Financing Arrangements

Northland Age, Volume 1, Issue 27, 19 June 1929, Page 3

Financing Arrangements

Kaitaia Dairy Company's Proposal

Resolution Carried Unanimously To Be Confirmed

The adjourned meeting of the Kaitaia Dairy Company was held in the A. & P. Hall on Saturday last. There were about 60 present.

Mr. W. Rose, Chairman of directors, presided. He stated the objects of the meeting, and moved the following resolution : That the Memorandum of Association of the Kaitaia Co-operative Dairy Factory Co. Ltd. be altered and the following sub-clauses be added to the objects for which the Company is established (in Article No 2 of the said Memorandum) as follows :

J. To make, draw, accept, endorse, discount, execute and issue Bills of Exchange, Promissory Notes, Bills of Lading or other warrants, debentures and any other instruments negotiable or transferable by delivery or to order or otherwise.

K. To lend and advance money or give credit on such terms as may be thought At, to such persons who are shareholders, or those engaged in the handling of cream for the Company, and to give guarantee or become security for the payment of money, and the performance of Contracts or obligations by any such persons.

Mr A Logan was asked to explain the object of the resolution.

Mr L Mclntosh stated that the resolution put before the meeting was to enable the company to finance suppliers. The resolution did not bind the company to the Rural Intermediate Credits Board.

Mr A H Puckey thought the clause empowering the company to finance employees should be deleted.

Mr Rose stated that if none other than shareholders were to be financed it would keep the Northern Native Suppliers from obtaining finance.

Mr A Logan instanced the probability of a contractor of the company requiring financial assistance, and pointed out that it would be in the interests of the company that he should obtain finance.

Mr Mclntosh said that the clause did not include employees of the company. The contractors are bound up with the company and may require financial assistance as stated by Mr Logan. Mr C B Michie said that it left a loophole only for directors. There seemed to be a latent impression that they were opening the door to finance all who may apply but this was not so. Mr Mclntosh said that he would state definitely on legal advice that employees could not be financed. If that portion of the resolution was not included now, it would be difficult to get it included later. Mr A Wallace said that the resolution should be put through. If the directors could not be trusted in this matter they could not be trusted with other businLS Mr W Rose said that unless an amendment was forthcoming the discussion was informal. Mr Sturmfels said that the directors were elected to run the business and the suppliers must back them up. % C Marsh, prior to seconding the resolution said that if it vvas the avowed policy of the

company to consider applications for finance for those outside the company, his amendment would fall to the ground.

Mr A H Puckey asked what was (he amount limited to that the company could borrow. He thought a sum should be fixed for which the company would be liable.

Mr Rose said that the Rural Intermediate credits Board had fixed the amount at £1,400. “We have an opportunity to get a loan at 6%%,” said Mr Rose “and I fail to see why there should be opposition to it.” Mr D Jameson asked if the interest would be charged on what was owing on a loan that was being paid back by instalments, or would it be charged at 6%% for the full period.

Mr Rose said they would go into that later.

Mr Jameson said that the loan would not work out at 6%% it interest was charged for the full perjod.

Mr Gibson stated that the yearly interest on £I4OO would amount to £93. But if the money was repayable by monthly instalments and interest was charged at the full rate it would cost 10 or II per cent; it would not be cheap money.

Mr C B Michie said that the resolution should be put and they could discuss ways and means of administering it later. Mr Gibson said he failed to see Mr Michie’s point. Mr W Parker asked it £1,400 was the only amount they eould get.

Mr L Mclntosh said they could get more if it was wanted later.

Mr C S Puckey said he would like to see the other loan accounts wiped off, and asked if it was the intention of the company to carry on the other loan accounts.

Mr W Rose said they had no intention of closing those funds. Mr C S Puckey said it would be a good plan to run all the loan accounts under this one scheme. This could be done by increasing the loan.

Mr Mclntosh stated that if they were to cancel the present financial arrangements they would need about £5,000 and this could not be obtained from the Rural Intermediate Credits Board at the present time.

Mr Rose then put the resolution which was carried without one dissentient voice. A number did not record kheir vote. Mr Rose stated that a further meeting would be called for June 29 to confirm the resolution.