HAW ERA DAIRY COY.

Taranaki Daily News, 31 July 1922, Page 7

HAW ERA DAIRY COY.

TWENTY-SEVENTH ANNUAL MEETING. PAST SEASON’S OPERATIONS. The twenty-seventh annual meeting of the Hawera Dairy Company was held at Hawera on Saturday, when Mr. .1. R. Corrigan presided over an attendance of about 120 suppliers. In moving the adoption of the annual report and baance sheet, the chainffan congratulated shareholders on the sound position of the company. He said: "The past season has been one that will long be remembered by producers in this Dominion, firstly by the rot that set in owing to the slump in prices of dairy produce and the consequently deflating of, land values creating a financial stringency throughout the country, and secondly by the violent fluctuations or prices of both butter and cheese, which had this effect: that factory directors and agents were at a loss to know which was the best proposition, butter or cheese-making. 1 cannot agree that these fluctuations in prices are altogether due to the law of supply and demand, but I hold that they are accentuated by trade-rigging of the markets by speculative firms. We cannot blame the speculators, for their methods are perfectly legitimate business. The fault lies in our own system of marketing, which, when analysed, is really no system at all. Until the dairy producers of this Dominion wake up to this fact and adopt a proper co-operative marketing scheme, whether by compulsion or otherwise, so long will this exploitation of producers go on.

"The deflation of values of land and produce has had its effect on the community, consequently the stabilisation of values which has had to be adopted has been very hard on the weak financial producers of the country, and in some instances they have lost everything. However, the proportion that have found themselves unable to carry on is not so great when closely enquired into, it being estimated that out of the 220 suppliers to tills company not more than 15 have had to go off their farms. Any process of stabilisation or reconstruction must be gradual, and 1 consider that we will not begin to feel the beneficial effects of same until January, 1923. One of the essentials of a return to prosperity is the cheapening of the cost of production, and this matter has had the careful attention of your directors throughout the past year. You will note from the statistics on the balance sheet that the total charges up to f.o.b. ocean steamer were 4.92 d per lb buttef-fat in 1921, and 4.14 d in 1922. This reduction of over three-farthings per lb butter-fat in the charges is equivalent to over £6500 in money, and in all the circumstances must be considered highly satisfactory. In 1921, wages and allowances represented 51.2 per cent, of the total manufacturing charge, whilst for 1922 wages and allowances represent only 48.5 per cent, of the total manufacturing charge. Our employees during the year have accepted the reductions in wages in a very loyal spirit, and in fairness to them they cannot be expected at the present time to make any further sacrifice, the high cost of living being a very heavy burden on the workers, particularly those with depend-

“Another way of helping to bring down the cost of production would be for the Government (who boasts about our credit being so good) to inaugurate a cheap money scheme, and borrow, say, ten millions in Britain, and lend out to the producers of this country, who could give them good security for cheap money. This would have the effect of helping us round the corner to prosperity. If ever there was a time in the history of New Zealand that cheap money was necessary, it is now. Yet what do we see? Any producer who requires money to carry on his business, when he goes to tiny financial institution to secure it, they cannot open their mouths wide enough to ask a rate that is bound to be oppressive. The weak spot in all co-operative associations in this country is the fact that they are undercapitalised, and I maintain it is the duty of all co-operative directorates to endeavour to put their companies In a good financial position, and not to be so dependant on the banks for their finance. This weakness is apparent in our company, although not to the same extent that is revealed by the analysis of the Dalance sheets of othet companies. Your directors have decided to levy a farthing a pound butter-fat for the purpose of putting the finances of the company on a better footing. Fully-paid shares will be isued to suppliers bearing interest at 6 per cent, for the amounts collected by the means of this levy. The liability to the bank will thus be reduced accordingly. The prices for dairy produce and prospects for the coming season look good, and at the present outlook might be in the vicinity of from 1/3 to 1/6 per lb butter-fat. However, this can really only be a guess, but the shortage of supplies from other countries must have its effect, and maybe this is the silver lining to the cloud. In conclusion, 1 would like again to bring to the notice of suppliers the importance of combining to further our own interests as producers. This is the age of federations —in the shipping trade, the meat business, and, indeed, throughout all trades and businesses. If the producers do not combine they are at the niercy of shipping and other federations. It is organisation versus disorganisation. Dairy factory directors must take up the question oi a federation of factories, and suppliers must back them up in the matter. I am hopeful that gome step will be taken in South Taranaki immediately in this important matter. If an example is needed to show our want of a federation of factories, we have it close at hand. Our neighbor, the Normanby company, is engaged in a law case regarding shares and but-ter-fat ratio per share, which is likely to he a gold mine for the lawyers, but most unfortunate from the point of view of dairy companies. Now, tills case vitally concerns the whole dairy industry, and I claim tliat it should not be the Normanby company’s private responsibility, but the responsibility of a thoroughly-representative federation of factories, which could more adequately look after the interests of the industry In matters like this, than could the individual companies separately.” Mr. Wills seconded.

