NEWTON KING, LTD.

Taranaki Daily News, 1 August 1922, Page 6

NEWTON KING, LTD.

SECOND ANNUAL MEETING. PAST Yelr REVIEWED. PRODUCE MARKET FEATURESThe second annual meeting of shareholders of Newton King, Ltd., was held in the Soldiers’ Clubroom, New Plymouth, yesterday. Mr. Newton King (chairman of directors) presided. On the suggestion of the chairman, the report and balance-sheet, which had been circulated, were taken as.read. Reviewing the work of the year just concluded, and the present position of the company, Mr. King said: “You have before you the second annual balance-sheet of the company, and I propose to discuss this, and to show you that although we have been unable to pay a dividend, the financial position of the company is undoubted, and that when once we have got over the present depression we may reasonably expect that the profit and loss account in future will be more pleasant reading than it is on this occasion. When I last addressed you, the slump in our primary products had been in existence only a few months, and it was then quite impossible to forecast what the future would be. Now that another twelve months have passed we are able to gauge more nearly the values of stock, and also farm lands. “You are, no doubt, aware that our business is so intimately connected with the farmers that when they are prosperous we also are in a like position, and it naturally follows that when they are suffering, as they are at present, we are in a similar position- This being so it will be necessary for me to refer briefly to the prices of our products during the past year, in order that you may more easily grasp the situation. BUTTER AND CHEESE.

“Cheese, when the season commenced, gave every prospect of being highly remunerative to the farmer, but, of course, not in comparison with the prices obtained during the last few years of the war. Some few factories did actually sell their output at ll|d per lb. f.o.b. They were lucky, indeed, as it was soon apparent that the English markets would not sflstajn - such offer*.and practically the whole of our output was sent to London on consignment. The prices fell many points in the early months, but I am pleased to say, have recovered very considerably, and although it is impossible to say what prices will be paid out by the factories owing to such a large quantity still being in stock or on the water, it may be a fair estimate to venture an opinion that the average price .will be about Is 3d to Is 4d per lb. of fat. “Butter promised well at the commencement of the season, but many factories that paid out as .much as Is 9d per lb. of fat in Augu«f found themselves in a very serious position when it became known in Dpcerqber that there were heavy reclamations-, so heavy indeed, that in December and January some factories only paid out 7d and Sd per lb. The London market fairly collapsed. owing to the fact being known that the Imperial Government had very heavy stocks of New Zealand and Australian and were going to slaughter it at any price. London buyers, however, absorbed the lot. and at reduced prices consumption increased enormously and the market advanced almost immediateIv. It has varied considerably during the last six months. For instance, in December ]i- t it was making 120 s to 130? in London, in Janiiarv 1435. in June last 227 s and to-day is 2045.

“Many factories have sold their autumn and winter make at prices varying from 1? 2d to Is 9Jd per lb. f.0.b.. but it is impossible to give an opinion as to what the average pay-out for the season will be. as it depends on the quantities sold, the prices obtained for ii, and the quantities consigned. There is pne thing we do know, and that is that we have had a most wonderful season for production, and this has helped farmers considerably. THE MEAT MARKET.

“I am sorry to say beef has gone from bad to worse, and the freezing companies some time ago absolutely refused to buy. Some •farmers who consigned fat bullocks and cows were actually in debt wh?n account gales were received. As Taranaki has a large area suitable for cattle only, or suitable for sheep, with cattle to keep the farms in condition, the loss of the beef market has been a hard hit. especially to the more distant iarms in the interior. “The prices for mutton have been steady for many months, but in the early months of the season were very unremunerative. The opening prices given by the local freezing works in December were, wethers to 56’s 24d- At the end of January they advanced io 3id. and in February to 4%d. Lamb opened at 4Zd in December. At the end of January it was sy»d. and,in February 7d. Very many of our clients, having their mutton and lamb fat. were obliged to sell in the earlier months, and in consequence did not obtain the benefit of the advance. “For a long time there was little prospect of prices for wool advancing, and farmers who had held for two years got tired and quitted at nominal rates. However. T am pleased to state that late sales have improved very much, and there is a very hopeful feeling for the future. REGAINING CONFIDENCE.

“From the foregoing you will realise what a serious time your directors have had during the past twelve months, and it is no exaggeration to say that early in the year pan n icky conditions prevailed throughout Taranaki. However, with better prices for our dairy produce and the very healthy tone of the London markets for same, coupled with the improvement in mutton, lamb and wool, farmers are regaining confidence, and we may. we think, reasonably look forward to a steady improvement. “There is one point I should refer to, and that is the serious results of the late land boom. There are. unfortunately, manv farmers who bought land during the first few years who. unless , the late owners, now third and fourth mortgagees, are prepared to make very 'heavy writings off cannot possibly carry

on. I am pleased to say that in many cases the mortgagees are meeting the purchasers in a commendable spirit, and in these cases the majority of holders should make good. You will realise that this company, whose main business is with the farmers, could not pass through scathless. and we, in common with simiJai' institutions, have had to shoulder our of the losses caused by the general deflation of farm lands and live stock/’

Mr. King then referred to the items appearing on the balance-sheet in detail, and stated that the reduction in book debts amounted to no less than £99,32" Is 7d, and the reduction in all liabilities amounted to £88,498 2s 9d, which, under the circumstances, must be a subject for congratulation. Mr. King stated there had been a. big reduction in general expenses, salaries and wages, but he regretted that this latter result had been achieved at the cost of a drastic reduction in the staff, and in consequence the firm had lost the services of very many and valued officers, who had been with him for many years. It was with great reluctance that the directors had been compelled to lose their services, but the position was forced upon them by circumstances over which they had no control. He added that Mr. G- M. Kebbell, who for many years was with him as chief accountant and was appointed secretary of the company, had. much to his regret, to resign owing to ill-health, and Mr Erie Shaw was appointed in his stead, and Mr. King felt certain that he would prove to be a very valued officer. BETTER TIMES AHEAD.

