SHARES IN MILK COMPANY

Press, Volume LXXXIX, Issue 26987, 12 March 1953, Page 12

SHARES IN MILK COMPANY

PURCHASE BY CITY COUNCIL

CONSUMER ASSOCIATION’S CRITICISM

“If the council in its undemocratic and unbusinesslike manner of buying a wildcat proposition cannot be restrained to act rationally, it is to be hoped that the next council to be elected will be able to justify itself by respecting public opinion and seeing that the financial structure of the future milk supply is built on a sound basis and that one debt is not piled on top of another,” said the secretary of the Christchurch Milk Consumers’ Protection Association (Mr G. J. Watson) in a statement to “The Press’’ yesterday. Mr Watson was commenting on the City Council’s recent decision to purchase shares in the Christchurch Milk Company. “The statement of Cr. T. H. McCombs that the liability of the council is limited to £20,000 is misleading,” said Mr Watson, “for when the council commits the ratepayers to the purchase of shares the way is open to sink unlimited money into this white elephant. “The public has been told in no uncertain terms that the Christchurch Milk Company, a company of £211,861 with less than £20,000 paid up capital, cannot on alone indefinitely without outside help,” said Mr Watson. “It has also been told that within five years the company’s plant would probably be overtaxed in capacity and in need of replacement and that £300,000 or more would be required to reestablish it in an outside locality with modern plant and equipment. The public has also been told that the Government was involved in the present plant and buildings with a State Advances debt debenture of £140,546.

“John Citizen cannot possibly escape the council’s indebtedness of a half share of a new enterprise plus half its antecedent liability,” he said.