MOA FARMERS' UNION.

Taranaki Daily News, Volume LI, Issue 265, 2 November 1908, Page 4

MOA FARMERS' UNION.

ANNUAL MEETING UF SHAREHOLDERS. The annual general meeting of shareholders in the Moa Fanners' Union, Ltd., was held in PeuningUm's llall, Inglewoud, on Saturday afternoon. Theie was an attendance of over a hundred shareholders. Mr. D. Todd, chairman of directors, presided. The annual report, as already published, was read. The profit anil loss account read: Dr. —To dividend for year ended 31st August, 1007, £133 ss; directors' honorarium account, £24 12a Od; petty cash, £O4 8s 7d; exchange, £l3 0s 8d; lire insurance, £ll2 His 3d; sundry wages, £ll 10s 10(1; rent, £BB 12a hi; wages and management, £3184 15s Id; amounts written oil general ledger accounts, £4l 12s !)d; amounts written off goods ledger accounts, £llß 7s sd; depreciation ui plant, £73 I2s 8d; balance, £240 7s 8d; total, £4115 Is (id. Cr.--By amount brought forward, £284 17s 7d; Manchester Wholesale Co-op., £lO 5s ltd; shares forfeited, £9O ss; discount and interest, £ll 2s; commission, £157 4s Id; gross prolil, trailing account, £3452 5s 8d; amounts written off as had received, £lO3 Is sd; total, £4115 Is Od.

The stock and trading account showed that at September Ist, 1907. there were in stock goods valued at £BIBO 12s od, and .C 25..841! lis 9d worth was bought during the year. For goods sold there was received £30,002 17s 3d, and the. stock at the end of the year was £8023 13s. Trade expenses absorbed £544 0s 7d, and there was a gross profit ,f £3452 5s 8:1. Trading capital account comprised £4BOO. The chairman, in moving the adoption of the report and balance-sheet, saiil that the past year had been a very tight one for money, and the two months' dry weather had made matters worse than they would otherwise have been. Aud then, to make matters worse still, the bank came along the other day and

i wanted their money in— £4500 overdraft. "It's for you shareholders," he said, "to consider how you're going to pay tlieni, aud when you're going to pay them." It seemed that for years pas'; every chairman of directors bad asked the shareholders to take up more shares, hut it was like pouring water on a duck's back. The result was that the directors were asked to carry on the business with only £IOOO capital, an average of two £1 shares for each shareholder. It was 0. ridiculous proposition to expect them to conduct a business of such magnitude on £IOOO capital. It was time something was done. (Hear, hear.) The directors, in accordance with the instruction of the shareholders at , last annual meeting, had put off one'of the carts, sold the horses, and sacked the man, but they had not taken off' the other one yet, owing to the accumulation 01 stock, which they wished to reduce. During the year tiicy had spent £4OO in buildings and plant in connection with the bakery, and this promised to prove a good investment. Already it was effecting a saving of £3 per week. Mr. Davidson seconded the motion to

adopt. ill'. Hopsou said the not profit tost year was only £fi 10s Id, in the previous year £143 3s 4.d t and in the year before that £l6 9s 4d. The company couldn't go on like this thev were simply drifting, lie showed the "drop in the amount of sales and the increase in the overdraft. Bad debts were increasing, and the concern was overstocked. He pointed out tlmt the profits were low because the company had to buy on bills, and thus could not secure any trade discounts. There was 2>/ 2 per eunt. discount obtainable on grocery and ironmongery and 3% per cent, on drapery, but the company had to 10-:e all that money, lie considered the re-freshment-rooms were a drag on the business, and lie thought it would wise to sell this property and put £IOOO in the business. Mr. Todd said the rooms should never have been bought.

-Mr. ilopson said he understood that an utter had been made to take over the business as a going concern, pay off the liabilities, and pay back the share capital. The only alternative was to go into liquidation. He suggested .that the directors should retire for a quarter of an .hour in order to formulate some scheme to deal wiLh the position, lie pointed out that the directors and some twenty shareholders who had signed a guarantee as a collateral security were the only people actually responsible—tlie shareholders as a body carried no responsibility.

Mr. 13. Robinson suggested that the company should be reconstructed on commercial, not co-operative, line-s . Mr. Tarploe complained that the directors had not carried out the promise made at last meeting to present departmental account*, so that the shareholders could see which departments were being run at a loss. The chairman said that these accounts had been approximated, but .the managei- had *aid he could not keep the accounts as suggested unless lie had extra clerical The approximate figures could be seen l»v any shareholder at the office, bin it wa« not advisable to read them here ami "give the show awas" to their competitors. Mr. larplee thought the shareholders were entitled to have the information now. lie. suggested the appointment of a committee of the shareholders to confer -with the directors with a view of ascertaining why the profits oil such a big turnover were so very small. Not only was the profit shown very small, but -0)0 odd had had to be taken from the forfeited shares account to show any profit at all. Also, £lO3 of back and supposed "bad"' debts had been included. and with these amounts deducted the working account looked worse than ever. The directors, in order to show this small profit, had omitted to allow any depreciation on the buildings, which was a mistake.

