THE CO-OPERATIVE ASSOCIATION.

Lyttelton Times, Volume XCIV, Issue 10705, 15 July 1895, Page 3

THE CO-OPERATIVE ASSOCIATION.

ANNUAL MEETING. The annual meeting of the shareholders in the New Zealand Farmers’ Co-operative Association was held on Saturday, when there was a, large attendance. The chair was taken by Mr C. Ensor (chairman of directors), and the other directors present were—Messrs S. Bailey, M. S. Campbell, J. Gammack, J. Gough, J. Haydbn, W. Henderson, D. M’Millan, F. D. S. Ne&ve, H. Overton, A. Parsons, H. W. Peryman, W. Rennie, F. H. Brittan, H. A. Knight, E. Bluaden and J, /Herrick. Mr T. Maude, solicitor to the Association, and Mr A., H. Turnbull (secretary) were also in attendance.

The Chairman delivered the following address:—

Gentlemen, —In moving the adoption of our fourteenth balance-sheet and report, I will first of all review the figures presented to you and the appropriations recommended by your directors. The net profits for the year, together with the amount carried forward from last year, are shown to be £310,569 19s 7d, almost exactly the same as the previous year. These results have, however, been arrived at by somewhat different modes. Our profits on merchandise and storage both show an increase, but, on the other hand, our commissions and exchange accounts show a very considerable , reduction. This falling off in our commissions earned is accounted for by the extremely low prices which have been obtained for wool, grain, stock and all descriptions of farm produce. A 20 per cent fall in the price of produce means a corresponding fall of 20 per cant in the commissions earned in its disposal, although the selling expenses would be the same. Also, the heavy reclamations which we have had from time to time to meet in London on produce shipped, have seriously affected our exchanges. It is gratifying to me to notice the improved profit on our grain store and storages, because the shareholders have had to pay no additional charges whatever for these services. Such profits prove that the improvements in the buildings and machinery effected by your directors during the year are lessening the cost of handling your produce. One of your Executive Committee, Mr Esnnia, has taken special interest in this department, and I am pleased to say that ha reports favourably of the increasing interest taken by our workmen in their arduous duties. There is one other feature in the accounts to which I will call attention, and that is that our working expenses have decreased by £3341, although the volume of our business as a whole shows an increase. Dividends and Bonus—You will see in the report that your directorareeommend that the same dividends and bonuses as have been paid for the last two years should be divided. To show that these recommendations are to the full in favour of buyers, I would say that if the proportion of rent and interest on stock, were added to the expenses incurred in conducting our merchandise business, the total would be about £39000. When it is seen that we propose to refund 3 par cent, it means that this refund bonus is really higher than the actual profits made in this department. Bonus on Share Capital.—As I learn that there is a doubt in the minds of some of our shareholders as to the wisdom of declaring a bonus on capital, I would explain that during the last seven years we have been selling shares at premiums varying from 2s to 8s per share, and that these premiums have been paid on some 10,000 shares, or on half of our present share capital. The shareholder who has paid the Association 8s premium on his shares of £32 paid up, supposing that he did not participate in the bonuses, would only get interest on his investment at the rate of per cent, and when we consider that there is a liability on every share in connection with the uncalled capital of £2, 1 am sure that such an investment would not command itself either to the public or any of cut shareholders. Allpremiums on shares are added to the reserve fund and so help to earn the interest. Our articles provide that the share capital must participate in the bonuses pro rata with the business, and it would be a breach of faith to alter this article so far as it applies to the shares already sold. A few of our shares are fully paid up; no bonus is paid on the additional capital uncalled, but paid up by the shareholders. I would point out, as a proof, that we are not unduly favouring capital; that of the 1000 shares authorised to be issued at our last annual meeting, only about 300 have been taken up, thus leaving 700 still to be disposed of. Election of Directors. —Shareholders will note that at the conclusion, or adjournment, of this meeting, an extraordinary general meeting will ba held in order to alter our articles with respect to the election of directors. Under the new articles it is proposed that voting papers should be sent to every shareholder, and so enable all to record their yotes for directors. The proxy system of voting for directors did not work well. In the case of contested elections large numbers of proxies would be sent to individuals, and so concentrate too much voting power in their hands. This matter will no doubt be fully discussed at the meeting to be held for the purpose. Loudon Agency.—During the year your directors, in conjuction with the South Canterbury Association, have made an important alteration in the London agency. It was felt that the time had arrived when your interests would be better served by being worked under our own direction by an agent who would be bound to devote his whole time to cur London business. From amongst a large number of applicants, Mr George Jameson was -selected, I believe almost unanimously, by the directors of both Associations. Mr Jameson, as most of you are aware, has had a long business training in the colony, and I think may be depended on to work out London agency with credit to himself and the institutions employing him. As an owner of considerable farming property in New Zealand, Mr Jameson’s interests are identical with our own, and we may rely that he will use every endeavour not only to place our produce on the London market? with care and economy but also to find outlets for it in other centres of population. Next year I hope that our report will show that our London agency is a financial success, and that our shareholders will be able to express their satisfaction at the mode in which their consignments are being dealt with I may mention that since Mr Jameson’s appointment the Hawke’s Bay Farmers’ Association has agreed to pass its business through our agency. Delegates’ Meeting. —Last month a meeting of delegates from this Association, the Wellington Farmers* Alliance, the Hawke’s Bay Farmers* Association, the South Canterbury and the J. G. Ward Associations, was held in Christchurch, .and the question of distributing our produce through the provincial towns in England was discussed. It was represented that differential railway tariffs existed between London and the great manufacturing centres in the south and west of England, and that a great advantage would result from our steamers calling and discharging at several ports, instead of London alone. The shipping companies have been approached, and are now considering the question. Since our meeting I notice the following cablegram has come from Manchester: —“The Manchester Committee negotiating for a direct trade in frozen meat, states that if freights are sent direct to Manchester instead of viA London, from £3l to £2 per ton will be saved throughout the district, including landing charges and delivery.” Other matters of interest and importance were discussed at this delegates’ meeting too long for me to notice here, but a report thereof will be published in our annual circular. The Farmers’ Insurance Company.—l have the pleasure to inform you that the Farmers’ Insurance Company has increased its paid-up capital to £350,000, the amount required by law to enable it to take risks from others than its own shareholders. In the course of the month we expect to register .this company as an oped company, and will be prepared to take risks in the open market. During the

