YEAR OF PROGRESS

New Zealand Herald, Volume LXX, Issue 21617, 9 October 1933, Page 12

YEAR OF PROGRESS

COMPANY .n -— —r-, . • FARMERS' CO-OPERATIVE ' £ OUTLOOK FOR FUTURE | REVIEW BY THE CHAIRMAN M (Extended Report by. Arrangement.) •» • [rmiM oru own n>nnu.s7'oM>KNT'J £ HAMILTON, Sunday The 26th r.nnual meeting of the Co-operative Auctioneering 'Company, Limited, was lielil in llamilJ lon yesterday. The chairman of directors, Mr. W. Seavill, presided over an of of) shareholders. I:; In moving tho adoption of the reimport and balance-sheet, which have •■-been published, ilxr chairman said lie .."would like to refer briefly to the .'operations of the various departments, • ■-covering the activities in which the company was engaged. ''lt goes without saying that the past year has been a very difficult ynie," Mr. Seavill said, "ami L venti re !:,*the opinion that sliareholders have ~Vause for satisfaction in tho results of past 12 months' Working, wh eh practically unparalleled in New Zealand to-day among companies engaged jjn similar business. Subscribed capital ;->hows no variation, and remains at «:<C655,267, the callod-up capital bong ''£479,953, which is all paid up. The ■preserve account remains at £20,000, >£16,175 represents the fixed deposits jyvit'a the company, and £3370 is the "Miin total at • credit of current accounts. X ''Sundry creditors, £23,251, show a ••decrease of £3105 on tho previous 'Tear's figures. This liability lias since Sheen paid." The liabilities, excluding ►♦capital and reserves, total £43,527, "while the assets amount to £55-4,338, Revealing a percentage of liabilities to >«Ssets of 7.79. - Value of Properties *5 "The value of the company's properties stands at: —Freehold, £102,728; .-j)as" year's figures having been depreciated by £3301. Maintenance, renewals and repairs have as usual teen •*chr..rgod against current expenses. The visum of £8412 covers tho whole of the plant, machinery, office furniWture and fittings engaged in the btisiSjiess, a reduction on last year's figures; :?of £lOll. Sundry debtors less reserves, •Jfand bills receivable, aggregate. **£192,064, a decrease of £52,181. '"lnvestments total £41,691. Of this Ssum £30,055 is invested in New Zealand Government Inscribed Stock, from ilwhich has been deducted a reservci of! «-£1560 for any possible fluctuation in Rvalue. The balance in the intestmenfs >is represented by inortgaf and other., ••'securities held -by-the conijfiin.y.' ■'■.,■ ' ..- "It is gratifying that under exists Kjnp conditions we bad not to lean upon. •Sour bankers, and that a credit' existed~3n New Zealand of £59,320. Stocks of have been valued by competent valuers at £57,709, a reduction of £2417 on last year's figures. ijl'h'3 percentage of expenses to gross is 82.-13. Further economies have £jbecn found possible in the management, ~a saving of _£4300 having been effected "on top of the reductions during the •last two years. "Briefly, summarised,, the position is. ■ ••isis follows:: — I'aid-up capital ' •*- i!479.i)53 Total liabilities .. . . 43,227 ,>2 Total assets 554,3M8 *5 Turnover . .. .. .. 1,048,1G6 (rrosa profit . . . . . . 95.845 Expenses • 76.558 Xet profit . . . . - . 17.057 »•) j* Merchandise Department w "Trading conditions for the year just "completed have been somewhat cliffi'ful t, and competition and price-cutting Sjiave been intensive. Political expedients have affected trade and consider—;r.bly restricted importations, brought -jibout by the adverse' exchange rate Stind the imposition of the sales tax. importers to day are inclined to retrain from placing overseas orders, *bwing to a feeling of insecurity. The of importations may ultimately have a beneficial effect, asi experience has tatight that stocks of imported goods under normal conditions in re far in excess of the country's IJieeds. % "It is pleasing for me to be able to that in face of these diflici ltics We have successfully maintained our yfcigh standard of quality, and the turnover in this section indicates that the service tho company renders has been appreciated by clients. Shareholders and clients can rest assured of being able to secure their needs from thecompany's* stores at tho lowest price consistent, of course, with good quality. "Stock market conditions during the year have proved as difficult as for the preceding one, and almost throughout . prices have shown little or no stability. With low rates ruling, in the store cattle section, operations were not on as large a scale as in previous years. For aboe.t a fortnight in the spring, store cattle showed a sharp rise in value, and back-country farmers carrying this class of stock were encouraged to look forward to a good season, flowover, beef, which had ruled extremely low during the previous winter, showed no improvement, so that the rise in store cattle was short lived. Large numbers of fat cattle were sold from £5 to £6 each, whereas tho same cattle in 1931 would have realised from £9 to £lO each, and in 1929 from £ls to £l6 each. , Business With Boner. Cows "During the, year,' the company has. done considerable business with boner cows, drives of