THE NEW ZEALAND FARMERS' CO-OPERATIVE ASSOCIATION OF CANTERBURY, LTD.

NZ Truth, Issue 749, 25 October 1919, Page 4

THE NEW ZEALAND FARMERS' CO-OPERATIVE ASSOCIATION OF CANTERBURY, LTD.

"Cambist" will this year take a different method of reviewing the annual balance-sheet of this company. In this instance he will turn the positton "upside down," so to speak, and follow on with the various items set forth m the documents under notice. However, to get on with the pleasant task> the first item that comes to his notice is the- enormous sum standing on the assets side. "Cash at Bank of New Zealand, etc,, £199,092." Probably there are a few companies at work m this country that could at the present moment point to so large a balance of ready cash as the sum .indicates. The position Is made still stronger, when the auditors report that there are no bills under discount this year. It is a proud moment when a concern can use its bankers merely aa a place to deposit money m, and it is better still when such an Institution never requires any banking assistance m matter of discounts. This very satisfactory position arises mostly from the fact that there is at present sufficient proprietors* capital m the business to > STABILISE THE GENERAL FINANCE . ' j of the association. Sundry debtors — auction and grain accounts come to £142,089, which is a email item considering the turnover m this business. There are no facts to hand which would warrant a definite pronouncement on the part of "Cambist" as to this class of business, but he thinks there are .few, if any, other farmers' brokers m this country who can exceed this association m the volume of actual business done under this heading. At any rate, the total 13 not a large one, and from the chairman's assurance, most of this money ia repaid, which is another- way of telling the proprietors that the advances were liquid and safe. General merchandise accounts, £233,387, seems to be a large amount outstanding under this *head. But it is not so, if the volume of business done is taken into account. There are over 8000 shareholders m this association, so that with the total well spread amongst that body of careful co-operators, the showing is not at all excessive, \ and no doubt is quite a safe under the circumstances. Investments m war bonds stand at £13,770. The question arises as to whether this amount is the face value of this investment, or whether the bonds havfe been written down to their present market value. On every hand war bonds are at a heavy discount, and are A BURDEN UPON THE PEOPLE which will soon make them more hated than ever. We all have our dead to mourn, but the profiteer holds the war bonds. To find the interest for the bond- Holder the thrifty are taxed up to the eyes, and the rich man goes on his laughing way drawing the dividends. This association has been "hit up" hardly foT some of the interest, so that what is saved at the bung, is lost .at the spigott. It will ,be good when this item is passed on to some othei' holders. Advances against stock, grain and produce shipped is entered at £192,---911. This is a liquid asset and it must run off the books as the shipments are cleared. The sum is small considering: the trade that passes. Sundry advances against freehold lands, stock, etc., secured £ 614,f843. This item may be considered the. loan department of the banking branch of the association's business, and it is quite a decent amount to have out. m such desirable securities. vThere is one thing about "such an advance; it can be well secured; it can be profitable to the company; it is /safe; it is beneficial to the borrower, and to the State indirectly, for it helps on production and the settlement of our lands. In every way this class of business breeds good results. The question naturally arises as to where the association procured so much money as these advances point ,-<to? The answer is simple, as it is clearly set forth m

THE EXCELLENT ACCOUNTS furnished for the shareholders. Looking at the other side, one will find that the association has two sets of liabili-. ties which more than provide the banking- capital of this concern. There are fixed deposits for twelve months £104,638, and another group placed m the keeping of the association for periods of two to five years aggregating £429,275. The total of these deposits comes to £533,913. The other source of banking funds is to.be found m shareholders' current accounts £576,177. The deposits and current accounts here referred to make a grand total of £1,110,090. so that It might be said that only about onehalf of this total is used for advance purposes, against the security of freehold lands, stocks, etc. The association shows great moderation m the use it has made of the current accounts and deposit moneys. Either the borrowers amongst the shareholders do not want any more than the total of advances indicates, .. or the association does v •., NOT ENCOURAGE THIS CLASS OF BUSINESS. Perhaps, too, the terms of the loans, are so conservative m the interests of perfect safety to the association that they do not appeal to the borrowers. Two things about the position are m evidence, namely,, that the company handles its borrowed money with great discretion, and that the loans aw. granted more with a view to help the borrowers, than to rake m profits from money lending pure and s j m P le -. . ... It is now time to look at the liabilities side of the balance-sheet The paid-up capital is £638,867, bemg an increase of £101,957 for the year No less than 25,366 new shares of all classes were allotted during the year, and after these were taken up there still remains a sum of £24.873 uncalled thereon. The capital account of the association is m a most satisfactory condition, for there is -the large sum of £304,638 to be called up if required. In this line is to be found a very solid reason why shareholders lend the company over half a million pounds of deposit money. The uncalled capital is more than half of the borrowed money, and the visible assets with an undoubted value of £2,105,91S added gives these people just On £o worth of security for every £1 left on deposit. This makes a "tip-top" security tor the lenders. The reserve fund with the premiums on new shares, also some additions from the year's profits, now stands at £170,000. If is

A SPLENDID RECORD . of care for the shareholders' interests. If the dividends have been liberal ever since the association started m business, the savings havo been consistent, and pronounced enough, to enpuro a growing premium on the shares, The only concluding' comment that "Cambist" considers necessary on the liabilities of the association is that owing to the strong capital position, which makes a very snug position for the shareholders, the outside creditors, who as-ain are mostly shareholders, are left practically with all of the assets as security for deposits and current accounts. This company is free of mortgages, debentures, or bank overdraft It is a live body powerful m every respect. What it owns it has paid for, and its assets are worth much more to-day than the sum they cost +v>a association.

fhe profit and loss account sh6ws a growing income. The total gross profits on merchandise came to £137 884 On commissions £62,732. The return from interest, discount and exchange, amounts to £33,782; grain and wool store earnings gave £1807, and transfer fees totalled £21. The summation of these figures makes a grand total of £236,228. This is practically 33 per cent, of the paid-up capital.

