a dynamo it required constant vigilance to manage it. The lights might be extinguished in a moment by the slipping of a belt. An accumulator requires to be charged by a dynamo machine. But this company possessed the power of sending out large battery cells—cells of any size indeed— and with an appliance of that sort, provided it complied with certain conditions of perfectly true in shape, and so on, and provided with certain plates and chemicals which he need not enlarge upon, and with that it was quite possible to make an installation of electric light. This company could in that way at once supply a demand for electric lighting (hear, hear). It would thus be possible to light a drawing-room or a ball-room easily, cheaply, and brilliantly. This must certainly supply them with a very large field of operations. The battery would run a great many hours—indeed, by a simple contrivance for causing a flow of the chemical fluid through it might be made practically continuous. The first twenty years of this century bad been occupied with the development of the steam-engine, the last twenty would certainly be marked by the industrial application of electricity to every department of human life. For that purpose a cheap and easily manufactured insulating material was absolutely necessary. As soon as they had organized their plant, and were to turn this out in quantities, he felt that they would have an assured success, and he might say that to that matter he was now giving personal attention (hear, hear). He had not the slightest reason to doubt, looking at it quite dispassionately, that he did not see bow they could fail very soon be doing a sound, progressive, and remunerative business (hear, hear).

In reply to a question from Mr. Henry Lefroy, the Chairman said that an ordinary house would require to light it about five cells of such a battery as was exhibited, which would give about twenty-four lights. The cost would depend on the number they could turn out.

Replying to other questions, he said that he did not think their works would cause any annoyance to surrounding dwellings, as they were well isolated. He thought that in about from a fortnight to three weeks they might be able to begin their manufacture, though he could hardly speak positively, they had been so often disappointed.

Mr. Carter would like to know why there had been such delay in getting the engine which was said to be such a necessary portion of the machinery. Then again, he had inferred from the chairman's speech that the demand for the article to be manufactured was purely speculative. How was that to be reconciled with the prospectus, which in such a different tone (hear, hear)?

The Chairman said that the gentleman surely attached a different meaning to the word speculative than he (the chairman) did. He called anything speculative as to which there must be a total want of experience. The success of a new material like theirs could not be gauged by anything that had gone before. Still, speculation in his sense might be as certain as the rising of the sun, and he had every reason to that for such a useful product as insulite a large demand would certainly arise when its merits became known. Then as to the machinery, they had first of all to get a place to put it in, as it bad to a certain extent to be adapted to the accommodation provided. They had had some trouble, too, about getting their orders placed.

Mr. Carter asked whether they had obtained any orders for the article. He had been told by a shareholder that they had obtained some.

The Chairman said that they had been asked by the Post-office for tenders, and they had besides taken one or two orders in a small way, and they were preparing themselves to execute orders on a large scale. The insulators they had supplied to the Post-office had been paid for.

A Shareholder inquired why no profit and loss account was attached to the report, and complained that the preliminary expenses bad been put down as an asset.

The Chairman said that no other account was possible under the circumstances, as they had not yet started as manufacturers. As to the preliminary, they would have to be liquidated from future orders, and they were not put down as assets.

Mr. Edward Harrison said that, although all must have been interested in hearing Dr. Fleming's lucid account, they would all feel that the way in which the company had hitherto been carried on was eminently unsatisfactory (hear, hear). They had been established for nine months and had been done. They were not told how much of the article they could turn out, what would be the cost of it, or what the profit was likely to be. All was as vague as nine months ago. There was no engineer's report, and there had been very great delay about the engine, which might have been, he should say, bought ready-made at a day's notice. He supposed all of the shareholders had received a circular from Mr. Arnold White. Was he going to take any action on that? (Mr. White: I shall take my own course.) He would like to know whether that circular was circulated with the knowledge of the directors. Could they turn out any quantity of this material if they got the orders? Nothing had been done and nothing was being done. He hoped the directors would atone for past neglect by getting to work as soon as possible (hear, hear).

The Chairman thought that the shareholder had no cause to complain of having been misled. (Mr. Harrison: I never said I had been misled.) He gave me that impression at all events. His point was this, however. How could they suppose that a company should be ready to get plant and apparatus, and set to work to manufacture this new substance in a few weeks or even in a few months. Theprospectus said that it was intended that a factory on a large scale be erected. Much time was needed for a work of that description. They could not actually say how many tons of the stuff they could turn out a week; but a large quantity of the more costly material had been got together— nearly £4,000 worth—and they hoped to be able to supply a large demand.

A Shareholder: Is it not a fact that it is not known even up to this moment how to prepare the substance?

The Chairman: It was known perfectly well at the time the patent was taken out, but many minor improvements have been mode, in fact Dr. Fleming was always making improvements.

Another Shareholder said that it seemed to him that they had paid £50,000 merely for a recipe.

A third Shareholder said that he thought the chairman's explanations perfectly satisfactory. He could quite see reasons for the delays that had occurred, and he believed that the position of the company was much more favourable than when it was first started.

In reply to a question, the Chairman said that the directors' fees were £400 to the chairman, and to every other director £100 with a further annual sum of £100 each, exclusive of the chairman. He might add that they had not drawn their fees as yet (hear, hear). He might add that as to the manufacture of the company, the greater part of their work could be done by unskilled labour, such as women and boys. There was no difficulty in obtaining the staple material, sawdust, and he believed not very much either about the other ingredients, though they were scattered rather widely. The meetings of the company were to be annual under the articles of association. He would have no objection to meet the shareholders oftener, and they themselves could summon a meeting.

The resolution for the adoption of the report end accounts was then put to the meeting and carried unanimously.

The Chairman then vacated the chair in favour of the Vice-chairman, who moved the re-election of the Right Hon. E. P. Bouverie, M. Moore, Esq. and Dr. Fleming to the board. The motion was carried unanimously, and the chairman resumed the chair.

The motion for the re-election of the auditors was then put and carried on the motion of Mr. Bompas, Q.C., who took occasion to mention the very high opinion which Prof. Stewart, of Cambridge, had recently expressed in his hearing as to the value of insulite and the ability of Dr. Fleming.

The customary vote of thanks to the chairman was then passed by acclamation, and the proceedings terminated.