Annual Meeting of Shareholders.

Waikato Times, Volume XXVI, Issue 2131, 6 March 1886, Page 2

Annual Meeting of Shareholders.

Thjc third annual meeting of the shareholders of the nssociitmn was held at the Hamilton store ve>ti-nlay afternoon. Mr W. A, Graham, Ctiairman of Ihiector*, occupied the chair, . % nd theie were about fifty shareholden, including director*, present. Tho Mani^-'i' lead tho advertisement calling the meeting, and the minutes of tho previous nntiii.il and two extraordinary general meetings. At this point the Chairman ie.i'l the following letter.

Kirikiriroa, 4th March, 18<S(j. W. A. Graham, K»q , (Jh urnian, North New Zealand Fanners' Co-operative Association. Demi Sir, — I notice last week that you had advertised the annual meeting of shareholders in the above association to be held nn Vnday, oth inst. As to do so would be holding two annual meeting within a year I asked a friend to remind you thnt at List meeting when you gave notico that next meeting would bo held on Friday, Oth March, 188<>, that you were iufoimcd by Mr R. F. Bandes that the Oth of March, would bo Saturday not Friday. You accordingly amended your notice and stated that Saturday would b.j tho day. As by today's paper the notification remain unaltered, I write to onter my formal protest against the meeting being held on any day prior to Saturday, the 6th day of March, 1886. If you do attempt, to hold a meeting to-morrow, the sth March, will you kindly oblige mo by reading this letter before proceeding to business.— Yours very truly J. McPhkrson, Shareholder X.N.Z.F.C. Association. Mr Graham said his recollection was that Friday wan appointed in order that those coming from Auckland might be üble to return on the following day. He had no recollection of the meeting having been fixed. Captain McPhersrm said he was certain his statement was correct. The Chairman said the number corresponded witli the rough minutes, and those were the records they had to go by. The minutes were then formally confirmed. The Chairman then read the dircctora'reportfas follows ; (the balance-sheet hasalready been published in the3e columns) :—

Directors' Report ok the North New Zk\i,and Farmers' Co-opera riVK Association (Limited), to be presented at the general meeting of Shareholder, to be held at Hamilton on Friday, sth INlarch, 1886. The Directors regret having to present at this the second annual meeting of shareholders an unfavourable bilanco-sheet. The deficit for the past year has absorbed the profit shown on tho previous year as well as a portion of the subscribed funds amounting to about five per cent, of the paid-up capital. This result has arisen from various cau«es — depression in agricultural districts, keen competition in b.isi-ncs-v together with bad debts and allowances for depreciation in the value of stock ; also, tho removal into more roomy and suitable premises in Auckland entailed additional expense and f<>r a time extra rental. Your directors have taken such steps as they believe will guard against such losses in future. Credit for goods will bo very materially ciiumscribed, if not altogether abolished, and arrangements for dealing with settlers' produce placed on a more satisfactory footing. The amount of business turned over dining the year proves that the Association's stoio, have been considerably pitionised, whiUt the prices at which (roods have been sold suggest that shareholders who have deilt with the Association have also been benefited, lint operations have been much hampered by want of cipitil, and it has been found absolutely nece->~>ary, in urder to continue the bu-ino-»s on ik> pro-en t line-., to call up a pi o port ion of the lvm iijiing unpaid capital whioh, it i- honed, will enable our manager to carry on the business of the Association to the satisfaction of shareholders. In accordance with the expressed wish of a number of shareholders it has been dncidod to hold weekly auction sales s»o that consignments of goods, or such portions of them that cannot be sold privately, may be. promptly quitted. It is intended that those sales shall presently include wool, hides, skins, &c, and any other goods by which the interests and convenience of shareholders will be bBst served. The directors retii ing by rotation are Messrs R. Gillett, W. H. Wallis, J. Newland, C. Day, A. Heather, and E. Waymouth, but they arc eligible for re-election. Two auditors will also have to be appointed for the ensuing year.