Story of Canterbury stock firm

Press, Volume CXI, Issue 32702, 3 September 1971, Page 18

Story of Canterbury stock firm

Two years ago the Canterbury stock and station firm of Pyne, Gould, Guinness Ltd, celebrated the fiftieth anniversary of its establishment. A history of the firm has now been published under the title, “Pyne, Gould, Guinness Ltd. The Jubilee History 1919-1969.”

It is, as the front flap of the dust cover says, more than a story of a firm of stock and station agents—it is the story of farming in Canterbury. The chairman of the directors of the company, Mr D. W. J. Gould, comments in the foreword: "The history itself, I think, shows very clearly one peculiarity of stock and station firms: more than any other kind of business that I can think of, the interests of the firm and its clients coincide. It prospers when they prosper; it shares in their reverses and misfortunes ...” Although the present firm of Pyne, Gould Guinness Ltd, did not come into existence until May 1, 1919, and is of relatively recent vintage, Mr Gould notes that its roots go deep to the very foundations of the Canterbury settlement. The 1919 merger brought together the Christchurch firms of Gould, Beaumont and Company and Pyne and Company and the South Canterbury firm of Guinness and Le Cren, Ltd. Each had been established very much earlier. And in fact Mr D. W. J. Gould’s grandfather, the first Mr George Gould, set up as a storekeeper or trader in Christchurch in the middle of 1851, and when he was joined in 1854 by Grosvenor Miles they embraced among their activities those of stock and station agents. In 1864 they shipped some 18 per cent of the wool passing through Lyttelton and in 1867 when the local price of wheat dropped to 3s per bushel because of a big harvest in Australia, Mr Gould bought and shipped to London 1000 sacks and sold the grain for 8s 3d per bushel. Apart from being a trader, an authority on sheep stations, and financier, the pioneer Gould was interested in a host of community activities in the young settlement and is remembered as the foundation vice-president of the Canterbury Agricultural and Pastoral Association and then its president from 1868 to 1874. The jubilee history records how the amalgamation of the three firms took place. A key figure in the moves that had this result was Mr Norton Francis, the father of the present managing director, Mr G. N. Francis. In 1901 he had become a partner in the South Canterbury firm of Guinness and Le Cren, Ltd and they in 1904 merged with the Geraldine firm of Mating and Shallcrass to give themselves South Canterbury - wide coverage. With an eye on even national coverage they conferred with the expanding Ann of Wright Stephenson and Company, but subsequently they opted for a regional amalgamation of interests to a national one

in the belief that the larger one might result in absorption rather than amalgama-

tion. Pyne and Company and Gould, Beaumont and Company had apparently many years earlier also contemplated a merging of their interests but it had not come to anything. Even after the merger of 1819 the idea of a still further expansion of interests persisted and 10 years later an amalgamation with the London based National Mortgage Company, Ltd, was all but completed. It was dropped because of the objections of the younger members of the firm who had come into the organisation and who, the story says, “were willing to stand and grow on their own feet.” The firm of Pyne, Gould, Guinness came into being at a time of prosperity following a period of controlled but profitable trading for farmers during World War I, but it was soon to be faced by more difficult times as evidenced by the return from the national wool clip suddenly declining from £l2m for 116mlb weight in 1920 to £sm for 159m1b in 1921. In the next few years fortunes fluctuated fairly widely. The history records, however, that the general downward trend continued until between 1931 and 1933 prices had reached a low level comparable with the long forgotten period 50 years earlier in the 1880 s. The firm’s “Annual Review” of 1930-31 related that “with production costs higher than receipts from the farm, the lot of most farmers during the year has been unenviable.” One of the basic reasons for the trouble was, of course, that after World War I many men who had gone on to the land had undertaken mortgage commitments that could only be sustained in favourable conditions and farms were often too small to withstand the vicissitudes of more diflicult times.