these culls being organised from all parts of the Waikato, Thecattle were sent direct to the Jlorotiu' freezing works, where they wero killed on the owner's account, and by this method -the farmer received the full market value. "We conducted an average number of clearing sales, but, generally speaking, prices for dairy stock have been disappointing. Cows with good butterfat records realised satisfactory prices, but the market has been over-supplied with dairy heifers. It is many years since farmers have been able to make replacements in their herds with the best of dairy heifers at from £0 to £7 a head. During the season large numbers of springing heifers wero sold at prices very little in advance of what was paid for them as yearlings. "Satisfactory business has been done in pedigree stock, and the prices realised compare favourably with those ruling elsewhere in the Dominion. "Prices lor iat sheep showed an improvement during the winter, but with the unfavourable conditions ruling last year, few tanners held a sufficient number of sheep to receive the benefit of , tho rise. There seems to be a distinct short ago of st ore sheep in the Waikato. Last year very few wethers came ill from outsioe districts, and as most of the hoggets held locally were killed for export, this class of sheep at the present time is difficult to secure,. Breeding Ewes Handled \ "Although we handled tho greater, V number of breeding ewes which arrived roin the east tfoast districts, there were bjkiot sufficient to fill requirements;, and frtfjdditional numbers camp from the <£orth Auckland district late in the nhiOason. The value of breeding ewes 40. I'ing advanced since the sheep fairs, of farmers, who anticipated ' -.v •*• -• ■ gto. ■

buying when the cues had lambs at foot, have been disappointed, practically no suitable sheep being on ofler. "At the smaller horse fairs held in various parts of the district, good prices were realised, but tho outstanding sales were, undoubtedly tlie Cambridge winter bud 'spfing fairs. : The spring fair was tho most successful sale wo have . conducted for nearly ii decade. Of 904 1 horses' offered, tyllj' were sold, tho top price'being £SO, while prices ranging from £lO to £SO were fairly common. It Was predicted a few-years ago that tho tractor would replace the horse, but such has not proved to bo the .case. The keen demand for useful farm sorts that exists to-day "suggests that the horse is still indispensable. Improvement in Pigs "The .greatest improvement during the year lias been iit the pig section. Not only have prices been consistently good, but a largo increase in numbers handled has been shown. "A most pleasing feature of the year's operations is the increased volume of business, showing that the service of the company still stands high in the estimation of the farming community. "Although there was a slight decrease in the number of sheep sold, duo to some extent to smaller arrivals of breeding ewes from, the east coast districts, the number of cattle handled, compared with last year, showed an increase of over 10,00(1 head, pigs over 15,000 head, while the total of horses increased by 57-I.' Wool Proves Disappointing "The result 'of the 1932-1933 wool season proved even more disappointing to growers than its'predecessor, and all associated with the trade will have reason to remember the low range of prices and the tremendous setback to the industry. "The first sale- of the season took [ place at Auckland on December , 1932, the average price realised being • 3.75 d per lb., £5 lis. Id per bale; the : second sale was held on January 20, j .11)33, the average-.price per lb. being | 4.46(1, and per bale £0 14s 7d; tho | third and last sale was held on March | 17. 193-'!, the price, per lb. averaging 3.54 d, and per bale £5 7s 4d; from which it will be seen that although tho opening sale was on a low level, a slight improvement took place in January, but in March was not maintained, and, in fact, the prices realised were slightly lower than at the open- ; ing salo. i "A keen demand was much in evi- | derico for well got up and efiieientlv classed wools, and it is pleasing to note that each year more growers are availing themselves of the excellent service provided by- tho-company for the classing, binning and pooling of clips. New. Season's Prospects "The quality and -condition of the wool offered showed no improvement upon the standard of the previous season, but it is hoped that the recent finning of prices will' arouse growers' ■interest, and that they will pay more attention to the get up and classing of their clips. "For the coming season, tho following sales have. been scheduled for Auckland: —First sale, Monday, November 27, 1933; second sale, Monday,. January 15, 1934; third sale, •Tuesday, March 27, 1934. Although! under' existing -world-wide conditions it is difficult to forecast, I am'inclined 'to' the view'-that for the coming sea-' • son pHces."Svill 'show, an advrtnee on. last year's realisations, and I think 1 can venture to say the indications are that there will be a strong and keen demand for all attractive wools. "Through