FARMERS' CO-OP. SOCIETY.

Taranaki Daily News, 22 May 1916, Page 6

FARMERS' CO-OP. SOCIETY.

ANNUAL MEETING. EXPANSION OF BUSINESS. "EXPENDITURE FAR TOO HIGH." The iiunual meeting of shareholders of the Farmer*' Co-operative Organisation of New Zealand, Ltd., was held at Hawera on Saturday. Mr. Alex. Hunter (chairman of directors) presided over a large attendance. The report was as follows: Mr. H. A. Williams has resigned th« charge of the Stock 'Department, and the directors have secured the services 01 Mr. X. P. Digby, who has had many years' experience as auctioneer and stock salesman with Messrs Pine and Co., of Christchurch. During the past twelve months we have purchased a site .n Inglewood on which to ereot yards. These yards are now under construction, and we hope to have them completed with the least possible delay. Extensive improvements have also been added to the company's yards at Manaia. We have also purchased a property at the corner of Union, Grey and Wellington streets, Hawera, for the purpose of erecting in the near future, should circumstances warrant, suitable buildings for the carrying on of the company's business. Merchandise Department.—The present accommodation is inadequate for the growing business of this branch, and the directors decided to lease the premises erected by Mr. Lpckhart, in Union street, Hawera, possession being taken at the beginning of April. This we anticipate will be the means of securing a much larger volume of business in this department. During the year the company have secured the services of Mr. F. J. fline, of Timaru, to take charge of the produce department Machinery Department.—Owing to the present accommodation of this branch of our business 'being unsuitable, negotiations were opened up with Me?,srs Booth, Mac Donald and Co., which resulted in our leasing their premises in Union street, Hawera. During the year ended >on March 31, there li&vf been a.Votpu 2337 shares. "C" issue. The present number, of shareholders in the company is 1818, there having been added 315 new shareholders during the past year. The net profit for the year in all departments is £4374 Os 3d, and after providing for depreciation of plant (£187), office furniture (£54 15s) and writing £IOOO off goodwill and £389 los off preliminary expenses, there remains a balance of £2742 10s 3d, which your directors allocate as follows: 'Jjo pay 2% per cent, on all purchases made by shareholders during the year (agricultural implements and motor-cars excepted), 10 per cent, rebate on commissions earned (wool and land excepted). , The directors also propose a fl per cent, dividend on "B" and "C" issue of shares; to reserve on account of possible bad and doubtful debts, £330; to pay £6O as subsidy to the employee;' superannuation scheme; to pay u per cent, on salaries and wages to those members of the staff who were not eligible for inclusion in the superannuation scheme; and that after making necessary reservations for payment of income tax and auditors' fees.' and making full provision for b.ad and doubtful debts, the balance be carried forward. In accordance with the article* of association, the directors to retire this year are: Messrs B. A. Gray and A. F. Symes, who do not offer themselves for re-election; and Messrs A. Hunter. A. V. Death and A. CVrkill, who, being eligiKe, again offer themselves for re-election. The auditor (Mr. J. \. Turton) also retires, and, being eligible, again offers his services. THE CHAIRMAN'S ADDRESS.

