A CO-OPERATIVE SPLIT.

Taranaki Daily News, Volume LVII, Issue 125, 20 October 1914, Page 3

A CO-OPERATIVE SPLIT.

CHEESE v. BUTTER. j TROUBLE AT OMATA. The lure of cheese has evidently caused troubic at Omata, as several of the suppliers to the butter factory have transferred their milk to the proprietary cheese factory that has been established there, the consequence being that the butter factory has been prejudicially affected, while those who have left the company to supply the cheese factory are still shareholders in the butter concern, and 'have a voice in its management, although they are interested in a rival iaciory. In order to place' the affairs of the butter factory on a more equila'u e basis and to encourage the advent of more suppliers, the directors proposed to alter the articles of association, the most important changes being: (1; That instead of members having to ta;:e up shares on a sliding scale governed by the quantity of their butterfat, it would only be necessary to take up one share, though any member could nppiy for as many as he wished; (b) that the "dry" shareholders shou:d not have a vote at meetings of the company. The new articles were submitted to a special general meeting of the company on .Saturday, when ilr. P. Raill pr. sided, and at times the proceedings were decidedly animated. The chairman fully explained the object of the proposed alterations in the articles, u-hich he read and commented on seriatum. lie pointed out that it would be optional as to how many shares were taken up, and that the chairman would have power to decide who wire bona fide suppliers or not. The minimum number was one share, and the qualifying number for a director was ten shares. Under the old arrangement, if a supplier took up 20 or 25 shares and had paid up £o thereon he was liable to have the remainder of the money called up at any time. The directors, however, wished to obviate this by al'otting Ave fully-paid-up shares, but it was discovered that that would be illegal. It was, he said, unnecessary for him to state that the directors would never have compelled any supplier to pay up in full on 20 or 25 shares, as that would have been a great handicap. The directors recognised that for a supplier to have to take up "25 shares was a big hurdle, and that they lost suppliers thereby, so that it was now proposed to make the number of shares optional, as they were not ging to risk losing suppliers by not rectifying faults in the artie'es. It had been mooted that the object of the directors was to rob the "dry" shareholders of receiving any interest on their shares. It lmd been fully intended to pay interest —if not 5 per-cent., then 2|/. per eent. at least—but the bottom fell out of the butter market in the autumn, and the money they had in hand for the payment of interest on shares had to be devoted to a refund to the. suppliers. It was only fair to pay interest, but they could not sacrifice the best interests of the suppliers in order to favor the "dry" shareholders. lie formally moved that the present articles of association be cancelled, and the new articles adopted. The motion was duly seconded. Mr. E. Bayly said that as the power of voting by the dry shareholders was to-be t.iken away, he considered it only fair that that interest should be paid on tile shares, or that the company should buy them out.

Tim chairman replied that if (he shareholders had stuck to the company and continued to supply milk there would have been a dividend, ljlit ho was sorry to say some of them had thought more of their private interests than the principles of co-operation. While favoring the payment of interest, fie objected to »;pbljiii£r the suppliers,who fed and milked their cows, of a just reward for their labor. Mr. Bayly remarked that it was the old shareholders who had helped to pay for the factory and brought it to its present position of being free from debt. The chairman said that the most vital point was that those who had initiated the factory no longer existed, and it was the second crop who wanted the profits. I'ersonaVy. lie was sati.-licd that although he had received no dividend he had obtained full value for his shares in the increa>e<[ price of butter. He pointed onl that without milk the factory would be only an empty wooden building, and he asked what interest they would get if the factory were put out of use the next dav?

Mr. l'\ .Morris enquired if the nc.v ru'e as to one. share had been in vogue at the start of the company, could they carry on?

The secretary (Mr. Hugh Daily) pointed out that tiie only disirimiuation against the "dry" shareholders was the deprivation of the. power of voting. Those members who did not supply milk to the factory voluntarily deprived themselves of the [lower of voting. The chairman insisted that the suppliers were, more entitled to interest than the dry shareholders. Mr. K. Ihy'y: If the "dry" shareholders are prepared to sell their shares at a discount, is the company prepared to buv?

The < h:> innan oftVivd to sell hi* shares at IDs rat-it, remarking that the old artirVs Were detrimental to the company. Mr. llay'y; Nut with pure co-opera-tion. The chairman: T am to hear you say that. How* much do you "drv"' shareholders want for your shares?

Several members expressed their willingness tn take Ills jut share, ami tlus chairman invited thru! to conn? up to tin' tah'e ami »ive in a written ollVr, which t!ii' directors would consider, but. af!er the share renter, the eliairman announced that the number of (he shares in question exceeded the Icg.il limit of one-iifth. so tliat the directors could not purchase beyond tint limit. In reply to a ijuestion. the chairman said the company did not want capital for buildings, !,<,(, Uiey wanted milk, adding that if the, "dry'-' .shareholders had In en wise they would not have jjoho to thi- cheese factory.

In reply t„ Mr. Smith, the chairman said the voting would he on the new articles as a whole, hut that it was open for any shareholder to move an amendment.

Mr. Smith said that lie objected f., the chairman, who was a "dry'' shareholder, liavimr the power under the new ail ides to decide the (juestion as to who were bona fide suppliers. 11,. considered lh.it tile directors as a body should exorcist; that nower.

The chairman replied that the decision would not aficct the suppliers. A ballot was then taken, Mr. Weller liciiiif appointed scrutineer. When the numbers were analysed it appeared tint till? requisite three-fourths majority necessary to carry the motion had not been obtained, and it was therefore declared •o lie lost by throe votes.

The chairman intimated that the new articles would lurain be submitted for approval at a future date, and the meeting dispersed.