HISTORY OF THE CO-OPERATIVEMOVEMENT IN SOUTH CANTERBURY.

Otago Witness, Volume 06, Issue 1986, 6 March 1890, Page 7

HISTORY OF THE CO-OPERATIVEMOVEMENT IN SOUTH CANTERBURY.

(By a Sooth Canterbury Farmer.)

I have been somewhat tardy in fulfilling the promise I made in my previous article on the co-operative movement in South Canterbury ; but the harvest just then coming in I was compelled to lay aside my pen for a time. However, I am glad to Bee by tbe Witness that the question of a co-operative association has not been lost sight of in Otago, and that farmers are still stirring in tbe matter. I see no reason why an association of the sort should not be as BUCoesßful in Otago as in Canterbury, providing that farmers go the right way to work about it. I see that it has been proposed to join up with Borne other co-cperative association already in existence, It would not be becoming in me to offer any opinion as to the wisdom or otherwise of taking such a step, not being well enough acquainted with the faots of the case ; but I will at least venture to say tbat any undertaking of the sort entered into by farmers should have for its great and leadiDg objeot the protection and furtherance of farmers' interests, I do not say that all others but farmers should be excluded from participating in its benefits. The South Canterbury Association includes a considerable number of town shareholders, who avail themselves of the advantage offered by tha concern, and thi3, so far as I have ever heard, in no way militates against the usefulness of the association looked at from a farmers' standpoint. If the town shareholders were ip a majority no doubt there would be

danger of the institution gradually assuming suoh a form as not to meet tbe wants of tbe agricultural seotion. As I am writing these articles solely in the hope of doing what little I can towards extending the co-operative movement among the farmers of the colony, of which I am a native born, and not for the pleasure of airing fny own ideas in print, I will here copy out from the printed memorandum a statement of tbe objects for whioh the Canterbury Farmers' Co operative Association was established. They are as follows :—

1. To offer facilities to the farmer for the shipment of his produoe to the various markets of the world, and the appointment of agents in different localities for the futherance of this objeot. 3. To effect advances ob any securities, real or personal, that the direotors appointed by the association might think fit. 3. To procure for sale to the shareholders cornsacks, woolpaoks, agricultural implements, seeds, and articles of consumption or otherwise, that the direotors to be appointed by the association might think fit. . i. To extend the working of the association in any direction whioh may seem likely to benefit the members.

6. To confine the advantages of the asssooiation exclusively to members. 6. To conduct the operations of the sooiety on a cash basis.

7. To divide the profits that might ncorue to the association in the conduot of its business among the shareholders of the association pro rata in accordance with the amount of business done by each shareholder after paying such dividends on paid-up capital that might be declared from time to time after setting aside any funds as a reserve fund that the directors of the association might think fit. 8. And the doing of all such other things as are incidental or conducive to the attainment of the above objeots. 4. The liability of the shareholders is limited. 5. The nominal capital of the company is £50,000, divided into 10,000 shares of £5 each.

From these it will be seen that the primary objects of the association were the advantageous disposal of the farmers' produoe and the economical purchase of those articles speoially required for use in the/farmers' business. I oan honeßtly say that these objeots have been carried out most thoroughly, and the operations have been extended little by little until at the present time it would be difficult to mention any artiole required on the farm, or, indeed, for domeßtiouseor personal wear, that cannot be obtained at the association's store. But tbe association did not attempt too much to begin with. It confined itself at first chiefly to leading lines ; to the handling and disposal of grain and other produce, the importation of seed, cornsaoks, &0., and other things came in due course. As an instance of the extent of the business now conducted by the association I may state that the quantity of grain reoeived into store for the year ending September 30, 1889, waß 102,904 sacks, and in addition to this a large quantity was sold and shipped by the association direot from the country, Sales of grain are conducted on behalf of shareholders at a commission of 1 per cent.