— W. A. Graham. Chairman. In moving the adoption of the report the Chairman said :— Gentlemen, I desire to say a few words regarding the past year's operations, and to point out to you the defects in our method of business transactions, which have forced themselves into our management, aud the which are prejudicial to the interests of all true co-opeiators. Theyaie: A peimcious system of credit; (2) An over anxiety to do a large business ; (3) A prejudicial want of confidence of shareholders in the management, and a feeling of livalry between the Waikato and Auckland branches. There ia no us© in endeavouring to despise facts. Our association is gradually drifting into the groove of a common trading society, which if not checked must lead to disaster, and I attribute in a very large measure the disappointments we have suffered to the causei mentioned above. Co-operation must be carried on upon a cash basis, other. vise it cuiaea to be cooperative, and becomes a common apeculative association. The mistake has arisen from the miao* inception of shareholders and the Board of Director*, and through them the management, the mi-ci inception of what could legitimately be expected from the association at its onset, and dvi ing the first few years of its infancy. «ud furthermore the want of reflection on the part of all, in reading our printed articles of association, and more particularly the objects which the association was empowered to embrace The object* for which this association was formed wore n»t intended to be misleading, butappa'ently they have been misunderstood «>r otherwise nv sinter preted by ahare- , holders and consequently your disti iota and management giving way to outside pressure have allowed themselves to undertake from the outset mine than shareholders could have legitimately or reasonably expeoted from their assojjation. Oridnally it was intended to oj»erat« from » central Wnikato depot, and have a tata-room in Auckland, *nd to commMiee with butchers' shop*. A committee was appointed to g<» to Auckland and initiate arrangement* to this effect. However, in the multiplicity of oouusel there is wisdom. On return of the committee the resolution relative to butchers' shops wai reminded and the head office shifted to Auckland, the Waikato offico being closed. This led to an outburst of leoling on part of Waikato shareholder* which resulted in opening YVaikato branches one »t Cambridge, one at Te A-wiiniitu and one at Hamilton. This was forced upon the association by the spirit of rivalry between districts. Had there been a branch in Waikalo, and one branch in Auckland, and the affair managed as. a WaiUato ass )cjati«n. it would h»ve been less loaded. About one half the business would have been done at J the co«t and 10 percent more margin available for dividend purposes. As it is, gentlemen, the banker has found you the money to buy and sell your goods upon credit, and therefore ho has claimed yopp dividends arid ha,s got tjie.ni, and will continue to do so, unless you make up ynur minds to find the cash to buy and srli for cash. The association, notwithstanding what i« being said against it, has proved of great benefit to country settlers, and although it ni»y be some years before we can gat all we desire from its auspices, still in the meanwhile has done good, and has acted as a safeguard to farmers, and th.ro.Dgl) tl»e farmars to the Iwst interests of the country. Gentlemen, fault has been found with our report for its vagueness. I admit that, when first placed before me, it seemed to myself as being rather short, but having consulted with the managers and my codirectqrs, we find that }tv/ast v/as goq.sidered better to make the statement a« short and simple as possible, and leave it to shareholders to ask any questions of the manager that they require. The head-office being fixed immovably in Auckland, and the directors receiving no remuneration whatsoever for their services, the drafting of the repoit ia left with the managers, managing diiecton aud the auditors to supervise and draft; and it ia therefore sufficient for our own p.ar{s \<t express our fullest confidence in the gentlemen who have gone through the fact and figures set out in the report, and moreover to express our belief in the accounts published, aud in the sound stability of the association. The losses made by the association, I am informed, were made chiefly at the commencement of the yenr, when owing to the large profits made in the first years Itart, a rcduc^ww was madt) \n ytfcea to

