DAIRYING INDUSTRY.

Waikato Argus, Volume V, Issue 368, 8 December 1898, Page 4

DAIRYING INDUSTRY.

MR R. R. HUNT AT TE A\YAMUTU. Mr R. R. Hunt addressed the milk suppliers at Te Awamutu, on Tuesday morning, the meeting having been postponed from the previous evening on account of the wretched weather, Mr John Fisher, Chairman of the Waikato Milk Suppliers’ Union, and 16 Te Awamutu. suppliers were present. Mr W. H. Mandeno, who was unanimously voted to the chair, briefly introduced the speaker, and called on Mr Fisher to make a few remarks. Mr Fisher said, as Chairman of the Waikato Milk Suppliers’ Union, he had been requested to accompany Mr Hunt round the district. On behalf of the Union, he thanked the Te Awamutu suppliers for the consistent vote passed at Mr Spragg’s meeting. II their example had been generally followed it would have assured matters for Mr Hunt, and the suppliers would have gained the better opinion of their fellowsettlers Mr Spragg’s unwillingness to recognise the Union in any shape or form had induced Mr Hunt to come forward with his proposals re co-operation, and it was most unfortunate that he had not been able to go round t(ie district at once. He (Mr Fisher) did not wish to influence their minds in any way ; but only asked them to put aside all bias, and give Mr Hunt’s proposals impartial consideration. In opening his address Mir Hunt referred to a remark made by Mr Teasdale re the suppliers being kept in the dark over the matter. This Mr Hunt explained in similar terms to these used at the last meeting ot Ohaupo. He said that after his proposals had been .approved of by the executive of the Union and the delegates, they considered it would be injudicious to make the fact known until they had communicated with the head of the Dairy Association in London, as it was not known at that time that Mr Spragg was a partner in the business. His offer was purely a business one, and under the circumstances he rather resented being called an interloper. Two or three days after he had made the offer of £9OOO for the business, Mr Spragg wrote, asking him to come and see him. He did so, and Mr Spragg said he would work amicably with him and settle matters on friendly lines. Mr Spragg had asked £11,500 for the property, and he (the speaker) asked him for a list of the properties and utensils. On this occasion Mr Spragg was freezingly polite and refused to give the list. If iMr Spragg had declined to sell in the first instance he would have gone back and explained his proposals to the suppliers ; hue he had been th rown off his guard,and considered that afterMrSpraeg had committed himsel f to writing there had been a distinct breach of faith. (Applause). Coming to the question of co-operation, Mr Hunt explained the allotment of shares, as already set forth in our columns. The first thing, he said, would be to form a company under the “ Limited Liability Act of New Zealand.” Each supplier should take shares according to the number of cows he milked, and general ability, to be paid by a sinking fund of Is for every 60 gallons. The question of how many shares would be taken up by each supplier would be left to the Board of Directors. The main points in the formation of the company, he said, were : Ist—As to capital; 2nd—sinking fund ;.3rd —as to guaranteed market for butter; 4th—a higher price for milk than hitherto ; sth—as to milking cows for themselves ; and lastly, the ultimate ownership of the Waikato creameries at the end of the term. He contended that the difficulties which .had existed ever since the industry was started in Waikato would never end until they had cooperation. It was for them to choose whether they would buy ou t the Dairy Association business or start new works for themselves. In taking over the Dairy Association business they w’ould have a trade marl: which had been