A YEAR OF PROGRESS.

New Zealand Herald, Volume LXVI, Issue 20385, 14 October 1929, Page 14

A YEAR OF PROGRESS.

OPERATIONS IN WAIKATO.

FARMERS'AUCTIONEERING CO.

DIVIDEND OF 8 PER CENT

VALUED DIRECTORS RETIRE.

(Extended Report by ArrnnKement.) YBY IELEGJIAPH. —OWN COUHESPON DENT.] HAMILTON. Saturday.

A very- satisfactory business year and regret at the retirement of Mr. IV. S. Hawkins, chairman, and Mr. Joseph Barugh, vice-chairman and founder of the company, wero tho matters of chief romark at tho annual meeting of shareholders of the Farmers' Co-operative Auctioneering Company, Limited, held at Hamilton to-day. Mr. Hawkins presided ovor an attendance of about 100, and in what was his final address to the shareholders ho mado somo trenchant remarks regarding tho obligations of farmers toward their co-operativo concerns. "The year under review marks a fur-ther-record in production, and there is reason to oxpect that each succeeding year will show a progressive improvement," said Mr. Hawkins. "I am certainly surprised that it has been possiblo for the Old Country—considering its financial obligations, its number of unemployed and its increasing difficulty in finding markets against tho competition of tho world —to place so high a value on our main e.tpoits during tho past two years. How long it may continue I do not know, but it is obvious that it cannot continue indefinitely, and therefore I still urge you to do all you possibly can, both as farmers and as members of tho community, to reduco costs of production in this country to the point at which you can face a ,material reduction in our export values.

Balance of Unpaid Calls. "The capital account is substantially the same as last year, tho small increaso in tho paid-up capital, namoly, £IOB, corresponding with tho reduction in calls unpaid. 'Since the closo of tho financial jear tho balance of the calls unpaid has been practically cleared up, and this blomish on our balance-sheet will, I hope, be conspicuous by its absenco next year. Tho reserve account has been increased by £3387 13s 3d, being tho carry-forward of last year's profits, which has been transferred.

''The mortgages owing by the company have been practically wiped out, the small sum standing under this head being a Government mortgage which it would be inadvisable to interfere with. The overdraft; at the Bank of New Zealand shows an increase of £33,454 19s 3d. Our freehold and leasehold properties show an increase over last year of £1556 9s. The fact that! we have erected and paid for a new woolstore in Auckland shows a further depreciation of these properties. The book value to-day is about £IO,OOO below the Government capital valuation. ( "The increase of £40,345 8s Id in the amount owing to us by sundry debtors has been caused by the larger business done by both the stock and merchandise ; departments. This is responsible for our increased overdraft. The greater turnover in the merchandise department has warranted our carrying a slightly fuller rauge of stocks. The liabilities, excluding capital and reserves, total £141,283 10s, tho total assets amounting to £693,523 16s 4d, leaving a balance of £552,240 6s 4d in lavour of our shareholders, against * paid-up capital of £479.003 JOs.

Most Satislactory Figures. "On the expenses side of the profit and loss account the amount £97,921 15s shows an increase over last year of £8451 6s 9d. The gross profit of £148,991. being £18,455 3s lOd in oxcess of last year's earnings, has proved the additional cost to be fully justified, particularly as the percentage of expenses to gross profits works out this year at 65.7 as against 68.5 in 1928. That profit has been contributed to by all departments, tho stock and merchandise showing a most marked improvement. When we remember that the net profit last year was more than double, that of 1927, the further addition to those figures of £10,003 17s Id is most satisfactory and 'justifies the. belief that the company has permanently recovered its earning power. "The amount available for distribution is £51,069 ss, out of which tho interest on preference share capital has already been .paid. From the balance we propose paying a dividend of 8 per cent, on the ordinary share capital, the income tax for the year and carrying the rest forv/ard. The following is a brief summary :

Paid-up capital, £479,003 10s. Turnover, £2,016,161. Gross profits, £148,991. Expenses, £97.921 15s. Net profits, £51,069 ss. "Tho markot for fat and rtoro cattlo has been 'Consistently good throughout tho year. Local prices were too high for exporters to operate to any extent, so that very few fat cattlo were frozen. Tho highest prico quoted for beef this winter was 44s per 1001b, as against 48s per 1001b last year. However, taking tho wholo year round, values have been steadier than the previous year. Many Successful Sales.