shaieholdeis i>f some 10 p" 1 c -lit. as tlio traido hid combined to I<i.\ 1 their pi ice-, to undeis 11 us. Shnreholdei s theieforo who dealt with the association li.uo received theii b^iiefit-t thereby. It u u s urn found that tho .iih iciation was ir.mig astern, that too much advantage was beinjf gnon to shareholders, and a co.nniitti;o was appoiiitcd tv examine into the \\ m kui^ of the association, and at the cud "f f >ai months to report as to the advi-.' , s of eliding the U'*ikato branch' 1 - •• billing up mr>re capitil. Tia», c<". i ttee consisted of MciiM Jleither, W.i> mouth, Gillett, (Jane, andGrahun. The import of the committee recommended the closing of the branches. But is the bi.i'iehes \v<tc forced upon the association by the sh.neholders, and a iiiiii'ii ity of the committee wvte a\or>c to closing tfu* branches until shateholders had an opportunity top\p'i>,-> then opinion in open meeting, ami .is th>i time was too shoit to call a special general meeting, it was icsoUcd to null up more cipital ,md keep the hi inch--. open until the gcm.ual meeting of shiteholdets. If tho biancho-. aro continued, the uholc of tli" capit.il of the association must l>o called up, and in any ca-se ib would )>•? unw imj to clomi tlio branches precipitately, Tlie directors le^ilvud to c ill up fivo shillings more of the cipital. The committee recommended charging the Waikato blanches a commission to co\er the extraLib nir and cost of working thu association entailed by keeping th') branches open. This has since boon carried out, and the effect has bpen that the association ha« been slowly but surely rocoveung its lost ground. The committee also reommended that cash be the only method upon which the association be carried on. But there still remains a division of opinion as to tho practibillty of sticking to absolute cmli with farmers who send from a distance for their requirements, and who cannot tell what the amount of the goods will h a ,, and the difficulty has been to draw tho line. The directors ha* c now resoh ed to ask for cash, and not sell or deliver goods which are not either p lid for or arranged for, in Mich a m inner as to be a cash equivalent. If shareholders will only bu loyal to their association it has a great future hefoie it, but to expect so ma-ny establishments and undertakings to hi carried <>n with such ,i s>nall capital called up cannot bo jpis>nably expected. Compared with the falling stirs around us. anil tho adverse b tlance-sheets of companies who have laige masses of capital .it com mand I feel that your association has got well through what we must hope will prose the most disastious year the agricultural intciests will suffer, and even in reviewing our losses, there is this satisfaction that with one or two exceptions they have been forced upon us by tho ruinous under-cutting by the trade, who in reality have suffered the most, and onr <»hareh.olders have reaped tho benefit in both cases. We have full confidence in our future, atid whilst the dirt-etuis are very anxious to nuke tho association a success without allowing it to become in itself a monopoly, they must lemiw\ shareholders that if they only try to tnke a selfish advantage of the associ ttion they prove themselves to bo but lustard co-operatois, for each and every one of us are alike responsible for tho progress or otherwise of tho institution. I depiecatn the lemaiks made in Tne W.iikato Times against our Auckland managing directors, Messrs Heather and Wayinmth, whom I know to be must honouiably devoted to your cause, and who have given most iuipirtiil and unbiassed attention and advice to the Bnrd o/ Directors. The association is under deep obligations of gratitude to those gentlemen in paitieul ir, and therefore I warn shareholders who are true co-op >rators i_jainst listening to unfounded reports concerning their association, or to hastily formed misconceptions. T1)B irimbci of .shareholders has greatly inuieased, and the dircitois have endeavoured to do the best they could. We have now 110') shareh >ldeis, and with this number you will understand the diitieulty of d ling justice to all. Sotno misconception hisaiisen fionj the fact that so many subjects were, mentioned in the articles of association, but tho original object was to make progress by degrees. We only expected two or three bandied shareholders at the outset. Mr