FARMERS' CO-OPERATIVE ORGANISATION.

Taranaki Daily News, 17 June 1918, Page 7

FARMERS' CO-OPERATIVE ORGANISATION.

ANNUAL MEETING Tho fourth annual meeting of tho Taranafci Farmers' Co-operative Organisation Society was held at Hawera on Saturday. Mr. A, Hunter, chairman of directors presiding over an attendance of between 400 and 500 shareholders. • The chairman expressed his pleasure at such a-largo attendance which denoted a livo interest }u the affairs of tho society, and was a. good augury for the future. ; REPORT AND BALANCE-SHEET. The report was as follows: —During the year Mr. S. A. Chisholm joined the colors. We regret the loss on the field of battle of Mr. F. -T. Hine, >vho made the supreme sacrifice for King /ind country. Mr. M. J. Lynskoy, general manager retired, and Mr. Thomas Taylor was appointed general manager and ! secretary, and Mr. . .T. G. Nicliol was i appointed assistant manager and internal auditor j During -the year wo have issued 2856 shares • ■to 784 'new shareholders, our paid up capital showing an increase of £14,958 15s. The r.ttt profit for the year in all department l ', is £9032 15s Id, to which has been added the sum of £lO3 lis Id brought forward from last year, making a total to be dealt with of £9136 Cs 2d, After providing for depreciation on plant (£5Ol 10s 4d), depreciation on buildings (£265) and on office furniture (£lO9 6s), and writing off £750 of good will account, and writing off preliminary expenses (£753 8s), there remains a balance of £6757 Is lOd, which the directors propose, to allocate as follows:—To pay, for the first six months of the year, a discount of 7 per cent on commission earned (wool and land Excepted); to pay 1% per cent, discount on all shareholders' merchandise purchased (except agricultural implements, motor cars and accessories). The directors ,urther proposo to pay a 6 per cent, dividend on "B" and "C" issue of shares, and after making the necessary reservation for payment of income tax, tho balance will be carried forward. CHAIRMAN'S ADDRESS. . The .chairman gave a very interesting review of the Society's business for the past year. He gaid, inter alia: —There has been a steady growth In the financial strength of the Society, and also. In its operations. The number of shareholders has Increased to 3810, and their holdings to. 9744 shares, a gain of 784 and 2856 respectively, bringing our allotted capital up to £97,440, plus £2OIO subscribed but not allotted at tho closo of the year, while our paid up capital has grown to £44,691, an improvement of nearly £15,000. Regarding the operations, I will first read the statement prepared by our management, as follows : "In comparing our accounts it will be noticed that our turnover from all sources lias risen from £659,335 10s 9d to £824,765 17s 3d. an increase of £165,430 6s - 6d, while our sundry debtors have risen to £101,718 13s. lOd, an increase on the previous year of £34,622 0s sd. Taking our sundry debtors on* the basis of our total turnover, It will be seen that this amount practically amounts to about six weeks' trading. Our Sundry creditors at £17,517 10s 3d are less this year by £2494 7s 2d. Taking our net profits as per balance-sheet, £6757 Is lOd, they would pay a dividend on paid-up capital of 15 per oant. On our annual turnover of £824,765 17s 3d, our paid •up capital as at March 31, 1918, £44,691 15s, is turned over nineteen times in the year." Our paid-up capital at . the beginning of the year, however, was only £29,733, so that it would perhaps be more correct to take the mean aitfount, £37,212, which would have to roll round twenty-two times. ' Stocks of merchandise, etc., at present tie up a total of nearly £20,000, and to this will have to be added sufficient to stock the stores which will be opened. Deposits, have gradually risen to almost £36,000. This is a large amount, but directors are satisfied, after careful consideration and expert advice, that there is no grave danger as yet. The deposits are mostly in moderate sums, and are well spread, while they are for fixed periods and made by shareholders. Among our assets there are still three objectionable items—stationery £l5O, office furniture £248, and last, but not least, goodwill £7750. Owing to the heavy increase in taxation, from £1283 to £2935 Os Cd, which includes £636 0s 6d under-estimated for 191617, we have only' been able to reduce tho goodwill account by £750, though we have wiped out the balance of preliminary expenses amount" ing to £753 Bs. Altogether the amounts written off, including depreciation, total £ 2379 4s 4d. The war taxation has been a big hurdle fc-r all co-operative societies, and has received serious consideration from them and the Federation. Representutions have been made to the Minister of Finance and the Commissioner of Taxes, but little satisfaction has been obtained. The Minister admitted that the system was quite unfair to co-operative societies, but said the money hgd to be obtained, and no concessions could be made Co-operative societies' shares aro mostly held in small parcels—our average holding is 3.46 per shareholder —so that the graduated taxation, amounting' to 7.s 6d in tho £, Is a heavy impost on the small shareholders. A society which is truly co-operative in tho 1 strict sense of the term should .not pay Income tax—that should be paid by the Individual shareholder —and this principle has already been admitted in framing tho law as regards co-operative dairy companies, which arc perhaps the nearest approach to true co-operation. These are times of stress, however, and money must be raised to carry on the war, and no one will raise an objection, under the circumstances, to a tax being levied. The object of co-operative companies is to obtain efficient service at the lowest cost, not to make profits and pay large dividends; and to reach that goal they try to work on a safe margin, and at the end of the year apportion the profits or savings in rebates on purchases and commissions, thus reducing the cost. It is obvious, therefore, that whatever taxation is imposed should be at a flat rate'and not on a graduated scale. It became evident that we could not continue to carry on for long on the lines orig-