"There has been a good demand for dairy cattle, tested cows and good quality heifers being especially sought after. Wo havo held a largo number of clearing sales, and the average price realised at the majority of them has been exceptionally good. All the pedigree sales conducted'have been successful, and wo aro looking forward to increased business in this direction.

"Sheep were in keen demand during the autumn; in fact the prices of all classes of store sheep at that time were beyond reason. Although fat sheep advanced slightly in the early part of the winter, store sheep and breeding owes havo shown a decline, and from the present outlook the coming year will see values lower all round. The inquiry for horses has been very good, especially for medium nnd heavy draught farm horses. At (lie recent spring fairs practically all (lie horses yarded have changed hands at satisfactory prices. 'Tigs have been yarded at, our principal wileyards in increased numbers, and prices throughout the year have been good. The demand, especially for fat pigs, is still i keen, and farmers may look with confidence to the future. In the King Country the carrying capacity has considerably increased owing; to the greater area topdressed during' the year, and much of what, was surplus stock has been held to cope with llio feed; Growth ol Private Sales. "Our private 'sales' havo increased considerably. Tho bulk of the stock business is already being done in this manner, and if this tendency continues it will be difficult to placo a valuo upon any class of stock, in the absence of tho competitive basis now obtainable through yard sales. This growth of private soiling seriously affects tho earning power of tho various Bftleyards established throughout our territory, and it will bo well for fai •mors to consider carefully whether they aro acting wisely in ignoring the. facilities provided for obtaining tho best current prices for their live stock. There aro indications of a coming world shortage oUbeef, wh.ch we, as. producers, would do w make a notoj of.

"In quantity the wool reclassed by tho company is'"increasing every year —2621 bales having been so dealt with last season. This work entails considerable strain on tho company's export at a busy time, but tho results obtained show how much it is appreciated by tho buyers. Tho alteration in the date of the second Auckland wool sale to January 21 should result in a considerable increase in the quantity of wool from the King Country district for next season. Our annual wool canvass of North Auckland clients resulted in a further increase from that district.

Ample Cargo Space. "Shipowners in tho Australian and New Zealand trade have experienced a normal year, and tho Australian waterfront conditions have been more settled. Exporters during tho past year have enjoyed ample space to litt. all their requirements. The extra tonnage required (luring tho peak of the New Zealand season was transferred from across tho Tasman at regular intervals. General cargo, and tho exportable surplus of meat and dairy produce, was in excess of tho previous year. The export of apples fell short of last season's figures, however, owing to tho unfavourable season. "In my last report I remarked on tho increased meat and dairy produce shipments to America. This trade has been well maintained throughout tho year, especially butter to Canada, and from what I can gather from forward sales, (his year's figures should eclipse last years' exports to that country. With regard to meat and butter exports fo tho United States of America, it is impossible to forecast how this trade will bo affected owing to tho proposed increased tariffs. Shippers are no doubt gratified :it. (he further reduction in freight rates of 5 per cent., which applied to refrigerated cargo as from September 1 last. "The activities of this department in Auckland have been increased and its scope 'enlarged in developing the tourist agency and hooking business. Wo have been appointed provincial representatives for tho Mount Cook Motor Company and Hermitage, Tongnriro National Park, Aard Motor Services throughout New Zealand, and tho New Zealand Deep Sea Anglinn, Limited, and wo look forward to this department proving a profitable section of tho business. Insurance And Land.

"Tho insurance and land department continues to show a very satisfactory return, although there is room for even more support than is already accorded. As chief agents in this district for the New Zealand Insurance Company, Limited, we keep abreast of what is required to protect clients against loss, and farmers should make a careful survey of their needs in I his direction. I feel certain that shareholders would bo well satisfied if they allowed us to handle this business for them.