four years the farmers’ insurance has been working, its business confined to its own shareholders has shown very satisfactory results; in addition to having paid dividends and bonuses to its insuring clients it has paid off all preliminary expenses and placed £520 00 to its Reserve Fuud. I hope for the future that this insurance company will have the support, not only of the shareholders of this institution, but also of the general public. I would point out that this Insurance Company will be the only company of the kind with its head-quarters in Canterbury. Cheap Money.—l am glad to be able to observe that the cheap money scheme of the Government has been boldly and successfully carried out, and we must all congratulate Mr Ward on the success of the first farmers’ cheap money loan. In every new country farmers are bound to be borrowers. They have land to clear, houses to build, fences to erect, and cheap capital is of all importance to them. The good which will accrue from this cheap money scheme will not be confined only to the borrowers under it, but it will have, and has already had, a general influence on the money market, and is enabling every borrower to get cheaper capital, and so the whole community benefits- The present reduction in the rate of interest I should estimate at about 1 per cent. If due caution and care are exercised by the Government in placing their loans, I am confident that money can be lent by them at 4 per cent in place of 5 per cent, the present rate, and the tendency also of the money markot is towards a lower rate of interest. Our Railways.—We are interested in closely watching the conduct of our railways. During the- year certain concessions have been granted on the carriage of stock, fruit, seed and manures, which I hope will prove beneficial not only to the producers bub also to the railways. It is, however, more and more evident that the high rates charged on passenger traffic, wool and parcels, are rapidly diverting the traffic from the rail to the road. So far as wool is concerned, if the present high rates are maintained, the railways can expect to carry but little on many of their lines. With regard to the passenger traffic, the great want of punctuality in the trains running from Christchurch up the country, is a frequent source of complaint Amongst farmers and others, and is evidence of the great laxity creeping in. It always seems to me that the conduct of these railway systems is an index to the character of the people of the country. I do nob wish the people of New Zealand to earn the character of being the slowest and most unpunctual people in the Australian group. Wheat Industry.—The great local rise which has taken place in the pries of whsat is a matter for congratulation to our farmers, more especially as, when the sudden jump in "prices came, a large portion.of our wheat was in the hands of the farmers. I am sura many of our shareholders will acknowledge that they are indebted for this state of things to the advice given to them through the Association, and also, to the cheap storage and liberal advances granted by this Association to enable them to hold when prices were so low. There is, however,.another side of the picture to look at, not at all satisfactory- The Government statistics show that the wheat product of New Zealand for 1895 was not more than 3,613,057 bushels, insufficient for our own consumption, as against 10.257,750 bushels for 1892, thus showing, in three years, a falling off of no less than 6,644,700 bushels, and disclosing the total collapse of one of cur Canterbury farmers’ principal mainstays, that of growing wheat for the Home market. We have before us the case of an English colony, with thousands of acres of wheat-growing land good enough to give an average, judging from last year, of twenty-four to thirty-two bushels of wheat to the acre, with the best appliances in the world and perhaps the best agricultural labour, completely beaten in the wheat-growing race by the low prices, lb is not because our labour is diverted into more profitable channels. There has never been a time in the history of the colony when we have had so much unemployed labour. Every town of importance in New Zealand is engaged in getting up a charitable fund to provide for its unemployed, and the country districts are flooded with man living on charity or vainly seeking for work. It is all very well to talk about the law of supply and demand being responsible for low prices; the questions we have to solve are why New Zealand is, with all her natural advantages, unable to compete in supplying the Home market? What country is supplanting us? The answer .is, that while we have been going back, the Argentine has been making giant strides forward. Statistics show that the wheat export of the Argentine has grown from 17,000,000 bushels in 1892 to 56,000,000 bushels in 1894. Figures also show that the exchange rate [between Argentine paper money and English gold prejudices our farmers and favours the Argentine farmers to a very large extent. Daring the last three years our New Zealand farmers have lost the industry of growing 6,000,000 bushels of wheat for export, while during the same time the Argentine farmers have more than tripled these exports. What clearer proof can we have that the currency question is at thp bottom of the evil, and that it is the hidden hand which is stealing the wheat-growing industries from England and her colonies ? According to the Quarterly Review, I find that in 1874, the year after other nations followed England and adopted the single gold standard, her wheat harvest was valued at .£42,000,000, while in 1894 her harvest only realised rather over £38,000,000. No fall in prices cau possibly account for this difference ; it can only prove an utter collapse of the wheat industry. The evidence taken in the recent Royal Commission on the subject states that in Essex “ the condition of agriculture is one of general ruin. Farm houses stand abandoned. Nearly 100,000 acres of wheat land have gone out of cultivation, and within sound of the church bells of London land has little more than prairie value.” It is evident that the cheap labour countries, such as India and the Argentine, wherein the farmers pay their labourers with depreciated silver or paper and sell their wheat for gold, ate ruling the prices. The only class which, appears to benefit by the low prices are the England has lent huge sums to foreign' countries. This seems to be the explanation of the apathy of her Government in those matters. I am pleased to notice that the Hon J. Eigg, in our Upper House, has been moving for a Royal Commission to inquire into the currency question, and I think all farmers and producers should back up his demand. It seems to me that the colonies, who are the borrowers, should move in this matter, In New Zealand -wo have lost not only pur wheat growing industry of 6,000,000 bushels, but this year our flax iqills are almost all closed. Next year our frozen meat trade may follow suit. We cannot expect to be able to meet the yearly drain for foreign interests if we are to lose our industries and have thousands of unemployed living on our producers. It is becoming more and more apparent that the tendency of our legislation must ba such as to give confidence to our employers of labour to develop onr resources, "and to increase our export trade. Before concluding I should like to review at this, our fourteenth annual meeting, the progress of this Association during the last seven years. I took occasion in moving the adoption of our balance-sheet seven years ago, to express the opinion that our institution had passed through its infant stage, and would for the future show rapid development. The following figures will show how rapid that progress has been. During the seven years since 1888 our shareholders have increased from 1558 to 2833, our subscribed capital from .£52,500 to £3101,460,ft0ur reserve fund from .£I2OO to £312,241, our deposits from £110,685 to £368,000, our advances to farmers at the close of the year from £331,722 to £396,191, our sales of merchandise from £345,100 to £3131,000. The greatest increase of all is in wages paid. In 1888 we paid in wages £32411, while this year we have paid £12,036. This latter includes the wages paid in our gijain ejpree, andalsointfee,

