RIFT WITHIN LUTE.

Auckland Star, Volume LIX, Issue 123, 26 May 1928, Page 7

RIFT WITHIN LUTE.

dairy produce board.

the chairman replies.

ME. GOODFELLOW'S RESIGNATION".

"WHERE HE OUGHT TO BE."

Mr. Goodfellow is just where lie ought to be,' said Mr. W. Grounds, chairman of the Dairy Control Board on his arrival from Wellington this morning. Mr. Grounds was referring to happenings at the last meeting of the board, at which Mr. Goodfellow tendered his resignation and immediately left the room. The split had been caused by Mr. Goodfellow n ®t holding with the view that the chairman's review should be published in the official organ of the Dairy Board without first having been submitted to a committee. On top of that was the question of licenses, to certain phases of which Mr. Goodfellow had also taken strong exception.

Mr. Grounds explained that in August last the Board had considered licenses in detail, and had finally approved of them as submitted to the Minister. In December a motion to rescind them was defeated by eight votes to four. On March 28, on the motion of Mr. Grounds, a resolution was carried, by eight votes to two, to the effect that the Board should insist on all factories supplying details as undertaken. "It was based on that that my review was written," said Mr. Grounds. "But outside pressure was brought to bear," he continued, "with the result that the board decided to relieve the factories of the necessity to supply f.o.b. to Eastern markets. Apart from that the whole of the licenses are still iu operation. Difficulties Multiplied. "Since the establishment of the Amalgamated Dairies, Ltd., our difficulties have been multiplied enormously." Mr. Grounds went on.' "Mr. Goodfeliow, who is a director, does not seem even yet to recognise that the main objection within the-industry to the establishment of an electoral system based upon a dairy control was due to suspicion of Waikato power and leadership. The basis of the Amalgamated Dairies has not diminished that misgiving. Added to thisj mercantile interests have been equally suspicious that the active head of a selling organisation, namely, the Xew Zealand Dairy Co-operative, Ltd., should have a seat upon the board. I have dealt succinctly with one aspect of the articles of association of the Amalgamated Dairies, Ltd., in my 'Exporters' Review' for this month, which will make my point of view reasonably clear."

Air. Grounds gave the interviewer the clause, which was as follows:—

"A director shall not be disqualified from his oflice by entering into contracts, arrangements, or dealings with the com- | pany, either as vendor, purchaser, or otherwise, or by reason of his accepting or holding an oflice, paid or unpaid, under the company, nor shall any contract, dealing, or arrangement with the company be avoided by reason of the fact that any director is interested therein, nor shall a director be liable to account to tlie company for any profit arising out of any contract, arrangement, or dealing with "the company, by reason of such director being a party to, or interested in, or deriving profit from any such contract, arrangement, or dealing, and being at the same time a director of the company and in a fiduciary relation thereto."

"To our mind, this provision for private operations bv directors of a company in the business they direct 1 on behalf of a co-operative association is the antliithesis of a co-operative ideal," commented Mr. Grounds. "The two conceptions cannot exist side bv side. A\e make no reflections regarding the use of these opportunities. We are concerned alone with the fact that the provisions for tliein would assuredly create distrust and suspicion, in which atmosphere the spirit of co-operation cannot exist." The Present Confusion. "Tlio present confusion is quite a *!y a £«eat disappointment to those who have steadfastly supported the idea of control, but our duty to the industry was plain," continued the chairman's statement. "We realise that disappointment breeds disgust and may lead to recklessness, which in turn might seriously impair the future prospects of the industry. It may be urged that the boaid, by its instability, richly deserves to bo terminated, but the principle enshrined in the ideal that prompted the board's establishment needs to be fostered and developed at all costs. We have several times expressed our deep convictions that the board, as a central controlling body, is more urgently needed than ever before and would repeat our warning that there is peril in destructive work until something acceptable has been prepared to take its plaee.

Speaking for myself and with a full sense of responsibility I liave carried, both in urging control legislation and the varied career of the board, I think c\en more than the board is required," said Mr. Grounds. "We need a revival of the Dairy Council as originally suggested and urged upon Parliament. If the council had been iii existence, as - we desired, many of the difficulties experienced would have been, readily overcome. Recent experiences should, have removed the main objection within the industry to- the adoption of the council. That the Act does not provide for it should not be taken as a barrier to its re-establishment. The moral force that it could exercise on the industry's destinies during the present crisis would be incalculable." "Grave Misfortune." Referring again to the New Zealand Co-operative Dairy Company and its relation with Jhe Amalgamated Dairies, Ltd., Mr. Grounds said that in the

board's opinion it was a pave tune to the wider interests of the in duatry that in company some ® 1 its officials the New Zealand Dairy Co™ panv decided to establish a marketing organisation on a basis that substantially diverged from the ideal and point of view that had been adopted for tho national effort. "We believe that the ideal offers the only acceptable basis for national consolidation, consequently we think the basis of ownership and control of the new company, as outlined in its articles of association, definitely exclude consideration of it as an acceptable alternative," he said. "A private company has a perfect right to decide its own constitution and method, of management, but when it aspires to national representation, its foundations, as well as its declarations, must be prepared for scrutiny, for the inner consciousness of the public mind, however agreeable on occasions, realises that 'figs are not gathered from thistles.'" ."May .Impede. Progress." "As a substantial portion of the coun- x try's output of butter, the volume of production of the New Zealand Dairy Company may give a lead towards improved marketing of immeasurable advantage if well directed," Mr. Grounds continued. "Conversely, if it takes a wrong path, "the momentum of this big organisation may effectually impede progress and seriously affect future development. To become part of a new organisation, which is not acceptable as a. national movement, only creates further divisions. Their previous course, that of establishing a selling organisation of* their own, was an entirely different and highly commendable procedure, but the new course introduces a duality of personality, which duality leaves room for doubt as to whether the voice is that of the producers' organisation or the selling agency, which are by no means one and the same thing." "Towards Disorganisation."

'"In my last review," said Mr. Grounds, '"it was indicated tliat we had arrived at the conclusion that some details of the hidden forces operating- against the board should be laid before producers. We had been urged to take this course by board members months ago when the New Zealand Dairy Company were threatening to take legal action. Mr. Goodfeliow asserts we have misrepresented the position. This is untrue, if it suggests a departure from accuracy. We admit that our conception of the position has not yet been fully represented. What we have eagerly sought, and still seek, is a way to consolidation, hence the restraint we have exercised. We have fought loyally and for the emancipation of the industry. We think that during the last year Mr, Goodfeliow has been taking a course definitely leading towards disorganisation. Taking the historic example of the American Civil War, where an exactly similar course developed, a war for emancipation ending in a war for secession, we think that those leading towards secession are seriously imperilling national interests."