CO-OPERATION AND FEDERATION.

Taranaki Daily News, 29 May 1917, Page 7

CO-OPERATION AND FEDERATION.

IK AIMS AND ADVANTAGES. ADDRESS BY MR. E. W. RALPH. Mr. E. W. Ralph, general manager of the N.Z. Farmers' Co-operative Association of Canterbury, delivered an interesting address to the shareholders of the Farmers' Co-operative Organisation. Society present at the annual meeting at Hawera on Saturday, upon the aims and objects of the federation of cooperative societies. He was followed throughout with close attention. Sheets of tabulated figures to 'which the speaker referred from time to" time enabled all to follow the address closely. CRITICISM AND ADVICE.

The speaker first referred to his pleasure at being present at such a large gathering. Though his own association had been going for close on 4(7 years, they never had such a meeting, which j was Tiot only the largest but the most enthusiastic the speaker had ever attended. Usually the meetings of his association lasted about an hour. He had followed closely throughout the meeting the various criticisms, especially those of Mr. Taylor, which he considered were very helpful, and, he added facetiously, he intended to sell a farm to Mr. Taylor. When inviting him to address the meeting, Mr. Lynskey had asked him to give benefit of any criticism. The meeting, however, had pointed out a few things that called for attention in matters of detail. It would be e miracle if a company of this size could be formed and everything go like clockwork from its initiation. His company had during its time made a lot of mistakes and it was for the newer companies to profit from these. Hia company would always welcome enquiries because he considered that co-operative concerns should use more concerted action. IT,ED FOR MORE CAPITAL.

The point that called for the greatest amount of criticism or advice was the questipn of capital. Other matters had been alluded to during the discussion on the report, but they were of detail. He would take the opportunity of saying a few words regarding capita) in relation to the furtherance of their own interests. In order that they might tike a clearer conception of flie ho had prepared a few figures which would prove the value of introducing new; capital. THE EARLY DAYS A* 1 CO-OPERATION His company was'.established a little over 36 years ago. In those days farming in Canterbury and in the Dominion generally was' in a struggling condition. There were very few independent farmers, perhaps one or two-here and there. Before the inauguration of the company there wore in Canterbury little farmers' clubs at which farmers discussed matters of mutual interest. In the earlier days the majority of those who took ljp farms were stonemasons, mechanics, etc., because the Government'were selling land at a low rate and by battling hard the fanners were able to get /ahead. Here and there were settled English, Scotch and Irish farmers from the old country who knew farming, and the novices benefited by their advice. It was at one of those clubs that the idea of forming the company took , rise, and from "the time it started it had never looked back, though during the first few years the struggle had been very hard.

* STEADY PROGRESS. : In the first year they had earned £IOO in commission, and in the third year £22.000. The first year they made £22 in finance and £720 on merchandise, a total of £BSO. They had practically no premises and no stock, merely ! a few bags of samples. Now their staff comprised 900.. Their total earnings for the first year were" £BSO (commission £10?, finance £22. merchandise £720) and the total had risen to £1C,954 (commission £6298, finance £1462, merchandise £3913, and grain storei, established in 1886, £2Bl') at the end of the tenth year. Their "profits, too, had kept in proportion, viz., commission £6OOO, merchandise £9OOO. After a few years tliey found it necessary to "build premises of their own, and to increase their capital so as to enable them to keep stocke. During the past ten years their earnings bad increased from £57,851 (commission £11,562, finance £4790. merchandise £40,606, grain stores £805) in MOT to £155.780 (commission £35,082, finance £20,882, merchandise £98,25'?, grain stores £13,892) in ltyM. He pointed out that the profits in merchandise a long way exceeded the profits \>n commission. They could not do' batter to bind their shareholders than by eater{»g for their domestic as well as their agricultural needs. His company had tried from the beginning to render it unnecessary for the farmer to go elsewhere for' supplies for their home or farm or finnncial needs.

