ASHBURTON CHEESE AND BUTTER FACTORY COMPANY.

Ashburton Guardian, Volume IV, Issue 1064, 3 October 1883, Page 2

ASHBURTON CHEESE AND BUTTER FACTORY COMPANY.

An extraordinary general meeting of the shareholders of the above Company was held yesterday afternoon in the Arcade Chambers, when there was a very large attendance. Mr John Orr, chairman of the Company presided The Chairman having read the advertisement calling the meeting, said he was idad to see so large an attendance. In reference to the first part of that advertisement, he would inform those present that twenty tons of cheese would be shipped to London by the Doric. After considering carefully their position, the Directors had decided on this course. A cooling chamber had been procured, and the freight was low. By this shipment nearly all the cheese now in the factory would be disposed of, and he thought that they could get rid of the remainder at fid per lb. So far they had not been able to obtain a sufficient price for their cheese, but ho hoped that during the next year things would improve. Up to the present Directors ware responsible to the Bank for the overdraft, but it was not intended to be so in future. It was found necessory if the Factory was to be carried on that the farmers should take a lower price for their milk than they had been receiving, and as a good deal of dissatisfaction had been expressed outside in regard to the way things were going on, the present meeting had been called in order that an explanation should be given, and the position of affairs made known to the shareholders. He concluded by saying that he would be willing to answer any questions that might be put to him, Mr J. Grigg said that the advertisement stated that certain advices had been received from England. Ho thought the meeting should be put in possession of 1 the whole facts, and ho asked that the 1 letters referred to be read. 1 The Secretary read the following ex-

tract from a letter received from Messrs Bowron Bros: —“Our advices further a ate that during the week previous to the mail leaving London, the enormous quantity of 68,000 American cheeses arrived in Liverpool and London, or equal to 1,500 tons, causing prices to fall from 54s to 50s per cwt, and this with a very heavy make in America caused a general expectation of another considerable drop in values. This of course influences all classes of cheese excepting a few of the, very prime English dairies, which will nearly always maintain an even value.” The Chairman said that it might be asked whyrthe cheese was to be shipped in the face of the advice received from Messrs Bowron. Thq answor'to that was that the Directors had previously made

arrangements to ship by the Doric, and they were forced to fulfil their engagement. He might mention they had received other information which did not make things look ,so black as the letter

just read. Mr T. Bullock would like to know wjrat it cost tojnake the chteae. Hc had been asked that question by several people who wished to know whether there had been a profit or a loss on the cheese actually manufactured. The Chairman said that as most of the farmers were aware it took 101 b 12oz of milk to make lib of cheese. The Directors had made a mistake last year in acting on the assumption that 101 b of milk was sufficient. At the present market rate a loss must ensue, if the, same price was paid for milk as was done last year. Mr Grigg asked what was the present financial position of the Company. T he Chairman said that a balance-sheet had not been prepared, but roughly speaking their position was this: The assets were estimated at L 6,697 and their liabilities L 4.988. He thought that even if they got their milk at 3£d there would be no dividend for the shareholders while cheese remained at its present price

Mr Dudley enquired what, oheeaa had already been shipped to England. The Chairman : About six tons. Some went by the British Kung in a freezing chamber, some was shipped in the ordinary way, and the rest was sent in charge of the purser. That sent in the freezing chamber was the beat and realised 60a, while what the purser took charge of was the worst.

Dr Trevor would like to know the actual cost of making |;he cheese, irrespective of the cost of the building. •he Chairman said that it was esti-

mated at 59s 6d after paying 4d for the milk. He might add that it the Directors’ original estimate had been correct, and 11b of cheese could have been made from lOlbs of milk, they would have had 2001bs more for the same amount of money.

Mr Friedlander said that the meeting should remember that during the first year a number of 'experiments were necessary, and the manager had told them that in future the cheese could be made much cheaper—say, for little more than Id per lb. As one of the Directors, ho would like to say a few words regarding the position of the Company. The Dire ;tora were anxious to obtain the bonus offered by the Government, and in order to fulfil the conditions they wore obliged either to keep 50 tons of cheese on the premises or to export that amount. There was no market open to them, and so the cheese accumulated. As the next season was coming on it was necessary to do something, and they had therefore interviewed the New Zealand Shipping Company in regard to a freezing chamber. Favorable arrangements were made before Messrs Bowron’s letter came, and the Shipping Company insisted on the shipment being made. Even in the face of the present state of the English market they must export, but he would remind them that if they kept the cheese here it would cripple next year’s operations. They would have to build more storing room at the Factory, and it was better to send the cheese to the only market open to them. Dr Trevor asked if the Australian markets had been tried.

The Chairman said that the Flemington cheese had been sent to Melbourne and Sydney, but not, he believed, to Queensland. In regard to the last-mentioned place, however, he might mention that he had himself sent a small ship rent there, and it had been sold there at a loss of 2d per lb. Mr William Anderson asked why if cheese could be made for Id, the farmers should not receive the same price for milk that they had been paid. The Chairman : The cheese cannot be' made for Id.

