DRASTIC BUT NECESSARY.
Fortunately the company is well supplied with liquid funds. The cash position, therefore, occasions no anxiety, and the shareholders are not called upon to provide any more money, so that the writing down of the shares is purely a book entry. Each shareholder, after the writing down, will still possess precisely the same interest in the company as before, but he will be much nearer a resumption of dividends on his shares, which will be of one-third the former nominal value. The scheme, which is the joint product of an examina- tion of the position by Mr. F. Dudley Docker, Mr. Reginald McKenna and Sir William Plender, is accompanied by equally far-reaehing proposals for the reorganization of the managerial side of the business, and for its more economical and efficient administration • and there is no doubt that, drastic though they are, the shareholders will be wise to accept the proposals for the writing down in the same spirit shown by the existing directors towards the managerial changes. Any reconstruction, to be effective, must be sufficiently far-reaching to cut out the " dead wood " at one pruning, and on this point there is no room for doubt regarding the adequacy of the Vickers proposals, for the three experts responsible for them commit themselves to the definite opinion that, if trade conditions become no worse, the company should be able to continue to meet all its fixed charges and pre- ference dividends out of its net profits and to resume dividends on its reduced ordinary capital.
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