NORTH NEW ZEALAND FARMERS' CO-OPERATIVE ASSOCIATION.

Waikato Times, Volume XXVIII, Issue 2283, 26 February 1887, Page 2

NORTH NEW ZEALAND FARMERS' CO-OPERATIVE ASSOCIATION.

Annua,! Meeting of Shareholders

Tub fourth annual meeting (if the shareholders of this association was held at Mr Parr's store, Hamilton, .yesterday. The chair was occupied by Mr \V. A. Graham, chairman of the directors, and there was a fair attendance, including the following directors : Messrs Newland, Clark, (lane, Forrest and Bell. The b.ihmce-sheet, a copy of which has been supplied to every shareholder, was laid

on the table. The Chairman then spoke as follows Genti.emen, —The balance-sheet which is in your hands, and which was issued from the Auckland office without my knowledge or .sanction, purports to be a statement of the association's affairs, and, if correct, discloses a disastrous result of the past year's transactions. At the close of the previous year's transactions there was a loss, which was considered by the management and a majority of the Board of Directors to be attributable to the working of the Waikato branches. It was considered by others and a minority of the Hoard of Directors, to be occasioned by a pernicious credit system of working the association. The board having decided by a large majority to continue the credit system, agreed to allow the matter to be finally decided by an open vote of the shareholders in general mooting. It was therefore put to the meeting, and by a large majority decided to continue the credit system. The board being forced back upon its former course considered the possibility of continuing the Waikato branches. It became apparent that there was too much friction in the management and strain upon the finances fco continueon the branches, and it was urged by the Auckland portion of the board, who were also supported by the Waikato managing directors and others of the Waikato directors, that the Waikato branches were the impediment to sale and economical working of the association. It was therefore decided to dispose of them, and this was done. Mr (Jane's services had been already dispensed with, and it was thought that, as the control had been removed entirely from Waikato and left untittered in the hands of the Auckland management, that matters would improve, and that, notwithstanding the keenness of competition, the association would progress, or at any rate hold its own. Although repeatedly asked for and promised, no balance-sheet could be obtained, the reply being that until the books were closed and balance struck only an estimated balance could be given, and so far as that went it showed the association, at any rate with its funds in stocks or otherwise, safe. It was not until the Waikato directors were summoned to meet in Auckland, and with the Auckland directors to consider the affairs of the association, that we became aware that a deficiency was apparent, and a demand was then made to call up the balance of the capital. This demand was refused by the board in the absence of full information and a complete statement as to the association's affairs. A thorough inves- ! tigation was demanded, and a resolution passed, by the board appointing Messrs Newland, Forrest, and Heather a committee with full power to act and to obtain an exhaustive report of the working of the institution from its commencement, in order that the board might be placed in possession of facts to lay before shareholders at their next annual meeting. This committee selected Mr Jonas, a qualified accountant outside of the association, to go through the books, and the result of his investigation is now in your hands. From its very exhaustive nature there can be no question of its reliability, and it discloses facts which leave no room for doubt that the shareholders wlio have dealt with the association and the management have divided the paid-up capital amongst them, and the banker has had the profits. The report of Mr Jonas shows that the shareholders have expected too much from the association ; namely, to carry on upon a credit system with altogether too limited a capital at their command. I say, unhesitatingly, that to the shareholders credit system is due the breaking of their camel's back. The association cannot carry on honestly any longer upon the present system ; or, in any case, unless its shareholders subscribe the necessary funds to enable it to buy everything for cash. There is not the slightest doubt that this association lias been a friend to the farmer. It has given him pure seeds and manures, and the prices charged would have been sufficient to have paid the cost of working on a cash basis. Have the shareholders supplied the funds to pay cash down for goods? I estimate the farmer's trade yearly of Waikato to be £100,000, at least. A saving of 10 pet' cent, is therefore a saving of ±110,000 to themselves and the district, for the 10 per cent, does not even go to the Waikato middleman, or shopkeeper, but goes to augment the city banker's return. 1 cannot recommend the shareholders to carry on on credit. The association must be placed in liquidation, or amply supplied with funds. I leave it with the meeting to say what they will do, before any other business is brought forward, In reply to Mr Rathborne, Mr Graham said the report had been prepared in Auckland, and signed in his absence, Mr jKnox : Then you may well say "Lord preserve me from my friends." Mr Rathborne : Hear, hear. Mr Newlaud said he had drawn out the notice in the absence of the chairman. He believed the remark he had inserted in the notice about want of capital was quite right. They had not nearly enough. They had done nearly £40,000 of business during the year on a very small capital. Ho had had great experience in business in the old country, and had never seen so little capital employed in so large a concern. The result was that the hands ot the management had been tied. He was always of opinion that that they should have started in a small way and grown gradually. He quite agreed that the profits had been partly absorbed by the shareholders, because they had got better manures and better seec's than they had over had before and probably ever would again. He attributed a great deal of the bad luck of the association to the shareholders themselves. One shareholder had se»t down a quantity of butter