SUPPORT YOUR DIRECTORS. He strongly recommended them to support their board of directors. The province was not a struggling one, but was prosperous, and the money wailiere. They should subscribe the money so as to enable their directors to give them a set of premises worthy of the company and where a comprehensive stock could be kept.. As showing what could be done if the wherewithal were supplied, he pointed out that his company's ferti-, liser business had grown so that they; decided to put up their own works, an J in 1909, the first year, their output wfo 2460 tons, which had increased year by year to 8849 tons in 1915 falling in 1916 4 A dry season, to 8327 tons. Their wooi department had handled 7962 bales in 1908-9, increasing to 12,008 in 1015-10. In 1906 their reserve fund stood at 849, but in 1908, when they amalgamate ed with tho Rangiora Co-operative So. biety, it was increased to £53,287, ana now stood at £145,000, an increase of £92,000 in eight years.

INTRODUCTION OF NEW CAPITAL. This brought forward the query, is it a help to the business His board of directors had been criticised by son business men, but the shareholders supported the board The result was that in 1808 their total liabilities were £210,737, and their assets (including uncalled capital) were £|M3..ffs9, the percentage of liabilities to assets being 47.46 Ten years later their liabilities were £094S2l, and their assets £1,001,845, the percentage being 43.37. Men usually only went into anything for pure love and affection once in their lives, and if they put anything into a company it was ■with the idea, of getting something out* They would obtain their full quota if I they save their controlling body the

sanwj l)acking as had been done in Canterbury. During past eleven years his company had paid out in dividends, bfctruses, and rebates £337,D08. and during the same period had introduced now capital amounting to £47(5,000, of which £339,808 had been paid up. So that they had given shareholders back nearly all they had paid up and had, in addition, added £103,1((0 to the reserve fund. In other words, they had appreciated the share capital by fls in the £, However, liia mission was not to blow up the affairs of his company, which took 29 years before its commission earnings amounted to £22,000, the amount earned by the Taranaki company at the end of its third year. *Mr. Taylor: Where's our reserve fund? Mr. Ralph said that it was not until the seventh year that his company established a| reserve fund, setting aside £I2OO. Th'ey commenced with an authorised capital of £200,000 and at the first year had issued £17,750, of which £14,000 had not been called. They paid seven per cent, dividend in the second year, but it was not until the sixth year that they paid any bonus, when they paid 9i per cent, dividend, 2£ bonus and 2% rebate on commission. PROSPECTS FOR TARANAKI SOCIETY. He was posjtivc that the progress of the Taranaki Society would be very rapid i-"d substantial, and in order to cope with it capital was required. Groups of men\w° u M come before the directors and ask that business should be started in their 4 looality. The board would acquiesce and a f&w of them would subscribe capital, but nothing in proportion to what was required to give effect to their wishes. £IOO,OOO should be nothing for the meeting to subscribe in a few minutes. He would like to eco them obtain good premises, something to be proud of, and give the staff an incentive to do its best. For how could a staff do its best in keen competition if in unsuitable premises. It was like asking a healthy man to live in a dungeon. , , ; i,

(ADVANTAGES OF FEDERATION, There -were the days of federation. Wo saw evidences of tho wonderful effect of unionism. All 'had lived in a time when unionism not what it now is, and no ono would bo bold enough to say that unionism in principle wi wrong. One might as well say that democracy was wrong in principle. Unionism was democratic. This society was an example of unionism. No one would say that co-operation was wrong, and if it "were applied to our commercial life, why not also apply it to overy other side if used as it should be? If it' were admitted that co-operation was sound, and the figures shown should put aside any adverse rote, why stop at that? Why not) develop further? That wSs the meaning of federation. They had done well in Canterbury, and the Tannaki Society 'had done well also, but they must do wore yet as what had been done was not sufficient, for while they were developing ( other private interests were developing also, and there were evidences of trusts working; to their disability. In order better to cope with these disadvantages the federation scheme had been conceived and duly registered. In the course of a fow weeks the statutory meeting would, be held, and an official would be appointed to take up the work in earnest.

