ROSEVILLE DAIItY FACTORY COMPANY.

Otago Daily Times, Issue 8539, 6 July 1889, Page 5 (Supplement)

ROSEVILLE DAIItY FACTORY COMPANY.

An adjourned meeting of the Koseville Dairy Factory Company (Limited) was held -at Sawyers' Bay on Wednesday afternoon. Mr XBauchop occupied the chair, and there were 28 shareholders present.

The annual rr.port, which was submitted to the meeting, stated that the directors had erected a cheese-manufacturing plant in order to utilise the skim milk, which wei previously almost all wasted, and this ought in future to prove a distinct gain to the operations of the company. There were 2812 shares held by shareholders —all paid up with the exception of £251 Oi 4d. This amount the directors had given instructions to call in at once. They felt very sorry that tho company's operations should show 6iieh a loss as was set forth. These losses wero made partly on consignments and partly through a considerable part of the manufactured article having turueel out bad and unsaleable. The directors, however, hoped by jndicions manngoaient, coupled with rigid economy in the working expenses, to present a mare favourable report next annual meeting. Tho balance sheet showed a debit balance of £1288 ss. The principal items of expenditure were:—Milk supplies, £1120 10s 7(1; goods, £708 4s 4d; freight and cartage, £55 8s 6i; wages, directors' aud auditors' fees, £433 14s Hi!; general expenses, £159 3s 2tl; interest and tiiscount, £190 2:) lOd. The total expenses for thu yer.r had amounted to £2745 14s Bd, and there was a debit balance from the previous year of £491 10* 2d, the actual loss for the year being £796 14s lOd. The Chaibman, in moving the adoption of tha report and balance sheet, said: Gentlemen, as you are aware, this is a meeting which was postponed from last month, when the balance sheet was not ready to be presented to you. The balance sheet is now in your hands, and I am very sorry indeed that it does not present a better appearance than it does. It shows a considerable los* to the company from the time of 1 its start. I don't kuow whother the directors ero to bkme. I believe they will bo blamed all round; but I am quite willing to take my share of blame, if there is any. The balance sheet shows a greater loss than anybody expected there would be. There certainly has been a loss on the condensed milk that was made in the early part of the season. We have discovered to our sorrow that that was the wrong time to make it. I don't know that I need, to supple-mer-fc anything that is in the balance sheet. If I c«n give any explanation about anything there I shall be most happy to do so, and any of the directors will be glad to do the same. Mr J. Watson seconded the motion. iMr Buchanan said before the report was adopted there were some things that required explanation. The Chairman said after the report was adopted Mr Buchanan could make any observations he wished to. He then put the motion, which was adopted, only Mr Kerr dissenting. Mr Buchanan said the second item in the profit and loss account of £706 for goods required some explanation. There were also some other items he should like explained. The general expenses came to £159 3s 2d, or over £3 h wfii-k—and in an establishment of that kind! Sundry accounts came to £49 0s 4d ; interest and discount to £190 2s lOd, and the whole expenses —with the exception of milk supplies—came to £1019 4s Id. This meant that manufacturing and delivering the manufactured article in Dunediu came to £492 13s Gd more than the raw materal. That was a wonderful result to come out of a factory with all the latest machinery and improvements. The speaker then read a paragraph from tho prospectus of the company, which stated that under the factory system the cost of manufacturing was reduced to a minimum by economising labour and using the latest machinery, and that the article produced would be of uniform quality, aud soon take its place in the market. He wondered if the man who wrote that was at that meeting, aud if it did not make his hair turn grey nothing in the world would.—(Hear, hear, and laughter.) As regards the capital account, there was £1657 17s Id for freehold and buildings, and £1486 16s Cd for plant and machinery. Now, hehad heard a man, who was well qualified to speak, say that if plant and everything was sold to-morrow it would not realise £1800. He could not see where the value was in the machinery as set down, and he thought that the shareholders would get nothing out of the company. The only persons who would get one penny's worth out of it were Messrs Bauchop and Ritchie. Thero was no mistake but that the loss had been through gross mismanagement and reckless expenditure. There was no gainsaying that. They could not have another year when the

price of dairy produce was so good as last year for many years to come, and he thought it wns a pity that the affairs of the company hat! been I managed in the way they had been. He did not saythatthebad management had been wilful,but that it was the result of ignorance. The bulk of the shareholders with whom he had talked were all of opinion that the company had been very badly managed from the beginning,— (Applause.)

Mr J. Watson said tho chairman could perhaps explain what the amount of £706 for goods included.

The Chairman explained that it included sugar, salt, tins, and oil the appliances for carrying on the business. He also stated that £117 had been incurred for law costs. Thero was, too, a verdict of £10 given against the company in a lawsuit. Then there web an injunction in the Supreme Court of £18 10s. The registration fees of the company cost £16 7s; preliminary expenses, £370; printing, £50; labels, 4l50; architect's fees, £33; digging a well and laying on water, £50; and erecting a telephone, £15 Mr Buchanan : I never heard of. law costs bsing put under the term of goods. Am I to understand that is under the beading of goods ? The Cuaihman : No; I have told you what is uuder tho heading of goods. There is sugar, ■•■M, tins, and one thing and another. He went on to ssy that there was a loss on consignments of £277.

