VESTEY’S AGAIN

New Zealand Times, Volume L, Issue 11647, 11 October 1923, Page 3

VESTEY’S AGAIN

POVERTY BAY PURHCASE

MR JONES REPLIES TO MR POLSON. BOARD AND FARMERS’ UNION. Following is the reply by Mr David Jones, chairman, New Zealand Meat Producers’ Beard, to the statements made to the Press by Mr W. J. Poison, Dominion President, New Zealand Farmers’ Union: Mr Poison says:—“From my knowledge ef its members I am sure that the hoard was entirely sincere when it caused that pronouncement to be made.” This plainly infers that in Mr Poison’s opinion the board is insincere now. He further adds:—‘‘lf the board has been influenced by Government pressure,” eto. lam very happy to inform* Mr Poison and the public, that the board is still sincere, and has never had the slightest intention of deviating from its policy as laid down in the resolution referred to, and that no Government pressure at this juncture, or at any other period, has been biought to bear upon the board. Itis an even more unfortunate circumstance that a gentleman holding the position of Dominion President of the New Zealand Farmers’ Union should endeavour to mislead the public mind, by insinuating that Government pressure is being brought to. bear when there was, and is, no ground whatever for suoh a suggestion. The rest ot Mr Poison’s statement rests upon the correctnet|i. or otherwise of his statement as follows: —' ‘This was further strengthened by the attitude of the board towards another New Zealand Farmers’ Fleering Company, which attempted to sell in Great Britain £‘20,000 to £2AOOO worth, of preference shares whicn gave no control. The board unequivocally and in writing refused to allow the company to do this. Finally, under pressure, the board gave way,” and Mr Poison gives an extract of a letter which de stroys the sense of it to support his statement.

‘‘IN A FALSE POSITION.” In view of the importance of the issue involved, and the attempts that are being made in many quarters to place my hoard in a false position, I desire to state the facts. A certain freezing company’s chair- 1 man and directors waited on the board on July 20th last and asked whether the board would vary ita resolution dealing with overseas interests, as it prevented them raising certain moneys, some £25,000. I asked: “Have you had a definite offer of money?” and the chairman said, “No”; but he thought from a discussion he had that he could secure the money, but our resolution had been mentioned as possibly affecting it, and he wanted us to take “the sting out of its tail.’ We sent the oompany the following reply on August 8th — “The board has given'careful consideration to the request made by your company that it should modify its resolution restraining overseas interests from obtaining further interests in the freezing works of the Dominion, as it may, in your opinion, make it more difficult to secure the finance necessary to carry on your works. “The board does not wish to place difficulties in the way, but rather to assist, if it oan be done without injury to the producers of the Dominion, and with their interests is bound up the interests of the farmers’ freezing works. “The resolution referred to should only deter those who may come within its scope, and any permission given or weakening of the board’s 1 attitude would be a direct encouragement to those interests, which, you agree, cannot be permitted to further extend their field of operations. “The board therefore cannot see its way to modify the policy laid down in the resolution.” REASON FOR MODIFICATION. On August 28th the chairman of directors of the Freezing Oompany in question wrote to the board as follows : “I beg to acknowledge receipt of your letter of the Bth inst., declining the request of the Freezing Company, conveyed to you by Mr and myself, that your board’s resolution carried some four months ago, dealing "ith the question of the control of New Zealand freezing works by oversea interests, should be modified so far as the clause is concerned, which says, ‘Or that oversea concerns should acquire any further interests in Now Zealand freezing works.’ “Our reason for asking such a modification being that the clause quoted prevented us from obtaining a certain Bum of money, by means of preference shares, from an English source, we having been informed that the money would probably be available, but that while vour

hoard’s resolution remained in its present form nothing could be done in the matter. “At our interview with your board in July, Mr and 1 expressed our entire agreement with your declared policy of preventing oversea interests from purchasing or building any further meat works in the Dominion, but when your hoard goes to the extreme length of preventing a comparatively small sum of English money from being invested in the preference shares of a New Zealand meat freezing company, it seems to me your board is going to an extreme never contemplated by Parliament, or by those wtofh you are appointed to represent. “At our interview I endeavoured to explain that it would be impossible for the holders of 20 or 25 thousand preference sh sires, who would have no votes, to in any way control the company or dictate its policy. “I note that in your reply you state, inter alia, ‘The board does not wish to place difficulties in the way but rather to assist-.’ ,