J. G. Ruthcifoid seconded the motion. Mr E. 0. Shepherd said the loss on the bumches was due to tho want of business talent m the Waikato directors. This was not a co-operativ e store, but .simply a branch of a business concern doing business at reasomblo rates. The ainill fanners did not giow r bank notes, but they grew corn and chaff and roots, which ought to be aa good ; yet this was the only place in Hamilton w here the small farmer could not exchange his produce for goods ! What had the association done to facilitate the sale of farmers' uroduce? The only redeeming featuie was that when the produce had inn the gauntlet of railway charges it met with a welcome by Mr Garrett at Auckland, who did the best with it he could. But if something better be not done the -sooner they closed the branches the better. He had offeied every sort of pioduce, and had not been able to sell a six pencewoi thin answer to Mr Wheeler, Mr Garrett said the total loss was £800 odd. The Auckland store .showed a profit, and the Cambridge showed a loss of t'fjlO, while Hamilton showed a small pi "fit. Mr Parr demurred at this, and u hen the book* were examined they found that a sum of £77 h\d been charged to Hamilt m in error. The Auckland branch showed a credit balance of £108. But for bid debts, the Ws at Cambridge would not appear so much. Since the accounts weie made up some of the bad debts had been collected. Mr Neal said he could aooount for a 10-s of £310 on oats which had been sold below cost. They were heU tooling. He then explained tho method of dealing as between tho Auckland store and the branches. Tho sum of £220 had been wined out as bad debts at CambriJge, but several small accounts have since been collected. In Hamilton the turnover for the year was £3,000. The first h-ilf-of last year this bi inch showed a los,-, ol £218, but the second half showed n profit of £1")3. Te Awjuiutu showed n turnover of £4."i00, and a loss of £12!). The gross turnover at Cambridge was £10,000. Replying to other questions, Mr Gane said the bad debts in Cambiidge had been made through contractors who had come to gi ief. The largest item was on account of Hill, who owed the association £110, and the total amount would, he thought, be under £200. Farm produce had beon purchased at too high a r-ata til the beginning of last year. The loss in this le&pect would be about £100. The remainder of the loss he attributed to tho high charges made in Auckland on account of management. The actual cost of management he estimate \ at £4.*)0, while tho turnover amounted to nbout £10,000 per annum. Com|>etiti<>n in Cambridge had been \ cry keen, and prices had l»een very low, Replying to Mr Y. W. Browning, Mr G.uio said he could not gi\o the names <»f those who got high prices for produce. He did uot think the prices paid weie particularly highi but the produce deteriorated. Mr Browning said chaff and oats did not deteiiorate very muchdiningthc year. The fact was that only a few people wero able to sell to the Cambridge branch, and they were friends of the manager. It wan a curious thing also that those who sold to th.c association bought from Liurie and Co., who could undersell the association. Mr (4ane said lie did not wish it to be understood that excesivo prices had been given for chaff and oats. What he said was that the produce did not fetch the price that was given for it;. Mr Browning asked how it wan that such large credit was giren to a contractor without >mv backing. Mr G.me said the contractor in question had nt the time an excellent reputation. The association was anxious to get iid of settler*' produce, nnd it was from this caiuo that they hid made the bad debts, In answer to Mr Gws, the Chairman :.aid the director* had the power to authorise credits. There was never any intention to make fish of one and flesh of another. The general instruction to the agents WAt> to deal for cash only, To be sure ctedit had been given, but there wn» on intention to deal difToienllv with different shareholder*. In ansvvei to the same shareholders, the manager said it wan not intended to auction good produce, which could always be got off with case. The auction sales were for the purpose of clearing off stuff which did not. move readily, in short to dispose of broken lots of stuff. Their object had been, when possible, |q deal with private people. Mr Selby asked wb.ath6r it had been determined to sell for oaah, and if so what was meant by the teim. The chairman said he understood the transactions would be in cash. Now a cheque was ca-li, and once they went into papjr they must go a little f ui ther. It vya.s necessary to have cash or s< in thing 1 which, the luinaaer uould get c.ish There would be a directors' meeting after the prosent one, and meantime thrv would bofrlad toget any suggest ions from tliesharnholders present, Wh&t he wished, to impreis