the increased rate of exchange, and consequent restricted importations from "the United Kingdom and American points, one-way cargoes have been more evident this year, shipping companies having again to send ships in ballast to lift New Zealand produce. A striking feature* was the increase in pork shipments, these being about 60 per cent more than the previous year's exports. Beef increased by 30 per cent, and there was a slight excess over last year's shipments of lamb, but approximately a 30 tier cent decrease in the export of mutton. Restricted Beef Shipments "Ship owners are fowling the restriction on beef shipments. A number of vessels have already cleared New Zealand coasts with vacant refrigerated space, and this will continue until butter comes Hong more freely. "With regard to dairy produce, the exportable surplus of butter shows an increase of 28 per cent, while cheese shows an increase of 19 per cent. General cargo has come forward regularly, and an improvement in wool prices has caused the shipment of a large quantity of old wOol. "Canadian trade has shown an improvement since the adjustment of the trade agreement between Canada and New Zealand, and large shipments of hides and sheepskins have been going forward. A pleasing feature in regard to Eastern trade has been the increase in wool -shipments to Japan, which last year approximated 30,000 bales. The coming season should sco this total considerably increased. A large quantity of scrap metal has also gone forward to Japan, and in smaller narce!s- other commodities, such as butter, casein, sheepskins, tallow, pelts, condensed and dried milk. Coastal shipping has not been satisfactory, but as soon as importations are increased an improvement will be shown. "Our agencies comprise tho Cunard Line (Australasian Service), Common'wealth and Dominion Line, Osaka Shoscn Kaisha (Japan and China), and .Gisborno Shcepfarmers' service, EastCoast ports. Insurance Resu'ts "Notwithstanding continued adjustments of insurable property to presentday .'yaluos, 1 am pleased to say that the results shown by this department have been well up to the standard of former years. No effort has been spared to'.secure now business to meet the lower level of commission earnings duo to depreciated values, and a good measure of success has been met. "Shareholders and customers aliko are once iliore reminded that it is in their own interests to see that all risks are guarded against, and that as chief agents in the Waikato for the New Zealand Insurance Company. Limited, we are in a position to give prompt attention to all inquiries. The life insurance agency of the Producers and Citizens' Co-operative Assurance Company, Limited, a comparatively new departure, is proving a useful adjunct to our activities. "One of the'' chief difficulties tho directorate and management have had to face has been to.deal sympathetically with our farmer clients, and at the same time to conserve the best interests of our shareholders. 'No' is one of the most difficult words to say, and the utmost consideration is given to the merits of every proposition before arriving at a decision whether further accommodation is warranted, or if the piling up of further debt by the client will not merely stave off temporarily an inevitable disaster. It has been tho policy of the directorate and management. to give the utmost assistance consistent with prudence to clients' needs. "I regret that the hopes 1 expressed at our annual meeting last year, regarding prices for dairy produce, were not fulfilled to the extent one could have wished, and what prices will rule during the season now entered on is beyond my powers to forecast. Quality of Production ; .''The-.only sound'.course for farmers to follow, whether it be dairy produce or meat or wool rvhich is under consideration, is to try and produce the best their various farms are capable of doing, content, in the face of worldwide competition, to rely on tho merit of the articles to obtain for them the

best price rather than look for help from tariffs, exchange, or artificial props of any kind, which can only he implemented at the consumer's expense. "The very encouraging reports of the condition, on its arrival in London, of a consignment of beef from New Zealand under the noval conditions of an atmosphere of carbon dioxide, combined with a modified freezing temperature, surely justify us in looting furward to oiir being ablo to land chilled meat in the Old Country in as good a condition as that shipped from South America. The chief menace to the primary producers in New Zealand is the possibility of a quota being established, to 'enable the British home-grown farm produce to be sold at a higher rate. 1 am sure wo all have a warm spot in our hearts for the English countryside, and deplore the straits to which farmers at Home are reduced. But, at the same time, two classes are going to be penalised if a quota be imposed: (1) the consumer in the Old Country, by Inning (a) his cost of living raised, or (b) his standard of living lowered; and (2) tho meat producers and dairy farmers in New Zealand, and indirectly