ON THE LAND

Manawatu Standard, Volume XLIV, Issue 1186, 8 December 1924, Page 3

ON THE LAND

DAIRY INDUSTRY AMENDMENT ACT. EXPLANATION OF PROVISIONS. The secretary of the National Dairy Association forwards' a copy of a memorandum prepared by its solicitor explaining the provisions ot the Dairy Industry Amendment Act, 1924. The memorandum is as follows: 1. The essential feature of co-operative dairy companies in New Zealand is that suppliers must bo shareholders. The articles of association of such companies usually fix the minimum number, of shares which each supplier is to take. This is done by providing that a supplier shall contribute to the capital of the company by taking shares in proportion to his supply so that, as the supply of the shareholder increases, he is bound to increase his shareholding proportionately. The number of cows’ milked by a’ supplier was at one time taken- as the test o£ how many shares such supplier should hold, but at, the present ■ time • the quantity of Jmtter-fat supplied is generally taken as the basis. .. . FAYING- FOR SERVICES.

2. Suppliers then pay tho company, in proportion to the services rendered by tho company. If they have a large supply, then they must take a large number of shares. If the supply, is small, the shareholder need take only a small number of shares. Co-operative dairy companies have in the past endeavoured to secure this result by provisions in their articles empowering tho directors to allot further shares to suppliers in proportion to their supply. For example, the article considered in Macdonald v. The Normanby Co-operative Dairy Company, Ltd., 1923, provided as follows: —The directors may at any time, and from time to time, if and when they think it expedient in the interests of the company to do so, require any shareholder by notice in writing, to take up additional shares beyond the number held by him, so that such shareholder shall hold shares in the company to the number computed on the basis of three shares for every 2501 b. of butter-fat supplied by him between the Ist. day of July in any year and tho 30th day of June following, as shown by the company’s books. At any time after the lapse of thirty days from the date of the above mentioned notice in writing the chairman of directors for. the time being may, on failure or neglect of such shareholder so to do, sign an application for such additional shares in the name and on behalf of any shareholder, and the directors may thereupon allot such additional shares to such shareholder as if they had been applied for in tho ordinary way, and the application had been signed by the shareholder.”

3. Many co-operative dairy companies have similar provisions in their • articles, and directors have acted upon them. Those provisions may have been inserted in the articles by amendment or they may, when once inserted in the articles, have been subsequently altered front time to time as the company needed additional capital. Relying on articles similar to the one quoted, directors of co-operative dairy companies have from lime to "time allotted shares to suppliers in the belief that such an article, although altered from time to time, operated in all eases as a contract between the company and the shareholder, obliging the shareholder, if increasing his supply, to accept the further shares allotted to him. RECENT JUDGMENT. 4. It appears front Macdonald’s case, however, that many such allotments made in entire good faith by directors in reliance on tho powers expressed to he given to them by the company’s articles, were invalid. What, indeed, the law was will be seen from the following extracts from Mr Justice Salmoud’s exposition in Macdonald’s case:—-"A company cannot issue or allot shares except to a person who has agreed with the company to accept them.” Shares have their sole origin in a contract between the company and the person to whom they were originally issued. A company cannot by amending its articles force additional shares upon a dissenting member under the plea that the articles constitute by virtue of that Act a contract by the member to accept those shares. What is required, therefore, in order to create an obligation to lake up additional shares in an actual contract to do so—as opposed to the merely constructive contract constituted by Section 24 of The Companies Act. 1 do not doubt that the terms of such an actual contract may be properly and validly inserted as a clause in the company’s articles, instead of being expressed in a separate document. In such a case I do not doubt that every person who accepts from the company an allotment of shares does thereby in fact agree with the company to accept additional shares in pursuance of the articles as they then stand. By so becoming a member by agreement with the company he does in fact accept by bis ownact and contract the obligation set out in the articles of acquiring additional shares. But a contract so entered into is not ulterahle at the will of the company.”

