FARMERS' CO-OPERATIVE ASSOCIATION.

Press, Volume LII, Issue 9157, 15 July 1895, Page 3

FARMERS' CO-OPERATIVE ASSOCIATION.

The fourteenth annual meeting of the shareholders of the New Zealand farmers . Co-operative Association was held on Saturday. Mr C. Ensor, Chairman of Directors, presided. There was a good attendance of | shareholders, and the following Directors were present:—Messrs M. S. Campbell. J. Gammack, J. Gough, J. Haydoa, l>. Mc- ! Millan, H. W. Peryma;!, J. Reunie, W. HendersoD, S. Btiiley, F. D. S. N-jave, H. j Overton, A. Piraons, F. K. BriUan, 11. A. '< Knight, R. lilunden, and J. J. Herrick. The annual report and balance-sheet were taken as reai. The Chairman, in moving the adoption of the report and balance-sheet, said—l will first of all review the figures presented to you and the appropriations recommended by your Directors. The net- profits for the year, together with the amounD carried forward frem last year, are shown to be £10 569 19s 7d—almost exactly the same as the previous year. These results have, however, been arrived at by somewhat difficult modes. Oar profits on merchandise and storage both show au increase ; but, ou the other hand, our commissions and ex change accounts show a vtry considerable reduction. This falling off in our commissions earned is accounted for by the extremely low prices which have been obtained for wool, grain, stock and all descriptions of farm produce. A 20 per cent, tall in the price of produce means a corresponding fall of 20 per cent, in the commissions earned in its disposal, although the gelling expenses would be the same. AI3O, the heavy reclamations which we have had from time to time to meet in London on produce shipped, have seriously affected our exchanges. It is gratifying to mc to uotice the improved profit on our grain store and storiiges, because the shareholders have had to pay no additional charges whatever for these services. Such profits prove that the improvements in the buildinge aud machinery effected by your Directors during the year are lessening the cost of handling your produce. One of your Executive Committee, Mr Renuie, has taken special interest in this department, and I am pleased to say that he reports favourably of the increasing interest ! taken by our workmen iv their arduous duties. There ie one other feature iv the accounts to which I will call attention, and that is, that our working expenses have decreased by £341, although the volume of our business as a whole shows au increase. You will eae in the report that your Directors recommend that the same dividends aud bonuses as have been paid for the last two years should be divided. To show that these recommendations are to the full in favour of buyers, I would say that if the proportion of rent and interest on stock were added to the expenses incurred in conducting our merchandise business, the total would be about £9000. When it is seen that we propose to refund 3 per cent, it means that this refund bonus is really higher than the actual profits made in this department. As I iearn that there is a doubt in the minds of some of our shareholders as to the wisdom of declaring a bonus on capital, I would explain that during the last seven years we have been selling shares at premiums, varying from 2s to 8s per share, and that these premiums have been paid on some 10,000 aharss, or on half of our present share capital. The shareholder who has paid the As- j sociation 8s premium on his shares of £2 paid up, supposing he did not participate in the bonuses, would only get iuterest on his investment at the rate of 5£ per cent., and when we consider that there is liability on every share in connection with the uncalled capital of £3, I am sure that such an investment would not commend itself to either the public or any of our shareholders, AH premiums on shares are added to the.reservo fund, and so help to earn the interest. Our articles provide that the share capital must participate in the bonuses pro rata with the business, and ie would be a breach of faith to alter this article so far as it applies to the shares already sold. A few of our shares are fully paid up. No bonus is paid on the additional capital uqcalled, but paid up by these shareholders. I would point out as a proof that we are not unduly favouring capital, that of the 1000 shares authorised to be issued at our last annual meeting, only about 300 have been taken up, thus leaving,, 700 still to be disposed of. Shareholders' will cote that at the conclusion, or adjournment, of this meeting, an extraordinary general meeting will be held iv order to niter our articles with respect to the election of Directors. Under the new articles it i 3 proposed that voting papers should be sent to every shareholder, aud so enable all to record their votes for Directors. The proxy system of voting for Directors did not work well. In the case of contested elections large numbers of proxies would be sent to individuals and so concentrated too much voting power in their hands. This matter will uo doubt be fully discussed at the meeting to be held for the purpose. , During■ the year, your Directors, in conjunction with the South Canterbury Association, have made an important alteration in the London Agency. Ib was felt that the time had arrived wheu your interests would be better served