Mr J. Kerb asked ho.v it was that the directors once came_ to the conclusion that the company was making a cleat profit of £13 10.S a week when thoy were running some £26 a week behind.

This Chairman said the return was given from the quautity of work done and tho articles produced in a certain time.

Mr T. K. Hartt, who came to the meeting at this stage, asked if a letter he had writtea in connection with the accounts had been read. The Chairman : No; it has not.

Mr Habit said, as auditor of the company, he thought the shareholders were entitled to know how the accounts hud been kept.

Mr Buchanan said there was a certain haziuess about the auditor's statement attached to the balance sheet. The auditor said: "lam of opinion it; exhibits a correct view of the company's affairs at the above date." Last year the auditor had certified to the balance sheet as being correct. He would like to know if there was not a certain ambiguity about the statement now made.

Mr Haety : That is why I asked the chairman to read my letter. That is all I have given and can give.

Mr Buchanan : I think we are entitled to a little explanation. The directors are not the company. The shareholders have something to Bay in tho matter.

Tbe Chairman then read the letter from the auditor referring to the improper way in which the books' had been kept. One of the letters stated that the auditor could not giro a certificate but only an expression of opinion as to the accounts, owing to tho way in which they had been kept.

Mr Harty said the letters were simply meant for tho shareholders and not for publication. As there was a reporter, present, however, the opinion of tho meeting should be taken as to whether the letters should be printed.

The Ciiaihsian subsequently took a vota on tho matter, and tha meeting declared aguinst the letters being printed.

Mr Moss said he understood that the directors were in a position to read tht first of the letters at the first meeting. Ko wished to know why it had"uot beeii read then.

The Chairman : The letter is to myself, Mr Moss.

Mr Moss said ho thought the letter ought to have been read at last meeting, as many went a*ay under tho impression that the auditor was in fault, and they went away blaming him,

The Chairman said he did not hear anyone blaming the auditor.

Mr Harty said he supposed ho was free to make a few remarks on thu balance sheet, as he thought the shareholders should be acquainted with the exact state of affairs. The parties who had charge of the books evidently did not understand how to keep them, but he thought the balance sheet now before the shareholders fairly represented the company's position. He believed the balance sheet might be taken as a true one, and he also believed that all the officers of the company had done the best they could. There wa* no laxity ou their part, but simply a want of kuowledge.

In reply to a question, the Chairman stared that £277 was lost on consignments, and £250 on one article which was unsaleable.

Mr Hahiy stated, in answer to a question, that the directors' and auditor's fees amounted to £48 7s, and that about £-100 had been expended in wages.

The Chairman: As one of the directors, I havo never taken a shilling of the company's money from the start; so that I cannot be accused of running away with the company's money.

Mr Buchanan asked if it was not usual in other public companies to state the number of gallons of milk received aud the actual cost. Everything in the balance sheet was moneys paid, but it was not tho milk suppliers who got the benefit here. The cost of manufacturing and other charges was more than the milk supply co.it altogether.

The Chairman said if tho milkmen had not got the lion's share, uobody else had.

Mr Buchanan : These figures of yours show who has got it.

Mr Kideb said he- thought the shareholders had fairly lost their money, and they should make up their minds to that. There wa3 no use crying over spilt milk—(laughter, and A Voice: " Spoilt milk.")—or spoilt milk either.

Mr M'Lachlan asked upon what recommendation tho directors appointed the late secretary. He was inclined to believe that for v reasonable salary a man could have been obtained vho would have kept the books in a proper manner, and he thought, seeing that the company was losing money in tho way it had been, the very last thing that should have been done was to put a man in a position he was totally unfitted for. He thought the directors should give some information as to why the late secretary was appointed to the position. He retired a few weeks before tho annual meeting, drew his salary, and the shareholders could " go to pot."—(Laughter.)

