CONSTITUTION OF N.D.A.

Hawera Star, Volume XLVII, 20 June 1928, Page 11

CONSTITUTION OF N.D.A.

PROPOSED ALTERATION NOT

CARRIED,

PRE.SK,NT SYSTEM CRITICISED. Although there was ;i substantial majority of 61 votes to 43 in favour Oi the proposal made at the conference of delegates of the National Dairy Association in Palmerston lNorth yesterday to alter the constitution of the Association by making it into a Limited Liability Company, the required majority of three fourths was not reached and therefore the proposal was not carried.

un moving the motion that the conference favour reconstruction of the association tne cliaiiman stated that it arose from the necessity for putting the association’s finance on a satislactory basis. The system of promissory notes under which they worked was unsatisfactory. He was of the opinion that its interest would be best, served by lorming it into a limited liability company, ft was not desirable to do that, however, unless all members gave their support, unfortunately there were members desirous of retaining their interest in the association, out not prepared to do business with tlie association. .tie could not favour altering its constitution unless there was whole-hearted support from members He asked members to give careful consideration to whether it would not be better to continue the association and extend its powers so that its sphere of usefulness in the industry would be widened. Under reconstruction the share capital liability would be little more than the liability now assumed by those companies that gave pronnssary notes. They had accumulated profits amounting to £221,060 which would be allottted to companies on a pro rata.basis to their annual subscription. That would be in the proxxirtion of 40, SO or ivj fully paid-up shams. They' asked companies to take up a number of shares equal to the number or luiiy paid up shares received, which would mean a total or 42,000 shares Another suggestion was that factories should take up further shares oil a sliding scale in proportion, to their output, giving another 35,000 shares, making a t dal of 77,000 shares. As the share capital was limited to 80,003 £1 shares, that would almost exhaust the available shares. There was no danger, therefore, that companies would be called upon to take up further share capital as their output increased. They would call up only 7 10 per cent, of the share capital, or £5600 leaving a balance of £SOOO available for financing and doing away with the necessity for promissory notes. With the reconstruction the annual subscription would cease. Mr. E. Burke (Kaupokonui) agreed that finance by promissory notes was unsatisfactory, hut pointed out that the industry was asked to support two organisations, the National Dairy Association and the Dairy Control Board, both of which were ‘doing the same work. He did not suy- that either was unnecessary, but thought it was not right, to ask the industry to support both.

Afr. Breen said the directors must consider how far they’ were to commit their companies financially and how far they were going to injure their districts if they allowed the association to go out of existence as a trading concern.. Mr. Harding (United) urged the necessitv of supporting the association, pointing out that its manufacture of rennet had kept down the price of foreign rennet. They produced on cooperative lines. The scheme threw to the winds the .small companies in favour of the big_er, said Mr. Muggeridge (Alton). He thought all companies should come in on the same basis, as tlie small companies liad been loyal to the N.D.A,. and they wanted an equitable basis ol reconstruction worked out. It could be seen, said Air. Gibson (Rahotu). that there was no unanimity. His company had not contributed promissory notes, 'but had suggested that thev should form a commercial company of those that wished to join and still have subscribing members who could take advantage of the consultative side, of which sight had been lost. Though they might replace their directors the' field of choice was verylimited. . . Replying to a question the chairman said no change would be made in the present system of voting, the maximum being three votes. That would safeguard the small companies. Mr. L. Taylor (Ngaere) said that il ompanies put their whole orders for basic slag through the N.D.A. they would save more in one . year than the whole contingent liability. Air. Milne (Stratford) considered it was a case of co-operation in each. ilher the N.D.A. or the control board should go out of existence. Mr. Marchant (Cardiff) said his directors opposed the proposal because it was felt the directors of the IS.D.A. had not the confidence of the industry. Mr J. B. Gow (Opotiki) thought the discussion showed there was a danger of disintergation. The co-operative spirit which had done so much for the industry in the past generation m New Zealand had been responsible for a distinct saving to the industry. If delegates stood in the way of directors placiim- the association on business oasis thev would be endangering the association in the interests of proprietary concerns. The directors did Hieir vo*st for them, though it was admitted that at times they made mistakes. An amendment that the proposal be held over for twelve months and that an inquiry be h.-lcl into the business methods of the Associations with proposals for their improvement, was defeated. The motion was then put and carried hv 61 to 43. the majority, however, being insufficient, to make the alteva- ] lion in the constitution.