by being worked under our own direction by aa agent who would be bound to devote his whole time to our London business. From amongst a large number of applicants, Mr George Jameson was selected, I believe almost unanimously, by the Directors of both Associations. Mr Jameson, as most of you are aware,-? has had a long business training in the colony, and I think may be depended on to work our London Agency with credit to himself and the institutions employing him. As an owner of considerable farming property, in New Zealand, Mr Jameson's interests are identical with our own, and we may rely that he will nse every endeavour not only to place our protluce on the London market with care and economy, but also to find outlets for it in other centres of population. Next year I hope that our report will show that oar London agency is a financial success, and that our shareholders wil\ fci rule to express their satisfaction at the mode iv which their consignments are being dealt with. I may mention that since Mr Jameson's appointment the Hawke'a Bxy Farmers' Association have agreed to pase their business through our agency. Last month a meeting of delegates from this Association, the Wellington Farmers' Alliance, the Hawka's Bay Farmers' Aseociatiou, the South Canterbury and the J. G. Ward Associations, was held in Christchurch, and the question of distributing our produce through the provincial towns iv England was discussed. It was represented that differential railway tariffs existed between London and' the great manufacturing centres in the south aud west of England, and that a great advantage would result from our steamers calling and discharging at several ports instead of London aloQ--. The Shipping Companies have been approached and are now considering the question. Since our meeting I notice the following telegram has come from Manchester :—" The Manchester Committee negotiating for a direct trade in frozen meat, states that if freights are sent direct to Manchester instead of via London, from £1 to £2 per ton will be saved throughout the district, including landing charges and delivery." Other matters of interest and imporiauce u-ere discussed at this delegates' meetiug too ioug for mc to notice here, but a report j thereof will be published in our annn*l circular. I have the pleasure to inform you that the Farmers' Insurance Company has increased its paid-up cipital to*£so,ooo, the amount required by law to enable it to take risks from others than its own shareholders. In the course of the month we expect to register this Company as an open Company, and will be prepared to take risks in the \ open market. During the four years the Farmers' Insurance has been working its business, confined to its own shareholders, has shown very satisfactory results, and in addition to having paid dividends and bonuses i to its insuring clients, it has paid off all preliminary expenses and placed £2000 to its reserve fund. I hope for the future that this Insurance Company will have the support not only of the shareholders of this institution, but also of the gsneral .public. I would point out that this Insurance Company will be the only Company of the kind with its ! head quarters in Canterbury. I am glad to be able to observe that the cheap money scheme of the Government has been boldly and successfully carried onS, and we must all congratulate Mr Ward on the success of the first farmers' cheap money loan. In every new country farmers are bound to be : borrowers, they hive land to clear, houaee to build, fences to erect, and cheap capital is of all importance to them. The

good which will accrue from this cheap money scheme will not be confined only to the borrowers under it, but it will have, ami has already hud, a general influence on ihe money market, and is enabling every borrower to get cheaper capital, and so the whole community benefits. The present reduction in the. rate of interest I should estimate at about 1 per cent. If due caution and care is exercised by the Government in placing their loans, I am confident that money can bo lent by them at 4 per cent, iv place of 5 per cent., the present rate, aud the tendency also of the money market i« towards a lower rate of interest. We are interested in closely watchiug the conduct of our railways. During the year certain concessions have been granted on the carriage of stock, fruit, grass seed aud manure*, which I hope will prove beneficial not only to the producers, but also to the railways. It is however more and more erideut that the high rates charged on passenger traffic, wool and parcels, are rapidly diverting the traffic from the rail to the road. So far as wool is concerned, if the present high rates are maintained the railways can expect to carry but little on many of their lines. With regard to the passenger traffic, the great waut of punctuality in the traiua running from Christohurch up to the country is a frequeni source of complaint amongst farmers and others, and is evidence of great laxity creeping in. It always seems to mc that the conduct of these railway systems is an iudex to the character of the people of the country. I don't wish the people of New Zealand to earn tbe character of being the slowest and most unpuuetual people in the Australian group. The great local rise which has taken place in the price