FARMERS' TRADING CO.

Auckland Star, Volume LI, Issue 124, 25 May 1920, Page 6

FARMERS' TRADING CO.

(Published ,by Arrangement.)

■i . * FtOWRISHING CO-OP. CONCERN. RECORD 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. JaJ. Boddie) presided over a meeting of about 500 shareholders. THE DIRECTORATE JUSTIFIED. In moving the adoption of the report and balance sheet <\vhieli 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, an 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 directors, and he was pleased to know that the directors' actions and the shareholding' confidence had been amply justified. GREAT CO-OPERATIVE CONX'ERX. Dealing with the capital account of the balance eheet, Mr. Podd.W pointed out that the shareholders had increased by 4,870 during the year, making a total up to tUe present of 11,800 members —a record pf which they had great reason to be proud. That liad outstretched any other concern in New Zealand. Further, the manner in which the increase was sustained showed that they were jnst beginning what would probably be the biggest co-operative company in the Dominion. TN T CURRENT ACCOUNT. Coming to the liabilities the only figure he had heard adversely criticised was the amount to credit of current account £110,082 10/!). 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 account. He wished to congratulate so I many of the farmers of the province on having a credit in the bank. But instead of I having the whole of that credit in their I own banting account many found it l)£st to put the whole or part of that credit on deposit with the company, and on this they could draw. This was the explanation of the £110,082, 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 euiu was available to set against account. "The company to-day has more than £00,000 of clean liquid cash," said Mr. lloddie.

"'So you can take my assurance that that figure is quite all right. It is watched very carefully month by month, s:nd I am convinced that it is a sane, sound business proposition." A SOUND WRITIXG-DOWX. Dealing with the assets lie pointed out that there was a 'large increase, and that was disc to the increasing , business. In answer to criticism that in the list of securities the leasehold should have been discriminated from the freehold, he thought that perhape it would be as well, 'because the amount of leasehold ■was trifling. The stocks were very much larger than they had teen before, and he wished they had twice as much. The goodwill was set down at £36,000, which was lese than last y«ar, when it was shown at £63,000. He explained this by pointing out that goodw.ill was an intangible assets. ■ FLOTATION EXPENSES. The figure for flotation expenses, >£5470 iIC/6, was reasonable enough, 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 (5/ per £100. He claimed that this could not be approached by any other company. THE QUESTION OF BRANCHES.

Referring to brandies, 'Mr. Boddie said the pressure of business from evcr.y part of the province was increasing so! rapidly that branches were even now re- J oeiving consideration. The .general manager, a keen, astute business man, was even now turning his attention to an American scheme called the chain store. C: tal was flowing in so well that exten = ion to more branch estal>l«h- :- ments was becoming every day -f re feasible and more necessary. And he could assnre hie hearers that the consideration lieing , given to this \y»3 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 niiich increased ceni tral accommodation had been provided, the shareholders would have to be satisfied witji the gradual establishment by the company of its own branch -stores. CAREFUL BRAXCHBUYIXG. The company had been the most talked of company in X.ew Zealand; 1 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 j the best businesses and had paid enormous goodwill. He had informed that gentleman, as he had informed the meeting that the company had not 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, j lie 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 had liad to adopt during the year was to manufacture some one or two lines they ■were selling. The company had of course a saddlery factory. ' A queer position arose re furniture. p Up till recently all the furniture sold was made 1 by other firms, and the company 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 Ret enough furniture to supply the demand, and so they had to make it themselves. The company -was fortunate in getting suitable premises and a thoroughly capable man, arid within two months 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 reasons compelled him to go away. The position regarding hides and skins wae very unsatisfactory. The great gap bettwsen the salce of raw!

material and manufactures -was bringing up a serioue problem, and it would not ibe long before the company attempted to solve that problem. He was not going to throw etones at anybody, but there were things unsatisfactory and unexplained in connection with the farmare , raw material. And they must, 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 whole 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. Boddio 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 torn-tit' 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 I 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 firjns 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 said many things, including a suggestion to open a land agency, had been discussed by the directera. 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 wae carried unanimously.

Speaking t>f 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 begun. We are young in the business, 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 air producers are finding it a mighty 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. TFiey recognised the principle of co-operation as the preatest movement in tine 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 Capt. Frank Colbeck were re-elected as directors without opposition. Mr. Thomas E. Whitton 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 100,000 additional B preference shares to Tank 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.

Xhe motion was seconded and carried unanimously.