WELLINGTON NOTES

Hokitika Guardian, 21 May 1924, Page 1

WELLINGTON NOTES

PROPOSED .MEAT .MERGER. (Special to “Guardian”.) WELLINGTON. .May 1!) On Friday last a second meeting was held in Wellington to discuss the proposed merger of all the meat companies in New Zealand. The scheme siig-gi-sled was a tentative one, and submitted for discussion. This scheme provided for the valuation of all the works which are to be paid for by the issue of t! per cent debentures having a currency of .'!() years. The works Would i ben become the property of •lock owners, and the industry would he run by boards iu each district with a Central or Executive Board of 10 members, five from- each Island. All property acquired would he placed in the hands of the Public Trustee, as security for the debentures, and the sinking fund payments for the redemption of the debentures would he paid to the Public Trustee. Anything more crude and childish cannot be imagined. Tlie stock owners desire to purchase all the freezing works in New Zealand on an 1.0. U. or promissory note that will not fall due until the

expiry of JO years. Of course there is in be a sinking fund, which is to come out of the profits of the industry. _ The farmers i-t the management of freezing works on co-ojierative lines have not shown any wonderful business capacity and long before tlie debentures come dm- the industry will have got into such a state that redemption of debentures will be problematical. Unless principal and interest are guaranteed there i- very little likelihood of the scheme finding favour with the successful proprietary companies, indeed it can be stated that these have already turned Hie scheme down. A DANGEROUS PROPOSAL.

The scheme of merging the freezing companies nml handing the control over to the farmers is really a dangermis cue, according to some interested iu the business. There is not the business ability among tho farmers to successfully manage such a huge undertaking. District hoards and a

Central Hoard would mean red tape. No one would accuse the .Meat Producers’ Hoard of being a business organisation. The amiable gentlemen on that Hoard and tho Officers of it are hard put to know how to spend the money that the Customs Department collects for them. A good deai has been wasted on world tours, but lheir business ability can be judged from the fact that a responsible member of the Hoard speaks of chilled beef being held ill stock. Under the proposed system of management by Boards whose members are irresponsible there will he considerable waste, a huge amount o| log-rolling and it i-. to be feared that a large quantity of set mill grade meat will be slopped. The trouble with the freezing industry today is that there are tori many works and the stock-owners are themselves to blame for this. The first freezing company fo be established in New Zealand was Ihe Canterbury Frr.xen Aleal Company, which was formed in 1882 and iu the same year the Gear Alea* Company was foniTod iu Wellington. Within the last ten or twelve years freezing works have appeared bkr mushrooms in different parts of tie country, and many ot th'-m have had a mushroom existence. Is i: wise to experiment with this industry just nov when our hold on the Smithfield market is weakening except in respect o lamb ?

OPINIONS ON THE PROPOSAL. It is tlie definite opinion of those controlling the meat companies in rnd around Wellington, that tlie schemes which originated with Messrs .1. -Dunedin). 11. S. Chadwick (Dam-c----virke). and .1. E. Makgill (Auckland) is not an acceptable one, at least to t..e proprietary concerns. Of coins?, if a way can be found for provnl- ig an acceptable guarantee for payment r.l capital ‘and interest the propriety companies would no doubt be willing to sell, but how are the promoters o‘ the scheme to provide that guarantee? An acceptable guarantee would be a Government guarantee, but dare the Government give such a guarantee.- It it did give ?uc ' !l a guarantee couUl.it refuse ‘similar assistance to other inilwstrioFi? It i> hoped hv *omo t ' from the general discussion that L's arisen, ’other and wrliaps better schemes will* be evolved. After all what is-really desired is the closing down of a number of works so as to leave more stock for those that ro-

main, which would result in the reduction to a substantial extent, of the freezing and overhead charges. Some again seem to pec a political move in the proposal. Meat is sure to he discussed in Parliament owing to the,sale of the Poverty Hay Aleat AYorks to Vesty Bros., hut with negotiations for a merger in hand it would scarcely be fair for members of Parliament to discuss meat freezing topics. INCREASING BANKING CAPITAL. It is pleasant to see the banks increasing their capital. Last year the Bank of New Zealand issued 1,250,000 shares of Cl each, and now the National Rank of New Zealand is issuing 100,000 shares at £1 10s each of* which £2 per share represents premium. Justbefore tbe announcement of the issue the shares of tlie National Hank were quoted on the Stock Exchanges at CO 17s (id. so that the directors have been fair, if not generous in making the premiitm £2. The bank will thus get £250,000 of share capital on which dividends must be paid and £200,000 in which no dividends have to he paid. The latter is like a jierjtelual deposit free of in I crest. Tin premium will, uf course, be added to tho reserve fund and when this issue is completed the paid un capital of tho National Rank will he £1.500.000 and the reserve fund £1,100,000, exclusive of the amount that may lie carried forward. Tho trade of New Zealand Is growing at all events it takes more money to finance the trade than was the ease before the war, and more hanking capital is needed. Our exports for Iho year ended March 01 were approximately £50,000,000, so that roughly £12,000,000 worth of produce is afloat during a quarter and tho hanks have to finance the hulls of this.