clothing factory, which does not show in our balance-sheet, separate accounts being kept and the amounts charged off to storage and goods. It will thus he seen that the Association is now a very large employer of labour. I now beg to move the adoption of our fourteenth annual balance-sheet and directors’ report, and that the dividends and bonuses as recommended be declared.

Mr Pannett, in seconding the adoption of the report and balance-sheet, thought there was matter for congratulation, in the manner in which the Association had- advanced, which was owing in a great measure to the business acumen of the management. One important matter in thjs co-operative association was the manner in which the strong had been able to benefit the weak. ; He was glad to hear the Chairman’s remarks as to the necessity of improvement in the management of the railways, and he thought it but right that such an influential body should urge the necessity of some alterations. Mr T. Conway complained of the manner in which the profits had been divided, which he considered was not in the interests of the small shareholders. He thought more of the profits should be divided amongst the purchasers. Mr A. M’Lachlan thought it would be better to have cheaper goods than to pay ten per cent in capital. He understood that the object that the Association had been started with was to bring down the .rates of interest, and he thought the result of the lost issue of shares ought to show the directors this. All the companies which had paid tea per cent had lost the confidence of their supporters, and if the rate of interest was not lowered this Association would follow'.

In reply to Mr W. H. Lane, the Chairman said the amount of unclaimed dividends was not more than .£360.