The chairman said the property had .boon depreciated until its value was shown in the books at .C2OOO, -vvliilst . the (iovernmoiit valuation was over £3OOO. Mr. Tarpleo. thought that unless ill? balance-sheet showed some depreciation of the buildings it was misleadins. Mr. T. Xicholls said the .CO lOs net profit was there alter deducting the C!W mentiiined by Mr. Tarpleo. The whole trouble was laek of sufficient oapital. Owing to the system of purchasing on bills, the company lost about .COOO a year in discounts. 'they wore turning over t'iIO.IIUO odd on a paltry Cililio provided by tile shareholders, whilst the directors, manager, and guarantors had to provide the rest by giving a joinl-and-several guarantee" to ihe bank. Ihere were three issues hat could lie put to the meeting:—To provide at this meeting , UJoOl) to meet the bank demand, either by mortgage or by the shareholders putting their hands in their pockets; to sell the business; or to liquidate. Of the Csini) book debts OHM was easily collectable. The business could be continued but lor the biln'c pressing for the repayment of advances. Mr. 15. If. Xicholls, the manager, slated that through the tinancial stringency the company found itself in a light place. Jie would like to ask Mr. Tarpleo. who teemed to have had wide experience in bifsiness, if he had ovr seen in any pari of Ihe world a sue- . cestui business having a turnover of AJIItI.UIK) and only .CltiUO stiWri!>--.l capital. If there were, he would go : and see the manager o!' il, with a view of picking up a "wrinkle.'' This coin

, pally was .short of capital. It had to give shareholders accommodation to the amount of over .CoWO. I tow could they do it, with (he present insufficient capital'; As for the loss tr.i tile dini'ig rooms, didn't file shareholders get (he benefit of the rooms? Jle believed in keeping sonvc departments, even at a loss. At this moment, tliev had to thd I more capital, or liquidate. lor his own part, lie was on a guarantee for) ASoOO, and it liad never caused him (lie loss of a midlife's sleep. On the balance-sheet the company could lose £3OOO and still pay every penny it owed. (Applause). -Mr. .laple.t- said the directors had! been using the £4300 of undivided profits, the t nion sold no cheaper than i other shops. Why was there onlv 11 1 ,.'. per cent, gro.-s p'rolit. and why'did it take 02 per cent, of u'lo gross profit to i pay working expenses; As for waiitni;; more capital, tie would not submit (his, balance slieel. to a man from whom h- '

wjintv'd tlio i)i'"»ii<\v, I Mi'. T. -Xic-liotis -aid Lin- rosl ot man- { agfinent was lower than in thi> general I run of such businesses. Mr I'riee wanted to know if I lip ma.ia 3 |l r wore hi a position to 1:!kc ov;r tile (business. 'but Ilk: nieelinp the (|UCstion ;ui unfair one. ■Mi*. Xicholls lliat it was llii l eluiiiee of a liret ini" for soj n^onn to take oyer llio 1 hi-i ; on [];:> terms mentioned. lie (IK!n"r want |. 0 s(v (1,,. I'usmes? «„ !M i ■ 1 1' j- tor ho i it it many friends amongst tlio shareholders. fl'o heartily wished Ponu. of the shavehnhl i:rs would come (o w them at tUo stores even- day. instead of turning u|) only once a ivar In find fault'. (Near, hear). He tiioujjlit lie eould fi ]K | n dozen or twenty propb ready to take over (lie concern at ifc face value. Apart from that, if the shareholders decided lo increase the capital to £7(100 I of CSOOO. he and his family would' take ii|i .C 2500 of it. (Applause!. I Mr. Price didn't think tile shareholders were so hopeful. Tn a discussion upon (he advisableacsjs of liqu'datiug-- tho former Xew

Plymouth Co-operatii a btores liquidation was mentioned. Mr. Hopson said the two businesses could '.lot be compared, He eulogised the system of book-keeping in the Moa Farmers' Union. Mr. I'arli thought that tile shareholders Who owed tlie company over £SOOO could easily settle tiie difficulty by paying their accounts right away.' Then they could say good-bye to the bank. Mr. llenwood thought the company should press for these amounts right away. In answer to a question, Mr. Nicholls said that the biggest account/ on the books was about £BO, and the average £4. Not one per cent, was owed by non-shareholders.

The manager said that cash trading was impossible during the whiter months. The people who were urging this system had often £SO on the books. In fact, tlk: Moa Farmers' Union was virtually a bank to the district. Some of the people who decried the credit system now had been pleased enough to accept the company's generosity in tire days past. The management should not be blamed but thanked for helping the shareholders in the months when their farms were earning little or nothing. Mr. Baxter believed in the suggestion that a man's credit be limited by the amount of iiis paid-up capital. In a dairying concern a man to take £IOO out had to take up £3O worth of shares. Here it appeared a man could put £1 into the business and get credit up to £IOO. I Mr. Richardson did not think it I would be a disaster for the 1000 shareholders to pay up this £4500 to tile bank right awav.

■Mr. li. C. Hughes was surprised to 1 see that the fanners were prepared to let their business go—a business which was all important in keeping down prices and helping them along in the winter season. During the past year the business bail undoubtedly been carried 011 at a loss. He moved, and Mr. Hopson seconded, t'hat a committee of five lie appointed to confer with the directors with a view to deciding oil the proper course to pursue. -Air. B. H. Nicholls said that the only men who really had a say were the directors and the guarantors. He or a-;iy other one of these could wind up tire business if he wished. He thought this committee sliould be composed of guarantors only, This course was adopted, and Messrs M. , Hopson. A. Morton. TTavcrlm-r, iMaekie, Henwood, and Alec Brown were appointed to the committee. The meeting was then adjourned till November 14tli, when the report of the combined committee will be presented.