"Although the Land Department is of considerable service to the company in many ways, of late years it has not helped much from an earning point of view. Mr. Young having left us, Mr. W. 11. Hume was offered and accepted tho appointment in his place. " Interest rates in tho Dominion are about £ per cent, lower than in Australia, and as the Government has not bee i able to borrow at a rate which could reduce interest charges there appears to bo no prospect of any reduction for some time to come. On tho other hand, I have it on good authority that they are not likely to be' increased, notwithstanding the fact that any reduction in tho selling value of our primary products means less money available for investment and development. " Banks and other lending institutions, including the Government, are for the most part well supplied with funds. Mortgages on freehold improved farm lands are readily obtainable at 6 per cent., but lenders at that figure require a substantial margin of security. The heavy burden of local taxation is more generally allowed for in making valuations. Traders on the whole are not securing an adequate return on their capital, due mainly to the excessive competition which prevails in most lines of business.

" The financial position of the majority of farmers to-day is sound, the exceptions being those who paid extravagant prices for their land. If we can rely on increased production to minimise tho re* duction in value of our exports, there is no occasion for any anxiety. As this will be my last opportunity of addressing you, may I say something about co-operation ? " The object of farmers' co-operative companies is to stand between their members and the exploitation of proprietary interests, and in their struggle to that end they have many handicaps. The first is their want of capital as compared with that at. the command of the companies working in opposition. The second is the necessity for restricted profits, otherwise the object could not bo carried out. Thirdly, the expectation of members of rebates as well as dividends.

" A very large proportion of ordinary shareholders in this company have only a few pounds each invested in share capital. As a consequence rebates paid in the past have been in many cases considerably in excess of the shareholding of the recipient. This means that his contribution to the capital of tho company is quite inadequate to finance the business he is doing, and that his rebates are only possible by the employment of capital belonging to other members. " Tho company is expected to pay, out of its restricted profits, not only interest on the capital employed in the form of dividends, but also a bonus, in the form of rebates, on tho business done to earn those profits.. This creates tho next handicap, which is the great difficulty of putting aside reserves to enable them to carry on in bad times. "Tho sales in the merchandise department for the year just completed show a very substantial increase when compared with the previous period, indicating that the services we render are being -appreciated bv clients. The prices of grocery and hardware still remain on a fairly even and stable basis, and there is every indication that this condition may continue. During the year we have extended our importations, covering a much wider range of glassware arid crockery, as well as a more comprehensive and attractive range of hardware. Shareholders and clients can be assured of securing their every need from any of our stores at the lowest prices consistent, of course, with good quality. ".Sales of wire and fencing materials during the year have, been exceptionally heavy. Although we handle Canadian wire as well as English, sales of tho former are very small in comparison. For many years we have confined our attention to a leading English make, and are satisfied that, this brand gives the greatest satisfaction to the user. There aro other brands on the market which are slightly cheaper, but these often prove dearer in the long run. We fully realise that farmers buying wire must be protected regarding quality. Sales of galvanised iron and wire netting have been well maintained.

Grain And Seeds. "A much bettor inquiry has been experienced during the past year for .Algerian seed oats. The demand in New Zealand about equals tho supply, so naturally toward tho end of the season prices increase. The inquiry for wheat is still maintained. Tho past year is notable for the first year's working of the Southern wheat pool. Prices during the year have been very reasonable, but as all free wheat is now off tho market the pool has periodically advanced tho price to cover the cost of holding, and therefore a higher figure must rule until next harvest, unless there he an alteration in tho present duty governing importations. "The sales of grass and clover seeds last autumn wero not as great as the previous season, which was referred to iri my last report as-being the heaviest for many years, yet the business don<; was well above normal, Prices were slightly higher than last year and tho quality first class. Competition is always very keen with this lino, and in spite of the somowhat serious competition with lowergrade seeds we are still able to maintain our connection through exorcising the most scrupulous core in selecting only tho | 'very quality. Wo'have Duilt up lap - excellent ' and

every effort is being put forth to maintain this, as we consider nothing but tho best is good enough for our clients. "The demand for manures 'throughout the year has been exceptionally heavy, as farmers now realiso that this requirement of agriculture needs greater attention. Although the bulk of our orders is for superphosphate and basic slag, it is interesting to noto that considerable quantities of nitrogenous manures were also in demand. During (he off-season—Decem-ber, January and February —special low quotations were offered l>y the fertiliser manufacturers, and the farmers did not hesitate to take advantage of the reduction. and in many instances booked very substantial quantities over and above their immediate requirements. Shipping From Europe.

