COOPERATION & FEDERATION.

Hawera & Normanby Star, Volume LXXII, Issue LXXII, 29 May 1917, Page 5

COOPERATION & FEDERATION.

AN INTERESTING ADDRESS BY Ai.it iialijtti..

[ I At the annual meeting c;f sharei holders uf t£e -fanners' Co-op. Ur- ' giimsafcicn Society on Saturday last, «i most interesting address was delivered by Mr itelpn, general managev of thd IN.Z. Farmers' Co-op. Association of Canterbury. Mr Relpn came to Hawera. by special invitation, and his address was listened to with, wrapt attention tiirougnout. The speaker said that he had not come to Hawera with any set speech, lie was as&ed by their chairman to try and come, and he had made the effort and he had learned a good deal. He had discovered that one had to come to Hawera to "get a really good enthusiastic" meeting. (Hear, hear.) This was the largest and most enthusiastic meeting he had ever attended— although he .had been associated with. co-operative work for forty years—notwithstanding Mr Taylor's criticisms, too. But he considered those criticisms had been helpful. Mr Taylor: Hear, hear; that's the way to tulk. (Laughter.) Continuing, Sir Reiph said that their meetings clown south usually lasted: about an hour. "But then we have no Mr Taylor there." A voice: We'll lend him to you. Mr Relph: "1 am going to try and sell Mr luylor a farm down our way." Coming to the subject matter of his address, Mr Relpii said that Mr Lynfikey Jtiad sent him a copy of this year's balance-sheet, asking for the benefit of his (Mr Relph's) criticisms. He read that balance-sneet and pointed out a few things that in his opinion called for attention. But they were only matters of detail, and it would be a miracle if a company such as this could go along like clockwork right from its initial stages. It would be ! impossible in fact that it could be so; j such things never had been and never j would be. The company to which he j belonged had made a lot of mistakes, j but newer concerns could avoid those errors, and for that reason he welcomed enquiries from younger concerns. He invited more concerted ac- ! tion, which would ultimately be valuI able to themselves and to others as* ; well. The one point that especially called for his criticism or advice was that of capital, and in order that they might more easily comprehend the figures he purposed quoting he had prepared the sheets which he would place before them. These would, »he trusted, enable them to see what they might be able to accomplish with adequate capital. He might firstly explain that the company to which he belonged in Canterbury was established a little over 36 years ago. In those days the farmers of Canterbury, and doubtless the farmers all over the Dominion, were in a hard struggling position, and very few of them were independent. Before the inauguration of his co-op, company there were in various parts of Canterbury little farmers' clubs, and the members met once a month to discuss matters of mutual concern. He might say, in passing, that the men who took up farms in those days were not farmers; they were stone masons, mechanics, and men from all kinds of professions, who took up the land simply because the Government sold it at reasonable" rates, and although they realised that they would have big struggles they know that ultimately they should be able to get ahead of things. Fortunately for them there were also somo English, Scottish and Irish farmers, who knew the farming business, and they were a great help to the others. As he previously said, at these little clubs matters of mutual concern were discussed, and at one of those meetings the idea of starting a co-operative company took shape. The company was started, and although in its early days it had a hard struggle for existence, it never turned back. ''In 1882 it earned only £108 in commissions, whereas your "company earned £22,000 in its third year," said the speaker. We earned £22 on finance and £720 on merchandise. We had then only a small room, and the staff consisted of the manager and a boy; now we have a staff of 900. The next year we made £235 on commissions and £3000 on merchandise; in 1884, £450 and £3524; in 1885, £633 and £i 5722; in 1886, £936 and £2750; in 1837, £1923 on commissions, £447 finance, £4100 merchandise, and £134 grain stores — total, £6664; in 1838, £2251, £2®*, £5020 and £158, total, £7691: in 188?, £2962, £1316, £6550, and £220,.t0ta1, £'11,048; in 1890, £4148. £1413, £9382 and £302. total, £15,281; in 1891, £6298, £1462, £8913 and £281, total, £16,954. In the first ten year* their gross earnings had increased from £850 to £16,954. They had, of course, in the meantime secured a small section, put a modest building upon it, and carried stocks, and on these they made their profits. Now he would look at the,figures of the last ten years of their operations: 1907, commission* £11,562 (still only half the amount that your Taranaki Co-op, had earned in its third year), finance £4790, merchandise £40,696. and grain stores £803 total gross earnings, £57,851; 190S-l-£13,360, £5516, £56,790 and £880, total £76,546; 1909—£17,862, £4818, £60,517 and £857 .total £84.----054; 1910—£22,801, £8752, £62,206, and £1007, total £94,766; 1911—£22,----849, £12,151, £69,534 and £1524, total. £106,058; 1912 — £25,532, £14,886, £74.607 and £998, total, £116,023; 1913—£26,865, £16,990, £81,657 am* £934, total £126,496; 1914—£30,945, £20.333, £86,664 and £1095, total £139,037; 1915 (war year)—£2s,9B6, £19,915, £90,792 and' £1254, total £137.949; 1916—£35.082, .£20882, £98,252 and £1564, total £155,780.