of wheat is a matter for congratulation to our farmers, more especially as when the sudden jump in prices came, a large portion of our wheat was in the hands of the farmers. I am sure many of our shareholders will acknowledge that they are indebted for this state of things to the foresight and advice given to them through tbe Association, and also to the cheap storage and liberal advances granted by this Association to enable them to hold when prices were so low. There is, however, another side of the picture to look at, not at all satisfactory. The Government statistics show that the wheat; product of New Zealand for 1895 was not more than 3,613,057 bushels, insufficient for our own consumption, as against 10,257,750 bushels for 1892, thus showing in three year 3 a falling off of no less than .6,644,700 bushels, and disclosing the total collapse of ono of our Canterbury farmers' principal mainstays, that of growing wheat for the Home market. We have before us the case of an English colony," with thousands of acres of wheat-growing land good enough to give an average, judging from last year, of 24.32 bushels of wheat to the acre, with the best appliances in the world, and perhaps the best agricultural labour, completely beaten in the wheat-growing - race by the low prices. It is not because our labour is divided into more profitable channels. There has never been a time in the history of the colony when we have had so much unemployed labour. Every town of importance in New Zealand is engaged in getting up a charitable fund to provide for its unemployed, and the country districts are flooded with men living on charity, or vainly seeking for work. It is all very well to talk about the law of supply and demaud beiug responsible for low prices, the questions we have to solve are why New Zealand is, with all her natural advantages, unable to compete iv supplying the Home market ? What country is supplanting us ? The answer is that while we have been going back the Argentine has been making giant strides forward. Statistics show that the wheat export ofc the Argentine has grown from 17,000,000 bushels iv 1892 to 56,000,000 bushels iv 1894. Figures also show that the exchange rales between Argentine paper money and English gold prejudices our farmers, and favours the Argentine farmers to a very large extent. During the last three years our New Zealand farmers have lost the industry of growing 6,000,000 bushels of wheat for export, while during the same the Argentine farmers have more than tripled these exports. What clearer proof can we have that the currenoy question is at the bottom of the evil, and that it is the hidden hand which is stealing the wheat growing industries from England and her colonies? According to the Quarterly Review I find that in 1874 the year after other nations followed*Euglaud and adopted the single gold siandard, her wheat harvest was valued at £42,000,000, while in 1894 her wheat harvest only realised rather over £8,000,000. No fall in- prices can possibly account for this difference. It can only prove an . utter collapse of tbe wheat industry. The evidence taken in the recent Royal Commission on the subject states that in Essex " the condition of agriculture ia one of general ruin. Farm houses stand abandoned, nearly 100,000 acres of wheat land have gone out of cultivation, and within sound of the church bells of London land has little more than prairie value." It is evident that the cheap labour countries, such as India and the Argentine, wherein the farmers pay their labourers with depreciated silver or paper and sell their wheat for gold, are ruling the pricss. The only class which appears to benefit by the low prices are the money lenders. England has lent huge sums to foreign countries. This seems .to be the explanation of the apathy of her Governments in these matters. I am pleased to notice that the Hon. J. Rig?, in our Upper Home, ha 3 been moving for a Royal Commission to enquire into the currency question, and I thinfc all farmers and producers rhould back up his demand. It seems to mc that the colonies, who are the borrowers, should move in this matter. In New Zealand, we have lost nob only onr wheat.- growing industry of 6,000,000 bushes, but this year our flax mills-Are almost all closed. Next year onr frozen meat trade may follow suit. We cannot expect to be able to mseb tbe yearly drain for foreign interests if wo are to lose our indu a triea, and have thousands of unemployed living on our producers. Itie becoming more and more apparent that the tendency of our legialetion must be such as to give confidence to our employers of labour to develop our resources and to increase our export trade. Before concluding I should like to review, at this our fourteenth annual meeting, the progress of this Association during the latt seven years, I took occasion, in moving the adoption of our balance sheet seven years ago, to express the opinion that our institntiou had passed through ita infant stage and would for the future show rapid development. The following figures will show how rapid that progress has been. During the seven years 6ince 1888 our shareholders have increased - from 155S to 2833, our subscribed capital from £52,500 to £101,460, our reserve fund from £1200 to £12,241, our deposits from £10,685 to £68,000, our advances to