worked up to the highest pitch during the last 14 years. In offering £9,000 for the business he had considered the fact that he could get new buildings erected *for £7,500, and hud set aside £1,500 for the transfer of the brand. He did not consider that goodwill entered into the matter at all. The average amount per head they would have to borrow’ for the 250 suppliers would be something like £4O, but the suppliers would not be asked to pay any money down. The union represented 5180 cows, but 400 at Nevvstead, Gordon, and 600 at Pukekura were not in the union. The sinking fund of Is for 60 gallons would be deducted from the month’s account, but il: need not be paid over to the capitalist at once, the directors might have the use of it for six months. At Ngaruawahia 450 tons of butter were produced in a year, thus the sinking fund w’ould amount to £2OOO per annum. As to a market, it would be easily obtained. There were already five or six buyers in New Zealand prepared to take as much butter as could be produced and pay cash for it. Cooperation, he said, was essentially a cash business all the world over, and in order to encourage' them to go into the business he was prepared to offer B*d per lb for five years, A bargain for three years would be better assured than five, but'five could be got if they had independence and showed firmness of front to the Dairy Association. If there was great disunion among them there would of course be a much harder bargain made than if they stood loyally together. It had been staled that 9d a lb had been paid in Taranaki ; but this was for sales in the beginning of the season and was not distributed over the whole season. He was prepared to offer them a fair division of anything realised over 96s’.per cwt. The prices foi last year ranged from 94s to 108 s. This, however, was purely a tentative offer and not a cast iron one. The whole question with the Dairy Association was a fair price for milk, and this they were not gecting. He was prepared to offer lid per gallon for 3’6 milk. Out of this the sinking fund would he deducted, leaving 2*Bo per gallon. The sinking fund would amount to £3160 a-year, so that in four and a-half years the money would be paid off, and even after the Is for every 60 gallons had been paid they would receive more for their milk limn they did afpresent from the Association, and 1 hey would he £2OOO better off at tha end of the year. If they made the butter for themselves, they would have, in addition to the butter fat they bought, 10 per cent, increase in salt and moisture, or in reality 10 per cent, more commercial butter than butter fat purchased. As to the making of butter and the cost of the work. The Company intended to return l|d per lb. on all butter manufactured to cover cost of boxes, shipping and interest ; but they had to take all the risk. If the suppliers v/ere prepared to do without any guarantee at all ard boldly say they would make the butter themselves, they would thus save the difference between 7id and BJd per lb ; but if they wanted a guarantee they would, of course, have to pay for it. Referring to local sales. Mr Hunt said that in the winter time the butter sold as high as Is 6d per lb. Did they get anything out of that ? (A supplier : No !) Besides, Taranaki butter was imported into the local market, and if they started a co operative concern they could refuse to take imported butter. He could assure them there was a tremendous margin to be picked up in Auckland on local sales of butter, fhe principal thing was to stick together and thus lessen the cost of production. Another source of revenue was on paid-up shares, as when tiie money was paid up the interest, instead of going to the capitalist, went to the suppliers. The total amount of profit from all sources he estimated at between £3OCO and £3OOO, and this they could