"Owing to an exceptionally severe winter in Europe, during which canals and harbours were frozen over, tho loading of basic slag was interfered with. In consequence the carrying vessels were very late in reaching Auckland, causing much inconvenience. African phosphate has also been in demand, and from reports received is showing satisfactory rosults.

"The company's garage in Barton Street has an equipment for car service equal to anything in this country, and all renovations and repairs can bo executed on the premises. The saddlery workshop has been thoroughly overhauled and is turning out work which is appreciated all over the North Island.

"The wool department shows a further satisfactory increase, the. total offering for the season amounting to 10.260 bales. Unfortunately a diop in (ho price, of 3d per lb., after the first sale in November, reduced the gross "Value very considerably. At the second sale in February 5931 bales were catalogued, the largest quantity we have ever handled at one time, and our new floor, which was commented on most favourably l>y buyers, was fully occupied. This new floor, providing as it does the most up-to-date lighting and facilities for the economical handling of wool, will undoubtedly be a great asset to the company in the future.

Burden of Taxation. " A further handicap, common of course lo all companies, is I lift enormous and unjust burden under tho present incidence of company taxation, by which the man with a few pounds invested is taxed on tho earning power of those few pounds on the same scale as another with an income of ,110,000 a year. The graduated land tax is as unjust a drain on our profits ns the income tax. As a war measure any form of taxation may be justifiable lo provido tho means lo save civilisation, but to perpetuate an injustice long after tho necessity has disappeared, either because they are afraid to place the taxation justly, or because (hey dare not ask their servants for a certain amount of extra work, is a disgrace to every Government that might have applied the remedv.

" These are some of the handicaps we have to contend with and we have only one weapon with which to overcome them —that is unity among ourselves. A cooperative company is democratically governed, and with all the units pulling together their power might bo irresistible. If they are pulling in different directions they can make no headway. " The conclusion I have arrived at after nearly a quarter of a century in the service of co-operation is that as long as farmers' co-operation rests on a purely voluntary basis it cannot get very far. Combined action, controlled and skilfully guided, is irresistible. Jn uncontrolled action, that is action left to tho whim of the individual, whether lie support or not, all effective power is dissipated and lost. Need For Co-operation.

" The strength of the labour unions lies in their power of compulsion. Tho executive can require from every individual member a very substantial sacrifice for the good of the whole. There are very few shareholders in a farmers' co-opera-tive company who will make any sort of sacrifice for the good of the whole. There are no members of a farmers' cooperative federation who will do it. After many years of service the co-operative company and the co-operative federation can only ask their members to do business with them if they cannot do better elsewhere. " Under such conditions you will not be much nearer the point you want to bo at in 50 years' time than you are to-day. Co-operation means mutual help and entails mutual sacrifice. There need be no compulsion in tho first instance on any individual to join up with co-operation, or to keep him there against bis will, but while he is a member there should be sufficient compulsion to make and keep him 100 per cent, loyal. " The prospects before this company were never brighter than they arc to-day. We have a sounder financial position and a greater capacity for service than we have had in our history. It lies with us, by unity among ourselves and loyalty to the company, to make that service as effective as we want it to be."

The chairman then moved tho adoption of the report and balance-sheet. " Something to be Proud Of."