They would notice that right th-roughc-the profits on general merchandise a. long way exceeded their profits on commission business, and their controlling., body had always been of the opinion that they could not do anything better in the w^y of binding the whole of : their shareholders together than in catering for their domestic as well aa^ their agricultural needs, and they had " endeavored from the beginning to*' make it unnecessary for the farmer tOi go past the co-op., no matter what* he wanted, whether for his farm, his-; home, or financial requirements. "In.. that connection let me say," said Mi— Relph, "that I would strongly recommend you to support your board. This.. province is not in the struggling condition it was_ many years ago; the*." country is prosperous, money is easy, and I "do think that you should subscribe more liberally- and provide the*money for your board that would en— able them to give you premises worthy— 8 of this splendid meeting. (Applause.)-

The sneaker then briefly referred to>> the Auckland Co-op., the first meotingji of which he had just attended. There* t-hey were attempting to do a merchandise business on insufficient capital;; they could not cany comprehensive stocks, and had to send out for goo'ta.* This was not satisfactory. If shareholders supplied their concerns with the np_pessary capital to build suitable premises and keep comprehensive stock* .1 their directors could then get whatever* was necessary and conduct a. more profitable and satisfactory business. Somefew years ago his company's fertiliser business grew to such an extent thatthey decided to go in for works of thei" own and mix their own fertilisers, ami the figures would indicate how that busi-