“AN EXTREMELY TRYING TIME. - ’ “Yqur hoard is doubtless aware that on account of the slump in beef, and for other reasons, farmers' freezing companies have had an ex- , tremely trying time, and when one of these companies has a chance of obtaining the use of a moderate amount of English capital, and in such a manner that its use cannot alter the policy of the company, it is difficult under suoh circumstances, in the face of your veto, to clearly recognise your hoard’s desire to ‘assist. ’ “It must be apparent to everyone taking an interest in the moat freezing industry that, owing to the wide publicity given to the affairs of a certain company at the present time, it would be quite impossible for any of the smaller freezing companies to raise money in the Dominion. “If a farmers’ freezing company requires money for its business, and cannot raise the money in New Zealand, while on the other hand, your board, 'by its resolution, prevents it from obtaining its requirements from a British source outside the Dominion, upon whom should the responsibility rest if that company is forced out of business? ‘ ‘From a farmer's point of view the position brought about by your board’s resolution is a very serious one, and the consequences may be far-reaching. As your board is aware, there are two classes of meat freezing companies operating in New Zealand. There are the proprietary and th© semi-proprietary companies, and the farmers’ co-operative com. panics; the former being old and wealthy concerns, chiefly controlled by city men and existing for the sole purpose of making dividends, have little difficulty in arranging their finances. “The farmers’ companies .were formed with the object of protecting the farmer, and securing to him a fair prioe for his stock. But farmers’ companies have not the same opportunities for obtaining necessary capital that are enjoyed by the proprietary concerns. “That being so, it is obvious that any action by your board which prevents farmers’ companies from obtaining British capital from outside New Zealand, is calculated to have a disastrous effect upon such com panics, and may ultimately drive the whole of our meat business into the hands of the proprietary concerns. “Looked at from a purely utilitarian point of . view such a result might seem desirable, but from a farmer’s point of view it would be disastrous, and would mean the loss of all the capital farmers have sunk in meat works; the farmer would not have a competitive market for his stock, and would ultimately be at the mercy of a monopoly. “I regret the attitude of your board, and regard the whole matter of ouch serious importance to the farming oommunity that I propose to fully deal with the question at the annual meeting of our company.” THE BOARD’S REPLY. On August 81st the board replied to the foregoing letter in the following words:— “Your letter of the 28th instant, in reply to mine of the Bth instant, has just been received. “You have read into my letter a great deal that I did not state. The .Meat Export Control Board is not preventing you from raising £ 1:0.000 to £25,000 in preference shares, ’ which would have no vote nor in any way control your company or dictate its policy. “The board has no desire to prevent you raising the preference shares that you suggest, and so long as these preference shares have nothing to do with the management of the works, and the entire and unrestricted control of the whole of your business remains in the hands of the New Zealand shareholders, the board would not take any action. It would only bo if and when the oversea capital that you imported into your business began to take any part in the control or management of your works, or dictated your policy in any way that the board

might step in and have any say in the matter. “This is a position that the hoard cannot depart from. Tho board cannot overlook the fact that if oversea interests are permitted to purchase and use without restriction further freezing works in New Zealand, or acquire interests that would give them a further measure of control over freezing works in New Zealand, it would be a grave danger to the meat industry of this Dominion. This is the reason for the action the board has taken. “In regard to the remarks contained in the second paragraph of your letter, I would again emphasise what I said in my previous letter of I the Bth instant, namely, that the ■ resolution referred to should only deter those who may contemplate coming within its 6cope.” This is the whole correspondence and the fact 3. and I would ask Mr Poison to state wherein the board at any time “unequivocally and in writing refused to allow tho company to sell in Great Britain £20,000 to £25,000 worth of preference shares which gave no control.”