inally adopted, so we decided to pay cash rebates and discounts. This took effect from the half-yearly balance, and the amounts handed back to shareholders were: Tor rebates on commissions, £IOG9 18s, and as discounts on purchases of merchandise, etc., £222 3s 3d. In the allocation of profits it has been decided to make rebates on the first half-year's working, amounting to £BSO, besides recommending the payment of a dividend of C per cent., absorbing £2250, the balance, after providing for land and income taxes, to be carried forward. The total rebated amounts to £2132 Is 3d, which, added to the dividend, aggregates £4CB2 Is 3d, equal to 11.77 per cent, on our mean paid-up capital. Among the expenses there is not much that is not accounted for by the growth of business and the exigencies of war time. Bad and doubtful debts show an increase of £494, though,we hope to recover part of the amount. Salaries have risen, and

may be expected to rise ftfrther. Travelling I expenses, the banc of an auctioneering business t in these days, arc also heavy. Stock commissions are again phenomenal, and we should not i lose sight of the probability of lower Teturns < later on, for values may recede. Interest shows i a substantial credit instead of a debit. We have constructed up-to-date yards at Waver- > ley; while sales have also been held in private yards, kindly lent, at Makahu and other hill-country centres. A new concrete store lies been built at Kaponga, and premises have also been secured at Stratford and Waverley. A spirit of loyalty Is needed. If all our shareholders would look at it in that light we could not but succeed, even in the face of vory indifferent management. After all, the directors do not sign a guarantee to the bank just for fun. or for any honor and glory that mav lie supposed to be attached to it. The demands of shareholders for motor repair faculties, and the increasing amount of work on the society's stock cars, induced us to take over the garage and business of Messrs Norton and Caplen. The terms were very suitable. The Co-onera-tivc Federation has become an accomplished fact, the statutory meeting being held last June. In our internal mr.naßement we have again had a change. Mr. Lynskey resigned, and after due consideration the directors appointed Mr. T. Taylor, who took up his duties a month before the end of the financial year. During the interval the main burden fell on Mr. Nlchol, and he carried out his duties with credit to himself and benefit to the society. lie will bo shortly answering the country's call and leaving for camn. He is the only Inside man who has been with us since the inceptiou of the society. His loss will he a serious one, and his place not easily filled I take this opportunity of wishing him God-speed and a ( safe return, and in this would also include the other members of the staff who are joining the colors We will all have to make further sacrifices, I believe, before this job is finished, and we must see it through The chairman concluded bv expressing his appreciation of the work of the auditors, nnd also regretting that Mr. .Tames Barkla had decided not to se?k re-election T le naid a high tribute to the work done by Mr Barkla in the formation of the society, and also since, when he always stood firmly for cle«n business on sound lines Mr. Hunter then formally moved the adoption of the report, and that the 6 per cent, dividend as recommended be paid. Mr D L Astburv seconded. Mr Owen asked wl*»t wrticulnr branches of til* business were not showing a profit The raanpe*r stated that every branch hrui shown n profit, though in some cases the profit npne-Ted snipil after deducing interest on enn!tnl supplied for the use of the depigment. The 'motor 'fonartment showed n profit of £8: bencl office merchandise shewed a profit of £ll I; •Klthcm <i3sß The smallest profit was at Mana!a The stock department had wade a profit o' £4OOO , J , t . „ jTr Davidson (Kaimata) asked whether it was not possible to improve the channels through which they brought their produce to show a i greater profit The manager slaved that, in future this would be possible through the Farmers' Co-operative Wholesale v?d-^* ir n. which had been formed Manaia shareholders complained that the Manain store was kept short of stock. The manager stated that he had received no complaints on that score from the asent there. Mr Astburv considered that this disclosed a wealiess* The branch should have notified the U did juA cam to hand.

