The Feilding Star. THURSDAY, DECEMBER 8, 1892. Butter Factories

Feilding Star, Volume XIV, Issue 73, 8 December 1892, Page 2

The Feilding Star. THURSDAY, DECEMBER 8, 1892. Butter Factories

We are informed by cablegram that the Agent-General of the colony in London, has written to the Chief Inspector of Dairy Factories in "Wellington, that he is looking forward to a very successful season for New Zealand butter, because the article has got a footing in the London market, and it will be the fault of the producers if they do not take advantage of their opportunity. " The more that is sent," he hopefully adds, "if the quality is good, the better %.e prices that will be got," meaning, we presume, owing to more openings being made for it. Although the prospect thus held out to dairy farmers must be attractive, we would caution them not to be led to commit themselves too far. We mean particularly in respect to the establishment of dairy j factories in localities where — to put it ' mildly — they are not required. Our chief objection is that the whole of the capital required is drawn directly from the pockets of the farmers. Outside capitalists who are content with five per cent (or sometimes more when they can get them) dividends are seldom persuaded to take shares in these ventures, because they know perfectly well that the machinery for .working limited companies with expensive staffs, consisting of managers, secretaries, and paid directors, is too cumbrous for such small affairs, and must lead to the absorption of the capital in wages and salaries, with the inevitable disastrous results to the shareholders. On the other hand the farmer, in the majority of cases, has seldom more money at his command than he requires for working and putting stock on his land, therefore when he invests in shares of whatever kind, more especially for freezing or butter factories; he is practically limiting his own means. We have expressed this opinion before when dealing with the subject, and recent events in connection with certain of the freezing companies which were to do so much in the way of profit to their shareholders, and have accomplished so little, prove bow correct our judgment was. Another point is this : directors or managers are not made by the mere stroke of a pen. A manager is generally selected i because he knows, or is suspected of knowing, something about the affairs lof the company he is appointed to j manage. Not so a director. He merely represents so many shares (not always paid up unfortunately) and the less he knows the more he interferes with the management, and thus bungles and blunders, until the balance sheet shows a debit to Profit and Loss Account, which may wake up the unlucky shareholders to a sense of their position — only when it is too late to retrieve the disaster. We believe that one or two butter factories established in recognised centres, the property of one company, the capital of which was not drawn from the pockets of the farmers, would be of real benefit because of the consequent possibility of economical management; but the establishment of expensive institutions in every " village hamlet " would be a positive misfortune.