ness' too had grown. In 1908 they put through 2460 tons; 1910, 4670; 1911, 5021; 1912, 5073; 1913, 6321; 1914, 7003; 1915, 8849; and 1916. 8327. In their wool department the number of j bales sold by his association also showed • a steady increase. In 1908-9 the figures; were 7962 bales; 1909-10. 9904; 1910-11, 9776; 1911-1-2, 9214; 1912-13, 9952; 1913-14, 11,707; 1914-15, 12,270; and. 1915-1/3. 12,608. In quoting these figures he did not do so with any thought that they would cause his hearers to feel any disappointment m their own concern. Quite the antithesis; he merely wanted to demonstrate what a co-op, concern was capable of if given proper opportunities. In 1908 an amalgamation took place. The Bangiora Co-op, was absorbed by the Canterbury Farmers' Co-op., and their resorve fund of £15,000 wae added to the other's capital. When the directors of the two concerns got together, a more progre«sive_ policy was decided upon with regard to its Stock and station business, and they would see how the reserve fund had grown. In 1908 tihe Association was in its 27th year of existence, and its reserve fund was £53,000, including £15,000 added by the amalgamation. In 1916 it was £145,000. showing that it had increased by nearly £92,000 in eight years. Some of their shareholders, thoughtful men, and men who had the welfare of their concern at heart, criticised the proposal to increase the capital. They said we have gone along quietly in the past and done well; let us continue to pursue that policy. However, the Board, supported by a majority of its shareholders, decided to get in more capital, and to get a move on. The critics argued that if tthey introduced more capital they would prejudice the company's position, but he would like to show them how the position was prejudiced. Their total liabilities in 1906 were £210,737, and their assets (including uncalled capital) £443,959; percentage of liabilities to assets, 47.46. Ten yearn later their lia- _ bilities were £694,821. and their assets £1,601,845; percentage' of liabilities to assets, 43.37. When a man joined a company he joined it because he wanted something ottb of it, and he could assure) his hearers that if they would give their controlling body adequate backing, thej same as shareholders down south had done, they .would get good value for their money. His company had paid out in dividends on capital, bonuses on pur-! chases and rebates on commissions, no, less a sum than £337,908 during the last! eleven years. During that same period the new capital introduced into the com. | pany amounted to £476,000 of which! £339,806 had been paid up, so that the; Association had paid out by way of interest, rebates, etc., an amount almost equal to th c amount naid in oi.t the shareholder still held *his share*. To p\it the position more clearly. Sui posing a farmer had paid in 111 during ■those eleven years. He would ha^e had returned to him nearly £*11. br.c he would still have his £11-wo.rtn cf shtres. Furshermore, since the /ssociauon had added £103,100 to their reserve tun." in that period, r.is share vslue had aopitciated something like 6s in the £. "What I noticed about your figures, m comparison with ours," continued the speaker, "is that whereas we were twenjty-nine years old before the commission we earned amounted to £22,000 you have finished your third year, and Son <^™ 1™ssion vo» earned amounted to £22,266. You have done in three years what we took 29 years to do. "(Applause). v F Mr Taylor: Didn't you establish a reserve fund? Where is ours? Mr Relph: Our reserve fund m the hrst three years was nil. It w,.s not until the year 1888—seven yoais alter the commencement of our *],asiae«s—that we made the first contribution to cur reserve fund of £1200. m Mr Taylor: You started from noth--lUSS we took over a big concern. Mr Relph: We began with an authorised capital of £250,000; we had bOJ members the first year and £17,555 subscribed capital, of which £3511 \ vas paid up and £14,000 uncalled. We didn t pay a bonus or anything else the first year; the second year we paid /per cent, on subscribed capital and fifth years we did likewise, but in the dend, 2* per cent, bonus, and 2* per cent rebate on commissions. Continuing, Mr Belph said that he was quite A«nJi 1?- tne pii°F£SS of the Taranaki Association would be very rapid and substantial, and he urged Shareholders JtS? J su PP°rt 1* by subscribing the capital necessary for its proper ded »X e% Ha wr ld, like *» s™^ them deielop the merchandise part of their StWeUS 3 ""«"«• I Mr Relph then procected to S oeak of tae advantages of federation -ffiv aU knew, he sazd, of the wonderful Sect of unionism m other spheres of life So-I Y'VT *thftt aft in the room «oUd admit that unionism, carried on on right lines was of advantage to an. They would all agree that tha Mr Rclpli: You will not nit't«. n t BIF* ««& tries-such as butter, cheese neat why not apply them to theh co-o^ tive businesses. If they admitted thnt the principle of cd-opera Son was sound, and he thought the facts nd figures quoted by him, and also thi E. l£ a'an^ shpeK sufficient to stow .hat the pnnoiplo was sound fief] VOICe: AYe are absolutely satisMr Relph wont on to say tliat there sv?^° B rf/ Wh-V their Wooeratiie sys,eni should not be further ilevoTop-h-,rv yi lf d C°ne well in CanteVSni'Vu"?. 7e" m Taran«ki had also done neJ and were going to do better. TV hi Ist they had been developing other private interests had also h o ?n developing, and they knew that there tvas md:sputa.ble evidence of a trust .workmg m the Dominion. They vo»H the better be able to cope with this Tii^t it tneir several interests were tanted-tbey knew < t^t stromth—and with this obipctive a fncl the first statutory meeting of the ' nenvcomnany would be held in n few v/n01,; 5- "'hen the necessary officers would be npnointed. They were all agreot. that it was a sound princmio to combine for mutual advanta^s and this wns shown by the fact tna't tne interests of the dairy factories, n-eezmg works, etc., were allied with each other. What were the farmers' co-operative societies going to do? Were they going to play a lone hand y They would know what thnt would inenn better than he did. Their company had been pursuing its course, and his own company had also been pursuing its own course. Both hnc! done aood work, still he thought they woujd never succeed as they should do until their interests were combined. All the co-operative companies sho'iid be joined together, and this was v/hnt the federation scheme aimed at. It was not intended or proposed to de•stroythe identity of the several institiitions, but It -was merely proposed to link'tip their interests on the principle that "unity is strength." This "would result in the growth of their business. They would later on need to