it is recorded that a plan to keep fanning going in these trying times was actually initially worked out by Mr Norton Francis and became known as the Canterbury Chamber of Commerce scheme. It provided that the first charge on farm returns for the year was the money advanced for working expenses to carry on the season’s operations and interest on these working expenses. With these expenses covered any surplus income was to be applied pro rata to a previously agreed "frozen” secured debt and then to the payment of other unsecured creditors. Under the Mortgagors and Lessees Rehabilation Act of 1936 more than £3m of fanners’ debts were written off and remissions of interest exceeding £l'.sm allowed by 1939, ana at the same time Pyne, Gould, Guinness Ltd, on their own initiative, wrote off nearly £500,000 which they considered not recoverable. As head of the firm’s trading departments much of the load of the depression days fell on the shoulders of Mr T. J. Maling, who had come to the organisation from Guinness and Le Cren and who was initially a partner in Maling and Shallcrass of Geraldine. The history gives much of the credit for the good will that the firm has subsequently enjoyed from its clients to him, in his handling of affairs during the depression, in that he believed to be fair, just and tolerant was more important than other business considerations. The firm records with pride that hardly any of its chients had to leave their farms during this period. In the organisation itself employees had to accept a 10 per cent cut in salaries in 1931 that was not restored until 1934 and 1935 and no dividends were paid to shareholders between 1930 and 1936. Mr George Gould, a son of the pioneer Gould, remained at the helm of the company during this period—he was chairman from 1923 to 1941. His particular contribution to farming was the importation in 1913 of Suffolk sheep and their subsequent crossing with the Southdown to develop the South Suffolk which in 1952 was given full Flock Book recognition. From a farming and economic point of view the period of World War 11, although an unhappy time for men everywhere, was a relatively stable and profitable period for the farming, industry and those associated with it but Pyne, Gould, Guinness had one trying experience at this time. Back in 1923 a change had been made in the firm’s capital structure.. Some 400,000 shares had been converted into “A” and “B” perpetual debenture stock at fixed rates of interest. This interest was deductible by the company for taxatibn purposes but was taxable in the hands of the debenture holders. In 1938 three other companies made similar capital reconstructions and in 1940 a fourth was contemplating doing so when in the Finance Act (No. 2) the late Mr Walter Nash included a clause laying down that interest on this

type of debenture would be a taxable charge on the company, and what was more serious the legislation was to be retrospective. For Pyne, Gould, Guinness the firm's history says that this would have spelt disaster. Pyne’s ana other companies concerned naturally took all this up with the Government and negotiations and discussions -went on for quite a long time. At one stage Mr Mating sent Mr Nash a telegram “Job, chapter nineteen, verse two.” It reads: “How long will ye vex iny soul and break me in pieces with words.” A few days later the Finance Amendment Act was before the House and section 8 stated that if more than a fourth of the debentures had been transferred for a consideration in money before the passing of the earlier Section 2, that section would not apply. This was the escape clause for the firm but Mr Nash subsequently pointed out that the position, would be reviewed at a later date and it was not until the passing of the 1954 income tax consolidating legislation that the directors were quite sure that the crisis had passed. The boom times following World War II and the inevitable fluctuations in fanning fortunes that have followed will be known to most readers and are the story of the final phase of the company’s first 50 years. Mr P. G. Stevens, formerly of Lincoln College, has made a readable story of the firm’s history. There are the little touches that enliven the bare bones of history. For instance, it is recalled that the first Norton Francis was an enthusiastic golfer and is credited with

introducing golf to South 1 Canterbury. In 1893 with 1 his father-in-law, Michael i Studholme, he set out a 1 few holes in a cow paddock 1 at Wainono. Similarly T. J. Maling was a pioneer motorist. In 1901 he bought an Oldsmobile car—one of two cars in South Canterbury at the time. In 1927 when Wright Stephenson and Company launched a national yearling sale at Trentham it was j natural that Pyne, Gould, < Guinness Ltd, through the < enthusiasm of Mr D. W. J. I Gould should have entered ( into the field also. Years i before Pyne and Company :

through Mr F. H. Pyne and Mr A. Boyle had developed a reputation for their sales of racing stock, including their New Zealand Cup week sale. In 1928 Pynes had the distinction of selling a gangling colt that,in the next four years stole the headlines as Phar Lap winning between £66,000 and £71,000. The sale price was only 160 guineas. The text Is well supported by photographs. One of these of members of the Geraldine branch of the firm In 1926 Includes J. (now Sir John) Acland as a stock agent with his dog Smut