IT IS ASTONISHINGLY GOOD, taken* m that manner, but there is no intention on the part of "Cambist"' that so short-sighted a method should be applied m criticism here. The best way to regard the finish of the year, is' m the fact that m spite of higher charges, and. the most unjust form of taxation that this country has ever suffered from, the association has paid the usual dividend of 8% per oent, on the ordinary shares, besides building up the reserves. The expenses were made bear the coat of, depreciations totalling £3258. The Government took £43,065 m; taxes. The first-mentioned sum may, or may not, be a reserve, but m the case of the la-tter and larger amount, one is justified m calling if a piece of political robbery on th'e part of the muddled Massey Government. How that wretched Government has fooled the farmers! There is not space here to comment upon the masterly address delivered by Mr. J. A. Pannett, chairman Of directors, to the shareholders. It is a pity that the whole of these proceedings are not put m booklet form, so that the members have time to weigh and study the position for themselves. WILSONS' (NA) >ORTLAND CEMENT, LIMITED. Touting for* Shares. The above company is the outcome of an amalgamation of Wilson's Portland Cement Co., the New Zealand Portland Cement Col., and the Dominion Portland Cement Co. One might call it a Trinity of failures but for the fact that the first-named concern used to pay a dividend. Whether the dividends were properly distributed, and earned, does not matter now, for all track of these transactions have become smothered up m the capacious merger of the three companies. However, it is good to «c« any New Zealand company able to squeeze a "profit" out of hydraulic limestone, and if the' Wilson show at. Warkworth was really able to do so. then good luck to them. As for the New Zealand Portland Cemeftit Co., its affairs were thoroughly exposed by "Cambist" m this column. It was this ill-starred, badly-managed and unsavory company that was the means of attracting the money of the late T. Coldham Williams, and following the fact that that "splendid old Colonist" had put his money In Its. shares, a mad boom m the shares waa worked up to Auckland and other parts of the Dominion. AH of this was exposed at the time by "Cambist," and the whole thing fell to pieces. From that time, on the New Zealand Portland Cement Co. - "never did any good." The proprietors were very glad to join up with the present merger. The affairs of the Dominion Portland Cement Co., Ltd., are still passing through

THE PROCESS OF LIQUIDATION under the supervision of the court. "Cambist" exposed the matters connected with the concern, and did his best to protect the unfortunate snareholders who put money in.to the corporation. So far, however, he fears that these unfortunate persons will lose about £188,000, they were "roped m" for, The properties and plant, eta, of the Dominion Portland Cement Co. are the "Joker card" In the present merger, or to be more correct, cement gamble. For gamble it is indeed. The whole thing is so "demnition good," that everyone connected with It appears to be most anxious to sell out to their friends and enemies alike.

At the present time the country is (flooded with type-written documents purporting to give' the results of tho first ten months' trading of the Wilsons' (N.Z.) Portland Cement po.,«Ltd. "Cambist" is not aware of any bal-ance-sheet issued by this company. If one has been issued, a copy has not reached him, neither does he .remember having seen In the daily press any Tef erence to a* shareholders' meeting connected with t THIS WELL,- WATERED COMPANY. It is a most suspicious circumstance when one finds sharebrokers rushing round with this sort of lure to trap investors into buying shares. "Cambist" warns his readers that they incur great danger of being disappointed if they part with their money, and take m return therefore, the scrip certificates of this heavily -watered concern.

The foregoing Is mostly the statements of "Cambist." He is vain enough to regard them, as "words of wisdom," and he commends these remarks to his readers. What he now does Is to give the figures from the precious type-written snare for. the investor. In that venial affair it is stated that the capital is 600,000 shares of £1 each, but it fails to tell the reader whether all of that capital is paid up, and how. Sunday creditors are put down at £6341, an extraordinary amount to be owing under that heading, when it is taken into account that the company owes the Bank of New Zealand £30,616, "secured by debentures." How any commercial man could let a concern so burdened with debentures hav,e the use of so. mucn good value as £6431, passes the coniprehension of this writer. The MOST ALARMING FACTabout debentures is that the holder of such grasping securities might close up upon the whole show if any of the conditions of these "blisters" made the movement a payable one for the noider. This was the "stunt" followed by the sharks who wiped the slate ot £ISS,OOO, money invested m .the Dominion Portland Cement Co. On the assets side of the type-written document, whioh bears no certificate from any firm of auditors or any director of the mysterious company, "freehold ana leasehold land,' limestone deposits, buildings, plant, vessels, wharves, tramways, etc., etc., £543,277." "Stocks, cement, etc., £44,240; sundry debtors, £41,864;" "War loan and cash lnhana, £3978; - contract deposits, £1091. "Cambist" will briefly dismiss these with the remark that as there are no details indicating how the figures are arrived at, he discredits the whole of them. Any day the debentureholders might "shut down" upon the lot, and these persons are at present the only ones who know anything about THE JUMBLE OF ASSETS set down hero, ' . It is stated that the gross profits for ten months' trading came fo £33,909, and that the net profits were £18,354. In the first place, this return is altogether too small to. ensure a dividend for the shareholders, or to pay off the debenture sharks. Secondly, without the fullest knowledge of the assets and the' depreciation connected with these mere or less intangible things, no one can say that any profit has been made. To make matters worse no auditor has vouched for the reality of these statements. On the face of things it is bad business to buy shares