5. Many shares have boon allotted by directors relying on the validity of articles similar to those considered in Macdonald's case. Some of such allotments were undoubtedly valid. Some others indeed might have been repudiated at the time, but the supplier either subsequently agreed to take the shares or else by his conduct slopped himself from denying that the shares were validly allotted to him. Some allotments, however, made in good faith by directors and, after suppliers had had the benefit of the. services of the company, might have been repudiated. PAST ALLOTMENTS DEALT WITH. The Dairy Industry Amendment Act, 1924, deals only with past allotments of shares. It docs not deal with allotments subsequent to the Act. It applies only to co-operative dairy companies. That Act validates any allotments of additional shares made to shareholders if the shares were allotted in conformity with the articles of association or any amendment thereof. But the Act does not validate an allotment of shares to any shareholder who within six months of the allotment gave notice in writing to the compuny of his objection to receive the shares, and also within that time permanently ceased to he a supplier of milk, cream, or other dairy produce to the company. It will he noted that a shareholder is not bound, by force of the Act only, unless the allotment was made in conofrmity with the articles or any amendment thereof. Nor will a shareholder be hound by force of the Act only (a) if within six months of the allotment he gave to the company notice in writing objecting to receive the shares, and (b) within that timo permanently ceased to be a supplier of milk, cream, or other dairy produce to the company. 7. The Act does not deal with the future. It might well he that the law should be altered to permit co-operative dairy companies from time to. time by resolution to alter the article dealing with allotment of shares, so as to bind shareholders, to take shares allotted in conformity with the altered articles. It will he noted, however, that the Act does not so provide. It validates the past; if affords no relief for the future.

8. When a supplier first supplies to a co-operative ■ dairy company he, in many eases, is allowed to supply on the understanding that, he will take shares Inter, the number to depend on his supply. The Act deals with such a case. It validates past allotments of shares by directors to suppliers. Such allotments are, however, not validated by force of the Act only if (a) within six months of the allotment the supplier by notice given in writing to the company objected to receive the shares and (b) within such time permanently ceased to supply milk, cream, or other dairy produce to the company. Unless these two conditions arc fulfilled, the supplier is stopped from denying the validity of the allotments made to him. OTHER OBLIGATIONS. 9. The Act deals also with the obligations of shareholders to supply milk, cream, or other dairy produce to a co-operative dairy company. It provides that provisions in articles of association purporting to oblige a shareholder to supply milk, cream, or other dairy produce to the company, shut!

be deemed to be and at all times since the making thereof to have boon valid and effective, mid to have imposed on the shareholder, according to the tenor of the articles, an obligation to supply. Tenuities fixed by such articles for failure to supply are deemed to be und to have boon lawfully fixed. Every shareholder who, after the Act, makes default in complying with the terms of articles as existing prior ro the Act obliging him to supply may be held liable accordingly. The Act does not permit articles of association to be altered m. /-.i. io i,-.chick, provisions obligt.'r shareholders to supply. This validation bolds irood only for six months from the date of tiie passing of tho Act. At the end of that time articles of association, purporting to oblige a shareholder to supply, cease to have any force save such force as they might have had if the Act had not boon passed. SUGGESTIONS FOR FUTURE. 10. It will thus be seen that the Dairy Industry Amendment Act, 1924, validates allotments of shares made by directors prior to tho Act. It does .not decal with allotments of shares by directors subsequent to the Act. In the future directors should, in prudence, secure an application by the shareholders for further shares before allotting them, or else they should get the shareholder to sign a suitable agreement by which the shareholder undertakes to accept such additional shares as the directors may subsequently allot to him. If in tho actual working of co-opera-live dairy companies .it is not practicable to obtain such applications or agreements (and in many cases it may bo impracticable), then no doubt Parliament may seo fit still further to alter the law so as to bring it into conformity with the past practice of co-operative daiyy companies. Similarly, six months after the passing of the Act co-operative dairy companies will not be able to rely on the Act as validating articles obliging shareholders to supply. Directors should, in prudence, if they desire that tho shareholders shall be bound to supply, get him to sign a suitable agreement binding him to supply, earo being taken that the agreement is so worded that it is not in unreasonable restraint of trade.

AUCKLAND WOOL SALES. Tho following is the range of prices j at tho Auckland wool sale last week, com- ( pared with that in February last: — j

