WANTED HALF A MILLION.

Taranaki Daily News, 3 May 1921, Page 7

WANTED HALF A MILLION.

(By

A SAFE INVESTMENT,

"Cambist,”

Financial Critic.)

If one has money to invest, two considerations usually determine the equation. The first is, security for the money; the other the rate of interest return. In the case now to be considered, we have an offer from the N.Z. Farmers’ Co-operative Association of Canterbury, Ltd., to accept £500,000 in sums of £25, £5O, and £lOO, until the whole emmission of their bonds is absorbed. Now the point about this matter that has to be carefully considered, is the use the association intends to make of the money. The answer to this question is a simple and reasonable one, namely, to advance the funds to producing farmers within the large sphere of the company’s operations. The districts covered are the pick of the South Island, for they comprise the best farmed lands in the Dominion, and what is most important, these lands also give the highest values in the products gathered both in quantity and value. In other words, the land is of the best quality, and the products therefrom set the standard for the whole Dominion.

Not one penny has ever been lost in this country, when the security has been properly valued land, that is, on a basis of sound land valuation, and the proper use of the pledged land. Most farmers require to be in debt in order to finance their properties into freedom. All of the prosperous farmers in this Dominion have experienced this fact, and they have surmounted their trials by becoming independent. This process has to be repeated time after time, as the older settlers pass into retirement, and the younger ones take their places. This branch of farmers’ business is well understood by most of the firms which handle it.

With close upon forty years’ successful dealings with farmers, the N.Z. Farmers’ Co-operative Association of Canterbury, Ltd., can be relied upon to carry forward this work, in the best manner, and with benefit (directly and indirectly) to all concerned-. The bondholder. who lends the money, and who will receive the- full market value for his money, will be brought into co-opera-tive association with the user of the money, will be refreshed by the handsome return from his investment, for he will see principal and interest accruing from the labors of the farmers accomodated by the association.

STABILITY AND SECURITY - . Having proved by the above intensive sketclr, the stability of the security which true farmers have to offer, it is time now to look into the security of the great co-operative association which is offering its bonds for acceptance by careful, thrifty investors. It is to that class of our worthy citizens the ’appeal goes forth, for there is nothing of a gamble in the proposition. It is eminently safe, and good business for reasonable persons who desire a sound investment for their funds. The men directing the N.Z. Farmers 1 Co-operative Association of Canterbury, Ltd., afe a team of careful, experienced directors, closely associated with every phase of the great co-operative business. They know that there is good use for the half-million pounds they are asking for. They did not ask for it before they could assure investors how safely the money can be lent to them. Here is the position of th'e company’s capital account —the authorised capital is £1,500,000, of which £1,302,295 is subscribed for. Of the latter sum, £877,612 is fully paid, and there is uncalled capital to the extent of £424,783 still due in respect of the shares which are not already fully paid for. It is very important to notice that the directors are practically only asking for a loan of £500,000 against the undoubtedly sound liability of the uncalled capital of the Association. In this movement the directors are reaching out to relieve the members of the association from immediately paying up their shares, and the board expects to be able to repay the bonds now on issue, within five or ten years, with ease. The whole of the. paidup capital of the association is wellsafeguarded by a reserve fund of £209.423 or, say, twenty-five per cent, of the paid-up capital, and as already stated, the uncalled capital is undoubtedly sound. Adding the paid-up capital, uncalled capital and reserve fund together, a total of £1,511,718 is made; on whish splendid security less than one-third ( £500.000) in bonds is offered. PRODUCING WEALTH.

The rate of interest is 7% per cent., payable half-yearly, so that an income is provided, at the end of each six months, that can be collected with the least possible trquble. The coupons can be collected through any bank, and that duty can be attended to by any banker who may be entrusted to safe keep the bonds themselves.. The bonds are to be free of .income tax. They are better than war bonds, for their currency is shorter, and the money will be used in producing wealth; —not in the . destruction of wealth.

The freehold and leasehold properties of the Association have been recently valued at £392,488. These appeared in the last balance-sheet as at only £268,844. Here, then is a secret' reserve of values amounting to £123,644. Some companies so well situated would have written up the reserve fund if they were so fortunate, but nothing of the kind has been attempted in this instance. The fact is, that the Association writes down, and depreciates its assets every balancing period. That sound practice assures a solid balance-sheet, and builds up a high credit for the Association. The turnover for the year 1919-20 was £5,501,349. This shows what a splendid body of co-operators make up the shareholding in the Association. But there is another side to this that appears to have been omitted from the prospectus. The Association has at present and always enjoyed the best of credit. In proof of that statement it is only necessary to point out that it holds deposits amounting to £689,000, most of which are for two or more years’ currency. These moneys are what make up, with other funds, the splendid farmers’ banking department of the Association. The use of the funds mentioned is mostly in secured advances to solvent farmers; these advances total three times in worth of each security making up the total of the advances, so that there need be no fear of this line in the business. The last mentioned sum is a potent power working for the good of the country, for it is the mainspring of the clock that ticks out the profits of successful farming. The bonds are, in fact, a sort of bank note, but they bear interest at the rate of 7i per cent. Being bearer bonds, they can be passed from hand to hand, just as a bank note is. Such a feature mubt prove of great convenience if a holder desired to realise on his Bonds i before due date of payment. This point tja certainly a valuable feature. But the

great point, is are they safe? The answer to the question is, candidly, Yes! —“Cambist.” (Note.—The company is only asking for £250,000, but “Cambist” feels positive that it should secure the half-million because there will be a boom in farmers’ production and the money will be needed to bring this about.) Write for prospectus to the directors, N.Z. Farmers’ Co-operative Association, of Canterbury. Ltd., Christchurch. (Published by special arrangement.)