share between them if they had only the pluck to adopt co-operation. The Dairy Association hud paid Mr Reynolds £IO,OOO for the business. This they had cleared since taking it over, and 'if they now got £9OOO clear they wou'cl do very well. Their ultimate ownership of the factories would be a very blessed state of affairs. They would have the profits rolling into themselves and be free men, instead of as at present having a brass padlock round their neck. They could change the directorate every year and be practically masters of the situation. He would be on the Board, but would be in the minority. He would have no controlling influence, but simply exercise a business man's hold upon the business. The bugbear of the scheme was the security, but it was just the same as that asked in Tarauaki, a mortgage on land and buildings and chattells ; the latter would not even be regstered. As to the joint and several bond, it was ridiculous to suppose that they had to mortgage their cows and farms. The company would be a limited liability one, whereby the amount of liability was limited to the amount of shares each man took up, and the shares would bo assessed by their own Board. If the woret came to the worst and they failed to make the business pay and the capitalist demanded his money, the company would go into liquidation and cills would be made. But by that time the sinking fund would have assumed reasonable proportions?, the buildings and plant would pay off a good deal of the liability, and a call would be made on the shareholders to pay off the joint and several bond. The liability would be limited according to the number of shares they took up, and the capitalist could not swoop down on the richest man for the lot. The joint and several bond was intended to bind them together more than anything else, and thua ensure the success of the industry. There wore from 10 to 15 co-operative factories in Tarauaki, all flourishing splendidly, and many •f them had commenced under much poorer auspices than they would have. Continuing, Mr Hunt said there was so little risk that he was quite prepared to sign the bond himself 7 The suppliers had £60.000 invested in Waikato, while the Hairy Association had only £IO,OOO. Why, then, did they allow individuals to come in and reap the profits and screw them down to the last farthing, when they were masters of the situation ? Co-operation would do away with that constant grumble heard over the testing. He was bringing in no new scheme, and, as he did not propose to take over the factories until the beginning of next September, there was ample time for them to send a delegate to Taranaki to make the fullest inquiry aa to the risks, profits, ete. The Whatawhata, Pirongia, and Ohaupo suppliers had borrowed money from the Bank, on the guarantee of two or three of the best men, to start factories, and had to pay as much, he believed, as eight or nine per cent, to the BankofN.Z. Mr Hunt here read extracts from some half-dozen co-operative balance-sheets, all showing that the prices realised for butter far exceeded the advances made, and also that the amount of butter produced was 10 per cent, over the butter-fat purchased. He was, he said, quite prepared to accept a nominal sum for an office in Auckland, with a eommiesion on loail sales, or, if they preferred it, a fixed sum as fair remuneration. If they approved of cooperation, they could get their executive committee to go into the thing with him, and refer the whole matter buck to them. (Hear, hear, and applause.) The property bought by iht Dairy Association for £IO,OOO included e. factory in Tarauaki, a manager's cottage, and also a cheese factory at Tauranga—a going concern, and he felt quite sure if Mr Lovell could get his money back again and the right to sell butter tor five years that he would accept the offer to purchase, notwithstanding anything Mr Spragg might say to the contrary ; and then Mr Spragg might carry out his threat and spend £7ooo—or even£"/0,000 —in the district without injuring them if they were true to their own interests. Mr Spragg had stated his intention of dividing £"2000 amongst them. If it had not been for his (Mr Hunt's) action, combined with the Milk Suppliers' Union, they would never have heard of it. (Applause). He asked them to empower their delegates to proceed further and find out what the factories could be bought for, and, then if they accepted, the deed would have to come back to them to sign for the money borrowed. (Applause). Mr Goodwin said that Mr Spragg had offered the £2OOO bonus last year if a certain quantity of milk had been supplied. The Chairman said it was quite evident Mr Goodwin had not read Mr Spragg's last circular, wherein it was stated that he was now quite willing to extend the scheme until they did get it. Mr Hunt 6aid the bonus reminded him of the bunch of carrots on a pole held in front of the donkey's nose by his rider. The more he strove for the carrots the less chance he had of getting it. In reply to other questions, Mr Hunt said he was certain that the guarantee would be such that it would be satisfactory to the Board of Directors. It was quite true that a quantity of butter bad been re*shipped from England last year, as better prices were being realised in the colony. The butter business was a cash one, and storekeepers never had more than £2los worth of butter on hand, so there was little or no chance of making losses. The offer was merely a tentative one, and whatever was agreed to would have to be submitted to the suppliers That would be the time to rote upon the question. If they affirmed their desire for co-operation, he was confident Lovell and Co. would sell. Mr W. Jones proposed that the meeting affirm the principles of co-operation. This was seconded by Mr Burke and carried by 14 to 2, Messrs Goodwin and Teasdale dissenting. Mr J. 11. Mandeuo proposed a hearty vote of thauks to Mr Hunt for the trouble he had taken, coupled with an expression of opinion that some such scheme is desirable and would be a benefit to the district ; also that it is desirable for the Union to formulate a scheme on the lines proposed by Mr Hunt, which should be referred back to the suppliers to be afproved by them before being accepted. This was seconded by Mr Weal and carried unanimously. Mr Hunt thanked the suppliers for the vote they had passed. He said he would endeavour to have the industry established on a satisfactory footing whereby they would reap the profits instead of the middleman. A vote of thanks to the chairman closed the meeting.

KIHIKIHI.

There were twelve suppliers present on Tuesday evening, to meet Mr Hunt and hear his proposals with regard to establishing the co-operative principle in the Waikato. The following resolutions were passed : —" That this meeting accepts the principles of co-operation." The followiug resolution was theu moved by Mr Elmsly, and seconded by Mr Armstrong, "That this meeting instructs the delegates of the Waikato Milk Suppliers' Union to formulate a scheme with Mr Hunt for the uo-operation of the Waikato creameries on the lines laid down by him, and to submit any terms arranged for to the milk suppliers before finally closing." Carried unanimously.— (Own Correspondent). Mr Hunt will address meetings to-day at Wbata-whata at 9 a.m., Te Ko'vhai at 2 p.m., aod Ngaruawahia at 7.30 p.m., and to-morrow at Hamilfon at 2 p.m. and Ohaupo at 7.30 p.m. On Saturday he will visit Pukerimu and Waihou at 10 a.m. and 7.38 p.m. respectively.