STOCK MARKET. Levin and Co., Ltd., report, on stock sales for week ending, December 6, 1924: At Bulls on Wednesday there was a small yarding of sheep and pigs and a good one of cattle. All classes sold freely while fats and forward empty cows sold at much increased values on lalo sules. Quotations: Shorn h.f. 2-ths, 28s 4d to 30s; prime woolly 2-t.h.s, 35s 3d to 48s; small woolly 4-th ewes, 40s; good store pigs, 35s 6d to 40s 6(1; others, 28s, 28s 6d; good weaners, 235, 24s 6d; light, fat. cows, £4 15s, £5 7s, £5 12s 6d to £6 ss; f. and f. cows, £3, £3 11s to £4 14s; cull cows, 355, 37s 6<l to £2 10. s; light 2-yr Hereford heifers, £4 15s: 2-yr late culvers, £2 9s, £3. —At Feilding on Friday there was a good yarding of both sheep and cattle. The sale of sheep was animated throughout, the recent increased prices being fully maintained. Fat cattle were in good demand. There were no grown bullocks yarded, while a fair yarding of younger cattle of good quality sold freely. A large number of yearling cattle of good quality sold freely. A large number of yearling Jersey-cross heifers met with a dragging sale. Quotations: I’rimo shorn 4-th wethers, 43s 2d; light fat h.f. 2-ths, 31s_ 4d, 33s to 355; prime woolly 2-th, 51s; 4-th maiden ewes, 35s 7d, 34s Id; f. and f. 4-tli wethers, 355; good 2-th wethers, 31s 6d, 31s 7d, 32s lOd; light fat heifers, £5 5s to £5 15s; light cows, £4 15s, £5, £5 3s 6d; f. and f. cows, £2 2s 6d, £2 17s 6d, £3 12s to £4 4s; 3-yr steers, £7 6s; 2-yr P.A. steers, £5 16s; 15month R.A. steers, £4 7s; cows and calves, £3 14s to £4 9s; 18-months. S.H. steers, £4 7s, £4 8s 6(J: yearling Jersey-cross heifers, 30s, 355, 37s 6d to £2 10s; 2-year heifers r.w.b., £3 to £5 ss.

DAIRY PRODUCE. Dalgety and Coy., Ltd., report having received the following cablegram from their London house under date of the 4th instant:—Butter: Market weak. Wo expect lower prices. We quote New Zealand salted 202 s (210 s), New Zealand exceptional brands 208 s (2125); Danish 232 s (2405); finest Australian salted 192 s (1965), unsalted 196 s (200). Cheese:- Market steady. New Zealand white and coloured 92s (90s). Canadian season is nearly over. Last week’s quotations are given in parentheses.

ENGLISH SHEEP. . COMPARISON WITH NEW ZEALAND. MR J. KNIGHT’S VIEWS. ■Mr J. Knight, of Foilding. who hits just | returned from a seven months* trip lO Britain, was interviewed by a. "Standard’ representative regarding his. inspection of the Southdown flocks of tho Home land. Mr Knight said .that the Southdown Association had placed all the information possible at his disposal and the secretary, Mr Stride, had personally conducted him on his tours and done everything possible for him. He would advise any breeder going home to get into personal touch with Mr Stride. Mr Knight inspected some 15 Southdown flocks and could not see much, if. any, improvement since his last visit to England. There were few outstanding sheep offering and he considered tho New Zealand sheep wore now quite on a level with the English ones. New Zealand, along with other countries, had picked the eyes out of the Home flocks and, being prepared to pay high prices, had secured the best. The absence of outstanding young sheep was a feature. The tendency at Home was. to keep to t lie darker sheep, while in New Zealand they were inclined to ’ a lighter colour.’ In bone and constitution the New” Zealand ohcfcp were quite us good as the English, while our wool was much ahead in quality. Mr Knight ventured tho opinion that there were Southdowns of both sexes in New Zealund which could more than hold their own with the licst English sheep. On account of tlie prevalence of foot and mouth disease, there was no export of stock. Air Knight, however, purchased two lambs, und arranged for their feeding for twelve months, in the hope of the embargo be.ing lifted. These youngsters were bought solely on account of their strain of blood. Asked as to the Romney sheep, Mr Knight said ho had seen tho Romneys at tho Royal Show and the Royal counties in’ England, and had attended their annual show and sale at Maidstone, and found the opinion that the Romney sheep breeders wero still practising too- much fake shearing and trimming, many sheep having two years' growth of wool. So far us wool was concerned, the English sheep could not compare with New Zealand, while their carcase and bone wove not one whit better, so that he considered there was no need to send to England any buyers for this purpose. The flocks generally were not as good as they were - when Mr Knight visited England in 1910. The Argentine breeders had, no doubt, bid high prices for some of the best, English blood, with the result that there was not the stock to breed from. Mr Knight considered that the Now Zealand sheep could more than hold their own in the Argentine and this was proved at the laio show in Palermo, where a sheep with seven months wool had to compete with one . carrying two years’ growth. Tho general opinion of the sheep breeding peejdo there was that the New Zealand sheep was the best and tho auction sales proved it, as Mr Terry’s ram brought the highest price. Air Knight was of tho opinion that thore wa« no need to cross tho Romneys with any other breed, not oven the Wcnsleydale, with its ■ poor constitution, but if they studied the quality of their wool there was no reason why. the Romney should be displaced as the sheep of the North Island of New Zealand. That was Ah’ Knight’s considered opinion after attending the wool conference at Bradford. The breeders of New Zealand should keep their eye on the Argentine, as a very large opening existed there for our best stock.

