THE NEW ZEALAND REFRIGERATING COMPANY.

Otago Witness, Issue 2059, 10 August 1893, Page 8

THE NEW ZEALAND REFRIGERATING COMPANY.

The position of a trading company wh^n it does not pay a dividend always invites criticism, but the position of a Refrigerating , Company whose shareholders frequently occupy two antagonastic positions is peculiarly awkward. At the annual meeting of the New Zealand Refrigerating Company this peculiarity of. position was particularly nofcicej|/blfr,< a, shareholder who holds a veiy- small interest in the company finding great fault with the way in which the directors had conducted the business, though as a sheep grower he has, no doubt, profited largely by the extravagant prices which have been ruling for .'stock. It must be evident to' those >vho look at the matter fairly, , that 'if the price of stock is high, .then' the profits of a buying conipany must be low, and that no man can,, expect to make the same money twi<3^ bver.v'' The directors, with, we £hink; sottmLijudgment, determined that rather than pay the high prices which others to their loss were prepared to give,- thoy would temporarily shut down the works. Was this or was it not a proper, course to pursue? There can surely^ be but one answer. In the Bankruptcy Court a very hard, name, viz./". reckless trading," would, be given to any' other policy, and we believe the vast body of the shareholders are quite content witE the course pursued, although of course they must regret the absence of a dividend. It seems that the course of the frozen meat trade is altering very, largely year by year, and that .each company will have to perform two functions — namely, those . of buying sheep and freezing them for clients. Whether systematic purchasing is a good thing or a bad thing we do not say— it is enough to point out that every sign points in the direction of this being the course preferred by growers, who like to sell here and for cash down rather than occupy the position of' exporters and await the chance. of a higher price in the London market. No doubt the trade must in the long run be ruled by the preferences of the sheepowner, and if he declares for a sale, on the spot the company must be ready to fall in with his wishes* But we understand that the directors of the New Zealand Refrigerating Company do not set their faces against buying N at all, but only against buying at extortionate prices. Late last season a lot of 5000 sheep were purchase^ at ruling rates, and the shipment showed the expected loss. Had the operation been repeated often, the results would clearly have been most disastroits. For, reluctant as they may be to acknowledge it, we do not hesitate to say that all those companies which have, -been paying the high prices ' which 'have .for some time been ruling here, and then freezing and sending to London on their own account, must have made losses. The figures show it, and, the fact can- be demonstrated to a certainty. Assuming, as we do, that some works can be more cheaply worked than others, and especially that chemical works can freeze at rates cheaper by a halfpenny or nearly sp per pound, yet the London prices show, very little, if any, margin of profit on the prices here. No 'doubt the farmer ,'has been more than satisfied with the v prices he has been receiving for his sheep — he would be more than human if 'he were not ; but the proprietors of other refrigerating companies have in some instances already 'felt' the pinch resulting from their recklessness" -in buying, and it is the general opinion of men who are well qualified to judge that the change to a more; . reasonable state of things is already commencing^ We believe that every prudent trader^ who is not also a farmer, will -support the directors of the Ne% Zealand Refrigerating Company in the course they have pursued. I Coming to matters of detail, we think that in one respect the criticisms offered at the meeting hit a blot. It is certainly hot right to charge Id per lb as the harbour dues at Oamaru when the dues are really and in fact only |d. As explained to us, the charge really includes other rates than the actual harbour dues, and it is practically a charge- arrived at to cover the very great extra-, cost incurred by running refrigerating works in so heavily rateci a town as Oamaru, and where coal also is more expensive. This being\ so, ' th,e plain fact should be stated, ;<so' thab factious critics should not' have occasion to p^oint out what do£s seem on the face of it to be an overcharge. We have no doubt that' now attention has been drawn once, more ~to the matter the company will • make the necessary change in stating- the charge to clients. In all- other respects the criticisms offered' appear to nave been fairly met by tW chairman, who, by the way,

displayed a very wide and accurate knowledge o£ the course o£ the frozen meat trade in other parts of the polony, as well as a complete acquaintance with the affairs of the company of which he is the head, It is satisfactory to find that there appears every prospect of the company seeing better days, ' and being able to carry on its business at a profit. The eager speculators both north and south who have rushed the Otago market cannot continue to pursue their past policy, and with the cessation of a cut-throat competition, will come sounder and more legitimate business. There seems to be a general consensus of opinion that having regard to London prices, which are not likely to rise permanently, 2d per Ibis a fair thing for freezing companies to pay for mutton here, and that anything over that price entails a considerable risk. There may be, and indeed probably are, various methods by which the cost of freezing and shipment, to say nothing of London charges, may be diminished, and ultimately the farmer and sheepowner will, through competition, get the benefit of the economies effected. The New Zealand Eefrigerating Company have been improving the conditions of their trade in London, and are prepared to buy, at a proper price, in the future ; while the position of the works at Burnside should, under fair competition, command an adequate supply of sheep. Probably the next ■thing will be to adopt the chemical' process instead -of the cold -air method, since the former appears to be the less expensive method. Meantime we should say shareholders may feel satisfied that their affairs are in prudent and competent hands.