Los Angeles daily herald., 1889-09-06
LIGHT ON THE WINE SYNDICATE.

LIGHT ON THE WINE SYNDICATE.
strange surroundings Of tho or.
ganixati0n OF q OOmpany-Sharc.
holders FIND They Paid an EnOr.
nous Price for the Property
Complaints About che Calffornfa
Accommodating for More I'm.
formation About the Company.
The affairs Of the great California wine
and fruit growing syndicate, known as
the IL. ]. Rose & Co., Limited" are ex-
citing more and more anxiety among the
numerous shareholders of that organiza-
ton. To get still further particulars
about the history of the formation of the
company which is creating 80 much talk
in financial circles just now, visit was
made yesterday to Mr.. w. Nj. Adams,
one of the shareholders most active in
bringing about an investigation of the
California scheme. This is the story Of
it's formation:
In 1885, during the great land boom in
California, Mr.. L. ]. Rose decided to put
his orange groves and wine-growing es.
tate into the market. It was called the
Sunny Slope, and was situated about ten
miles from Los Angeles, near the base OF
the Sierra Madre mountains. There
were 1850 acres in the tract. In setting
forth the numerous advantages of the
estate the prospectus said:
The San Gabriel station, on the main line of
the Southern Pacific railway, Is about two
miles from the center OF the estate. Recently
the Los Angeles and San Gabriel railway has
been constructed through, and station opened
on the northern portion of the property, in con-
sequence OF which there 10 demand for build.
ing sites at good prices: The acreage now in
vineyard Is about $50 acres, two-thirds Of
which are in full bearing. About 1855 acres
are planted with oranges and lemons, twenty
acres with miscellaneous fruit trees. and l.
property also comprises wine house and Gel
lar 112 feet by 165 feet, distillery capable OF
turning out about 1000 gallons Of grape
b SGsnay per Gay, winery crushing machinery.
and grape machinery capable of delivering 200
tons OF grape juice into watts, with q capacity OF
o6O,oOO gallons; steam power, together with
working mems cottages, mules, and agricul.
tural implements,
As q preliminary Mr.. Rose sought the
assistance of Mr.. Mortimer, the British
Consul at Los Angeles, and engaged him
to write report on the estate. He did
30, and the document was given to a man
named Bowe, an American, who was to
promote the enterprise. He came to
London and visited Mr.. John Puleston
before he became Sir John Puleston. he
thought we'll of the scheme, and formed
. syndicate to purchase the property and
put it on the market. Meesrs. Ashurst,
Morris 4 Co., solicitors in behalf of the
company, commissioned Mr.. Batten, q
London barrister, to 60 to Los Angeles
and verify the report made by the British
Consul. After making what was sup.
posed to be q thorough investigation, be
corroborated the report, and estimated
that the vineyards and orange groves
would yield E35 900 year. The reports
were 30 satisfactory that the property
was at once purchased for G16O, 900 in
cash and ESQ 900 in fully paid up shares.
At the first ordinary general meeting
held last year, there were not only no
dividends, but there was deficit oil
$4,000, Of which $1,000 went for di.
rectors' fees. Inquiries were then in.
stituted by some of the shareholders,
and several facts brought to light.
First-That Mr.. Mortimer's report was
not unbiased and disinterested. It was
elected from the directors that 92, 900
had been offered by Rose, the original
owner of the estate, to the Consul con-
tingent upon the sale.
RVNOAU- 4u0U A0 u6u lulOTuQ0u r.
Batten as much in August, 1886, as the
only authorized agent of the company
with whom he came in contact, of whom
he had knowledge previous to the sale of
the property to the company.
Third-Thst Mr.. Mortimer had in his
aforesaid report placed valuation Of
9140, 600 on the property, which valua-
ton was omitted by the directors, both
in the portion quoted in the prospectus,
and also in the document purporting to
be complete version of the report as
published by them.
No meeting has been called this year,
and no accounts rendered for the year
1888. Many of the shareholders, several
of whom are connected with the Stock
Exchange, are of the opinion that the
circumstances require the appointment
of q committee of investigation. Ac.
cordingly the following statement has
been sent to all the shareholders:
DEAR sIR-You will doubtless remember the
nature of the balance sheet presented at our
general meeting last year. and the admissions
then ELECTED, showing that the value of the
estate and the extent OF the business had been
grossly exaggerated. This year the ordinary
general meeting has been put off to q very late
period; and we understand from personal en-
quiry Of the Secretary. that the delay has been
the Californian accounts have been kept We
are also in possession OF certain well authenu-
Gated facts tending. we regret to say, not only
to throw doubt upon the businesslike character
of the present management but also to bring
into grave question the good faith with which
the purchase Of the estate was conducted. And
we refer more particularly to the omission
from the report of Mr.. Consul Mortimer, Issued
with the prospectus, of the fact that he had
valued the property at only f140. 600. Had
this valuation been disclosed to the share
holders, the price of f160 900 in cash and ELS
been given by the company. Mr.. Mortimer
has declared upon oath that it was contained
in his original report, though trace of it Is 10
be found either in the portion quoted in the
prospectus, or in the document purporting to
be a complete version of that report which was
published by the directors.
Under these circumstances. we consider 1t
essential that a committee of shareholders
should be appointed to investigate and report
upon the truth Of Mr.. Consul MOrtimers state
ment, the facts conn ected with the purchase of
the property. and the general condition and ad-
what measures should be adopted with q view
to obtaining In the future more remuHerative
results.
It is our intention, accordingly, to move at
the ensuing meeting for the appointment OF
such COMMITTEES; and we would earnestly re-
should you be prevented from appearing, at all
events to refrain from giving your proxy to any
who il not prepared to assist in obtaining a
complete investigation of the present unsatis-
factory condition of affairs:
We are, dear sir. faithfully yours,
DAVID WILSON, 81 Brook street, Gros-
venor square.
WELBoRE j. ELLIS, Royal Exchange
PuildipOa r. q