In moving the adoption of the report and balance-sheet the chairman said:—

"Gentlerrien,--In moving tli'e adoption of the report and balance-sheet for our second year of operations, with, your permission I propose to make some remarks thereon, dealing first with the balance-sheet. An effort has been made to make this, as far as possible, an oplrn book, with fairly full details. The subscribed capital on March .11. 1910. was £50,180, invested by 1818 shareholders, showing an increase in capital for the twelve months of £20,670, and in membership of 315.- The paid-up capital is sot down at £20,31(1, an advance of £12,888 These fignrex are very encouraging, and indicate that the Society has the confidence of a fairly large number of the farmers of the district. It is to be hoped that the satisfaction arising therefrom will not induce any to ease off, but rather to. increase thei l- endeavors to further strengthen and build up the Society, and place Us finance 4 nn such a footing as will enable it to cater to the best advantage for farmers' requirements. Before leaving this question of capital, I woukl advance the opinion, and in practice I have acted upon it, that if farmers supply capital for concerns or ventures outside their onw immediate business,' and I think it is in.some casesHheir bounden duty to do so, they should first' and foremost assist those which handle the farmers' produce, and especially those which do so on co-operative lines. Among liabilities calling for comment, there is the amount of fixed deposits, £17.780, an increase of £3934. These deposits are now arranged on a more satisfactory basis, avoiding the dangers of money at call, heavy withdrawals at any date, or withdrawals at the time of year when the heaviest strain falls upon the finances. A bank account such as ours fluctuates considerably and often rapidly, and consequently the figures are little guide to our position except when taken in conjunction with the figures, and which you have, no doubt, already studied. The amount owing by the Society to sundry creditors has increased by £1035; while, on the opposite side of the account, the amount due to the Society by sundry debtors shows an increase of £17,032. * These increases are due largely to the abnormally high prices and extraordinary activity of the live stock market, and to some extent also by the increase of business. Among our other assets it will b" noted that our properties show an increase of £3699. nearly all of this being accounted for by (lie Inglewood property and yards. Stocks of merchandise and machinery show an increase of £2980, and absorb close on £7OOO. Shareholders are continually applying for exlensions of the business, a,Md complaining that this or. that is not in stock; but the figures show that we are guilty of overtrading iis it is. I wold therefore ask that yon exercise p:>'vnee, and remember that your busi- ..<•-> is being financed to a considerable e\'. :iit on the personal guarantee -of the d hectors. The matter, however, is in <">"r own hands, and if you find the cawial there will be no difficulty about the stocks. If we had the capital to cn?'ile us Ho seize our opportunities in j uuviugi ,wt oould makt gu&tw Jge&i

or sell cheaper, sometimes both. As it is, if shareholders would place their orders ahead for the larger lines they require, they would reap considerable advantage, for the bulked orders place power in the buyer's hands to command a favorable quotation, besides enabling him to keep down the cost by avoiding unnecessary freight and bundling. The amounts written oil* plant, oliiice furniture, goodwill, and preliminary expenses total £ll*3l, while the sum of £350 has been set aside as a provision for bad and doubtlul debts. On this score we may consider ourselves fairly fortunate so far, but at the same time it is wise to make such provision. Besides these amounts, a sum of £6OO has been kept in reserve to meet income tax and auditor's fees. Your directors consider that these expenses should be a charge against the profits of the year for which they are incurred, and, although it means that a double burden falls on the 1915-1G year, it is better to face it at once. Last year the amount written down was £1605, the total for the year just concluded being £2581, an increase of £SS6. For the current year the directors should, I think, set themselves the task of wiping at least £3OOO off the goodwill Recount.

Coming to the profit and loss account, we find receipts from commissions, ineluding profit on merchandise and machinery, amount to £15,730, as against £11,588 for the previous year, an "increase of £4148; as against which our working expenses have increased by £1685. The ratio of expenditure to income is far too high, but your directors hope that, with the experience gained, the management will develop a more accurate system of control, bring the different departments into closer touch with one another, and stop the leakages. Taking all things into consideration, we might have been in a worse position than we are, for, owing to members of the st'ff living f ( r the front or through other causes, the continuity of the work has been seriously interfered with, the changes' necessitating the initiation of new employees to the routine; while frequently the staff has been short-handed. It might be mentioned ncre that Mr. Niehol is the only member of the indoor staff who has been with us since we commenced operations. Mr Holder has had the great misfortune to suffer a sen- "■"> breakdown in health, and has re. ; igned the position of manager and secretary. He has been a most courteous and obliging officer, and yon will nil, I am sure,'join in wishing him a speedy and complete return to health. His retirement necessitates the engagement of a new manager, and as Mr. H. A. Williams is also severing his connection, the appointment will be one of no little importance to the Society. Mr Williams has been one of the most responsible officers of the Society: his connection with the business extending back for many years through the times of our predecessor*, and nnti 1 he has left us we will not realise how much of our business leans upon him. In taking jii s place, Mr. Digby will have no sinecure. NEW DEPARTURES.