Mr. A. W. Blanchard, who seconded tho motion, said that any criticism with which lie had como prepared had been forestalled by the chairman's remarks. Ho had been a very keen critic of tho balance-sheets for years, but this year's was one of the finest ever issued by the company. The fact that every department showed a profit, was something to be very proud of. In recognising the efforts of the directors it must be remembered that the results were also duo in sumo measure to the staff. (Applause.) Tho members of the staff who did eood solid work and obtained results should have their services recognised. Mr. Blanchard said he was pleased that a "rotten" item that had been on the balance-sheet for the past 20 years, unpaid calls, had disappeared, and ho hoped that it would never be seen again. After recalling that the articles of association limited tho dividends to 8 per cent., he pointed out that for the past sixyears, during the first two of which no dividend had been paid, tho dividends had averaged 5 per cent., and he did not think this average was ono anyono could quarrel with. Tho turnover for the same period wan over £2,000,000, and the profits totalled £51,000, or 2!f per cent., which showed that tho company was not making much out of tho shareholders. The speaker supported what the chairman had said regarding company income, tax, and suggested that each year tho amount payable should ho shown on tho balancesheet. lfe. referred to unfulfilled election promises on this subject. Mr. .T. H. Fisher expressed a hope that because tho meeting was only a small ono they would not sit down and think everything in tho garden was lovely. He referred to people who were doing business with other firms but should bo dealing with this company. The Farmers' Auctioneering Company being a part of (ho Waikalo, ho said, ho hated to seo tho business cut up in the way it was.

Other Vlowpoint Expressed. Mr. F>. flay, replying to Mr. Fisher, said he had been connected with another big institution which, ho believed, did not regret tho fact that working alongside it in tho district, and doing fairly well in sorno cases were men who had formerly been associated with it. He said it would eventually be ji very bad thing for tho farmers if tho Farmers' Auctioneering Company, or any similar concern, were to do all tho business in the district. He believed in the maintenance of fair competition, and ho did not quite agree, with somo of what tho chairman had said. The company, ho believed,. could give the best, service to tho farmers bv seeing that it. had a sufficiency of capital and that its staff was efficient, and not by seeking a monopoly of tha business.

The chairman said lie agreed substantially with both Mr. Fisher and Mr. Hay. It would be impossible for tho company to do all the business offering in tho district; it had nothing like the capital required to do that. Ho was sorry that it had apparently been necessary for some shareholders to break away with their "business,, but, at the same time,»he, was pleased-to say; that the company^]

business had not suffered in the total amount. Tho business had actually increased in spite of tho breakaways. Mr.. Blanchard said £364,000 was owing to t lie company, it had properties worth £170,000, ami an overdraft of 152,000. Whero woro they going to get (lie money to do any further business than they were doing 1 The motion for tho adoption of tho report and balance-sheet was carried without dissent.

Messrs. A. E. Manning and D. S. Reid were declared elected to (ill tho two vacancies on the directorate caused by the retirement of Messrs. Hawkins and Barugh. Tho result of tho poll was:—A. E. Manning, 1892 vdtes; D. S. Reid, 1355; H H. Short, 1120; M. Wells, 780; A. W. Blanchard, 386; informal, 92. Mr. Manning, in returning thanks for his election, said ho hoped to be able to show that (lie confidence of the shareholders had not been misplaced. Throughnut (lie small fight there had been no bitterness and no ill-feeling, and he wished (he unsuccessful candidates better luck next time. ITo deeply regretted the circumstances that had brought about his election, (he retirement of Messrs. ITawkins and Barugh. When he had been asked to contest the scat he told Mr. Hawkins that on no account would he contest it against Mr. Hawkins or Mr. Barugh. Ploneor of Co-operation.

Mr. Barugh was, perhaps, tho pioneer of co operation in this community. His had been a life of service. Tho speaker said unhesitatingly—and he had known Mr. Barugh closely for the past 30 years — that he knew no man who had done more for tlio farming community than Mr. Barugh. (Applause.) Mr. Barugh went (jut lull of honour, and tho speaker knew that all wished him peace and plenty m his last days. Mr. Manning added that he felt diffident about saying anything regarding Mr. Hawkins, because he'know what a modest man he was. He was putting aside the command of this ship which ho had brought into peaceful waters, hut tho waters had not always been peaceful. Mr. Hawkins had been criticised, as any man in his position would be, but nono could say that he had not steered a straight course, shown inflexible courage and honesty of purpose, and done everything in the interests of the shareholders of the company and all (lie Waikato. Die main characteristic of these two men had been utter disregard of self. Mr. Reid, also returning thanks for election, sairl he looked upon his success as being due to tho fact that he had been asked to consent to nomination by men of very high standing, and they had done a great deal of work on his behalf. At ono time' he thought he was fighting a losing fight and several of his best friends asked him to stand down bccauso they did not think he had a chance of getting iu. But ho had felt that a man who was not prepared to take a beating was not, worth his salt and that by retiring ho would not be playing the game by those who had asked him to come out. Groat Work For Farmers.

