CORRESPONDENCE.

Hawera & Normanby Star, Volume LXVIII, Issue LXVIII, 23 September 1914, Page 3

CORRESPONDENCE.

SOUTH TARANAKI BACON COMPANY.

(To the Editor.)

"Sirj-^On reading the report of the annual meeting of the Awatuna Co-; operative Dairy Company in. to-day'si issue, I noticed a resolution passed rei the above Bacon Company. With your1 permission I desire to say" a little, thereon,, also to ask of those who should know a few questions. Here I quote the clause under contention: —"It was sunder; the distinct understanding that the pig was to pay for everything, and their Articles of Association provided that the directors 'shall' deduct lsuer 1001b of pork to be credited to the share capital. At *the last meeting: of the Bacon Company this was amended to read 'may" deduct, etc. In view of the represejitations originally made-he moved that the meeting instruct "its represeriative on the Bacon Company, when the next balance-sheet is being prepared, to vote that the Is per 1001b deduction 'shall' be made."

•According to report, the above matter arid motion was brought up and forward by Mr. C. Wbolford, seconded by Mr. C.H. Hurst, being empliatioaJly carried. I will now endeavour to make my points clear to your readers. First, to whom are the shares allotted?—To the! Dairy Companies, not the individual. Second, from whence are the Bacon Company directors drawn?— Representative men are sent forward.by dairy factory directorates. Now., to, the point at issue: If one shilling per I lOGlbs. of pork be deducted, would this one shilling come off the net value of the jag, being the one shilling odd less to. the individual who supplied the pork or a scale of levy to the shareholding j"TCompany w "°-se supplier forwarded the pork ? Now, suppose an individ,, su PPlied 20001bs of pork, at one shilling levy he.has paid the price of one share, yet the dairy company would receive the benefit. Let this continue some little time, and the dairy *obmpames have gained all shares wifhout payment. Is this just to aUf ■' Decidedly ? no. Let us now look at the matter from another point of view. A dairy -company takes up shares in the Bacon Company. A call comes, and the money is paid from the dairy company's funds Who suffers? There may be individuals who do not raise or fatten pigs among the shareholders who may feel that the majority's funds are being used to benefit a few. We will now look to the other side I trust that all your thinking readers will allow that money lent or paid up is entitled to a current rate of interest —say, a, medium between a Government arid a bank lending rate. I know that there is a tendency on the part of some co-op, companies to pay but * per cent, rate of interest. In this case the dairy company would certainly suffer, if, instead of paying a share dividend, the surplus money be paid to the pork suppliers; but I trust the directors of the Bacon Company never i will have occasion to adopt such methods. Again, there is further this < advantage and although a dairy ' company shareholder may not be a >'• Bacon Company- supplier, yet the fact : remains that he can do so, and also that he will receive whatever the best business ability of the directors can procure, whether it be much or small: or, should he prefer to supply a pro-^ pnetary concern, there is no doubt that the establishment of the Bacon 1 Company has not caused the buying price of pork to diminish, so likewise he indirectly gains. ; From a review of the foregoing, as- ■ summg that the one shilling per lOOlbs ' is pa;d by the individual, I feel that irr^s to "ie; interests of all for Mr. Woolford and tha Awatuna shareholders to reconsider the resolution.

J. S. TOSLAND, Jun Pih-aina, Sepetmber 21.