Manawatu Herald. TUESDAY, SEPT. 4, 1900. Limitation of Profits.

Manawatu Herald, 4 September 1900, Page 2

Manawatu Herald. TUESDAY, SEPT. 4, 1900. Limitation of Profits.

We see much danger to the farming class by the proposal some members of parliament are endeavouring to accomplish of limiting the profits of the Meat Export Companies. It is urged that these companies though making very large profits do not see fit to distribute their wealth amongst stock-owners. From the latter's point of view this is very wrong of them, but from any reasonable person's view it seems but ordinary business and sound common sense. By distributing a portion of the profits gained by these companies amongst their shareholders, and pil-ing-up the remainder in the shape of a reserve fund, all those who have embarked their savings in this industry have a prospect of holding their capital secure, and they have something to bring into use should the future markets be against their ventures. It must be perfectly clear that had they distributed some portion, no matter the amount, amongst tho stock-owners, that portion would not be handed to them in any time of difficulty. The question to be fairly considered is, what right or for what reason, should a private company be debarred from making as much profit as possible ? In days gone bye when the difficulty of disposing of surplus sheep was one of much moment to every owner of sheep, the idea of freezing and exporting them was seized upon with avidity. The early companies made many losses, and it is a question whether those which have kept going, some were closed down and all the capital lost, have earned any very large average dividend from the date of the capital being paid up. These companies were looked upon as the salvation of the colony and at their institution if they had requh'ed a charter entitling them to earn one hundred per cent, it would readily have been granted, as it was then understood that they had a great risk io ran and -were conferring a blessing, if successful, upon the community. It is certain that, whatever the price they pay for . sheep, they have made it possib c for sheepowners to dispose of their surplus stock, at a satisfactory price. We all want more, and we all try to get it, which is but another way of describing a successful business activity. There »ppeAr§ not only to to

no reason why the sheepowners should not originate another independent company to the two now in Wellington, but, judging from the balance-sheet of the Meat Export Company, every reason why another should be started, as the profits appear very large. But this is no reason why the present companies should be limited in their profits. If the profits of the Meat Export Company appeal to financiers as being sound, with the amount of money invested in such small interest returning ventures, it is wonderful a new company has not been floated, especially when, as some members of parliament assert, all the small sheepowners are sore at, and opposed to, the actions of the present cempanies. The attempt to show that private companies should be limited in their profits because Gas companies are, is stretching a comparison beyond the limits of common sense. In the case of Gas companies they secure from a public body sole privileges under which, without this supposed sausguaidiug jf olio public, they could *io just us they well pleased without the healthy stimulus of opposition, but these meat companies have no special protection against competition, and it is open to anyone to start another company on this coast, if they choose. The statements as to the' profits cannot be so accurate or enterprise' is indeed dead in the colony. Now let us turn to the sheepowners point of view. They declare that these companies do not pay them enough for their stock Then why sell it to them ? They sell simply j because they cannot do better, and they get the cash leaving all the j other difficulties of carrying out the t remaining duties to these companies. i They have the chance of selling to j local butchers or of freezing on their own account. It is declared the charges for freezing are too high, and the difficulty of filing to advantage in London very great. It is thus admitted that these companies have difficulties to contend with. Now supposing this Limitation of Profit idea is made law, what would be the position of the sheepowners north of Wellington if the meat companies objected to such a Bill and decided to close their business for a time ? No law can make them keep at work and pay sheepowners the prices they want for their sheep, so that as these companies have, as it has been stated, a large reserve fund to provide against emergencies, there is nothing against their so acting, and a great likelihood that they may. What price would sheep be then ? It is absurd for the State to interfere with private enterprise or so to interfere with the reaping of possible large profits that the acceptance of large risks would be refused. If the case of the small sheepowner is so bad as has been said it is, they are unlucky in not possessing that energy to better -their position by other means than interfering with the success of other and more spirited follow colonists.