for which he demanded 9d per pound in a falling market, the lesult being that tho butter remained on at the store and was not now worth 2d per lb. A similar thing had occurred with regard to quantity of pressed hay. He moved that the balance-sheet be adopted. Mr Edgcumbe seconded pro fonna. Mr A. Dawson asked if the manager had given £.i>ooo credit without the consent of tho directors. The Chairman said the shareholders had decided that the business should be carried on on a cash basis. Mr A. Dawson agreed, but wanted to know how long the credit was to run. If they read the articles of association they would sec that the affairs will to conducted on a cash basis. Tho Chairman said the question had been thrashed out at the last meeting. Mr E. C. Shepherd spoke at some length, giving his ideas of what the association ought to have been. The small farmers were led to believe that they were establishing a lartre selling agency, not a buying agency. It had been said the price of manure and seeds had gone down, but so had everything else, so that the association had no right to take credit for the reduction. The directors had played the farmers falsa in allowing the management to go to Auckland. He and his friends had trusted in Mr Graham personally, and although he was willing to believe that the directors had acted honestly, they hud undoubtedly made a great mistake. He had no fault to find with the business management.

Mr Parr said Mr Newland had made a statement that the settlers would not get as good seeds as formerly. Now this was not true. He could supply them with better seeds and better manure at less cost evon than the association could do. Respecting the causes of the failure he put it down to the excessive cost of the Auckland management. Such a business ought to have been carried on at a cost of 4 per cent, or 5 per cent. He had made a profit in Hamilton, and he was free to say that he could have made the whole association pay. Mr Rathborne asked how it was that the association continued to carry on when they were doing so at a loss. Mr Graham said he had depended on tho advice of his co-directors and officers, in whom he had placed the utmost confidence. He showed at some length that the original object had to be changed from time to time, they were compelled to open branches and and to go into lines with which it was never intended to meddle. They must not forget that there never was a period in which the agricultural interests were more depressed than at present. Mr Knox asked whether tea and kerosene &c., supplied to shareholders was supplied by the Auckland directors. Mr Graham said that was a matter in the hands of the manager. Mr Garrett said it was not a question for the manager. It had been arranged, before he became manager, that Mr Heather should supply these articles, giving some concession. (Sensation.) Mr Caley would like to know how the loss of £2000 had been made 1

The Chairman said it was owing to excess in the cost of management, interest, &c. The printed statement would explain this more fully. He asked them to pass the accounts, when he would move that the association go into liquidation.

A long and at the end a somewhat bitter discussion ensued. The manager rose to reply to some of the questions that had been asked. In the first place it was objected that too much credit had been given, when, as a matter of fact, the amount of debts outstanding was greater in 188-1 than now. Several gentlemen present objected to the manager making a speech, contending that he was not on his defence, and Mr Knox wanted to know why the name of the second auditor was not attached to the balance-sheet. Mr Garrett said he understood Mr Edgecombe ceased to act after the Wuikato branches had been closed. After some further discussion, Mr Garrett said he must decline to answer questions if put in an insulting manner. lie then made references to Mr Knox's nationality, which were indignantly resented by that gentleman. The chairman having poured oil on the troubled waters, Mr Knox moved, and Mr George Smith (Piako) seconded, "That as the balancesheet had not been audited in accordance with the Articles of Association and the minutes of the last general meeting, the same be not received or adopted." Mr .1. Forrest supported the resolution. He certainly thought Mr Edgeeumbe's name should have been attached to the statement. It was quite clear that from the enormous loss made in the past that the balance-sheets had not fairly shown the position of the association.

Mr Shepherd also agreed with the resolu

Mr Edgecumbe said, in reference to the auditing that the auditors could only vouch for the correctness of the manager's figures. Regarding the enormous loss made during the last year, the fact was that no f,ross profit had been made. The goods had been sold for less than they were bought for. The whole of the expenses therefore bad to be paid out of the capital. He was perfectly satisfied that a man with Mr Waymouth's reputation would not sign a balance-sheet unless satisfied that it was correct.

The Chairman suggested that the meeting be adjourned for a fortnight or a month, by which time the shareholders would have had time to study the balance-sheet and statement, and be prepared to come to a decision. He would like the meeting to decide what they should do.

After some discussion, it was resolved that the meeting stand adjourned until Wednesday fortnight, the Kith inst., at the Public Hall, Hamilton, at 2 p.m.