' WHAT WAS PROPOSED. He then outlined tlie objects of federation. 00-operative factories, etc., were at present playing a lone hand. Though they had. done good work they would never succeed in carrying out the ideals indicated until all co-operative concerns were joined together, not to make one large concern, nor to destroy the)y Individual identity, but to link up t.he various companies in a way the Trades' Unions.had done. Unity was strength, As their business grew they would find it necessary to establish an office in London to and from which all our exports and imports would filter. The speaker's company had an offiqe 'n London. The principle of the federation was to put the smaller concerns on an equality with the larger ones in the way of purchases. At present the company buying 10,000 tons could buy cheaper than the one requiring MO tons. The federation would not take advantage of the smaller purchasers, but all orders would be pooled and distributed at the one prict. „ . , , ; i . ■ v ■ POSSIBILITIES OF OUR EXPORTS.

The same applied to our exports, where the speaker saw more possibilities. This was essentially a producing country. Over 80 per cent, of the wealth came from the land. This would never be a manufacturing country 'but a producer of the best food and clothing that the old country required. We were experiencing the benefits of intense cultivation. Take the produce of our dafry factories, the idea or the federation was that we should obtain a more i direct •benefit and eliminate tie co-called service that we had to pay so much for. •

CONTINUITY OF SUPPLY REQUIRED.

When r.t Homo ho had visited various factories and was informed that they would tr.ko our produce when they could be guaranteed continuity of supply. At present) tTie various concerns could supply for a certain period, but if linked up could guarantee continuity. All consuming concerns were afraid to cut away from their present channels until assured of continuity of supply. It would not remain a close co-operation as far as New Zealand was concerned.

THE GROWTH OF CO-OPERATION. Ho had been in close correspondence with 61. co-operative concerns throughout the British Empire. During the past few years a large number of cooperative concerns had been established ir South Africa, and' as it was said that New Zealand wa,9 the country in which eo-operation was most highly developed letters had been forwarded to him for information. In Canada, also, farmers were taking up co-operation, Australia also was anxious to link up with New Zealand in having bases established in the commercial centres of tho world. Take butter. Tooley Street and butter had been associated from time immemorial, and tho people in the trado had the impression that the butter only came from that street. The soonc-r that idea was got rid of r.nd they had bases in tho commercial centres the better. CO-OPERATION AND TRUSTS.

The trusts had been working in the United States with vory prejudicial effects, and the Government had recently sent an accredited officer to New Zealand to enquire into co-operative concerns here. Ho had returned with a mass of data. Ho also obtained details regarding the fede?ation, with which he 'agreed, and, expressed surprise that it hflfl tint tiaan started before. B/UMi*.

was active in the matter and eager to develop co-operation. There they had', '4OO co-operative yentures with a total metnbership of 12,000,000. In (Jrcati Britain there were 4,f100,000 consumers connected with co-operative industrial concerns, and their trading accounts amounted to £120,000,000 aimuaJly. If one considered tho possibilities of the scheme, they became more wonderful, j The more one dwelt' upon it the more [ possibilities one saw,'and he felt that he [would like to live 500 years to see it carried out.

Mr. Ralph then briefly criticised various points brought up in the discussion, and strongly urged shareholders to take up more capital. Mr. Gane, in proposing a vote of thanks to the speaker for his excellent address, said, that co-operation was the true point to steer' for. Unity was strength if rightly applied. Mr. Buekeridge, in seconding, said that all were repaid for listening to the address. He emphasised the need for shareholders to supply capital. The Resolution was carried with acclamation.

In acknowledging, Mr. [Ralph said that he hoped to bo with them again next year, and would be disappointed if, after that vote of thanks, the capital did not i-how a substantial increase. Several applications for increased shares were handed in at the meeting.