up in then was th it it u is the wish of the directors to il^alfauly with all. Mrduo. X igecumUi s.-ud he undcr-itood the t uiiii " c<> opci.Uum '•md " cash ' to be n» ;v j pihu synonvmoiH. Tlu-re could be no co-operation without cosh. If they gave any di'-crction.iry powei.to the UKUi'iL'er-s abuses would Iji* ccit iiu to cro«>j> m. Hf <lid not think there were any settlers present who knew so littio about tho |>rice of goods as not to ha able to send a cho<iu"- for tho v iluu approximately Once the poods vcre parted with thoy ucie gone, .titd could not l)o recalled. It was thu-. that the bnd bohta had been made. Co o|>eratioii without cash was a fallacy. When produce was sent to Auckland the manager should act «s .1 bmker and *end in returns when it wi-. sold. Mr Westney said a sy.->tem of short credits was in foiee in Te Awatnutu. Th« turn.iver thole* had been about £5,000 and they had not luM; t'j in bad debts. Mr Shepherd thought that settler's produci" should be icgaidcd as earth Mr Hubbtitd was of opinion that when goods wcie sent to the Association, peoplo should Ret adv ances »Bj)iu>t them. The manager said they did not buy produce; they simply acted as agent*. Mr Solby .said if it was determined to do away with the credit system ho would have to «evt*r 111.1 business connection with the Association. At the same time he was bound to t-ay that since he had dealt with them he h.ul much more thin recouped the value of his '•hare*. The association had also done Rood in bringing down the prices all over the district. Mr J. Brooks said the opinion of the directors was not unanimous upon the point referred to by Mr Selby. They had talked the matter over, but no conclusion had been arrived at. He, to a certain extent, agreed w ltli Mr Selby. Money sent by return of post was cash. If a man failed to pay for a consignment he should Ret no more. Mr Edgecumbe axkod how the association were to get the money for the fir«t order. Mr Brooks : Recover it in the usual way Mr Edgecumbe . Just so. Mr Forest said two months ago there wa« about £2000 on tho Cambridge books. Ho would like to see this amouut reduced. Tho money was ov\ ing by men whom nobody cared to deal with. He was of opinion that the expenses shown should be reduced. If this were not done he was sura that the association would fall through. The expenses must be reduced. Thcie was something v ery mysterious About Cambridge. It was supposed to be tho wealthiest town in Waikato, and yet thero was more money on the books there than anywhere eke. It had been stated that Mr Gaiie had been collecting his own old accounts and leaving the Co-operative's go. He did not belie\e this, but it had been so bt ited. He had gone into the matter and, taking the woist month in the year, they found a profit had been mnde. Isovv where had thi> gone to? If the accounts were shown faiily it would be seen that Hamilton had done the best. He thought the meeting should be adjourned for a month. In the meantime /our disinterested peoplo should go into the whole nutter and see where £1000 could be saved. He could show them. The Chairman said the largest co-opera-tive association in England cost iH per cent, to work. The associ ition in Melbourne cost 11 per cent. Tho North New Zealand Faimcis' Co-operative Association was not theiefore costly at (j\ per cent. If they determined to close the branches there would l)j a suing, but he would not advise this. They should not take the last dis istrous year as a cntciion. He beliovcd he saw how £500 could be saved next year, and thpy could savo much more when they were placed in a position to purchase on the best tei in-. Tho association's business was increa>ing, and the number of >hn>oholdei9 was increasing. The director! had done everything they could. Mr Gano had resigned, and he was bound to say that he had done his utmost for the association. He warned the shareholders against any scheme, of false economy. Mr Barangh said the directors were divided on the ca^h v. credit question. Ho was now in favour of