WELLINGTON WOOLLEN COMPANY

Dominion, Volume 9, Issue 2870, 7 September 1916, Page 8

WELLINGTON WOOLLEN COMPANY

ANNUAL MEETING A RECORD YEAR REVIEWED

Mr. W. H. P. Barber (chairman) presided at too annual meeting of tho Wellington AVoollen Company, held in the Chamber of Commerco at noon yesterday. Thcro was a fair attendance of shareholders. On tho motion of Mr. Donald M'Lean, secondod by Mr. Louis Blundell, tho report and balance-sheet (already published) were taken as read. In. moving the adoption of tho report, the chairman of directors said:— "The overturn for the year, just closed, easily 'headed the previous beet, but owing to the bulk of the output being to contract booked nearly a year ago, aud also that provision has been mado for the new. taxation under the Finance-Act, together with the many -unexpected advances in cost of production with which we have been faced, tho percentage on output of last year has quite naturally not been maintained. The increase in the stock total over that of 1915 is not in finished goods, but is accounted for by the larger purchase of wool, which in .view of the uncertainty of the market, the directors deemed it prudent to secure when they could. We also have a somewhat larger holding of bought goods. Regarding the excess profit tax just referred to (assessed, on our balance-sheet to July 31, 1915), whilst no patriot could object to its institution, it would appear that in view of tho need for money tho ethical aspect as to tho method of application recoived but scant consideration, for ibj effect is to deal more severely with the deserving, by penalising their energy, whilst overlooking those who had better fortune before the war, with equal prosperity since, without any additional expenditure by them of effort or capital. It would have been an equitablo method of arriving at excess profit, if a fixed percentage had been allowed merchants and manufacturers on output, all above such amount to bo assessed as excess profit. That course, in my opinion, would not have punished individual effort and enterprise to the same extent as is now done by the Act. Post-War - Depression.

"It is anticipated by tlio6o who have added to their sales by being in a position to supply munitions that they arc more likely to bo the firet to feci tho effects of a post-war depression through disorganisation of their normal trade, and the re-establishing of their lapsed business connection given up to assist in meeting the country's needs. I. have stressed somewhat the importance to us of the warehousing trade this year, because sinco tho Government contracts were placed in November last every commodity used in woollen manufacture, withput exception, has increased in price. The Hon. the Minister of Munitions and tbe expert advisers associated with him, when placing orders succeeded in oecuring Government supplies for twelve months ahead at firm, and, to them, satisfactory, prices. As is wett known, when the wool season opened prices rose consistently. It is many years, and certainly not since the establishment of tho company, that 3s. 6d. per lb. was asked for scoured wool, yet that was the caso with us a few days ago. Coal, soap, oil, acids, and every necessity to a woollen mill increased enormously. Dyes, when obtainable, are at almost unboliovablo prices. I mention this becauso had wo depended entirely on tho military work, our showing would not have been so good,' as the prices contracted for (nine months ago) are now far from being on a parity with the cost of production.

The Trouble at the Mill. "There is a. brief reference in tho report to the labour troublo which occurred at the mills in March last. The unfortunate- happening boing, it is Sloped, a matter now finished with; tho directors think that no good can bo obtained by delving closely into tho merits from their viewpoint, but I wish merely to say that tho previous considerate treatment of tho employees should have revealed tho evident purpose of tho. directors to make the company's service attractive and comfortable, while we wero forced to boar in mind that all the Now Zealand mills were parties to an award, still existing,-and that'apart from business competition we owed it to them to abide by the provisions of the agreement. Bonus to Directors.