"In regard to the produce 'department, it was found that the expense and loss through removing stuff from the Winter Show Buildings was prohibitive, and later that the heat from the low roof at Mr. Goodwin's building was affecting the gormivtion of seeds stocked there. When th. .pportunity of securing Mr Lockhart's new building in Union street presented itself, negotiations were entered into, which resulted in having the deptvrtmc-ni housed there, IA site in Union street eminently suited to the Society's business ha? also been secured. It was considered thai that part of the town was the most suitable, and that with the strengthen, ing of our finances buildings suitable to our requirements could be erected as needed. A store has been opened in Elthain,'with ,Mf- -ludd in charge, and is showing a healthy turnover. The directors will no doubt have to face the demand for store accommodation at Inglewood and Stratford in the near future. The new yards at Inglewood are Hearing completion and our opening, sale will shortly eventuate. These yard's are, f believe, the first in \eiv Zealand to be erected in concrete. The yards in some of the other centres have required considerable attention during the year, and this accounts for C.">n4, the bulk of the sum set down as miscellaneous charg-s in the profit and loss account. Of this sum nearly half was absorbed in repairs and. additions to Manaia yards, which arc now very convenient. The Eltham yards require enlargement and improvement, and this work has already been arranged for.

"An Auctioneers' Association has been formed for Turanaki, on similar lines to such bodies in other parts of the Dominion. The Waikato Farmers' have advised us that they found the association in t)iciu|district, to which they subscribe, of considerable assistance. The rules of the Association came into force on January 1, 1010. Further progress has been made in the formation of a. Farmers' Co-op. Wholesale Federation, and we have recently received word that the N.Z. Farmers' of Christchurch has succeeded in having its Memorandum and Articles so altered as .to permit it to join in the projected federation. The possibilities of such a concern for botk buying and selling will undoubtedly be of great assistance to' all the affiliated societies. ?HE WAR. "An occasion such as this cannot be allowed to pass without some mention of the dreadful war which has affected every corner of the inhabited earth as probably nothing has ever before done. So far as we can see the military experts have not over-estimated its duration. It behoves us, therefore, as a Society to shape as safe a course as possible, for it is impossible to predict what ups and downs may occur in the money and produce markets of the world. Our staff has supplied quite a number of men, while members and their sons are strongly represented, and several of the number have made the supreme sacrifice. Many more must yet go, for we must see the job through; If further confirmation of this were needed, we have it in the proposition of the German Socialists that they are so firmly in the grip of the Prussian militarist power tha l they have no influence to bring about peace, but they urge the workers of the Allied and neutral nations—if any nation can be said to be truly neutral—to make it impossible for them to further prosecute the war against Germany. That way lies Prussian domination of the world with the enslavement of all the racps, as the Germans have been •ad'e slaves, for who with any but the spirit of a slave could make such a. proposition? I doubt, if even the prospect of peace, when coupled with the Kaiser's equivalent to "the flesh-pots of Egypt," will l>e sufficient to secure its serious consideration. But this is NewZealand, and one at least of our duties is to keep the "milk and honey (lowing" for the support of the Allied forcesnaval, military and industrial. Shortage of labor Is apparently going to make it difficult to keep up supplies, and little has so > far, been done to organise the production of tWs country. The AgiigultHMl Pratftmtat eAS.net but be pea-