Mr Anderson thought that farmers were reaping no benefit whatever from the factory. He had himself put a number of cows on his land and had done what he could to help the factory, but he doubted if they were any better off that they were before it was built.

Mr Grigg thought that the previous speaker was rat' er under a misapprehension. In his opinion the factory had been built to help the farmers. (Hear, hear.) The Directors have done their best to assist the farmers, and the question was now whether the latter themselves would come forward. He thought the price suggested by the Chairman was too much. He would like to see the industry worked upon a different plan, and would suggest that 3d should be paid for the milk, and these who supplied it should' receive pari; of the profits. Many of the shareholders were unconnected with farming, and it was the duty of the Directors to see that the money so invested should if possible pay interest to the investors, and after that the balance should be made over to the farmers. He strongly recommended some such course as this. Ho had every faith in the ultimate success of the Factory if the difficulty was met in that way. One thing he would mention, and that was that in his opinion the cheeses were made

too large. Had they been smaller they would have been readily saleable. The quality was good, and as a matter of fact the Directors had been offered 6i-d per lb for a considerable quantity of small cheeses. This, of course, only applied to the local markets, but they must remember that if they were to increase the trade they must face the English markets. _ A large number of factories were springing up all over New Zealand, and it was evident that more cheese would be inanufa tured in the colony than could be consumed here. As to what had been said about the farmers doing better by making ’ the cheese at homo, he certainly doubted jif that were true. He had carefully en- | quired into the matter, and had made up his mind that this was not the case. As an instance he would mention one farm where the rental was paid from the profit from the sale of eight weeks’ milk. Did this look as if the farmer’s were not benefited by the establishment of the factory I If the farmers studied their own interests they would meet the Directors in a fair spirit and stand in with them. This was no time to mince matters, and he warned them that the Factory must be closed if they expected anything like the price they had been paid for their milk last year. (Applause.) Mr Anderson said that ho would not milk his cows for the benefit of other people. The only concession he was will ing to make was to supply enough milk to make 11b of cheese for 4d. If the expenses of working the Factory were curtailed he felt sure that with milk at that price, sufficient would be realised to return 8 per cent to the shareholders. The Chairman pointed out that whatever mistake the directors might have made, they had derived no benefit. They had acted with the best intentions, and he felt sure that whatever price the farmers might be paid for milk, the directors would be willing to pay back to them pro rata what remained after 6 or 7 per cent had been realised. This was of course for the shareholders themselves to decide, bat ho simply laid before the meeting the opinion of the directors. Mr M. Wilson said that Mr Bowron had told them that their cheese would fetch a certain price. Why was it not sold when it was saleable 1 The Chairman : For two reasons. First, that we were holding the cheese for the purpose of obtaining a bonus, and secondly, because a freezing chamber Was not available. Mr Painter said that Mr Bowron estimated the price of making 11b of cheese at |d. A man, a woman and a boj could work the Factory. (Mr Wilson : That’s bosh). He was informed that the men at the Factory took what milk they wanted, and that the manager removed the cream to make butter for his own use. The Chairman said that these things had never been brought before the directors. At the same time he would be opposed.to a cheeseparing policy should be followed out in regard to the manager. In regard to what had been mentioned about Mr Bowron, he wished it to be distinctly understood that the directors did not hold themselves responsible for what. that gentleman had said. Mr Bullock said that the only benefit derived by those shareholders not producers was the interest on their capital invested. The question was, would the farmers submit to a reduction in the price of milk ? He quite agreed with Mr Grigg in regard to 3d being paid, and after 8 per cent was realised the profits should be, divided among the farmers. This was, in his opinion, the fairest suggestion laid before the meeting. point that the Chairman had omitted which he should like the meeting to have some information upon. He referred to the profit made upon the pigs, which {ho undetr stood amounted to 100 jper cant. If this were so, it was a most important adjunct to the industry. Ho would like to see a farmer move that it is desirable co keep the Factory on for anotheryear,asit would be better for such a motion to coma from that source than frofn a non-producing shareholder. Mr Hayman said that ho was hot aware that the manager had taken the cream as had been suggested. He had had au opportunity of judging, and doubted if there was any truth in what was said., At any rate he regarded the objection made by Mr Painter aa a mean one. Mr Painter explained that he did not grudge the manager the cream. What he meant was that it was taken out of the vats, and thus affected ihc quality of the cheese. Mr Grigg was of opinion that the charge was a serious one. It should have been brought under the notice of the Directors, and not mentioned at a meeting like this. Mr J. Brown understood that the Chairman had fixed the price at 3£d for 101 b 12oz of milk. Aa a shareholder he was quite willing that the Factory should goon for twelve months, even if it realised no profit. Still he thought the amount mentioned by Mr Bullock (3d) too low. The Chairman said that the Directors

had already done more than anybody else for the Factory. They had become guarantee for a large amount of money from the Bank, and he thought it was only fair play that the farmers should lend their help at the present crisis. Mr Grigg said he would, with the view of testing the meeting, move the following resolution: “That the Directors be authorised to offer the producers 3d per gallon for milk of 101 b 12oz for the ci.suing year, with the understanding that after 7 per cent, be paid to the shareholders as interest any balance remaining be divided pro rata among the providers. ”

Dr Trevor, as a non-producing share holder, was of opinion that 5 per cent, interest was sufficient.