farmers at the close of the year from £31,722 to £96,191, onr sales of merchandise from £45,100 to £131,000. The greatest increase of all is iv wages paid. In. 1888 we paid in washes £2411, while this year we hive paid £12,036. This latter includes the wages paid in our grain stores and also in the clothing factory, which does not show in our balance sheet, separate accounts being kept and the amounts charged off to storage and goods. It will thus be seen that the Association is now a very large employer of labour. I now beg to move the adoption of our fourteenth annual balance sheet and Directors' report, and tbab the dividends and bonases as recommended be declared. (Applause.) Mr Panned; seconded the motion, and said it was a matter of congratulation that such a balance-sheet could be presented, considering the trying times through which they were passing. Italsowasacommendation to the acumen and business management of those in charge of the Association. The success of the Association also went to prove the value of co-operation. He expressed his pleasure that the Chairman had prophesied a benefit to farmers iv an improved management of tbe railways. (Applause.) ■ Mr T. Cosway said that there were a number of small shareholders who were not altogether satisfied wit!) the interest on shares. A number of shares received 10 per cent. While recognising what capital had done for the Associalion, he thought it had had a. good innings, and he considered if the shares ia question received 8 per cent, that should be sufficient. Mr A. McLaciilasJ supported the previous speaker* remarks, and said that the confidence in the Association was shaken on account of its high rate of interest, as was showu by the fact that the last issue of shares had hung. He understood that the Association had been started to bring down prices in interest, bat from what he saw tie

did not think this had been effected to any appreciable extenc «_.»- In answer to Mr W. H. Lane, the GsAiaman said that the funds of the Association "had been increased by £361 on the ferfeitui* of dividends. On the forfeiture of bonnwa the amount had been very small. Mr Lane suggested that it would be a harder matter to atate what bueiness bad been driven from the Association by the inflicting of the forfeiture penalty. ■ The Chairman said there was no penalty. Though it was understood that bonuses übclaimed within twelve months were liable to forfeiture, that was not enforced, and payments were made whenever asked. Mr Lanb questioned this, and gave an illustration. The Chairman pointed out that the gentleman had not applied, and Mr Lane admitted that such was the case. Mr Lanb proceeded to state that he supported the remarks of other speakers who had observed that they could be as well served elsewhere, where they did not have shares ; and he considered 2£ per cent, discount payment* was as good as bonuses once a year or not at aIL Bβ suggested that to avoid shareholders overlook* ing the dividends or bonuses that when they were due a warrant should be issued to each shareholder. In answer to Mr J. Milne, the Chairman said that 4 to 4i per cent, had been paid on deposits, bub that had recently been reduced. Mr Milke went on to speak on matters ia the report and balance sheet, and said that the Association charged too much for the goods it so)d. He had in many things, some of which he mentioned, got better value at a cheaper rate at other establishments. In this way he contended business was being driven from the Association. Mr Aoton-Adams moved as an amendment to reduce to 8 per. cent, the total amount payable as dividend and bonuses on the called-up capital and to inorease to 5 per cent, tho bonuses on shareholders' purchases. This he considered would be a more equitable distribution. When tbe money was first put into the concern it was only fair that 10 per cent, should be paid as the concern might be considered risky. It had now been running fourteen years and was no longer a risk ; it was one of the most solid concerns in New Zealand. The shareholders, roughly speaking, found £40,000 and got 10 per cent., and the depositors found another £40,000 and they got from 4 to 4£ per cent. That was a very moderate rate of interest, and he congratulated the Directors upon getting the money at such a low rate. It also showed that the institution was solid. Therefore tbe shareholders should consider 8 per cent, sufficient remuneration. The Chairman said that the amendment proposed could not be accepted without rlrsc altering the articles of the Association. Mr Acton-Adams said tbat if his proposal were opposed to the articles of the Association he would withdraw it. The Chairman said that whatever they did they mu>t keep faith with the shareholders. Mr Adams read the article to which the Chairman had referred, and said there Was nothing in it which, to his mind, gave the Chairman power to move the amendment out of order. There appeared* to him to be no reason why there should not be a differential bonus. He thought the Chairman was raising a point of order in his own favour. - The Chairman answered that they could not go into little legal points at that meet* ing. It was perfectly clear they had to give a bonus on capital and a bonus to. shareholders. The articles had been altered for that reason, and they must etick to it.