sidered of the very first importance v. the Dominion, watching, as it should, over the industry which provides the bulk of the wealth, and therefore .lie power of this section of the Empire. AN INDUK'IRIAL ARMY. That the wealth production is by means ol food r.ml clothing .iialcrial makes it of great importance to the Empire. In the face of this the Minister of Agriculture is so busy that he has practically no time to devote to this department. Ther.; is room there for the best man tint this country can supply, and more than enough to fully occupy his time. Expert producers of cheese, butter, meat, wool, grain, etc., are being taken out of the country to the almost certain- reduction of supplies. It appears to me that the man-power—and woman-power, too, if necessary— of the Dominion should be organised in the same way that the munition output has been in Britain and France—formed into an industrial army. The Department should know the bare minimum need o' ; managers, and experts for dairy factories, freezing works, woollen mills, farms, business concerns, etc., and also the necessary labor to carry on with. Then, with due regard to existing conditions, the units of the industrial army could be told off to their stations, and the surplus trained as called-up for military purposes. Why haggle over the word 'compulsion' and 'conscription'? Freedom itself is being jeopardised by the delay. The 'neople' rule this conntry through their representatives. In any, case, we can hardly be said to be compelling ourselves to defend ourselves. Prussia is doing that. When we have intimated in a way that she can understand that her yok? does not fit, any who have the time and inclination can return to the wordy argument. But lam afraid I have taken up too much of your time already, and will conclude by reminding you that the success of this toncern —your own Society—depends on your taking care to appoint men of standing and financial stability on die Board of Directors, and then to back them up by giving the Society your full support."

"A TAMMANY RC .." Mr. Ganc seconded the adoption of the report and balance-sheet. Mr. J. 0. Taylor complained that two directors were "ijt.nipod" into the directorate without tne sanction of the shareholders. The directors were all honorable men, but they were not above tarnmany practices, and he had no hesitation ( in saying the directorate was a tarnmany ring. He implored the shareholders not to give any votes to the men who, were "dumped" into the directorate, because iij doing so they would be supporting tammany. The chairman called Mr. Taylor to order at this stage, and explained that the two directors in question had been elected in order and according to the Articles of Association Mr. Taylor went on to express ihe opinion that money should not be strewn about in the way it had been All the business of the Society appeared io be in cattle sales and it was cattle dealers who would get all the bene fits. He asked/for an explanation of how there was ,414,n00 in cheques outstanding.

Mr. Buckeridge pointed out that there was nothing extraordinary in this, for the business of the Society represented about £IOOO a day, so that the amount outstanding only lepresented a fortnight's business. Mr. F. Mills asked why no rebate was made on motor ears and machinery. The chairman said the reason was that the machinery section of the business was really a necessary evil in that it did not provide a profit, but it had to lie run to meet the requirements of farmers. In not giving a rebate the Society was following the practice of similar organisations. Mr. Mills did not think this was a .sufficient answer. They should not follow closely the methods of other organisations, for if they did this they would fall into the same mistakes made by other organisations. Tf there was no profit in any section of the business it should be dropped

The chairman- But the farmers ask for it.

Mr. Mills: They ask for lots of things they cannot get.

Mr. Taylor asked the chairman if he thought the superannuation scheme was necessary.

The "liairmnn replied liat lie thought the scheme was an excellent one. Tt had been shown that- such schemes led to more efficient service and less shifting round by the staff, and' if the scheme only succeeded in'doing this its introduction was justified.. Mi". Taylor asked if sufficient provision had been male for bad and doubtful debts The chairman said the directors thought the amount that had been allowed was ample. "Now (rive us an explanation about this £1701) paid in travelling expenses," called Mi'. Taylor. The ehiirinan .raid the expenses comprised .CSS 14s m railway tickets, £BB7 Ifis (id in agents' expenses, and £834 3s 2d in motor and gig hire. Mr. Taylor: But you admit it is rather a big figure? The chairman: I do. OPENING OF NEW BLANCHES. "Now let us get down to this Inglewood business," continued Mr. Taylor, who went on to praise the excellent condition of the yards. The porperty comprised twenty-five acres and it was valued by the. Government at £1(140, whereas it was put down on the balance sheet at £-?f>ni). lie knew that the Government did not fix the full value of property, but he thought the difference in this case was too great. He wanted to know if any of'the pioperty had been let for grazing. The chairman replied that none of the land had been let. but it was not left idle, but was made use of as aceommtdation paddocks. Mr. .Petersen asked if anything had been done in the direction of opening up a business at Stratford. The chairman said that it was proposed to do so, but be could not say when the mqve would be made. The question of providing building sites in Stratford would have to be, gone into shortly. The chairman added that the matter was under consideration at the last meeting of the directors. The Society would have to grow slowly, for the opening up of new branches entailed great additional expense. One of the present difficulties was to prevent over-trading. It was proposed to open stores both at Stratford and Inglewood shortly. SALE OF SHARES. In replv to a question the chairman said shares were being sold by some shareholders in the Inglewood district. He did not know the reason for this, but he knew that the shares were being bought up by an Inglewood man.