! The chairman stated that the directors recognised the difficulty in connection with the produce department, and had under consideration now tiie appointment of a suitable manager. Mr. 1). Todd (Inglewood) stated that there was very little in the Inglewood' store, and what was there was very dear. Mr. (Jane stated that there was difficulty at times in obtaining stores at the head store in Hawera. Mr. liuckerldgc said that he was pleased to see that they were anxious to place the blame in tiie right place, but ho thought that they should blame themselves In not providing sufficient capital to purchase the stock. At present they had to turn over their capita! once every two wocks, and he did not know where they would find any other concern that was doing what they were. If sufficient capital wcro provided to enable them to beat their competitors in buying they would be able to beat them in selling. If every shareholder were prepared to take up capital sufficient to carry the load of his own business with the society, the business would be easily run. At present the average holding of each shareholder was £3O, which was nut nearly sufficient. When they provided sufiicicnt, capital if the business was not run right, they would have the right to growl, but until then they should growl at themselves. Mr. Owen considered that the company should take steps to obtain a supply of benzine for its shareholders. It was said there was plenty in New Zealand, but it did not reach their shareholders. The chairman stated that the federation had endeavored to obtain a shipment of benzine from America, but were blocked by the shipping difficulty. As far as ho could find, there was plenty of benzine in Wellington and Auckland, but it was all in the hands of one trust, and was onlv being sold iu one-case lots. Mr. .1. K Corrigan asked how their opponents obtained benzine.

The manager stated that during the next two or three months stocks of benzine would be available for shareholders. Mr. James (Ngaere) admitted that additional capital was required, but he considered the only way to obtain increased capital was to give increased confidence in the directorate and staff. If the huge concern was run efficiently on good, sound business lines, so as to create full confidence in the directorate, they would get plenty of capital. Mr. Buckeridge said the fact that the number of shares had increased by 2856 during the year nliowed that theTe was confidence in the con-

Mr. James said that he knew that there was already confidence in the society of which the directors should be proud, but more confidence was renulred.

Mr. Astbury said that what was wanted was capital, and the company's agents should continually canvass for new shares. He thought the meeting would be well advised if they put the £6ooo' back into the business instead of navlng it out in dividends to shareholders. Ho favored the money being given to shareholders in the shape of new shares. It was stated that this could not be done, Mr. Astbury then moved that £6OOO of the balance be handed to the directors to use as they think fit. This was seconded,

Suppliers considered this would be unfair to the small shareholders, and also to those who had placed trust money in the concern. Mr. R. Bremer favored the money being allowed to accumulate at interest for three years. Mr. J. R. Corrigan considered that they should invest the money in war bonds, which would assist shareholders and also the country. They might then obtain some ease in taxation. Mr. \V. D. Powdrell did not see any difficulty in allotting tho balance to shareholders in the shape of new capital, as this was done in other companies. Mr. J. Cleaver strongly urged loyalty to tho organisation. The chairman said that out of the £6OOO balance £3500 was allocated for land and income tax. Mr. Owen thought that the matter might be left optional with shareholders. Mr. Buckeridge favored this latter suggestion. Ho pointed out that all the society intended to call up was £5 per share. He urged shareholders to Increase their holding, so as to carry on their own individual business. They would not get much stock if they went to any auctioneer and said that they wanted to stock a famr and had only £ls.

In reply to Mr. Voullalre, Mr. Buckeridge stated that a farmer should take up shaTes to the amount that he felt he could afford. There were many shareholders who did the maximum of business with the concern on a minimum of slmro capital. Later Mr. Buckeridge stated that the capital should bo turned over three times per year.

