FARMERS' TRADING CO.

Auckland Star, Volume LI, Issue 124, 25 May 1920, Page 8

FARMERS' TRADING CO.

CPuWtaned by Arrangement.)

FLOURISHING CO-OP. CONCERN.

REOOR33 OF A YEAR'S WORK.

The annual meeting of the Farmers' Union Trading Company was held this morning at the Town Hall concert chamber, when the chairman of directors. (Mr. Jan.- Boddie) presided over a meeting of about 500 shareholders. ■ TffT. DOBECTORATE JUSTDGFrBD. In moving the adoption of the report and balance' sheet {which have already been'published), the chairman stated that he himself had never had any doubt as to the wisdom of the farmers taking a hand in their own business. \The results of the last two years' operations had justified any claim he, as a chairman, and all members of the Board had made on this head. The magnificent loyalty of 99 per cent, of the shareholders had been a fine incentive to' the and he was pleased to know that the directors' actions and the shareholders' confidence had been amply justified. GREAT CO-OPERATIVE CONCERNS Dealing with the capital account of the balance eheet, Mr. Boddie pointed out that the shareholders had increased by. 4,870 during the year, making a total up to the present of 11,800 members —a record of which they had great reason to be proud.. That had outstretched any other concern in* New Zealand. Further, sthe manner in which the increase was sustained showed that they were just beginning what would probably be the biggest co-operative company in the Dominion. IN CURRENT ACCOUNT. Coming to the liabilities the only figure he had heard adversely criticised i was • the amount to credit- of current account £110,682 16/0. Criticism was a good thing, but by people not knowing the whole facts it was wrong. This figure had had more careful scrutiny by the directors than any other. This amount was at present on current ac- ! count. He wished to congratulate, so many of the farmers of the province ori having a credit in the bank. But instead of having the whole of that credit in their own baniing account many found it hest to put the whole or part of that credit on deposit with the company, and ori this"they could draw. This was the explanation of the £110,682, and the idea was found to be a great convenience both to the farmer and the company, "for it gave the one a credit on ; call and the other cash to use. The figure was watched very carefully, and the sum was available to set against account. "The company to-day has more than £60,000 of clean liquid cash," said Mr. Roddie. "So you can take my assurance that that figure is quite all right. It is watched very carefully month by month, end I am convinced that it is a sane, sound business proposition."

A SOUND WRITEfG-DOWNT. Dealing with the assets he pointed out that there was a 'large increase, and that was due to the increasing business. In answer to criticism that in the Hst of securities the leasehold should have been discriminated from the freehold, he thought that perhaps it would be as well, 'because ihe amount of leasehold was trifling. The stocks were very'much larger than' they-had been before, and he wished they had twice, as much. The goodwill was set down at £36,000, which was 'lese than last year, when ifc wa* shown at £63,000. "He explained this by pointing out that goodwill was an intangible assets. FLOTATION EXPENSES. ' ■ The figure for flotation expenses, (£5470 (16/6, was reasonable and he Was, convinced that the item could well have been, increased by £2000 without in any way exceeding the bounds of reason. Their expenses had been moet economical, and inspection of the books had made it clear to him that brokerage, expenses were somewhere about '6/ per. £ 100. He claimed .that this could not be approached by any other company. . THE- QiUE-ST-lOSr OF BRANCHES.

Referring to branches, Mr. Boddie said the pressure of business from every part of the province was increasing so ra.pidly that branches were ».ven now receiving consideration. The general' ■manager, a keen, astute business man, was even now turning his attention to an Anior : —i scheme called the chain store. ' "-al was flowing in so well that cxtn nn to more branch estab l: =hments \v<is becoming every day feasible and more necessary. And lie could asscre hie hearers that the consideration "being to this was very careful. Dozens of offers to acquire business premises all* over the province were ■even.now on the files, and shareholders everywhere were keen to get a local branch. It was ■considered the policy to have their own trained men who knew the goods and the trade to run their agencies. And until those men were ready, and the very much increased central accommodation had been provided, the shareholders would have to foe satisfied with the 'gradual establishment by the company of its own branch stores. CAREFUL BRAJTCH-BUYTXG. The company had been the most talked of company in New Zealand; there had been more wicked things eaid of it than of any other company in the country. But the more they talked, the more the company grew. He had -been told by a man that in every district they had entered they had bought the- best businesses and had paid -enormous goodwill. He had informed that pentleman, as he had informed the- meeting that the company had riot paid one penny goodwill for the businesses they had taken over. In no case had shares been allotted as part payment for these branch businesses. Furthermore, he was satisfied that in the acquisition of these branches'the company had got good value for ite money. THEIR OWN FACTORIES. ■ A further*departure the company hart had to adopt during the year was to manufacture some one or-two lines •were selling. The company had of course a saddlery factory. A queer position arose re furniture. Up till recently all the furniture sold was made' by other firms, and the comnany took the whole output of three fairly small concerns. One after another theee factories -were taken over by auctioneering firms, so it came to the position, they could not get enough furniture to supply the demand, and so they had to make it themselves. The company wae fortunate in getting. suitable premise's and a thoroughly capable man, and within two month's a fair output of furniture waa assured. Then came a boot factory, which the company needed and had bought from a man who had made a thorough success of it before personal, masons compelled him to go away. The position regarding hides and skins was very, unsatisfactory. The greatj gap betvrtjen, the sales of; xmr