THE DISCUSSION. Replying to Mr. Death, the secretary explained that the overdraft at the time the balance sheet was made out was £4OOO, but £12,500 had been advanced against store warrants, which made the debit balance £16,000. Mr. Corrigan took exception to a remark by Mr. Death that the balance sheet had been "faked,” and stated that he would forfeit £l'lo to £5 if Mr. Death could get any accountant between Auckland and Wellington to find anything' faked about the balance sheet. He again explained the position regarding store warrants, and added: "You are here to show

that you’ are a better financier than 1 am.” Mr. Spratt brought up the <iuestiou of the £lOO appearing on the balance sheet as war bonds. He considered that these should be sold and the money divided among the shareholders, as by the time the war bonds matured the shareholders would all perhaps be strangers, and would obtain money they were not entitled to. The chairman explained tliat the war bonds had been purchased to cover a Government guarantee. The money had been taken out of the year’s working account, and when the bonds matured, as they would do shortly, the money would go back into the company. The chairman justified the employment of a man to whom some exception had been taken, showing that he had saved £2OOO for the company during the war period. The report and balance sheet, were adopted.

ELECTION OF DIRECTORS. For the three vacancies on the directorate there were four nominations, viz. : Messrs. J. R. Alexander, H. Barr, H. E. Johnson (the retiring directors) and W. Reynolds The election resulted: H. E. Johnson 'V Reynolds 381, H. Barr 367 (elected) ; J. R. AlexanMr."*V. B. Stratton was re-elected auditor. A vote of thanks and appreciation was to the secretary, Mr. G. A. Duncan, especial V paying a tribute to the expeditious way in which the balance sheet, had been got out The chairman stated that on /« Q got their stock sheets out, and Home for their balances. On July 3 the < -® sheet had been passed ; it was in the auditor s hands-on the 4th, and in the printer s hands on the Sth—a record piece ot work. The directors’ remuneration was fixed at £1 is per meeting, as last year. An amendment, that it be reduced to 15s, as an e to the men whose wages had been reduced, WJ TUere t was a little discussion over the ques-

Hon of the chairjuan’s iionorariuiy. A motion was tabled that it bo the same as last year (150 guineas), but Mr. Gawith moved an amendment that it be reduced by half. The amendment was lost and the motion carried. Mr. W. Reid (chairman of the works committee) was voted 50 guineas (the same as last year), exclusive of his director’s fees, as a bonus. GENERAL. Mr. Laurent touched on the way that buyers had been round the district during the past two or three months, buying the late season’s outputs and playing one factory against, the other. He thought a system could be arranged whereby factories could pool their outputs and auction them. The chairman stated that the committee appointed at Palmerston North to consider the marketing of produce had set up a sub-com-mittee. of which .he was a member. This sub-committee would meet at Wellington on Monday to endeavor to formulate a scheme that would be acceptable to both Islands. He recognised there was considerable fluctuation in prices, Instancing where the May make was sold by one factory at 1/2%, whereas Hawera had sold the same make four days later at. 1/5. Eyen the chairman of the National Dairy Association had sold his output at 1/2%. He recognised that this exploitation must stop. As soon as a scheme was brought down it would be placed before them for consideration, and he hoped something would result. In reply to a question, he said that he would not favor monthly sales in New Zealand. He understood that the question of fortnightly sales in London would be brought forward. He also announced that a conference of the meat and dairy produce people was being held, with a .view to obtaining some relief in freights.

Mr. Cameron asked whether, in view of the large increase of the supply on the Denbigh Road, the time was not ripe for the establishment of a branch there. The chairman said that if the settlers could show that they had the requisite number of cows and were prepared to make the necessary financial arrangements, the directors would give them fair consideration. He suggested the settlers should have a meeting amongst themselves. He considered that about 1000 cows would be necessary, otherwise the expense at the commencement and end of the season would be heavy. A supplier suggested that the company should pay out a little more for winter milk. He pointed out that the supplier had the option of sending the milk to proprietary concerns if the higher-priced winter milk were to be used to average the pay-out over the whole year. The chairman admitted there was some justification for the claim, which would be considered in paying out any further balances. A supplier asked why shareholders were charged from 2/3 to 1/11, from August to November, for their butter, when the factory had never made sales at such a price. The secretary, stated that he always endeavored to protect the storekeeper who bought through them. A supplier said that they should supply shareholders at a lesser rate than they received elsewhere. The chairman pointed out the difficulties. Suppliers were not always loyal, and when the factory sold its butter cheaper there were Instances where shareholders used to obtain butter for other people. A supplier asked if the winter supply paid for running the factories.' The chairman stated that it had always been understood that the factories should be closed as soon as the supply did not warrant it. This year, owing to the milk season, the supply had been such that they had to run all their branches throughout the winter. Several suppliers considered that in view of the opposition from outside the company should encourage winter supply by paying out extra in the winter. The chairman said that this would receive consideration. Mr. Droski asked that some - alteration should be effected at Tokaora, so as to obviate the delay in obtaining skim milk at the factory. The chairman promised that something would be done. For some time past- tlte question of having a standardised milk for the manufacture of cheese has been exercising the minds of directors of dairy factories, particularly of thoSO with high-testing milk. During the past year the Hawera Dairy Company has been experimenting in this connection. Mr. J. B. son, one of the directors, who has had considerable experience in cheese-making, has been keenly interesting himself in the experiments, and at the meeting he gave an instructive address ou the subject, a full report of which is held over till to-morrow’s issue.