A shareholder considered that farmers were supporting the society very well, and the matter of taking up shares should be left to the individual farmer. He thought that the society was doing remarkably well in making a rebate of 15 per cent, commission, and paying out six per cent. Interest. A shareholder considered that the payment of interest was the best incentive to take up new shares. Mr. Halllwell (the society's solicitor) advised 1 'hat the society could not allocate the interest 'in new shares. He strongly favored the payment of interest, and urged all shareholders to increase their holding by 50 per cent. He himself would start the hall rolling by increasing his shares from 10 to 15. To further questions the chairman said that it was preferable to supply goods at low prices vnMmr than to make a big profit. He favored profits being divided pro rata among the purchasers. but it was advisable to keep the margin of nrofit as low as possible. Mr. J. Baker considered that tho regulation made by the directorate insisting that the name nf the vondor and purchaser of all cattle must be given at the sale had driven cattle f) other yards.

The chairman said that the steady Inermse in the returns showed that this was not so. The svstem was followed In other parts of New Zealand. They were endeavoring to get this incorporated In the Auctioneers Act, ns it tended to fair dealing, and no reputable dealer would oblect Various speakers, including Messrs. W. D PowdreH and R. Dunn (president of the farmers' Union) spoke strongly In Its favor, affirming that it tended to straight dealing. Mr. Dunn stated that the Farmers' Union had endeavored to have this made compulsory, and he hoped when thoy again tried to have the Act amended they would hare the support of all co-operative societies. Mr. Owen nsked why the society did not call up more of its uncalled capita!! The chairman stated that thq society financed on the uncalled capital. Each director had to sign the joint and several Guarantee, but was reloased by the bank when lie retired from the directorate. , ,

In Teplv to Mr. Corrigan, the chairman stated that the society had decided to pay marred men who went to the front half salary, but no provision was made for unmarried men. Positions were being provided for the men when they returned, It was not possible to give them the same position. Mr. Corrigan referred to the various businesses which had been started in the district by ex-employees of the society, and asked whether there was any reason for this. A shareholder remarked that If the shareholders were loyal to the society these businesses would not affect it. In reply to Mr. Astbury, the manager stated that an endeavor would be made to prevent the possibility of mistakes occurring at branches. A good deal of difficulty was due to shortage of staff. The discussion was continued after the luncheon adjournment. Mr. Corrigan considered that the business should be systematlsed to overcome the trouble. Mr. Todd referred to the continued increase in travelling expenses. It was explained that this was due to the increased business. The motion was then carried, ELECTION OP DIRECTORS. For the five vacancies caused by the retlrenAt of Messrs Jns. Barkla,. A. T. Wills. A. Ltffeom. Wm. Skedgewcll and .T. Swlndlehurst there were nine nominations. The majority of thu candidates briefly addressod the meeting. The election resulted: Messrs. F. SaTten 432, W T. P. Wells 377, H. C. Belton 357, W. Skedg-1 well 327, A G. Larcom 310 (elected) : A. T. I Wells 310, .T Swlndlehurst 302, T. Foreman 107 and H W. James 132. ' Votes of thanks were accorded the retiring' directors (Messrs. A. T. Wills and J. Swlndlehurst) for their past services. Messrs. Rowley and Gill were re-elected auditors at a fee of £250. GENERAL, The chairman's honorarium was increased . from £IOO to £125, and it was resolved to pay directors £1 per day, plus travelling expenses, Mr Gibson (Plverlea) moved that the dlrec- » tors be recommended to procure ft motor lorry. | Mr. Swlndlehurst seconded, , Mr. W. 11. Powdrell recommended caution in the matter, owing to the cost of upkeep. I The resolution was defeated. A vote of thank3'vvas accorded Mr. Barkla for his services on the directorate, the chair- , man and Mr. Buckerldge each paying a tribute j to his work Votes of thanks were also accorded the manager and staff. P During the counting of the votes a canvass for shares was made in the room, upwards of I 500 being readllv Uken un t FLECTION OF CHAIRMAN At a subsequent meeting of directors Mr. A. > Hunter was re-elected chairman, and Mr. C. D. I Dickie deputy chairman.