Mr Grigg said he would leave that to the meeting.

Mr Friedlmder said the Directors owned that they made a mistake last year. They knew their own business, but they were ignorant of milk making. Still the farmers had reaped the benefit of the mistake, and they should help the Directors this year. He could not quite agree with the motion, and he thought that producers’ maximum price should he fixed at 4d or sd, and after that the profits should be divided amongst all the shareholders. At this point Mr ,-snderson again complained of the expense of the Factory, and the Chairman, by request, asked him what he made last year out of his cows. Mr Andersen replied, amidst laughter, L3O a month.

Mr Friedlander thought it showed very bad taste on the part of one of the largest producers to come to this meeting and try to pursuado the minds of farmers, so as to prevent them helping the Directors. Mr Grigg said that U2 an acre had been added to the value of farms in the district by the establishment of the Factory, although this was probably on account of too much being paid for milk. As to Mr Fi iedlander’s objection to a division of profits, he thought that the great wish of the shareholders was to help the Factory, and if a division would do this he was willing to make the sacrifice. Mr Friedlander suggested that all surplus after paying 4d for milk should go to a reserve fund. Mr Grigg accepted thia, Mr Alcorn, in seconding Mr Grigg’s motion said that 4d was a good price for mi k, but he would not object to paying that amount if the times warranted it. He had great faith in the future of the Factory, and from his own knowledge he cou'd tell them that the Flemington cheese commanded Id per lb more than the best Akaroa.

Mr J. Clark supported what had been said by a previous speaker regarding the

size of the cheese. In Christchurch he had been frequently asked if smaller cheeses were not procurable, and he felt certain that if made they would have a large sale. As to the motion, he -had no doubt that if it were carried the farmers would ore long bo getting more than Ad for their milk

Mr J. Brown thought that the 12ozs should be struck out, and this was accepted by Mr Grigg as being in accordance with his original idea. At the instance of Mr Bullock 5 per cent was inserted.

The ■lotion, as amended, was read as follows “ That the Directors be authorised to offer the producers 3d per gallon for milk of 10!bs for the ensuing year, \viih the understanding that after 5 per cent be paid to the shareholders as interest, any balance remaining be divided pro raia amongst the providers, any surplus accruing afier the divi-ion to be placed to a reserve fund.” Mr Thomas pointed out that it would be for the interest of the farmers to accept the lower terms for milk. He knew that many of them had laid their lands down in grass instead of sowing wheat, and they would be in a very awkward position if the Paotory were closed .Speaking for hnnself, ho never expected to get any return fromAhe shares ha held and would be willing to give the whole of the profit to the farmers. The Chairman said that the motion would, if carried, place the Directors in a worse position than if o£d were paid for lllbs of milk. Mr Cowan moved as an amendment—- “ That 3Jd be paid for lllbs of milk.” Mr Oliver seconded this.

On being put to the meeting, the amendment was declared carried by a

majority of 13—24 voting for it and 11 against. Mr Thomas said that he thought the Factory was being too expensively managed, and perhaps it might bo found better to let it by contract. Mr Friedlander said that the farmers did not seem to realise the position of the Directors. Those gentleman had given a vast quantity of time and thought and bad never received a penny. They now came to ask the farmers’ advice, and it should be recognised that the only interest the Directors had was thoi.few pounds they had invested. . The Factory would not only benefit the district, but also iho whole colony, a id this being se the farmers should meet them in a fair and liberal, spirit. Mr Dudley hoped the meeting would not consider that what Mr Anderson had said represented the opinion of the farmers. He was afraid that that gentleman had made too good a thing out of the Factory last year and had become greedy. At Ellesmere it was allowed that was a fair p-ice for milk, and that rate would pay the farthers well. m reply to Mr Bullock, the Chairman said that the profit on the pigs in the Factory was LlO2 during last year. A conversation then followed concerning the necessity of procuring a guarantee and ultimately Mr Cowan moved and Mr Milner seconded—“ That the Directors be empoweerd to carry into effect the motion previously passed.” This was carried unanimously. A short discussion took place upon the Chairman saying that he would like to learn the sense of the meeting as to whether the capital of the Company should be increased by raising the shares from L 5 to LlO, or whether more shares should be placed in the market. The Directors should be relieved of their present responsibility. Mr Friedlander pointed out that this year they had to pay over L2OO for interest on money obtained from the Bank. No decision in the matter was arrived at, and after the usual vote of thanks had been accorded to the Chairman the meeting separated.