Mr. King added: “Before concluding these remarks I should like to point out that the prospects for the future show a marked improvement on six months ago, and your directors feel that witlh. improved prices for our produce, coupled with reduction in freight, and easier financial conditions, better times arc in front of us. although there is still a great amount of reconstruction of mortgages to be effected. Taxation has not yet been altered, but it is recognised by the Premier that it must bp reduced, and even now a report is in the Premier's hands from a committee of business experts, and we hope that a reduction in income tax will be ■one of the first things carried out.” Mr- King expressed his appreciation of the way his fellow directors and the staff had whole-'heartedly faced the extremely difficult position, and he moved the adoption of the report and balancesheet.

Mr S. W. Shaw, in seconding, said: •Mr. King in his address has been, I think, rather modest. He might have taken a good deal more credit for the balance sheet than he has done. The past year has bee-: one of exceptional difficulty for all large trading companies whose interests have been so largely identified with the farming community. The men on the land especially those solely engaged in grazing, have been and are passing through a most, trying ordeal, disastrous to themselves and also to those doing business with them. I feel -ure that the public generally do not'rea’ise hew serious are the problems which companies like ours have had to solve. Many of our clients, who a year ago were prosperous and whose positions showed very substantial equities, are to-day down and out, through, in most cases, no fault of their own.

THE DROP IN VALUES. “Mr. King has referred to the slump in the prices of meat and dairy produce. I will give you a few figures with regard to store stock. Store ewes, which in the early part of 1921 were selling at 25s io 30s, were in December last down Jo 10s. Wethers during the same period dropped fully £1 per head. Store bullocks have dropped £7 to £8 per head. Store cow.-; dropped £4 to £5, and steers in the same same proportion. Wool up to a few months ago was only saleable at prices which hardly paid for expenses of shearing and marketing, and those who were forced to sell received little or nothing with whicn to meet living expenses, let alone to pny interest, rates, etc., on their land. Think what these figures mean; interest 6n their mortgages, and other expenses going on ali the time, and no revenue coming in to meet it. The dairy-farmer, although hard hit, fortunately has not suffered to the same extent as those depeiMlent upon grazing. “Under these circumstances it was inevitable that all companies such as ours should make losses, and compared with many, we have come through the ordeal well. Fortunately, our accounts are well spread, the amount of our book debts being represented by many thousand accounts, of which a large number are se ! cured. During the very trying period I have referred to, while exercising the greatest care in giving credit, we have endeavored to render every assistance to the men on the land. Had we refused to supply them except for spot cash it would only have intensified the panic and added io the difficulties of very many who, while! quite sound financially, were quite unable to find the ready cash This policy has, we feel sure, been fully appreciated by our farmer clients, and our trading account, which has been very satisfactory indeed, bears this out. The company has benefited considerably from the amount of capitap retained in the business by Mr. King, the rate of interest for which has resulted in a half of one-half per cent., as against the bank rate. While wc all regret that it is not possible to pay a dividend, the loss of which hurts some of us pretty badly, we, compared with our farmer clients, have suffered very lightly in a time of depression and stress which is unprecedented in the history of New Zealand. LESSONS OF THE SLUMP. “I believe that this period of slump and depression, unpleasant though it is, will ultimately be productive of much good. It will tend to eliminate the speculative element from the farming industry, and will help to make better farmers. Men are realising that land is worth no more than it will produce, and that tjiey must adopt improved methods and produce more than in the past. This policy, if carried into effect, combined with the practice of industry and thrift, will do much to restore the prosperity which we all so much de-

“In conclusion, I would like to supplement what Mr. King has said with regard to the staff. The saving which we have been able to effect in our office expenses has been due to improved organisation and the introduction of labor-saving appliances in the shape of bookkeeping machines. The latter, although costly, will repay their outlay. The savings these and other expenses, however, ha.e' only been made possible by the loyal and will- , ing co-operation of both our inside and

outside staff, who have done their utmost to meet the altered conditions under which We are doing business.” Mr. King then declared that the question of the adoption of the report and balance sheet was open 'for discussion, and subsequently it was unanimously adopted. ELECTION OF DIRECTORS. The chairman stated that under the articles of association of the company all the directors, with the exception of the chairman of directors, retired this year. He said that all these gentlemen were eligible, and offered themselves for re-election, and as there had been no further nominations be duly declared the retiring directors reelected for the coming year. Mr. Hugh Baily was appointed auditor to the company for the ensuing year. \ The meeting then terminated with a hearty vote of thanks to the directors and staff for their services during the past year.