The Temuka Leader TUESDAY, MARCH 31, 1885. THE TEMUKA LINSEED COMPANY.

Temuka Leader, Issue 1321, 31 March 1885, Page 2

The Temuka Leader TUESDAY, MARCH 31, 1885. THE TEMUKA LINSEED COMPANY.

The report of the Temuka Linseed Oil, Cake, and Fibre Manufacturing Company, Limited, is not very pleasant reading for the shareholders. There were many things calculated to render the meeting anything but encouraging. There arc altogether 72 shareholders in the Company, yet it was necessary to go out into the highways and byways to get 12 of them together to form a quorum. This was not very encouraging to the Directors, and it conveys the impression that the shareholders do not care what mnv hjppen to the Company. Very probably the balance-sheet, which each shareholder received through the post, had something to do with this apparent disregard for the Company’s well being. It was undoubtedly very dispiriting. There seems to have been nothingbutlosses from beginning to end* The native flax diessed by the Company did not realise more than half what it cost to prepare, and though the flax sent home to the English market was sold at £4O per ton only £23 per ton reached the Company, the balance being swallowed up in expenses. The Directors have, we are convinced, done their best. They were all men who had no experience ot the flax industry, they had no opportunity of knowing how it would work until they tested if, and consequently if they made the mistake of allowing themselves to be misled by representations made to them, they do not deserve blame. In all probability those who may blame them now would have acted as they did if they had been placed in their position. Where the directors erred was in not getting in the first instance a spinning plant. When the Company was at first started nothing was said about preparing flax for export. That was not the intention of the shareholders, and it never entered into the calculations of the promoters of the industry. The Company was started on the undrrstanding that the flax grown in the district would be manufactured into twine, and all calculations were based upon this being done. It was shown then that if this were’done the profits woo'd be considerable, and a'though wo have little dnnbt but that the representations then male were exlr:>v«!>r.nl, we are still of opinion that spinning will pny handsomely. If (lr j direct is had carried out their first intention of getting a spinning plant we feel confident their balance sheet would have been quite different now ; but they di't not ; they took another course and the result is not at all satisfactory. However, as wo have said, any other men placed in their position would probably have done the same thing. They j had not sufficient capital at their command, their knowledge of the industry j was gained from extravagant representa 1

tions made from interested motives, they were working in the dark, everything was new to them, and error under such circumstances carries its own excuse with it. They have, however, nobly atoned now for any fault they may have committed by offering to give their personal guarantee to the bank for an overdraft sufficient to enable them to purchase a spinning plant and put it in working order. In the face of the unsatisfactory result of last year’s work, the natural discouragement they must have felt at seeing so few shareholders present at the annual meeting, and the fact that the Christchurch Flax Company had been wound up, it must be admitted that this action is a noble effort to establish the industry, and that the shareholders owe them a debt of gratitude for the magnanimous manner in which they have gone to work. Mr Hay hurst’s action in purchasing the spinning plant has, in a measure, forced them to take this course, but wo feel confident it is the best thing that could have happened, for if spinning proves successful—as it will without doubt—the industry will in due course expand to dimensions which its present aspect gives very slight hopes of. There is no reason why spinning should not pay. At the time' of floating the Company, it was asserted that after allowing £3 per ton to the farmer for the straw, without the seed, the profits would amount to over 50 per cent.—in fact, one man made i( appear cent, per cent. Supposing this estimate to have been tour times too high there would still be sufficient margin left for good profit. The flax can be grown here as cheaply and of as good a quality as anywhere, the machinery for its preparation will be as good as elsewhere ; we have a large local market for the twine, and under these circumstances it can hardly be possible that it will prove a failure if properly managed. We make these remarks to show that its unpromising aspect is not the fault of the industry, but of the way it has hitherto been worked, and to try to make shareholders take an interest in it again. It would, we are afraid, be useless to try to increase the capital now ; the cloud which hangs over it is too dark at present, although it appears to us well lined with silver. At the same time this is exactly what is wanted. The company will have to borrow money to carry on the industry, and if they make a profit it will be swallowed up in interest. This cannot bo avoided just yet, but next year, when it will be shown that it is a paying concern, we trust that an effort will be made to increase the capital to such an extent that the profits can be given in dividends to the shareholders instead of paying it away in interest. There is one thing the Directors ought to do at once. They ought to ascertain what they can afford to pay for. the straw to the farmers and guarantee that they will buy it at that price. Unless this is done time to sow the seed next spring wo are afraid that very little flax will be grown next year, and unless the flax is grown the machinery will bo useless and the whole thing must fall through.