WOOL PRICES. Speaking of wool, Air Knight thought that, there would bo very good prices for some years to come, as he had found in his travels that consumption was greater than the supply. Ho was informed by a Boston buyer that, at the : opening of tho season in Boston, there [were not 500 halos available. This, after the' large accumulation of Bawra wool, was remarkable, but the demand had been so keen and sustained that ibis stock had bec-u soon depleted. One of the tensons for the huge consumption of wool | was the striking popularity of winter sports such as skating and ski-mg ;n Switziylund and other countries where most 'of the hotels wero better patronised in winter than in tho summer. These winter games necessitated tho wearing of woollen garments .and t his materially helped tho consumption.

FROZEN MEAT PRICES. The New Zealand Meat Rioducors’ Board has received the following cable from its London ollice dated sih December, 1924, advising Sniithfield delivered prices at that date as follows, lamb and wethers showing nominal prices owing to shortage of (supplies:,—New Zealand wethers and maiden ewes, Canterbury quality, selected brands, 56 lb and under 9d, 57-64 9d, 65-72 B|d; .other brands. 561 b and under SJd, 57-64 Bjd, 65-72 New Zealand lamb, Canterbury' quality, 561 b and under 13Jd, 37-42 13Jd, 43-50 123 d; -seconds 123 d.; other brands, first quality, 421 h and under 13d. Now Zealand beef: Ox fores 4gd,' hinds sgd; cow fores and hinds, not quoted. Argentine chilled beef: Ox fores 4o<l, hindo Argent ine ■ frozen beef: fix fores 43d. hinds 53d. Frozen pork : 80-120 lbs 9d, 1201801 hs bid. Frozen veal: 4id. Dalgety and Co.. Ltd., report having received the following cablegram from their London liouso under date of the 4th inst. : Laud): New Zealand prime crossbred, Canterbury heavy and light, not quoted, North Island heavy 12-id, light 13d. Fair demand for New Zealand lamb, market linn. Mutton: New Zealand prime crossbred mutton, Canterbury heavy und light not quoted, North-Island heavy Bd, light 83d. Moderate demand.for New Zealand million, market firm. Beef: New Zealand prime ox, hinde sjjd, fores 4jj<l. Active demand for New Zealand beef, market weak. Australian' frozen meat: Good average quality crossbred lamb, heavy not quoted, light 13d. Good demand for lamb. Mutton not quoted. Levin and Co.. Lid., have received the following cable from their London agents dated sth December, 1924: —No change of any importance, meat market quiet but steady.

Mr Knight, of Feilding, who has just returned from a trip to England, told a “Standard” representative that the farmers of New Zealand must give up the feeding of turnips and rape to cows if they wish to keep up the quality of their butter, as it is impossible to keep the taint out. New Zealand butter bad wow its place in London and everything possible must he done to keep that place. The* were othor crops which the farmer could profitably grow which did not have any objectionable. taint, such as lucerne, clovers, kale cabbage and vetches.

Dec. Feb. Merino—d. d. d. d. Average 331 to 354 — Fine lialfbred— Super — 25 to 28 Average 32 to 34 21 to 25 inferior — 244 to 19 Med. lialfbred'— Average 30 to 33 — Coarser lialfbred— Super 30 to 31 Average 27 to 29 Fine crossbred — Super 28 to 29j 19 to 21J Average 24 to 26 17 to 184 Inferior 22 to 24 15 lo 164 Med. crossbred — Super 25 to 27 18 to 19| Average 23 to 24 16 to 17>2 Inferior 20 to 22 14 to 15 Coarse crossbred —• Super 23 to 25 15 lo 164 Average 21 to 23 14 to 154 Inferior 20 to 21 13 to 14 Lincoln crossbred — Average 20 to 21i 13 to 15 Inferior 114 to 124 Iloggnta— Fine 29 to 31 21 to 25i Medium 20 to 28 18 to 20 Coarse 24 to 25 15 to 16 Low 21 to 22 14 to 15 Bellies & pieces— Fine crossbred good to super 20 to 22 Ditto low to mod. 16 to 19 15 to 174 Xd. gd. to super 16 to 18 15 to 184 Ditto low to ined. 14 to 16 84 to 12 Crutchings— Med. to good ... 14 to 16 11 to 144 Inferior & seedy 11 to 13 6 to 10 Locks — Crossbred, good . 9 to 12 74 to 94