It will be inßtruotive to glance at the resultß shown by the last balance sheet for the year ending 30th September 1889. During the year the share list had been increased by 2175 shares, the list being now closed with a total of 5265 shares, representing £26,325 of subscribed capital, of which £14,553 remains uncalled. The net profits for the year amounted to £4765 11s 2d, to whioh waß added £498 4a 2d carried forward from tbe previons year, making a total of £5263 15b 4d available for distribution. This Bum was allocated as follows :— A dividend of 8 per cent, per annum on the paid-up capital ; a bonus of 6 per cent, on shareholders' purchases and storage accounts during the year ; tbe sum of £1750 to be placed to the credit of the reserve fund ; and the balances, after providing for the usual fees to auditors and stooktaker and bonus to staff, to be carried forward. Such results as thaae ought surely to be an incentive to Otago farmers to follow in the same lines. A net profit available for distribution of £5263 on a paid-up capital of £11,770 ought to be good enough to please anybody.

It should be pointed out that the business of the association is not oonduoted on a strictly cash basis. Most of the shareholders live in the country, and of necessity send orders for goods to be despatched by rail and in other ways, and to exaot cash over the counter would involve agood deal of inconvenience. The terms are cash within the month during whioh thegoods aro ordered, and 10 per cent, interest ib charged on all overdue aocounts. This involves the obances of bad debts, and in the earlier days of the association it was predioted by those unfavourable to the movement that it would be the rock on which the conoern would split, This aspect of the business was indeed regarded with some apprehension by the most ardent supporters of the co-operative movement. But ns showing how groundless were these fears and predictions, tho amount lost in bad debts for the year ending September 30 last waß only £321. Considering the immense amount of business transacted by the association this shows in a most gratifying way how substantial and reliable a class of poople the general body of farmers are. But it is right to state that the association has not alwayß been bo fortunate. In looking back through the fib of balance sheets I find that the bad debts written off in the year 1884 amounted to £967. This was the year following the disastrous harvest of 1883, when the great bulk of tbe grain iv South Canterbury was more or less injured by rain. Tho damaged grain was unsaleable here, and a great quantity was shipped Home. The association, acoordiag to the usual custom, advanced money on shipments placed ia their hands, but they advanced on too high a standard, and tbe large amount of bad debts made that year chiefly arose from tho failure of the results of sales to cover advanoes. This iB a lesson which the directors have not forgotten, and advances have ever since been made with greater caution.

It is a singular experience to find shareholders in an association partaking of a commercial nature complaining that the profits made are too large. Boards of directors are seldom called upon to refute &o serious a charga laid at their doore by shareholders, yet this is a complaint which has been sometimes made by shareholders in the Canterbury Farmers' Association. It is argued that the objeot of the association is not to make money

beyond paying a fair dividend on tfie capital subscribed and covering working expenses. Undoubtedly the association has done much moro than thip, and if smaller profits wore aimed at farmers could obtain their goods cheaper, and have the benefit of cheaper services iv othor ways. But in answer to this it may be pointed out that tho direotors aim at establishing d strong reserve fund available for any unforeseen contingency j and if the profits are large the bonus on purchases and Btorage accounts returned at the end of the year is fortunately large. It is a very satisfactory feeling for a shareholder to pocket a cash bonus of 6 per cent, on his year's purchases. It is a fact which should afford good nutritious food for reflection to Otago farmers that the Canterbury Farmers' Association have been able to compete with the other commercial establishments, and at the name time pay a good dividend on capital, put by a large amount in reserve, and at the same time roturn a bonus of 0 pet cent, cash on all purchases, In dealing with the association the farmer has the reassuring feeling that he has not to do with a concern the object of which is to get the laet possible penny out of him. The association works for the good of all conoerned, and in its dealings with individuals is only interested in doing the fair thing between shareholder and shareholder. This 00- operation among farmers is viewed with disfavour and dislike by nil classes of tho trading community ; but farmers cannot help that ; they have had enough work to get along, and in banding together for their common welfare and support their hand is raised against no man ; they only seek to do their own business in their own way and want nothing more for themselves and their families than " the glorious privilege of being independent,"