have an institution, established in London through which their exports would be filtering, and through which their imports would be made. His association had had an office in London for many years. That was all very well. But much better results would be obtained if all the farmers' co-operative societies were combined and had the one office in London, as the principle of federation would put the smaller concerns on an equality with the larger ones in regard .to their purchases, etc. Ihe aim of the federation was for the older societies to help the younger societies, and by federation they would be able to buy ten times as; much stuff as they were now doing. The system was to "pool" their orders. I<or instance, Christchurch could obtain 10,000 tons of superphosphate anc Hawera 5000 tons, and by federation both orders could be supplied at th< on. pno» per ton. Then, again, bj federation they would be able tc I ov?' cJ 6 aip®S eat *.deal more with their exports. Federation opened up a wonaSSI P^b^ty with regard to thei: exports, especially when it was re menibered that this country was a ' Pf° du""g immunity. Over 80 pei cent of their wealth came from the . land. New Zealand would never b a manufacturing country, but i 1 1 When t7 "d done Previously 1 m+ v ake their Produce. They • TfTi, glve a continuity of supply nroducmg concerns they would then , f° d "*" f^erned. Recently he had stage, nere anxiously watchins: tho do v all the people in England enSrtter'tV 116 b^tei't^de thought the t£ +1. 1G f iror? Ne"' Zealand and the other producing countries. Well the sooner they got rid of Toolc-v wK* f n T th°, °ther sti oei Hens m London so far as their pro<!»cp was concerned, and got thX SB 1"!' C T °-°ll l eratl> busing estabshod in London, the better it would be .for everybody. (Applause.) The , United StatP* recently 'sent ovor an acc,ed,tod officer to X o «- Zealand to study our co-operative methols, nnd ho (the speaker) was fortunately able to supply him with information "which if TrV VIU he ver-v bel Pful to him in ostnbhshmg co-operative conoorns in thP States He also enquired into tho details of the proved federation of co-opc-rative associations, and in dis-cusß!-g the matter with him afterwards he agreed that the proposal was on rurht lines and quite pound, and his wonder was that H had not been started before. Russia, anticipating an early close of the war, was eager to develop her agricultural interests and her people wore taking advantage of At the present time they had 40,000 co-operative societies jvit^ a membership of 12 millions, and in Great Britain four million persons were m co-operative concerns as consumers, and their purchases amounted to 100 imllions A few facts like these indicated the enormous possibilities of co-operative work, and the more one dwelt upon it the more one eo»ld realise of its possibilities. The unfortunate part was that one could nou live long enough to see it out. He was not one r' the shareholders of their local company, but he would prehaps be pardoned for making some

l- remarks in regard to criticisms passed d on the amount of money owing to the ir Association. It v/as impossible to i- avoid that position. That word "un>r secured" only occurred because their 1. board of directors was* so frightfully j- honest. His-company had a quarter c of a million unsecured, but rjiey ,1k! c not use the words "unsecui;<l erer!;---a tors"; they referred to the item as >r sundry debtors," and they believe I «r those amounts would all be paid Ti ■» 3 . other week they put £77,000 en their .c books all unsecured, but they would , r probably be paid by the following d week, and neither he nor his directors a lost any sleep over it. c In conclusion, he would again urg-^ '<• upon shareholders to back up their >- concern with additional capital—not a one share, but a substantial share a subscription Money would do won- » ders and if they put in a sufficient y quantity they would have it returned 0 as they m the South had been able to r return it to the farmers. I n regard - to the complaints that were made ir about clerical mistakes having been i- made, these must occur in any busi- % ness, out shareholders should give r their .staff credit; for being genuinely 8 anxious to serve them as well as posb sible. And when a' mistake did oct cur the shareholder concernpd should ! 1 £' nte to or call at the office and if s he could not get satisfaction there go r1 to the board of directors. "But don't > bother annual meetings or the chair- , man of directors about these matters j until you have exhausted every other i means including his worship here," • Rell>h' indica"tin S Mr ' fvlo^™ Mr Gane > s^onded by Mr Buckendge, a very hearty vote of thanks was accorded to Mr SllSt'ndd^" 198* *tererti "S a^ exTiSL acls nop:ledging the vote, Mr ?4Ph^S^ d- that ]le would endeavor to i™%£ e\ ? ext annual meeting, Z id,} e had te cra*-l to i^ but if shareholders had. not by that time ye y materially increased their shareho dings he would then know that the w^ n f y that day ac"corded him was not a sincere one. that he had a note to refer to the P oposed producers' shipping company, but it was a delicate matter iust now' au about it m due course. They JSS I, f remember that New Zel lhey would also know that freights had gone up enormously, and that wS to be expected during war but the I after 1?!? WJXS W6r? Wto expert I r, n ? c War- A: wa, s no «se waiting p",^ OV«1; 1 this shipping' problem lioaucers of tins country had already mHe up then- minds to do something and at a conference recently "held m Sou-1"^ u/re unanS moub m their decision to form a shioFin? C"mpany- From that meetinga ' committee was set up, of which he (Mr Relph) was one, and they had liisi - pne a little stage furtheV. 7 They had however, decided to defer any further action until the arrival in New Zealand of certain celebrities "It is ob fnfrW' S™* o}*™ to im Part too much infoimation just now," said Mr Belph, but you can takp it from me that It wb.at xithey mi"ht We to do e?s?unl-l^ eir are p^wet c ss until they have succeeded in gettmrr control of the only connecting link between the Home Consumer and (fepGssr namely-the shipping-"

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