CO-OPERATIVE FINANCE.

New Zealand Herald, Volume LX, Issue 18494, 3 September 1923, Page 10

CO-OPERATIVE FINANCE.

THE BACON COY. GUARANTEE.

CASE FOR OPPOSITION.

SOME SUGGESTIONS.

Mr. Percy H. Saxton, Tathanui, Morrinsville, writes: — : .-.''', : . * - In the Herald of August ,23, in reporting the meeting of t the New Zealand Dairy Company suppliers, I see;; I tuna credited' with leading the "opposition," but, while considerable space is given to the speeches of the Government, very little is given to me. As the "accredited- leader of the opposition," may I ask further. space iu your columns to state our case fairly. As. Mr. Goodfellow quite rightly remarked, there is a principle involved.' There, .at least* we -agree. Mr.' . Good--fellow, however, is a business man. In business v ho* is not generally credited with being sentimental, not even with the Imperial Government, for "butter at less Ahan 2s 6d per lb., and in this he is right—it is business. '

Not many years ago, when it, became an absolute necessity to save a large co-. operative dairy concern from going to the wall, an amalgamation was effected; a business _ ono entirely— sentiment, M ©von though it meant better co-operative" control of the dairy industry. It was not then done just for "co-operative principle"; ho had his own shareholders' interests to look after first. So far in the present case for the relief of the unfortunate guarantors it has not, to my knowledge, been backed by the application or suggestion of one' sound business principle in its favour. Put briefly, the dairymen of the Dominion axe asked to meet a cheque drawn and endorsed by other parties entirely without their knowledge, and paid away fox something that at present they know little or nothing about. Is this reasonable? Let us all hope that, .favourable as they aro to the repayment of the guarantors, none of our company's directors follows such a procedure in the usual management of the company's business. The case as put so far is. ono of pure sentimentnothing short.

In putting my case thus curtly I do so just as a straight-out protest against our own directors participating in what must be a partisan question, and it is certainly one wheh, except sentiment prevails over the business sense of the company's shareholders, has no concern for us in the position of New Zealand Dairy Company's suppliers. "

• Each Company Its Own Duties. I protest absolutely at the v-ar this thing is being pushed on to us, so pushed that one s better feelings of sympathy and desire to assist in a purely voluntary (and sentimental) way are in great danger of being stifled .altogether. Although not navmg been benefited one iota by the aeon Company's work, I am quit© willing to put in my share as grateful acknow- • ledgment of what the guarantors tried to

But this only brings me back to the principle at the bottom of the whole business which I contend to be that every separate co-operate • business concern, -cooperative or not, must bo recognised now and for all time as having a, standing en!iVl-,.^ Vn - Its r, 'S hts > dutiws, assets and liabilities are its own responsibility. They are not to be played with or shuffled about at the-whim of its directorate, - and the responsibility attaching to the position of a'director, must be seriously recognised as a position of ' trust, requiring knowledge and honourable and careful administration, .-.•., ~,i >

• /: The ; Joint and Several." '■ However alluring *a • secret; treaty with the company's bankers in the form of a 'joint ~ and several"!». may i be, the fact that in, case of need it cannot be treated as . a " scrap of paper" had better be quickly recognised by. all those who, like myself, have made themselves thus responsible. A company is formed with a certain capital for a certain purpose, and its join in such <»nditionally on that basis. : ; They i become co-oper-ators to a limited extent for specified ObJets V, If : however; more capital is required to carry on business with in the future, and it is in" the share-holders' interests that it be found, then surely the share-holders are tho first people to approach for money, not the bankers, unless it M; meant. gratuitously. The sooner the 'joint and several", undertaking;* by the few for the benefit of 'the many are abolished, \ the quicker -will existing organisations be stabilised—or otherwise. In the interests of sound business, let it be soon. Every dairyfarmer and 'former has, whether he sees it or not, a vital interest in this question. We want our business liabilities definitely fixed, our legal commitments settled beyond " alteration. -•-'.' 'If we are in a company, we want to feel our total liability i a - limited, and that any extraordinary extensions of business or forms of expenditure cannot be pushed on to uu, either by act of Parliament or in any other way without having first careful investigation, and full information placed befor us. ...,■:.','

, v Business and Sentiment. I am justified in saying that as a result of replies to my questions at the meeting in question, which are not reported, ft becomes increasingly evident that all the cards are not on the table yet. Information which every person who' may be made to pay in his ' share, has a j right to know has hot been given. It is still hidden under Zi smoke screen of sentiment, miscalled "principle." ' Personally, I am and have been, ever since dairyfarming took me into the movement, a strong co-operator. I know from experience however, that the movement as applied to business cannot live by sentiment alone. The present trouble is all because the best form of compensation has not been found, not. because I, and many others with views on the same lines as myself, oppose it or do not wish to contribute.

Levy on Government Grams, As : a constructive suggestion, in addition to what I have said above, which I trust will also be found instructive as well as constructive, . let me- say that this £55,000 loss is an amount largo enough, and of a sufficiently national character, either to be found by a small export levy for one or two seasons on pork or' dairy produce, or, if hot considered sufficiently large for that then let Parliament mako provision in the estimates for it, vote on it—on the estimate this time instead of the proposed bill which destroys the farmers' confidence cin present or . future cooperative management, law, or organisation. Let the necessary evidence to support tho case be brought before the House with rightful publicity, and whatever the final issue, all concerned whether benefiting or not, would then get. what they don't at present, full information, and a square deal.'' - "

If that fails, then" get to work with the voting envelopes, the,result from which, I am sure will be a source of gratification to the guarantors themselves, and a lesson for the rest of us. .In this way, out of evil may come good, , a satisfied : and onlightened body of shareholders, and the settlement of a difficult question of tfio greatest moment for all connected with the financial side of our primary industries and co-operative organisations. * -