"I am aware that exception, by a shareholder, has been taken to the vote of the shareholders made to thD directors at the last meeting, 'as a mark of appreciation for past services.' So far as tho directors aro concerned, they make no apology for expressing their opinion that tho affairs of the company having grown ;so largely, the present honorarium, which was fixed 13 years ago, \vhen the company's operations were but onefourth of the present day, is not now adequate for the responsibility attaching to so considerable an institution, nor for the time occupied by the directors -in attending to the a'ffairs of -the company. In order, however, to meet tho suggestion that such a motion as you passed at last meeting was in tho-nature of a surprise vote, the directors desire to say that they will not accept such a method of recognition of their services at the present or future meetings, but will submit at a later date a recommendation for an alteration in the Articles of Association, which will definitely deal with the subject after full notice to all shareholders. It has been found that the termination of the financial year does not fit to tho best advantage ivith'the season's trade opening, and it is intended to ask you later, to consent to the alteration to Juno 30, instead of July 31. \ There are some other changes iii the articles also desirable, and a special meeting will bo called to deal with them. I have to intimate that since the publication of the report the directors have invested JCSOOO in tho New Zealand 4} per cent, war loan. They have "also offered to assist the employees to participate by purchasing loan certificates for any who so desire, making repayment easy for them by a deduction of Sd. per certificate, free of interest, fromweeklv wage. ..." The chairman then moved the adoption of tho report and balance-sheet. A Breeze.

Air. G. Kebbell, in seconding the resolution, referred to the manner in which the .£SOO voted to the directors at the last annual meeting had been accounted for in the balance-sheet. After some little trouble, he 'had found- that it was included in the sum represented' as bonuses to employees in the 1915-16 bal-ance-sheet. He maintained that such a procedure ivas not correct. It was done after the balance-sheet was passed, and once the balance-sheet was passed it could not be interfered with, and the balance to be carried forward should have been JiGTH, not -C(i2H. The XSOO should have been taken out of this year's profits, wot last year's. He had always been against a shareholder interfering in this way, but in this particular case there was not a director who had not known that it was so, and that the balance as passed should be carried forward untouched. Tho balance-sheet was correct, but it was not correctly made up. Mr. W. G.. Foster: "You're wrong— you're quite incorrect! It is not as you represent—the vote was not made until two months later. Why, it's idiotic! I for one would be very pleased to hand the money back again, but I wish to inform tiio shareholders that they aro not paying their directors an adequate amount for the work they' are doing."

Mr. E. Dyer said that as the mover of the resolution did not feel inclined (o speak, ho (as the seconder) would like to remark to Sir. Kebbell, who was absent, that tho voto was passed unanimously by the meeting. It was a great pity that Mr. Kebbell was not there, as he might have blocked it. Ho reminded the'shareholders that at that particular time (u year ago) the directors had u lot of extra work In do, and many more meetings to attend on account of the consideration to bo given to Government contracts. It was not a recurring thing—the directors woro not asking for it again this year. He admitted that a/good deal had been made out of it.

. Mr. A. Crawford approved the vote, but thought it should nave been shown separate from employees' bonuses. The chairman 6aid that Mr. Crawford

bail misunderstood Mr. Kebbcll, who was only objecting to tho vote having been made without the necessary notion having been given. It was really immaterial how the item was shown as loug as it. was included in an item that is explained. It was evident that the wliolo of the company's accounts could not be shown'within the scope of the printed balance-sheet. The item was included under "bonuses," not "employees' bonuses," ami it was a bonus payable ti tho directors as a recognition of appreciation on the part of the shareholders. He had been a director of tho company for 28 years, and during that time many difficult problems had cropped up that called for an immense amount of judgment and experience to solve in order to prevent the company getting into difficulties. In such an industry they hud to give a great deal of thought and consideration to their wool requirements for the year. Then there were labour troubles—they employed about 750 hands—and such a business could not be conducted without certain anxieties to contend with and problems lo solve. Perhaps it would not be wise to quote figures, but he could say that the turnover of the company was just about four times what it was when the directors' honorariums were fixed. Anyhow, tho directors would take other steps, of which due notice would be given. Messrs. TV. H. P. Barber and W. G. Foster were re-elected directors without opposition. Messrs. Henry Kembcr aud Son, and E.. W. Hunt were re-elected auditors at a remuneration of .£lO5 each per annum.