WHERE’S THE ECONOMY.

Taranaki Daily News, 29 December 1921, Page 7

WHERE’S THE ECONOMY.

DAIRY FACTORY LOSSES, DUE TO MISTAKEN POLICY, (By Frank Goldberg.) It is high time that, dairy farmers in Taranaki realised that the men who are going to win out in these times of difficulty are those who look ahead and plan their expenses judiciously. Because a farmer can buy groceries and general merchandise at the factory at cost price, it does not follow that he is saving money. He certainly gets the goods at lower prices than they can be obtained elsewhere, but as a shareholder and supplier to the factory he loses in reduced dividends, and pays out far more than he saves in buying at the stores. The practice of dealihg in merchandise that some factories have gone into rather extensively is proving a. heavy burden on the staffs and an undoubted drain on the finances of the factories concerned. Lack of experience in the handling of such goods and in the methods of costing has resulted in factories turning goods over at a big loss. For instance, in many cases no account is take of interest on loans for merchandise or of storage, cartage, wages, insurance, depreciation of values and all other overhead charges, with the result that the factory part of the business has to make up the deficiency to the detriment of its profits. Shareholders in dairy factories will do well to think of this phase of the matter,. for the losses shown on the latest balance sheets of various factories bear eloquent testimony to the fact that something is radically wrong. The “something” is, without question, this mistaken trading policy, a hoped for economy that is no economy at all.