NORTH OTAGO FIBERS

Evening Star, Issue 22448, 19 September 1936, Page 27

NORTH OTAGO FIBERS

CO-OPERATIVE ASSOCIATION'S MEETING RECENT LEGISLATION REVIEWED The annual meeting of the shareholders of the North Otago Farmers’ Co-operative Association Ltd. was held in St. Paul’s Hall yesterday afternoon. Mr J. R. M‘Cul)och (chairman of directors) was in the chair, there being a full attendance of directors and about 30 shareholders present. ELECTION OF DIRECTORS. The election of six vacancies on the board of directors resulted in the return of the six retiring directors: — Messrs C. Hedges, J. Newflands, A. C. Nichols, E. S. Brewster, J. Irving, L. Pavletich. Messrs D. S. Bain and A. Sallis were defeated in the ballot. CHAIRMAN’S REPORT. In his report to the shareholders the chairman of directors (Mr J. R. M‘Culloch) stated that the accumulated deficit of the association, which originally stood at £10,461, had been reduced to £2,668 13s 10d.- The net profit disclosed was less than in the previous year, and was due in a large measure to the fact that depreciation aniounting to £5lO had) been written offpremises, and to wage increases largely duo to the operation of _ awards,' amounting to £472. While improved conditions in the primary produce markets were reflected in commission earnings, these would have been much greater but for the fact that the association was placed at a disadvantage as compared with brokers in the woolseMing centres. In return for the risk of carrying on farmers’ accounts, the association earned considerably less than those who handled the wool at the point of realisation. Unfortunately increases in commission earnings had been nullified by the effects of the drought, which seriously reduced the crop yields, with a consequent loss of turnover in produce and harvest requisites generally. As insufficient wheat was produced last year for the country’s requirements, the 1935 surplus held in the various stores on account of the Wheat Committee was drawn upon to make up the deficiency, and in consequence the association’s store earnings, which proved an important source of revenue during the previous year, were considerably reOn July 31 the association had a credit balance with the Commercial Bank of Australia of £6,129, compared with _a debit last year of £2,592. The association was carrying on a. number of farmers under profit-sharing agreements, which were finalised after July 31, and portion of the amount standing to the association’s credit represented sums due to mortgagees and other interested parties, most of which had since been paid. Generally speaking, business throughout the year bad been well maintained, the financial position was sound, and the directors had no intention of making further calls on shares. They had hoped earlier in the year that the accumulated deficit might have been still further reduced, but they were so closely Jinked up with the farming community that droughts, price fluctuations, etc., were immediately reflected in their business. Although some of their kindred associations, who previously wrote down their capital, were to-day resuming dividend payments, they as directors were stilj confident that there was nothing to justify any change of policy, and that the whole of the association’s capital would be completely restored.

Referring to the Mortgagors and Lessees Rehabilitation Bill now before the House, Mr M'CulJoch said it was a measure the purpose of which was to retain three classes of mortgagors in occupation of their properties. He proposed, however, to deal with one class only—namely, the farmer mortgagor. Under the Bill the basic value of farm lands to which mortgages are to be reduced was to be ascertained by the Adjustment Commission, on a basis of net revenue that could be derived from it by an efficient farmer, calculated by; reference to farm products received over the past eight or F 0 years. : The amount of a mortgage over and above tho value of the land so fixed became an unsecured and adjustable debt, and except to the extent to which the commission made an. order for payment, all adjustable debts • under the Bill were deemed to be discharged. Adjustable debts in the case of farmers included all unsecured debts incurred before the date of application. _ As this was the first occasion on which such a far-reaching measure had been introduced by any Government in tho British Empire, he considered it his duty to bring the maffer before them and point out the possible effects of such legislation on their business. During the worst period of the depression this association, in common with others assuming similar responsibilities, was compelled to make provision for losses owing to the depreciated values of land and stock securities which might be expected to result from tho fall in land values as a result of the proposed mortgage legislation. Particularly was this the case in Otago, jvhere there were approximately 5,600 Crown tenants occupying something like 5,500,000 acres. If the declared policy of the Government to eliminate goodwills was to be acted upon by the Adjustment Commission, then colossal losses had to be faced by mortgagees and the life savings of many settlers would automatically disappear. It was held in some quarters that in the process of adjusting mortgage debts the inefficient farmer would be gradually eliminated, and that thereafter land mortgages would be on a safe basis. Viewed without political bias and from a business standpoint only ho was inclined to think that it would have been m the _ interests of ’ the country generally if the Adjustment Commissions, who discharged their duties iu a most efficient manner, had been allowed to continue under the former legislation. Under the proposed legislation commissions would have very wide powers, and it was to be hoped that mortgagees and stock firms, who had assisted so largely in the development of this country, would not be unduly penalised. Referring to the immediate prospects for primary products. Mr M‘Culloeli said the outlook for tho moment, especially for meat and wool, gave cause for optimism. Wheat-growing, chiefly on account of the higher costs of production, was being neglected in favour of stockraising, which promised to be more remunerative. fn view of the importmice of the industry to the town and district, it was a matter for regret that the area under wheat showed a tendency to decrease. Tho annual report was adopted. Messrs D. V. G. Smith and W. J. Davies were reappointed auditors.