The Chairman: The circumstances, so far as 11 can recoliect, iv connection with tha late secretary were these: That we wantedj-* secretary. Ho was a director and he offered to take, or was requested to accept office—l am sure I cannot say which. He said he could do the work and up took office, aud you see how he has fulfilled it. I don't know—Mr Harty says ho has made a bad job of it. I think he has. Mr J. Watson : I may say that there was no buttonholing so far as I know of in appointing the secretary. We thought that being an intelligent fellow he would have been able to manage the books. The directors have done thoir level best in everything that has come before them. They have spent a lot of time and takeu a lot of trouble in the affairs of the company, but things would not go right. They are not in fault. So far as I am myself concerned, I have nothing to regret except that things have turned out badly. Mr Habty: I don't think that the.factory was ever kept fully going. That is a sufficient reason for the non-success of the company. The Chaibman : That is tho reason. Mr Bdchanan said it was no wonder the company did not succeed when they had a manager who had a lot of fads, and tried to make buttermilk cheese, and to extract sugar from milk. Mr Eldkb : I know a factory with which I am connected myself iv which all the sweet buttermilk goes along with other milk, and is made into cheese every day. Sir Buchanan: As food? | Mr Eldkk replied in the affirmative, and stated furthermore that the cheese was sold and Mr Buchanan was eating it in his own house. — (Laughter.) He then proceeded-to say that there was a large proportion of Bugar in whoy, and that sugar of milk was an article that should never be thrown away. Mr J. C. Watson said he believed tho loss of the company would not have been so great as it had been if the milk supply had kept up. From what he could make out, those who supplied the milk to the factory—whether shareholders or not—had stopped the supply as soon as they found that they had other use for it. The Chaibman: That is so. Mr Watson proceeded to say that he had satisfactory evidence that that was so. The fault lay with those milkmen who were shareholders. They all knew that if a factory like that could be kept going to the full extent by tho milk supply, the loss would have been very small compared with what it was now. Those who had studied the matter carefully were satisfied of that. Mr Kerb said he was one of those who supplied milk to the factory, aud he left off supplying it because the company broke confidence with him. The company usually paid on the 10th of the month, and after he went to the expense of buying cows to supply the company with milk the company would not pay him for his milk. The Ouaibmav: Yes; anil you were the first man to send a lawyer's letter to tha company. Mr Kerb : I admit it. I went straight into town to do it. The Chairman: You went straight away, although you were told that you would get your money next day. Mr Kbrr: Not next day; I dispute that. The Chairman said the next business was the election of directors. Mr J. C. Watson said he would like the question answered as to whether the company got a full milk supply. Mr Kitchie observed that Mr Kerr had spoken about the company making £13 a week. That was at the time the company got 580 gallons of milk per day, but the supply dwindled down to something like 100 gallons. There was the same fuel and nearly the same labour necessary for 100 gallons as there was for 500. If the company did not get a sufficient quantity of milk it would never pay. He admitted candidly that there was one month when the milk suppliers were not paid until the 20th of the month; but there had never been a milk factory in New Zealand that had paid so regularly as this one had done. Mr Hartt said he would like to know what were the prospects of the company before they elected any officers. He had always thought that the factory was in the wrong place, and that it should be taken across to Portobello, where the prinoipal milk supply came from. The Chairmah : Very little milk came from there.

Mr Douglas asked what ability the present manager had for the position he occupied.

The Chairman replied that Dlr Kitohio was the most competent man that the directors could obtain in every respect. He was a man who was not frightened of work to begin with, then he was a good mechanic, and had a knowledge of machinery, and did a great deal with his own hands aud saved the company employing labour that would otherwise havo to be employed. Those were the reasons, he believed, why he was appointed.

Mr Douglas said the question was: Could he make condensed milk?

The Chaihman said Mr Douglas could take some condensed milk home with him if he liked to try it.

Mt Ritchie also opened a pot of condensed milk and invitedMr Douglas to try it, but that gentleman did not accept the offer. The Chaibjian subsequently observed that he' was not afraid of anything in the future. He 'lid not know whether the other directors were, but he certainly was not.

Mr Tucker said he thought he knew more about a dairy factory than most of them presfiot, because he had learned his trade in a dairy factory. He might tell them that they could not make a Bilk parse ont of a sow's ear, and there was not a gallon of milk that ever came into that factory that he would make condensed milk with. Soma of the milk was filthy. Many iv the district when they milked cows drew off a little milk into their hands, and i hen wiped the cow's teats with it and let the •Hi-b fall into the milk.—(Laughter, and a Voice: "They don't do that"; followed by en :\n uproar and cries of " Order!") The speaker proceeded to say that before the milk was Drought to the factory it should bo cooled down no as to get the animal odour out of it. When the milk was cooled down it could be brought to the factory iv a proper state. But it was necessary to have a refrigerator to cool the milk. The milk came to that factory by rail or over the water by steamer, and it got churned up and arrived there in the heat of the day. Che germs in the milk had then started their career, and no amount, of preserving or condensing could ever stop them. He went on to state that about £24,000 had been spent in Australia in the attempt to make condensed milk, and hed failed owing to the climate beiug too hot. He predicted that they would uever be sble to make such milk there, and stated that ht thought they would only be able to make condensed milk in New Zealand in the cool part of tha year. ■

After some farther discussion Messrs Bauchop and Baird, the retiring directors!, were re-elected, aud Messrs W. Greigg and Elder were also elected as directors.

Mr Elder said it was a great advantage to the district to have the dairy factory there. Some of the shareholder did not place much value on their shares, and if the directors bought them up for a few shillings, and got the whole of the shares into their own hands the factory might be carried on to advantage. He was sure that the shareholders would all sell out very cheaply. He kuew his friend Mr Moss would.

Mr Moss: I will give you my shares.— (Laughter.)

Mr E. G. Allen said he agreed with the suggestion of Mr Elder. Something of the kiud would have to be doiio or the sompany would have to go into liquidation. Although only a very Bmal! shareholder in the concern he would be exceedingly sorry to see that iudustry die

The discussion of the company's affairs then terminated, and after Mr B. G. Allen had been elected auditor the meeting closeu.