everyone else in the Dominion, to whom it will he a most serious blow. Seriousness of Quotas "Those in authority at Home are no doubt considering the pros and cons, and we farmers in New Zealand are certainly not in a position to throw stones, alid for two reasons. We have not reciprocated with Croat Britain by trading with her to as full an extent as we might have, and we would do exactly what the British farmers are doing and make a great outcry if meat and dairy produce were imported into New Zealand and undersold ours. However, whatever the outcome may be, it is just as well we should realise how serious tho possibilities are. "There is a matter to which I feel I must refer which affects, not only companies such as ours, but a great number of farmers. It is claimed in certain quarters that legislative action should be taken to compel the holders of stock securities to share with the mortgagee of the land the proceeds of the farm. At the present time in a number of cases, the stock mortgagee shares with the mortgagor these proceeds, and, at first glance, it might appear equitable that the land mortgagee also should get a proportion. It is argued that if it. were not for the land, the stock could not be grazed, and consequently could not be appreciated and got ready for sale, or, in the case of dairy stock, produce any milk. Arguments in Reply "There are several arguments I can advance in reply. The security in a stock mortgage is extremely hazardous, owing (a) to mortality risks; (h) to its being readily removable; (c) to its being consumed as food; and (d) the possibility of tho stock having to be realised on at an unadvantageous time, owing to the sale of the farm by the land mortgagee. None of those risks have to be considered by the mortgagee of the land, and it is suggested now that another unattractive feature should be added. "Why should the land mortgagee be entitled- to collateral security at the expenso of the holder of the bill of sale over the stock, and none be available in return for the last-named, who is expected to find all cash advances necessary for the carrying on of the ! farm and fertilising of the pastures, to take all risk of further loss, but is expected to share any surplus with the land mortgagee? "Though, admittedly, stock cannot be hold without the land on which to graze it, if no stock were carried tho value of the land mortgagee's security would - rapidly decline, owing to deterioration, so these two considerations cancel one another. This particularly applies to secondrdass hill country. Stock Finance Difficulty "Sales of stock in periods of lowvalues often do not produce more than enough to keep the farmer going, and perhaps reduce his indebtedness to the holder of tho bill of sale. Further, out of these proceeds, this company, at any rate, often allocates a portion for top-dressing, which benefits the land mortgagee as well as the farmer and itself. "A fact that is frequently lost sight of is that in cases where the present value of the stock is less than the amount of tho advance,. any proceeds from the sale of such stock represent realisation of capital—not increment —and should not, surely, bo made available to meet interest charges due to other creditors. As I pointed out, no provision is apparently contemplated to be made, whereby a stock mortgagee would participate in the realisation —in part or whole —of the land mortgagee's security. "The final argument I have to submit is that if the security of the bill of sale holder is interfered with it will be extremely difficult tor many farmers to arrange stock finance, unless, of course, tho mortgagee of tho land is prepared to give the accommodation. Political Interference "Now mortgages on land are almost a thing of the past, and GovornnK it interference in stock securities w ,dd automatically add to tho difficulties of farmers in making arrangements for stocking their properties, and further, would largely curtail the functions of companies such as. ours, with a consequent diminution of income for ourselves and income tax for tho Government. "L very much regret that tho socialistic leanings of all political partics in New Zealand to-day appear to vary only in degree. However, as long as the majority of those with the best brains in tho country shirk public service and remain inarticulate, or do not realise whither things are drifting, one cannot be surprised if a Government takes advantage of this apathy and tacit acquiescence in its ' activities. Legislation in recent years has been in tho direction of making it • easy for citizens to sidestep their obligations, which action cannot fail to sap 'j tho morale of the nation. [, "In this connection let mo quote from an article which appeared a ' short while ago in tho London Times, •written bv Sir A. M. Samuel. Ho |said: 'No nation, even in conditions of profound peace, can continue as a ; trading community, or, indeed, exist as a political entity if it fails to observo faithfully all contractual obligations. The decay of common honesty, •evident everywhere „in recent years, is a major cause contributing to tho world's