A company of this kind would always lie criticised, but from his experience with public companies he had found that nine times out of ton those working for such a company wore trying to do what was right. They did not always succeed, but hn thought an honest mistake should not be condemned. On the board his policy would be that if ho thought a thing was wrong ho would oppose it and if he thought it was right he would support it. Endorsing all that had been said about Messrs. Hawkins and Barugh, Mr. Reid said it was his great regret that ho was stepping in owing to their retirement. They had mailo tremendous sacrifices and been blamed for many things for which they did not deserve blame. No man in the Waikato had done more, or in such an unselfish manner, for the farmers than Mr. Barugh. Mr. Hawkins was a straightgoer, respected by everyone, and nothing told more in the long run than a man having done what he honestly believed to he in the interests of thoso he was working for. Messrs. C. W. Armstrong ntul R. P. Hazard were re-elected auditors, at a fee of £SOO. Mr. Hazard, acknowledging this mark of the shareholders' continued support* said the auditors had a special opportunity of watching the work, and he could join in what had been said regarding the directors and staff. In regard to "sundry debtors," the most important item of tho balance-sheet, tho auditors had particularly noticed tlie effect of the excellence of (he management. Mr. D. Hay was re-elected to the position of shareholders' scrutineer. Resolution of Thanks. Mr. Blanchard asked Mr. Hawkins to vacate tho chair in favour of Air. E. M. l'Jdkins heforo he moved tho fojlowing resolution, in doing which, ho said, ho believed he was voicing the opinion of all shareholders, whether present or not: —

" Tlio shareholders of the Farmers' Cooperative Auctioneering Company learned with very great sorrow and regret that the chairman of the board of directors, Mr. Hawkins, and the vice-chairman, Mr. Barugh, had declined to stand for re-elec-tion at this annual meeting of shareholders. We are cognisant of tho fact that ihcy were tho only elective members of the board that had signed the original deed of incorporation. We recognise the great value of the services rendered for 22 years, which has entailed a vast sacrifice of time and money, which few would care to make. They have been guided by high ideals which wo all admire, and their work for the company will stand as a memorial for all time for service ungrudgingly given and faithfully carried out. The shareholders herewith tender to them their heartfelt thanks and wish them jnany years of happiness in their retirement."

Mr. W. J. McKee seconder! the motion, which was carried by acclamation. The meeting sang heartily, ''For They Are Jolly Good Fellows."

Mr. Barugh, responding, said he had come to know a great many of fhoso present since he came to the Waikato nearly 50 years ago. During that time it had always been his pleasure to help others to do good to tho farmers' cause. He proceeded to relate how tho movement which resulted in the founding of the Farmers' Co-operative Auctioneering Company had its beginning, and hoped that tho good spirit of co-operation among the farmers would always bo carried on. "A Most Satisfying Thing."

Mr. Hawkins said: I thank you, and again I thank you. And having said that I foci tongue-tied. Why it should bo necessary to show so much appreciation for ;i man who has merely done his duty I do not know. It is most gratifying. The goodwill of those for whom one has worked is a most satisfying thing at the end of one's career.

"In the direction in whicb Mr. Raruch spoke to you, I acted as Mr. .Barugh's assistant. He was the man who founded the company, whose influence among the farmers at that time made it possible. Since then what I have done in connection with the company any man could have done, and most, of those who are directors are doing to-day. It is, perhaps, more unfortunate from my point of view than from yours that we aro gcttinc too old to carry on, but it. has to be. It comes to all of us sooner or later." Mr. Hawkins expressed the very sinCere thanks of the directors to the staff—not. only to the senior officers, who were an exceptionally fine body of men. but also to all the others, who were carrying out their duties conscientiously and effec'ively in the interests of the company. The directors were indebted to each one of them for his or her share in achieving the results before the meeting. (Applause. 1 Before Mr. Hawkins resumed his seat Mr. Ed kins said, addressinc the shareholders: "You are losing in Mr. Hawkins one of the finest chairmen who has ever been on any board." The directors met later and elected Mr. Walter Senvill as chairman.