material and manufactures wme briiuSnup a serioue problem, mad it would not ibe long before the company attempted to solve that' problem. Hβ was not going to throw etone* at anybody, but there were things - unsatisfactory and unexplained in connection 'with the farmere* raw material. And they most, without Government assistance, solve the problem for themselves. (Hear, hear.) THE LAIDLAW LEEDS PURCHASE.

After referring to the trip to America of the manager (Mr. Laidlaw) the speaker referred to the purchase of.the business from Laidlaw Leeds. In the purchase of the business the company had'bought three sole agencies, but he would not. name them. The profit from these three lines would in five years- return in profit the who)e of the amount paid for the goodwill of the Laidlaw Leeds' business and leave £3,481 over and above. -. A WORD FOR THE STAFF. Mr. Boddie stated his opinion that the company's staff throughout was capable, reliable, honest and loyal. In conclusion he pointed out that the company had grown in two years from "a mere tom-tjt" to a very big concern, in which the turnover for a month was £114,000. Consequently, with the difficulty- of getting stocks, and the tremendous growth' of business and correspondence,, it was' with the greatest 'difficulty that the staff could cope with the work; for the great growth meant that the systems, had to be continually changed, and the staffs trained to deal with the increase. He pointed out that the mistakes made were not-always on the part of the staff.

QUESTION TIME. A speaker asked whether it would be possible for the company to provide in some way a financial institution for the raising of mortgages, as many other firms had undertaken. The practice of lawyers, he said,' was to make a mortgage for three years, and at the end of that time another legal fee had to be paid. It'was an iniquitous thing, and the speaker said it was not current-in Wellington.

In reply Mr. Boddie eaid many things, including a suggestion to open a land agency, had been discussed by the-direc-tors.' He was sure that a land agency would be one of the first new extensions. There was the question of a dispensary also, and when the new building was erected, if space could be spared, this might become a fact.

Several men rose to support a suggestion to raise the honorarium of the nine directors of the company. . The mover suggested £100 a year. '

The resolution was carried unanimously.

Speaking of the rebate, the chairman said £20,000 had been credited to purchasers, and he read a few figures at random, showing that the rebate to one man was £130 and to others sums running from £4 odd up to £20. -

THE ONE THING NECESSARY. : "There is one thing necessary to complete what we have-began.' We are young in the badness, and we are meeting the same experience as the primary producers in our own and other countries. We are young in the business of cooperation, but we and all producers are finding it a aighty weapon to protect the primary producers from trusts and combines." He appealed to all to cast behind them any tactics that - used the prices of the company -to beat' down "others. There was no profit, no ambition in business matters in the company-so far as the. directors were concerned. They recognised the principle of co-operation as the greatest movement in~the world to-day. He appealed to all shareholders for their sympathy,-their loyalty, and their support. If things did not look well all the time that ~ was" merely natural. ; He formally moved the adoption of the report and balance-sheet. ■ A seconder rose immediately, and the resolution was carried unanimously without further, discussion. " APPOINTMENTS MADE. Messrs. Ed. Somerville, John H. Hayward and Cant. Frank Colbeck were re-elected as directors without opposition. Mr. Thomas E. Whittor. was appointed auditor at a remuneration of £300. £1,000,000 CAPITAL. Immediately after the general meeting a special one was opened to consider three special resolutions proposed by the directors and dealing with" a suggested increase in capital.

The resolutions were:—"That # subject to compliance with any statutory provisions as to obtaining; the consent of the Minister of Finance or the AttorneyGeneral, or otherwise the capital of the company be increased to £1,000.000. (a) by the creation of .300.000 additional ordinary shares of £1 each; (b) by the creation of- 10O.C0O additional B preference shares to rank pari passu with and to be issued with and subject to the like rights, privileges, liabilities and conditions with, and . subject to which, the existing B preference shares were issued."

The chairman moved "That the capital of the company be increased from £600,000 to £1,000,000. He explained that without this new capital the progress of the company -would be held up. At the rate applications for shares were coming in the shares at .present available -would be very soon exhausted. . The motion was seconded and carried unanimously.