Mr Lane complained that sufficient care was not taken in seeing that shareholders got their dividends. This, he thought, militated against the Association. Ho maintained that he could get goods cheaper elsewhere, and could also get two and a half per cent discount for monthly accounts, which he thought was better than a yearly dividend. Mr John Miln thought it.would be batter for dividend warrants to’ be sent to shareholders immediately a dividend was declared. He would like some information aa to the deposits, which were over £38,000. (The Chairlnan stated that the interest on this amount was from 4to 4* per cent.) He thought this was fairly satisfactory. He understood they were lending this money, at a higher rate of interest, and were, therefore, making a profit on it, and using -this to pay bonuses. He spoke aa to one or two small losses the Association had made, hut was still prepared to admit that the concern had gone on satisfactorily. He said ho would spend considerably more money*' with - the- Association, only that ha could get better served elsewhere-. He was satisfied that the prices of goods were being kept up in order to pay larger dividends, and this he thought was likely to drive business away. Ho pointed out several articles which he had been able to get both better and cheaper outside the Association. Mr W. Acton-Adains said that he wished, as an amendment to the adoption of the report and balance-sheet, to move to reduce to 8 per cent the total amount of dividend and bonus payable on. called-up capital, and to increase to 5 per cent the bonus to_ shareholdera on purchases. He said that at one time the Association was weak, but now it was one of the most.substantial institutions in the colony. The bulk of the money received by the Association was on deposit, and now that the Association was thoroughly solid the money ought to be obtained at less interest. The Chairman ruled tne’amendment out of order, as it'.would clash with the articles of association, and.would ha breaking faith with the shareholders. The articles had been made to suit the shareholders, and could not be altered at a moment’s notice. They could not now go into little legal points. Mr Adams saief, as the Chairman had ruled .him out of order, he would move that, before declaring any bonus, he should take a legal opinion on his ruling. Mr A. 5 M’Laohlan seconded the amend--01 The Chairman in reply to a remark by Mr M’Lachlanj said that he did not think the rate of interest paid was too high under the circumstances. They must have the confidence of the shareholders, and to do this they must not break faith with them, especially in face of the fact that most of the co-operative associations started in the colony had not been a success. The Chairman proceeded to put the motion, wben Mr Adams protested against the motion being put until hia amendment had been disposed of. He did not believe that the directors at anytime had promised to give shareholders 10 pjsr cent. The Chairman said he had no objection to take counsel’s opinion on the matter, hut declined to put the amendment. After further discussion, the Chairman ruled that it was hot an amendment on the motion for adoption of the report, but he would be happy to take it as a resolution after the report and balance-sheet had been either accepted or rejected. The amendment could not affect the present balance-sheet. . The report and balance-sheet were then adopted, with six dissentients. Messrs S. Bailey, W. Boag. J. Gammaok, J. J. Herrick, J, Holmes and J. Rennie were re-elected directors, and Mr D, Buddo was elected in place of Mr J. Deans, retired.

The auditors’ fees ware fixed at the same remuneration as last year- Messrs W. Jameson, H. A. Bruce, H. R. Homan, W. M. Ollivier, A. W. Hulme and T. B. Craig were nominated for the positions. The Chairman declared the show of hands to be in favour of Messrs H. A. Bruce and W. Jameson. A poll was demanded on behalf of Mr Homan. • Mr Acton-Adams then moved—" That the Directors be requested to take counsel’s opinion as to whether the chairman was correct in ruling that* Mr ActonAdams could not propose a resolution giving the shareholders 1 per cent bonus on their shares and S per cent on their

purchases, instead of the amounts in the directors’ report.” The motion was seconded by Mr A. M’Laohlan, and, on being put to the meeting, was declared lost, the voting being—s 6 against and 48 for. [The allocation, carried in the report, was as followsTo pay the usual dividend of 7 per cent, and also a bonus of 3 per cent on the called-up capital, to payment of a bonus of 3 per cent.to shareholders on their purchases of merchandise' during the year, and a bonus at the same rate on salaries paid and wages earned, and also to refund 20 per cent on all nett commissions earned. To write 10 per cent off the machinery and office furniture accounts;’ to. carry £IOOO to ,the, .reserve fund.' and the balance forward; to next year’s account.”^; The meeting theft J adjourned, and an extraordinary general meeting took place, at which resolutions were carried altering articles of association 50, 62 and 80; and creating new articles giving every shareholder a vote in the election of Directors and doing away with proxies. A further meeting will be held on July 31 to confirm the above.

The general meeting was afterwards resumed, when the Chairman announced that the poll for auditors had resulted in the re-election of Messrs H. A. Bruce and W. Jameson.

Votes of thanka having been passed to the chairman of directors, the directors, the general manager and the staff, the proceedings terminated.