A Shareholder—lf we can't have a "cut ■ here to-day, what's the use of coming here? M Mr Acton-Adams said he thought it was beneath the dignity of the Chairman to talk about little legal points. As, however, the amendment was ruled out of order, he (Mr Adams) would move—" That before a dividend waa declared, oouneelV opinion should be taken as to whether the Chairman's ruling was correct or not." Mr A. Mc LaohliAH seconded the amend* menb, and asked if there were any reason why it should not be submitted to£he shareholders, and also if the Directoie were unanimously of opinion that 10 per cent, was a fair interest on capital. The Chairman said Jthat if they con* sidered the risk 1 people" had: run by putting money into the concern, he thought it would be conceded that the interest paid wu a fair amount. The risk was not confined merely to capital on which interest was paid, as for every £2 paid by a shareholder ho was further liable for £3. It wm in consideration of that liability that they got the cheap money which enabled them .to pay the bonuses. If the articles wore to be altered, the alteration' could only be made to apply to future shares, and not those under which the Association was* started. They could pay first as much as was wanted on purchases, but to do that they would have to put on additional profits. (Laughter, and a Voios—'• You would lose all your trade.") . ;.; *'.' Mr Blackixore congratulated the Chair* man on sticking to the original ideas of the Association. The Cuaikman proceeded to pat the motion. Mr Acton-Adams asked that his amend* ment should be put. He submitted to the Chairman's ruling, but would ask'in fair* ness that what was proposed and seconded, and in due form should be put to the .meeting. He did not believe that shareholders had been promised 10 per cent, for all time, and he would like to know for the sake of that aud future meetings whether they must vote aye or no for" the proposal by the Chairman, or whether they could make any little alteration. The Chaibman answered that until the article waa altered bonuses had to be given to shareholders and ou capital. Mr Acton-Adams—Will you take conneel's opinion 1 The Chaibman—l have no objection. Do you want to etop the business while that is done ? ' Mr Acton-Adams—No. The Chairman—l will take counsel , * opinion without a resolution. The motion before the meeting is the adoption of the report and balance-sheet. Mr Acton-Adams—-Will yon put my amendment? The Chairman—lt is not an amendment. You may put it after' the motion ha* been disposed of. (Cries of " No, no.") That is the ruling I give. , < ' ,Mr Acton-Adams—l don't wish to inter* fere with the motion. ' t The Ciuibman—You may move it at the riant time. It> is no amendment at all. (Voices—"lt is.") You mast first of all approve or not approve of the motion I hare moved. If Mr Acton-Adams wishes mc to take counsel's opinion, it can only refer to the next annual meetiug. If it is now carried it will probably mean that the balance sheet and report are returned to Uβ, while we know we can pay the money. The motiqn for the meetiug is that the report and balance sheet, and the recommendations- of the Directors, be approved. * ' '-> The motion was put , , and declared by the Chairman to be carried. Mr Acton-Adams then moved his motion in the following form— •' That the Directors be requested to take counsel's opinion as to whether the Chairman was correct in the ruling that Mr Acton-Adams could not propose a resolution giyiug the shareholder* 1 per cent, bonus on their shares and 5 per cant.on their purchases, instead of the amounts in the Directors'report." The motion was put, and the Chairman declared it lost by 56 voted to 48. The Chaibman declared Messrs 8. Bailey, WVBoag, D. Buddo, J. Gammack, J. V J. Herrick, J. Holmes, and J. Rennie elected as Directors for the ensuing year. The auditors' remuneration was fixed at the same as last year. . ... Messrs H. A. Bruce, W. Jameson, W. Ollivier, A. W. Hulme, H. R. Homan, and .* IV B. Craig were nominated as auditor*. A ballot was taken for tne election, and resulted in the retnrn of the old auditorsMessrs H. A. Brace and Vγ". Jameson. , The usual votes of thanks were accorded to the Chairman of Directors, the Directois, the General Manager and staff, after which the meeting closed. ,