cash. It might be difficult at first, but with a little contrivance it might be managed. He did not think the business could be long carried on without cash. He thoroughly agreed with Mr Edgecumbe. It had been said they should trust the " good marks," but they could never tell who the "good marks' were. In reply to Mr Gertnann, the manager said the total amount of bonk debts was £7000. Mr Gould was in favour of the credit system. They were a trading society, thero was no use disguising the fact, and they must do the best they could. If he got accommodation ho was teady to pay for it. Mr H. Svvarhrick agreed with Mr Gould that thoy were really a business concern. In England the ci-operative associations were conducted on a purely cash basis. Mr Brooks said the co-operative societies in England were established in the towns. The customers got their wages and could always go to the stores and pay for what they wanted. Here they were mostly fanners, who could only move their produce once or twice a year, and could not pay cash. Were these men to be refused t (No.) The Chairman said some of the directors were in favo.ir of c>*h, or "an equivalent for cash." Whit they wanted was to be in a position to represent in cash or in cash value the goads they had sold. There should be no doubt about the security held by the association. Mr J. C. Biown was of opinion that tho expenses were out of all propoition to the capital. He moved that an extraordinary general meeting of shareholders be held that day month, at which the manager should produce a full and complete balanceshppt. He heartily approved of tho objects of the association, and wished to s?(> it put on a firm and permanent basis. Mr Brooks reminded Mr Brown that the value of the association's annual business was £50,000. It only cost «i% to do the business. The Chairman was of opinion that no institution in the province was worked at % less cost than this. The report was then adopted. Mr F. W. Browning moved that tho business be conducted in future on a cash basis. If the business decreased let them work the stores half time. Let the man who had made a success of the Hamilton store spend three days a week at Cambridge. If there was no credit there could be no bad debts. Mr McMiokon seconded the motion. Messrs Brooks, Gane, and Gould said they would take the motion as a voto of want of confidence. The last named gentleman said the motion was equivalent to an order to wind up the association. Mr Browning said if credit was continued the association would soon wind up of itself. Mr Edgecumbe said, in \iew of the position taken by some of the directors, they should defer the question until they had a fuller meeting. Mr Gane was certain the association could not be run on a purely cash basis. He would like to t.ee the cash system inaugurated, but ha did not think they should be hasty. He moved as an amendment " That an extraordinary meeting be held in three months to consider the matter." This was seconded by Mr J. Wallace. Mr Edgecumbe asked Mr Gane to fix an earlier date, say <v month. Mr Gaua skid that would be in the busy s»euw>u. Mr Edgecumbe said shareholders' proxies could be received. Mr Fin rest said adjourning meetings meant expense. The Chairman said ho would bo glad to meet the shareholders every three months. Tho motion was put and lost, and tho amendment was corned. Meaara Gillett, Heather, Newland and Waymouth were re-elected directors, and Messrs Jaa. Anderson (Mangare), and RKeynolds (Pukerimu), were elected in the room of Meswfc Waljis and Day. It was resolved to hold the next annual meeting at Hamilton by 25 to 9, on amendment to hold the meeting at Auckland being lost. Mr J. G. Rutherford had a number of proxies, but he decided not to use them. The date was. fixed for the last Friday in Fehrnaiy, 1887, Messrs Geo. Edgecumbe and J. Waymouth were re-elected, auditors, at a fee of £10 10s each, Mr- Gonnann moved that the directors be invited to take into consideration the question of dosing the Waikato branches or otherwise during the present year, Mr Hodgson seconded the motion, whiok was lost. The meeting then terminated.

A mictiug of the directors was held subsequently, Present: Messrs \V. A. ( Si. i ham (Chairman), Gould, Forrest, Clark, Brooks, Gnne, Westney, Rutherford, Barugh, and (iillett. The resignation of Mr Gane of the office of managing director for Wuikato was received and accepted. The other busyiest w«» of routine cMw;to\\