A shareholder said shares were also being sold in the Opnnake district. Mr. Taylor said he thought the reason was that things bad not been run as well as thoy sh.uld have been. He proceeded to criticise the. directors, but

his remarks wero lost in insistent cries of "sit down!" An Inglewood-shareholder said it had been reported that directors had sold shares. There seemed to be some dissatisfaction in' the Inglewood district, where it was said some shareholders sold their shares at a shilling each. The chairman said any director who sold shares was entitled to uuiumissiuii, but it was not. permissible for shares to be allotted to a director as commission. In reply to further questions, the chairman said the Inglewood property was purchased for a lump sum of £2225, and not at so much an acre. It was considered that the Society had derived benefits from the Auctioneers' Association. Mr, W. Powdrell said he was glad to see the capital of the Society had been increased, but a great deal more capital was required. The only thing to do now was to put the best business men on the directorate, no matter from what part of the distr'et the directors came from. It would be much better if the directorate consisted of seven or eight good business men, instead of fifteen men who did not take particular interest in all the activities of the Society. In appointing directors the matter of parochialism should not be allowed to come in. In regard to people selling their shares he said there, were prospects of the shares becoming of immense value. The Society requited to be careful before it launched out by building sale yards and a store in Stratford; it was a risky proposition and he advised the Society to be careful, If it was desired to supply farmers in Inglewood and in Waverley, he would he in favor of it being done from one big central depot in Hawera. In the course of further discussion, the necessity for appointing a manager for the business was emphasised by several shareholders. The opinion was generally expressed that a manager would have, to be appointed or the Society would go to t..e wall. EXPENDITURE AND PROFIT. Mr. Buckeridge said be was of opinion that the Society was spending too much money to get its business. He gave this warning last year, and he felt compelled to emphasise it again now. Last year it cost £SI36 to earn £11,588, or 73 per cent., while this year it had cost £lO,285 to earn £15,736, or 65} per cent. There was an improvement of 1\ per cent, this year, but the amount was still much too high. Compared with this Mr. Buckeridge quoted the Waikato Farmers' Society. In its first year this Society spent £6724 to earn £14,000, or 45 per cent, and in its fourth year it spent £lo,of>s to earn £23,292, or 43 per cent. The cost for the Taranaki Society had heen greater than it should be, and in spite of the a Iverse conditions now ruling, there was something wrong with the management of the Society. He would like to see the farmers support the Society more liberally in the matter of taking'up shares. The backbone of the Society was strong capital, and the farmers had not supported it a 9 well as they should do, if they wanted to make the business a success.

After further discussion the motion was carried. ELECTION OF DIRECTORS. An election for five directors was then taken, thirteen shareholders offering their services. . The election resulted ts follows, the first five gentlemen being elected:—Messrs A. Hunter, 348 votes; B. C. Lysaght, 200 j A. E. Death, 229; A. Corkill, 190; G. H. Buckeridge, 195; G. Preece, 140;' .T. B. Gigson, 118; D. Richards, 88; W. G. Belton, 80; G. Gwymer, 55; .T. Simpson, 50; W. B. Tryday, 35; and .1. O Taylor, 35. There were ten informal votes. At a subsequent meeting of directors Mr. Hunter was re-elected chairman. GEN'EKAL. Mr. J. Tnrton was re-elected auditor at a remuneration' of £l5O a year. It was decided that the directors' remuneration should be the same as last year, and that of the chairman was fixed at £IOO a year. A hearty vote of thanks was passed to Messrs." E. A. Gray and A. F. Symes (retiring d,irectois who did not offer themselves for re-election) for their past services.