DAIRY COMPANIES

Southland Times, Issue 18856, 23 June 1920, Page 5

DAIRY COMPANIES

ADVANCES FROM BANK. TIGHTENING UP POLICY. (Per United Press Association.) PALMERSTON NORTH. June 22. The president of the National Dairy Association announced to-day that the associated hanks had decided that in the case of dairy factories requiring finance they must pot up 2o per cent, before being granted advances The capital must be subscribed to at le-ist two-thirds of the advance asked for, and in same ratio should the shares he increased. Depreciation must he written off each year to (he extent of at least the amount permitted by the Income Tajt Department, t!u amount written off to he applied in permanent reduction of the overdraft Emit. So long as a company is indebted to a bank, at least one penny per lb of butter fat swopped must he withheld from di'tribution, this amount to he e'thir applied in payment of the suppliers’ liability, written off the companv’s assets, or credited to reserve fund. All advances must be secured by joint several guarantees by ‘Upp'wrs and by the fc'-nrity of all Be asset ■■ of the company. Existing companies reconstructing or financing must observe similar conditions. The chairman said that this tightenmg up was going to ’nave a deleterious e'Tect upon the industry, osoccially the development of hackblock factories.