malaise. An international rise .in prices is not worth the paper on ;which the prices are to be printed unless nations and men maintain and enlarge good faith between one another. With disrespect for tho sanctity •of contract, self-respect is abolished, prices become meaningless, commercial intercourse ceases, and the very 'structure of society is dissolved.' Honouring of Contracts. "I think wo should take the foregoing statement very much to heart, and ask ourselves whether wo are not allowing material considerations to obscure moral values. Notwithstanding protestations to the contrary, most nations to-day would appear to be striving to score at each other's expense, as are also —among themselves —the various sections and classes comprising those nations. "It surely must bo conceded that a principle is not affected merely because a. large number of people may be concerned in its application. Cap wo not hi New Zealand, 'even now, revert to the old-timo fashion of being gov-

crned by principle, and honour our contracts, among ourselves, and with Great Britain? It is undeniable that wo have laid ourselves open to grave reproach, in this connection. "A long timo ago someone made tho statement that it was expedient that one man should die for the nation. It is quite obvious that many people today echo that sentiment, tho sacrificial victim, in their minds, being either the land or the stock mortgagee. Jn Now Zealand to-day the trouble in rural matters is- a triangular one, the position up to date being that the land mortgagee has had his rights in.his contract with tho farmer cancelled, and ho is now trying to halve his losses by transferring some of them on to the stock mortgagee, and the Government appears to be lending a sympathetic car. It is a good illustration of how, if you once tell an economic lie, you h.avo to tell another, and probably some more later on, and so perpetuate something which should never have been begun Tribute to Staff "Ignoring a principle, rind resorting to an expedient, is the adoption of an apparent remedy the efficacy of which is nob borne out by .subsequent experience. It is an attempt, by means of taking a short cut, to remove tho ill-effect, not the cause, of an evil, or of a hardship, and can only bo implemented by transferring the burden to soiueono else's shoulders. "1 cannot speak too highly of tho manner in which tho whole staff has responded to the calls made upon if and has risen to the occasion. No one has relaxed for a minute in the search for new business, profitable investment, endeavouring to satisfy tho company's customers, and at the same time safeguarding its interests. "In conclusion, may I once more urge you to forward tho interests of your company to the utmost. Tho results of the year's working as a whole, and some of tho details 1 have given you, surely speak for themselves, and proclaim that this. company enjoys tho confidence of a very largo number of farmers. It possesses an enviable reputation, and its prestige is growing daily. I do ask you to give us the first opportunity to serve you when you have any buying or soiling to do, and thereby draw nearer the day when wo can once again make sufficient profits to pay a dividend on ordinary shares. 1 now formally move the, adoption of the report and balance-sheet." ■ Directors Congratulated In seconding the adoption of the report and balance-sheet, Mr. J. Pohlen, Matamata, said as an original shareholder and ono of those who assisted to launch the company, ho was very pleased with tho continued prosperity of the company. Tho directors and management deserved to bo congratulated on the very satisfactory statement of accounts presented at that meeting. Tho last two years, ho added, had been very trying to everyone connected with the primary industry, and tho company had emerged through tho period with thing colours. Mr. Pohlen said signs of recovery wore now evident. Tho brighter prospects for sheep and wool promised to ho permanent, and shareholders would bo justified in taking an optimistic view of tho future and in looking forward to receiving a return on the capital they had invested with the companv. The speaker said ho considered interest was still too high for primary producers, and the timo was coming when investors could only expect a lower rate than that which they had been accustomed to receiving. Mr. Martin Butler, Pukeroro, said he heartily congratulated tho directors and management on the balance-sheet. Ho thought it. would not bo long before ordinary shareholders would receive du idonds. The report and balance-sheet wero adopted. The retiring directors, Messrs. >\. W. Livingstone and T). Stewart Reid, M.P.. were re-elected, and Messrs. C. W. Armstrong and R. P. Hazard wero reappointed auditors. Tributes wero paid to the loyalty and devotion of tho staff bv Mr. E. M. Edkins, a, director, and on his motion a vote of thanks was unanimouslv adopted. The secretary and general manager. Mr A. C. Bushell, said every member of the staff had given excellent service, and he was proud to be associated with such an efficient team. The meeting then closed.