Value Of Shares Held By ' Dry' Shareholders

Northern Advocate, 5 August 1949, Page 3

Value Of Shares Held By ' Dr y' Shareholders

- PARLIAMENT . .

WELLINGTON, Fri. (P.A.).-—When the second reading of the Cooperative Dairy Companies Bill was continued m the House of Representatives yesterday Mr A. J. Murdoch (o—Marsden) said he hoped the tribunal to be appointed m accordance with the provisions of the bill would not arbitrarily fix the value of shares which would have to be surrendered by dry shareholders. Mr Murdoch said that shares which were worth £1 ongmally should be worth £1 today. " , Mr S. W. Smith (o—Hobson): Oh, no, not necessarily. Mr Murdoch said money that was put into daily company shares years ago was worth more then than it was today, ana m many cases whoever put in his £1 should get his £1 back.

Mr A. C. Baxter (G—Raglan) said that an indication of who might be appointed to the tribunal might be found in the names of those who signed the report on cooperative dairy company legislation. The committee was: Mr H. A. Foy„ director of the Dairy Division, Department of Agriculture, chairman; Mr C. H. Courtney, secretary of the Dairy Board; Mr F. W. Groom, office solicitor to the New Zealand Cooperative Dairy Company; Mr E. C. Adams, District Land Registrar, Wellington. FACTORY WORKERS Mr Baxter said that the setting up of the tribunal was the only way to settle the question of the value of shares. He thought there was one important omission from the schedule to the bill, and that was that there was no scope or any encouragement given to dairy factory workers. He thought dairy factory workers, dairy farm workers and sharemilkers should all be represented on dairy company directorates, even if one director had to serve these three groups, who made a vital contribution to the industry. Mr T. P. Shand (O—Marlborough) said the principle to which Mr Baxter referred might also be extended by appointing two employers’ representatives to the executives of trade unions. Such proposals for giving workers a voice in the direction of the business which employed them went too far: where two parties had occasion to bargain with each other, it was foolish to say that representatives of one party could function as executives of the other. EFFECT ON SOME Mr Shand said there were possibilities that the bill might adversely affect some companies, which might be deprived of invaluable services of experienced “dry” directors who had played a large part in establishing the company and making it successful. He urged amendment of the bill to meet this difficulty. Mr Nash, Minister of Finance, said the bill would be referred to a committee, but the opportunity should not be used to delay an invaluable and important measure merely because of the acknowledged difficulties of a few small companies. The situation could perhaps be met by giving any “dry” shareholder whose services as a director the company wished to retain an interest in some supplier’s land, which would enable the director to retain his association with the company.

INJUSTICES The Minister said the bill recognised that, while normally contracts should not be broken, injustice to suppliers could not be perpetuated. The price to suppliers of discharging must not be forgotten. New Zealand’s cooperative butter and cheese producing companies were as efficient as any suppliers’ organisations in the world, and it would be difficult to find any industry more efficient than the New Zealand dairy industry. No country could produce butter at a lower cost. It showed what New Zealand suppliers had done for themselves to ensure the maximum return by eliminating waste to greater degrees than had been achieved in other countries. Mr Nash said he believed cooperation must in future be given wider application in the light of the dairy industry’s magnificent example. The halfway course between private and state enterprise was cooperative enterprise—in production and distribution.

No industry had the right to exploit the community through the power of its organisation. He knew of one company, established since the end of the last war. which had paid 100 per cent dividend, and that was not right. He went on to say that the use of the term “cooperative” ought not to be for investment purposes. FAIR TREATMENT The proposed tribunal would try to be fair to those who had invested their money in dairy companies, and

would see that they received fair and just treatment. Mr Nordmeyer. Minister of Industries and Commerce, replying to the debate, said it appeared desirable that the model set of articles should be adopted by dairy companies if they wished to get full advantage from the act. The bill was one which dealt with cooperative dairy companies, but if it was decided that it should be made to apply to other organisations, then it would be quite improper for this measure to be the vehicle. The bill was given its second reading and was referred to the Statutes Revision Committee.