THE FARMERS' CO-OPERATIVE ASSOCIATION.

Press, Volume LXI, Issue 18416, 24 June 1925, Page 6

THE FARMERS' CO-OPERATIVE ASSOCIATION.

TO THE EDITOR O? "THE rMSS." Sir. —The proposals made by the Directors of tho IS'.Z. Farmers' Cooperative Association for tho reduction of capital and writing off of accrued dividends as published in "Tito I'rcss 1 this morning and as notified to shareholders, will no doubt bo widely discussed and considered, the concern being tj a great, extent a public institution. No doubt, reconstruction and wiping out of tho present debit balance is necessary, and this the shareholders • wilj probably deal with. However. 0110 paragraph of tho statement you publish | calls for public comment. it reads as i follows: —"It is quite- obvious ihat when a company s condition is such that it cannot pay a preference dividend, the advantage of c-uiuulative rights is a doubtful one, and, more-' over, if a company is unable ta pay a preference dividend one year, there would bo little prospect of it l>ein<r able to pay a further accumulation in ihe following and succeeding years.''

Sir, this is an amazing statement, and should be most strongly protested against. It is the foundation of all sound business that contracts entered into should be carried out to the letter, bub here we bare a semi-publi'-institution. which has represented on selling certain shares that tho dividends, in- consideration of a low rate, would be cumulative, and. as such, take precedence over all other dividends and, if necessary, share capital, calmly suggesting that such representations were quite valueless and practically incapable of execution. Most decidedly such is not a fact, and it is to me amazing that it should be made in such form by responsible business men. I. venture to say that the positioji in ibis case can be met without infringement of such rights. During the past few years we have had to suffer very considerable interference: with contractual rights. It started with the moratorium for mortgagors, then the moratorium for companies holding deposits, later tlio reduction of interest rates and other variation of terms of bond and debenture issues and tho latest is tlie proposition now stated. I,t is rapidly creating in the mind of the investor n. very uncomfortable feeling as to whether conditions attaehineg' to investments hr.rve"any real- value at all.

I hope tho Directors of the Farmers' Co-op. Association will realise the farreaching effect of their proposals in this regard and, for the good of the community as a whole, modify them so as not to further pull down the feeling of . confidence so necessary to prosperity and good business.—Yours, etc.. T. N. GIBBS. Christcburch, June 22nd.

J TO THE EDITOR OF "TJIE PRESS." Sir.—As a preference'shareholder in the above company, I wish to protest strongly against some of the methods now being employed to interfere with the rights of ''preference" shareholders in the company. Clause I.: We advanced our good money l to thi s concern in good faith, when it. was in need, and as giltedged security. We are now asked to forego oui cumulative interest, which wo shall have to do, as there is no money apparently to pay it with. Clause II.: But, moreover, we are also asked to relinquish and extinguish our cumulative rights, attaching to our preference shares as from January olst, 1925.

Now this last clause should l>e stoutly resisted by every shareholder. Wo are to. have our preference shares placed on a par with the ordinary shares, which are worth little. Surdly ''preference'* stands for some-, thing?—' Yours 'etc.. A "SHAREHOLDER. 1 '